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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ______________ )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
JANUS INVESTMENT FUND
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(Exact Name of Registrant as Specified in Charter)
151 Detroit Street, Denver, Colorado 80206-4805
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(Address of Principal Executive Offices)
303-333-3863
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(Registrant's Telephone No., including Area Code)
Stephanie Grauerholz-Lofton -- 151 Detroit Street, Denver, Colorado 80206-4805
------------------------------------------------------------------------------
(Name and Address of Agent for Service)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED IN THIS
FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A CURRENTLY VALID OMB
CONTROL NUMBER.
SEC 1913 (04-05)
<Table>
FOR SHAREHOLDERS OF (JANUS LOGO)
JANUS MID CAP VALUE FUND
JANUS SMALL CAP VALUE FUND
</Table>
August 27, 2008
Dear Shareholder:
The Board of Trustees for your Fund is requesting that you vote on a
proposal to approve a new subadvisory agreement between your Fund's investment
adviser, Janus Capital Management LLC ("Janus Capital"), and your Fund's current
subadviser, Perkins, Wolf, McDonnell and Company, LLC ("PWM"). The proposed new
subadvisory agreement will be substantially similar to the current subadvisory
agreement in place for your Fund. The proposal arises because Janus Capital,
which currently owns a 30% interest in PWM, has entered into an agreement to
acquire an additional 50% interest in PWM. Under applicable law, this
transaction could result in a change in control of PWM that could cause an
automatic termination of the current subadvisory agreement. We are therefore
seeking your approval of a new agreement so that PWM can continue to serve as
your Fund's subadviser.
The Board of Trustees for your Fund is also requesting that you vote on a
proposal to approve an amended and restated investment advisory agreement
between your Fund and its investment adviser, Janus Capital. The proposed
amended and restated investment advisory agreement will make Janus Capital,
rather than your Fund, responsible for paying PWM for its services as
subadviser, which would be in line with industry standard regarding payment of
subadvisory fees. The proposed amended and restated investment advisory
agreement for Janus Small Cap Value Fund will also change that Fund's investment
advisory fee structure from a fixed rate to a rate that adjusts up or down based
upon the Fund's performance relative to its benchmark index, the Russell 2000(R)
Value Index. (The current investment advisory agreement for Janus Mid Cap Value
Fund already provides for a similar performance adjustment.) The Board of
Trustees believes that moving to a fee schedule that moves up or down based upon
the Fund's performance better aligns the interests of the Fund's managers with
those of the shareholders of the Fund. Please read the Proxy Statement for a
description of the performance-based fee structure you are being asked to
approve. All other terms of the amended and restated investment advisory
agreement will be substantially similar to the current investment advisory
agreement in place for your Fund.
These proposals will be presented to shareholders at a joint Special
Meeting of Shareholders to be held October 30, 2008. For additional details
about the proposals, please read the Questions and Answers section at the
beginning of the enclosed Proxy Statement, as well as the entire Proxy
Statement.
THE INDEPENDENT TRUSTEES OF EACH FUND BELIEVE THE PROPOSALS ARE IN THE BEST
INTEREST OF SHAREHOLDERS AND HAVE RECOMMENDED THAT SHAREHOLDERS VOTE "FOR" THE
PROPOSED NEW SUBADVISORY AGREEMENT AND THE PROPOSED AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT.
You can vote in one of four ways:
- BY MAIL with the enclosed proxy card;
- BY INTERNET through the website listed in the proxy voting instructions;
- BY TELEPHONE by calling the toll-free number listed on your proxy card
and following the recorded instructions; or
- IN PERSON at the Special Meeting of Shareholders on October 30, 2008.
Your vote is extremely important, so please read the enclosed Proxy
Statement carefully and submit your vote. If you have any questions about the
proposals, please call our proxy solicitor, D.F. King & Co., Inc., at
1-800-628-8528.
Thank you for your consideration of these important proposals. We value you
as a shareholder and look forward to our continued relationship.
Sincerely,
/s/ Robin C. Beery
Robin C. Beery
President and Chief Executive Officer of
Janus Investment Fund
JANUS INVESTMENT FUND
JANUS MID CAP VALUE FUND
JANUS SMALL CAP VALUE 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 Mid Cap Value Fund and Janus Small Cap Value Fund (each, a "Fund" and
together, the "Funds"), each a series of Janus Investment Fund (the "Trust"),
has been called to be held at the JW Marriott Hotel, 150 Clayton Lane, Denver,
Colorado 80206, on October 30, 2008, at 10:00 a.m. Mountain Time (together with
any adjournments or postponements thereof, the "Meeting"). At the Meeting,
shareholders of each Fund will be asked to vote on the proposals set forth
below, as applicable, and to transact such other business, if any, as may
properly come before the Meeting.
Proposal 1: Janus Mid Cap Value Fund only: To approve a new subadvisory
agreement between Janus Capital Management LLC ("Janus
Capital"), the Fund's investment adviser, and Perkins, Wolf,
McDonnell and Company, LLC ("PWM"), the Fund's current
subadviser.
Proposal 2: Janus Small Cap Value Fund only: To approve a new subadvisory
agreement between Janus Capital, the Fund's investment adviser,
and PWM, the Fund's current subadviser.
Proposal 3: Janus Mid Cap Value Fund only: To approve an amended and
restated investment advisory agreement between the Trust, on
behalf of the Fund, and Janus Capital, to reallocate the
obligation to compensate any subadviser engaged by Janus
Capital.
Proposal 4: Janus Small Cap Value Fund only: To approve an amended and
restated investment advisory agreement between the Trust, on
behalf of the Fund, and Janus Capital, to reallocate the
obligation to compensate any subadviser engaged by Janus
Capital, and to change the investment advisory fee rate from a
fixed rate to a rate that adjusts up or down based upon the
Fund's performance relative to its benchmark index, the Russell
2000(R) Value Index.
Shareholders of record of each Fund, as of the close of business on August
20, 2008, will receive notice of the Meeting and will be entitled to vote at the
Meeting.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE URGED TO COMPLETE,
SIGN, AND DATE THE ENCLOSED PROXY CARD(S) AND RETURN IT IN THE ENCLOSED
ADDRESSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES, OR TO
TAKE ADVANTAGE OF THE INTERNET OR TELEPHONIC VOTING PROCEDURES DESCRIBED ON THE
ENCLOSED PROXY CARD(S). 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/ Robin C. Beery
Robin C. Beery
President and Chief Executive Officer of
Janus Investment Fund
August 27, 2008
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and may avoid 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 John Doe, Trustee
Plan
Trust Account
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee u/t/d Jane B. Doe
12/28/78
Custodial or Estate Account
(1) John B. Smith, Cust. f/b/o John B. Smith
John B. Smith, Jr. UGMA
(2) Estate of John B. Smith John B. Smith, Jr., Executor
</Table>
August 27, 2008
JANUS INVESTMENT FUND
JANUS MID CAP VALUE FUND
JANUS SMALL CAP VALUE FUND
151 DETROIT STREET
DENVER, COLORADO 80206
JOINT SPECIAL MEETING OF SHAREHOLDERS
JOINT PROXY STATEMENT
This is a joint Proxy Statement for Janus Mid Cap Value Fund and Janus
Small Cap Value Fund (each, a "Fund" and together, the "Funds"), each a series
of Janus Investment Fund (the "Trust"). Proxies for a joint Special Meeting of
Shareholders of each Fund are being solicited by the Board of Trustees of the
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 Mid Cap Value Fund only: To approve a new subadvisory
agreement between Janus Capital Management LLC ("Janus
Capital"), the Fund's investment adviser, and Perkins, Wolf,
McDonnell and Company, LLC ("PWM"), the Fund's current
subadviser.
Proposal 2: Janus Small Cap Value Fund only: To approve a new
subadvisory agreement between Janus Capital, the Fund's
investment adviser, and PWM, the Fund's current subadviser.
Proposal 3: Janus Mid Cap Value Fund only: To approve an amended and
restated investment advisory agreement between the Trust, on
behalf of the Fund, and Janus Capital, to reallocate the
obligation to compensate any subadviser engaged by Janus
Capital.
Proposal 4: Janus Small Cap Value Fund only: To approve an amended and
restated investment advisory agreement between the Trust, on
behalf of the Fund, and Janus Capital, to reallocate the
obligation to compensate any subadviser engaged by Janus
Capital, and to change the investment advisory fee rate from
a fixed rate to a rate that adjusts up or down based upon
the Fund's performance relative to its benchmark index, the
Russell 2000(R) Value Index.
1
The joint Special Meeting of Shareholders will be held at the JW Marriott
Hotel, 150 Clayton Lane, Denver, Colorado 80206, on October 30, 2008 at 10:00
a.m. Mountain Time, or at such later time as may be necessary due to
adjournments or postponements thereof (the "Meeting"). Any shareholder of record
who owned shares of a Fund as of the close of business on August 20, 2008 (the
"Record Date"), will receive notice of the Meeting and will be entitled to vote
at the Meeting.
At the Meeting, you will be asked to vote on the proposals for the Fund of
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, D.F. King & Co., Inc., at 1-800-628-8528. The Proxy Statement, Notice
of Special Meeting, and the proxy card(s) are first being mailed to shareholders
on or about August 27, 2008.
THE 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 EACH FUND'S MOST RECENT ANNUAL REPORT
AND ANY MORE RECENT SEMIANNUAL REPORT ARE AVAILABLE, WITHOUT CHARGE, BY CALLING
A JANUS REPRESENTATIVE AT 1-800-525-3713, VIA THE INTERNET AT WWW.JANUS.COM, OR
BY SENDING A WRITTEN REQUEST TO THE SECRETARY OF THE TRUST AT 151 DETROIT
STREET, DENVER, COLORADO 80206.
2
QUESTIONS AND ANSWERS
The following Questions and Answers are intended to provide an overview of
the information provided in this Proxy Statement and to summarize the proposals
to be considered at the Meeting, or at any adjournment thereof.
WHAT IS BEING PROPOSED?
You are being asked to approve a new subadvisory agreement between Janus
Capital Management LLC ("Janus Capital"), your Fund's investment adviser, and
Perkins, Wolf, McDonnell and Company, LLC ("PWM"), your Fund's subadviser (the
"New Subadvisory Agreement"). A form of the proposed New Subadvisory Agreement
is attached as Exhibit A to this Proxy Statement.
You are also being asked to approve an amended and restated investment
advisory agreement between your Fund and Janus Capital, which has been amended
to provide that Janus Capital would be responsible for compensating PWM for its
services, rather than PWM being compensated directly by your Fund (the "Amended
Advisory Agreement"). In addition, the Amended Advisory Agreement for Janus
Small Cap Value Fund will change the investment advisory fee rate paid to Janus
Capital from a fixed rate to a rate that adjusts up or down based upon the
Fund's performance relative to its benchmark index, the Russell 2000(R) Value
Index. A form of the proposed Amended Advisory Agreements for Janus Mid Cap
Value Fund and Janus Small Cap Value Fund is attached as Exhibit B to this Proxy
Statement.
The following table identifies which Fund is entitled to vote on each
proposal:
<Table>
<Caption>
PROPOSALS
----------------------------------------------------------
4
3 (AMENDED
1 2 (AMENDED ADVISORY
(NEW SUB- (NEW SUB- ADVISORY AGREEMENT
ADVISORY ADVISORY AGREEMENT REALLOCATION AND
FUND AGREEMENT) AGREEMENT) REALLOCATION) PERFORMANCE FEE)
---- ---------- ---------- ------------- ----------------
Janus Mid Cap Value
Fund............... X X
Janus Small Cap Value
Fund............... X X
</Table>
If approved, the New Subadvisory Agreements and the Amended Advisory
Agreements will take effect upon consummation of the transaction discussed
below, which is anticipated to occur in the fourth quarter of 2008. If the
Amended Advisory Agreement is approved for Janus Small Cap Value Fund, the
performance-based advisory fee structure is expected to take effect on the first
day of the month following the approval; however, the first performance fee
adjustment will not occur until one year after the new fee structure takes
effect.
3
WHAT IS HAPPENING BETWEEN JANUS CAPITAL AND PWM?
In 2003, Janus Capital acquired 30% of the outstanding ownership interests
of PWM, and also obtained the right to purchase certain additional blocks of the
outstanding ownership interests of PWM. The 70% of PWM that is not currently
owned by Janus Capital is beneficially owned by several affiliates of PWM,
including certain employees of PWM and members of their respective families (the
"Sellers").
On July 7, 2008, Janus Capital and the Sellers entered into a Unit Purchase
Agreement (the "Purchase Agreement"), according to which Janus Capital will
acquire an additional 50% of PWM (the "Pending Acquisition"), pending
shareholder approval of various proposals. In connection with the consummation
of the Pending Acquisition, PWM will change its name to "Perkins Investment
Management LLC." Under the Purchase Agreement, certain current owners of PWM
have retained a 20% beneficial interest in PWM. Janus Capital, however, has the
right to acquire all or a portion of that retained interest under certain
circumstances.
Janus Capital expects PWM to serve as its domestic value equity investment
platform (the "Value Platform"). Management of the Value Platform will be
ultimately determined by a Board of Directors of PWM, which will be controlled
by Janus Capital, together with Janus Capital Group Inc. ("JCGI"), (collectively
"Janus"). This Board of Directors is separate and distinct from the Board of
Trustees of the Funds.
HOW WILL THE TRANSACTION BETWEEN JANUS CAPITAL AND PWM AFFECT MY FUND?
Under applicable law, the Pending Acquisition may be deemed to be a sale of
a "controlling block" of PWM's voting securities and, as a result, the
consummation of the Pending Acquisition could result in an automatic termination
of the current subadvisory agreements between Janus Capital and PWM. Therefore,
shareholders of the Funds will be asked to approve new subadvisory agreements
between Janus Capital and PWM.
Consummation of the Pending Acquisition is not expected to have any
material impact on the principal investment policies, strategies, or risks of
the Funds. Your current subadviser, including your current Portfolio Managers,
will still be responsible for the day-to-day management of your Fund immediately
following the transaction. In addition, the management fee rate paid by Janus
Mid Cap Value Fund will not change as a result of the Pending Acquisition. If
shareholders of Janus Small Cap Value Fund approve Proposal 4, the base
management fee rate paid by that Fund will not change, but the performance-based
fee adjustment may increase or decrease the rate of the advisory fee based on
the Fund's performance relative to its benchmark index, the Russell 2000(R)
Value Index.
If approved by shareholders and if certain other conditions, as described
in the Purchase Agreement or as otherwise agreed to by Janus Capital and PWM,
are satisfied, the Pending Acquisition, the amended and restated investment
advisory
4
agreements, and the subadvisory agreements are each expected to become effective
in the fourth quarter of 2008. After the closing of the Pending Acquisition, the
Funds intend to change their names to "Perkins Mid Cap Value Fund" and "Perkins
Small Cap Value Fund," respectively.
WHY AM I BEING ASKED TO APPROVE A NEW SUBADVISORY AGREEMENT?
Under the Investment Company Act of 1940, as amended (the "1940 Act"), the
structure of the Pending Acquisition could be deemed an "assignment" of the
current subadvisory agreement between Janus Capital and PWM, which automatically
terminates the current subadvisory agreement and requires approval of a new
subadvisory agreement if PWM is to continue to serve as subadviser. The proposed
New Subadvisory Agreement for your Fund is substantially similar to the current
subadvisory agreement. The Board of Trustees has approved the New Subadvisory
Agreements and authorized submission of each agreement to shareholders for
approval.
WHY AM I BEING ASKED TO APPROVE AN AMENDED AND RESTATED INVESTMENT ADVISORY
AGREEMENT?
The Amended Advisory Agreement for your Fund will reallocate, from your
Fund to Janus Capital, the obligation to compensate any subadviser engaged by
Janus Capital for its services as subadviser. Under the current and proposed
subadvisory relationship, PWM would continue to act as subadviser. In addition,
the Amended Advisory Agreement for Janus Small Cap Value Fund will change that
Fund's investment advisory fee structure from a fixed rate to a rate that
adjusts up or down based upon the Fund's performance, as described in the
question below. Shareholders of Janus Small Cap Value Fund should note that, if
they approve the proposed Amended Advisory Agreement for that Fund, PWM's
subadvisory fee rate will also adjust up or down in line with the performance
fee, as Janus Capital will pay 50% of the advisory fee it receives from the Fund
to PWM. These proposed amendments to the current advisory agreements require
your approval of an Amended Advisory Agreement.
WHY IS THE BOARD PROPOSING MOVING TO A PERFORMANCE-BASED FEE SCHEDULE FOR JANUS
SMALL CAP VALUE FUND?
The Board believes that a fee schedule that adjusts based upon the positive
or negative performance of the Fund, relative to its benchmark index, better
aligns the interests of the managers with those of the Fund's shareholders. It
is possible, however, that the addition of a performance-based fee structure may
not always align these interests. (The current investment advisory agreement for
Janus Mid Cap Value Fund already provides for a performance adjustment.)
Currently, Janus Small Cap Value Fund pays an advisory fee at a fixed annual
rate. As proposed, the rate of investment advisory fee payable to Janus Capital
would decrease when the Fund does not perform well, relative to its benchmark
index, and would increase
5
during periods when the Fund outperforms its benchmark index. In addition, since
PWM receives 50% of the advisory fee payable to Janus Capital, PWM's
compensation for managing that Fund will also be subject to performance
adjustments. Janus Capital and PWM believe that the proposed advisory fee
structure will enable them to maintain the quality of services they provide to
the Fund and to attract and retain talented investment personnel.
WHAT IS THE RECOMMENDATION OF THE BOARD OF TRUSTEES?
The Board of Trustees recommends that you vote "FOR" the proposals
applicable to your Fund.
WHO WILL PAY FOR THE PROXY SOLICITATION?
Janus Capital and PWM will jointly bear the costs associated with the
Meeting and the proxy solicitation. Neither you nor your Fund will bear any of
those costs.
WHAT WILL HAPPEN IF SHAREHOLDERS OF A FUND DO NOT APPROVE THE APPLICABLE
PROPOSALS?
If shareholders of a Fund do not approve the proposals applicable to their
Fund, the current investment advisory and subadvisory agreements will remain in
effect with respect to the Funds. The Board of Trustees will take such action as
it deems to be in the best interest of the Funds, including potentially
soliciting additional proxies.
WHO IS ELIGIBLE TO VOTE?
Shareholders of record who owned shares of a Fund at the close of business
on August 20, 2008 (the "Record Date") will be entitled to be present and vote
at the Meeting. Those shareholders are entitled to one vote for each whole
dollar (and a proportionate fractional vote for each fractional dollar) of net
asset value owned on all matters presented at the Meeting regarding their
respective Fund.
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, by going to the website listed on your proxy card;
- BY TELEPHONE, using the toll-free number listed on your proxy card; or
- IN PERSON, by attending the Special Meeting of Shareholders on October
30, 2008 (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.
6
It is important that shareholders respond to ensure that there is a quorum
for the Meeting. If we do not receive your response within a few weeks, you may
be contacted by D.F. King & Co., Inc., the proxy solicitor engaged by Janus
Capital, who will remind you to vote your shares and help you return your proxy.
If we do not receive sufficient votes to approve the New Subadvisory Agreements
or the Amended Advisory Agreements by the date of the Meeting, we may adjourn
the Meeting to a later date so that we can continue to seek additional votes.
IF I SEND MY VOTE IN NOW AS REQUESTED, CAN I CHANGE IT LATER?
Yes. You may revoke your proxy vote at any time before it is voted at the
Meeting by: (i) delivering a written revocation to the Secretary of the Trust at
151 Detroit Street, Denver, Colorado 80206; (ii) submitting a subsequently
executed proxy vote; or (iii) attending the Meeting and voting in person.
Even if you plan to attend the Meeting, we ask that you return your proxy.
This will help us ensure that an adequate number of shares are present at the
Meeting for consideration of the proposals.
WHAT IS THE REQUIRED VOTE TO APPROVE THE PROPOSALS FOR EACH FUND?
Approval of each applicable proposal by a Fund will require the affirmative
vote of a "majority of the outstanding voting securities" of that Fund within
the meaning of the 1940 Act. A "majority of the outstanding voting securities"
means the lesser of (i) 67% or more of the shares of the Fund present at the
Meeting, if the holders of more than 50% of the outstanding shares are present
or represented by proxy, or (ii) more than 50% of the outstanding shares (a
"1940 Act Majority"). Thirty percent of the shares entitled to vote shall
constitute a quorum.
Additionally, implementation of the New Subadvisory Agreements and the
Amended Advisory Agreements is contingent upon approval of each Proposal within
this Proxy Statement, as well as approval of similar proposals by shareholders
of Janus Adviser Mid Cap Value Fund and Mid Cap Value Portfolio, which are
series, respectively, of Janus Adviser Series ("JAD") and Janus Aspen Series
("JAS"), other registered investment companies advised by Janus Capital. Each of
those separate proposals is described in other proxy statements. In addition,
implementation of each Proposal is contingent upon the closing of the Pending
Acquisition and other conditions as described in the Purchase Agreement or
otherwise agreed to by Janus Capital and PWM.
