Document:

Exhibit 10.2

 

CHANGE IN CONTROL AGREEMENT

 

THIS AGREEMENT, dated as of May 1, 2006, is
made by and between Janus Capital Group Inc. (the “Company”) and John H. Bluher
(the “Executive”).

 

WHEREAS, the Company considers it essential
to the best interests of the Company to foster the continued employment of key
personnel; and

 

WHEREAS, the Company recognizes that the
possibility of a Change in Control always exists and that such possibility, and
the uncertainty and questions which it may raise among employees, may result in
the departure or distraction of key personnel to the detriment of the Company;
and

 

WHEREAS, the Company has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of key personnel, including the Executive, to their
assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a Change in Control;

 

NOW, THEREFORE, in consideration of the
premises and the mutual covenants herein contained, the Company and the
Executive hereby agree as follows:

 

1.             Defined
Terms. The definitions of capitalized terms used in this Agreement are
provided in the last Section hereof.

 

2.             Term
of Agreement. The Term of this Agreement shall commence on the date hereof
and shall continue in effect through December 31, 2007; provided, however,
that commencing on January 1, 2007 and each January 1 thereafter, the Term
shall automatically be extended for one additional year unless, not later than
September 30 of the preceding year, the Company or the Executive shall have
given notice not to extend the Term; and further  provided, however,
that if a Change in Control shall have occurred during the Term, the Term shall
expire no earlier than twenty-four (24) months beyond the month in which such
Change in Control occurred. Notwithstanding anything herein to the contrary,
the Term of the Agreement shall immediately terminate if, prior to the Change
in Control, the Company (or such other Affiliate of the Parent that then
employs the Executive) ceases to be an Affiliate of the Parent.

 

3.             Company’s
Covenants Summarized. In order to induce the Executive to remain in the
employ of the Company and in consideration of the Executive’s covenants set
forth in Section 4 hereof, the Company agrees, under the conditions described
herein, to pay the Executive the Severance Payments and the other payments and
benefits described herein. Except as provided in Section 9.1 hereof, no
Severance Payments shall be payable under this Agreement unless there shall
have been (or, under the terms of the second sentence of Section 6.1 hereof,
there shall be deemed to have been) a termination of the Executive’s employment
with the Company following a Change in Control and during the Term. This
Agreement shall not be construed as creating an express or implied contract of
employment and, except as otherwise agreed in 

 

 

writing between the Executive and the Company, the Executive shall not
have any right to be retained in the employ of the Company.

 

4.             The
Executive’s Covenants. The Executive agrees that, subject to the terms and
conditions of this Agreement, in the event of a Potential Change in Control
during the Term, the Executive will remain in the employ of the Company until
the earliest of (i) a date which is six (6) months from the date of such
Potential Change in Control, (ii) the date of a Change in Control, (iii) the
date of termination by the Executive of the Executive’s employment for Good
Reason or by reason of death, Disability or Retirement, or (iv) the termination
by the Company of the Executive’s employment for any reason.

 

5.             Compensation
Other Than Severance Payments.

 

5.1           Following a Change in Control and during the Term,
during any period that the Executive fails to perform the Executive’s full-time
duties with the Company as a result of incapacity due to physical or mental
illness, the Company shall pay the Executive’s base salary to the Executive at
the rate in effect at the commencement of any such period, together with all
compensation and benefits payable to the Executive under the terms of any
compensation or benefit plan, program or arrangement maintained by the Company
during such period (other than any disability plan), until the Executive’s
employment is terminated by the Company for Disability.

 

5.2           If the Executive’s employment shall be terminated for
any reason following a Change in Control and during the Term, the Company shall
pay the Executive’s base salary and incentive compensation to the Executive
through the Date of Termination as in effect immediately prior to the Date of
Termination or, if higher, as in effect immediately prior to the Change in
Control, together with all compensation and benefits payable to the Executive
through the Date of Termination under the terms of the Company’s compensation
and benefit plans, programs or arrangements as in effect immediately prior to
the Date of Termination or, if more favorable to the Executive, as in effect
immediately prior to the Change in Control.

 

5.3           If the Executive’s employment shall be terminated for
any reason following a Change in Control and during the Term, the Company shall
pay to the Executive the Executive’s normal post-termination compensation and
benefits as such payments become due. Such post-termination compensation and
benefits shall be determined under, and paid in accordance with, the Company’s
retirement, insurance and other compensation or benefit plans, programs and
arrangements as in effect immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately prior to the Change in
Control.

 

6.             Severance
Payments.

 

6.1           If the Executive’s employment is terminated following
a Change in Control and during the Term, other than (A) by the Company for
Cause, (B) by reason of death or Disability, or (C) by the Executive without
Good Reason, then, the Company shall pay the Executive the amounts, and provide
the Executive the benefits, described in 

 

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this Section 6.1 (“Severance Payments”) and
Section 6.2, in addition to any payments and benefits to which the Executive is
entitled under Section 5 hereof. For purposes of this Agreement, the Executive’s
employment shall be deemed to have been terminated following a Change in
Control by the Company without Cause or by the Executive with Good Reason, if
(i) the Executive’s employment is terminated by the Company without Cause prior
to a Change in Control (whether or not a Change in Control ever occurs) and
such termination was at the request or direction of a Person who has entered
into an agreement with the Parent the consummation of which would constitute a
Change in Control, (ii) the Executive terminates his employment for Good Reason
prior to a Change in Control (whether or not a Change in Control ever occurs)
and the circumstance or event which constitutes Good Reason occurs at the
request or direction of such Person, or (iii) the Executive’s employment is
terminated by the Company without Cause or by the Executive for Good Reason and
such termination or the circumstance or event which constitutes Good Reason is
otherwise in connection with or in anticipation of a Change in Control (whether
or not a Change in Control ever occurs).

 

(A)              In lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination and in lieu of any
severance benefit otherwise payable to the Executive, the Company shall pay to
the Executive a lump sum severance payment, in cash, equal to two times the sum
of (1) the Executive’s cash compensation in the
calendar year prior to the Date of Termination or, if higher, earned in the calendar
year immediately prior to the Change in Control and (2) the value of the
Company’s contributions made pursuant to the Janus Capital Group Inc. 401(k),
Profit Sharing and Employee Stock Ownership Plan (or any successor plan) on
behalf of the Executive in the four quarters immediately prior to the Date of
Termination or, if higher, in the four quarters immediately prior to the Change
in Control. For purposes of calculating the cash compensation payment under
Section 6.1(A)(1), the Executive’s annual target bonus in the calendar year
immediately prior to the Date of Termination or the Change in Control, as
applicable, will be applied rather than the actual bonus amount paid to the
Executive.

