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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. 1)
Filed by 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 INVESTMENT FUND
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(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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.:
- --------------------------------------------------------------------------------
3) Filing Party:
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4) Date Filed:
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FOR SHAREHOLDERS OF
JANUS MONEY MARKET FUND
JANUS GOVERNMENT MONEY MARKET FUND
(JANUS LOGO)
December 21, 2006
DEAR SHAREHOLDER:
The Board of Trustees for your Fund recently approved a reorganization of
the above-referenced money market funds (each, a "Current Fund" and together,
the "Current Funds") that results in the transfer of a portion of the assets of
each Current Fund having a value equal to the aggregate net asset value of the
Fund's Institutional Shares and Service Shares classes to a corresponding new
money market fund in exchange for corresponding shares of such new money market
fund (each, a "New Fund" and together, the "New Funds"). The reorganization,
which requires shareholder approval, will transfer assets of Institutional
Shares and Service Shares classes to a product designed primarily for
institutional investors and sold through intermediaries, allowing Janus Capital
Management LLC ("Janus Capital") the ability to enhance its distribution
capabilities, create a more efficient product line and better meet the needs of
its investors. Holders of the Investor Shares class of the Current Funds will
remain shareholders of the Current Funds, which are designed primarily for
retail investors.
The reorganization is intended to maintain the status quo for shareholders
so that after the reorganization, your shares will have the same account value,
and your New Fund will have the same investment objective, policies and
strategies, and fee structure. Holders of Institutional Shares and Service
Shares classes will be able to exchange shares among other Janus Adviser Series
funds offering similar share classes in Janus Capital's
institutional/intermediary structure, and holders of Investor Shares will
continue to be able to exchange shares among the funds in Janus Capital's retail
structure. Each New Fund and Current Fund seeks to maintain a net asset value of
$1.00 per share. Although the exchange by a shareholder of a Current Fund's
Institutional Shares or Service Shares for New Fund shares is a taxable
transaction, the reorganization is not expected to have any adverse federal
income tax consequences for the shareholder because each Current Fund has
maintained, and is expected to continue to maintain, a stable net asset value of
$1.00 per share. Neither the Current Funds nor the New Funds will bear the costs
of the reorganization. You may want to consult your tax adviser regarding your
specific situation.
The chart below shows the results of the proposed reorganization:
<Table>
<Caption>
SHAREHOLDER CURRENTLY OWNS: SHAREHOLDER WILL OWN:
- --------------------------- ---------------------
Janus Money Market Fund Investor Shares Janus Money Market Investor Shares
Fund
Janus Money Market Fund Institutional Shares Janus Institutional Institutional Shares
Money Market Fund
Janus Money Market Fund Service Shares Janus Institutional Service Shares
Money Market Fund
Janus Government Money Investor Shares Janus Government Investor Shares
Market Fund Money Market Fund
Janus Government Money Institutional Shares Janus Institutional Institutional Shares
Market Fund Government Money
Market Fund
Janus Government Money Service Shares Janus Institutional Service Shares
Market Fund Government Money
Market Fund
</Table>
For additional details about the proposed reorganization, we encourage you
to read the Questions and Answers section at the beginning of the enclosed Proxy
Statement as well as the entire Proxy Statement.
THE INDEPENDENT TRUSTEES OF EACH CURRENT FUND BELIEVES THE PROPOSED
REORGANIZATION IS IN THE BEST INTEREST OF SHAREHOLDERS AND HAS RECOMMENDED THAT
SHAREHOLDERS VOTE "FOR" THE REORGANIZATION.
You can vote in one of four ways:
- BY MAIL with the enclosed proxy card;
- BY INTERNET through the website listed in the proxy
voting instructions;
- BY TELEPHONE by calling 1-866-241-6192 and following the
recorded instructions; or
- IN PERSON at the special shareholder meeting on February 16, 2007.
Your vote is extremely important, so please read the enclosed Proxy
Statement carefully and submit your vote. If you have any questions about the
proposal, please call our proxy solicitor, Computershare Fund Services, at
1-866-546-5791.
Thank you for your consideration of this important proposal. We value you
as a shareholder and look forward to continuing our relationship with you.
Sincerely,
/s/ GARY D. BLACK
Gary D. Black
Chief Executive Officer
Janus Capital Management LLC
(JANUS LOGO)
JANUS INVESTMENT FUND
151 DETROIT STREET
DENVER, COLORADO 80206
NOTICE OF A JOINT SPECIAL MEETING OF SHAREHOLDERS
Notice is hereby given that a joint Special Meeting of Shareholders of
Janus Money Market Fund and Janus Government Money Market Fund (each, a "Current
Fund" and together, the "Current Funds"), each a series of Janus Investment Fund
(the "Current Trust"), has been called to be held at Janus Capital Management
LLC ("Janus Capital") 151 Detroit Street, Denver, Colorado 80206, on February
16, 2007, at 10:00 a.m. Mountain time (together with any adjournments or
postponements thereof, the "Meeting"). At the Meeting, shareholders of each
Current Fund will be asked to vote on the proposal set forth below and to
transact such other business, if any, as may properly come before the Meeting:
Proposal 1: (Janus Money Market Fund) To approve the transactions
contemplated under an Agreement and Plan of Reorganization,
which would result in the transfer of a portion of the assets
of Janus Money Market Fund having a value equal to the
aggregate net asset value of the Institutional Shares and
Service Shares of Janus Money Market Fund in exchange for
corresponding shares of Janus Institutional Money Market Fund
(a corresponding series of Janus Adviser Series), and the
redemption in kind of such Institutional Shares and Service
Shares by distributing to holders thereof shares of the
acquiring fund equal in value and number to the shares
redeemed.
Proposal 2: (Janus Government Money Market Fund) To approve the
transactions contemplated under an Agreement and Plan of
Reorganization, which would result in the transfer of a portion
of the assets of Janus Government Money Market Fund having a
value equal to the aggregate net asset value of the
Institutional Shares and Service Shares of Janus Government
Money Market Fund in exchange for corresponding shares of Janus
Institutional Government Money Market Fund (a corresponding
series of Janus Adviser Series), and the redemption in kind of
such Institutional Shares and Service Shares by distributing to
holders thereof shares of the acquiring fund equal in value and
number to the shares redeemed.
Shareholders of record of each Current Fund, as of the close of business on
December 12, 2006, 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). 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/ KELLY ABBOTT HOWES
Kelley Abbott Howes
President and Chief Executive Officer
of Janus Investment Fund
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and may avoid any 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:
<Table>
<Caption>
REGISTRATION VALID SIGNATURE
------------ ---------------
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 Plan John Doe, Trustee
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
</Table>
December 21, 2006
JANUS INVESTMENT FUND
Janus Money Market Fund
Janus Government Money Market Fund
151 DETROIT STREET
DENVER, COLORADO 80206
JOINT SPECIAL MEETING OF SHAREHOLDERS
JOINT PROXY STATEMENT
This is a joint Proxy Statement for Janus Money Market Fund and Janus
Government Money Market Fund (each, a "Current Fund" and together, the "Current
Funds"), each a series of Janus Investment Fund (the "Current Trust"). Proxies
for a Special Meeting of Shareholders of each Current Fund are being solicited
by the Board of Trustees of the Current Trust (the "Board," the "Board of
Trustees" or the "Trustees") to approve the following proposals, as applicable,
that have already been approved by the Board:
Proposal 1: (Janus Money Market Fund) To approve the transactions
contemplated under an Agreement and Plan of Reorganization,
which would result in the transfer of a portion of the assets
of Janus Money Market Fund having a value equal to the
aggregate net asset value of the Institutional Shares and
Service Shares of Janus Money Market Fund in exchange for
corresponding shares of Janus Institutional Money Market Fund
(a corresponding series of Janus Adviser Series), and the
redemption in kind of such Institutional Shares and Service
Shares by distributing to holders thereof shares of the
acquiring fund equal in value and number to the shares
redeemed.
Proposal 2: (Janus Government Money Market Fund) To approve the
transactions contemplated under an Agreement and Plan of
Reorganization, which would result in the transfer of a portion
of the assets of Janus Government Money Market Fund having a
value equal to the aggregate net asset value of the
Institutional Shares and Service Shares of Janus Government
Money Market Fund in exchange for corresponding shares of Janus
Institutional Government Money Market Fund (a corresponding
series of Janus Adviser Series), and the redemption in kind of
such Institutional Shares and Service Shares by distributing to
holders thereof shares of the acquiring fund equal in value and
number to the shares redeemed.
The Meeting will be held at Janus Capital Management LLC ("Janus Capital")
151 Detroit Street, Denver, Colorado 80206, on February 16, 2007 at 10:00 a.m.
Mountain time, or at such later time as may be necessary due to adjournments or
1
postponements thereof (the "Meeting"). Any shareholder of record who owned
shares of a Current Fund, as of the close of business on December 12, 2006 (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 the proposal for the Current
Fund for which you held shares as of the Record Date. You should read the entire
Proxy Statement before voting. If you have any questions, please call our proxy
solicitor, Computershare Fund Services, at 1-866-546-5791. The Proxy Statement,
Notice of Special Meeting, and the proxy cards are first being mailed to
shareholders on or about December 27, 2006.
THE CURRENT FUNDS PROVIDE ANNUAL AND SEMI-ANNUAL REPORTS TO THEIR
SHAREHOLDERS THAT HIGHLIGHT RELEVANT INFORMATION, INCLUDING INVESTMENT RESULTS
AND A REVIEW OF PORTFOLIO CHANGES. ADDITIONAL COPIES OF EACH CURRENT FUND'S MOST
RECENT ANNUAL REPORT AND ANY MORE RECENT SEMI-ANNUAL REPORT ARE AVAILABLE,
WITHOUT CHARGE, BY CALLING A JANUS CAPITAL REPRESENTATIVE AT 1-800-295-2687, VIA
THE INTERNET AT WWW.JANUS.COM, OR BY SENDING A WRITTEN REQUEST TO THE SECRETARY
OF JANUS INVESTMENT FUND AT 151 DETROIT STREET, DENVER, COLORADO 80206.
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QUESTIONS AND ANSWERS
WHAT IS BEING PROPOSED?
You are being asked to approve the transactions contemplated under an
Agreement and Plan of Reorganization (the "Agreement") for your Current Fund.
Pursuant to the transactions, which we refer to as the "Reorganization," your
Current Fund will transfer a portion of its assets having a value equal to the
aggregate net asset value of the Current Fund's Institutional Shares and Service
Shares classes to a newly formed series of Janus Adviser Series (the "New
Trust") with the same investment objective, policies and strategies.
WHAT DOES THE PROPOSAL MEAN FOR INSTITUTIONAL SHARES AND SERVICE SHARES?
Holders of Institutional Shares and Service Shares classes of Janus Money
Market Fund would become shareholders of Institutional Shares and Service Shares
classes, respectively, of Janus Institutional Money Market Fund, a new series of
the New Trust. Holders of Institutional Shares and Service Shares classes of
Janus Government Money Market Fund would become shareholders of Institutional
Shares and Service Shares classes, respectively, of Janus Institutional
Government Money Market Fund, also a new series of the New Trust. Each such
shareholder will receive shares of the applicable series of the New Trust
equivalent in number and value to their shares in the Current Fund at the time
of the transaction in redemption of their current shares. Institutional Shares
and Service Shares in each Current Fund will then be liquidated and terminated
and each such shareholder's shares will be cancelled. Janus Institutional Money
Market Fund and Janus Institutional Government Money Market Fund are referred to
herein individually as a "New Fund" and together, the "New Funds."
WHAT DOES THE PROPOSAL MEAN FOR INVESTOR SHARES?
Holders of the Investor Shares class of each Current Fund would remain
shareholders of the Current Fund, and the Current Fund will operate as a single
class fund after the Reorganization, with the same investment objective,
strategies, policies and fee structure. Janus Capital will continue to serve as
investment adviser to the Current Fund and, while assets of the Current Fund
will be lower immediately following the Reorganization, based on October 31,
2006 net assets of the Investor Shares class of each Current Fund, each such
class is expected to have a total expense ratio (after waivers) equal to the
total expense ratio (after waivers) currently applicable to the Investor Shares
class.
WHAT IS THE RECOMMENDATION OF THE BOARD OF TRUSTEES?
The Independent Trustees recommend that you vote "FOR" the proposal
applicable to your Current Fund.
3
WHY IS THE REORGANIZATION BEING PROPOSED?
The proposals are part of Janus Capital's initiative to reorganize the
money market funds it offers. Currently, each Current Fund is a series of the
Current Trust, which is primarily designed for retail investors. The primary
purpose of the proposals is to create separate retail money market funds and
institutional money market funds, rather than the current multiple class
structure of the Current Trust that includes both retail and institutional
investors. Janus Capital believes the Reorganization will benefit both retail
and institutional investors by providing Janus Capital with more flexibility to
tailor its services and products to the respective demands of the retail and
institutional marketplaces. Janus Capital believes that the Reorganization will
result in a more efficient product line and will allow Janus Capital to better
meet the different needs of investors.
WILL THE REORGANIZATION RESULT IN A CHANGE TO THE INVESTMENT OBJECTIVE,
POLICIES, OR STRATEGIES OF THE CURRENT FUNDS?