WHO SHOULD I CALL FOR ADDITIONAL INFORMATION ABOUT THIS PROXY STATEMENT?
Please call D.F. King & Co., Inc., the proxy solicitor for the Funds, at
1-800-628-8528.
7
PROPOSAL 1 AND PROPOSAL 2
APPROVE A NEW SUBADVISORY AGREEMENT BETWEEN
JANUS CAPITAL AND PWM
INTRODUCTION
PWM currently serves as subadviser to each Fund pursuant to a separate
subadvisory agreement between PWM and Janus Capital, each dated July 1, 2004
(each, together with any amendments thereto, a "Current Subadvisory Agreement"
or "Agreement").
In 2003, Janus Capital acquired 30% of the outstanding ownership interests
of PWM, and also obtained the right to purchase certain additional blocks of the
outstanding ownership interests of PWM. The 70% of PWM that is not currently
owned by Janus Capital is beneficially owned by several affiliates of PWM,
including certain employees of PWM and members of their respective families.
On July 7, 2008, Janus Capital and the Sellers entered into a Purchase
Agreement, pursuant to which Janus Capital will acquire an additional 50% of PWM
(as previously defined, the "Pending Acquisition"), pending shareholder approval
of various proposals. In connection with the consummation of the Pending
Acquisition, PWM will change its name to "Perkins Investment Management LLC."
Under the Purchase Agreement, certain current owners of PWM have retained a 20%
beneficial interest in PWM. Janus Capital, however, has the right to acquire all
or a portion of that retained interest under certain circumstances.
The 1940 Act requires that an agreement under which a registered investment
adviser serves as the subadviser to an investment company must provide for the
automatic termination of the agreement in the event of its "assignment" (as
defined in the 1940 Act). A sale of a "controlling block" of an investment
adviser's voting securities generally is deemed to result in an assignment of
the investment adviser's advisory agreements. Because the Pending Acquisition
may be deemed to be the sale of a "controlling block" of PWM's voting
securities, the consummation of that transaction could result in the assignment
and automatic termination of the Current Subadvisory Agreements. Accordingly,
the New Subadvisory Agreements between PWM and Janus Capital, on behalf of each
Fund, are being proposed for approval by shareholders of each Fund. A form of
the proposed New Subadvisory Agreement is attached to this Proxy Statement as
Exhibit A. The terms of each New Subadvisory Agreement are substantially similar
in all material respects to the terms of the corresponding Current Subadvisory
Agreement and are described in this Proxy Statement. The Board of Trustees has
authorized the submission of the New Subadvisory Agreements to shareholders for
approval with respect to their applicable Fund.
Shareholders of Janus Mid Cap Value Fund will vote on Proposal 1 and
shareholders of Janus Small Cap Value Fund will vote on Proposal 2.
8
INFORMATION CONCERNING THE SUBADVISER
PWM, to be renamed "Perkins Investment Management LLC" following the
consummation of the Pending Acquisition, is principally located at 311 S. Wacker
Drive, Suite 6000, Chicago, Illinois 60606. PWM is a subsidiary of Janus Capital
and is registered as an investment adviser with the Securities and Exchange
Commission (the "SEC"). PWM and its predecessor have been in the investment
management business since 1984. PWM also serves as investment adviser or
subadviser to separately managed accounts and other registered investment
companies. Janus Capital currently has a 30% ownership stake in PWM. As of March
31, 2008, PWM had $10 billion in assets under management. It is expected that,
immediately following the Pending Acquisition, the same investment and senior
management personnel will remain responsible for the day-to-day operations of
PWM.
Assuming the closing of the Pending Acquisition, PWM will be 80% owned by
Janus Capital, located at 151 Detroit Street, Denver, Colorado 80206, and 20%
owned by a newly formed limited liability company called "Omni Investment
Holdings LLC," which in turn will be owned by certain principal employees of
PWM, among others.
PWM acts as investment adviser or subadviser to other investment companies
with investment objectives and strategies similar to those of the Funds.
Information on those similar investment companies is set forth in Exhibit C to
this Proxy Statement.
PRINCIPAL EXECUTIVE OFFICERS AND DIRECTORS OF THE SUBADVISER. Information
regarding the principal executive officers and directors of PWM is set forth
below. Unless otherwise noted, the principal address for each person listed
below, as it relates to his duties with PWM, is the same as that of PWM.
<Table>
<Caption>
NAME POSITION WITH PWM
---- -----------------
Robert Perkins............... President, Manager
Gregory Wolf................. Chief Operating Officer
N. Theodore Hans............. Chief Compliance Officer
Jeffrey Kautz................ Chief Investment Officer, Manager
Gary Black*.................. Manager
</Table>
---------------
* Principal address is 151 Detroit Street, Denver, Colorado 80206.
Following the consummation of the Pending Acquisition, the composition of
the seven-person Board of Directors of PWM will consist of three representatives
from PWM and four representatives from Janus.
COMPARISON OF THE CURRENT AND NEW SUBADVISORY AGREEMENTS
Each Current Subadvisory Agreement and the corresponding New Subadvisory
Agreement are substantially similar, except for the proposed reallocation to
Janus
9
Capital of the obligation to compensate PWM, or any subadviser engaged by Janus
Capital. Differences also include dates of execution and termination provisions,
and the New Subadvisory Agreements reflect the new name of PWM as "Perkins
Investment Management LLC." A description of the Current and New Subadvisory
Agreements follows.
Subadvisory Services. Under the terms of each Current Subadvisory
Agreement, PWM: (i) manages the investment operations of the Fund; (ii) keeps
Janus Capital fully informed as to the valuation of assets of the Fund, its
condition, investment decisions and considerations; (iii) maintains all books
and records required under federal securities law relating to day-to-day
portfolio management of the Fund; (iv) performs certain limited related
administrative functions; and (v) provides the Trustees and Janus Capital with
economic, operational, and investment data and reports. Additionally, PWM
determines what securities and other assets of the Fund will be acquired, held,
disposed of or loaned, in conformity with the investment objectives, policies,
and restrictions established by the Trustees and set forth in the Trust's
registration statement.
The terms of each New Subadvisory Agreement relating to the provision of
such advisory services are the same as those of each Current Subadvisory
Agreement.
Compensation. In return for the services provided, PWM is entitled to
receive a subadvisory fee, paid by the Fund, that is accrued daily and payable
monthly at an annual rate equal to 50% of the investment advisory fee otherwise
payable by each Fund to Janus Capital (calculated after any applicable
performance fee adjustments, fee waivers, and expense reimbursements). Under the
Current Subadvisory Agreement, the Fund pays the subadvisory fee directly to
PWM. Under the New Subadvisory Agreement, Janus Capital, and not the Fund, pays
PWM its subadvisory fee. Shareholders of Janus Small Cap Value Fund should note
that, if they approve the proposed Amended Advisory Agreement for that Fund,
PWM's subadvisory fee rate will also adjust up or down in line with the
performance fee, as Janus Capital will pay 50% of the advisory fee it receives
from the Fund to PWM.
During the most recent fiscal year ended October 31, 2007, Janus Mid Cap
Value Fund and Janus Small Cap Value Fund paid subadvisory fees to PWM of
$19,398,485 and $6,429,645, respectively.
If the New Subadvisory Agreement had been in effect for Janus Mid Cap Value
Fund, PWM would have received the same amount of fees with respect to the Fund
except those fees would have been paid by the Fund to Janus Capital and Janus
Capital in turn would have paid PWM.
With respect to Janus Small Cap Value Fund, the following table summarizes
the pro forma subadvisory fees based on the average net assets of the Fund that
would have been paid by Janus Capital to PWM if the New Subadvisory Agreement
had been in effect for the fiscal year ended October 31, 2007. This information
10
assumes that the Performance Adjustment (as described further under Proposal 4)
would have been in effect during the fiscal year and that it would have been
calculated over the 36-month period ended October 31, 2007. The last column
indicates the percentage increase or decrease of the fee that PWM would have
received had the proposed performance-based fee arrangement been in effect
during the period.
<Table>
<Caption>
AVERAGE NET ASSETS PRO FORMA % INCREASE(+)
(000'S) SUBADVISORY FEES OR DECREASE(-)
------------------ ---------------- --------------
$1,805,496 $4,651,234 -27.7%
</Table>
In addition to the subadvisory fee paid to PWM for services provided to
Janus Small Cap Value Fund, Janus Capital also pays PWM a fee equivalent to
approximately one-half of the reduction in the advisory fee paid by Janus Small
Cap Value Fund that Janus Capital agreed to in August 2004 in connection with
the Assurance of Discontinuance entered into with the New York Attorney General.
As a result, for the fiscal year ended October 31, 2007, Janus Capital paid PWM
an additional $352,127.
Liability. Each Current Subadvisory Agreement provides that PWM, and any
affiliate of PWM performing services for the Funds contemplated thereunder
(including any managers, members, owners, directors, and officers of PWM and
such affiliates), shall not be liable for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or omission
taken with respect to the Fund, except for willful misfeasance, bad faith or
gross negligence in the performance of their respective duties, or by reason of
reckless disregard of their respective obligations and duties under the
Agreement, and except to the extent otherwise provided by law.
The provisions of the New Subadvisory Agreements with respect to liability
are the same as those of the Current Subadvisory Agreements.
Termination of the Agreement. Each Current Subadvisory Agreement
terminates automatically in the event of its assignment or upon the termination
of the corresponding investment advisory agreement with Janus Capital. Each
Current Subadvisory Agreement may be terminated, without penalty, either by the
vote of a 1940 Act Majority of the Fund's outstanding voting securities or by
the Board, upon 60 days' written notice to PWM. Each Current Subadvisory
Agreement may also be terminated, without penalty, by Janus Capital or the
Trust: (i) by giving 60 days' written notice of termination to PWM; (ii) if PWM
materially breaches any of the representations and warranties set forth in the
Agreement and such breach is not cured within 20 days' of notice thereof; or
(iii) if PWM becomes unable to discharge its duties and obligations under the
Agreement. Additionally, each Agreement may be terminated by PWM (i) upon a
material breach by Janus Capital of any of the obligations set forth in the
Agreement, if such breach is not cured within 20 days after notice thereof, or
(ii) upon three years' written notice.
11
Each New Subadvisory Agreement also terminates automatically in the event
of its assignment or upon termination of the Fund's corresponding investment
advisory agreement. Each New Subadvisory Agreement may be terminated at any
time, without penalty, either by the shareholders of the Fund acting by vote of
at least a majority of its outstanding voting securities, or by the Trustees,
provided in either case that 90 days' advance written notice of termination be
given to PWM at its principal place of business. Each New Subadvisory Agreement
may also be terminated (i) by Janus Capital or by PWM at any time, without
penalty, by giving 90 days' advance written notice of termination to the other
party, or (ii) by Janus Capital or the Trust, without advance notice, if PWM
becomes unable to discharge its duties and obligations under the New Subadvisory
Agreement.
Additional Information. Each Trustee is an "Independent Trustee," meaning
that he or she is not an "interested person" (as defined by the 1940 Act) of the
Trust. Each Current Subadvisory Agreement, dated July 1, 2004, as amended June
14, 2006, was last submitted to shareholders for approval on March 7, 2003 in
connection with the reorganization of each Fund from another fund complex into
the Janus fund complex. At a meeting of the Trustees held on December 14, 2007,
the Trustees approved the continuation of each Current Subadvisory Agreement.
Each Fund's Current Subadvisory Agreement continues in effect until February 1,
2009, and thereafter from year to year as long as such continuance is approved
at least annually by a majority of the Independent Trustees, and by either a
majority of the outstanding voting securities of the Fund or the Board of
Trustees. In conjunction with their approval of the continuance of the Current
Subadvisory Agreements, the Board noted that at a meeting held on November 6,
2007, they had previously approved the New Subadvisory Agreements and that such
new agreements would not take effect unless approved by shareholders. A
discussion of the Board's considerations and recommendations concerning the New
Subadvisory Agreements at the November 6, 2007 board meeting follows below.
Each New Subadvisory Agreement is contingent upon, and will become
effective upon consummation of, the closing of the Pending Acquisition, subject
to certain other conditions. Each Current Subadvisory Agreement will be in
effect until it terminates in accordance with its terms, including or until the
consummation of the transaction between PWM and Janus Capital. If approved, each
New Subadvisory Agreement will be in effect for an initial term ending on
February 1, 2009, and may continue in effect thereafter from year to year if
such continuance is specifically approved at least annually by either the Board
of Trustees or the affirmative vote of a 1940 Act Majority of the outstanding
voting securities of the Fund and, in either event, by the vote of a majority of
the Independent Trustees, cast in person at a meeting called for such purpose.
BOARD APPROVAL AND RECOMMENDATION
The Trustees of Janus Investment Fund, all of whom are Independent Trustees
and none of whom has ever been affiliated with Janus Capital or PWM, considered
12
the New Subadvisory Agreements for the Funds. In the course of their
consideration of the New Subadvisory Agreements, the Independent Trustees met in
executive session and were advised by their independent legal counsel. The
Independent Trustees received and reviewed a substantial amount of information
provided by Janus Capital and PWM in response to requests of the Independent
Trustees and their counsel. They also considered information provided by their
independent fee consultant. Based on their evaluation of that information and
other factors, on November 6, 2007, the Independent Trustees approved the New
Subadvisory Agreement for each Fund, subject to shareholder approval.
In considering whether to approve the New Subadvisory Agreements, the Board
of Trustees noted that, except for the proposed reallocation to Janus Capital of
the obligation to pay compensation to the subadviser, the New Subadvisory
Agreements are substantially similar to the Current Subadvisory Agreements,
which were most recently approved by them at a meeting held on December 20,
2006. The Board also met with representatives of PWM and considered the
information provided by Janus Capital in preparation for the Trustees'
consideration of advisory contracts at their meetings held in December 2007. The
Board took into account the investment performance of PWM as subadviser to the
Funds and concluded that such performance was acceptable. The Board considered
information regarding the Pending Acquisition, including the allocation of
control between Janus Capital and the other beneficial owners of PWM, and the
potential impact of the Pending Acquisition on the finances and operation of
PWM. The Board noted that Janus Capital had maintained a substantial ownership
interest in PWM since 2003. The Board also noted Janus Capital's intention to
build a Value Platform, to maintain each Fund's current investment philosophy,
and to retain key investment personnel. Certain of these considerations are
discussed in more detail below.
NATURE, EXTENT AND QUALITY OF SERVICES
The Trustees' analysis of the nature, extent, and quality of PWM's services
to the Funds took into account the investment objectives and strategies of the
Funds and the knowledge the Trustees gained from their regular meetings with PWM
throughout prior years with respect to the Funds. In addition, the Trustees
reviewed PWM's resources and key personnel, especially those who would be
providing investment management services to the Funds. The Trustees also
considered other services to be provided to the Funds by PWM. Janus Capital
advised the Board of Trustees that it expects that there will be no diminution
in the scope and quality of advisory services provided to the Funds as a result
of the Pending Acquisition or New Subadvisory Agreements.
The Trustees concluded that the subadvisory relationship and arrangement
was not expected to adversely affect the nature, extent or quality of services
provided to the Funds, and that the Funds would continue to benefit from
services provided under the New Subadvisory Agreements. They also concluded that
the quality of PWM's services to the Funds has been adequate. In reaching their
conclusions, the
13
Trustees considered: (i) information provided by Janus Capital and PWM in
connection with the Trustees' consideration of the New Subadvisory Agreements;
(ii) the key factors identified in materials previously provided to the Trustees
by their independent counsel; (iii) that the New Subadvisory Agreements will not
cause any change in the portfolio managers who handle the day-to-day management
responsibilities for the Funds; and (iv) that there will be no change in the
overall investment strategies of the Funds. They also concluded that PWM's
financial condition was sound.
COSTS OF SERVICES PROVIDED
The Trustees considered the subadvisory fee rates and fee structures under
the New Subadvisory Agreements, as well as the overall fee structure of the
Funds. The Trustees examined the fee information and expenses for the Funds in
comparison to information for other comparable funds, as provided by Lipper,
Inc. ("Lipper"), an independent provider of investment company data. In
reviewing the data, the Trustees noted that, under the terms of the proposed
Amended Advisory Agreements, the Funds' expense structures would now include
payment to only Janus Capital for investment management services, as opposed to
payment to both Janus Capital and PWM.
The Trustees considered the methodology used by PWM in determining
compensation payable to its portfolio managers and the competition for
investment management talent. The Trustees also considered that, other than the
potential impact of performance fees for Janus Small Cap Value Fund, there will
be no change to the overall fees paid by the Funds or services provided to the
Funds.
The Trustees concluded that the estimated overall expense ratio of each
class of shares of the Funds, taking into account any expense limitations, was
comparable to or more favorable than the median expense ratios of their peers,
and that the fees that the Funds will pay to Janus Capital (a portion of which
Janus Capital will pay to PWM) are reasonable in relation to the nature and
quality of the services to be provided, taking into account (1) the fees charged
by other advisers and subadvisers for managing comparable mutual funds with
similar strategies and (2) the impact of the performance-based fee structure, as
applicable.
INVESTMENT PERFORMANCE
The Trustees considered the performance results of the Funds over various
time periods. They reviewed information comparing each Fund's performance with
the performance of comparable funds and peer groups identified by Lipper, and
with each Fund's benchmark index. They concluded that the performance of the
Funds was acceptable under current market conditions. Although the performance
of the Funds lagged benchmark indices for certain periods, the Trustees also
concluded that Janus Capital and PWM had taken appropriate steps to address
those instances of underperformance.
14
BENEFITS DERIVED FROM THE RELATIONSHIP WITH PWM
The Trustees also considered benefits that would accrue to the Funds from
their relationship with PWM. The Trustees concluded that, other than the
services to be provided by PWM pursuant to the New Subadvisory Agreements and
the fees to be paid indirectly by the Funds for such services, the Funds, Janus
Capital, and PWM may potentially benefit from their relationship with one
another in other ways. They also concluded that success of their relationship
could attract other business to Janus Capital and PWM or to other Janus funds,
and that the success of Janus Capital and PWM could enhance each firm's ability
to serve the Funds.
After full consideration of the above factors, as well as other factors,
the Trustees concluded that approving the New Subadvisory Agreement for each
Fund was in the best interest of the Fund and its shareholders. The Trustees
voted to approve the New Subadvisory Agreements and to recommend them to
shareholders for their approval.
REQUIRED VOTE
Approval of each New Subadvisory Agreement requires the affirmative vote of
a 1940 Act Majority of the Fund to which it applies, all share classes voting
together as a single class. Implementation of each New Subadvisory Agreement
referred to in Proposal 1 and Proposal 2 is contingent upon the approval of each
Proposal within this Proxy Statement, as well as upon the approval of similar
proposals on new subadvisory agreements and amended and restated investment
advisory agreements by shareholders of Janus Adviser Mid Cap Value Fund, a
series of JAD, and Mid Cap Value Portfolio, a series of JAS. Implementation of
the New Subadvisory Agreements is also contingent upon the closing of the
Pending Acquisition in addition to other conditions as described in the Purchase
Agreement or otherwise agreed to by Janus Capital and PWM. If shareholders of a
Fund do not approve the Proposal applicable to their Fund or if any other
contingency is not met, the Current Subadvisory Agreements will remain in effect
and the Board of Trustees will take such further action as it deems to be in the
best interest of the Funds and their shareholders.
THE INDEPENDENT TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMEND THAT YOU VOTE
"FOR" APPROVAL OF THE NEW SUBADVISORY AGREEMENT FOR YOUR FUND.
PROPOSAL 3 AND PROPOSAL 4 -- GENERAL INFORMATION
APPROVE AN AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT BETWEEN YOUR FUND
AND JANUS CAPITAL
INTRODUCTION
Janus Capital currently serves as investment adviser to each Fund pursuant
to a separate investment advisory agreement between the Trust, on behalf of each
Fund,
15
and Janus Capital, each dated July 1, 2004 (each, together with any amendments
thereto, a "Current Advisory Agreement").
In conjunction with Janus Capital's Pending Acquisition of a greater
ownership interest in its affiliated investment adviser, PWM, Janus Capital
undertook a review of the structure of the advisory relationships currently in
place between Janus Capital, PWM and the Janus funds subadvised by PWM,
including the Funds. The proposed Amended Advisory Agreements would reallocate
the obligation to compensate PWM for its services as subadviser from your Fund
to Janus Capital. The proposed change is in line with subadvisory payment
structures in the industry and allows Janus Capital to move to a more cohesive
operating platform with respect to its subadvised funds, including the Funds.
The proposed Amended Advisory Agreement for Janus Small Cap Value Fund will also
change that Fund's investment advisory fee structure from a fixed rate to a rate
that adjusts up or down based on the Fund's performance relative to its
benchmark index, the Russell 2000(R) Value Index.