 

(B)               For the twenty-four (24) month period immediately
following the Date of Termination, the Company shall arrange to provide the
Executive and his dependents medical, dental, and vision insurance benefits
substantially similar to those provided to the Executive and his dependents
immediately prior to the Date of Termination or, if more favorable to the
Executive, those provided to the Executive and his dependents immediately prior
to the Change in Control, at no greater after tax cost to the Executive than
the after tax cost to the Executive immediately prior to such date. Benefits
otherwise receivable by the Executive pursuant to this Section 6.1(B) shall be
reduced to the extent benefits of the same type are received by or made
available to the Executive during the twenty-four (24) month period following
the Executive’s termination of employment (and any such benefits received by or
made available to the Executive shall be reported to the Company by the
Executive); provided, however, that the Company shall reimburse
the Executive for the excess, if any, of the after tax cost of such benefits to
the Executive over such cost immediately prior to the Date of Termination or,
if more favorable to the Executive, the 

 

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Change
in Control. The coverage provided pursuant to this Section 6.1(B)
shall run concurrently with and shall be offset against any continuation
coverage under Part 6 of Title I of Employee Retirement Income Security Act of
1974, as amended.

 

(C)               The Company will make available to the Executive three
months of outplacement service at no cost to the Executive through a provider
of such services selected by the Company.

 

6.2           (A)          Whether or not the Executive becomes
entitled to the Severance Payments, if any payment or benefit received or to be
received by the Executive (including any payment or benefit received in
connection with a Change in Control or the termination of the Executive’s employment,
whether pursuant to the terms of this Agreement or any other plan, arrangement
or agreement) (all such payments and benefits, excluding the Gross-Up Payment,
being hereinafter referred to as the “Total Payments”) will be subject (in
whole or part) to the Excise Tax, then, the Company shall pay to the Executive
an additional amount (the “Gross-Up Payment”) such that the net amount retained
by the Executive, after deduction of any Excise Tax on the Total Payments and
any federal, state and local income and employment taxes and Excise Tax upon
the Gross-Up Payment, and after taking into account the phase out of itemized
deductions and personal exemptions attributable to the Gross-Up Payment, shall
be equal to the Total Payments. For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rate of taxation in the state and locality of the Executive’s
residence on the Date of Termination (or if there is no Date of Termination,
then the date on which the Gross-Up Payment is calculated for purposes of this
Section 6.2), net of the maximum reduction in federal income tax which could be
obtained from deduction of such state and local taxes.

 

(B)           For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(i) all of the Total Payments shall be treated as “parachute payments” within
the meaning of section 280G(b)(2) of the Code, unless in the opinion of tax
counsel (“Tax Counsel”) reasonably acceptable to the Executive and selected by
the accounting firm which was, immediately prior to the Change in Control, the
Company’s independent auditor (the “Auditor”), such other payments or benefits
(in whole or in part) do not constitute parachute payments, including by reason
of section 280G(b)(4)(A) of the Code, (ii) all “excess parachute payments”
within the meaning of section 280G(b)(l) of the Code shall be treated as
subject to the Excise Tax unless, in the opinion of Tax Counsel, such excess
parachute payments (in whole or in part) represent reasonable compensation for
services actually rendered, within the meaning of section 280G(b)(4)(B) of the
Code, in excess of the Base Amount allocable to such reasonable compensation,
or are otherwise not subject to the Excise Tax, and (iii) the value of any
noncash benefits or any deferred payment or benefit shall be determined by the
Auditor in accordance with the principles of sections 280G(d)(3) and (4) of the
Code. Prior to the payment date set forth in Section 6.3 hereof, the Company
shall provide the Executive with its calculation of the amounts referred to in
this Section 6.2(B) and such supporting materials as are 

 

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reasonably necessary for the Executive to
evaluate the Company’s calculations. If the Executive disputes the Company’s
calculations (in whole or in part), the reasonable opinion of Tax Counsel with
respect to the matter in dispute shall prevail.

 

6.3           The payments provided in subsection (A) of Section 6.1
hereof and in Section 6.2 hereof shall be made not later than the fifth day
following the Date of Termination (or if there is no Date of Termination, then
the date on which the Gross-Up Payment is calculated for purposes of Section
6.2 hereof); provided, however, that if the amounts of such
payments cannot be finally determined on or before such day, the Company shall
pay to the Executive on such day an estimate, as determined in good faith by
the Executive or, in the case of payments under Section 6.2 hereof, in
accordance with Section 6.2 hereof, of the minimum amount of such payments to
which the Executive is clearly entitled and shall pay the remainder of such
payments (together with interest on the unpaid remainder (or on all such
payments to the extent the Company fails to make such payments when due) at 120%
of the rate provided in section 1274(b)(2)(B) of the Code) as soon as the
amount thereof can be determined but in no event later than the thirtieth
(30th) day after the Date of Termination. At the time that payments are made
under this Agreement, the Company shall provide the Executive with a written
statement setting forth the manner in which such payments were calculated and
the basis for such calculations including, without limitation, any opinions or
other advice the Company has received from Tax Counsel, the Auditor or other
advisors or consultants (and any such opinions or advice which are in writing
shall be attached to the statement).

 

6.4           In the event the Executive incurs legal fees and
expenses disputing in good faith any issue hereunder relating to the
termination of the Executive’s employment, seeking in good faith to obtain or
enforce any benefit or right provided by this Agreement or in connection with
any tax audit or proceeding to the extent attributable to the application of
section 4999 of the Code to any payment or benefit provided hereunder, the
Company shall reimburse the Executive for such legal fees and expenses if the
Executive prevails, in material part, in such dispute.

 

7.             Termination
Procedures and Compensation During Dispute.

 

7.1           Notice of Termination. After a Change in Control and
during the Term, any purported termination of the Executive’s employment (other
than by reason of death) shall be communicated by written Notice of Termination
from one party hereto to the other party hereto in accordance with Section 10
hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a
notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated. Further, a Notice of Termination
for Cause is required to include a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters (3/4) of the entire membership
of the Board at a meeting of the Board which was called and held for the
purpose of considering such termination (after reasonable notice to the
Executive and an opportunity for the Executive, together with the Executive’s
counsel, to be heard before the Board) finding that, in the good faith opinion
of the Board, the Executive was guilty of conduct set forth 

 

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in clause (i) or (ii) of the definition of
Cause herein, and specifying the particulars thereof in detail.

 

7.2           Date of Termination. “Date of Termination,” with
respect to any purported termination of the Executive’s employment after a
Change in Control and during the Term, shall mean (i) if the Executive’s
employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that the Executive shall not have returned to
the full-time performance of the Executive’s duties during such thirty (30) day
period), and (ii) if the Executive’s employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the case of
a termination by the Company, shall not be less than thirty (30) days (except
in the case of a termination for Cause) and, in the case of a termination by
the Executive, shall not be less than fifteen (15) days nor more than sixty
(60) days, respectively, from the date such Notice of Termination is given).

 

7.3           Dispute Concerning Termination. If within fifteen (15) days after
any Notice of Termination is given, or, if later, prior to the Date of
Termination (as determined without regard to this Section 7.3), the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be extended
until the earlier of (i) the date on which the Term ends or (ii) the date on
which the dispute is finally resolved, either by mutual written agreement of
the parties or by a final judgment, order or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected); provided,
however, that the Date of Termination shall be extended by a notice of
dispute given by the Executive only if such notice is given in good faith and
the Executive pursues the resolution of such dispute with reasonable diligence.