No. Each Current Fund and its corresponding New Fund will have the same
investment objective, policies, and strategies. Each New Fund and each Current
Fund seek to maintain a net asset value of $1.00 per share pursuant to Rule 2a-7
under the Investment Company Act of 1940, as amended (the "1940 Act"). You
should be aware, of course, that the New Fund will be separate from the Current
Fund, so the future investment performance of each New Fund and its classes may
differ from the investment performance it may have achieved if the assets
remained in the Current Fund due to differences in asset size, cash flows, or
other factors. The performance of Investor Shares will continue to reflect its
historical performance in the applicable Current Fund.
HOW WILL THE REORGANIZATION AFFECT FEES AND EXPENSES?
The fee structure of all share classes of each Current Fund will remain the
same after the Reorganization. However, total assets of each New Fund and each
Current Fund will be lower immediately following the Reorganization. Janus
Capital has agreed to contractually waive a portion of the fees it receives for
advisory and administrative services through at least December 1, 2008 that will
be payable by each New Fund on behalf of Institutional Shares and Service Shares
to Janus Capital under advisory and administration agreements between each New
Fund and Janus Capital. Janus Capital is waiving such fees for Institutional
Shares and Service Shares of each Current Fund on a voluntary basis. For
Investor Shares of each Current Fund, Janus Capital currently intends to
continue to waive one-half of its advisory fee. This waiver is voluntary and
could change or be terminated at any time at the discretion of Janus Capital.
Certain fees and expenses (such as fees paid to the New Funds' and Current
Funds' Trustees and independent auditors) are not currently included as part of
any fee waiver and these expenses may result in a higher total expense ratio for
a share class of a New Fund or Current Fund after the Reorganization, depending
on a fund's asset
4
size. Based on October 31, 2006 combined net assets of the Institutional Shares
and Service Shares classes and net assets of Investor Shares of a Current Fund,
assuming consummation of the Reorganization, there is not expected to be an
increase in the total expense ratio of Institutional Shares or Service Shares of
a New Fund or Investor Shares of a Current Fund as a result of these other fees
and expenses.
Janus Capital will pay all the fees associated with the Reorganization,
including the cost of providing these materials to you. Neither the Current
Trust nor the New Trust -- nor you as a shareholder -- will bear these costs.
WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATION?
If shareholders of a Current Fund approve the Reorganization, shareholders
of Institutional Shares and Service Shares of the Current Fund on the
Reorganization date (expected to be on or about February 23, 2007) will be
deemed to have requested a redemption of their shares for federal income tax
purposes (a "redemption upon the demand of the shareholder") as of the
Reorganization date. The Current Fund and remaining Investor Shares class are
not expected to realize any gain or loss in connection with a redemption upon
the demand of the shareholder transaction. Like any other redemption, a
redemption upon the demand of the shareholder will be a taxable event for
shareholders of Institutional Shares and Service Shares of the Current Fund.
However, neither the holders of Institutional Shares or Service Shares nor the
holders of Investor Shares are expected to recognize any capital gain or loss
because each Current Fund has at all times maintained, and will continue to seek
to maintain, a stable net asset value of $1.00 per share, and each New Fund will
also seek to maintain a stable net asset value of $1.00 per share. Nevertheless,
you may wish to consult a tax adviser for more information on your own tax
situation.
WHAT WILL HAPPEN IF SHAREHOLDERS OF A CURRENT FUND DO NOT APPROVE THE PROPOSAL?
If shareholders of a Current Fund do not approve the proposal applicable to
their Fund, then the Reorganization will not take effect with respect to that
Fund and the Board of Trustees would take such action as they deem to be in the
best interests of that Fund, including soliciting additional proxies.
Additionally, if shareholders of a Current Fund do not approve the proposal with
respect to that Fund, the Board of Trustees of the Current Trust or of the New
Trust may elect not to implement the Reorganization with respect to both Current
Funds.
HOW DO I VOTE MY SHARES?
You can vote in any one of four ways:
- BY MAIL, by sending the enclosed proxy card(s) (signed and dated) in the
enclosed envelope;
- BY INTERNET through the website by going to the website listed on your
proxy card;
5
- BY TELEPHONE by calling 1-866-241-6192 and following the recorded
instructions; or
- IN PERSON, by attending the Special Meeting of Shareholders on February
16, 2007 (or any adjournment or postponement thereof).
Whichever method you choose, please take the time to read the full text of
the Proxy Statement before you vote.
IF I SEND MY PROXY IN NOW AS REQUESTED, CAN I CHANGE MY VOTE LATER?
Yes. You may revoke your proxy vote at any time before it is voted at the
Meeting by: (i) delivering a written revocation to the Secretary of the Current
Trust at 151 Detroit Street, Denver, Colorado 80206; (ii) submitting a
subsequently executed proxy; or (iii) attending the Meeting and voting in
person. Even if you plan to vote at the Meeting, we ask that you return the
enclosed proxy. This will help us ensure that an adequate number of shares are
present at the Meeting for consideration of the proposals.
WHAT IS THE REQUIRED VOTE TO APPROVE EACH PROPOSAL?
Approval of a proposal by a Current Fund will require the affirmative vote
of a "majority of the outstanding voting securities" of that Current Fund within
the meaning of the 1940 Act, voting together as a single class. A "majority of
the outstanding voting securities" means the lesser of (1) 67% or more of the
shares present at the Meeting if the shareholders of more than 50% of the
outstanding shares are present or represented by proxy, or (2) more than 50% of
the outstanding shares. In addition, each proposal requires the vote of a
majority of votes cast at a meeting at which a quorum is present with respect to
each of the Institutional Shares class and Service Shares class (voting
separately). Thirty percent of the votes entitled to be cast shall constitute a
quorum.
WHOM SHOULD I CALL FOR ADDITIONAL INFORMATION ABOUT THE PROXY STATEMENT?
Please call Computershare Fund Services, the proxy solicitor for the
Current Funds, at 1-866-546-5791.
6
PROPOSALS
APPROVE A PLAN OF REORGANIZATION FOR EACH CURRENT FUND
INTRODUCTION
Janus Money Market Fund and Janus Government Money Market Fund (the
"Current Funds") are separate series of Janus Investment Fund (the "Current
Trust"), a Massachusetts business trust. Each Current Fund offers three classes
of shares: Investor Shares, Institutional Shares, and Service Shares. Investor
Shares are designed primarily for retail investors; Institutional Shares are
designed primarily for large institutional and individual investors; and Service
Shares are designed for sale primarily through banks and other financial
intermediaries.
At a meeting of the Trustees of the Current Trust held on October 6, 2006,
the Independent Trustees approved an Agreement and Plan of Reorganization (the
"Agreement"), which would result in the transfer of a portion of the assets of
Janus Money Market Fund having a value equal to the aggregate net asset value of
Institutional Shares and Service Shares to Janus Institutional Money Market Fund
in exchange for Institutional Shares and Service Shares, respectively, of Janus
Institutional Money Market Fund; and a portion of the assets of Janus Government
Money Market Fund having a value equal to the aggregate net asset value of
Institutional Shares and Service Shares to Janus Institutional Government Money
Market Fund in exchange for Institutional Shares and Service Shares,
respectively, of Janus Institutional Government Money Market Fund. Janus
Institutional Money Market Fund and Janus Institutional Government Money Market
Fund (each a "New Fund" and together, the "New Funds") are newly established
series of Janus Adviser Series (the "New Trust"). Pursuant to the transactions
contemplated under the Agreement, which we refer to as the "Reorganization," all
Institutional Shares and Service Shares of Janus Money Market Fund and Janus
Government Money Market Fund will be redeemed in a two-step process described
below. After the Reorganization, a shareholder of Institutional Shares or
Service Shares of a Current Fund will own shares of the corresponding class of a
New Fund of the New Trust equal in number and value to the shares owned
immediately before the Reorganization. Holders of Investor Shares of each
Current Fund will remain shareholders of their Current Fund, and each Current
Fund will operate as a single class fund after the Reorganization. Janus Capital
will bear all costs associated with the Reorganization.
For the reasons set forth below under "Reasons for the Reorganization," the
Trustees of the Current Trust, including all of the Trustees who are not deemed
to be "interested persons" of that Trust ("Independent Trustees") as that term
is defined in the 1940 Act, have determined that the Reorganization is in the
best interests of each Current Fund and that the interests of shareholders of
each Current Fund will not be diluted as a result of the Reorganization.
7
You are being asked to approve the transactions contemplated under the
Agreement. Shareholders of Janus Money Market Fund, voting together, are being
asked to vote on Proposal 1. Shareholders of Janus Government Money Market Fund,
voting together, are being asked to vote on Proposal 2. In addition, approval of
Proposal 1 is contingent upon approval of the proposal by a majority of
shareholders of Institutional Shares and Service Shares of Janus Money Market
Fund, present in person or by proxy at the Meeting, voting separately; and
approval of Proposal 2 is contingent upon approval of the proposal by a majority
of the shareholders of Institutional Shares and Service Shares of Janus
Government Money Market Fund, present in person or by proxy at the Meeting,
voting separately. If a proposal is approved for a Current Fund, as described
above, the Trustees and officers of the Current Trust will execute and implement
the Agreement. If approved, the Reorganization is expected to take effect on or
about February 23, 2007, or as soon as practicable thereafter ("Closing Date").
SUMMARY OF THE AGREEMENT AND PLAN OF REORGANIZATION
The important terms of the Agreement are summarized below. This summary is
qualified in its entirety by reference to the Agreement itself, which is set
forth in Exhibit A to this Proxy Statement.
Creation of New Funds. The Independent Trustees of the New Trust have
adopted for each New Fund investment objectives, policies, and strategies that
are identical to those of the corresponding Current Fund. In addition, provided
that shareholders have approved the Reorganization, the Independent Trustees of
the Current Trust, or any duly authorized officer of the Current Trust, as sole
shareholder of each New Fund, will approve an investment advisory agreement
between the New Fund and Janus Capital that is the same in all material respects
as the current advisory agreement between each Current Fund and Janus Capital,
except for the New Fund and New Trust as a party, the effective date, and the
initial term.
Redesignation of Transferring Classes. To facilitate the Reorganization,
the Independent Trustees of the Current Trust will designate a new series of the
Current Trust that corresponds to each Current Fund (each a "Transferring Fund")
and will designate new classes of such series that correspond to the
Institutional Shares and Service Shares classes (each a "Transferring Class")
effective immediately prior to the Valuation Time (as defined below).
Immediately prior to the Valuation Time, each Current Fund will allocate to its
corresponding Transferring Fund a portion of its assets and liabilities having a
value equal to the aggregate net asset value of all issued and outstanding
Institutional Shares and Service Shares of that Current Fund. The assets
allocated from each Current Fund to its corresponding Transferring Fund
generally will include a pro rata share of each security's position in the
Current Fund except for (i) securities that are subject to restrictions on
resale or transfer, such as private placement securities (other than those that
have been deemed liquid), and (ii) rounding off to eliminate fractional shares
and odd lots of securities. In other words, Janus Capital will generally seek to
ensure that the Current Fund retains, and the Transferring Fund receives, full
lots of securities (rather than odd lots and
8
fractional shares). Janus Capital will generally seek to allocate restricted
securities that have been deemed liquid (which would generally include section
4(2) commercial paper) on a pro rata basis unless precluded by law. To the
extent that restrictions on transfer preclude Janus Capital from allocating to
the Transferring Funds private placement securities, Janus Capital will seek to
allocate securities that are comparable in terms of maturity and yield. In
addition, assets will be allocated between the Current Fund and the Transferring
Fund in a manner such that the deviation between amortized and market value of
portfolio securities will be substantially the same before and immediately
following the Reorganization with respect to each Current Fund and each
Transferring Fund.
Transfer of Assets and Liabilities. As of the close of the regular trading
session of the New York Stock Exchange on the Closing Date (referred to as the
"Valuation Time" in the Agreement), each Transferring Fund will transfer,
convey, and assign all of its assets and liabilities to its corresponding New
Fund. In exchange, each New Fund will deliver to the corresponding Transferring
Fund a number of full and fractional shares of Institutional Shares and Service
Shares, respectively, equal in number to the full and fractional shares of the
corresponding class of the Transferring Fund outstanding as of the Valuation
Time. Each Current Fund will seek to extinguish all known liabilities before the
Valuation Time of the Reorganization. To the extent that such liabilities are
not extinguished, they will be allocated in a manner consistent with each
Current Fund's Rule 18f-3 Plan. Under the Agreement, liabilities attributable to
a specific class are attributable to that class. Liabilities that are not
attributable to a particular class (e.g., advisory fees and custody fees) are
allocated among the classes in accordance with their relative net assets.
It is anticipated that each New Fund will have, after the Reorganization, a
cash position in its portfolio roughly equivalent to the cash position of the
corresponding Current Fund immediately prior to the Reorganization. If, however,
the cash position of the New Fund, after the Reorganization, is more than one
percentage point greater than the cash position of the Current Fund just prior
to the Reorganization, Janus Capital will bear the cost of investing such excess
cash.
Distribution of New Fund Shares. Immediately following the transfer set
forth above, each Transferring Fund will distribute Institutional Shares and
Service Shares of the corresponding New Fund to each Current Fund. Each Current
Fund will then distribute to its shareholders of record, determined as of the
Valuation Time, shares of the New Fund corresponding to Institutional Shares and
Service Shares, respectively. The distribution will be accomplished by the
transfer agent of each New Fund crediting to the account of each shareholder of
record of the corresponding Current Fund the same number of shares of the New
Fund as the shareholder held in the Current Fund as of the Valuation Time. All
issued and outstanding shares of each Transferring Fund will be canceled.