The 1940 Act requires that shareholders approve material changes to the
terms of an investment advisory agreement. Because the proposed changes
reflected in the Proposals may be deemed to be material changes to the Current
Advisory Agreement, you are being asked to approve an Amended Advisory Agreement
for your Fund. A form of the proposed Amended Advisory Agreement for Janus Mid
Cap Value Fund and Janus Small Cap Value Fund is attached to this Proxy
Statement as Exhibit B. Except for the reallocation of the obligation to pay a
subadviser, under these proposals, and the addition of a performance-based
advisory fee for Janus Small Cap Value Fund, each proposed Amended Advisory
Agreement is substantially similar in all material respects as its corresponding
Current Advisory Agreement. The Board of Trustees has authorized the submission
of the Amended Advisory Agreement for each Fund to that Fund's shareholders for
their approval.
Shareholders of Janus Mid Cap Value Fund will vote on Proposal 3 and
shareholders of Janus Small Cap Value Fund will vote on Proposal 4.
INFORMATION CONCERNING THE ADVISER
Janus Capital, 151 Detroit Street, Denver, Colorado 80206-4805, serves as
investment adviser to the Funds. Janus Capital is a direct subsidiary of JCGI, a
publicly traded company with principal operations in financial asset management
businesses that had $187.6 billion in assets under management as of March 31,
2008. JCGI owns approximately 95% of Janus Capital, with the remaining 5% held
by Janus Management Holdings Corporation. Certain employees of Janus Capital
and/or its affiliates serve as officers of the Trust. Certain officers of the
Trust are shareholders of JCGI.
Janus Capital (together with its predecessors) has served as an investment
adviser since 1970. As of March 31, 2008, the Janus funds that Janus Capital
advises consisted of 74 portfolios offering a broad range of investment
objectives.
16
Janus Capital also serves as subadviser for a number of private-label mutual
funds and provides separate account advisory services for institutional
accounts.
Janus Capital acts as investment adviser or subadviser to other investment
companies with investment objectives and strategies similar to those of the
Fund. Information on those similar investment companies is set forth in Exhibit
C to this Proxy Statement.
Principal Executive Officers and Directors of the Adviser. The principal
executive officers and directors of Janus Capital and their principal
occupations are included in Exhibit D to this Proxy Statement.
COMPARISON OF THE CURRENT AND AMENDED ADVISORY AGREEMENTS
Other than as described below, the terms of the Current Advisory Agreements
and the Amended Advisory Agreements are substantially similar. Differences also
include the dates of execution and renewal. The same advisory services will be
provided under the Amended Advisory Agreements as are provided under the Current
Advisory Agreements.
Advisory Services. The terms of the advisory services are the same under
the Current Advisory Agreements and the Amended Advisory Agreements.
Janus Capital provides each Fund with continuing investment management
services. Janus Capital is responsible for the day-to-day management of each
Fund and for providing continuous investment advice regarding the purchase and
sale of securities held by the Funds, subject to (i) the Trust's Amended and
Restated Agreement and Declaration of Trust and Amended and Restated Bylaws;
(ii) the investment objectives, policies and restrictions set forth in each
Fund's registration statement; (iii) the provisions of the 1940 Act and the
Internal Revenue Code of 1986, as amended; and (iv) such other policies and
instructions as the Trustees may from time to time determine. As permitted under
the Current and Amended Advisory Agreements, Janus Capital has delegated these
responsibilities to PWM. Janus Capital maintains a supervisory role with respect
to such delegation.
Janus Capital provides office space for the Funds and pays the salaries,
fees, and expenses of all Fund officers (sharing certain expenses and salaries
for the Funds' Chief Compliance Officer and other compliance-related personnel
as authorized by the Trustees from time to time). Janus Capital is also
authorized to perform or delegate to others, such as PWM, to perform certain
administrative and other services and is responsible for the other business
affairs of the Fund. Janus Capital also provides certain administrative services
to each Fund as described under "Additional Information About the Funds -- Other
Fund Service Providers" in this Proxy Statement.
The Funds pay all expenses incidental to their organization, operations and
business not specifically assumed by Janus Capital or PWM, including custodian
and transfer agency fees and expenses, brokerage commissions and dealer spreads,
17
and other expenses in connection with the execution of portfolio transactions,
legal and accounting expenses, interest, taxes, a portion of trade association
or other investment company organization dues and expenses, registration fees,
expenses of shareholders' meetings, reports to shareholders, fees and expenses
of Independent Trustees, and other costs of complying with applicable laws
regulating sale of Fund shares. Information concerning services provided by
Janus Distributors LLC ("Janus Distributors"), the Funds' distributor, and Janus
Services LLC ("Janus Services"), the Funds' transfer agent, each a wholly-owned
subsidiary of Janus Capital, and a description of any fees paid by the Funds to
Janus Distributors and Janus Services, is included under "Additional Information
About the Funds -- Other Fund Service Providers" in this Proxy Statement.
Liability. Each Fund's Current and Amended Advisory Agreement provides
that Janus Capital shall not be liable for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or omission
taken with respect to the Fund, except for willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties under the agreement, and except to the
extent otherwise provided by law.
Termination of the Agreement. Each Fund's Current and Amended Advisory
Agreement continues in effect from year to year so long as such continuance is
specifically approved annually by a majority of the Funds' Independent Trustees,
and by either a 1940 Act Majority of the outstanding voting securities of each
Fund or the Board of Trustees, cast in person at a meeting called for such
purpose. Each Fund's Current and Amended Advisory Agreement: (i) may be
terminated, without penalty, by the Fund or Janus Capital on 60 days' written
notice; (ii) terminates automatically in the event of its assignment; and (iii)
generally, may not be amended without the approval by vote of a majority of the
Trustees of the Fund, including a majority of the Independent Trustees, and, to
the extent required by the 1940 Act, the vote of a 1940 Act Majority of the
outstanding voting securities of that Fund.
Additional Information. The date of each Current Advisory Agreement
between Janus Capital and each Fund, the date it was last considered and
reviewed by the Trustees, the date when it was last approved by the shareholders
of each
18
Fund, and the reason it was last submitted for shareholder approval are set
forth below:
<Table>
<Caption>
DATE OF DATE LAST DATE LAST
CURRENT CONSIDERED BY SUBMITTED TO
FUND AGREEMENT TRUSTEES SHAREHOLDERS REASON
---- ------------- ----------------- --------------- -------------
Janus Mid Cap
Value Fund... July 1, 2004 December 14, 2007 January 9, 2006 Approval of
as amended performance-
February 1, based fee
2006 and June structure
14, 2006
Janus Small Cap
Value Fund... July 1, 2004 December 14, 2007 March 7, 2003 Reorganization
as amended of the Fund
June 14, 2006 into the
Janus funds
complex
</Table>
At a meeting of the Trustees held on December 14, 2007, the Trustees
approved the continuation of the Current Advisory Agreement through February 1,
2009. In conjunction with their approval of the continuance of the Current
Advisory Agreement, the Board noted that at a meeting held on November 6, 2007,
they had previously approved the Amended Advisory Agreements and that such new
agreements would not take effect unless approved by shareholders. A discussion
of the Board's considerations and recommendations concerning the Amended
Advisory Agreements at the November 6, 2007 board meeting follows below.
The implementation of the Amended Advisory Agreements is contingent upon,
and will become effective upon consummation of, the closing of the Pending
Acquisition, subject to certain other conditions. The Current Advisory
Agreements will be in effect until they terminate in accordance with their
terms, including or until the consummation of the transaction between PWM and
Janus Capital. If approved, the Amended Advisory Agreements will be in effect
for an initial term ending on February 1, 2009, and may continue in effect
thereafter from year to year if such continuation is specifically approved at
least annually by either the Board of Trustees or the affirmative vote of a 1940
Act Majority of the outstanding voting securities of the Fund and, in either
event, by the vote of a majority of the Independent Trustees, cast in person at
a meeting called for such purpose.
BOARD APPROVAL AND RECOMMENDATION
The Trustees considered the Amended Advisory Agreements for the Funds. In
the course of their consideration of the Amended Advisory Agreements, the
Independent Trustees met in executive session and were advised by their
independent legal counsel. The Independent Trustees received and reviewed a
substantial amount of information provided by Janus Capital in response to
requests of the Independent Trustees and their counsel. They also considered
information provided by their independent fee consultant. Based on their
evaluation of that information
19
and other factors, on November 6, 2007, the Independent Trustees approved the
Amended Advisory Agreement for each Fund, subject to shareholder approval.
In considering whether to approve the Amended Advisory Agreements, the
Board of Trustees noted that, except for the proposed reallocation to Janus
Capital of the obligation to pay compensation to any subadviser, and the
performance-based fee structure proposed for Janus Small Cap Value Fund, the
Amended Advisory Agreements are substantially similar to the Current Advisory
Agreements, which were most recently approved by them at a meeting held on
December 20, 2006. The Board also met with representatives of Janus Capital and
considered information provided by Janus Capital in preparation for the
Trustees' consideration of advisory contracts at their meetings held in December
2007. The Board took into account the services provided by Janus Capital in its
capacity as investment adviser to the Funds and concluded that the services
provided were acceptable. Certain of these considerations are discussed in more
detail below.
NATURE, EXTENT AND QUALITY OF SERVICES
The Trustees reviewed the nature, extent and quality of the services
provided by Janus Capital, taking into account the investment objective and
strategies of each Fund and the knowledge the Trustees gained from their regular
meetings with management on at least a quarterly basis, and their ongoing review
of information related to the Funds. In addition, the Trustees reviewed the
resources and key personnel of Janus Capital, especially those who provide
investment management services to the Funds. The Trustees also considered other
services provided to the Funds by Janus Capital. Janus Capital also advised the
Board of Trustees that it expects that there will be no diminution in the scope
and quality of advisory services provided to the Funds as a result of the
Amended Advisory Agreements.
The Trustees concluded that the advisory relationship and arrangement was
not expected to adversely affect the nature, extent or quality of services
provided to the Funds, and that the Funds would continue to benefit from
services provided under the Amended Advisory Agreements. They also concluded
that the quality of Janus Capital's services to the Funds has been adequate. In
reaching their conclusions, the Trustees considered: (i) information provided by
Janus Capital for their consideration of the Amended Advisory Agreements; (ii)
the key factors identified in materials previously provided to the Trustees by
their independent counsel; and (iii) the reasonableness of the fees payable by
shareholders of the Funds. They also concluded that Janus Capital's financial
condition was sound.
COSTS OF SERVICES PROVIDED
The Trustees considered the fee structure under the Amended Advisory
Agreements, as well as the overall fee structure of the Funds. The Trustees
examined the fee information and expenses for the Funds in comparison to
information for other comparable funds, as provided by Lipper. In reviewing the
data, the Trustees noted that the Funds' expense structures would now include
20
payment only to Janus Capital for investment management services, as opposed to
payment to both Janus Capital and PWM.
The Trustees considered the structure by which Janus Capital and PWM would
be paid for their services, including the implementation of the new
performance-based fee structure for Janus Small Cap Value Fund. The Trustees
also considered the overall fees of the Funds for services provided to the
Funds.
The Trustees concluded that the estimated overall expense ratio of each
class of shares of the Funds, taking into account any expense limitations, was
comparable to or more favorable than the median expense ratios of their peers,
and that the fees that the Funds will pay to Janus Capital (a portion of which
Janus Capital will pay to PWM) are reasonable in relation to the nature and
quality of the services to be provided, taking into consideration (1) the fees
charged by other advisers and subadvisers for managing comparable mutual funds
with similar strategies and (2) the impact of the performance-based fee
structure, as applicable.
PERFORMANCE OF THE FUNDS
The Trustees considered the performance results of the Funds over various
time periods. They reviewed information comparing each Fund's performance with
the performance of comparable funds and peer groups identified by Lipper, and
with each Fund's benchmark index. They concluded that the performance of the
Funds was acceptable under current market conditions. Although the performance
of the Funds lagged benchmark indices for certain periods, the Trustees also
concluded that Janus Capital and PWM, as the Funds' subadviser, had taken
appropriate steps to address those instances of underperformance.
OTHER BENEFITS FROM THE RELATIONSHIP WITH JANUS CAPITAL
The Trustees also considered benefits that would accrue to the Funds from
their relationship with Janus Capital. The Trustees concluded that, other than
the services to be provided by Janus Capital pursuant to the Amended Advisory
Agreements and the fees to be paid by the Funds for such services, the Funds,
Janus Capital and PWM may potentially benefit from their relationship with one
another in other ways. They also concluded that success of their relationship
could attract other business to Janus Capital and PWM or to other Janus funds,
and that the success of Janus Capital and PWM could enhance each firm's ability
to serve the Funds.
After full consideration of the above factors, as well as other factors,
the Trustees concluded that approving the Amended Advisory Agreement for each
Fund was in the best interest of the Fund and its shareholders. The Trustees,
all of whom are Independent Trustees, voted to approve the Amended Advisory
Agreements and to recommend them to shareholders for their approval.
21
REQUIRED VOTE
Approval of each Amended Advisory Agreement requires the affirmative vote
of a 1940 Act Majority of the Fund to which it applies, all share classes voting
together as a single class. Implementation of each Amended Advisory Agreement
referred to in Proposal 3 and Proposal 4 is contingent upon the approval of each
Proposal within this Proxy Statement, as well as upon the approval of similar
proposals on new subadvisory agreements and amended and restated investment
advisory agreements for shareholders of Janus Adviser Mid Cap Value Fund, a
series of JAD, and Mid Cap Value Portfolio, a series of JAS. Implementation of
the Amended Advisory Agreements is also contingent upon the closing of the
Pending Acquisition in addition to other conditions as described in the Purchase
Agreement or otherwise agreed to by Janus Capital and PWM. If shareholders of a
Fund do not approve the proposal applicable to their Fund or if any other
contingency is not met, the Current Advisory Agreements will remain in effect
and the Board of Trustees will take such further action as it deems to be in the
best interest of the Funds and their shareholders.
THE INDEPENDENT TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMEND THAT YOU VOTE
"FOR" APPROVAL OF THE AMENDED ADVISORY AGREEMENT FOR YOUR FUND.
PROPOSAL 3 -- JANUS MID CAP VALUE FUND
Janus Mid Cap Value Fund Compensation. The investment advisory fee rate
payable by Janus Mid Cap Value Fund to Janus Capital is the same under the
Current Advisory Agreement and the Amended Advisory Agreement. In return for the
services provided to Janus Mid Cap Value Fund under its Current and Amended
Advisory Agreements, the Fund pays a performance-based investment advisory fee.
This fee consists of two components: (1) a base fee calculated by applying the
contractual fixed rate of 0.64% to the Fund's average daily net assets during
the previous month ("Base Fee"), plus or minus (2) a performance-fee adjustment
("Performance Adjustment") calculated by applying a variable rate of up to 0.15%
(positive or negative) to the Fund's average daily net assets during the
applicable performance measurement period. The performance measurement period
generally is the previous 36 months, although when the Fund's performance-based
fee structure has been in effect for at least 12 months, but less than 36
months, the performance measurement period equals the time that has elapsed
since the performance-based fee structure took effect. Janus Mid Cap Value
Fund's performance fee structure was effective in February 2006, with the first
Performance Adjustment implemented in February 2007. Therefore, the performance
measurement period began February 2006 and will add a month to each period until
February 2009, at which time the performance measurement period will continue on
a rolling 36-month basis.
The Performance Adjustment may result in an increase or decrease in the
investment advisory fee paid by Janus Mid Cap Value Fund, depending on the
22
investment performance of the Fund relative to its benchmark index, the Russell
Midcap(R) Value Index, over the performance measurement period. No Performance
Adjustment is applied unless the difference between the Fund's investment
performance and the cumulative investment record of the Russell Midcap(R) Value
Index is 0.50% or greater (positive or negative) during the applicable
performance measurement period. For purposes of computing the Base Fee and the
Performance Adjustment, net assets will be averaged over different periods
(average daily net assets during the previous month for the Base Fee, versus
average daily net assets during the performance measurement period for the
Performance Adjustment). Performance of the Fund is calculated net of expenses,
whereas the Russell Midcap(R) Value Index does not have any fees or expenses.
Reinvestment of dividends and distributions are included in calculating the
performance of both the Fund and the Russell Midcap(R) Value Index. The Base Fee
is calculated and accrued daily. The Performance Adjustment is calculated
monthly in arrears and is accrued evenly each day throughout the month. The
investment advisory fee is paid monthly in arrears.
The investment performance of the Fund's Investor Shares is used for
purposes of calculating the Fund's Performance Adjustment. After Janus Capital
determines whether the Fund's performance was above or below its benchmark index
by comparing the investment performance of the Fund's Investor Shares against
the cumulative investment record of the Russell Midcap(R) Value Index, Janus
Capital applies the same Performance Adjustment (positive or negative) across
each other class of shares of the Fund. It is not possible to predict the effect
of the Performance Adjustment on future overall compensation to Janus Capital
since it will depend on the performance of the Fund relative to the record of
the Fund's benchmark index and future changes to the size of the Fund.
Although the performance fee structure described above for Janus Mid Cap
Value Fund is the same under both the Current Advisory Agreement and the Amended
Advisory Agreement, the party obligated to pay any subadviser differs. Under the
Current Advisory Agreement, Janus Mid Cap Value Fund is obligated to pay 50% of
the investment advisory fee to Janus Capital and 50% to any subadviser. Under
the Amended Advisory Agreement, Janus Mid Cap Value Fund pays the entire
investment advisory fee to Janus Capital and Janus Capital in turn pays 50% of
that fee to any subadviser.
During the most recent fiscal year ended October 31, 2007, Janus Mid Cap
Value Fund paid advisory fees to Janus Capital of $19,398,485 and subadvisory
fees to PWM of $19,398,485. If the Amended Advisory Agreement had been in
effect, Janus Mid Cap Value Fund would have paid Janus Capital $38,796,970, from
which Janus Capital would have paid PWM $19,398,485, the same amount PWM
received under the Current Advisory Agreement.
THE INDEPENDENT TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMEND THAT YOU VOTE
"FOR" APPROVAL OF THE AMENDED ADVISORY AGREEMENT.
23
PROPOSAL 4 -- JANUS SMALL CAP VALUE FUND
Janus Small Cap Value Fund Compensation. The base rate of the investment
advisory fee payable by Janus Small Cap Value Fund is the same under the Current
Advisory Agreement and the Amended Advisory Agreement. In return for the
services provided under the Current Advisory Agreement between Janus Capital and
Janus Small Cap Value Fund, the Fund pays Janus Capital an investment advisory
fee that is calculated daily and paid monthly based on the average daily net
assets of the Fund, calculated at the annual rate of 0.72%. However, under the
Fund's Amended Advisory Agreement, the base fee would be subject to adjustment
up or down based on the Fund's performance relative to its benchmark index, the
Russell 2000(R) Value Index.
The only difference between the Current and Amended Advisory Agreement
regarding the base fee payable by Janus Small Cap Value Fund relates to the
party obligated to pay the fees associated with the services provided by any
subadviser. Under the Current Advisory Agreement, Janus Small Cap Value Fund is
obligated to pay 50% of the investment advisory fee to Janus Capital and 50% to
any subadviser. Under the Amended Advisory Agreement, Janus Small Cap Value Fund
pays the entire investment advisory fee to Janus Capital and Janus Capital in
turn pays 50% of that fee to any subadviser.
During the most recent fiscal year ended October 31, 2007, Janus Small Cap
Value Fund paid advisory fees to Janus Capital of $6,429,645 and subadvisory
fees to PWM of $6,429,645. If the Amended Advisory Agreement, including
application of any performance fee adjustments, had been in effect, Janus Small
Cap Value Fund would have paid Janus Capital $9,302,468, from which Janus
Capital would have paid PWM $4,651,234, the same amount PWM received under the
Current Advisory Agreement.
The proposed investment advisory fee to be paid to Janus Capital by the
Fund will consist of two components: (1) a base fee calculated by applying the
current contractual fixed-rate advisory fee at the annual rate of 0.72% to the
Fund's average daily net assets during the previous month ("Base Fee"), plus or
minus (2) a performance-fee adjustment ("Performance Adjustment") calculated by
applying a variable rate of up to 0.15% (positive or negative) to the Fund's
average daily net assets during the applicable performance measurement period.
The performance measurement period generally will be the previous 36 months,
although no Performance Adjustment will be made until the Amended Advisory
Agreement has been in effect for at least 12 months. When the Amended Advisory
Agreement has been in effect for at least 12 months, but less than 36 months,
the performance measurement period will be equal to the time that has elapsed
since the Amended Advisory Agreement took effect. The Base Fee is calculated and
accrued daily. The Performance Adjustment is calculated monthly in arrears and
is accrued evenly each day throughout the month. The investment advisory fee is
paid monthly in arrears.
24
The Performance Adjustment may result in an increase or decrease in the
investment advisory fee paid by the Fund, depending on the investment
performance of the Fund relative to its benchmark index, the Russell 2000(R)
Value Index, over the performance measurement period. No Performance Adjustment
will be applied unless the difference between the Fund's investment performance
and the cumulative investment record of the Russell 2000(R) Value Index is 0.50%
or greater (positive or negative) during the applicable performance measurement
period. Because the Performance Adjustment is tied to the Fund's performance
relative to its benchmark index (and not its absolute performance), the
Performance Adjustment could increase Janus Capital's fee even if the Fund's
shares lose value during the performance measurement period, and could decrease
Janus Capital's fee even if the Fund's shares increase in value during the
performance measurement period. For purposes of computing the Base Fee and the
Performance Adjustment, net assets will be averaged over different periods
(average daily net assets during the previous month for the Base Fee, versus
average daily net assets during the performance measurement period for the
Performance Adjustment). Performance of the Fund is calculated net of expenses,
whereas the Fund's benchmark index does not have any fees or expenses.