 

7.4           Compensation During Dispute. If a purported termination occurs
following a Change in Control and during the Term and the Date of Termination
is extended in accordance with Section 7.3 hereof, the Company shall continue
to pay the Executive the full compensation in effect when the notice giving
rise to the dispute was given (including, but not limited to, salary) and
continue the Executive as a participant in all compensation, benefit and
insurance plans in which the Executive was participating when the notice giving
rise to the dispute was given, until the Date of Termination, as determined in
accordance with Section 7.3 hereof. Amounts paid under this Section 7.4 are in
addition to all other amounts due under this Agreement (other than those due
under Section 5.2 hereof) and shall not be offset against or reduce any other
amounts due under this Agreement.

 

8.             No
Mitigation. The Company agrees that, if the Executive’s employment with the
Company terminates during the Term, the Executive is not required to seek other
employment or to attempt in any way to reduce any amounts payable to the
Executive by the Company pursuant to Section 6 hereof or Section 7.4 hereof. Further,
except as specifically provided in Section 6.1(B) hereof, no payment or benefit
provided for in this Agreement shall be reduced by any compensation earned by
the Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by the Executive to
the Company, or otherwise.

 

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9.             Successors;
Binding Agreement.

 

9.1           In addition to any obligations imposed by law upon any
successor to the Company, and subject to the last sentence of Section 2, the
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the
Company to obtain such assumption and agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle the
Executive to compensation from the Company in the same amount and on the same
terms as the Executive would be entitled to hereunder if the Executive were to
terminate the Executive’s employment for Good Reason after a Change in Control,
except that, for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination.

 

9.2           This Agreement shall inure to the benefit of and be
enforceable by the Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amount would still be payable to the Executive
hereunder (other than amounts which, by their terms, terminate upon the death
of the Executive) if the Executive had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the executors, personal representatives or administrators of
the Executive’s estate.

 

10.           Notices.
For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States registered mail,
return receipt requested, postage prepaid, addressed, if to the Executive, to
the address on record at the Company and, if to the Company, to the address set
forth below, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of
address shall be effective only upon actual receipt:

 

To the Company:

 

Janus Capital Group Inc.

151 Detroit Street

Denver, Colorado 80206

Attn.: 
General Counsel

 

11.           Miscellaneous.
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by
the Executive and the Company, provided, however, that the Company may amend
the Agreement in a manner reasonably intended to avoid the acceleration of tax
and the possible imposition of penalties under Section 409A of the Code. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or of any lack of compliance with, any condition or provision of
this 

 

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Agreement to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same or at any prior
or subsequent time. This Agreement supersedes any other agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof which have been made by either party; provided, however,
that this Agreement shall supersede any agreement setting forth the terms and
conditions of the Executive’s employment with the Company only in the event
that the Executive’s employment with the Company is terminated on or following
a Change in Control, by the Company other than for Cause or by the Executive
for Good Reason or prior to a Change in Control pursuant to the second sentence
of Section 6.1 of this Agreement. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
Delaware. All references to sections of the Exchange Act or the Code shall be
deemed also to refer to any successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding required
under federal, state or local law and any additional withholding to which the
Executive has agreed. The obligations of the Company and the Executive under
this Agreement which by their nature may require either partial or total
performance after the expiration of the Term (including, without limitation,
those under Sections 6 and 7 hereof) shall survive such expiration.

 

12.           Validity.
The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.

 

13.           Counterparts.
This Agreement may be executed in several counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and the
same instrument.

 

14.           Settlement
of Disputes. All claims by the Executive for benefits under this Agreement
shall be directed to and determined by the Board and shall be in writing. Any
denial by the Board of a claim for benefits under this Agreement shall be
delivered to the Executive in writing and shall set forth the specific reasons
for the denial and the specific provisions of this Agreement relied upon. The
Board shall afford a reasonable opportunity to the Executive for a review of
the decision denying a claim and shall further allow the Executive to appeal to
the Board a decision of the Board within sixty (60) days after notification by
the Board that the Executive’s claim has been denied. Notwithstanding the
above, in the event of any dispute, any decision by the Board hereunder shall
be subject to a de novo review by the court.

 

15.           Definitions.
For purposes of this Agreement, the following terms shall have the meanings
indicated below:

 

(A)          “Affiliate” shall have the meaning set forth in Rule
12b-2 promulgated under Section 12 of the Exchange Act.

 

(B)           “Auditor” shall have the meaning set forth in Section
6.2 hereof.

 

(C)           “Base Amount” shall have the meaning set forth in
section 280G(b)(3) of the Code.

 

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(D)          “Board” shall mean the Board of Directors of the
Parent.

 

(E)           “Cause” for termination by the Company of the
Executive’s employment shall mean (i) the willful and continued failure by the
Executive to substantially perform the Executive’s duties with the Company
(other than any such failure resulting from the Executive’s incapacity due to
physical or mental illness or any such actual or anticipated failure after the
issuance of a Notice of Termination for Good Reason by the Executive pursuant
to Section 7.1 hereof) that has not been cured within 30 days after a written
demand for substantial performance is delivered to the Executive by the Board,
which demand specifically identifies the manner in which the Board believes
that the Executive has not substantially performed the Executive’s duties;  (ii) the willful engaging by the Executive in
conduct which is demonstrably and materially injurious to the Company,
monetarily or otherwise; or (iii) a willful or reckless
violation by the Executive of a material legal or regulatory requirement that
is materially and demonstrably injurious to the Company. For purposes of
this definition, no act, or failure to act, on the Executive’s part shall be
deemed “willful” unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that the Executive’s act, or failure
to act, was in the best interest of the Company. Any act, or failure to act,
based upon express written authority by the Board, Chief Executive Officer
and/or Chief Investment Officer with respect to such act or omission or based
upon the advice of counsel for the Company shall be conclusively presumed to be
done, or omitted to be done, by the Executive in good faith and in the best
interests of the Company.

 

(F)           A “Change in Control” shall be deemed to have occurred
if the event set forth in any one of the following paragraphs shall have
occurred:

 

(1)           An
acquisition by any Person of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then
outstanding shares of common stock of the Parent (the “Outstanding Parent
Common Stock”) or (B) the combined voting power of the then outstanding voting
securities of the Parent entitled to vote generally in the election of
directors (the “Outstanding Parent Voting Securities”); excluding, however, the
following:  (i) any acquisition directly
from the Parent, other than an acquisition by virtue of the exercise of a
conversion privilege unless the security being so converted was itself acquired
directly from the Parent, (ii) any acquisition by the Parent, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or maintained
by the Parent or any entity controlled by the Parent, or (iv) any acquisition
pursuant to a transaction which complies with clauses (A), (B) and (C) of
subsection (3) of this definition; or

 

(2)           A
change in the composition of the Board such that the individuals who, as of the
effective date of the this Agreement, constitute the Board (such Board shall be
hereinafter referred to as the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board; provided, however,
for purposes of this definition, that any individual who 

 

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becomes a member of the Board subsequent to
the effective date hereof, whose election, or nomination for election by the
Parent’s shareholders, was approved by a vote of at least a majority of those
individuals who are members of the Board and who were also members of the
Incumbent Board (or deemed to be such pursuant to this proviso) shall be
considered as though such individual were a member of the Incumbent Board; but,
provided  further, that any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board shall
not be so considered as a member of the Incumbent Board; or