All of these transactions would occur as of the Closing Date. The value of
your investment and the number of your shares immediately after the
Reorganization will be the same as they were immediately prior to the
Reorganization.
9
Closing Date. The Closing Date is expected to be on or about February 23,
2007, or such other date as the parties may mutually agree. If on the Closing
Date there are certain trading restrictions or disruptions or other factors that
may impact the Reorganization, then the Closing Date may be postponed.
Other Provisions. The obligations of the Current Trust and the New Trust
under the Agreement are subject to various conditions as stated in the
Agreement. Notwithstanding the approval of the Reorganization by shareholders,
the Trustees of the Current Trust or the New Trust may terminate or amend the
Agreement under certain circumstances specified in the Agreement. If
shareholders of one but not both of the Current Funds approve the
Reorganization, the Trustees of the Current Trust or the New Trust may terminate
the Agreement or may determine to proceed with the Reorganization with respect
to the Current Fund for which the shareholders approved the Reorganization. At
any time prior to the Closing Date, the Trustees of the Current Trust or the New
Trust may waive any condition if, in their judgment, the waiver will not have a
material adverse effect on the benefits intended under the Agreement to a
Current Fund or New Fund.
COMPARISON OF CURRENT FUNDS AND NEW FUNDS
Investment Adviser. Janus Capital will serve as investment adviser to the
New Funds under agreements with the New Funds that are the same in all material
respects as the current agreements for the Current Funds. Janus Capital will
continue to serve as investment adviser to the Current Funds under agreements
with the Current Funds that are currently in effect. The new agreements, like
the current agreements, provide that Janus Capital will furnish continuous
advice and recommendations concerning the New Funds' investments, provide office
space for the New Funds, and pay all or a portion of the salaries, fees, and
expenses of all New Fund officers and of those Trustees who are considered
interested persons of Janus Capital. The new agreements will include the New
Trust as a party rather than the Current Trust. The New Trust has the same
address as the Current Trust: 151 Detroit Street, Denver, Colorado 80206-4805.
The telephone number for the New Trust is 1-800-525-0020.
The advisory fee rate in the investment advisory agreement for each New
Fund is identical to the advisory fee rate included in the investment advisory
agreement for each Current Fund. Janus Capital has agreed to contractually waive
one-half of the advisory fee rate through at least December 1, 2008 that will be
payable by each New Fund to Janus Capital under the investment advisory
agreement for each New Fund. Janus Capital has also agreed to continue to waive
one-half of the advisory fee rate payable by each Current Fund under each
Current Fund's investment advisory agreement. For Investor Shares of each
Current Fund, this waiver is voluntary and could change or be terminated at any
time at the discretion of Janus Capital. The advisory fee is calculated daily
and paid monthly, based on average daily net assets. In addition, Janus Capital
has agreed to contractually waive a portion of its administrative services fee
at least through December 1, 2008 that otherwise would be payable by each of the
Institutional Shares and Service Shares of each New Fund to Janus Capital
10
under the administration agreement for each New Fund. All such waivers are
currently voluntary for the Current Funds.
Each New Fund will operate separately from its corresponding Current Fund.
That means that a New Fund's future investment performance will not be identical
to the performance of the corresponding Current Fund. Investment performance
could be better or worse. There is no guarantee of future performance of any
Share class. While the person or persons currently serving as portfolio manager
or co-portfolio manager for each Current Fund are expected to serve as the
portfolio manager or co-portfolio manager for the corresponding New Fund, Janus
Capital reserves the right to add or change portfolio managers of each Current
Fund and New Fund in its discretion, as it does with all mutual funds that it
manages.
Capitalization. The following tables show, on an audited basis, the
capitalization of each Current Fund as of October 31, 2006, as well as pro forma
capitalization information, assuming that the Reorganization occurred on October
31, 2006. The actual initial capitalization of each New Fund will equal the
capitalization of the Institutional Shares and Service Shares of the New Fund on
the effective date of the Reorganization. The actual initial capitalization of
each Current Fund will equal the
11
capitalization of Investor Shares of the Current Fund on the effective date of
the Reorganization.
<Table>
<Caption>
NET ASSETS NET ASSETS
OUTSTANDING OUTSTANDING
(BEFORE (PRO FORMA AFTER
REORGANIZATION) REORGANIZATION)
--------------- ------------------
CURRENT FUNDS
Janus Money Market Fund --
Investor Shares.............. $1,412,927,489 $1,412,927,489
Janus Money Market Fund --
Institutional Shares......... 6,317,001,929 0
Janus Money Market Fund --
Service Shares............... 34,406,805 0
-------------- --------------
Total..................... $7,764,336,223 $1,412,927,489
Janus Government Money Market
Fund -- Investor Shares...... $ 176,188,307 $ 176,188,307
Janus Government Money Market
Fund -- Institutional
Shares....................... 536,061,597 0
Janus Government Money Market
Fund -- Service Shares....... 165,479,120 0
-------------- --------------
Total..................... $ 877,729,024 $ 176,188,307
NEW FUNDS
Janus Institutional Money
Market Fund -- Institutional
Shares....................... $ 0 $6,317,001,929
Janus Institutional Money
Market Fund -- Service
Shares....................... 0 34,406,805
-------------- --------------
Total..................... $ 0 $6,351,408,734
Janus Institutional Government
Money Market Fund --
Institutional Shares......... $ 0 $ 536,061,597
Janus Institutional Government
Money Market Fund -- Service
Shares....................... 0 165,479,120
-------------- --------------
Total..................... $ 0 $ 701,540,717
</Table>
12
Fees and Expenses. The Board of Trustees of the New Trust has adopted, for
each New Fund and class thereof, administration agreements and fees and transfer
agent arrangements identical to those of each Current Fund and corresponding
class thereof. However, the assets of each Current Fund and each corresponding
New Fund immediately following the Reorganization are expected to be less than
those of the total assets of the corresponding Current Fund immediately prior to
the Reorganization (see net assets of each class of each Current Fund in the
table above). Janus Capital has agreed to contractually waive a portion of its
administrative services fee that will be payable by each of Institutional Shares
and Service Shares of each New Fund to Janus Capital under the administration
agreement for each New Fund. Janus Capital also has agreed to continue to waive
one-half of its investment advisory fee payable by Institutional Shares and
Service Shares of each New Fund and by Investor Shares of each Current Fund.
Janus Capital currently waives such fees for the Current Funds on a voluntary
basis and for the New Funds, will continue such waivers until at least December
1, 2008. For Investor Shares of each Current Fund, this waiver is voluntary and
could change or be terminated at any time at the discretion of Janus Capital.
The chart below provides additional detail about fees and expenses. The
chart shows the fees and expenses of each class of each Current Fund and the
projected ("pro forma") estimated fees and expenses for Institutional Shares and
Service Shares classes of each New Fund, and for the Investor Shares class of
the Current Funds, assuming consummation of the Reorganization as of October 31,
2006. All fees and expenses shown were determined based on net assets of each
Current Fund and each class thereof as of October 31, 2006. All such fees and
expenses are borne indirectly by the shareholders. NEITHER THE CURRENT FUNDS NOR
THE NEW FUNDS WILL PAY ANY FEES IN CONNECTION WITH THE PROPOSED REORGANIZATION.
Shareholder fees are those paid directly from your investment, such as
sales loads and redemption fees. The Current Funds and New Funds are no-load
investments, so you will generally not pay any shareholder fees when you buy or
sell shares of these Current Funds or New Funds.
Annual fund operating expenses shown in the table below are paid out of the
assets of a Current Fund or New Fund 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 below
show, these costs are borne indirectly by all shareholders.
13
ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
<Table>
<Caption>
TOTAL ANNUAL NET ANNUAL
FUND FUND
MANAGEMENT OTHER OPERATING EXPENSE OPERATING
FEE(1) EXPENSES(2) EXPENSES WAIVERS(3) EXPENSES(4)
---------- ----------- ------------ ---------- -----------
JANUS MONEY MARKET FUND --
INVESTOR SHARES
Current........................ 0.20% 0.50% 0.70% N/A 0.70%
Pro Forma...................... 0.20% 0.50% 0.70% N/A 0.70%
JANUS GOVERNMENT MONEY MARKET --
INVESTOR SHARES
Current........................ 0.20% 0.51% 0.71% N/A 0.71%
Pro Forma...................... 0.20% 0.51% 0.71% N/A 0.71%
JANUS MONEY MARKET FUND --
INSTITUTIONAL SHARES
Current........................ 0.20% 0.15% 0.35% N/A 0.35%
Pro Forma...................... 0.20% 0.15% 0.35% 0.17% 0.18%
JANUS GOVERNMENT MONEY MARKET --
INSTITUTIONAL SHARES
Current........................ 0.20% 0.16% 0.36% N/A 0.36%
Pro Forma...................... 0.20% 0.16% 0.36% 0.20% 0.16%
JANUS MONEY MARKET FUND --
SERVICE SHARES
Current........................ 0.20% 0.40% 0.60% N/A 0.60%
Pro Forma...................... 0.20% 0.40% 0.60% 0.17% 0.43%
JANUS GOVERNMENT MONEY MARKET --
SERVICE SHARES
Current........................ 0.20% 0.41% 0.61% N/A 0.61%
Pro Forma...................... 0.20% 0.41% 0.61% 0.20% 0.41%
</Table>
- ---------------
(1) The "Management Fee" is the investment advisory fee rate paid by the Current
Funds and New Funds to Janus Capital without taking into account any
waivers. For the Current Funds, Janus Capital has agreed to voluntarily
waive one-half of the advisory fee rate shown in the table. As such, the
waiver for the Current Funds could change or terminate at any time at the
discretion of Janus Capital. For the New Funds, Janus Capital has agreed to
contractually waive one-half of the advisory fee rate shown in the table
through at least December 1, 2008.
(2) Included in Other Expenses is an administrative services fee of 0.50% for
Investor Shares, 0.15% for Institutional Shares and 0.40% for Service
Shares, of the average daily net assets of each such class, respectively, of
each Current Fund and each New Fund, to compensate Janus Capital for
providing certain administrative services including, but not limited to,
recordkeeping and registration services. For the Current Funds, Janus
Capital has voluntarily agreed to waive a portion of its administrative
services fee paid by Institutional Shares and Service Shares of each Current
Fund. As such, the administrative fee waiver for Institutional Shares and
Service Shares of each Current Fund could change or terminate at any time at
the discretion of Janus Capital. For the New Funds, Janus Capital has agreed
to contractually waive a portion of its administrative services fee paid by
each New Fund on behalf of Institutional Shares and Service Shares through
at least December 1, 2008.
(3) The amounts waived for the New Funds are estimated assuming the
Reorganization was consummated October 31, 2006 and based on the waivers
agreed to by Janus Capital as described in footnotes (1) and (2) of this
table. Such waivers are voluntarily in effect for the Current Funds and, if
included in
14
"Expense Waivers" above for each class of each Current Fund, would have amounted
to 0.10% for Investor Shares of both Janus Money Market Fund and Janus
Government Money Market Fund, respectively; 0.17% and 0.20%, for Institutional
Shares of Janus Money Market Fund and Janus Government Money Market Fund,
respectively; and 0.17% and 0.20% for Service Shares of Janus Money Market
Fund and Janus Government Money Market Fund, respectively, thereby making the
Net Annual Fund Operating Expenses the same for "Current" and "Pro Forma" for
each class.
(4) For the Current Funds (before and pro forma after the Reorganization), does
not include fees and expenses voluntarily waived by Janus Capital as
described in footnotes (1) and (2) above.
EXAMPLES:
THE FOLLOWING EXAMPLES ARE BASED ON EXPENSES WITHOUT WAIVERS AS SHOWN IN
THE TABLE ABOVE. These examples are intended to help you compare the cost of
investing in each class of each Current Fund before and after the proposed
Reorganization on a pro forma basis (assuming consummation of the Reorganization
as of October 31, 2006). The examples assume that you invest $10,000 in each
class of each Current Fund before the Reorganization, and in Institutional
Shares and Service Shares classes of each New Fund and in the Investor Shares
class of each Current Fund after the Reorganization, for the time periods
indicated, you reinvest all dividends and distributions, and then redeem all of
your shares at the end of those periods. The examples also assume that your
investment has a 5% return each year and that the operating expenses of each
class of each Current Fund and each New Fund remains the same. Although your
actual costs may be higher or lower, based upon these assumptions your costs
would be as follows:
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- -------- -------- --------
JANUS MONEY MARKET FUND --
INVESTOR SHARES
Current............................ $ 72 $ 224 $ 390 $ 871
Pro Forma.......................... $ 72 $ 224 $ 390 $ 871
JANUS GOVERNMENT MONEY MARKET --
INVESTOR SHARES
Current............................ $ 73 $ 227 $ 395 $ 883
Pro Forma.......................... $ 73 $ 227 $ 395 $ 883
JANUS MONEY MARKET FUND --
INSTITUTIONAL SHARES
Current............................ $ 36 $ 113 $ 197 $ 443
Pro Forma.......................... $ 36 $ 113 $ 197 $ 443
JANUS GOVERNMENT MONEY MARKET --
INSTITUTIONAL SHARES
Current............................ $ 37 $ 116 $ 202 $ 456
Pro Forma.......................... $ 37 $ 116 $ 202 $ 456
JANUS MONEY MARKET FUND -- SERVICE
SHARES
Current............................ $ 61 $ 192 $ 335 $ 750
Pro Forma.......................... $ 61 $ 192 $ 335 $ 750
JANUS GOVERNMENT MONEY MARKET --
SERVICE SHARES
Current............................ $ 62 $ 195 $ 340 $ 762
Pro Forma.......................... $ 62 $ 195 $ 340 $ 762
</Table>
15
FUND SERVICE PROVIDERS
Janus Capital or its affiliates serve as administrator, distributor, and
transfer agent of the Current Funds and the New Funds, subject to substantially
the same terms.
