UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
<Table>
Filed by the Registrant [X]
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[X] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
BERGER OMNI INVESTMENT TRUST
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
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(1) Title of each class 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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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.
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</Table>
FOR SHAREHOLDERS OF ONE OR MORE OF THE FOLLOWING FUNDS:
BERGER SMALL CAP VALUE FUND
BERGER SMALL CAP VALUE FUND II
BERGER MID CAP VALUE FUND
[Janus LOGO] January XX, 2003
Dear Shareholder:
Your Fund's Board is requesting your vote on several proposals regarding your
Berger value fund(s). Among them are the naming of Janus Capital Management LLC
as the adviser to your fund and the reorganization of your fund into the Janus
fund family. Under this arrangement, Janus will assume responsibility for the
Fund's day-to-day servicing and marketing operations while the current
subadviser and portfolio manager will remain the same.
While we encourage you to read the Questions and Answers section and the full
text of the enclosed proxy statement, the proposals are summarized as follows:
o Approve a new investment advisory agreement with Janus Capital
Management LLC;
o Approve a new subadvisory agreement between Janus and your
Fund's existing subadviser;
o Approve changes to each Fund's fundamental investment policies
to make them consistent with Janus fund policies;
o Approve the reorganization of each fund into the Janus fund
family;
o Elect trustees; and
o With respect to the Institutional Shares of Berger Small Cap
Value Fund II, approve a distribution and shareholder service
plan. Note that the overall expenses of this fund are expected
to decrease if these proposals are adopted.
YOUR FUND'S BOARD OF TRUSTEES APPROVED THE PROPOSALS AND URGES YOU TO VOTE "FOR"
EACH PROPOSAL.
Please take a few minutes to cast your vote now. If you have any questions about
the proposals, feel free to call our proxy solicitor at 1-866-238-7096.
Thank you for your response and we look forward to welcoming you as a Janus
shareholder and serving your future investment needs.
Respectfully,
Mark Whiston
CEO, Janus Capital Group Inc.
YOUR VOTE IS IMPORTANT. To vote, simply fill out each of the enclosed proxy
cards and return them to us in the enclosed postage-paid envelope. If we do not
hear from you by ______, our proxy solicitor, Georgeson Shareholder
Communications Inc., may contact you.
IMPORTANT NEWS FOR SHAREHOLDERS
While we encourage you to read the full text of the enclosed Proxy Statement,
here is a brief overview of some matters affecting your Fund that will be the
subject of a shareholder vote.
QUESTIONS AND ANSWERS
Q. WHAT IS HAPPENING WITH BERGER AND JANUS?
A. Prior to January 1, 2003, Stilwell Financial Inc. ("Stilwell") was the
indirect owner of both Berger Financial Group LLC, the investment
adviser to the Berger Funds ("Berger"), and Janus Capital Management
LLC ("Janus"), the investment adviser to the Janus Funds. On September
3, 2002, Stilwell announced its intention to consolidate all of its
investment advisory operations under Janus. As a result of this
restructuring, it is anticipated that Berger, the investment adviser to
your Fund, will be consolidated into Janus, and Berger will cease to
exist.
At the meeting, you will be asked to vote on several proposals designed
to integrate your Fund into the Janus family of funds. First, you will
be asked to approve new investment advisory agreements with Janus and
new subadvisory agreements with your Fund's current subadviser. Second,
you will be asked to consider the election of a new Board of Trustees.
Third, you will be asked to consider changes to your Fund's fundamental
policies. Fourth, certain shareholders of Berger Small Cap Value Fund
II (the Institutional Shares class only) will be asked to approve a
distribution and shareholder servicing plan. Lastly, you will be asked
to consider a proposal to reorganize your Fund into a newly created
series of an existing Janus trust. Collectively, these transactions are
referred to as the "Fund Restructuring."
Q. HOW WILL THE FUND RESTRUCTURING AFFECT THE MANAGEMENT OF MY FUND?
A. Janus, an affiliate of Berger, will serve as investment adviser to your
Fund. Your current subadviser, including your current portfolio
manager, will not change and will continue to be responsible for the
day-to-day management of your Fund. The proposals are not expected to
have any material impact on the principal investment policies,
strategies and risks of the Funds. The composition of your Fund's
portfolio is not expected to change in anticipation of the Fund
Restructuring.
Q. WHO ARE BEING NOMINATED TO SERVE AS TRUSTEES?
A. There are seven nominees. The nominees currently serve as trustees for
the Janus mutual funds. The proposed use of a single board for all
Janus mutual funds is expected to result in administrative efficiencies
and cost savings. The Board of the Janus Funds has appointed four of
the current independent trustees of your Fund to serve as an Advisory
Board to facilitate the transition of your Fund to the Janus family of
funds.
Q. WHY ARE YOUR FUND'S FUNDAMENTAL POLICIES CHANGING?
A. As described in more detail in the accompanying proxy statement, many
of the existing fundamental policies were adopted in response to
regulatory or other requirements that no longer apply. In addition,
small variations in wording between your Fund's investment policies and
those of the Janus funds may increase the costs of compliance. The
investment strategies of the Funds are not expected to change as a
result of the proposals.
Q. WHY IS YOUR FUND'S INVESTMENT OBJECTIVE CHANGING TO A NON-FUNDAMENTAL
POLICY?
A. Applicable law does not require a Fund's investment objective to be
fundamental. This change will allow the Board to respond to regulatory
or market changes without incurring the costs of a shareholder vote if
it should become desirable to change the Fund's objective at a later
date.
Q. WHY IS YOUR FUND BEING REORGANIZED?
A. Reorganizing your Fund as a series of an existing Janus trust is
expected to increase administrative efficiencies and reduce costs to
your Fund by standardizing documentation and policies governing all of
the Janus Funds.
Q. WHAT OTHER CHANGES ARE EXPECTED AS A RESULT OF THE FUND RESTRUCTURING?
A. Your Fund will become a part of the Janus family of funds. Janus or its
affiliates will provide most of the services necessary to operate your
Fund, including marketing and distribution, fund accounting,
shareholder services and administrative services. The fee structures
and shareholder policies and services of the Janus funds will apply.
Q. HOW DOES MY FUND'S BOARD RECOMMEND THAT I VOTE?
A. After careful consideration of possible alternatives, your Fund's
Board, including those members who are not "interested persons,"
approved the proposals and recommend that you vote in favor of each
proposal. The reasons for the Board's recommendation are discussed in
more detail in the enclosed Proxy Statement under "Board
Considerations" in each proposal.
Q. WHO WILL PAY FOR THE PROXY SOLICITATION?
A. Janus and/or the subadvisers will bear the costs associated with the
proxy solicitation. Neither you nor your Fund will bear any of these
costs.
Q. HOW CAN I VOTE MY SHARES?
A. You may choose from the following options, which are described in more
detail on the proxy card:
o by mail, using the enclosed proxy card(s) and return envelope;
o by telephone, using the toll free number listed on your proxy
card(s);
o through the Internet, using the website address listed on your
proxy card(s); or
o in person at the shareholder meeting.
Q. WHAT SHOULD I DO IF I RECEIVE MORE THAN ONE PROXY CARD?
A. Because each Fund's shareholders must vote separately, you are being
sent a proxy card for each Fund account that you have. Please vote on
all applicable proposals shown on each proxy card that you receive.
Q. WHOM SHOULD I CALL FOR ADDITIONAL INFORMATION ABOUT THIS PROXY
STATEMENT?
A. Please call Georgeson Shareholder Communications Inc., our proxy
solicitor, at 1-866-238-7096.
Q. IF THESE PROPOSALS ARE APPROVED BY SHAREHOLDERS, HOW WILL YOUR ACCOUNT
SERVICING BE TRANSFERRED TO JANUS?
A. If approved, the Fund Restructuring is expected to occur in the first
quarter of 2003 and the service transition from Berger to Janus should
be seamless. You will receive information from Janus prior to and after
the Fund Restructuring.
Q. IN THE INTERIM, WHO DO I CONTACT FOR SERVICE-RELATED QUESTIONS?
A. Until notified otherwise, please continue to direct all service-related
questions to Berger Funds at xxx-xxx-xxxx.
[PRELIMINARY COPY]
BERGER OMNI INVESTMENT TRUST
BERGER SMALL CAP VALUE FUND
BERGER INVESTMENT PORTFOLIO TRUST
BERGER SMALL CAP VALUE FUND II
BERGER MID CAP VALUE FUND
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
Notice is hereby given that Special Meetings of Shareholders of Berger Small Cap
Value Fund, Berger Small Cap Value Fund II and Berger Mid Cap Value Fund (each a
"Fund," and, collectively, the "Funds") will be held jointly at the offices of
Janus Capital Management LLC, 3773 Cherry Creek Drive North, Denver, Colorado
80209, on March 7, 2003 at 10:00 a.m., Mountain time, for the purposes of
considering the proposals set forth below and to transact such other business,
if any, as may properly come before the Meetings.
PROPOSAL 1: For each Fund, to approve a new investment advisory agreement
for the Fund with Janus Capital Management LLC ("Janus").
PROPOSAL 2: For shareholders of Berger Small Cap Value Fund and Berger Mid
Cap Value Fund only, to approve a new subadvisory agreement
between Janus and Perkins, Wolf, McDonnell and Company and a
new subadvisory agreement between Janus and a newly formed
subsidiary of Perkins, Wolf, McDonnell and Company.
PROPOSAL 3: For shareholders of Berger Small Cap Value Fund II only, to
approve a new subadvisory agreement between Janus and Bay Isle
Financial LLC.
PROPOSAL 4: For each Fund, to approve changes to the Fund's fundamental
policies, including changing the Fund's investment objective
from fundamental to non-fundamental.
PROPOSAL 5: For holders of Institutional Shares of Berger Small Cap Value
Fund II only, to approve a distribution and shareholder
servicing plan.
PROPOSAL 6: For each Fund, to elect seven (7) Trustees to its Board of
Trustees.
PROPOSAL 7: For each Fund, to approve an Agreement and Plan of
Reorganization, whereby that Fund would be reorganized into a
newly created series of the Janus Funds.
Shareholders of record of each Fund as of the close of business on
January 7, 2003 are entitled to notice of, and to vote at, the Meeting for that
Fund's shareholders, or any adjournment of the Meetings.
The persons named as proxies will vote in their discretion on any other
business that may properly come before a Meeting or any adjournments or
postponements thereof.
In the event that the necessary quorum to transact business or the vote
required to approve any proposal is not obtained at a Meeting with respect to
one or more Funds, the persons named as proxies may propose one or more
adjournments of the Meetings, in accordance with applicable law, to permit
further solicitation of proxies with respect to that proposal. Any such
adjournment as to a matter will require the affirmative vote of the holders of a
majority of the shares of the applicable Fund present in
person or by proxy at a Meeting. The persons named as proxies will vote in favor
of such adjournment if they determine that such adjournment and additional
solicitation are reasonable and in the interests of shareholders.
THE BOARD OF EACH TRUST RECOMMENDS THAT SHAREHOLDERS VOTE FOR ALL
APPLICABLE PROPOSALS.
By Order of the Boards of Trustees
Sue Vreeland
Secretary
, 2003
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IMPORTANT -- WE URGE YOU TO SIGN AND DATE THE ENCLOSED PROXY CARD(s) AND RETURN
IT IN THE ENCLOSED ADDRESSED ENVELOPE, WHICH REQUIRES NO POSTAGE (OR TAKE
ADVANTAGE OF THE ELECTRONIC OR TELEPHONIC VOTING PROCEDURES DESCRIBED ON THE
PROXY CARD(s)). YOUR PROMPT RETURN OF THE ENCLOSED PROXY CARD(s) (OR YOUR VOTING
BY OTHER AVAILABLE MEANS) MAY SAVE THE NECESSITY OF FURTHER SOLICITATIONS. IF WE
DO NOT HEAR FROM YOU AFTER A REASONABLE AMOUNT OF TIME, YOU MAY RECEIVE A
TELEPHONE CALL FROM OUR PROXY SOLICITOR, GEORGESON SHAREHOLDER COMMUNICATIONS
INC., REMINDING YOU TO VOTE YOUR SHARES. IF YOU WISH TO ATTEND THE MEETINGS AND
VOTE YOUR SHARES IN PERSON AT THAT TIME, YOU WILL STILL BE ABLE TO DO SO.
[PRELIMINARY COPY]
JOINT PROXY STATEMENT
BERGER OMNI INVESTMENT TRUST
BERGER SMALL CAP VALUE FUND
BERGER INVESTMENT PORTFOLIO TRUST
BERGER SMALL CAP VALUE FUND II
BERGER MID CAP VALUE FUND
210 UNIVERSITY BOULEVARD
DENVER, COLORADO 80206
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Boards of Trustees of Berger Investment Portfolio Trust and
Berger Omni Investment Trust (each a "Trust," and, collectively, the "Trusts").
These proxies will be used at the Special Meetings of Shareholders (the
"Meetings") of Berger Small Cap Value Fund, Berger Small Cap Value Fund II and
Berger Mid Cap Value Fund (each a "Fund," and, collectively, the "Funds") to be
held on March 7, 2003, at the offices of Janus Capital Management LLC, 3773
Cherry Creek Drive North, Denver, Colorado 80209, at 10:00 a.m., Mountain time,
or such later time made necessary by any and all adjournments or postponements
thereof.
This Proxy Statement, the Notice of Special Meetings and the proxy card
are first being mailed to shareholders on or about _________, 2003 or as soon as
practicable thereafter.
Any shareholder giving a proxy may revoke it any time before it is
exercised by submitting to the Secretary of the relevant Trust a written notice
of revocation or a subsequently executed proxy or by attending the relevant
Meetings and voting in person. All properly executed and unrevoked proxies
received in time for the Meetings will be voted as specified in the proxy or, if
no specification is made, for each proposal referred to in the Proxy Statement.
Shareholders of record of each Fund as of the close of business on
January 7, 2003 (the "Record Date") will be entitled to vote on the proposals
presented at the Meetings. The table below lists the number of shares of each
Fund and each class of each Fund that were outstanding at the close of business
on the Record Date. Shareholders of each Fund are entitled to one vote for each
full share held and fractional votes for fractional shares held on the Record
Date. Except for the election of Trustees, where shareholders of Berger Small
Cap Value Fund II and Berger Mid Cap Value Fund will vote together with other
series of Berger Investment Portfolio Trust not included in this Proxy
Statement, shareholders of each Fund will vote separately on each proposal
presented at its Meeting. Shareholders of all classes of a Fund will vote as a
single class, except for Proposal 5 where only holders of Institutional Shares
of Berger Small Cap Value Fund II will vote.
<Table>
<Caption>
NAME OF FUND TOTAL NUMBER OF SHARES OUTSTANDING
------------ ----------------------------------
Berger Small Cap Value Fund.................
Investor Shares..........................
Institutional Shares.....................
Berger Small Cap Value Fund II..............
Investor Shares..........................
Institutional Shares.....................
Service Shares...........................
Berger Mid Cap Value Fund...................
Investor Shares..........................
Institutional Shares.....................
</Table>
EACH FUND PROVIDES ANNUAL AND SEMIANNUAL REPORTS TO SHAREHOLDERS.
ADDITIONAL COPIES OF EACH FUND'S ANNUAL AND SEMIANNUAL REPORTS ARE AVAILABLE
UPON REQUEST AND WITHOUT CHARGE BY WRITING TO BERGER FUNDS, P.O. BOX 219958,
KANSAS CITY, MISSOURI 64121-9958, OR BY CALLING TOLL-FREE 1-800-333-1001.
The following table identifies the Funds entitled to vote on each
proposal:
<Table>
<Caption>
BERGER SMALL CAP BERGER SMALL CAP BERGER MID CAP
PROPOSAL VALUE FUND VALUE FUND II VALUE FUND
-------- ---------------- ---------------- --------------
1. To approve a new investment advisory X X X
agreement with Janus Capital
Management LLC ("Janus")
2. To approve a new subadvisory X X
agreement between Janus and
Perkins, Wolf, McDonnell and
Company ("PWM") and a new
subadvisory agreement between
Janus and a newly formed
subsidiary of PWM
3. To approve a new subadvisory X
agreement between Janus and Bay
Isle Financial LLC
4. To approve changes to the Fund's X X X
fundamental policies
5. To approve a distribution and X
shareholder servicing plan (Institutional
Shares only)
6. To elect seven (7) Trustees X X* X*
7. To approve an Agreement and Plan of X X X
Reorganization
</Table>
- ----------
* Voting together with other series of Berger Investment Portfolio Trust.
2
INTRODUCTION
Berger Financial Group LLC ("Berger") currently serves as investment
adviser to each Fund pursuant to an investment advisory agreement between Berger
and the respective Trust on behalf of each Fund (each a "Current Advisory
Agreement"). As of September 3, 2002, Stilwell Financial Inc. ("Stilwell"),
indirectly owned approximately eighty-six percent (86%) of Berger and
approximately ninety-eight percent (98%) of Janus Capital Corporation ("JCC"),
which owned approximately ninety-two percent (92%) of Janus Capital Management
LLC ("Janus"). On that date, Stilwell entered into an Agreement and Plan of
Merger with JCC providing for the merger of JCC into Stilwell, which would be
the surviving company of the merger, operating under the Janus name. On
September 3, 2002, Stilwell announced its intention to merge its investment
operations into a unified organization under Janus. As a result of a series of
transactions related to the Agreement and Plan of Merger, on January 1, 2003,
JCC merged into Stilwell, Stilwell changed its name to Janus Capital Group Inc.
("Janus Group") and Berger became a wholly owned subsidiary of Janus. It is
expected that Berger will be consolidated into Janus in 2003 and will cease to
exist. In connection with the Stilwell consolidation, Janus presented several
proposals to the Boards of the Berger funds, the net effect of which would be to
integrate the Berger funds into the Janus family of funds.
As discussed in greater detail below, the Fund Restructuring is part of
an initiative to restructure and streamline the management and operation of
funds advised by Janus and Berger. This initiative includes several components:
(1) a change in branding to offer all funds advised by Janus Group affiliates
under the Janus name; (2) the combination of certain Berger funds with a growth
style into similar Janus funds; (3) the combination of certain Berger funds with
a value style into newly-created Janus shell funds; (4) the liquidation of
certain small Berger funds that are unlikely to reach an efficient operating
size; (5) the elimination of the master-feeder structure for international
products; and (6) the implementation of the fee structure and services currently
in place for the Janus funds.
DESCRIPTION OF THE TRANSACTIONS
Janus Group, 100 Filmore Street, Denver, Colorado 80206, is a publicly
traded holding company with principal operations in the financial asset
management businesses. Janus Group owns approximately ninety-two percent (92%)
and is the managing member of Janus vested with all management authority and
responsibility, although the officers of Janus have been delegated most of the
management of the day-to-day operations. Key employees of Janus own the
remaining shares of Janus. Shares of Janus are designated into multiple classes
of shares, and each share generally has one vote except for certain matters that
affect shareholder rights, which require a separate vote of
employee-shareholders. Janus Group owns approximately eighty-six percent (86%)
of Berger.
In anticipation of the corporate restructuring of Stilwell and Janus,
the Boards have evaluated proposals from Janus and other unaffiliated third
parties to assume management of the Funds and other Berger funds. Janus
presented a package of proposals relating to all of the Berger funds which was
comprised of the following components: (i) a unified marketing and branding
strategy for all Funds under the Janus name; (ii) the consolidation of certain
Berger growth funds into existing, compatible Janus products; (iii) the
reorganization of certain Berger value funds into newly created Janus funds;
(iv) the liquidation of smaller funds that are unlikely to achieve economies of
scale; and (v) the implementation of standard Janus documentation, fundamental
investment policies, fee structures and shareholder services across all
products.
The net effect of the proposals is to assimilate the Berger Funds into
the Janus family of funds (the "Fund Restructuring"). Following the Fund
Restructuring, Janus not only will assume management of the Funds, but also will
provide many related services including marketing and distribution, transfer
3
agency, fund accounting and shareholder services. The intent of the proposals
set forth in this Proxy Statement is to implement Janus-related policies and
services for all Funds.
Janus, 100 Fillmore Street, Denver, Colorado 80206, began serving as
investment adviser to Janus Fund in 1970 and currently serves as adviser to
fifty-nine (59) proprietary Janus funds and subadviser to approximately
fifty-two (52) non-proprietary mutual funds. Janus and its affiliates also serve
as adviser to offshore funds, unregistered pooled vehicles and institutional
separate accounts. As of September 30, 2002, the Janus portfolio management team
consisted of twenty-three (23) portfolio managers and over forty (40) research
analysts. Janus offers domestic and international equity products primarily in
the "growth" style, as well as fixed income and money market products. Janus and
its affiliates had approximately $[128] billion in assets under management as of
December 31, 2002, and constitute one of the nation's largest asset management
complexes.
PROPOSAL 1: APPROVAL OF NEW INVESTMENT
ADVISORY AGREEMENT WITH JANUS
INTRODUCTION
In connection with the Fund Restructuring, the Board of Trustees of
each Trust has approved a new investment advisory agreement for each Fund with
Janus (the "New Advisory Agreements") and has recommended that shareholders
approve the New Advisory Agreements. The form of the New Advisory Agreement is
attached to this Proxy Statement as Exhibit A. The differences between the New
Advisory Agreement and Current Advisory Agreement for each Fund are described
below. If approved by shareholders, the New Advisory Agreement for each Fund
will become effective immediately prior to the closing of the Reorganization of
that Fund (see Proposal 7) and will be the form of advisory agreement for the
Janus fund into which that Fund is reorganized. If shareholders of a Fund do not
approve a New Advisory Agreement, none of the proposals described in this Proxy
Statement will be implemented and the Board will take such further action as it
deems to be in the best interests of that Fund and its shareholders.
COMPARISON OF THE CURRENT AND NEW ADVISORY AGREEMENTS
Investment Advisory Services. Under each Current Advisory Agreement,
Berger manages the overall investment operations of the Fund. Pursuant to each
Current Advisory Agreement, Berger has hired a subadviser who is responsible for
determining what securities and other assets of the Fund will be acquired, held,
disposed of or loaned, in conformity with the investment objective, policies and
restrictions and the other statements concerning the Fund in the Trust's charter
documents and registration statements, the Investment Advisers Act of 1940, as
amended (the "Advisers Act"), all other applicable federal and state law and
regulations, and the provisions of the Internal Revenue Code of 1986, as amended
(the "Code"), applicable to the Fund as a registered investment company. Each
Current Advisory Agreement provides that Berger shall also cause its officers to
attend meetings and furnish certain oral and written reports; place orders for
or supervise the purchase and sale of securities for investments of each Fund;
give instructions to the custodian regarding Fund transactions (except for the
Current Advisory Agreement of Berger Small Cap Value Fund); assist in the
calculation of the Fund's net asset value (except for the Current Advisory
Agreement of Berger Small Cap Value Fund); exercise voting rights on behalf of
the Fund (applicable to the Current Advisory Agreement of Berger Mid Cap Value
Fund only); maintain all books and records required to be maintained under the
Investment Company Act of 1940, as amended (the "1940 Act"); provide the Board
with data and reports; and comply with the Trust's charter documents, currently
effective registration statements, written policies, procedures and guidelines
of the Fund, written instructions and directions of the Board of Trustees and
4
the requirements of the 1940 Act, the Advisers Act and all other applicable
federal and state laws and regulations.
