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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ______________ )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
JANUS ASPEN SERIES
File Nos. 33-63212 and 811-7736
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(Name------------------
(Exact Name of Registrant as Specified In Itsin Charter)
- --------------------------------------------------------------------------------151 Detroit Street, Denver, Colorado 80206-4805
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(Address of Principal Executive Offices)
303-333-3863
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(Registrant's Telephone No., including Area Code)
Stephanie Grauerholz-Lofton -- 151 Detroit Street, Denver, Colorado 80206-4805
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(Name and Address of Person(s) Filing Proxy Statement, if other than the Registrant)Agent for Service)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
- --------------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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PERSONS WHO POTENTIALLY ARE TO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED IN THIS
FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A CURRENTLY VALID OMB
CONTROL NUMBER.
SEC 1913 (05-05)(04-05)
FOR SHAREHOLDERS OF
JANUS ASPEN SERIES
(THE "TRUST")MID CAP VALUE PORTFOLIO
(JANUS LOGO)
DEAR SHAREHOLDER:
Your Fund'sAugust 27, 2008
Dear Shareholder:
The Board of Trustees for your Portfolio is requesting yourthat you vote on severala
proposal to approve a new subadvisory agreement between your Portfolio's
investment adviser, Janus Capital Management LLC ("Janus Capital"), and your
Portfolio's current subadviser, Perkins, Wolf, McDonnell and Company, LLC
("PWM"). The proposed new subadvisory agreement will be substantially similar to
the current subadvisory agreement in place for your Portfolio. The proposal
arises because Janus Capital, which currently owns a 30% interest in PWM, has
entered into an agreement to acquire an additional 50% interest in PWM. Under
applicable law, this transaction could result in a change in control of PWM that
could cause an automatic termination of the current subadvisory agreement. We
are therefore seeking your approval of a new agreement so that PWM can continue
to serve as your Portfolio's subadviser.
The Board of Trustees for your Portfolio is also requesting that you vote
on a proposal to approve an amended and restated investment advisory agreement
between your Portfolio and its investment adviser, Janus Capital. The proposed
amended and restated investment advisory agreement will make Janus Capital,
rather than your Portfolio, responsible for paying PWM for its services as
subadviser, which would be in line with industry standard regarding payment of
subadvisory fees. This proposed change does not change the management fee rate
for your Portfolio. All other terms of the amended and restated investment
advisory agreement will be substantially similar to the current investment
advisory agreement in place for your Portfolio.
These proposals
regarding your Janus Fund that will be presented to shareholders at a Special Meeting of
Shareholders to be held November 22, 2005. We encourage you toOctober 30, 2008. For additional details about the
proposals, please read the Questions and Answers section at the beginning of the
enclosed Proxy Statement, as well as the entire Proxy Statement, which describes eachStatement.
THE INDEPENDENT TRUSTEES OF THE PORTFOLIO BELIEVE THE PROPOSALS ARE IN THE
BEST INTEREST OF SHAREHOLDERS AND HAVE RECOMMENDED THAT SHAREHOLDERS VOTE "FOR"
THE PROPOSED NEW SUBADVISORY AGREEMENT AND THE PROPOSED AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT.
You can vote in one of four ways:
- BY MAIL with the proposals. A summaryenclosed proxy card;
- BY INTERNET through the website listed in the proxy voting instructions;
- BY TELEPHONE by calling the toll-free number listed on your proxy card
and following the recorded instructions; or
- IN PERSON at the Special Meeting of the proposals follows:
Proposal 1. For the Trust, to elect nine Trustees, including eight
"independent" candidates.
Proposal 2. To approve amendments to the Trust's Amended and Restated
Trust Instrument as follows:
2.a. provides for shareholder votes to be counted basedShareholders on each dollar of net asset value held by the shareholder
rather than oneOctober 30, 2008.
Your vote for each share.
2.b. permits the Trustees, subject to applicable federal and
state rules and regulations, to reorganize all or a
portion of the Trust or any of its Funds or classes.
2.c. permits the Trustees, subject to applicable federal and
state rules and regulations, to liquidate the Trust or
any Fund or class thereof.
Proposal 3. For shareholders of Flexible Bond Portfolio only, to approve
the elimination of the Fund's fundamental policy regarding
investments in income-producing securities.
Proposal 4.a. For shareholders of each Fund (except Mid Cap Value
Portfolio, Risk-Managed Core Portfolio, Risk-Managed Growth
Portfolio and Small Company Value Portfolio), to approve
certain amendments to the Fund's investment advisory
agreement with Janus Capital Management LLC ("JCM") to
conform to prevailing industry practice.
Proposal 4.b. To approve an amended investment advisory agreement between
the Fund and JCM to change the investment advisory fee rate
from a fixed rate to a rate that adjusts upward or downward
based upon the Fund's performance relative to its benchmark
index for the following Funds:
4.b.i. Mid Cap Value Portfolio
4.b.ii. Risk-Managed Core Portfolio
4.b.iii. Worldwide Growth Portfolio
Proposal 5. For shareholders of Risk-Managed Core Portfolio only, to
approve an amended subadvisory agreement between JCM, on
behalf of the Fund, and Enhanced Investment Technologies,
LLC ("INTECH") to change the subadvisory fee rate paid by
JCM to INTECH from a fixed rate to a rate that adjusts
upward or downward based upon the Fund's performance
relative to its benchmark index.
As noted above, shareholders of certain Funds will be asked to approve
changing the Fund's investment advisory fee structure from a fixed-rate fee to a
fee that varies based on the Fund's performance relative to its benchmark index.
The Trustees believe that moving to a fee schedule that moves upward or downward
based upon the performance of the Fund better aligns the interests of the
shareholders of the Fund with those of the Fund's manager. Pleaseis extremely important, so please read the enclosed Proxy
Statement for a description of the performance-based fee structurecarefully and other
changes you are being asked to approve.
YOUR VOTE IS IMPORTANT TO US. PLEASE TAKE A FEW MINUTES TO REVIEW THE
ENCLOSED PROXY STATEMENT AND COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY
CARD(S), OR VOTE YOUR SHARES BY INTERNET OR TELEPHONE, AS DESCRIBED ON THE
ENCLOSED PROXY CARD(S), UNLESS YOU PLAN TO ATTEND THE SPECIAL MEETING. YOUR
FUND'S BOARD OF TRUSTEES APPROVED THE PROPOSALS AND URGES YOU TO VOTE "FOR" EACH
PROPOSAL.submit your vote. If you have any questions about the
proposals, please call our proxy solicitor, Computershare,D.F. King & Co., Inc., at
1-866-340-4019.1-800-628-8528.
Thank you for your responseconsideration of these important proposals. We value you
as a shareholder and we look forward to preserving your trust as
a valued shareholder over the long-term.our continued relationship.
Sincerely,
/s/ Dennis B. Mullen
Dennis B. Mullen
Chairman of the BoardRobin C. Beery
Robin C. Beery
President and Chief Executive Officer of
Janus Aspen Series
JANUS ASPEN SERIES
MID CAP VALUE PORTFOLIO
151 DETROIT STREET
DENVER, COLORADO 80206
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
Notice is hereby given that a Special Meeting of Shareholders of Mid Cap
Value Portfolio (the "Portfolio"), a series of Janus Aspen Series (the "Trust," each separate series thereof, a "Fund""Trust") will,
has been called to be held at the JW Marriott Hotel, 150 Clayton Lane, Denver,
Colorado 80206, on November
22, 2005October 30, 2008, at 10:00 a.m. Mountain Time (together with
any adjournments or postponements thereof, the "Meeting"). At the Meeting,
shareholders of the Portfolio will be asked to vote on the proposals set forth
below and to transact such other business, if any, as may properly come before
the Meeting:Meeting.
Proposal 1: To elect nine Trustees.approve a new subadvisory agreement between Janus Capital
Management LLC ("Janus Capital"), the Portfolio's investment
adviser, and Perkins, Wolf, McDonnell and Company, LLC, the
Portfolio's current subadviser.
Proposal 2: To approve amendments to the Trust's Amendedan amended and Restated Trust Instrument as follows:
2.a. provides for shareholder votes to be counted
based on each dollar of net asset value held
by the shareholder rather than one vote for
each share.
2.b. permits the Trustees, subject to applicable
federal and state rules and regulations, to
reorganize all or a portion of the Trust or
any of its Funds or classes.
2.c. permits the Trustees, subject to applicable
federal and state rules and regulations, to
liquidate the Trust or any Fund or class
thereof.
Proposal 3: For shareholders of Flexible Bond Portfolio only,
to approve the elimination of the Fund's
fundamental policy regarding investments in
income-producing securities.
Proposal 4.a.: For shareholders of each Fund (except Mid Cap
Value Portfolio, Risk-Managed Core Portfolio,
Risk-Managed Growth Portfolio and Small Company
Value Portfolio), to approve certain amendments to
each Fund's investment advisory agreement with
Janus Capital Management LLC ("JCM") to conform to
prevailing industry practice.
Proposal 4.b.: To approve an amendedrestated investment advisory
agreement between the Trust, on behalf of each
respective Fund,the Portfolio, and
JCM,Janus Capital, to changereallocate the investment
advisory fee rate from a fixed rateobligation to a rate that
adjusts upward or downward based upon the Fund's
performance relative to its benchmark index for
the following Funds:
4.b.i. Mid Cap Value Portfolio
4.b.ii. Risk-Managed Core Portfolio
4.b.iii. Worldwide Growth Portfolio
Proposal 5: For shareholderscompensate any
subadviser engaged by Janus Capital.
Shareholders of Risk-Managed Core Portfolio only, to
approve an amended subadvisory agreement between JCM, on
behalfrecord of the Fund, and Enhanced Investment Technologies,
LLC ("INTECH"), to change the subadvisory fee rate paid by
JCM to INTECH from a fixed rate to a rate that adjusts
upward or downward based upon the Fund's performance
relative to its benchmark index.
Any shareholder who owned shares of a FundPortfolio, as of the close of business on
September 9, 2005,August 20, 2008, will receive notice of the Meeting and will be entitled to vote
at the Meeting.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE URGED TO COMPLETE,
SIGN, AND DATE THE ENCLOSED PROXY CARD(S) AND RETURN IT IN THE ENCLOSED
ADDRESSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES, OR TO
TAKE ADVANTAGE OF THE INTERNET OR TELEPHONIC VOTING PROCEDURES DESCRIBED ON THE
ENCLOSED PROXY CARD(S). PROMPT RETURN OF THE ENCLOSED PROXY CARD(S) (OR VOTING
BY INTERNET OR TELEPHONE) WILL HELP YOUR FUND AVOID THE EXPENSES OF ADDITIONAL
SOLICITATIONS. IF YOU WISH TO ATTEND THE MEETING AND VOTE YOUR SHARES
IN PERSON AT THAT TIME, YOU WILL STILL BE ABLE TO DO SO.
By order of the Board of Trustees,
/s/ Kelley Abbott Howes
Kelley Abbott Howes
ViceRobin C. Beery
Robin C. Beery
President General Counsel
and Secretary
October 17, 2005Chief Executive Officer of
Janus Aspen Series
August 27, 2008
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and may avoid the time and expense to the Trustany delay involved in validating your vote if you fail to sign
your proxy card properly.
1. INDIVIDUAL ACCOUNT: Sign your name exactly as it appears in the
registration on the proxy card.
2. JOINT ACCOUNT: Either party may sign, but the name of the party
signing should conform exactly to the name shown in the registration on the
proxy card.
3. ALL OTHER ACCOUNTS: The capacity of the individual signing the
proxy card should be indicated unless it is reflected in the form of
registration. For example:
REGISTRATION VALID SIGNATURE
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Corporate Account
(1) ABC Corp. ABC Corp.
(2) ABC Corp. John Doe, Treasurer
(3) ABC Corp. c/o John Doe, John Doe
Treasurer
(4) ABC Corp. Profit Sharing John Doe, Trustee
Plan
Trust Account
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee u/t/d Jane B. Doe
12/28/78
Custodial or Estate Account
(1) John B. Smith, Cust. f/b/o John B. Smith
John B. Smith, Jr. UGMA
(2) Estate of John B. Smith John B. Smith, Jr., Executor
October 17, 2005August 27, 2008
JANUS ASPEN SERIES
Balanced Portfolio Large Cap Growth Portfolio
Core Equity Portfolio Mid Cap Growth Portfolio
Flexible Bond Portfolio Mid Cap Value Portfolio
Foreign Stock Portfolio Money Market Portfolio
Forty Portfolio Risk-Managed Core Portfolio
Global Life Sciences Portfolio Risk-Managed Growth Portfolio
Global Technology Portfolio Small Company Value Portfolio
Growth and Income Portfolio Worldwide Growth Portfolio
International Growth Portfolio
MID CAP VALUE PORTFOLIO
151 DETROIT STREET
DENVER, COLORADO 80206
SPECIAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
This is a Proxy Statement for the above listed Janus funds (each, a "Fund"
and collectively, the "Funds"Mid Cap Value Portfolio (the "Portfolio"), each of which is a
series of Janus Aspen Series ("JAS" or the(the "Trust"). Proxies for a Special Meeting of
Shareholders of each
Fundthe Portfolio are being solicited by the Board of Trustees of
the Trust (the "Board," the "Board of Trustees" or the "Trustees") of JAS to approve
the following proposals that have already been approved by the Board.Board:
Proposal 1: To approve a new subadvisory agreement between Janus
Capital Management LLC ("Janus Capital"), the Portfolio's
investment adviser, and Perkins, Wolf, McDonnell and
Company, LLC , the Portfolio's current subadviser.
Proposal 2: To approve an amended and restated investment advisory
agreement between the Trust, on behalf of the Portfolio,
and Janus Capital, to reallocate the obligation to
compensate any subadviser engaged by Janus Capital.
The Special Meeting of Shareholders will be held at the JW Marriott Hotel,
150 Clayton Lane, Denver, Colorado 80206, on November 22, 2005October 30, 2008 at 10:00 a.m.
Mountain Time, or at such later time as may be necessary due to adjournments or
postponements thereof (the "Meeting"). Any shareholder of record who owned
shares of the Portfolio as of the close of business on August 20, 2008 (the
"Record Date"), will receive notice of the Meeting and will be entitled to vote
at the Meeting.
At the Meeting, you will be asked to vote on several proposals affecting
your Fund(s).the proposals. You should read
the entire Proxy Statement before voting. If you have any questions, please call
1-866-340-4019.
Each Fundour proxy solicitor, D.F. King & Co., Inc., at 1-800-628-8528. The Proxy
Statement, Notice of Special Meeting, and the proxy card(s) are first being
mailed to shareholders and contract owners on or about August 27, 2008.
The Portfolio is available in connection with investment in and payments
under variable life insurance contracts and variable annuity contracts offered
by the separate accounts, or subaccounts thereof, of certain life insurance
companies ("Participating Insurance Companies"). The FundsPortfolio may also be
available to certain qualified retirement plans. Individual contract owners are
not the "shareholders" of the Funds.Portfolio. Rather, the Participating Insurance
Companies and their
1
separate accounts are the shareholders. Each Participating Insurance Company may
offer to contract owners the opportunity to instruct it how to vote shares on
the proposals presented at the Meeting.
The Proxy Statement, Notice of
Special Meeting and the proxy card(s) are first being mailed to shareholders and
contract owners on or about October 17, 2005.
1
COPIES OF EACH FUND'S MOST RECENTTHE PORTFOLIO PROVIDES ANNUAL AND SEMIANNUAL REPORTS TO ITS SHAREHOLDERS
THAT HIGHLIGHT RELEVANT INFORMATION, INCLUDING INVESTMENT RESULTS AND A REVIEW
OF PORTFOLIO CHANGES, ARE AVAILABLE UPON REQUEST AND WITHOUT CHARGE
BY CONTACTING YOUR INSURANCE COMPANY OR PLAN SPONSOR.CHANGES. ADDITIONAL COPIES OF EACH FUND'STHE PORTFOLIO'S MOST RECENT ANNUAL
REPORT AND ANY MORE RECENT SEMIANNUAL REPORT ARE ALSO AVAILABLE, WITHOUT CHARGE, BY
CONTACTINGCALLING A JANUS REPRESENTATIVE AT 1-800-525-0020,1-877-335-2687, VIA THE INTERNET AT
WWW.JANUS.COM,WWW.JANUS.COM/INFO, OR BY SENDING A WRITTEN REQUEST TO THE SECRETARY OF THE
TRUST AT 151 DETROIT STREET, DENVER, COLORADO 80206.
2
QUESTIONS AND ANSWERS
The following Questions and Answers are intended to provide an overview of
the information provided in this Proxy Statement and to summarize the proposals
to be considered at the Meeting, or at any adjournment thereof.
WHAT PROPOSALSIS BEING PROPOSED?
You are being asked to approve a new subadvisory agreement between Janus
Capital Management LLC ("Janus Capital"), your Portfolio's investment adviser,
and Perkins, Wolf, McDonnell and Company, LLC ("PWM"), your Portfolio's
subadviser (the "New Subadvisory Agreement"). A form of the proposed New
Subadvisory Agreement is attached as Exhibit A to this Proxy Statement.
You are also being asked to approve an amended and restated investment
advisory agreement between your Portfolio and Janus Capital, which has been
amended to provide that Janus Capital would be responsible for compensating PWM
for its services, rather than PWM being compensated directly by your Portfolio
(the "Amended Advisory Agreement"). A form of the proposed Amended Advisory
Agreement is attached as Exhibit B to this Proxy Statement.
If approved, the Amended Advisory Agreement and the New Subadvisory
Agreement will take effect upon consummation of the transaction discussed below,
which is anticipated to occur in the fourth quarter of 2008.
WHAT IS HAPPENING BETWEEN JANUS CAPITAL AND PWM?
In 2003, Janus Capital acquired 30% of the outstanding ownership interests
of PWM, and also obtained the right to purchase certain additional blocks of the
outstanding ownership interests of PWM. The 70% of PWM that is not currently
owned by Janus Capital is beneficially owned by several affiliates of PWM,
including certain employees of PWM and members of their respective families (the
"Sellers").
On July 7, 2008, Janus Capital and the Sellers entered into a Unit Purchase
Agreement (the "Purchase Agreement"), according to which Janus Capital will
acquire an additional 50% of PWM (the "Pending Acquisition"), pending
shareholder approval of various proposals. In connection with the consummation
of the Pending Acquisition, PWM will change its name to "Perkins Investment
Management LLC." Under the Purchase Agreement, certain current owners of PWM
have retained a 20% beneficial interest in PWM. Janus Capital, however, has the
right to acquire all or a portion of that retained interest under certain
circumstances.
Janus Capital expects PWM to serve as its domestic value equity investment
platform (the "Value Platform"). Management of the Value Platform will be
ultimately determined by a Board of Directors of PWM, which will be controlled
by Janus Capital, together with Janus Capital Group Inc. ("JCGI"), (collectively
3
"Janus"). This Board of Directors is separate and distinct from the Board of
Trustees of the Portfolio.
HOW WILL THE TRANSACTION BETWEEN JANUS CAPITAL AND PWM AFFECT MY PORTFOLIO?
Under applicable law, the Pending Acquisition may be deemed to be a sale of
a "controlling block" of PWM's voting securities and, as a result, the
consummation of the Pending Acquisition could result in an automatic termination
of the current subadvisory agreement between Janus Capital and PWM. Therefore,
shareholders of the Portfolio will be asked to approve a new subadvisory
agreement between Janus Capital and PWM.
Consummation of the Pending Acquisition is not expected to have any
material impact on the principal investment policies, strategies, or risks of
the Portfolio. Your current subadviser, including your current Portfolio
Managers, will still be responsible for the day-to-day management of your
Portfolio immediately following the transaction. In addition, the management fee
rate paid by your Portfolio will not change as a result of the Pending
Acquisition.
If approved by shareholders and if certain other conditions, as described
in the Purchase Agreement or as otherwise agreed to by Janus Capital and PWM,
are satisfied, the Pending Acquisition, the amended and restated investment
advisory agreement, and the subadvisory agreement are each expected to become
effective in the fourth quarter of 2008. After the closing of the Pending
Acquisition, the Portfolio intends to change its name to "Janus Aspen Perkins
Mid Cap Value Portfolio."
WHY AM I BEING ASKED TO VOTE ON?
There are several proposals for shareholder consideration.
- PROPOSAL 1 relates to the election of eight "independent" Trustees and
one "interested" Trustee. The election of Trustees will be determined by
the affirmative vote of a plurality (the greatest number of affirmative
votes) of the shares of all Funds of the Trust voting in person or by
proxy at the Meeting.
- PROPOSAL 2 seeks approval of several amendments to the Trust's Amended
and Restated Trust Instrument ("Trust Instrument"). There are three
separate proposed amendments to the Trust Instrument described in this
Proxy Statement under Proposals 2.a., 2.b. and 2.c. Approval of each
Proposal requires the affirmative vote of a majority of the outstanding
shares of the Trust.
- PROPOSAL 2.A. provides for shareholder votes to be counted based on
each dollar of net asset value held by the shareholder rather than one
vote for each share.
- PROPOSAL 2.B. permits the Trustees, subject to applicable federal and
state law, to reorganize all or a portion of the Trust or any of its
Funds or classes.
- PROPOSAL 2.C. permits the Trustees, subject to applicable federal and
state law, to liquidate the Trust or any Fund or class thereof.
- PROPOSAL 3 applies to Flexible Bond Portfolio only and seeks approval to
eliminate the Fund's fundamental policy to normally invest at least 80%
of its assets in income-producing securities.APPROVE A NEW SUBADVISORY AGREEMENT?
Under the Investment Company Act of 1940, as amended ("1940(the "1940 Act"), approval of Proposal 3
requires the
affirmative votestructure of the lesser of: (i) more than 50%Pending Acquisition could be deemed an "assignment" of the
total outstanding voting securities of the Fund or (ii) 67% or more of
the outstanding voting securities present at the Meeting if more than 50%
of the outstanding voting securities of the Fund are present at the
Meeting in person or by proxy (a "1940 Act Majority").
- PROPOSAL 4.A. seeks approval of an amendment to the investment advisorycurrent subadvisory agreement between Janus Capital Management LLC ("JCM" or "Janus Capital")
and PWM, which automatically
terminates the Trust, on behalf of each of certain Funds, to conform to
prevailing industry practice. Shareholders of each Fund (except Mid Cap
Value Portfolio, Risk-Managed Core Portfolio, Risk-Managed Growth
Portfoliocurrent subadvisory agreement and Small Company Value Portfolio) are being asked to approve
this Proposal with respect to that Fund. Approval of this Proposal
requires the voteapproval of a 1940 Act Majoritynew
subadvisory agreement if PWM is to continue to serve as subadviser. The proposed
New Subadvisory Agreement is substantially similar to the current subadvisory
agreement. The Board of a Fund.
- PROPOSAL 4.B. seeks approval of an amended investment advisory agreement
between JCMTrustees has approved the New Subadvisory Agreement and
the Trust, on behalfauthorized submission of the Funds voting on Proposals
3
4.b.i., 4.b.ii. and 4.b.iii. that changes the investment advisory fee
rate payableagreement to JCM by the Fund from a fixed rate to a rate that adjusts
upward or downward based upon the Fund's performance relative to its
benchmark index. Approval of Proposal 4.b with respect to the following
Funds (each voting separately) requires a 1940 Act Majority of the Fund.
4.b.i. Mid Cap Value Portfolio
4.b.ii. Risk-Managed Core Portfolio
4.b.iii. Worldwide Growth Portfolio
- PROPOSAL 5 applies to Risk-Managed Core Portfolio only and seeks approval
of an amended subadvisory agreement between JCM, on behalf of the Fund,
and Enhanced Investment Technologies, LLC ("INTECH"). Under the amended
subadvisory agreement, the subadvisory fee rate payable by JCM to INTECH
would change from a fixed rate to a rate that adjusts upward or downward
based upon the Fund's performance relative to its benchmark index.
Approval of Proposal 5 requires a 1940 Act Majority of the Fund.
The following table identifies the Funds entitled to vote on each Proposal:
PROPOSALS
---------------------------------------------------------------------------------------------
4.B.
(4.B.I., 4.B.II.,
2 4.A. 4.B.III.) 5
(2.A., 2.B., 2.C.) 3 (ADVISORY (JANUS (INTECH
1 (AMENDMENTS (ELIMINATE AGREEMENT PERFORMANCE- PERFORMANCE-
(TRUSTEE TO THE TRUST FUNDAMENTAL CONFORMING BASED BASED
FUND ELECTION) INSTRUMENT) POLICY) AMENDMENTS) ADVISORY FEE)* ADVISORY FEE)
- ---- --------- ------------------ ----------- ----------- ----------------- -------------
Balanced Portfolio....... X X X
Core Equity Portfolio.... X X X
Flexible Bond
Portfolio............... X X X X
Foreign Stock
Portfolio............... X X X
Forty Portfolio.......... X X X
Global Life Sciences
Portfolio............... X X X
Global Technology
Portfolio............... X X X
Growth and Income
Portfolio............... X X X
International Growth
Portfolio............... X X X
Large Cap Growth
Portfolio............... X X X
Mid Cap Growth
Portfolio............... X X X
Mid Cap Value
Portfolio............... X X X
Money Market Portfolio... X X X
Risk-Managed Core
Portfolio............... X X X X
4
PROPOSALS
---------------------------------------------------------------------------------------------
4.B.
(4.B.I., 4.B.II.,
2 4.A. 4.B.III.) 5
(2.A., 2.B., 2.C.) 3 (ADVISORY (JANUS (INTECH
1 (AMENDMENTS (ELIMINATE AGREEMENT PERFORMANCE- PERFORMANCE-
(TRUSTEE TO THE TRUST FUNDAMENTAL CONFORMING BASED BASED
FUND ELECTION) INSTRUMENT) POLICY) AMENDMENTS) ADVISORY FEE)* ADVISORY FEE)
- ---- --------- ------------------ ----------- ----------- ----------------- -------------
Risk-Managed Growth
Portfolio............... X X
Small Company Value
Portfolio............... X X
Worldwide Growth
Portfolio............... X X X X
- ---------------
* Each Fund will vote separately on this Proposal.
HAS MY FUND'S BOARD APPROVED THE PROPOSALS?
Yes, the Board unanimously recommends that shareholders vote FOR all
applicable proposals.for approval.
WHY AM I BEING ASKED TO ELECTAPPROVE AN AMENDED AND RESTATED INVESTMENT ADVISORY
AGREEMENT?
The Amended Advisory Agreement for your Portfolio will reallocate, from
your Portfolio to Janus Capital, the obligation to compensate any subadviser
engaged by Janus Capital for its services as subadviser. Under the current and
proposed subadvisory relationship, PWM would continue to act as subadviser. The
proposed amendment to the current advisory agreement requires your approval of
an Amended Advisory Agreement.
4
WHAT IS THE RECOMMENDATION OF THE BOARD OF TRUSTEES?
The Trustees are your representatives who oversee management and operations
of your Fund. Certain regulations require that a majorityBoard of Trustees be elected
by shareholders. In addition, underrecommends that you vote "FOR" the 1940 Act, new trustees cannot be
appointed byproposals.
WHO WILL PAY FOR THE PROXY SOLICITATION?
Janus Capital and PWM will jointly bear the Trustees to fill vacancies created by an expansioncosts associated with the
Meeting and the proxy solicitation. Neither you nor your Portfolio will bear any
of those costs.
WHAT WILL HAPPEN IF SHAREHOLDERS OF THE PORTFOLIO DO NOT APPROVE THE PROPOSALS?
If shareholders of the Board
unless, after those appointments, at least two-thirds ofPortfolio do not approve the Trustees have been
elected by shareholders.proposals, the current
investment advisory and subadvisory agreements will remain in effect with
respect to your Portfolio. The Board currently has seven members, of which five
have been elected by shareholders. The Board has determinedTrustees will take such action as it
deems to be in the best interest of the Funds and their shareholders to expand the Board to nine
members, but the Trustees cannot take this action without shareholder vote due
to the 1940 Act restriction noted above. All seven membersPortfolio, including potentially
soliciting additional proxies.
WHO IS ELIGIBLE TO VOTE?
Shareholders of record who owned shares of the current BoardPortfolio at the close of
business on August 20, 2008 (the "Record Date") will be entitled to be present
and two new members will stand for electionvote at the Meeting. WHY IS THE BOARD RECOMMENDING CHANGES TO THE TRUST INSTRUMENT?
The Board is recommending several amendments to the Trust Instrument toThose shareholders for approval as described below.
- Shareholder Voting. Currently, shareholders of each Fund are entitled to
one vote for each full share held and fractional votes for fractional
shares held. If shareholders of the Trust approve the proposed amendments
to the Trust's Trust Instrument, shareholder voting will change from
"share-based" to "dollar-based," as described in Proposal 2.a. Thus, each
holder of a whole or fractional share held in a Fund will be entitled to one vote for each
whole dollar and(and a proportionate fractional vote for each fractional dollardollar) of
net asset value standing in such shareholder's
name. The Board believes that dollar-based voting provides a more
equitable distribution of voting rights for certain votes than the
one-share, one-vote system currently in effect.
5
- Reorganization. Under current Securities and Exchange Commission ("SEC")
regulations, certain mergers and reorganizations of mutual funds can be
approved by the Board of such funds without requiring shareholder vote.
However, this is only the case if a Fund's organizational documents also
allow the Board to take such action. Since solicitation of Fund
shareholders in such a transaction can be costly to a Fund, the Board
believes that changing the Trust's Trust Instrument to be consistent with
current regulation could potentially save Fund shareholders unnecessary
costs and is therefore in the best interest of such Funds. The proposed
amendments to the Trust Instrument provide that the Trustees may,
consistent with applicable federal and state law, unilaterally approve a
reorganization of the Trust, Fund or class thereof.
- Liquidation. The current Trust Instrument permits the Board, without
shareholder approval, to terminate the Trust or any of its Funds under
certain circumstances. The current Trust Instrument does not expressly
provide that the Board may terminate one or more classes of a Fund. In
addition, there may be circumstances other than those described in the
Trust Instrument that the Board may determine is in the best interest of
the Trust, Fund or class to liquidate such Trust, Fund or class. As
proposed, the Trust Instrument expressly permits the Board to liquidate
any one or more classes of a Fund (as well as the Trust or Fund) under
any circumstances that the Board determines are in the best interest of
the class, Fund or Trust.
WHY IS THE BOARD RECOMMENDING THE ELIMINATION OF A FUNDAMENTAL POLICY REGARDING
INVESTMENTS IN INCOME-PRODUCING SECURITIES FOR FLEXIBLE BOND PORTFOLIO?
Eliminating Flexible Bond Portfolio's fundamental investment policy to
normally invest 80% of assets in income-producing securities is recommended
because the Fund has adopted a non-fundamental policy of investing 80% of its
net assets in bonds (consistent with the Fund's name) and such a policy is not
required to be fundamental. The Board believes these two policies are largely
duplicative and thus they are not both necessary. Since the policy related to
income-producing securities is a "fundamental" policy, it can only be changed
with shareholder approval. Notably, the proposed elimination of this investment
policy will not change the investment objectives of the Fund.
WHY IS THE BOARD PROPOSING CONFORMING AMENDMENTS TO CERTAIN FUNDS' INVESTMENT
ADVISORY AGREEMENTS?
Shareholders of certain Funds will be asked to approve amendments to a
Fund's investment advisory agreement with Janus Capital to conform to prevailing
industry practice and clarify that Janus Capital has investment discretion over
the Funds it manages. Such amendments are also in conformity with
recommendations made by an independent compliance consultant engaged by Janus
Capital. Janus Capital intends to continue to manage the Funds and provide the
same level of
6
services under the proposed amended investment advisory agreements. The proposed
conforming amendments will not impact the fee paid by your Fund.
WHY IS THE BOARD PROPOSING MOVING TO A PERFORMANCE-BASED FEE SCHEDULE FOR
CERTAIN FUNDS?
The Board believes that a fee schedule that adjusts based upon the positive
or negative performance of a Fund relative to its benchmark index better aligns
the interests of the manager, Janus Capital, with those of the Fund's
shareholders. Currently, the Funds pay a fee at a fixed annual rate. As
proposed, the investment advisory fee paid to Janus Capital would decrease when
the Fund does not perform well relative to its benchmark index and would
increase during periods when the Fund outperforms its benchmark index. Janus
Capital believes that the proposed advisory fee structure will enable it to
maintain the quality of services it provides to the Funds and to attract and
retain talented investment personnel.
WHAT WILL HAPPEN IF SHAREHOLDERS OF AN APPLICABLE FUND DO NOT APPROVE ALL
APPLICABLE PROPOSED AMENDMENTS TO THE INVESTMENT ADVISORY AGREEMENT FOR THEIR
FUND?
If shareholders of a Fund who are voting on a proposal to amend the Fund's
current investment advisory agreement with Janus Capital do not approve such
proposal(s), as applicable, Janus Capital will continue to manage the Fund and
receive compensation for its services at a flat fixed-rate fee as detailed under
the terms of the current investment advisory agreement.
WHAT SHOULD I DO IF I RECEIVE MORE THAN ONE PROXY CARD?
Because each Fund's shareholders must vote separately, you are being sent a
proxy card for each Fund account that you have. Please voteowned on all applicable
proposals shown on each proxy card that you receive.matters presented at the Meeting.
HOW DO I VOTE MY SHARES?
You can vote your sharesin any one of four ways:
- BY MAIL, by completing and signingsending the enclosed proxy card(s) (signed and mailing the completed proxy card(s)dated) in the
enclosed postage paid
envelope. You may also voteenvelope;
- BY INTERNET, by going to the website listed on your sharesproxy card;
- BY TELEPHONE, using the toll-free number listed on your proxy card; or
- IN PERSON, by telephoneattending the Special Meeting of Shareholders on October
30, 2008 (or any adjournment or viapostponement thereof).
Whichever method you choose, please take the Internet by
followingtime to read the instructions onfull text of
the attached proxy card(s). Shareholders of record
of each Fund at the close of business on September 9, 2005 (the "Record Date")
will receive notice of and be askedProxy Statement before you vote.
It is important that shareholders respond to vote on the proposals, as applicable,
presented atensure that there is a quorum
for the Meeting. If we do not receive your response within a few weeks, you need assistance or have any questions regardingmay
be contacted by D.F. King & Co., Inc., the proposals or howproxy solicitor engaged by Janus
Capital, who will remind you to vote your shares please call 1-866-340-4019.
PROPOSAL 1: ELECTION OF TRUSTEES
Atand help you return your proxy.
If we do not receive sufficient votes to approve the New Subadvisory Agreement
or the Amended Advisory Agreement by the date of the Meeting, shareholders of all Funds will be askedwe may adjourn the
Meeting to elect nine
individualsa later date so that we can continue to constitute the Trust's Board of Trustees. The nine nominees for
election as Trustees who receive the greatest number of votes from shareholders
7seek additional votes.
5
voting in person or byIF I SEND MY VOTE IN NOW AS REQUESTED, CAN I CHANGE IT LATER?
Yes. You may revoke your proxy vote at any time before it is voted at the
Meeting will be elected as Trustees ofby: (i) delivering a written revocation to the Trust. These nine nominees were selected after careful consideration by the
Trust's Nominating and Governance Committee, a committee consisting entirely of
Trustees who are not "interested" persons (as defined in Section 2(a)(19) of the
1940 Act)Secretary of the Trust or JCM (the "Independent Trustees") and the nominations
were approved by all of the current Independent Trustees. Seven of the nine
nominees currently serve as Trustees of the Trust. The other two nominees were
each recommended by a current Independent Trustee. Each nominee has consented to
serve as a Trustee and to being named in this Proxy Statement. The persons named
as proxies on the enclosed proxy card(s) will vote for the election of the
nominees named below unless authority to vote for any or all of the nominees is
withheld.
If elected, each Trustee will serve as a Trustee until the next meeting of
shareholders, if any, called for the purpose of electing Trustees or until the
election and qualification of a successor. If a Trustee sooner dies, resigns,
retires (required at age 72) or is removed as provided in the organizational
documents of the Trust, the Board may, in its discretion and subject to the 1940
Act, select another person to fill the vacant position. If any or all of the
nominees should become unavailable for election at the Meeting due to events not
now known or anticipated, the persons named as proxies will vote for such other
nominee or nominees as the current Independent Trustees may recommend.
The Funds are not required, and do not intend, to hold annual shareholder
meetings for the purpose of electing Trustees. However, under the terms of a
settlement reached between JCM and the SEC in August 2004, commencing in 2005
and not less than every fifth calendar year thereafter, the Trust will hold a
meeting of shareholders to elect Trustees. Shareholders also have the right to
call a meeting to remove a Trustee or to take other action described in the
Trust's organizational documents. Also, if at any time less than a majority of
the Trustees holding office has been elected by the Trust's shareholders, the
Trustees then in office will promptly call a shareholder meeting for the purpose
of electing Trustees.
The nominees for Trustees and their backgrounds are shown on the following
pages. This information includes each nominee's name, age, principal
occupation(s) during the past five years and other information about the
nominee's professional background, including other directorships the nominee
holds. The address of each nominee is
151 Detroit Street, Denver, Colorado 80206. All nominees listed below, other than Mr. Contro80206; (ii) submitting a subsequently
executed proxy vote; or (iii) attending the Meeting and Ms. Wolf,voting in person.
Even if you plan to attend the Meeting, we ask that you return your proxy.
This will help us ensure that an adequate number of shares are currently Trusteespresent at the
Meeting for consideration of the Trustproposals.
WHAT IS THE REQUIRED VOTE TO APPROVE THE PROPOSALS?
Approval of each proposal will require the affirmative vote of a "majority
of the outstanding voting securities" of the Portfolio within the meaning of the
1940 Act. A "majority of the outstanding voting securities" means the lesser of
(i) 67% or more of the shares of the Portfolio present at the Meeting, if the
holders of more than 50% of the outstanding shares are present or represented by
proxy, or (ii) more than 50% of the outstanding shares (a "1940 Act Majority").
One-third of the outstanding shares entitled to vote shall constitute a quorum.
Additionally, implementation of the New Subadvisory Agreement and have served in that capacity since
originally elected or appointed. In addition, each nominee, other than Mr.
Controthe
Amended Advisory Agreement is contingent upon approval of both Proposals within
this Proxy Statement, as well as approval of the same proposals by shareholders
of Janus Mid Cap Value Fund and Ms. Wolf, is currently a trusteeJanus Adviser Mid Cap Value Fund, which are
series, respectively, of Janus Investment Fund ("JIF") and Janus Adviser Series
("JAD"), other registered investment companies advised by JCM (JIF, JASJanus Capital. Each of
those separate proposals is described in other proxy statements. In addition,
implementation of each Proposal is contingent upon the closing of the Pending
Acquisition and JAD are collectively referredother conditions as described in the Purchase Agreement or
otherwise agreed to hereinby Janus Capital and PWM.
WHO SHOULD I CALL FOR ADDITIONAL INFORMATION ABOUT THIS PROXY STATEMENT?
Please call D.F. King & Co., Inc., the proxy solicitor for the Portfolio,
at 1-800-628-8528.
6
PROPOSAL 1
APPROVE A NEW SUBADVISORY AGREEMENT BETWEEN
JANUS CAPITAL AND PWM
INTRODUCTION
PWM currently serves as subadviser to the Portfolio pursuant to a
subadvisory agreement between PWM and Janus Capital, dated July 1, 2004
(together with any amendments thereto, the "Current Subadvisory Agreement" or
"Agreement").
In 2003, Janus Capital acquired 30% of the outstanding ownership interests
of PWM, and also obtained the right to purchase certain additional blocks of the
outstanding ownership interests of PWM. The 70% of PWM that is not currently
owned by Janus Capital is beneficially owned by several affiliates of PWM,
including certain employees of PWM and members of their respective families.
On July 7, 2008, Janus Capital and the Sellers entered into a Purchase
Agreement, pursuant to which Janus Capital will acquire an additional 50% of PWM
(as previously defined, the "Pending Acquisition"), pending shareholder approval
of various proposals. In connection with the consummation of the Pending
Acquisition, PWM will change its name to "Perkins Investment Management LLC."
Under the Purchase Agreement, certain current owners of PWM have retained a 20%
beneficial interest in PWM. Janus Capital, however, has the right to acquire all
or a portion of that retained interest under certain circumstances.
The 1940 Act requires that an agreement under which a registered investment
adviser serves as the "Janus Funds").
Collectively,subadviser to an investment company must provide for the
Janus Funds consist of 65 series as of September 1, 2005.
Except for Mr. Bailey, each Trustee or nominee is not an "interested"
personautomatic termination of the Trust, as that term isagreement in the event of its "assignment" (as
defined in the 1940 Act. Mr. BaileyAct). A sale of a "controlling block" of an investment
adviser's voting securities generally is treated asdeemed to result in an 8
interested person of the Trust by virtue of his past positions and continuing
relationships with JCM.
NOMINEES AS INDEPENDENT TRUSTEES
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX PRINCIPAL OCCUPATION(S) DURING PAST
LENGTH OF OVERSEEN OR TO BE FIVE YEARS
NAME, AGE AND POSITION(S) TIME SERVED OVERSEEN BY AND OTHER DIRECTORSHIPS
WITH TRUST FOR THE TRUST NOMINEE HELD BY NOMINEE
- ------------------------- ------------- ----------------- -----------------------------------
Jerome S. Contro Partner, Tango Group, a private
Age 49 investment firm (since 1999).
Nominee N/A 65 Trustee and Chairman of RS
Investment Trust (since 2001);
Director, IZZE Beverages; and
Director, MyFamily.com, Inc.
(genealogical research website).
William F. McCalpin Executive Vice President and Chief
Age 47 Operating Officer of The
Trustee 6/02-Present 65 Rockefeller Brothers Fund (a
private family foundation). Trustee
and Vice President, Asian Cultural
Council.
John W. McCarter, Jr. President and Chief Executive
Age 66 Officer of The Field Museum of
Trustee 6/02-Present 65 Natural History (Chicago, IL).
Chairman of the Board and Director,
Divergence Inc. (biotechnology
firm); Director, A.M. Castle & Co.
(metals distributor) and W.W.
Grainger, Inc. (industrial
distributor); and Trustee of Harris
Insight Funds Trust (19
portfolios), WTTW (Chicago public
television station), the University
of Chicago, and Chicago Public
Education Fund.
Dennis B. Mullen Chairman and Chief Executive
Age 61 Officer, Red Robin Gourmet Burgers,
Chairman 3/04-Present Inc. (since 2005). Formerly,
Trustee 9/93-Present 65* private investor. Director, Red
Robin Gourmet Burgers, Inc.;
Director, Janus World Funds Plc
(Dublin-based, non-U.S. funds).
- ---------------
* Mr. Mullen also serves as director of Janus World Funds Plc ("JWF"), an
offshore entity, consisting of 21 portfolios. Including JWF and the 65
portfolios comprising the Janus Funds, Mr. Mullen oversees 86 portfolios.
9
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX PRINCIPAL OCCUPATION(S) DURING PAST
LENGTH OF OVERSEEN OR TO BE FIVE YEARS
NAME, AGE AND POSITION(S) TIME SERVED OVERSEEN BY AND OTHER DIRECTORSHIPS
WITH TRUST FOR THE TRUST NOMINEE HELD BY NOMINEE
- ------------------------- ------------- ----------------- -----------------------------------
James T. Rothe Co-founder and Managing Director,
Age 61 Roaring Fork Capital Partners
Trustee 1/97-Present 65 (private equity firm) and Professor
Emeritus of Business, University of
Colorado, Colorado Springs, CO
(since 2004). Formerly, Professor
of Business, University of Colorado
(2002-2004); and Distinguished
Visiting Professor of Business
(2001-2002), Thunderbird University
(American Graduate School of
International Management), Phoenix,
AZ. Director, Red Robin Gourmet
Burgers, Inc.
William D. Stewart Corporate Vice President and
Age 60 General Manager of MKS
Trustee 9/93-Present 65 Instruments-HPS Products, Boulder,
CO (a manufacturer of vacuum
fittings and valves).
Martin H. Waldinger Private Investor and Consultant to
Age 66 California Planned Unit
Trustee 9/93-Present 65 Developments. Formerly, CEO and
President, Marwal, Inc. (homeowner
association management company).
10
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX PRINCIPAL OCCUPATION(S) DURING PAST
LENGTH OF OVERSEEN OR TO BE FIVE YEARS
NAME, AGE AND POSITION(S) TIME SERVED OVERSEEN BY AND OTHER DIRECTORSHIPS
WITH TRUST FOR THE TRUST NOMINEE HELD BY NOMINEE
- ------------------------- ------------- ----------------- -----------------------------------
Linda S. Wolf Retired. Formerly, Chairman and
Age 57 Chief Executive Officer, Leo
Nominee N/A 65 Burnett (Worldwide) (advertising
agency) (2001-2005); President, Leo
Burnett (USA) (advertising agency)
(1996-2000). Director, Wal-Mart;
Director, The Field Museum of
Natural History (Chicago, IL);
Director, Children's Memorial
Hospital (Chicago, Il); Director,
Chicago Council on Foreign
Relations; Director, Economic Club
of Chicago.
NOMINEE AS INTERESTED TRUSTEE
Thomas H. Bailey Retired. Formerly, President
Age 67 (1978-2002) and Chief
Trustee 5/93-Present 65 Executive Officer
(1994-2002), Janus Capital
or Janus Capital
Corporation. Chairman and
Director (1978-2002), Janus
Capital Corporation;
Director (1997-2001), Janus
Distributors, Inc.; and
President and Director
(1994-2002), the Janus
Foundation.
GENERAL INFORMATION REGARDING THE BOARD OF TRUSTEES
The Trust is governed by the Board of Trustees, which is responsible for
major decisions relating to each Fund's investment objective(s), policies and
techniques. The Trustees also supervise the operation of the Funds by officers
of the Funds and JCM (which is responsible for the Trust's day-to-day
operations). The Trustees meet periodically throughout the year to oversee the
Trust's activities, review each Fund's investment performance and the quality of
other services, including administration, distribution, and shareholder
servicing, provided to each Fund and its shareholders by JCM, any subadvisers to
a Fund, and any affiliates of JCM.
At least annually, the Trustees review and evaluate the fees and operating
expenses paid by each Fund for these services and negotiate such changes as they
deem appropriate. In carrying out these responsibilities, the Trustees are
assisted by the Trust's independent auditor (who reports directly to the Trust's
Audit Committee), independent counsel, an independent fee consultant and other
experts as
11
appropriate, all of whom are selected by the Independent Trustees. The
Independent Trustees vote separately to approve all financial arrangements and
other agreements with each Fund's investment adviser and any affiliatesassignment of
the investment adviser. The Trust's Independent Trustees meet regularlyadviser's advisory agreements. Because the Pending Acquisition
may be deemed to be the sale of a "controlling block" of PWM's voting
securities, the consummation of that transaction could result in executive
session.
There were seven regular meetingsthe assignment
and five special meetingsautomatic termination of the Trustees
held duringCurrent Subadvisory Agreement. Accordingly, the
Trust's fiscal year ended December 31, 2004. Each Trustee
attended at least 75%New Subadvisory Agreement between PWM and Janus Capital, on behalf of the
meetings during that fiscal year. Since the TrustPortfolio, is not required to convene annual shareholder meetings, there is no policy
requiring Trustee attendance at such meetings.
The Board of Trusteesbeing proposed for election at the Meeting will be
comprised of eight Independent Trustees and one individual who is considered an
"interested" Trustee. The SEC has adopted rules that require at least 75%approval by shareholders of the board members of a fund to be "independent" if the fund takes advantage of
certain exemptive rules under the 1940 Act. If the slate of nominees is approved
by shareholders, more than 85%Portfolio. A
form of the Board of Trustees will be Independent.
COMMITTEES OF THE BOARD OF TRUSTEES
The Board of Trustees has seven standing committees that perform
specialized functions: an Audit Committee, a Brokerage Committee, an Investment
Oversight Committee, a Legal and Regulatory Committee, a Money Market Committee,
a Nominating and Governance Committee, and a Pricing Committee. Each committeeproposed New Subadvisory Agreement is comprised entirely of Independent Trustees and has a written charter that
delineates its duties and powers. Each committee reviews and evaluates matters
as specified in its charter and makes recommendations to the Trustees as it
deems appropriate. Each committee may utilize the resources of the Trust's
counsel, counsel to the Independent Trustees, independent auditors and other
experts. The committees normally meet in conjunction with regular meetings of
the Trustees but may convene at other times (in person or by telephone) as
deemed appropriate or necessary. The membership and chairperson of each
committee is appointed by the Trustees upon recommendation of the Trust's
Nominating and Governance Committee.
Audit Committee. The Audit Committee reviews the Trust's financial
reporting process, the system of internal controls over financial reporting,
disclosure controls and procedures, Form N-CSR filings and the audit process.
The Committee's review of the audit process includes, among other things,
recommendation of the appointment and compensation of the Trust's independent
auditors, oversight of the independent auditors, and pre-approval of all audit
and non-audit services. The Committee receives annual representations from the
Trust's independent auditor that performs audits of the Funds' financial
statements as to its independence. Currently, the members of the Audit Committee
are John W. McCarter, Jr. (Chairman), Dennis B. Mullen and William D. Stewart.
The Committee held four meetings during the fiscal year ended December 31, 2004.
12
Brokerage Committee. The Brokerage Committee reviews and makes
recommendations regarding matters related to the Trust's use of brokerage
commissions and placement of portfolio transactions, including policies
regarding the allocation of brokerage commissions, directed brokerage,
"step-out" arrangements and any soft dollar credits. Currently, the members of
the Brokerage Committee are James T. Rothe (Chairman), William F. McCalpin and
Dennis B. Mullen. The Committee held four meetings during the fiscal year ended
December 31, 2004.
Investment Oversight Committee. The Investment Oversight Committee,
established in September 2004, oversees the investment activities of Funds that
invest in equity securities and/or fixed-income securities. The Committee meets
regularly with investment personnel at JCM and of any subadviser to a Fund to
review the investment performance and strategies of the Funds in light of their
stated investment objectives and policies. Prior to establishment of this
Committee, the Committee's functions were performed at least quarterly by all of
the Trustees. Currently, the members of the Investment Oversight Committee are
Dennis B. Mullen (Chairman), William F. McCalpin, John W. McCarter, Jr., James
T. Rothe, William D. Stewart and Martin H. Waldinger. The Committee held three
meetings during the fiscal year ended December 31, 2004.
Legal and Regulatory Committee. The Legal and Regulatory Committee
oversees compliance with various procedures adopted by the Trust, reviews
certain regulatory filings made with the SEC, and oversees the implementation
and administration of the Trust's Proxy Voting Guidelines. The Committee is also
responsible for monitoring the Trust's compliance with regulatory orders or
settlement agreements that have a bearing on the Trust. Currently, the members
of the Legal and Regulatory Committee are William F. McCalpin (Chairman),
William D. Stewart and Martin H. Waldinger. The Committee held four meetings
during the fiscal year ended December 31, 2004.
Money Market Committee. The Money Market Committee reviews various matters
related to the operations of the Trust's money market funds, including
compliance with the Trust's Money Market Fund Procedures and Rule 2a-7 under the
1940 Act. Currently, the members of the Money Market Committee are Martin H.
Waldinger (Chairman), William F. McCalpin and James T. Rothe. The Committee held
four meetings during the fiscal year ended December 31, 2004.
Nominating and Governance Committee. The Nominating and Governance
Committee consults with JCM management in developing the agenda for each regular
meeting of the Board, reviews and recommends changes to Trustee compensation,
and oversees the administration of, and ensures compliance with, the Governance
Procedures and Guidelines adopted by the Trustees. The Committee is also
responsible for identifying and nominating candidates for appointment as
Trustees. Consistent with the Trust's organizational documents and procedures
adopted by the Committee, the Committee will consider Trustee nominations made
by shareholders. Shareholders of a Fund may submit names of potential candidates
for consideration by the Committee by submitting their recommendations to the
Trust's Secretary, at the address of the principal executive office of the
Trust, in
13
accordance with procedures adopted by the Committee. A copy of such procedures
is included as Appendix 1 to the Nominating and Governance Committee Charter attached to this Proxy
Statement as Exhibit A. The Committee's principal criterion for selectionterms of candidates for the New Subadvisory Agreement are
substantially similar in all material respects to the terms of the Current
Subadvisory Agreement and are described in this Proxy Statement. The Board of
Trustees is their ability to contribute to the overall functioning of
the Board of Trustees and to carry out the responsibilities of the Trustees. In
considering a potential candidate's qualifications to serve as a Trustee, the
Committee may also take into account a wide variety of other criteria,
including, but not limited to: (i) knowledge of the investment company industry,
(ii) relevant experience, (iii) educational background, (iv) reputation for high
ethical standards and personal and professional integrity, (v) financial,
technical or other expertise, (vi) time commitment to the performance of duties
of a Trustee, (vii) stature commensurate with the responsibility of representing
Fund shareholders, and (viii) if a candidate is for an Independent Trustee
position, that the person meets the independence criteria established by the
1940 Act and the Governance Procedures and Guidelines adopted by the Trustees.
The Committee may use any process it deems appropriate for the purpose of
evaluating candidates for Trustee, which may include, without limitation,
personal interviews, background checks, written submissions by the candidates
and third party references. There is no difference in the manner by which the
Committee will evaluate nominees when the nominee is submitted by a Fund
shareholder.
Currently, the members of the Nominating and Governance Committee are
Dennis B. Mullen (Chairman), John W. McCarter, Jr. and William D. Stewart. The
Committee held four meetings during the fiscal year ended December 31, 2004.
Pricing Committee. The Pricing Committee determines the fair value of
restricted and other securities for which market quotations are not readily
available, or that are deemed not to be reliable, pursuant to procedures adopted
by the Trustees. The Committee also reviews other matters related to pricing the
Funds' securities. Currently, the members of the Pricing Committee are William
D. Stewart (Chairman), James T. Rothe and Martin H. Waldinger. The Committee
held fifteen meetings during the fiscal year ended December 31, 2004.
SHARE OWNERSHIP
The Trustees believe that each Trustee should invest in one or more Funds
(but not necessarily all) for which he or she serves as Trustee, to the extent
the Trustee is directly eligible to do so. The amount of such investment, and
Janus Fund(s) in which a Trustee determines to invest, will be dictated by the
Trustee's individual financial circumstances and investment goals.
The Trustees and nominees cannot directly own shares of a Fund without
purchasing an insurance contract through one of the Participating Insurance
Companies or through a qualified plan. As a result, as of September 13, 2005,
none of the Trustees or nominees for election at the Meeting owned any Fund
shares. In addition, as of September 13, 2005, the nominees, Trustees and
executive officers of
14
the Funds, individually and collectively as a group, owned less than 1% of the
outstanding shares of each Fund. The Trustees and nominees own shares of other
Janus funds that are similarly managed as the Funds but offered through
different distribution channels. The following table shows the aggregate dollar
range of equity securities in all Janus Funds (65 funds as of September 13,
2005) owned directly or beneficially as of September 13, 2005 by each Trustee
and by the nominees for election at the Meeting.
AGGREGATE DOLLAR RANGE OF EQUITY
SECURITIES IN ALL FUNDS OVERSEEN OR TO BE
OVERSEEN BY TRUSTEE/NOMINEE IN
NAME OF TRUSTEE/NOMINEE JANUS FAMILY OF FUNDS
- ----------------------- -----------------------------------------
Independent Trustees
William F. McCalpin............. Over $100,000
John W. McCarter, Jr. .......... Over $100,000
Dennis B. Mullen................ Over $100,000
James T. Rothe.................. Over $100,000
William D. Stewart.............. Over $100,000
Martin H. Waldinger............. Over $100,000
Trustee Nominees
Jerome S. Contro................ Over $100,000
Linda S. Wolf................... Over $100,000
Interested Trustee
Thomas H. Bailey................ Over $100,000
COMPENSATION OF TRUSTEES
The Trust pays each Independent Trustee an annual retainer plus a fee for
each regular in-person meeting of the Trustees attended and a fee for attending
an in-person committee meeting convened on a date other than that of a regularly
scheduled Trustee meeting. Each current Independent Trustee also receives fees
from other Janus funds for serving as Trustee of those funds. JCM pays persons
who are directors, officers or employees of JCM or any affiliate thereof, or any
Trustee considered an "interested" Trustee, for their services as Trustees or
officers of the Fund. None of the Trustees are entitled to receive any
retirement or deferred compensation benefits from the Funds.
The Trust's Nominating and Governance Committee, which consists solely of
Independent Trustees, annually reviews and recommends to the Independent
Trustees any changes to compensation paid by the Funds to the Independent
Trustees. The Independent Trustees also meet at least annually to review their
fees in connection with the recommendations of the Nominating and Governance
Committee, to ensure that such fees continue to be appropriate in light of their
responsibilities as well as in relation to fees paid to trustees of other mutual
fund complexes. The following table shows the fees paid to each current
Independent
15
Trustee by the Trust for the fiscal year ended December 31, 2004 and by all of
the Janus Funds during calendar year 2004:
AGGREGATE TOTAL COMPENSATION
COMPENSATION FROM THE TRUST AND THE
NAME OF INDEPENDENT TRUSTEE FROM THE TRUST(1) JANUS FUND COMPLEX(2)
- --------------------------- -------------------------- ------------------------------
William F. McCalpin $33,679 $243,000
John W. McCarter, Jr. $34,093 $243,000
Dennis B. Mullen(3) $53,206 $429,205
James T. Rothe $34,914 $302,000
William D. Stewart $36,525 $252,000
Martin H. Waldinger $34,290 $247,500
- ---------------
(1) Includes compensation for service on behalf of 17 Funds (as of December 31,
2004).
(2) For Mr. Rothe, includes compensation for service on the boards of four Janus
trusts comprised of 61 portfolios (as of December 31, 2004). For Mr. Mullen,
includes compensation for service on the boards of five Janus trusts
comprised of 82 portfolios (21 portfolios of which are for service on the
board of Janus World Funds Plc, an offshore product) (as of December 31,
2004). For Messrs. McCarter, McCalpin, Stewart and Waldinger, includes
compensation for service on the boards of three Janus trusts comprised of 59
portfolios (as of December 31, 2004).