Reinvestment of dividends and distributions are included in calculating the
performance of both the Fund and the Russell 2000(R) Value Index.
The investment performance of the Fund's Investor Shares will be used for
purposes of calculating the Fund's Performance Adjustment. After Janus Capital
determines whether the Fund's performance was above or below the Russell 2000(R)
Value Index by comparing the investment performance of the Fund's Investor
Shares against the cumulative investment record of the Russell 2000(R) Value
Index, Janus Capital will apply the same Performance Adjustment (positive or
negative) across each other class of shares of the Fund.
The Trustees may determine that a class of shares of the Fund other than
Investor Shares is the most appropriate for use in calculating the Performance
Adjustment. If a different class of shares is substituted in calculating the
Performance Adjustment, the use of that successor class of shares may apply to
the entire performance measurement period so long as the successor class was
outstanding at the beginning of such period. If the successor class of shares
was not outstanding for all or a portion of the performance measurement period,
it may only be used in calculating that portion of the Performance Adjustment
attributable to the period during which the successor class was outstanding, and
any prior portion of the performance measurement period would be calculated
using the class of shares previously designated. Any change to the class of
shares used to calculate the Performance Adjustment is subject to applicable
law. It is currently the position of the staff of the SEC (the "Staff") that any
changes to a class of shares selected for purposes of calculating the
Performance Adjustment will require shareholder approval. If there is a change
in the Staff's position, the Trustees intend to notify shareholders of such
change in position at such time as the Trustees may determine that a change in
such selected class is appropriate.
25
As previously noted, the Fund's benchmark index is the Russell 2000(R)
Value Index. This index measures the performance of those Russell 2000(R)
companies with lower price-to-book ratios and lower forecasted growth values.
The Trustees may from time to time determine that another securities index is a
more appropriate benchmark index for purposes of evaluating the performance of
the Fund. In that event, the Trustees may approve the substitution of a
successor index for the Fund's benchmark index. However, the calculation of the
Performance Adjustment for any portion of the performance measurement period
prior to the adoption of the successor index will still be based upon the Fund's
performance compared to its former benchmark index. Any change to the Fund's
benchmark index for purposes of calculating the Performance Adjustment is
subject to applicable law. It is currently the position of the Staff that any
changes to the Fund's benchmark index will require shareholder approval. If
there is a change in the Staff's position, the Trustees intend to notify
shareholders of such change in position at such time as the Trustees may
determine that a change in the Fund's benchmark index is appropriate.
It is not possible to predict the effect of the Performance Adjustment on
future overall compensation to Janus Capital since it will depend on the
performance of the Fund relative to the record of its benchmark index and future
changes to the size of the Fund.
If the average daily net assets of the Fund remain constant during a
36-month performance measurement period, current net assets will be the same as
average net assets over the performance measurement period and the maximum
Performance Adjustment will be equivalent to 0.15% of current net assets. When
current net assets vary from average net assets over the 36-month performance
measurement period, the Performance Adjustment, as a percentage of current
assets, may vary significantly, including at a rate more or less than 0.15%,
depending upon whether the net assets of the Fund had been increasing or
decreasing (and the amount of such increase or decrease) during the performance
measurement period. Note that if net assets for the Fund were increasing during
the performance measurement period, the total performance fee paid, measured in
dollars, would be more than if the Fund had not increased its net assets during
the performance measurement period.
Suppose, for example, that the Performance Adjustment was being computed
after the assets of the Fund had been shrinking. Applying the proposed monthly
Base Fee of 1/12th of 0.72% of average daily net assets during the previous
month, assume that average daily net assets during the 36-month performance
measurement period were $500 million, but that average daily net assets during
the preceding month were just $200 million.
26
The Base Fee would be computed as follows:
$200 million x 0.72% / 12 = $120,000
If the Fund outperformed or underperformed its benchmark index by an amount
which triggered the maximum Performance Adjustment, the Performance Adjustment
would be computed as follows:
$500 million x 0.15% / 12 = $62,500, which is approximately 1/12th of
0.375% of $200 million.
If the Fund had outperformed its benchmark index, the advisory fee rate for
that month would be a Base Fee of $120,000, plus a Performance Adjustment of
$62,500, for a total fee of $182,500, which is approximately 1/12th of 1.095% of
$200 million.
If the Fund had underperformed its benchmark index, the advisory fee rate
for that month would be a Base Fee of $120,000, minus a Performance Adjustment
of $62,500, for a total fee of $57,500, which is approximately 1/12th of 0.345%
of $200 million.
Therefore, the total advisory fee rate for that month, as a percentage of
average net assets during the preceding month, would be approximately 1/12th of
1.095% in the case of outperformance, or approximately 1/12th of 0.345% in the
case of underperformance. Under extreme circumstances involving underperformance
by a rapidly shrinking Fund, the dollar amount of the Performance Adjustment
could be more than the dollar amount of the Base Fee. In such circumstances,
Janus Capital would reimburse the Fund.
By contrast, the Performance Adjustment would be a smaller percentage of
current assets if the net assets of the Fund were increasing during the
performance measurement period. Suppose, for example, that the Performance
Adjustment was being computed after the assets of the Fund had been growing.
Assume its average daily net assets during the 36-month performance measurement
period were $500 million, but that average daily net assets during the preceding
month were $800 million.
The Base Fee would be computed as follows:
$800 million x 0.72% / 12 = $480,000
If the Fund outperformed or underperformed its benchmark index by an amount
which triggered the maximum Performance Adjustment, the Performance Adjustment
would be computed as follows:
$500 million x 0.15% / 12 = $62,500, which is approximately 1/12th of
0.094% of $800 million.
If the Fund had outperformed its benchmark index, the advisory fee rate for
that month would be a Base Fee of $480,000, plus a Performance Adjustment of
27
$62,500, for a total fee of $542,500, which is approximately 1/12th of 0.814% of
$800 million.
If the Fund had underperformed its benchmark index, the advisory fee rate
for that month would be a Base Fee of $480,000, minus a Performance Adjustment
of $62,500, for a total fee of $417,500, which is approximately 1/12th of 0.626%
of $800 million.
Therefore, the total advisory fee rate for that month, as a percentage of
average net assets during the preceding month, would be approximately 1/12th of
0.814% in the case of outperformance, or approximately 1/12th of 0.626% in the
case of underperformance.
If approved for Janus Small Cap Value Fund and any other contingencies are
met, the Amended Advisory Agreement described in this Proposal is expected to
become effective on the first day of the month following the approval. However,
as noted above, for the first 12 months after the effective date, only the
Fund's Base Fee rate will apply.
COMPARISON OF CURRENT AND PRO FORMA ADVISORY FEES DURING THE PREVIOUS FISCAL
YEAR
The following table shows: (1) the dollar amount of the actual advisory
fees paid by the Fund, before and after all applicable waivers, for the fiscal
year ended October 31, 2007; (2) the dollar amount of the pro forma advisory
fees that would have been paid by the Fund, before and after all applicable
waivers, if the proposed performance-based fee structure had been in effect
during such fiscal year; and (3) the difference between (i) the amount of the
pro forma advisory fees, net of waivers, that would have been paid under the
performance-based fee structure and (ii) the amount of the actual advisory fees
paid, net of waivers, expressed as a percentage of the actual advisory fees'
amount. Such percentage difference is positive when the amount of the pro forma
advisory fees would have been larger than the amount of the actual advisory fees
paid by the Fund, and negative when the amount of the pro forma advisory fees
would have been smaller than the amount of the actual advisory fees paid by the
Fund. For purposes of pro forma calculations, it is assumed that the Performance
Adjustment would have been in effect during the entire fiscal year ended October
31, 2007 and that it would have been calculated over the full preceding 36-month
performance measurement period.
<Table>
<Caption>
DIFFERENCE
ACTUAL ACTUAL PRO FORMA PRO FORMA BETWEEN
ADVISORY ADVISORY ADVISORY ADVISORY PRO FORMA
FEE BEFORE FEE AFTER FEE BEFORE PRO FORMA FEE AFTER AND ACTUAL
WAIVER WAIVER WAIVER WAIVER* WAIVER* WAIVER* ADVISORY
($) (000'S) ($) (000'S) ($) (000'S) ($) (000'S) ($) (000'S) ($) (000'S) FEE
--------------------- ----------- ----------- ----------- ----------- ----------- -----------
12,859 0 12,859 9,302 0 9,302 (27.7)%
</Table>
---------------
* As described in this Proxy Statement, any Performance Adjustment included in
calculating the Pro Forma Advisory Fees for the Fund is based on the
investment performance of the Fund's Investor Shares versus the Fund's
benchmark index over the 36-month period ended October 31, 2007.
28
HYPOTHETICAL EXAMPLE
The following hypothetical examples illustrate the application of the
Performance Adjustment for the Fund. The examples assume that the average daily
net assets of the Fund remain constant during a 36-month performance measurement
period. The Performance Adjustment would be a smaller percentage of current
assets if the net assets of the Fund were increasing during the performance
measurement period, and a greater percentage of current assets if the net assets
of the Fund were decreasing during the performance measurement period. All
numbers in the examples are rounded to the nearest hundredth percent. The net
assets of the Fund as of the fiscal years ended October 31, 2006 and October 31,
2007 were $2,080,013,273 and $1,587,531,145, respectively.
The monthly maximum positive or negative Performance Adjustment of 1/12th
of 0.15% of average net assets during the prior 36 months occurs if the Fund
outperforms or underperforms its benchmark index by 5.50% over the same period.
The Performance Adjustment is made in even increments for every 0.50% difference
in the investment performance of the Fund compared to the investment record of
the Russell 2000(R) Value Index.
EXAMPLE 1: FUND OUTPERFORMS ITS BENCHMARK BY 5.50%
If the Fund has outperformed the Russell 2000(R) Value Index by 5.50%
during the preceding 36 months, the Fund would calculate the investment advisory
fee as follows:
<Table>
<Caption>
PERFORMANCE TOTAL ADVISORY FEE
BASE FEE RATE ADJUSTMENT RATE RATE FOR THAT MONTH
------------- --------------- -------------------
1/12th of 0.72% 1/12th of 0.15% 1/12th of 0.87%
</Table>
EXAMPLE 2: FUND PERFORMANCE TRACKS ITS BENCHMARK
If Fund performance has tracked the performance of the Russell 2000(R)
Value Index during the preceding 36 months, the Fund would calculate the
investment advisory fee as follows:
<Table>
<Caption>
PERFORMANCE TOTAL ADVISORY FEE
BASE FEE RATE ADJUSTMENT RATE RATE FOR THAT MONTH
------------- --------------- -------------------
1/12th of 0.72% 0.00% 1/12th of 0.72%
</Table>
EXAMPLE 3: FUND UNDERPERFORMS ITS BENCHMARK BY 5.50%
If the Fund has underperformed the Russell 2000(R) Value Index by 5.50%
during the preceding 36 months, the Fund would calculate the investment advisory
fee as follows:
<Table>
<Caption>
PERFORMANCE TOTAL ADVISORY FEE
BASE FEE RATE ADJUSTMENT RATE RATE FOR THAT MONTH
------------- --------------- -------------------
1/12th of 0.72% 1/12th of -0.15% 1/12th of 0.57%
</Table>
29
Under the terms of the Fund's Current Subadvisory Agreement, PWM is
entitled to receive a subadvisory fee, paid by the Fund, that is accrued daily
and payable monthly at an annual rate equal to 50% of the investment advisory
fee paid by the Fund to Janus Capital (calculated after any fee waivers and
expense reimbursements). This means that, pursuant to the terms of the Amended
Advisory Agreement, the subadvisory fee rate for fees paid by Janus Capital to
PWM will adjust up or down in line with the advisory fee rate for fees paid by
the Fund to Janus Capital, based on the performance of the Fund's Investor
Shares relative to the Russell 2000(R) Value Index. If Proposal 4 is not
approved, PWM will continue to receive a subadvisory fee from the Fund that is
equal to 50% of the advisory fee otherwise paid by the Fund to Janus Capital
under the Current Advisory Agreement (thereby reducing Janus Capital's advisory
fee by 50%), which currently equates to 0.36% of the Fund's average daily net
assets.
It is important to note that if shareholders of Janus Small Cap Value Fund
approve Proposal 4, any fees paid by the Fund under the Amended Advisory
Agreement will be paid in their entirety to Janus Capital and Janus Capital will
in turn compensate any subadviser. Under current agreements, the Fund pays 50%
of its investment advisory fee to Janus Capital and 50% to PWM.
COMPARISON OF CURRENT AND PRO FORMA EXPENSES
The following tables describe the shareholder fees and annual fund
operating expenses that you may pay if you buy and hold shares of the Fund under
the current fee structure and proposed performance-based fee structure, without
giving effect to any fee waivers. For purposes of pro forma calculations, it is
assumed that the Performance Adjustment would have been in effect during the
entire fiscal year ended October 31, 2007, and that it would have been
calculated over a full 36-month performance measurement period. The fees and
expenses shown were determined based upon average net assets as of the fiscal
year ended October 31, 2007. For the 36-month period ended October 31, 2007, the
Fund underperformed the Russell 2000(R) Value Index and the fiscal year-end
average daily net assets were lower than the trailing 36-month average daily net
assets, resulting in the pro forma management fee shown in the Annual Fund
Operating Expenses table below.
Shareholder fees are those paid directly from your investment and may
include sales loads, redemption fees or exchange fees.
Annual fund operating expenses are paid out of the Fund's assets and
include fees for portfolio management, maintenance of shareholder accounts,
shareholder servicing, accounting and other services. You do not pay these fees
directly but, as the examples show, these costs are borne indirectly by all
shareholders.
The Trust, on behalf of the Fund, has entered into an expense waiver
agreement with Janus Services with respect to Institutional Shares of Janus
Small Cap Value Fund. Pursuant to that waiver agreement, Janus Services has
agreed to waive transfer agency fees applicable to and paid by Janus Small Cap
Value Fund's
30
Institutional Shares by any amount by which total operating expenses exceed
0.79% of average daily net assets through March 1, 2009, as described in a
footnote to the Annual Fund Operating Expense table below. As a result of the
expense waiver agreement, the actual Total Annual Operating Expenses for
Institutional Shares of the Fund may be less than the amount listed in the table
below.
SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)
(CURRENT AND PRO FORMA STRUCTURE)
<Table>
<Caption>
INVESTOR
SHARES(1)(2) INSTITUTIONAL SHARES(2)
------------------ -----------------------
Maximum Sales Charge
(Load).................... None None
Redemption Fee.............. None None
Exchange Fee................ None None
</Table>
ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)(3)
<Table>
<Caption>
TOTAL ANNUAL
ACQUIRED FUND
MANAGEMENT OTHER FUND(6) FEES OPERATING
FEE(4) EXPENSES(5) AND EXPENSES EXPENSES(7)
----------------- ----------- ------------ ------------
JANUS SMALL CAP VALUE
FUND
Investor Shares
Current.......... 0.72% 0.29% 0.02% 1.03%
Pro Forma........ 0.52% 0.29% 0.02% 0.83%
Institutional
Shares
Current.......... 0.72% 0.25% 0.02% 0.99%
Pro Forma........ 0.52% 0.25% 0.02% 0.79%
</Table>
EXAMPLES:
THE FOLLOWING EXAMPLES ARE BASED ON EXPENSES WITHOUT WAIVERS, AS SHOWN IN
THE TABLES ABOVE. These examples are intended to help you compare the cost of
investing in the Fund, under both the current fee structure and the proposed fee
structure, with the cost of investing in other mutual funds. The examples assume
that you invest $10,000 in the Fund for the time periods indicated, reinvest all
dividends and distributions, and then redeem all your shares at the end of each
period. Since no sales load applies, the results apply whether or not you redeem
your shares at the end of the periods shown. The examples also assume that your
investment has a 5% return each year and that the Fund's operating expenses
without waivers remain the same. The pro forma calculations assume that the
Performance Adjustment had been in effect for a 36-month period as of the end of
31
the last fiscal year. Although your actual costs may be higher or lower, based
on these assumptions your costs would be:
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
JANUS SMALL CAP VALUE FUND
Investor Shares
Current........................ $105 $328 $569 $1,259
Pro Forma*..................... $ 85 $265 $460 $1,025
Institutional Shares
Current........................ $101 $315 $547 $1,213
Pro Forma*..................... $ 81 $252 $439 $ 978
</Table>
---------------
(1) The Fund may charge a fee to cover the cost of sending a wire transfer for
redemptions, and your bank may charge an additional fee to receive the wire.
For more information, please refer to the respective prospectus.
(2) For shares purchased through an intermediary, your financial intermediary
may charge you a separate or additional fee for purchases and redemptions of
shares.
(3) All expenses are shown without the effect of expense offset arrangements.
Pursuant to such arrangements, credits realized as a result of uninvested
cash balances are used to reduce the custodian and transfer agent expenses.
(4) The "Management Fee" is the investment advisory fee rate paid by the Fund to
Janus Capital as of the end of the fiscal year. Any Performance Adjustment
included in calculating the Pro Forma Management Fee is based on the
investment performance of the Fund's Investor Shares versus the Russell
2000(R) Value Index over the 36-month period ended October 31, 2007. Once
the Performance Adjustment is determined, it is applied across each other
class of shares of the Fund.
(5) Included in Other Expenses is an administrative services fee of 0.05% of the
average daily net assets of the Fund to compensate Janus Capital for
providing certain administrative services including, but not limited to,
recordkeeping and registration functions.
(6) "Acquired Fund" means any underlying fund (including, but not limited to,
exchange-traded funds) in which the Fund invests or has invested during the
period. Total Annual Fund Operating Expenses shown may not correlate to the
Fund's ratio of gross expenses to average net assets appearing in the Fund's
financial statements, which reflect the operating expenses of the Fund and
does not include Acquired Fund fees and expenses.
(7) All expenses are stated without contractual expense waivers by Janus
Services LLC. Janus Services LLC has contractually agreed to waive the
transfer agency fees applicable to the Fund's Institutional Shares as
necessary to ensure that the total expense ratio does not exceed an annual
rate of 0.79% of average daily net assets (excluding items not normally
considered operating expenses such as legal claims and expenses, litigation
costs, and any indemnification related thereto), until March 1, 2009.
* The Pro Forma numbers shown for each class of shares of the Fund include a
pro forma management fee calculated as described in the text and related
footnotes that accompany the fee table above.
ADDITIONAL BOARD CONSIDERATIONS
Over the past few years, the Independent Trustees and their independent fee
consultant, in consultation with independent legal counsel to the Independent
Trustees, have continued to explore the possibility of modifying the fee
structure for certain Janus funds to provide for a Base Fee for each of those
funds at the same rate as its current advisory fee rate, and a performance-based
adjustment that would increase or decrease the fee based on whether the fund's
total return performance exceeds or lags a stated relevant benchmark index.
32
Working with Janus Capital to develop a performance structure that was
acceptable to Janus Capital, the Independent Trustees were seeking to provide a
closer alignment of the interests of Janus Capital with those of the Fund and
its shareholders. They believe that the fee structure proposed for the Fund will
achieve that objective. Included as part of their analysis of the overall
performance fee structure, the Trustees, in consultation with their independent
fee consultant, considered the appropriate performance range that would result
in the maximum and minimum Performance Adjustment of up to 0.15% (positive or
negative) of the Fund's average daily net assets during the applicable
performance measurement period. The Trustees reviewed information provided by
Janus Capital and prepared by their independent fee consultant with respect to
an appropriate deviation of excess/under returns relative to the Fund's
benchmark index, taking into consideration expected tracking error of the Fund,
expected returns and potential risks and economics involved for Janus Capital,
PWM and the Fund's shareholders. The Trustees also reviewed the structure of
performance fees applied by other Janus funds.
As described above, the Performance Adjustment that will be added to or
subtracted from the Base Fee as a result of the Fund's performance, relative to
its benchmark index, is a variable of up to 0.15% of average net assets during
the performance measurement period. Importantly, the performance is computed
after deducting the Fund's operating expenses (including advisory fees), which
means that, in order to receive any upward adjustment from the Base Fee, Janus
Capital and PWM must deliver a total return after expenses that exceeds the
return of the benchmark index, which does not incur any expenses.
The Trustees determined that the benchmark index specified in the Amended
Advisory Agreement for purposes of computing the Performance Adjustment is
appropriate for the Fund based on a number of factors, including that the index
is broad-based and is composed of securities of the types in which the Fund may
invest. The Trustees believe that divergence between the Fund's performance and
performance of the index can be attributed, in part, to the ability of the
portfolio managers in making investment decisions within the parameters of the
Fund's investment objective and investment policies and restrictions.