Each Current Advisory Agreement authorizes and directs Berger, absent
instructions from the Trust to the contrary, to place Fund portfolio
transactions only with brokers and dealers who render satisfactory service in
the execution of orders at the most favorable prices and at reasonable
commission rates. Each Current Advisory Agreement also describes the
circumstances under which Berger may pay a broker an amount of commission for
effecting a securities transaction in excess of the amount of commission another
broker would have charged, as well as Berger's other brokerage practices with
respect to the Fund.
Each New Advisory Agreement contains substantially similar provisions
except that Janus is granted broad authority to perform all management and
administrative services necessary to operate the Fund (rather than enumerating
such services) and except that the policies regarding the placement of brokerage
transactions are not set forth in the Agreement itself but would be contained in
the Fund's registration statement.
Expenses. Each Current Advisory Agreement provides that Berger shall
pay all its own costs and expenses incurred in fulfilling its obligations under
the Agreement, as well as rental of offices of the Trust, fees of any subadviser
engaged by Berger and compensation, fees and related expenses of the Trust's
officers and Trustees, except for Trustees who are not interested persons of
Berger. Each Current Advisory Agreement also provides that the Trust shall pay
all expenses incidental to its operations and business not specifically assumed
or agreed to be paid by Berger thereunder, provided, however, that, to the
extent Berger performs certain administrative and clerical functions, the Trust
shall compensate or reimburse Berger for its expenses incurred as Berger and the
Trust shall agree from time to time. Berger currently provides administrative
services to each Fund pursuant to a separate agreement for no additional
compensation.
The New Advisory Agreements contain substantially similar provisions
except that they do not provide for compensation or reimbursement to Janus for
administrative and clerical functions. Rather, Janus will provide such services
pursuant to a separate administration agreement, which provides that Janus may
be reimbursed for expenses. See "Administration Agreement" at page __.
Compensation. In return for the services provided under each Current
Advisory Agreement, each Fund pays Berger an advisory fee which is accrued daily
and payable monthly. The advisory fee rates under the Current Advisory
Agreements are as follows:
<Table>
<Caption>
AVERAGE DAILY NET ASSETS ANNUAL FEE RATE
------------------------ ---------------
Small Cap Value Fund on the first $500 million 0.85%
on the next $500 million 0.80%
over $1 billion 0.75%
Small Cap Value Fund II on the first $500 million 0.85%
on the next $500 million 0.80%
over $1 billion 0.75%
Mid Cap Value Fund on the first $500 million 0.75%
on the next $500 million 0.70%
over $1 billion 0.65%
</Table>
In return for the services provided under each New Advisory Agreement,
each Fund will pay Janus an advisory fee which is accrued daily and payable
monthly. The annual advisory fee rates under the New Advisory Agreements are as
follows:
5
<Table>
Small Cap Value Fund 0.75% of average daily net assets
Small Cap Value Fund II 0.75% of average daily net assets
Mid Cap Value Fund 0.65% of average daily net assets
</Table>
Each Current Advisory Agreement provides that Berger will be responsible for any
fees of any subadviser it engages. The New Advisory Agreements for Berger Small
Cap Value Fund and Berger Mid Cap Value Fund provide that each Fund will pay any
subadviser engaged directly by Janus to subadvise the Fund and that the amount
otherwise payable to Janus under the Agreement will be reduced by the amount of
such subadvisory fees.
During the fiscal year ended September 30, 2002, Berger Small Cap Value
Fund, Berger Small Cap Value Fund II and Berger Mid Cap Value Fund paid
approximately $25,688,000, $26,000 and $4,360,000, respectively, in aggregate
advisory fees to Berger. If the advisory fee rates under the New Advisory
Agreements had been in effect, Berger Small Cap Value Fund, Berger Small Cap
Value Fund II and Berger Mid Cap Value Fund would have paid approximately
$24,954,000, $24,000 and $3,827,000, respectively, in aggregate advisory fees.
The expense table under Proposal 7 includes information on how overall expenses
would differ as a result of the Fund Restructuring.
Janus acts as investment adviser or subadviser to other investment
companies with investment objectives similar to the Funds. Information on these
similar investment companies, including advisory fee rates, net assets and
aggregate advisory fees paid for each fund, is set forth in Exhibit B to this
Proxy Statement.
Liability of Investment Adviser. Each Current Advisory Agreement
provides that Berger, any affiliate of Berger performing services for the Trust
contemplated thereunder and any managers, members, owners and officers of Berger
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. Each New Advisory
Agreement contains substantially similar provisions.
Termination of the Agreements. Each Current Advisory Agreement
terminates automatically in the event of its assignment. Each Current Advisory
Agreement may be terminated without penalty upon sixty (60) days' written notice
by either party. Each Fund may terminate its Current Advisory Agreement either
by the vote of a majority of the outstanding voting securities of the Fund or by
the Board, including a majority of the Trustees who are not parties to the
Agreement or "interested persons" of any such party. Each New Advisory Agreement
contains substantially similar provisions. On November 26, 2002, the Boards of
Trustees gave notice of their intent to terminate the Current Advisory
Agreements concurrent with the effectiveness of the New Advisory Agreements.
Additional Information. The date of each Current Advisory Agreement,
the date it was last approved by the Board of Trustees, the date when it was
last approved by the shareholders of each Fund and the reason it was last
submitted for shareholder approval are set forth in Appendix 3 to this Proxy
Statement.
Each New Advisory Agreement is contingent upon, and will become
effective immediately prior to, the closing of the Reorganization (see Proposal
7) and will be in effect for an initial term ending on July 1, 2004. Each New
Advisory Agreement for a Fund may be continued thereafter from year to year only
if specifically approved at least annually by either the Trustees of the Trust
of which the Fund is a
6
series or the affirmative vote of a majority of the outstanding voting
securities of the Fund, and, in either event, by the vote of a majority of the
Trustees of the Trust who are not parties to the Agreement or interested persons
of any such party, cast in person at a meeting called for such purpose.
Appendix 1 to this Proxy Statement provides information regarding the
officers and directors of Janus and directors of Janus Group. [Except as
indicated on Appendix 6, no officer or Trustee of either Trust is an officer,
employee or director of Janus. No officer or Trustee of either Trust owns any
securities of, or has any other material direct or indirect interest in, Janus
or any of its affiliates. No Trustee of a Trust has had any direct or indirect
material interest in any material transaction since October 1, 2001, or in any
material proposed transactions, to which Janus or any parent or subsidiary of
Janus was or is to be a party.]
AFFILIATED BROKERAGE TRANSACTIONS
Berger may place portfolio transactions on an agency basis through DST
Securities, Inc. ("DSTS"), a wholly owned subsidiary of DST Systems, Inc.
("DST"), pursuant to procedures adopted by the Boards of the Trusts. When
transactions are effected through DSTS, the commission received by DSTS may be
credited against, and thereby reduce, certain operating expenses that a Fund
would otherwise be obligated to pay. No portion of the commission is retained by
DSTS. DSTS may be considered an affiliate of Berger due to the ownership
interest of Janus Group in DST and Berger.
Janus also intends to place portfolio transactions on an agency basis
through DSTS, on the same terms, and subject to the Funds' procedures, described
above. DSTS also may be considered an affiliate of Janus.
The chart below sets forth the brokerage commissions paid to DSTS
during the fiscal year ended September 30, 2002.
<Table>
<Caption>
PERCENTAGE OF BROKERAGE
NAME OF FUND COMMISSIONS PAID TO DSTS COMMISSIONS PAID BY FUND
------------ ------------------------ ------------------------
Berger Small Cap Value Fund $34,000 0.6%
Berger Small Cap Value Fund II -- 0.0%
Berger Mid Cap Value Fund $28,000 0.8%
</Table>
BOARD CONSIDERATIONS
On September 3, 2002, Stilwell announced its intention to consolidate
its investment operations under the "Janus" name. Since then, the Board of
Trustees of each Trust, including the Trustees who are not "interested persons"
of Berger, Janus or the Trust (the "Independent Trustees"), have met on several
occasions with senior Janus personnel to discuss the Stilwell consolidation and
proposals by Janus to assume management of the Funds and to integrate the Funds
into the Janus family of funds. These discussion included an analysis of the
potential benefits and risks to the Funds and their shareholders. The
Independent Trustees were assisted in this process by their independent legal
counsel and by independent consultants with special expertise in financial and
mutual fund matters. The Board of Trustees also considered various alternatives
to the assumption of investment management duties by Janus, including the
appointment of another adviser and the merger or liquidation of certain Funds.
In reviewing the proposal by Janus to assume management responsibility
of the Funds and to integrate the Funds into the Janus family of funds, the
Board requested and reviewed various materials including materials provided by
Janus and by independent parties. These materials included information
7
regarding Janus and its affiliates, and their respective personnel, operations
and financial condition. Janus also provided its Form ADV filed with the
Securities and Exchange Commission (the "SEC"), and information regarding the
performance records and expenses of mutual funds currently managed by Janus. The
Board of Trustees met with senior officers of Janus and its affiliates, and such
personnel were available to discuss the operations of Janus, including the
operations of affiliates who are proposed to provide services to the Funds. The
Board of Trustees also met with the current trustees of the Janus funds who are
proposed to be elected as the Trustees of each Trust pursuant to Proposal 6 and
reviewed the Janus trustees' policies and procedures as they relate to Fund
oversight.
The Board of Trustees considered a number of factors in reviewing the
New Advisory Agreements with Janus, including (1) Janus's commitment to continue
the investment philosophies of the Funds through existing subadvisory
relationships and the continued employment of the same investment management
teams; (2) Janus's ability to expand the marketing efforts of the Funds through
its marketing and distribution networks; (3) Janus's ability to provide trading,
administrative, legal and accounting support to the Funds; (4) Janus's
commitment to maintain the same or a lower overall expense ratio for each Fund;
(5) the expanded range of exchange opportunities that would be available to
shareholders as members of the larger Janus family of funds; and (6) the
similarities and differences between the Current Advisory Agreements and the New
Advisory Agreements.
The Board of Trustees also considered the nature and quality of the
services provided by Janus to funds already managed by Janus. In reviewing the
quality of services provided to those funds, the Board of Trustees considered
comparative information. The Board of Trustees reviewed the financial condition
and profitability of Janus, the quality and depth of Janus's organization in
general and its ability to use economies of scale to contain the expenses of the
Funds. The Board of Trustees also considered the soft-dollar practices of Janus.
In addition, the Board of Trustees considered other services to be provided to
the Funds by Janus, such as marketing, distribution, administrative services,
shareholder services, assistance in meeting legal and regulatory requirements,
and other services necessary for the Funds' operations. The Board of Trustees
considered the fees to be paid to Janus for its investment advisory services to
the Funds (in isolation and in conjunction with the proposed subadvisory fees -
see Proposals 2 and 3), as well as compensation to be paid to Janus (or its
affiliates) for nonadvisory services provided to the Funds. In connection with
their review of such fees, the Board of Trustees reviewed information comparing
the advisory fee rates of the New Advisory Agreements with the current rates and
those of comparable funds.
Based on their review, the Board of Trustees, including the Independent
Trustees, concluded that the proposed advisory fees and other expenses of the
Funds (as they are proposed to be managed by Janus) are fair, both absolutely
and in comparison with those of other funds in the industry, and that
shareholders should receive reasonable value in return for paying such fees and
expenses.
Based on the foregoing, at a meeting held on November 26, 2002, the
Board of Trustees, including the Independent Trustees, voted to approve the New
Advisory Agreements and to recommend them to shareholders for their approval.
If shareholders of a Fund do not approve a New Advisory Agreement, then
none of the proposals relating to the Fund Restructuring will take effect and
the Board will take such further action as it deems to be in the best interests
of that Fund and its shareholders. If the transactions contemplated by the
Reorganization (see Proposal 7) take effect, each newly created Janus Fund into
which the Berger Funds will be reorganized will have the same form of advisory
agreement as is being proposed in this Proxy Statement. The Current Advisory
Agreements will not remain in effect.
8
THE BOARD OF TRUSTEES OF EACH TRUST RECOMMENDS THAT
SHAREHOLDERS OF EACH FUND VOTE FOR THE APPROVAL OF THE NEW
ADVISORY AGREEMENT FOR YOUR FUND.
PROPOSAL 2: APPROVAL OF NEW SUBADVISORY
AGREEMENTS WITH PERKINS, WOLF, MCDONNELL AND COMPANY
AND PWM NEWCO, LLC WITH RESPECT TO
BERGER SMALL CAP VALUE FUND AND
BERGER MID CAP VALUE FUND
INTRODUCTION
Perkins, Wolf, McDonnell and Company ("PWM") currently serves as
subadviser to the Berger Small Cap Value Fund and the Berger Mid Cap Value Fund
pursuant to two separate subadvisory agreements between PWM and Berger (the
"Current PWM Subadvisory Agreements").
Each Current PWM Subadvisory Agreement provides for its termination
upon the termination of the Current Advisory Agreement with Berger. Accordingly,
each Current PWM Subadvisory Agreement will terminate automatically upon the
termination of the Current Advisory Agreements with Berger. On November 26,
2002, the Board terminated each Current Advisory Agreement as of the
effectiveness of the New Advisory Agreement with Janus as described in Proposal
1.
In connection with the Fund Restructuring and Proposal 1 of this Proxy
Statement, a new subadvisory agreement between PWM and Janus is being proposed
for approval by shareholders of each Fund (the "New PWM Subadvisory Agreement").
The form of New PWM Subadvisory Agreement is attached to this Proxy Statement as
Exhibit C. The terms of each New PWM Subadvisory Agreement are the same in all
material respects as the terms of the corresponding Current PWM Subadvisory
Agreement. PWM receives fifty percent (50%) of the advisory fees received by the
adviser under the New PWM Subadvisory Agreements and Current PWM Subadvisory
Agreements. Because the advisory fee rates paid to Berger and Janus differ,
however, the effective rate received by PWM will differ. Under each New PWM
Subadvisory Agreement, PWM will be paid directly by the Fund and not by Janus;
however, the subadvisory fees are paid out of the advisory fees and do not
increase the expenses paid by the Fund.
In addition, in anticipation of the transaction between PWM and Janus,
as described in the next paragraph, a new subadvisory agreement between PWM's
successor (PWM NEWCO, LLC, as defined below) and Janus is also being proposed
for approval by shareholders of each Fund subadvised by PWM (the "NEWCO
Subadvisory Agreements"). You are being asked to approve both the New PWM and
NEWCO Subadvisory Agreements because the transaction between PWM and Janus is
not scheduled to close until after the Meetings. Your vote on the New PWM
Subadvisory Agreements includes both the New PWM and NEWCO Subadvisory
Agreements. If shareholders approve the New PWM Subadvisory Agreements and
subsequent to the Meetings the transaction between PWM and Janus is not
consummated, the New PWM Subadvisory Agreements, which would take effect as soon
as practicable following the date of the Meetings, will continue in effect and
the NEWCO Subadvisory Agreements will not take effect. The terms of each NEWCO
Subadvisory Agreement are the same in all material respects as the terms of the
corresponding Current PWM Subadvisory Agreement and are identical to the terms
of the New PWM Subadvisory Agreements, except with respect to one of the parties
(PWM versus PWM NEWCO, LLC), its effective date and the termination provisions.
On December 2, 2002, Janus and PWM entered into a Unit Purchase
Agreement pursuant to which PWM will contribute substantially all of its assets
related to its investment advisory business to a
9
newly formed limited liability company ("PWM NEWCO, LLC") and Janus will
purchase thirty percent (30%) of the outstanding ownership interests in PWM
NEWCO, LLC. PWM's broker-dealer operations will continue as a separate business.
In addition, Janus will have call rights to purchase additional shares
of PWM NEWCO, LLC in fourteen percent (14%) blocks beginning in the first
quarter of 2004. After Janus owns at least 50% of the outstanding voting shares
of PWM NEWCO, LLC, it could accelerate its purchase of the remaining units by
calling all shares (or any 14% increment thereof) at a formula price. Janus will
have the right to elect one-third (1/3) of the members of the board of managers
of PWM NEWCO, LLC upon its initial investment. Janus will have the right to
elect three-fifths (3/5) of the members of the board of managers when its
ownership exceeds fifty percent (50%). As long as Janus owns less than fifty
percent (50%) of the outstanding shares of PWM NEWCO, LLC, Janus will have
certain minority shareholder protections, including rights to approve certain
extraordinary transactions, loans out of the ordinary course, transactions with
affiliates, material changes in the operating budget and compensation of
principal officers and investment personnel.
As conditions to the closing of Janus's initial investment and each
subsequent investment, (1) key personnel of PWM, including the portfolio
managers of your Funds, will be required to enter into employment agreements
with PWM NEWCO, LLC; and (2) PWM, PWM NEWCO, LLC and Janus will enter into a
Relationship Agreement and such Agreement shall be in full force and effect. The
Relationship Agreement will set forth a framework of cooperation between the
parties relating to marketing and distribution, product development and
fee-sharing. Pursuant to the Relationship Agreement, PWM NEWCO, LLC will agree
to provide exclusive services to Janus with respect to certain value investment
strategies, including the strategies followed by the Funds. Further, PWM NEWCO,
LLC will agree not to terminate a NEWCO Subadvisory Agreement with each Fund for
at least two years following the closing of Janus's initial investment and only
upon three years' notice thereafter, or upon a material breach by Janus of the
NEWCO Subadvisory Agreement. Similarly, Janus will agree not to terminate a
NEWCO Subadvisory Agreement except for "cause" for as long as the Relationship
Agreement is in effect, where cause is defined to include, among other things,
any material breach by PWM NEWCO, LLC of a NEWCO Subadvisory Agreement or the
Relationship Agreement.
Each New PWM Subadvisory Agreement provides for its automatic
termination in the event of its assignment. The transfer of the New PWM
Subadvisory Agreements from PWM to PWM NEWCO, LLC, together with the acquisition
of thirty percent (30%) of the outstanding shares of PWM NEWCO, LLC by Janus and
its related management and shareholder rights, may constitute an "assignment" of
each New PWM Subadvisory Agreement under the 1940 Act. Each New PWM Subadvisory
Agreement could be deemed to terminate in connection with Janus's purchase of
shares of PWM NEWCO, LLC. Accordingly, the Board of Trustees is seeking your
approval of the NEWCO Subadvisory Agreements as well as the New PWM Subadvisory
Agreements.
On November 26, 2002, the Board of Trustees of each Trust, including
the Trustees who are not "interested persons" of Berger, PWM, Janus or the
Trust, voted to approve the New PWM and NEWCO Subadvisory Agreements and to
recommend their approval to shareholders.
If shareholders of a Fund do not approve a New PWM Subadvisory
Agreement for that Fund, the Board will take such further action as it deems to
be in the best interests of that Fund and its shareholders. If shareholders of a
Fund do not approve the New Advisory Agreement for that Fund with Janus, then
the New PWM Subadvisory Agreement will not take effect and the Board will take
such action as it deems to be in the best interests of shareholders. If the
transactions contemplated by the Reorganization of any Fund (see Proposal 7)
take effect, each newly created Janus fund into which that Fund will be
reorganized will have the same form of subadvisory agreement as is being
proposed in this Proxy Statement.
10
EACH BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS OF EACH FUND VOTE
IN FAVOR OF APPROVAL OF THE NEW PWM SUBADVISORY AGREEMENTS AND NEWCO SUBADVISORY
AGREEMENTS.
INFORMATION CONCERNING PWM
Perkins, Wolf, McDonnell and Company ("PWM"), 310 S. Michigan Avenue,
Suite 2600, Chicago, Illinois 60604, was organized in 1980 under the name
Mac-Per-Wolf Co. to operate as a securities broker-dealer. In September 1983, it
changed its name to Perkins, Wolf, McDonnell and Company. PWM is a member of the
National Association of Securities Dealers, Inc. (the "NASD") and, in 1984,
became registered as an investment adviser with the SEC. Immediately prior to
the closing of Janus's initial investment, PWM will contribute substantially all
of its assets related to its investment advisory business to PWM NEWCO, LLC. PWM
NEWCO, LLC will succeed to the investment adviser registration of PWM and the
same investment and senior management personnel will remain responsible for the
day-to-day operations of the firm. The current officers and directors of PWM are
as follows:
Robert Hunter Perkins, 310 S. Michigan Avenue, Suite 2600, Chicago,
Illinois 60604. President and Director, PWM and PWM NEWCO, LLC.
Gregory Erhard Wolf, 310 S. Michigan Avenue, Suite 2600, Chicago,
Illinois 60604. Treasurer, Director, Chief Operating Officer, PWM and PWM NEWCO,
LLC.
Norman Theodore Hans, Jr., 310 S. Michigan Avenue, Suite 2600, Chicago,
Illinois 60604. Chief Compliance Officer, Secretary, PWM and PWM NEWCO, LLC.
[Except as indicated on Appendix 6, no officer or Trustee of a Trust is
an officer, employee or director of PWM or PWM NEWCO, LLC. No officer or Trustee
of a Trust owns any securities of, or has any other material direct or indirect
interest in, PWM or any of its affiliates. No Trustee of a Trust has had any
direct or indirect material interest in any material transaction since October
1, 2001, or in any material proposed transactions, to which PWM or any parent or
subsidiary of PWM was or is to be a party.]
BOARD CONSIDERATIONS
In considering whether to approve the New PWM and NEWCO Subadvisory
Agreements, the Board of Trustees of each Trust considered factors similar to
those considered in approving the New Advisory Agreements, to the extent
applicable. (See Proposal 1 for more information regarding the Boards'
evaluation.) The Board took into account the investment performance of PWM as
subadviser to the Funds and the plans of PWM management regarding its future
operations. In addition, each Board requested and considered information
regarding the proposed transaction between PWM NEWCO, LLC and Janus, various
provisions of control granted to Janus over time and the potential impact of the
transaction on the finances and operation of PWM NEWCO, LLC. Each Board also
considered Janus's commitment to maintain the investment philosophy espoused by
PWM and its commitment to retain key investment personnel, including the current
portfolio managers of your Fund.
The Trustees received materials regarding PWM and met with PWM
management in person to discuss the effect of the Fund Restructuring and the
Unit Purchase Agreement between PWM and Janus. The Trustees reviewed the nature
and quality of the services provided by PWM to your Fund, including PWM's
relative performance. The Trustees received information regarding the effect of
the proposed transaction between PWM NEWCO, LLC and Janus on PWM's ability to
deliver investment advisory services. In reviewing the fees to be paid to PWM
for its services, the Trustees reviewed information
11
comparing the subadvisory fee rates of the New PWM Subadvisory Agreements with
the current rates and those for advisers of comparable funds.
Based on the foregoing, at a meeting held on November 26, 2002, each
Board of Trustees concluded that the subadvisory fee rates to be paid to PWM are
fair and that the shareholders of each Fund have received and should continue to
receive reasonable value in return for paying such fees. Each Board of Trustees,
including the Trustees who are not "interested persons" of Berger, PWM, Janus or
the Trust, then voted to approve the New PWM Subadvisory Agreements and NEWCO
Subadvisory Agreements and to recommend them to shareholders for their approval.
COMPARISON OF THE NEW AND THE CURRENT PWM SUBADVISORY AGREEMENTS
For purposes of comparing the subadvisory agreements, unless otherwise
indicated, "New PWM Subadvisory Agreements" refers to both the New PWM and NEWCO
Subadvisory Agreements.