(3) For compensation received from the Trust, includes additional compensation
paid for service as Independent Chairman of the Board of Trustees. For
aggregate compensation received from the Janus Fund Complex, includes
additional compensation paid for service as Independent Chairman of the
boards of three Janus trusts, including the Trust, comprised of 59
portfolios (as of December 31, 2004).
OFFICERS
The officers of the Trust and their principal occupations are set forth in
Exhibit B to this Proxy Statement.
SHAREHOLDER COMMUNICATIONS
The Trustees provide for shareholders to send written communications to the
Trustees via regular mail. Written communications to the Trustees, or to an
individual Trustee, should be sent to the attention of the Trust's Secretary at
the address of the Trust's principal executive office. All such communications
received by the Trust's Secretary shall be promptly forwarded to the individual
Trustee to whom they are addressed or to the full Board, as applicable. If a
communication does not indicate a specific Trustee, it will be sent to the Chair
of the Nominating and Governance Committee and the outside counsel to the
Independent Trustees for further distribution as deemed appropriate by such
persons. The Trustees may further develop and refine this process as deemed
necessary or desirable.
THE BOARD OF TRUSTEES, INCLUDING ALL OF THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF EACH FUND VOTE FOR EACH NOMINEE.
16
PROPOSAL 2: APPROVE AMENDMENTS TO THE TRUST'S AMENDED
AND RESTATED TRUST INSTRUMENT
On September 20, 2005, the Board of Trustees approved several amendments to
the Trust's Trust Instrument andhas authorized the submission of those amendmentsthe New Subadvisory Agreement to
shareholders of the Trust's shareholdersPortfolio for their authorization.
As proposed, the amendments: (i) provide for shareholder votesapproval.
INFORMATION CONCERNING THE SUBADVISER
PWM, to be counted based upon each dollar of net asset value ("NAV") rather than one vote
for each share; (ii) permitrenamed "Perkins Investment Management LLC" following the
Trustees, subject to applicable federal and
state law, to reorganize all or a portionconsummation of the TrustPending Acquisition, is principally located at 311 S. Wacker
Drive, Suite 6000, Chicago, Illinois 60606. PWM is a subsidiary of Janus Capital
7
and is registered as an investment adviser with the Securities and Exchange
Commission (the "SEC"). PWM and its predecessor have been in the investment
management business since 1984. PWM also serves as investment adviser or
anysubadviser to separately managed accounts and other registered investment
companies. Janus Capital currently has a 30% ownership stake in PWM. As of its FundsMarch
31, 2008, PWM had $10 billion in assets under management. It is expected that,
immediately following the Pending Acquisition, the same investment and senior
management personnel will remain responsible for the day-to-day operations of
PWM.
Assuming the closing of the Pending Acquisition, PWM will be 80% owned by
Janus Capital, located at 151 Detroit Street, Denver, Colorado 80206, and 20%
owned by a newly formed limited liability company called "Omni Investment
Holdings LLC," which in turn will be owned by certain principal employees of
PWM, among others.
PWM acts as investment adviser or classes without shareholder approval;subadviser to other investment companies
with investment objectives and (iii) permitstrategies similar to those of the Trustees, subject to
applicable federal and state law, to liquidate the Trust or any Fund or class
without shareholder approval. Such amendments require shareholder approval. The
Trust Instrument, marked to show the proposed amendments,Portfolio.
Information on those similar investment companies is set forth in Exhibit C to
this Proxy Statement.
PROPOSAL 2.A. SHAREHOLDER VOTING RIGHTSPRINCIPAL EXECUTIVE OFFICERS AND DIRECTORS OF THE SUBADVISER. Information
regarding the principal executive officers and directors of PWM is set forth
below. Unless otherwise noted, the principal address for each person listed
below, as it relates to his duties with PWM, is the same as that of PWM.
NAME POSITION WITH PWM
- ---- -----------------
Robert Perkins................ President, Manager
Gregory Wolf.................. Chief Operating Officer
N. Theodore Hans.............. Chief Compliance Officer
Jeffrey Kautz................. Chief Investment Officer, Manager
Gary Black*................... Manager
- ---------------
* Principal address is 151 Detroit Street, Denver, Colorado 80206.
Following the consummation of the Pending Acquisition, the composition of
the seven-person Board of Directors of PWM will consist of three representatives
from PWM and four representatives from Janus.
COMPARISON OF THE CURRENT AND NEW SUBADVISORY AGREEMENTS
The Current Subadvisory Agreement and the New Subadvisory Agreement are
substantially similar, except for the proposed reallocation to Janus Capital of
the obligation to compensate PWM, or any subadviser engaged by Janus Capital.
Differences also include dates of execution and termination provisions, and the
New Subadvisory Agreement reflects the new name of PWM as "Perkins Investment
8
Management LLC." A description of the Current and New Subadvisory Agreements
follows.
Subadvisory Services. Under the current Trust Instrument, each holderterms of a whole sharethe Current Subadvisory
Agreement, PWM: (i) manages the investment operations of the Portfolio; (ii)
keeps Janus Capital fully informed as to the valuation of assets of the
Portfolio, its condition, investment decisions and considerations; (iii)
maintains all books and records required under federal securities law relating
to day-to-day portfolio management of the Portfolio; (iv) performs certain
limited related administrative functions; and (v) provides the Trustees and
Janus Capital with economic, operational, and investment data and reports.
Additionally, PWM determines what securities and other assets of the Portfolio
will be acquired, held, disposed of or loaned, in conformity with the investment
objectives, policies, and restrictions established by the Trustees and set forth
in the Trust's registration statement.
The terms of the New Subadvisory Agreement relating to the provision of
such advisory services are the same as those of the Current Subadvisory
Agreement.
Compensation. In return for the services provided, PWM is entitled to
onereceive a subadvisory fee, paid by the Portfolio, that is accrued daily and
payable monthly at an annual rate equal to 50% of the investment advisory fee
otherwise payable by the Portfolio to Janus Capital (calculated after any
applicable performance fee adjustments, fee waivers, and expense
reimbursements). Under the Current Subadvisory Agreement, the Portfolio pays the
subadvisory fee directly to PWM. Under the New Subadvisory Agreement, Janus
Capital, and not the Portfolio, pays PWM its subadvisory fee.
The compensation payable by the Portfolio to Janus Capital is described
below under Proposal 2.
During the most recent fiscal year ended December 31, 2007, the Portfolio
paid subadvisory fees of $243,220 to PWM. If the New Subadvisory Agreement had
been in effect, PWM would have received the same amount of fees except those
fees would have been paid by the Portfolio to Janus Capital and Janus Capital in
turn would have paid PWM.
Liability. The Current Subadvisory Agreement provides that PWM, and any
affiliate of PWM performing services for the Portfolio contemplated thereunder
(including any managers, members, owners, directors, and officers of PWM and
such affiliates), shall not be liable for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or omission
taken with respect to the Portfolio, except for willful misfeasance, bad faith
or gross negligence in the performance of their respective duties, or by reason
of reckless disregard of their respective obligations and duties under the
Agreement, and except to the extent otherwise provided by law.
The provisions of the New Subadvisory Agreement with respect to liability
are the same as those of the Current Subadvisory Agreement.
9
Termination of the Agreement. The Current Subadvisory Agreement terminates
automatically in the event of its assignment or upon the termination of the
investment advisory agreement with Janus Capital. The Current Subadvisory
Agreement may be terminated, without penalty, either by the vote as to any matter on which the holder is entitled to vote,
and each holder of a fractional share shall1940 Act
Majority of the Portfolio's outstanding voting securities or by the Board, upon
60 days' written notice to PWM. The Current Subadvisory Agreement may also be
entitledterminated, without penalty, by Janus Capital or the Trust: (i) by giving 60
days' written notice of termination to PWM; (ii) if PWM materially breaches any
of the representations and warranties set forth in the Agreement and such breach
is not cured within 20 days' of notice thereof; or (iii) if PWM becomes unable
to discharge its duties and obligations under the Agreement. Additionally, the
Agreement may be terminated by PWM (i) upon a proportionate
fractional vote.material breach by Janus Capital
of any of the obligations set forth in the Agreement, if such breach is not
cured within 20 days after notice thereof, or (ii) upon three years' written
notice.
The proposed amendmentNew Subadvisory Agreement also terminates automatically in the event of
its assignment or upon termination of the Portfolio's investment advisory
agreement. The New Subadvisory Agreement may be terminated at any time, without
penalty, either by the shareholders of the Portfolio acting by vote of at least
a majority of its outstanding voting securities, or by the Trustees, provided in
either case that 90 days' advance written notice of termination be given to PWM
at its principal place of business. The New Subadvisory Agreement may also be
terminated (i) by Janus Capital or by PWM at any time, without penalty, by
giving 90 days' advance written notice of termination to the other party, or
(ii) by Janus Capital or the Trust, Instrument would give
shareholders one vote for each whole dollarwithout advance notice, if PWM becomes
unable to discharge its duties and a fractional vote for each
fractional dollar of NAVobligations under the New Subadvisory
Agreement.
Additional Information. Each Trustee is an "Independent Trustee," meaning
that he or she is not an "interested person" (as defined by the 1940 Act) of the
applicable sharesTrust. The Current Subadvisory Agreement, dated July 1, 2004, as amended June
14, 2006, was last submitted to shareholders for approval on March 7, 2003 in
connection with the reorganization of the Portfolio from another fund complex
into the Janus fund complex. At a meeting of the Trustees held on December 14,
2007, the Trustees approved the continuation of the Current Subadvisory
Agreement. The Portfolio's Current Subadvisory Agreement continues in effect
until February 1, 2009, and thereafter from year to year as long as such
continuance is approved at least annually by a majority of the Independent
Trustees, and by either a majority of the outstanding voting securities of the
Portfolio or the Board of Trustees. In conjunction with their approval of the
continuance of the Current Subadvisory Agreement, the Board noted that at a
meeting held on November 6, 2007, they had previously approved the New
Subadvisory Agreement and that such new agreement would not take effect unless
approved by shareholders. A discussion of the Board's considerations and
recommendations concerning the New Subadvisory Agreement at the November 6, 2007
board meeting follows below.
10
The New Subadvisory Agreement is contingent upon, and will become effective
upon consummation of, the closing of the Pending Acquisition, subject to certain
other conditions. The Current Subadvisory Agreement will be in effect until it
terminates in accordance with its terms, including or until the consummation of
the transaction between PWM and Janus Capital. If approved, the New Subadvisory
Agreement will be in effect for an initial term ending on February 1, 2009, and
may continue in effect thereafter from year to year if such continuance is
specifically approved at least annually by either the Board of Trustees or the
affirmative vote of a 1940 Act Majority of the outstanding voting securities of
the Portfolio and, in either event, by the vote of a majority of the Independent
Trustees, cast in person at a meeting called for such purpose.
BOARD APPROVAL AND RECOMMENDATION
The Trustees of Janus Aspen Series, all of whom are Independent Trustees
and none of whom has ever been affiliated with Janus Capital or PWM, considered
the New Subadvisory Agreement for the Portfolio. In the course of their
consideration of the New Subadvisory Agreement, the Independent Trustees met in
executive session and were advised by their independent legal counsel. The
Independent Trustees received and reviewed a substantial amount of information
provided by Janus Capital and PWM in response to requests of the Independent
Trustees and their counsel. They also considered information provided by their
independent fee consultant. Based on their evaluation of that information and
other factors, on November 6, 2007, the Independent Trustees approved the New
Subadvisory Agreement, subject to shareholder approval.
In considering whether to approve the New Subadvisory Agreement, the Board
of Trustees noted that, except for the proposed reallocation to Janus Capital of
the obligation to pay compensation to the subadviser, the New Subadvisory
Agreement is substantially similar to the Current Subadvisory Agreement, which
was most recently approved by them at a meeting held on December 20, 2006. The
Board also met with representatives of PWM and considered the information
provided by Janus Capital in preparation for the Trustees' consideration of
advisory contracts at their meetings held in December 2007. The Board took into
account the investment performance of PWM as subadviser to the Portfolio and
concluded that such performance was acceptable. The Board considered information
regarding the Pending Acquisition, including the allocation of control between
Janus Capital and the other beneficial owners of PWM, and the potential impact
of the Pending Acquisition on the finances and operation of PWM. The Board noted
that Janus Capital had maintained a shareholder's namesubstantial ownership interest in PWM since
2003. The Board also noted Janus Capital's intention to build a Value Platform,
to maintain the Portfolio's current investment philosophy, and to retain key
investment personnel. Certain of these considerations are discussed in more
detail below.
11
NATURE, EXTENT AND QUALITY OF SERVICES
The Trustees' analysis of the nature, extent, and quality of PWM's services
to the Portfolio took into account the investment objective and strategies of
the Portfolio and the knowledge the Trustees gained from their regular meetings
with PWM throughout prior years with respect to the Portfolio. In addition, the
Trustees reviewed PWM's resources and key personnel, especially those who would
be providing investment management services to the Portfolio. The Trustees also
considered other services to be provided to the Portfolio by PWM. Janus Capital
advised the Board of Trustees that it expects that there will be no diminution
in the scope and quality of advisory services provided to the Portfolio as of a record date. As a
result of the proposed amendment, voting power would
be allocated in proportionPending Acquisition or New Subadvisory Agreement.
The Trustees concluded that the subadvisory relationship and arrangement
was not expected to adversely affect the nature, extent or quality of services
provided to the valuePortfolio, and that the Portfolio would continue to benefit from
services provided under the New Subadvisory Agreement. They also concluded that
the quality of each shareholder'sPWM's services to the Portfolio has been adequate. In reaching
their conclusions, the Trustees considered: (i) information provided by Janus
Capital and PWM in connection with the Trustees' consideration of the New
Subadvisory Agreement; (ii) the key factors identified in materials previously
provided to the Trustees by their independent counsel; (iii) that the New
Subadvisory Agreement will not cause any change in the portfolio managers who
handle the day-to-day management responsibilities for the Portfolio; and (iv)
that there will be no change in the overall investment rather
than onstrategies of the
numberPortfolio. They also concluded that PWM's financial condition was sound.
COSTS OF SERVICES PROVIDED
The Trustees considered the subadvisory fee rate and fee structure under
the New Subadvisory Agreement, as well as the overall fee structure of shares owned. For the
textPortfolio. The Trustees examined the fee information and expenses for the
Portfolio in comparison to information for other comparable funds, as provided
by Lipper, Inc. ("Lipper"), an independent provider of investment company data.
In reviewing the data, the Trustees noted that, under the terms of the proposed
amendments, see
Article VI, Section 1 ofAmended Advisory Agreement, the marked Trust Instrument attachedPortfolio's expense structure would now include
payment to this Proxy
Statementonly Janus Capital for investment management services, as Exhibit C.opposed to
payment to both Janus Capital and PWM.
The original intent ofTrustees considered the one-share, one-vote provision wasmethodology used by PWM in determining
compensation payable to provide
equitable voting rights to all shareholders. Since establishment ofits portfolio managers and the Trust
and adoption of the Trust Instrument, however, the Trust has established
additional Funds as well as share classes within certain Funds. As of the Record
Date,competition for
investment management talent. The Trustees also considered that there were seventeen Funds in the Trust, three of which consist of three
classes of shares, nine of which consist of two classes of shares and five of
which consist of one class of shares.
Separate votes are taken by a Fund or class only if a matter affects or
requires the vote of only that Fund or class or if that Fund's or class'
interest in the matter differs from the interest of other Funds in the Trust. In
matters that affect the Trust as a whole, such as electing Trustees or amending
the Trust Instrument, shareholders vote on a Trust-wide basis. Under the current
Trust Instrument, a holder of lower-priced shares has a greater number of votes
on matters submitted to a Trust-wide vote than the holder of an equivalent
dollar amount of higher-priced shares. For example, a shareholder with a $10,000
investment in a Fund with an NAV of $5 per share currently would have twice as
many votes as a shareholder with a $10,000 investment in a Fund with an NAV of
$10 per share.
17
Under the Trust Instrument, as proposed towill be amended, a shareholder's
voting power would be in direct proportionno
change to the shareholder's dollar
investment.overall fees paid by the Portfolio or services provided to the
Portfolio.
The Trustees believe that dollar-based voting, as proposed, provides
a more equitable distribution of voting rights, particularly for Trust-wide
votes, than the one-share, one-vote system currently in effect. The Board of
Trustees has concluded that the proposed amendment to the Trust's Trust
Instrument is in the best interest of shareholders.
Information regarding the net assetsestimated overall expense ratio of each
class of shares of each Fund
asthe Portfolio, taking into account any expense limitations,
was comparable to or more favorable than the median expense ratios of its peers,
and
12
that the fees that the Portfolio will pay to Janus Capital (a portion of which
Janus Capital will pay to PWM) are reasonable in relation to the nature and
quality of the Record Date is shown in Exhibit Dservices to this Proxy Statement.
REQUIRED VOTE
Approval of Proposal 2.a. requiresbe provided, taking into account the affirmative vote of a majorityfees charged by
other advisers and subadvisers for managing comparable mutual funds with similar
strategies.
INVESTMENT PERFORMANCE
The Trustees considered the performance results of the outstanding sharesPortfolio over
various time periods. They reviewed information comparing the Portfolio's
performance with the performance of comparable funds and peer groups identified
by Lipper, and with the Portfolio's benchmark index. They concluded that the
performance of the Trust, voting in person or by proxy.
IfPortfolio was acceptable under current market conditions.
Although the Proposal is not approved,performance of the Trust Instrument will remain unchanged
and in effect with respect to provisions providing that voting is share-weighted
rather than dollar-weighted, as proposed.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR
PROPOSAL 2.A.
PROPOSAL 2.B. REORGANIZATION OF THE TRUST, ITS FUNDS OR CLASSES
Currently,Portfolio may have lagged the Trust Instrument requires shareholder approval in order to
reorganize the Trust or any of its Funds or classes, except that to change the
Trust's form of organizationbenchmark index
for certain periods, the Trustees also concluded that Janus Capital and PWM had
taken appropriate steps to address those instances of underperformance.
BENEFITS DERIVED FROM THE RELATIONSHIP WITH PWM
The Trustees also considered benefits that would accrue to the Portfolio
from its relationship with PWM. The Trustees concluded that, other than the
services to be provided by PWM pursuant to the New Subadvisory Agreement and the
fee to be paid indirectly by the Portfolio for such services, the Portfolio,
Janus Capital, and PWM may without shareholder approval: (i)
causepotentially benefit from their relationship with one
another in other ways. They also concluded that success of their relationship
could attract other business to Janus Capital and PWM or to other Janus funds,
and that the Trustsuccess of Janus Capital and PWM could enhance each firm's ability
to merge or consolidate with or into one or more entities, ifserve the surviving entity isPortfolio.
After full consideration of the Trust or another open-end management investment
company under the 1940 Act, or a series thereof, that will succeed to or assume
the Trust's registration under the 1940 Act or (ii) cause the Trust to
incorporate under the laws of Delaware.
The Board believes there may beabove factors, as well as other circumstances in which it would not
be in the shareholders' best interest to require a shareholder meeting to
authorize a reorganization. For example,factors,
the Trustees may determineconcluded that it
would be inapproving the best interest of shareholders to reorganize a particular Fund
(but not the entire Trust) into another registered investment company in an
attempt to achieve lower operating costs. As it now stands, the Trustees cannot
effectuate such a potentially beneficial reorganization without first conducting
a shareholder meeting and incurring attendant costs and delays. In contrast, the
proposed amendments to the Trust Instrument give the Trustees the flexibility to
merge, consolidate, reorganize or otherwise transfer assets of all or a portion
of the Trust or any of its Funds or classes and achieve potential shareholder
benefits without incurring the delay and potential costs of a proxy
solicitation. The Board also believes that such flexibility should help to
assure that the Trust and the Funds operate under the most appropriate form of
organization.
18
Any such transaction would be subject to applicable federal and state rules
and regulations. In the case of mergers or other reorganizations involving a
Fund and another fund managed or otherwise controlled by JCM, under current SEC
rules, shareholder approval would still be required in many circumstances. For
example, shareholder approval would still be required when any fundamental
investment policy of the acquired fundNew Subadvisory Agreement was materially different from a policy of
the acquiring fund or when the terms of the acquiring fund's advisory contract
were materially different from that of the acquired fund. In all cases, the
proposed amendments require that applicable Fund shareholders receive prior
notification of any proposed transaction. For the text of the proposed
amendments, see Article X, Section 4 of the marked Trust Instrument attached to
this Proxy Statement as Exhibit C.
REQUIRED VOTE
Approval of Proposal 2.b. requires the affirmative vote of a majority of
the outstanding shares of the Trust, voting in person or by proxy.
If the Proposal is not approved, the Trust Instrument will remain unchanged
and in effect with respect to its current provisions regarding reorganizing the
Trust, a Fund or class thereof.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR
PROPOSAL 2.B.
PROPOSAL 2.C. LIQUIDATION OF THE TRUST, A FUND OR A CLASS
The current Trust Instrument expressly permits the Trustees, without
shareholder approval, to terminate the Trust or any of its Funds if a majority
of the Trustees determines that continuation of the Trust or Fund is not in the
best interest of the Trust, the Fund, or their respective shareholders as a
result of factors or events adversely affecting the ability of the Trust or the
Fund to conductPortfolio and its business and operations in an economically viable manner.shareholders. The current Trust Instrument does not specifically state whether the Trustees
may elect to terminate one or more classes of a Fund without liquidating the
entire Fund. Also, the Trustees believe that there may be other circumstances,
such as when new legal constraints on Fund operations arise, in which it would
not be in the shareholders' best interest to require a shareholder meeting to
authorize a liquidation. As proposed, the Trust Instrument expressly permits the
Trustees to liquidate any one or more classes of a Fund (as well as the Trust or
a Fund) under any circumstances that the Trustees determine to be in the best
interest of the Trust, Fund or class. Any such liquidation would be subject to
applicable federal and state rules and regulations. In all cases, the proposed
amendments require that applicable Fund shareholders receive prior notification
of any proposed transaction. The Board of Trustees has concluded that the
proposed amendments to the Trust's Trust Instrument are in the best interest of
the Trust's shareholders.
For the text of the proposed amendments, see Article X, Section 5 of the
marked Trust Instrument attached to this Proxy Statement as Exhibit C.
19
REQUIRED VOTE
Approval of Proposal 2.c. requires the affirmative vote of a majority of
the outstanding shares of the Trust, voting in person or by proxy.
If the Proposal is not approved, the Trust Instrument will remain unchanged
and in effect with respect to its current provisions regarding liquidating the
Trust or a Fund, but not expressly permitting liquidation of a class, as
proposed.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR
PROPOSAL 2.C.
PROPOSAL 3: APPROVE ELIMINATION OF FUNDAMENTAL
INVESTMENT POLICY FOR FLEXIBLE BOND PORTFOLIO
Flexible Bond Portfolio was previously named Flexible Income Portfolio. In
accordance with a rule adopted by the SEC requiring a fund to adopt an 80%
investment policy with respect to investments suggested by a fund's name (the
"names rule"), Flexible Income Portfolio adopted a policy to normally invest at
least 80% of its assets in income-producing securities. Such policy was adopted
as fundamental. When Flexible Income Portfolio changed its name to Flexible Bond
Portfolio, in accordance with the names rule, it adopted a policy to invest,
under normal circumstances, at least 80% of its net assets in bonds. This 80%
policy was adopted as non-fundamental and is in addition to the fundamental
policy to invest in income-producing securities. The Trustees believe that these
two policies are largely duplicative and propose eliminating Flexible Bond
Portfolio's fundamental policy regarding its investments in income-producing
securities. Elimination of a fundamental policy requires shareholder approval.
In addition, the proposal to eliminate Flexible Bond Portfolio's policy to
invest 80% of assets in income-producing securities is designed to provide the
Fund with maximum flexibility to pursue its investment objective of maximizing
total return, consistent with preservation of capital, based primarily on
investments in bonds and to respond to an ever-changing investment environment.
Flexible Bond Portfolio intends to maintain its current investment objective and
continue to invest at least 80% of its net assets, under normal circumstances,
in bonds. "Bonds," as that term is defined in Flexible Bond Portfolio's
prospectus, currently include mortgage-backed securities, corporate bonds,
government bonds, convertible bonds and zero coupon bonds. Any change to
Flexible Bond Portfolio's non-fundamental policy on bond investments would
require 60 days' prior notice to shareholders before implementation.
The Trustees believe that eliminating Flexible Bond Portfolio's policy to
invest 80% of assets in income-producing securities is in the best interest of
the Fund.
20
REQUIRED VOTE
On September 20, 2005, the Board of Trustees voted to
approve the elimination of Flexible Bond Portfolio's fundamental policy as described above,
subjectNew Subadvisory Agreement and to receipt of shareholderrecommend it to shareholders for
their approval.
REQUIRED VOTE
Approval of Proposal 3the New Subadvisory Agreement requires the affirmative vote of
a 1940 Act Majority of the Fund, withPortfolio, all share classes voting together with respectas a
single class. Approval of Proposal 1 is contingent upon the approval of both
Proposals within this Proxy Statement, as well as upon the approval of the same
proposals by shareholders of Janus Mid Cap Value Fund, a series of JIF, and
Janus Adviser Mid Cap Value Fund, a series of JAD. Implementation of the New
Subadvisory Agreement is also contingent upon the closing of the Pending
Acquisition in addition to other conditions as described in the Fund,
eligiblePurchase
Agreement or otherwise agreed to be voted atby Janus Capital and PWM. If shareholders of
the Meeting.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF FLEXIBLE
BOND PORTFOLIO VOTE FOR APPROVAL TO ELIMINATE THE FUND'S FUNDAMENTAL POLICY TO
INVEST 80% OF ASSETS IN INCOME-PRODUCING SECURITIES.
PROPOSAL 4: PROPOSED AMENDED
INVESTMENT ADVISORY AGREEMENTS
INTRODUCTION
On September 20, 2005,Portfolio do not approve the Proposal, or if any other contingency is not
met, the Current Subadvisory Agreement will remain in effect and the Board of
Trustees approved certain conforming
amendmentswill take such further action as it deems to be in the best interest of
the Portfolio and its shareholders.
THE INDEPENDENT TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMEND THAT YOU VOTE
"FOR" APPROVAL OF THE NEW SUBADVISORY AGREEMENT.
13
PROPOSAL 2
APPROVE AN AMENDED AND RESTATED INVESTMENT ADVISORY
AGREEMENT BETWEEN YOUR PORTFOLIO AND JANUS CAPITAL
INTRODUCTION
Janus Capital currently serves as investment adviser to the Investment Advisory AgreementsPortfolio
pursuant to an investment advisory agreement between the Trust, on behalf of certain Funds,the
Portfolio, and JCM (collectively,Janus Capital, dated July 1, 2004 (together with any amendments
thereto, the "Proposed"Current Advisory Agreement").
In conjunction with Janus Capital's Pending Acquisition of a greater
ownership interest in its affiliated investment adviser, PWM, Janus Capital
undertook a review of the structure of the advisory relationships currently in
place between Janus Capital, PWM and the Janus funds subadvised by PWM,
including the Portfolio. The proposed Amended Advisory Agreements"Agreement would
reallocate the obligation to compensate PWM for its services as subadviser from
your Portfolio to Janus Capital. The proposed change is in line with subadvisory
payment structures in the industry and each individually,allows Janus Capital to move to a "Proposedmore
cohesive operating platform with respect to its subadvised funds, including the
Portfolio.
The 1940 Act requires that shareholders approve material changes to the
terms of an investment advisory agreement. Because the proposed reallocation of
the obligation to compensate PWM may be deemed to be a material change to the
Current Advisory Agreement, you are being asked to approve an Amended Advisory
Agreement"), and authorized
the submission of those amendments to the applicable Funds' shareholdersAgreement for their approval. The primary purpose of these amendments is to conform to
prevailing industry practice; however, the proposed changes, on their face, may
be considered "material" changes requiring shareholder approval.your Portfolio. A descriptionform of the proposed amendments is provided in further detail below under
"Description of the Proposed Amended Advisory Agreements."
A copy of a form of Proposed Amended Advisory Agreement
between JCM and the
Trust, on behalf of each equity or income Fund permitted to vote on this
Proposal 4.a., marked to show proposed revisions, is attached as Exhibit E to this Proxy Statement. A copyStatement as Exhibit B. Except for the reallocation of
the obligation to pay a form of Proposedsubadviser, the proposed Amended Advisory Agreement between JCM andis
substantially similar in all material respects to the Trust, on behalf of Money Market Portfolio, marked to show
proposed revisions, is attached as Exhibit F to this Proxy Statement.
On September 20, 2005 and October 19, 2005, the Board of Trustees also
approved and ratified amended Investment Advisory Agreements (collectively, the
"Proposed Amendments" and each individually, a "Proposed Amendment") for
shareholders of each of Mid Cap Value Portfolio, Risk-Managed Core Portfolio and
Worldwide Growth Portfolio that changes the annual rate for fees paid to JCM by
each Fund pursuant to its Current Advisory
Agreement (described below) from a
fixed-rate fee to one that adjusts upward or downward based upon a Fund's
performance relative to its benchmark index. Such a change in fee structure
requires shareholder approval.Agreement. The Board of Trustees has authorized the submission of the Proposed Amendments to shareholders of the applicable Funds for their
approval as described in Proposal 4.b. below. For Worldwide Growth Portfolio,
the Proposed
21
Amendment would be incorporated into the Proposed Amended
Advisory Agreement discussed in Proposal 4.a. below.
A copy of a form of Proposed Amendment for Worldwide Growth Portfolio is
attached as Exhibit G to this Proxy Statement. A copy of a form of Proposed
Amendment for Mid Cap Value Portfolio and Risk-Managed Core Portfolio is
attached as Exhibit H to this Proxy Statement.
The proposal to modify the fee schedule in each Fund's Current Advisory
Agreement and institute the proposed performance-based advisory fee is designed
to more closely align JCM's interests with those of the Funds' shareholders. The
investment advisory fee a Fund pays to JCM decreases when the Fund is not
performing well relative to its benchmark index and increases during periods
when the Fund outperforms its benchmark index. In addition, JCM believes that
the proposed advisory fee structure will enable it to maintain the quality of
services it provides to the Funds and to attract and retain talented investment
personnel.
JCM AS INVESTMENTPortfolio's shareholders for approval.
INFORMATION CONCERNING THE ADVISER
JCM currentlyJanus Capital, 151 Detroit Street, Denver, Colorado 80206-4805, serves as the
investment adviser to each Fund pursuant to an
Investment Advisory Agreement between JCM and the Trust, on behalf of each Fund
(each, a "Current Advisory Agreement" and collectively, the "Current Advisory
Agreements"). JCMPortfolio. Janus Capital is a direct subsidiary of
Janus Capital Group Inc. ("JCG"),JCGI, a publicly-tradedpublicly traded company with principal operations in financial asset
management businesses. JCGbusinesses that had $187.6 billion in assets under management as of
March 31, 2008. JCGI owns approximately 95% of JCM,Janus Capital, with the remaining
5% held by Janus Management Holdings Corporation. The principal executive officers and
directors of JCM, located at 151 Detroit Street, Denver, Colorado 80206, and
their principal occupations are included in Exhibit I to this Proxy Statement.
Certain employees of JCMJanus
Capital and/or its affiliates serve as officers of the Trust. Certain officers
and interested Trustees of the Trust are shareholders of JCG.
JCMJCGI.
Janus Capital (together with its predecessors) has served as an investment
adviser since 1970. As of September 1, 2005,March 31, 2008, the Janus Fundsfunds that JCMJanus Capital
advises consisted of 6574 portfolios offering a broad range of investment
objectives.
JCM14
Janus Capital also serves as subadviser for a number of private-label mutual
funds and provides separate account advisory services for institutional
accounts.
As of June 30,
2005, JCM had approximately $130.3 billion in assets under management. JCM
currently servesJanus Capital acts as an investment adviser or subadviser to other funds that haveinvestment
companies with investment objectives and strategies similar to those of the
Portfolio. Information on those similar investment objectives as the Funds, as described in detailcompanies is set forth in
Exhibit JC to this Proxy Statement.
DESCRIPTIONPrincipal Executive Officers and Directors of the Adviser. The principal
executive officers and directors of Janus Capital and their principal
occupations are included in Exhibit D to this Proxy Statement.
COMPARISON OF THE CURRENT AND AMENDED ADVISORY AGREEMENTS
Under eachOther than as described below, the terms of the Current Advisory Agreement
JCMand the Amended Advisory Agreement are substantially similar. Differences also
include the dates of execution and renewal. The same advisory services will be
provided under the Amended Advisory Agreement as are provided under the Current
Advisory Agreement. A brief description of the Current and Amended Advisory
Agreements, noting any differences, follows.
Advisory Services. The terms of the advisory services are the same under
the Current Advisory Agreement and the Amended Advisory Agreement.
Janus Capital provides each Fundthe Portfolio with continuing investment management
services. For all Funds except Risk-Managed
Core Portfolio and Mid Cap Value Portfolio, JCMJanus Capital is responsible for the day-to-day management of the
FundsPortfolio and providesfor providing continuous investment advice regarding the purchase
and sale of securities held by the Funds,Portfolio, subject to (i) the Trust's Amended
and Restated Trust Instrument Bylaws,and Bylaws; (ii) the investment objectives,
policies and restrictions set forth in 22
each Fund'sthe Portfolio's registration statement,statement;
(iii) the provisions of the 1940 Act and the Internal Revenue Code of 1986, as
amended,amended; and (iv) such other policies and instructions as the Trustees may from
time to time determine. For Risk-Managed
Core Portfolio, JCMAs permitted under the Current and Amended Advisory
Agreements, Janus Capital has delegated these responsibilities to INTECH pursuant to a
subadvisory agreement between JCM, on behalf of the Fund, and INTECH. For Mid
Cap Value Portfolio, JCM has delegated these responsibilities to Perkins, Wolf,
McDonnell and Company, LLC ("Perkins") pursuant to a subadvisory agreement
between JCM, on behalf of the Fund, and Perkins. JCMPWM. Janus
Capital maintains a supervisory role with respect to such delegation to each of INTECH and Perkins.
JCMdelegation.
Janus Capital provides office space for the FundsPortfolio and pays the
salaries, fees, and expenses of all FundPortfolio officers (sharing certain expenses
and thosesalaries for the Portfolio's Chief Compliance Officer and other
compliance-related personnel as authorized by the Trustees who are considered interested
persons of JCM. JCM providesfrom time to time).
Janus Capital is also authorized to perform or delegate to others, such as PWM,
to perform certain administrative and other services and is responsible for the
other business affairs of all the Funds. JCM has delegated
certain of these duties to INTECH and Perkins with respect to the Fund(s) each
manages pursuant to the subadvisory agreement between JCM and each of INTECH and
Perkins. JCMPortfolio. Janus Capital also provides certain
administrative services to the FundsPortfolio as described on page 54 ofunder "Additional
Information About the Portfolio -- Other Portfolio Service Providers" in this
Proxy Statement.
The Funds payPortfolio pays all expenses incidentincidental to theirits organization, operations
and business not specifically assumed by JCM, INTECHJanus Capital or Perkins, as applicable,PWM, including
custodian
15
and transfer agency fees and expenses, brokerage commissions and dealer spreads,
and other expenses in connection with the execution of portfolio transactions,
legal and accounting expenses, interest, taxes, a portion of trade association
or other investment company organization dues and expenses, registration fees,
expenses of shareholders' meetings, reports to shareholders, fees and expenses
of Independent Trustees, and other costs of complying with applicable laws
regulating the sale of FundPortfolio shares. Information concerning services provided by
Janus Distributors LLC ("Janus Distributors"), the Funds'Portfolio's distributor, and
Janus Services LLC ("Janus Services"), the Funds'Portfolio's transfer agent, each a
wholly-owned subsidiary of JCM,Janus Capital, and a description of any fees paid by
the FundsPortfolio to Janus Distributors and Janus Services, is provided on
page 55 ofincluded under
"Additional Information About the Portfolio -- Other Portfolio Service
Providers" in this Proxy Statement.
At a meeting ofCompensation. The investment advisory fee rate payable by the Trustees held on June 15, 2005,Portfolio to
Janus Capital is the Trustees, including
all of the Independent Trustees, approved the continuation ofsame under the Current Advisory Agreement for each Fund. Each Fund's Current Advisory Agreement
continues in effect until July 1, 2006 and thereafter from year to year as long
as such continuance is approved at least annually by a majority of the
Independent Trustees, and by either a majority of the outstanding voting
securities of that Fund or the Trustees of that Fund.
Each Current Advisory Agreement: (i) may be terminated without the payment
of any penalty by JCM, the Trustees of the Trust, or the shareholders of the
Fund acting by vote of at least a majority of its outstanding voting securities
on 60 days' advance written notice; (ii) terminates automatically in the event
of its assignment; and (iii) generally, may not be amended without the approval
by vote of a majority of the Trustees of the Fund, including a majority of the
Independent Trustees and, to the extent required by the 1940 Act, the vote of a
majority of the
23
outstanding voting securities of that Fund. The table below shows the date of
each Current Advisory Agreement, the date each Current Advisory Agreement was
last submitted to a vote of shareholders, and the reasons for such submission.
DATE OF CURRENT DATE LAST SUBMITTED TO
FUND ADVISORY AGREEMENT* SHAREHOLDERS*
- ---- ------------------- ----------------------
Balanced Portfolio......... July 1, 2004 January 31, 2002(1)
Core Equity Portfolio...... July 1, 2004 January 31, 2002(1)
Flexible Bond Portfolio.... July 1, 2004 January 31, 2002(1)
Foreign Stock Portfolio.... July 1, 2004 January 31, 2002(1)
Forty Portfolio............ July 1, 2004 January 31, 2002(1)
Global Life Sciences
Portfolio................ July 1, 2004 January 31, 2002(1)
Global Technology
Portfolio................ July 1, 2004 January 31, 2002(1)
Growth and Income
Portfolio................ July 1, 2004 January 31, 2002(1)
International Growth
Portfolio................ July 1, 2004 January 31, 2002(1)
Large Cap Growth
Portfolio................ July 1, 2004 January 31, 2002(1)
Mid Cap Growth Portfolio... July 1, 2004 January 31, 2002(1)
Mid Cap Value Portfolio.... July 1, 2004 December 31, 2002(2)
Money Market Portfolio..... April 3, 2002 January 31, 2002(1)
Risk-Managed Core
Portfolio................ July 1, 2004 December 31, 2002(2)
Worldwide Growth
Portfolio................ July 1, 2004 January 31, 2002(1)
- ---------------
* The date of the Current Advisory Agreement is normally the date of Trustee
approval of the agreement, which may differ from the date last submitted to
shareholders.
(1) Approved by shareholders in connection with a transaction involving sale of
shares of JCM by Thomas H. Bailey.
(2) Approved by the initial shareholder in connection with the Fund's
commencement of operations.
DESCRIPTION OF CURRENT ADVISORY FEE
Pursuant to its Current Advisory Agreement, each Fund pays JCM an
investment advisory fee for its services, which is calculated daily and paid
monthly. The investment advisory fee paid by each Fund to JCM under its Current
Advisory Agreement is calculated at the following annual rate as a percentage of
each Fund's average daily net asset value:
FUND ANNUAL RATE
- ---- -----------
Foreign Stock Portfolio............. 0.64%
Forty Portfolio..................... 0.64%
Global Life Sciences Portfolio...... 0.64%
Global Technology Portfolio......... 0.64%
International Growth Portfolio...... 0.64%
24
FUND ANNUAL RATE
- ---- -----------
Large Cap Growth Portfolio.......... 0.64%
Mid Cap Growth Portfolio............ 0.64%
Mid Cap Value Portfolio(1).......... 0.64%
Growth and Income Portfolio......... 0.62%
Core Equity Portfolio............... 0.60%
Worldwide Growth Portfolio.......... 0.60%
Balanced Portfolio.................. 0.55%
Risk-Managed Core Portfolio(2)...... 0.50%
Flexible Bond Portfolio............. First $300 Million.... 0.55%
Over $300 Million.... 0.45%
Money Market Portfolio.............. 0.25%
- ---------------
(1) This amount is reduced by the amount payable by Mid Cap Value Portfolio to
Perkins, the subadviser to Mid Cap Value Portfolio, pursuant to a
Sub-Advisory Agreement between JCM and Perkins. Under this Sub-Advisory
Agreement, Mid Cap Value Portfolio pays Perkins a fee equal to 50% of the
advisory fee otherwise payable by the Fund to JCM (net of any reimbursements
of expenses incurred or fees waived by JCM). For the fiscal year ended
December 31, 2004, the Fund paid Perkins a subadvisory fee at the annual
rate of 0.32% of the Fund's average daily net assets. If Proposal 4.b.i. is
approved, Perkins will receive a fee from the Fund that will adjust upward
or downward based upon the Fund's performance relative to the Russell
Midcap(R) Value Index.
(2) JCM, and not Risk-Managed Core Portfolio, pays INTECH a fee for its services
provided pursuant to a Sub-Advisory Agreement between JCM, on behalf of the
Fund, and INTECH, at an annual rate of 0.26% of the Fund's average daily net
assets. See Proposal 5 for information regarding a proposed amended
subadvisory agreement between JCM and INTECH that incorporates a
performance-based advisory fee paid by JCM to INTECH.
Through May 1, 2007 for the Funds listed below (May 1, 2006 for Money
Market Portfolio), JCM has agreed by contract to waive its advisory fee payable
by each of these Funds in an amount equal to the amount, if any, that such
Fund's normal operating expenses in any fiscal year (including the investment
advisory fee, but excluding, as applicable, interest, taxes, brokerage
commissions, distribution (12b-1) fees and extraordinary expenses) exceed the
following percentage of the Fund's average daily net asset value. JCM
anticipates continuing the fee waiver for Money Market Portfolio on a voluntary
basis after May 1, 2006. Mortality risk, expense risk and other charges imposed
by Participating Insurance Companies are also excluded from the expense
limitations noted.
Core Equity Portfolio.................................... 1.20%
Flexible Bond Portfolio.................................. 0.90%
Foreign Stock Portfolio.................................. 1.24%
Global Life Sciences Portfolio........................... 1.24%
Global Technology Portfolio.............................. 1.24%
Mid Cap Value Portfolio.................................. 1.24%
Money Market Portfolio................................... 0.50%
Risk-Managed Core Portfolio.............................. 1.10%
25
The following table summarizes the advisory fees paid by the Funds to JCM
before any waivers and the amounts waived, if any, including any applicable
advisory fee waivers, for the fiscal year ended December 31, 2004.
ADVISORY FEES WAIVERS
FUND ($)(000'S) ($)(000'S)
- ---- ------------- ----------
Balanced Portfolio...................... 20,917 N/A
Core Equity Portfolio................... 65 30
Flexible Bond Portfolio................. 3,108 N/A
Foreign Stock Portfolio................. 86 N/A
Forty Portfolio......................... 5,927 N/A
Global Life Sciences Portfolio.......... 232 N/A
Global Technology Portfolio............. 1,239 N/A
Growth and Income Portfolio............. 519 N/A
International Growth Portfolio.......... 6,955 N/A
Large Cap Growth Portfolio.............. 10,672 N/A
Mid Cap Growth Portfolio................ 11,556 N/A
Mid Cap Value Portfolio................. 218 --
Money Market Portfolio.................. 36 36(1)
Risk-Managed Core Portfolio............. 86 --
Worldwide Growth Portfolio.............. 21,736 N/A
- ---------------
(1) In addition to waiving all of its advisory fee, JCM also reimbursed the Fund
for other expenses that exceeded its expense limit.
PROPOSAL 4.A. APPROVE CONFORMING AMENDMENTS TO INVESTMENT ADVISORY
AGREEMENTS BETWEEN JCM AND THE TRUST ON BEHALF OF CERTAIN FUNDS
Proposal 4.a. applies to each Fund except Mid Cap Value Portfolio, Risk-
Managed Core Portfolio, Risk-Managed Growth Portfolio and Small Company Value
Portfolio.
DESCRIPTION OF THE PROPOSED AMENDED ADVISORY AGREEMENTS
Other than as described below, the terms of the Current Advisory Agreements
and the Proposed Amended
Advisory Agreements are substantially similar, exceptAgreement. In return for the effective dates and the renewal dates. The same services will be
provided under the Proposed Amended Advisory Agreements as are provided under
the Current Advisory Agreements. For shareholders of Worldwide Growth Portfolio,
in addition to the proposed amendments to the Fund's Current Advisory Agreement
as described in this Proposal 4.a., one additional change to your Fund's Current
Advisory Agreement is proposed to be incorporated into the Proposed Amended
Advisory Agreement as discussed under Proposal 4.b. below.
26
WHAT ARE THE SIGNIFICANT DIFFERENCES BETWEEN THE CURRENT ADVISORY AGREEMENT AND
THE PROPOSED AMENDED ADVISORY AGREEMENT?
The Current Advisory Agreement for each applicable Fund does not expressly
provide that JCM has investment discretion to manage the Fund's investments.
Rather, the Current Advisory Agreement could be read to provide that JCM will
make recommendations solely in an advisory capacity. The Proposed Amended
Advisory Agreement for each Fund would remove references to JCM acting solely in
an advisory capacity and clarify that JCM has authority to execute transactions
based on its investment recommendations on behalf of the Fund.
Although, as a technical matter, these amendments could be read to increase
the scope of JCM's authority, they are not expected to result in a change in the
way the Funds' investments are managed. In large part, this is because, although
each portfolio manager is an employee of JCM, the Trustees have previously
elected each Fund's portfolio manager as a Fund officer and have specifically
authorized such officers to place orders to purchase and sell Fund investments.
The proposed amendments are consistent with recommendations made by an
independent compliance consultant engaged by JCM as a result of a settlement
reached between JCM and the SEC in August 2004. Shareholders of Mid Cap Value
Portfolio, Risk-Managed Core Portfolio, Risk-Managed Growth Portfolio and Small
Company Value Portfolio are not being asked to vote on Proposal 4.a. as the
Current Advisory Agreements between JCM and the Trust on behalf of each of these
Funds already contain the recommended changes.
BOARD APPROVAL AND RECOMMENDATION
On September 20, 2005, the Board of Trustees, including all of the
Independent Trustees, voted unanimously to approve the Proposed Amended Advisory
Agreement for each applicable Fund and authorized the submission of each
Proposed Amended Advisory Agreement to the Fund's shareholders for approval.
In approving the proposed amendments to each of the Current Advisory
Agreements, the Trustees considered the recommendations of the independent
compliance consultant engaged by JCM regarding the form of each of those
agreements and concluded that the proposed change in the description of the
authority of JCM would be more consistent with industry practice and would
reflect an appropriate delegation of authority to JCM.
In connection with their most recent consideration of the investment
advisory agreements for all of the Funds, the Trustees received and reviewed a
substantial amount of information provided by JCM and the respective subadvisers
for sub-advised Funds in response to requests of the Independent Trustees and
their counsel. They also received and reviewed a considerable amount of
information and analysis provided to the Trustees by an independent fee
consultant. Throughout their consideration of the agreements, the Independent
Trustees were advised by their independent legal counsel. The Independent
Trustees met on two separate
27
occasions with JCM management to consider the agreements, and at each of those
meetings they also met separately in executive session with their counsel.
Based on their evaluation of the information provided by JCM, subadvisers,
the independent fee consultant, Lipper Inc. ("Lipper"), and other information,
the Trustees determined that the overall arrangements between the Funds and JCM
were fair and reasonable in light of the nature and quality of the services
provided by JCM, its affiliates and the subadvisers, the fees charged for those
services, and other matters that the Trustees considered relevant in the
exercise of their business judgment.
In considering the agreements, the Trustees reviewed and analyzed various
factors that they determined were relevant, including the factors described
below, none of which by itself was considered dispositive. However, the material
factors and conclusions that formed the basis for the Trustees' determination to
approve the agreements are discussed separately below.
NATURE, EXTENT AND QUALITY OF SERVICES
The Trustees reviewed the nature, extent and quality of the services of JCM
and the subadvisers to the Funds, taking into account the investment objective
and strategy of each Fund and the knowledge the Trustees gained from their
regular meetings with management on at least a quarterly basis. In addition, the
Trustees reviewed the resources and key personnel of JCM and each subadviser,
especially those who provide investment management services to the Funds. The
Trustees also considered other services provided to the Funds by JCM or the
subadvisers, such as managing the execution of portfolio transactions and the
selection of broker-dealers for those transactions, serving as the Funds'
administrator, monitoring adherence to the Funds' investment restrictions,
producing shareholder reports, providing support services for the Trustees and
Trustee committees and overseeing the activities of other service providers,
including monitoring compliance with various policies and procedures of the
Funds and with applicable securities laws and regulations. The Trustees also
reviewed the enhanced compliance program of JCM and the actions taken by JCM in
response to various legal and regulatory proceedings since the fall of 2003.
The Trustees concluded that the nature, extent and quality of the services
provided by JCM and, if applicable, the subadviser to each Fund were appropriate
and consistent with the terms of the respective advisory agreements, that the
quality of those services had been consistent with or superior to quality norms
in the industry and that the Funds were likely to benefit from the continued
provision of those services. They also concluded that JCM and each subadviser
had sufficient personnel, with the appropriate education and experience, to
serve the Funds effectively and had demonstrated its continuing ability to
attract and retain well-qualified personnel.
28
PERFORMANCE OF THE FUNDS
The Trustees considered the short-term and longer term performance of each
Fund. They reviewed information comparing each Fund's performance with the
performance of comparable funds and peer groups identified by Lipper and with
the Fund's benchmark index. They concluded that the performance of most Funds
was good to very good. Although the performance of some Funds lagged that of
their peers for certain periods, they also concluded that JCM had taken
appropriate steps to address the under-performance and that the more recent
performance of most of those Funds had been improving.
COSTS OF SERVICES PROVIDED
The Trustees examined information on the fees and expenses of each Fund in
comparison to information for other comparable funds as provided by Lipper. They
noted that the rate of management (investment advisory and administrative) fees
for each Fund, after contractual expense limitations, was below the mean
management fee rate of the respective peer group of funds selected by Lipper and
for more than two-thirds of the Funds was in the lowest cost quartile.
The Trustees considered the methodology used by JCM in determining
compensation payable to portfolio managers, the very competitive environment for
investment management talent and the competitive market for mutual funds in
different distribution channels.
The Trustees also reviewed JCM's management fees for its separate account
clients and for its sub-advised funds (for which JCM provides only portfolio
management services). Although in most instances sub-advisory and separate
account fee rates for various investment strategies were lower than management
fees for Funds having a similar strategy, the Trustees noted that JCM performs
significant additional services for the Funds that it does not provide to those
other clients, including administrative services, oversight of the Funds' other
service providers, trustee support, regulatory compliance and numerous other
services. Moreover, they noted that the spread between the average fees charged
to the Funds and the fees that JCM charged to its separate account clients was
significantly smaller than the average spread for such fees of other advisers,
based on publicly available data and research conducted by their independent fee
consultant.
The Trustees also considered the profitability to JCM and its affiliates of
their relationships with each Fund and found JCM's profitability not to be
unreasonable.
Finally, the Trustees considered the financial condition of JCM, which they
found to be sound.
The Trustees concluded that the management fees and any other compensation
payable by each Fund to JCM and its affiliates, as well as the fees paid by JCM
or a Fund to the subadvisers of sub-advised Funds, were reasonable in relation
to the nature and quality of the services provided, taking into account the fees
charged by other advisers for managing comparable mutual funds with similar
strategies and the fees JCM charges to other clients. The Trustees also
concluded that the overall
29
expense ratio of each Fund was reasonable, taking into account the size of the
Fund, the quality of services provided by JCM, the investment performance of the
Fund and the expense limitations agreed to by JCM.
ECONOMIES OF SCALE
The Trustees received and considered information about the potential of JCM
to experience economies of scale as the assets of the Funds increase. They noted
that, although each Fund (except one Fund that has breakpoints) pays an advisory
fee at a fixed rate as a percentage of net assets, without any breakpoints, the
management fee paid by each Fund, after any applicable contractual expense
limitations, was below the mean management fee rate of the Fund's peer group
selected by Lipper. The Trustees also took note that, for those Funds whose
expenses are being reduced by the contractual expense limitations of JCM, JCM is
subsidizing the Funds because they have not reached adequate scale. Moreover, as
the assets of many of the Funds have declined in the past few years, the Funds
have benefited from having advisory fee rates that have remained constant rather
than fees with breakpoints and higher fee rates at lower asset levels in which
the effective fee rate might have increased as assets declined. As notedPortfolio under
Proposal 4.b., it is proposed that the advisory fees payable by certain Funds be
modified to reflect a performance-based structure under which the rate of fee
would increase or decrease from the current fixed rate if the Fund outperforms
or underperforms its benchmark index over a trailing period. Such a fee
structure is likely to increase or decrease JCM's economies of scale, depending
on whether the effective rate of the fee is increased or decreased. The Trustees
also noted that the Funds share directly in economies of scale through lower
charges of third-party service providers based on the combined scale of all of
the Funds. Based on all of the information they reviewed, the Trustees concluded
that the fee structure in each of the advisory agreements was reasonable and
that the current rates of fees reflect a sharing between JCM and the Fund of
economies of scale at the current asset level of the Fund.
OTHER BENEFITS TO THE ADVISER
The Trustees also considered benefits that accrue to JCM and its affiliates
from their relationship with the Funds. They recognized that affiliates of JCM
separately serve the Funds as transfer agent and distributor, respectively. The
Trustees also considered JCM's use of commissions paid by most Funds on their
portfolio brokerage transactions to obtain proprietary research products and
services benefiting the Funds and/or other clients of JCM, as well as JCM's
agreement not to use any Fund's portfolio brokerage transactions to obtain third
party research through brokers. The Trustees concluded that JCM's use of "soft"
commission dollars to obtain proprietary research products and services was
consistent with regulatory requirements and was likely to benefit the Funds. The
Trustees also concluded that, other than the services provided by JCM and its
affiliates pursuant to the agreements and the fees to be paid by each Fund
therefore, the Funds and
30
JCM may potentially benefit from their relationship with each other in other
ways. They concluded that JCM benefits from the receipt of proprietary research
products and services acquired through commissions paid on portfolio
transactions of the Funds and that the Funds benefit from JCM's receipt of those
products and services, as well as research products and services acquired
through commissions paid by other clients of JCM. They further concluded that
success of each Fund could attract other business to JCM or its other Funds and
that the success of JCM could enhance JCM's ability to serve the Funds.
After full consideration of the above factors as well as other factors, the
Trustees, including all of the Independent Trustees, concluded that
the Current Advisory Agreement for each Fund was in the best interest of the Fund and its
shareholders. The Independent Trustees also approved the Proposed Amended Advisory Agreement for each Fund, concluding that such Proposed Amended Advisory
Agreement was inAgreements, the best interest of the Fund and its shareholders.
REQUIRED VOTE
Approval of Proposal 4.a. as to each applicable Fund requiresPortfolio pays a 1940 Act
Majority of that Fund. If shareholders of a Fund do not approve the Proposed
Amended Advisory Agreement for the Fund, JCM will continue as the Fund's
investment adviser under the terms of the Current Advisory Agreement with the
Fund. If shareholders approve the Proposed Amended Advisory Agreement for the
Fund, the amendments are expected to become effective on January 1, 2006.
Shareholders of Worldwide Growth Portfolio may approve other amendments to the
Current Advisory Agreement as discussed in Proposal 4.b.
THE BOARD OF TRUSTEES, INCLUDING ALL OF THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF EACH APPLICABLE FUND VOTE FOR
APPROVAL OF THE CONFORMING AMENDMENTS IN THE PROPOSED AMENDED ADVISORY AGREEMENT
FOR THEIR FUND.
PROPOSAL 4.B. APPROVE PROPOSED AMENDMENTS TO INVESTMENT ADVISORY
AGREEMENTS BETWEEN JCM AND THE TRUST ON BEHALF OF CERTAIN FUNDS
THAT WOULD INTRODUCE A PERFORMANCE INCENTIVE INVESTMENT
ADVISORY FEE STRUCTURE FOR THE FUNDS
This Proposal 4.b. applies to shareholders of Mid Cap Value Portfolio,
Risk-Managed Core Portfolio and Worldwide Growth Portfolio. Each Fund will vote
separately on this Proposal. Shareholders of Mid Cap Value Portfolio will vote
on Proposal 4.b.i. Shareholders of Risk-Managed Core Portfolio will vote on
Proposal 4.b.ii. Shareholders of Worldwide Growth Portfolio will vote on
Proposal 4.b.iii.
DESCRIPTION OF THE PROPOSED AMENDMENTS ON PERFORMANCE FEES
Except for the proposed change in fee structure discussed below and the
changes discussed under Proposal 4.a. above that apply to Worldwide Growth
Portfolio, after giving effect to the Proposed Amendments, the Current Advisory
31
Agreements will remain substantially unchanged, except for the effective date of
the Proposed Amendments and the renewal dates. It is anticipated that the same
services will be provided under the Advisory Agreements before and after the
Proposed Amendments.
The proposedperformance-
based investment advisory fee. This fee to be paid to JCM by each of these
Funds will consistconsists of two components: (1) a base
management fee calculated by applying the current specified fixed-ratecontractual fixed rate of the advisory fee0.64% to the
Fund'sPortfolio's average daily net assets during the previous month ("Base Fee"),
plus or minus (2) a performance-fee adjustment ("Performance Adjustment")
calculated by applying a variable rate of up to 0.15% (positive or negative) to
the Fund'sPortfolio's average daily net assets during the applicable performance
measurement period. The performance measurement period generally will beis the previous
36 months, although no Performance Adjustment will be made until a Proposed Amendment has
been in effect for at least 12 months. When a Proposed Amendmentwhen the Portfolio's performance-based fee structure has
been in effect for at least 12 months, but less than 36 months, the performance
measurement period will be equal toequals the time that has elapsed since the Proposed
Amendmentperformance-based
fee structure took effect. The Base Fee is calculated and accrued daily. ThePortfolio's performance fee structure was
effective in February 2006, with the first Performance Adjustment is calculated monthlyimplemented in
arrearsFebruary 2007. Therefore, the performance measurement period began February 2006
and is accrued evenlywill add a month to each day throughoutperiod until February 2009, at which time the
month. The investment advisory fee is paid monthly in
arrears.
For each Fund, the fixed rate used in computing the Base Feeperformance measurement period will be the
same as that used in computing the fee paid to JCM by the Fund under its Current
Advisory Agreement.continue on a rolling 36-month basis.