Transfer Agent. Janus Services LLC ("Janus Services"), P.O. Box 173375,
Denver, Colorado 80217, a wholly-owned subsidiary of Janus Capital, serves as
the transfer agent of the Current Trust and the New Trust pursuant to Amended
and Restated Transfer Agency Agreements between the Trusts and Janus Services.
The Current Funds do not pay, and New Funds will not pay, a fee to Janus
Services. Janus Services intends to continue to provide the same services after
consummation of the Reorganization.
Distributor. Janus Distributors LLC ("Janus Distributors"), located at 151
Detroit Street, Denver, Colorado 80206, a wholly-owned subsidiary of Janus
Capital, serves as distributor of the Current Trust and the New Trust pursuant
to Amended and Restated Distribution Agreements between the Trusts and Janus
Distributors. Janus Distributors does not receive compensation from
Institutional Shares, Service Shares or Investor Shares of the Current Funds,
and will not receive compensation from Institutional Shares or Service Shares of
each New Fund, (nor from the Current Funds after the Reorganization) for
services rendered. Janus Distributors intends to continue to provide the same
services after consummation of the Reorganization.
Administrator. Janus Capital serves as administrator to the Current Funds
and New Funds, performing or arranging for the provision of, among other things,
fund accounting, shareholder services, recordkeeping, and registration
functions. Janus Capital is compensated by each share class of each Current Fund
and will also be compensated by each share class of each New Fund for services
provided pursuant to administration agreements. Janus Capital intends to
continue to provide the same administrative services after consummation of the
Reorganization.
Shareholder Rights. Each Current Fund is a series of the Current Trust, a
Massachusetts business trust. Each New Fund is a series of the New Trust, a
Delaware statutory trust. Shareholders will have similar rights before and after
the Reorganization, except with respect to voting. Shareholders of each Current
Fund are entitled to one vote for each whole dollar and a proportionate
fractional vote for each fractional dollar of net asset value of the Current
Fund that they own. Shareholders of each New Fund are entitled to one vote per
share (and fractional votes for fractional shares).
In addition, under Massachusetts law, shareholders of each Current Fund
could, under certain circumstances, be held liable for the obligations of their
Current Fund. However, the Amended and Restated Agreement and Declaration of
Trust of each Current Fund disclaims shareholder liability for acts or
obligations of the Current Fund and provides that shareholders shall be held
harmless and shall be indemnified by the Current Trust for all losses and
expenses of any fund shareholder held liable for the obligations of the Current
Fund. Delaware law and the Amended and Restated Trust Instrument of the New
Trust generally provide that shareholders are not
16
personally liable for acts, omissions, liabilities or obligations of any kind of
the New Trust.
Officers and Trustees. The officers and Trustees of the Current Funds and
the New Funds are identical as of the date of this Proxy Statement.
Other. The fiscal year end of each Current Fund is October 31. The fiscal
year end of each New Fund will be July 31. The independent accountant for both
the Current Funds and the New Funds is PricewaterhouseCoopers LLP, 1670
Broadway, Suite 1000, Denver, Colorado 80202.
REASONS FOR THE REORGANIZATION
The Independent Trustees of the Current Trust have unanimously determined
that the Reorganization is in the best interests of the Current Funds and that
the interests of shareholders of those Current Funds will not be diluted as a
result of the Reorganization. Therefore, the Independent Trustees unanimously
recommend that shareholders approve the Reorganization. The principal factors
considered by the Independent Trustees are summarized below.
As discussed above, the Reorganization is part of an initiative to
reorganize the money market funds offered by Janus Capital to create a more
efficient product line and better meet the needs of retail and institutional
investors. The Board, including the Independent Trustees, considered the
Reorganization at meetings held on September 6, 2006 and October 6, 2006. At
each meeting, the Independent Trustees met privately with their independent
counsel to consider the proposals. The Independent Trustees also considered
information regarding the proposals provided by their independent fee
consultant. The Independent Trustees voted to approve the Reorganization for
each Current Fund and recommended that shareholders of each Current Fund approve
the proposal applicable to their Fund.
In making these determinations, the Independent Trustees considered the
following factors, among others, giving appropriate weight to all pertinent
factors:
- Janus Capital's belief that separating the retail shareholders from the
institutional shareholders in separate funds will enhance its ability to
diversify the institutional shareholder base on the one hand, a benefit
for institutional shareholders that provides for more efficient
management of frequent cash flow normally associated with institutional
shareholders, while, on the other hand, allowing for more efficient
management of a fund designed for retail shareholders by having a fund
less vulnerable to institutional shareholder cash flows. The
Reorganization is anticipated to provide better opportunities for the
portfolio manager(s) to look for opportunities in the markets that are
consistent with the shareholder base.
- Janus Capital's belief that the proposed transaction will benefit the
Current Funds and the New Funds by creating separate funds for investors
with differing needs. Specifically, the Reorganization will allow Janus
Capital
17
additional flexibility to offer services to institutional investors that
are not necessary or desirable for retail investors and vice versa.
- The Reorganization will allow shareholders of Institutional Shares and
Service Shares to continue their investment in a fund with investment
objectives, policies, and restrictions identical to those of their
Current Fund. The Reorganization is not expected to have any impact on
the management of the Current Funds or New Funds.
- The Trustees' belief that each New Fund will receive the same level and
quality of services from Janus Capital and its affiliates that have been
provided to the corresponding Current Fund.
- The material terms of the investment advisory contracts are identical for
each Current Fund and each New Fund.
- As a result of fee waivers, following the Reorganization and based on
October 31, 2006 combined net assets of the Institutional Shares and
Service Shares classes of each Current Fund, each new class of each New
Fund is expected to have a total expense ratio (after waivers) equal to
the total expense ratio (after waivers) currently applicable to its
corresponding class of its corresponding Current Fund.
- As a result of the fee waiver of a portion of the investment advisory
fee, following the Reorganization and based on October 31, 2006 net
assets of the Investor Shares class of each Current Fund, each such class
is expected to have a total expense ratio (after waivers) equal to the
total expense ratio (after waivers) currently applicable to the Investor
Shares class.
- With respect to fee waivers for Institutional Shares and Service Shares,
the Trustees noted that the fee waivers applied to these share classes of
the Current Funds are voluntary and can be terminated by Janus Capital at
any time, but the fee waivers to be applied to the New Funds are
contractual and will remain in place until at least December 1, 2008. As
a result, although immediately following the Reorganization each New Fund
will have lower assets than each Current Fund immediately before the
Reorganization, because of the contractual fee waivers, the total expense
ratio (after waivers) of each of Institutional Shares and Service Shares
of each New Fund is not expected to exceed that of each corresponding
class of each Current Fund until at least December 1, 2008, assuming all
classes approve the Reorganization (and based on combined net assets of
the Institutional Shares and Service Shares classes of each Current Fund
as of October 31, 2006).
- With respect to the waiver of a portion of the investment advisory fee
payable by Investor Shares of each Current Fund, the Trustees noted that
Janus Capital has agreed to continue this waiver after the
Reorganization. As a result, although immediately following the
Reorganization each Current Fund will have lower assets than prior to the
Reorganization, because of the continuation
18
of the fee waiver, the total expense ratio (after the waiver) of Investor
Shares is expected to be the same before and after the Reorganization
(based on net assets of the Investor Shares class of each Current Fund as
of October 31, 2006).
- The potential for greater efficiency in terms of portfolio management of
money market assets to the extent that the Reorganization and related
actions by Janus Capital can increase, in the aggregate, the amount of
money market assets that Janus Capital manages.
- The potential benefits of the Reorganization to Janus Capital and its
affiliates, including Janus Capital's belief that the proposed
transactions could benefit each Current Fund and each New Fund by
enhancing distribution capabilities, creating a more efficient product
line, and allowing Janus Capital to better meet the needs of
institutional and retail investors.
- The terms of the Reorganization and whether the Reorganization would
dilute the interests of the shareholders of each Current Fund and each
New Fund.
- The Reorganization is not expected to create a taxable event for the
Current Funds. While the Reorganization will create a taxable event for
redeeming shareholders, no capital gain or loss is expected to be
realized by redeeming shareholders because each Current Fund has at all
times maintained and will continue to seek to maintain, and each New Fund
will seek to maintain, a stable net asset value of $1.00 per share.
- Janus Capital will bear all of the costs of the Reorganization.
FEDERAL INCOME TAX CONSEQUENCES
The Reorganization as applied to Institutional Shares and Service Shares of
each Current Fund is intended to qualify for U.S. federal income tax purposes as
a "redemption upon the demand of the shareholder" for purposes of section
852(b)(6) of the Internal Revenue Code of 1986, as amended (the "Code"). If it
so qualifies, the Current Funds will not recognize a taxable gain or loss as a
direct result of the Reorganization. The assets transferred to each New Fund
will carry over their tax basis from the Current Fund, and neither the Current
Fund nor the New Fund should recognize gain or loss as a result of the
transactions constituting the Reorganization. As a condition to the closing of
the Reorganization, the Current Trust will receive a tax opinion to the effect
that the in-kind redemption of Institutional Shares and Service Shares of each
Current Fund pursuant to the Reorganization should qualify as a "redemption upon
the demand of the shareholder" for purposes of Section 852(b)(6) of the Code. No
tax ruling from the Internal Revenue Service regarding the Reorganization has
been requested. The tax opinion is not binding on the Internal Revenue Service
or a court and does not preclude the Internal Revenue Service from asserting or
adopting a contrary position.
19
Distributions. Immediately prior to the Reorganization, each Current Fund
will distribute all undistributed ordinary income, if any. Such distribution
will be taxable to the shareholders of the Current Funds.
Tax Effect on Shareholders. For holders of Institutional Shares and
Service Shares of each Current Fund, the transaction will be treated as a
taxable sale of such shares of the Current Fund and a purchase of corresponding
shares of the New Fund. Accordingly, the basis for the New Fund shares received
by a shareholder of each of Institutional Shares and Service Shares will be the
net asset value per share of those New Fund shares on the date of the
Reorganization, and the shareholder's holding period for those New Fund shares
will begin on the following day. Although a redemption of shares is a taxable
event, shareholders are not expected to recognize a gain or loss in connection
with the Reorganization because each Current Fund has maintained at all times
and will continue to seek to maintain, and each New Fund will seek to maintain,
a stable net asset value of $1.00 per share.
PERFORMANCE INFORMATION
Janus Capital expects that performance information for Institutional Shares
and Service Shares of each New Fund will include the performance information for
Institutional Shares and Service Shares, respectively, of each Current Fund,
prior to the Reorganization date. Performance information for Investor Shares of
each Current Fund will continue to include its performance prior to the
Reorganization date.
OTHER EFFECTS OF SHAREHOLDER APPROVAL
If shareholders approve the proposed Reorganization, the Independent
Trustees of the Current Trust, or any duly authorized officer of the Current
Trust, as sole shareholder of each New Fund, will approve an investment advisory
agreement between the New Fund and Janus Capital. As noted above, the terms of
the investment advisory agreements between the New Funds and Janus Capital will
be the same in all material respects as the current investment advisory
agreements between Janus Capital and the Current Funds (except that the New
Trust will be a party and the effective date and term will be different).
THE INDEPENDENT TRUSTEES OF THE CURRENT TRUST UNANIMOUSLY RECOMMEND THAT
YOU VOTE "FOR" THE PROPOSED REORGANIZATION.
20
ADDITIONAL INFORMATION
QUORUM AND VOTING
Shareholders of each Current Fund will vote both (1) together as a fund,
and (2) separately with regard to shareholders of Institutional Shares and
Service Shares (voting separately), at the Meeting. Each holder of a whole or
fractional share shall be entitled to one vote for each whole or fractional
dollar value of net asset value held in such shareholder's name. If you are not
the owner of record but your shares are instead held for your benefit by a
financial intermediary such as a retirement plan service provider,
broker-dealer, bank trust department, insurance company or other financial
intermediary, that financial intermediary may request that you provide
instruction on how to vote the shares you beneficially own. Your financial
intermediary will provide you with additional information.
Thirty percent of the outstanding votes entitled to be cast at the Meeting
for each Current Fund (and for each of Institutional Shares and Service Shares
of each Current Fund, voting separately) shall be a quorum for the transaction
of business by that Fund at the Meeting. Any lesser number is sufficient for
adjournments. In the event that the necessary quorum to transact business or the
vote required to approve a proposal is not obtained at the Meeting, 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. Any
such adjournment will require the affirmative vote of the shareholders of a
majority of the shares of a Current Fund, present in person or by proxy at the
Meeting. The persons named as proxies will vote the proxies for a Current Fund
or class thereof (including broker non-votes and abstentions) in favor of
adjournment if they determine additional solicitation is warranted and in the
interests of shareholders of the Current Fund.
"Broker non-votes" are shares held by a broker or nominee for which an
executed proxy is received by the Current Fund, but are not voted 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.