Subadvisory Services. Under each Current PWM Subadvisory Agreement, PWM
manages the investment operations of the Fund and the composition of its
investment portfolio. PWM determines what securities and other assets of the
Fund will be acquired, held, disposed of or loaned and directs Berger 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 charter documents and
registration statements, the Advisers Act, all other applicable federal and
state law and regulations, and the provisions of the Code applicable to the Fund
as a registered investment company. Each Current PWM Subadvisory Agreement
provides that PWM shall cause its officers to attend meetings and furnish
certain oral and written reports; maintain all books and records required to be
maintained under the 1940 Act; provide the Board with data and reports; provide
Berger with information relating to PWM for regulatory filings and other issues;
and comply with the Trust's charter documents, currently effective registration
statements, written policies, procedures and guidelines of the Fund, written
instructions and directions of the Board and the requirements of the 1940 Act,
the Advisers Act and all other applicable federal and state laws and
regulations.
The provisions of each New PWM Subadvisory Agreement relating to the
provision of such advisory services are substantially similar.
Compensation. In return for the services provided under each Current
PWM Subadvisory Agreement, Berger pays PWM a subadvisory fee that is accrued
daily and payable monthly. The subadvisory fee rate is equal to fifty percent
(50%) of the investment advisory fees paid to Berger. Based on this formula, the
effective subadvisory fee rate for the Berger Small Cap Value Fund is 0.425% of
the first $500 million of average daily net assets, 0.40% of the next $500
million of average daily net assets, and 0.375% of average daily net assets in
excess of $1 billion, and the effective subadvisory fee rate for the Berger Mid
Cap Value Fund is 0.375% of the first $500 million of average daily net assets,
0.35% of the next $500 million of average daily net assets, and 0.325% of
average daily net assets in excess of $1 billion.
The subadvisory fee rates under each New PWM Subadvisory Agreement are
identical to the corresponding Current PWM Subadvisory Agreement, except that
the subadvisory fees are paid by the Fund and are based on fifty percent (50%)
of the investment advisory fees payable to Janus from the Fund net of any
reimbursement of expenses or waivers incurred by Janus. As a result of the
proposed advisory fee rates under the New Investment Advisory Agreement,
however, the effective fee rate for Berger Small Cap Fund and Berger Mid Cap
Value Fund, assuming no reimbursement of expenses or waivers incurred by Janus,
will be .375% and .325%, respectively.
12
During the fiscal year ended September 30, 2002, Berger paid PWM
approximately $12,857,000 and $2,161,000, respectively, in subadvisory fees with
respect to the Berger Small Cap Value Fund and the Berger Mid Cap Value Fund. If
the New Investment Advisory Agreements and New PWM Subadvisory Agreements had
been in effect, PWM would have received approximately $12,477,000 and $1,913,500
in subadvisory fees for Berger Small Cap Value Fund and Berger Mid Cap Value
Fund, respectively.
PWM acts as investment adviser or subadviser to other investment
companies with investment objectives similar to those of these Funds.
Information on these similar investment companies, including advisory fee rates,
net assets and aggregate advisory fees paid for each fund, is set forth in
Exhibit B to this Proxy Statement.
Liability. Each Current PWM Subadvisory Agreement provides that PWM,
any affiliate of PWM performing services for the Trust contemplated thereunder
and any managers, members, owners 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 PWM Subadvisory
Agreements with respect to liability are substantially similar.
Termination of Agreement. Each Current PWM Subadvisory Agreement
terminates automatically in the event of its assignment and upon the termination
of the corresponding Current Advisory Agreement with Berger. Each Current PWM
Subadvisory Agreement may be terminated without penalty by the Fund either by
the vote of a majority of its outstanding voting securities or by the Board upon
sixty (60) days' written notice to PWM. Each Current PWM Subadvisory Agreement
may be terminated without penalty by PWM upon sixty (60) days' written notice to
Berger and the Fund. Each Current PWM Subadvisory Agreement may also be
terminated by either party (or by the Fund with respect to PWM) if the other
party materially breaches any of the representations and warranties in the
Agreement if such breach is not cured within a twenty (20)-day period after
notice of such breach. In addition, Berger or the Fund may terminate a Current
PWM Subadvisory Agreement if PWM becomes unable to discharge its duties and
obligations under the Agreement.
The termination provisions of each New PWM Subadvisory Agreement are
identical to the corresponding Current PWM Subadvisory Agreement, except that
with respect to each NEWCO Subadvisory Agreement (i) Janus may terminate the
agreement without cause upon sixty (60) days' written notice; and (ii) as
described above, PWM NEWCO, LLC may not terminate the agreement for two years
and only upon three years' notice thereafter.
Additional Information. The date of each Current PWM Subadvisory
Agreement, the date it was last considered and reviewed by the Trustees, the
date when it was last approved by the shareholders of each Fund and the reason
it was last submitted for shareholder approval are set forth in Appendix 3 to
this Proxy Statement.
Each New PWM Subadvisory Agreement is contingent upon, and will be
effective immediately prior to, the closing of the Reorganization (see Proposal
7). Each New PWM Subadvisory Agreement will be in effect until it terminates in
accordance with its terms, including until the consummation of the transaction
between PWM and Janus. Each NEWCO Subadvisory Agreement will be effective upon
the consummation of the transaction between PWM and Janus. Each NEWCO
Subadvisory Agreement (or each New PWM Subadvisory Agreement if the transaction
between PWM and Janus is not consummated) will be in effect for an initial term
ending on July 1, 2004 and may be continued thereafter from year to
13
year only if specifically approved at least annually by either the Trustees of
the Trust or the affirmative vote of a majority of the outstanding voting
securities of the Fund and, in either event, by the vote of a majority of the
Trustees of the Trust who are not parties to the Agreement or interested persons
of any such party or the Trust, cast in person at a meeting called for such
purpose.
If shareholders of a Fund do not approve a New PWM Subadvisory
Agreement, the Trustees will take such action as they deem to be in the best
interests of the Fund and its shareholders. If shareholders of a Fund do not
approve the New Advisory Agreement with Janus, then the New PWM Subadvisory
Agreement will not take effect and the Trustees will take such action as they
deem to be in the best interests of the Fund and its shareholders.
THE BOARD OF TRUSTEES OF EACH TRUST RECOMMENDS THAT SHAREHOLDERS
OF EACH FUND VOTE FOR THE APPROVAL OF THE NEW PWM
SUBADVISORY AGREEMENTS FOR YOUR FUND.
PROPOSAL 3: APPROVAL OF NEW SUBADVISORY AGREEMENT
WITH BAY ISLE FINANCIAL LLC WITH RESPECT TO
BERGER SMALL CAP VALUE FUND II
INTRODUCTION
Bay Isle Financial LLC ("Bay Isle") currently serves as subadviser to
the Berger Small Cap Value Fund II pursuant to a subadvisory agreement (the
"Current Bay Isle Subadvisory Agreement") between Bay Isle and Berger. Bay Isle
is currently a wholly owned subsidiary of Berger, which is a wholly owned
subsidiary of Janus, and Janus serves as managing member of Bay Isle. In
connection with the Fund Restructuring, it is expected that officers and
directors of Bay Isle affiliated with Berger would resign and Bay Isle would
approve new officers and directors. Janus has committed to maintain the
investment management style of Bay Isle. Janus currently intends to keep the
current investment management team of Bay Isle, including the portfolio manager
of your Fund, in place.
The Current Bay Isle Subadvisory Agreement provides for its termination
upon the termination of the Current Advisory Agreement for Berger Small Cap
Value Fund II with Berger. Accordingly, the Current Bay Isle Subadvisory
Agreement will terminate automatically upon the termination of the Current
Advisory Agreement with Berger. On November 26, 2002, the Board terminated the
Current Advisory Agreement with Berger as of the effective date of the New
Advisory Agreement with Janus, as described in Proposal 1.
In connection with the Fund Restructuring and Proposal 1 of this Proxy
Statement, a new subadvisory agreement between Bay Isle and Janus is being
proposed for approval by shareholders of the Fund (the "New Bay Isle Subadvisory
Agreement"). The form of New Bay Isle Subadvisory Agreement is attached to this
Proxy Statement as Exhibit C. The terms of the New Bay Isle Subadvisory
Agreement are the same in all material respects as the terms of the Current Bay
Isle Subadvisory Agreement. The fee rate to be paid to Bay Isle under the New
Bay Isle Subadvisory Agreement and Current Bay Isle Subadvisory Agreement is one
hundred percent (100%) of the fee rate paid under the Investment Advisory
Agreements with Berger and Janus, respectively. However, the fee rates paid to
Berger and Janus differ (see Proposal 1).
If shareholders of the Fund do not approve the New Bay Isle Subadvisory
Agreement, the Board will take such further action as it deems to be in the best
interests of the Fund and its shareholders. If shareholders of the Fund do not
approve the New Advisory Agreement with Janus, then the New Bay Isle
14
Subadvisory Agreement will not take effect and the Board will take such action
as it deems to be in the best interests of the Fund and its shareholders.
On November 26, 2002, the Board of Trustees of the Trust, including the
Trustees who are not "interested persons" of Berger, Bay Isle, Janus or the
Trust, voted to approve the New Bay Isle Subadvisory Agreement and to recommend
its approval to shareholders.
If the transactions contemplated by the Reorganization (see Proposal 7)
take effect, the newly created Janus fund into which the Fund will be
reorganized will have the same form of subadvisory agreement as is being
proposed in this Proxy Statement.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS OF THE FUND VOTE IN
FAVOR OF APPROVAL OF THE NEW BAY ISLE SUBADVISORY AGREEMENT.
INFORMATION CONCERNING BAY ISLE
Bay Isle, 475 14th Street, Suite 550, Oakland, California 94612, has
been in the investment advisory business since 1987. Bay Isle serves as
investment adviser or subadviser to mutual funds, institutional investors and
individual separate accounts. Effective December 31, 2001, Berger acquired all
of the outstanding shares of Bay Isle. On or about January 1, 2003, Berger
became a wholly owned subsidiary of Janus and Bay Isle became an indirect wholly
owned subsidiary of Janus. The current officers of Bay Isle are as follows:
William Franz Kim Schaff, 475 14th Street, Suite 550, Oakland,
California 94612. President and Chief Investment Officer, Bay Isle Financial
LLC.
Gary Pollock, 475 14th Street, Suite 550, Oakland, California 94612.
Executive Vice President, Treasurer and Chief Operations Officer, Bay Isle
Financial LLC.
[No officer or Trustee of the Trust owns any securities of, or has any
other material direct or indirect interest in, Bay Isle or any of its
affiliates. No Trustee of the Trust has had any direct or indirect material
interest in any material transaction since October 1, 2001, or in any material
proposed transactions, to which Bay Isle or any parent or subsidiary of Bay Isle
was or is to be a party.]
BOARD CONSIDERATIONS
In considering whether to approve the New Bay Isle Subadvisory
Agreement, the Board considered similar factors to those it considered in
approving the New Advisory Agreements and New PWM Subadvisory Agreements, to the
extent applicable. (See Proposals 1 and 2 for more information regarding the
Board's evaluation.) Based on the facts that (1) the sole reason the Board
considered the New Bay Isle Subadvisory Agreement was due to the Fund
Restructuring and the New Advisory Agreement with Janus and is not related to
the performance or structure of Bay Isle, and (2) the New Bay Isle Subadvisory
Agreement is substantially similar to the Current Bay Isle Subadvisory
Agreement, the Board did not conduct a special review on the operations of Bay
Isle in approving the New Bay Isle Subadvisory Agreement. However, the Board of
Trustees did consider the nature and quality of the services provided by Bay
Isle to the Fund, including Bay Isle's relative performance. The Board of
Trustees also requested a special presentation by Bay Isle at which the Fund
Restructuring was discussed in detail, together with its potential impact on the
operations of Bay Isle. In reviewing the fees to be paid to Bay Isle for its
services, the Board of Trustees reviewed information comparing the subadvisory
fee rate of the New Bay Isle Subadvisory Agreement with the current rate and
those for advisers of comparable funds.
15
Based on the foregoing, at a meeting held on November 26, 2002, the
Board of Trustees concluded that the subadvisory fee rate to be paid to Bay Isle
is fair and reasonable. The Board of Trustees, including the Trustees who are
not "interested persons" of Berger, Bay Isle, Janus or the Trust, then voted to
approve the New Bay Isle Subadvisory Agreement and to recommend it to
shareholders for their approval.
COMPARISON OF NEW AND CURRENT BAY ISLE SUBADVISORY AGREEMENT
Subadvisory Services. Under the Current Bay Isle Subadvisory Agreement,
Bay Isle manages the investment operations of the Berger Small Cap Value Fund II
and the composition of its investment portfolio. Bay Isle determines what
securities and other assets of the Fund will be acquired, held, disposed of or
loaned and directs Berger 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
charter documents and registration statements, the Advisers Act, all other
applicable federal and state law and regulations, and the provisions of the Code
applicable to the Fund as a registered investment company. The Current Bay Isle
Subadvisory Agreement provides that Bay Isle shall cause its officers to attend
meetings and furnish certain oral and written reports; maintain all books and
records required to be maintained under the 1940 Act; assist in the calculation
of the Fund's net asset value; exercise voting rights on behalf of the Fund;
provide the Board with data and reports; provide Berger with information
relating to Bay Isle for regulatory filings and other issues; and comply with
the Trust's charter documents, currently effective registration statements,
written policies, procedures and guidelines of the Fund, written instructions
and directions of the Board and the requirements of the 1940 Act, the Advisers
Act and all other applicable federal and state laws and regulations.
The provisions of the New Bay Isle Subadvisory Agreement are
substantially similar.
Compensation. In return for the services provided under the Current Bay
Isle Subadvisory Agreement, Berger pays Bay Isle a subadvisory fee equal to one
hundred percent (100%) of the advisory fee received by Berger net of any
reimbursement of expenses paid by Berger to the Fund, which is accrued daily and
payable monthly. Under the New Bay Isle Subadvisory Agreement, Bay Isle will
receive one hundred percent (100%) of the advisory fees received by Janus net of
any reimbursement of expenses; however, the advisory fee rate paid to Janus will
differ. (See Proposal 1 for a discussion of the Investment Advisory Agreement.)
During the fiscal year ended September 30, 2002, Berger paid Bay Isle
approximately $26,000 in subadvisory fees with respect to the Berger Small Cap
Value Fund II. If the New Investment Advisory Agreement and New Bay Isle
Subadvisory Agreement had been in effect, Bay Isle would have received $24,000
in aggregate fees.
Bay Isle acts as investment adviser or subadviser to other investment
companies with investment objectives similar to those of the Fund. Information
on these similar investment companies, including advisory fee rates, net assets
and aggregate advisory fees paid for the fund, is set forth in Exhibit B to this
Proxy Statement.
Liability of Subadviser. The Current Bay Isle Subadvisory Agreement
provides that Bay Isle, any affiliate of Bay Isle performing services for the
Trust contemplated thereunder and any managers, members, owners and officers of
Bay Isle 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 its
16
duties, or by reason of reckless disregard of its obligations and duties under
the Agreement and except to the extent otherwise provided by law.
The provisions of the New Bay Isle Subadvisory Agreement with respect
to liability are substantially similar.
Termination of Agreement. The Current Bay Isle Subadvisory Agreement
terminates automatically in the event of its assignment and upon the termination
of the corresponding Current Advisory Agreement with Berger. The Current Bay
Isle Subadvisory Agreement may be terminated without penalty upon sixty (60)
days' written notice by either party, or by the Fund with respect to Bay Isle,
either by the vote of a majority of its outstanding voting securities or by the
Board. The Current Bay Isle Subadvisory Agreement may also be terminated by
Berger or the Fund if Bay Isle becomes unable to discharge its duties and
obligations under the Agreement. The provisions of the New Bay Isle Subadvisory
Agreement with respect to termination are substantially similar.
Additional Information. The date of the Current Bay Isle Subadvisory
Agreement, the date it was last considered and reviewed by the Trustees, the
date when it was last approved by the shareholders of the Fund and the reason it
was last submitted for shareholder approval are set forth in Appendix 3 to this
Proxy Statement.
The New Bay Isle Subadvisory Agreement is contingent upon, and will be
effective immediately prior to, the closing of the Reorganization (see Proposal
7). The New Bay Isle Subadvisory Agreement will be in effect for an initial term
ending on July 1, 2004, and may be continued thereafter from year to year only
if specifically approved at least annually by either the Trustees of the Trust
or the affirmative vote of a majority of the outstanding voting securities of
the Fund, and in either event, by the vote of a majority of the Trustees of the
Trust who are not parties to the Agreement or interested persons of any such
party or the Trust, cast in person at a meeting called for such purpose.
If shareholders of the Fund do not approve the New Bay Isle Subadvisory
Agreement, the Board will take such further action as it deems to be in the best
interests of the Fund and its shareholders. If shareholders of the Fund do not
approve the New Advisory Agreement with Janus, then the New Bay Isle Subadvisory
Agreement will not take effect and the Board will take such action as it deems
to be in the best interests of the Fund and its shareholders.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS THAT
SHAREHOLDERS OF THE FUND VOTE FOR THE APPROVAL OF THE
NEW BAY ISLE SUBADVISORY AGREEMENT FOR YOUR FUND.
PROPOSAL 4: APPROVAL OF CHANGES TO
FUNDAMENTAL POLICIES
INTRODUCTION
Each Fund has adopted certain "fundamental" investment policies which
can only be changed by shareholder vote. As described below, in connection with
the Fund Restructuring, Janus recommended to each Board, and each Board is
recommending to shareholders, that the fundamental investment policies of the
Funds be amended or repealed to bring them in line with the fundamental policies
of the Janus Funds. The effect of implementation of these proposals should be to
reduce the burdens of monitoring, and ensuring compliance with, varying sets of
fundamental policies - some differing from each other by only a few words -
across the Janus Funds. Janus also recommended to each Board, and each Board is
17
recommending to shareholders, that the investment objective of each Fund be
changed from fundamental to non-fundamental. No material change in the Funds'
investment strategies is expected as a result of the proposed changes to the
Funds' fundamental investment policies.
Although the proposed changes are designed to standardize the Funds'
fundamental investment policies, shareholders may vote separately on each item.
[This Proposal 4 is contingent upon, and will become effective immediately prior
to, the closing of the Reorganization.] [If, however, the Reorganization is not
approved, this proposal will not take effect.] [If, however, the Reorganization
is not approved, this proposal will become effective on the close of business on
___________, 2003.]
On November 26, 2002, the Board of Trustees of each Trust voted to
approve the proposed changes to the Funds' fundamental policies and to recommend
approval of the changes to shareholders.
EACH BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS OF EACH FUND VOTE
FOR APPROVAL OF THE CHANGE TO EACH APPLICABLE FUNDAMENTAL POLICY.
(a) DIVERSIFICATION (ALL FUNDS)
Each Fund is diversified and, as a result, is currently subject to a
fundamental policy providing that the Fund may not, with respect to 75% of the
Fund's total assets, purchase the securities of any one issuer (except U.S.
government securities) if immediately after and as a result of such purchase (a)
the value of the holdings of the Fund in the securities of such issuer exceeds
5% of the value of the Fund's total assets, or (b) the Fund owns more than 10%
of the outstanding voting securities of such issuer. If this proposal is
approved by the shareholders of a Fund, the fundamental policy relating to
diversification will be amended and restated to read as follows:
With respect to 75% of its total assets, the Fund may not
purchase securities of an issuer (other than the U.S. Government, its
agencies, instrumentalities or authorities or repurchase agreements
collateralized by U.S. Government securities, and other investment
companies) if: (a) such purchase would, at the time, cause more than 5%
of the Fund's total assets taken at market value to be invested in the
securities of such issuer; or (b) such purchase would, at the time,
result in more than 10% of the outstanding voting securities of such
issuer being held by the Fund.
The proposed fundamental policy is substantially similar to the current
policy and is intended to standardize the fundamental policies across the Janus
Funds. If adopted by the shareholders of a Fund, this policy is not expected to
alter the investment practices of the Fund.
(b) CONCENTRATION (ALL FUNDS)
None of the Funds has adopted a policy of concentrating its investments
in a particular industry. As a result, each Fund is currently subject to a
fundamental policy providing that the Fund may not invest more than 25% of the
value of its assets in any one industry. As permitted by the 1940 Act, each Fund
excludes U.S. government securities from this limitation. In applying this
restriction, each Fund uses the industry groups used in the Data Monitor
Portfolio Monitoring System of William O'Neal & Co. Incorporated. If this
proposal is approved by the shareholders of a Fund, the fundamental policy
relating to concentration will be amended and restated to read as follows:
The Fund may not invest 25% or more of the value of its total
assets in any particular industry (other than U.S. government
securities).
18
If the proposal is approved, the Funds will generally rely on industry
classifications as published by Bloomberg L.P. or may use industry
classifications as published by the SEC. The proposed fundamental policy is
substantially similar to the current policy and is intended to standardize the
fundamental policies across the Janus Funds. If adopted by the shareholders of a
Fund, this policy is not expected to alter the investment practices of the Fund.
(c) BORROWING (ALL FUNDS)
Each Fund has adopted a fundamental policy relating to borrowing. Each
Fund currently may borrow money for temporary or emergency purposes. Berger
Small Cap Value Fund may borrow in an amount up to 5% of the value of its
assets. Berger Small Cap Value Fund II and Berger Mid Cap Value Fund each may
borrow in an amount up to 25% of its total assets from banks; provided that when
borrowings exceed 5% of its total assets, the Fund will not purchase portfolio
securities. If the proposal is approved by the shareholders of a Fund, the
fundamental policy relating to borrowing will be amended and restated to read as
follows:
The Fund may not borrow money except that the Fund may borrow
money for temporary or emergency purposes (not for leveraging or
investment). Borrowings from banks will not, in any event, exceed
one-third of the value of a Fund's total assets (including the amount
borrowed). This policy shall not prohibit short sales transactions, or
futures, options, swaps or forward transactions.
The proposed fundamental policy provides increased flexibility with
respect to borrowing as permitted by the 1940 Act. As a result, there is no
restriction on borrowing for temporary or emergency purposes, and borrowings
from banks may not exceed one-third of the value of a Fund's total assets. None
of the Funds intends to change its borrowing practices. The proposal is intended
to standardize the fundamental policies among the Janus Funds and to allow for
the flexibility permitted under the 1940 Act. If adopted by the shareholders of
a Fund, this policy is not expected to change the borrowing practices of a Fund
or the risks associated with borrowing.
(d) SENIOR SECURITIES (ALL FUNDS)
Each Fund has adopted a fundamental policy relating to "senior
securities." Berger Small Cap Value Fund II and Berger Mid Cap Value Fund may
not issue senior securities (except to the extent permitted under the 1940 Act),
and Berger Small Cap Value Fund may not issue senior securities as defined in
the 1940 Act. If a proposal is approved by shareholders of a Fund, the
fundamental policy relating to senior securities will be amended and restated to
read as follows:
The Fund may not issue "senior securities" in contravention of
the 1940 Act.
The proposed fundamental policy is substantially similar to the current
policy and is intended to standardize the fundamental policies across the Janus
Funds. If adopted by the shareholders of a Fund, this policy is not expected to
alter the investment practices of the Fund.
(e) UNDERWRITING (ALL FUNDS)
Each Fund has adopted a fundamental policy restricting its ability to
act as an underwriter of securities issued by others. Berger Small Cap Value
Fund currently may not act as an underwriter of securities issued by others or
invest in restricted securities. Berger Small Cap Value Fund II and Berger Mid
Cap Value Fund may not act as securities underwriter (except to the extent the
Fund may be deemed an underwriter under the Securities Act of 1933 in disposing
of a security). If the proposal is approved by
19
the shareholders of a Fund, the fundamental policy relating to underwriting
securities issued by others will be amended and restated to read as follows:
The Fund may not act as an underwriter of securities issued by
others, except to the extent that the Fund may be deemed an underwriter
in connection with the disposition of portfolio securities of the Fund.