The Performance Adjustment may result in an increase or decrease in the
investment advisory fee paid by a Fund,the Portfolio, depending uponon the investment
performance of the FundPortfolio relative to its benchmark index, the Russell
Midcap(R) Value Index, over the performance measurement period. No Performance
Adjustment will beis applied unless the difference between the Fund'sPortfolio's investment
performance and the cumulative investment record of the Fund's benchmark indexRussell Midcap(R) Value
Index is 0.50% or greater (positive or negative) during the applicable performance measurement period. Because the Performance
Adjustment is tied to a Fund's relative performance to its benchmark index (and
not its absolute performance), the Performance Adjustment could increase JCM's
fee even if the Fund's shares lose value during the performance measurement
period and could decrease JCM's fee even if the Fund's shares increase in value
during the
performance measurement period. For purposes of computing the Base Fee and the
Performance Adjustment, net assets will be averaged over different periods
(average daily net assets during the previous month for the Base Fee, versus
average daily net assets during the performance measurement period for the
Performance Adjustment). Performance of a Fundthe Portfolio is calculated net of
expenses, whereas a Fund's benchmark indexthe Russell Midcap(R) Value Index does not have any fees or
expenses. Reinvestment of dividends and distributionsdistribu-
16
tions are included in calculating both the performance of a Fundboth the Portfolio and the
Fund's benchmark index.Russell Midcap(R) Value Index. The Base Fee is calculated and accrued daily. The
Performance Adjustment is calculated monthly in arrears and is accrued evenly
each day throughout the month. The investment advisory fee is paid monthly in
arrears.
The investment performance of a Fund'sthe Portfolio's Service Shares ("Service Shares")is used for
purposes of calculating the performance measurement period will be used to calculate thePortfolio's Performance Adjustment. After JCMJanus
Capital determines whether a particular Fund'sthe Portfolio's performance was above or below its
benchmark index by comparing the investment performance of 32
the Fund'sPortfolio's
Service Shares against the cumulative investment record of that Fund's benchmark
index, JCM will applythe Russell Midcap(R)
Value Index, Janus Capital applies the same Performance Adjustment (positive or
negative) across each other class of shares of the Fund.
The Trustees may determine that a class of shares of a Fund other than
Service Shares is the most appropriate for use in calculating the Performance
Adjustment. If a different class of shares is substituted in calculating the
Performance Adjustment, the use of that successor class of shares may apply to
the entire performance measurement period so long as the successor class was
outstanding at the beginning of such period. If the successor class of shares
was not outstanding for all or a portion of the performance measurement period,
it may only be used in calculating that portion of the Performance Adjustment
attributable to the period during which the successor class was outstanding and
any prior portion of the performance measurement period would be calculated
using the class of shares previously designated. Any change to the class of
shares used to calculate the Performance Adjustment is subject to applicable
law. It is currently the position of the staff of the SEC (the "Staff") that any
changes to a class of shares selected for purposes of calculating the
Performance Adjustment will require shareholder approval. If there is a change
in the Staff's position, the Trustees will notify the shareholders of such
change in position at such time as the Trustees may determine that a change in
such selected class is appropriate.
Each Fund's benchmark index is identified below. The Trustees may from time
to time determine that another securities index is a more appropriate benchmark
index for purposes of evaluating the performance of that Fund. In that event,
the Trustees will approve the substitution of a successor index for the Fund's
benchmark index. However, the calculation of the Performance Adjustment for any
portion of the performance measurement period prior to the adoption of the
successor index will still be based upon the Fund's performance compared to its
former benchmark index. Any change to a particular Fund's benchmark index for
purposes of calculating the Performance Adjustment is subject to applicable law.
It is currently the position of the Staff that any changes to a Fund's benchmark
index will require shareholder approval. If there is a change in the Staff's
position, the Trustees will notify the shareholders of such change in position
at such time as the Trustees may determine that a change in a Fund's benchmark
index is appropriate.Portfolio. It is not possible
to predict the effect of the Performance Adjustment on future overall
compensation to JCMJanus Capital since it will depend on the performance of each Fundthe
Portfolio relative to the record of the Fund'sPortfolio's benchmark index and future
changes to the size of each Fund.
If the average daily net assets of a Fund remain constant during a 36 month
performance measurement period, current net assets will be the same as average
net assets overPortfolio.
Although the performance measurement period and the maximum Performance
Adjustment will be equivalent to 0.15% of current net assets. When current net
assets vary from net assets over the 36 month performance measurement period,
the Performance Adjustment, as a percentage of current assets, may vary
significantly,
33
including at a rate more or less than 0.15%, depending upon whether the net
assets of the Fund had been increasing or decreasing (and the amount of such
increase or decrease) during the performance measurement period. Note that if
net assets for a Fund were increasing during the performance measurement period,
the total performance fee paid, measured in dollars, would be more than if that
Fund had not increased its net assets during the performance measurement period.
Suppose, for example, that the Performance Adjustment was being computed
after the assets of a Fund had been shrinking. Assume its monthly Base Fee was
1/12th of 0.60% of average daily net assets during the previous month. Assume
also that average daily net assets during the 36 month performance measurement
period were $500 million, but that average daily net assets during the preceding
month were just $200 million.
The Base Fee would be computed as follows:
$200 million x 0.60% / 12 = $100,000
If the Fund outperformed or underperformed its benchmark index by an amount
which triggered the maximum Performance Adjustment, the Performance Adjustment
would be computed as follows:
$500 million x 0.15% / 12 = $62,500, which is approximately 1/12th of
0.375% of $200 million.
If the Fund had outperformed its benchmark index, the total advisory fee
rate for that month would be $162,500, which is approximately 1/12th of 0.975%
of $200 million.
If the Fund had underperformed its benchmark index, the total advisory fee
rate for that month would be $37,500, which is approximately 1/12th of 0.225% of
$200 million.
Therefore, the total advisory fee rate for that month, as a percentage of
average net assets during the preceding month, would be approximately 1/12th of
0.975% in the case of outperformance, or approximately 1/12th of 0.225% in the
case of underperformance. Under extreme circumstances, involving
underperformance by a rapidly shrinking Fund, the dollar amount of the
Performance Adjustment could be more than the dollar amount of the Base Fee. In
such circumstances, JCM would reimburse the applicable Fund.
By contrast, the Performance Adjustment would be a smaller percentage of
current assets if the net assets of the Fund were increasing during the
performance measurement period. Suppose, for example, that the Performance
Adjustment was being computed after the assets of a Fund had been growing.
Assume its average daily net assets during the 36 month performance measurement
period were $500 million, but that average daily net assets during the preceding
month were $800 million.
34
The Base Fee would be computed as follows:
$800 million x 0.60% / 12 = $400,000
If the Fund outperformed or underperformed its benchmark index by an amount
which triggered the maximum Performance Adjustment, the Performance Adjustment
would be computed as follows:
$500 million x 0.15% / 12 = $62,500, which is approximately 1/12th of
0.094% of $800 million.
If the Fund had outperformed its benchmark index, the total advisory fee
rate for that month would be $462,500, which is approximately 1/12th of 0.694%
of $800 million.
If the Fund had underperformed its benchmark index, the total advisory fee
rate for that month would be $337,500, which is approximately 1/12th of 0.506%
of $800 million.
Therefore, the total advisory fee rate for that month, as a percentage of
average net assets during the preceding month, would be approximately 1/12th of
0.694% in the case of outperformance or approximately 1/12th of 0.506% in the
case of underperformance.
If approved for a Fund, the Proposed Amendmentstructure described in this Proposal
4.b (and each applicable subsection of Proposal 4.b.) and the amended fee
schedule for that Fund are expected to become effective on January 1, 2006.
However, as noted above for the first 12 months after the effective date, only
the Fund's Base Fee rate will apply.
The proposed Base Fee for each Fund (which is the same asunder
both the current
annual investment advisory fee rate paid by the Fund to JCM)Current Advisory Agreement and the Fund's
benchmark index are shown inAmended Advisory Agreement, the
following table:
BASE FEE
FUND BENCHMARK INDEX (ANNUAL FEE RATE)
- ---- --------------- -----------------
Mid Cap Value Portfolio....... Russell Midcap(R) Value 0.64%#
Index*
Risk-Managed Core Portfolio... S&P 500(R) Index** 0.50%##
Worldwide Growth Portfolio.... MSCI World(SM) Index*** 0.60%
- ---------------
* The Russell Midcap(R) Value Index measuresparty obligated to pay any subadviser differs. Under the performance of those Russell
Midcap companies with lower price-to-book ratios and lower forecasted growth
rates.
** The S&P 500(R) IndexCurrent Advisory
Agreement, the Portfolio is Standard & Poor's composite index of 500 stocks, a
widely recognized, unmanaged index of common stock prices.
*** The Morgan Stanley Capital International ("MSCI") World(SM) Index is a
market capitalization weighted index composed of companies representative of
the market structure of developed market countries in North America, Europe
and the Asia/Pacific Region.
# This amount is reduced by the amount payable by Mid Cap Value Portfolioobligated to Perkins, the subadviser to Mid Cap Value Portfolio, pursuant to a
Sub-Advisory Agreement between JCM and Perkins. Under this Sub-Advisory
Agreement, Mid Cap Value Portfolio pays Perkins a fee equal topay 50% of the
advisory fee otherwise payable by the Fund to JCM (net of any reimbursements
of expenses incurred or fees waived by JCM). For the fiscal year ended
December 31, 2004, Mid Cap Value Portfolio paid Perkins a subadvisory fee at
the annual rate of 0.32% of the Fund's average
35
daily net assets. If Proposal 4.b.i. is approved, Perkins will receive a fee
from the Fund that will adjust upward or downward based upon the Fund's
performance relative to the Russell Midcap(R) Value Index.
## JCM, and not Risk-Managed Core Portfolio, pays INTECH a fee for its services
provided pursuant to a Sub-Advisory Agreement between JCM, on behalf of the
Fund, and INTECH, at an annual rate of 0.26% of the Fund's average daily net
assets. See Proposal 5 for information regarding a proposed amended
subadvisory agreement between JCM and INTECH that incorporates a
performance-based fee paid by JCM to INTECH.
COMPARISON OF CURRENT AND PRO FORMA ADVISORY FEES DURING THE PREVIOUS FISCAL
YEAR
The following table shows: (1) the dollar amount of the actual advisory
fees paid by each Fund, before and after all applicable waivers, for the fiscal
year ended December 31, 2004; (2) the dollar amount of the pro forma advisory
fees that would have been paid by each Fund, before and after all applicable
waivers, if the proposed performance-based fee structure had been in effect
during such fiscal year; and (3) for each Fund, the difference between (i) the
amount of the pro forma advisory fees, net of waivers, that would have been paid
under the performance-based fee structure and (ii) the amount of the actual
advisory fees paid, net of waivers, expressed as a percentage of the actual
advisory fees' amount. Such percentage difference is positive when the amount of
the pro forma advisory fees would have been larger than the amount of the actual
advisory fees paid by a Fund and negative when the amount of the pro forma
advisory fees would have been smaller than the amount of the actual advisory
fees paid by the Fund. For purposes of pro forma calculations, it is assumed
that the Performance Adjustment would have been in effect during the entire
fiscal year ended December 31, 2004 and that it would have been calculated over
the full preceding 36 month performance measurement period (for Mid Cap Value
Portfolio and Risk-Managed Core Portfolio, the period from each Fund's date of
inception: December 31, 2002 to December 31, 2004 and January 2, 2003 to
December 31, 2004, respectively).
ACTUAL ADVISORY FEES PRO FORMA ADVISORY FEES*
--------------------------------------- --------------------------------------- DIFFERENCE
ACTUAL ACTUAL PRO FORMA PRO FORMA BETWEEN
ADVISORY ADVISORY ADVISORY ADVISORY PRO FORMA
FEES BEFORE FEES AFTER FEES BEFORE FEES AFTER AND ACTUAL
WAIVERS WAIVERS WAIVERS WAIVERS WAIVERS WAIVERS ADVISORY
FUND ($) (000'S) ($) (000'S) ($) (000'S) ($) (000'S) ($) (000'S) ($) (000'S) FEES
- ---- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Mid Cap Value
Portfolio.......... 218 N/A 218 202 N/A 202 (7.34)%
Risk-Managed Core
Portfolio.......... 86 N/A 86 98 N/A 98 0%
Worldwide Growth
Portfolio.......... 21,736 N/A 21,736 23,371 N/A 23,371 7.52%
- ---------------
* As described in this Proxy Statement, any Performance Adjustment included in
calculating the Pro Forma Advisory Fees is based on the investment performance
of a Fund's Service Shares versus the Fund's benchmark index over the 36 month
period ended December 31, 2004 (for Mid Cap Value Portfolio and Risk-Managed
Core Portfolio, the period from each Fund's date of inception: December 31,
2002 to December 31, 2004 and January 2, 2003 to December 31, 2004,
respectively).
36
4.b.i. MID CAP VALUE PORTFOLIO
The following hypothetical examples illustrate the application of the
Performance Adjustment for the Fund. The examples assume that the average daily
net assets of the Fund remain constant during a 36 month performance measurement
period. The Performance Adjustment would be a smaller percentage of current
assets if the net assets of the Fund were increasing during the performance
measurement period, and a greater percentage of current assets if the net assets
of the Fund were decreasing during the performance measurement period. All
numbers in the examples are rounded to the nearest hundredth percent. The net
assets of the Fund as of the fiscal years ended December 31, 2003 and December
31, 2004 were $29,697,739 and $41,563,567, respectively.
The monthly maximum positive or negative Performance Adjustment of 1/12th
of 0.15% of average net assets during the prior 36 months occurs if the Fund
outperforms or underperforms its benchmark index by 4.00% over the same period.
The Performance Adjustment is made in even increments for every 0.50% difference
in the investment performance of the Fund's Service Shares compared to the
investment record of the Russell Midcap(R) Value Index.
EXAMPLE 1: FUND OUTPERFORMS ITS BENCHMARK BY 4%
If the Fund has outperformed the Russell Midcap(R) Value Index by 4% during
the preceding 36 months, the Fund would calculate the investment advisory fee
as
follows:
TOTAL ADVISORY FEE RATE
BASE FEE RATE PERFORMANCE ADJUSTMENT RATE FOR THAT MONTH
- ------------- --------------------------- -----------------------
1/12th of 0.64% 1/12th of 0.15% 1/12th of 0.79%
EXAMPLE 2: FUND PERFORMANCE TRACKS ITS BENCHMARK
Ifto Janus Capital and 50% to any subadviser. Under the Fund performanceAmended Advisory
Agreement, the Portfolio pays the entire investment advisory fee to Janus
Capital and Janus Capital in turn pays 50% of that fee to any subadviser.
Janus Capital has trackedagreed by contract to waive the performance ofadvisory fee payable by
the Russell
Midcap(R) Value Index duringPortfolio in an amount equal to the preceding 36 months,amount, if any, by which the Fund would calculatePortfolio's
normal operating expenses in any fiscal year exceed 1.24%, including the
investment advisory fee, but excluding any class-specific distribution and
shareholder servicing fees (12b-1), as follows:
TOTAL ADVISORY FEE RATE
BASE FEE RATE PERFORMANCE ADJUSTMENT RATE FOR THAT MONTH
- ------------- --------------------------- -----------------------
1/12th of 0.64% 0.00 1/12th of 0.64%
EXAMPLE 3: FUND UNDERPERFORMS ITS BENCHMARK BY 4%
If the Fund has underperformed the Russell Midcap(R) Value Index by 4%
during the preceding 36 months, the Fund would calculate the investment advisory
feewell as follows:
TOTAL ADVISORY FEE RATE
BASE FEE RATE PERFORMANCE ADJUSTMENT RATE FOR THAT MONTH
- ------------- --------------------------- -----------------------
1/12th of 0.64% 1/12th of -0.15% 1/12th of 0.49%
37
Under the terms of the current Sub-Advisory Agreement between JCM, on
behalf of Mid Cap Value Portfolio,administrative services fees
applicable to Service Shares, and Perkins, Mid Cap Value Portfolio pays
Perkins a fee equal to 50% of the advisory fee otherwise paid to JCM by the Fund
(and JCM's fee is thereby reduced by 50% to account for the fee paid directly to
Perkins). This means that pursuant to the terms of the Proposed Amendment, the
subadvisory fee rate for fees paid by the Fund to Perkins will adjust upward or
downward in line with the advisory fee rate for fees paid by the Fund to JCM
based on Mid Cap Value Portfolio's Service Shares' performance relative to the
Russell Midcap(R) Value Index. If Proposal 4.b.i. isitems not approved for Mid Cap
Value Portfolio, Perkins will continue to receive a subadvisory fee from the
Fund that is equal to 50% of the advisory fee otherwise paid by the Fund to JCM
under the Current Advisory Agreement (and JCM's advisory fee is thereby reduced
by 50%), currently 0.32% of Mid Cap Value Portfolio's average daily net assets.
COMPARISON OF CURRENT AND PRO FORMA EXPENSES
The following tables describe the shareholder fees and annual fundnormally considered operating
expenses, that you may pay if you buy and hold shares of the Fund under
the current fee structure and proposed performance-based fee structure, without
giving effect to any fee waivers. For purposes of pro forma calculations, it is
assumed that the Performance Adjustment would have been in effect during the
entire fiscal year ended December 31, 2004 and that it would have been
calculated over the period December 31, 2002 to December 31, 2004 (the period
since the Fund's inception date). The fees and expenses shown were determined
based upon average net assetssuch as of the fiscal year ended December 31, 2004,
restated, for current expenses, to reflect a reduction in the Fund's management
fee, effective July 1, 2004. For the December 31, 2002 to December 31, 2004
period, the Fund underperformed its benchmark index (by more than 4%) and the
fiscal year end average daily net assets were higher than the trailing 24 month
average daily net assets, resulting in the pro forma management fee shown in the
Annual Fund Operating Expenses table below for the Fund.
Shareholder fees are those paid directly from your investment and may
include sales loads, redemption fees or exchange fees. The Fund is a no-load
investment in that there are no sales charges, so you will generally not pay any
shareholder fees when you buy or sell shares of the Fund. However, each variable
insurance contract involves fees and expenses not described herein. See your
contract prospectus for information regarding contract fees and expenses and any
restrictions on purchases or allocations.
Annual fund operating expenses are paid out of the Fund's assets and
include fees for portfolio management, maintenance of shareholder accounts,
shareholder servicing, accounting and other services. You do not pay these fees
directly but, as the examples show, these costs are borne indirectly by all
shareholders.
The tables and examples provided below are designed to assist participants
in qualified plans that invest in shares of the Fund in understanding the fees
and expenses that you may pay as an investor in the Fund. THE TABLES AND
EXAMPLES DO
38
NOT REFLECT DEDUCTIONS AT THE SEPARATE ACCOUNT LEVEL FOR ANY CHARGES THAT MAY BE
INCURRED UNDER A CONTRACT. INCLUSION OF THESE CHARGES WOULD INCREASE THE FEES
AND EXPENSES DESCRIBED BELOW.
The Trust, on behalf of the Fund, has entered into an expense waiver
agreement with JCM. In the expense waiver agreement, JCM has agreed to reduce
annual Fund operating expenses allocated to any class to the extent that total
operating expenses exceed a specific percentage of average daily net assets,
subject to certain limitations as described in the expense waiver agreement.
Additional details with respect to the expense waiver agreement are described in
the footnotes to the Annual Fund Operating Expenses table listed below. As a
result of the expense waiver agreement, the actual Total Annual Operating
Expenses may be less than the amount listed in the table below.
SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)
(CURRENT AND PRO FORMA STRUCTURE)
SERVICE INSTITUTIONAL
SHARES SHARES
------- -------------
Maximum Sales Charge (Load) Imposed On Purchases
(% of offering price)............................. None None
Redemption Fee (as a % of amount redeemed).......... None None
Exchange Fee........................................ None None
ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
DISTRIBUTION/ TOTAL ANNUAL
MANAGEMENT SERVICE OTHER OPERATING
FEE(1) (12b-1) FEES(2) EXPENSES EXPENSES(4)
---------- --------------- -------- ------------
MID CAP VALUE PORTFOLIO
Service Shares
Current........... 0.64% 0.25% 0.47%(3) 1.36%
Pro Forma......... 0.60% 0.25% 0.47%(3) 1.32%
Institutional Shares
Current........... 0.64% N/A 0.37% 1.01%
Pro Forma......... 0.60% N/A 0.37% 0.97%
EXAMPLES:
THE FOLLOWING EXAMPLES ARE BASED ON EXPENSES WITHOUT WAIVERS AS SHOWN IN
THE TABLES ABOVE. These examples are intended to help you compare the cost of
investing in the Fund under both the current fee structure and the proposed fee
structure with the cost of investing in other mutual funds. The examples assume
that you invest $10,000 in the Fund for the time periods indicated and then
redeem all of your shares at the end of those periods. Since no sales load
applies, the results apply whether or not you redeem your shares at the end of
the periods shown below.
39
The examples also assume that your investment has a 5% return each year and that
the Fund's operating expenses without waivers remain the same. The pro forma
calculations assume that the Performance Adjustment had been in effect from the
date of Fund inception, December 31, 2002, through December 31, 2004. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
MID CAP VALUE PORTFOLIO
Service Shares
Current.......................... $138 $431 $745 $1,635
Pro Forma*....................... 134 418 723 1,590
Institutional Shares
Current.......................... 103 322 558 1,236
Pro Forma*....................... 99 309 536 1,190
- ---------------
(1) Any Performance Adjustment included in calculating the Pro Forma Management
Fee is based on the investment performance of the Fund's Service Shares
versus the Fund's benchmark index over the period December 31, 2002 to
December 31, 2004 (since the Fund's date of inception). Once the Performance
Adjustment is determined, it is applied across each other class of shares of
the Fund.
(2) Because the 12b-1 fee is charged as an ongoing fee, over time the fee will
increase the cost of your investment and may cost you more than paying other
types of sales charges.
(3) Included in Other Expenses is an administrative services fee of 0.10% of the
average daily net assets to compensate Janus Services for providing, or
arranging for the provision of, recordkeeping, subaccounting and
administrative services to retirement or pension plan participants, variable
contract owners or underlying investors investing through institutional
channels.
(4) Total Annual Operating Expenses do not reflect the application of a
contractual expense waiver by JCM. JCM has contractually agreed to waive the
Fund's total operating expenses (excluding the distribution fee,
administrative services fee, brokerage commissions, interest, dividends, taxes, and
extraordinary expenses)expenses including, but not limited to, the extent such operating expenses exceed 1.24%
of average daily net assets on the fiscal year ending date in which the
agreement is in effect.acquired fund fees and
expenses. Because a fee waiver will have a positive effect upon the Fund'sPortfolio's
performance, a fee waiver that is in place during the period when the
Performance Adjustment applies may effectaffect the Performance Adjustment in a way
that is favorable to JCM.Janus Capital. It is possible that the cumulative dollar
amount of additional compensation ultimately payable to JCM will,Janus Capital may, under
some circumstances, exceed the cumulative dollar amount of management fees
waived by JCM. The current agreementJanus Capital. Unless terminated, revised, or extended, the
Portfolio's expense limit will be in effect until May 1, 2007, unless terminated, revised or extended. Additionally,2009.
During the current
agreement does not contain any provisions allowing for the recoupment of any
fees waived.
* The Pro Forma numbers include a pro forma management fee calculated as
described in the text and related footnotes that accompany the fee table
above.
4.B.II. RISK-MANAGED CORE PORTFOLIO
The following hypothetical examples illustrate the application of the
Performance Adjustment for the Fund. The examples assume that the average daily
net assets of the Fund remain constant during a 36 month performance measurement
period. The Performance Adjustment would be a smaller percentage of current
assets if the net assets of the Fund were increasing during the performance
measurement period, and a greater percentage of current assets if the net assets
of the Fund were decreasing during the performance measurement period. All
numbers in the examples are rounded to the nearest hundredth percent. The
average
40
daily net assets of the Fund as of the fiscal years ended December 31, 2003 and
December 31, 2004 were $11,337,113 and $20,679,995, respectively.
The monthly maximum positive or negative performance adjustment of 1/12th
of 0.15% of average net assets during the prior 36 months occurs if the Fund
outperforms or underperforms its benchmark index by 4.00% over the same period.
The Performance Adjustment is made in even increments for every 0.50% difference
in the investment performance of the Fund's Service Shares compared to the
investment record of the S&P 500(R) Index.
EXAMPLE 1: FUND OUTPERFORMS ITS BENCHMARK BY 4%
If the Fund has outperformed the S&P 500(R) Index by 4% during the
preceding 36 months, the Fund would calculate the investment advisory fee as
follows:
TOTAL ADVISORY FEE RATE
BASE FEE RATE PERFORMANCE ADJUSTMENT RATE FOR THAT MONTH
- ------------- --------------------------- -----------------------
1/12th of 0.50% 1/12th of 0.15% 1/12th of 0.65%
EXAMPLE 2: FUND PERFORMANCE TRACKS ITS BENCHMARK
If the Fund performance has tracked the performance of the S&P 500(R) Index
during the preceding 36 months, the Fund would calculate the investment advisory
fee as follows:
TOTAL ADVISORY FEE RATE
BASE FEE RATE PERFORMANCE ADJUSTMENT RATE FOR THAT MONTH
- ------------- --------------------------- -----------------------
1/12th of 0.50% 0.00 1/12th of 0.50%
EXAMPLE 3: FUND UNDERPERFORMS ITS BENCHMARK BY 4%
If the Fund has underperformed the S&P 500(R) Index by 4% during the
preceding 36 months, the Fund would calculate the investment advisory fee as
follows:
TOTAL ADVISORY FEE RATE
BASE FEE RATE PERFORMANCE ADJUSTMENT RATE FOR THAT MONTH
- ------------- --------------------------- -----------------------
1/12th of 0.50% 1/12th of -0.15% 1/12th of 0.35%
COMPARISON OF CURRENT AND PRO FORMA EXPENSES
The following tables describe the shareholder fees and annual fund
operating expenses that you may pay if you buy and hold shares of the Fund under
the current fee structure and proposed performance-based fee structure, without
giving effect to any fee waivers. For purposes of pro forma calculations, it is
assumed that the Performance Adjustment would have been in effect during the
entiremost recent fiscal year ended December 31, 20042007, the Portfolio
paid advisory fees to Janus Capital of $243,220 and that itsubadvisory fees to PWM of
$243,220. If the Amended Advisory Agreement had been in effect, Mid Cap Value
Portfolio would have been
calculated overpaid Janus Capital $486,439, from which Janus Capital would
17
have paid PWM $243,220, the period January 2, 2003 to December 31, 2004 (the period
sincesame amount PWM received under the Fund's inception date).Current Advisory
Agreement.
Liability. The fees and expenses shown were determined
based upon average net assets as of the fiscal year ended December 31, 2004,
restated, for current expenses, to reflect a reduction in the management fee,
effective July 1, 2004. For the January 2, 2003 to
41
December 31, 2004 period, the Fund outperformed its benchmark index (by more
than 4%)Portfolio's Current Advisory Agreement and the fiscal year end average daily net assets were higher than the
trailing 24 month average daily net assets, resulting in the pro forma
management fee shown in the Annual Fund Operating Expenses table belowAmended
Advisory Agreement each provide that Janus Capital shall not be liable for the
Fund.
Shareholder fees are those paid directly from your investment and may
include sales loads, redemption feesany
error of judgment or exchange fees. The Fund is a no-load
investment in that there are no sales charges, so you will generally not paymistake of law or for any shareholder fees when you buy or sell shares of the Fund. However, each variable
insurance contract involves fees and expenses not described herein. See your
contract prospectus for information regarding contract fees and expenses and any
restrictions on purchases or allocations.
Annual fund operating expenses are paidloss arising out of the Fund's assets and
include feesany
investment or for portfolio management, maintenance of shareholder accounts,
shareholder servicing, accounting and other services. You do not pay these fees
directly but, as the examples show, these costs are borne indirectly by all
shareholders.
The tables and examples provided below are designed to assist participants
in qualified plans that invest in shares of the Fund in understanding the fees
and expenses that you may pay as an investor in the Fund. THE TABLES AND
EXAMPLES DO NOT REFLECT DEDUCTIONS AT THE SEPARATE ACCOUNT LEVEL FOR ANY CHARGES
THAT MAY BE INCURRED UNDER A CONTRACT. INCLUSION OF THESE CHARGES WOULD INCREASE
THE FEES AND EXPENSES DESCRIBED BELOW.
The Trust, on behalf of the Fund, has entered into an expense waiver
agreement with JCM. In the expense waiver agreement, JCM has agreed to reduce
annual Fund operating expenses allocated to any class to the extent that total
operating expenses exceed a specific percentage of average daily net assets,
subject to certain limitations as described in the expense waiver agreement.
Additional detailsact or omission taken with respect to the expense waiver agreement are describedPortfolio,
except for willful misfeasance, bad faith or gross negligence in the footnotesperformance
of its duties, or by reason of reckless disregard of its obligations and duties
under the agreement, and except to the Annual Fund Operating Expenses table listed below. As a
resultextent otherwise provided by law.
Termination of the expense waiver agreement, the actual Total Annual Operating
Expenses may be less than the amount listed in the table below.
SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)
(CURRENT AND PRO FORMA STRUCTURE)
SERVICE
SHARES
-------
Maximum Sales Charge (Load) Imposed On Purchases (% of
offering price)..................................... None
Redemption Fee on Shares held for three months or less
(as a % of amount redeemed)......................... None
Exchange Fee.......................................... None
42
ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
DISTRIBUTION/
SERVICE TOTAL ANNUAL
MANAGEMENT (12b-1) OTHER OPERATING
FEE(1) FEES(2) EXPENSES(3) EXPENSES(4)
---------- ------------- ----------- ------------
RISK-MANAGED CORE PORTFOLIO
Service Shares
Current................. 0.50% 0.25% 0.62% 1.37%
Pro Forma............... 0.64% 0.25% 0.62% 1.51%
EXAMPLES:
THE FOLLOWING EXAMPLES ARE BASED ON EXPENSES WITHOUT WAIVERS AS SHOWN IN
THE TABLES ABOVE. These examples are intended to help you compare the cost of
investing in the Fund under both the current fee structureAgreement. The Portfolio's Current Advisory Agreement
and the proposed fee
structure with the cost of investing in other mutual funds. The examples assume
that you invest $10,000 in the Fund for the time periods indicated and then
redeem all of your shares at the end of those periods. Since no sales load
applies, the results apply whether or not you redeem your shares at the end of
the periods shown below. The examples also assume that your investment has a 5%
returnAmended Advisory Agreement each year and that the Fund's operating expenses without waivers remain
the same. The pro forma calculations assume that the Performance Adjustment had
beencontinue in effect from year to year so
long as such continuance is specifically approved annually by a majority of the
datePortfolio's Independent Trustees, and by either a 1940 Act Majority of Fund inception, January 2, 2003 through December
31, 2004. Although your actual coststhe
outstanding voting securities of the Portfolio or the Board of Trustees, cast in
person at a meeting called for such purpose. The Current and Amended Advisory
Agreement each: (i) may be higherterminated, without penalty, by the Portfolio or
lower, basedJanus Capital on these
assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
RISK-MANAGED CORE PORTFOLIO
Service Shares
Current.......................... $139 $434 $750 $1,646
Pro Forma*....................... 154 477 824 1,802
- ---------------
(1) Any Performance Adjustment included60 days' written notice; (ii) terminates automatically in calculating the
Pro Forma Management
Fee is based onevent of its assignment; and (iii) generally, may not be amended without the
investment performanceapproval by vote of a majority of the Fund versus the Fund's
benchmark index over the period January 2, 2003 to December 31, 2004 (since
the Fund's date of inception).
(2) Because the 12b-1 fee is charged as an ongoing fee, over time the fee will
increase the cost of your investment and may cost you more than paying other
types of sales charges.
(3) Included in Other Expenses is an administrative services fee of 0.10%Trustees, including a majority of the
average daily net assets to compensate Janus Services for providing, or
arranging for the provision of, recordkeeping, subaccountingIndependent Trustees, and,
administrative services to retirement or pension plan participants, variable
contract owners or underlying investors investing through institutional
channels.
(4) Total Annual Operating Expenses do not reflect the application of a
contractual expense waiver by JCM. JCM has contractually agreed to waive the
Fund's total operating expenses (excluding the distribution fee,
administrative services fee, brokerage commissions, interest, taxes and
extraordinary expenses) to the extent required by the 1940 Act, the vote of a
1940 Act Majority of the outstanding voting securities of the Portfolio.
Additional Information. The Current Advisory Agreement, dated July 1,
2004, as amended February 1, 2006 and June 14, 2006, was last submitted to
shareholders on January 9, 2006 for approval of the current performance-based
investment advisory fee structure. At a meeting of the Trustees held on December
14, 2007, the Trustees approved the continuation of the Current Advisory
Agreement through February 1, 2009. In conjunction with their approval of the
continuance of the Current Advisory Agreement, the Board noted that at a meeting
held on November 6, 2007, they had previously approved the Amended Advisory
Agreement and that such operating expenses exceed 1.10%new agreement would not take effect unless approved by
shareholders. A discussion of average daily net assets on the fiscal year ending date in whichBoard's considerations and recommendations
concerning the agreementAmended Advisory Agreement at the November 6, 2007 board meeting
follows below.
The implementation of the Amended Advisory Agreement is in effect. Because a fee waivercontingent upon,
and will have a positive effectbecome effective upon consummation of, the Fund's performance, a fee waiver that is in place duringclosing of the period
when the Performance Adjustment applies may effect the Performance
Adjustment in a way that is favorablePending
Acquisition, subject to JCM. It is possible that the
cumulative dollar amount of additional compensation ultimately payable to
JCM will, under some circumstances, exceed the cumulative dollar amount of
fees waived by JCM.certain other conditions. The current agreementCurrent Advisory Agreement
will be in effect until Mayit terminates in accordance with its terms, including or
until the consummation of the transaction between PWM and Janus Capital. If
approved, the Amended Advisory Agreement will be in effect for an initial term
ending on February 1, 2007, unless terminated,
432009, and may continue in effect thereafter from year to
year if such continuation is specifically approved at least annually by either
the Board of Trustees or the affirmative vote of a 1940 Act Majority of the
outstanding voting
18
revised or extended. Additionally,securities of the current agreement does not contain
any provisions allowingPortfolio and, in either event, by the vote of a majority of
the Independent Trustees, cast in person at a meeting called for such purpose.
BOARD APPROVAL AND RECOMMENDATION
The Trustees considered the Amended Advisory Agreement for the recoupmentPortfolio.
In the course of their consideration of the Amended Advisory Agreement, the
Independent Trustees met in executive session and were advised by their
independent legal counsel. The Independent Trustees received and reviewed a
substantial amount of information provided by Janus Capital in response to
requests of the Independent Trustees and their counsel. They also considered
information provided by their independent fee consultant. Based on their
evaluation of that information and other factors, on November 6, 2007, the
Independent Trustees approved the Amended Advisory Agreement, subject to
shareholder approval.
In considering whether to approve the Amended Advisory Agreement, the Board
of Trustees noted that, except for the proposed reallocation to Janus Capital of
the obligation to pay compensation to any fees waived.
*subadviser, the Amended Advisory
Agreement is substantially similar to the Current Advisory Agreement, which was
most recently approved by them at a meeting held on December 20, 2006. The Pro Forma numbers includeBoard
also met with representatives of Janus Capital and considered information
provided by Janus Capital in preparation for the Trustees' consideration of
advisory contracts at their meetings held in December 2007. The Board took into
account the services provided by Janus Capital in its capacity as investment
adviser to the Portfolio and concluded that the services provided were
acceptable. Certain of these considerations are discussed in more detail below.
NATURE, EXTENT AND QUALITY OF SERVICES
The Trustees reviewed the nature, extent and quality of the services
provided by Janus Capital, taking into account the investment objective and
strategies of the Portfolio and the knowledge the Trustees gained from their
regular meetings with management on at least a pro formaquarterly basis, and their
ongoing review of information related to the Portfolio. In addition, the
Trustees reviewed the resources and key personnel of Janus Capital, especially
those who provide investment management fee calculated as
describedservices to the Portfolio. The Trustees
also considered other services provided to the Portfolio by Janus Capital. Janus
Capital also advised the Board of Trustees that it expects that there will be no
diminution in the textscope and related footnotes that accompanyquality of advisory services provided to the
fee table
above.
4.b.iii. WORLDWIDE GROWTH PORTFOLIO
The following hypothetical examples illustrate the applicationPortfolio as a result of the Performance Adjustment for the Fund.Amended Advisory Agreement.
The examples assumeTrustees concluded that the average daily
net assetsadvisory relationship and arrangement was
not expected to adversely affect the nature, extent or quality of the Fund remain constant during a 36 month performance measurement
period. The Performance Adjustment would be a smaller percentage of current
assets if the net assets of the Fund were increasing during the performance
measurement period, and a greater percentage of current assets if the net assets
of the Fund were decreasing during the performance measurement period. All
numbers in the examples are roundedservices
provided to the nearest hundredth percent. The net
assets of the Fund as of the fiscal years ended December 31, 2003 and December
31, 2004 were $3,980,761,843 and $2,727,930,168, respectively.
The monthly maximum positive or negative performance adjustment of 1/12th
of 0.15% of average net assets during the prior 36 months occurs if the Fund
outperforms or underperforms its benchmark index by 6.00% over the same period.
The Performance Adjustment is made in even increments for every 0.50% difference
in the investment performance of the Fund's Service Shares compared to the
investment record of the MSCI World(SM) Index.
EXAMPLE 1: FUND OUTPERFORMS ITS BENCHMARK BY 6%
If the Fund has outperformed the MSCI World(SM) Index by 6% during the
preceding 36 months, the Fund would calculate the investment advisory fee as
follows:
TOTAL ADVISORY FEE RATE
BASE FEE RATE PERFORMANCE ADJUSTMENT RATE FOR THAT MONTH
- ------------- --------------------------- -----------------------
1/12th of 0.60% 1/12th of 0.15% 1/12th of 0.75%
EXAMPLE 2: FUND PERFORMANCE TRACKS ITS BENCHMARK
If the Fund performance has tracked the performance of the MSCI World(SM)
Index during the preceding 36 months, the Fund would calculate the investment
advisory fee as follows:
TOTAL ADVISORY FEE RATE
BASE FEE RATE PERFORMANCE ADJUSTMENT RATE FOR THAT MONTH
- ------------- --------------------------- -----------------------
1/12th of 0.60% 0.00 1/12th of 0.60%
44
EXAMPLE 3: FUND UNDERPERFORMS ITS BENCHMARK BY 6%
If the Fund underperforms the MSCI World(SM) Index by 6% during the
preceding 36 months, the Fund would calculate the investment advisory fee as
follows:
TOTAL ADVISORY FEE RATE
BASE FEE RATE PERFORMANCE ADJUSTMENT RATE FOR THAT MONTH
- ------------- --------------------------- -----------------------
1/12th of 0.60% 1/12th of -0.15% 1/12th of 0.45%
COMPARISON OF CURRENT AND PRO FORMA EXPENSES
The following tables describe the shareholder fees and annual fund
operating expenses that you may pay if you buy and hold shares of the Fund under
the current fee structure and proposed performance-based fee structure, without
giving effect to any fee waivers. For purposes of pro forma calculations, it is
assumed that the Performance Adjustment would have been in effect during the
entire fiscal year ended December 31, 2004 and that it would have been
calculated over a full 36 month performance measurement period. The fees and
expenses shown were determined based upon average net assets as of the fiscal
year ended December 31, 2004, restated, for current expenses, to reflect a
reduction in the management fee, effective July 1, 2004. For the 36 month period
ended December 31, 2004, the Fund underperformed its benchmark index (by more
than 6%) and the fiscal year end average daily net assets were lower than the
trailing 36 month average daily net assets, resulting in the pro forma
management fee shown in the Annual Fund Operating Expenses table below for the
Fund.
Shareholder fees are those paid directly from your investment and may
include sales loads, redemption fees or exchange fees. The Fund is a no-load
investment in that there are no sales charges, so you will generally not pay any
shareholder fees when you buy or sell shares of the Fund. However, each variable
insurance contract involves fees and expenses not described herein. See your
contract prospectus for information regarding contract fees and expenses and any
restrictions on purchases or allocations.
Annual fund operating expenses are paid out of the Fund's assets and
include fees for portfolio management, maintenance of shareholder accounts,
shareholder servicing, accounting and other services. You do not pay these fees
directly but, as the examples show, these costs are borne indirectly by all
shareholders.
The tables and examples provided below are designed to assist participants
in qualified plans that invest in shares of the Fund in understanding the fees
and expenses that you may pay as an investor in the Fund. THE TABLES AND
EXAMPLES DO NOT REFLECT DEDUCTIONS AT THE SEPARATE ACCOUNT LEVEL FOR ANY CHARGES
THAT MAY BE INCURRED UNDER A CONTRACT. INCLUSION OF THESE CHARGES WOULD INCREASE
THE FEES AND EXPENSES DESCRIBED BELOW.
45
SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)
(CURRENT AND PRO FORMA STRUCTURE)
SERVICE SERVICE II INSTITUTIONAL
SHARES SHARES SHARES
------- ---------- -------------
Maximum Sales Charge (Load) Imposed On
Purchases (% of offering price)......... None None None
Redemption Fee on Shares held for 60 days
or less (as a % of amount redeemed)..... None 1.00%(1) None
Exchange Fee.............................. None None(2) None
- ---------------
(1) The Redemption Fee may be waived in certain circumstances.
(2) An exchange of Fund shares held for 60 days or less may be subject to the
Fund's 1% Redemption Fee.
ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
DISTRIBUTION/ TOTAL ANNUAL
MANAGEMENT SERVICE OTHER OPERATING
FEE(1) (12B-1) FEES(2) EXPENSES EXPENSES
---------- --------------- -------- ------------
WORLDWIDE GROWTH PORTFOLIO
Service Shares
Current................. 0.60% 0.25% 0.03% 0.88%
Pro Forma............... 0.67% 0.25% 0.03% 0.95%
Service II Shares
Current................. 0.60% 0.25% 0.03% 0.88%
Pro Forma............... 0.67% 0.25% 0.03% 0.95%
Institutional Shares
Current................. 0.60% N/A 0.03% 0.63%
Pro Forma............... 0.67% N/A 0.03% 0.70%
EXAMPLES:
THE FOLLOWING EXAMPLES ARE BASED ON EXPENSES WITHOUT WAIVERS AS SHOWN IN
THE TABLES ABOVE. These examples are intended to help you compare the cost of
investing in the Fund under both the current fee structure and the proposed fee
structure with the cost of investing in other mutual funds. The examples assume
that you invest $10,000 in the Fund for the time periods indicated and then
redeem all of your shares at the end of those periods. Since no sales load
applies, the results apply whether or not you redeem your shares at the end of
the periods shown below. The examples also assume that your investment has a 5%
return each yearPortfolio, and that the Fund's operating expenses without waivers remainPortfolio would continue to benefit from
services provided under the same. The pro forma calculations assumeAmended Advisory Agreement. They also concluded that
the Performance Adjustment hadquality of Janus Capital's services to the Portfolio has been adequate. In
reaching their conclusions, the Trustees considered: (i) information provided by
Janus Capital for their consideration of the Amended Advisory Agreement; (ii)
the key factors
19
identified in effectmaterials previously provided to the Trustees by their independent
counsel; and (iii) the reasonableness of the fees payable by shareholders of the
Portfolio. They also concluded that Janus Capital's financial condition was
sound.
COSTS OF SERVICES PROVIDED
The Trustees considered the fee structure under the Amended Advisory
Agreement, as well as the overall fee structure of the Portfolio. The Trustees
examined the fee information and expenses for the 46
36 month period ended December 31, 2004. Although your actual costs mayPortfolio in comparison to
information for other comparable funds, as provided by Lipper. In reviewing the
data, the Trustees noted that the Portfolio's expense structure would now
include payment only to Janus Capital for investment management services, as
opposed to payment to both Janus Capital and PWM.
The Trustees considered the structure by which Janus Capital and PWM would
be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
WORLDWIDE GROWTH PORTFOLIO
Service Shares
Current.......................... $90 $281 $488 $1,084
Pro Forma*....................... 97 303 525 1,166
Service II Shares
Current.......................... 90 281 488 1,084
Pro Forma*....................... 97 303 525 1,166
Institutional Shares
Current.......................... 64 202 351 786
Pro Forma*....................... 72 224 390 871
- ---------------
(1) Any Performance Adjustment included in calculatingpaid for their services. The Trustees also considered the Pro Forma Management
Fee as shownoverall fees of the
Portfolio for services provided to the Portfolio.
The Trustees concluded that the estimated overall expense ratio of each
class of shares of the Fund is based onPortfolio, taking into account any expense limitations,
was comparable to or more favorable than the investmentmedian expense ratios of its peers,
and that the fees that the Portfolio will pay to Janus Capital (a portion of
which Janus Capital will pay to PWM) are reasonable in relation to the nature
and quality of the services to be provided, taking into consideration the fees
charged by other advisers and subadvisers for managing comparable mutual funds
with similar strategies.
PERFORMANCE OF THE PORTFOLIO
The Trustees considered the performance results of the Portfolio over
various time periods. They reviewed information comparing the Portfolio's
performance with the performance of comparable funds and peer groups identified
by Lipper, and with the Fund's Service Shares versus the Fund's benchmark index
over the 36 month period ended December 31, 2004. Once the Performance
Adjustment is determined, it is applied across each other class of shares of
the Fund.
(2) Because the 12b-1 fee is charged as an ongoing fee, over time the fee will
increase the cost of your investment and may cost you more than paying other
types of sales charges.
* The Pro Forma numbers include a pro forma management fee calculated as
described in the text and related footnotes that accompany the fee table
above.
FOR MID CAP VALUE PORTFOLIO, RISK-MANAGED CORE PORTFOLIO, AND WORLDWIDE GROWTH
PORTFOLIO
BOARD APPROVAL AND RECOMMENDATION
On September 20, 2005 and October 19, 2005, the Board of Trustees,
including all of the Independent Trustees, voted unanimously to approve the
Proposed Amendment for each applicable Fund and authorized the submission of
each Proposed Amendment to the Fund's shareholders for approval.
For more than a year the Independent Trustees and their independent fee
consultant, in consultation with independent legal counsel to the Independent
Trustees, have been exploring the possibility of modifying the fee structure for
certain Funds to provide for a Base Fee for each of those Funds at the same rate
as the current advisory fee rate for that Fund, and a performance-based
adjustment that would increase or decrease the fee based on whether the Fund's
total return performance exceeds or lags a stated relevantPortfolio's benchmark index. They also worked with JCM to develop a performance structureconcluded that was
acceptable to JCM. In doing so, the Independent Trustees were seeking to provide
a closer alignment of the interests of JCM with those of the Funds and their
shareholders. They believe that the fee structure proposed for each Fund will
achieve that objective. Included as part of their analysis of the overall
performance fee structure, the Trustees, in consultation with their independent
fee consultant,
47
considered the appropriate performance range for achieving the maximum and
minimum advisory fee that would result in the Performance Adjustment of up to
0.15% (positive or negative) of a Fund's average daily net assets during the
applicable performance measurement period. The Trustees reviewed information
provided by JCM and prepared by their independent fee consultant with respect to
an appropriate deviation of excess/under returns relative to a Fund's benchmark
index, taking into consideration expected tracking error of the Fund, expected
returns and potential risks and economics involved both for JCM and the Fund's
shareholders. The Trustees also reviewed the structure of performance fees
applied by other mutual fund complexes. Based on this information, the Trustees
determined that a performance range that approximates one standard deviation of
excess/under returns relative to a Fund's benchmark index was appropriate for
calculating the maximum range (positive or negative) of the Performance
Adjustment.
As described above, the Performance Adjustment that will be added to or
subtracted from the Base Fee as a result of a Fund's performance relative to its
benchmark index is a variable up to 0.15% of average net assets during the
performance measurement period. Importantly, the performance is computed after
deducting the Fund's operating expenses (including advisory fees), which means
that in order to receive any upward adjustment from the Base Fee, JCM must
deliver a total return after expenses that exceeds the return of the benchmark
index, which does not incur any expenses.
The Trustees determined that the benchmark index specified in each of the
Proposed Amendments for purposes of computing the performance fee adjustments is
appropriate for the respective Fund based on a number of factors, including the
fact that the index is broad-based and is composed of securities of the types in
which the Fund may invest. The Trustees believe that divergence between the
Fund's performance and performance of the index can be attributed, in part, to
the ability of the portfolio manager in making investment decisions within the
parameters of the Fund's investment objective and investment policies and
restrictions.
The Trustees determined that the class of shares of each Fund selected for
purposes of calculating the Performance Adjustment as applied to the Fund is the
most appropriate class for use in calculating such Fund's Performance
Adjustment. In making that determination, the Trustees considered the fee
structure and expenses paid by each class of shares, any fees paid to or
retained by JCM or its affiliates, as well as the distribution channel for each
class of shares.
The time periods to be used in determining any Performance Adjustment were
also judged to be of appropriate length to ensure proper correlation and to
prevent fee adjustments from being based upon random or insignificant
differences between the
performance of the Fund andPortfolio was acceptable under current market conditions.
Although the performance of the index. InPortfolio may have lagged the benchmark index
for certain periods, the Trustees also concluded that regardJanus Capital and PWM, as
the Portfolio's subadviser, had taken appropriate steps to address those
instances of underperformance.
OTHER BENEFITS FROM THE RELATIONSHIP WITH JANUS CAPITAL
The Trustees also considered benefits that would accrue to the Portfolio
from its relationship with Janus Capital. The Trustees concluded that, other
than the services to be provided by Janus Capital pursuant to the Amended
Advisory Agreement and the fees to be paid by the Portfolio for such services,
the Portfolio, Janus Capital and PWM may potentially benefit from their
relationship with one another in other ways. They also concluded that success of
their relationship could attract other business to Janus Capital and PWM or to
other Janus funds, and that
20
the success of Janus Capital and PWM could enhance each firm's ability to serve
the Portfolio.
After full consideration of the above factors, as well as other factors,
the Trustees concluded that approving the Amended Advisory Agreement was in the
best interest of the Portfolio and its shareholders. The Trustees, all of whom
are Independent Trustees, voted to approve the Amended Advisory Agreement and to
recommend it would be appropriateto shareholders for there to be no
adjustment from the Base Fee for the first 12 months after the effective date of
each Proposed Amendment before implementation of any Performance Adjustment, and
that, once implemented, the Performance Adjustment should reflect only the
Fund's performance subsequent to
48
that effective date. Moreover, the Trustees believed that, upon reaching the
thirty sixth month after the effective date, the performance measurement period
would be fully implemented, and that the Performance Adjustment should
thereafter be based upon a thirty-six month rolling performance measurement
period.
In addition to considering the performance fee structure reflected in each
Proposed Amendment, in approving each of those agreements, the Trustees followed
the process and considered the factors and reached the conclusions described
above under Proposal 4.a Board Approval and Recommendation.their approval.
REQUIRED VOTE
Approval of Proposal 4.b. as to each applicable Fundthe Amended Advisory Agreement requires the affirmative vote of
a 1940 Act Majority. In addition:
-Majority of the Portfolio, all share classes voting together as a
single class. Approval of Proposal 4.b.i. by shareholders of Mid Cap Value Portfolio2 is contingent upon the approval of both
Proposals within this Proxy Statement, as well as upon the approval of the same
proposal forproposals by shareholders of Janus Mid Cap Value Fund, a series of JIF, and
Janus Adviser Mid Cap Value Fund, a series of JAD, with respectJAD. Implementation of the Amended
Advisory Agreement is also contingent upon the closing of the Pending
Acquisition in addition to separate proposed amendments to the investment advisory
agreements for those fundsother conditions as described in separate proxy statements.
- Approval of Proposal 4.b.ii.the Purchase
Agreement or otherwise agreed to by shareholders of Risk-Managed Core
Portfolio is contingent upon approval of the same proposal for shareholders of
Janus Risk Managed Stock Fund, a series of JIF,Capital and Janus Adviser Risk-Managed
Core Fund, a series of JAD, with respect to separate proposed amendments to the
investment advisory agreements for those funds described in separate proxy
statements.
- Approval of Proposal 4.b.iii. by shareholders of Worldwide Growth
Portfolio is contingent upon approval of the same proposal for shareholders of
Janus Worldwide Fund, a series of JIF, and Janus Adviser Worldwide Fund, a
series of JAD, with respect to separate proposed amendments to the investment
advisory agreements for those funds described in separate proxy statements.PWM. If shareholders of
a Fundthe Portfolio do not approve the Proposed Amendment,Proposal, or if the
contingencies stated above areany other contingency is not
complied with, JCM would continue as the
Fund's investment adviser under the terms ofmet, the Current Advisory Agreement for
that Fund.
With respect to Proposal 4.b. (and each related subsection thereof),will remain in addition to obtaining the required shareholder approval, implementation of the
Proposed Amendment for each applicable Fund is subject to an amendment to JCM's
settlement order entered into with the Office of the Attorney General of the
State of New York ("NYAG") in August 2004 (the "Order"). Under the Order, JCM
agreed that it would reduce the net management fee rates paid by certain Janus
Funds by $25 million a year over a five-year period commencing July 1, 2004,effect and
that such reduced fee rates may not be increased during that period. In order to
be able to implement the proposed performance fee structures for various Funds,
the Independent Trustees requested the NYAG to amend the Order to allow JCM to
charge such fees. The NYAG has agreed in principle to that request, and JCM and
the NYAG are in the process of amending the Order accordingly.
49
THE BOARD OF TRUSTEES, INCLUDING ALL OF THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF EACH APPLICABLE FUND VOTE FOR
APPROVAL OF THE PROPOSED AMENDMENT FOR THEIR FUND.
PROPOSAL 5: APPROVE AN AMENDED SUB-ADVISORY AGREEMENT
BETWEEN JCM, ON BEHALF OF RISK-MANAGED CORE PORTFOLIO,
AND INTECH THAT WOULD INTRODUCE A
PERFORMANCE INCENTIVE SUBADVISORY FEE STRUCTURE
This Proposal 5 applies to Risk-Managed Core Portfolio only.
INTRODUCTION
On September 20, 2005, as described in Proposal 4.b. subsection 4.b.ii.)
above, the Board of
Trustees approvedwill take such further action as it deems to be in the Proposed Amendmentbest interest of
the Portfolio and its shareholders.
THE INDEPENDENT TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMEND THAT YOU VOTE
"FOR" APPROVAL OF THE AMENDED ADVISORY AGREEMENT.
ADDITIONAL INFORMATION ABOUT THE PORTFOLIO
OTHER PORTFOLIO SERVICE PROVIDERS
Administrator. Janus Capital also serves as administrator to the
Current
Advisory Agreement for shareholdersPortfolio, performing internal accounting, recordkeeping, blue sky monitoring
and registration functions of Risk-Managed Core Portfolio that changes
the annual rate for advisory fees paid to JCMPortfolio. Janus Capital may be reimbursed by
the Fund, pursuant to its
Current Advisory Agreement, from a fixed-rate fee to one that adjusts upward or
downward based upon the performance of the Fund's Service Shares relative to the
Fund's benchmark index, the S&P 500(R) Index.
In addition, the Board of Trustees approved proposed amendments to the
Sub-Advisory Agreement ("Proposed Amended Sub-Advisory Agreement") between JCM,
on behalf of the Fund,Portfolio for certain administrative and INTECH, related to subadvisory services provided for
the Fund. The Proposed Amended Sub-Advisory Agreement similarly changes the
annual rate for subadvisory fees paid by JCM to INTECH, pursuant to its current
Sub-Advisory Agreement ("Current Sub-Advisory Agreement"), from a fixed-rate fee
to one that adjusts upward or downward based upon the performance of the Fund's
Service Shares relative to the Fund's benchmark index. Such change in fee
structure requires shareholder approval. The Board of Trustees approved and
authorized the submission of the Proposed Amended Sub-Advisory Agreement to
shareholders of the Fund for their approval.
A form of Proposed Amended Sub-Advisory Agreement is attached as Exhibit K
to this Proxy Statement.
The proposal to amend the Current Sub-Advisory Agreement and institute the
proposed performance-based subadvisory fee is designed to more closely align
INTECH's interests with those of the Fund's shareholders. The subadvisory fee
JCM pays to INTECH would decrease when the Fund is not performing well relative
to its benchmark index, and would increase during periods when the Fund
outperforms its benchmark index. In addition, JCM believes that the proposed
subadvisory fee structure would enable INTECH to maintain the quality of
servicesclerical functions it provides to
the Fund. THE FUND DOES NOT PAY THE SUBADVISORY FEE TO
INTECH; THE SUBADVISORY FEE IS PAID SOLELY BY JCM.
50
INTECH AS SUBADVISER
INTECH currently servesPortfolio, as subadviserwell as for reasonable costs it incurs in performing certain
functions. Janus Capital intends to continue to provide the Fund pursuant to the Current
Sub-Advisory Agreement. INTECH is an indirect subsidiary of JCG. JCM indirectly
owns approximately 77.5%same administrative
services after implementation of the outstanding voting shares of INTECH. JCG owns
approximately 95% of JCM. The principal executive officers and directors of
INTECH, located at 2401 PGA Boulevard, Suite 100, Palm Beach Gardens, Florida
33410, and their principal occupations are included in Exhibit L to this Proxy
Statement.
INTECH has served as an investment adviser since 1987 and, as of September
1, 2005, serves as subadviser to five Janus funds. INTECH also provides separate
account advisory services for institutional accounts. As of June 30, 2005,
INTECH had approximately $31.7 billion in assets under management. INTECH
currently serves as a subadviser to several other Janus funds with similar
investment objectives as the Fund. The objective, net asset size as of June 30,
2005, and annual rate of compensation paid by JCM to INTECH, as a percentage of
such fund's average daily net assets, is shown in the table below.
NET ASSET ANNUAL RATE FEE WAIVERS
SIZE OF OR
FUND OBJECTIVE (IN MILLIONS) COMPENSATION REDUCTIONS
- ---- ---------------- ------------- ------------ -----------
Janus Risk-Managed
Stock Fund......... long-term growth $350.3 0.26% None*
of capital
Janus Adviser
Risk-Managed Core
Fund............... long-term growth $ 22.0 0.26% None*
of capital
- ---------------
* As of June 30, 2005, there were no fee waivers in place with respect to fees
paid by JCM to INTECH pursuant to the current subadvisory agreements between
JCM, on behalf of each fund listed in the table, and INTECH.