The Trustees determined that Investor Shares of the Fund is the most
appropriate class for use in calculating the Fund's Performance Adjustment. In
making that determination, the Trustees considered the fee structure and
expenses paid by each class of shares of the Fund, any fees paid to or retained
by Janus Capital or its affiliates, and the distribution channel for each class
of shares.
The time periods to be used in determining any Performance Adjustment were
also judged to be of appropriate length to ensure proper correlation and to
prevent fee adjustments from being based upon random or insignificant
differences between the performance of the Fund and of the index. In that
regard, the Trustees concluded that it would be appropriate for there to be no
adjustment from the Base Fee for the first 12 months after the effective date of
the Amended Advisory
33
Agreement and that, once implemented, the Performance Adjustment should reflect
only the Fund's performance subsequent to that effective date. Moreover, the
Trustees believed that, upon reaching the thirty-sixth month after the effective
date, the performance measurement period should be fully implemented, and that
the Performance Adjustment should thereafter be based upon a 36-month rolling
performance measurement period.
In addition to considering the performance fee structure reflected in the
Amended Advisory Agreement, in approving that agreement the Trustees followed
the process, considered the factors, and reached the conclusions described above
under "Proposal 3 and Proposal 4 -- General Information -- Board Approval and
Recommendation."
THE INDEPENDENT TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMEND THAT YOU VOTE
"FOR" APPROVAL OF THE AMENDED ADVISORY AGREEMENT.
ADDITIONAL INFORMATION ABOUT THE FUNDS
OTHER FUND SERVICE PROVIDERS
Administrator. Janus Capital serves as administrator to the Funds,
performing internal accounting, recordkeeping, blue sky monitoring and
registration functions. Each Fund pays Janus Capital for its administrative
services at the annual rate of 0.05% of the Fund's average daily net assets.
Janus Capital retains these fees. In addition, Janus Capital may be reimbursed
by the Funds for certain administrative and clerical functions Janus Capital
provides to the Funds, as well as for reasonable costs it incurs in performing
certain functions. Janus Capital intends to continue to provide the same
administrative services after implementation of the proposed New Subadvisory
Agreements and the proposed Amended Advisory Agreements.
The fees paid to Janus Capital by each Fund for administrative services,
including in the aggregate with the investment advisory fee paid by each Fund,
for the fiscal year ended October 31, 2007, are shown below.
<Table>
<Caption>
FEES PAID TO JANUS CAPITAL
--------------------------------------------
ADMINISTRATIVE SERVICE FEES AGGREGATE FEES
FUND ($) (000'S) ($) (000'S)
---- --------------------------- --------------
Janus Mid Cap Value Fund.... 3,377 42,174
Janus Small Cap Value
Fund...................... 903 13,762
</Table>
Distributor. Janus Distributors, a wholly-owned subsidiary of Janus
Capital, located at 151 Detroit Street, Denver, Colorado 80206, serves as
distributor of the Funds pursuant to an Amended and Restated Distribution
Agreement between the Trust and Janus Distributors. Janus Distributors does not
receive compensation from the Trust or the Funds for services rendered. Janus
Distributors intends to continue to provide the same services after
implementation of the proposed New Subadvisory Agreements and the proposed
Amended Advisory Agreements.
34
Transfer Agent. Janus Services, P.O. Box 173375, Denver, Colorado 80207-
3375, a wholly-owned subsidiary of Janus Capital, serves as the Funds' transfer
agent pursuant to an Amended and Restated Transfer Agency Agreement ("Transfer
Agency Agreement") between Janus Services and the Trust. Pursuant to the
Transfer Agency Agreement, each class of shares of the Funds reimburses Janus
Services for out-of-pocket expenses incurred by Janus Services in connection
with services rendered. In addition, for services provided, including, but not
limited to, establishing and maintaining shareholder accounts, recording
ownership of shares on the Trust's books, mailing shareholder reports, recording
reinvestment of dividends and distributions, and coordinating with banks,
broker-dealers and other financial intermediaries who represent Fund
shareholders, Janus Services receives from each Fund an asset-weighted average
annual fee based upon the proportion of the Fund's net assets sold directly and
the proportion of the Fund's net assets sold through financial intermediaries.
The applicable annual fee rates are 0.16% of the daily closing net asset value
of Fund shares sold directly to shareholders and 0.21% of the daily closing net
asset value of Fund shares sold through financial intermediaries. In addition,
Investor Shares of Janus Mid Cap Value Fund pay Janus Services a monthly fee
calculated at an annual rate of $4.00 per open shareholder account. Janus
Services has contractually agreed to waive until at least March 1, 2009, the fee
it receives from Janus Mid Cap Value Fund -- Institutional Shares and Janus
Small Cap Value Fund -- Institutional Shares, to the extent that the annual
normal operating expenses paid by that class for each Fund exceed 0.77% and
0.79%, respectively, of the class' average daily net asset value. Janus Services
intends to continue to provide the same services after implementation of the
proposed New Subadvisory Agreements and the proposed Amended Advisory
Agreements.
Janus Mid Cap Value Fund and Janus Small Cap Value Fund paid $13,629,015
and $3,546,521, respectively, to Janus Services for the fiscal year ended
October 31, 2007.
ADDITIONAL INFORMATION ABOUT THE TRUST
TRUSTEES AND PRINCIPAL EXECUTIVE OFFICERS OF THE FUNDS
The Trustees and principal executive officers of the Funds and their
principal occupations, including any positions with Janus Capital, are set forth
in Exhibit E to this Proxy Statement.
OTHER LEGAL REQUIREMENTS UNDER THE 1940 ACT
Section 15(f) of the 1940 Act provides that, when a change in control of an
investment adviser (or subadviser) occurs, the investment adviser or any of its
affiliated persons may receive any amount or benefit in connection with the
change in control, as long as two conditions are satisfied. The first condition
specifies that, during the three-year period immediately following consummation
of the transaction, at least 75% of the Funds' Board must be Independent
Trustees. Currently, the
35
Board of Trustees of the Trust meets this 75% requirement, as 100% of the Board
is Independent.
The second condition specifies that no "unfair burden" may be imposed on
the Funds as a result of the transaction relating to the change of control, or
any express or implied terms, conditions or understandings. The term "unfair
burden," as defined in the 1940 Act, includes any arrangement during the
two-year period after the change in control whereby the investment adviser (or
predecessor or successor adviser), or any interested person of any such adviser,
receives or is entitled to receive any compensation, directly or indirectly,
from a Fund or its security holders (other than fees for bona fide investment
advisory or other services) or from any person in connection with the purchase
or sale of securities or other property to, from, or on behalf of a Fund (other
than fees for bona fide principal underwriting services). Janus Capital and PWM
have represented to the Board of Trustees that the change in control transaction
will not cause the imposition of an unfair burden, as that term is defined in
Section 15(f) of the 1940 Act, on the Funds.
ADDITIONAL INFORMATION ABOUT THE MEETING
QUORUM AND VOTING
Shareholders of each class of a Fund will vote together at the Meeting.
Each holder of a whole or fractional share shall be entitled to one vote for
each whole dollar and a proportionate fractional vote for each fractional dollar
of net asset value held in such shareholder's name as of the Record Date. 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 shares entitled to vote at the Meeting for each Fund
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 as to a proposal will
require the affirmative vote of the holders of a majority of the shares of a
Fund, present in person or by proxy at the Meeting. The persons named as proxies
will vote the proxies for a Fund (including broker non-votes and abstentions) in
favor of adjournment if they determine additional solicitation is warranted and
in the interest of shareholders of the Fund.
"Broker non-votes" are shares held by a broker or nominee for which an
executed proxy is received by a Fund, but are not voted because instructions
have not been received from beneficial owners or persons entitled to vote, and
the broker
36
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 a
proposal. Therefore, if your shares are held through a broker or other nominee,
it is important for you to instruct the broker or nominee how to vote your
shares.
Approval of each Proposal will require the affirmative vote of a 1940 Act
Majority of a Fund's shareholders eligible to vote at the Meeting. In addition
to the Proposals outlined in this Proxy Statement, shareholders of other funds
within the Janus fund complex are receiving similar proxy statements seeking
approval for new subadvisory agreements with PWM and amended and restated
investment advisory agreements with Janus Capital. Implementation of the
agreement referred to in each Proposal in this Proxy Statement is contingent
upon the approval by shareholders of all four Proposals described in this Proxy
Statement, as well as approval of similar proposals by shareholders of Janus
Adviser Mid Cap Value Fund and Mid Cap Value Portfolio, which are series of JAD
and JAS, respectively, as described in separate proxy statements. In addition,
implementation of each Proposal is contingent upon consummation of the Pending
Acquisition and certain other conditions that may be outlined in the Purchase
Agreement or otherwise agreed to by Janus Capital and PWM.
SHARE OWNERSHIP
The following table shows, as of the close of business on the Record Date,
the number of outstanding shares and net assets of each class of each Fund:
<Table>
<Caption>
TOTAL NUMBER OF
FUND SHARES OUTSTANDING NET ASSETS
---- ------------------ --------------
Janus Mid Cap Value Fund
-- Institutional Shares...... 34,035,812 $ 750,149,298
-- Investor Shares........... 307,034,970 $6,711,784,437
Janus Small Cap Value Fund
-- Institutional Shares...... 30,170,456 $ 665,560,250
-- Investor Shares........... 29,325,425 $ 638,121,251
</Table>
Beneficial owners of 5% or more of the outstanding shares of each class of
each Fund as of the Record Date are shown below. To the best knowledge of the
Trust, no person beneficially owned more than 5% of the outstanding shares of
any class of each Fund except as shown below. To the best knowledge of the
Trust, entities shown as owning 25% or more of a class of a Fund, unless
otherwise indicated, are not the beneficial owners of such shares.
37
<Table>
<Caption>
NAME AND ADDRESS NUMBER OF PERCENTAGE
NAME OF FUND AND CLASS OF BENEFICIAL OWNER SHARES OF CLASS
---------------------- ----------------------------------- ----------- ----------
Janus Mid Cap Value Fund Prudential Investment 29,972,246 88.06%(1)
-- Institutional Management Service
Shares.................... FBO Mutual Fund Clients
Newark, NJ 07102
Janus Mid Cap Value Fund National Financial Services Corp. 110,839,855 36.10%(2)
-- Investor Shares....... For the Exclusive Benefit of Our
Customers
New York, NY 10281
Charles Schwab & Co., Inc. 67,762,669 22.07%
Reinvest Account
San Francisco, CA 94104
Janus Small Cap Value Fund Vanguard Fiduciary Trust Company 7,188,129 23.83%
-- Institutional Valley Forge, PA 19482
Shares....................
JP Morgan Chase Bank Cust. 6,651,765 22.05%
Super Saver Capital Accumulation
Plan for EE of Participating AMR
Co. Subsidiaries
New York, NY 10004
National Financial Services Corp. 5,282,986 17.51%
For the Exclusive Benefit of Our
Customers
New York, NY 10281
Janus Small Cap Value Fund Northern Trust Company 7,195,721 24.54%
-- Investor Shares....... FBO Triad Hospitals Inc.
Chicago, IL 60675
National Financial Services Corp. 4,392,868 14.98%
For the Exclusive Benefit of Our
Customers
New York, NY 10281
Charles Schwab & Co., Inc. 2,120,375 7.23%
Reinvest Account
San Francisco, CA 94104
Reliance Trust Company 1,770,274 6.04%
FBO Copeland Retirement Trust
Account
Defined Contribution Plan 401k
Somerset, NJ 08873
</Table>
---------------
(1) This entity could be deemed to be a "control person" and may have the power
to control any of the shares of the Fund.
(2) 5% or more of the outstanding shares of the Fund may be held for the
exclusive benefit of an individual shareholder.
As of the Record Date, the officers and Trustees as a group owned less than
1% of the outstanding shares of each Fund.
38
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 shared by Janus Capital and PWM. In addition to solicitation by mail,
officers and representatives of the 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.
Janus Capital has engaged D.F. King & Co., Inc. ("D.F. King"), a
professional proxy solicitation firm, to assist in the solicitation of proxies,
at an estimated cost of $750,000, plus expenses. Such expenses will be shared by
Janus Capital and PWM, with Janus Capital assuming 75% of the expenses and
Perkins assuming 25% of the expenses up to $2,500,000 after which Janus Capital
will assume 100% of the expenses. Among other things, D.F. King will be: (i)
required to maintain the confidentiality of all shareholder information; (ii)
prohibited from selling or otherwise disclosing shareholder information to any
third party; and (iii) required to comply with applicable telemarketing laws.
Brokers, banks, and other fiduciaries may be required to forward soliciting
material to their principals on behalf of a Fund and to obtain authorization for
the execution of proxies. For those services, they will be reimbursed by Janus
Capital and/or PWM for their expenses, to the extent that Janus Capital or the
Fund would have directly borne those expenses.
As the Meeting date approaches, certain shareholders whose votes have not
been received may receive telephone calls from a representative of D.F. King.
Authorization to permit D.F. King to execute proxies may be obtained by
telephonic or electronically transmitted instructions from shareholders of each
Fund. Proxies that are obtained telephonically will be recorded in accordance
with the procedures described below. The 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 D.F. King
representative is required to ask for each shareholder's full name, address and
title (if the shareholder is authorized to act on behalf of an entity, such as a
corporation), and to confirm that the shareholder has received the Proxy
Statement and proxy card(s) in the mail. If the information solicited agrees
with the information provided to D.F. King, then the D.F. King representative
has the responsibility to explain the process, read the proposals listed on the
proxy card, and ask for the shareholder's instructions on each proposal.
Although the D.F. King representative is permitted to answer questions about the
process, he or she is not permitted to recommend to the shareholder how to vote.
The D.F. King representative may read any recommendation set forth in this Proxy
Statement. The D.F. King representative will record the
39
shareholder's instructions. Within 72 hours, the shareholder will be sent a
confirmation of his or her vote asking the shareholder to call D.F. King
immediately if his or her instructions are not accurately reflected in the
confirmation.
Telephone Touch-Tone Voting. Shareholders may provide their voting
instructions through telephone touch-tone voting 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 to submission and terminating their Internet session,
will, upon request, receive an e-mail confirming their voting instructions.
If a shareholder wishes to participate in the Meeting but does not wish to
give a proxy by telephone or via the Internet, the shareholder may still submit
the proxy card(s) originally sent with the Proxy Statement in the postage-paid
envelope provided, or attend the Meeting in person. Shareholders requiring
additional information regarding the proxy or replacement proxy card(s) may
contact D.F. King at 1-800-628-8528. Any proxy given by a shareholder is
revocable until voted at the Meeting.
Revoking a Proxy. Any shareholder submitting a proxy has the power to
revoke it at any time before it is exercised by submitting to the Secretary of
the Trust at 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 proposals, as described in this Proxy
Statement.
Shares Held by Accounts of Insurance Companies. Shares of the Funds may be
held by certain separate accounts of insurance companies to fund benefits
payable under certain variable annuity contracts and variable life insurance
policies. Your insurance company may request that you provide it with voting
instructions for your beneficially held shares of any such separate account. If
you do not provide voting instructions to your insurance company, it may vote
all of the shares held in that separate account in the same proportions as the
voting actually received from its other variable contract holders for that
separate account.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of a Fund's portfolio securities are
placed on behalf of the Fund by Janus Capital or its agent. Janus Capital places
portfolio transactions for the Funds solely upon PWM's direction. The Funds do
not allocate portfolio transactions to broker-dealers on the basis of the sale
of Fund shares,
40
although brokerage firms whose customers purchase shares of a Fund may execute
transactions for the Fund and receive brokerage commissions.
During the most recent fiscal year, neither Fund paid any commissions to
affiliated broker-dealers.
LEGAL MATTERS
Information regarding material pending legal proceedings involving Janus
Capital, PWM, or the Trust is attached as Exhibit F to this Proxy Statement.
SHAREHOLDER PROPOSALS FOR SUBSEQUENT MEETINGS
The 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
SEC in August 2004, commencing in 2005 and not less than every fifth calendar
year thereafter, the Trust will hold a meeting of shareholders to elect
Trustees. Shareholder meetings may be called from time to time as described in
the Amended and Restated Agreement and Declaration of Trust and the Amended and
Restated Bylaws of the Trust.
Under the proxy rules of the SEC, shareholder proposals that meet certain
conditions may be included in a 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 Fund shares either (i) with a value of at least
$2,000 or (ii) in an amount representing at least 1% of a Fund's securities to
be voted at the time the proposal is submitted and for one year prior thereto,
and must continue to own such shares through the date on which the meeting is
held. Another requirement relates to the timely receipt by a Fund of any such
proposal. Under those rules, a proposal must have been submitted within a
reasonable time before the 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 Fund's proxy material for the next special meeting after the meeting to
which this Proxy Statement relates must be received by a Fund within a
reasonable time before the Fund begins to print and mail the proxy materials for
that meeting.
A shareholder wishing to submit a proposal for inclusion in a proxy
statement subsequent to the Meeting, if any, should send the written proposal to
the Secretary of the Trust at 151 Detroit Street, Denver, Colorado 80206, within
a reasonable time before a 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 Funds began to mail
this Proxy Statement. The timely submission of a proposal does not guarantee its
inclusion in the proxy materials.
41
SHAREHOLDER COMMUNICATIONS
The Trustees provide for shareholders to send written communications to the
Trustees via regular mail. Written communications to the Trustees, or to an
individual Trustee, should be sent to the attention of the Trust's Secretary at
the address of the Trust's principal executive office. All such communications
received by the Trust's Secretary shall be promptly forwarded to the individual
Trustee to whom they are addressed or to the full Board of Trustees, as
applicable. If a communication does not indicate a specific Trustee, it will be
sent to the Chairperson of the Nominating and Governance Committee and the
independent counsel to the Trustees for further distribution, as deemed
appropriate by such persons. The Trustees may further develop and refine this
process as deemed necessary or desirable.
REPORTS TO SHAREHOLDERS AND FINANCIAL STATEMENTS
The annual report to shareholders of the Funds, including financial
statements of the Funds, has previously been sent to shareholders. THE 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 FUNDS' MOST RECENT ANNUAL REPORT AND ANY MORE
RECENT SEMIANNUAL REPORT ARE AVAILABLE, WITHOUT CHARGE, BY CALLING A JANUS
REPRESENTATIVE AT 1-800-525-3713, VIA THE INTERNET AT WWW.JANUS.COM, OR BY
SENDING A WRITTEN REQUEST TO THE SECRETARY OF THE TRUST AT 151 DETROIT STREET,
DENVER, COLORADO 80206.
To avoid sending duplicate copies of materials to households, the Funds may
mail only one copy of each report or this Proxy Statement to shareholders having
the same last name and address on the Funds' records. The consolidation of these
mailings benefits the Funds through reduced mailing expenses. If a shareholder
wants to receive multiple copies of these materials or to receive only one copy
in the future, the shareholder should contact the Funds' transfer agent, Janus
Services, at 1-800-525-3713 or notify the Funds' transfer agent in writing at
P.O. Box 173375, Denver, Colorado 80207-3375.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board of Trustees is not aware of any matters that will be presented
for action at the Meeting other than the matters described in this Proxy
Statement. Should any other matters requiring a vote of shareholders arise, the
proxy in the accompanying form will confer upon the person or persons entitled
to vote the shares represented by such proxy the discretionary authority to vote
the shares as to any other matters, in accordance with their best judgment in
the interest of the Trust and/or Funds.
42
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/ Robin C. Beery
Robin C. Beery
President and Chief Executive Officer of
Janus Investment Fund
43
INDEX OF EXHIBITS
<Table>
EXHIBIT A: Form of Subadvisory Agreement
EXHIBIT B: Form of Amended and Restated Investment Advisory
Agreement
EXHIBIT C: Other Funds Managed by Janus Capital and PWM with
Similar Investment Objectives
EXHIBIT D: Principal Executive Officers and Directors of Janus
Capital and Their Principal Occupations
EXHIBIT E: Trustees and Principal Executive Officers of the Funds
and Their Principal Occupations
EXHIBIT F: Legal Matters
</Table>
44
EXHIBIT A
FORM OF SUB-ADVISORY AGREEMENT
[JANUS][PERKINS][ ] FUND
(A SERIES OF JANUS INVESTMENT FUND)
This SUB-ADVISORY AGREEMENT (the "Agreement") is entered into effective as
of [the 1st day of July 2004], by and between JANUS CAPITAL MANAGEMENT
LLC, a Delaware limited liability company ("Janus") and PERKINS[ ][, WOLF,
MCDONNELL AND COMPANY][INVESTMENT MANAGEMENT][,] LLC a Delaware limited
liability company ("[PWM][Perkins]").
WHEREAS, Janus has entered into an Investment Advisory Agreement (the
"Advisory Agreement") with Janus Investment Fund, a Massachusetts business trust
(the "Trust") and an open-end, management investment company registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), with respect to
[the Janus ][Perkins ][ ] Fund, a series of the Trust (the "Fund") pursuant to
which Janus has agreed to provide investment advisory services with respect to
the Fund; and
WHEREAS, [Perkins][PWM] is engaged in the business of rendering investment
advisory services and is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, Janus desires to retain [Perkins][PWM] to furnish investment
advisory services with respect to the Fund, and [Perkins][PWM] is willing to
furnish such services;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Duties of [Perkins][PWM]. Janus hereby engages the services of
[Perkins][PWM] as subadviser in furtherance of the Advisory Agreement.