The 1940 Act does not require funds to adopt fundamental policies
relating to restricted securities. If the proposal is approved by shareholders
of Berger Small Cap Value Fund, the Fund would be permitted to invest in
restricted securities. Restricted securities are a type of illiquid security.
Berger Small Cap Value Fund's policy regarding illiquid securities is described
below in Proposal 4(q). The proposed fundamental policy regarding underwriting
is substantially similar to the current policy and is intended to standardize
the fundamental policies across the Janus Funds. If adopted by the shareholders
of a Fund, this policy is not expected to alter the investment practices of a
Fund.
(f) LENDING (ALL FUNDS)
Each Fund has adopted a fundamental policy relating to lending. Berger
Small Cap Value Fund currently may not loan cash or portfolio securities, except
in connection with the acquisition of debt securities which the Fund's
investment policies and restrictions permit it to purchase. Berger Small Cap
Value Fund II and Berger Mid Cap Value Fund each currently may not make loans,
except that the Fund may enter into repurchase agreements and may lend portfolio
securities in accordance with the Fund's investment policies. If the proposal is
adopted by the shareholders of a Fund, the fundamental policy relating to
lending will be amended and restated to read as follows:
The Fund may not lend any security or make any other loan if,
as a result, more than 33?% of the Fund's total assets would be lent to
other parties (but this limitation does not apply to investments in
repurchase agreements, commercial paper, debt securities or loans,
including assignments and participation interests).
The proposed fundamental policy provides increased flexibility with
respect to lending as permitted by the 1940 Act. As a result, lending is not
restricted to the purchase of debt securities, repurchase agreements or
otherwise in accordance with a Fund's investment policies, and a Fund may lend
up to 33?% of the Fund's total assets as permitted by current SEC staff
positions. The proposal is intended to standardize the fundamental policies
among the Janus Funds and to allow for the flexibility permitted under the 1940
Act. If adopted by the shareholders of a Fund, this policy is not expected to
materially change the lending practices of a Fund or the risks associated with
lending. The proposal will give the Funds the ability to participate in
securities lending arrangements, as well as allow the Funds to participate in an
interfund lending facility with other Janus Funds pursuant to an order of the
SEC.
(g) REAL ESTATE (ALL FUNDS)
Each Fund has adopted a fundamental policy relating to investing in
real estate. Berger Small Cap Value Fund may not purchase or sell real estate or
any other interests in real estate (including real estate limited partnership
interests). Berger Small Cap Value Fund and Berger Mid Cap Value Fund may not
invest in real estate (although each Fund may purchase shares of a real estate
investment trust). If a proposal is adopted by shareholders of a Fund, the
fundamental policy will be amended and restated to read as follows:
20
The Fund may not invest directly in real estate or interests
in real estate; however, the Fund may own debt or equity securities
issued by companies engaged in those businesses.
The proposed fundamental policy is substantially similar to the current
policy and is intended to standardize the fundamental policies across the Janus
Funds. If adopted by the shareholders of a Fund, this policy is not expected to
alter the investment practices of a Fund.
(h) COMMODITIES (ALL FUNDS)
Each Fund has adopted a fundamental policy relating to investments in
commodities. Each Fund currently may not invest in commodities or commodity
contracts; however, Berger Small Cap Value Fund II and Berger Mid Cap Value Fund
exclude certain derivatives from this restriction. If this proposal is approved
by the shareholders of a Fund, the fundamental policy relating to commodities
will be amended and restated to read as follows:
The Fund may not purchase or sell physical commodities unless
acquired as a result of ownership of securities or other instruments
(but this limitation shall not prevent the Fund from purchasing or
selling foreign currencies, options, futures, swaps, forward contracts
or other derivative instruments or from investing in securities or
other instruments backed by physical commodities).
The proposed fundamental policy is substantially similar to the current
policy and is intended to standardize the fundamental policies across the Janus
Funds. If adopted by the shareholders of a Fund, this policy is not expected to
alter the investment practices of a Fund.
(i) INVESTMENT COMPANIES (ALL FUNDS)
Each Fund has adopted a policy relating to the purchase of securities
of investment companies. Each Fund may purchase securities of other investment
companies provided that the purchase is in the open market involving no
commission or profit to a sponsor or dealer (other than the customary broker's
commission). Berger Small Cap Value Fund may also invest in other investment
companies in connection with certain corporate transactions. Berger Small Cap
Value Fund's policy is fundamental, and the policy of Berger Small Cap Value
Fund II and Berger Mid Cap Value Fund is non-fundamental. If this proposal is
approved by the shareholders of a Fund, the fundamental or non-fundamental
policy, as the case may be, will be repealed and a fundamental policy relating
to the purchase of securities of investment companies will be adopted as
follows:
The Fund may, notwithstanding any other investment policy or
limitation (whether or not fundamental), invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objectives, policies and
limitations as the Fund.
The proposed fundamental policy provides the flexibility for a Fund to
participate as a "feeder" fund in a "master-feeder" structure. There are no
current plans for the Funds to participate in such a structure. The proposed
policy does not prohibit a Fund from otherwise investing in other investment
companies as permitted by the 1940 Act. The proposed policy is intended to
standardize the fundamental policies across the Janus Funds. If adopted by the
shareholders of a Fund, this policy is not expected to materially alter the
investment practices of a Fund. The repeal of the current policies would allow
the Funds to invest cash balances in a Janus money market fund pursuant to an
exemptive order obtained from the SEC by the Janus Funds or other exemptive
relief.
21
(j) INVESTING FOR CONTROL OR MANAGEMENT (BERGER SMALL CAP VALUE FUND ONLY)
Berger Small Cap Value Fund has adopted a fundamental policy which
provides that it may not invest in companies for the purpose of acquiring
control or management thereof. This policy is not required to be fundamental by
the 1940 Act. The Janus Funds have adopted a substantially similar
non-fundamental policy. If this proposal is approved by shareholders of the
Fund, the fundamental policy relating to investing for control or management
will be repealed and the Board will adopt a substantially similar
non-fundamental policy for the Fund.
The repeal of this fundamental policy is intended to standardize the
fundamental policies across the Janus Funds. If approved by the shareholders of
the Fund, the repeal is not expected to alter the investment practices of the
Fund.
(k) OFFICER AND TRUSTEE INVESTMENTS (BERGER SMALL CAP VALUE FUND ONLY)
Berger Small Cap Value Fund has adopted a fundamental policy which
provides that it may not invest or hold securities of any issuer if the officers
and trustees of the Fund and its advisers own individually more than 1/2 of 1%
of the securities of such issuer or together own more than 5% of the securities
of such issuer. This policy derives from certain state securities laws to which
the Fund is no longer subject. In addition, the 1940 Act does not have a
parallel limitation. As a result, the Janus Funds have not adopted a similar
policy. If this proposal is approved by shareholders of the Fund, the
fundamental policy relating to investing in issuers when officers and trustees
own such securities will be repealed.
The repeal of this fundamental policy is intended to standardize the
fundamental policies across the Janus Funds. If approved by the shareholders of
the Fund, the repeal is not expected to alter the investment practices of the
Fund.
(l) JOINT TRADING ACCOUNTS (BERGER SMALL CAP VALUE FUND ONLY)
Berger Small Cap Value Fund has adopted a fundamental policy which
provides that the Fund will not participate on a joint or joint and several
basis in any trading account in securities. Although Section 17(d) of the 1940
Act and Rule 17d-1 thereunder prohibit, among other things, certain joint
trading accounts, the SEC may grant funds exemptive relief from such
prohibitions. In addition, the 1940 Act does not require funds to adopt a
fundamental policy with respect to joint trading accounts. As a result, the
Janus Funds have not adopted a similar policy. If this proposal is approved by
shareholders of the Fund, the fundamental policy relating to joint trading
accounts will be repealed.
The repeal of this fundamental policy is intended to standardize the
fundamental policies across the Janus Funds. If approved by the shareholders of
the Fund, the repeal is not expected to materially alter the investment
practices of the Fund. The new policy would allow the Fund to participate in a
joint trading account pursuant to an exemptive order obtained from the SEC by
the Janus Funds.
(m) UNSEASONED COMPANIES (BERGER SMALL CAP VALUE FUND ONLY)
Berger Small Cap Value Fund has adopted a fundamental policy which
provides that the Fund will not purchase securities of any company with a record
of less than three years continuous operation (including that of predecessors)
if such purchase would cause the cost of the Fund's investments in all such
companies to exceed 5% of the Fund's total assets. This policy derives from
certain state securities laws to which the Fund is no longer subject. In
addition, the 1940 Act does not address "unseasoned
22
companies." As a result, the Janus Funds have not adopted a similar policy. If
this proposal is approved by shareholders of the Fund, the fundamental policy
relating to unseasoned companies will be repealed.
The repeal of this fundamental policy is intended to standardize the
fundamental policies across the Janus Funds. If approved by the shareholders of
the Fund, the repeal is not expected to alter the investment practices of the
Fund.
(n) TEN PERCENT (10%) OWNERSHIP (BERGER SMALL CAP VALUE FUND ONLY)
Berger Small Cap Value Fund has adopted a fundamental policy which
provides that the Fund will not invest in securities (except those of the U.S.
government or its agencies) of any issuer if immediately thereafter the Fund
would own more than 10% of that issuer's voting securities. In general the 1940
Act does not prohibit a fund from owning more than 10% of an issuer's voting
securities. However, pursuant to the 1940 Act, a diversified fund (like the
Fund) may not, with respect to 75% of its assets, own more than 10% of an
issuer's voting securities. Accordingly, the Fund's policy is more restrictive
than the 1940 Act. The Fund also has adopted the required policy relating to
diversification. If this proposal is approved by shareholders of the Fund, the
fundamental policy relating to ten percent (10%) ownership will be repealed.
The repeal of this fundamental policy is intended to standardize the
fundamental policies across the Janus Funds. If approved by the shareholders of
the Fund, the repeal is not expected to alter the investment practices of the
Fund.
(o) PLEDGING (BERGER SMALL CAP VALUE FUND ONLY)
Berger Small Cap Value Fund has adopted a fundamental policy which
provides that the Fund may not pledge, mortgage or hypothecate any of its assets
to secure a debt. This policy is not required to be fundamental by the 1940 Act.
The Janus Funds have adopted a less restrictive non-fundamental policy. If this
proposal is approved by shareholders of the Fund, the fundamental policy
relating to pledging will be repealed. In addition, the Board will adopt a
non-fundamental policy which generally provides that the Fund may not mortgage
or pledge any securities owned or held by it in amounts that exceed, in the
aggregate, 15% of its net asset value.
The repeal of this fundamental policy is intended to standardize the
fundamental policies across the Janus Funds. If approved by the shareholders of
the Fund, the repeal is not expected to alter the investment practices of the
Fund.
(p) USE OF MARGIN AND SHORT SALES (BERGER SMALL CAP VALUE FUND ONLY)
Berger Small Cap Value Fund has adopted a fundamental policy which
provides that the Fund may not purchase securities on margin or sell short. This
policy is not required to be fundamental by the 1940 Act. The Janus Funds have
adopted less restrictive non-fundamental policies relating to the use of margin
and short sales. If this proposal is approved by shareholders of the Fund, the
fundamental policy relating to the use of margin and short sales will be
repealed. In addition, the Board will adopt non-fundamental policies that permit
the use of margin and short sales under certain circumstances.
The repeal of this fundamental policy is intended to standardize the
fundamental policies across the Janus Funds. If approved by the shareholders of
the Fund, the repeal of this policy is not expected to alter the investment
practices of the Fund.
23
(q) ILLIQUID SECURITIES (BERGER SMALL CAP VALUE FUND ONLY)
Berger Small Cap Value Fund has adopted a fundamental policy which
provides that the Fund may not invest more than ten percent (10%) of the value
of its net assets in illiquid securities, securities that are not readily
marketable, repurchase agreements maturing in more than seven (7) days, written
over-the-counter ("OTC") options and securities used as cover for written OTC
options. The 1940 Act does not require that a fund's policy relating to illiquid
securities be fundamental. In addition, the Fund's policy is more restrictive
than SEC interpretations under the 1940 Act, which permit a fund to invest up to
fifteen percent (15%) of its net assets in illiquid securities. If this proposal
is approved by shareholders of the Fund, the fundamental policy relating to
illiquid securities will be repealed. In addition, the Board will adopt a
non-fundamental policy that permits the Fund to invest up to fifteen percent
(15%) of its net assets in illiquid securities.
The repeal of this fundamental policy is intended to standardize the
fundamental policies across the Janus Funds. If approved by the shareholders of
the Fund, the repeal of this policy is not expected to alter the investment
practices of the Fund.
(r) OIL, GAS AND MINERAL LEASES (BERGER SMALL CAP VALUE FUND ONLY)
Berger Small Cap Value Fund has adopted a fundamental policy which
provides that the Fund may not invest in oil, gas or mineral leases. The 1940
Act does not address such investments. This policy derives from certain state
securities laws to which the Fund is no longer subject. If this proposal is
approved by shareholders of the Fund, the fundamental policy relating to oil,
gas and mineral leases will be repealed.
The repeal of this fundamental policy is intended to standardize the
fundamental policies across the Janus Funds. If approved by the shareholders of
the Fund, the repeal of this policy is not expected to alter the investment
practices of the Fund.
(s) WARRANTS (BERGER SMALL CAP VALUE FUND ONLY)
Berger Small Cap Value Fund has adopted a fundamental policy which
provides that the Fund may not invest more than five percent (5%) of the value
of its net assets in warrants or more than two percent (2%) of its net assets in
warrants that are not listed on the New York Stock Exchange, the American Stock
Exchange, or the NASDAQ National Market System. This policy derives from certain
state securities laws to which the Fund is no longer subject. The 1940 Act does
not have a parallel limitation. If this proposal is approved by shareholders of
the Fund, the fundamental policy relating to warrants will be repealed.
The repeal of this fundamental policy is intended to standardize the
fundamental policies across the Janus Funds. If approved by the shareholders of
the Fund, the repeal of this policy is not expected to alter the investment
practices of the Fund.
(t) INVESTMENT OBJECTIVES (ALL FUNDS)
The investment objective of each Fund is capital appreciation and is
fundamental. Each Board recommends changing the investment objective of each
Fund from fundamental to non-fundamental. If this proposal is approved by
shareholders of a Fund, the Board would have the flexibility to reword or change
the substance of the investment objective in response to changes in applicable
law and the marketplace without incurring the time and costs associated with a
shareholder vote. The Boards do not currently intend to change any Fund's
investment objective.
24
The proposed change is intended to conform to the practices of the
Janus Funds, which all have investment objectives that are non-fundamental. If
approved by the shareholders of a Fund, this change is not expected to alter the
investment practices of the Fund.
THE BOARD OF TRUSTEES OF EACH TRUST RECOMMENDS THAT
SHAREHOLDERS OF EACH FUND VOTE FOR APPROVAL
OF THE APPLICABLE CHANGES TO EACH FUNDAMENTAL POLICY.
PROPOSAL 5: APPROVAL OF A DISTRIBUTION AND
SHAREHOLDER SERVICING PLAN
(INSTITUTIONAL SHARES OF BERGER SMALL CAP VALUE FUND II ONLY)
INTRODUCTION
As described in more detail in Proposal 7, as a result of the
Reorganization, all three classes of Berger Small Cap Value Fund II will receive
Class I Shares of Janus Adviser Small Cap Value Fund, which will pay
distribution and shareholder servicing fees at an annual rate of .25% of average
daily net assets. However, the Institutional Shares of Berger Small Cap Value
Fund II are not currently subject to any distribution and shareholder servicing
plan. Investor Shares and Service Shares of Berger Small Cap Value Fund II are
also subject to a similar distribution and shareholder servicing plan, which
provides for the payment of fees of up to .25% of average daily net assets. The
Board of Trustees has approved a Distribution and Shareholder Servicing Plan for
Institutional Shares of Berger Small Cap Value Fund II (the "Plan") that is
substantially similar to the plan to which the Investor Shares and Service
Shares are subject. The Plan was adopted in accordance with Rule 12b-1 under the
1940 Act and is often referred to as a "Rule 12b-1 plan." Because the
Institutional Shares of Berger Small Cap Value Fund II currently do not pay any
distribution and shareholder servicing fees, holders of Institutional Shares are
being asked to vote separately to approve the Plan. If the transactions
contemplated by the Reorganization (see Proposal 7) take effect, the Class I
Shares of the newly created Janus Fund into which the Institutional Shares of
the Fund will be reorganized will have a substantially similar form of
distribution and shareholder servicing plan which authorizes the same level of
fees being proposed in this Proxy Statement.
A copy of the Plan is attached to this Proxy Statement as Exhibit D.
Because distribution and shareholder servicing fees are paid out of Fund assets
on an ongoing basis, over time these fees will increase the cost of a
shareholder's investment and could cost long-term shareholders more than other
types of sales charges. The Plan is contingent upon, and will become effective
immediately prior to, the closing of the Reorganization (see Proposal 7).
Although Institutional Shares of the Fund will pay distribution and shareholder
servicing fees if this Proposal 4 is approved, as a result of the
Reorganization, holders of Institutional Shares of the Fund are expected to pay
lower fees overall. The expense table under Proposal 7 includes information on
how expenses differ between the Institutional Shares of Berger Small Cap Value
Fund II and Class I Shares of Janus Adviser Small Cap Value Fund.
On November 26, 2002, the Board of Trustees of the Trust, including the
Trustees who are not "interested persons" of the Trust and who have no direct or
indirect financial interest in the operation of the Plan or any related
agreements, voted to approve the Plan with respect to the Institutional Shares
of Berger Small Cap Value Fund II and to recommend its approval to shareholders.
THE BOARD OF TRUSTEES RECOMMENDS THAT HOLDERS OF INSTITUTIONAL SHARES
OF THE FUND VOTE IN FAVOR OF APPROVAL OF THE PLAN.
25
TERMS OF THE PLAN
Under the Plan adopted in accordance with Rule 12b-1 under the 1940
Act, Institutional Shares of the Berger Small Cap Value Fund II may pay Berger a
fee at an annual rate of up to .25% of the average daily net assets of
Institutional Shares of the Fund. Under the terms of the Plan, the Fund is
authorized to make payments to Berger for remittance to retirement and pension
plan service providers, bank trust departments, brokers, financial advisers and
other financial intermediaries as compensation for distribution and shareholder
servicing performed with respect to Institutional Shares by such service
providers. The Plan is a compensation type plan and permits the payment at an
annual rate of up to .25% of the average daily net assets of Institutional
Shares of the Fund for activities that are primarily intended to result in sales
and retention of Institutional Shares of the Fund, including but not limited to
preparing, printing and distributing prospectuses, statements of additional
information, shareholder reports, and educational materials to prospective and
existing investors, responding to inquiries by investors, receiving and
answering correspondence and similar activities. Payments under the Plan are not
tied exclusively to actual distribution and service expenses, and the payments
may exceed distribution and service expenses actually incurred.
The Plan and any distribution and shareholder servicing agreement
related to the Plan that is entered into by the Fund or Berger in connection
with the Plan will continue in effect for a period of more than one year only so
long as continuance is specifically approved at least annually by a vote of a
majority of the Trustees of the Trust, and of a majority of the Trustees who are
not "interested persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Plan or any related agreements
("Qualified Trustees"). All material amendments to the Plan must be approved by
a majority vote of the Trustees, including a majority of the Qualified Trustees,
at a meeting called for that purpose. In addition, the Plan may be terminated at
any time, without penalty, by vote of a majority of the outstanding
Institutional Shares of the Fund or by vote of a majority of the Qualified
Trustees.
BOARD CONSIDERATIONS
In considering whether to approve the Plan, the Board considered the
nature and potential amount of expenditures under the Plan. In approving the
Plan for the Institutional Shares, the Board determined that there is a
reasonable likelihood that the Plan would benefit the Fund and its shareholders,
including holders of Institutional Shares, by contributing to the growth of the
Fund's size and thus lowering its operating costs to each shareholder. The Board
considered several factors, including that the Plan would (i) facilitate
distribution of the Fund's shares, (ii) allow Janus to market the Fund to other
institutional investors in a coordinated manner with other Janus products
designed for such investors, and (iii) permit possible administrative and
operating efficiencies through increased Fund size.
Based on the foregoing, at a meeting held on November 26, 2002, the
Board of Trustees concluded that there is a reasonable likelihood that the Plan
will benefit the Institutional Shares of Berger Small Cap Value Fund II and its
shareholders. The Board of Trustees, including the Qualified Trustees, then
voted to approve the Plan and to recommend it to shareholders for their
approval.
26
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS THAT HOLDERS
OF INSTITUTIONAL SHARES OF THE BERGER SMALL CAP VALUE FUND II
VOTE FOR APPROVAL OF THE PLAN.
PROPOSAL 6: ELECTION OF TRUSTEES
In order to conform the board membership of your Fund to the Janus
family of funds, the seven (7) persons shown below have been nominated to each
Trust's Board to replace the current Trustees of the Trusts. Each nominee
currently serves as a trustee of mutual funds managed by Janus. The persons
named as proxies on the enclosed proxy card will vote for the election of all of
the nominees named below unless authority to vote for any or all of the nominees
is withheld in the proxy. The nominees, if elected, will take office immediately
prior to the closing of the Reorganizations and will serve until the closing of
the Reorganizations. If the Reorganizations are not approved by shareholders,
the current Trustees of the Trusts will continue to serve as Trustees. All of
the nominees have consented to serve as Trustees. However, if any nominee should
become unavailable for election due to events not now known or anticipated, the
persons named as proxies will vote for such other nominees as the current
Trustees may recommend.
None of the nominees are currently Trustees of the Trusts. The
following are the names of the nominees, together with a brief description of
their principal occupations during the last five years.
<Table>
<Caption>
- ----------------------------------------------------------------------------------------------------------------------
NOMINEES
- ----------------------------------------------------------------------------------------------------------------------
Number of Funds
in Berger Fund
Name, Age at Positions Principal Complex to be Other
December 31, 2002 and Held with Length of Occupations During Overseen by Directorships
Address Funds Time Served the Past Five Years Nominee Held by Nominee
- ----------------------------------------------------------------------------------------------------------------------
INTERESTED NOMINEE
- ----------------------------------------------------------------------------------------------------------------------
Thomas H. Bailey* N/A Nominee Formerly, President 7 Trustee, Janus
100 Fillmore Street (1978-2002) and Funds (59
Denver, CO 80206 Chief Executive portfolios).
Age: 65 Officer (1994-2002)
of Janus Capital;
President and
Director
(1994-2002) of the
Janus Foundation;
Chairman and
Director
(1978-2002) of
Janus Capital
Corporation and
Director
(1997-2001) of
Janus Distributors,
Inc.
- ----------------------------------------------------------------------------------------------------------------------
INDEPENDENT NOMINEES
- ----------------------------------------------------------------------------------------------------------------------
William F. McCalpin N/A Nominee Executive Vice 7 Founding
100 Fillmore Street President and Chief Director and
Denver, CO 80206 Operating Officer of Board Chair,
Age: 45 The Rockefeller Solar
Brothers Fund (a Development
private family Foundation;
</Table>
27
<Table>
<Caption>
- ----------------------------------------------------------------------------------------------------------------------
NOMINEES
- ----------------------------------------------------------------------------------------------------------------------
Number of Funds
in Berger Fund
Name, Age at Positions Principal Complex to be Other
December 31, 2002 and Held with Length of Occupations During Overseen by Directorships
Address Funds Time Served the Past Five Years Nominee Held by Nominee
- ----------------------------------------------------------------------------------------------------------------------
foundation). Trustee and
Formerly, Director Vice
of Investments President,
(1991-1998) of The Asian Cultural
John D. and Council;
Catherine T. Trustee, Janus
MacArthur Foundation Funds (59
(a private family portfolios).
foundation).