DESCRIPTION OF THE CURRENT SUB-ADVISORY AGREEMENT
Under the Current Sub-Advisory Agreement, JCM has delegated to INTECH
certain investment management services. JCM maintains a supervisory role with
respect to its delegation of investment management services to INTECH. INTECH is
responsible for the day-to-day management of the Fund and determines the
purchase and sale of securities held by the Fund, subject to the Trust's Trust
Instrument, Bylaws, the investment objectives, policies and restrictions set
forth in the Fund's registration statement, the provisions of the 1940 Act and
the Internal Revenue Code of 1986, as amended, and such policies and
instructions as the Trustees may determine.
INTECH pays the salaries, fees and expenses of its investment personnel. In
connection with JCM's delegation of investment management services to INTECH,
INTECH: (i) manages the investment operations of the Fund's portfolio; (ii)
furnishes information to JCM or the Trust as reasonably required to keep JCM,
51
the Board of Trustees and appropriate officers of the Trust fully informed as to
the condition of the portfolio of the Fund; (iii) maintains all books and
records related to the Fund required to be maintained pursuant to the 1940 Act
and the Investment Advisers Act of 1940, as amended; (iv) submits reports to JCM
relating to the valuation of the Fund's assets; (v) exercises voting rights,
subscription rights, rights to consent to corporate action and any other rights
pertaining to the Fund's assets that may be exercised; (vi) provides the
Trustees and JCM with economic, operational and investment data and reports; and
(vii) provides JCM with information for regulatory filings. JCM provides certain
administrative and other services and is responsible for the other business
affairs of the Fund not specifically delegated to INTECH.
Pursuant to its Current Sub-Advisory Agreement dated July 1, 2004, JCM pays
INTECH a subadvisory fee for its services, which is calculated daily and paid
monthly at the annual rate of 0.26% of the Fund's average daily net asset value.
For the fiscal year ended December 31, 2004, JCM paid INTECH $39,703 in
subadvisory fees for Risk-Managed Core Portfolio.
At a meeting of the Trustees held on June 15, 2005, the Trustees, including
all of the Independent Trustees, approved the continuation of the Current Sub-
Advisory Agreement for the Fund. The Current Sub-Advisory Agreement continues in
effect until July 1, 2006 and thereafter from year to year so long as such
continuance is approved at least annually by a majority of the Independent
Trustees and by either a majority of the outstanding voting securities of the
Fund or the Trustees of the Fund. The Current Sub-Advisory Agreement was
submitted to the vote of the Fund's initial shareholder on December 31, 2002 in
connection with the commencement of the Fund's operations.
The Current Sub-Advisory Agreement: (i) may be terminated without payment
of any penalty by the Trustees of the Trust, or by the shareholders of the Fund
acting by vote of at least a majority of its outstanding voting securities on 60
days' advance written notice; (ii) terminates automatically in the event of its
assignment; (iii) may be terminated by JCM or INTECH at any time, without
penalty, by giving 60 days' advance written notice of termination to the other
party; (iv) may be terminated by JCM or the Trust without advance notice if
INTECH becomes unable to discharge its duties and obligations under the Current
Sub-Advisory Agreement; (v) terminates, without penalty, upon termination of the
Current Advisory Agreement between JCM and the Fund; and (vi) generally, may not
be amended without approval by vote of a majority of the Trustees of the Fund,
including a majority of the Independent Trustees and, to the extent required by
the 1940 Act, the vote of a majority of the outstanding voting securities of the
Fund.
The following table summarizes the pro forma advisory fees based on the net
assets of Risk-Managed Core Portfolio that would have been paid by JCM to INTECH
under the Proposed Amended Sub-Advisory Agreement for the fiscal year ended
December 31, 2004. This information assumes that the Performance Adjustment (as
described below) would have been in effect during the fiscal year and that it
would have been calculated over the period since the Fund's inception,
52
January 2, 2003 to December 31, 2004. The last column indicates the percentage
increase or decrease of the fee that INTECH would have received had the proposed performance-based fee arrangement been in effect during the period.
NET ASSETS PRO FORMA % INCREASE(+) OR
(000'S) ADVISORY FEES DECREASE(-)
---------- ------------- ----------------
$20,680 $41,113 +3.55%
DESCRIPTION OF THE PROPOSED AMENDED SUB-ADVISORY AGREEMENT
Except for the changes in the fee structure described below, the effective
dates, and the renewal dates, the terms of the Current Sub-AdvisoryNew Subadvisory Agreement and the
Proposedproposed Amended Sub-Advisory Agreement are substantially similar. It is
anticipated that the same services will be provided under the Proposed Amended
Sub-Advisory Agreement as are provided under the Current Sub-AdvisoryAdvisory Agreement.
The proposed subadvisory fee rate to be paid by JCM to INTECH will consist
of two components: (1) a base management fee calculated and accrued daily and
payable monthly, equal to 0.26% of the Fund's average daily net assets during
the previous month ("Base Fee"), plus or minus (2) half of any performance fee
adjustment paid to JCM by the Fund ("Performance Adjustment"), pursuant to the
Proposed Amendment to the Current Advisory Agreement between JCM and the Trust,
on behalf of the Fund. No Performance Adjustment will be paid to INTECH until
the Proposed Amended Sub-Advisory Agreement has been in effect for at least 12
months.
The Base Fee rate is the same as the annual fixed-rate fee paid by JCM to
INTECH under its Current Sub-Advisory Agreement. The Performance Adjustment is
calculated monthly and may result in an increase or decrease in the subadvisory
fee rate paid by JCM to INTECH, depending upon the investment performance of the
Fund's Service Shares relative to the S&P 500(R) Index over the performance
measurement period. For purposes of computing the Base Fee and the Performance
Adjustment, net assets are averaged over different periods (average daily net
assets during the previous month for the Base Fee versus average daily net
assets over the performance measurement period for the Performance Adjustment).
If approved by shareholders of the Fund, the Proposed Amended Sub-Advisory
Agreement for the Fund and new fee schedule is expected to become effective on
January 1, 2006. For the first 12 months after the effective date, only the Base
Fee rate will apply. Beginning 12 months after the effective date, the
Performance Adjustment will go into effect based upon the performance period
commencing on the effective date. When the Proposed Amended Sub-Advisory
Agreement has been in effect for at least 12 months, but less than 36 months,
the performance measurement period will be equal to the time that has elapsed
since the Proposed Amended Sub-Advisory Agreement took effect. Once the Fund has
36 months of performance history from the effective date, the Performance
Adjustment will be
53
calculated using a rolling 36 month period. The Fund does not pay any
subadvisory fees to INTECH; this fee is paid by JCM.
BOARD APPROVAL AND RECOMMENDATION
On September 20, 2005, the Board of Trustees, including all of the
Independent Trustees, voted unanimously to approve the Proposed Amended
Sub-Advisory Agreement for Risk-Managed Core Portfolio and authorized the
submission of the Proposed Amended Sub-Advisory Agreement to the Fund's
shareholders for approval.
The Trustees determined that, if the fees paid by the Fund to JCM are to be
performance-based, the fees paid by JCM to INTECH should be determined under a
corresponding performance-based fee structure. In approving the proposed
performance fee structure for the Proposed Amended Sub-Advisory Agreement, the
Trustees considered the factors and reached the conclusions described above
under Proposal 4.b -- Board Approval and Recommendation.
In addition, in approving the Proposed Amended Sub-Advisory Agreement, the
Trustees followed the process and considered the factors and reached the
conclusions described above under Proposal 4.a -- Board Approval and
Recommendation.
REQUIRED VOTE
Approval of Proposal 5 requires a 1940 Act Majority of the Fund. Approval
of Proposal 5 is contingent upon approval of the Proposed Amendment to the
Current Advisory Agreement by shareholders of Risk-Managed Core Portfolio as
described in Proposal 4.b. (and subsection 4.b.ii.) above. If shareholders of
the Fund do not approve the Proposed Amended Sub-Advisory Agreement, or if the
contingencies discussed under "Required Vote" in Proposal 4.b. above are not
complied with, INTECH will continue as the Fund's subadviser under the terms of
the Current Sub-Advisory Agreement. If approved, the Proposed Amended
Sub-Advisory Agreement is expected to become effective on January 1, 2006.
THE BOARD OF TRUSTEES, INCLUDING ALL OF THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF THE FUND VOTE FOR APPROVAL OF THE
PROPOSED AMENDED SUB-ADVISORY AGREEMENT.
FUND SERVICE PROVIDERS
WHO SERVES AS MY FUND'S TRANSFER AGENT?Distributor. Janus Services,Distributors, a wholly-owned subsidiary of JCM,Janus
Capital, located at 151 Detroit Street, Denver, Colorado 80206, is a distributor
of the Portfolio pursuant to an Amended and Restated Distribution Agreement
between the Trust and Janus Distributors. According to the plan adopted pursuant
to Rule 12b-1 under the 1940 Act for Service Shares of the Portfolio, Janus
Distributors receives a 12b-1 distribution fee from Service Shares at the annual
rate of up to 0.25% of the average daily net assets of such shares. Janus
Distributors uses
21
the payments to pay insurance companies and qualified service providers for
distribution services provided by such service providers. Janus Distributors may
retain some or all of the fees it receives from Service Shares, or may pass it
through to financial intermediaries in payment for distribution services. Janus
Distributors intends to continue to provide the same services after
implementation of the proposed New Subadvisory Agreement and the proposed
Amended Advisory Agreement.
Service Shares of the Portfolio paid fees to Janus Distributors in the
amount of $171,913 for the fiscal year ended December 31, 2007.
Transfer Agent. Janus Services, P.O. Box 173375, Denver, Colorado 80207-
3375, a wholly-owned subsidiary of Janus Capital, serves as each Fund'sthe Portfolio's
transfer agent pursuant to an Amended and Restated Transfer Agency Agreement
("Transfer Agency Agreement") between Janus Services and the Trust. Pursuant to
the Transfer Agency Agreement, each class of each Fundshares of the Portfolio reimburses
Janus Services for out-of-pocket expenses incurred by Janus Services in
connection with services rendered. In addition, Janus Services may receive from
Service Shares of Risk-Managed Core
54
Portfolio, Risk-Managed Growth Portfolio, Mid Cap Value Portfolio and Small
Company Valuethe Portfolio an administrative services fee calculated at an
annual rate of up to 0.10% of the average daily net asset valueassets of the Service Shares
of each of these Funds.such shares. Such
fee compensates Janus Services for providing, or arranging for the provision of,
recordkeeping, subaccounting and administrative services to retirement or
pension plan participants, variable contract owners or other underlying
investors investing through institutional channels. Janus Services may pass
through all or a portion of this administrative services fee to third party
service providers. Janus Services may also retain a portion of the
administrative services fee to cover costs of administering relationships with
third party service providers. Janus Services intends to continue to provide the
same services after implementation of the investment advisory
agreements, as proposed to be amended (discussed in Proposals 4.a.New Subadvisory Agreement and
4.b.
above).
Fees paid bythe proposed Amended Advisory Agreement.
Service Shares of Mid Cap Valuethe Portfolio Risk-Managed Core
Portfolio, Risk-Managed Growth Portfolio and Small Company Value Portfoliopaid administrative services fees to Janus
Services in the amount of $68,765 for the fiscal year ended December 31, 2004 are shown in the
following table.
FEES PAID TO JANUS SERVICES FOR FISCAL YEAR
FUND ENDED DECEMBER 31, 2004($)
- ---- -------------------------------------------
Mid Cap Value Portfolio....... 25,782
Risk-Managed Core Portfolio... 15,271
Risk-Managed Growth
Portfolio................... 9,724
Small Company Value
Portfolio................... 2,062
WHO SERVES AS MY FUND'S DISTRIBUTOR?
Janus Distributors, a wholly-owned subsidiary of JCM, located at 151
Detroit Street, Denver, Colorado 80206, serves as distributor2007.
ADDITIONAL INFORMATION ABOUT THE TRUST
TRUSTEES AND PRINCIPAL EXECUTIVE OFFICERS OF THE PORTFOLIO
The Trustees and principal executive officers of the Trust
pursuantPortfolio and their
principal occupations, including any position(s) with Janus Capital, are set
forth in Exhibit E to an Amended and Restated Distribution Agreement between the Trust and
Janus Distributors. Pursuant to plans adopted pursuant to Rule 12b-1 underthis Proxy Statement.
OTHER LEGAL REQUIREMENTS UNDER THE 1940 ACT
Section 15(f) of the 1940 Act for Service Shares and Service II Shares, Janus Distributors receivesprovides that, when a 12b-1 distribution fee from Service Shares and Service II Shares atchange in control of an
investment adviser (or subadviser) occurs, the annual
rateinvestment adviser or any of up to 0.25%its
affiliated persons may receive any amount or benefit in connection with the
change in control, as long as two conditions are satisfied. The first condition
specifies that,
22
during the three-year period immediately following consummation of the
average daily net assets of such shares in each Fund.
Janus Distributors uses the payments to pay insurance companies and qualified
service providers for distribution services provided by such service providers.
Janus Distributors may retain some or alltransaction, at least 75% of the fee it receives from each class
of shares or may pass it through to financial intermediaries in payment for
distribution services. Janus Distributors intends to continue to provide the
same services after implementation of the investment advisory agreements, as
proposed toPortfolio's Board must be amended (discussed in Proposals 4.a. and 4.b. above).
55
Fees paid by Service Shares and Service II Shares of each Fund offering
such shares for the fiscal year ended December 31, 2004 are shown in the table
below.
FEES PAID TO JANUS DISTRIBUTORS FOR
FISCAL YEAR ENDED
DECEMBER 31, 2004
------------------------------------
SERVICE SHARES SERVICE II SHARES
FUND ($)(000'S) ($)(000'S)
- ---- --------------- ------------------
Balanced Portfolio................. 1,164 N/A
Core Equity Portfolio.............. 1 N/A
Flexible Bond Portfolio............ 85 N/A
Foreign Stock Portfolio............ 33 N/A
Forty Portfolio.................... 1,058 N/A
Global Life Sciences Portfolio..... 80 N/A
Global Technology Portfolio........ 403 65
Growth and Income Portfolio........ 140 N/A
International Growth Portfolio..... 1,143 160
Large Cap Growth Portfolio......... 479 N/A
Mid Cap Growth Portfolio........... 529 N/A
Mid Cap Value Portfolio............ 64 N/A
Money Market Portfolio............. --(1) N/A
Risk-Managed Core Portfolio........ 38 N/A
Risk-Managed Growth Portfolio...... 24 N/A
Small Company Value Portfolio...... 5 N/A
Worldwide Growth Portfolio......... 581 --(1)
- ---------------
(1) Amounts are less than $1,000.
WHO SERVES AS MY FUND'S ADMINISTRATOR?
JCM serves as administrator to the Trust, performing internal accounting,
recordkeeping, blue sky monitoring and registration functions of the Trust. JCM
may be reimbursed by the Trust for certain administrative and clerical functions
it provides to each Fund as well as for reasonable costs it incurs in performing
certain functions. JCM intends to continue to provide the same administrative
services after implementation of the investment advisory agreements, as proposed
to be amended (discussed in Proposals 4.a. and 4.b. above).
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Based on the Audit Committee's recommendation,Independent Trustees.
Currently, the Board of Trustees including all of the Independent Trustees, selected PricewaterhouseCoopers LLP
("PWC") as the Trust's independent registered public accounting firm during the
Trust's current fiscal year. In accordance with Independence Standards Board
56
Standard No. 1 ("ISB No. 1"), PWC has confirmed to the Trust's Audit Committee
that it is an independent registered accounting firm with respect to the Funds.
Representatives of PWC will be available at the Meeting to answer appropriate
questions concerning the Trust's financial statements and will have an
opportunity to make a statement if they so choose.
As the independent registered public accounting firm for the Trust, PWC
performs audit services for the Trust, including the audit of the Trust's annual
financial statements, reviews of the Trust's annual reports, semiannual reports,
quarterly portfolio holdings reports and registration statement amendments. PWC
may also provide other audit-related, non-audit and tax-related services to the
Funds.
The Trust's Audit Committee must pre-approve all audit and non-audit
services provided by PWC to the Funds. The Trust's Audit Committee has adopted
policies and procedures to, among other purposes, provide a framework for the
Audit Committee's consideration of any non-audit services provided by PWC. The
policies and procedures require that any audit and non-audit service provided to
the Funds by PWC and any non-audit service provided by PWC to JCM and entities
controlling, controlled by, or under common control with JCM that provide
ongoing services to the Funds (collectively, "Fund Service Providers") that
relate directly to the operations and financial reporting of a Fund ("Covered
Services") are subject to approval by the Audit Committee before such service is
provided. The Chairman of the Audit Committee (or, in his absence, any Audit
Committee member) is authorized to grant such pre-approval in the interim
between regularly scheduled meetings of the Audit Committee. In such case, the
Chairman must report the pre-approval to the Audit Committee no later than its
next meeting.
Pre-approval of non-audit services provided by PWC to the Trust and Fund
Service Providers is not required if: (i) the services were not recognized by
JCM at the time of the engagement as non-audit services; (ii) for non-audit
services provided to the Trust, the aggregate fees paid for all such non-audit
services provided to the Trust are no more than 5% of the total fees paid by the
Trust to the independent auditor during the fiscal year in which the non-audit
services are provided; (iii) for non-audit services provided to Fund Service
Providers, the aggregate fees for all such non-audit services provided are no
more than 5% of the total fees paid by the Trust and Fund Service Providers
during the fiscal year of the Trust in whichmeets this 75% requirement, as
100% of the non-audit services are
provided; and (iv) such services are promptly broughtBoard is Independent.
The second condition specifies that no "unfair burden" may be imposed on
the Portfolio as a result of the transaction relating to the attentionchange of control,
or any express or implied terms, conditions or understandings. The term "unfair
burden," as defined in the Audit Committee by JCM, and1940 Act, includes any arrangement during the
Audit Committeetwo-year period after the change in control whereby the investment adviser (or
predecessor or successor adviser), or any interested person of any such adviser,
receives or is entitled to receive any compensation, directly or indirectly,
from the Portfolio or its delegate approves them
prior to the completion of the audit (the "de minimis exception").
In circumstances where the Trust's Audit Committee did not pre-approve
certain non-audit services that were rendered by PWC tosecurity holders (other than fees for bona fide
investment advisory or other services) or from any Fund Service
Provider that did not relate directly to the operations and financial reporting
of a Janus Fund ("Non-Covered Service"), the Trust's Audit Committee will
consider whether the provision of such non-audit service by PWC is compatible
with maintaining PWC's
57
independence in auditing the Funds, taking into account representations from
PWC, in accordance with ISB No. 1, regarding its independence from the Funds and
their related entities. There were no non-audit services provided to a Fund
Service Provider by PWC that were not pre-approved by the Audit Committee.
Audit Fees. In each of the fiscal years ended December 31, 2004 and
December 31, 2003, the aggregate Audit Fees billed by PWC for professional
services rendered for the audits of the financial statements of each Fund, or
services that are normally provided by PWCperson in connection with statutory and
regulatory filingsthe
purchase or engagements for those fiscal years for the Trust, are
shown in the table below.
2004(A) 2003(A)
------- -------
$237,100 $245,100
- ---------------
(A) Aggregate amounts may reflect rounding.
Audit-Related Fees. In eachsale of the fiscal years ended December 31, 2004
and December 31, 2003, there were no Audit-Related Fees billed by PWC for
services rendered for assurance and related servicessecurities or other property to, each Fund that are
reasonably related to the performance of the auditfrom, or review of the Funds'
financial statements, but not reported as Audit Fees.
In each of the fiscal years ended December 31, 2004 and December 31, 2003,
the aggregate Audit-Related Fees that were billed by PWC that were required to
be approved by the Audit Committee for services rendered on behalf of the
Fund
Service ProvidersPortfolio (other than fees for assurancebona fide principal underwriting services). Janus
Capital and related services that relate directlyPWM have represented to the operations and financial reportingBoard of Trustees that the change in
control transaction will not cause the imposition of an unfair burden, as that
term is defined in Section 15(f) of the Funds that are reasonably related to1940 Act, on the performance of the audit or review of the Funds' financial statements, but
not reported as Audit Fees, are shown in the table below.
2004(A) 2003(A)
------- -------
$112,250 $231,395
- ---------------
(A) Aggregate amounts may reflect rounding.
Fees included in the audit-related category consist of assurance and
related services (e.g., due diligence services) that are traditionally performed
by the independent registered public accounting firm. These audit-related
services include due diligence related to mergers and acquisitions and
semiannual financial statement disclosure review.
No amounts were approved by the Audit Committee pursuant to the de minimis
exception for the fiscal years ended December 31, 2004 and December 31, 2003 for
the Trust. There were no amounts that were required to be approved by the Audit
Committee pursuant to the de minimis exception for the fiscal years ended
December 31, 2004 and December 31, 2003 for the Trust, on behalf of the Fund
Service Providers, that relate directly to the operations and financial
reporting of each Fund.
58
Tax Fees. In each of the fiscal years ended December 31, 2004 and December
31, 2003, the aggregate Tax Fees billed by PWC for professional services
rendered for tax compliance, tax advice, and tax planning for the Funds are
shown in the table below.
2004(A) 2003(A)
------- -------
$57,695 $58,656
- ---------------
(A) Aggregate amounts may reflect rounding.
In each of the fiscal years ended December 31, 2004 and December 31, 2003,
the aggregate Tax Fees billed by PWC that were required to be approved by the
Audit Committee for professional services rendered on behalf of the Fund Service
Providers for tax compliance, tax advice, and tax planning that relate directly
to the operations and financial reporting of the Funds are shown in the table
below.
2004(A) 2003(A)
------- -------
$38,435 $23,215
- ---------------
(A) Aggregate amounts may reflect rounding.
Fees included in the Tax Fees category consist of all services performed by
professional staff in PWC's tax division, except those services related to the
audit. Typically, this category includes fees for tax compliance, tax planning,
and tax advice. Tax fees include amounts for tax advice related to mergers and
acquisitions and requests for ruling or technical advice from taxing
authorities.
No amounts were approved by the Audit Committee pursuant to the de minimis
exception for the fiscal years ended December 31, 2004 and December 31, 2003 for
the Trust. There were no amounts that were required to be approved by the Audit
Committee pursuant to the de minimis exception for the fiscal years ended
December 31, 2004 and December 31, 2003 for the Trust, on behalf of the Fund
Service Providers, that relate directly to the operations and financial
reporting of each Fund.
All Other Fees. In each of the fiscal years ended December 31, 2004 and
December 31, 2003, there were no Other Fees billed by PWC for other non-audit
services rendered to the Funds.
In each of the fiscal years ended December 31, 2004 and December 31, 2003,
there were no Other Fees billed by PWC that were required to be approved by the
Audit Committee for other non-audit services rendered on behalf of the Fund
Service Providers that relate directly to the operations and financial reporting
of the Funds.
No amounts were approved by the Audit Committee pursuant to the de minimis
exception for the fiscal years ended December 31, 2004 and December 31, 2003 for
the Trust. There were no amounts that were required to be approved by the Audit
Committee pursuant to the de minimis exception for the fiscal years ended
December 31, 2004 and December 31, 2003 for the Trust, on behalf of the
59
Fund Service Providers that relate directly to the operations and financial
reporting of each Fund.
For the fiscal years ended December 31, 2004 and December 31, 2003 for the
Trust, the aggregate fees billed by PWC of $84,000 and $119,000, respectively,
for non-audit services rendered on behalf of the Funds, JCM and Fund Service
Providers relating to Covered and Non-Covered Services, are shown in the table
below.
2004(A) 2003(A)
--------------------------------------- ---------------------------------------
COVERED SERVICES NON-COVERED SERVICES COVERED SERVICES NON-COVERED SERVICES
---------------- -------------------- ---------------- --------------------
$84,000 $0 $119,000 $0
- ---------------
(A) Aggregate amounts may reflect rounding.Portfolio.
ADDITIONAL INFORMATION ABOUT THE MEETING
QUORUM AND VOTING
Shareholders areof each class of the Portfolio will vote together at the
Meeting. Each holder of a whole or fractional share shall be entitled to one
vote for each full share heldwhole dollar and a proportionate fractional vote for each
fractional sharedollar of net asset value held onin such shareholder's name as of the
Record Date. If you are not the owner of record, but are a beneficial owner as a
participant in a qualified plan or a contract owner of a variable insurance
contract, your qualified plan or insurance company may request that you instruct
itprovide
instruction on how to vote the shares you beneficially own. Your qualified plan
or insurance company will provide you with additional information.
One-third of the outstanding shares entitled to vote at the Meeting with
respect to each Fund or the Trust, as applicable, shall
be a quorum for the transaction of business at the Meeting. Any lesser number is
sufficient for adjournments. Quorum with respect to each proposal is described in greater
detail below. In the event that the necessary quorum to transact
business or the vote required to obtain anyapprove a proposal is not obtained at the
Meeting, with respect
to one or more Funds, the persons named as proxies may propose one or more adjournments of
the Meeting, in accordance with applicable law, to permit further solicitation
of proxies with respect to that proposal.proxies. Any such adjournment as to a matterproposal will require the affirmative
vote of the holders of a majority of the shares of the applicable Fund,Portfolio, present in
person or by proxy at the Meeting. If a quorum is not present, theThe persons named as proxies will vote thosethe
proxies that they are entitled to vote "FOR" each item for the proposedPortfolio (including broker non-votes and abstentions) in favor
of adjournment if they determine additional solicitation is warranted and will vote those proxies required to be voted "AGAINST" each
item againstin the
adjournment.interest of shareholders of the Portfolio.
23
"Broker non-votes" are shares held by a broker or nominee for which an
executed proxy is received by the Trust,Portfolio, but are not voted as to one or more
proposals because
instructions have not been received from beneficial owners or persons entitled
to vote, and the broker or nominee does not have discretionary voting power.
For purposes ofAbstentions and "broker non-votes" are counted as shares eligible to vote at the
Meeting in determining whether a quorum is present, but do not represent votes
cast with respect to adjournment or a proposal. Accordingly, assuming the
presence of a quorum, for
transacting
60
business at the Meeting, abstentions and "broker non-votes" are treated as
shares that are present, but will not be voted for or against any adjournment or
proposal. For purposes of voting on a proposal, abstentions and "broker non-votes" will not be counted in favorhave the effect of
buta vote against a proposal. Therefore, if your shares are held through a broker
or other nominee, it is important for you to instruct the broker or nominee how
to vote your shares.
Approval of each Proposal will have no other effect on,
Proposal 1, for whichrequire the requiredaffirmative vote isof a plurality (the greatest number)1940 Act
Majority of the votes cast. For all Proposals except Proposal 1, abstentions and "broker
non-votes" effectively will be votes against these Proposals.
PROPOSAL 1: ELECTING TRUSTEES
Shareholders of each Fund will vote together. The presence in person or by
proxy of the holders of record of one-third of the Funds' aggregate total shares
outstanding and entitled to vote constitutes a quorum at the Meeting with
respect to this Proposal.
PROPOSALS 2.A., 2.B. AND 2.C.: AMENDMENTS TO THE TRUST INSTRUMENT
Shareholders of each Fund will vote together with respect to each of
Proposal 2.a., 2.b. and 2.c. The presence in person or by proxy of the holders
of record of one-third of the Funds' aggregate total shares outstanding and
entitled to vote constitutes a quorum at the Meeting with respect to these
Proposals.
PROPOSAL 3: ELIMINATION OF FUNDAMENTAL POLICY, FLEXIBLE BOND PORTFOLIO ONLY
Shareholders of Flexible Bond Portfolio will vote together. The presence in
person or by proxy of the holders of record of one-third of Flexible Bond
Portfolio's aggregate total shares outstanding and entitled to vote constitutes
a quorum with respect to this Proposal.
PROPOSALS 4.A. AND 4.B.: APPROVAL OF AMENDED INVESTMENT ADVISORY AGREEMENTS
Shareholders of each Fund (except Mid Cap Value Portfolio, Risk-Managed
Core Portfolio, Risk-Managed Growth Portfolio, and Small Company Value
Portfolio) vote separately on Proposal 4.a. (all classes of a Fund voting
together). Shareholders of Mid Cap Value Portfolio, Risk-Managed Core Portfolio,
and Worldwide Growth Portfolio will vote separately on Proposal 4.b. (all
classes of a Fund voting together). The presence in person or by proxy of the
holders of record of one-third of each applicable Fund's shares outstanding and
entitledshareholders eligible to vote at the Meeting constitutes a quorum with respectMeeting. In
addition to these
Proposals.
Approval of Proposal 4.b.i. bythe Proposals outlined in this Proxy Statement, shareholders of
Mid Cap Value Portfolioother funds within the Janus fund complex are receiving similar proxy statements
seeking approval for new subadvisory agreements with PWM and amended and
restated investment advisory agreements with Janus Capital. Implementation of
the agreement referred to in each Proposal in this Proxy Statement is contingent
upon the approval of the same proposal forproposals by shareholders of Janus Mid Cap Value
Fund a series of JIF, and Janus Adviser Mid Cap Value Fund, awhich are series of JIF and JAD,
with respect to separate proposed amendments to the current investment
advisory agreements for those fundsrespectively, as described in separate proxy statements. ApprovalIn addition,
implementation of each Proposal 4.b.ii. by shareholders of Risk-Managed Core Portfolio is contingent upon approvalconsummation of the same proposal for shareholders ofPending
Acquisition and certain other conditions that may be outlined in the Purchase
Agreement or otherwise agreed to by Janus Risk-
Managed Stock Fund, a series of JIF,Capital and Janus Adviser Risk-Managed Core Fund,
61
a series of JAD, with respect to separate proposed amendments to the current
investment advisory agreements for those funds described in separate proxy
statements. Approval of Proposal 4.b.iii. by shareholders of Worldwide Growth
Portfolio is contingent upon approvalPWM.
SHARE OWNERSHIP
The following table shows, as of the same proposal for shareholdersclose of Janus Worldwide Fund, a series of JIF, and Janus Adviser Worldwide Fund, a
series of JAD, with respect to separate proposed amendments tobusiness on the current
investment advisory agreements for those funds described in separate proxy
statements.
PROPOSAL 5: APPROVAL OF AMENDED SUB-ADVISORY AGREEMENT, RISK-MANAGED CORE
PORTFOLIO ONLY
Shareholders of Risk-Managed Core Portfolio will vote together on Proposal
5. The presence in person or by proxy ofRecord Date,
the holders of record of one-third of
the Fund's shares outstanding and entitled to vote at the Meeting constitutes a
quorum with respect to this Proposal. Approval of Proposal 5 is contingent upon
approval of the Proposed Amendment to the Current Advisory Agreement by
shareholders of Risk-Managed Core Portfolio as described in Proposal 4.b.ii.
above.
With respect to Proposals 4.b. and 5, in addition to obtaining the required
shareholder approval, implementation of the Proposed Amendment for each
applicable Fund (described in Proposal 4.b.) and the Proposed Amended
Sub-Advisory Agreement for Risk-Managed Core Portfolio (described in Proposal 5)
is subject to an amendment to JCM's settlement order entered into with the
Office of the Attorney General of the State of New York ("NYAG") in August 2004
(the "Order"). Under the Order, JCM agreed that it would reduce the net
management fee rates paid by certain Janus Funds by $25 million a year over a
five-year period commencing July 1, 2004 and that such reduced fee rates may not
be increased during that period. In order to be able to implement the proposed
performance fee structures for various Funds, the Independent Trustees requested
the NYAG to amend the Order to allow JCM to charge such fees. The NYAG has
agreed in principle to that request, and JCM and the NYAG are in the process of
amending the Order accordingly.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The number of outstanding shares and net assets of each class of each Fund,
as applicable, asthe Portfolio:
TOTAL NUMBER OF
PORTFOLIO SHARES OUTSTANDING NET ASSETS
- --------- ------------------ -----------
Mid Cap Value Portfolio
-- Institutional Shares......... 1,226,654 $17,737,423
-- Service Shares............... 4,321,589 $61,971,592
Shares of the close of business on the Record Date, is included in
Exhibit D to this Proxy Statement.
Shares of each FundPortfolio are offered byfor purchase through an insurance
contract of a Participating Insurance Company or through a qualified plan. As of
September 1, 2005,August 20, 2008, all of the outstanding shares of the FundsPortfolio were owned by
certain insurance company separate accounts and qualified plans. The percentage
ownership of each separate account or qualified plan owning 5% or more than 5%of the
outstanding shares of each class (as applicable) of each Fund's sharesthe Portfolio as of September 1, 2005 is provided
in Exhibit M. To the best of the Trust's knowledge, as of September 1, 2005, no
person owned beneficially more than 5% of any class of a Fund's outstanding
shares, except as stated in Exhibit M. To the best knowledge of the Trust,
except for JCM's
62
ownership in a Fund as indicated in Exhibit M, no person beneficially owned 25%
or more of a class of shares of any Fund. EntitiesRecord Date are
shown in Exhibit M to this
Proxy Statement as owning 25% or more of a class of a Fund, unless otherwise
indicated, are not the beneficial owners of such shares.below. None of the qualified plans owned 10% or more of the shares of the
Trust as a whole.
24
NAME AND ADDRESS NUMBER OF PERCENTAGE
NAME OF PORTFOLIO AND CLASS OF BENEFICIAL OWNER SHARES OF CLASS
- --------------------------- ------------------------------- ---------- ----------
Mid Cap Value Portfolio
-- Institutional Shares..... Western Reserve Life 425,171 34.66%
Cedar Rapids, IA 52499
Sun Life Assurance 311,276 25.38%
Company of Canada
Large Case PPVUL --
Variable Account H
Wellesley Hills, MA 02481
Sun Life Financial 262,942 21.44%
FBO Larse Case Vul SEP
Account G
Wellesley Hills, MA 02481
Jefferson National Life 136,673 11.14%
Insurance
Louisville, KY 40223
PEL Life-Coli 62,392 5.09%
FMD Variable Accounting Group
AEGON USA Inc.
Cedar Rapids, IA 52499
Mid Cap Value Portfolio
-- Service Shares........... Lincoln Benefit Life 1,557,543 36.04%
Lincoln, NE 68506
Nationwide Insurance Company -- 836,609 19.36%
NWPPVA2
Columbus, OH 43218
Nationwide Insurance Company -- 381,505 8.83%
NWPP
Columbus, OH 43218
Kemper Investors Life Insurance 366,115 8.47%
Company
Zurich Life
Mercer Island, WA 98040
As of the Record Date, the officers and Trustees as a group owned less than
1% of the outstanding shares of the Portfolio.
SOLICITATION OF PROXIES
The cost of preparing, printing, and mailing the proxy card(s) and this
Proxy Statement, and all other costs incurred with the solicitation of proxies,
including any additional solicitation made by letter, telephone, or otherwise,
will be allocated between JCMshared by Janus Capital and the Janus Funds, with each Fund bearing a
portion of the total cost. JCM will pay the costs associated with solicitation
of proxies for the election of Trustees. The Janus Funds will pay all other
costs allocated among the Janus Funds on the basis of relative net assets.PWM. In addition to solicitation by mail,
officers and representatives of the Funds,Trust, officers and employees of JCMJanus
Capital or its affiliates, and certain financial services firms and their
representatives, without extra compensation, or a solicitor, may conduct
additional solicitations personally, by telephone, or by any other means
available.
JCM25
Janus Capital has engaged Computershare,D.F. King & Co., Inc. ("D.F. King"), a
professional proxy solicitation firm, to assist in the solicitation of proxies,
for the Janus Funds, at an estimated cost of $5.4 million,$750,000, plus expenses. Such expenses shall be allocated between the
Janus Funds and JCM as described above.
Insurance companies and qualified plans may be required to forward
soliciting material to the beneficial owners of shares. For those services, they
will be reimbursedshared by
Janus Capital and PWM, with Janus Capital assuming 75% of the Funds for their expenses and
Perkins assuming 25% of the expenses up to $2,500,000 after which Janus Capital
will assume 100% of the extent the Funds would
have directly borne those expenses. Among other things, ComputershareD.F. King will be: (i)
required to maintain the confidentiality of all shareholder information; (ii)
prohibited from selling or otherwise disclosing shareholder information to any
third party; and (iii) required to comply with applicable telemarketing laws.
Insurance companies and qualified plans may be required to forward
soliciting material to the beneficial owners of the Portfolio and to obtain
authorization for the execution of proxies. For those services, they will be
reimbursed by Janus Capital and/or PWM for their expenses, to the extent that
Janus Capital or the Portfolio would have directly borne those expenses.
As the Meeting date approaches, certain shareholders whose votes have not
been received may receive telephone calls from a representative of Computershare.D.F. King.
Authorization to permit ComputershareD.F. King to execute proxies may be obtained by
telephonic or electronically transmitted instructions from shareholders of each Fund.the
Portfolio. Proxies that are obtained telephonically will be recorded in
accordance with the procedures described below. The Funds believePortfolio believes that
these procedures are reasonably designed to ensure that both the identity of the
shareholder casting the vote and the voting instructions of the shareholder are
accurately determined.
In all cases where a telephonic proxy is solicited, the ComputershareD.F. King
representative is required to ask for each shareholder's full name, address and
title (if the shareholder is authorized to act on behalf of an entity, such as a
corporation), and to confirm that the shareholder has received the Proxy
Statement and proxy card(s) in the mail. If the information solicited agrees
with the information provided to Computershare,D.F. King, then the ComputershareD.F. King representative
has the responsibility to
63
explain the process, read the proposals listed on the
proxy card, and ask for the shareholder's instructions on such proposals.each proposal.
Although the ComputershareD.F. King representative is permitted to answer questions about the
process, he or she is not permitted to recommend to the shareholder how to vote.
The ComputershareD.F. King representative may read any recommendation set forth in this Proxy
Statement. The ComputershareD.F. King representative will record the shareholder's
instructions. Within 72 hours, the shareholder will be sent a confirmation of
his or her vote asking the shareholder to call ComputershareD.F. King immediately if his or
her instructions are not accurately reflected in the confirmation.
Telephone Touch-Tone Voting. Shareholders may provide their voting
instructions through telephone touch-tone voting. Followvoting by following the instructions
inon the enclosed proxy materials using the proxy card as a guide.card(s). Shareholders will have an opportunity to review
their voting instructions and make any necessary changes before submitting their
voting instructions and terminating their telephone call.
26
Internet Voting. Shareholders may provide their voting instructions
through Internet voting. Followvoting by following the instructions inon the enclosed proxy
materials using
the proxy card as a guide.card(s). Shareholders who vote via the Internet, in addition to confirming their
voting instructions prior to submission and terminating their Internet link,session,
will, upon request, receive an e-mail confirming their voting instructions.
If a shareholder wishes to participate in the Meeting but does not wish to
give a proxy by telephone or via the Internet, the shareholder may still submit
the proxy card(s) originally sent with the Proxy Statement in the postage paidpostage-paid
envelope provided, or attend the Meeting in person. Shareholders requiring
additional information regarding the proxy or replacement proxy card(s) may
contact ComputershareD.F. King at 1-866-340-4019.1-800-628-8528. Any proxy given by a shareholder is
revocable until voted at the Meeting.
Revoking a Proxy. Any shareholder submitting a proxy has the power to
revoke it at any time before it is exercised by submitting to the Secretary of
the Trust at the address indicated on page 1 of this Proxy Statement,151 Detroit Street, Denver, Colorado 80206, a written notice of
revocation or a subsequently executed proxy, or by attending the Meeting and
voting in person. All properly executed and unrevoked proxies received in time
for the Meeting will be voted as specified in the proxy or, if no specification
is made, for each proposal referred towill be voted "FOR" the proposals, as described in thethis Proxy
Statement.
Shares Held Byby Accounts of Insurance Companies. Shares of the FundsPortfolio
may be held by certain separate accounts of insurance companies to fund benefits
payable under certain variable annuity contracts and variable life insurance
policies ("variable contracts").policies. Your insurance company may request that you provide it with voting
instructions for your beneficially held shares of any such separate account. If
you do not provide voting instructions to your insurance company, it may vote
all of the shares held in that separate account in the same proportions as the
voting actually received from its other variable contract holders for that
separate account.
64
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of a Fund'sthe Portfolio's portfolio securities
are placed on behalf of each Fundthe Portfolio by JCMJanus Capital or its agent. INTECH has authority to place
trades on behalf of Risk-Managed Core Portfolio and Risk-Managed Growth
Portfolio. With respect to Mid Cap Value Portfolio, JCMJanus
Capital places portfolio transactions for the Portfolio solely upon Perkins'PWM's
direction. The policy of each of JCM, INTECH
and Perkins is to seek "best execution" on each trade. In seeking best execution
on trades for Mid Cap Value Portfolio JCM acts on behalf of and in consultation
with Perkins. The Funds dodoes not allocate portfolio transactions to
broker-dealers on the basis of the sale of FundPortfolio shares, although brokerage
firms whose customers purchase shares of the FundsPortfolio may execute transactions
for the FundsPortfolio and receive brokerage commissions.
The Trustees have authorized JCM to place trades with an affiliated broker.
JCM has not placed any trades with an affiliated broker since June 16, 2004.
However, prior to June 16, 2004, JCM was affiliated with DST Securities, Inc.
("DSTS"), a wholly-owned subsidiary of DST Systems, Inc. ("DST"), and placed
trades on behalf ofDuring the Funds through DSTS. As authorized by the Trustees, JCM
placed trades with DSTS when it reasonably believed that the quality of the
execution and the associated commission were fair and reasonable and when,
overall, the associated transaction costs, net of any credits discussed below,
were lower than the net costs that would be incurred through other brokerage
firms that provide comparable execution. Brokerage commissions paid on
transactions executed through DSTS were normally used as a means to reduce Fund
expenses by generating credits to offset the license fees charged to a Fund by
DST for the use of its shareholder accounting system. The table below sets forth
the fees paid to DSTS for the Funds'most recent fiscal year, ended December 31, 2004. Funds
not listed belowthe Portfolio did not pay any
feescommissions to DSTS.
AGGREGATE COMMISSIONS PERCENT OF AGGREGATE BROKERAGE
FUND PAID TO DSTS COMMISSIONS PAID BY FUND
- ---- --------------------- ------------------------------
Balanced Portfolio... $4,000 2.66%
Worldwide Growth
Portfolio.......... $2,785 7.48%
affiliated broker-dealers.
LEGAL MATTERS
Information regarding material pending legal proceedings involving JCMJanus
Capital, PWM, or any Fundthe Trust is attached as Exhibit NF to this Proxy Statement.
27
SHAREHOLDER PROPOSALS FOR SUBSEQUENT MEETINGS
The Funds arePortfolio is not required, and dodoes not intend, to hold annual
shareholder meetings. Under the terms of a settlement reached between Janus
Capital and the SEC in August 2004, commencing in 2005 and not less than every
fifth calendar year thereafter, the Trust will hold a meeting of shareholders to
elect Trustees. Shareholder meetings may be called from time to time as
described in the Trust'sAmended and Restated Trust Instrument and Bylaws.the Bylaws of the
Trust.
Under the proxy rules of the SEC, shareholder proposals that meet certain
conditions may be included in a Fund'sthe Portfolio's proxy statement for a particular
meeting. Those rules currently require that for future meetings, the shareholder
must be a record or beneficial owner of Fundthe Portfolio shares
65
either (i) with a
value of at least $2,000 or (ii) in an amount representing at least 1% of the
Fund'sPortfolio's securities to be voted at the time the proposal is submitted and for
one year prior thereto, and must continue to own such shares through the date on
which the meeting is held. Another requirement relates to the timely receipt by
a Fundthe Portfolio of any such proposal. Under those rules, a proposal must have been
submitted within a reasonable time before the FundPortfolio began to print and mail
this Proxy Statement in order to be included in this Proxy Statement. A proposal
submitted for inclusion in a Fund'sthe Portfolio's proxy material for the next special
meeting after the meeting to which this Proxy Statement relates must be received
by the FundPortfolio within a reasonable time before the FundPortfolio begins to print
and mail the proxy materials for that meeting.
ShareholdersA shareholder wishing to submit a proposal for inclusion in a proxy
statement subsequent to the Meeting, if any, should send theirthe written proposal to
the Secretary of the Trust at 151 Detroit Street, Denver, Colorado 80206, within
a reasonable time before the FundPortfolio begins to print and mail the proxy
materials for that meeting. Notice of shareholder proposals to be presented at
the Meeting must have been received within a reasonable time before the
FundPortfolio began to mail this Proxy Statement. The timely submission of a
proposal does not guarantee its inclusion in the proxy materials.
SHAREHOLDER COMMUNICATIONS
The Trustees provide for shareholders to send written communications to the
Trustees via regular mail. Written communications to the Trustees, or to an
individual Trustee, should be sent to the attention of the Trust's Secretary at
the address of the Trust's principal executive office. All such communications
received by the Trust's Secretary shall be promptly forwarded to the individual
Trustee to whom they are addressed or to the full Board of Trustees, as
applicable. If a communication does not indicate a specific Trustee, it will be
sent to the Chairperson of the Nominating and Governance Committee and the
independent counsel to the Trustees for further distribution, as deemed
appropriate by such persons. The Trustees may further develop and refine this
process as deemed necessary or desirable.
28
REPORTS TO SHAREHOLDERS AND FINANCIAL STATEMENTS
The Annual Reportannual report to shareholders of each Fund,the Portfolio, including financial
statements of the Fund,Portfolio, has previously been sent to shareholders. COPIES OF EACH
FUND'S MOST RECENTTHE
PORTFOLIO PROVIDES ANNUAL AND SEMIANNUAL REPORTS TO ITS SHAREHOLDERS THAT
HIGHLIGHT RELEVANT INFORMATION, INCLUDING INVESTMENT RESULTS AND A REVIEW OF
PORTFOLIO CHANGES, ARE AVAILABLE UPON REQUEST AND WITHOUT CHARGE BY CONTACTING
YOUR INSURANCE COMPANY OR PLAN SPONSOR.CHANGES. ADDITIONAL COPIES OF EACH FUND'STHE PORTFOLIO'S MOST RECENT ANNUAL
REPORT AND ANY MORE RECENT SEMIANNUAL REPORT ARE ALSO AVAILABLE, WITHOUT CHARGE, BY
CALLING 800-525-0220,A JANUS REPRESENTATIVE AT 1-877-335-2687, VIA THE INTERNET AT
WWW.JANUS.COM,WWW.JANUS.COM/INFO, OR BY SENDING A WRITTEN REQUEST TO THE SECRETARY OF THE
TRUST AT 151 DETROIT STREET, DENVER, COLORADO 80206.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board of Trustees is not aware of any matters that will be presented
for action at the Meeting other than the matters described in this Proxy
Statement. Should any other matters requiring a vote of shareholders arise, the
proxy in the accompanying form will confer upon the person or persons entitled
to vote the shares represented by such proxy the discretionary authority to vote
the shares as to any other matters, in accordance with their best judgment in
the interest of the Trust and/or Fund.
66
Portfolio.
PLEASE COMPLETE, SIGN, AND RETURN THE ENCLOSED PROXY CARD(S) OR VOTE BY
INTERNET OR TELEPHONE PROMPTLY. NO POSTAGE IS REQUIRED IF YOU MAIL YOUR PROXY
CARD(S) IN THE UNITED STATES.
By order of the Board of Trustees,
/s/ Kelley Abbott Howes
Kelley Abbott Howes
ViceRobin C. Beery
Robin C. Beery
President General Counsel
and Secretary
67Chief Executive Officer of
Janus Aspen Series
29
INDEX OF EXHIBITS
EXHIBIT A: Nominating and Governance Committee CharterForm of Subadvisory Agreement
EXHIBIT B: Trust Officers and Their Principal Occupations
EXHIBIT C:Form of Amended and Restated Trust Instrument
EXHIBIT D: Number of Outstanding Shares and Net Assets
EXHIBIT E: Form of Proposed AmendedInvestment Advisory
Agreement
for Equity
and Income Funds -- Conforming Amendments
EXHIBIT F: Form of Proposed Amended Advisory Agreement for Money
Market Portfolio -- Conforming Amendments
EXHIBIT G: Form of Proposed Amended Advisory Agreement for
Worldwide Growth Portfolio -- Performance Fees
EXHIBIT H: Form of Proposed Amended Advisory Agreement for Mid Cap
Value Portfolio and Risk-Managed Core Portfolio --
Performance Fees
EXHIBIT I: Principal Executive Officers of JCM and Their Principal
Occupations
EXHIBIT J:C: Other Funds Managed by JCMJanus Capital and PWM with
Similar Investment Objectives
EXHIBIT K: Form of Proposed Amended Sub-Advisory Agreement for
Risk-Managed Core Portfolio
EXHIBIT L:D: Principal Executive Officers and Directors of INTECHJanus
Capital and Their Principal Occupations
EXHIBIT M: 5% Beneficial OwnersE: Trustees and Principal Executive Officers of Sharesthe
Portfolio and Their Principal Occupations
EXHIBIT N:F: Legal Matters
6830
EXHIBIT A
FORM OF SUB-ADVISORY AGREEMENT
[JANUS ASPEN PERKINS ]MID CAP VALUE PORTFOLIO
(A SERIES OF JANUS ASPEN SERIES
JANUS INVESTMENT FUND
JANUS ADVISER SERIES
NOMINATING AND GOVERNANCE COMMITTEE CHARTER
(ADOPTED DECEMBER 5, 2000; REVISED DECEMBER 10, 2001;
REVISED DECEMBER 10, 2002; REVISED SEPTEMBER 16, 2003;
REVISED MARCH 16, 2004; REVISED JUNE 15, 2004; REVISED JUNE 14, 2005)
I. PURPOSE
The Nominating and Governance CommitteeSERIES)
This SUB-ADVISORY AGREEMENT (the "Committee""Agreement") is a committeeentered into effective as
of the Board[1st ][ ]day of Trustees[July ][ ]200[8][4], by and between
JANUS CAPITAL MANAGEMENT LLC, a Delaware limited liability company ("Trustees"Janus") of each ofand
PERKINS[, WOLF, McDONNELL AND COMPANY,][ INVESTMENT MANAGEMENT] LLC, a Delaware
limited liability company ("[PWM][Perkins]").
WHEREAS, Janus has entered into an Investment Advisory Agreement (the
"Advisory Agreement") with Janus Aspen Series, Janus
Investment Fund,a Delaware statutory trust (the
"Trust") and Janus Adviser Series (each a "Trust" and, collectively, the
"Trusts"). Its primary functions are to:
- identify and recommend individuals for Trustee membership,
- consult withan open-end, management in planning Trustee meetings, and
- oversee the administration of, and ensure compliance with, the Governance
Procedures and Guidelines (the "Procedures and Guidelines") adopted by
the Trusts as in effect from time to time.
II. COMPOSITION
The Committee shall be comprised of three or more Independent Trustees, who
shall be designated by a majority vote of the Trustees. Independent Trustees are
those Trustees of the Trusts who are not "interested persons" of the Trusts, as
defined byinvestment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), with respect to
[Janus Aspen Perkins] Mid Cap Value Portfolio, a series of the Trust (the
"Fund") pursuant to which Janus has agreed to provide investment advisory
services with respect to the Fund; and
who meet the standards for independence set forthWHEREAS, [Perkins][PWM] is engaged in the Proceduresbusiness of rendering investment
advisory services and Guidelines.
The membersis registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
ChairmanWHEREAS, Janus desires to retain [Perkins][PWM] to furnish investment
advisory services with respect to the Fund, and [Perkins][PWM] is willing to
furnish such services;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Duties of [Perkins][PWM.] Janus hereby engages the services of
[Perkins][PWM] as subadviser in furtherance of the CommitteeAdvisory Agreement.
[Perkins][PWM] agrees to perform the following duties, subject to the
oversight of Janus and to the overall control of the officers and the Board
of Trustees (the "Trustees") of the Trust:
(a) [Perkins][PWM] shall manage the investment operations of the
Fund and the composition of its investment portfolio, shall determine
without prior consultation with the Trust or Janus, what securities and
other assets of the Fund will be electedacquired, held, disposed of or loaned,
and shall direct Janus with respect to the execution of trades in
connection with such determinations, in conformity with the investment
objectives, policies and restrictions and the other statements
concerning the Fund in the Trust's trust instrument, as amended from
time to time (the "Trust Instrument"), bylaws and registration
statements under the 1940 Act and
A-1
the Securities Act of 1933, as amended (the "1933 Act"), the Advisers
Act, the rules thereunder and all other applicable federal and state
laws and regulations, and the provisions of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to the Trust, on behalf of the
Fund, as a regulated investment company;
(b) [Perkins][PWM] shall cause its officers to attend meetings and
furnish oral or written reports, as the Trust or Janus may reasonably
require, in order to keep Janus, the Trustees and appropriate officers
of the Trust fully informed as to the condition of the investment
portfolio of the Fund, the investment decisions of [Perkins][PWM], and
the investment considerations which have given rise to those decisions;
(c) [Perkins][PWM] shall maintain all books and records required to
be maintained by [Perkins][PWM ]pursuant to the 1940 Act, the Advisers
Act, and the rules and regulations promulgated thereunder, as the same
may be amended from time to time, with respect to transactions on behalf
of the Fund, and shall furnish the Trustees and Janus with such periodic
and special reports as the Trustees or Janus reasonably may request.
[Perkins][PWM] hereby agrees that all records which it maintains for the
Fund or the Trust are the property of the Trust, agrees to permit the
reasonable inspection thereof by the Trust or its designees and agrees
to preserve for the periods prescribed under the 1940 Act and the
Advisers Act any records which it maintains for the Trust and which are
required to be maintained under the 1940 Act and the Advisers Act, and
further agrees to surrender promptly to the Trust or its designees any
records which it maintains for the Trust upon request by the Trust;
(d) [Perkins][PWM] shall submit such reports relating to the
valuation of the Fund's assets and to otherwise assist in the
calculation of the net asset value of shares of the Fund as may
reasonably be requested;
(e) [Perkins][PWM] shall provide Janus with such assistance and
advice as Janus may reasonably request as to the manner in which to
exercise, on behalf of the Fund, such voting rights, subscription
rights, rights to consent to corporate action and any other rights
pertaining to the Fund's assets that may be exercised, in accordance
with any policy pertaining to the same that may be adopted or agreed to
by the Trustees annuallyof the Trust, so that Janus may exercise such rights,
or, in the event that the Trust retains the right to exercise such
voting and serve until their respective successorsother rights, to furnish the Trust with advice as may
reasonably be requested as to the manner in which such rights should be
exercised;
(f) At such times as shall be duly electedreasonably requested by the Trustees
or Janus, [Perkins][PWM] shall provide the Trustees and qualified.
III. MEETINGS
The CommitteeJanus with
economic, operational and investment data and reports, including without
limitation all information and materials reasonably requested by or
requested to be
A-2
delivered to the Trustees of the Trust pursuant to Section 15(c) of the
1940 Act, and shall meet four times annually, or more frequentlymake available to the Trustees and Janus any
economic, statistical and investment services normally available to
similar investment company clients of [Perkins][PWM]; and
(g) [Perkins][PWM] will provide to Janus for regulatory filings and
other appropriate uses materially accurate and complete information
relating to [Perkins][PWM] as
circumstances dictate. Special meetings (including telephone meetings) may be calledreasonably requested by Janus from
time to time and, notwithstanding anything herein to the contrary,
[Perkins][PWM] shall be liable to Janus for all damages, costs and
expenses, including without limitation reasonable attorney's fees
(hereinafter referred to collectively as "Damages"), incurred by Janus
as a result of any material inaccuracies or omissions in such
information provided by [Perkins][PWM] to Janus, provided, however, that
[Perkins][PWM] shall not be liable to the extent that any Damages are
based upon inaccuracies or omissions made in reliance upon information
furnished to [Perkins][PWM] by Janus.
2. Further Obligations. In all matters relating to the performance of
this Agreement, [Perkins][PWM] shall act in conformity with the Trust's
Trust Instrument, bylaws and currently effective registration statements
under the 1940 Act and the 1933 Act and any amendments or supplements
thereto (the "Registration Statements") and with the written policies,
procedures and guidelines of the Fund, and written instructions and
directions of the Trustees and Janus and shall comply with the requirements
of the 1940 Act, the Advisers Act, the rules thereunder, and all other
applicable federal and state laws and regulations. Janus agrees to provide
to [Perkins][PWM] copies of the Trust's Trust Instrument, bylaws,
Registration Statement, written policies, procedures and guidelines and
written instructions and directions of the Trustees and Janus, and any
amendments or supplements to any of them at, or, if practicable, before the
time such materials become effective.
3. Obligations of Janus. Janus shall have the following obligations
under this Agreement:
(a) To keep [Perkins][PWM] continuously and fully informed (or
cause the custodian of the Fund's assets to keep [Perkins][PWM] so
informed) as to the composition of the investment portfolio of the Fund
and the nature of all of the Fund's assets and liabilities from time to
time;
(b) To furnish [Perkins][PWM] with a certified copy of any
financial statement or report prepared for the Fund by certified or
independent public accountants and with copies of any financial
statements or reports made to the Fund's shareholders or to any
governmental body or securities exchange; [and]
A-3
(c) To furnish [Perkins][PWM] with any further materials or
information which [Perkins][PWM] may reasonably request to enable it to
perform its function under this Agreement[.][; and]
[(d) To compensate Perkins for its services in accordance with the
provisions of Section 4 hereof.]
4. Compensation. [For PWM's][Janus shall pay Perkins for its]
services under this Agreement, [the Fund shall pay to PWM ]a fee equal to
50% of the advisory fee payable to Janus from the Fund [before reduction of
the Janus fee by the Chairmanamount of the fee payable to PWM ](net of any
[performance fee adjustment, ]reimbursement of expenses incurred or fees
waived by Janus). [Such fee][Fees paid to Perkins] shall be computed and
accrued daily and payable monthly as of the last day of each month during
which or part of which this Agreement is in effect[ and shall be paid at
the same time and in the same amount as the fees payable to Janus]. For the
month during which this Agreement becomes effective and the month during
which it terminates, however, there shall be an appropriate proration of
the fee payable for such month based on the number of calendar days of such
month during which th[e][is] Agreement is effective.