[Perkins][PWM] agrees to perform the following duties, subject to the
oversight of Janus and to the overall control of the officers and the Board
of Trustees (the "Trustees") of the Trust:
(a) [Perkins][PWM] shall manage the investment operations of the
Fund and the composition of its investment portfolio, shall determine
without prior consultation with the Trust or Janus, what securities and
other assets of the Fund will be acquired, held, disposed of or loaned,
and shall direct Janus with respect to the execution of trades in
connection with such determinations, in conformity with the investment
objectives, policies and restrictions and the other statements
concerning the Fund in the Trust's trust instrument, as amended from
time to time (the "Trust Instrument"), bylaws and registration
statements under the 1940 Act and
A-1
the Securities Act of 1933, as amended (the "1933 Act"), the Advisers
Act, the rules thereunder and all other applicable federal and state
laws and regulations, and the provisions of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to the Trust, on behalf of the
Fund, as a regulated investment company;
(b) [Perkins][PWM] shall cause its officers to attend meetings and
furnish oral or written reports, as the Trust or Janus may reasonably
require, in order to keep Janus, the Trustees and appropriate officers
of the Trust fully informed as to the condition of the investment
portfolio of the Fund, the investment decisions of [Perkins][PWM], and
the investment considerations which have given rise to those decisions;
(c) [Perkins][PWM] shall maintain all books and records required to
be maintained by [Perkins][PWM] pursuant to the 1940 Act, the Advisers
Act, and the rules and regulations promulgated thereunder, as the same
may be amended from time to time, with respect to transactions on behalf
of the Fund, and shall furnish the Trustees and Janus with such periodic
and special reports as the Trustees or Janus reasonably may request.
[Perkins][PWM] hereby agrees that all records which it maintains for the
Fund or the Trust are the property of the Trust, agrees to permit the
reasonable inspection thereof by the Trust or its designees and agrees
to preserve for the periods prescribed under the 1940 Act and the
Advisers Act any records which it maintains for the Trust and which are
required to be maintained under the 1940 Act and the Advisers Act, and
further agrees to surrender promptly to the Trust or its designees any
records which it maintains for the Trust upon request by the Trust;
(d) [Perkins][PWM] shall submit such reports relating to the
valuation of the Fund's assets and to otherwise assist in the
calculation of the net asset value of shares of the Fund as may
reasonably be requested;
(e) [Perkins][PWM] shall provide Janus with such assistance and
advice as Janus may reasonably request as to the manner in which to
exercise, on behalf of the Fund, such voting rights, subscription
rights, rights to consent to corporate action and any other rights
pertaining to the Fund's assets that may be exercised, in accordance
with any policy pertaining to the same that may be adopted or agreed to
by the Trustees of the Trust, so that Janus may exercise such rights,
or, in the event that the Trust retains the right to exercise such
voting and other rights, to furnish the Trust with advice as may
reasonably be requested as to the manner in which such rights should be
exercised;
(f) At such times as shall be reasonably requested by the Trustees
or Janus, [Perkins][PWM] shall provide the Trustees and Janus with
economic, operational and investment data and reports, including without
limitation all information and materials reasonably requested by or
requested to be
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delivered to the Trustees of the Trust pursuant to Section 15(c) of the
1940 Act, and shall make available to the Trustees and Janus any
economic, statistical and investment services normally available to
similar investment company clients of [Perkins][PWM]; and
(g) [Perkins][PWM] will provide to Janus for regulatory filings and
other appropriate uses materially accurate and complete information
relating to [Perkins][PWM] as may be reasonably requested by Janus from
time to time and, notwithstanding anything herein to the contrary,
[Perkins][PWM] shall be liable to Janus for all damages, costs and
expenses, including without limitation reasonable attorney's fees
(hereinafter referred to collectively as "Damages"), incurred by Janus
as a result of any material inaccuracies or omissions in such
information provided by [Perkins][PWM] to Janus, provided, however, that
[Perkins][PWM] shall not be liable to the extent that any Damages are
based upon inaccuracies or omissions made in reliance upon information
furnished to [Perkins][PWM] by Janus.
2. Further Obligations. In all matters relating to the performance of
this Agreement, [Perkins][PWM] shall act in conformity with the Trust's
Trust Instrument, bylaws and currently effective registration statements
under the 1940 Act and the 1933 Act and any amendments or supplements
thereto (the "Registration Statements") and with the written policies,
procedures and guidelines of the Fund, and written instructions and
directions of the Trustees and Janus and shall comply with the requirements
of the 1940 Act, the Advisers Act, the rules thereunder, and all other
applicable federal and state laws and regulations. Janus agrees to provide
to [Perkins][PWM] copies of the Trust's Trust Instrument, bylaws,
Registration Statement, written policies, procedures and guidelines and
written instructions and directions of the Trustees and Janus, and any
amendments or supplements to any of them at, or, if practicable, before the
time such materials become effective.
3. Obligations of Janus. Janus shall have the following obligations
under this Agreement:
(a) To keep [Perkins][PWM] continuously and fully informed (or
cause the custodian of the Fund's assets to keep [Perkins][PWM] so
informed) as to the composition of the investment portfolio of the Fund
and the nature of all of the Fund's assets and liabilities from time to
time;
(b) To furnish [Perkins][PWM] with a certified copy of any
financial statement or report prepared for the Fund by certified or
independent public accountants and with copies of any financial
statements or reports made to the Fund's shareholders or to any
governmental body or securities exchange; [and]
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(c) To furnish [Perkins][PWM] with any further materials or
information which [Perkins][PWM] may reasonably request to enable it to
perform its function under this Agreement[.][; and]
(d) [To compensate Perkins for its services in accordance with the
provisions of Section 4 hereof.]
[4. ]Compensation. [For PWM's][Janus shall pay Perkins for its]
services under this Agreement[, the Fund shall pay to PWM ]a fee equal to
50% of the advisory fee payable[ to Janus from the Fund ][before reduction
of the Janus fee by the amount of the fee payable to PWM ](net of any
[performance fee adjustment, ]reimbursement of expenses incurred or fees
waived by Janus). [Such fee] [Fees paid to Perkins ]shall be computed and
accrued daily and payable monthly as of the last day of each month during
which or part of which this Agreement is in effect[ and shall be paid at
the same time and in the same amount as the fees payable to Janus]. For the
month during which this Agreement becomes effective and the month during
which it terminates, however, there shall be an appropriate proration of
the fee payable for such month based on the number of calendar days of such
month during which th[is][e] Agreement is effective.
5. Expenses. [Perkins][PWM] shall pay all its own costs and expenses
incurred in rendering its service under this Agreement.
6. Representations of [Perkins][PWM]. [Perkins][PWM] hereby
represents, warrants and covenants to Janus as follows:
(a) [Perkins][PWM]: (i) is registered as an investment adviser
under the Advisers Act and will continue to be so registered for so long
as this Agreement remains in effect; (ii) is not prohibited by the 1940
Act or the Advisers Act from performing the services contemplated by
this Agreement; (iii) has met, and will continue to meet for so long as
this Agreement remains in effect, any other applicable federal or state
requirements, or the applicable requirements of any regulatory or
industry self-regulatory organization necessary to be met in order to
perform the services contemplated by this Agreement; (iv) has the legal
and corporate authority to enter into and perform the services
contemplated by this Agreement; and (v) will immediately notify Janus of
the occurrence of any event that would disqualify [Perkins][PWM] from
serving as an investment adviser of an investment company pursuant to
Section 9(a) of the 1940 Act or otherwise, and of the institution of any
administrative, regulatory or judicial proceeding against [Perkins][PWM]
that could have a material adverse effect upon [Perkins][PWM's] ability
to fulfill its obligations under this Agreement.
(b) [Perkins][PWM] has adopted a written code of ethics complying
with the requirements of Rule 17j-1 under the 1940 Act and will provide
Janus with a copy of such code of ethics, together with evidence of its
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adoption[, and any material changes thereto]. Within 45 days after the
end of the last calendar quarter of each year that this Agreement is in
effect, the president or a vice president of [Perkins][PWM] shall
certify to Janus that [Perkins][PWM] has complied with the requirements
of Rule 17j-1 during the previous year and that there has been no
violation of [Perkins][PWM's] code of ethics or, if such a violation has
occurred, that appropriate action was taken in response to such
violation. Upon the written request of Janus, [Perkins][PWM] shall
permit Janus, its employees or its agents to examine the reports
required to be made to [Perkins][PWM] by Rule 17j-1(c)(1) and all other
records relevant to [Perkins][PWM's] code of ethics.
(c) [Perkins][PWM] has provided Janus with a copy of its Form ADV
as most recently filed with the U.S. Securities and Exchange Commission
("SEC") and will, promptly after filing any amendment to its Form ADV
with the SEC, furnish a copy of such amendment to Janus.
[(d) PWM will notify Janus of any change in the identity or control
of its shareholders owning a 10% or greater interest in PWM, or any
change that would constitute a change in control of PWM under the 1940
Act, prior to any such change if PWM is aware, or should be aware, of
any such change, but in any event as soon as any such change becomes
known to PWM.]
7. Term. This Agreement shall become effective as of the date first
set forth above and shall continue in effect until February 1,
[2007][2009], unless sooner terminated in accordance with its terms, and
shall continue in effect from year to year thereafter only so long as such
continuance is specifically approved at least annually by (a) the vote of a
majority of the Trustees of the Trust who are not parties hereto or
interested persons of the Trust, Janus or [Perkins][PWM], cast in person at
a meeting called for the purpose of voting on the approval of the terms of
such renewal, and (b) either the Trustees of the Trust or the affirmative
vote of a majority of the outstanding voting securities of the Fund. The
annual approvals provided for herein shall be effective to continue this
Agreement from year to year if given within a period beginning not more
than ninety (90) days prior to February 1 of each applicable year,
notwithstanding the fact that more than three hundred sixty-five (365) days
may have elapsed since the date on which such approval was last given.
8. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees or by the shareholders of the Fund acting by vote
of at least a majority of its outstanding voting securities, provided in
any such case that [6][9]0 days' advance written notice of termination be
given to [Perkins][PWM] at its principal place of business. This Agreement
may [also ]be terminated [(i)] by Janus [or the Trust: (i) by giving][at
any time, without penalty by giving] [6][9]0 days' advance written notice
of termination to [Perkins; (ii) by Perkins at any time, without penalty by
giving 90 days' advance notice to Janus and the Trust, unless Janus or the
Trust requests additional time to find a
A-5
replacement for Perkins, in which case Perkins shall allow the additional
time requested by Janus or the Trust not to exceed 90 days' beyond the
initial 90 days' notice period unless otherwise agreed to by Janus, the
Trust and Perkins; or (iii) by Janus or the Trust without advance notice if
Perkins] [PWM; (ii) upon a material breach by PWM of any of the
representations and warranties set forth in Section 6 of this Agreement, if
such breach shall not have been cured within a 20-day period after notice
of such breach; or (iii) if PWM ]becomes unable to discharge its duties and
obligations under this Agreement. [This Agreement may be terminated by PWM
at any time, without penalty upon a material breach by Janus of any of the
obligations set forth in Section 3 of this Agreement, if such breach shall
not have been cured within a 20-day period after notice of such breach.
This Agreement may be terminated by PWM after April 30, 2005 upon three
years' written notice. ]In addition, this Agreement shall terminate,
without penalty, upon the termination of the Advisory Agreement.
9. Assignment. This Agreement shall automatically terminate in the
event of its assignment.
10. Amendments. This Agreement may be amended by the parties only in
a written instrument signed by the parties to this Agreement and only if
such amendment is specifically approved (i) by a majority of the Trustees,
including a majority of the Trustees who are not interested persons (as
that phrase is defined in Section 2(a)(19) of the 1940 Act) of the Trust or
Janus, [Perkins][PWM] or their affiliates, and (ii) if required by
applicable law, by the affirmative vote of a majority of the outstanding
voting securities of the Fund (as that phrase is defined in Section
2(a)(42) of the 1940 Act).
11. Limitation on Personal Liability. All parties to this Agreement
acknowledge and agree that the Trust is a series trust and all debts,
liabilities, obligations and expenses incurred, contracted for or otherwise
existing with respect to a particular series shall be enforceable against
the assets held with respect to such series only, and not against the
assets of the Trust generally or against the assets held with respect to
any other series and further that no Trustee, officer or holder of shares
of beneficial interest of the Trust shall be personally liable for any of
the foregoing.
12. Limitation of Liability of [Perkins][PWM]. Janus will not seek to
hold [Perkins][PWM], and [Perkins][PWM] shall not be, liable for any error
of judgment or mistake of law or for any loss arising out of any investment
or for any act or omission taken with respect to the Fund, except for
willful misfeasance, bad faith or gross negligence in the performance of
its duties, or by reason of reckless disregard of its obligations and
duties hereunder and except to the extent otherwise provided by law. As
used in this section, "[Perkins][PWM]" shall include any affiliate of
[Perkins][PWM] performing services for the Fund contemplated hereunder and
directors, officers and employees of [Perkins][PWM] and such affiliates.
A-6
13. Activities of [Perkins][PWM]. The services of [Perkins][PWM]
hereunder are not to be deemed to be exclusive, and [Perkins][PWM] is free
to render services to other parties, so long as its services under this
Agreement are not materially adversely affected or otherwise impaired
thereby. Nothing in this Agreement shall limit or restrict the right of any
director, officer or employee of [Perkins][PWM] to engage in any other
business or to devote his or her time and attention in part to the
management or other aspects of any other business, whether of a similar or
a dissimilar nature. It is understood that Trustees, officers and
shareholders of the Trust are or may become interested in [Perkins][PWM] as
directors, officers and shareholders of [Perkins][PWM], that directors,
officers, employees and shareholders of [Perkins][PWM] are or may become
similarly interested in the Trust, and that [Perkins][PWM] may become
interested in the Trust as a shareholder or otherwise.
14. Third Party Beneficiary. The parties expressly acknowledge and
agree that the Trust is a third party beneficiary of this Agreement and
that the Trust shall have the full right to sue upon and enforce this
Agreement in accordance with its terms as if it were a signatory hereto.
Any oversight, monitoring or evaluation of the activities of [Perkins][PWM
]by Janus, the Trust or the Fund shall not diminish or relieve in any way
the liability of [Perkins][PWM] for any of its duties and responsibilities
under this Agreement.
15. Notices. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered
personally or by overnight delivery service or mailed by certified or
registered mail, return receipt requested and postage prepaid, or sent by
facsimile addressed to the parties at their respective addresses set forth
below, or at such other address as shall be designated by any party in a
written notice to the other party.
(a) To Janus at:
Janus Capital Management LLC
151 Detroit Street
Denver, Colorado 80206
Attention: General Counsel
Phone: (303) 333-3863
Fax: (303) 316-5728
(b) To [Perkins][PWM] at:
Perkins[, Wolf, McDonnell and Company,] [Investment
Management] LLC
[310 South Michigan Avenue][311 South Wacker Drive, Suite
6000]
Chicago, Illinois 6060[6][4]
Attention: President
Phone: (312) 922-0355
Fax: (312) 922-0418
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(c) To the Trust at:
Janus Investment Fund
151 Detroit Street
Denver, Colorado 80206
Attention: [General ][Chief Legal] Counsel
16. Certain Definitions. The terms "vote of a majority of the
outstanding voting securities," "assignment," "approved at least annually,"
and "interested persons" shall have the respective meanings specified in
the 1940 Act, as now in effect or hereafter amended, and the rules and
regulations thereunder, subject to such orders, exemptions and
interpretations as may be issued by the SEC under the 1940 Act and as may
be then in effect.
17. Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Colorado (without giving effect to the
conflicts of laws principles thereof) and the 1940 Act. To the extent that
the applicable laws of the State of Colorado conflict with the applicable
provisions of the 1940 Act, the latter shall control.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers designated below as of the day and year first
above written.
JANUS CAPITAL MANAGEMENT LLC
By:
----------------------------------
Name:
Title:
[Loren M. Starr
Chief Financial Officer and
Senior Vice President]
PERKINS[, WOLF, MCDONNELL AND COMPANY]
[INVESTMENT MANAGEMENT LLC]
By:
----------------------------------
Name:
Title:
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[ACKNOWLEDGEMENT:
The undersigned acknowledges that it
is obligated to compensate PWM for its
services in accordance with the
provisions of Section 4 of this
Agreement.
JANUS INVESTMENT FUND on behalf of
[Janus Mid Cap Value Fund] [Janus
Small Cap Value Fund]
By:
Girard C. Miller
President and Chief Executive Officer]
A-9
EXHIBIT B
JANUS INVESTMENT FUND
FORM OF [AMENDED AND RESTATED]
INVESTMENT ADVISORY AGREEMENT
[JANUS ][PERKINS ][ ] FUND
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this [1st day
of July, 2004, as amended this 1st day of February, 2006, ][ day of
, 2008,] between JANUS INVESTMENT FUND, a Massachusetts business trust
(the "Trust"), and JANUS CAPITAL MANAGEMENT LLC, a Delaware limited liability
company ("JCM").
W I T N E S S E T H :
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and has registered its shares for public offering under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Trust is authorized to create separate funds, each with its
own separate investment portfolio of which the beneficial interests are
represented by a separate series of shares; one of such funds created by the
Trust being designated as the [Janus ][Perkins ][ ] Fund (the "Fund"); and
WHEREAS, the Trust and JCM deem it mutually advantageous that JCM should be
appointed as investment adviser to the Fund.
NOW, THEREFORE, the parties agree as follows:
1. Appointment. The Trust hereby appoints JCM as investment adviser
and manager with respect to the Fund for the period and on the terms set
forth in this Agreement. JCM hereby accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided.
2. Investment Advisory Services. JCM shall determine the securities
or other assets to be purchased, sold or held and shall place orders for
the purchase or sale of such securities or other assets with brokers,
dealers or others. JCM shall furnish continuous advice and recommendations
to the Fund as to the acquisition, holding, or disposition of any or all of
the securities or other assets which the Fund may own or contemplate
acquiring from time to time. JCM shall give due consideration to the
investment policies and restrictions and the other statements concerning
the Fund in the Declaration of Trust, bylaws, and registration statements
under the 1940 Act and the 1933 Act, and to the provisions of the Internal
Revenue Code, as amended from time to time, applicable to the Fund as a
regulated investment company. In addition, JCM shall cause its officers to
attend meetings and furnish oral or written reports, as
B-1
the Trust may reasonably require, in order to keep the Trustees and
appropriate officers of the Trust fully informed as to the condition of the
investment portfolio of the Fund, the investment recommendations of JCM,
and the investment considerations which have given rise to those
recommendations. Subject to the approval of the Trustees of the Trust and,
if required, the shareholders of the Fund, JCM is authorized to engage one
or more subadvisers in connection with JCM's duties and responsibilities
under this Agreement, which subadvisers may be affiliates of JCM.
3. Other Services. JCM is hereby authorized (to the extent the Trust
has not otherwise contracted) but not obligated (to the extent it so
notifies the Trustees at least 60 days in advance), to perform (or arrange
for the performance by affiliates of or duly appointed subadvisers or
affiliates of) the management and administrative services necessary for the
operation of the Fund. JCM is specifically authorized, on behalf of the
Trust, to conduct relations with custodians, depositories, transfer and
pricing agents, accountants, attorneys, underwriters, brokers and dealers,
corporate fiduciaries, insurance company separate accounts, insurers, banks
and such other persons in any such other capacity deemed by JCM to be
necessary or desirable. JCM shall generally monitor and report to Fund
officers the Fund's compliance with investment policies and restrictions as
set forth in the currently effective prospectus and statement of additional
information relating to the shares of the Fund under the 1933 Act. JCM
shall make reports to the Trustees of its performance of services hereunder
upon request therefor and furnish advice and recommendations with respect
to such other aspects of the business and affairs of the Fund as it shall
determine to be desirable. JCM is also authorized, subject to review by the
Trustees, to furnish such other services as JCM shall from time to time
determine to be necessary or useful to perform the services contemplated by
this Agreement.
4. Obligations of Trust. The Trust shall have the following
obligations under this Agreement:
(a) to keep JCM continuously and fully informed as to the
composition of its investment portfolio and the nature of all of its
assets and liabilities from time to time;
(b) to furnish JCM with a certified copy of any financial statement
or report prepared for it by certified or independent public accountants
and with copies of any financial statements or reports made to its
shareholders or to any governmental body or securities exchange;
(c) to furnish JCM with any further materials or information which
JCM may reasonably request to enable it to perform its function under
this Agreement; [and]
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(d) to compensate JCM for its services and reimburse JCM for its
expenses incurred hereunder in accordance with the provisions hereof.[;
and]
[(e) to compensate any subadviser engaged by JCM pursuant to the
authority granted in Section 2 hereof.]