Abstentions 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, abstentions and "broker non-votes" will have the effect of
a vote against the respective proposal on the Fund vote, but will have no effect
on the class vote for purposes of counting votes of the Institutional Shares and
Service Shares (voting separately).
Approval of a proposal applicable to a Current Fund will require the
affirmative vote of a "majority of the outstanding voting securities" of the
Current Fund within the meaning of the 1940 Act, voting together as a single
class. A "majority of the outstanding voting securities" means the lesser of (1)
67% or more of the shares present at the Meeting if the holders of more than 50%
of the outstanding shares are present or represented by proxy, or (2) more than
50% of the outstanding shares. In addition, each proposal requires the vote of a
majority of votes cast at a Meeting at
21
which a quorum is present with respect to each of the Institutional Shares class
and Service Shares class (voting separately).
SHARE OWNERSHIP
As of the close of business on the Record Date, outstanding shares of each
class of each Current Fund were as follows:
<Table>
<Caption>
NUMBER OF
SHARES
--------------
JANUS MONEY MARKET FUND
Investor Shares.............................. 1,396,821,771
Institutional Shares......................... 7,785,595,299
Service Shares............................... 35,069,353
JANUS GOVERNMENT MONEY MARKET FUND
Investor Shares.............................. 175,042,839
Institutional Shares......................... 567,547,749
Service Shares............................... 158,304,676
--------------
</Table>
Beneficial owners of 5% or more of the outstanding shares of each class of
each Current Fund as of the Record Date are shown in Exhibit B. To the best
knowledge of the Current Trust, no person beneficially owned more than 5% of the
outstanding shares of each class of each Current Fund except as shown in Exhibit
B. To the best knowledge of the Current Trust, entities shown as owning 25% or
more of a class of a Current Fund, unless otherwise indicated, are not the
beneficial owners of such shares.
As of the Record Date, the officers and Trustees as a group owned less than
1% of the outstanding Investor Shares of Janus Money Market Fund and of the
outstanding Investor Shares of Janus Government Money Market Fund. The officers
and Trustees owned 2.2% of the Institutional Shares of Janus Money Market Fund
and less than 1% of the outstanding shares of the Institutional Shares of Janus
Government Money Market Fund. The officers and Trustees also owned less than 1%
of the outstanding shares of the Service Shares of each of Janus Money Market
Fund and Janus Government Money Market Fund.
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 paid by Janus Capital. In addition to solicitation by mail, officers and
representatives of the Current Trust, officers and employees of Janus 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.
22
Janus Capital has engaged Computershare Fund Services ("Computershare"), a
professional proxy solicitation firm, to assist in the solicitation of proxies,
at an estimated cost of $250,000, plus any out-of-pocket expenses. Such expenses
will be paid by Janus Capital. Among other things, Computershare 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.
Brokers, banks, and other fiduciaries may be required to forward soliciting
material to their principals on behalf of a Current Fund and to obtain
authorization for the execution of proxies. For those services, they will be
reimbursed by Janus Capital for their expenses to the extent Janus Capital would
have directly borne those expenses.
As the Meeting date approaches, certain shareholders whose proxies have not
been received may receive telephone calls from a representative of
Computershare. Authorization to permit Computershare to execute proxies may be
obtained by telephonic or electronically transmitted instructions from
shareholders of each Current Fund. Proxies that are obtained telephonically will
be recorded in accordance with the procedures described below. The Current Funds
believe 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 representative is
required to ask for each shareholder's full name, address, 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, then the Computershare representative has the
responsibility to explain the process and ask for the shareholder's instructions
on the proposal. Although the Computershare representative is permitted to
answer questions about the process, he or she is not permitted to recommend to
the shareholder how to vote. The Computershare representative may read any
recommendation set forth in this Proxy Statement. The Computershare
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 Computershare 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 by following the instructions
on the enclosed proxy 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.
Internet Voting. Shareholders may provide their voting instructions
through Internet voting by following the instructions on the enclosed proxy
card(s). Shareholders who vote via the Internet, in addition to confirming their
voting instructions prior
23
to submission and terminating their Internet link, 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-paid envelope provided, or attend the
Meeting in person. Shareholders requiring additional information regarding the
proxy or replacement proxy card(s), may contact Computershare at 1-866-546-5791.
Any proxy given by a shareholder is revocable until voted at the Current
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 Current Trust at 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, will be voted "FOR" the proposal, as described in this
Proxy Statement.
LEGAL MATTERS
Information regarding material pending legal proceedings involving Janus
Capital, the Current Trust, or the New Trust is attached as Exhibit C to this
Proxy Statement.
SHAREHOLDER PROPOSAL FOR SUBSEQUENT MEETINGS
The Current Funds are not required, and do not intend, to hold annual
shareholder meetings. Under the terms of a settlement reached between Janus
Capital and the Securities and Exchange Commission ("SEC") in August 2004,
commencing in 2005 and not less than every fifth calendar year thereafter, the
Current Trust and the New Trust will hold a meeting of shareholders to elect
Trustees. The New Trust is also subject to the terms of the SEC settlement.
Shareholder meetings may be called from time to time as described in the Amended
and Restated Agreement and Declaration of Trust and the Amended and Restated
Bylaws of the Current Trust. Under the proxy rules of the SEC, shareholder
proposals that meet certain conditions may be included in a Current Fund'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 Current
Fund shares either (i) with a value of at least $2,000 or (ii) in an amount
representing at least 1% of a Current Fund's securities to be voted, at the time
a 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 Current Fund of any such proposal. Under
those rules, a proposal must have been submitted within a reasonable time before
the Current Funds began to print and mail this Proxy Statement in order to be
included in this Proxy Statement. A proposal submitted for inclusion in a
Current Fund's proxy material for the next special meeting after the meeting to
which this Proxy Statement relates must
24
be received by a Current Fund within a reasonable time before a Current Fund
begins to print and mail the proxy materials for that meeting.
Shareholders wishing to submit a proposal for inclusion in a proxy
statement subsequent to the Meeting, if any, should send their written proposal
to the Secretary of the Current Trust at 151 Detroit Street, Denver, Colorado
80206, within a reasonable time before a Current Fund 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 Current Funds 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 Current Trust's
Secretary at the address of the Current Trust's principal executive office. All
such communications received by the Current 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 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.
REPORTS TO SHAREHOLDERS AND FINANCIAL STATEMENTS
The Annual Report to shareholders of the Current Funds, including financial
statements of the Current Funds, has previously been sent to shareholders. THE
CURRENT FUNDS PROVIDE ANNUAL AND SEMIANNUAL REPORTS TO THEIR SHAREHOLDERS THAT
HIGHLIGHT RELEVANT INFORMATION, INCLUDING INVESTMENT RESULTS AND A REVIEW OF
PORTFOLIO CHANGES. ADDITIONAL COPIES OF THE CURRENT FUNDS' MOST RECENT ANNUAL
REPORT AND ANY MORE RECENT SEMIANNUAL REPORT ARE AVAILABLE, WITHOUT CHARGE, BY
CALLING A JANUS CAPITAL REPRESENTATIVE AT 1-800-295-2687, VIA THE INTERNET AT
WWW.JANUS.COM, OR BY SENDING A WRITTEN REQUEST TO THE SECRETARY OF THE CURRENT
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
interests of the Current Trust and/or Current Fund.
25
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/ KELLY ABBOTT HOWES
Kelley Abbott Howes
Chief Executive Officer and President
of Janus Investment Fund
26
INDEX OF EXHIBITS
<Table>
EXHIBIT A: Form of Agreement and Plan of Reorganization
EXHIBIT B: 5% Beneficial Owners of Shares
EXHIBIT C: Legal Matters
</Table>
27
EXHIBIT A
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated as of , 200__ (the
"Agreement"), between Janus Investment Fund, a Massachusetts business trust with
offices at 151 Detroit Street, Denver, Colorado 80206 (the "Transferring
Trust"), on behalf of the Institutional Shares class and Service Shares class
(each, a Transferring Class") of its series, Janus Money Market Fund and Janus
Government Money Market Fund (each, a "Transferring Fund"), and Janus Adviser
Series, a Delaware statutory trust (the "Acquiring Trust"), on behalf of the
Institutional Shares class and Service Shares class (each, an "Acquiring Class")
of its series, Janus Institutional Money Market Fund and Janus Institutional
Government Money Market Fund (each series of the Acquiring Trust, an "Acquiring
Fund").
WHEREAS, each Transferring Fund is authorized to issue three classes of
shares, Investor Shares, Institutional Shares and Service Shares, and may issue
additional classes in the future;
WHEREAS, each Acquiring Fund is authorized to issue four classes of shares,
Select Shares, Primary Shares, Institutional Shares and Service Shares, and may
issue additional classes in the future;
WHEREAS, for each Transferring Class of a Transferring Fund, there is a
corresponding Acquiring Class of each Acquiring Fund (and this Agreement refers
to the Transferring Class and the corresponding Acquiring Class as
"corresponding" classes) and for each Transferring Fund, there is an Acquiring
Fund corresponding to each Transferring Fund as follows (and this Agreement
refers to the Transferring Fund and the corresponding Acquiring Fund as
"corresponding" funds):
<Table>
<Caption>
TRANSFERRING TRUST ACQUIRING TRUST
- ------------------ ---------------
Janus Money Market Fund Janus Institutional Money Market Fund
Janus Government Money Market Fund Janus Institutional Government Money
Market Fund
</Table>
WHEREAS, the Transferring Trust and the Acquiring Trust wish to effect a
reorganization (the "Reorganization"), which will consist of designating each
Transferring Class of each Transferring Fund as a new series of the Transferring
Trust, assigning to each new series a portion of the assets and liabilities of
the Transferring Fund equal in value to the aggregate net asset value of the
Transferring Fund represented by the Transferring Classes, as applicable,
transferring the assets and liabilities of the corresponding new series to the
corresponding Acquiring Class of each Acquiring Fund in exchange for shares of
the corresponding Acquiring Class of each Acquiring Fund (the "Acquiring Fund
Shares") and the redemption of those Transferring Class shares by distribution
in kind to the holders thereof of the corresponding Acquiring Fund Shares, such
actions to occur on the closing date
A-1
provided for in paragraph 4.1 hereof (the "Closing Date"), all upon the terms
and conditions hereinafter set forth in this Agreement;
WHEREAS, as of the Closing Date, the Transferring Trust and the Acquiring
Trust are registered, open-end management investment companies, each
Transferring Class and Transferring Fund will be duly established and designated
classes and series of the Transferring Trust, and each Acquiring Class and
Acquiring Fund will be duly established and designated classes and series of the
Acquiring Trust;
WHEREAS, both the Transferring Trust and the Acquiring Trust will be
authorized as of the Closing Date to issue shares of beneficial interest in
connection with the Reorganization;
WHEREAS, the Board of Trustees of the Transferring Trust has determined
that the Reorganization is in the best interests of each Transferring Fund and
that the interests of each Transferring Fund's shareholders would not be diluted
as a result of the Reorganization;
WHEREAS, the Board of Trustees of the Acquiring Trust has determined that
the Reorganization is in the best interests of each Acquiring Fund and that the
interests of each Acquiring Fund's shareholders would not be diluted as a result
of the Reorganization; and
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties agree as follows:
1. CREATION OF ACQUIRING FUNDS
1.1 Investment Objectives, Policies and Procedures. Prior to the Closing
Date, the Board of Trustees of the Acquiring Trust shall adopt for each
Acquiring Fund investment objectives, policies and procedures identical to those
of the corresponding Transferring Fund.
1.2 Agreements and Plans. Prior to the Closing Date, the Board of
Trustees of the Acquiring Trust shall adopt for each Acquiring Class of each
Acquiring Fund investment advisory agreements, other agreements, and
distribution and administration plans and fees substantially similar to those of
the corresponding Transferring Class of the corresponding Transferring Fund.
1.3 Initial Shareholder Approvals. Prior to the valuation time provided
for in paragraph 3.1 hereof (the "Valuation Time"), each Acquiring Fund shall
issue to the corresponding Transferring Fund one nominal share of the Acquiring
Fund. No payment shall be made to the Acquiring Funds in connection with the
issuance of these nominal shares. Provided that the shareholders of one or both
Transferring Funds have approved the Reorganization, the Board of Trustees of
the Transferring Trust, or any officer of the Transferring Trust duly authorized
by that Board, on behalf of the Transferring Fund as sole shareholder of the
corresponding Acquiring Fund, shall approve the investment advisory agreement
between the Acquiring Fund and Janus Capital Management LLC ("Janus Capital")
substantially similar to the current
A-2
advisory agreement between the corresponding Transferring Fund and Janus
Capital, to take effect the day following the Closing Date. After these
approvals, and before the Valuation Time, each Transferring Fund shall redeem
its nominal share of the Acquiring Fund.