5. Expenses. [Perkins][PWM] shall pay all its own costs and expenses
incurred in rendering its service under this Agreement.
6. Representations of [Perkins][PWM]. [Perkins][PWM] hereby
represents, warrants and covenants to Janus as follows:
(a) [Perkins][PWM]: (i) is registered as an investment adviser
under the Advisers Act and will continue to be so registered for so long
as this Agreement remains in effect; (ii) is not prohibited by the 1940
Act or the Advisers Act from performing the services contemplated by
this Agreement; (iii) has met, and will continue to meet for so long as
this Agreement remains in effect, any other applicable federal or state
requirements, or the applicable requirements of any regulatory or
industry self-regulatory organization necessary to be met in order to
perform the services contemplated by this Agreement; (iv) has the legal
and corporate authority to enter into and perform the services
contemplated by this Agreement; and (v) will immediately notify Janus of
the occurrence of any event that would disqualify [Perkins][PWM] from
serving as an investment adviser of an investment company pursuant to
Section 9(a) of the 1940 Act or otherwise, and of the institution of any
administrative, regulatory or judicial proceeding against [Perkins][PWM]
that could have a material adverse effect upon [Perkins][PWM's] ability
to fulfill its obligations under this Agreement.
(b) [Perkins][PWM] has adopted a written code of ethics complying
with the requirements of Rule 17j-1 under the 1940 Act and will provide
Janus with a copy of such code of ethics, together with evidence of its
A-4
adoption[, and any material changes thereto]. Within 45 days after the
end of the last calendar quarter of each year that this Agreement is in
effect, the president or a majorityvice president of [Perkins][PWM] shall
certify to Janus that [Perkins][PWM] has complied with the requirements
of Rule 17j-1 during the previous year and that there has been no
violation of [Perkins][PWM's] code of ethics or, if such a violation has
occurred, that appropriate action was taken in response to such
violation. Upon the written request of Janus, [Perkins][PWM] shall
permit Janus, its employees or its agents to examine the reports
required to be made to [Perkins][PWM] by Rule 17j-1(c)(1) and all other
records relevant to [Perkins][PWM's] code of ethics.
(c) [Perkins][PWM] has provided Janus with a copy of its Form ADV
as most recently filed with the U.S. Securities and Exchange Commission
("SEC") and will, promptly after filing any amendment to its Form ADV
with the SEC, furnish a copy of such amendment to Janus.
[(d) PWM will notify Janus of any change in the identity or control
of its shareholders owning a 10% or greater interest in PWM, or any
change that would constitute a change in control of PWM under the 1940
Act, prior to any such change if PWM is aware, or should be aware, of
any such change, but in any event as soon as any such change becomes
known to PWM.]
7. Term. This Agreement shall become effective as of the members ofdate first
set forth above and shall continue in effect until February 1, 200[7][9]
unless sooner terminated in accordance with its terms, and shall continue
in effect from year to year thereafter only so long as such continuance is
specifically approved at least annually by (a) the Committee upon
reasonable notice to the other members of the Committee. The presence in person
or by telephonevote of a majority of
the number of Committee members shall
constitute a quorum at any meeting. If a quorum is not present, the member(s) of
the Committee who is/are present may select any other Independent Trustee(s) to
serve on the Committee for such meeting to constitute a quorum. The Committee
may ask management and representatives of the servicing agents to attend
meetings and provide pertinent information as appropriate.
IV. RESPONSIBILITIES AND DUTIES
In performing its duties, the Committee will maintain effective working
relationships with the Trustees and management. To effectively perform his or
her
A-1
role, each Committee member will obtain an understanding of the detailed
responsibilities of Committee membership. Each Committee member will also
achieve an understanding of the Trusts' separation of duties and
responsibilities among the investment adviser, custodian, transfer agent, fund
accounting function and principal accounting officer, and the risks associated
with such responsibilities. The duties and responsibilities of a Committee
member shall be in addition to his or her duties as a Trustee and include
responsibility to prepare for, attend, and actively participate in Committee
meetings. Members may pursue training related to their responsibilities.
A. TRUSTEE NOMINATIONS, ELECTIONS, AND TRAINING
The Committee shall:
1. Identify and nominate candidates for appointment as Trustees of the Trusts. The principal criterion for selection of candidates is their ability to
contribute to the overall functioningTrust who are not parties hereto or interested persons
of the Boards and to carry out the
responsibilities of the Trustees. The Trustees, collectively, should representTrust, Janus or [Perkins][PWM], cast in person at a broad cross section of backgrounds, functional disciplines, and experience. In
addition, in considering a potential candidate's qualifications to serve as a
Trustee of a Trust, the Committee may take into account a wide variety of
criteria, including, but not limited to:
(a) The candidate's knowledge in matters related to the investment
company industry;
(b) The candidate's relevant experience, including as a director or
senior officer of public or private companies, or service as a
director/trustee of a registered investment company;
(c) The candidate's educational background;
(d) The candidate's reputation for high ethical standards and personal
and professional integrity;
(e) Any specific financial, technical or other expertise possessed by
the candidate, and the extent to which such expertise would complement the
Trustees' existing mix of skills and qualifications;
(f) The candidate's willingness to serve, and willingness and ability
to commit the time necessary for the performance of the duties of a
Trustee, including high attendance at regular and special meetings and
participation in committee activities as needed;
(g) The candidate must exhibit stature commensurate with the
responsibility of representing Fund shareholders;
(h) If the nomination is for an "independent" trustee, the candidate
must not be considered an "interested" person of the Fund, Janus Capital
Management LLC ("Janus Capital") or any sub-adviser to a Fund, as defined
under the 1940 Act;
(i) The candidate must otherwise be qualified under applicable laws
and regulations to serve as a trustee of the applicable Trust; and
A-2
(j) Such other criteria as the Committee determines to be relevant in
light of the existing composition of the Board, number of Board members and
any anticipated vacancies or other factors.
Although Janus Capital, current Trustees, current shareholders of a Fund
and any other person or entity that may be deemed necessary or desirable by
the Committee, may submit to the Committee suggested candidates for
Trustees, neither the Committee nor the Independent Trustees as a group
shall consider those candidates on a preferential basis as opposed to other
possible candidates. Shareholders may submit the name of a candidate for
consideration by the Committee by submitting their recommendations to the
Trusts' Secretary in accordance with the Procedures for Consideration of
Trustee Candidates Submitted by Shareholders ("Shareholder Nomination
Procedures") attached as Appendix 1. The Trusts' Secretary will forward all
such recommendations to the Chairman of the Committee (or his designee)
promptly upon receipt, and, for shareholder recommendations, in accordance
with the Shareholder Nomination Procedures.
The Committee may use any process it deems appropriatemeeting called
for the purpose of evaluating candidates, which process may include, without limitation,
personal interviews, background checks, written submissions byvoting on the candidates and third party references. There is no difference in the manner
by which the Committee will evaluate nominees when the nominee is submitted
by a shareholder.
The Committee reserves the right to make the final selection regarding the
nomination of any Trustee of a Trust and to recommend such nomination to
the Independent Trusteesapproval of the applicable Trust.
2. Review periodically the composition and size of the Board of Trustees to
determine whether it may be appropriate to add individuals with backgrounds or
skill sets different from those of the current Trustees.
3. Oversee arrangements for orientation of new Independent Trustees,
continuing education for the Independent Trustees, and an annual evaluation of
the performance of the Independent Trustees in accordance with the Procedures
and Guidelines.
B. COMMITTEE NOMINATIONS AND FUNCTIONS
The Committee shall:
1. Identify and recommend individuals for membership on all committees,
recommend individuals to chair committees, and review committee assignments at
least annually.
2. Review as necessary the responsibilities of each committee, whether
there is a continuing need for each committee, whether there is a need for
additional committees, and whether committees should be combined or reorganized.
C. GOVERNANCE OVERSIGHT
The Committee shall:
1. Oversee the governance processes and activities of the Trustees to
assure conformity to the Procedures and Guidelines.
A-3
2. Recommend an Independent Trustee of the Trust for appointment by the
Trustees as Chairman of the Trustees, as described in each Trust's Declaration
of Trust or Trust Instrument, or by-laws. The Chairman of the Trustees may
perform the following functions:
(a) Act as the primary contact between Janus Capital and the Trustees,
undertaking to meet or confer periodically with members of the Janus
Capital executive team regarding matters related to the operations and
performance of the Trusts;
(b) Coordinate the Trustees' use of outside resources, including
consultants or other professionals;
(c) Coordinate an annual schedule of portfolio reports to the
Trustees;
(d) Conduct the Trustee meetings;
(e) Confer with Janus Capital personnel and counsel for the
Independent Trustees in planning agendas for regular board and committee
meetings; and
(f) Perform such other duties as the Independent Trustees may
determine from time to time.
3. Review annually the Procedures and Guidelines, and recommend changes, if
any, to the Trustees.
D. TRUSTEE MEETING PLANNING
The Committee shall consult with management in planning Trustee meetings
and may from time to time recommend agenda items, or request presentations from
particular service providers, consultants, or portfolio managers, either to the
Committee or the Trustees.
E. OTHER RESPONSIBILITIES AND DUTIES
The Committee shall:
1. Review annually the compensation of the Independent Trustees and
determine whether to recommend to the Trustees any change in the schedule of
compensation. The Committee may also recommend that the Trustees authorize the
payment of supplemental compensation to any one or more Independent Trustees in
view of special responsibilities assumed, services rendered or any other
appropriate factors.
2. Authorize and oversee investigations into any matters within the
Committee's scope of responsibilities. The Committee shall be empowered to use
Trust assets to retain independent counsel, consultants, and other professionals
to assist in the conduct of any investigation. Janus Capital will report the use
of Trust assets for such purpose quarterly to the Trustees.
3. Review this Charter at least annually and recommend changes, if any, to
the Trustees.
4. Perform any other activities consistent with this Charter, each Trust's
Declaration of Trust or Trust Instrument, by-laws, and governing law as the
Committee or the Trustees deem necessary or appropriate.
5. Maintain minutes of its meetings and report to the Trustees.
A-4
APPENDIX 1
JANUS INVESTMENT FUND
JANUS ASPEN SERIES
JANUS ADVISER SERIES
(EACH A "TRUST," AND COLLECTIVELY, THE "TRUSTS," AND EACH
SERIES OF A TRUST, A "FUND")
PROCEDURES FOR CONSIDERATION OF TRUSTEE CANDIDATES SUBMITTED BY SHAREHOLDERS
(ADOPTED MARCH 16, 2004)
The Trusts' Nominating and Governance Committee ("Committee") is
responsible for identifying and nominating candidates for appointment as
Trustees of the Trusts. Shareholders of a Fund may submit names of potential
candidates for nomination as Trustee of a Trust in accordance with these
Procedures.
A candidate for nomination as Trustee of a Trust submitted by a shareholder
will not be deemed to be properly submitted to the Committee for the Committee's
consideration unless the following qualifications have been met and procedures
followed:
1. A shareholder of a Fund who wishes to nominate a candidate for
election to a Trust's Board of Trustees ("Nominating Shareholder") must
submit any such recommendation in writing via regular mail to the attention
of the Secretary of the Trust, at the address of the principal executive
offices of the Trust ("Shareholder Recommendation").
2. The Shareholder Recommendation must include: (i) the class or
series and number of all shares of the Fund owned beneficially or of record
by the Nominating Shareholder at the time the recommendation is submitted
and the dates on which such shares were acquired, specifying the number of
shares owned beneficially; (ii) a full listing of the proposed candidate's
education, experience (including knowledge of the investment company
industry, experience as a director or senior officer of public or private
companies, and directorships on other boards of other registered investment
companies), current employment, date of birth, business and residence
address, and the names and addresses of at least three professional
references; (iii) information as to whether the candidate is or may be an
"interested person" (as such term is defined in the Investment Company Act
of 1940, as amended) of the Fund, Janus Capital Management LLC, or any
sub-adviser to a Fund, and, if believed not to be an "interested person,"
information regarding the candidate that will be sufficient for the Fund to
make such determination; (iv) the written and signed consent of the
candidate to be named as a nominee and to serve as a Trustee of the Trust,
if elected; (v) a description of all arrangements or understandings between
the Nominating Shareholder, the candidate and/or any other person or
persons (including their names) pursuant to which the Shareholder
Recommendation is being made, and if none, so specify; (vi) the
A-5
class or series and number of all shares of the Fund owned of record or
beneficially by the candidate, as reported by the candidate; and (vii) such
other information that would be helpful to the Committee in evaluating the
candidate.
3. The Committee may require the Nominating Shareholder to furnish
such other information as it may reasonably require or deem necessary to
verify any information furnished pursuant to paragraph 2 above or to
determine the qualifications and eligibility of the candidate proposed by
the Nominating Shareholder to serve as a Trustee of a Trust. If the
Nominating Shareholder fails to provide such other information in writing
within seven days of receipt of written request from the Committee, the
recommendationterms of such candidate as a nominee will be deemed not properly
submitted for consideration,renewal, and
(b) either the Committee is not required to consider
such candidate.
Unless otherwise specified by the Committee chairman (or his designee) or
by outside counsel to the independent Trustees, the Secretary of the Trust (or
her designee) will promptly forward all Shareholder Recommendations to the
Committee chairman (or his designee) and the outside counsel to the independent Trustees of the Trust indicating whetheror the Shareholder Recommendation has
been properly submitted pursuant to these Procedures.
Recommendations for candidates as Trustees of a Trust will be evaluated,
among other things, in light of whether the number of Trustees is expected to
change and whether the Trustees expect any vacancies. When the Committee is not
actively recruiting new Trustees, Shareholder Recommendations will be kept on
file until active recruitment is under way.
A-6
EXHIBIT B
TRUST OFFICERS AND THEIR PRINCIPAL OCCUPATIONS
TERM OF
NAME, AGE AS OF OFFICE* AND
DECEMBER 31, 2004 POSITIONS HELD WITH LENGTH OF PRINCIPAL OCCUPATIONS DURING
AND ADDRESS PORTFOLIOS TIME SERVED THE PAST FIVE YEARS
- ----------------- ------------------- ----------- ----------------------------
Jonathan D. Coleman... Executive Vice President 2/02-Present Vice President of Janus
151 Detroit Street and Portfolio Manager Capital and Portfolio
Denver, CO 80206 Mid Cap Growth Portfolio Manager for other Janus
Age 33 accounts. Formerly, Analyst
(1994-1997 and 2000-2002)
for Janus Capital
Corporation.
C. Mike Lu............ Executive Vice President 12/99-Present Vice President of Janus
151 Detroit Street and Portfolio Manager Capital and Portfolio
Denver, CO 80206 Global Technology Manager for other Janus
Age 35 Portfolio accounts.
Brent A. Lynn......... Executive Vice President 1/01-Present Vice President of Janus
151 Detroit Street and Portfolio Manager Capital and Portfolio
Denver, CO 80206 International Growth Manager for other Janus
Age 40 Portfolio accounts. Formerly, Analyst
(1991-2001) for Janus
Capital Corporation.
Thomas R. Malley...... Executive Vice President 12/99-Present Vice President of Janus
151 Detroit Street and Co-Portfolio Manager Capital and Portfolio
Denver, CO 80206 Global Life Sciences Manager for other Janus
Age 36 Portfolio accounts.
Marc Pinto............ Executive Vice President 5/05-Present Vice President of Janus
151 Detroit Street and Co-Portfolio Manager Capital and Portfolio
Denver, CO 80206 Balanced Portfolio Manager for other Janus
Age 43 accounts.
Blaine P. Rollins..... Executive Vice President 1/00-Present Vice President of Janus
151 Detroit Street and Portfolio Manager Capital and Portfolio
Denver, CO 80206 Large Cap Growth Manager for other Janus
Age 37 Portfolio accounts.
Scott W. Schoelzel.... Executive Vice President 5/97-Present Vice President of Janus
151 Detroit Street and Portfolio Manager Capital and Portfolio
Denver, CO 80206 Forty Portfolio Manager for other Janus
Age 46 accounts.
Gibson Smith.......... Executive Vice President 5/05-Present Vice President of Janus
151 Detroit Street and Co-Portfolio Manager Capital and Portfolio
Denver, CO 80206 Balanced Portfolio Manager for other Janus
Age 36 accounts. Formerly, Analyst,
(2001-2003) for Janus
Capital Corporation and
worked in the fixed-income
division (1991-2001) for
Morgan Stanley.
Minyoung Sohn......... Executive Vice President 5/05-Present Vice President of Janus
151 Detroit Street and Portfolio Manager Capital and Portfolio
Denver, CO 80206 Core Equity Portfolio Manager for other Janus
Age 29 accounts. Formerly, Analyst
(1998-2003) for Janus
Capital Corporation.
Executive Vice President 1/04-Present
and Portfolio Manager
Growth and Income
Portfolio
B-1
TERM OF
NAME, AGE AS OF OFFICE* AND
DECEMBER 31, 2004 POSITIONS HELD WITH LENGTH OF PRINCIPAL OCCUPATIONS DURING
AND ADDRESS PORTFOLIOS TIME SERVED THE PAST FIVE YEARS
- ----------------- ------------------- ----------- ----------------------------
Ronald V. Speaker..... Executive Vice President 5/93-Present Vice President of Janus
151 Detroit Street and Portfolio Manager Capital and Portfolio
Denver, CO 80206 Flexible Bond Portfolio Manager for other Janus
Age 40 accounts.
J. Eric Thorderson.... Executive Vice President 1/01-Present Vice President of Janus
151 Detroit Street and Portfolio Manager Capital and Portfolio
Denver, CO 80206 Money Market Portfolio Manager for other Janus
Age 43 accounts.
Jason P. Yee.......... Executive Vice President 7/04-Present Vice President of Janus
151 Detroit Street and Portfolio Manager Capital and Portfolio
Denver, CO 80206 Worldwide Growth Manager for other Janus
Age 35 Portfolio accounts. Formerly,
Portfolio Manager and
Managing Director
(1996-2000) for Bee &
Associates and Analyst
(2000-2001) for Janus
Capital Corporation.
Executive Vice President 3/01-Present
and Portfolio Manager
Foreign Stock Portfolio
Bonnie M. Howe........ Vice President 12/99-Present Vice President and Assistant
151 Detroit Street General Counsel of Janus
Denver, CO 80206 Capital, Janus Distributors
Age 39 LLC and Janus Services LLC.
Kelley Abbott Howes... General Counsel 4/04-Present Senior Vice President and
151 Detroit Street General Counsel of Janus
Denver, CO 80206 Vice President and 12/99-Present Capital and Janus Services
Age 39 Secretary LLC; and Senior Vice
President and Assistant
General Counsel of Janus
Distributors LLC. Formerly,
Vice President (1999-2005)
of Janus Distributors LLC;
Vice President (2000-2004)
and Assistant General
Counsel (2002-2004) of Janus
Services LLC; and Vice
President (1999-2002) and
Assistant General Counsel
(1999-2004) of Janus
Capital.
B-2
TERM OF
NAME, AGE AS OF OFFICE* AND
DECEMBER 31, 2004 POSITIONS HELD WITH LENGTH OF PRINCIPAL OCCUPATIONS DURING
AND ADDRESS PORTFOLIOS TIME SERVED THE PAST FIVE YEARS
- ----------------- ------------------- ----------- ----------------------------
David R. Kowalski..... Vice President and Chief 6/02-Present Senior Vice President and
151 Detroit Street Compliance Officer Chief Compliance Officer of
Denver, CO 80206 Janus Capital, Janus
Age 47 Distributors LLC, and Janus
Services LLC; Chief
Compliance Officer of Bay
Isle Financial LLC; and Vice
President and Chief
Compliance Officer of
Enhanced Investment
Technologies LLC. Formerly,
Vice President of Janus
Capital (2000-2005), Janus
Distributors LLC
(2000-2001), and Janus
Services LLC (2004-2005);
and Assistant Vice President
of Janus Services LLC
(2000-2004).
Girard C. Miller**.... President and Chief 11/03-Present Executive Vice President and
151 Detroit Street Executive Officer Chief Operating Officer of
Denver, CO 80206 Janus Capital Group Inc. and
Age 53 Janus Capital; President of
Janus Distributors LLC and
Janus Capital International
LLC; Executive Vice
President of Janus Services
LLC; President and Director
of Janus Management Holdings
Corporation; and Chief
Operating Officer and
President of Capital Group
Partners, Inc. Formerly,
Director of Capital Group
Partners, Inc. (2003-2004);
and President and Chief
Executive Officer of ICMA
Retirement Corporation
(1993-2003).
Jesper Nergaard....... Chief Financial Officer 3/05-Present Vice President of Janus
151 Detroit Street Capital. Formerly, Director
Denver, CO 80206 Vice President, 2/05-Present of Financial Reporting for
Age 42 Treasurer, and Principal OppenheimerFunds, Inc.
Accounting Officer (2004-2005); Site Manager
and First Vice President of
Mellon Global Securities
Services (2003); and
Director of Fund Accounting,
Project Development and
Training of INVESCO Funds
Group (1994-2003).
- ---------------
* Officers are elected annually by the Trustees for a one-year term.
** Mr. Miller intends to resign his positions with Janus Capital Group Inc. and
its subsidiaries effective January 3, 2006. A successor to his positions with
the Trust will be appointed by the Trustees prior to this date.
B-3
EXHIBIT C
JANUS ASPEN SERIES
AMENDED AND RESTATED
TRUST INSTRUMENT
DATED MARCH 18, [2003][2003,]
[AMENDED [NOVEMBER __, 2005]]
DEFINITIONS..................................................... C-1
THE TRUSTEES AND THE ADVISORY BOARD............................. C-2
SECTION 1. Management of the Trust.......................... C-2
SECTION 2. Election and Number of Trustees.................. C-2
SECTION 3. Term of Office of Trustees....................... C-2
SECTION 4. Vacancies; Appointment of Trustees............... C-2
SECTION 5. Temporary Vacancy or Absence..................... C-3
SECTION 6. Chairman......................................... C-3
SECTION 7. Action by the Trustees........................... C-3
SECTION 8. Ownership of Trust Property...................... C-3
SECTION 9. Effect of Trustees Not Serving................... C-4
SECTION 10. Trustees, etc. as Shareholders................... C-4
POWERS OF THE TRUSTEES.......................................... C-4
SECTION 1. Powers........................................... C-4
SECTION 2. Certain Transactions............................. C-6
SECTION 3. Advisory Board................................... C-7
SERIES; CLASSES; SHARES......................................... C-7
SECTION 1. Establishment of Series or Classes............... C-7
SECTION 2. Shares of Beneficial Interest.................... C-7
SECTION 3. Investment in the Trust.......................... C-8
SECTION 4. Assets and Liabilities of Series................. C-8
SECTION 5. Ownership and Transfer of Shares................. C-9
SECTION 6. Status of Shares; Limitation of Shareholder
Liability........................................ C-9
DISTRIBUTIONS AND REDEMPTIONS................................... C-10
SECTION 1. Distributions.................................... C-10
SECTION 2. Redemptions...................................... C-10
SECTION 3. Determination of Net Asset Value................. C-11
SECTION 4. Suspension of Right of Redemption................ C-11
SECTION 5. Redemptions Necessary for Qualification as
Regulated Investment Company..................... C-11
SHAREHOLDERS' VOTING POWERS AND MEETINGS........................ C-11
SECTION 1. Voting Powers.................................... C-11
SECTION 2. Meetings of Shareholders......................... C-12
SECTION 3. Quorum; Required Vote............................ C-12
CONTRACTS WITH SERVICE PROVIDERS................................ C-13
SECTION 1. Investment Adviser............................... C-13
SECTION 2. Principal Underwriter............................ C-13
SECTION 3. Transfer Agency, Shareholder Services, and
Administration Agreements........................ C-13
SECTION 4. Custodian........................................ C-14
SECTION 5. Parties to Contracts with Service Providers...... C-14
EXPENSES OF THE TRUST AND SERIES................................ C-14
LIMITATION OF LIABILITY AND INDEMNIFICATION..................... C-15
SECTION 1. Limitation of Liability.......................... C-15
C-i
SECTION 2. Indemnification.............................................. C-15
SECTION 3. Indemnification of Shareholders.............................. C-17
MISCELLANEOUS............................................................... C-17
SECTION 1. Trust Not a Partnership...................................... C-17
SECTION 2. Trustee Action; Expert Advice; No Bond or Surety............. C-17
SECTION 3. Record Dates................................................. C-17
SECTION 4. Termination of the Trust[, Series or Class].................. C-18
SECTION 5. Reorganization............................................... C-19
SECTION 6. Trust Instrument............................................. C-20
SECTION 7. Applicable Law............................................... C-20
SECTION 8. Amendments................................................... C-21
SECTION 9. Fiscal Year.................................................. C-21
SECTION 10. Severability................................................. C-21
SECTION 11. Use of the Name "Janus."..................................... C-22
C-ii
JANUS ASPEN SERIES
AMENDED AND RESTATED TRUST INSTRUMENT
This AMENDED AND RESTATED TRUST INSTRUMENT is made on March 18, 2003, and
amended [November , 2005] by the Trustees, to establish a business trust for
the investment and reinvestment of funds contributed to the Trust by investors.
The Trustees declare that all money and property contributed to the Trust shall
be held and managed in trust pursuant to this Trust Instrument. The name of the
Trust created by this Trust Instrument is Janus Aspen Series.
ARTICLE I
DEFINITIONS
Unless otherwise provided or required by the context:
(a) "Advisory Board" refers to the Advisory Board of the Trust
established in accordance with Article III, Section 3.
(b) "Bylaws" means the Bylaws of the Trust adopted by the Trustees, as
amended from time to time;
(c) "Class" means any class of Shares of a Series established pursuant
to Article IV;
(d) "Commission," "Interested Person," and "Principal Underwriter"
have the meanings provided in the 1940 Act;
(e) "Covered Person" means a person so defined in Article IX, Section
2;
(f) "Delaware Act" means Chapter 38 of Title 12 of the Delaware Code
entitled "Treatment of Delaware Business Trusts," as amended from time to
time;
(g) "Majority Shareholder Vote" means "theaffirmative vote of a majority
of the outstanding voting securities" as defined insecurities of the 1940 Act;
(h) "Net Asset Value" means the net asset valueFund. The annual approvals
provided for herein shall be effective to continue this Agreement from year
to year if given within a period beginning not more than ninety (90) days
prior to February 1 of each Seriesapplicable year, notwithstanding the fact that
more than three hundred sixty-five (365) days may have elapsed since the
date on which such approval was last given.
8. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees or by the shareholders of the Trust, determined asFund acting by vote
of at least a majority of its outstanding voting securities, provided in
Article V, Section 3;any such case that [6][9]0 days' advance written notice of termination be
given to [Perkins][PWM] at its principal place of business. This Agreement
may [also ]be terminated [(i) ]by Janus [or the Trust: (i) "Outstanding Shares" means Shares shown in the booksby giving][at
any time, without penalty by giving] [6][9]0 days' advance written notice
of termination to [Perkins][PWM]; (ii) [upon a material breach by PWM of
any of the Trust
or its transfer agent as then issuedrepresentations and outstanding, but doeswarranties set forth in Section 6 of this
Agreement, if such breach shall not
include
Shares whichA-5
have been repurchasedcured within a 20-day period after notice of such breach][by
Perkins at any time, without penalty by giving 90 days' advance notice to
Janus and the Trust, unless Janus or redeemedthe Trust requests additional time to
find a replacement for Perkins, in which case Perkins shall allow the
additional time requested by Janus or the Trust not to exceed 90 days'
beyond the initial 90 days' notice period unless otherwise agreed to by
Janus, the Trust and which are
held in the treasury of the Trust;
(j) "Series" means a series of Shares established pursuant to Article
IV;
(j) "Shareholder" means a record owner of Outstanding Shares;
(l) "Shares" means the equal proportionate transferable units of
interest into which the beneficial interest of each SeriesPerkins]; or Class is
divided from time to time (including whole Shares and fractions of Shares);
(m) "Trust" means(iii) [by Janus Aspen Series established hereby, and reference
to the Trust, when applicable to one or more Series, refers to that Series;
(n) "Trustees" means the persons who have signed this Trust
Instrument, so long as they shall continue in office in accordance with the
terms hereof, and all other persons who may from time to time be duly
qualified and serving as
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Trustees in accordance with Article II, in all cases in their capacities as
Trustees hereunder;
(o) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the Trust or any
Series or the Trustees on behalf of the Trust or any Series;
(p) The "1940 Act" means the Investment Company Act of 1940, as
amended from time to time.
ARTICLE II
THE TRUSTEES AND THE ADVISORY BOARD
SECTION 1. Management of the Trust.
The business and affairs of the Trust shall be managed by or under the
direction of the Trustees, and they shall have all powers necessary or desirable
to carry out that responsibility. The Trustees may execute all instruments and
take all action they deem necessary or desirable to promote the interests of the
Trust. Any determination made by the Trustees in good faith as to what is in the
interests of the Trust shall be conclusive.
SECTION 2. Election and Number of Trustees.
Immediately following adoption of this Amended and Restated Trust
Instrument, the Trustees of the Trust shall be the persons signing this Amended
and Restated Trust Instrument. The number of Trustees shall be fixed from time
to time by a majority of the Trustees; provided, that there shall be at least
two (2) Trustees. The Shareholders shall elect the Trustees (other than the
initial Trustee) on such dates as the Trustees may fix from time to time.
SECTION 3. Term of Office of Trustees.
Each Trustee shall hold office for life or until his successor is elected or the Trust terminates; except that (a) any Trustee may resign by delivering to
the other Trustees or to any Trust officer a written resignation effective upon
such delivery or a later date specified therein; (b) any Trustee who requests to
be retired, or who has become physically or mentally incapacitated or is
otherwisewithout
advance notice] if [Perkins][PWM] becomes unable to serve,discharge its duties
and obligations under this Agreement. [This Agreement may be retiredterminated by
PWM at any time, without penalty upon a material breach by Janus of any of
the obligations set forth in Section 3 of this Agreement, if such breach
shall not have been cured within a 20-day period after notice of such
breach. This Agreement may be terminated by PWM after May 1, 2005 upon
three years' written notice. ]In addition, this Agreement shall terminate,
without penalty, upon the termination of the Advisory Agreement.
9. Assignment. This Agreement shall automatically terminate in the
event of its assignment.
10. Amendments. This Agreement may be amended by the parties only in a
written instrument signed by a
majority of the other Trustees, specifying the effective date of retirement; (c)
any Trustee shall be retired or removed with or without cause at any time upon
the unanimous written request of the remaining Trustees;parties to this Agreement and (d) any Trustee may
be removed at any meeting of the Shareholders by a vote of at least two-thirds
of the Outstanding Shares.
SECTION 4. Vacancies; Appointment of Trustees.
Whenever a vacancy shall exist, regardless of the reason foronly if such
vacancy,
the remaining Trustees shall appoint any person as they determine in their sole
discretion to fill that vacancy, consistent with the limitations under the 1940
Act. Such appointment shall be made by a written instrument signedamendment is specifically approved (i) by a majority of the Trustees,
or byincluding a resolutionmajority of the Trustees duly adopted and recordedwho are not interested persons (as
that phrase is defined in Section 2(a)(19) of the records1940 Act) of the Trust specifying the effective date of the appointment. The
Trustees may appoint a new Trustee as provided above in anticipation of a
vacancy expected to occur because of the retirement, resignation, or
removal of
a Trustee,Janus, [Perkins][PWM] or an increase
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in number of Trustees, provided that such appointment shall become effective
only at or after the expected vacancy occurs. As soon as any such Trustee has
accepted his appointment in writing, the trust estate shall vest in the new
Trustee, together with the continuing Trustees, without any further act or
conveyance,their affiliates, and he shall be deemed a Trustee hereunder.
SECTION 5. Temporary Vacancy or Absence.
Whenever a vacancy in the Trustees shall occur, until such vacancy is
filled, or while any Trustee is absent from his domicile (unless that Trustee
has made arrangements to be informed about, and to participate in, the affairs
of the Trust during such absence), or is physically or mentally incapacitated,
the remaining Trustees shall have all the powers hereunder and their certificate
as to such vacancy, absence, or incapacity shall be conclusive. Any Trustee may,(ii) if required by
power of attorney, delegate his powers as Trustee for a period not to exceed
six (6) months, unless otherwise extended for one or more additional consecutive
six (6) month periods, to any other Trustee or Trustees.
SECTION 6. Chairman.
The Trustees shall appoint one of their number to be Chairman of the
Trustees. The Chairman shall preside at all meetings of the Trustees and
Shareholders and shall have such other duties as may be assigned to the Chairmanapplicable law, by the Trustees from time to time.
SECTION 7. Action by the Trustees.
The Trustees shall act by majorityaffirmative vote at a meeting duly called (including
at a telephonic meeting, unless the 1940 Act requires that a particular action
be taken only at a meeting of the Trustees in person) at which a quorum is
present or by written consent of a majority of Trustees (or such greater number
as may be required by applicable law) without a meeting. A majoritythe outstanding
voting securities of the Trustees shall constitute a quorum at any meeting. Meetings of the Trustees may
be called orally orFund (as that phrase is defined in writing by the Chairman of the Trustees or by any two
other Trustees. Notice of the time, date and place of all Trustees meetings
shall be given to each Trustee by telephone, facsimile or other electronic
mechanism sent to his home or business address at least twenty-four hours in
advance of the meeting or by written notice mailed to his home or business
address at least seventy-two hours in advance of the meeting. Notice need not be
given to any Trustee who attends the meeting without objecting to the lack of
notice or who signs a waiver of notice either before or after the meeting.
Subject to the requirementsSection
2(a)(42) of the 1940 Act, the Trustees by majority vote may
delegateAct).
11. Limitation on Personal Liability. All parties to any Trustee or Trustees authority to approve particular matters or
take particular actions on behalf of the Trust. Any written consent or waiver
may be providedthis Agreement
acknowledge and delivered toagree that the Trust by facsimile or other similar
electronic mechanism.
SECTION 8. Ownership of Trust Property.
The Trust Property of the Trust and of each Series shall be held separate
and apart from any assets now or hereafter held in any capacity other than as
Trustee hereunder by the Trustees or any successor Trustees. All of the Trust
Property and legal title thereto shall at all times be considered as vested in
the Trustees on behalf
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of the Trust, except that the Trustees may cause legal title to any Trust
Property to be held by or in the name of the Trust, or in the name of any person
as nominee. No Shareholder shall be deemed to have a severable ownership in any
individual asset of the Trust or of any Series or any right of partition or
possession thereof, but each Shareholder shall have, as provided in Article IV,
a proportionate undivided beneficial interest in the Trust or Series represented
by Shares.
SECTION 9. Effect of Trustees Not Serving.
The death, resignation, retirement, removal, incapacity, or inability or
refusal to serve of the Trustees, or any one of them, shall not operate to annul
the Trust or to revoke any existing agency created pursuant to the terms of this
Trust Instrument.
SECTION 10. Trustees, etc. as Shareholders.
Subject to any restrictions in the Bylaws, any Trustee, officer, agent or
independent contractor of the Trust may acquire, own and dispose of Shares to
the same extent as any other Shareholder; the Trustees may issue and sell Shares
to and buy Shares from any such person or any firm or company in which such
person is interested, subject only to any general limitations herein.
ARTICLE III
POWERS OF THE TRUSTEES
SECTION 1. Powers.
The Trustees in all instances shall act as principals, free of the control
of the Shareholders. The Trustees shall have full power and authority to take or
refrain from taking any action and to execute any contracts and instruments that
they may consider necessary or desirable in the management of the Trust. The
Trustees shall not in any way be bound or limited by current or future laws or
customs applicable to trust investments, but shall have full power and authority
to make any investments which they, in their sole discretion, deem proper to
accomplish the purposes of the Trust. The Trustees may exercise all of their
powers without recourse to any court or other authority. Subject to any
applicable limitation herein or in the Bylaws or resolutions of the Trust, the
Trustees shall have power and authority, without limitation:
(a) To invest and reinvest cash and other property, and to hold cash
or other property uninvested, without in any event being bound or limited
by any current or future law or custom concerning investments by trustees,
and to sell, exchange, lend, pledge, mortgage, hypothecate, write options
on and lease any or all of the Trust Property; to invest in obligations,
securities and assets of any kind, and without regard to whether they may
mature before the possible termination of the Trust; and without limitation
to invest all or any part of its cash and other property in securities
issued by a registered investment company or series thereof, subject to the
provisions of the 1940 Act;
(b) To operate as and carry on the business of a registered investment
company, and exercise all the powers necessary and proper to conduct such a
business;
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(c) To adopt Bylaws not inconsistent with this Trust Instrument
providing for the conduct of the business of the Trust and to amend and
repeal them to the extent such right is not reserved to the Shareholders;
(d) To elect and remove such officers and appoint and terminate such
agents as they deem appropriate;
(e) To appoint and remove members of the Advisory Board in accordance
with the provisions of Section 3 of this Article III.
(f) To employ as custodian of any assets of the Trust, subject to any
provisions herein or in the Bylaws, one or more banks, trust companies or
companies that are members of a national securities exchange, or other
entities permitted by the Commission to serve as such;
(g) To retain one or more transfer agents and Shareholder servicing
agents, or both;
(h) To provide for the distribution of Shares either through a
Principal Underwriter or distributor as provided herein or by the Trust
itself, or both, or pursuant to a distribution plan of any kind;
(i) To set record dates in the manner provided for herein or in the
Bylaws;
(j) To delegate such authority as they consider desirable to any
officers of the Trust and to any agent, independent contractor, manager,
investment adviser, custodian or underwriter;
(k) To sell or exchange any or all of the assets of the Trust, subject
to Article X, Section 4;
(l) To vote or give assent, or exercise any rights of ownership, with
respect to other securities or property; and to execute and deliver powers
of attorney delegating such power to other persons;
(m) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;
(n) To hold any security or other property (i) in a form not
indicating any trust, whether in bearer, book entry, unregistered or other
negotiable form, or (ii) either in the Trust's or Trustees' own name or in
the name of a custodian or a nominee or nominees, subject to safeguards
according to the usual practice of business trusts or investment companies;
(o) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes, and
with separate Shares representing beneficial interests in such Series, and
to establish separate Classes, all in accordance with the provisions of
Article IV;
(p) To the full extent permitted by Section 3804 of the Delaware Act,
to allocate assets, liabilities and expenses of the Trust to a particular
Series and liabilities and expenses to a particular Class or to apportion
the same between or among two or more Series or Classes, provided that any
liabilities or expenses incurred by a particular Series or Class shall be
payable solely out of
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the assets belonging to that Series or Class as provided for in Article IV,
Section 4;
(q) To consent to or participate in any plan for the liquidation,
reorganization, consolidation or merger of any corporation or concern whose
securities are held by the Trust; to consent to any contract, lease,
mortgage, purchase, or sale of property by such corporation or concern; and
to pay calls or subscriptions with respect to any security held by the
Trust;
(r) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy including, but not
limited to, claims for taxes;
(s) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided for;
(t) To borrow money;
(u) To establish committees for such purposes, with such membership,
and with such responsibilities as the Trustees may consider proper;
(v) To issue, sell, repurchase, redeem, cancel, retire, acquire, hold,
resell, reissue, dispose of and otherwise deal in Shares; to establish
terms and conditions regarding the issuance, sale, repurchase, redemption,
cancellation, retirement, acquisition, holding, resale, reissuance,
disposition of or dealing in Shares; and, subject to Articles IV and V, to
apply to any such repurchase, redemption, retirement, cancellation or
acquisition of Shares any funds or property of the Trust or of the
particular Series with respect to which such Shares are issued; and
(w) To carry on any other business in connection with or incidental to
any of the foregoing powers, to do everything necessary or desirable to
accomplish any purpose or to further any of the foregoing powers, and to
take every other action incidental to the foregoing business or purposes,
objects or powers.
The clauses above shall be construed as objects and powers, and the
enumeration of specific powers shall not limit in any way the general powers of
the Trustees. Any action by one or more of the Trustees in their capacity as
such hereunder shall be deemed an action on behalf of the Trust or the
applicable Series, and not an action in an individual capacity. No one dealing
with the Trustees shall be under any obligation to make any inquiry concerning
the authority of the Trustees, or to see to the application of any payments made
or property transferred to the Trustees or upon their order. In construing this
Trust Instrument, the presumption shall be in favor of a grant of power to the
Trustees.
SECTION 2. Certain Transactions.
Except as prohibited by applicable law, the Trustees may, on behalf of the
Trust, buy any securities from or sell any securities to, or lend any assets of
the Trust to, any Trustee or officer of the Trust or any firm of which any such
Trustee or officer is a member acting as principal, or have any such dealings
with any investment adviser, administrator, distributor or transfer agent for
the Trust or with any Interested Person of such person. The Trust may employ any
such person or entity in which such person is an Interested Person, as broker,
legal counsel,
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registrar, investment adviser, administrator, distributor, transfer agent,
dividend disbursing agent, custodian or in any other capacity upon customary
terms.
SECTION 3. Advisory Board.
The Trustees may from time to time establish an Advisory Board having such
rights, responsibilitiesseries trust and other characteristics as shall be specified in a
written charter approved by the Trustees.
ARTICLE IV
SERIES; CLASSES; SHARES
SECTION 1. Establishment of Series or Classes.
The Trust shall consist of one or more Series. The Trustees hereby
establish the Series listed in Schedule A attached hereto and made a part
hereof. Each additional Series shall be established by the adoption of a
resolution of the Trustees. The Trustees may divide the Shares of any Series
into Classes. In such case each Class of a Series shall represent interests in
the assets of that Series. The Trustees may designate the relative rights and
preferences of the Shares of each Series or Class. The Trust shall maintain
separate and distinct records for each Series and hold and account for the
assets thereof separately from the other assets of the Trust or of any other
Series. A Series may issue any number of Shares and need not issue Shares. Each
Share of a Series shall represent an equal beneficial interest in the net assets
of such Series. Each holder of Shares of a Series or Class shall be entitled to
receive his pro rata share of all distributions made with respect to such Series
or Class. Upon redemption of his Shares, such Shareholder shall be paid solely
out of the funds and property of such Series. The Trustees may change the name
of any Series or Class. At any time that there are no shares outstanding of any
particular Series (or Class) previously established and designated, the Trustees
may by a majority vote abolish that Series (or Class) and rescind the
establishment and designation thereof.
SECTION 2. Shares of Beneficial Interest.
The beneficial interest in the Trust shall be divided into Shares of one or
more separate and distinct Series or Classes established by the Trustees. The
number of Shares of each Series and Class is unlimited and each Share shall have
a par value of $0.001 per Share. All Shares issued hereunder shall be fully paid
and nonassessable. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust. The
Trustees shall have full power and authority, in their sole discretion and
without obtaining Shareholder approval: to issue original or additional Shares
at such times and on such terms and conditions as they deem appropriate; to
issue fractional Shares and Shares held in the treasury; to establish and to
change in any manner Shares of any Series or Classes with such preferences,
terms of conversion, voting powers, rights and privileges as the Trustees may
determine (but the Trustees may not change Outstanding Shares in a manner
materially adverse to the Shareholders of such Shares); to divide or combine the
Shares of any Series or Classes into a greater or lesser number; to classify or
reclassify any unissued Shares of any Series or Classes
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into one or more Series or Classes of Shares; to abolish any one or more Series
or Classes of Shares; to issue Shares to acquire other assets (including assets
subject to, and in connection with, the assumption of liabilities) and
businesses; and to take such other action with respect to the Shares as the
Trustees may deem desirable. Shares held in the treasury shall not confer any
voting rights on the Trustees and shall not be entitled to any dividends or
other distributions declared with respect to the Shares.
SECTION 3. Investment in the Trust.
The Trustees shall accept investments in any Series from such persons and
on such terms as they may from time to time authorize. At the Trustees'
discretion, such investments, subject to applicable law, may be in the form of
cash or securities in which that Series is authorized to invest, valued as
provided in Article V, Section 3. Investments in a Series shall be credited to
each Shareholder's account in the form of full or fractional Shares at the Net
Asset Value per Share next determined after the investment is received or
accepted as may be determined by the Trustees; provided, however, that the
Trustees may, in their sole discretion, (a) impose a sales charge upon
investments in any Series or Class or (b) determine the Net Asset Value per
Share of the initial capital contribution. The Trustees shall have the right to
refuse to accept investments in any Series at any time without any cause or
reason therefor whatsoever.
SECTION 4. Assets and Liabilities of Series.
All consideration received by the Trust for the issue or sale of Shares of
a particular Series, together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits, and proceeds thereof
(including any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be), shall be held and accounted for separately
from the other assets of the Trust and every other Series and are referred to as
"assets belonging to" that Series. The assets belonging to a particular Series
shall belong only to that Series for all purposes, and to no other Series,
subject only to the rights of creditors of that particular Series. Any assets,
income, earnings, profits, and proceeds thereof, funds, or payments which are
not readily identifiable as belonging to any particular Series shall be
allocated by the Trustees between and among one or more Series as the Trustees
deem fair and equitable. Each such allocation shall be conclusive and binding
upon the Shareholders of all Series for all purposes, and such assets, earnings,
income, profits or funds, or payments and proceeds thereof shall be referred to
as assets belonging to that Series. The assets belonging to a Series shall be so
recorded upon the books of the Trust, and shall be held by the Trustees in trust
for the benefit of the Shareholders of that Series. The assets belonging to a
Series shall be charged with the liabilities of that Series and all expenses,
costs, charges and reserves attributable to that Series, except that liabilities
and expenses allocated solely to a particular Class shall be borne by that
Class. Any general liabilities, expenses, costs, charges or reserves of the
Trust which are not readily identifiable as belonging to any particular Series
or Class shall be allocated and
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charged by the Trustees between or among any one or more of the Series or
Classes in such manner as the Trustees deem fair and equitable. Each such
allocation shall be conclusive and binding upon the Shareholders of all Series
or Classes for all purposes.
Without limiting the foregoing, but subject to the right of the Trustees to
allocate general liabilities, expenses, costs, charges or reserves as herein
provided, the debts,
liabilities, obligations and expenses incurred, contracted for or otherwise
existing with respect to a particular Seriesseries shall be enforceable against
the assets ofheld with respect to such Seriesseries only, and not against the
assets of the Trust generally or of any other Series. Notice of this contractual
limitation on liabilities among Series may, in the Trustees' discretion, be set
forth in the certificate of trust of the Trust (whether originally or by
amendment) as filed or to be filed in the Office of the Secretary of State of
the State of Delaware pursuant to the Delaware Act, and upon the giving of such
notice in the certificate of trust, the statutory provisions of Section 3804 of
the Delaware Act relating to limitations on liabilities among Series (and the
statutory effect under Section 3804 of setting forth such notice in the
certificate of trust) shall become applicable to the Trust and each Series. Any
person extending credit to, contracting with or having any claim against any
Series may look only to the assets of that Series to satisfy or enforce any
debt, liability, obligation or expense incurred, contracted or otherwise
existing with respect to that Series. No Shareholder or former Shareholder of
any Series shall have a claim on or any right to any assets allocated or
belonging to any other Series. No Shareholder or former Shareholder of any
particular Series shall have any claim or right to institute suit against the
Trust or any Seriesheld with respect to
any matterother series and further that does not directly affect
that particular Series.
SECTION 5. Ownership and Transferno Trustee, officer or holder of Shares.
The Trust shall maintain a register containing the names and addressesshares
of beneficial interest of the Shareholders of each Series and Class thereof, the number of Shares of each
Series and Class held by such Shareholders, and a record of all Share transfers.
The register shall be conclusive as to the identity of Shareholders of record
and the number of Shares held by them from time to time. The Trustees may
authorize the issuance of certificates representing Shares and adopt rules
governing their use. The Trustees may make rules governing the transfer of
Shares, whether or not represented by certificates.
SECTION 6. Status of Shares; Limitation of Shareholder Liability.
Shares shall be deemed to be personal property giving Shareholders only the
rights provided in this Trust Instrument. Every Shareholder, by virtue of having
acquired a Share, shall be held expressly to have assented to and agreed to be
bound by the terms of this Trust Instrument and to have become a party hereto.
No Shareholder shall be personally liable for the debts, liabilities,
obligations and expenses incurred by, contracted for, or otherwise existing with
respect to, the Trust or any Series. Neither the Trust nor the Trustees shall
have any power to bind any Shareholder personally or to demand payment from any
Shareholder for anything, other than as agreed by the Shareholder. Shareholders
shall have the same
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limitation of personal liability as is extended to shareholders of a private
corporation for profit incorporated in the State of Delaware. Every written
obligation of the Trust or any Series shall contain a statement to the effect
that such obligation may only be enforced against the assets of the Trust or
such Series; however, the omission of such statement shall not operate to bind
or create personal liability for any Shareholder or Trustee.
ARTICLE V
DISTRIBUTIONS AND REDEMPTIONS
SECTION 1. Distributions.
The Trustees may declare and pay dividends and other distributions from the
assets belonging to each Series. The amount and payment of dividends or
distributions and their form, whether they are in cash, Shares or other Trust
Property, shall be determined by the Trustees. Dividends and other distributions
may be paid pursuant to a standing resolution adopted once or more often as the
Trustees determine. All dividends and other distributions on Shares of a
particular Series shall be distributed pro rata to the Shareholders of that
Series in proportion to the number of Shares of that Series they held on the
record date established for such payment, except that such dividends and
distributions shall appropriately reflect expenses allocated to a particular
Class of such Series. The Trustees may adopt and offer to Shareholders such
dividend reinvestment plans, cash dividend payout plans or similar plans as the
Trustees deem appropriate.
SECTION 2. Redemptions.
Each Shareholder of a Series shall have the right at such times as may be
permitted by the Trustees to require the Series to redeem all or any part of his
Shares at a redemption price per Share equal to the Net Asset Value per Share.
In the absence of such resolution, the redemption price per Share shall be the
Net Asset Value next determined after receipt by the Series of a request for
redemption in proper form less such charges as are determined by the Trustees
and described in any required disclosure document. The Trustees may specify
conditions, prices, and places of redemption, and may specify binding
requirements for the proper form or forms of requests for redemption. Payment of
the redemption price may be wholly or partly in securities or other assets at
the value of such securities or assets used in such determination of Net Asset
Value, or may be in cash. Upon redemption, Shares may be reissued from time to
time. The Trustees may require Shareholders to redeem Shares for any reason
under terms set by the Trustees, including the failure of a Shareholder to
supply a personal identification number if required to do so, or to have the
minimum investment required, or to pay when due for the purchase of Shares
issued to him. To the extent permitted by law, the Trustees may retain the
proceeds of any redemption of Shares required by them for payment of amounts due
and owing by a Shareholder to the Trust or any Series or Class. Notwithstanding
the foregoing, the Trustees may postpone payment of the redemption price and may
suspend the right of the Shareholders to require any Series or
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Class to redeem Shares during any period of time when and to the extent
permissible under the 1940 Act.
SECTION 3. Determination of Net Asset Value.
The Trustees shall cause the Net Asset Value of Shares of each Series or
Class to be determined from time to time in a manner consistent with applicable
laws and regulations. The Trustees may delegate the power and duty to determine
Net Asset Value per Share to one or more Trustees or officers of the Trust or to
a custodian, depository or other agent appointed for such purpose. The Net Asset
Value of Shares shall be determined separately for each Series or Class at such
times as may be prescribed by the Trustees or, in the absence of action by the
Trustees, as of the close of the regular trading session on the New York Stock
Exchange on each day for all or part of which such Exchange is open for
unrestricted trading.
SECTION 4. Suspension of Right of Redemption.
If, as referred to in Section 2 of this Article, the Trustees postpone
payment of the redemption price and suspend the right of Shareholders to redeem
their Shares, such suspension shall take effect at the time the Trustees shall
specify, but not later than the close of business on the business day next
following the declaration of suspension. Thereafter Shareholders shall have no
right of redemption or payment until the Trustees declare the end of the
suspension. If the right of redemption is suspended, a Shareholder may either
withdraw his request for redemption or receive payment based on the Net Asset
Value per Share next determined after the suspension terminates.
SECTION 5. Redemptions Necessary for Qualification as Regulated Investment
Company.
If the Trustees shall determine that direct or indirect ownership of Shares
of any Series has or may become concentrated in any person to an extent which
would disqualify any Series as a regulated investment company under the Internal
Revenue Code, then the Trustees shall have the power (but not the obligation) by
lot or other means they deem equitable to (a) call for redemption by any such
person of a number, or principal amount, of Shares sufficient to maintain or
bring the direct or indirect ownership of Shares into conformity with the
requirements for such qualification and (b) refuse to transfer or issue Shares
to any person whose acquisition of Shares in question would, in the Trustees'
judgment, result in such disqualification. Any such redemption shall be effected
at the redemption price and in the manner provided in this Article. Shareholders
shall upon demand disclose to the Trustees in writing such information
concerning direct and indirect ownership of Shares as the Trustees deem
necessary to comply with the requirements of any taxing authority.
ARTICLE VI
SHAREHOLDERS' VOTING POWERS AND MEETINGS
SECTION 1. Voting Powers.
The Shareholders shall have power to vote only with respect to (a) the
election of Trustees as provided in Section 2 of this Article; (b) the removal
of Trustees as
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provided in Article II, Section 3(d); (c) any investment advisory or management
contract as provided in Article VII, Section 1; (d) [any termination of the
Trust as provided in Article X, Section 4; (e)] the amendment of this Trust
Instrument to the extent and as provided in Article X, Section 8; and ([f][e])
such additional matters relating to the Trust as may be required or authorized
by law, this Trust Instrument, or the Bylaws or any registration of the Trust
with the Commission or any State, or as the Trustees may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares shall be
voted by individual Series or Class, except (a) when required by the 1940 Act,
Shares shall be voted in the aggregate and not by individual Series or Class,
and (b) when the Trustees have determined that the matter affects the interests
of more than one Series or Class, then the Shareholders of all such affected
Series or Classes shall be entitled to vote thereon. Each [whole Share][holder
of Shares of each Series or Class, as applicable,] shall be entitled to one vote
[as to any matter on which it is entitled to vote, and each fractional Share
shall be entitled to a proportionate fractional vote][for each dollar of net
asset value (or fractional vote for each fractional dollar of net asset value)
of such Shares standing in such Shareholder's name on the books of the Trust on
the record date for such vote (with references in this Declaration of Trust to
"Shares voted" or Shares "entitled to vote" interpreted as "votes cast" or
"votes entitled to be cast").] There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy or in any manner
provided for in the Bylaws. The Bylaws may provide that proxies may be given by
any electronic or telecommunications device or in any other manner, but if a
proposal by anyone other than the officers or Trustees is submitted to a vote of
the Shareholders of any Series or Class, or if there is a proxy contest or proxy
solicitation or proposal in opposition to any proposal by the officers or
Trustees, Shares may be voted only in person or by written proxy. Until Shares
of a Series are issued, as to that Series the Trustees may exercise all rights
of Shareholders and may take any action required or permitted to be taken by
Shareholders by law, this Trust Instrument or the Bylaws.
SECTION 2. Meetings of Shareholders.
Special meetings of the Shareholders of any Series or Class may be called
by the Trustees and shall be called by the Trustees upon the written request of
Shareholders owning at least two-thirds of the Outstanding Shares of such Series
or Class entitled to vote. Shareholders shall be entitled to at least fifteen
days' notice of any meeting, given as determined by the Trustees.
SECTION 3. Quorum; Required Vote.
One-third of the Outstanding Shares of each Series or Class, or one-third
of the Outstanding Shares of the Trust, entitled to vote in person or by proxy
shall be a quorum for the transaction of business at a Shareholders' meeting
with respect to such Series or Class, or with respect to the entire Trust,
respectively. Any lesser number shall be sufficient for adjournments. Any
adjourned session of a Shareholders' meeting may be held within a reasonable
time without further notice. Except when a larger vote is required by law, this
Trust Instrument or the Bylaws, a
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majority of the Outstanding Shares voted in person or by proxy shall decide any
matters to be voted upon with respect to the entire Trust and a plurality of
such Outstanding Shares shall elect a Trustee; provided, that if this Trust
Instrument or applicable law permits or requires that Shares be voted on any
matter by individual Series or Classes, then a majority of the Outstanding
Shares of that Series or Class (or, if required by law, a Majority Shareholder
Vote of that Series or Class) voted in person or by proxy on the matter shall
decide that matter insofar as that Series or Class is concerned. Shareholders
may act as to the Trust or any Series or Class by the written consent of a
majority (or such greater amount as may be required by applicable law) of the
Outstanding Shares of the Trust or of such Series or Class, as the case may be.
ARTICLE VII
CONTRACTS WITH SERVICE PROVIDERS
SECTION 1. Investment Adviser.
Subject to a Majority Shareholder Vote, the Trustees may enter into one or
more investment advisory contracts on behalf of the Trust or any Series,
providing for investment advisory services, statistical and research facilities
and services, and other facilities and services to be furnished to the Trust or
Series on terms and conditions acceptable to the Trustees. Any such contract may
provide for the investment adviser to effect purchases, sales or exchanges of
portfolio securities or other Trust Property on behalf of the Trustees or may
authorize any officer or agent of the Trust to effect such purchases, sales or
exchanges pursuant to recommendations of the investment adviser. The Trustees
may authorize the investment adviser to employ one or more sub-advisers. Any
reference in this Trust Instrument to the investment adviser shall be deemed to
include such sub-advisers, unless the context otherwise requires.
SECTION 2. Principal Underwriter.
The Trustees may enter into contracts on behalf of the Trust or any Series
or Class, providing for the distribution and sale of Shares by the other party,
either directly or as sales agent, on terms and conditions acceptable to the
Trustees. The Trustees may adopt a plan or plans of distribution with respect to
Shares of any Series or Class and enter into any related agreements, whereby the
Series or Class finances directly or indirectly any activity that is primarily
intended to result in sales of its Shares, subject to the requirements of
Section 12 of the 1940 Act, Rule 12b-1 thereunder, and other applicable rules
and regulations.
SECTION 3. Transfer Agency, Shareholder Services, and Administration
Agreements.
The Trustees, on behalf of the Trust or any Series or Class, may enter into
transfer agency agreements, Shareholder service agreements, and administration
and management agreements with any party or parties on terms and conditions
acceptable to the Trustees.
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SECTION 4. Custodian.