- ----------------------------------------------------------------------------------------------------------------------
John W. McCarter, Jr. N/A Nominee President and Chief 7 Chairman of
100 Fillmore Street Executive Officer of the Board,
Denver, CO 80206 The Field Museum of Divergence
Age: 64 Natural History. LLC; Director
Formerly, Senior of A.M. Castle
Vice President & Co., Harris
(1987-1997) of Insight Funds
Booz-Allen & Trust (22
Hamilton, Inc. (a portfolios),
management W.W. Grainger,
consulting firm). Inc.; Trustee
of WTTW
(Chicago public
television
station), the
University of
Chicago and
Chicago Public
Education
Fund; Trustee,
Janus Funds
(59 portfolios).
- ----------------------------------------------------------------------------------------------------------------------
Dennis B. Mullen N/A Nominee Private Investor. 7 Director, Red
100 Fillmore Street Formerly (1997-1998) Robin Gourmet
Denver, CO 80206 Chief Financial Burgers, Inc.;
Age: 59 Officer - Boston Trustee, Janus
Market Concepts, Funds (59
Boston Chicken, portfolios).
Inc., Golden, CO (a
restaurant chain).
- ----------------------------------------------------------------------------------------------------------------------
James T. Rothe N/A Nominee Professor of 7 Director,
100 Fillmore Street Business, University Optika, Inc.;
Denver, CO 80206 of Colorado, Director,
Age: 59 Colorado Springs, NeoCore Corp.;
CO. Formerly, Trustee,
</Table>
28
<Table>
<Caption>
- ----------------------------------------------------------------------------------------------------------------------
NOMINEES
- ----------------------------------------------------------------------------------------------------------------------
Number of Funds
in Berger Fund
Name, Age at Positions Principal Complex to be Other
December 31, 2002 and Held with Length of Occupations During Overseen by Directorships
Address Funds Time Served the Past Five Years Nominee Held by Nominee
- ----------------------------------------------------------------------------------------------------------------------
Distinguished Janus Funds
Visiting Professor (59 portfolios).
of Business
(2001-2002),
Thunderbird
(American Graduate
School of
International
Management),
Phoenix, AZ; and
Principal (1988 -
1999) of
Phillips-Smith
Retail Group,
Colorado Springs,
CO (a venture
capital firm).
- ----------------------------------------------------------------------------------------------------------------------
William D. Stewart N/A Nominee Corporate Vice 7 Trustee, Janus
100 Fillmore Street President and Funds (59
Denver, CO 80206 General Manager of portfolios).
Age: 58 MKS Instruments -
HPS Products,
Boulder, CO (a
manufacturer of
vacuum fittings and
valves).
- ----------------------------------------------------------------------------------------------------------------------
Martin H. Waldinger Nominee N/A Consultant. 7 Trustee, Janus
100 Fillmore Street Funds (59
Denver, CO 80206 portfolios).
Age: 64
- ----------------------------------------------------------------------------------------------------------------------
</Table>
- ----------
* Mr. Bailey is treated as an "interested person" of the Trusts by virtue
of his past positions and continuing relationships with Janus.
Each Board currently has five standing committees that each perform
specialized functions as described below: an Audit Committee, Nominating
Committee, Compensation Committee, Pricing Committee and Brokerage Committee.
During the fiscal year ended September 30, 2002, the Board met seven times.
The Audit Committee reviews the financial reporting process, the system
of internal control, the audit process and each Trust's process for monitoring
compliance with investment restrictions and applicable laws as well as the
Company's Code of Ethics. The Audit Committee is currently comprised of only
Independent Trustees, none of whom is standing for re-election as a Trustee. The
current members of the Audit Committee are Michael Owen (Chair), Katherine A.
Cattanach (Vice Chair), Dennis E. Baldwin, Paul R. Knapp, Harry T. Lewis, Jr.,
William Sinclaire and Albert C. Yates. The Audit Committee held four meetings
during the fiscal year ended September 30, 2002.
The Nominating Committee identifies and recommends individuals for
Trusteeship. The Nominating Committee does not consider nominees recommended by
shareholders. The Nominating
29
Committee is currently comprised of only Independent Trustees, none of whom is
standing for re-election as a Trustee. The current members of the Nominating
Committee are Katherine A. Cattanach (Chair), Michael Owen, Dennis E. Baldwin,
Harry T. Lewis, Jr., William Sinclaire and Albert C. Yates. The Nominating
Committee did not meet during the fiscal year ended September 30, 2002.
The Compensation Committee determines and reviews the level of
compensation for Independent Trustees. The Compensation Committee is currently
comprised of only Independent Trustees, none of whom is standing for re-election
as a Trustee. The current members of the Compensation Committee are Katherine A.
Cattanach (Chair), William Sinclaire and Albert C. Yates. The Compensation
Committee did not meet during the fiscal year ended September 30, 2002.
The Pricing Committee determines the fair value of restricted
securities and other securities for which market quotations are not readily
available pursuant to procedures adopted by the Trustees. All of the members of
the Pricing Committee are currently Independent Trustees except for Jack R.
Thompson, and none of the members of the Pricing Committee are standing for
re-election as Trustees. The Pricing Committee members are Harry T. Lewis, Jr.
(Chair), Dennis E. Baldwin, Jack R. Thompson and Albert C. Yates. The Pricing
Committee did not meet during the fiscal year ended September 30, 2002.
The Brokerage Committee reviews and makes recommendations regarding
matters related to the Company's use of brokerage commissions and placement of
portfolio transactions. All of the members of the Brokerage Committee are
currently Independent Trustees except for Jack R. Thompson, and none of the
members of the Brokerage Committee are standing for re-election as Trustees. The
Brokerage Committee members are Dennis E. Baldwin (Chair), Katherine A.
Cattanach, Harry T. Lewis, Jr. and Jack R. Thompson. The Brokerage Committee
held two meetings during the fiscal year ended September 30, 2002.
Independent Trustees are compensated for their services according to a
fee schedule, allocated among the Berger Funds. Neither the officers of the
Trusts nor the Trustees receive any form of pension or retirement benefit from
the Trusts. None of the nominees for election as trustees were compensated by
any Berger Funds during the fiscal year ended September 30, 2002, and none of
the current Trustees are standing for re-election as Trustees.
The names of the current Trustees and officers of the Trusts, together
with a brief description of their principal occupations during the last five
years, are included in Appendix 6.
BOARD CONSIDERATIONS
The current Board of Trustees met personally with the nominees. In
addition to reviewing the backgrounds and qualifications of each nominee, the
current Board of Trustees also reviewed the policies and practices followed by
the trustees of the Janus Funds in their oversight of the Janus family of funds.
The current Board of Trustees also took into consideration the fact that the
nominees who are not interested persons of Janus have retained independent legal
counsel.
The current Board of Trustees also considered a proposal to establish
an advisory board comprised of at least four of the current Independent Trustees
of the Trusts (the "Advisory Board"). The Advisory Board is intended to
facilitate the transition to the Janus family of funds and is expected to
provide advice and make recommendations to the Boards of Trustees of the Janus
Trusts (ad defined below under Proposal 7) regarding the Janus Funds into which
the Berger Funds are reorganized. The current Board of Trustees anticipates that
through this means shareholders of the Funds will have the continued benefit of
their additional oversight during the transition period and for a reasonable
time thereafter. Each member of the Advisory Board would be compensated at an
annual rate of $60,000, and
30
the chairman of the Advisory Board would receive an additional $5,000 annually,
payable by the Janus Funds and by other funds managed by Janus into which other
funds in the Berger family are reorganized.
THE BOARD OF TRUSTEES OF EACH TRUST RECOMMENDS
THAT SHAREHOLDERS OF EACH FUND VOTE
FOR THE ELECTION OF EACH NOMINEE.
PROPOSAL 7: APPROVAL OF AGREEMENT
AND PLAN OF REORGANIZATION
INTRODUCTION
The Board of Trustees of each Trust, including all of the Independent
Trustees, approved an Agreement and Plan of Reorganization (the "Reorganization
Plan"), a copy of which is attached as Exhibit E, at a meeting held on November
26, 2002. Subject to its approval by shareholders of each Berger Fund with
respect to such Berger Fund, the Reorganization Plan provides for the
reorganization of each Berger Fund into a newly created Janus Fund (each a
"Reorganization") as follows:
<Table>
<Caption>
BERGER FUND JANUS FUND
----------- ----------
Berger Small Cap Value Fund Janus Small Cap Value Fund
Investor Shares Investor Shares
Institutional Shares Institutional Shares
Berger Small Cap Value Fund II Janus Adviser Small Cap Value Fund
Investor Shares Class I Shares
Institutional Shares Class I Shares
Service Shares Class I Shares
Berger Mid Cap Value Fund Janus Mid Cap Value Fund
Investor Shares Investor Shares
Institutional Shares Institutional Shares
</Table>
As indicated above, shareholders of each class of Berger Small Cap Value Fund
and Berger Mid Cap Value Fund will receive shares in a comparable class of the
corresponding Janus Fund. However, all shareholders of Berger Small Cap Value
Fund II will receive Class I shares of Janus Adviser Small Cap Value Fund.
Shareholders of each Berger Fund will vote together as a single class on the
Reorganization of their Fund. The Reorganization of each Berger Fund is not
contingent upon approval by shareholders of any other Fund. The Reorganization
of any Fund is contingent upon the appointment of Janus as investment adviser
for that Fund (see Proposal 1), the approval of subadvisory agreements with PWM
and Bay Isle, as applicable (see Proposals 2 and 3), the approval of changes in
the Fund's fundamental policies (see Proposal 4), for holders of Institutional
Shares of Berger Small Cap Value Fund II, the approval of the distribution and
shareholder servicing plan (see Proposal 5) and the election by the shareholders
of the Trust of those persons nominated as trustees (see Proposal 6) (the
"Related Proposals"). As further discussed below, a vote for the Reorganization
Plan for each Fund encompasses both approval of the Reorganization of the Fund
and a temporary waiver of certain investment policies of the Fund to permit the
transactions contemplated by the Reorganization Plan.
If shareholders of your Fund do not approve the Reorganization or any
Related Proposal applicable to your Fund, the Reorganization for your Fund will
not take place and your Fund's Board will
31
take such action as it deems to be in the best interests of your Fund, including
resoliciting proxies or liquidating the Fund.
On November 26, 2002, the Board of Trustees of each Trust, including
the Independent Trustees, voted to approve the Reorganization Plan and to
recommend its approval to shareholders.
EACH BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS OF EACH FUND VOTE
IN FAVOR OF APPROVAL OF THE REORGANIZATION PLAN.
THE REORGANIZATION
The Reorganization Plan provides that all of the assets and liabilities
of each Berger Fund will be transferred to a corresponding Janus Fund on or
about March 24, 2003 (the "Closing Date"), based on the net asset values of the
respective Funds immediately after the close of the regular trading session on
the New York Stock Exchange (normally, 4:00 p.m. Eastern time) on the business
day immediately prior to the Closing Date (the "Effective Time"). In exchange
for the transfer of these assets and liabilities, the corresponding Janus Fund
will simultaneously issue on the Closing Date of the Reorganization a number of
full and fractional shares of that Janus Fund to the corresponding Berger Fund
equal in value to the aggregate net asset value of the corresponding Berger Fund
calculated as of the Effective Time of the Reorganization.
Following the transfer of assets and liabilities in exchange for Janus
Fund shares, the corresponding Berger Fund will distribute, in complete
liquidation, pro rata to its shareholders of record, all the shares of the
corresponding Janus Fund so received. Shareholders of the Berger Fund owning
shares at the Effective Time of the Reorganization will receive a number of
shares of the corresponding Janus Fund with the same aggregate value as the
shareholder had in the Berger Fund at the Effective Time. Such distribution will
be accomplished by the establishment of accounts in the names of the Berger
Funds' shareholders on the share records of the Janus Funds' transfer agent.
Each account will receive the respective pro rata number of full and fractional
shares of the Janus Funds due to the shareholders of the corresponding Berger
Fund. The Berger Fund then will be terminated. The Janus Funds will not issue
share certificates to Berger Fund shareholders in connection with the
Reorganizations. Shares of the Janus Funds to be issued will have no preemptive
or conversion rights.
The Reorganization Plan contains customary representations and
warranties. The Reorganization Plan provides that the consummation of the
Reorganization with respect to a Berger Fund and its corresponding Janus Fund is
conditioned upon, among other things: (1) approval of the Reorganization by the
Berger Fund's shareholders; (2) the receipt by the Funds of a tax opinion to the
effect that the Reorganization will be tax-free for federal income tax purposes
to the Berger Funds, their shareholders and the Janus Funds; and (3) approval of
the establishment of an Advisory Board. The Reorganization Plan may be
terminated by mutual agreement of the parties, or by either party if, before the
Closing Date, any of the required conditions have not been met or the
representations and warranties are not true.
In connection with the Reorganizations, immediately prior to the
closing, one share of each class of each newly created Janus Fund will be issued
to the corresponding Berger Fund. Each Berger Fund as sole shareholder of the
corresponding Janus Fund will then approve new investment advisory and
subadvisory agreements with Janus, PWM and Bay Isle, as applicable, on the same
terms as the new agreements described in Proposals 1, 2 and 3, the fundamental
policies described in Proposal 4, the slate of nominees described in Proposal 6,
and, with respect to Berger Small Cap Value Fund II, the distribution and
shareholder servicing plan described in Proposal 5.
32
Because each Fund's existing investment restrictions could preclude it
from consummating the Reorganization in the manner contemplated by the
Reorganization Plan, shareholders of the Funds are requested to authorize the
temporary suspension of certain investment restrictions that restrict each
Fund's ability to invest more than 25% of the value of its total assets in
securities of one or more issuers conducting their principal activities in the
same industry and restrictions on investments in other investment companies, as
set forth in its Statement of Additional Information, as well as the temporary
suspension of any other investment restriction of the Funds to the extent
necessary to permit the consummation of the Reorganization. A vote in favor of
the proposal is deemed to be a vote in favor of the temporary suspensions.
As a result of the Reorganizations, Berger Fund shareholders will
become shareholders of a newly created Janus Fund with the same investment
objective, substantially similar investment strategies and policies and the same
portfolio management team. As discussed in this Proxy Statement, there will be
some changes as a result of the Reorganization. Janus will assume management
responsibility for the Funds, and your Fund will have the same Trustees as the
Janus Funds. Your Fund will also have fundamental restrictions consistent with
the other Janus Funds; however, the changes in fundamental restrictions will not
affect your Fund's principal investment strategies or approach. In addition,
although overall Fund expenses are expected to decrease as a result of the
Reorganization, all former shareholders of Berger Small Cap Value Fund II,
including holders of Institutional Shares, will be subject to a distribution and
shareholder servicing plan.
Other changes also will occur as a result of the Reorganization. Janus
and its affiliates, rather than Berger and its affiliates, will provide
nonadvisory services to the Funds. In addition, although the Janus Funds are
newly created series, they are series of existing trusts. Janus Small Cap Value
Fund and Janus Mid Cap Value Fund are series of a business trust named Janus
Investment Fund, and Janus Adviser Small Cap Value Fund is a series of a
statutory trust named Janus Adviser Series (Janus Investment Fund and Janus
Adviser Series are collectively referred to as the "Janus Trusts"). As a result,
there are differences between the rights of shareholders of the Janus Trusts and
the Trusts under their governing charter documents, bylaws and state law.
Shareholder Rights. Berger Small Cap Value Fund is a series of Berger
Omni Investment Trust, a Massachusetts business trust. The corresponding Janus
Fund, Janus Small Cap Value Fund, is a series of Janus Investment Fund, also a
Massachusetts business trust. As a result, shareholders will have similar rights
before and after the Reorganization, except with respect to voting. Shareholders
of Berger Small Cap Value Fund are entitled to one per share (and fractional
votes for fractional shares). Shareholders of Janus Small Cap Value Fund are
entitled to one vote for each dollar of net asset value of the Fund that they
own. Under Massachusetts law, shareholders of each Fund could, under certain
circumstances, be held liable for the obligations of their Fund. However, Janus
Investment Fund's Declaration of Trust disclaims shareholder liability for acts
or obligations of the Fund and provides indemnification for all losses and
expenses of any Fund shareholder held liable for the obligations of the Fund.
Berger Small Cap Value Fund II is a series of Berger Investment
Portfolio Trust, a Delaware statutory trust. The corresponding Janus Fund, Janus
Adviser Small Cap Value Fund, is a series of Janus Adviser Series, also a
Delaware statutory trust. As a result, shareholders will have similar rights
before and after the Reorganization. Shareholders of each Fund are entitled to
one vote per share (and fractional votes for fractional shares). In addition,
Delaware law and each Trust Instrument generally provide that shareholders are
not personally liable for acts, omissions, liabilities or obligations of any
kind of the respective Trust.
Berger Mid Cap Value Fund is also a series of Berger Investment
Portfolio Trust, a Delaware statutory trust, and Janus Mid Cap Value Fund is a
series of Janus Investment Fund, a Massachusetts
33
business trust. As a result, shareholder voting rights will change as a result
of the Reorganization, as discussed above. In addition, shareholders of the
newly created Janus Fund could, under certain circumstances under Massachusetts
law, be held liable for the obligations of their Fund. However, as discussed
above, Janus Investment Fund's Declaration of Trust disclaims such liability and
provides indemnification for shareholders.
Current Service Providers. Currently, Berger and its affiliates provide
distribution, shareholder services and administrative services to the Funds.
Contingent upon the approval of the Reorganizations and entering into the New
Advisory Agreements with Janus, Janus and its affiliates will provide
distribution, shareholder services and administrative services to the Funds. A
description of the current arrangements and fees paid to Berger and its
affiliates is set forth in Appendix 2. Although the fees charged by Janus and
its affiliates may differ compared to the current structure, it is anticipated
that the net overall expense ratio for each Fund would remain the same or be
lower than the current expense ratio. The services to be provided by Janus and
its affiliates to shareholders of the Funds would be similar to those currently
provided by Berger and its affiliates. However, unlike the Berger Funds, the
Janus Funds do not offer the Low Minimum Investment Plan or SIMPLE IRAs.
The following comparative fee tables show the annual Fund operating
expenses (as a percentage of net assets) for each Berger Fund as of September
30, 2002 and the pro forma effect of the New Advisory Agreements, 12b-1 fees and
other fees resulting from the Fund Restructuring.
<Table>
<Caption>
BERGER SMALL CAP JANUS SMALL CAP VALUE
VALUE FUND FUND
(INVESTOR SHARES) (INVESTOR SHARES)
----------------- ---------------------
Management Fees............................... 0.78% 0.75%
Distribution (12b-1) Fees..................... 0.25% 0.00%
Other Expenses................................ 0.14% 0.37%
---- ----
Total Annual Operating Expenses............... 1.17% 1.12%
Less Fee Waivers........................... (0.02)%(1) 0.00%
----- ----
Net Expenses.................................. 1.15% 1.12%
</Table>
<Table>
<Caption>
BERGER SMALL CAP VALUE JANUS SMALL CAP VALUE
FUND FUND
(INSTITUTIONAL SHARES) (INSTITUTIONAL SHARES)
---------------------- ----------------------
Management Fees............................... 0.78% 0.75%
Distribution (12b-1) Fees..................... 0.00% 0.00%
Other Expenses................................ 0.04% 0.26%
---- -----
Total Annual Operating Expenses............... 0.82% 1.01%
Less Fee Waiver.......................... 0.01% (0.19)%(2)
---- -----
Net Expenses................................ 0.82% 0.82%
</Table>
34
<Table>
<Caption>
BERGER SMALL BERGER SMALL BERGER SMALL JANUS ADVISER
CAP VALUE CAP VALUE CAP VALUE SMALL CAP
FUND II FUND II FUND II VALUE FUND
(INVESTOR (INSTITUTIONAL (SERVICE (CLASS I
SHARES) SHARES) SHARES) SHARES)
------------ -------------- ------------ -------------
Management Fees.................... 0.85% 0.85% 0.85% 0.75%
Distribution (12b-1) Fees.......... 0.25% 0.00% 0.25% 0.25%
Other Expenses..................... 2.17% 1.64% 3.76% 1.10%
----- ---- ----- ----
Total Annual Operating Expenses.... 3.37% 2.49% 4.66% 2.10%
Less Fee Waivers............... (0.43)%(3) 0.00% (1.48)%(3) (0.35)%(4)
----- ---- ----- -----
Net Expenses....................... 2.96% 2.49% 3.18% 1.75%
</Table>
<Table>
<Caption>
BERGER MID CAP JANUS MID CAP
VALUE FUND VALUE FUND
(INVESTOR SHARES) (INVESTOR SHARES)
----------------- -----------------
Management Fees............................... 0.75% 0.65%
Distribution (12b-1) Fees..................... 0.25% 0.00%
Other Expenses................................ 0.17% 0.43%
---- ----
Total Annual Operating Expenses............... 1.17% 1.08%
</Table>
<Table>
<Caption>
BERGER MID CAP JANUS MID CAP
VALUE FUND VALUE FUND
(INSTITUTIONAL SHARES) (INSTITUTIONAL SHARES)
---------------------- ----------------------
Management Fees............................... 0.65% 0.65%
Distribution (12b-1) Fees..................... 0.00% 0.00%
Other Expenses................................ 0.13% 0.28%
---- ----
Total Annual Operating Expenses............... 0.78% 0.93%
Less Fee Waivers 0.00% (0.15)%(2)
---- -----
Net Expenses 0.78% 0.78%
</Table>
- ----------
(1) Pursuant to a written agreement, Berger waives a portion of the 12b-1
fee by the amount such fee is not used in connection with the
distribution or servicing of the Investor Shares of Berger Small Cap
Value Fund during any period in which the Fund remains closed to new
investors.
(2) In connection with the Fund Restructuring, Janus has agreed to waive
transfer agency fees for the Institutional Shares of Janus Small Cap
Value Fund and Janus Mid Cap Value Fund through July 1, 2004 such that
the net expenses of the Institutional Shares of such Funds are the same
as the expense ratio of the Institutional Shares of Berger Small Cap
Value Fund and Berger Mid Cap Value Fund, respectively, as of October
31, 2002.
(3) Pursuant to a written agreement, Berger reimburses the Investor Shares
and Service Shares of Berger Small Cap Value Fund II to the extent that
transfer agency, shareholder reporting and registration expenses exceed
0.25% of the average daily net assets of the respective class during the
fiscal year.
(4) Janus has contractually agreed to waive total operating expenses
(excluding brokerage commissions, interest, taxes and extraordinary
expenses) for Class I Shares of Janus Adviser Small Cap Value Fund to
the level indicated until at least July 1, 2004.
Distribution Arrangement. In connection with the Fund Restructuring,
each Board of Trustees overseeing the newly created Janus Funds has approved
Janus Distributors as principal underwriter of each acquiring Janus Fund (and
class thereof) in the continuous offering of its shares. Pursuant to a
Distribution Agreement between Janus Distributors and each Janus Trust, Janus
Distributors will be authorized to solicit, as agent of the Trust, unconditional
orders for purchases of Fund shares. Janus Distributors will not receive any
compensation under the Distribution Agreement but may be paid to the extent
authorized under any applicable Rule 12b-1 Plan.