2. REORGANIZATION
2.1 Creation of New Series of the Transferring Trust. Subject to the
terms and conditions contained herein, the Transferring Trust agrees that, as of
immediately prior to the Valuation Time, it will designate each Transferring
Class of each Transferring Fund as a corresponding class of a separate series of
the Transferring Trust (each an "Interim Transferring Fund"), and each
Transferring Fund will allocate to the corresponding Interim Transferring Fund a
portion of the assets and liabilities of the Transferring Fund, including
securities and cash, having a value equal to the aggregate net asset value of
all Transferring Class shares of the Transferring Fund, both full and
fractional, issued and outstanding (collectively, the "Transferred Assets" of
that Transferring Fund), such values to be determined as set forth in paragraph
3.1. Each Interim Transferring Fund shall be newly-formed for the sole purpose
of engaging in the Reorganization and shall not have any assets or engage in any
business except as is necessary to consummate the Reorganization. Appendix A to
this Agreement identifies, for each Transferring Class of each Transferring
Fund, its corresponding Interim Transferring Fund and the corresponding
Acquiring Class of the corresponding Acquiring Fund. Where appropriate due to
the size of the Transferred Assets (either in absolute terms or as a percentage
of the entire Transferring Fund), the Transferred Assets shall consist of as
nearly a prorata portion as is reasonably practical of each security or other
asset held by the Transferring Fund as of immediately prior to the Valuation
Time. If, however, the size of the Transferred Assets makes it impractical to
apply such a prorata split to most of the securities held by the Transferring
Fund, the Transferred Assets shall be selected in a manner equitable to all
shareholders of the Transferring Fund. In any case, the Transferred Assets shall
be selected in a manner such that the deviation between market value and
amortized cost of each Interim Transferring Fund does not materially differ from
the deviation between market value and amortized cost of the corresponding
Transferring Class of the corresponding Transferring Fund immediately prior to
the Valuation Time. If the Transferred Assets consist all or primarily of cash,
Janus Capital shall bear the cost of the brokerage and other expenses incurred
by the Acquiring Funds in investing the cash. The allocation of assets under
this paragraph 2.1 shall be done in accordance with the Transferring Trust's
procedures consistent with Rule 17a-7 under the Investment Company Act of 1940,
as amended (the "1940 Act"), and related no-action letters issued by the staff
of the Securities and Exchange Commission, as if the allocation of assets were a
sale of assets from each Transferring Class of a Transferring Fund to the
corresponding Interim Transferring Fund; provided, however, instead of a cash
payment, each Interim Transferring Fund will be considered to have issued its
shares to the corresponding Transferring Fund with a value equal to the value of
the corresponding Transferred Assets.
A-3
2.2 Transfer of Assets and Liabilities; Issuance of Shares. Subject to
the terms and conditions contained herein:
(a) As of the Valuation Time, the Transferring Trust will transfer,
convey and assign all of the Transferring Class Assets of each Interim
Transferring Fund to the corresponding Acquiring Fund.
(b) In exchange therefor, each Acquiring Fund will (i) deliver to the
corresponding Interim Transferring Fund a number of full and fractional
Acquiring Fund Shares equal to the number of full and fractional
Transferring Class Shares of the corresponding Interim Transferring Fund
outstanding as of the Valuation Time and (ii) take certain other actions,
as set forth in paragraph 2.3. In lieu of delivering certificates for the
Acquiring Fund Shares, each Acquiring Fund shall cause its transfer agent
to credit the Acquiring Fund Shares to the corresponding Interim
Transferring Fund's account on the books of the Acquiring Fund and shall
deliver a confirmation thereof to the corresponding Interim Transferring
Fund.
(c) Immediately after the Valuation Time and the transfer described in
paragraph 2.2(b), each Interim Transferring Fund shall transfer all of the
shares of the Acquiring Fund to the corresponding Transferring Fund in
complete liquidation of the Interim Transferring Fund and all outstanding
shares of the Interim Transferring Fund shall be cancelled.
2.3 Liabilities. Each Transferring Fund will endeavor to discharge all of
its known liabilities and obligations attributable to its Transferring Classes
prior to the Closing Date to the extent reasonably practicable. Each
Transferring Fund will transfer to the corresponding Interim Transferring Fund,
which will assume, any such liabilities and obligations which have not been
discharged prior to the Closing Date as provided for in paragraphs 2.1 and 2.2.
The Acquiring Fund will, in turn, assume all such known liabilities, debts,
obligations and duties of the Interim Transferring Fund.
2.4 Delivery of Assets. Each Interim Transferring Fund shall deliver the
Transferred Assets at the closing provided for in paragraph 4.1 (the "Closing")
to the custodian for the corresponding Acquiring Fund (each, a "Custodian"), for
the account of the corresponding Acquiring Class of the corresponding Acquiring
Fund, all securities not in bearer form duly endorsed, or accompanied by duly
executed separate assignments or stock powers, in proper form for transfer, with
signatures guaranteed, and with all necessary stock transfer stamps, sufficient
to transfer good and marketable title thereto (including all accrued interest
and dividends and rights pertaining thereto) to the Custodian for the account of
the corresponding Acquiring Fund free and clear of all liens, encumbrances,
rights, restrictions and claims. All cash delivered shall be in the form of
immediately available funds payable to the order of the Custodian for the
account of the corresponding Acquiring Fund.
2.5 Subsequent Dividends or Interest Payments. Each Transferring Class of
each Transferring Fund will pay or cause to be paid to the corresponding
Acquiring Class of the corresponding Acquiring Fund any dividends or interest
received on or
A-4
after the Closing Date with respect to any of the Transferring Class Assets.
Each Transferring Class of the Transferring Fund will transfer to the
corresponding Acquiring Class of the corresponding Acquiring Fund any
distributions, rights or other assets received by (and attributable to the
Transferring Classes of) the Transferring Fund on or after the Closing Date as
distributions on or with respect to any of the Transferring Class Assets. Such
assets shall be deemed included in the Transferring Class Assets and shall not
be separately valued.
2.6 Distribution of Acquiring Fund Shares. Immediately following the
transfer in Sections 2.2, 2.3 and 2.4, each Transferring Fund will distribute in
kind pro rata to the holders of record the shares of the corresponding
Transferring Classes of the corresponding Transferring Fund, determined as of
the Valuation Time, in redemption of such shares of the Transferring Classes,
the Acquiring Fund Shares received by the Transferring Fund pursuant to
paragraph 2.2. Such distribution will be accomplished by the transfer agent of
each Acquiring Fund transferring the Acquiring Fund Shares then credited to the
account of the corresponding Transferring Funds on the books of the Acquiring
Fund to open accounts on such books in the names of the holders of the
Transferring Funds' shares and representing the respective pro rata number of
the Acquiring Fund Shares due each such shareholder.
2.7 Transfer Taxes. Any transfer taxes payable upon issuance of the
Acquiring Fund Shares in a name other than that of the registered holder of the
redeemed Transferring Fund shares on the books of the Transferring Fund shall,
as a condition of such issuance and transfer, be paid by the person to whom such
Acquiring Fund Shares are to be issued and transferred.
2.8 Reporting Responsibilities. Any reporting responsibility of the
Transferring Funds is and shall remain the responsibility of the Transferring
Funds after the Reorganization.
2.9 Expenses. Janus Capital shall bear all expenses incurred in
connection with the Agreement and the transactions contemplated herein.
3. VALUATION
3.1 Valuation of the Transferred Assets. The value of the Transferred
Assets of each Transferring Fund shall be their values computed as of the close
of the regular trading session on the New York Stock Exchange (normally 4:00
p.m., New York City time) on the Closing Date (the "Valuation Time") based on
the Transferring Fund's valuation procedures set forth in the Transferring
Fund's then-current Prospectus and Statement of Additional Information and the
Transferring Fund's procedures under Rule 17a-7 under the 1940 Act. The
aggregate net asset value of the shares of each Transferring Class of each
Transferring Fund, both full and fractional, issued and outstanding, shall be
equal to (a) the number of Transferring Class shares issued and outstanding at
the Valuation Time, multiplied by (b) the net asset value per share of a
Transferring Class share computed as of the Valuation Time, based on the
Transferring Fund's valuation procedures set forth in the Transferring Fund's
then-current Prospec-
A-5
tus and Statement of Additional Information and the Transferring Fund's
procedures under Rule 17a-7 under the 1940 Act.
3.2 Net Asset Values of the Acquiring Funds. The net asset value of a
share of an Acquiring Class of an Acquiring Fund as of the Valuation Time shall
be the same as net asset value per share of the corresponding Transferring Class
shares of the corresponding Transferring Fund computed as of the Valuation Time
in accordance with paragraph 3.1.
4. CLOSING AND CLOSING DATE
4.1 Closing Time and Place. Subject to the provisions of Section 8 of
this Agreement, the Closing Date shall be February 23, 2007, or such other date
as the parties may mutually agree. All acts taking place on the Closing Date,
other than the acts called for by paragraph 1.3 hereof, shall be deemed to take
place simultaneously as of the close of the regular trading session on the New
York Stock Exchange on the Closing Date unless otherwise provided,
notwithstanding that the Closing shall be held at 4:30 p.m., Mountain time, on
the Closing Date at the offices of Janus Capital, 151 Detroit Street, Denver,
Colorado 80206, or at such other time and/or place as the parties may mutually
agree.
4.2 Custodian Certificate. Each Custodian shall deliver at the Closing a
certificate of an authorized officer stating that the Transferring Class Assets
for each Interim Transferring Fund have been delivered in proper form to each
Acquiring Fund.
4.3 Delay in Valuation. If at the Valuation Time (a) the trading market
or markets for portfolio securities of any Interim Transferring Fund shall be
closed to trading or trading thereon shall be restricted, or (b) trading or the
reporting of trading in such market or markets shall be disrupted so that
accurate appraisal of the value of the net assets of the Transferring Class
Assets is impracticable, the Closing Date shall be postponed until the first
business day after the day when trading shall have been fully resumed and
reporting shall have been restored.
4.4 Transfer Agent Certificates. The transfer agent for the Transferring
Trust shall deliver at the Closing a certificate of an authorized officer
stating that its records contain the names and addresses of all the shareholders
of each Interim Transferring Fund and the number of outstanding shares owned by
each such shareholder immediately prior to the Closing. The transfer agent for
the Acquiring Trust shall issue and deliver to the Secretary of the Transferring
Trust a confirmation, or other evidence satisfactory to the Transferring Trust,
that the shares of each Acquiring Class of each Acquiring Fund to be transferred
to the corresponding Interim Transferring Fund on the Closing Date have been
credited to the Interim Transferring Fund's account on the books of the
Acquiring Fund.
4.5 Other Documents. At the Closing, each party shall deliver to the
other such bills of sale, checks, assignments, receipts or other documents as
such other party or its counsel may reasonably request.
A-6
5. REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of the Transferring Trust. The
Transferring Trust represents and warrants to the Acquiring Trust as follows:
(a) Structure and Standing. The Transferring Trust is a business
trust duly organized, validly existing and in good standing under the laws
of the Commonwealth of Massachusetts and has power to own all of its
properties and assets and to carry out this Agreement.
(b) SEC Registration. The Transferring Trust is registered under the
1940 Act as an open-end management investment company, and such
registration has not been revoked or rescinded and is in full force and
effect.
(c) Series and Classes. Each Transferring Fund and Transferring Class
is a duly established and designated series and class, respectively, of the
Transferring Trust. On or before the Closing Date, the Transferring Trust
will designate each Interim Transferring Fund as a duly established and
designated series of the Transferring Trust.
(d) Prospectus. The current prospectus and statement of additional
information of the Transferring Classes of each Transferring Fund conform
in all material respects to the applicable requirements of the Securities
Act of 1933, as amended (the "1933 Act"), and the 1940 Act and the rules
and regulations of the SEC thereunder and do not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(e) Declaration of Trust. The Transferring Trust is not, and the
execution, delivery and performance of this Agreement will not result, in
material violation of the Transferring Trust's Amended and Restated
Declaration of Trust dated March 18, 2003 (the "Declaration of Trust") or
the Trust's By-Laws or of any agreement, indenture, instrument, contract,
lease or other undertaking to which the Transferring Trust or any
Transferring Fund is a party or by which it is bound.
(f) Contracts. The Transferring Trust has no material contracts or
other commitments outstanding (other than this Agreement) that will be
terminated with liability to any Transferring Fund's Transferring Classes
on or prior to the Closing Date.
(g) Litigation. No litigation or administrative proceeding or
investigation of or before any court or governmental body is currently
pending or to its knowledge threatened against the Transferring Trust with
respect to its Transferring Funds or any of their properties or assets
that, if adversely determined, would materially and adversely affect its
financial condition or the conduct of its business. The Transferring Trust
knows of no facts that might form the basis for the institution of such
proceedings and is not a party to or subject to the provisions of any
order, decree or judgment of any court or governmental body
A-7
that materially and adversely affects its business or its ability to
consummate the transactions herein contemplated.
(h) Financial Statements. The Statements of Assets and Liabilities of
each Transferring Class of each Transferring Fund for the fiscal years
ended October 31, 2004, 2005 and 2006 have been audited by
PricewaterhouseCoopers, LLP, independent auditors; such financial
statements are in accordance with generally accepted accounting principles,
consistently applied; such statements (copies of which have been furnished
to the Acquiring Trust) fairly reflect the financial condition of the
Transferring Classes of the Transferring Funds as of such dates; and there
are no known contingent liabilities of the Transferring Classes of the
Transferring Funds as of such dates not disclosed therein.
(i) No Material Changes. Since October 31, 2006, there has not been
any material adverse change in the Transferring Funds' financial condition,
assets, liabilities or business other than changes occurring in the
ordinary course of business, or any incurrence by any Transferring Fund of
indebtedness maturing more than one year from the date such indebtedness
was incurred.