The Trustees shall at all times place and maintain the securities and
similar investments of the Trust and of each Series in custody meeting the
requirements of Section 17(f) of the 1940 Act and the rules thereunder. The
Trustees, on behalf of the Trust or any Series, may enter into an agreement with
a custodian on terms and conditions acceptable to the Trustees, providing for
the custodian, among other things, to (a) hold the securities owned by the Trust
or any Series and deliver the same upon written order or oral order confirmed in
writing, (b) receive and receipt for any moneys due to the Trust or any Series
and deposit the same in its own banking department or elsewhere, (c) disburse
such funds upon orders or vouchers, and (d) employ one or more sub-custodians.
SECTION 5. Parties to Contracts with Service Providers.
The Trustees may enter into any contract referred to in this Article with
any entity, although one more of the Trustees or officers of the Trust may be an
officer, director, trustee, partner, shareholder, or member of such entity, and
no such contract shall be invalidated or rendered void or voidable because of
such relationship. No person having such a relationship shall be disqualified
from voting on or executing a contract in his capacity as Trustee and/or
Shareholder, or be liable merely by reason of such relationship for any loss or
expense to the Trust with respect to such a contract or accountable for any
profit realized directly or indirectly therefrom.
Any contract referred to in Sections 1 and 2 of this Article shall be
consistent with and subject to the applicable requirements of Section 15 of the
1940 Act and the rules and orders thereunder with respect to its continuance in
effect, its termination, and the method of authorization and approval of such
contract or renewal. No amendment to a contract referred to in Section 1 of this
Article shall be effective unless assented to in a manner consistent with the
requirements of Section 15 of the 1940 Act, and the rules and orders thereunder.
ARTICLE VIII
EXPENSES OF THE TRUST AND SERIES
Subject to Article IV, Section 4, the Trust or a particular Series shall
pay, or shall reimburse the Trustees from the Trust estate or the assets
belonging to the particular Series, for their expenses and disbursements,
including, but not limited to, interest charges, taxes, brokerage fees and
commissions; expenses of issue, repurchase and redemption of Shares; certain
insurance premiums; applicable fees, interest charges and expenses of third
parties, including the Trust's investment advisers, managers, administrators,
distributors, custodians, transfer agents and fund accountants; fees of pricing,
interest, dividend, credit and other reporting services; costs of membership in
trade associations; telecommunications expenses; funds transmission expenses;
auditing, legal and compliance expenses; costs of forming the Trust and its
Series and maintaining its existence; costs of preparing and printing the
prospectuses of the Trust and each Series, statements of additional information
and Shareholder reports and delivering them to Shareholders; expenses of
meetings of
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Shareholders and proxy solicitations therefor; costs of maintaining books and
accounts; costs of reproduction, stationery and supplies; fees and expenses of
the Trustees and members of the Advisory Board; compensation of the Trust's
officers and employees and costs of other personnel performing services for the
Trust or any Series; costs of Trustee meetings and meetings of the Advisory
Board; Commission registration fees and related expenses; state or foreign
securities laws registration fees and related expenses; and for such
non-recurring items as may arise, including litigation to which the Trust or a
Series (or a Trustee or officer of the Trust acting as such) is a party, and for
all losses and liabilities by them incurred in administering the Trust. The
Trustees shall have a lien on the assets belonging to the appropriate Series, or
in the case of an expense allocable to more than one Series, on the assets of
each such Series, prior to any rights or interests of the Shareholders thereto,
for the reimbursement to them of such expenses, disbursements, losses and
liabilities. This Article shall not preclude the Trust from directly paying any of
the aforementioned fees and expenses.
ARTICLE IX
LIMITATION OF LIABILITY AND INDEMNIFICATION
SECTION 1.foregoing.
12. Limitation of Liability.
All persons contracting with or having any claim against the Trust or a
particular Series shall look only to the assetsLiability of the Trust or such Series for
payment under such contract or claim; and neither the Trustees nor any of the
Trust's officers, employees, members of the Advisory Board or agents, whether
past, present or future, shall be personally liable therefor. Every written
instrument or obligation on behalf of the Trust or any Series shall contain a
statement to the foregoing effect, but the absence of such statement shall not
operate to make any Trustee or officer of the Trust liable thereunder. Provided
they have exercised reasonable care and have acted under the reasonable belief
that their actions are in the best interest of the Trust, the Trustees and
officers of the Trust shall not be responsible or liable for any act or omission
or for neglect or wrongdoing of them or any officer, agent, employee, investment
adviser or independent contractor of the Trust, but nothing contained in this
Trust Instrument or in the Delaware Act shall protect any Trustee or officer of
the Trust against liability to the Trust or to Shareholders to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
SECTION 2. Indemnification.
(a) Subject to the exceptions and limitations contained in subsection (b)
below:
(i) every person who is, or has been, a Trustee, officer, member of
the Advisory Board or employee of the Trust ("Covered Person") shall be
indemnified by the Trust or the appropriate Series to the fullest extent
permitted by law against liability and against all expenses reasonably
incurred or paid by him in connection with any claim, action, suit or
proceeding in which he becomes involved as a party or otherwise by virtue
of his being or having
C-15
been a Covered Person and against amounts paid or incurred by him in the
settlement thereof, whether or not he is a Covered Person at the time such
expenses are incurred;
(ii) as used herein, the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits or proceedings
(civil, criminal or other, including appeals), actual or threatened, and
the words "liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of his office,
or (B) not to have acted in good faith in the reasonable belief that his
action was in the best interest of the Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Covered Person did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office: (A) by the court or other
body approving the settlement; (B) by at least a majority of those Trustees
who are neither Interested Persons of the Trust nor are parties to the
matter based upon a review of readily available facts (as opposed to a full
trial-type inquiry); or (C) by written opinion of independent legal counsel
based upon a review of readily available facts (as opposed to a full
trial-type inquiry)[Perkins][PWM]. (c) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not be exclusive of
or affect any other rights to which any Covered Person may now or hereafter be
entitled, and shall inure to the benefit of the heirs, executors and
administrators of a Covered Person.
(d) To the maximum extent permitted by applicable law, expenses in
connection with the preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in subsection (a) of this
Section may be paid by the Trust or applicable Series from time to time prior to
final disposition thereof upon receipt of an undertaking by or on behalf of such
Covered Person that such amount will be paid over by him to the Trust or
applicable Series if it is ultimately determined that he is not entitled to
indemnification under this Section; provided, however, that either (i) such
Covered Person shall have provided appropriate security for such undertaking,
(ii) the Trust is insured against losses arising out of any such advance
payments or (iii) either a majority of the Trustees who are neither Interested
Persons of the Trust nor parties to the matter, or independent legal counsel in
a written opinion, shall have determined, based upon a review of readily
available facts (as opposed to a full trial-type inquiry) that there is reason
to believe that such Covered PersonJanus will not be disqualified from
indemnification under this Section.
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(e) Any repeal or modification of this Article IX by the Shareholders of
the Trust, or adoption or modification of any other provision of the Trust
Instrument or Bylaws inconsistent with this Article, shall be prospective only,seek to
the extent that such repeal or modification would, if applied
retrospectively, adversely affect any limitation on the liability of any Covered
Person or indemnification available to any Covered Person with respect to any
act or omission which occurred prior to such repeal, modification or adoption.
SECTION 3. Indemnification of Shareholders.
If any Shareholder or former Shareholder of any Series shall be held
personally liable solely by reason of his being or having been a Shareholderhold [Perkins][PWM], and not because of his acts or omissions or for some other reason, the Shareholder
or former Shareholder (or his heirs, executors, administrators or other legal
representatives or in the case of any entity, its general successor) shall be
entitled out of the assets belonging to the applicable Series to be held
harmless from and indemnified against all loss and expense arising from such
liability. The Trust, on behalf of the affected Series, shall, upon request by
such Shareholder, assume the defense of any such claim made against such
Shareholder for any act or obligation of the Series and satisfy any judgment
thereon from the assets of the Series.
ARTICLE X
MISCELLANEOUS
SECTION 1. Trust Not a Partnership.
This Trust Instrument creates a trust and not a partnership. No Trustee
shall have any power to bind personally either the Trust's officers or any
Shareholder.
SECTION 2. Trustee Action; Expert Advice; No Bond or Surety.
The exercise by the Trustees of their powers and discretion hereunder in
good faith and with reasonable care under the circumstances then prevailing
shall be binding upon everyone interested. Subject to the provisions of Article
IX, the Trustees shall not be liable for errors of judgment or mistakes of fact
or law. The Trustees may take advice of counsel, members of the Advisory Board
or other experts with respect to the meaning and operation of this Trust
Instrument, and subject to the provisions of Article IX,[Perkins][PWM] shall not be, liable for any error
of judgment or mistake of law or for any loss arising out of any investment
or for any act or omission taken with respect to the Fund, except for
willful misfeasance, bad faith or gross negligence in the performance of
its duties, or by reason of reckless disregard of its obligations and
duties hereunder and except to the extent otherwise provided by law. As
used in this section, "[Perkins][PWM]" shall include any affiliate of
[Perkins][PWM] performing services for the Fund contemplated hereunder and
directors, officers and employees of [Perkins][PWM] and such affiliates.
A-6
13. Activities of [Perkins][PWM.] The services of [Perkins][PWM]
hereunder are not to be deemed to be exclusive, and [Perkins][PWM] is free
to render services to other parties, so long as its services under this
Agreement are not materially adversely affected or otherwise impaired
thereby. Nothing in this Agreement shall limit or restrict the right of any
director, officer or employee of [Perkins][PWM] to engage in any other
business or to devote his or her time and attention in part to the
management or other aspects of any other business, whether of a similar or
a dissimilar nature. It is understood that Trustees, officers and
shareholders of the Trust are or may become interested in [Perkins][PWM] as
directors, officers and shareholders of [Perkins][PWM], that directors,
officers, employees and shareholders of [Perkins][PWM] are or may become
similarly interested in the Trust, and that [Perkins][PWM] may become
interested in the Trust as a shareholder or otherwise.
14. Third Party Beneficiary. The parties expressly acknowledge and
agree that the Trust is a third party beneficiary of this Agreement and
that the Trust shall have the full right to sue upon and enforce this
Agreement in accordance with such adviceits terms as if it were a signatory hereto.
Any oversight, monitoring or for failing to follow such
advice. The Trustees shall not be required to give any bond as such, nor any
surety if a bond is obtained.
SECTION 3. Record Dates.
The Trustees may fix in advance a date up to one hundred twenty (120) days
before the date of any Shareholders' meeting, or the date for the payment of any
dividends or other distributions, or the date for the allotment of rights, or
the date when any change or conversion or exchange of Shares shall go into
effect as a record date for the determinationevaluation of the Shareholders entitled to
noticeactivities of and to vote at, any such meeting, or entitled to receive payment of
such dividend or other distribution, or to receive any such allotment of rights,
or to exercise such rights in respect of any such change, conversion or exchange
of Shares. Any Shareholder who
C-17
was a Shareholder at the date and time so fixed shall be entitled to vote at
such meeting or any adjournment thereof.
SECTION 4. Termination of the Trust. [(a) This Trust shall have perpetual
existence. Subject to a Majority Shareholder Vote of[Perkins][PWM]
by Janus, the Trust or the Fund shall not diminish or relieve in any way
the liability of each Series[Perkins][PWM] for any of its duties and responsibilities
under this Agreement.
15. Notices. Any notice or other communication required to be affected,given
pursuant to this Agreement shall be deemed duly given if delivered
personally or by overnight delivery service or mailed by certified or
registered mail, return receipt requested and postage prepaid, or sent by
facsimile addressed to the Trustees may]parties at their respective addresses set forth
below, or at such other address as shall be designated by any party in a
written notice to the other party.
(a) To Janus at:
Janus Capital Management LLC
151 Detroit Street
Denver, Colorado 80206
Attention: General Counsel
Phone: (303) 333-3863
Fax: (303) 316-5728
(b) To[Perkins][PWM] at:
[Perkins][, Wolf, McDonnell and Company,][ Investment
Management] LLC
[310 South Michigan Avenue][311 South Wacker Drive, Suite
6000]
Chicago, Illinois 6060[6][4]
Attention: President
Phone: (312) 922-0355
Fax: (312) 922-0418
A-7
(c) To the Trust at:
Janus Aspen Series
or Class.]
[(i) sell and convey all or substantially all151 Detroit Street
Denver, Colorado 80206
Attention: [General ][Chief Legal ]Counsel
16. Certain Definitions. The terms "vote of a majority of the
assets ofoutstanding voting securities," "assignment," "approved at least annually,"
and "interested persons" shall have the Trust or any affected Series to another Series or to another entity which
is an open-end investment company as definedrespective meanings specified in
the 1940 Act, as now in effect or is a
series thereof, for adequate consideration, which may includehereafter amended, and the assumption of all outstanding obligations, taxesrules and
other liabilities,
accrued or contingent, of the Trust or any affected Series,regulations thereunder, subject to such orders, exemptions and
which may
include shares of or interests in such Series, entity, or series thereof;
or]
[(ii) at any time sell and convert into money all or substantially all
of the assets of the Trust or any affected Series.]
[(a) Unless terminated as provided herein, the Trust shall continue without
limitation of time. The Trust may be dissolved at any time by the Trustees by
written notice to the Shareholders. Any Series may be dissolved at any time by
the Trustees by written notice to the Shareholders of such Series. Any Class of
any Series may be terminated at any time by the Trustees by written notice to
the Shareholders of such Class. Any action to dissolve the Trust shall be deemed
to also be an action to dissolve each Series and each Class thereof.]
[Upon making reasonable provision][(b) Upon the requisite action by the
Trustees to dissolve the Trust or any one or more Series, after paying or
otherwise providing] for [the payment of all known liabilities of the Trust or
any affected Series in either (i) or (ii), by such assumption or otherwise, the
Trustees shall distribute the remaining proceeds or assets (as the case may be)
ratably among the Shareholders of the Trust or any affected Series; however, the
payment to any particular Class of such Series may be reduced by any fees,
expenses or charges allocated to that Class.]
[(b) The Trustees may take any of the actions specified in subsection
(a)(i) and (ii) above without obtaining a Majority Shareholder Vote of the Trust
or any Series if a majority of the Trustees determines that the continuation of
the Trust or Series is not in the best interests of the Trust, such Series, or
their respective Shareholders as a result of factors or events adversely
affecting the ability of the Trust or such Series to conduct its business and
operations in an economically viable manner. Such factors and events may include
the inability of the Trust or a Series to maintain its assets at an appropriate
size, changes in laws or regulations governing the Trust or the Series or
affecting assets of the type in which the Trust or Series invests, or economic
developments or trends having a significant adverse impact on the business or
operations of the Trust or such Series. (c) Upon completion of the distribution
of the remaining proceeds or assets pursuant to subsection (a), the Trust
or][all charges, taxes, expenses and liabilities, whether due or accrued or
anticipated, of the Trust or of the particular Seriesinterpretations as may be determinedissued by the Trustees, the Trust shall in accordance with such procedures as the Trustees
C-18
consider appropriate reduce the remaining assets of the Trust or of the affected
Series to distributable form in cash or Shares (if any Series remain) or other
securities, or any combination thereof, and distribute ratably the proceeds to
the Shareholders of the Trust or Series involved. Thereupon, any] affected
Series [or Class ]shall terminate and the Trustees and the Trust shall be
discharged of any and all further liabilities and duties [hereunder with
respect][relating] thereto [or arising therefrom, ]and the right, title and
interest of all parties [therein][with respect to such Series or Class] shall be
canceled and discharged. Upon [termination of the Trust, following][the
requisite action by the Trustees to terminate any Class of any Series, the
Trustees may, to the extent they deem it appropriate, follow the procedures set
forth in this Section 4(b) with respect to such Class that are specified in
connection with the dissolution and winding up of the Trust or any Series.
Alternatively, in connection with the termination of any Class of any Series,
the Trustees may treat such termination as a redemption of the Shareholders of
such Class effected provided that the costs relating to the termination of such
Class may, to the extent consistent withSEC under the 1940 Act and other applicable law,as may
be includedthen in the determination of the net asset value of the Shares of such
Class for purposes of determining the redemption price toeffect.
17. Governing Law. This Agreement shall be paid to the
Shareholders of such Class (to the extent not otherwise included in such
determination).]
[(c) Following] completion of winding up of [its][the Trust's] business,
the Trustees shall cause a certificate of cancellation of the Trust['s
certificate]['s Certificate] of [trust][Trust] to be filedconstrued in accordance
with
the Delaware Act, which certificate of cancellation may be signed by any one
Trustee.[ Upon termination of the Trust, the Trustees shall be discharged of any
and all further liabilities and duties relating thereto or arising therefrom,
and the right, title and interest of all parties with respect to the Trust shall
be canceled and discharged.]
SECTION 5. Reorganization.
[Notwithstanding anything else herein, to change the Trust's form of
organization the Trustees may, without Shareholder approval, (a) cause the Trust
to merge or consolidate with or into one or more entities, if the surviving or
resulting entity is the Trust or another open-end management investment company
under the 1940 Act, or a series thereof, that will succeed to or assume the
Trust's registration under the 1940 Act, or (b) cause the Trust to incorporate
under the laws of Delaware. Any agreement of merger or consolidation or
certificate of merger may be signed by a majority of Trustees and facsimile
signatures conveyed by electronic or telecommunication means shall be valid.]
[The Trust, or any one or more Series or Classes, may, either as the
successor, survivor, or non-survivor, (1) consolidate or merge with one or more
other trusts, sub-trusts, partnerships, limited liability companies,
associations or corporations (or series or class of a series with respect to the
foregoing) organized under the laws of the State of Delaware or any other state
of the United States, to form a consolidated or merged trust, sub-trust,
partnership, limited liability company, association or corporation under the
laws of which any one of the constituent entities is organized or (2) transfer a
substantial portion of its assets to one or more other trusts,
C-19
sub-trusts, partnerships, limited liability companies, associations or
corporations (or series or class of a series with respectColorado (without giving effect to the
foregoing)
organized underconflicts of laws principles thereof) and the 1940 Act. To the extent that
the applicable laws of the State of Delaware or any other stateColorado conflict with the applicable
provisions of the United States, or1940 Act, the latter shall control.
IN WITNESS WHEREOF, the parties have one or more such trusts, sub-trusts, partnerships,
limited liability companies, associations or corporations (or series or class of
a series with respect to the foregoing) transfer a substantial portion of its
assets to it, any such consolidation, merger or transfercaused this Agreement to be
upon such terms
and conditionsexecuted by their duly authorized officers designated below as are specified in an agreement and plan of reorganization
authorized and approved by the Trustees and entered into by the Trust, or one or
more Series as the case may be, in connection therewith. Any such consolidation,
merger or transfer may be authorized at any time by vote of a majority of the Trustees then in office without the needday
and year first above written.
JANUS CAPITAL MANAGEMENT LLC
By:
----------------------------------
Name: ----------------------------
Title: ---------------------------
[Loren M. Starr, Chief Financial
Officer And Senior Vice President]
[PERKINS][, WOLF, MCDONNELL AND
COMPANY,] INVESTMENT MANAGEMENT LLC
By:
----------------------------------
Name: ----------------------------
Title: ---------------------------
A-8
[ACKNOWLEDGEMENT:
The undersigned acknowledges that it
is obligated to compensate PWM for shareholder approval. Prior to
giving effect to any such authorization, the Trust shall notify the Shareholders
of the relevant Series or Class.]
Pursuant to andits
services in accordance with the
provisions of Section 3815(f) of the
Delaware Act, an agreement of merger or consolidation approved by the Trustees
in accordance with this Section 5 may effect any amendment to the Trust
Instrument or effect the adoption of a new trust instrument of the Trust if it
is the surviving or resulting trust in the merger or consolidation.
SECTION 6. Trust Instrument.
The original or a copy4 of this
Trust InstrumentAgreement.
JANUS ASPEN SERIES on behalf of Mid
Cap Value Portfolio
By:
Girard C. Miller
President and of each amendment
hereto or Trust Instrument supplemental shall be kept at the office of the Trust
where it may be inspected by any Shareholder. Anyone dealing with the Trust may
rely on a certificate by a Trustee or an officer of the Trust as to the
authenticity of the Trust Instrument or any such amendments or supplements and
as to any matters in connection with the Trust. The masculine gender herein
shall include the feminine and neuter genders. Headings herein are for
convenience only and shall not affect the construction of this Trust Instrument.
This Trust Instrument may be executed in any number of counterparts, each of
which shall be deemed an original.
SECTION 7. Applicable Law.
This Trust Instrument and the Trust created hereunder are governed by and
construed and administered according to the Delaware Act and the applicable laws
of the State of Delaware; provided, however, that there shall not be applicable
to the Trust, the Trustees or this Trust Instrument (a) the provisions of
Section 3540 of Title 12 of the Delaware Code, or (b) any provisions of the laws
(statutory or common) of the State of Delaware (other than the Delaware Act)
pertaining to trusts which relate to or regulate (i) the filing with any court
or governmental body or agency of trustee accounts or schedules of trustee fees
and charges, (ii) affirmative requirements to post bonds for trustees, officers,
agents or employees of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (iv) fees or other sums payable to trustees, officers,
agents or employees of a trust, (v) the allocation of receipts and expenditures
to income or principal, (vi) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of
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holding of trust assets, or (vii) the establishment of fiduciary or other
standards of responsibilities or limitations on the acts or powers of trustees,
which are inconsistent with the limitations or liabilities or authorities and
powers of the Trustees set forth or referenced in this Trust Instrument. The
Trust shall be of the type commonly called a Delaware business trust, and,
without limiting the provisions hereof, the Trust may exercise all powers which
are ordinarily exercised by such a trust under Delaware law. The Trust
specifically reserves the right to exercise any of the powers or privileges
afforded to trusts or actions that may be engaged in by trusts under the
Delaware Act, and the absence of a specific reference herein to any such power,
privilege or action shall not imply that the Trust may not exercise such power
or privilege or take such actions.
SECTION 8. Amendments.
The Trustees may, without any Shareholder vote, amend or otherwise
supplement this Trust Instrument by making an amendment, a Trust Instrument
supplemental hereto or an amended and restated trust instrument; provided, that
Shareholders shall have the right to vote on any amendment (a) which would
affect the voting rights of Shareholders granted in Article VI, Section 1, (b)
to this Section 8, (c) required to be approved by Shareholders by law or by the
Trust's registration statement(s) filed with the Commission, and (d) submitted
to them by the Trustees in their discretion. Any amendment submitted to
Shareholders which the Trustees determine would affect the Shareholders of any
Series shall be authorized by vote of the Shareholders of such Series and no
vote shall be required of Shareholders of a Series not affected. Notwithstanding
anything else herein, any amendment to Article IX which would have the effect of
reducing the indemnification and other rights provided thereby to Trustees,
officers, employees, and agents of the Trust or to Shareholders or former
Shareholders, and any repeal or amendment of this sentence, shall each require
the affirmative vote of the holders of two-thirds of the Outstanding Shares of
the Trust entitled to vote thereon.
SECTION 9. Fiscal Year.
The fiscal year of the Trust shall end on a specified date as set forth in
the Bylaws. The Trustees may change the fiscal year of the Trust without
Shareholder approval.
SECTION 10. Severability.
The provisions of this Trust Instrument are severable. If the Trustees
determine, with the advice of counsel, that any provision hereof conflicts with
the 1940 Act, the regulated investment company provisions of the Internal
Revenue Code or with other applicable laws and regulations, the conflicting
provision shall be deemed never to have constituted a part of this Trust
Instrument; provided, however, that such determination shall not affect any of
the remaining provisions of this Trust Instrument or render invalid or improper
any action taken or omitted prior to such determination. If any provision hereof
shall be held invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision only in such jurisdiction
and shall not affect any other provision of this Trust Instrument.
C-21
SECTION 11. Use of the Name "Janus."
Janus International Holdings LLC ("JIH") has consented to the use by the
Trust and by each Series thereof to the identifying word "Janus" in the name of
the Trust and of each Series. Such consent is conditioned upon the Trust's
employment of Janus Capital Management LLC as investment adviser to the Trust
and to each Series. As between JIH and the Trust, JIH shall control the use of
such name insofar as such name contains the identifying word "Janus." JIH may
from time to time use the identifying word "Janus" or license the use of the
identifying word "Janus" in other connections and for other purposes, including
without limitation in the names of other investment companies, corporations or
businesses that it or one of its affiliates may manage, advise, sponsor or own
or in which it or one of its affiliates may have a financial interest. JIH may
require the Trust or any Series to cease using the identifying word "Janus" in
the name of the Trust or any Series if the Trust or Series ceases to employ
Janus Capital Management LLC or a subsidiary or affiliate thereof as investment
adviser.
IN WITNESS WHEREOF, the undersigned, being the Trustees of the Trust, have
executed this Trust Instrument as of the date first above written.
- --------------------------------- ---------------------------------
Thomas H. Bailey James T. Rothe
- --------------------------------- ---------------------------------
William F. McCalpin William D. Stewart
- --------------------------------- ---------------------------------
John W. McCarter, Jr. Martin H. Waldinger
- --------------------------------- ---------------------------------
Dennis B. Mullen Jerome S. Contro
---------------------------------
Linda S. Wolf
Address: 151 Detroit Street
Denver, Colorado 80206
C-22Chief Executive Officer]
A-9
EXHIBIT D
NUMBER OF OUTSTANDING SHARES AND NET ASSETS
The following table shows, as of the close of business on the Record Date,
the number of outstanding shares and net assets of each class of each Fund, as
applicable:
TOTAL NUMBER
OF SHARES
PORTFOLIO OUTSTANDING NET ASSETS
- --------- -------------- ----------
Balanced Portfolio
Institutional........................................ 67,894,592.542 $1,718,412,137.24
Service.............................................. 20,730,530.998 $ 542,725,301.53
Core Equity Portfolio
Institutional........................................ 578,346.959 $ 11,902,380.42
Service.............................................. 45,217.432 $ 936,905.19
Flexible Bond Portfolio
Institutional........................................ 25,153,521.738 $ 292,535,457.81
Service.............................................. 2,689,976.484 $ 32,790,813.34
Foreign Stock Portfolio
Service.............................................. 1,120,514.619 $ 16,415,539.17
Forty Portfolio
Institutional........................................ 20,620,657.592 $ 563,356,365.41
Service.............................................. 17,133,107.134 $ 464,135,872.26
Global Life Sciences Portfolio
Institutional........................................ 424,967.015 $ 3,820,453.46
Service.............................................. 3,718,342.388 $ 33,056,063.83
Global Technology Portfolio
Institutional........................................ 842,606.188 $ 3,050,234.40
Service.............................................. 36,121,897.328 $ 135,457,114.98
Service II........................................... 6,474,869.738 $ 24,734,002.40
Growth and Income Portfolio
Institutional........................................ 1,929,938.680 $ 33,291,442.23
Service.............................................. 3,242,168.501 $ 56,154,358.44
International Growth Portfolio
Institutional........................................ 16,172,815.287 $ 505,562,205.87
Service.............................................. 18,195,630.349 $ 563,336,715.61
Service II........................................... 2,719,357.754 $ 84,735,187.61
Large Cap Growth Portfolio
Institutional........................................ 36,908,002.557 $ 760,673,932.70
Service.............................................. 7,981,968.382 $ 162,512,876.26
Mid Cap Growth Portfolio
Institutional........................................ 18,998,875.891 $ 530,638,603.64
Service.............................................. 9,357,123.944 $ 255,917,339.87
Mid Cap Value Portfolio
Institutional........................................ 696,420.352 $ 10,522,911.52
Service.............................................. 2,643,509.422 $ 39,811,251.90
Money Market Portfolio
Institutional........................................ 12,534,132.200 $ 12,534,132.20
Risk-Managed Core Portfolio
Service.............................................. 1,223,128.668 $ 17,551,896.39
Risk-Managed Growth Portfolio
Service.............................................. 885,697.085 $ 10,929,502.03
Small Company Value Portfolio
Service.............................................. 442,595.779 $ 7,382,497.59
Worldwide Growth Portfolio
Institutional........................................ 55,670,788.573 $1,519,255,820.16
Service.............................................. 7,356,156.678 $ 199,425,407.54
Service II........................................... 362.376 $ 9,856.63
D-1
EXHIBIT E
FORM OF PROPOSED AMENDED ADVISORY AGREEMENT
FOR EQUITY AND INCOME FUNDS -- CONFORMING AMENDMENTSB
JANUS ASPEN SERIES
FORM OF [AMENDED AND RESTATED]
INVESTMENT ADVISORY AGREEMENT
[ ][JANUS ASPEN PERKINS ]MID CAP VALUE PORTFOLIO
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this
[1st][ ]day of [July][ ], 200[8][4, as amended this 1st day of
July, 2004, [[AS AMENDED JANUARY 1,February, 2006], ]between between [JANUS ADVISER]JANUS ASPEN SERIES, a Delaware statutory
trust (the "Trust"), and JANUS CAPITAL MANAGEMENT LLC, a Delaware limited
liability company ("JCM").
W I T N E S S E T H:H :
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and has registered its shares for public offering under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Trust is authorized to create separate funds, each with its
own separate investment portfolio of which the beneficial interests are
represented by a separate series of shares; one of such funds created by the
Trust being designated as the [ ] Portfolio (the "Fund"); and
WHEREAS, the Trust and JCM deem it mutually advantageous that JCM should
[assist the Trustees and officers of the Trust in the management of the
securities portfolio of][be appointed as the investment adviser to] the Fund.
NOW, THEREFORE, the parties agree as follows:
1. Appointment. The Trust hereby appoints JCM as investment adviser and
manager with respect to the Fund for the period and on the terms set forth in
this Agreement. JCM hereby accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. Investment Advisory Services. JCM shall [determine the securities or
other assets to be purchased, sold or held and shall place orders for the
purchase or sale of such securities or other assets with brokers, dealers or
others. JCM shall ]furnish continuous advice and recommendations to the Fund[,
and have authority to act with respect thereto,] as to the acquisition, holding,
or disposition of any or all of the securities or other assets which the Fund
may own or contemplate acquiring from time to time. JCM shall give due
consideration to the investment policies and restrictions and the other
statements concerning the Fund in the Trust Instrument, bylaws, and registration
statements under the 1940 Act and the 1933 Act, and to the provisions of the
Internal Revenue Code, as amended from time to time, applicable to the Fund as a
regulated investment company and as a funding vehicle for variable insurance
contracts. In addition, JCM shall cause its officers to attend meetings and
furnish oral or written reports, as the Trust may reasonably require, in order
to keep the Trustees and appropriate officers of the Trust fully informed as to
the condition
E-1
of the investment portfolio of the Fund[, the investment recommendations of JCM,
and the investment considerations which have given rise to those
recommendations. JCM shall supervise the purchase and sale of securities as
directed by the appropriate officers of the Trust].
3. Other Services. JCM is hereby authorized (to the extent the Trust has
not otherwise contracted) but not obligated (to the extent it so notifies the
Trustees at least 60 days in advance), to perform (or arrange for the
performance by affiliates of) the management and administrative services
necessary for the operation of the Fund. JCM is specifically authorized, on
behalf of the Trust, to conduct relations with custodians, depositories,
transfer and pricing agents, accountants, attorneys, underwriters, brokers and
dealers, corporate fiduciaries, insurance company separate accounts, insurers,
banks and such other persons in any such other capacity deemed by JCM to be
necessary or desirable. JCM shall generally monitor and report to Fund officers
the Fund's compliance with investment policies and restrictions as set forth in
the currently effective prospectus and statement of additional information
relating to the shares of the Fund under the 1933 Act. JCM shall make reports to
the Trustees of its performance of services hereunder upon request therefor and
furnish advice and recommendations with respect to such other aspects of the
business and affairs of the Fund as it shall determine to be desirable. JCM is
also authorized, subject to review by the Trustees, to furnish such other
services as JCM shall from time to time determine to be necessary or useful to
perform the services contemplated by this Agreement.
4. Obligations of Trust. The Trust shall have the following obligations
under this Agreement:
(a) to keep JCM continuously and fully informed as to the composition
of its investment portfolio and the nature of all of its assets and
liabilities from time to time;
(b) to furnish JCM with a certified copy of any financial statement or
report prepared for it by certified or independent public accountants and
with copies of any financial statements or reports made to its shareholders
or to any governmental body or securities exchange;
(c) to furnish JCM with any further materials or information which JCM
may reasonably request to enable it to perform its function under this
Agreement; and
(d) to compensate JCM for its services and reimburse JCM for its
expenses incurred hereunder in accordance with the provisions hereof.
5. Compensation.
BALANCED PORTFOLIO
The Trust shall pay to JCM for its investment advisory services a fee,
calculated and payable for each day that this Agreement is in effect, of 1/365
of 0.55% of the daily closing net asset value of the Fund (1/366 of 0.55% of the
daily closing net asset value of the Fund in a leap year). The fee shall be paid
monthly.
E-2
FOREIGN STOCK PORTFOLIO, FORTY PORTFOLIO GLOBAL LIFE SCIENCES PORTFOLIO, GLOBAL
TECHNOLOGY PORTFOLIO, INTERNATIONAL GROWTH PORTFOLIO, LARGE CAP GROWTH
PORTFOLIO, AND MID CAP GROWTH PORTFOLIO
The Trust shall pay to JCM for its investment advisory services a fee,
calculated and payable for each day that this Agreement is in effect, of 1/365
of 0.64% of the daily closing net asset value of the Fund (1/366 of 0.64% of the
daily closing net asset value of the Fund in a leap year). The fee shall be paid
monthly.
CORE EQUITY PORTFOLIO AND WORLDWIDE GROWTH PORTFOLIO
The Trust shall pay to JCM for its investment advisory services a fee,
calculated and payable for each day that this Agreement is in effect, of 1/365
of 0.60% of the daily closing net asset value of the Fund (1/366 of 0.60% of the
daily closing net asset value of the Fund in a leap year). The fee shall be paid
monthly.
GROWTH AND INCOME PORTFOLIO
The Trust shall pay to JCM for its investment advisory services a fee,
calculated and payable for each day that this Agreement is in effect, of 1/365
of 0.62% of the daily closing net asset value of the Fund (1/366 of 0.62% of the
daily closing net asset value of the Fund in a leap year). The fee shall be paid
monthly.
FLEXIBLE BOND PORTFOLIO
The Trust shall pay to JCM for its investment advisory services a fee,
calculated and payable for each day that this Agreement is in effect, of 1/365
of 0.55% of the first $300,000,000 of the daily closing net asset value of the
Fund, plus 1/365 of 0.45% of the daily closing net asset value in excess of
$300,000,000 (or 1/366 of the daily closing net asset value of either rate in a
leap year). The fee shall be paid monthly.
6. Expenses Borne by JCM. In addition to the expenses which JCM may incur
in the performance of its investment advisory functions under this Agreement,
and the expenses which it may expressly undertake to incur and pay under other
agreements with the Trust or otherwise, JCM shall incur and pay the following
expenses relating to the Fund's operations without reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of the Trust's
officers and its Trustees, except for such Trustees who are not "interested
persons," as defined in the 1940 Act, of JCM; and
(b) Rental of offices of the Trust.
7. Expenses Borne by the Trust. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCM pursuant to Sections 3 and 6
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not "interested persons," as defined in the 1940 Act, of JCM; compensation
of the Fund's custodian, transfer agent, registrar and dividend disbursing
agent; legal, accounting, audit and printing expenses; administrative, clerical,
recordkeeping and bookkeeping expenses; brokerage commissions and all other
expenses in connection with execution of portfolio transactions (including any
appropriate commissions paid to JCM
E-3
or its affiliates for effecting exchange listed, over-the-counter or other
securities transactions); interest; all federal, state and local taxes
(including stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to purchasers thereof;
expenses of local representation in Delaware; expenses of shareholders' meetings
and of preparing, printing and distributing proxy statements, notices, and
reports to shareholders; expenses of preparing and filing reports and tax
returns with federal and state regulatory authorities; all expenses incurred in
complying with all federal and state laws and the laws of any foreign country
applicable to the issue, offer, or sale of shares of the Fund, including, but
not limited to, all costs involved in the registration or qualification of
shares of the Fund for sale in any jurisdiction, the costs of portfolio pricing
services and compliance systems, and all costs involved in preparing, printing
and mailing prospectuses and statements of additional information to Fund
shareholders; and all fees, dues and other expenses incurred by the Trust in
connection with the membership of the Trust in any trade association or other
investment company organization. To the extent that JCM shall perform any of the
above described administrative and clerical functions, including transfer
agency, registry, dividend disbursing, recordkeeping, bookkeeping, accounting
and blue sky monitoring and registration functions, and the preparation of
reports and returns, the Trust shall pay to JCM compensation for, or reimburse
JCM for its expenses incurred in connection with, such services as JCM and the
Trust shall agree from time to time, any other provision of this Agreement
notwithstanding.
8. [Treatment of Investment Advice. The Trust shall treat the investment
advice and recommendations of JCM as being advisory only, and shall retain full
control over its own investment policies. However, the Trustees may delegate to
the appropriate officers of the Trust, or to a committee of the Trustees, the
power to authorize purchases, sales or other actions affecting the portfolio of
the Fund in the interim between meetings of the Trustees.9.] Termination. This
Agreement may be terminated at any time, without penalty, by the Trustees of the
Trust, or by the shareholders of the Fund acting by vote of at least a majority
of its outstanding voting securities, provided in either case that sixty (60)
days advance written notice of termination be given to JCM at its principal
place of business. This Agreement may be terminated by JCM at any time, without
penalty, by giving sixty (60) days advance written notice of termination to the
Trust, addressed to its principal place of business. The Trust agrees that,
consistent with the terms of the Trust Instrument, the Trust shall cease to use
the name "Janus" in connection with the Fund as soon as reasonably practicable
following any termination of this Agreement if JCM does not continue to provide
investment advice to the Fund after such termination.
[10.][9.] Assignment. This Agreement shall terminate automatically in the
event of any assignment of this Agreement.
[11.][10.] Term. This Agreement shall continue in effect until[
July][[JANUARY] 1, [2005,][2007]]unless sooner terminated in accordance with its
terms, and shall continue in effect from year to year thereafter only so long as
such continuance is specifically approved at least annually by (a) the vote of a
majority of the Trustees
E-4
of the Trust who are not parties hereto or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on the approval of
the terms of such renewal, and (b) either the Trustees of the Trust or the
affirmative vote of a majority of the outstanding voting securities of the Fund.
The annual approvals provided for herein shall be effective to continue this
Agreement from year to year if given within a period beginning not more than
ninety (90) days prior to [July][[JANUARY] 1[]] of each applicable year,
notwithstanding the fact that more than three hundred sixty-five (365) days may
have elapsed since the date on which such approval was last given.
[12.][11.] Amendments. This Agreement may be amended by the parties only if
such amendment is specifically approved (i) by a majority of the Trustees,
including a majority of the Trustees who are not interested persons (as that
phrase is defined in Section 2(a)(19) of the 1940 Act) of any party to this
Agreement and, if required by applicable law, (ii) by the affirmative vote of a
majority of the outstanding voting securities of the Fund (as that phrase is
defined in Section 2(a)(42) of the 1940 Act).
[13.][12.] Other Series. The Trustees shall determine the basis for making
an appropriate allocation of the Trust's expenses (other than those directly
attributable to the Fund) between the Fund and the other series of the Trust.
[14.][13.] Limitation of Personal Liability. All the parties hereto
acknowledge and agree that all liabilities of the Trust arising, directly or
indirectly, under this Agreement, of any and every nature whatsoever, shall be
satisfied solely out of the assets of the Fund and that no Trustee, officer or
holder of shares of beneficial interest of the Trust shall be personally liable
for any of the foregoing liabilities. The Trust Instrument describes in detail
the respective responsibilities and limitations on liability of the Trustees,
officers and holders of shares of beneficial interest of the Trust.
[15.][14.] Limitation of Liability of JCM. JCM shall not be liable for any
error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission taken with respect to the Trust, except
for willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and duties
hereunder and except to the extent otherwise provided by law. As used in this
Section 15, "JCM" shall include any affiliate of JCM performing services for the
Trust contemplated hereunder and directors, officers and employees of JCM and
such affiliates.
[16.][15.] Activities of JCM. The services of JCM to the Trust hereunder
are not to be deemed to be exclusive, and JCM and its affiliates are free to
render services to other parties. It is understood that trustees, officers and
shareholders of the Trust are or may become interested in JCM as directors,
officers and shareholders of JCM, that directors, officers, employees and
shareholders of JCM are or may become similarly interested in the Trust, and
that JCM may become interested in the Trust as a shareholder or otherwise.
[17.][16.] Certain Definitions. The terms "vote of a majority of the
outstanding voting securities," "assignment" and "interested persons" when used
herein, shall
E-5
have the respective meanings specified in the 1940 Act, as now in effect or
hereafter amended, and the rules and regulations thereunder, subject to such
orders, exemptions and interpretations as may be issued by the Securities and
Exchange Commission under said Act and as may be then in effect.
[18.][17.] Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Colorado (without giving effect to the conflicts
of laws principles thereof) and the 1940 Act. To the extent that the applicable
laws of the State of Colorado conflict with the applicable provisions of the
1940 Act, the latter shall control.
This Agreement shall supercede all prior investment advisory agreements
entered into between JCM and the Trust, on behalf of the Fund.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the date and year first
above written.
JANUS CAPITAL MANAGEMENT LLC
By:
--------------------------------------
Chief Financial Officer and
Senior Vice President
JANUS ASPEN SERIES
By:
--------------------------------------
President and Chief
Executive Officer
E-6
EXHIBIT F
FORM OF PROPOSED AMENDED ADVISORY AGREEMENT
FOR MONEY MARKET PORTFOLIO -- CONFORMING AMENDMENTS
JANUS ASPEN SERIES
FORM OF INVESTMENT ADVISORY AGREEMENT
MONEY MARKET PORTFOLIO
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 3rd day
of April, 2002, [[AS AMENDED JANUARY 1, 2006], ]between JANUS ASPEN SERIES, a
Delaware business trust (the "Trust"), and JANUS CAPITAL MANAGEMENT LLC, a
Delaware limited liability company ("JCM").
WITNESSETH:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and has registered its shares for public offering under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Trust is authorized to create separate funds, each with its
own separate investment portfolio of which the beneficial interests are
represented by a separate series of shares; one of such funds created by the
Trust being designated as the Money Market Portfolio (the "Fund"); and
WHEREAS, the Trust and JCM deem it mutually advantageous that JCM should
[assist the Trustees and officers of the Trust in the management of the
securities portfolio][be appointed as investment adviser] of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. Investment Advisory Services. JCM shall [determine the securities or
other assets to be purchased, sold or held and shall place orders for the
purchase or sale of such securities or other assets. JCM shall ]furnish
continuous advice and recommendations to the Fund[, and have authority to act
with respect thereto,] as to the acquisition, holding, or disposition of any or
all of the securities or other assets which the Fund may own or contemplate
acquiring from time to time. JCM shall give due consideration to the investment
policies and restrictions and the other statements concerning the Fund in the
Trust Instrument, bylaws, and registration statements under the 1940 Act and the
1933 Act, and to the provisions of the Internal Revenue Code, as amended from
time to time, applicable to the Fund as a regulated investment company and as a
funding vehicle for variable insurance contracts. In addition, JCM shall cause
its officers to attend meetings and furnish oral or written reports, as the
Trust may reasonably require, in order to keep the Trustees and appropriate
officers of the Trust fully informed as to the condition of the investment
portfolio of the Fund[, the investment recommendations of JCM, and the
investment considerations which have given rise to those recommendations. JCM
shall supervise the purchase and sale of securities as directed by the
appropriate officers of the Trust].
F-1
2. Other Services. JCM is hereby authorized (to the extent the Trust has
not otherwise contracted) but not obligated (to the extent it so notifies the
Trustees at least 60 days in advance), to perform (or arrange for the
performance by affiliates of) the management and administrative services
necessary for the operation of the Fund. JCM is specifically authorized, on
behalf of the Trust, to conduct relations with custodians, depositories,
transfer and pricing agents, accountants, attorneys, underwriters, brokers and
dealers, corporate fiduciaries, insurance company separate accounts, insurers,
banks and such other persons in any such other capacity deemed by JCM to be
necessary or desirable. JCM shall generally monitor and report to Fund officers
the Fund's compliance with investment policies and restrictions as set forth in
the currently effective prospectus and statement of additional information
relating to the shares of the Fund under the Securities Act of 1933, as amended.
JCM shall make reports to the Trustees of its performance of services hereunder
upon request therefor and furnish advice and recommendations with respect to
such other aspects of the business and affairs of the Fund as it shall determine
to be desirable. JCM is also authorized, subject to review by the Trustees, to
furnish such other services as JCM shall from time to time determine to be
necessary or useful to perform the services contemplated by this Agreement.
3. Obligations of Trust. The Trust shall have the following obligations
under this Agreement:
(a) to keep JCM continuously and fully informed as to the composition
of its investment portfolio and the nature of all of its assets and
liabilities from time to time;
(b) to furnish JCM with a certified copy of any financial statement or
report prepared for it by certified or independent public accountants and
with copies of any financial statements or reports made to its shareholders
or to any governmental body or securities exchange;
(c) to furnish JCM with any further materials or information which JCM
may reasonably request to enable it to perform its function under this
Agreement; and
(d) to compensate JCM for its services and reimburse JCM for its
expenses incurred hereunder in accordance with the provisions hereof.
4. Compensation. The Trust shall pay to JCM for its investment advisory
services a fee, calculated and payable for each day that this Agreement is in
effect, of 1/365 of 0.25% of the aggregate closing net asset value of the shares
of the Fund for each day of such month.
5. Expenses Borne by JCM. In addition to the expenses which JCM may incur
in the performance of its investment advisory functions under this Agreement,
and the expenses which it may expressly undertake to incur and pay under other
agreements with the Trust or otherwise, JCM shall incur and pay the following
expenses relating to the Fund's operations without reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of the Trust's
officers and its Trustees, except for such Trustees who are not interested
persons of JCM; and
F-2
(b) Rental of offices of the Trust.
6. Expenses Borne by the Trust. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCM pursuant to Sections 2 and 5
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not interested persons of JCM; compensation of the Fund's custodian,
transfer agent, registrar and dividend disbursing agent; legal, accounting,
audit and printing expenses; administrative, clerical, recordkeeping and
bookkeeping expenses; brokerage commissions and all other expenses in connection
with execution of portfolio transactions (including any appropriate commissions
paid to JCM or its affiliates for effecting exchange listed, over-the-counter or
other securities transactions); interest; all federal, state and local taxes
(including stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to purchasers thereof;
expenses of local representation in Delaware; expenses of shareholders' meetings
and of preparing, printing and distributing proxy statements, notices, and
reports to shareholders; expenses of preparing and filing reports and tax
returns with federal and state regulatory authorities; all expenses incurred in
complying with all federal and state laws and the laws of any foreign country
applicable to the issue, offer, or sale of shares of the Fund, including, but
not limited to, all costs involved in the registration or qualification of
shares of the Fund for sale in any jurisdiction, the costs of portfolio pricing
services and compliance systems, and all costs involved in preparing, printing
and mailing prospectuses and statements of additional information of the Fund;
and all fees, dues and other expenses incurred by the Trust in connection with
the membership of the Trust in any trade association or other investment company
organization. To the extent that JCM shall perform any of the above described
administrative and clerical functions, including transfer agency, registry,
dividend disbursing, recordkeeping, bookkeeping, accounting and blue sky
monitoring and registration functions, and the preparation of reports and
returns, the Trust shall pay to JCM compensation for, or reimburse JCM for its
expenses incurred in connection with, such services as JCM and the Trust shall
agree from time to time, any other provision of this Agreement notwithstanding.
7. [Treatment of Investment Advice. The Trust shall treat the investment
advice and recommendations of JCM as being advisory only, and shall retain full
control over its own investment policies. However, the Trustees may delegate to
the appropriate officers of the Trust, or to a committee of the Trustees, the
power to authorize purchases, sales or other actions affecting the portfolio of
the Fund in the interim between meetings of the Trustees.8.]
_Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Fund acting
by vote of at least a majority of its outstanding voting securities, provided in
either case that sixty (60) days advance written notice of termination be given
to JCM at its principal place of business. This Agreement may be terminated by
JCM at any time, without penalty, by giving sixty (60) days advance written
notice of termina-
F-3
tion to the Trust, addressed to its principal place of business. The Trust
agrees that, consistent with the terms of the Trust Instrument, the Trust shall
cease to use the name "Janus" in connection with the Fund as soon as reasonably
practicable following any termination of this Agreement if JCM does not continue
to provide investment advice to the Fund after such termination.
[9.][8.] Assignment. This Agreement shall terminate automatically in the
event of any assignment of this Agreement.
[10.][9.] Term. This Agreement shall continue in effect until
[July][[JANUARY] 1, [2002,][2007]], unless sooner terminated in accordance with
its terms, and shall continue in effect from year to year thereafter only so
long as such continuance is specifically approved at least annually by the vote
of a majority of the Trustees of the Trust who are not parties hereto or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on the approval of the terms of such renewal, and by either
the Trustees of the Trust or the affirmative vote of a majority of the
outstanding voting securities of the Fund. The annual approvals provided for
herein shall be effective to continue this Agreement from year to year if given
within a period beginning not more than ninety (90) days prior to
[July][[JANUARY] 1[]] of each applicable year, notwithstanding the fact that
more than three hundred sixty-five (365) days may have elapsed since the date on
which such approval was last given.
[11.][10.] Amendments. This Agreement may be amended by the parties only
if such amendment is specifically approved (i) by a majority of the Trustees,
including a majority of the Trustees who are not interested persons (as that
phrase is defined in Section 2(a)(19) of the 1940 Act) of JCM and, if required
by applicable law, (ii) by the affirmative vote of a majority of the outstanding
voting securities of the Fund (as that phrase is defined in Section 2(a)(42) of
the 1940 Act).
[12.][11.] Other Series. The Trustees shall determine the basis for making
an appropriate allocation of the Trust's expenses (other than those directly
attributable to the Fund) between the Fund and the other series of the Trust.
[13.][12.] Limitation of Personal Liability. All the parties hereto
acknowledge and agree that all liabilities of the Trust arising, directly or
indirectly, under this Agreement, of any and every nature whatsoever, shall be
satisfied solely out of the assets of the Fund and that no Trustee, officer or
holder of shares of beneficial interest of the Trust shall be personally liable
for any of the foregoing liabilities. The Trust Instrument describes in detail
the respective responsibilities and limitations on liability of the Trustees,
officers and holders of shares of beneficial interest of the Trust.
[14.][13.] Limitation of Liability of JCM. JCM shall not be liable for any
error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission taken with respect to the Trust, except
for willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and duties
hereunder and except to the extent otherwise provided by law. As used in this
Section 14, "JCM" shall include any affiliate of
F-4
JCM performing services for the Trust contemplated hereunder and directors,
officers and employees of JCM and such affiliates.
[15.][14.] Activities of JCM. The services of JCM to the Trust hereunder
are not to be deemed to be exclusive, and JCM and its affiliates are free to
render services to other parties. It is understood that trustees, officers and
shareholders of the Trust are or may become interested in JCM as directors,
officers and shareholders of JCM, that directors, officers, employees and
shareholders of JCM are or may become similarly interested in the Trust, and
that JCM may become interested in the Trust as a shareholder or otherwise.
[16.][15.] Certain Definitions. The terms "vote of a majority of the
outstanding voting securities," "assignment" and "interested persons" when used
herein, shall have the respective meanings specified in the 1940 Act, as now in
effect or hereafter amended, and the rules and regulations thereunder, subject
to such orders, exemptions and interpretations as may be issued by the
Securities and Exchange Commission under said Act and as may be then in effect.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the date and year first
above written.
JANUS CAPITAL MANAGEMENT LLC
By:
--------------------------------------
JANUS ASPEN SERIES
By:
--------------------------------------
F-5
EXHIBIT G
FORM OF PROPOSED AMENDED ADVISORY AGREEMENT FOR
WORLDWIDE GROWTH PORTFOLIO -- PERFORMANCE FEES
JANUS ASPEN SERIES
FORM OF INVESTMENT ADVISORY AGREEMENT
WORLDWIDE GROWTH PORTFOLIO
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 1st day
of July, 2004, [[AS AMENDED THIS 1ST DAY OF JANUARY, 2006],] between JANUS ASPEN
SERIES, a Delaware statutory trust (the "Trust"), and JANUS CAPITAL MANAGEMENT
LLC, a Delaware limited liability company ("JCM").
WITNESSETH:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and has registered its shares for public offering under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Trust is authorized to create separate funds, each with its
own separate investment portfolio of which the beneficial interests are
represented by a separate series of shares; one of such funds created by the
Trust being designated as the Worldwide Growth Portfolio (the "Fund"); and
WHEREAS, the Trust and JCM deem it mutually advantageous that JCM should
[assist the Trustees and officers of the Trust in the management of the
securities portfolio][be appointed as investment adviser] of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. Appointment. The Trust hereby appoints JCM as investment adviser and
manager with respect to the Fund for the period and on the terms set forth in
this Agreement. JCM hereby accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. Investment Advisory Services. JCM shall [determine the securities or
other assets to be purchased, sold or held and shall place orders for the
purchase or sale of such securities or other assets with brokers, dealers or
others. JCM shall ]furnish continuous advice and recommendations to the Fund[,
and have authority to act with respect thereto,] as to the acquisition, holding,
or disposition of any or all of the securities or other assets which the Fund
may own or contemplate acquiring from time to time. JCM shall give due
consideration to the investment policies and restrictions and the other
statements concerning the Fund in the Trust Instrument, bylaws, and registration
statements under the 1940 Act and the 1933 Act, and to the provisions of the
Internal Revenue Code, as amended from time to time, applicable to the Fund as a
regulated investment company and as a funding vehicle for variable insurance
contracts. In addition, JCM shall cause its officers to attend meetings and
furnish oral or written reports, as the Trust may reasonably require, in order
to keep
G-1
the Trustees and appropriate officers of the Trust fully informed as to the
condition of the investment portfolio of the Fund[, the investment
recommendations of JCM, and the investment considerations which have given rise
to those recommendations. JCM shall supervise the purchase and sale of
securities as directed by the appropriate officers of the Trust].
3. Other Services. JCM is hereby authorized (to the extent the Trust has
not otherwise contracted) but not obligated (to the extent it so notifies the
Trustees at least 60 days in advance), to perform (or arrange for the
performance by affiliates of) the management and administrative services
necessary for the operation of the Fund. JCM is specifically authorized, on
behalf of the Trust, to conduct relations with custodians, depositories,
transfer and pricing agents, accountants, attorneys, underwriters, brokers and
dealers, corporate fiduciaries, insurance company separate accounts, insurers,
banks and such other persons in any such other capacity deemed by JCM to be
necessary or desirable. JCM shall generally monitor and report to Fund officers
the Fund's compliance with investment policies and restrictions as set forth in
the currently effective prospectus and statement of additional information
relating to the shares of the Fund under the 1933 Act. JCM shall make reports to
the Trustees of its performance of services hereunder upon request therefor and
furnish advice and recommendations with respect to such other aspects of the
business and affairs of the Fund as it shall determine to be desirable. JCM is
also authorized, subject to review by the Trustees, to furnish such other
services as JCM shall from time to time determine to be necessary or useful to
perform the services contemplated by this Agreement.
4. Obligations of Trust. The Trust shall have the following obligations
under this Agreement:
(a) to keep JCM continuously and fully informed as to the composition
of its investment portfolio and the nature of all of its assets and
liabilities from time to time;
(b) to furnish JCM with a certified copy of any financial statement or
report prepared for it by certified or independent public accountants and
with copies of any financial statements or reports made to its shareholders
or to any governmental body or securities exchange;
(c) to furnish JCM with any further materials or information which JCM
may reasonably request to enable it to perform its function under this
Agreement; and
(d) to compensate JCM for its services and reimburse JCM for its
expenses incurred hereunder in accordance with the provisions hereof.
5. Compensation. The Trust shall pay to JCM for its investment advisory
services a [fee, calculated and payable for each day that this Agreement is in
effect, of 1/365][monthly base fee of 1/12] of 0.60% of the [average ]daily
closing net asset value of the Fund[ (1/366 of 0.60% of the daily closing net
asset value of the Fund in a leap year). The fee shall be paid monthly][,
adjusted by a performance fee as set forth in Schedule A. For any period less
than a month during which this Agreement
G-2
is in effect, the base fee shall be prorated according to the proportion which
such period bears to a full month of 28, 29, 30 or 31 days, as the case may be.]
6. Expenses Borne by JCM. In addition to the expenses which JCM may incur
in the performance of its investment advisory functions under this Agreement,
and the expenses which it may expressly undertake to incur and pay under other
agreements with the Trust or otherwise, JCM shall incur and pay the following
expenses relating to the Fund's operations without reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of the Trust's
officers and its Trustees, except for such Trustees who are not "interested
persons," as defined in the 1940 Act, of JCM; and
(b) Rental of offices of the Trust.
7. Expenses Borne by the Trust. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCM pursuant to Sections 3 and 6
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not "interested persons," as defined in the 1940 Act, of JCM; compensation
of the Fund's custodian, transfer agent, registrar and dividend disbursing
agent; legal, accounting, audit and printing expenses; administrative, clerical,
recordkeeping and bookkeeping expenses; brokerage commissions and all other
expenses in connection with execution of portfolio transactions (including any
appropriate commissions paid to JCM or its affiliates for effecting exchange
listed, over-the-counter or other securities transactions); interest; all
federal, state and local taxes (including stamp, excise, income and franchise
taxes); costs of stock certificates and expenses of delivering such certificates
to purchasers thereof; expenses of local representation in Delaware; expenses of
shareholders' meetings and of preparing, printing and distributing proxy
statements, notices, and reports to shareholders; expenses of preparing and
filing reports and tax returns with federal and state regulatory authorities;
all expenses incurred in complying with all federal and state laws and the laws
of any foreign country applicable to the issue, offer, or sale of shares of the
Fund, including, but not limited to, all costs involved in the registration or
qualification of shares of the Fund for sale in any jurisdiction, the costs of
portfolio pricing services and compliance systems, and all costs involved in
preparing, printing and mailing prospectuses and statements of additional
information to Fund shareholders; and all fees, dues and other expenses incurred
by the Trust in connection with the membership of the Trust in any trade
association or other investment company organization. To the extent that JCM
shall perform any of the above described administrative and clerical functions,
including transfer agency, registry, dividend disbursing, recordkeeping,
bookkeeping, accounting and blue sky monitoring and registration functions, and
the preparation of reports and returns, the Trust shall pay to JCM compensation
for, or reimburse JCM for its expenses incurred in connection with, such
services as JCM and the Trust shall agree from time to time, any other provision
of this Agreement notwithstanding.