 

(3)           Consummation
of a reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Parent or the acquisition of the
assets or stock of another entity (“Business Combination”); excluding, however,
such a Business Combination pursuant to which (A) all or substantially all of
the individuals and entities who are the beneficial owners, respectively, of
the Outstanding Parent Common Stock and Outstanding Parent Voting Securities
immediately prior to such Business Combination will beneficially own, directly
or indirectly, more than 50% of, respectively, the outstanding shares of common
stock, and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case may be, of
the corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the Parent
or all or substantially all the Parent’s assets either directly or through one
or more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Parent
Common Stock and Outstanding Parent Voting Securities, as the case may be, (B)
no Person (other than the Parent or any employee benefit plan (or related
trust) of the Parent or the corporation resulting from such Business
Combination) will beneficially own, directly or indirectly, 20% or more of,
respectively, the outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
outstanding voting securities of such corporation entitled to vote generally in
the election of directors except to the extent that such ownership existed
prior to the Business Combination; and (C) individuals who were members of the
Incumbent Board will constitute at least a majority of the members of the board
of directors of the corporation resulting from such Business Combination; or

 

(4)           The
approval by the stockholders of the Parent of a complete liquidation or
dissolution of the Parent.

 

(G)           “Code” shall mean the Internal Revenue Code of 1986,
as amended from time to time.

 

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(H)          “Company” shall mean Janus Capital Group Inc.,
collectively with its Affiliates, and any successor to its business and/or
assets which assumes and agrees to perform this Agreement by operation of law,
or otherwise.

 

(I)            “Date of Termination” shall have the meaning set forth
in Section 7.2 hereof.

 

(J)            “Disability” shall be deemed the reason for the termination
by the Company of the Executive’s employment, if, as a result of the Executive’s
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of the Executive’s duties with the
Company for a period of six (6) consecutive months, the Company shall have
given the Executive a Notice of Termination for Disability, and, within thirty
(30) days after such Notice of Termination is given, the Executive shall not
have returned to the full-time performance of the Executive’s duties. For
purposes of this Agreement, “Disability” shall be as defined under, and the
Executive must comply with, the then-current long-term disability policy of the
Company.

 

(K)          “Exchange Act” shall mean the Securities Exchange Act
of 1934, as amended from time to time.

 

(L)           “Excise Tax” shall mean any excise tax imposed under
section 4999 of the Code.

 

(M)         “Executive” shall mean
the individual named in the first paragraph of this Agreement.

 

(N)          “Good Reason” for termination by the Executive of the
Executive’s employment shall mean the occurrence (without the Executive’s
express written consent which specifically references this Agreement) after any
Change in Control, or prior to a Change in Control under the circumstances
described in clauses (ii) and (iii) of the second sentence of Section 6.1
hereof (treating all references in paragraphs (1) through (4) below to a “Change
in Control” as references to a “Potential Change in Control”), of any one of
the following acts by the Company, or failures by the Company to act, unless,
in the case of any act or failure to act described in paragraph (1), or (4)
below, such act or failure to act is corrected prior to the Date of Termination
specified in the Notice of Termination given in respect thereof:

 

(1)           a
substantial adverse alteration in the nature or status of the Executive’s
responsibilities from those in effect immediately prior to the Change in
Control other than any such alteration primarily attributable to the fact that
the Parent may no longer be a public company or to other changes in the
identity, nature or structure of the Parent; and provided, that a change
in the Executive’s title or reporting relationships shall not of itself
constitute Good Reason (unless such change results in a substantial adverse
alteration as described above);

 

11

 

(2)           a
material reduction in the Executive’s aggregate target compensation as in
effect immediately prior to the Change in Control or a material adverse change
in the methodology used to determine incentive compensation; provided, however,
that changes to individual components of Executive’s compensation comprising
aggregate target compensation shall not constitute Good Reason;

 

(3)           the
relocation of the Executive’s principal place of employment to a location more
than 40 miles from the Executive’s principal place of employment immediately
prior to the Change in Control or the Company’s requiring the Executive to be
based anywhere other than such principal place of employment (or permitted
relocation thereof) except for required travel on the Company’s business to an
extent substantially consistent with the Executive’s present business travel
obligations;

 

(4)           any
purported termination of the Executive’s employment which is not effected
pursuant to a Notice of Termination satisfying the requirements of Section 7.1
hereof; for purposes of this Agreement, no such purported termination shall be
effective. The Executive’s right to terminate the Executive’s employment for
Good Reason shall not be affected by the Executive’s incapacity due to physical
or mental illness.

 

The Executive’s continued employment shall not constitute consent to,
or a waiver of rights with respect to, any act or failure to act constituting
Good Reason hereunder.

 

(O)          “Gross Up Payment” shall have the meaning set forth in
Section 6.2 hereof.

 

(P)           “Notice of Termination” shall have the meaning set
forth in Section 7.1 hereof.

 

(Q)          “Parent” shall mean Janus Capital Group Inc.

 

(R)           “Person” shall have the meaning given in Section
3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof, except that such term shall not include (i) the Company (ii) a trustee
or other fiduciary holding securities under an employee benefit plan of the
Company (iii) an underwriter temporarily holding securities pursuant to an
offering of such securities, or (iv) a corporation owned, directly or
indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company.

 

(S)           “Potential Change in Control” shall be deemed to have
occurred if the event set forth in any one of the following paragraphs shall
have occurred:

 

(1)           the
Parent enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control;

 

12

 

(2)           the
Parent or any Person publicly announces an intention to take or to consider
taking actions which, if consummated, would constitute a Change in Control;

 

(3)           any
Person becomes the beneficial owner, directly or indirectly, of securities of
the Parent representing 15% or more of either the then outstanding shares of
common stock of the Parent or the combined voting power of the Parent’s then outstanding
securities (not including in the securities beneficially owned by such Person
any securities acquired directly from the Parent or its Affiliates); or

 

(4)           the
Board adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.

 

(T)           “Retirement” shall be deemed the reason for the
termination by the Executive of the Executive’s employment if such employment
is terminated in accordance with the Company’s retirement policy, including
early retirement, generally applicable to its salaried employees.

 

(U)          “Severance Payments” shall have the meaning set forth
in Section 6.1 hereof.

 

(V)           “Tax Counsel” shall have the meaning set forth in
Section 6.2 hereof.

 

(W)         “Term” shall mean the period of time described in
Section 2 hereof (including any extension, continuation or termination
described therein).

 

(X)          “Total Payments” shall mean those payments so
described in Section 6.2 hereof.

 

[SIGNATURE PAGE FOLLOWS]

 

13

 

IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first above written.

 

 

	
   

  	
  JANUS CAPITAL GROUP INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David R. Martin

  	
   

  
	
   

  	
  Name:

  	
  David R. Martin

  
	
   

  	
  Title:

  	
  Executive Vice President and CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ John H. Bluher

  	
   

  
	
   

  	
  John H. Bluher

  
					

 

14Exhibit 10.3

 

CHANGE IN
CONTROL AGREEMENT

 

THIS AGREEMENT, dated as of May 1, 2006, is
made by and between Janus Capital Group Inc. (the “Company”) and Dominic C.
Martellaro (the “Executive”).