35
Administration Agreement. Each Board of Trustees overseeing the newly
created Janus Funds has approved an Administration Agreement between Janus and
each Janus Trust on behalf of each acquiring Janus Fund. Pursuant to such
Agreement, Janus or an affiliate will be responsible for providing or arranging
for the provision of most administrative services necessary to operate the
Funds, including, without limitation, fund accounting, preparation of
registration statements and other filings, valuation of securities, and legal
and compliance functions. Janus or an affiliate may be reimbursed for its
expenses pursuant to the Administration Agreement.
Transfer Agency Agreement. Each Board of Trustees overseeing the newly
created Janus Funds has approved a Transfer Agency Agreement with Janus Services
LLC. Janus Services LLC will receive annual fees in the amount of 0.16% or 0.25%
of the average daily net assets of each Fund (depending on the distribution
channel), plus certain out-of-pocket expenses.
FEDERAL INCOME TAXES
Each Reorganization is intended to qualify for U.S. federal income tax
purposes as a tax-free reorganization under Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"). If it so qualifies, neither the
Berger Funds nor their shareholders will recognize taxable gain or loss as a
result of the Reorganization; the tax basis of the Janus Fund shares received by
shareholders will be the same in the aggregate as the basis of the Berger Fund
shares exchanged; and the holding period of the Janus Fund shares received will
include the holding period of the Berger Fund shares exchanged, provided that
the shares exchanged were held as capital assets at the time of the
Reorganization. As a condition to the closing of the Reorganizations, the Trusts
and the Janus Trusts will receive a tax opinion to that effect. No tax ruling
from the Internal Revenue Service regarding the Reorganizations has been
requested. The tax opinion is not binding on the Internal Revenue Service or a
court and does not preclude the Internal Revenue Service from asserting or
adopting a contrary position.
BOARD CONSIDERATIONS
The Independent Trustees of the Trusts reviewed the potential
implication of these proposals for the Reorganizations discussed in this Proxy
Statement as well as for various other Berger funds for which they serve as
board members. They were assisted in this review by their independent legal
counsel and by special consultants with special expertise in financial and
mutual fund matters.
The Boards of Trustees, including the Independent Trustees, considered
the Reorganization at a number of meetings. On November 26, 2002, the Boards of
Trustees, including the Independent Trustees, voted to approve the
Reorganizations and to recommend their approval to shareholders. In reviewing
the Reorganizations, the Boards, including the Independent Trustees, were
presented with information to assist them in evaluating the Reorganizations,
such as: (1) the terms and conditions of the Reorganizations; (2) the
compatibility of the Funds' objectives, limitations and policies; (3) estimated
expense ratios for the Janus Funds and any changes in fees to be paid or borne
by shareholders of the Funds (directly or indirectly) after the Reorganizations;
(4) the fact that each Reorganization is expected to be free from federal income
taxes; (5) any direct or indirect federal income tax consequences to the
shareholders of the Funds; (6) the fact that the Janus Funds will assume all of
the liabilities of the Berger Funds; (7) the fact that the Reorganization
expenses incurred by the Funds will be borne by Janus and not the Funds; (8) the
fact that services to be provided to shareholders of the Berger Funds after the
Reorganizations would be similar to those currently provided; and (9) the fact
that shareholders would have access through exchange privileges to a larger
group of funds.
At the meeting, each Board, including all of the Independent Trustees,
determined that the Reorganizations are in the best interests of each Berger
Fund and that the interests of existing Berger
36
Fund shareholders will not be diluted as a result of the Reorganizations. The
Boards, including the Independent Trustees, concluded that the proposed
Reorganizations were the best course available to the Berger Funds from among
the possible alternatives, including liquidation. In reaching that conclusion,
the Boards noted that each Berger Fund will have the same investment objectives
and policies as those of the corresponding Janus Fund and that the Berger Funds
would not bear any expenses in connection with the Reorganizations. The Boards
also noted the lower or equal expense ratios of the Janus Funds.
THE BOARD OF TRUSTEES OF EACH TRUST RECOMMENDS
THAT SHAREHOLDERS OF EACH FUND
VOTE FOR APPROVAL OF THE REORGANIZATION PLAN.
ADDITIONAL INFORMATION ABOUT THE MEETINGS
GENERAL
This solicitation is being made primarily by the mailing of this Proxy
Statement and the accompanying proxy card. Supplementary solicitations may be
made by mail, telephone, telegraph, facsimile, electronic means or by personal
interview by representatives of the Trusts. In addition, Georgeson Shareholder
Communications Inc. ("GS"), our proxy solicitor, may be paid to solicit
shareholders of the Funds. The total cost of such services is estimated to be
$150,000. The costs of preparing, printing and mailing the Proxy Statement, and
all other costs incurred in connection with the solicitation of proxies,
including the fees of GS, will be paid by Janus and/or the subadvisers. Janus
will also reimburse brokerage firms and other financial intermediaries for their
reasonable expenses in forwarding solicitation materials to the beneficial
owners of shares.
The Trusts may arrange to have votes recorded by telephone. If the
Trusts record votes by telephone, they will use procedures designed to
authenticate shareholders' identities, to allow shareholders to authorize voting
in accordance with their instructions, and to confirm that their instructions
have been properly recorded. Proxies voted by telephone may be revoked in the
same manner as that proxies voted by mail may be revoked.
The Trusts may also arrange to have votes submitted over the Internet.
In order to use this feature, you should go to www.proxyvote.com and enter the
control number set forth on your proxy card(s). You will be prompted to follow a
simple set of instructions. Proxies voted on the Internet may be revoked in the
same manner as proxies voted by mail may be revoked.
QUORUM AND VOTING
For the Berger Small Cap Value Fund, a majority of the shares of the
Fund entitled to vote, present in person or by proxy, constitutes a quorum. For
the Berger Small Cap Value Fund II and Berger Mid Cap Value Fund, one-third of
the shares of the Fund entitled to vote, present in person or by proxy,
constitutes a quorum.
For purposes of determining the presence of a quorum for transacting
business at the Meetings, abstentions and broker "nonvotes" (that is, proxies
from brokers or nominees indicating that such persons have not received
instructions from the beneficial owner or other persons entitled to vote shares
on a particular matter with respect to which the brokers or nominees do not have
discretionary power) will be treated as shares that are present but which have
not been voted. Accordingly, shareholders are urged to forward their voting
instructions promptly. For purposes of the proposals, except for the election of
Trustees, abstentions and broker nonvotes will have the effect of a "no" vote.
For purposes of the election
37
of Trustees, abstentions and broker nonvotes will not be counted in favor of,
but will have no other effect on, the vote.
Each of Proposals 1, 2, 3, 4, 5 and 7 requires the affirmative vote
with respect to any Fund of the lesser of (1) 67% of the outstanding shares of
the Fund present at the Meetings if more than 50% of the shares of the Fund
outstanding on the Record Date are present in person or by proxy or (2) more
than 50% of the shares of the Fund outstanding on the Record Date. For Proposal
4, shareholders may vote on each fundamental policy separately. For Proposal 5,
"Fund" refers to the Institutional Shares of the Berger Small Cap Value Fund II.
For Proposal 6, the election of Trustees, Berger Small Cap Value Fund
II, Berger Mid Cap Value Fund and four other series of the Berger Investment
Portfolio Trust to which this Proxy Statement does not relate, vote together,
and requires the affirmative vote of a plurality of the shares of the Berger
Investment Portfolio Trust present at the Meetings, which means the nominees
receiving the greatest number of votes will be elected. For Berger Small Cap
Value Fund, the election of Trustees requires the affirmative vote of a
plurality of the shares of the Fund present at the Meeting.
In the event that the necessary quorum to transact business or the
votes required to approve a proposal are not obtained at the Meetings, the
persons named as proxies on the proxy card may propose one or more adjournments
of the Meetings, in accordance with applicable law, to permit further
solicitation of proxies. Any such adjournment as to a Fund will require the
affirmative vote of the majority of the Fund's shares present in person or by
proxy at the Meetings. The persons named as proxies will vote in favor of such
adjournment if they determine that such adjournment and additional solicitation
are reasonable and in the interests of shareholders.
OWNERSHIP OF FUND SHARES
To the best of each Trust's knowledge, as of December 31, 2002, no
person owned beneficially more than five percent (5%) of any Fund's outstanding
shares, except as set forth in Appendix 4 to this Proxy Statement.
Appendix 5 sets forth the number of shares of each Fund beneficially
owned by each Trustee, the Trustees and officers as a group and each nominee, as
well as the dollar range of the value of shares of each Fund and all Berger
Funds overseen by each Trustee and to be overseen by each nominee, as of
___________, 2002.
SUBMISSION OF SHAREHOLDER PROPOSALS
The Trusts do not generally hold annual shareholders' meetings, but
will hold special meetings as required or deemed desirable. Because each Trust
does not hold regular shareholders' meetings, the anticipated date of the next
special shareholders' meeting (if any) cannot be provided. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a subsequent
shareholders' meeting of a Trust or a Fund should send their written proposals
to the Secretary of the applicable Trust. Proposals must be received a
reasonable time before a Trust begins to print and mail its proxy materials for
the meeting.
OTHER MATTERS TO COME BEFORE THE MEETINGS
The Trustees do not intend to present any other business at the
Meetings, nor are they aware that any shareholder intends to do so. If, however,
any other matters are properly brought before the
38
Meetings, the persons named as proxies will vote on such other matter(s) in
accordance with their judgment.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY IN ORDER TO AVOID UNNECESSARY
DELAY AND COST. SHAREHOLDERS ARE THEREFORE URGED TO COMPLETE, SIGN, DATE AND
RETURN THE PROXY CARD AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
By Order of the Boards of Trustees
Sue Vreeland
Secretary
, 2003
- -------------
39
EXHIBIT A
FORM OF NEW INVESTMENT
ADVISORY AGREEMENT
[NAME OF FUND]
(A SERIES OF [NAME OF TRUST])
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this
___day of __________, 2003, between [NAME OF TRUST], a [Delaware/Massachusetts]
business trust (the "Trust"), and JANUS CAPITAL MANAGEMENT LLC, a Delaware
limited liability company ("JCM").
WITNESSETH:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and has registered its shares for public offering under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Trust is authorized to create separate funds, each with
its own separate investment portfolio of which the beneficial interests are
represented by a separate series of shares; one of such funds created by the
Trust being designated as the [Name of 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 [Trust Instrument/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 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 duly appointed subadvisers or affiliates of) the management and
administrative services necessary for the operation of the Fund. JCM is
specifically authorized, on
A-1
behalf of the Trust, to conduct relations with custodians, depositories,
transfer and pricing agents, accountants, attorneys, underwriters, brokers and
dealers, corporate fiduciaries, insurance company separate accounts, insurers,
banks and such other persons in any such other capacity deemed by JCM to be
necessary or desirable. JCM shall generally monitor and report to Fund officers
the Fund's compliance with investment policies and restrictions as set forth in
the currently effective prospectus and statement of additional information
relating to the shares of the Fund under the Securities Act of 1933, as amended.
JCM shall make reports to the Trustees of its performance of services hereunder
upon request therefor and furnish advice and recommendations with respect to
such other aspects of the business and affairs of the Fund as it shall determine
to be desirable. JCM is also authorized, subject to review by the Trustees, to
furnish such other services as JCM shall from time to time determine to be
necessary or useful to perform the services contemplated by this Agreement.
4. Obligations of Trust. The Trust shall have the following obligations
under this Agreement:
(a) to keep JCM continuously and fully informed as to the
composition of its investment portfolio and the
nature of all of its assets and liabilities from time
to time;
(b) to furnish JCM with a certified copy of any financial
statement or report prepared for it by certified or
independent public accountants and with copies of any
financial statements or reports made to its
shareholders or to any governmental body or
securities exchange;
(c) to furnish JCM with any further materials or
information which JCM may reasonably request to
enable it to perform its function under this
Agreement; and
(d) to compensate JCM for its services and reimburse JCM
for its expenses incurred hereunder in accordance
with the provisions hereof; and
[Small Cap Value Fund and Mid Cap Value Fund only: (e) to
compensate any subadviser engaged by JCM pursuant to the
authority granted in Section 1 hereof.]
5. Compensation. The Trust shall pay to JCM for its investment advisory
services a fee, calculated and payable for each day that this Agreement is in
effect, of 1/365 of [Small Cap Value Fund and Small Cap Value Fund II only:
0.75%] [Mid Cap Value Fund only: 0.65%] of the daily closing net asset value of
the Fund (1/366 of [Small Cap Value Fund and Small Cap Value Fund II only:
0.75%] [Mid Cap Value Fund only: 0.65%] of the daily closing net asset value of
the Fund in a leap year) [Small Cap Value Fund and Mid Cap Value Fund only:
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.]
6. Expenses Borne by JCM. In addition to the expenses which JCM may
incur in the performance of its investment advisory functions under this
Agreement, and the expenses which it may expressly undertake to incur and pay
under other agreements with the Trust or otherwise, JCM shall incur and pay the
following expenses relating to the Fund's operations without reimbursement from
the Fund:
(a) Reasonable compensation, fees and related expenses of
the Trust's officers and its Trustees, except for
such Trustees who are not interested persons of JCM;
and
(b) Rental of offices of the Trust.
A-2
[Small Cap Value Fund II only: (c) Fees of any subadviser
engaged by JCM pursuant to the authority granted in Section 1
hereof.]
7. Expenses Borne by the Trust. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCM pursuant to Sections 3 and 6
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not interested persons of JCM; compensation of the Fund's custodian,
transfer agent, registrar and dividend disbursing agent; legal, accounting,
audit and printing expenses; administrative, clerical, recordkeeping and
bookkeeping expenses; brokerage commissions and all other expenses in connection
with execution of portfolio transactions (including any appropriate commissions
paid to JCM or its affiliates for effecting exchange listed, over-the-counter or
other securities transactions); interest; all federal, state and local taxes
(including stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to purchasers thereof;
expenses of local representation in [Delaware/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 the membership of the Trust in any trade association
or other investment company organization.
8. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Fund acting
by vote of at least a majority of its outstanding voting securities, provided in
either case that sixty (60) days advance written notice of termination be given
to JCM at its principal place of business. This Agreement may be terminated by
JCM at any time, without penalty, by giving sixty (60) days advance written
notice of termination to the Trust, addressed to its principal place of
business. The Trust agrees that, consistent with the terms of the Trust
Instrument, the Trust shall cease to use the name "Janus" in connection with the
Fund as soon as reasonably practicable following any termination of this
Agreement if JCM does not continue to provide investment advice to the Fund
after such termination.
9. Assignment. This Agreement shall terminate automatically in the
event of any assignment of this Agreement.
10. Term. This Agreement shall continue in effect until July 1, 2004,
unless sooner terminated in accordance with its terms, shall continue in effect
from year to year thereafter only so long as such continuance is specifically
approved at least annually by the vote of a majority of the Trustees of the
Trust who are not parties hereto or interested persons of any such party, cast
in person at a meeting called for the purpose of voting on the approval of the
terms of such renewal, and by either the Trustees of the Trust or the
affirmative vote of a majority of the outstanding voting securities of the Fund.
The annual approvals provided for herein shall be effective to continue this
Agreement from year to year if given within a period beginning not more than
ninety (90) days prior to July 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 JCM and, if required
A-3
by applicable law, (ii) by the affirmative vote of a majority of the outstanding
voting securities of the Fund (as that phrase is defined in Section 2(a)(42) of
the 1940 Act).
12. Other Series. The Trustees shall determine the basis for making an
appropriate allocation of the Trust's expenses (other than those directly
attributable to the Fund) between the Fund and the other series of the Trust.
13. Limitation of Personal Liability. All the parties hereto
acknowledge and agree that all liabilities of the Trust arising, directly or
indirectly, under this Agreement, of any and every nature whatsoever, shall be
satisfied solely out of the assets of the Fund and that no Trustee, officer or
holder of shares of beneficial interest of the Trust shall be personally liable
for any of the foregoing liabilities. The Trust Instrument describes in detail
the respective responsibilities and limitations on liability of the Trustees,
officers and holders of shares of beneficial interest of the Trust.
14. Limitation of Liability of JCM. JCM shall not be liable for any
error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission taken with respect to the Trust, except
for willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and duties
hereunder and except to the extent otherwise provided by law. As used in this
Section 14, "JCM" shall include any affiliate of JCM performing services for the
Trust contemplated hereunder and directors, officers and employees of JCM and
such affiliates.
15. Activities of JCM. The services of JCM to the Trust hereunder are
not to be deemed to be exclusive, and JCM and its affiliates are free to render
services to other parties. It is understood that trustees, officers and
shareholders of the Trust are or may become interested in JCM as directors,
officers and shareholders of JCM, that directors, officers, employees and
shareholders of JCM are or may become similarly interested in the Trust, and
that JCM may become interested in the Trust as a shareholder or otherwise.
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 SEC 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.
A-4
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Investment Advisory Agreement as of the date and year
first above written.
JANUS CAPITAL MANAGEMENT LLC
By:
--------------------------------------
Thomas A. Early, Vice President
[NAME OF TRUST]
By:
--------------------------------------
A-5
EXHIBIT B
INFORMATION FOR OTHER
FUNDS WITH SIMILAR OBJECTIVES
<Table>
<Caption>
FUNDS ADVISED BY JANUS
----------------------
NET ASSETS AS OF
FUND OBJECTIVE FEE RATE 10/31/02
---- --------- -------- ----------------
Janus Special Situations Fund Seeks capital appreciation by investing 0.65% $ 614,345,133
primarily in common stocks believed to be
overlooked or undervalued by other investors.
Janus Strategic Value Fund Seeks long-term growth of capital by investing 0.65% $ 1,288,825,227
primarily in common stocks believed to be
undervalued relative to their intrinsic worth.
Janus Adviser Strategic Value Fund Seeks long-term growth of capital by investing 0.65%(1) $ 3,792,856
primarily in common stocks believed to be
undervalued relative to their intrinsic worth.
Janus Aspen Strategic Value Portfolio Seeks long-term growth of capital by investing 0.65%(1,2) $ 18,885,001
primarily in common stocks believed to be
undervalued relative to their intrinsic worth.
Janus Global Value Fund Seeks long-term growth of capital by investing 0.65% $ 149,944,263
primarily in common stocks of companies of any
size believed to be undervalued relative to
their intrinsic worth located throughout the
world.
</Table>
- ----------
(1) For Janus Adviser Strategic Value Fund and Janus Aspen Strategic Value
Portfolio, Janus was paid 0.00% in management fees (net of fee waivers) for the
period ending 9/30/02 based on each Fund's average net assets. Janus's fee
waivers exceeded its management fees for those Funds.
(2) Janus has agreed to reimburse the Portfolio by the amount, if any, that the
Portfolio's normal operating expenses in any fiscal year, including the
investment advisory fee but excluding brokerage commissions, interest, taxes and
extraordinary expenses, exceed an annual rate of 1.25% of the average net assets
of the Portfolio until at least the next annual renewal of the advisory
agreement. Mortality risk, expense risk and other charges imposed by
participating insurance companies are excluded from the above expense
limitation.
B-1
<Table>
<Caption>
FUNDS ADVISED BY JANUS
----------------------
NET ASSETS AS OF
FUND OBJECTIVE FEE RATE 10/31/02
---- --------- -------- ----------------
Janus Aspen Small Cap Value Portfolio Seeks capital appreciation by investing 0.75%(3) N/A(4)
primarily in the common stocks of small
companies whose stock prices are believed to be
undervalued.
Janus Adviser Mid Cap Value Fund Seeks capital appreciation by investing 0.65% N/A(4)
primarily in the common stocks of mid-sized
companies whose stock prices are believed to be
undervalued.
Janus Aspen Mid Cap Value Portfolio Seeks capital appreciation by investing 0.65%(5) N/A(4)
primarily investing in the common stocks of
mid-sized companies whose stock prices are
believed to be undervalued.
</Table>
- ----------
(3) Janus Capital has agreed to reimburse the Portfolio by the amount, if any,
that the Portfolio's normal operating expenses in any fiscal year, including the
investment advisory fee but excluding brokerage commissions, interest, taxes and
extraordinary expenses, exceed an annual rate of 1.35% of the average net assets
of the Portfolio until at least the next annual renewal of the advisory
agreement. Mortality risk, expense risk and other charges imposed by
participating insurance companies are excluded from the above expense
limitation.
(4) The Fund did not commence operations until December 31, 2002.
(5) Janus Capital has agreed to reimburse the Portfolio by the amount, if any,
that the Portfolio's normal operating expenses in any fiscal year, including the
investment advisory fee but excluding brokerage commissions, interest, taxes and
extraordinary expenses, exceed an annual rate of 1.25% of the average net assets
of the Portfolio until at least the next annual renewal of the advisory
agreement. Mortality risk, expense risk and other charges imposed by
participating insurance companies are excluded from the above expense
limitation.
B-2
<Table>
<Caption>
FUNDS SUBADVISED BY JANUS
-------------------------
NET ASSETS AS
FUND OBJECTIVE FEE RATE OF 9/30/02
---- --------- -------- -------------
PF Janus Strategic Value Fund Seeks long-term growth of capital by primarily 0.50% on first $250 $ 6,037,048
investing in common stocks whose stock prices million
are believed to be undervalued relative to 0.45% on next $500
their intrinsic worth. million
0.40% on next $750
million
0.35% over $1.5
billion(6)
Pacific Select Fund Strategic Value Portfolio Seeks long-term growth of capital by primarily 0.50% on first $250 $74,173,489
investing in domestic and foreign equity million
securities whose stock prices are believed to 0.45% on next $500
undervalued relative to their intrinsic worth. million
0.40% on next $750
million
0.35% over $1.5
billion(6)
</Table>
<Table>
<Caption>
FUNDS SUBADVISED BY BAY ISLE
----------------------------
NET ASSETS AS OF
FUND OBJECTIVE FEE RATE 9/30/02
---- --------- -------- ----------------
Berger Large Cap Value Fund Aims for capital appreciation by investing 0.75% on first $500 $6,096,000
primarily in the common stocks of large million
companies whose stock prices are believed to be
undervalued. 0.70% on next $500
million
0.65% over $1
billion
Janus Aspen Small Cap Value Portfolio Seeks capital appreciation by investing 0.75% N/A(4)
primarily in the common stocks of small
companies whose stock prices are believed to be
undervalued.
</Table>
- ----------
(6) Assets for the PF Janus Strategic Value Fund and the Pacific Select Fund
Strategic Value Portfolio are combined for fee calculation purposes. Fees
charged by Janus do not reflect the additional fees charged by the primary
investment adviser to the fund.
B-3
<Table>
<Caption>
FUNDS SUBADVISED BY PWM
-----------------------
NET ASSETS AS
FUND OBJECTIVE FEE RATE OF 9/30/02
---- --------- -------- -------------
CIGNA Small Cap Value/Berger Fund (formerly Seeks long-term capital appreciation by 0.25% $797,403,000
known as CIGNA Small Company Stock Value Fund) investing primarily in common stocks of small
U.S. companies whose stock prices are believed
to be undervalued.
Hartford Small Cap Value HLS Fund (formerly Seeks capital appreciation by investing 0.25% on first $50 $ 81,184,000
known as Fortis Series Fund) primarily in common stocks of small companies million and
whose stock prices are believed to be 0.225% over
undervalued. $50 million
Schwab Balanced MarketMasters Fund Seeks capital growth and income by investing 50% of the advisory $ 13,670,000
45% to 75% of its assets in stocks and other fee received by
equity securities and the rest in bonds and Berger
other debt investments.