G-3
8. [Treatment of Investment Advice. The Trust shall treat the investment
advice and recommendations of JCM as being advisory only, and shall retain full
control over its own investment policies. However, the Trustees may delegate to
the appropriate officers of the Trust, or to a committee of the Trustees, the
power to authorize purchases, sales or other actions affecting the portfolio of
the Fund in the interim between meetings of the Trustees.9. ]Termination. This
Agreement may be terminated at any time, without penalty, by the Trustees of the
Trust, or by the shareholders of the Fund acting by vote of at least a majority
of its outstanding voting securities, provided in either case that sixty (60)
days advance written notice of termination be given to JCM at its principal
place of business. This Agreement may be terminated by JCM at any time, without
penalty, by giving sixty (60) days advance written notice of termination to the
Trust, addressed to its principal place of business. The Trust agrees that,
consistent with the terms of the Trust Instrument, the Trust shall cease to use
the name "Janus" in connection with the Fund as soon as reasonably practicable
following any termination of this Agreement if JCM does not continue to provide
investment advice to the Fund after such termination.
[10.][9.] Assignment. This Agreement shall terminate automatically in the
event of any assignment of this Agreement.
[11.][10.] Term. This Agreement shall continue in effect until
[July][[JANUARY] 1, [2005,][2007],] unless sooner terminated in accordance with
its terms, and shall continue in effect from year to year thereafter only so
long as such continuance is specifically approved at least annually by (a) the
vote of a majority of the Trustees of the Trust who are not parties hereto or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on the approval of the terms of such renewal, and (b) either
the Trustees of the Trust or the affirmative vote of a majority of the
outstanding voting securities of the Fund. The annual approvals provided for
herein shall be effective to continue this Agreement from year to year if given
within a period beginning not more than ninety (90) days prior to
[July][[JANUARY] 1[]] of each applicable year, notwithstanding the fact that
more than three hundred sixty-five (365) days may have elapsed since the date on
which such approval was last given.
[12.][11.] Amendments. This Agreement may be amended by the parties only
if such amendment is specifically approved (i) by a majority of the Trustees,
including a majority of the Trustees who are not interested persons (as that
phrase is defined in Section 2(a)(19) of the 1940 Act) of any party to this
Agreement and, if required by applicable law, (ii) by the affirmative vote of a
majority of the outstanding voting securities of the Fund (as that phrase is
defined in Section 2(a)(42) of the 1940 Act).
[13.][12.] Other Series. The Trustees shall determine the basis for
making an appropriate allocation of the Trust's expenses (other than those
directly attributable to the Fund) between the Fund and the other series of the
Trust.
[14.][13.] Limitation of Personal Liability. All the parties hereto
acknowledge and agree that all liabilities of the Trust arising, directly or
indirectly, under this Agreement, of any and every nature whatsoever, shall be
satisfied solely out of the
G-4
assets of the Fund and that no Trustee, officer or holder of shares of
beneficial interest of the Trust shall be personally liable for any of the
foregoing liabilities. The Trust Instrument describes in detail the respective
responsibilities and limitations on liability of the Trustees, officers and
holders of shares of beneficial interest of the Trust.
[15.][14.] Limitation of Liability of JCM. JCM shall not be liable for
any error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission taken with respect to the Trust, except
for willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and duties
hereunder and except to the extent otherwise provided by law. As used in this
Section 15, "JCM" shall include any affiliate of JCM performing services for the
Trust contemplated hereunder and directors, officers and employees of JCM and
such affiliates.
[16.][15.] Activities of JCM. The services of JCM to the Trust hereunder
are not to be deemed to be exclusive, and JCM and its affiliates are free to
render services to other parties. It is understood that trustees, officers and
shareholders of the Trust are or may become interested in JCM as directors,
officers and shareholders of JCM, that directors, officers, employees and
shareholders of JCM are or may become similarly interested in the Trust, and
that JCM may become interested in the Trust as a shareholder or otherwise.
[17.][16.] Certain Definitions. The terms "vote of a majority of the
outstanding voting securities," "assignment" and "interested persons" when used
herein, shall have the respective meanings specified in the 1940 Act, as now in
effect or hereafter amended, and the rules and regulations thereunder, subject
to such orders, exemptions and interpretations as may be issued by the
Securities and Exchange Commission under said Act and as may be then in effect.
[18.][17.] Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Colorado (without giving effect to the conflicts
of laws principles thereof) and the 1940 Act. To the extent that the applicable
laws of the State of Colorado conflict with the applicable provisions of the
1940 Act, the latter shall control.
This Agreement shall supercede all prior investment advisory agreements
entered into between JCM and the Trust, on behalf of the Fund.
G-5
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the date and year first
above written.
JANUS CAPITAL MANAGEMENT LLC
By:
--------------------------------------
Chief Financial Officer and
Senior Vice President
JANUS ASPEN SERIES
By:
--------------------------------------
President and Chief
Executive Officer
G-6
[SCHEDULE A]
[PERFORMANCE ADJUSTMENT]
[Beginning with the Base Fee payable for January 2006 and in month 13 from
the date of this agreement, the Base Fee shall be adjusted monthly based upon
the investment performance of the Fund's Service Shares ("Class") in relation to
the cumulative investment record of the Fund's benchmark, the MSCI World Index
(the "Index"), over the "Performance Period" (such adjustment being referred to
herein as the "Performance Adjustment"). The "Performance Period" is defined as
the shorter of (a) the period from the date of this Agreement through the end of
the month for which the fee is being calculated, and (b) the 36 month period
preceding the end of the month for which the fee is being calculated.]
[The Performance Adjustment shall be calculated by subtracting the
investment record of the Index from the investment performance of the Class. If
there is less than a 0.50% difference (plus or minus) between the investment
performance of the Class and the investment record of the Index, the Fund pays
JCM the Base Fee with no adjustment. If the difference between the investment
performance of the Class and the investment record of the Index is 0.50% or
greater during any Performance Period, the Base Fee will be subject to an upward
or downward performance adjustment of 1/12 of 0.0125% for every full 0.50%
increment by which the Class outperforms or underperforms the Index. The maximum
percentage used in calculating the Performance Adjustment (positive or negative)
in any month is 1/12 of 0.15%. The Performance Adjustment is applied against the
Fund's average daily net assets during the Performance Period.]
[For purposes of computing the Base Fee and the Performance Adjustment, net
assets are averaged over different periods (average daily net assets during the
relevant month for the Base Fee versus average daily net assets during the
Performance Period for the Performance Adjustment). The Base Fee is calculated
and accrued daily. The Performance Adjustment is accrued daily and calculated
monthly. The investment advisory fee is paid monthly in arrears.]
[The average daily net asset value of the Fund, or any class thereof, shall
be determined in the manner set forth in the Trust's Amended and Restated Trust
Instrument, Bylaws and registration statement, each as may be amended from time
to time.]
[The investment performance of the Class will be the sum of:]
[(1) the change in the Class's net asset value ("NAV") per share
during the Performance Period; plus]
[(2) the value of the Class's cash distributions per share accumulated
to the end of the Performance Period; plus]
[(3) the value of capital gains taxes per share paid or payable on
undistributed realized long-term capital gains accumulated to the end of
the Performance Period;]
[expressed as a percentage of the Class's NAV per share at the beginning of the
Performance Period. For this purpose, the value of distributions per share of
realized
G-7
capital gains, of dividends per share paid from investment income and of capital
gains taxes per share paid or payable on undistributed realized long-term
capital gains shall be treated as reinvested in shares of the Class at the NAV
in effect at the close of business on the record date for the payment of such
distributions and dividends and the date on which provision is made for such
taxes, after giving effect to such distributions, dividends and taxes.]
[The investment record of the Index will be the sum of:]
[(1) the change in the level of the Index during the Performance
Period; plus]
[(2) the value, computed consistently with the Index, of cash
distributions made by companies whose securities comprise the Index
accumulated to the end of the Performance Period; expressed as a percentage
of the Index level at the beginning of the Performance Period. For this
purpose, cash distributions on the securities which comprise the Index
shall be treated as reinvested in the index at least as frequently as the
end of each calendar quarter following the payment of the dividend.]
[The Trustees have initially designated the Class to be used for purposes
of determining the Performance Adjustment. From time to time, the Trustees may,
by vote of the Trustees of the Trust voting in person, including a majority of
the Trustees who are not parties to this Agreement or "interested persons" (as
defined in the 1940 Act) of any such parties, determine that a class of shares
of the Fund other than the Class is the most appropriate for use in calculating
the Performance Adjustment. If a different class of shares ("Successor Class")
is substituted in calculating the Performance Adjustment, the use of that
Successor Class of shares for purposes of calculating the Performance Adjustment
may apply to the entire Performance Period so long as such Successor Class was
outstanding at the beginning of such period. If the Successor Class of shares
was not outstanding for all or a portion of the Performance Period, it may only
be used in calculating that portion of the Performance Adjustment attributable
to the period during which such Successor Class was outstanding and any prior
portion of the Performance Period shall be calculated using the class of shares
previously designated.]
G-8
EXHIBIT H
FORM OF PROPOSED AMENDED ADVISORY AGREEMENT FOR
MID CAP VALUE PORTFOLIO AND
RISK-MANAGED CORE PORTFOLIO -- PERFORMANCE FEES
JANUS ASPEN SERIES
FORM OF INVESTMENT ADVISORY AGREEMENT
[ ] PORTFOLIO
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 1st day
of July, 2004, [[AS AMENDED THIS 1ST DAY OF JANUARY, 2006]] between JANUS ASPEN
SERIES, a Delaware statutory trust (the "Trust"), and JANUS CAPITAL MANAGEMENT
LLC, a Delaware limited liability company ("JCM").
WITNESSETH:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and has registered its shares for public offering under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Trust is authorized to create separate funds, each with its
own separate investment portfolio of which the beneficial interests are
represented by a separate series of shares; one of such funds created by the
Trust being designated as the [ ]Janus Aspen Perkins Mid Cap Value Portfolio (the
"Fund"); and
WHEREAS, the Trust and JCM deem it mutually advantageous that JCM should be
appointed as investment adviser to the Fund.
NOW, THEREFORE, the parties agree as follows:
1. Appointment. The Trust hereby appoints JCM as investment adviser
and manager with respect to the Fund for the period and on the terms set
forth in this Agreement. JCM hereby accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided.
2. Investment Advisory Services. JCM shall determine the securities or other
assets to be purchased, sold or held and shall place orders for the purchase or
sale of such securities or other assets with brokers, dealers or others. JCM
shall furnish continuous advice and recommendations to the Fund as to the
acquisition, holding, or disposition of any or all of the securities or other
assets which the Fund may own or contemplate acquiring from time to time. JCM
shall give due consideration to the investment policies and restrictions and the
other statements concerning the Fund in the Trust Instrument, bylaws, and
registration statements under the 1940 Act and the 1933 Act, and to the
provisions of the Internal Revenue Code, as amended from time to time,
applicable to the Fund as a regulated investment companycompany[ and as a funding
vehicle for variable
B-1
insurance contracts.contracts]. In addition, JCM shall cause its officers to attend
meetings and furnish oral or written reports, as the Trust may reasonably
require, in order to keep the Trustees and
H-1
appropriate officers of the
Trust fully informed as to the condition of the investment portfolio of the
Fund, the investment recommendations of JCM, and the investment
considerations which have given rise to those recommendations. Subject to
the approval of the Trustees of the Trust and, if required, the
shareholders of the Fund, JCM is authorized to engage one or more
subadvisers in connection with JCM's duties and responsibilities under this
Agreement, which subadvisers may be affiliates of JCM.
3. Other Services. JCM is hereby authorized (to the extent the Trust
has not otherwise contracted) but not obligated (to the extent it so
notifies the Trustees at least 60 days in advance), to perform (or arrange
for the performance by affiliates of or duly appointed subadvisers or
affiliates of) the management and administrative services necessary for the
operation of the Fund. JCM is specifically authorized, on behalf of the
Trust, to conduct relations with custodians, depositories, transfer and
pricing agents, accountants, attorneys, underwriters, brokers and dealers,
corporate fiduciaries, insurance company separate accounts, insurers, banks
and such other persons in any such other capacity deemed by JCM to be
necessary or desirable. JCM shall generally monitor and report to Fund
officers the Fund's compliance with investment policies and restrictions as
set forth in the currently effective prospectus and statement of additional
information relating to the shares of the Fund under the 1933 Act. JCM
shall make reports to the Trustees of its performance of services hereunder
upon request therefor and furnish advice and recommendations with respect
to such other aspects of the business and affairs of the Fund as it shall
determine to be desirable. JCM is also authorized, subject to review by the
Trustees, to furnish such other services as JCM shall from time to time
determine to be necessary or useful to perform the services contemplated by
this Agreement.
4. Obligations of Trust. The Trust shall have the following
obligations under this Agreement:
(a) to keep JCM continuously and fully informed as to the
composition of its investment portfolio and the nature of all of its
assets and liabilities from time to time;
(b) to furnish JCM with a certified copy of any financial statement
or report prepared for it by certified or independent public accountants
and with copies of any financial statements or reports made to its
shareholders or to any governmental body or securities exchange;
MID CAP VALUE PORTFOLIO:
(c) to furnish JCM with any further materials or information which
JCM may reasonably request to enable it to perform its function under
this Agreement; [and]
B-2
(d) to compensate JCM for its services and reimburse JCM for its
expenses incurred hereunder in accordance with the provisions hereof; and
(e)hereof[;
and.]
[(e) to compensate any subadviser engaged by JCM pursuant to the
authority granted in Section 2 hereof.
H-2
RISK-MANAGED CORE PORTFOLIO
(c) to furnish JCM with any further materials or information which JCM may
reasonably request to enable it to perform its function under this Agreement;
and
(d) to compensate JCM for its services and reimburse JCM for its expenses
incurred hereunder in accordance with the provisions hereof.]
5. Compensation.
MID CAP VALUE PORTFOLIO The Trust shall pay to JCM for its investment advisory services a [monthly
base ]fee[, calculated and payable for each day thatpursuant
to this Agreement is in
effect,a monthly base fee of 1/365][ of 1/12]12 of 0.64% of the [average ]daily closing net asset
value of the Fund[ (1/366 of 0.64% of theaverage daily
closing net asset value of the Fund, in a leap year)][, adjusted by a performance fee as set
forth in Schedule A,]A[ provided that any amounts due pursuant to Section 4(e)
above shall be paid directly to such subadviser by the Fund and shall
reduce the amount payable to [JCMJCM hereunder.][Janus hereunder. For ]For any period less than a
month during which this Agreement is in effect, the base fee shall be
prorated according to the proportion which such period bears to a full
month of 28, 29, 30 or 31 days, as the case may be.]
RISK-MANAGED CORE PORTFOLIO
The Trust shall pay to JCM for its investment advisory services a [fee,
calculated and payable for each day that this Agreement is in effect, of
1/365][monthly base fee of 1/12] of 0.50% of the [average ]daily closing net
asset value of the Fund[ (1/366 of 0.50% of the daily closing net asset value of
the Fund in a leap year)][, adjusted by a performance fee as set forth in
Schedule A. For any period less than a month during which this Agreement is in
effect, the base fee shall be prorated according to the proportion which such
period bears to a full month of 28, 29, 30 or 31 days, as the case may be.]
6. Expenses Borne by JCM. In addition to the expenses which JCM may
incur in the performance of its investment advisory functions and other
services under this Agreement, and the expenses which it may expressly
undertake to incur and pay under other agreements with the Trust or
otherwise, JCM shall incur and pay the following expenses relating to the
Fund's operations without reimbursement from the Fund:
MID CAP VALUE PORTFOLIO:
(a) Reasonable compensation, fees and related expenses of the
Trust's officers and its Trustees, except for such Trustees who are not
"interested persons," as defined in the 1940 Act, of JCM;JCM, and except as
otherwise provided in Section 7; [and]
(b) Rental of offices of the Trust.
RISK-MANAGED CORE PORTFOLIO
(a) Reasonable compensation, fees and related expenses of the Trust's
officers and its Trustees, except for such Trustees who are not "interested
persons," as defined in the 1940 Act, of JCM;
(c) Rental of offices of the Trust; and
H-3
(d)Trust[; and]
[(c) Fees of any subadviser engaged by JCM pursuant to the
authority granted in Section 2 hereof.]
7. Expenses Borne by the Trust. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCM pursuant to Sections 3 and
6 hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees
who are not "interested persons," as defined in the 1940 Act, of JCM;
compensation and related expenses of the Chief Compliance Officer of the
Trust and compliance staff, as authorized from time to time by the Trustees
of the Trust; compensation of the Fund's custodian, transfer agent,
registrar and dividend disbursing agent; legal, accounting, audit and
printing expenses; administrative, clerical, recordkeeping and bookkeeping
expenses; brokerage commissions and all other expenses in connection with
execution of portfolio transactions (including any appropriate commissions
paid to JCM or its affiliates for effecting exchange listed,
over-the-counter or other securities transactions); interest; all federal,
state and local taxes (including stamp, excise, income and franchise
taxes); costs of
B-3
stock certificates and expenses of delivering such certificates to
purchasers thereof; expenses of local representation in Delaware; expenses
of shareholders' meetings and of preparing, printing and distributing proxy
statements, notices, and reports to shareholders; expenses of preparing and
filing reports and tax returns with federal and state regulatory
authorities; all expenses incurred in complying with all federal and state
laws and the laws of any foreign country applicable to the issue, offer, or
sale of shares of the Fund, including, but not limited to, all costs
involved in the registration or qualification of shares of the Fund for
sale in any jurisdiction, the costs of portfolio pricing services and
compliance systems, and all costs involved in preparing, printing and
mailing prospectuses and statements of additional information to Fund
shareholders; and all fees, dues and other expenses incurred by the Trust
in connection with the membership of the Trust in any trade association or
other investment company organization.
8. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Fund
acting by vote of at least a majority of its outstanding voting securities,
provided in either case that sixty (60) days advance written notice of
termination be given to JCM at its principal place of business. This
Agreement may be terminated by JCM at any time, without penalty, by giving
sixty (60) days advance written notice of termination to the Trust,
addressed to its principal place of business. The Trust agrees that,
consistent with the terms of the Trust Instrument, the Trust shall cease to
use the name "Janus" in connection with the Fund as soon as reasonably
practicable following any termination of this Agreement if JCM does not
continue to provide investment advice to the Fund after such termination.
9. Assignment. This Agreement shall terminate automatically in the
event of any assignment of this Agreement.
10. Term. This Agreement shall continue in effect until [July][[JANUARY]February 1,
[2005,]200[7][2007]]9], unless sooner terminated in accordance with its terms, and shall
continue in effect from year to year thereafter only so long as such
continuance is specifically
H-4
approved at least annually by (a) the vote of a
majority of the Trustees of the Trust who are not parties hereto or
interested persons of any such party, cast in person at a meeting called
for the purpose of voting on the approval of the terms of such renewal, and
(b) either the Trustees of the Trust or the affirmative vote of a majority
of the outstanding voting securities of the Fund. The annual approvals
provided for herein shall be effective to continue this Agreement from year
to year if given within a period beginning not more than ninety (90) days
prior to [July][[JANUARY] 1[]]February 1 of each applicable year, notwithstanding the fact that
more than three hundred sixty-five (365) days may have elapsed since the
date on which such approval was last given.
11. Amendments. This Agreement may be amended by the parties only if such
amendment is specifically approved (i) by a majority of the Trustees,
B-4
including a majority of the Trustees who are not interested persons (as
that phrase is defined in Section 2(a)(19) of the 1940 Act) of any party to
this Agreement and, if required by applicable law, (ii) by the affirmative
vote of a majority of the outstanding voting securities of the Fund (as
that phrase is defined in Section 2(a)(42) of the 1940 Act).
12. Other Series. The Trustees shall determine the basis for making
an appropriate allocation of the Trust's expenses (other than those
directly attributable to the Fund) between the Fund and the other series of
the Trust.
13. Limitation of Personal Liability. All the parties hereto
acknowledge and agree that all liabilities of the Trust arising, directly
or indirectly, under this Agreement, of any and every nature whatsoever,
shall be satisfied solely out of the assets of the Fund and that no
Trustee, officer or holder of shares of beneficial interest of the Trust
shall be personally liable for any of the foregoing liabilities. The Trust
Instrument describes in detail the respective responsibilities and
limitations on liability of the Trustees, officers and holders of shares of
beneficial interest of the Trust.
14. Limitation of Liability of JCM. JCM shall not be liable for any
error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission taken with respect to the Trust,
except for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its
obligations and duties hereunder and except to the extent otherwise
provided by law. As used in this Section 14, "JCM" shall include any
affiliate of JCM performing services for the Trust contemplated hereunder
and directors, officers and employees of JCM and such affiliates.
15. Activities of JCM. The services of JCM to the Trust hereunder are
not to be deemed to be exclusive, and JCM and its affiliates are free to
render services to other parties. It is understood that trustees, officers
and shareholders of the Trust are or may become interested in JCM as
directors, officers and shareholders of JCM, that directors, officers,
employees and shareholders of JCM are or may become similarly interested in
the Trust, and that JCM may become interested in the Trust as a shareholder
or otherwise.
H-5
16. Certain Definitions. The terms "vote of a majority of the
outstanding voting securities," "assignment" and "interested persons" when
used herein, shall have the respective meanings specified in the 1940 Act,
as now in effect or hereafter amended, and the rules and regulations
thereunder, subject to such orders, exemptions and interpretations as may
be issued by the Securities and Exchange Commission under said Act and as
may be then in effect.
17. Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Colorado (without giving effect to the
conflicts of laws principles thereof) and the 1940 Act. To the extent that
the applicable
B-5
laws of the State of Colorado conflict with the applicable provisions of
the 1940 Act, the latter shall control.
This Agreement shall supercede all prior investment advisory agreements
entered into between JCM and the Trust, on behalf of the Fund.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the amended date and year
first above written.
JANUS CAPITAL MANAGEMENT LLC
By:
------------------------------------------------------------------------
[David R. Martin, Chief Financial
Officer and SeniorExecutive Vice
PresidentPresident]
JANUS ASPEN SERIES
By:
------------------------------------------------------------------------
[Kelley A. Howes, President and
Chief Executive Officer H-6]
B-6
[SCHEDULE A]
[PERFORMANCE ADJUSTMENT]SCHEDULE A
PERFORMANCE ADJUSTMENT
[Beginning with the Base Fee payable for JanuaryFebruary 2006 and in month 13 from
the amended date of this agreement, theAgreement, t][T]he Base Fee shall be adjusted monthly
based upon the investment performance of the Fund's Service Shares[Class ]Shares
("Class") in relation to the cumulative investment record of the Fund's
benchmark, the [RISK-MANAGED CORE
PORTFOLIO -- STANDARD & POOR'S 500 INDEX (THE "INDEX"Russell Midcap Value Index (the "Index")] [MID CAP VALUE
PORTFOLIO -- RUSSELL MIDCAP VALUE INDEX (THE "INDEX")], over the "Performance
Period" (such adjustment being referred to herein as the "Performance
Adjustment"). The "Performance Period" is defined as the shorter of (a) the
period from [February 1, 2006 ][the date of this Agreement through]through the end of
the month for which the fee is being calculated, and (b) the 36 month period
preceding the end of the month for which the fee is being calculated.calculated [(beginning
February 1, 2006).]
[TheThe Performance Adjustment shall be calculated by subtracting the
investment record of the Index from the investment performance of the Class. If
there is less than a 0.50% difference (plus or minus) between the investment
performance of the Class and the investment record of the Index, the Fund pays
JCM the Base Fee with no adjustment. If the difference between the investment
performance of the Class and the investment record of the Index is 0.50% or
greater during any Performance Period, the Base Fee will be subject to an upward
or downward performance adjustment of 1/12 of 0.01875% for every full 0.50%
increment by which the Class outperforms or underperforms the Index. The maximum
percentage used in calculating the Performance Adjustment (positive or negative)
in any month is 1/12 of 0.15%. The Performance Adjustment is applied against the
Fund's average daily net assets during the Performance Period.]
[For
For purposes of computing the Base Fee and the Performance Adjustment, net
assets are averaged over different periods (average daily net assets during the
relevant month for the Base Fee versus average daily net assets during the
Performance Period for the Performance Adjustment). The Base Fee is calculated
and accrued daily. The Performance Adjustment is calculated monthly in arrears
and is accrued daily and calculated
monthly.evenly each day throughout the month. The investment advisory fee
is paid monthly in arrears.]
[The
The average daily net asset value of the Fund, or any class thereof, shall
be determined in the manner set forth in the Trust's Amended and Restated Trust
Instrument, Bylaws and registration statement, each as may be amended from time
to time.]
[The
The investment performance of the Class will be the sum of:]
[(1)
(1) the change in the Class's net asset value ("NAV") per share during
the Performance Period; plus]
[(2)plus
(2) the value of the Class's cash distributions per share accumulated
to the end of the Performance Period; plus]
[(3)plus
B-7
(3) the value of capital gains taxes per share paid or payable on
undistributed realized long-term capital gains accumulated to the end of
the Performance Period;]
H-7
[expressed expressed as a percentage of the Class's NAV per
share at the beginning of the Performance Period. For this purpose, the
value of distributions per share of realized capital gains, of dividends
per share paid from investment income and of capital gains taxes per share
paid or payable on undistributed realized long-term capital gains shall be
treated as reinvested in shares of the Class at the NAV in effect at the
close of business on the record date for the payment of such distributions
and dividends and the date on which provision is made for such taxes, after
giving effect to such distributions, dividends and taxes.]
[The
The investment record of the Index will be the sum of:]
[(1)
(1) the change in the level of the Index during the Performance
Period; plus]
[(2)plus
(2) the value, computed consistently with the Index, of cash
distributions made by companies whose securities comprise the Index
accumulated to the end of the Performance Period; expressed as a percentage
of the Index level at the beginning of the Performance Period. For this
purpose, cash distributions on the securities which comprise the Index
shall be treated as reinvested in the indexIndex at least as frequently as the
end of each calendar quarter following the payment of the dividend.]
[The
The Trustees have initially designated the Class to be used for purposes of
determining the Performance Adjustment. From time to time, the Trustees may, by
vote of the Trustees of the Trust voting in person, including a majority of the
Trustees who are not parties to this Agreement or "interested persons" (as
defined in the 1940 Act) of any such parties, determine that a class of shares
of the Fund other than the Class is the most appropriate for use in calculating
the Performance Adjustment. If a different class of shares ("Successor Class")
is substituted in calculating the Performance Adjustment, the use of that
Successor Class of shares for purposes of calculating the Performance Adjustment
may apply to the entire Performance Period so long as such Successor Class was
outstanding at the beginning of such period. If the Successor Class of shares
was not outstanding for all or a portion of the Performance Period, it may only
be used in calculating that portion of the Performance Adjustment attributable
to the period during which such Successor Class was outstanding and any prior
portion of the Performance Period shall be calculated using the class of shares
previously designated.]
H-8
B-8
EXHIBIT I
PRINCIPAL EXECUTIVE OFFICERS OF JCM AND
THEIR PRINCIPAL OCCUPATIONS
POSITION(S) WITH JCM
NAME JCM/AFFILIATED ENTITY NAME OR AFFILIATED ENTITY
- ---- -------------------------- --------------------
Robin C. Beery........... Janus Capital Group Inc. Chief Marketing Officer
and Executive Vice
President
Janus Capital Management LLC Chief Marketing Officer
and Executive Vice
President
The Janus Foundation President and Director
Janus Services LLC President
Gary D. Black............ Janus Capital Group Inc. Chief Investment Officer,
President and Director
Janus Capital Management LLC Chief Investment Officer
and President
Janus Management Holdings Corp. Executive Vice President
Bay Isle Financial LLC President
Enhanced Investment Technologies, Working Director
LLC
John H. Bluher........... Janus Capital Group Inc. General Counsel, Chief
Public Affairs Officer
and Executive Vice
President
Janus Capital Management LLC Chief Public Affairs
Officer and Executive
Vice President
Janus Management Holdings Corp. General Counsel, Chief
Public Affairs Officer
and Executive Vice
President
Janus Services LLC Executive Vice President
Capital Group Partners, Inc. Director
Enhanced Investment Technologies, Vice President
LLC
Dominic Martellaro....... Janus Capital Group Inc. Executive Vice President
Janus Capital Management LLC Executive Vice President
Janus Capital Trust Manager Limited Director
Janus Services LLC Executive Vice President
Janus World Funds Plc Director
David R. Martin.......... Janus Capital Group Inc. Chief Financial Officer
and Executive Vice
President
Janus Capital Management LLC Chief Financial Officer
and Executive Vice
President
Janus International Limited Chief Financial Officer
and Executive Vice
President
Janus Management Holdings Corp. Chief Financial Officer
and Executive Vice
President
Janus Services LLC Chief Financial Officer
and Executive Vice
President
I-1
POSITION(S) WITH JCM
NAME JCM/AFFILIATED ENTITY NAME OR AFFILIATED ENTITY
- ---- -------------------------- --------------------
Girard C. Miller*........ Janus Capital Group Inc. Chief Operating Officer
and Executive Vice
President
Janus Capital Management LLC Chief Operating Officer
and Executive Vice
President
Janus Distributors LLC President
Janus Capital International LLC President
Janus Services LLC Executive Vice President
Janus Management Holdings Corp. President and Director
Capital Group Partners, Inc. Chief Operating Officer
and President
Steven L. Scheid......... Janus Capital Group Inc. Chief Executive Officer,
Director and Chairman of
the Board
Janus Capital Management LLC Chief Executive Officer
Enhanced Investment Technologies, Working Director
LLC
John Zimmerman........... Janus Capital Group Inc. Executive Vice President
Janus Capital Management LLC Executive Vice President
Enhanced Investment Technologies, Working Director
LLC
- ---------------
* Mr. Miller intends to resign his positions with Janus Capital Group Inc. and
its subsidiaries effective January 3, 2006. A successor to his positions with
the Trust will be appointed by the Trustees prior to this date.
I-2
EXHIBIT JC
OTHER FUNDS MANAGED BY JCMJANUS CAPITAL AND PWM WITH SIMILAR INVESTMENT OBJECTIVES
The following table provideslists certain information regarding other funds managed by
JCM havingwith similar
investment objectives as the Funds.for which Janus Capital and PWM provide investment
advisory or subadvisory services. The table shows such fund's asset size as of
June 30, 2005,March 31, 2008, the rate of compensation paid to JCM by that fund, and whether JCMJanus
Capital has contractually agreed to waive or reduce compensation it receivesreceived from
that fund.
ASSET SIZE ANNUAL RATE OF FEE WAIVERS OR
FUND OBJECTIVE (IN $ MILLIONS) COMPENSATION REDUCTIONS
- ---- --------- --------------- ------------------------ --------------
JANUS INVESTMENT FUND
Equity Funds
Janus Balanced Fund.. Seeks long-term 2,660.0 0.55% N/A
capital growth,
consistent with
preservation of
capital and
balanced by
current income.
Janus Contrarian
Fund............... Seeks long-term 2,653.7 0.64% N/A
growth of capital.
Janus Core Equity
Fund............... Seeks long-term 635.7 0.60% N/A
growth of capital.
Janus Enterprise
Fund............... Seeks long-term 1,687.7 0.64% N/A
growth of capital.
Janus Fund........... Seeks long-term 11,786.1 0.64% N/A
growth of capital
in a manner
consistent with
preservation of
capital.
Janus Global Life
Sciences Fund...... Seeks long-term 1,157.2 0.64% N/A
growth of capital.
Janus Global
Opportunities
Fund............... Seeks long-term 219.0 0.64% N/A
growth of capital.
Janus Global
Technology Fund.... Seeks long-term 1,027.1 0.64% N/A
growth of capital.
Janus Growth and
Income Fund........ Seeks long-term 5,379.8 0.62% N/A
capital growth and
current income.
Janus Mercury Fund... Seeks long-term 4,401.8 0.64% N/A
growth of capital.
Janus Mid Cap Value
Fund............... Seeks capital 4,653.8 0.64% 0.77%(1)
appreciation.
Janus Olympus Fund... Seeks long-term 2,211.3 0.64% N/A
growth of capital.
J-1
ASSET SIZE ANNUAL RATE OF FEE WAIVERS OR
FUND OBJECTIVE (IN $ MILLIONS) COMPENSATION REDUCTIONS
- ---- --------- --------------- ------------------------ --------------
Janus Orion Fund..... Seeks long-term 595.3 0.64% N/A
growth of capital.
Janus Overseas Fund.. Seeks long-term 2,181.7 0.64% N/A
growth of capital.
Janus Research Fund.. Seeks long-term 28.1 0.64% 1.25%(2)
growth of capital.
Janus Risk-Managed
Stock Fund......... Seeks long-term 350.3 0.50% N/A
growth of capital.
Janus Small Cap Value
Fund............... Seeks capital 2,666.4 0.72% 0.79%(2)
appreciation.
Janus Triton Fund.... Seeks long-term 23.9 0.64% 1.25%(2)
growth of capital.
Janus Twenty Fund.... Seeks long-term 9,399.8 0.64% N/A
growth of capital.
Janus Venture Fund... Seeks capital 1,366.0 0.64% N/A
appreciation.
Janus Worldwide
Fund............... Seeks long-term 5,454.1 0.60% N/A
growth of capital
in a manner
consistent with
the preservation
of capital.
Income Funds
Janus Federal Tax-
Exempt Fund........ Seeks as high a 118.3 First $300 Million 0.50% 0.55%(2)
level of current Over $300 Million 0.45%
income exempt from
federal income tax
as is consistent
with preservation
of capital.
Janus Flexible Bond
Fund............... Seeks to obtain 1,014.0 First $300 Million 0.58% 0.93%(2)
maximum total Over $300 Million 0.48%
return, consistent
with preservation
of capital.
Janus High-Yield
Fund............... Seeks to obtain 542.0 First $300 Million 0.65% 0.90%(2)
high current Over $300 Million 0.55%
income. Capital
appreciation is a
secondary
objective when
consistent with
its primary
objective.
Janus Short-Term Bond
Fund............... Seeks as high a 226.0 First $300 Million 0.64% 0.64%(2)
level of current Over $300 Million 0.54%
income as is
consistent with
preservation of
capital.
J-2
ASSET SIZE ANNUAL RATE OF FEE WAIVERS OR
FUND OBJECTIVE (IN $ MILLIONS) COMPENSATION REDUCTIONS
- ---- --------- --------------- ------------------------ --------------
Money Market Funds
Janus Government
Money Market
Fund............... Seeks maximum 831.9 0.20% (3)(4)
current income to
the extent
consistent with
stability of
capital.
Janus Institutional
Cash Reserves
Fund............... Seeks maximum 1,414.2 0.20% (3)(5)
current income to
the extent
consistent with
stability of
capital.
Janus Money Market
Fund............... Seeks maximum 4,988.6 0.20% (3)(6)
current income to
the extent
consistent with
stability of
capital.
Janus Tax-Exempt
Money Market
Fund............... Seeks maximum 124.5 0.20% (3)(6)
current income
that is exempt
from federal
income taxes to
the extent
consistent with
stability of
capital.
JANUS ADVISER
SERIES(7)
Equity Funds
Janus Adviser
Balanced Fund...... Seeks long-term 615.8 0.55% 0.57%
capital growth,
consistent with
preservation of
capital and
balanced by
current income.
Janus Adviser
Contrarian Fund.... Seeks long-term N/A 0.64% 1.25%
growth of capital.
Janus Adviser Core
Equity Fund........ Seeks long-term 43.4 0.60% 0.70%
growth of capital.
Janus Adviser Foreign
Stock Fund......... Seeks long-term 3.5 0.64% 1.24%
growth of capital.
Janus Adviser Forty
Fund............... Seeks long-term 1,123.2 0.64% 0.67%
growth of capital.
J-3
ASSET SIZE ANNUAL RATE OF FEE WAIVERS OR
FUND OBJECTIVE (IN $ MILLIONS) COMPENSATION REDUCTIONS
- ---- --------- --------------- ------------------------ --------------
Janus Adviser Growth
and Income Fund.... Seeks long-term 219.0 0.62% 0.99%
capital growth and
current income.
Janus Adviser
International
Growth Fund........ Seeks long-term 290.7 0.64% 0.73%
growth of capital.
Janus Adviser Large
Cap Growth Fund.... Seeks long-term 224.4 0.64% 0.66%
growth of capital
in a manner
consistent with
the preservation
of capital.
Janus Adviser Mid Cap
Growth Fund........ Seeks long-term 94.1 0.64% 0.65%
growth of capital.
Janus Adviser Mid Cap
Value Fund......... Seeks capital 67.3 0.64% 0.74%
appreciation.
Janus Adviser Orion
Fund............... Seeks long-term N/A 0.64% 1.25%
growth of capital.
Janus Adviser Risk-
Managed Core
Fund............... Seeks long-term 22.0 0.50% 0.60%
growth of capital.
Janus Adviser Risk-
Managed Growth
Fund............... Seeks long-term 89.8 0.50% 0.60%
growth of capital.
Janus Adviser Small
Company Value
Fund............... Seeks capital 20.1 0.74% 1.24%
appreciation.
Janus Adviser Small-
Mid Growth Fund.... Seeks long-term N/A 0.64% 1.25%
growth of capital.
Janus Adviser
Worldwide Fund..... Seeks long-term 483.6 0.60% 0.65%
growth of capital
in a manner
consistent with
the preservation
of capital.
Income Funds
Janus Adviser
Flexible Bond
Fund............... Seeks to obtain 59.8 First $300 Million 0.50% 0.55%
maximum total Over $300 Million 0.40%
return, consistent
with preservation
of capital.
J-4
ASSET SIZE ANNUAL RATE OF FEE WAIVERS OR
FUND OBJECTIVE (IN $ MILLIONS) COMPENSATION REDUCTIONS
- ---- --------- --------------- ------------------------ --------------
Janus Adviser High-
Yield Fund......... Seeks to obtain N/A3.5 First $300 Million 0.65% 1.00%0.90%(1)
high current Over $300 Million 0.55%
income. Capital
appreciation is a
secondary
investment
objective when
consistent with its
primary investment
objective.
Money Market Funds
Janus Adviser Money
Market Fund........Mid Cap
Value Fund(2)...... Seeks maximum 10.6 0.25% 0.36%(8)capital 841.5 0.64%(3) 0.74%(1)
appreciation.
Janus Adviser Small
Company Value
Fund............... Seeks capital 45.2 0.74% 1.00%(1)
appreciation.
Small Company Value
Portfolio.......... Seeks capital 17.8 0.74% 1.34%(4)
appreciation.
Janus High-Yield
Fund............... Seeks to obtain 503.5 First $300 Million 0.65% 0.90%(5)
high current income to
the extentOver $300 Million 0.55%
income. Capital
appreciation is a
secondary
investment
objective when
consistent with stability of
capital.
JANUS ASPEN SERIES(9)
Equity Funds
Balanced Portfolio...its
primary investment
objective.
Janus Mid Cap Value
Fund(2)............ Seeks long-term 2,248.2 0.55% N/A
capital growth,
consistent with
preservation of6,597.5 0.64%(6) (7)
appreciation.
Janus Small Cap Value
Fund(2)............ Seeks capital and
balanced by
current income.
Core Equity
Portfolio..........1,295.4 0.72% (7)
appreciation.
Janus Venture Fund... Seeks long-term 10.9 0.60% 1.20%
growth of capital.
Foreign Stock
Portfolio.......... Seeks long-term 16.7 0.64% 1.24%
growth of capital.
Forty Portfolio...... Seeks long-term 939.9capital 1,226.6 0.64% N/A
growth of capital.
Global Life Sciences
Portfolio.......... Seeks long-term 35.2 0.64% 1.24%
growth of capital.
Global Technology
Portfolio.......... Seeks long-term 153.8 0.64% 1.24%
growth of capital.
Growth and Income
Portfolio.......... Seeks long-term 135.4 0.62% N/A
capital growth and
current income.
International Growth
Portfolio.......... Seeks long-term 1,017.4 0.64% N/A
growth of capital.
Large Cap Growth
Portfolio.......... Seeks long-term 910.4 0.64% N/A
growth of capital
in a manner
consistent with
the preservation
of capital.
Mid Cap Growth
Portfolio.......... Seeks long-term 750.2 0.64% N/A
growth of capital.appreciation.
J-5C-1
ASSET SIZE ANNUAL RATE OF FEE WAIVERS OR
FUND OBJECTIVE (IN $ MILLIONS) COMPENSATION REDUCTIONS
- ---- --------- --------------- ------------------------ --------------
Mid Cap Value
Portfolio.......... Seeks capital 46.3 0.64% 1.24%
appreciation.
Risk-Managed Core
Portfolio.......... Seeks long-term 18.0 0.50% 1.10%
growth of capital.
Risk-Managed Growth
Portfolio.......... Seeks long-term 10.5 0.50% 1.10%
growth of capital.
Small Company Value
Portfolio.......... Seeks capital 3.1 0.74% 1.34%
appreciation.
Worldwide Growth
Portfolio.......... Seeks long-term 1,703.5 0.60% N/A
growth of capital
in a manner
consistent with
the preservation
of capital.
Income Funds
Flexible Bond
Portfolio.......... Seeks to obtain 329.9 First $300 Million 0.55% 0.90%
maximum total Over $300 Million 0.45%
return, consistent
with preservation
of capital.
Money Market Funds
Money Market
Portfolio.......... Seeks maximum 12.6 0.25% 0.50%
current income to
the extent
consistent with
stability of
capital.
SUBADVISED ACCOUNTS
Accessor Capital
Management......... Seeks long-term 130.6 0.45% N/A
growth of capital.
AEGON/Janus Growth
Portfolio.......... Seeks growth of 1,586.7 First $250 Million 0.40% N/A
capital. Next $500 Million 0.35%
Next $750 Million 0.30%
Next $1.5 Billion 0.25%
Over $3 Billion 0.225%
AXA Enterprise
Multimanager Core
Equity Fund........ Seeks long-term 3.9 First $100 Million 0.55% N/A
growth of capital. Next $400 Million 0.50%
Over $500 Million 0.45%
AXA Premier VIP Large
Cap Core Equity
Portfolio.......... Seeks long-term 60.0 First $100 Million 0.55% N/A
growth of capital. Next $400 Million 0.50%
Over $500 Million 0.45%
J-6
ASSET SIZE ANNUAL RATE OF FEE WAIVERS OR
FUND OBJECTIVE (IN $ MILLIONS) COMPENSATION REDUCTIONS
- ---- --------- --------------- ------------------------ --------------
EQ/Janus Large Cap
Growth Portfolio... Seeks long-term 325.2 First $100 Million 0.55% N/A
growth of capital. Next $400 Million 0.50%
Over $500 Million 0.45%
Hartford Small Cap
Value HLS Fund..... Seeks capital 110.7 First $50 Million 0.50% N/A
appreciation. Over $50 Million 0.45%
ING Janus Contrarian
Portfolio.......... Seeks capital 65.1822.9 First $500$100 Million 0.45% N/A
appreciation. Next $500 Million 0.425%
Over $1 Billion 0.40%
Laudus Balanced
MarketMasters
Fund............... Seeks capital 25.5 0.50% N/A
growth and income.
Lincoln National
Capital
Appreciation Fund.. Seeks long-term 579.0 First $250$100 Million 0.40%
N/A
growth of capitalNext $200 Million 0.35%
Next $500 Million 0.35%
in a manner Next $7500.325%
Over $900 Million 0.30%
consistent with Next $1.5 Billion 0.25%
the preservation
of capital.
Maxim Janus Large Cap
Growth Portfolio... Seeks long-term 327.0 First $250 Million 0.50% N/A
growth of capital. Next $500 Million 0.45%
Next $750 Million 0.40%
Over $1.5 Billion 0.35%
Mercer Advisory...... Seeks long-term 11.2 First $100 Million 0.40% N/A
growth of capital. Next $150 Million 0.325%
Next $250 Million 0.275%
Next $500 Million 0.25%
Over $1 Billion 0.20%
MetLife Janus
Aggressive Growth
Portfolio.......... Seeks long-term 661.6 First $25 Million 0.50% N/A
growth of capital. Next $225 Million 0.40%
Next $750 Million 0.35%
Over $1 Billion 0.30%
Northwestern Mutual
Janus Capital
Appreciation
Portfolio.......... Seeks long-term 88.7 First $100 Million 0.55% N/A
growth of capital. Next $400 Million 0.50%
Over $500 Million 0.45%
Ohio National Aggressive Growth
Portfolio.......... Seeks long-term 15.3 First $100 Million 0.55% N/A
growth of capital. Next $400 Million 0.50%
Over $500 Million 0.45%
J-7
ASSET SIZE ANNUAL RATE OF FEE WAIVERS OR
FUND OBJECTIVE (IN $ MILLIONS) COMPENSATION REDUCTIONS
- ---- --------- --------------- ------------------------ --------------
Pacific Select
Focused 30
Portfolio.......... Seeks long-term 102.8 First $25 Million 0.45% N/A
growth of capital. Next $125 Million 0.40%
Next $850 Million 0.35%
Next $1 Billion 0.30%
Over $2 Billion 0.25%
Pacific Select Growth
LT Portfolio....... Seeks long-term 1,473.9 First $25 Million 0.45% N/A
growth of capital Next $125 Million 0.40%
in a manner Next $850 Million 0.35%
consistent with Next $1 Billion 0.30%
the preservation Over $2 Billion 0.25%
of capital.
PF Janus Growth LT
Fund............... Seeks long-term 23.2 First $25 Million 0.45% N/A
growth of capital. Next $125 Million 0.40%
Next $850 Million 0.35%
Next $1 Billion 0.30%
Over $2 Billion 0.25%
Seasons Series Trust
Focus Growth
Portfolio.......... Seeks long-term 31.9 First $50 Million 0.55% N/A
growth of capital. Next $450 Million 0.50%
Over $500 Million 0.45%
Seasons Series Trust
LargeSmall
Cap Growth
Portfolio.......... Seeks long-term 46.420.4 First $200$50 Million 0.65% N/A
capital Next $100 Million 0.60%
N/A
growth of capital.appreciation. Over $200$150 Million 0.55%
Seasons Series Trust
Multi-Managed
Growth Portfolio... Seeks long-term 58.8 First $200 Million 0.60% N/A
growth of capital. Over $200 Million 0.55%
Seasons Series Trust
Multi-Managed
Income/ Equity
Portfolio.......... Seeks conservation 42.9 First $200 Million 0.60% N/A
of principal while Over $200 Million 0.55%
maintaining some
potential for
long-term growth
of capital.
Seasons Series Trust
Multi-Managed
Income Portfolio... Seeks capital 14.5 First $200 Million 0.60% N/A
preservation. Over $200 Million 0.55%
Seasons Series Trust
Multi-Managed
Moderate Growth
Portfolio.......... Seeks long-term 76.5 First $200 Million 0.60% N/A
growth of capital. Over $200 Million 0.55%
J-8
ASSET SIZE ANNUAL RATE OF FEE WAIVERS OR
FUND OBJECTIVE (IN $ MILLIONS) COMPENSATION REDUCTIONS
- ---- --------- --------------- ------------------------ --------------
SIIT Disciplined0.50%
SEI Small/Mid Cap
Equity Fund........ Seeks long-term 920.3 First $1 Billion 0.17% N/A
growth of capital. Over $1 Billion 0.13%
Style Focus Series:
Small Cap Growth
Portfolio.......... Seeks capital 1.9 First $50 Million 0.60% (10)
appreciation. Next $100 Million 0.55%
Next $500 Million 0.50%
Over $650 Million 0.45%
SunAmerica Focused
Multi-Cap Growth
Portfolio.......... Seeks long-term 170.2 First $50 Million 0.55% N/A
growth of capital. Next $450 Million 0.50%
Over $500 Million 0.45%
SunAmerica Focused
Small Cap Value
Portfolio.......... Seeks long-term 186.4 First $50 Million145.4 0.50% N/A
growth of capital. Over $50 Million 0.45%
SVS Janus Growth and
Income Portfolio...capital
appreciation.
SEI Small Cap Fund... Seeks long-term 204.6 First $25 Million 0.45% N/A
capital growth and Next $125 Million 0.40%
current income. Next $600 Million 0.375%
Over $750 Million 0.35%
SVS Janus Growth
Opportunities
Portfolio.......... Seeks long-term 147.1 First $25 Million 0.45% N/A
growth of capital Next $125 Million 0.40%
in a manner Next $600 Million 0.375%
consistent with Over $750 Million 0.35%
the preservation
of capital.
TA IDEX Janus Growth
Fund............... Seeks growth of 1,090.5 First $250 Million 0.40% (11)
capital. Next $500 Million 0.35%
Next $750 Million 0.30%
Next $1.5 Billion 0.25%
Over $3 Billion 0.225%
Travelers Series
Trust Capital
Appreciation Fund.. Seeks growth of 1,044.6 First $100 Million73.5 0.50% N/A
capital. Next $400 Million 0.45%
Next $1 Billion 0.40%
Over $1.5 Billion 0.35%
WM Trust IIappreciation.
SEI Small Cap Growth
Fund............... Seeks long-term 565.6 First $250 Million 0.40%67.6 0.50% N/A
capital
Next $500 Million 0.35%
appreciation. Over $750 Million 0.30%
Over $1.5 Billion 0.25%
WM Variable Trust
Growth Fund........ Seeks long-term 77.9 First $250 Million 0.40% N/A
capital Next $500 Million 0.35%
appreciation. Over $750 Million 0.30%
Over $1.5 Billion 0.25%
- ---------------
(1) Janus ServicesCapital has contractually agreed to waive the Fund's total operating
expenses (excluding the distribution and shareholder servicing fees
(applicable to Class A Shares, Class C Shares, Class R Shares, and Class S
Shares), administrative services fee (applicable to Class R Shares and Class
S Shares), brokerage commissions, interest, dividends, taxes, and
extraordinary expenses including, but not limited to, acquired fund fees and
expenses) to the limit shown until at least December 1, 2009. The expense
limit is described in the respective Statement of Additional Information.
(2) Subadvised by PWC.
(3) The Fund pays an investment advisory fee rate that adjusts up or down based
upon the Fund's performance relative to its benchmark index during a
measuring period. This fee rate, as of July 31, 2007, was 0.59%.
(4) Janus Capital has contractually agreed to waive the Portfolio's total
operating expenses (excluding the distribution and shareholder servicing fee
(applicable to Service Shares), administrative services fee (applicable to
Service Shares), brokerage commissions, interest, dividends, taxes, and
extraordinary expenses including, but not limited to, acquired fund fees and
expenses) to the limit shown until at least May 1, 2009. The expense limit
is described in the respective Statement of Additional Information.
(5) Janus Capital has contractually agreed to waive the Fund's total operating
expenses (excluding brokerage commissions, interest, dividends, taxes, and
extraordinary expenses including, but not limited to, acquired fund fees and
expenses) to the limit shown until at least March 1, 2009. The expense
waiver is described in the respective Statement of Additional Information.
(6) The Fund pays an investment advisory fee rate that adjusts up or down based
upon the Fund's performance relative to its benchmark index during a
measuring period. This fee rate, as of October 31, 2007, was 0.58%.
(7) Janus Services LLC has contractually agreed to waive the transfer agency
fees payable by the Institutional Shares of Janus Mid Cap Value Fund and
Janus Small Cap Value Fund so that the
J-9
total expenses of the Institutional Shares do not exceed an annual rate of
0.77% and 0.79%, respectively, of average daily net assets (excluding any
items not normally considered operating expenses).
(2) Until at least March 1, 2007, JCM has agreed to reduce certain expenses
that exceed the percent shown in the table of the Fund's average daily net
assets.
(3) Advisory fee has been reduced from 0.20% to 0.10% until at least March 1,
2006.
(4) Administrative services fee has been reduced to 0.05% and 0.30% for the
Institutional Class and Service Class, respectively, until at least March
1, 2006.
(5) Administrative services fee has been reduced from 0.15% to 0.08% until at
least March 1, 2006.
(6) Administrative services fee has been reduced to 0.08% and 0.33% for the
Institutional Class and Service Class, respectively, until at least March
1, 2006.
(7) Until at least December 1, 2006, JCM has agreed to reduce certain expenses
that exceed the percent shown in the table, if any, under "Fee Waivers or
Reductions," of the Fund's average daily net assets.
(8) 12b-1 fee has been reduced from 1.00% to 0.25% until at least December 1,
2006.
(9) Until at least May 1, 2007, JCM has agreed to reduce certain expenses that
exceed the percent shown in the table, if any, under "Fee Waivers or
Reductions," of the Fund's average daily net assets.
(10) Fee schedule reflects a 5 basis point temporary waiver.
(11) Less 50% of any amount reimbursed pursuant to the fund's expense
limitation.
J-10
EXHIBIT K
FORM OF PROPOSED AMENDED SUB-ADVISORY AGREEMENT
FOR RISK-MANAGED CORE PORTFOLIO
(A SERIES OF JANUS ASPEN SERIES)
This SUB-ADVISORY AGREEMENT (the "Agreement") is entered into effective as
of the 1st day of July 2004, [[amended this 1st day of January 2006],] by and
between JANUS CAPITAL MANAGEMENT LLC, a Delaware limited liability company
("Janus") and ENHANCED INVESTMENT TECHNOLOGIES, LLC, a Delaware limited
liability company ("INTECH").
WHEREAS, Janus has entered into an Investment Advisory Agreement (the
"Advisory Agreement") with Janus Aspen Series, a Delaware statutory trust (the
"Trust") and an open-end, management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), with respect to
Risk-Managed Core Portfolio, a series of the Trust (the "Fund") pursuant to
which Janus has agreed to provide investment advisory services with respect to
the Fund; and
WHEREAS, INTECH is engaged in the business of rendering investment advisory
services and is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, Janus desires to retain INTECH to furnish investment advisory
services with respect to the Fund, and INTECH is willing to furnish such
services;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Duties of INTECH. Janus hereby engages the services of INTECH as
subadviser in furtherance of the Advisory Agreement. INTECH agrees to perform
the following duties, subject to the oversight of Janus and to the overall
control of the officers and the Board of Trustees (the "Trustees") of the Trust:
(a) INTECH shall manage the investment operations of the Fund and the
composition of its investment portfolio, shall determine without prior
consultation with the Trust or Janus, what securities and other assets of
the Fund will be acquired, held, disposed of or loaned, and place orders
for the purchase or sale of such securities or other assets with brokers,
dealers or others, all in conformity with the investment objectives,
policies and restrictions and the other statements concerning the Fund in
the Trust's trust instrument, as amended from time to time (the "Trust
Instrument"), bylaws and registration statements under the 1940 Act and the
Securities Act of 1933, as amended (the "1933 Act"), the Advisers Act, the
rules thereunder and all other applicable federal and state laws and
regulations, and the provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), applicable to the Trust, on behalf of the Fund, as a
regulated investment company;
(b) INTECH shall cause its officers to attend meetings and furnish
oral or written reports, as the Trust or Janus may reasonably require, in
order to keep Janus, the Trustees and appropriate officers of the Trust
fully informed as
K-1
to the condition of the investment portfolio of the Fund, the investment
decisions of INTECH, and the investment considerations which have given
rise to those decisions;
(c) INTECH shall maintain all books and records required to be
maintained by INTECH pursuant to the 1940 Act, the Advisers Act, and the
rules and regulations promulgated thereunder, as the same may be amended
from time to time, with respect to transactions on behalf of the Fund, and
shall furnish the Trustees and Janus with such periodic and special reports
as the Trustees or Janus reasonably may request. INTECH hereby agrees that
all records which it maintains for the Fund or the Trust are the property
of the Trust, agrees to permit the reasonable inspection thereof by the
Trust or its designees and agrees to preserve for the periods prescribed
under the 1940 Act and the Advisers Act any records which it maintains for
the Trust and which are required to be maintained under the 1940 Act and
the Advisers Act, and further agrees to surrender promptly to the Trust or
its designees any records which it maintains for the Trust upon request by
the Trust;
(d) INTECH shall submit such reports relating to the valuation of the
Fund's assets and to otherwise assist in the calculation of the net asset
value of shares of the Fund as may reasonably be requested;
(e) INTECH shall, on behalf of the Fund, exercise such voting rights,
subscription rights, rights to consent to corporate action and any other
rights pertaining to the Fund's assets that may be exercised, in accordance
with any policy pertaining to the same that may be adopted or agreed to by
the Trustees of the Trust, or, in the event that the Trust retains the
right to exercise such voting and other rights, to furnish the Trust with
advice as may reasonably be requested as to the manner in which such rights
should be exercised;
(f) At such times as shall be reasonably requested by the Trustees or
Janus, INTECH shall provide the Trustees and Janus with economic,
operational and investment data and reports, including without limitation
all information and materials reasonably requested by or requested to be
delivered to the Trustees of the Trust pursuant to Section 15(c) of the
1940 Act, and shall make available to the Trustees and Janus any economic,
statistical and investment services normally available to similar
investment company clients of INTECH; and
(g) INTECH will provide to Janus for regulatory filings and other
appropriate uses materially accurate and complete information relating to
INTECH as may be reasonably requested by Janus from time to time and,
notwithstanding anything herein to the contrary, INTECH shall be liable to
Janus for all damages, costs and expenses, including without limitation
reasonable attorney's fees (hereinafter referred to collectively as
"Damages"), incurred by Janus as a result of any material inaccuracies or
omissions in such information provided by INTECH to Janus, provided,
however, that INTECH shall not be liable to the extent that any Damages are
based upon inaccuracies
K-2
or omissions made in reliance upon information furnished to INTECH by
Janus.
2. Further Obligations. In all matters relating to the performance of this
Agreement, INTECH shall act in conformity with the Trust's Trust Instrument,
bylaws and currently effective registration statements under the 1940 Act and
the 1933 Act and any amendments or supplements thereto (the "Registration
Statements") and with the written policies, procedures and guidelines of the
Fund, and written instructions and directions of the Trustees and Janus and
shall comply with the requirements of the 1940 Act, the Advisers Act, the rules
thereunder, and all other applicable federal and state laws and regulations.