 

WHEREAS, the Company considers it essential
to the best interests of the Company to foster the continued employment of key
personnel; and

 

WHEREAS, the Company recognizes that the
possibility of a Change in Control always exists and that such possibility, and
the uncertainty and questions which it may raise among employees, may result in
the departure or distraction of key personnel to the detriment of the Company;
and

 

WHEREAS, the Company has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of key personnel, including the Executive, to their
assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a Change in Control;

 

NOW, THEREFORE, in consideration of the
premises and the mutual covenants herein contained, the Company and the
Executive hereby agree as follows:

 

1.             Defined
Terms. The definitions of capitalized terms used in this Agreement are
provided in the last Section hereof.

 

2.             Term
of Agreement. The Term of this Agreement shall commence on the date hereof
and shall continue in effect through December 31, 2007; provided, however,
that commencing on January 1, 2007 and each January 1 thereafter, the Term
shall automatically be extended for one additional year unless, not later than
September 30 of the preceding year, the Company or the Executive shall have
given notice not to extend the Term; and further  provided, however,
that if a Change in Control shall have occurred during the Term, the Term shall
expire no earlier than twenty-four (24) months beyond the month in which such
Change in Control occurred. Notwithstanding anything herein to the contrary,
the Term of the Agreement shall immediately terminate if, prior to the Change
in Control, the Company (or such other Affiliate of the Parent that then
employs the Executive) ceases to be an Affiliate of the Parent.

 

3.             Company’s
Covenants Summarized. In order to induce the Executive to remain in the
employ of the Company and in consideration of the Executive’s covenants set
forth in Section 4 hereof, the Company agrees, under the conditions described
herein, to pay the Executive the Severance Payments and the other payments and
benefits described herein. Except as provided in Section 9.1 hereof, no
Severance Payments shall be payable under this Agreement unless there shall
have been (or, under the terms of the second sentence of Section 6.1 hereof,
there shall be deemed to have been) a termination of the Executive’s employment
with the Company following a Change in Control and during the Term. This
Agreement shall not be construed as creating an express or implied contract of
employment and, except as otherwise agreed in 

 

 

writing between the Executive and the Company, the Executive shall not
have any right to be retained in the employ of the Company.

 

4.             The
Executive’s Covenants. The Executive agrees that, subject to the terms and
conditions of this Agreement, in the event of a Potential Change in Control
during the Term, the Executive will remain in the employ of the Company until
the earliest of (i) a date which is six (6) months from the date of such
Potential Change in Control, (ii) the date of a Change in Control, (iii) the
date of termination by the Executive of the Executive’s employment for Good
Reason or by reason of death, Disability or Retirement, or (iv) the termination
by the Company of the Executive’s employment for any reason.

 

5.             Compensation
Other Than Severance Payments.

 

5.1           Following a Change in Control and during the Term,
during any period that the Executive fails to perform the Executive’s full-time
duties with the Company as a result of incapacity due to physical or mental
illness, the Company shall pay the Executive’s base salary to the Executive at
the rate in effect at the commencement of any such period, together with all
compensation and benefits payable to the Executive under the terms of any
compensation or benefit plan, program or arrangement maintained by the Company
during such period (other than any disability plan), until the Executive’s
employment is terminated by the Company for Disability.

 

5.2           If the Executive’s employment shall be terminated for
any reason following a Change in Control and during the Term, the Company shall
pay the Executive’s base salary and incentive compensation to the Executive
through the Date of Termination as in effect immediately prior to the Date of
Termination or, if higher, as in effect immediately prior to the Change in
Control, together with all compensation and benefits payable to the Executive
through the Date of Termination under the terms of the Company’s compensation
and benefit plans, programs or arrangements as in effect immediately prior to
the Date of Termination or, if more favorable to the Executive, as in effect
immediately prior to the Change in Control.

 

5.3           If the Executive’s employment shall be terminated for
any reason following a Change in Control and during the Term, the Company shall
pay to the Executive the Executive’s normal post-termination compensation and
benefits as such payments become due. Such post-termination compensation and
benefits shall be determined under, and paid in accordance with, the Company’s
retirement, insurance and other compensation or benefit plans, programs and
arrangements as in effect immediately prior to the Date of Termination or, if
more favorable to the Executive, as in effect immediately prior to the Change
in Control.

 

6.             Severance
Payments.

 

6.1           If the Executive’s employment is terminated following
a Change in Control and during the Term, other than (A) by the Company for Cause,
(B) by reason of death or Disability, or (C) by the Executive without Good
Reason, then, the Company shall pay the Executive the amounts, and provide the
Executive the benefits, described in 

 

2

 

this Section 6.1 (“Severance Payments”) and
Section 6.2, in addition to any payments and benefits to which the Executive is
entitled under Section 5 hereof. For purposes of this Agreement, the Executive’s
employment shall be deemed to have been terminated following a Change in
Control by the Company without Cause or by the Executive with Good Reason, if
(i) the Executive’s employment is terminated by the Company without Cause prior
to a Change in Control (whether or not a Change in Control ever occurs) and such
termination was at the request or direction of a Person who has entered into an
agreement with the Parent the consummation of which would constitute a Change
in Control, (ii) the Executive terminates his employment for Good Reason prior
to a Change in Control (whether or not a Change in Control ever occurs) and the
circumstance or event which constitutes Good Reason occurs at the request or
direction of such Person, or (iii) the Executive’s employment is terminated by
the Company without Cause or by the Executive for Good Reason and such
termination or the circumstance or event which constitutes Good Reason is
otherwise in connection with or in anticipation of a Change in Control (whether
or not a Change in Control ever occurs).

 

(A)              In lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination and in lieu of any
severance benefit otherwise payable to the Executive, the Company shall pay to
the Executive a lump sum severance payment, in cash, equal to two times the sum
of (1) the Executive’s cash compensation in the
calendar year prior to the Date of Termination or, if higher, earned in the calendar
year immediately prior to the Change in Control and (2) the value of the
Company’s contributions made pursuant to the Janus Capital Group Inc. 401(k),
Profit Sharing and Employee Stock Ownership Plan (or any successor plan) on
behalf of the Executive in the four quarters immediately prior to the Date of
Termination or, if higher, in the four quarters immediately prior to the Change
in Control. For purposes of calculating the cash compensation payment under
Section 6.1(A)(1), the Executive’s annual target bonus in the calendar year
immediately prior to the Date of Termination or the Change in Control, as
applicable, will be applied rather than the actual bonus amount paid to the
Executive.