(j) Tax Returns. At the Closing Date, all federal and other tax
returns and reports of the Transferring Funds required by law to have been
filed by such date shall have been filed, and all federal and other taxes
shall have been paid so far as due, or provision shall have been made for
the payment thereof; and, to the best of the Transferring Trust's
knowledge, no such return is currently under audit and no assessment has
been asserted with respect to any such return.
(k) RIC Status. For each taxable year of the Transferring Funds ended
on or prior to the Closing Date, they have met the requirements of
subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"),
for qualification and treatment as a regulated investment company, and will
continue to meet all such requirements for the taxable year that includes
the Closing Date.
(l) Shares. All issued and outstanding shares of each Transferring
Class of each Transferring Fund are duly and validly issued and
outstanding, fully paid and nonassessable by the Transferring Fund, except
to the extent that under Massachusetts law shareholders of a business trust
may, under certain circumstances, be held personally liable for its
obligations. All of the issued and outstanding shares of the Interim
Transferring Funds, at the Valuation Time, will be held by the persons and
in the amounts set forth in the records of the transfer agent as provided
in paragraph 4.4. The Interim Transferring Funds do not have outstanding
any options, warrants or other rights to subscribe for or purchase any
shares of any Interim Transferring Fund, nor is there outstanding any
security convertible into any share of any of the Interim Transferring
Funds, except such as are contemplated herein.
(m) Authority to Transfer Transferring Class Assets. On the Closing
Date, each Interim Transferring Fund will have full right, power and
authority to sell, assign, transfer and deliver the Transferring Class
Assets.
A-8
(n) Authorization. The execution, delivery and performance of this
Agreement will have been duly authorized prior to the Closing Date by all
necessary action on the part of the Transferring Trust's Board of Trustees;
and, subject to the approval of the shareholders of each Transferring Fund
and assuming due execution and delivery hereof by the Acquiring Trust, this
Agreement will constitute the valid and legally binding obligation of the
Transferring Trust on behalf of its series, enforceable in accordance with
its terms, subject to the effect of bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws relating to or
affecting creditors' rights generally and court decisions with respect
thereto, and to general principles of equity and the discretion of the
court (regardless of whether the enforceability is considered in a
proceeding in equity or at law).
(o) Proxy Statement. The Proxy Statement (as defined in paragraph 6.3
hereof) (other than information that relates to or has been furnished by
the Acquiring Trust) will, on the mailing date of the Proxy Statement and
on the Closing Date, not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which such
statements were made, not misleading.
5.2 Representations and Warranties of the Acquiring Trust. The Acquiring
Trust represents and warrants to the Transferring Trust as follows:
(a) Structure and Standing. The Acquiring Trust is a statutory trust
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has power to own its properties and assets and to
carry out this Agreement.
(b) SEC Registration. The Acquiring Trust is registered under the
1940 Act as an open-end, management investment company, and, as of the
Closing Date, such registration will not have been revoked or rescinded and
will be in full force and effect.
(c) Prospectus. Each Acquiring Fund's prospectus and statement of
additional information that is or will be included in the Acquiring Trust's
registration statement will, at the time the registration statement becomes
effective, conform in all material respects to the applicable requirements
of the 1933 Act, the 1940 Act and the rules and regulations of the SEC
thereunder and will not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(d) Trust Instrument. The Acquiring Trust is not, and the execution,
delivery and performance of this Agreement will not result, in material
violation of its Amended and Restated Trust Instrument dated March 18,
2003, as amended (the "Trust Instrument"), or its By-Laws or of any
agreement, indenture,
A-9
instrument, contract, lease or other undertaking to which it is a party or
by which it is bound.
(e) Litigation. No litigation or administrative proceeding or
investigation of or before any court or governmental body is currently
pending or to its knowledge threatened against the Acquiring Trust or any
of its properties or assets that, if adversely determined, would materially
and adversely affect its financial condition or the conduct of its
business. The Acquiring Trust knows of no facts that might form the basis
for the institution of such proceedings and is not a party to or subject to
the provisions of any order, decree or judgment of any court or
governmental body that materially and adversely affects its business or its
ability to consummate the transactions herein contemplated.
(f) Shares. All shares of the Acquiring Trust issued in connection
with the Reorganization will be duly and validly issued and outstanding,
fully paid and nonassessable by the Acquiring Trust, except to the extent
that under Delaware law shareholders of a statutory trust may, under
certain circumstances, be held personally liable for its obligations. The
Acquiring Trust does not have outstanding any options, warrants or other
rights to subscribe for or purchase any shares of the Acquiring Trust, nor
is there outstanding any security convertible into any shares of the
Acquiring Trust, except such as are contemplated herein.
(g) Authorization. The execution, delivery and performance of this
Agreement will have been duly authorized prior to the Closing Date by all
necessary action, if any, on the part of the Acquiring Trust's Board of
Trustees; and, assuming due execution and delivery hereof by the
Transferring Trust, this Agreement will constitute the valid and legally
binding obligation of the Acquiring Trust on behalf of the Acquiring Funds,
enforceable in accordance with its terms, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
and other similar laws relating to or affecting creditors' rights generally
and court decisions with respect thereto, and to general principles of
equity and the discretion of the court (regardless of whether the
enforceability is considered in a proceeding in equity or at law).
(h) Proxy Statement. The Proxy Statement (only insofar as it relates
to the Acquiring Trust and is based on information furnished by the
Acquiring Trust) will, on the mailing date of the Proxy Statement and on
the Closing Date, not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which such
statements were made, not misleading.
6. COVENANTS OF THE TRANSFERRING TRUST AND THE ACQUIRING TRUST
6.1 Ordinary Course. The Transferring Trust will operate its business in
the ordinary course between the date hereof and the Closing Date, it being
understood that such ordinary course of business will include the declaration
and payment of
A-10
customary dividends and other distributions in the ordinary course and on the
Closing Date.
6.2 Shareholder Meeting. The Transferring Trust shall call a meeting of
its Transferring Fund shareholders to consider and act upon this Agreement and
to take all other action necessary to obtain approval of the transactions
contemplated herein.
6.3 Proxy Statement. The Transferring Trust and the Acquiring Trust shall
cooperate in the provision of all information reasonably necessary for the
preparation, filing and mailing of the proxy statement in connection with the
meeting of the Transferring Class shareholders to consider approval of this
Agreement and the transactions contemplated herein (the "Proxy Statement").
6.4 Approvals. The Acquiring Trust shall use all reasonable efforts to
obtain the approvals and authorizations required by the 1933 Act, the 1940 Act
and such of the state blue sky or securities laws as it may deem appropriate in
order to continue its operations after the Closing Date.
6.5 Additional Actions. Subject to the provisions of this Agreement, the
Transferring Trust and the Acquiring Trust will each take, or cause to be taken,
all action and do, or cause to be done, all things reasonably necessary, proper
or advisable to consummate and make effective the transactions contemplated
herein.
7. CONDITIONS PRECEDENT
7.1 Conditions Precedent to Obligation of the Acquiring Trust. The
obligations of the Acquiring Trust to consummate the transactions provided for
herein shall be subject, at its election, to the performance by the Transferring
Trust of all the obligations to be performed by it hereunder on or before the
Closing Date and, in addition thereto, the following conditions:
(a) Representation and Warranties. All representations and warranties
of the Transferring Trust contained in this Agreement shall be true and
correct in all material respects as of the date hereof and, except as they
may be affected by the transactions contemplated herein, as of the Closing
with the same force and effect as if made on the Closing Date and as of the
Closing.
(b) Certificates. The Transferring Trust shall have delivered to the
Acquiring Trust at the Closing a certificate executed in its name by its
President and a Vice President, in form and substance reasonably
satisfactory to the Acquiring Trust, to the effect that the representations
and warranties of the Transferring Trust made in this Agreement are true
and correct at and as of the Closing, except as they may be affected by the
transactions contemplated herein, and as to such other matters as the
Acquiring Trust shall reasonably request.
7.2 Conditions Precedent to Obligations of the Transferring Trust. The
obligations of the Transferring Trust to consummate the transactions provided
for herein shall be subject, at its election, to the performance by the
Acquiring Trust of all the
A-11
obligations to be performed by it hereunder on or before the Closing Date and,
in addition thereto, the following conditions:
(a) Representations and Warranties. All representations and
warranties of the Acquiring Trust contained in this Agreement shall be true
and correct in all material respects as of the date hereof and, except as
they may be affected by the transactions contemplated herein, as of the
Closing with the same force and effect as if made on the Closing Date and
as of the Closing.
(b) Certificate. The Acquiring Trust shall have delivered to the
Transferring Trust at the Closing a certificate executed in its name by its
President and a Vice President, in form and substance reasonably
satisfactory to the Transferring Trust, to the effect that the
representations and warranties of the Acquiring Trust made in this
Agreement are true and correct at and as of the Closing, except as they may
be affected by the transactions contemplated herein, and as to such other
matters as the Transferring Trust shall reasonably request.
7.3 Further Conditions Precedent to Obligations of the Transferring Trust
and the Acquiring Trust. If any of the conditions set forth below does not
exist on or before the Closing Date with respect to the Transferring Trust or
the Acquiring Trust, the other party to this Agreement, at its option, shall not
be required to consummate the transactions contemplated herein.
(a) Shareholder Approval. This Agreement and the transactions
contemplated herein shall have been approved by the requisite vote of the
holders of the outstanding shares of each Transferring Fund voting both (i)
together as a fund, and (ii) with regard to holders of the outstanding
shares of each Transferring Class, separately as classes, in accordance
with the provisions of the Transferring Trust's Declaration of Trust and
the 1940 Act. If the shareholders of Transferring Classes of some but not
all of the Transferring Funds approve this Agreement and the transactions
contemplated herein, the Board of Trustees of the Transferring Trust or of
the Acquiring Trust may terminate this Agreement pursuant to Section 8 or
may determine to proceed with the Agreement and the transactions with
respect to the Transferring Fund for which a necessary shareholder approval
was obtained.
(b) Litigation. On the Closing Date, no action, suit or other
proceeding shall be pending before any court or governmental agency in
which it is sought to restrain or prohibit, or obtain damages or other
relief in connection with, this Agreement or the transactions contemplated
herein.
(c) Consents and Approvals. All consents of other parties and all
other consents, orders and permits of Federal, state and local regulatory
authorities (including those of the SEC and of state Blue Sky and
securities authorities) deemed necessary by the Transferring Trust or the
Acquiring Trust to permit consummation, in all material respects, of the
transactions contemplated herein shall have been obtained, except where
failure to obtain any such consent, order
A-12
or permit would not involve a risk of a material adverse effect on the
assets or properties of the Transferring Trust or the Acquiring Trust.
(d) Distribution. Each Transferring Class of each Transferring Fund
shall have declared a dividend or dividends that, together with all
previous dividends, shall have the effect of distributing to the
Transferring Fund's shareholders all of its investment company taxable
income, and net interest income excludable from gross income under section
103(a) of the Code, for all its taxable years ended on or prior to the
Closing Date and for its current taxable year through the Closing Date
(computed without regard to any deduction for dividends paid) and any net
capital gain realized in all such taxable years (after reduction for any
capital loss carryforward).
(e) Tax Opinion. The Transferring Trust shall have received an
opinion from Vedder, Price, Kaufman & Kammholz, P.C. substantially to the
effect that the Transferring Funds should not recognize any gain or loss
for federal income tax purposes as a result of the in-kind redemption of
the shares of the Transferring Classes pursuant to the Reorganization. Each
of the Transferring Trust, on behalf of the Transferring Funds, and the
Acquiring Trust, on behalf of the Acquiring Funds, shall cooperate in
providing such representations as are requested by counsel to render such
opinion.
(f) Amortized Cost and Market Value Deviation. The net asset value
per share of the Transferring Fund calculated using market values shall not
deviate by more than .5 of 1% from the net asset value per share calculated
using amortized cost during the period from the date hereof to the Closing.
8. TERMINATION OF AGREEMENT
8.1 Termination. This Agreement and the transactions contemplated herein
may be terminated and abandoned by resolution of the Board of Trustees of the
Transferring Trust or of the Acquiring Trust, as the case may be, at any time at
or prior to the Closing Date (notwithstanding any vote of shareholders) if: (a)
circumstances should develop that, in the opinion of either such Board, make
proceeding with this Agreement inadvisable; (b) a material breach by the other
party of any representation, warranty or agreement contained therein has
occurred; (c) a condition to the obligation of the terminating party cannot
reasonably be met.
8.2 Effect of Termination. If this Agreement is terminated and the
Reorganization is abandoned pursuant to the provisions of this Section 8, this
Agreement shall become void and have no effect, without any liability on the
part of either party hereto or the Trustees, officers or shareholders of the
Transferring Trust or of the Acquiring Trust, as the case may be, in respect of
this Agreement. If this Agreement is terminated or the exchange contemplated
herein is abandoned, Janus Capital shall bear all expenses incurred in
connection with this Agreement and the transactions contemplated herein up to
the time of such termination or abandonment.
A-13
9. MISCELLANEOUS
9.1 Waiver. At any time prior to the Closing Date, any of the conditions
set forth in Section 7 may be waived by the Board of Trustees of the
Transferring Trust or of the Acquiring Trust, as the case may be, if, in the
judgment of either, such waiver will not have a material adverse effect on the
benefits intended under this Agreement to the Transferring Trust or the
Acquiring Trust as the case may be.
9.2 Captions. The captions contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
9.3 Survival of Representations and Warranties. None of the
representations and warranties included or provided for herein shall survive
consummation of the Reorganization.
