The effective date of reorganization is December 31, 2002.
When the reorganization is fully implemented, Janus Capital Management Inc. (Janus) will be the name of the publicly traded company. Its subsidiaries and affiliates will include Janus Capital Management LLC, Enhanced Investment Technologies LLC (INTECH), Bay Isle Financial LLC, Nelson Money Managers Plc and DST Systems, Inc.
The company’s offices in Kansas City will be closed.
A vote of shareholders is not required to effect the reorganization.
Shareholders will not be required to exchange share certificates.
NEW MANAGEMENT TEAM
Key Management Members:
- CEO and Vice Chairman of the Board – Mark Whiston
- Chief Financial Officer – Loren Starr
- Chief Administrative Officer, General Counsel – Thomas Early
- Chief Technology Officer – Tim Hudner
- Chief Marketing Officer – Robin Beery
- Director of Research – Jim Goff
Mark Whiston will initiate a search for a president of Janus.
- The search will be conducted outside of Janus.
The management teams of Stilwell and Berger will transition various duties to Janus during a period of up to one year after the effective date of the merger.
IMPACTS OF THE REORGANIZATION
When reorganization is fully implemented, annual savings are estimated to total approximately $40 million.
The components of the estimated savings:
- Compensation: 50%
- Facilities and supplies: 20%
- Marketing: 10%
- Professional expenses: 10%
- Miscellaneous: 10%
There will be a one-time cost of approximately $36 million in third quarter. Approximately 85% of that figure will be severance and benefits, and the remainder will be for facilities and other costs.
When fully implemented, approximately 130 to 140 positions are expected to be eliminated.
EQUITY OWNERSHIP
Employees are not expected to receive additional grants of stock as a result of the reorganization.
All future equity grants are expected to be in public company common stock.
All previously issued equity grants change to a five-year pro rata vesting schedule resulting in the following:
- Incremental adjustment of $26 million to non-cash compensation expense in third quarter 2002
From approximately $18 million in second quarter 2002 to approximately $44 million in third quarter 2002
- Quarterly non-cash compensation associated with all current equity grants expected to total approximately $24 million in fourth quarter 2002 and approximately $22 million per quarter through the end of 2004
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