 

(B)               For the twenty-four (24) month period immediately
following the Date of Termination, the Company shall arrange to provide the
Executive and his dependents medical, dental, and vision insurance benefits
substantially similar to those provided to the Executive and his dependents
immediately prior to the Date of Termination or, if more favorable to the
Executive, those provided to the Executive and his dependents immediately prior
to the Change in Control, at no greater after tax cost to the Executive than
the after tax cost to the Executive immediately prior to such date. Benefits
otherwise receivable by the Executive pursuant to this Section 6.1(B) shall be
reduced to the extent benefits of the same type are received by or made
available to the Executive during the twenty-four (24) month period following
the Executive’s termination of employment (and any such benefits received by or
made available to the Executive shall be reported to the Company by the
Executive); provided, however, that the Company shall reimburse
the Executive for the excess, if any, of the after tax cost of such benefits to
the Executive over such cost immediately prior to the Date of Termination or,
if more favorable to the Executive, the 

 

3

 

Change
in Control. The coverage provided pursuant to this Section 6.1(B)
shall run concurrently with and shall be offset against any continuation
coverage under Part 6 of Title I of Employee Retirement Income Security Act of
1974, as amended.

 

(C)               The Company will make available to the Executive three
months of outplacement service at no cost to the Executive through a provider
of such services selected by the Company.

 

6.2           (A)          Whether or not the Executive becomes
entitled to the Severance Payments, if any payment or benefit received or to be
received by the Executive (including any payment or benefit received in
connection with a Change in Control or the termination of the Executive’s
employment, whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement) (all such payments and benefits, excluding the Gross-Up
Payment, being hereinafter referred to as the “Total Payments”) will be subject
(in whole or part) to the Excise Tax, then, the Company shall pay to the
Executive an additional amount (the “Gross-Up Payment”) such that the net
amount retained by the Executive, after deduction of any Excise Tax on the
Total Payments and any federal, state and local income and employment taxes and
Excise Tax upon the Gross-Up Payment, and after taking into account the phase
out of itemized deductions and personal exemptions attributable to the Gross-Up
Payment, shall be equal to the Total Payments. For purposes of determining the
amount of the Gross-Up Payment, the Executive shall be deemed to pay federal
income taxes at the highest marginal rate of federal income taxation in the
calendar year in which the Gross-Up Payment is to be made and state and local
income taxes at the highest marginal rate of taxation in the state and locality
of the Executive’s residence on the Date of Termination (or if there is no Date
of Termination, then the date on which the Gross-Up Payment is calculated for
purposes of this Section 6.2), net of the maximum reduction in federal income
tax which could be obtained from deduction of such state and local taxes.

 

(B)           For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(i) all of the Total Payments shall be treated as “parachute payments” within
the meaning of section 280G(b)(2) of the Code, unless in the opinion of tax
counsel (“Tax Counsel”) reasonably acceptable to the Executive and selected by
the accounting firm which was, immediately prior to the Change in Control, the
Company’s independent auditor (the “Auditor”), such other payments or benefits
(in whole or in part) do not constitute parachute payments, including by reason
of section 280G(b)(4)(A) of the Code, (ii) all “excess parachute payments”
within the meaning of section 280G(b)(l) of the Code shall be treated as
subject to the Excise Tax unless, in the opinion of Tax Counsel, such excess
parachute payments (in whole or in part) represent reasonable compensation for
services actually rendered, within the meaning of section 280G(b)(4)(B) of the
Code, in excess of the Base Amount allocable to such reasonable compensation,
or are otherwise not subject to the Excise Tax, and (iii) the value of any
noncash benefits or any deferred payment or benefit shall be determined by the
Auditor in accordance with the principles of sections 280G(d)(3) and (4) of the
Code. Prior to the payment date set forth in Section 6.3 hereof, the Company
shall provide the Executive with its calculation of the amounts referred to in
this Section 6.2(B) and such supporting materials as are 

 

4

 

reasonably necessary for the Executive to
evaluate the Company’s calculations. If the Executive disputes the Company’s
calculations (in whole or in part), the reasonable opinion of Tax Counsel with
respect to the matter in dispute shall prevail.

 

6.3           The payments provided in subsection (A) of Section 6.1
hereof and in Section 6.2 hereof shall be made not later than the fifth day
following the Date of Termination (or if there is no Date of Termination, then
the date on which the Gross-Up Payment is calculated for purposes of Section
6.2 hereof); provided, however, that if the amounts of such
payments cannot be finally determined on or before such day, the Company shall
pay to the Executive on such day an estimate, as determined in good faith by
the Executive or, in the case of payments under Section 6.2 hereof, in
accordance with Section 6.2 hereof, of the minimum amount of such payments to
which the Executive is clearly entitled and shall pay the remainder of such
payments (together with interest on the unpaid remainder (or on all such
payments to the extent the Company fails to make such payments when due) at
120% of the rate provided in section 1274(b)(2)(B) of the Code) as soon as the
amount thereof can be determined but in no event later than the thirtieth
(30th) day after the Date of Termination. At the time that payments are made
under this Agreement, the Company shall provide the Executive with a written
statement setting forth the manner in which such payments were calculated and
the basis for such calculations including, without limitation, any opinions or
other advice the Company has received from Tax Counsel, the Auditor or other
advisors or consultants (and any such opinions or advice which are in writing
shall be attached to the statement).

 

6.4           In the event the Executive incurs legal fees and
expenses disputing in good faith any issue hereunder relating to the
termination of the Executive’s employment, seeking in good faith to obtain or
enforce any benefit or right provided by this Agreement or in connection with
any tax audit or proceeding to the extent attributable to the application of
section 4999 of the Code to any payment or benefit provided hereunder, the
Company shall reimburse the Executive for such legal fees and expenses if the
Executive prevails, in material part, in such dispute.

 

7.             Termination
Procedures and Compensation During Dispute.

 

7.1           Notice of Termination. After a Change in Control and
during the Term, any purported termination of the Executive’s employment (other
than by reason of death) shall be communicated by written Notice of Termination
from one party hereto to the other party hereto in accordance with Section 10
hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a
notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated. Further, a Notice of Termination
for Cause is required to include a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters (3/4) of the entire membership
of the Board at a meeting of the Board which was called and held for the
purpose of considering such termination (after reasonable notice to the
Executive and an opportunity for the Executive, together with the Executive’s
counsel, to be heard before the Board) finding that, in the good faith opinion
of the Board, the Executive was guilty of conduct set forth 

 

5

 

in clause (i) or (ii) of the definition of
Cause herein, and specifying the particulars thereof in detail.

 

7.2           Date of Termination. “Date of Termination,” with
respect to any purported termination of the Executive’s employment after a
Change in Control and during the Term, shall mean (i) if the Executive’s
employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that the Executive shall not have returned to
the full-time performance of the Executive’s duties during such thirty (30) day
period), and (ii) if the Executive’s employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the case of
a termination by the Company, shall not be less than thirty (30) days (except
in the case of a termination for Cause) and, in the case of a termination by
the Executive, shall not be less than fifteen (15) days nor more than sixty
(60) days, respectively, from the date such Notice of Termination is given).

 

7.3           Dispute Concerning Termination. If within fifteen (15) days after
any Notice of Termination is given, or, if later, prior to the Date of
Termination (as determined without regard to this Section 7.3), the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be extended
until the earlier of (i) the date on which the Term ends or (ii) the date on
which the dispute is finally resolved, either by mutual written agreement of
the parties or by a final judgment, order or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected); provided,
however, that the Date of Termination shall be extended by a notice of
dispute given by the Executive only if such notice is given in good faith and
the Executive pursues the resolution of such dispute with reasonable diligence.