9.4 Entire Agreement. This Agreement contains the entire agreement and
understanding between the parties with respect to the subject matter hereof and
merges and supersedes all prior discussions, agreements and understandings of
every kind and nature between them relating to the subject matter hereof.
Neither party shall be bound by any condition, definition, warranty or
representation other than as set forth or provided in this Agreement or as may
be, on or subsequent to the date hereof, set forth in a writing signed by the
party to be bound thereby.
9.5 Authorizations. All agreements, representations, actions and
obligations described herein made or to be taken or undertaken by a Transferring
Fund or an Interim Transferring Fund are made and shall be taken or undertaken
by the Transferring Trust on behalf of the Transferring Fund or the Interim
Transferring Fund. All agreements, representations, actions and obligations
described herein made or to be taken or undertaken by an Acquiring Fund are made
and shall be taken or undertaken by the Acquiring Trust on behalf of the
Acquiring Fund.
9.6 Trust Disclosure. Copies of the Declaration of Trust of the
Transferring Trust and the Trust Instrument of Acquiring Trust are on file with
the Secretaries of the Transferring Trust and the Acquiring Trust, respectively.
This Agreement is executed by the undersigned officers on behalf of the
Transferring Trust and the Acquiring Trust, respectively, and not on behalf of
such officers or the Trustees of either the Transferring Trust or the Acquiring
Trust as individuals. The respective obligations of the Transferring Trust and
the Acquiring Trust under this Agreement are not binding upon any of their
respective Trustees, officers or shareholders individually.
9.7 Choice of Law. This Agreement shall be governed and construed in
accordance with the internal laws of the [State of Delaware/Commonwealth of
Massachusetts], without giving effect to principles of conflict of laws.
9.8 Counterparts. This Agreement may be executed in counterparts, each of
which, when executed and delivered, shall be deemed to be an original.
A-14
9.9 Assignment. This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by
either party without the written consent of the other party. Nothing herein
expressed or implied is intended or shall be construed to confer upon or give
any person, firm or corporation, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by reason of
this Agreement.
IN WITNESS WHEREOF, the Transferring Trust, on behalf of the Transferring
Funds, and the Acquiring Trust, on behalf of the Acquiring Funds, have caused
this Agreement and Plan of Reorganization to be executed and attested on its
behalf by its duly authorized representatives as of the date first above
written.
<Table>
JANUS INVESTMENT FUND on behalf of
Janus Money Market Fund and Janus
Government Money Market Fund
ATTEST: By:
------------------------------ --------------------------------
Secretary Vice President
JANUS ADVISER SERIES on behalf of
Janus Institutional Money Market Fund
and Janus Institutional Government
Money Market Fund
ATTEST: By:
------------------------------ --------------------------------
Secretary Vice President
</Table>
A-15
The undersigned is a party to this Agreement solely for the purpose of
Sections 2.9 and 8.2.
<Table>
JANUS CAPITAL MANAGEMENT LLC
ATTEST: By:
------------------------------ --------------------------------
Name:
-------------------------
Title:
-------------------------
</Table>
A-16
APPENDIX A TO AGREEMENT AND PLAN OF REORGANIZATION
<Table>
<Caption>
TRANSFERRING FUND/CLASS INTERIM TRANSFERRING ACQUIRING FUND/CLASS
(EACH A SERIES OF JANUS FUND/CLASS (EACH A SERIES OF (EACH A SERIES OF
INVESTMENT FUND) JANUS INVESTMENT FUND) JANUS ADVISER SERIES)
- ----------------------- ---------------------------- ---------------------
JANUS MONEY JANUS INTERIM MONEY MARKET JANUS
MARKET FUND FUND INSTITUTIONAL
Institutional Shares Institutional Shares MONEY MARKET
Service Shares Service Shares FUND
Institutional Shares
Service Shares
JANUS GOVERNMENT MONEY JANUS INTERIM GOVERNMENT JANUS INSTITUTIONAL
MARKET FUND MONEY MARKET FUND GOVERNMENT MONEY
Institutional Shares Institutional Shares MARKET FUND
Service Shares Service Shares Institutional Shares
Service Shares
</Table>
A-17
EXHIBIT B
BENEFICIAL OWNERS OF 5% OR MORE OF FUND SHARES AS OF DECEMBER 12, 2006
As of the Record Date, the following table lists those shareholders known
to own beneficially 5% or more of the outstanding shares of the Current Classes
of the Current Funds.
<Table>
<Caption>
NAME AND ADDRESS NUMBER OF PERCENTAGE
NAME OF FUND AND CLASS OF BENEFICIAL OWNER SHARES OF CLASS
- ---------------------- ------------------------ ----------------- ----------
Janus Money Market Fund
Institutional Shares.......... Comerica Bank 1,975,911,479 25.38%
Detroit, MI 48226-3155
Comerica Bank 710,000,000 9.12%
Detroit, MI 48226-3215
Hare and Co. 699,932,830 8.99%
The Bank Of New York
East Syracuse, NY 13057-
1382
Union Bank 463,168,356 5.95%
FBO SIMF Omnibus
Reinvest
San Diego, CA 92186-5484
Janus Government Money Market
Fund Institutional Shares..... Comerica Bank 299,476,125 52.77%
Detroit, MI 48226-3155
Employers Health 80,234,712 14.14%
Insurance Co.
Louisville, KY
40202-2946
Colorado State Treasury 50,000,000 8.81%
Denver, CO 80203
Mellon Financial Markets 40,679,472 7.71%
LLC
FBO United Health Group
Pittsburgh, PA
15258-00001
Janus Money Market Fund Service
Shares........................ EGAP & Co. (1) 21,445,902 61.15%
Chittenden Trust Company
Burlington, VT
05402-0820
Wells Fargo Brokerage 13,623,407 38.85%
Services, LLC (2)
Minneapolis, MN 55402-
1916
Janus Government Money Market
Fund Service Shares........... EGAP & Co. (1) 101,106,679 63.87%
Chittenden Trust Company
Burlington, VT
05402-0820
Wells Fargo Brokerage 57,197,976 36.13%
Services, LLC (2)
Minneapolis, MN 55402-
1916
</Table>
- ---------------
(1) EGAP & Co. is governed under the laws of the State of Vermont, and its
parent company is Chittenden Trust Company.
(2) Wells Fargo Brokerage Services, LLC is governed under the laws of
California, and its parent company is Wells Fargo Co.
B-1
EXHIBIT C
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 U.S. District Court for the District of Maryland (the "Court")
for coordinated proceedings. On September 29, 2004, five consolidated amended
complaints were filed with the Court that generally include: (i) claims by a
putative class of investors in certain Janus funds asserting claims on behalf of
the investor class; (ii) derivative claims by investors in certain Janus funds
ostensibly on behalf of such funds; (iii) claims on behalf of participants in
the Janus 401(k) plan; (iv) claims brought on behalf of shareholders of Janus
Capital Group Inc. ("JCGI") on a derivative basis against the Board of Directors
of JCGI; and (v) claims by a putative class of shareholders of JCGI asserting
claims on behalf of the shareholders. 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 (actions (i)
and (ii) described above), except certain claims under Section 10(b) of the
Securities Exchange Act of 1934 and under Section 36(b) of the Investment
Company Act of 1940, as amended (the "1940 Act"). On August 15, 2006, the
complaint in the 401(k) plan class action (action (iii) described above) was
dismissed by the district court with prejudice; the plaintiff has appealed that
dismissal decision to the United States Court of Appeals for the Fourth Circuit.
Motions to dismiss the two actions brought by JCGI shareholders (actions (iv)
and (v) described above) are fully briefed and pending before the district
court.
C-1
In addition to the lawsuits described above, the Auditor of the State of
West Virginia ("Auditor"), in his capacity as securities commissioner, has
initiated administrative proceedings against many 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. 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. No further proceedings are currently
scheduled.
In addition to the "market timing" actions described above, Janus Capital
is a defendant in a consolidated lawsuit in 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 in 2004 by fund investors
asserting breach of fiduciary duty under Section 36(b) of the 1940 Act. The
plaintiffs seek declaratory and injunctive relief and an unspecified amount of
damages. The trial is scheduled to commence on May 21, 2007.
In 2001, Janus Capital's predecessor was also named as a defendant in a
class action suit in 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 vacated that decision and remanded it for
further proceedings. In March 2006, the defendants, including Janus Capital,
filed a Petition for a Writ of Certiorari with the U.S. Supreme Court to review
the decision of the U.S. Court of Appeals. In June 2006, the U.S. Supreme Court
invited the U.S. Solicitor General to file a brief expressing the view of the
United States, and in November 2006, the Solicitor General filed a brief
expressing its view on the matter. The U.S. Supreme Court has granted the
Petition for a Writ of Certiorari.
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.
C-2
FORM OF PROXY CARD
PROXY JANUS INVESTMENT FUND PROXY
JANUS MONEY MARKET FUND
JOINT SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 16, 2007
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF JANUS INVESTMENT FUND ("TRUST"). The undersigned, revoking
previous proxies, hereby appoints Kelley A. Howes, 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 Joint Special Meeting of Shareholders ("Meeting") of Janus Money Market
Fund, to be held at Janus Capital Management LLC, 151 Detroit Street, Denver, CO on February 16, 2007 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
Joint Proxy Statement and Notice of Joint 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 JMM_17019A
VOTING OPTIONS
READ YOUR PROXY STATEMENT AND HAVE IT AT HAND WHEN VOTING.
[COMPUTER LOGO] [TELEPHONE LOGO] [ENVELOPE LOGO] [MAN LOGO]
LOG ON TO: CALL 1-866-241-6192 VOTE, SIGN AND DATE THIS ATTEND SHAREHOLDER MEETING
HTTPS://VOTE.PROXY-DIRECT.COM FOLLOW THE RECORDED PROXY CARD AND JANUS CAPITAL MANAGEMENT LLC
FOLLOW THE ON-SCREEN INSTRUCTIONS INSTRUCTIONS AND RETURN IN THE 151 DETROIT STREET
AVAILABLE 24 HOURS AVAILABLE 24 HOURS POSTAGE-PAID ENVELOPE DENVER, CO
ON FEBRUARY 16, 2007
IF YOU VOTE ON THE INTERNET OR VIA TELEPHONE, YOU NEED NOT RETURN THIS PROXY CARD.
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 PROPOSAL SET FORTH BELOW.
PLEASE MARK A BOX BELOW IN BLUE OR BLACK INK AS FOLLOWS. EXAMPLE: [X]
FOR AGAINST ABSTAIN
1. Approve the transactions contemplated under an Agreement and Plan of [ ] [ ] [ ]
Reorganization, which would result in the transfer of a portion of the assets of
Janus Money Market Fund having a value equal to the aggregate net asset value of
the Institutional Shares and Service Shares of Janus Money Market Fund in
exchange for corresponding shares of Janus Institutional Money Market Fund (a
corresponding series of Janus Adviser Series), and the redemption in kind of
such Institutional Shares and Service Shares by distributing to holders thereof
shares of the acquiring fund equal in value and number to the shares redeemed.
JMM_17019A
FORM OF PROXY CARD
PROXY JANUS INVESTMENT FUND PROXY
JANUS GOVERNMENT MONEY MARKET FUND
JOINT SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 16, 2007
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF JANUS INVESTMENT FUND ("TRUST"). The undersigned, revoking
previous proxies, hereby appoints Kelley A. Howes, 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 Joint Special Meeting of Shareholders ("Meeting") of Janus Government
Money Market Fund, to be held at Janus Capital Management LLC, 151 Detroit Street, Denver, CO on February 16,
2007 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 Joint Proxy Statement and Notice of Joint 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 JMM_17019B
VOTING OPTIONS
READ YOUR PROXY STATEMENT AND HAVE IT AT HAND WHEN VOTING.
[COMPUTER LOGO] [TELEPHONE LOGO] [ENVELOPE LOGO] [MAN LOGO]
LOG ON TO: CALL 1-866-241-6192 VOTE, SIGN AND DATE THIS ATTEND SHAREHOLDER MEETING
HTTPS://VOTE.PROXY-DIRECT.COM FOLLOW THE RECORDED PROXY CARD AND JANUS CAPITAL MANAGEMENT LLC
FOLLOW THE ON-SCREEN INSTRUCTIONS INSTRUCTIONS AND RETURN IN THE 151 DETROIT STREET
AVAILABLE 24 HOURS AVAILABLE 24 HOURS POSTAGE-PAID ENVELOPE DENVER, CO
ON FEBRUARY 16, 2007
IF YOU VOTE ON THE INTERNET OR VIA TELEPHONE, YOU NEED NOT RETURN THIS PROXY CARD.
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 PROPOSAL SET FORTH BELOW.
PLEASE MARK A BOX BELOW IN BLUE OR BLACK INK AS FOLLOWS. EXAMPLE: [X]
FOR AGAINST ABSTAIN
2. Approve the transactions contemplated under an Agreement and Plan of [ ] [ ] [ ]
Reorganization, which would result in the transfer of a portion of the assets of
Janus Government Money Market Fund having a value equal to the aggregate net
asset value of the Institutional Shares and Service Shares of Janus Government
Money Market Fund in exchange for corresponding shares of Janus Institutional
Government Money Market Fund (a corresponding series of Janus Adviser Series),
and the redemption in kind of such Institutional Shares and Service Shares by
distributing to holders thereof shares of the acquiring fund equal in value and
number to the shares redeemed.
JMM_17019B