SunAmerica Focused 2000 Value Portfolio Seeks long-term growth of capital through a 0.25% on first $50 $ 46,805,000
focused portfolio of no more than 60 stocks million and
that are similar to those comprising the 0.225% over $50
Russell 2000 Value Index. million
Janus Adviser Mid Cap Value Fund Seeks capital appreciation by investing 0.325%(7) N/A(4)
primarily in the common stocks of mid-sized
companies whose stock prices are believed to
be undervalued.
Janus Adviser Mid Cap Value Portfolio Seeks capital appreciation by investing 0.325%(7) N/A(4)
primarily in the common stocks of mid-sized
companies whose stock prices are believed to
be undervalued.
</Table>
- ----------
(7) PWM's fee is equal to 50% of the advisory fee Janus receives from the Fund
or Portfolio, as applicable (calculated after any fee waivers).
B-4
EXHIBIT C
FORM OF
NEW SUBADVISORY AGREEMENT
[NAME OF FUND]
(A SERIES OF [NAME OF TRUST])
This SUB-ADVISORY AGREEMENT (the "Agreement") is entered into effective
as of the ___ day of ___________ 200_, by and between JANUS CAPITAL MANAGEMENT
LLC, a Delaware limited liability company ("Janus") and [Name of Subadviser].
WHEREAS, Janus has entered into an Investment Advisory Agreement (the
"Advisory Agreement") with [Name of Trust], a [Delaware/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 [Name of 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, Subadviser 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 Subadviser to furnish investment
advisory services with respect to the Fund, and Subadviser 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 Subadviser. Janus hereby engages the services of
Subadviser as subadviser in furtherance of the Advisory Agreement. Subadviser
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) Subadviser 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 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 Fund as a regulated investment
company;
(b) Subadviser 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 Subadviser, and the investment considerations which have
given rise to those decisions;
C-1
(c) Subadviser shall maintain all books and records required
to be maintained by Subadviser 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. Subadviser 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) Subadviser 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) [New PWM and NEWCO Subadvisory Agreements only -
Subadviser 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;]
[New Bay Isle Subadvisory Agreement only - Subadviser shall, on behalf
of the Fund, exercise such voting rights, subscription rights, rights to consent
to corporate action and any other rights pertaining to the Fund's assets that
may be exercised, in accordance with any policy pertaining to the same that may
be adopted or agreed to by the Trustees of the Trust, or, in the event that the
Trust retains the right to exercise such voting and other rights, to furnish the
Trust with advice as may reasonably be requested as to the manner in which such
rights should be exercised;]
(f) At such times as shall be reasonably requested by the
Trustees or Janus, Subadviser shall provide the Trustees and Janus with
economic, operational and investment data and reports, including without
limitation all information and materials reasonably requested by or requested to
be delivered to the Trustees of the Trust pursuant to Section 15(c) of the 1940
Act, and shall make available to the Trustees and Janus any economic,
statistical and investment services normally available to similar investment
company clients of Subadviser; and
(g) Subadviser will provide to Janus for regulatory filings
and other appropriate uses materially accurate and complete information relating
to Subadviser as may be reasonably requested by Janus from time to time and,
notwithstanding anything herein to the contrary, Subadviser 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 Subadviser to Janus, provided, however, that Subadviser
shall not be liable to the extent that any Damages are based upon inaccuracies
or omissions made in reliance upon information furnished to Subadviser by Janus.
2. Further Obligations. In all matters relating to the performance of
this Agreement, Subadviser 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
C-2
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 Subadviser 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 Subadviser continuously and fully informed (or
cause the custodian of the Fund's assets to keep Subadviser 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 Subadviser with a certified copy of any
financial statement or report prepared for the Fund by certified or independent
public accountants and with copies of any financial statements or reports made
to the Fund's shareholders or to any governmental body or securities exchange;
(c) To furnish Subadviser with any further materials or
information which Subadviser may reasonably request to enable it to perform its
function under this Agreement; and
[New Bay Isle Subadvisory Agreement only: (d) To compensate
Subadviser for its services in accordance with the provisions of Section 4
hereof.]
4. Compensation. [New PWM and NEWCO Subadvisory Agreements only - For
Subadviser's services under this Agreement, the Fund shall pay to Subadviser a
fee equal to 50% of the advisory fee payable to Janus from the Fund (calculated
after any fee waivers).] [New Bay Isle Subadvisory Agreement only - Janus shall
pay to Subadviser for its services under this Agreement a fee, payable in United
States dollars, at an annual rate of 0.75% of the average daily net assets of
the Fund, provided, however, that such fee shall be net of any reimbursement of
expenses paid by Janus.] [Such/this] fee 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 [New PWM and NEWCO Subadvisory Agreements only - 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 the Agreement is effective.
5. Expenses. Subadviser shall pay all its own costs and expenses
incurred in rendering its service under this Agreement.
6. Representations of Subadviser. Subadviser hereby represents,
warrants and covenants to Janus as follows:
(a) Subadviser: (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
C-3
Subadviser 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 Subadviser that
could have a material adverse effect upon Subadviser's ability to fulfill its
obligations under this Agreement.
(b) Subadviser has adopted a written code of ethics complying
with the requirements of Rule 17j-1 under the 1940 Act and will provide Janus
with a copy of such code of ethics, together with evidence of its adoption.
Within 45 days after the end of the last calendar quarter of each year that this
Agreement is in effect, the president or a vice president of Subadviser shall
certify to Janus that Subadviser has complied with the requirements of Rule
17j-1 during the previous year and that there has been no violation of
Subadviser'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, Subadviser shall permit Janus, its employees or its agents to
examine the reports required to be made to Subadviser by Rule 17j-1(c)(1) and
all other records relevant to Subadviser's code of ethics.
(c) Subadviser 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) [New PWM and NEWCO Subadvisory Agreements only -
Subadviser will notify Janus of any change in the identity or control of its
shareholders owning a 10% or greater interest in Subadviser, or any change that
would constitute a change in control of Subadviser under the 1940 Act, prior to
any such change if Subadviser is aware, or should be aware, of any such change,
but in any event as soon as any such change becomes known to Subadviser.]
[New Bay Isle Subadvisory Agreement only - Representations of Janus.
Janus hereby represents, warrants and covenants to Subadviser as follows:
Janus (i) is registered as an investment adviser under the Advisers Act
and will continue to be so registered for so long as this Agreement remains in
effect; (ii) is not prohibited by the 1940 Act or the Advisers Act from
fulfilling its obligations under this Agreement; (iii) has met, and will
continue to meet for so long as this Agreement remains in effect, any other
applicable federal or state requirements, or the applicable requirements of any
regulatory or industry self-regulatory organization necessary to be met in order
to fulfill its obligations under this Agreement; (iv) has the legal and
corporate authority to enter into and perform this Agreement; and (v) will
immediately notify Subadviser of the occurrence of any event that would
disqualify Janus from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the 1940 Act or otherwise, and of the institution of
any administrative, regulatory or judicial proceeding against Janus that could
have a material adverse effect upon Janus' ability to fulfill its obligations
under this Agreement.
Janus has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and will provide Subadviser with a
copy of such code of ethics, together with evidence of its adoption.
Janus has provided Subadviser 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 Subadviser.]
7. Term. This Agreement shall become effective as of the date first set
forth above and shall continue in effect until July 1, 2004 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
C-4
least annually by the vote of a majority of the Trustees of the Trust who are
not parties hereto or interested persons of the Trust, Janus or Subadviser, cast
in person at a meeting called for the purpose of voting on the approval of the
terms of such renewal, and by either the Trustees of the Trust or the
affirmative vote of a majority of the outstanding voting securities of the Fund.
The annual approvals provided for herein shall be effective to continue this
Agreement from year to year if given within a period beginning not more than
ninety (90) days prior to July 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 60 days' advance written notice of termination be given to Subadviser at
its principal place of business. [NEWCO Subadvisory Agreements only - This
Agreement may also be terminated by Janus or the Trust: (i) by giving 60 days'
advance notice of termination to Subadviser;] [New PWM and NEWCO Subadvisory
Agreements only - (ii) upon a material breach by Subadviser 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 Subadviser becomes unable to discharge its duties and
obligations under this Agreement. This Agreement may be terminated by Subadviser
at any time, without penalty:] [New PWM Subadvisory Agreements only - (i) by
giving 60 days' advance written notice of termination to Janus and to the Trust;
or] [New PWM and NEWCO Subadvisory Agreements only - (ii) 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.] [NEWCO Subadvisory Agreement only - This Agreement may be
terminated by Subadviser after [date] upon three years' written notice.] [New
Bay Isle Subadvisory Agreement only - This Agreement may be terminated (i) by
Janus or by Subadviser at any time, without penalty by giving 60 days' advance
written notice of termination to the other party, or (ii) by Janus or the Trust
without advance notice if Subadviser becomes unable to discharge its duties and
obligations under this Agreement.] 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, Subadviser
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 Subadviser. Janus will not seek to hold
Subadviser, and Subadviser 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
C-5
obligations and duties hereunder and except to the extent otherwise provided by
law. As used in this section, "Subadviser" shall include any affiliate of
Subadviser performing services for the Fund contemplated hereunder and
directors, officers and employees of Subadviser and such affiliates.
13. Activities of Subadviser. The services of Subadviser hereunder are
not to be deemed to be exclusive, and Subadviser 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
Subadviser 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
Subadviser as directors, officers and shareholders of Subadviser, that
directors, officers, employees and shareholders of Subadviser are or may become
similarly interested in the Trust, and that Subadviser 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 Subadviser by Janus, the Trust or
the Fund shall not diminish or relieve in any way the liability of Subadviser
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
100 Fillmore Street
Denver, Colorado 80206
Attention: General Counsel
Phone: (303) 333-3863
Fax: (303) 316-5728
(b) To Subadviser at:
[Contact information]
(c) To the Trust at:
[Name of Trust]
210 University Boulevard
Denver, Colorado 80206
Attention: General 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,
C-6
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:
--------------------------------------
[SUBADVISER]
By:
--------------------------------------
[New PWM and NEWO Subadvisory Agreements
only -
ACKNOWLEDGMENT:
The undersigned acknowledges that it is
obligated to compensate Subadviser for
its services in accordance with the
provisions of Section 4 of this
Agreement.
[TRUST] on behalf of [Fund]
By: ]
-------------------------------------
C-7
EXHIBIT D
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN
BERGER INVESTMENT PORTFOLIO TRUST
(BERGER SMALL CAP VALUE FUND II - INSTITUTIONAL SHARES)
WHEREAS, Berger Investment Portfolio Trust (the "Trust") engages in
business as an open-end management investment company and is or will be
registered as such under the Investment Company Act of 1940, as amended (the
"Act");
WHEREAS, shares of beneficial interest of the Trust are divided into
multiple series including Berger Small Cap Value Fund II ("Fund"), which offers
a class of shares designated Institutional Shares;
NOW, THEREFORE, the Trust hereby adopts on behalf of the Fund with
respect to the Institutional Shares of the Fund, and Berger Financial Group LLC
hereby agrees to the terms of, the Plan, in accordance with Rule 12b-1 under the
Act on the following terms and conditions:
1. The Trust is authorized to pay out of the assets of the Fund a fee
at the rate of up to 0.25% on an annualized basis of the average daily net
assets of the Institutional Shares to Berger Financial Group LLC, provided that,
at any time such payment is made, whether or not this Plan continues in effect,
the making thereof will not cause the limitation upon such payments established
by this Plan to be exceeded. Such fee shall be calculated and accrued daily and
paid at such intervals as the Trustees shall determine, subject to any
applicable restriction imposed by rules of the National Association of
Securities Dealers, Inc.
2. The amount set forth in paragraph 1 of this Plan shall be paid for
any activities or expenses primarily intended to result in the sale of the
Institutional Shares, including, but not limited to, payment of compensation,
including incentive compensation, to securities dealers and other financial
institutions and organizations (collectively, the "Service Providers") to obtain
various distribution related and/or administrative services for the investors in
the Institutional Shares (including plan participants in the case of qualified
plans that invest in the Institutional Shares). These services may include, but
are not limited to the following functions: printing and delivering
prospectuses, statements of additional information, shareholder reports, proxy
statements and marketing materials related to the Institutional Shares to
prospective and existing investors; providing educational materials regarding
the Institutional Shares; providing facilities to answer questions from
prospective and existing investors about the Fund; receiving and answering
correspondence; complying with federal and state securities laws pertaining to
the sale of Institutional Shares; and assisting investors in completing
application forms and selecting dividend and other accounts options. The
principal underwriter is also authorized to engage directly in any activities
relating to the purposes of this Plan. In addition, this Plan hereby authorizes
payment by the Trust of the cost of preparing, printing and distributing
prospectuses and statements of additional information relating to the
Institutional Shares to prospective investors and of implementing and operating
the Plan. Payments under the Plan are not tied exclusively to actual
distribution and service expenses, and the payments may exceed distribution and
service expenses actually incurred.
3. This Plan shall not take effect until it, together with any related
agreements, has been approved by votes of a majority of both (a) the Trustees of
the Trust and (b) those Trustees of the Trust who are not "interested persons"
of the Trust (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or any agreements related to it
(the "Rule 12b-1 Trustees"), cast in person at a meeting (or meetings) called
for the purpose of voting on this Plan and such related agreements.
D-1
4. After approval as set forth in paragraph 3 and approval by holders
of Institutional Shares of the Fund as required by the Act, this Plan shall take
effect as of the date of execution. The Plan shall continue in full force and
effect as to the Institutional Shares of the Fund for so long as such
continuance is specifically approved at least annually in the manner provided
for approval of this Plan in paragraph 3.
5. Any person authorized to direct the disposition of monies paid or
payable by the Trust pursuant to this Plan, shall provide to the Trustees of the
Trust, and the Trustees shall review, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
6. This Plan may be terminated as to the Institutional Shares of the
Fund at any time, without payment of any penalty, by vote of the Trustees of the
Trust, by vote of a majority of the Rule 12b-1 Trustees, or by a vote of a
majority of the outstanding voting securities of the Institutional Shares of the
Fund.
7. This Plan may not be amended to increase materially the amount of
distribution fee provided for in paragraph 1 hereof unless such amendment is
approved by a vote of a majority of the outstanding voting securities (as
defined in the Act) of the Institutional Shares of the Fund and no material
amendment to the Plan shall be made unless approved in the manner provided for
approval and annual renewal in paragraph 3 hereof.
8. While this Plan is in effect, the selection and nomination of
Trustees who are not "interested persons" (as defined in the Act) of the Trust
shall be committed to the discretion of the Trustees who are not such interested
persons.
9. The Trust shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 5 hereof, for a period of
not less than six years from the date of this Plan, any such agreement or any
such report, as the case may be, the first two years in an easily accessible
place.
IN WITNESS WHEREOF, the Trust, on behalf of the Institutional Shares of
the Fund, and Berger Financial Group LLC have executed this Distribution and
Shareholder Servicing Plan as of the __ day of _____________, 200__.
BERGER INVESTMENT PORTFOLIO TRUST
By:
--------------------------------------
Name:
Title:
BERGER FINANCIAL GROUP LLC
By:
--------------------------------------
Name:
Title:
D-2
EXHIBIT E
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of [this 10th day of December, 2002], by and among [Name of Janus Trust], a
[Massachusetts business/Delaware statutory] trust, with its principal place of
business at 100 Fillmore Street, Denver, Colorado 80206-4923 (the "Acquiring
Trust"), with respect to [Name of Janus Fund], a newly created shell series of
the Acquiring Trust (the "Acquiring Fund"), and [Name of Berger Trust], a
[Massachusetts business/Delaware statutory] trust, with its principal place of
business at 210 University Boulevard, Denver, Colorado 80206 (the "Selling
Trust"), with respect to [Name of Berger Fund], a series of the Trust (the
"Selling Fund"), and Janus Capital Management LLC ("Janus"), the investment
adviser to the Acquiring Fund (for purposes of paragraph 9.1 of the Agreement
only).
The Selling Fund intends to change its identity through a
"reorganization" within the meaning of Section 368(a)(1)(F) of the United States
Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury
Regulations promulgated thereunder. The reorganization will consist of: (i)
[Berger Small Cap Value Fund and Berger Mid Cap Value Fund only: the transfer of
all of the assets of the Selling Fund in exchange for full and fractional
Investor and Institutional Shares of beneficial interest, $.01 par value per
share, of the Acquiring Fund ("Acquiring Fund Shares") to be issued by the
Acquiring Trust, having an aggregate number equal to the respective number of
Investor and Institutional Shares of the Selling Fund then outstanding, and
having an aggregate net asset value equal to the net asset value of the Selling
Fund;] [Berger Small Cap Value Fund II only: the transfer of all of the assets
of the Selling Fund in exchange for full and fractional Class I Shares of
beneficial interest, $.001 par value per share, of the Acquiring Fund
("Acquiring Fund Shares") to be issued by the Acquiring Trust, having an
aggregate net asset value equal to the total net asset value of Investor,
Institutional and Service Shares of the Selling Fund;] (ii) the assumption by
the Acquiring Fund of all of the liabilities of the Selling Fund; and (iii) the
distribution, after the Closing Date (as defined in paragraph 3.1) hereinafter
referred to, of the Acquiring Fund Shares to the shareholders of the Selling
Fund and the termination, dissolution and complete liquidation of the Selling
Fund as provided herein, all upon the terms and conditions set forth in this
Agreement (the "Reorganization").
WHEREAS, the Acquiring Fund and the Selling Fund are separate series of
the Acquiring Trust and Selling Trust, respectively, and the Acquiring Trust and
the Selling Trust are open-end, registered management investment companies and
the Selling Fund owns securities that generally are assets of the character in
which the Acquiring Fund is permitted to invest;
WHEREAS, the Acquiring Fund was established by the Acquiring Trust for
the purpose of acquiring the assets of the Selling Fund, and is authorized to
issue its shares of beneficial interest (although none have been issued) [Berger
Small Cap Value Fund II only: at an initial net asset value per share of
$10.00];
WHEREAS, the Trustees of the Acquiring Trust have determined that the
Reorganization, with respect to the Acquiring Fund, is in the best interests of
the Acquiring Fund;
WHEREAS, the Trustees of the Selling Trust have determined that the
Reorganization, with respect to the Selling Fund, is in the best interests of
the Selling Fund and that the interests of the existing shareholders of the
Selling Fund will not be diluted as a result of the Reorganization;
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NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
ARTICLE I
TRANSFER OF ASSETS OF THE SELLING FUND IN EXCHANGE FOR ACQUIRING FUND
SHARES AND THE ASSUMPTION OF THE SELLING FUND'S LIABILITIES AND
LIQUIDATION OF THE SELLING FUND
1.1 THE EXCHANGE. Subject to the terms and conditions contained herein
and on the basis of the representations and warranties contained herein, the
Selling Fund agrees to transfer all of its assets, as set forth in paragraph
1.2, to the Acquiring Fund. In exchange, the Acquiring Fund agrees: [Berger
Small Cap Value Fund and Berger Mid Cap Value Fund only: (i) to deliver to the
Selling Fund the number of full and fractional Acquiring Fund Shares equivalent
in number and in value to the Selling Fund shares outstanding immediately prior
to the closing (the "Closing") provided for in paragraph 3.1; and (ii) to assume
all of the liabilities of the Selling Fund. Such transactions shall take place
at the Closing.] [Berger Small Cap Value Fund II only: (i) to deliver to the
Selling Fund the number of full and fractional Acquiring Fund Shares, as set
forth in paragraphs 1.7 and 2.3; and (ii) to assume all of the liabilities of
the Selling Fund. Such transactions shall take place at the closing (the
"Closing") provided for in paragraph 3.1.]
1.2 ASSETS TO BE ACQUIRED. The assets of the Selling Fund to be
acquired by the Acquiring Fund shall consist of all property, including, without
limitation, all cash, securities, commodities, interests in futures and
dividends or interest receivables, owned by the Selling Fund and any deferred or
prepaid expenses shown as an asset on the books of the Selling Fund on the
Closing Date.
The Selling Fund has provided the Acquiring Fund with its most recent
audited financial statements, which contain a list of all of the Selling Fund's
assets as of the date of such statements. The Selling Fund hereby represents
that, as of the date of the execution of this Agreement, there have been no
changes in its financial position as reflected in such financial statements
other than those occurring in the ordinary course of business in connection with
the purchase and sale of securities, the issuance and redemption of Selling Fund
shares and the payment of normal operating expenses, dividends and capital gains
distributions.
1.3 LIABILITIES TO BE ASSUMED. The Acquiring Fund shall assume all of
the Selling Fund's liabilities, debts, obligations and duties of whatever kind
or nature, whether absolute, accrued, contingent or otherwise, whether or not
arising in the ordinary course of business, whether or not determinable at the
Closing Date and whether or not specifically referred to in this Agreement. The
Selling Fund's liabilities specifically include obligations to the independent
Trustees of the Selling Trust under any deferred compensation plan.
1.4 STATE FILINGS. Prior to the Closing Date, the Selling Trust shall
make any filings with the [Commonwealth of Massachusetts/State of Delaware] that
may be required under the laws of the [Commonwealth of Massachusetts/State of
Delaware], effective as of the Closing Date.
1.5 LIQUIDATION AND DISTRIBUTION. On or as soon after the Closing Date
as is conveniently practicable, but in no event later than 12 months after the
Closing Date (the "Liquidation Date"): (a) the Selling Fund will distribute in
complete liquidation of the Selling Fund, pro rata to its shareholders of
record, determined as of the close of business on the Valuation Date (as defined
in paragraph 2.1) (the "Selling Fund Shareholders"), all of the Acquiring Fund
Shares received by the Selling Fund pursuant to paragraph 1.1 [Berger Small Cap
Value Fund II only: in accordance with
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paragraph 1.7]; and (b) the Selling Fund will thereupon proceed to dissolve and
terminate as set forth in paragraph 1.9 below. Such distribution will be
accomplished by the transfer of Acquiring Fund Shares credited to the account of
the Selling Fund on the books of the Acquiring Fund to open accounts on the
share records of the Acquiring Fund in the name of the Selling Fund Shareholders
and representing the respective [Berger Small Cap Value Fund and Berger Mid Cap
Value Fund only: pro rata] number of Acquiring Fund Shares due such shareholders
[Berger Small Cap Value Fund II only: , as determined in paragraph 1.7.] The
Acquiring Fund shall assume the share records received from the Selling Fund are
valid, current and accurate and that such transfers to shareholders are valid,
proper and correct. All issued and outstanding shares of the Selling Fund will
simultaneously be canceled on the books of the Selling Fund. The Acquiring Fund
shall not issue certificates representing Acquiring Fund Shares in connection
with such transfer.
1.6 OWNERSHIP OF SHARES. Ownership of Acquiring Fund Shares will be
shown on the books of the Acquiring Fund's transfer agent [Berger Small Cap
Value Fund II only: and shares will be simultaneously issued to the Selling Fund
to be distributed to Selling Fund Shareholders]. [Berger Small Cap Value Fund
and Berger Mid Cap Value Fund only: Shares of the Acquiring Fund will be issued
simultaneously to the Selling Fund, in an amount equal in number and in value to
the aggregate net asset value of the Selling Fund's shares, to be distributed to
Selling Fund Shareholders. Shareholders of record of Investor Shares of the
Selling Fund will receive Investor Shares of the Acquiring Fund and shareholders
of Institutional Shares of the Selling Fund will receive Institutional Shares of
the Acquiring Fund.]