Janus agrees to provide to INTECH copies of the Trust's Trust Instrument,
bylaws, Registration Statement, written policies, procedures and guidelines and
written instructions and directions of the Trustees and Janus, and any
amendments or supplements to any of them at, or, if practicable, before the time
such materials become effective.
3. Obligations of Janus. Janus shall have the following obligations under
this Agreement:
(a) To keep INTECH continuously and fully informed (or cause the
custodian of the Fund's assets to keep INTECH so informed) as to the
composition of the investment portfolio of the Fund and the nature of all
of the Fund's assets and liabilities from time to time;
(b) To furnish INTECH with a certified copy of any financial statement
or report prepared for the Fund by certified or independent public
accountants and with copies of any financial statements or reports made to
the Fund's shareholders or to any governmental body or securities exchange;
(c) To furnish INTECH with any further materials or information which
INTECH may reasonably request to enable it to perform its function under
this Agreement; and
(d) To compensate INTECH for its services in accordance with the
provisions of Section 4 hereof.
4. Compensation. Janus shall pay to INTECH for its services under this
Agreement a fee, payable in United States dollars, at an annual rate of 0.26% of
the average daily net assets of the Fund. [This fee][, plus or minus one-half of
any performance adjustment paid to or incurred by Janus pursuant to the Advisory
Agreement between the Trust, on behalf of the Fund, and Janus. Fees paid to
INTECH] shall be computed and accrued daily and payable monthly as of the last
day of each month during which or part of which this Agreement is in effect. For
the month during which this Agreement becomes effective and the month during
which it terminates, however, there shall be an appropriate proration of the fee
payable for such month based on the number of calendar days of such month during
which this Agreement is effective.
5. Expenses. INTECH shall pay all its own costs and expenses incurred in
rendering its service under this Agreement.
K-3
6. Representations of INTECH. INTECH hereby represents, warrants and
covenants to Janus as follows:
(a) INTECH: (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Agreement;
(iii) has met, and will continue to meet for so long as this Agreement
remains in effect, any other applicable federal or state requirements, or
the applicable requirements of any regulatory or industry self-regulatory
organization necessary to be met in order to perform the services
contemplated by this Agreement; (iv) has the legal and corporate authority
to enter into and perform the services contemplated by this Agreement; and
(v) will immediately notify Janus of the occurrence of any event that would
disqualify INTECH from serving as an investment adviser of an investment
company pursuant to Section 9(a) of the 1940 Act or otherwise, and of the
institution of any administrative, regulatory or judicial proceeding
against INTECH that could have a material adverse effect upon INTECH's
ability to fulfill its obligations under this Agreement.
(b) INTECH has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and will provide Janus with a
copy of such code of ethics, together with evidence of its adoption. Within
45 days after the end of the last calendar quarter of each year that this
Agreement is in effect, the president or a vice president of INTECH shall
certify to Janus that INTECH has complied with the requirements of Rule
17j-1 during the previous year and that there has been no violation of
INTECH's code of ethics or, if such a violation has occurred, that
appropriate action was taken in response to such violation. Upon the
written request of Janus, INTECH shall permit Janus, its employees or its
agents to examine the reports required to be made to INTECH by Rule
17j-1(c)(1) and all other records relevant to INTECH's code of ethics.
(c) INTECH has provided Janus with a copy of its Form ADV as most
recently filed with the U.S. Securities and Exchange Commission ("SEC") and
will, promptly after filing any amendment to its Form ADV with the SEC,
furnish a copy of such amendment to Janus.
7. Representations of Janus. Janus hereby represents, warrants and
covenants to INTECH as follows:
(a) Janus (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the 1940 Act or the
Advisers Act from fulfilling its obligations under this Agreement; (iii)
has met, and will continue to meet for so long as this Agreement remains in
effect, any other applicable federal or state requirements, or the
applicable requirements of any regulatory or industry self-regulatory
organization necessary to be met in order to fulfill its obligations under
this Agreement; (iv) has the legal and corporate authority to enter into
and perform this Agreement; and (v) will immediately notify
K-4
INTECH of the occurrence of any event that would disqualify Janus from
serving as an investment adviser of an investment company pursuant to
Section 9(a) of the 1940 Act or otherwise, and of the institution of any
administrative, regulatory or judicial proceeding against Janus that could
have a material adverse effect upon Janus' ability to fulfill its
obligations under this Agreement.
(b) Janus has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and will provide INTECH with
a copy of such code of ethics, together with evidence of its adoption.
(c) Janus has provided INTECH with a copy of its Form ADV as most
recently filed with the U.S. Securities and Exchange Commission ("SEC") and
will, promptly after filing any amendment to its Form ADV with the SEC,
furnish a copy of such amendment to INTECH.
8. Term. This Agreement shall become effective as of the date first set
forth above and shall continue in effectInstitutional Shares until [JulyMarch 1, [][January 1],
[2005][2007]] unless sooner terminated in accordance with its terms, and shall
continue in effect from year to year thereafter only so long as such continuance
is specifically approved at least annually by (a) the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of the
Trust, Janus or INTECH, cast in person at a meeting called for the purpose of
voting on the approval of the terms of such renewal, and (b) either the Trustees
of the Trust or the affirmative vote of a majority of the outstanding voting
securities of the Fund. The annual approvals provided for herein shall be
effective to continue this Agreement from year to year if given within a period
beginning not more than ninety (90) days prior to [July 1 [][January 1]] of each
applicable year, notwithstanding the fact that more than three hundred
sixty-five (365) days may have elapsed since the date on which such approval was
last given.
9. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees or by the shareholders of the Fund acting by vote of at
least a majority of its outstanding voting securities, provided in any such case
that 60 days' advance written notice of termination be given to INTECH at its
principal place of business. This Agreement may be terminated (i) by Janus or by
INTECH at any time, without penalty by giving 60 days' advance written notice of
termination to the other party, or (ii) by Janus or the Trust without advance
notice if INTECH becomes unable to discharge its duties and obligations under
this Agreement. In addition, this Agreement shall terminate, without penalty,
upon termination of the Advisory Agreement.
10. Assignment. This Agreement shall automatically terminate in the event
of its assignment.
11. Amendments. This Agreement may be amended by the parties only in a
written instrument signed by the parties to this Agreement and only if such
amendment is specifically approved (i) by a majority of the Trustees, including
a majority of the Trustees who are not interested persons (as that phrase is
defined in Section 2(a)(19) of the 1940 Act) of the Trust or Janus, INTECH or
their
K-5
affiliates, and (ii) if required by applicable law, by the affirmative vote of a
majority of the outstanding voting securities of the Fund (as that phrase is
defined in Section 2(a)(42) of the 1940 Act).
12. Limitation on Personal Liability. All parties to this Agreement
acknowledge and agree that the Trust is a series trust and all debts,
liabilities, obligations and expenses incurred, contracted for or otherwise
existing with respect to a particular series shall be enforceable against the
assets held with respect to such series only, and not against the assets of the
Trust generally or against the assets held with respect to any other series and
further that no Trustee, officer or holder of shares of beneficial interest of
the Trust shall be personally liable for any of the foregoing.
13. Limitation of Liability of INTECH. Janus will not seek to hold INTECH,
and INTECH shall not be, liable for any error of judgment or mistake of law or
for any loss arising out of any investment or for any act or omission taken with
respect to the Fund, except for willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its obligations and duties hereunder and except to the extent otherwise
provided by law. As used in this section, "INTECH" shall include any affiliate
of INTECH performing services for the Fund contemplated hereunder and directors,
officers and employees of INTECH and such affiliates.
14. Activities of INTECH. The services of INTECH hereunder are not to be
deemed to be exclusive, and INTECH is free to render services to other parties,
so long as its services under this Agreement are not materially adversely
affected or otherwise impaired thereby. Nothing in this Agreement shall limit or
restrict the right of any director, officer or employee of INTECH to engage in
any other business or to devote his or her time and attention in part to the
management or other aspects of any other business, whether of a similar or a
dissimilar nature. It is understood that Trustees, officers and shareholders of
the Trust are or may become interested in INTECH as directors, officers and
shareholders of INTECH, that directors, officers, employees and shareholders of
INTECH are or may become similarly interested in the Trust, and that INTECH may
become interested in the Trust as a shareholder or otherwise.
15. Third Party Beneficiary. The parties expressly acknowledge and agree
that the Trust is a third party beneficiary of this Agreement and that the Trust
shall have the full right to sue upon and enforce this Agreement in accordance
with its terms as if it were a signatory hereto. Any oversight, monitoring or
evaluation of the activities of INTECH by Janus, the Trust or the Fund shall not
diminish or relieve in any way the liability of INTECH for any of its duties and
responsibilities under this Agreement.
16. Notices. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered personally or
by overnight delivery service or mailed by certified or registered mail, return
receipt requested and postage prepaid, or sent by facsimile addressed to the
parties at their respective addresses set forth below, or at such other address
as shall be designated by any party in a written notice to the other party.
K-6
(a) To Janus at:
Janus Capital Management LLC
151 Detroit Street
Denver, Colorado 80206
Attention: General Counsel
Phone: (303) 333-3863
Fax: (303) 316-5728
(b) To INTECH at:
Enhanced Investment Technologies, LLC
2401 PGA Boulevard, Suite 100
Palm Beach Gardens, Florida 33410
Attention: President
Phone: (561) 775-1100
Fax: (561) 775-1150
(c) To the Trust at:
Janus Aspen Series
151 Detroit Street
Denver, Colorado 80206
Attention: General Counsel
Phone: (303) 333-3863
Fax: (303) 316-5728
17. Certain Definitions. The terms "vote of a majority of the outstanding
voting securities," "assignment," "approved at least annually," and "interested
persons" shall have the respective meanings specified in the 1940 Act, as now in
effect or hereafter amended, and the rules and regulations thereunder, subject
to such orders, exemptions and interpretations as may be issued by the SEC under
the 1940 Act and as may be then in effect.
18. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of Colorado (without giving effect to the conflicts of laws
principles thereof) and the 1940 Act. To the extent that the applicable laws of
the State of Colorado conflict with the applicable provisions of the 1940 Act,
the latter shall control.
K-7
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers designated below as of the day and year first
above written.
JANUS CAPITAL MANAGEMENT LLC
By:
--------------------------------------
ENHANCED INVESTMENT
TECHNOLOGIES, LLC
By:
--------------------------------------
K-82009.
C-2
EXHIBIT LD
PRINCIPAL EXECUTIVE OFFICERS AND DIRECTORS OF
INTECHJANUS CAPITAL AND THEIR PRINCIPAL OCCUPATIONS
SUBADVISER/ JANUS CAPITAL/AFFILIATED POSITION(S)POSITIONS(S) WITH SUBADVISER ORJANUS CAPITAL
NAME ENTITY NAME OR AFFILIATED ENTITY
- ---- ---------------------- ------------------------------------------------------ -------------------------------
E. Robert Fernholz.......... Enhanced InvestmentRobin C. Beery........... Janus Capital Group Inc. Chief InvestmentMarketing Officer Technologies,and
Executive Vice President
Janus Capital Management LLC Chief Marketing Officer and
Executive Vice President
Janus Distributors LLC Executive Vice President
and
Working Director
Robert A. Garvy............. Enhanced Investment Chief Executive Officer,
Technologies, LLC President and Working Director
David E. Hurley............. Enhanced Investment Chief Operating Officer and
Technologies,Janus Services LLC Executive Vice President
Gary D. Black...............
Enhanced Investment Working Director
Technologies, LLC
John H. Bluher.............. Enhanced InvestmentGary D. Black............ Janus Capital Group Inc. Chief Executive Officer and
Director
Janus Capital Management LLC Chief Executive Officer
Janus Management Holdings Corp. President and Director
Janus Distributors LLC Executive Vice President
Technologies,Janus Services LLC Steven L. Scheid............Executive Vice President
Bay Isle Financial LLC President
Enhanced Investment Working Director
Technologies, LLC
Daniel P. Charles........ Janus Capital Management LLC Senior Vice President and
Managing Director of
JanusIntech Institutional Asset
Management
Janus Distributors LLC Senior Vice President and
Managing Director of
JanusIntech Institutional Asset
Management
Janus Services LLC Senior Vice President and
Managing Director of
JanusIntech Institutional Asset
Management
Enhanced Investment Working Director
Technologies, LLC
Jonathan D. Coleman...... Janus Capital Management LLC Co-Chief Investment Officer and
Executive Vice President
D-1
JANUS CAPITAL/AFFILIATED POSITIONS(S) WITH JANUS CAPITAL
NAME ENTITY NAME OR AFFILIATED ENTITY
- ---- ------------------------ -------------------------------
Gregory A. Frost......... Janus Capital Group Inc. Chief Financial Officer and
Executive Vice President
Janus Capital Management LLC Chief Financial Officer and
Executive Vice President
Janus Capital Asia Limited Director and Assistant
Treasurer
Janus Capital International Director and Assistant
Limited Treasurer
Janus Capital Singapore Pte. Director
Limited
Janus Distributors LLC Chief Financial Officer and
Executive Vice President
Janus Holdings Corporation Senior Vice President,
Controller, and Director
Janus International Holding LLC Executive Vice President,
Controller, and Director
Janus Management Holdings Corp. Chief Financial Officer,
Executive Vice President, and
Director
Janus Services LLC Chief Financial Officer and
Executive Vice President
Bay Isle Financial LLC Chief Financial Officer and
Senior Vice President
Berger Financial Group LLC Vice President
Capital Group Partners, Inc. Executive Vice President, Chief
Financial Officer, and Director
Enhanced Investment Vice President and Working
Technologies, LLC Director
Heidi W. Hardin.......... Janus Capital Management LLC General Counsel, Senior Vice
President, and Secretary
Janus Distributors LLC General Counsel, Senior Vice
President, and Secretary
Janus Services LLC General Counsel, Senior Vice
President, and Secretary
Kelley Abbott Howes...... Janus Capital Group Inc. Chief Administrative Officer,
General Counsel, Executive Vice
President, and Secretary
Janus Capital Management LLC Chief Administrative Officer
and Executive Vice President
Janus Distributors LLC Chief Administrative Officer
and Executive Vice President
Janus Management Holdings Corp. Chief Administrative Officer,
General Counsel, Executive Vice
President, Director, and
Secretary
Capital Group Partners, Inc. Director
Enhanced Investment Vice President
Technologies, LLC
D-2
JANUS CAPITAL/AFFILIATED POSITIONS(S) WITH JANUS CAPITAL
NAME ENTITY NAME OR AFFILIATED ENTITY
- ---- ------------------------ -------------------------------
Dominic C. Martellaro.... Janus Capital Group Inc. Executive Vice President
Janus Capital Management LLC Executive Vice President
Janus Capital Funds Plc Director
Janus Capital Trust Manager Director
Limited
Janus Distributors LLC President
Janus Services LLC Executive Vice President
Gibson Smith............. Janus Capital Management LLC Co-Chief Investment Officer and
Executive Vice President
Janus Distributors LLC Executive Vice President
Janus Services LLC Executive Vice President
John Zimmerman..............Zimmerman(1)........ Janus Capital Group Inc. Executive Vice President
Janus Capital Management LLC Executive Vice President
Janus Distributors LLC Executive Vice President
Janus Services LLC Executive Vice President
Enhanced Investment Working Director
Technologies, LLC
L-1- ---------------
(1) Mr. Zimmerman resigned his positions with Janus Capital Group Inc. and its
subsidiaries effective August 2007.
D-3
EXHIBIT M
5% BENEFICIAL OWNERSE
TRUSTEES AND PRINCIPAL EXECUTIVE OFFICERS OF SHARES
As of the Record Date, the following table lists those shareholders known
to own beneficially 5% or more of the outstanding shares of any class of shares
of any Fund.THE
PORTFOLIO AND THEIR PRINCIPAL OCCUPATIONS
TRUSTEES
PRINCIPAL
POSITION(S) OCCUPATIONS
NAME, ADDRESS, HELD WITH LENGTH OF DURING THE PAST OTHER DIRECTORSHIPS
AND ADDRESS OF NUMBER OF PERCENTAGE
NAME OF FUND AND CLASS BENEFICIAL OWNER SHARES OF CLASSAGE THE PORTFOLIO(*) TIME SERVED FIVE YEARS HELD BY TRUSTEE
- ------------------------ ---------------- ------------ ---------------------- ------------------- ---------- --------------------------------
Balanced Portfolio --
Institutional Shares......... NY Life Distributors 31,070,915 45.76%
169 Lackawanna Ave.
Parsippany, NJ 07054-1007
GE Life & Annuity Company 12,135,568 17.87%
6610
William F. McCalpin..... Chairman 1/08-Present Private Investor. Chairman of the Board
151 Detroit Street Formerly, Vice and Director of The
Denver, CO 80206 Trustee 6/02-Present President of Asian Investment Fund for
DOB: 1957 Cultural Council and Foundations Investment
Executive Vice Program (TIP)
President and Chief (consisting of 4
Operating Officer of funds) and the F.B.
The Rockefeller Heron Foundation (a
Brothers Fund (a private grantmaking
private family foundation).
foundation)
(1998-2006).
Jerome S. Contro........ Trustee 11/05-Present General partner of Chairman of the Board
151 Detroit Street Crosslink Capital, a and Trustee of RS
Denver, CO 80206 private investment Investment Trust
DOB: 1956 firm (since 2008). (consisting of 40
Formerly, partner of funds) (since 2001),
Tango Group, a private and Director of
investment firm Envysion, Inc.
(1999-2008). (internet technology),
Lijit Networks Inc.
(internet technology),
and LogRhythm Inc.
(software solutions).
John W. BroadMcCarter, Jr.... Trustee 6/02-Present President and Chief Chairman of the Board
151 Detroit Street Richmond, VA 23230-1702
Kemper Investors Life Insurance 4,505,007 6.64%
Co.
3003 77th Avenue SE
Mercer Island, WA 98040-2837
Annuity Investors Life 3,522,799 5.19%
Insurance Co.
PO Box 5423
Cincinnati, OH 45201-5423
Balanced Portfolio --
Service Shares............... GE Life & Annuity Company 5,011,855 24.18%
6610 W. BroadExecutive Officer of and Director of
Denver, CO 80206 The Field Museum of Divergence Inc.
DOB: 1938 Natural History (biotechnology firm);
(Chicago, IL) (since Director of W.W.
1997). Grainger, Inc.
(industrial
distributor); and
Trustee of WTTW
(Chicago public
television station)
and the University of
Chicago.
Dennis B. Mullen........ Trustee 9/93-Present Chief Executive Chairman of the Board
151 Detroit Street Richmond, VA 23230-1702
NY Life Distributors 3,438,953 16.59%
169 Lackawanna Ave.
Parsippany, NJ 07054-1007
Ohio National Life Insurance 2,470,101 11.92%
Co.
PO Box 237
Cincinnati, OH 45201-0237
Lincoln Life 2,060,077 9.94%
1300 S. Clinton Street
Fort Wayne, IN 46802-3518
Travelers Insurance Co. 1,545,892 7.46%
1 Tower Square #6MS
Hartford, CT 06183-0001
Travelers Life & Annuity 1,132,721 5.46%
1 Tower Square #6MS
Hartford, CT 06183-0001
Core Equity Portfolio --
Institutional Shares......... Western Reserve Life 522,930 90.42%
PO Box 5068
Clearwater, FL 33758-5068
Great West Life & Annuity 54,996 9.51%
8515 E. Orchard Road
Englewood,Officer of Red Robin (since 2005) and
Denver, CO 80111-5002
Core Equity Portfolio --
Service Shares............... Principal Life Insurance 37,825 83.65%
Company
711 High Street
Des Moines, IA 50392-0001
Principal Life Insurance 7,392 16.35%
Company
711 High Street
Des Moines, IA 50392-000180206 Gourmet Burgers, Inc. Director of Red Robin
DOB: 1943 (since 2005). Gourmet Burgers, Inc.;
Formerly, private and Director of Janus
investor. Capital Funds Plc
(Dublin-based,
non-U.S. funds).
M-1E-1
PRINCIPAL
POSITION(S) OCCUPATIONS
NAME, ADDRESS, HELD WITH LENGTH OF DURING THE PAST OTHER DIRECTORSHIPS
AND ADDRESS OF NUMBER OF PERCENTAGE
NAME OF FUND AND CLASS BENEFICIAL OWNER SHARES OF CLASSAGE THE PORTFOLIO(*) TIME SERVED FIVE YEARS HELD BY TRUSTEE
- ------------------------ ---------------- ------------ ---------------------- ------------------- ---------- --------------------------------
Flexible Bond Portfolio
James T. Rothe.......... Trustee 1/97-Present Co-founder and Director of Red Robin
151 Detroit Street Managing Director of Gourmet Burgers, Inc.
Denver, CO 80206 Roaring Fork Capital
DOB: 1943 Management, LLC
(private investment in
public equity firm),
and Professor Emeritus
of Business of the
University of
Colorado, Colorado
Springs, CO (since
2004). Formerly,
Professor of Business
of the University of
Colorado (2002-2004);
and Distinguished
Visiting Professor of
Business (2001-2002)
of Thunderbird
(American Graduate
School of
International
Management), Glendale,
AZ.
William D. Stewart...... Trustee 9/93-Present Corporate Vice N/A
151 Detroit Street President and General
Denver, CO 80206 Manager of MKS
DOB: 1944 Instruments -- Institutional Shares......... AUL Group 7,206,126 28.65%
PO Box 1995
Indianapolis, IN 46206-9102
GE Life & Annuity Company 3,915,619 15.57%
6610 W. BroadHPS
Products, Boulder, CO
(a manufacturer of
vacuum fittings and
valves).
Martin H. Waldinger..... Trustee 9/93-Present Private Investor and N/A
151 Detroit Street Richmond, VA 23230-1702
Great West Life & Annuity 2,217,097 8.81%
8515 E. Orchard Road
Englewood,Consultant to
Denver, CO 80111-5002
Lincoln Benefit Life 2,135,670 8.49%
294080206 California Planned
DOB: 1938 Unit Developments
(since 1994).
Formerly, CEO and
President of Marwal,
Inc. (homeowner
association management
company).
Linda S. 84thWolf........... Trustee 12/05-Present Retired. Formerly, Director of Wal-Mart,
151 Detroit Street Lincoln, NE 68506
Great West Life & Annuity 1,588,548 6.32%
8515 E. Orchard Road
Englewood,Chairman and Chief The Field Museum of
Denver, CO 80111-5002
AUL American Investment Trust 1,470,320 5.85%
PO Box 1995
Indianapolis, IN 46206-9102
AUL Individual Variable Annuity 1,438,441 5.72%
One American Square, Box 1995
Indianapolis, IN 46282-0020
Flexible Bond Portfolio --
Service Shares............... Mony Life Insurance Company 1,277,084 47.48%
1740 Broadway #MD6-36
New York, NY 10019-4315
Lincoln Life 489,037 18.18%
1300 S. Clinton Street
Fort Wayne, IN 46802-3518
Guardian Insurance & Annuity 309,561 11.51%
Co. Inc.
3900 Burgess Place
Bethlehem, PA 18017-9097
Principal Life Insurance 209,654 7.79%
Company
711 High Street
Des Moines, IA 50392-0001
Mony Life Insurance Company 170,069 6.32%
1740 Broadway #MD6-26
New York, NY 10019-4315
Foreign Stock Portfolio --
Service Shares............... Lincoln Benefit Life 787,792 70.31%
2940 S. 84th Street
Lincoln, NE 68506-4142
Lincoln Benefit Life 329,633 29.42%
2940 S. 84th Street
Lincoln, NE 68506-4142
Forty Portfolio --
Institutional Shares......... Life80206 Executive Officer of Virginia 5,283,371 25.62%
6610 W. Broad Street
Richmond, VA 23230-1702
Connecticut Mutual Life 2,749,558 13.33%
Insurance Co.
1295 State Street
Springfield, MA 01111-0001Natural History
DOB: 1947 Leo Burnett (Chicago, IL),
(Worldwide) Children's Memorial
(advertising agency) Hospital (Chicago,
(2001-2005). IL), Chicago Council
on Global Affairs, and
InnerWorkings (U.S.
provider of print
procurement
solutions).
M-2- ---------------
* Each Trustee is currently a Trustee of three registered investment companies
advised by Janus Capital: Janus Investment Fund, Janus Adviser Series, and
Janus Aspen Series. Additionally, Mr. Mullen also serves as director of Janus
Capital Funds Plc.
E-2
OFFICERS
TERM OF
OFFICE* AND
LENGTH OF
NAME, ADDRESS, AND ADDRESS OF NUMBER OF PERCENTAGE
NAME OF FUND AND CLASS BENEFICIAL OWNER SHARES OF CLASSPOSITION(S) HELD TIME PRINCIPAL OCCUPATIONS DURING THE
AGE WITH THE PORTFOLIO SERVED PAST FIVE YEARS
- ---------------------- ------------------- ---------- ---------------------------- ------------------------ ------------- -----------------------------------
Charles Schwab & Co.Robin C. Beery........ President and Chief 4/08-Present Executive Vice President and Chief
151 Detroit Street Executive Officer Marketing Officer of Janus Capital
Denver, CO 80206 Group Inc. 1,754,923 8.51%
101 Montgomeryand Janus Capital;
DOB: 1967 Executive Vice President of Janus
Distributors LLC and Janus Services
LLC; and Working Director of
Enhanced Investment Technologies,
LLC. Formerly, President
(2002-2007) and Director
(2000-2007) of The Janus
Foundation; President (2004-2006)
and Vice President and Chief
Marketing Officer (2003-2004) of
Janus Services LLC; and Senior Vice
President (2003-2005) and Vice
President (1999-2003) of Janus
Capital Group Inc. and Janus
Capital.
Stephanie Grauerholz-
Lofton................ Chief Legal Counsel and 1/06-Present Vice President and Assistant
151 Detroit Street San Francisco, CA 94104-4122
Delaware Charter Guarantee 1,684,822 8.17%
Trust
711 HighSecretary General Counsel of Janus Capital,
Denver, CO 80206 and Vice President and Assistant
DOB: 1970 Vice President 3/06-Present Secretary of Janus Distributors
LLC. Formerly, Assistant Vice
President of Janus Capital and
Janus Distributors LLC (2006).
Andrew J. Iseman**.... President and Chief 3/07-4/08 Executive Vice President and Chief
151 Detroit Street Des Moines, IA 50392-0001
Mony America 1,276,098 6.19%
1740 Broadway, Suite 635
New York, NY 10019-4315
Forty Portfolio -- Service
Shares....................... Nationwide Insurance Co. 9,013,995 52.61%
PO Box 182029
Columbus, OH 43218-2029
Minnesota Life 2,031,604 11.86%
400 N. RobertExecutive Officer Operating Officer of Janus Capital
Denver, CO 80206 Group, Inc. and Janus Capital;
DOB: 1964 President of Janus Services LLC;
and Director of Capital Group
Partners, Inc. Formerly, Senior
Vice President of Enhanced
Investment Technologies, LLC
(2005-2007); Senior Vice President
of Janus Capital Group, Inc. (2007)
and Janus Capital (2007); and Vice
President of Janus Capital (2003-
2005) and Janus Services LLC (2003-
2004).
David R. Kowalski..... Vice President, Chief 6/02-Present Senior Vice President and Chief
151 Detroit Street St. Paul, MN 55101
Nationwide Insurance Co. 1,536,609 8.97%
PO Box 182029
Columbus, OH 43218-2029
Nationwide Insurance Co. 1,502,110 8.77%
PO Box 182029
Columbus, OH 43218-2029
GE Life & Annuity Company 981,776 5.73%
6610 W. Broad Street
Richmond, VA 23230-1702
Global Life Sciences
Portfolio -- Institutional
Shares....................... Western Reserve Life 424,967 100.00%
PO Box 5068
Clearwater, FL 33758-5068
Global Life Sciences
Portfolio -- Service
Shares....................... GE Life & Annuity Company 2,097,728 56.42%
6610 W. Broad Street
Richmond, VA 23230-1702
Travelers Insurance Co. 1,076,740 28.96%
1 Tower Square #6MS
Hartford, CT 06183-0001
Travelers Life & Annuity 524,603 14.11%
1 Tower Square #6MS
Hartford, CT 06183-0001
Global Technology Portfolio --
Institutional Shares......... Western Reserve Life 785,088 93.17%
PO Box 5068
Clearwater, FL 33758-5068
Global Technology Portfolio --
Service II Shares............ Nationwide Insurance Co. 5,077,927 78.43%
PO Box 182029
Columbus, OH 43218-2029
Nationwide Insurance Co. 1,330,752 20.55%
PO Box 182029
Columbus, OH 43218-2029
Global Technology Portfolio --
Service Shares............... Nationwide Insurance Co. 12,116,431 33.54%
PO Box 182029
Columbus, OH 43218-2029Compliance Officer, and Compliance Officer of Janus
Denver, CO 80206 Anti-Money Laundering Capital, Janus Distributors LLC,
DOB: 1957 Officer and Janus Services LLC; Chief
Compliance Officer of Bay Isle
Financial LLC; and Vice President
of Enhanced Investment
Technologies, LLC. Formerly, Chief
Compliance Officer of Enhanced
Investment Technologies, LLC (2003-
2005); Vice President of Janus
Capital (2000-2005), and Janus
Services LLC (2004-2005); and
Assistant Vice President of Janus
Services LLC (2000-2004).
M-3E-3
TERM OF
OFFICE* AND
LENGTH OF
NAME, ADDRESS, AND ADDRESS OF NUMBER OF PERCENTAGE
NAME OF FUND AND CLASS BENEFICIAL OWNER SHARES OF CLASSPOSITION(S) HELD TIME PRINCIPAL OCCUPATIONS DURING THE
AGE WITH THE PORTFOLIO SERVED PAST FIVE YEARS
- ---------------------- ------------------- ---------- ---------------------------- ------------------------ ------------- -----------------------------------
IDS Life Insurance Corp. 8,181,722 22.65%
125 AXPJesper Nergaard....... Chief Financial Center
Minneapolis, MN 55474-0001
Nationwide Insurance Co. 3,555,305 9.84%
PO Box 182029
Columbus, OH 43218-2029
GE Life & Annuity Company 3,467,673 9.60%
6610 W. BroadOfficer 3/05-Present Vice President of Janus Capital.
151 Detroit Street Richmond, VA 23230-1702
Travelers Insurance Co. 2,929,762 8.11%
1 Tower Square #6MS
Hartford, CT 06183-0001
GrowthFormerly, Director of Financial
Denver, CO 80206 Vice President, 2/05-Present Reporting for OppenheimerFunds,
DOB: 1962 Treasurer, and Income Portfolio --
Institutional Shares......... Jefferson National Life 648,231 33.59%
Insurance
9920 Corporate Campus Dr.,
Suite 1000
Louisville, KY 40223-4051
Western Reserve Life 612,112 31.72%
PO Box 5068
Clearwater, FL 33758-5068
Great West Life & Annuity 369,285 19.13%
8515 E. Orchard Road
Englewood, CO 80111-5002
Great West Life & Annuity 138,422 7.17%
8515 E. Orchard Road
Englewood, CO 80111-5002
GrowthPrincipal Inc. (2004-2005); Site Manager and
Income Portfolio --
Service Shares............... Allmerica Financial Life 2,139,043 65.98%
Insurance & Annuity Co.
440 Lincoln Street
Worcester, MA 01653-0002
Travelers Insurance Co. 490,148 15.12%
1 Tower Square #6MS
Hartford, CT 06183-0001
Travelers Life & Annuity 338,184 10.43%
1 Tower Square #6MS
Hartford, CT 06183-0001Accounting Officer First Allmerica Financial Life 168,572 5.20%
Insurance
440 Lincoln Street
Worcester, MA 01653-0002
International Growth
Portfolio -- Institutional
Shares....................... Pruco Life Insurance Co.Vice President of 5,659,675 34.99%
Arizona
100 Mulberry Street
Newark, NJ 07102-4056
GE Life & Annuity Company 3,497,107 21.62%
6610 W. Broad Street
Richmond, VA 23230-1702
Realistar Life Insurance Co. 1,911,889 11.82%
PO Box 20, Rte. 3806
Minneapolis, MN 55440-0020Mellon
Global Securities Services (2003);
and Director of Fund Accounting,
Project Development, and Training
of INVESCO Funds Group (1994-2003).
M-4
NAME AND ADDRESS OF NUMBER OF PERCENTAGE
NAME OF FUND AND CLASS BENEFICIAL OWNER SHARES OF CLASS
- ---------------------- ------------------- ---------- ----------
International Growth
Portfolio -- Service II
Shares....................... Nationwide Insurance Co. 2,133,571 78.46%
PO Box 182029
Columbus, OH 43218-2029
Nationwide Insurance Co. 553,059 20.34%
PO Box 182029
Columbus, OH 43218-2029
International Growth
Portfolio -- Service
Shares....................... IDS Life Insurance Corp. 4,754,081 26.13%
125 AXP Financial Center
Minneapolis, MN 55474-0001
Nationwide Insurance Co. 3,961,052 21.77%
PO Box 182029
Columbus, OH 43218-2029
Minnesota Life 1,831,244 10.06%
400 N. Robert Street
St. Paul, MN 55101
Nationwide Insurance Co. 1,340,042 7.36%
PO Box 182029
Columbus, OH 43218-2029
Large Cap Growth Portfolio --
Institutional Shares......... Pruco Life Insurance Co. of 9,205,165 24.94%
Arizona
100 Mulberry Street
Newark, NJ 07102-4056
GE Life & Annuity Company 8,545,812 23.15%
6610 W. Broad Street
Richmond, VA 23230-1702
Kemper Investors Life Insurance 2,559,097 6.93%
Co.
3003 77th Avenue SE
Mercer Island, WA 98040-2837
Jefferson National Life 1,976,340 5.35%
Insurance
9920 Corporate Campus Dr.,
Suite 1000
Louisville, KY 40223-4051
Large Cap Growth Portfolio --
Service Shares............... Allmerica Financial Life 2,227,990 27.91%
Insurance & Annuity Co.
440 Lincoln Street
Worcester, MA 01653-0002
Lincoln Life 2,163,948 27.11%
1300 S. Clinton Street
Fort Wayne, IN 46802-3518
Pruco Life Insurance Co. of 1,165,594 14.60%
Arizona
100 Mulberry Street
Newark, NJ 07102-4056
Ohio National Life Insurance 1,051,737 13.18%
Co.
PO Box 237
Cincinnati, OH 45201-0237
GE Life & Annuity Company 726,332 9.10%
6610 W. Broad Street
Richmond, VA 23230-1702
M-5
NAME AND ADDRESS OF NUMBER OF PERCENTAGE
NAME OF FUND AND CLASS BENEFICIAL OWNER SHARES OF CLASS
- ---------------------- ------------------- ---------- ----------
Mid Cap Growth Portfolio --
Institutional Shares......... GE Life & Annuity Company 4,823,184 25.39%
6610 W. Broad Street
Richmond, VA 23230-1702
Kemper Investors Life Insurance 2,157,983 11.36%
Co.
3003 77th Avenue SE
Mercer Island, WA 98040-2837
Lincoln Benefit Life 1,239,576 6.52%
2940 S. 84th Street
Lincoln, NE 68506-4142
Jefferson National Life 1,224,088 6.44%
Insurance
9920 Corporate Campus Dr.,
Suite 1000
Louisville, KY 40223-4051
Lincoln Benefit Life 1,190,261 6.26%
2940 S. 84th Street
Lincoln, NE 68506-4142
Western Reserve Life 1,182,117 6.22%
PO Box 5068
Clearwater, FL 33758-5068
Mony America 1,042,287 5.49%
1740 Broadway, Suite 635
New York, NY 10019-4315
Annuity Investors Life 1,017,528 5.36%
Insurance Co.
PO Box 5423
Cincinnati, OH 45201-5423
Delaware Charter Guarantee 980,696 5.16%
Trust
711 High Street
Des Moines, IA 50392-0001
Mid Cap Growth Portfolio --
Service Shares............... Lincoln Life 1,774,793 18.97%
1300 S. Clinton Street
Fort Wayne, IN 46802-3518
IDS Life Insurance Corp. 1,607,213 17.18%
125 AXP Financial Center
Minneapolis, MN 55474-0001
Travelers Insurance Co. 1,356,898 14.50%
1 Tower Square #6MS
Hartford, CT 06183-0001
Travelers Life & Annuity 1,032,840 11.04%
1 Tower Square #6MS
Hartford, CT 06183-0001
PFL Life Insurance Company 674,647 7.21%
4333 Edgewood Road NE
Cedar Rapids, IA 52499-0001
Principal Financial Group 650,110 6.95%
711 High Street
Des Moines, IA 50392-0001
GE Life & Annuity Company 559,382 5.98%
6610 W. Broad Street
Richmond, VA 23230-1702
M-6
NAME AND ADDRESS OF NUMBER OF PERCENTAGE
NAME OF FUND AND CLASS BENEFICIAL OWNER SHARES OF CLASS
- ---------------------- ------------------- ---------- ----------
Mid Cap Value Portfolio --
Institutional Shares......... Western Reserve Life 696,420 100.00%
PO Box 5068
Clearwater, FL 33758-5068
Mid Cap Value Portfolio --
Service Shares............... Nationwide Insurance Co. 699,242 26.45%
PO Box 182029
Columbus, OH 43218-2029
Lincoln Benefit Life 695,078 26.29%
2940 S. 84th Street
Lincoln, NE 68506-4142
PFL Life Insurance Company 247,093 9.35%
4333 Edgewood Road NE
Cedar Rapids, IA 52499-0001
Kemper Investors Life Insurance 227,138 8.59%
Co.
3003 77th Avenue SE
Mercer Island, WA 98040-2837
PFL Life Insurance Company 191,823 7.26%
4333 Edgewood Road NE
Cedar Rapids, IA 52499-0001
Travelers Life & Annuity 182,659 6.91%
1 Tower Square #6MS
Hartford, CT 06183-0001
Mony Life Insurance Co. of 140,154 5.30%
America
1740 Broadway, Suite 635
New York, NY 10019-4315
Money Market Portfolio --
Institutional Shares......... Western Reserve Life 12,534,132 100.00%
PO Box 5068
Clearwater, FL 33758-5068
Risk-Managed Core Portfolio --
Service Shares............... Nationwide Insurance Co. 292,408 23.91%
PO Box 182029
Columbus, OH 43218-2029
Lincoln Benefit Life 286,013 23.38%
2940 S. 84th Street
Lincoln, NE 68506-4142
Nationwide Insurance Co. 178,063 14.56%
PO Box 182029
Columbus, OH 43218-2029
Nationwide Insurance Co. 76,808 6.28%
PO Box 182029
Columbus, OH 43218-2029
Small Company Value
Portfolio -- Service
Shares....................... Kemper Investors Life Insurance 321,013 72.53%
Co.
3003 77th Avenue SE
Mercer Island, WA 98040-2837
Lincoln Benefit Life 44,164 9.98%
2940 S. 84th Street
Lincoln, NE 68506-4142
M-7
NAME AND ADDRESS OF NUMBER OF PERCENTAGE
NAME OF FUND AND CLASS BENEFICIAL OWNER SHARES OF CLASS
- ---------------------- ------------------- ---------- ----------
Federal Kemper Life Assurance 23,168 5.23%
2500 Westfield Drive
Elgin, IL 60123-7836
Worldwide Growth Portfolio --
Institutional Shares......... NY Life Distributors 14,744,955 26.49%
169 Lackawanna Avenue
Parsippany, NJ 07054-1007
Life of Virginia 7,293,313 13.10%
6610 W. Broad Street
Richmond, VA 23230-1702
Lincoln Life 6,116,912 10.99%
1300 S. Clinton Street
Fort Wayne, IN 46802-3518
AUL Group 3,737,369 6.71%
PO Box 1995
Indianapolis, IN 46206-9102
Kemper Investors Life Insurance 3,388,653 6.09%
Co.
3003 77th Avenue SE
Mercer Island, WA 98040-2837
Worldwide Growth Portfolio --
Service Shares............... PFL Life Insurance Company 1,138,921 15.48%
4333 Edgewood Road NE
Cedar Rapids, IA 52499-0001
NY Life Distributors 1,009,452 13.72%
169 Lackawanna Avenue
Parsippany, NJ 07054-1007
Travelers Life & Annuity 947,511 12.88%
1 Tower Square #6MS
Hartford, CT 06183-0001
GE Life & Annuity Company 709,684 9.65%
6610 W. Broad Street
Richmond, VA 23230-1702
Ohio National Life Insurance 676,029 9.19%
Co.
PO Box 237
Cincinnati, OH 45201-0237
PFL Life Insurance Company 467,697 6.36%
4333 Edgewood Road NE
Cedar Rapids, IA 52499-0001
Travelers Insurance Co. 459,050 6.24%
1 Tower Square #6MS
Hartford, CT 06183-0001
Lincoln Life 388,349 5.28%
1300 S. Clinton Street
Fort Wayne, IN 46802-3518
M-8- ---------------
* Officers are elected at least annually by the Trustees for a one-year term
and may also be elected from time to time by the Trustees for an interim
period.
** Mr. Iseman resigned his positions with Janus Capital Group Inc. and its
subsidiaries effective April 2008.
E-4
EXHIBIT NF
LEGAL MATTERS
In the fall of 2003, the Securities and Exchange Commission ("SEC"), the
Office of the New York State Attorney General ("NYAG"), the Colorado Attorney
General ("COAG"), and the Colorado Division of Securities ("CDS") announced that
they were investigating alleged frequent trading practices in the mutual fund
industry. On August 18, 2004, Janus Capital announced that it had reached final
settlements with the SEC, the NYAG, the COAG, and the CDS related to such
regulators' investigations into Janus Capital's frequent trading arrangements.
A number of civil lawsuits were brought against Janus Capital and certain
of its affiliates, the Janus funds, and related entities and individuals based
on allegations similar to those announced by the above regulators and were filed
in several state and federal jurisdictions. Such lawsuits alleged a variety of
theories for recovery including, but not limited to, the federal securities
laws, other federal statutes (including ERISA), and various common law
doctrines. The Judicial Panel on Multidistrict Litigation transferred these
actions to the United StatesU.S. District Court for the District of Maryland (the "Court")
for coordinated proceedings. On September 29, 2004, five consolidated amended
complaints were filed in thatwith the Court that generally include: (i) claims by a
putative class of investors in thecertain Janus funds asserting claims on behalf of
the investor class;class (Marini, et al. v. Janus Investment Fund, et al., U.S.
District Court, District of Maryland, Case No. 04-CV-00497); (ii) derivative
claims by investors in thecertain Janus funds ostensibly on behalf of thesuch funds
(Steinberg et al. v. Janus funds;Capital Management, LLC et al., U.S. District Court,
District of Maryland, Case No. 04-CV-00518); (iii) claims on behalf of
participants in the Janus 401(k) plan;plan (Wangberger v. Janus Capital Group Inc.,
401(k) Advisory Committee, et al., U.S. District Court, District of Maryland,
Case No. JFM-05-2711); (iv) claims brought on behalf of shareholders of Janus
Capital Group Inc. ("JCGI") on a derivative basis against the Board of Directors
of JCGI;JCGI (Chasen v. Whiston, et al., U.S. District Court, District of Maryland,
Case No. 04-MD-00855); and (v) claims by a putative class of shareholders of
JCGI asserting claims on behalf of the shareholders.shareholders (Wiggins, et al. v. Janus
Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No.
04-CV-00818). Each of the five complaints initially named JCGI and/or Janus
Capital as a defendant. In addition, the following were also named as defendants
in one or more of the actions: Janus Investment Fund ("JIF"), Janus Aspen Series
("JAS"), Janus Adviser Series ("JAD"), Janus Distributors LLC, Enhanced
Investment Technologies, LLC ("INTECH"), Bay Isle Financial LLC ("Bay Isle"),
Perkins, Wolf, McDonnell and Company, LLC ("Perkins"), the Advisory Committee of
the Janus 401(k) plan, and the current or former directors of JCGI.
On August 25, 2005, the Court entered orders dismissing most of the claims
asserted against Janus Capital and its affiliates by fund investors in the
Marini and Steinberg cases (actions (i) and (ii) described above), except certain claims
under Section 10(b)
F-1
of the Securities Exchange Act of 1934 and under Section 36(b) of the Investment
Company Act of 1940. As a result, JCGI, Janus Capital, the Advisory Committee1940, as amended (the "1940 Act"). A currently pending Motion for
Summary Judgment is seeking dismissal of the Janus 401(k) plan, andremaining claims. On August 15,
2006, the current or former directors of JCGI are the
remaining defendants in one or more of the actions. TheWangberger complaint in the 401(k) plan class action (action (iii)
described above) was voluntarily dismissed but
was recently refiled using a new namedby the Court with prejudice. The plaintiff and asserting claims similarappealed that
dismissal decision to the initial complaint.
N-1
The Attorney General's OfficeUnited States Court of Appeals for the State of West Virginia filed a
separate market timing related civil action against Janus Capital and several
other non-affiliated mutual fund companies, claiming violations underFourth Circuit,
which recently remanded the West
Virginia Consumer Credit and Protection Act. The civil action requests certain
monetary penalties, among other relief. A request to transfer this actioncase back to the MDL caseCourt for further proceedings. The
Court also dismissed the Chasen lawsuit (action (iv) above) against JCGI's Board
of Directors without leave to amend. Finally, a Motion to Dismiss the Wiggins
suit (action (v) above) was granted and the matter was dismissed in May 2007.
However, in June 2007, Plaintiffs appealed that dismissal to the U.S. DistrictUnited States
Court of Baltimore, Maryland, described aboveAppeals for the Fourth Circuit. That appeal is currently pending.
In addition to the lawsuits described above, the Auditor of the State of
West Virginia ("Auditor"), in his capacity as securities commissioner, has
issued an order indicating an intent to initiateinitiated administrative proceedings against mostmany of the defendants in the
market timing cases (including JCGI and Janus Capital) and, as a part of its
relief, is seeking disgorgement and other monetary relief based on similar
market timing allegations.allegations (In the Matter of Janus Capital Group Inc. et al.,
Before the Securities Commissioner, State of West Virginia, Summary Order No.
05-1320). The respondents in these proceedings collectively sought a Writ of
Prohibition in state court, which was denied. Their subsequent Petition for
Appeal was also denied. Consequently, in September 2006, JCGI and Janus Capital
filed their answer to the Auditor's summary order instituting proceedings and
requested a hearing. A status conference was held on June 28, 2007, during which
the parties were ordered to submit their proposed scheduling order. To date, no
scheduling order has been entered in the case. In addition to the "market timing" actions described above,pending Motion
to Discharge Order to Show Cause, JCGI and Janus Capital, is a defendant in a consolidated lawsuit inas well as other
similarly situated defendants, continue to challenge the U.S. District Court for the
District of Colorado challenging the investment advisory fees charged by Janus
Capital to certain Janus funds. The action was filed by fund investors asserting
breach of fiduciary duty under Section 36(b)statutory authority of
the Investment Company Act of
1940.
A lawsuit was alsoAuditor to bring such an action.
During 2007, two lawsuits were filed against Janus Capital and certain affiliates in
the U.S. District Court for the DistrictManagement Holdings
Corporation ("Janus Holdings"), an affiliate of ColoradoJCGI, by former Janus portfolio
managers, alleging that Janus Capital
failedHoldings unilaterally implemented certain changes
to ensure that certaincompensation in violation of prior agreements (Edward Keely v. Janus
funds participated in securities class
action settlements for which the funds were eligible. The complaint asserts
claims under Sections 36(a), 36(b), and 47(b)Holdings, Denver District Court, Case No. 2007CV7366; Tom Malley v. Janus
Holdings, Denver District Court, Case No. 2007CV10719). These complaints allege
some or all of the Investment Company Act,following claims: (1) breach of fiduciary dutycontract; (2) willful and
negligence.
In 2001,wanton breach of contract; (3) breach of good faith and fair dealing; and (4)
estoppel. Janus Capital's predecessor was also named as a defendant in a
class action suit inHoldings filed Answers to these complaints denying any liability
for these claims and intends to vigorously defend against the U.S. District Court for the Southern District of New
York, alleging that certain underwriting firms and institutional investors
violated antitrust laws in connection with initial public offerings. The U.S.
District Court dismissed the plaintiff's antitrust claims in November, 2003,
however the U.S. Court of Appeals recently vacated that decision and remanded it
for further proceedings.allegations.
Additional lawsuits may be filed against certain of the Janus funds, Janus
Capital, and related parties in the future. Janus Capital does not currently
believe that these pending actions will materially affect its ability to
continue providing services it has agreed to provide to the Janus funds.
N-2F-2
FORM OF PROXY JANUS ASPEN SERIESCARD
PROXY SPECIAL MEETING OF SHAREHOLDERSTABULATOR
P.O. BOX 859232 EVERY SHAREHOLDER'S VOTE IS IMPORTANT
BRAINTREE, MA 02185-9232 *** 3 EASY WAYS TO BE HELD NOVEMBER 22, 2005
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF JANUS ASPEN SERIES
("TRUST"). The undersigned, revoking previous proxies, hereby appoints Kelley A.
Howes, Girard C. Miller, and Jesper Nergaard, or any of them, as attorneys and
proxies, with full power of substitution to each, to vote the shares which the
undersigned is entitled to vote at the Special Meeting of Shareholders
("Meeting") of the Portfolios listed below to be held at the JW Marriott Hotel,
150 Clayton Lane, Denver, CO on November 22, 2005 at 10:00 a.m. Mountain Time
and at any adjournment(s) or postponement(s) of such Meeting. As to any other
matter that properly comes before the Meeting or any adjournment(s) or
postponement(s) thereof, the persons appointed above may vote in accordance with
their best judgment. The undersigned hereby acknowledges receipt of the
accompanying Proxy Statement and Notice of Special Meeting.
VOTE VIA THE INTERNET: HTTPS://VOTE.PROXY-DIRECT.COM
VOTE VIA THE TELEPHONE: 1-866-241-6192
-----------------------------------------------------
NOTE: Please sign exactly as your name(s) appears on
the Proxy. If you are signing this Proxy for a
corporation, estate, trust or other fiduciary
capacity, for example, as a trustee, please state
that capacity or title along with your signature.
-----------------------------------------------------
Signature
-----------------------------------------------------
Signature (Joint Owners)
-----------------------------------------------------
Date JAS_15730
PORTFOLIOS PORTFOLIOS PORTFOLIOS
- ---------- ---------- ----------
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VOTING OPTIONS
READ YOUR PROXY STATEMENT AND HAVE IT AT HAND WHEN VOTING.
(PC ICON) (TELEPHONE ICON) (LETTER ICON) (HUMAN ICON)
LOG ON TO: CALL 1-866-241-6192 VOTE, SIGN AND DATE THIS PROXY ATTEND SHAREHOLDER MEETING
HTTPS://VOTE.PROXY-DIRECT.COM FOLLOW THE RECORDED CARD AND RETURN IN THE JW MARRIOTT HOTEL
FOLLOW THE ON-SCREEN INSTRUCTIONS INSTRUCTIONS POSTAGE-PAID ENVELOPE 150 CLAYTON LANE
AVAILABLE 24 HOURS AVAILABLE 24 HOURS DENVER, CO
ON NOVEMBER 22, 2005
IF YOU VOTE ON THE INTERNET OR BY TELEPHONE, YOU NEED NOT RETURN THIS
PROXY CARD.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED, OR, IF YOU RETURN THIS
PROXY BUT DO NOT FILL IN A BOX BELOW, WE WILL VOTE YOUR SHARES "FOR" THAT
PROPOSAL.
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. EXAMPLE: [X]
[ ] To vote FOR ALL Portfolios on ALL Proposals mark this box. No other vote is
necessary.
1. ELECTION OF TRUSTEES:
01. Jerome S. Contro 02. William F. McCalpin 03. John W. McCarter, Jr.
04. Dennis B. Mullen 05. James T. Rothe 06. William D. Stewart
07. Martin H. Waldinger 08. Linda S. Wolf 09. Thomas H. Bailey
FOR ALL WITHHOLD FOR ALL
AUTHORITY EXCEPT
FOR ALL
[ ] [ ] [ ]
To withhold authority to vote for one or more (but not all) nominees, mark
"FOR ALL EXCEPT" and write the corresponding number(s) of the nominee(s) on
the line below.
----------------------------------------------------------------------------
2. APPROVAL OF AMENDMENTS TO THE TRUST'S AMENDED AND RESTATED TRUST
INSTRUMENT.
2.a. PROVIDES FOR SHAREHOLDER VOTES TO BE COUNTED BASED ON EACH DOLLAR OF NET
ASSET VALUE RATHER THAN ONE VOTE FOR EACH SHARE.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2.b. PERMITS THE TRUSTEES, SUBJECT TO APPLICABLE FEDERAL AND STATE LAW, TO
REORGANIZE ALL OR A PORTION OF THE TRUST OR ANY PORTFOLIO OR CLASS THEREOF.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2.c. PERMITS THE TRUSTEES, SUBJECT TO APPLICABLE FEDERAL AND STATE LAW, TO
LIQUIDATE THE TRUST OR ANY PORTFOLIO OR CLASS THEREOF.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. APPROVE ELIMINATION OF JANUS ASPEN FLEXIBLE BOND PORTFOLIO'S FUNDAMENTAL
POLICY REGARDING INVESTMENTS IN INCOME-PRODUCING SECURITIES.
FOR AGAINST ABSTAIN
Fundname Drop In 1 [ ] [ ] [ ]
4. INVESTMENT ADVISORY AGREEMENT
4.a. APPROVE CONFORMING AMENDMENTS TO THE INVESTMENT ADVISORY AGREEMENT BETWEEN
JANUS CAPITAL MANAGEMENT LLC AND YOUR PORTFOLIO.PROXIES ***
VOTE VIA THE TELEPHONE VOTE VIA THE INTERNET VOTE BY MAIL
1) Read the Proxy Statement and 1) Read the Proxy Statement and 1) Read the Proxy Statement
have this card at hand have this card at hand
2) Mark the appropriate boxes
2) Call toll-free at 2) Log on to www.2votefundproxy.com on this proxy card
1-800-966-8932 and follow and follow the on-screen
the recorded instructions instructions 3) Sign and date this proxy
card
3) If you vote via the 3) If you vote via the
telephone, you do not need Internet, you do not need to 4) Mail your completed proxy
to mail this proxy card mail this proxy card card in the enclosed
envelope
PROXY MID CAP VALUE PORTFOLIO PROXY
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 30, 2008
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF JANUS ASPEN SERIES. The undersigned, revoking any previous proxies, hereby
appoints Robin C. Beery, Jesper Nergaard, and Stephanie Grauerholz-Lofton or any of them, as attorneys and proxies, with full power
of substitution to each, to vote the shares which the undersigned is entitled to vote at the Special Meeting of Shareholders
("Meeting") of Mid Cap Value Portfolio to be held at the JW Marriott Hotel, 150 Clayton Lane, Denver, CO on October 30, 2008 at
10:00 a.m. Mountain Time and at any adjournment(s) or postponement(s) of such Meeting. As to any other matter that properly comes
before the Meeting or any adjournment(s) or postponement(s) thereof, the persons appointed above may vote in accordance with their
best judgment. The undersigned hereby acknowledges receipt of the accompanying Proxy Statement and Notice of Special Meeting.
NOTE: Please sign exactly as your name(s) appears on
the Proxy. If you are signing this Proxy for a
corporation, estate, trust or in other fiduciary
capacity, for example, as a trustee, please state
that capacity or title along with your signature.
-------------------------- --------------------
Signature Date
-------------------------- --------------------
Signature (Joint Owners) Date
WHEN THIS PROXY IS PROPERLY EXECUTED, THE SHARES REPRESENTED HEREBY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED FOR THE PROPOSALS SET FORTH BELOW.
PLEASE MARK A BOX BELOW IN BLUE OR BLACK INK AS FOLLOWS. EXAMPLE: [X]
FOR AGAINST ABSTAIN
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Fundname Drop In 11. Approve a new subadvisory agreement between Janus Capital Management LLC and Perkins,
Wolf, McDonnell and Company, LLC, with respect to Mid Cap Value Portfolio, so that
Perkins, Wolf, McDonnell and Company, LLC can continue to serve as Mid Cap Value
Portfolio's subadviser. [ ] [ ] [ ]
Fundname Drop In 22. Approve an amended and restated investment advisory agreement between Janus Capital
Management LLC and Janus Aspen Series, on behalf of Mid Cap Value Portfolio, to
reallocate the obligation to compensate any subadviser engaged by Janus Capital. [ ] [ ] [ ]
Fundname Drop In 3 [ ] [ ] [ ]
Fundname Drop In 4 [ ] [ ] [ ] Fundname Drop In 5 [ ] [ ] [ ] Fundname Drop In 6 [ ] [ ] [ ]
Fundname Drop In 7 [ ] [ ] [ ] Fundname Drop In 8 [ ] [ ] [ ] Fundname Drop In 9 [ ] [ ] [ ]
Fundname Drop In 10 [ ] [ ] [ ] Fundname Drop In 11 [ ] [ ] [ ] Fundname Drop In 12 [ ] [ ] [ ]YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. IF YOU ARE NOT VOTING BY TELEPHONE OR INTERNET, PLEASE
SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE SIGN ON THE REVERSE SIDE OF THIS CARD
JAS-MCV-PXC
4.b. APPROVE A PROPOSED AMENDMENT TO THE INVESTMENT ADVISORY AGREEMENT BETWEEN
JANUS CAPITAL MANAGEMENT LLC AND YOUR PORTFOLIO THAT WOULD INTRODUCE A
PERFORMANCE INCENTIVE INVESTMENT ADVISORY FEE STRUCTURE.
4.b.i.
FOR AGAINST ABSTAIN
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4.b.ii.
FOR AGAINST ABSTAIN
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4.b.iii.
FOR AGAINST ABSTAIN
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5. APPROVE AN AMENDED SUB-ADVISORY AGREEMENT BETWEEN JANUS CAPITAL MANAGEMENT
LLC, ON BEHALF OF RISK-MANAGED CORE PORTFOLIO, AND INTECH THAT WOULD
INTRODUCE A PERFORMANCE INCENTIVE SUB-ADVISORY FEE STRUCTURE.
FOR AGAINST ABSTAIN
Fundname Drop In 1 [ ] [ ] [ ]
JAS_15730