 

7.4           Compensation During Dispute. If a purported termination occurs
following a Change in Control and during the Term and the Date of Termination
is extended in accordance with Section 7.3 hereof, the Company shall continue
to pay the Executive the full compensation in effect when the notice giving
rise to the dispute was given (including, but not limited to, salary) and
continue the Executive as a participant in all compensation, benefit and
insurance plans in which the Executive was participating when the notice giving
rise to the dispute was given, until the Date of Termination, as determined in accordance
with Section 7.3 hereof. Amounts paid under this Section 7.4 are in addition to
all other amounts due under this Agreement (other than those due under Section
5.2 hereof) and shall not be offset against or reduce any other amounts due
under this Agreement.

 

8.             No
Mitigation. The Company agrees that, if the Executive’s employment with the
Company terminates during the Term, the Executive is not required to seek other
employment or to attempt in any way to reduce any amounts payable to the
Executive by the Company pursuant to Section 6 hereof or Section 7.4 hereof. Further,
except as specifically provided in Section 6.1(B) hereof, no payment or benefit
provided for in this Agreement shall be reduced by any compensation earned by
the Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by the Executive to
the Company, or otherwise.

 

6

 

9.             Successors;
Binding Agreement.

 

9.1           In addition to any obligations imposed by law upon any
successor to the Company, and subject to the last sentence of Section 2, the
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the
Company to obtain such assumption and agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle the
Executive to compensation from the Company in the same amount and on the same
terms as the Executive would be entitled to hereunder if the Executive were to
terminate the Executive’s employment for Good Reason after a Change in Control,
except that, for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination.

 

9.2           This Agreement shall inure to the benefit of and be
enforceable by the Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amount would still be payable to the Executive
hereunder (other than amounts which, by their terms, terminate upon the death
of the Executive) if the Executive had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the executors, personal representatives or administrators of
the Executive’s estate.

 

10.           Notices.
For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States registered mail,
return receipt requested, postage prepaid, addressed, if to the Executive, to
the address on record at the Company and, if to the Company, to the address set
forth below, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of
address shall be effective only upon actual receipt:

 

To the Company:

 

Janus Capital Group Inc.

151 Detroit Street

Denver, Colorado 80206

Attn.: 
General Counsel

 

11.           Miscellaneous.
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by
the Executive and the Company, provided, however, that the Company may amend
the Agreement in a manner reasonably intended to avoid the acceleration of tax
and the possible imposition of penalties under Section 409A of the Code. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or of any lack of compliance with, any condition or provision of
this 

 

7

 

Agreement to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same or at any prior
or subsequent time. This Agreement supersedes any other agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof which have been made by either party; provided, however,
that this Agreement shall supersede any agreement setting forth the terms and
conditions of the Executive’s employment with the Company only in the event
that the Executive’s employment with the Company is terminated on or following
a Change in Control, by the Company other than for Cause or by the Executive
for Good Reason or prior to a Change in Control pursuant to the second sentence
of Section 6.1 of this Agreement. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
Delaware. All references to sections of the Exchange Act or the Code shall be
deemed also to refer to any successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding required
under federal, state or local law and any additional withholding to which the
Executive has agreed. The obligations of the Company and the Executive under
this Agreement which by their nature may require either partial or total
performance after the expiration of the Term (including, without limitation,
those under Sections 6 and 7 hereof) shall survive such expiration.

 

12.           Validity.
The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.

 

13.           Counterparts.
This Agreement may be executed in several counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and the
same instrument.

 

14.           Settlement
of Disputes. All claims by the Executive for benefits under this Agreement
shall be directed to and determined by the Board and shall be in writing. Any
denial by the Board of a claim for benefits under this Agreement shall be
delivered to the Executive in writing and shall set forth the specific reasons
for the denial and the specific provisions of this Agreement relied upon. The
Board shall afford a reasonable opportunity to the Executive for a review of
the decision denying a claim and shall further allow the Executive to appeal to
the Board a decision of the Board within sixty (60) days after notification by
the Board that the Executive’s claim has been denied. Notwithstanding the
above, in the event of any dispute, any decision by the Board hereunder shall
be subject to a de novo review by the court.

 

15.           Definitions.
For purposes of this Agreement, the following terms shall have the meanings
indicated below:

 

(A)          “Affiliate” shall have the meaning set forth in Rule
12b-2 promulgated under Section 12 of the Exchange Act.

 

(B)           “Auditor” shall have the meaning set forth in Section
6.2 hereof.

 

(C)           “Base Amount” shall have the meaning set forth in
section 280G(b)(3) of the Code.

 

8

 

(D)          “Board” shall mean the Board of Directors of the
Parent.

 

(E)           “Cause” for termination by the Company of the
Executive’s employment shall mean (i) the willful and continued failure by the
Executive to substantially perform the Executive’s duties with the Company
(other than any such failure resulting from the Executive’s incapacity due to
physical or mental illness or any such actual or anticipated failure after the
issuance of a Notice of Termination for Good Reason by the Executive pursuant
to Section 7.1 hereof) that has not been cured within 30 days after a written
demand for substantial performance is delivered to the Executive by the Board,
which demand specifically identifies the manner in which the Board believes
that the Executive has not substantially performed the Executive’s duties;  (ii) the willful engaging by the Executive in
conduct which is demonstrably and materially injurious to the Company,
monetarily or otherwise; or (iii) a willful or reckless
violation by the Executive of a material legal or regulatory requirement that
is materially and demonstrably injurious to the Company. For purposes of
this definition, no act, or failure to act, on the Executive’s part shall be
deemed “willful” unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that the Executive’s act, or failure
to act, was in the best interest of the Company. Any act, or failure to act,
based upon express written authority by the Board, Chief Executive Officer
and/or Chief Investment Officer with respect to such act or omission or based
upon the advice of counsel for the Company shall be conclusively presumed to be
done, or omitted to be done, by the Executive in good faith and in the best
interests of the Company.

 

(F)           A “Change in Control” shall be deemed to have occurred
if the event set forth in any one of the following paragraphs shall have
occurred:

 

(1)           An
acquisition by any Person of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then
outstanding shares of common stock of the Parent (the “Outstanding Parent
Common Stock”) or (B) the combined voting power of the then outstanding voting
securities of the Parent entitled to vote generally in the election of
directors (the “Outstanding Parent Voting Securities”); excluding, however, the
following:  (i) any acquisition directly
from the Parent, other than an acquisition by virtue of the exercise of a
conversion privilege unless the security being so converted was itself acquired
directly from the Parent, (ii) any acquisition by the Parent, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Parent or any entity controlled by the Parent, or (iv) any
acquisition pursuant to a transaction which complies with clauses (A), (B) and
(C) of subsection (3) of this definition; or

 

(2)           A
change in the composition of the Board such that the individuals who, as of the
effective date of the this Agreement, constitute the Board (such Board shall be
hereinafter referred to as the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board; provided, however,
for purposes of this definition, that any individual who 

 

9

 

becomes a member of the Board subsequent to
the effective date hereof, whose election, or nomination for election by the
Parent’s shareholders, was approved by a vote of at least a majority of those
individuals who are members of the Board and who were also members of the
Incumbent Board (or deemed to be such pursuant to this proviso) shall be
considered as though such individual were a member of the Incumbent Board; but,
provided  further, that any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board shall
not be so considered as a member of the Incumbent Board; or