5. Compensation.
PERKINS MID CAP VALUE FUND
The Trust shall pay to JCM for its services pursuant to this Agreement a
monthly base fee of 1/12 of 0.64% of the average daily closing net asset value
of the Fund, adjusted by a performance fee as set forth in Schedule A[, provided
that any amounts due pursuant to Section 4(e) above shall be paid directly to
such subadviser by the Fund and shall reduce the amount payable to Janus
hereunder. ]For any period less than a month during which this Agreement is in
effect, the base fee shall be prorated according to the proportion which such
period bears to a full month of 28, 29, 30 or 31 days, as the case may be.
PERKINS SMALL CAP VALUE FUND
The Trust shall pay to JCM for its services pursuant to this Agreement a
[monthly base ]fee[ of 1/12][, calculated and payable for each day that this
Agreement is in effect, of 1/365] of 0.72% of the [average ]daily closing net
asset value of the Fund[, adjusted by a performance fee as set forth in Schedule
A. ][(1/366 of 0.72% of the daily closing net asset value of the Fund in a leap
year) provided that any amounts due pursuant to Section 4(e) above shall be paid
directly to such subadviser by the Fund and shall reduce the amount payable to
Janus hereunder.][ For any period less than a month during which this Agreement
is in effect, the base fee shall be prorated according to the proportion which
such period bears to a full month of 28, 29, 30 or 31 days, as the case may be.]
6. Expenses Borne by JCM. In addition to the expenses which JCM may
incur in the performance of its investment advisory functions and other
services under this Agreement, and the expenses which it may expressly
undertake to incur and pay under other agreements with the Trust or
otherwise, JCM shall incur and pay the following expenses relating to the
Fund's operations without reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of the
Trust's officers and its Trustees, except for such Trustees who are not
"interested persons," as defined in the 1940 Act, of JCM, and except as
otherwise provided in Section 7; [and]
(b) Rental of offices of the Trust[; and][.]
[(c) Fees of any subadviser engaged by JCM pursuant to the
authority granted in Section 2 hereof.]
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7. Expenses Borne by the Trust. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCM pursuant to Sections 3 and
6 hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees
who are not "interested persons," as defined in the 1940 Act, of JCM;
compensation and related expenses of the Chief Compliance Officer of the
Trust and compliance staff, as authorized from time to time by the Trustees
of the Trust; compensation of the Fund's custodian, transfer agent,
registrar and dividend disbursing agent; legal, accounting, audit and
printing expenses; administrative, clerical, recordkeeping and bookkeeping
expenses; brokerage commissions and all other expenses in connection with
execution of portfolio transactions (including any appropriate commissions
paid to JCM or its affiliates for effecting exchange listed,
over-the-counter or other securities transactions); interest; all federal,
state and local taxes (including stamp, excise, income and franchise
taxes); costs of stock certificates and expenses of delivering such
certificates to purchasers thereof; expenses of local representation in
Massachusetts; expenses of shareholders' meetings and of preparing,
printing and distributing proxy statements, notices, and reports to
shareholders; expenses of preparing and filing reports and tax returns with
federal and state regulatory authorities; all expenses incurred in
complying with all federal and state laws and the laws of any foreign
country applicable to the issue, offer, or sale of shares of the Fund,
including, but not limited to, all costs involved in the registration or
qualification of shares of the Fund for sale in any jurisdiction, the costs
of portfolio pricing services and compliance systems, and all costs
involved in preparing, printing and mailing prospectuses and statements of
additional information to Fund shareholders; and all fees, dues and other
expenses incurred by the Trust in connection with the membership of the
Trust in any trade association or other investment company organization.
8. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Fund
acting by vote of at least a majority of its outstanding voting securities,
provided in either case that sixty (60) days advance written notice of
termination be given to JCM at its principal place of business. This
Agreement may be terminated by JCM at any time, without penalty, by giving
sixty (60) days advance written notice of termination to the Trust,
addressed to its principal place of business. The Trust agrees that,
consistent with the terms of the Trust Instrument, the Trust shall cease to
use the name "Janus" in connection with the Fund as soon as reasonably
practicable following any termination of this Agreement if JCM does not
continue to provide investment advice to the Fund after such termination.
9. Assignment. This Agreement shall terminate automatically in the
event of any assignment of this Agreement.
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10. Term. This Agreement shall continue in effect until February 1,
[2007][2009], unless sooner terminated in accordance with its terms, and
shall continue in effect from year to year thereafter only so long as such
continuance is specifically approved at least annually by (a) the vote of a
majority of the Trustees of the Trust who are not parties hereto or
interested persons of any such party, cast in person at a meeting called
for the purpose of voting on the approval of the terms of such renewal, and
(b) either the Trustees of the Trust or the affirmative vote of a majority
of the outstanding voting securities of the Fund. The annual approvals
provided for herein shall be effective to continue this Agreement from year
to year if given within a period beginning not more than ninety (90) days
prior to February 1 of each applicable year, notwithstanding the fact that
more than three hundred sixty-five (365) days may have elapsed since the
date on which such approval was last given.
11. Amendments. This Agreement may be amended by the parties only if
such amendment is specifically approved (i) by a majority of the Trustees,
including a majority of the Trustees who are not interested persons (as
that phrase is defined in Section 2(a)(19) of the 1940 Act) of any party to
this Agreement and, if required by applicable law, (ii) by the affirmative
vote of a majority of the outstanding voting securities of the Fund (as
that phrase is defined in Section 2(a)(42) of the 1940 Act).
12. Other Series. The Trustees shall determine the basis for making
an appropriate allocation of the Trust's expenses (other than those
directly attributable to the Fund) between the Fund and the other series of
the Trust.
13. Limitation of Personal Liability. All the parties hereto
acknowledge and agree that all liabilities of the Trust arising, directly
or indirectly, under this Agreement, of any and every nature whatsoever,
shall be satisfied solely out of the assets of the Fund and that no
Trustee, officer or holder of shares of beneficial interest of the Trust
shall be personally liable for any of the foregoing liabilities. The Trust
Instrument describes in detail the respective responsibilities and
limitations on liability of the Trustees, officers and holders of shares of
beneficial interest of the Trust.
14. Limitation of Liability of JCM. JCM shall not be liable for any
error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission taken with respect to the Trust,
except for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its
obligations and duties hereunder and except to the extent otherwise
provided by law. As used in this Section 14, "JCM" shall include any
affiliate of JCM performing services for the Trust contemplated hereunder
and directors, officers and employees of JCM and such affiliates.
15. Activities of JCM. The services of JCM to the Trust hereunder are
not to be deemed to be exclusive, and JCM and its affiliates are free to
render
B-5
services to other parties. It is understood that trustees, officers and
shareholders of the Trust are or may become interested in JCM as directors,
officers and shareholders of JCM, that directors, officers, employees and
shareholders of JCM are or may become similarly interested in the Trust,
and that JCM may become interested in the Trust as a shareholder or
otherwise.
16. Certain Definitions. The terms "vote of a majority of the
outstanding voting securities," "assignment" and "interested persons" when
used herein, shall have the respective meanings specified in the 1940 Act,
as now in effect or hereafter amended, and the rules and regulations
thereunder, subject to such orders, exemptions and interpretations as may
be issued by the Securities and Exchange Commission under said Act and as
may be then in effect.
17. Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Colorado (without giving effect to the
conflicts of laws principles thereof) and the 1940 Act. To the extent that
the applicable laws of the State of Colorado conflict with the applicable
provisions of the 1940 Act, the latter shall control.
This Agreement shall supercede all prior investment advisory agreements
entered into between JCM and the Trust, on behalf of the Fund.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the amended date and year
first above written.
JANUS CAPITAL MANAGEMENT LLC
By:
--------------------------------------
JANUS INVESTMENT FUND
By:
--------------------------------------
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SCHEDULE A
PERFORMANCE ADJUSTMENT
PERKINS MID CAP VALUE FUND
[Beginning with the Base Fee payable for February 2006 and in month 13 from
the amended date of this Agreement, t][T]he Base Fee shall be adjusted monthly
based upon the investment performance of the Fund's Investor Shares in relation
to the cumulative investment record of the Fund's benchmark, the Russell Midcap
Value Index (the "Index"), over the "Performance Period" (such adjustment being
referred to herein as the "Performance Adjustment"). The "Performance Period" is
defined as the shorter of (a) the period from [February 1, 2006][the date of
this Agreement] through the end of the month for which the fee is being
calculated, and (b) the 36 month period preceding the end of the month for which
the fee is being calculated[ (beginning February 1, 2006).]
The Performance Adjustment shall be calculated by subtracting the
investment record of the Index from the investment performance of the Fund's
Investor Shares. If there is less than a 0.50% difference (plus or minus)
between the investment performance of the Fund's Investor Shares and the
investment record of the Index, the Fund pays JCM the Base Fee with no
adjustment. If the difference between the investment performance of the Fund's
Investor Shares and the investment record of the Index is 0.50% or greater
during any Performance Period, the Base Fee will be subject to an upward or
downward performance adjustment of 1/12 of 0.01875% for every full 0.50%
increment by which the Fund's Investor Shares outperform or underperform the
Index. The maximum percentage used in calculating the Performance Adjustment
(positive or negative) in any month is 1/12 of 0.15%. The Performance Adjustment
is applied against the Fund's average daily net assets during the Performance
Period.
PERKINS SMALL CAP VALUE FUND
[Beginning with the Base Fee payable for 2008 and in month 13
from the date of this Agreement, the Base Fee shall be adjusted monthly based
upon the investment performance of the Fund's Investor Shares in relation to the
cumulative investment record of the Fund's benchmark, the Russell 2000(R) Value
Index (the "Index"), over the "Performance Period" (such adjustment being
referred to herein as the "Performance Adjustment"). The "Performance Period" is
defined as the shorter of (a) the period from the date of this Agreement through
the end of the month for which the fee is being calculated, and (b) the 36 month
period preceding the end of the month for which the fee is being calculated.]
[The Performance Adjustment shall be calculated by subtracting the
investment record of the Index from the investment performance of the Fund's
Investor Shares. If there is less than a 0.50% difference (plus or minus)
between the investment performance of the Fund's Investor Shares and the
investment record of the Index, the Fund pays JCM the Base Fee with no
adjustment. If the difference between the
B-7
investment performance of the Fund's Investor Shares and the investment record
of the Index is 0.50% or greater during any Performance Period, the Base Fee
will be subject to an upward or downward performance adjustment of 1/12 of
0.01364% for every full 0.50% increment by which the Fund's Investor Shares
outperform or underperform the Index. The maximum percentage used in calculating
the Performance Adjustment (positive or negative) in any month is 1/12 of 0.15%.
The Performance Adjustment is applied against the Fund's average daily net
assets during the Performance Period.]
PERKINS MID CAP VALUE FUND AND PERKINS SMALL CAP VALUE FUND
For purposes of computing the Base Fee and the Performance Adjustment, net
assets are averaged over different periods (average daily net assets during the
relevant month for the Base Fee versus average daily net assets during the
Performance Period for the Performance Adjustment). The Base Fee is calculated
and accrued daily. The Performance Adjustment is calculated monthly in arrears
and is accrued evenly each day throughout the month. The investment advisory fee
is paid monthly in arrears.
The average daily net asset value of the Fund, or any class thereof, shall
be determined in the manner set forth in the Trust's Amended and Restated
Agreement and Declaration of Trust, Amended and Restated Bylaws and registration
statement, each as may be amended from time to time.
The investment performance of the Fund's Investor Shares will be the sum
of:
(1) the change in Investor Shares' net asset value ("NAV") per share
during the Performance Period; plus
(2) the value of the Investor Shares' cash distributions per share
accumulated to the end of the Performance Period; plus
(3) the value of capital gains taxes per share paid or payable on
undistributed realized long-term capital gains accumulated to the end of
the Performance Period;
expressed as a percentage of Investor Shares' NAV per share at the beginning of
the Performance Period. For this purpose, the value of distributions per share
of realized capital gains, of dividends per share paid from investment income
and of capital gains taxes per share paid or payable on undistributed realized
long-term capital gains shall be treated as reinvested in Investor Shares at the
NAV in effect at the close of business on the record date for the payment of
such distributions and dividends and the date on which provision is made for
such taxes, after giving effect to such distributions, dividends and taxes.
The investment record of the Index will be the sum of:
(1) the change in the level of the Index during the Performance
Period; plus
B-8
(2) the value, computed consistently with the Index, of cash
distributions made by companies whose securities comprise the Index
accumulated to the end of the Performance Period; expressed as a percentage
of the Index level at the beginning of the Performance Period. For this
purpose, cash distributions on the securities which comprise the Index
shall be treated as reinvested in the Index at least as frequently as the
end of each calendar quarter following the payment of the dividend.
The Trustees have initially designated Investor Shares to be used for
purposes of determining the Performance Adjustment. From time to time, the
Trustees may, by vote of the Trustees of the Trust voting in person,
including a majority of the Trustees who are not parties to this Agreement
or "interested persons" (as defined in the 1940 Act) of any such parties,
determine that a class of shares of the Fund other than Investor Shares is
the most appropriate for use in calculating the Performance Adjustment. If
a different class of shares ("Successor Class") is substituted in
calculating the Performance Adjustment, the use of that Successor Class of
shares for purposes of calculating the Performance Adjustment may apply to
the entire Performance Period so long as such Successor Class was
outstanding at the beginning of such period. If the Successor Class of
shares was not outstanding for all or a portion of the Performance Period,
it may only be used in calculating that portion of the Performance
Adjustment attributable to the period during which such Successor Class was
outstanding and any prior portion of the Performance Period shall be
calculated using the class of shares previously designated.
B-9
EXHIBIT C
OTHER FUNDS MANAGED BY JANUS CAPITAL AND PWM
WITH SIMILAR INVESTMENT OBJECTIVES
The following table lists certain information regarding funds with similar
investment objectives for which Janus Capital and PWM provide investment
advisory or subadvisory services. The table shows such fund's asset size as of
March 31, 2008, the rate of compensation paid by that fund, and whether Janus
Capital has contractually agreed to waive or reduce compensation received from
that fund.
<Table>
<Caption>
ASSET SIZE ANNUAL RATE OF FEE WAIVERS OR
FUND OBJECTIVE (IN $ MILLIONS) COMPENSATION REDUCTIONS
---- --------- --------------- ------------------------ --------------
Janus Adviser High-
Yield Fund......... Seeks to obtain 3.5 First $300 Million 0.65% 0.90%(1)
high current Over $300 Million 0.55%
income. Capital
appreciation is a
secondary
investment
objective when
consistent with
its primary
investment
objective.
Janus Adviser Mid Cap
Value Fund(2)...... Seeks capital 841.5 0.64%(3) 0.74%(1)
appreciation.
Janus Adviser Small
Company Value
Fund............... Seeks capital 45.2 0.74% 1.00%(1)
appreciation.
Mid Cap Value
Portfolio(2)....... Seeks capital 71.6 0.64%(4) 1.24%(5)
appreciation.
Small Company Value
Portfolio.......... Seeks capital 17.8 0.74% 1.34%(5)
appreciation.
Janus High-Yield
Fund............... Seeks to obtain 503.5 First $300 Million 0.65% 0.90%(6)
high current Over $300 Million 0.55%
income. Capital
appreciation is a
secondary
investment
objective when
consistent with
its primary
investment
objective.
Janus Venture Fund... Seeks capital 1,226.6 0.64% N/A
appreciation.
</Table>
C-1
<Table>
<Caption>
ASSET SIZE ANNUAL RATE OF FEE WAIVERS OR
FUND OBJECTIVE (IN $ MILLIONS) COMPENSATION REDUCTIONS
---- --------- --------------- ------------------------ --------------
ING Janus Contrarian
Portfolio.......... Seeks capital 822.9 First $100 Million 0.45% N/A
appreciation. Next $100 Million 0.40%
Next $200 Million 0.35%
Next $500 Million 0.325%
Over $900 Million 0.30%
Ohio National
Small Cap Growth
Portfolio.......... Seeks long-term 20.4 First $50 Million 0.65% N/A
capital Next $100 Million 0.60%
appreciation. Over $150 Million 0.50%
SEI Small/Mid Cap
Equity Fund........ Seeks long-term 145.4 0.50% N/A
capital
appreciation.
SEI Small
Cap Fund........... Seeks capital 73.5 0.50% N/A
appreciation.
SEI Small Cap Growth
Fund............... Seeks long-term 67.6 0.50% N/A
capital
appreciation.
</Table>
---------------
(1) Janus Capital has contractually agreed to waive the Fund's total operating
expenses (excluding the distribution and shareholder servicing fees
(applicable to Class A Shares, Class C Shares, Class R Shares, and Class S
Shares), administrative services fee (applicable to Class R Shares and
Class S Shares), brokerage commissions, interest, dividends, taxes, and
extraordinary expenses including, but not limited to, acquired fund fees
and expenses) to the limit shown until at least December 1, 2009. The
expense limit is described in the respective Statement of Additional
Information.
(2) Subadvised by PWC.
(3) The Fund pays an investment advisory fee rate that adjusts up or down based
upon the Fund's performance relative to its benchmark index during a
measuring period. This fee rate, as of July 31, 2007, was 0.59%.
(4) The Portfolio pays an investment advisory fee rate that adjusts up or down
based upon the Portfolio's performance relative to its benchmark index
during a measuring period. This fee rate, as of December 31, 2007, was
0.60%.
(5) Janus Capital has contractually agreed to waive the Portfolio's total
operating expenses (excluding the distribution and shareholder servicing
fee, administrative services fee (applicable to Service Shares), brokerage
commissions, interest, dividends, taxes, and extraordinary expenses
including, but not limited to, acquired fund fees and expenses) to the
limit shown until at least May 1, 2009. The expense limit is described in
the respective Statement of Additional Information.
(6) Janus Capital has contractually agreed to waive the Fund's total operating
expenses (excluding brokerage commissions, interest, dividends, taxes, and
extraordinary expenses including, but not limited to, acquired fund fees
and expenses) to the limit shown until at least March 1, 2009. The expense
waiver is described in the respective Statement of Additional Information.
C-2
EXHIBIT D
PRINCIPAL EXECUTIVE OFFICERS AND DIRECTORS OF
JANUS CAPITAL AND THEIR PRINCIPAL OCCUPATIONS
<Table>
<Caption>
JANUS CAPITAL/AFFILIATED POSITIONS(S) WITH JANUS CAPITAL
NAME ENTITY NAME OR AFFILIATED ENTITY
---- ------------------------ -------------------------------
Robin C. Beery................ Janus Capital Group Inc. Chief Marketing Officer and
Executive Vice President
Janus Capital Management LLC Chief Marketing Officer and
Executive Vice President
Janus Distributors LLC Executive Vice President
Janus Services LLC Executive Vice President
Enhanced Investment Working Director
Technologies, LLC
Gary D. Black................. Janus Capital Group Inc. Chief Executive Officer and
Director
Janus Capital Management LLC Chief Executive Officer
Janus Management Holdings Corp. President and Director
Janus Distributors LLC Executive Vice President
Janus Services LLC Executive Vice President
Bay Isle Financial LLC President
Enhanced Investment Working Director
Technologies, LLC
Daniel P. Charles............. Janus Capital Management LLC Senior Vice President and
Managing Director of
JanusIntech Institutional Asset
Management
Janus Distributors LLC Senior Vice President and
Managing Director of
JanusIntech Institutional Asset
Management
Janus Services LLC Senior Vice President and
Managing Director of
JanusIntech Institutional Asset
Management
Enhanced Investment Working Director
Technologies, LLC
Jonathan D. Coleman........... Janus Capital Management LLC Co-Chief Investment Officer and
Executive Vice President
Gregory A. Frost.............. Janus Capital Group Inc. Chief Financial Officer and
Executive Vice President
Janus Capital Management LLC Chief Financial Officer and
Executive Vice President
Janus Capital Asia Limited Director and Assistant
Treasurer
Janus Capital International Director and Assistant
Limited Treasurer
Janus Capital Singapore Pte. Director
Limited
Janus Distributors LLC Chief Financial Officer and
Executive Vice President
Janus Holdings Corporation Senior Vice President,
Controller, and Director
</Table>
D-1
<Table>
<Caption>
JANUS CAPITAL/AFFILIATED POSITIONS(S) WITH JANUS CAPITAL
NAME ENTITY NAME OR AFFILIATED ENTITY
---- ------------------------ -------------------------------
Janus International Holding LLC Executive Vice President,
Controller, and Director
Janus Management Holdings Corp. Chief Financial Officer,
Executive Vice President, and
Director
Janus Services LLC Chief Financial Officer and
Executive Vice President
Bay Isle Financial LLC Chief Financial Officer and
Senior Vice President
Berger Financial Group LLC Vice President
Capital Group Partners, Inc. Executive Vice President, Chief
Financial Officer, and Director
Enhanced Investment Vice President and Working
Technologies, LLC Director
Heidi W. Hardin............... Janus Capital Management LLC General Counsel, Senior Vice
President, and Secretary
Janus Distributors LLC General Counsel, Senior Vice
President, and Secretary
Janus Services LLC General Counsel, Senior Vice
President, and Secretary
Kelley Abbott Howes........... Janus Capital Group Inc. Chief Administrative Officer,
General Counsel, Executive Vice
President, and Secretary
Janus Capital Management LLC Chief Administrative Officer
and Executive Vice President
Janus Distributors LLC Chief Administrative Officer
and Executive Vice President
Janus Management Holdings Corp. Chief Administrative Officer,
General Counsel, Executive Vice
President, Director, and
Secretary
Capital Group Partners, Inc. Director
Enhanced Investment Vice President
Technologies, LLC
Dominic C. Martellaro......... Janus Capital Group Inc. Executive Vice President
Janus Capital Management LLC Executive Vice President
Janus Capital Funds Plc Director
Janus Capital Trust Manager Director
Limited
Janus Distributors LLC President
Janus Services LLC Executive Vice President
Gibson Smith.................. Janus Capital Management LLC Co-Chief Investment Officer and
Executive Vice President
Janus Distributors LLC Executive Vice President
Janus Services LLC Executive Vice President
</Table>
D-2
<Table>
<Caption>
JANUS CAPITAL/AFFILIATED POSITIONS(S) WITH JANUS CAPITAL
NAME ENTITY NAME OR AFFILIATED ENTITY
---- ------------------------ -------------------------------
John Zimmerman(1)............. Janus Capital Group Inc. Executive Vice President
Janus Capital Management LLC Executive Vice President
Janus Distributors LLC Executive Vice President
Janus Services LLC Executive Vice President
Enhanced Investment Working Director
Technologies, LLC
</Table>
---------------
(1) Mr. Zimmerman resigned his positions with Janus Capital Group Inc. and its
subsidiaries effective August 2007.