 

(3)           Consummation
of a reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Parent or the acquisition of the
assets or stock of another entity (“Business Combination”); excluding, however,
such a Business Combination pursuant to which (A) all or substantially all of
the individuals and entities who are the beneficial owners, respectively, of
the Outstanding Parent Common Stock and Outstanding Parent Voting Securities
immediately prior to such Business Combination will beneficially own, directly
or indirectly, more than 50% of, respectively, the outstanding shares of common
stock, and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case may be, of
the corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the Parent
or all or substantially all the Parent’s assets either directly or through one
or more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Parent
Common Stock and Outstanding Parent Voting Securities, as the case may be, (B)
no Person (other than the Parent or any employee benefit plan (or related trust)
of the Parent or the corporation resulting from such Business Combination) will
beneficially own, directly or indirectly, 20% or more of, respectively, the
outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the outstanding voting
securities of such corporation entitled to vote generally in the election of
directors except to the extent that such ownership existed prior to the
Business Combination; and (C) individuals who were members of the Incumbent
Board will constitute at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination; or

 

(4)           The
approval by the stockholders of the Parent of a complete liquidation or dissolution
of the Parent.

 

(G)           “Code” shall mean the Internal Revenue Code of 1986,
as amended from time to time.

 

10

 

(H)          “Company” shall mean Janus Capital Group Inc.,
collectively with its Affiliates, and any successor to its business and/or
assets which assumes and agrees to perform this Agreement by operation of law,
or otherwise.

 

(I)            “Date of Termination” shall have the meaning set forth
in Section 7.2 hereof.

 

(J)            “Disability” shall be deemed the reason for the
termination by the Company of the Executive’s employment, if, as a result of
the Executive’s incapacity due to physical or mental illness, the Executive
shall have been absent from the full-time performance of the Executive’s duties
with the Company for a period of six (6) consecutive months, the Company shall
have given the Executive a Notice of Termination for Disability, and, within
thirty (30) days after such Notice of Termination is given, the Executive shall
not have returned to the full-time performance of the Executive’s duties. For
purposes of this Agreement, “Disability” shall be as defined under, and the
Executive must comply with, the then-current long-term disability policy of the
Company.

 

(K)          “Exchange Act” shall mean the Securities Exchange Act
of 1934, as amended from time to time.

 

(L)           “Excise Tax” shall mean any excise tax imposed under
section 4999 of the Code.

 

(M)         “Executive” shall mean
the individual named in the first paragraph of this Agreement.

 

(N)          “Good Reason” for termination by the Executive of the
Executive’s employment shall mean the occurrence (without the Executive’s
express written consent which specifically references this Agreement) after any
Change in Control, or prior to a Change in Control under the circumstances described
in clauses (ii) and (iii) of the second sentence of Section 6.1 hereof
(treating all references in paragraphs (1) through (4) below to a “Change in
Control” as references to a “Potential Change in Control”), of any one of the
following acts by the Company, or failures by the Company to act, unless, in
the case of any act or failure to act described in paragraph (1), or (4) below,
such act or failure to act is corrected prior to the Date of Termination
specified in the Notice of Termination given in respect thereof:

 

(1)           a
substantial adverse alteration in the nature or status of the Executive’s
responsibilities from those in effect immediately prior to the Change in
Control other than any such alteration primarily attributable to the fact that
the Parent may no longer be a public company or to other changes in the
identity, nature or structure of the Parent; and provided, that a change
in the Executive’s title or reporting relationships shall not of itself
constitute Good Reason (unless such change results in a substantial adverse
alteration as described above);

 

11

 

(2)           a
material reduction in the Executive’s aggregate target compensation as in
effect immediately prior to the Change in Control or a material adverse change
in the methodology used to determine incentive compensation; provided, however,
that changes to individual components of Executive’s compensation comprising
aggregate target compensation shall not constitute Good Reason;

 

(3)           the
relocation of the Executive’s principal place of employment to a location more
than 40 miles from the Executive’s principal place of employment immediately
prior to the Change in Control or the Company’s requiring the Executive to be
based anywhere other than such principal place of employment (or permitted
relocation thereof) except for required travel on the Company’s business to an
extent substantially consistent with the Executive’s present business travel
obligations;

 

(4)           any
purported termination of the Executive’s employment which is not effected
pursuant to a Notice of Termination satisfying the requirements of Section 7.1
hereof; for purposes of this Agreement, no such purported termination shall be
effective. The Executive’s right to terminate the Executive’s employment for
Good Reason shall not be affected by the Executive’s incapacity due to physical
or mental illness.

 

The Executive’s continued employment shall not constitute consent to,
or a waiver of rights with respect to, any act or failure to act constituting
Good Reason hereunder.

 

(O)          “Gross Up Payment” shall have the meaning set forth in
Section 6.2 hereof.

 

(P)           “Notice of Termination” shall have the meaning set
forth in Section 7.1 hereof.

 

(Q)          “Parent” shall mean Janus Capital Group Inc.

 

(R)           “Person” shall have the meaning given in Section
3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof, except that such term shall not include (i) the Company (ii) a trustee
or other fiduciary holding securities under an employee benefit plan of the
Company (iii) an underwriter temporarily holding securities pursuant to an
offering of such securities, or (iv) a corporation owned, directly or
indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company.

 

(S)           “Potential Change in Control” shall be deemed to have
occurred if the event set forth in any one of the following paragraphs shall
have occurred:

 

(1)           the
Parent enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control;

 

12

 

(2)           the
Parent or any Person publicly announces an intention to take or to consider
taking actions which, if consummated, would constitute a Change in Control;

 

(3)           any
Person becomes the beneficial owner, directly or indirectly, of securities of
the Parent representing 15% or more of either the then outstanding shares of
common stock of the Parent or the combined voting power of the Parent’s then
outstanding securities (not including in the securities beneficially owned by
such Person any securities acquired directly from the Parent or its
Affiliates); or

 

(4)           the
Board adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.

 

(T)           “Retirement” shall be deemed the reason for the
termination by the Executive of the Executive’s employment if such employment
is terminated in accordance with the Company’s retirement policy, including
early retirement, generally applicable to its salaried employees.

 

(U)          “Severance Payments” shall have the meaning set forth
in Section 6.1 hereof.

 

(V)           “Tax Counsel” shall have the meaning set forth in
Section 6.2 hereof.

 

(W)         “Term” shall mean the period of time described in
Section 2 hereof (including any extension, continuation or termination
described therein).

 

(X)          “Total Payments” shall mean those payments so
described in Section 6.2 hereof.

 

[SIGNATURE PAGE FOLLOWS]

 

13

 

IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first above written.

 

 

	
   

  	
  JANUS CAPITAL GROUP INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ David R. Martin

  	
   

  
	
   

  	
  Name:

  	
  David R. Martin

  
	
   

  	
  Title:

  	
  Executive Vice President and CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    /s/
  Dominic C. Martellaro

  	
   

  
	
   

  	
  Dominic C. Martellaro

  

 

14

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