D-3
EXHIBIT E
TRUSTEES AND PRINCIPAL EXECUTIVE OFFICERS
OF THE FUNDS AND THEIR PRINCIPAL OCCUPATIONS
TRUSTEES
<Table>
<Caption>
POSITION(S) PRINCIPAL
NAME, ADDRESS, HELD WITH LENGTH OF OCCUPATIONS DURING OTHER DIRECTORSHIPS
AND AGE THE FUNDS* TIME SERVED THE PAST FIVE YEARS HELD BY TRUSTEE
-------------- ------------ ------------ ---------------------- ----------------------
William F. McCalpin...... Chairman 1/08-Present Private Investor. Chairman of the
151 Detroit Street Formerly, Vice Board and Director
Denver, CO 80206 Trustee 6/02-Present President of Asian of The Investment
DOB: 1957 Cultural Council and Fund for
Executive Vice Foundations
President and Chief Investment Program
Operating Officer of (TIP) (consisting
The Rockefeller of 4 funds) and the
Brothers Fund (a F.B. Heron
private family Foundation (a private
foundation) grantmaking
(1998-2006). foundation).
Jerome S. Contro......... Trustee 11/05-Present General partner of Chairman of the
151 Detroit Street Crosslink Capital, a Board and Trustee
Denver, CO 80206 private investment of RS Investment
DOB: 1956 firm (since 2008). Trust (consisting
Formerly, partner of of 40 funds) (since
Tango Group, a private 2001), and Director
investment firm of Envysion, Inc.
(1999-2008). (internet
technology), Lijit
Networks Inc.
(internet
technology), and
LogRhythm Inc.
(software
solutions).
John W. McCarter, Jr..... Trustee 6/02-Present President and Chief Chairman of the
151 Detroit Street Executive Officer of Board and Director
Denver, CO 80206 The Field Museum of of Divergence Inc.
DOB: 1938 Natural History (biotechnology
(Chicago, IL) (since firm); Director of
1997). W.W. Grainger, Inc.
(industrial
distributor); and
Trustee of WTTW
(Chicago public
television station)
and the University
of Chicago.
Dennis B. Mullen......... Trustee 9/93-Present Chief Executive Chairman of the
151 Detroit Street Officer of Red Robin Board (since 2005)
Denver, CO 80206 Gourmet Burgers, Inc. and Director of Red
DOB: 1943 (since 2005). Robin Gourmet
Formerly, private Burgers, Inc.; and
investor. Director of Janus
Capital Funds Plc
(Dublin-based,
non-U.S. funds).
</Table>
E-1
<Table>
<Caption>
POSITION(S) PRINCIPAL
NAME, ADDRESS, HELD WITH LENGTH OF OCCUPATIONS DURING OTHER DIRECTORSHIPS
AND AGE THE FUNDS* TIME SERVED THE PAST FIVE YEARS HELD BY TRUSTEE
-------------- ------------ ------------ ---------------------- ----------------------
James T. Rothe........... Trustee 1/97-Present Co-founder and Director of Red
151 Detroit Street Managing Director of Robin Gourmet
Denver, CO 80206 Roaring Fork Capital Burgers, Inc.
DOB: 1943 Management, LLC
(private investment in
public equity firm),
and Professor Emeritus
of Business of the
University of
Colorado, Colorado
Springs, CO (since
2004). Formerly,
Professor of Business
of the University of
Colorado (2002-2004);
and Distinguished
Visiting Professor of
Business (2001-2002)
of Thunderbird
(American Graduate
School of
International
Management), Glendale,
AZ.
William D. Stewart....... Trustee 9/93-Present Corporate Vice N/A
151 Detroit Street President and General
Denver, CO 80206 Manager of MKS
DOB: 1944 Instruments -- HPS
Products, Boulder, CO
(a manufacturer of
vacuum fittings and
valves).
Martin H. Waldinger...... Trustee 9/93-Present Private Investor and N/A
151 Detroit Street Consultant to
Denver, CO 80206 California Planned
DOB: 1938 Unit Developments
(since 1994).
Formerly, CEO and
President of Marwal,
Inc. (homeowner
association management
company).
Linda S. Wolf............ Trustee 12/05-Present Retired. Formerly, Director of
151 Detroit Street Chairman and Chief Wal-Mart, The Field
Denver, CO 80206 Executive Officer of Museum of Natural
DOB: 1947 Leo Burnett History (Chicago,
(Worldwide) IL), Children's
(advertising agency) Memorial Hospital
(2001-2005). (Chicago, IL),
Chicago Council on
Global Affairs, and
InnerWorkings
(U.S. provider of
print procurement
solutions).
</Table>
---------------
* Each Trustee is currently a Trustee of three registered investment companies
advised by Janus Capital: Janus Investment Fund, Janus Adviser Series, and
Janus Aspen Series. Additionally, Mr. Mullen also serves as director of Janus
Capital Funds Plc.
E-2
OFFICERS
<Table>
<Caption>
TERM OF
OFFICE* AND
NAME, ADDRESS, AND POSITION(S) HELD WITH LENGTH OF PRINCIPAL OCCUPATIONS
AGE THE FUNDS TIME SERVED DURING THE PAST FIVE YEARS
------------------ ------------------------ ------------- --------------------------
Robin C. Beery........ President and Chief 4/08-Present Executive Vice President
151 Detroit Street Executive Officer and Chief Marketing
Denver, CO 80206 Officer of Janus Capital
DOB: 1967 Group Inc. and Janus
Capital; Executive Vice
President of Janus
Distributors LLC and Janus
Services LLC; and Working
Director of Enhanced
Investment Technologies,
LLC. Formerly, President
(2002-2007) and Director
(2000-2007) of The Janus
Foundation; President
(2004-2006) and Vice
President and Chief
Marketing Officer (2003-
2004) of Janus Services
LLC; and Senior Vice
President (2003-2005) and
Vice President (1999-2003)
of Janus Capital Group
Inc. and Janus Capital.
Stephanie Grauerholz-
Lofton.............. Chief Legal Counsel Vice President and
151 Detroit Street and Secretary 1/06-Present Assistant
Denver, CO 80206 General Counsel of Janus
DOB: 1970 Vice President 3/06-Present Capital, and Vice
President and Assistant
Secretary of Janus
Distributors LLC.
Formerly, Assistant Vice
President of Janus Capital
and Janus Distributors LLC
(2006).
Andrew J. Iseman**.... President and Chief 3/07-4/08 Executive Vice President
151 Detroit Street Executive Officer and Chief Operating
Denver, CO 80206 Officer of Janus Capital
DOB: 1964 Group, Inc. and Janus
Capital; President of
Janus Services LLC; and
Director of Capital Group
Partners, Inc. Formerly,
Senior Vice President of
Enhanced Investment
Technologies, LLC (2005-
2007); Senior Vice
President of Janus Capital
Group, Inc. (2007) and
Janus Capital (2007); and
Vice President of Janus
Capital (2003-2005) and
Janus Services LLC
(2003-2004).
</Table>
E-3
<Table>
<Caption>
TERM OF
OFFICE* AND
NAME, ADDRESS, AND POSITION(S) HELD WITH LENGTH OF PRINCIPAL OCCUPATIONS
AGE THE FUNDS TIME SERVED DURING THE PAST FIVE YEARS
------------------ ------------------------ ------------- --------------------------
David R. Kowalski..... Vice President, Chief 6/02-Present Senior Vice President and
151 Detroit Street Compliance Officer, Chief Compliance Officer
Denver, CO 80206 and Anti-Money of Janus Capital, Janus
DOB: 1957 Laundering Officer Distributors LLC, and
Janus Services LLC; Chief
Compliance Officer of Bay
Isle Financial LLC; and
Vice President of Enhanced
Investment Technologies,
LLC. Formerly, Chief
Compliance Officer of
Enhanced Investment
Technologies, LLC (2003-
2005); Vice President of
Janus Capital (2000-2005),
and Janus Services LLC
(2004-2005); and Assistant
Vice President of Janus
Services LLC (2000-2004).
Jesper Nergaard....... Chief Financial Officer 3/05-Present Vice President of Janus
151 Detroit Street Capital. Formerly,
Denver, CO 80206 Vice President, 2/05-Present Director of Financial
DOB: 1962 Treasurer, and Principal Reporting for
Accounting Officer OppenheimerFunds, Inc.
(2004-2005); Site Manager
and First Vice President
of Mellon Global
Securities Services
(2003); and Director of
Fund Accounting, Project
Development, and Training
of INVESCO Funds Group
(1994-2003).
</Table>
---------------
* Officers are elected at least annually by the Trustees for a one-year term
and may also be elected from time to time by the Trustees for an interim
period.
** Mr. Iseman resigned his positions with Janus Capital Group Inc. and its
subsidiaries effective April 2008.
E-4
EXHIBIT F
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 (Marini, et al. v. Janus Investment Fund, et al., U.S.
District Court, District of Maryland, Case No. 04-CV-00497); (ii) derivative
claims by investors in certain Janus funds ostensibly on behalf of such funds
(Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court,
District of Maryland, Case No. 04-CV-00518); (iii) claims on behalf of
participants in the Janus 401(k) plan (Wangberger v. Janus Capital Group Inc.,
401(k) Advisory Committee, et al., U.S. District Court, District of Maryland,
Case No. JFM-05-2711); (iv) claims brought on behalf of shareholders of Janus
Capital Group Inc. ("JCGI") on a derivative basis against the Board of Directors
of JCGI (Chasen v. Whiston, et al., U.S. District Court, District of Maryland,
Case No. 04-MD-00855); and (v) claims by a putative class of shareholders of
JCGI asserting claims on behalf of the shareholders (Wiggins, et al. v. Janus
Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No.
04-CV-00818). Each of the five complaints initially named JCGI and/or Janus
Capital as a defendant. In addition, the following were also named as defendants
in one or more of the actions: Janus Investment Fund ("JIF"), Janus Aspen Series
("JAS"), Janus Adviser Series ("JAD"), Janus Distributors LLC, Enhanced
Investment Technologies, LLC ("INTECH"), Bay Isle Financial LLC ("Bay Isle"),
Perkins, Wolf, McDonnell and Company, LLC ("Perkins"), the Advisory Committee of
the Janus 401(k) plan, and the current or former directors of JCGI.
On August 25, 2005, the Court entered orders dismissing most of the claims
asserted against Janus Capital and its affiliates by fund investors in the
Marini and Steinberg cases (actions (i) and (ii) above) except certain claims
under Sec-
F-1
tion 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"). A currently pending
Motion for Summary Judgment is seeking dismissal of the remaining claims. On
August 15, 2006, the Wangberger complaint in the 401(k) plan class action
(action (iii) above) was dismissed by the Court with prejudice. The plaintiff
appealed that dismissal decision to the United States Court of Appeals for the
Fourth Circuit, which recently remanded the case back to the Court for further
proceedings. The Court also dismissed the Chasen lawsuit (action (iv) above)
against JCGI's Board of Directors without leave to amend. Finally, a Motion to
Dismiss the Wiggins suit (action (v) above) was granted and the matter was
dismissed in May 2007. However, in June 2007, Plaintiffs appealed that dismissal
to the United States Court of Appeals for the Fourth Circuit. That appeal is
currently pending.
In addition to the lawsuits described above, the Auditor of the State of
West Virginia ("Auditor"), in his capacity as securities commissioner, has
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 (In the Matter of Janus Capital Group Inc. et al.,
Before the Securities Commissioner, State of West Virginia, Summary Order No.
05-1320). The respondents in these proceedings collectively sought a Writ of
Prohibition in state court, which was denied. Their subsequent Petition for
Appeal was also denied. Consequently, in September 2006, JCGI and Janus Capital
filed their answer to the Auditor's summary order instituting proceedings and
requested a hearing. A status conference was held on June 28, 2007, during which
the parties were ordered to submit their proposed scheduling order. To date, no
scheduling order has been entered in the case. In addition to the pending Motion
to Discharge Order to Show Cause, JCGI and Janus Capital, as well as other
similarly situated defendants, continue to challenge the statutory authority of
the Auditor to bring such an action.
During 2007, two lawsuits were filed against Janus Management Holdings
Corporation ("Janus Holdings"), an affiliate of JCGI, by former Janus portfolio
managers, alleging that Janus Holdings unilaterally implemented certain changes
to compensation in violation of prior agreements (Edward Keely v. Janus
Holdings, Denver District Court, Case No. 2007CV7366; Tom Malley v. Janus
Holdings, Denver District Court, Case No. 2007CV10719). These complaints allege
some or all of the following claims: (1) breach of contract; (2) willful and
wanton breach of contract; (3) breach of good faith and fair dealing; and (4)
estoppel. Janus Holdings filed Answers to these complaints denying any liability
for these claims and intends to vigorously defend against the allegations.
Additional lawsuits may be filed against certain of the Janus funds, Janus
Capital, and related parties in the future. Janus Capital does not currently
believe that these pending actions will materially affect its ability to
continue providing services it has agreed to provide to the Janus funds.
F-2
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2) Call toll-free at 2) Log on to boxes on this proxy
1-800-966-8932 and WWW.2VOTEFUNDPROXY.COM card
follow the recorded and follow the 3) Sign and date this
instructions on-screen proxy card
3) If you vote via the instructions 4) Mail your completed
telephone, you do not 3) If you vote via the proxy card in the
need to mail this Internet, you do not enclosed envelope
proxy card need to mail this
proxy card
PROXY JANUS MID CAP VALUE FUND PROXY
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 30, 2008
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF JANUS INVESTMENT FUND. The
undersigned, revoking any previous proxies, hereby appoints Robin C. Beery,
Jesper Nergaard, and Stephanie Grauerholz-Lofton or any of them, as attorneys
and proxies, with full power of substitution to each, to vote the shares which
the undersigned is entitled to vote at the Special Meeting of Shareholders
("Meeting") of Janus Mid Cap Value Fund to be held at the JW Marriott Hotel, 150
Clayton Lane, Denver, CO on October 30, 2008 at 10:00 a.m. Mountain Time and at
any adjournment(s) or postponement(s) of such Meeting. As to any other matter
that properly comes before the Meeting or any adjournment(s) or postponement(s)
thereof, the persons appointed above may vote in accordance with their best
judgment. The undersigned hereby acknowledges receipt of the accompanying Proxy
Statement and Notice of Special Meeting.
NOTE: Please sign exactly as your name(s)
appears on the Proxy. If you are signing
this Proxy for a corporation, estate, trust
or in other fiduciary capacity, for example,
as a trustee, please state that capacity or
title along with your signature.
------------------------ -----------------
Signature Date
------------------------ -----------------
Signature (Joint Owners) Date
JIF-MCV-PXC
WHEN THIS PROXY IS PROPERLY EXECUTED, THE SHARES REPRESENTED HEREBY WILL BE
VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR
THE PROPOSALS SET FORTH BELOW.
PLEASE MARK A BOX BELOW IN BLUE OR BLACK INK AS FOLLOWS. EXAMPLE: [X]
FOR AGAINST ABSTAIN
1. Approve a new subadvisory agreement between
Janus Capital Management LLC and Perkins,
Wolf, McDonnell and Company, LLC, with respect [ ] [ ] [ ]
to Janus Mid Cap Value Fund, so that Perkins,
Wolf, McDonnell and Company, LLC can continue
to serve as Janus Mid Cap Value Fund's
subadviser.
2. NOT APPLICABLE
3. Approve an amended and restated investment
advisory agreement between Janus Capital
Management LLC and Janus Investment Fund, on [ ] [ ] [ ]
behalf of Janus Mid Cap Value Fund, to
reallocate the obligation to compensate any
subadviser engaged by Janus Capital.
4. NOT APPLICABLE
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. IF YOU ARE NOT VOTING
BY TELEPHONE OR INTERNET, PLEASE SIGN AND DATE THIS PROXY CARD ON THE REVERSE
SIDE AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE SIGN ON THE REVERSE SIDE OF THIS CARD
JIF-MCV-PXC
FORM OF PROXY CARD
PROXY TABULATOR
P.O. BOX 859232 EVERY SHAREHOLDER'S VOTE IS IMPORTANT
BRAINTREE, MA 02185-9232 *** 3 EASY WAYS TO VOTE YOUR PROXIES ***
VOTE VIA THE TELEPHONE VOTE VIA THE INTERNET VOTE BY MAIL
1) Read the Proxy 1) Read the Proxy 1) Read the Proxy
Statement and have Statement and have Statement
this card at hand this card at hand 2) Mark the appropriate
2) Call toll-free at 2) Log on to boxes on this proxy
1-800-966-8932 and WWW.2VOTEFUNDPROXY.COM card
follow the recorded and follow the 3) Sign and date this
instructions on-screen proxy card
3) If you vote via the instructions 4) Mail your completed
telephone, you do not 3) If you vote via the proxy card in the
need to mail this Internet, you do not enclosed envelope
proxy card need to mail this
proxy card
PROXY JANUS SMALL CAP VALUE FUND PROXY
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 30, 2008
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF JANUS INVESTMENT FUND. The
undersigned, revoking any previous proxies, hereby appoints Robin C. Beery,
Jesper Nergaard, and Stephanie Grauerholz-Lofton or any of them, as attorneys
and proxies, with full power of substitution to each, to vote the shares which
the undersigned is entitled to vote at the Special Meeting of Shareholders
("Meeting") of Janus Small Cap Value Fund to be held at the JW Marriott Hotel,
150 Clayton Lane, Denver, CO on October 30, 2008 at 10:00 a.m. Mountain Time and
at any adjournment(s) or postponement(s) of such Meeting. As to any other matter
that properly comes before the Meeting or any adjournment(s) or postponement(s)
thereof, the persons appointed above may vote in accordance with their best
judgment. The undersigned hereby acknowledges receipt of the accompanying Proxy
Statement and Notice of Special Meeting.
NOTE: Please sign exactly as your name(s)
appears on the Proxy. If you are signing
this Proxy for a corporation, estate, trust
or in other fiduciary capacity, for example,
as a trustee, please state that capacity or
title along with your signature.
------------------------ -----------------
Signature Date
------------------------ -----------------
Signature (Joint Owners) Date
JIF-SCV-PXC
WHEN THIS PROXY IS PROPERLY EXECUTED, THE SHARES REPRESENTED HEREBY WILL BE
VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR
THE PROPOSALS SET FORTH BELOW.
PLEASE MARK A BOX BELOW IN BLUE OR BLACK INK AS FOLLOWS. EXAMPLE: [X]
FOR AGAINST ABSTAIN
1. NOT APPLICABLE
2. Approve a new subadvisory agreement between
Janus Capital Management LLC and Perkins,
Wolf, McDonnell and Company, LLC, with respect [ ] [ ] [ ]
to Janus Small Cap Value Fund, so that
Perkins, Wolf, McDonnell and Company, LLC can
continue to serve as Janus Small Cap Value
Fund's subadviser.
3. NOT APPLICABLE
4. Approve an amended and restated investment
advisory agreement between Janus Capital
Management LLC and Janus Investment Fund, on
behalf of Janus Small Cap Value Fund, to
reallocate the obligation to compensate any [ ] [ ] [ ]
subadviser engaged by Janus Capital, and to
change the investment advisory fee rate from a
fixed rate to a rate that adjusts up or down
based upon the Fund's performance relative to
its benchmark index, the Russell 2000(R) Value
Index.
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. IF YOU ARE NOT VOTING
BY TELEPHONE OR INTERNET, PLEASE SIGN AND DATE THIS PROXY CARD ON THE REVERSE
SIDE AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE SIGN ON THE REVERSE SIDE OF THIS CARD
JIF-SCV-PXC