1.7 [Berger Small Cap Value Fund II only: DISTRIBUTION OF ACQUIRING
FUND SHARES. The total number of Acquiring Fund Shares issued to the Selling
Fund pursuant to paragraph 2.3 shall be allocated among the three classes of the
Selling Fund as follows: (i) with respect to the Institutional Share Class, that
portion of full and fractional Acquiring Fund Shares equal to the ratio of the
net asset value of all Institutional Shares of the Selling Fund outstanding
divided by the total net asset value of all Selling Fund Shares outstanding;
(ii) with respect to the Investor Share Class, that portion of full and
fractional Acquiring Fund Shares equal to the ratio of the net asset value of
all Investor Shares of the Selling Fund outstanding divided by the total net
asset value of all Selling Fund Shares outstanding; and (iii) with respect to
the Service Share Class, that portion of full and fractional Acquiring Fund
Shares equal to the ratio of the net asset value of all Service Shares of the
Selling Fund outstanding divided by the total net asset value of all Selling
Fund Shares outstanding.
The allocated Acquiring Fund Shares shall be distributed pro rata to
Selling Fund Shareholders on a per class basis. Each Selling Fund Shareholder
shall be entitled to the number of full and fractional Acquiring Fund Shares
allocated to the applicable class equal to the ratio of the number of Selling
Fund Shares of the applicable class held by such Shareholder, divided by the
number of Selling Fund Shares outstanding of such class.]
TRANSFER TAXES. Any transfer taxes payable upon the issuance of
Acquiring Fund Shares in a name other than the registered holder of the Selling
Fund shares on the books of the Selling Fund as of that time shall, as a
condition of such issuance and transfer, be paid by the person to whom such
Acquiring Fund Shares are to be issued and transferred.
1.8 REPORTING RESPONSIBILITY. Any reporting responsibility of the
Selling Fund, including, without limitation, the responsibility for filing of
regulatory reports, tax returns or other documents with the Securities and
Exchange Commission (the "Commission"), any state securities commission and any
federal, state or local tax authorities or any other relevant regulatory
authority, is and shall remain the responsibility of the Selling Fund.
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1.9 TERMINATION AND DISSOLUTION. The Selling Fund shall be terminated
and dissolved promptly following the Closing Date and the making of all
distributions pursuant to paragraph 1.5.
1.10 BOOKS AND RECORDS. All books and records of the Selling Fund,
including all books and records required to be maintained under the Investment
Company Act of 1940 (the "1940 Act") and the rules and regulations thereunder,
shall be available to the Acquiring Fund from and after the Closing Date and
shall be turned over to the Acquiring Fund as soon as practicable following the
Closing Date.
ARTICLE II
VALUATION
2.1 VALUATION OF ASSETS. The value of the Selling Fund's assets to be
acquired by the Acquiring Fund hereunder [Berger Small Cap Value Fund and Berger
Mid Cap Value Fund only: shall be the value of such assets] [Berger Small Cap
Value Fund II only: , and the net asset value per share of Institutional,
Investor and Service Class Shares of the Selling Fund, respectively, shall be
determined] as of the close of regular trading on the New York Stock Exchange
("NYSE") on the business day immediately prior to the Closing Date (such time
and date being hereinafter called the "Valuation Date"), using the valuation
procedures set forth in the trust instrument of the Selling Trust and the
Selling Fund's then-current prospectus and statement of additional information
or such other valuation procedures as shall be mutually agreed upon by the
parties.
2.2 VALUATION OF SHARES. [The Berger Small Cap Value Fund and Berger
Mid Cap Value Fund only: The net asset value per share of Acquiring Fund Shares
shall be the net asset value per share of the Selling Fund on the Valuation
Date, using the valuation procedures set forth in the Selling Trust's trust
instrument and the Selling Fund's then-current prospectus and statement of
additional information or such other valuation procedures as shall be mutually
agreed upon by the parties.] [Berger Small Cap Value Fund II only: On the
Closing Date, the net asset value per share of Acquiring Fund Shares shall be
$10.00.]
2.3 SHARES TO BE ISSUED. [Berger Small Cap Value Fund and Berger Mid
Cap Value Fund only: The number of Acquiring Fund Shares to be issued (including
fractional shares, if any) in exchange for the Selling Fund's assets shall be
equal to the number of Selling Fund shares outstanding on the Valuation Date.]
[Berger Small Cap Value Fund II only: The number of full and fractional
Acquiring Fund Shares to be issued in exchange for the Selling Fund's assets
shall be equal to the value of all the assets, less the amount of liabilities,
of the Selling Fund, using the valuation procedures referred to in paragraph
2.1, divided by the net asset value of an Acquiring Fund Share.]
2.4 DETERMINATION OF VALUE. All computations of value shall be made by
or under the direction of each Fund's respective accounting agent, if
applicable, in accordance with its regular practice and the requirements of the
1940 Act.
ARTICLE III
CLOSING AND THE CLOSING DATE
3.1 CLOSING DATE. The Closing shall occur on March 24, 2003, or such
other date(s) as the parties may agree to in writing (the "Closing Date").
Unless otherwise provided, all acts taking place at the Closing shall be deemed
to take place as of immediately after the close of regular trading on the
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Valuation Date. The Closing shall be held at the offices of Vedder, Price,
Kaufman & Kammholz, 222 North LaSalle Street, Chicago, Illinois 60601, or at
such other time and/or place as the parties may agree.
3.2 CUSTODIAN'S CERTIFICATE. The Selling Fund shall cause its
Custodian, State Street Bank and Trust Company (the "Custodian"), to deliver at
the Closing a certificate of an authorized officer stating that: (a) the Selling
Fund's portfolio securities, cash and any other assets have been delivered in
proper form to the Acquiring Fund on the Closing Date; and (b) all necessary
taxes including all applicable federal and state stock transfer stamps, if any,
have been paid, or provision for payment shall have been made, in conjunction
with the delivery of portfolio securities by the Selling Fund.
3.3 EFFECT OF SUSPENSION IN TRADING. In the event that, on the
Valuation Date, either: (a) the NYSE or another primary exchange on which the
portfolio securities of the Acquiring Fund or the Selling Fund are purchased or
sold shall be closed to trading or trading on such exchange shall be restricted;
or (b) trading or the reporting of trading on the NYSE or elsewhere shall be
disrupted so that accurate appraisal of the value of the net assets of the
Acquiring Fund or the Selling Fund is impracticable, the Valuation Date shall be
postponed until the first business day after the day when trading is fully
resumed and reporting is restored.
3.4 TRANSFER AGENT'S CERTIFICATE. The Selling Fund shall cause its
transfer agent, DST Systems, Inc., to deliver at the Closing a certificate of an
authorized officer stating that its records contain the names and addresses of
Selling Fund Shareholders as of the Closing Date, and the number [Berger Small
Cap Value Fund II only: , class] and percentage ownership of outstanding shares
owned by each such shareholder immediately prior to the Closing. The Acquiring
Fund shall issue and deliver or cause Janus Services LLC, its transfer agent, to
issue and deliver a confirmation evidencing Acquiring Fund Shares to be credited
on the Closing Date to the Secretary of the Selling Trust or provide evidence
satisfactory to the Selling Fund that the Acquiring Fund Shares have been
credited to the Selling Fund's account on the books of the Acquiring Fund. At
the Closing, each party shall deliver to the other such bills of sale, checks,
assignments, share certificates, receipts and other documents, if any, as such
other party or its counsel may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS OF THE SELLING FUND. The Selling Trust, on behalf
of the Selling Fund, represents and warrants to the Acquiring Trust, on behalf
of the Acquiring Fund, as follows:
(a) The Selling Fund is a legally designated, separate series
of a [business/statutory] trust that is duly organized, validly existing and in
good standing under laws of the [Commonwealth of Massachusetts/State of
Delaware].
(b) The Selling Trust is registered as an open-end management
investment company under the 1940 Act, and the Selling Trust's registration with
the Commission as an investment company under the 1940 Act is in full force and
effect.
(c) The current prospectus and statement of additional
information of the Selling Fund conform in all material respects to the
applicable requirements of the Securities Act of 1933 (the "1933 Act") and the
1940 Act and the rules and regulations thereunder and do not include any untrue
statement of a material fact or omit to state any material fact required to be
stated or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
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(d) The Selling Fund is not in violation of, and the
execution, delivery and performance of this Agreement (subject to shareholder
approval) will not result in the violation of, any provision of the Selling
Trust's trust instrument or bylaws or of any material agreement, indenture,
instrument, contract, lease or other undertaking to which the Selling Fund is a
party or by which it is bound.
(e) The Selling Fund has no material contracts or other
commitments (other than this Agreement) that will be terminated with liability
to it before the Closing Date, except for liabilities, if any, to be discharged
or reflected in the Statement of Assets and Liabilities as provided in paragraph
1.2 hereof.
(f) Except as otherwise disclosed in writing to and accepted
by the Acquiring Fund, no litigation, administrative proceeding or investigation
of or before any court or governmental body is presently pending or to its
knowledge threatened against the Selling Fund or any of its properties or assets
that, if adversely determined, would materially and adversely affect its
financial condition, the conduct of its business or the ability of the Selling
Fund to carry out the transactions contemplated by this Agreement. The Selling
Fund knows of no facts that might form the basis for the institution of such
proceedings and is not a party to or subject to the provisions of any order,
decree or judgment of any court or governmental body that materially and
adversely affects its business or its ability to consummate the transactions
contemplated herein.
(g) The financial statements of the Selling Fund as of
September 30, 2002 and for the fiscal year then ended have been prepared in
accordance with generally accepted accounting principles and have been audited
by independent auditors, and such statements (copies of which have been
furnished to the Acquiring Fund) fairly reflect the financial condition of the
Selling Fund as of September 30, 2002, and there are no known contingent
liabilities of the Selling Fund as of such date that are not disclosed in such
statements.
(h) Since the date of the financial statements referred to in
paragraph (g) above, there have been no material adverse changes in the Selling
Fund's financial condition, assets, liabilities or business (other than changes
occurring in the ordinary course of business), or any incurrence by the Selling
Fund of indebtedness maturing more than one year from the date such indebtedness
was incurred, except as otherwise disclosed to and accepted by the Acquiring
Fund. For the purposes of this paragraph (h), a decline in the net asset value
of the Selling Fund shall not constitute a material adverse change.
(i) All federal and other tax returns and reports of the
Selling Fund required by law to be filed have been filed, and all federal and
other taxes shown due on such returns and reports have been paid, or provision
shall have been made for the payment thereof. To the best of the Selling Fund's
knowledge, no such return is currently under audit, and no assessment has been
asserted with respect to such returns.
(j) All issued and outstanding shares of the Selling Fund are
duly and validly issued and outstanding, fully paid and nonassessable by the
Selling Fund. All of the issued and outstanding shares of the Selling Fund will,
at the time of the Closing Date, be held by the persons and in the amounts set
forth in the records of the Selling Fund's transfer agent as provided in
paragraph 3.4. The Selling Fund has no outstanding options, warrants or other
rights to subscribe for or purchase any of the Selling Fund shares and has no
outstanding securities convertible into any of the Selling Fund shares.
(k) At the Closing Date, the Selling Fund will have good and
marketable title to the Selling Fund's assets to be transferred to the Acquiring
Fund pursuant to paragraph 1.2 and full right,
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power and authority to sell, assign, transfer and deliver such assets hereunder,
free of any lien or other encumbrance, except those liens or encumbrances to
which the Acquiring Fund has received notice, and, upon delivery and payment for
such assets and the filing of any documents that may be required under
[Massachusetts/Delaware] state law, the Acquiring Fund will acquire good and
marketable title, subject to no restrictions on the full transfer of such
assets, other than such restrictions as might arise under the 1933 Act and other
than as disclosed to and accepted by the Acquiring Fund.
(l) The execution, delivery and performance of this Agreement
have been duly authorized by all necessary action on the part of the Selling
Fund. Subject to approval by the Selling Fund Shareholders, this Agreement
constitutes a valid and binding obligation of the Selling Fund, enforceable in
accordance with its terms, subject as to enforcement to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting creditors'
rights and to general equity principles.
(m) The information to be furnished by the Selling Fund for
use in no-action letters, applications for orders, registration statements,
proxy materials and other documents that may be necessary in connection with the
transactions contemplated herein shall be accurate and complete in all material
respects and shall comply in all material respects with federal securities and
other laws and regulations.
(n) From the time of the meeting of the Selling Fund
Shareholders and on the Closing Date, any written information furnished by the
Selling Trust with respect to the Selling Fund for use in the Proxy Materials
(as defined in paragraph 5.8) or any other materials provided in connection with
the Reorganization does not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated or
necessary to make the statements, in light of the circumstances under which such
statements were made, not misleading.
(o) The Selling Fund has elected to qualify and has qualified
as a "regulated investment company" under the Code (a "RIC") as of and since its
first taxable year; has been a RIC under the Code at all times since the end of
its first taxable year when it so qualified; and qualifies and will continue to
qualify as a RIC under the Code for its taxable year ending upon its
liquidation.
(p) No governmental consents, approvals, authorizations or
filings are required under the 1933 Act, the Securities Exchange Act of 1934
(the "1934 Act"), the 1940 Act or [Massachusetts/Delaware] state law for the
execution of this Agreement by the Selling Trust, for itself and on behalf of
the Selling Fund, except for the filing of any documents that may be required
under [Massachusetts/Delaware] law and except for such other consents,
approvals, authorizations and filings as have been made or received and such
consents, approvals, authorizations and filings as may be required subsequent to
the Closing Date, it being understood, however, that this Agreement and the
transactions contemplated herein must be approved by the shareholders of the
Selling Fund as described in paragraph 5.2.
4.2 REPRESENTATIONS OF THE ACQUIRING FUND. The Acquiring Trust, on
behalf of the Acquiring Fund, represents and warrants to the Selling Trust, on
behalf of the Selling Fund, as follows:
(a) The Acquiring Trust is registered as an open-end
management investment company under the 1940 Act, and the Acquiring Trust's
registration with the Commission as an investment company under the 1940 Act is
in full force and effect.
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(b) Before the Closing Date, the Acquiring Fund will be a duly
established and designated series of the Acquiring Trust, a [business/statutory
trust] that is duly organized, validly existing and in good standing under the
laws of the [Commonwealth of Massachusetts/State of Delaware], and will have
power to carry on its business as it is now being conducted and to carry out
this Agreement.
(c) The Acquiring Fund has not commenced operations and will
not do so until after the Closing.
(d) The Acquiring Fund is not in violation of, and the
execution, delivery and performance of this Agreement will not result in a
violation of, the Acquiring Trust's trust instrument or bylaws or of any
material agreement, indenture, instrument, contract, lease or other undertaking
to which the Acquiring Fund is a party or by which it is bound.
(e) Except as otherwise disclosed in writing to and accepted
by the Selling Fund, no litigation, administrative proceeding or investigation
of or before any court or governmental body is presently pending or to its
knowledge threatened against the Acquiring Fund or any of its properties or
assets which, if adversely determined, would materially and adversely affect its
financial condition, the conduct of its business or the ability of the Acquiring
Fund to carry out the transactions contemplated by this Agreement. The Acquiring
Fund knows of no facts that might form the basis for the institution of such
proceedings and it is not a party to or subject to the provisions of any order,
decree or judgment of any court or governmental body that materially and
adversely affects its business or its ability to consummate the transaction
contemplated herein.
(f) The execution, delivery and performance of this Agreement
have been duly authorized by all necessary action on the part of the Acquiring
Fund, and this Agreement constitutes a valid and binding obligation of the
Acquiring Fund, enforceable in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, reorganization, moratorium and other laws
relating to or affecting creditors' rights and to general equity principles.
(g) Acquiring Fund Shares to be issued and delivered to the
Selling Fund for the account of the Selling Fund Shareholders pursuant to the
terms of this Agreement will, at the Closing Date, have been duly authorized.
When so issued and delivered, such shares will be duly and validly issued
Acquiring Fund Shares and will be fully paid and nonassessable.
(h) The information to be furnished by the Acquiring Fund for
use in no-action letters, applications for orders, registration statements,
proxy materials and other documents that may be necessary in connection with the
transactions contemplated herein shall be accurate and complete in all material
respects and shall comply in all material respects with federal securities and
other laws and regulations.
(i) From the time of the meeting of the Selling Fund
Shareholders and on the Closing Date, any written information furnished by the
Acquiring Trust with respect to the Acquiring Fund for use in the Proxy
Materials (as defined in paragraph 5.8), or any other materials provided in
connection with the Reorganization, does not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated or necessary to make the statements, in light of the circumstances under
which such statements were made, not misleading.
(j) The Acquiring Fund will be a "fund" as defined in section
851(g)(2) of the Code and will meet all the requirements of Subchapter M for
qualification and treatment as a RIC for its taxable year that includes the
Closing Date and shall continue to qualify as a RIC under the Code.
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(k) No governmental consents, approvals, authorizations or
filings are required under the 1933 Act, the 1934 Act, the 1940 Act or
[Massachusetts/Delaware] state law for the execution of this Agreement by the
Acquiring Trust, for itself and on behalf of the Acquiring Fund, or the
performance of the Agreement by the Acquiring Trust, for itself and on behalf of
the Acquiring Fund, except for the filing of any documents that may be required
under [Massachusetts/Delaware] state law and such other consents, approvals,
authorizations and filings as have been made or received and except for such
consents, approvals, authorizations and filings as may be required subsequent to
the Closing Date.
(l) The Acquiring Fund agrees to use all reasonable efforts to
obtain the approvals and authorizations required by the 1933 Act, the 1940 Act
and any state blue sky or securities laws as it may deem appropriate in order to
continue its operations after the Closing Date.
ARTICLE V
COVENANTS OF THE ACQUIRING FUND AND THE SELLING FUND
5.1 OPERATION IN ORDINARY COURSE. Subject to paragraph 8.5, the Selling
Fund will operate its business in the ordinary course between the date of this
Agreement and the Closing Date, it being understood that such ordinary course of
business will include customary dividends and shareholder purchases and
redemptions. No party shall take any action that would, or reasonably would be
expected to, result in any of its representations and warranties set forth in
this Agreement being or becoming untrue in any material respect.
5.2 APPROVAL OF SHAREHOLDERS. The Selling Trust will call a special
meeting of Selling Fund Shareholders to consider and act upon this Agreement (or
transactions contemplated hereby) and to take all other appropriate action
necessary to obtain approval of the transactions contemplated herein.
5.3 INVESTMENT REPRESENTATION. The Selling Fund covenants that the
Acquiring Fund Shares to be issued pursuant to this Agreement are not being
acquired for the purpose of making any distribution, other than in connection
with the Reorganization and in accordance with the terms of this Agreement.
5.4 ACCESS TO BOOKS AND RECORDS. Upon reasonable notice, the Acquiring
Trust's officers and agents shall have reasonable access to the Selling Fund's
books and records necessary to maintain current knowledge of the Selling Fund
and to ensure that the representations and warranties made by the Selling Fund
are accurate.
5.5 ADDITIONAL INFORMATION. The Selling Fund will assist the Acquiring
Fund in obtaining such information as the Acquiring Fund reasonably requests
concerning the beneficial ownership of the Selling Fund's shares.
5.6 FURTHER ACTION. Subject to the provisions of this Agreement, the
Acquiring Fund and the Selling Fund will take or cause to be taken all action
and do or cause to be done all things reasonably necessary, proper or advisable
to consummate and make effective the transactions contemplated by this
Agreement, including any actions required to be taken after the Closing Date. In
particular, the Selling Fund covenants that it will, as and when reasonably
requested by the Acquiring Fund, execute and deliver or cause to be executed and
delivered all such assignments and other instruments and will take or cause to
be taken such further action as the Acquiring Fund may reasonably deem necessary
or desirable in order to vest in and confirm the Acquiring Fund's title to and
possession of all the assets and otherwise to carry out the intent and purpose
of this Agreement.
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5.7 STATEMENT OF EARNINGS AND PROFITS. As promptly as practicable, but
in any case within sixty (60) days after the Closing Date, the Selling Fund
shall furnish the Acquiring Fund, in such form as is reasonably satisfactory to
the Acquiring Fund, a statement of the earnings and profits of the Selling Fund
for federal income tax purposes that will be carried over by the Acquiring Fund
as a result of Section 381 of the Code, and which will be certified by the
Selling Trust's Treasurer.
5.8 PREPARATION OF PROXY STATEMENT. The Selling Fund will prepare a
proxy statement (the "Proxy Statement") on Schedule 14A of the 1934 Act relating
to the transactions contemplated by this Agreement. The Proxy Statement shall be
in compliance with the 1933 Act, the 1934 Act and the 1940 Act, as applicable.
Each party will provide the other party with the materials and information
necessary to prepare the Proxy Statement of the Selling Fund (the "Proxy
Materials"), for inclusion therein, in connection with the meeting of the
Selling Fund Shareholders to consider the approval of this Agreement and the
transactions contemplated herein.
5.9 LIABILITY INSURANCE. For the period beginning at the Closing Date
and ending not less than five years thereafter, the Acquiring Trust, its
successors or assigns shall provide, or cause to be provided, reasonable
liability insurance covering the actions of the former independent trustees of
the Selling Trust for the period they served as such. The Acquiring Trust shall
ensure that the members of the newly created advisory board are covered persons
under the current liability insurance policies of the Acquiring Trust for the
duration of the advisory board and shall use commercially reasonable efforts to
maintain such coverage for three years thereafter.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLING FUND
The obligations of the Selling Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquiring Fund of all the obligations to be performed by the Acquiring Fund
pursuant to this Agreement on or before the Closing Date and, in addition,
subject to the following conditions:
6.1 All representations, covenants and warranties of the Acquiring Fund
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and as of the Closing Date, with the same force and effect
as if made on and as of the Closing Date. The Acquiring Fund shall have
delivered to the Selling Fund a certificate executed in the Acquiring Fund's
name by the Acquiring Trust's President or Vice President and its Treasurer or
Assistant Treasurer, in form and substance satisfactory to the Selling Fund and
dated as of the Closing Date, to such effect and as to such other matters as the
Selling Fund shall reasonably request.
6.2 The Selling Fund shall have received on the Closing Date an opinion
of Vedder, Price, Kaufman & Kammholz, dated as of the Closing Date, in a form
reasonably satisfactory to the Selling Fund, covering the following points:
(a) The Acquiring Trust is a [business/statutory] trust
validly existing under the laws of the [Commonwealth of Massachusetts/State of
Delaware].
(b) This Agreement has been duly authorized, executed and
delivered by the Acquiring Trust on behalf of the Acquiring Fund and, assuming
due authorization, execution and delivery of this Agreement by the Selling
Trust, is a valid and binding obligation of the Acquiring Trust on behalf of the
Acquiring Fund enforceable against the Acquiring Fund in accordance with its
terms, subject as to
E-10
enforcement to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws relating to or affecting creditors' rights generally
and to general equity principles.
(c) The execution and delivery of this Agreement do not, and
the consummation of the transactions contemplated herein will not, result in a
violation of the Acquiring Trust's trust instrument or bylaws.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Selling Fund of all the obligations to be performed by the Selling Fund pursuant
to this Agreement on or before the Closing Date and, in addition, shall be
subject to the following conditions:
7.1 All representations, covenants and warranties of the Selling Fund
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and as of the Closing Date, with the same force and effect
as if made on and as of the Closing Date. The Selling Fund shall have delivered
to the Acquiring Fund on the Closing Date a certificate executed in the Selling
Fund's name by the Selling Trust's President or Vice President and the Treasurer
or Assistant Treasurer, in form and substance satisfactory to the Acquiring Fund
and dated as of the Closing Date, to such effect and as to such other matters as
the Acquiring Fund shall reasonably request.
7.2 The Selling Fund shall have delivered to the Acquiring Fund a
statement of the Selling Fund's assets and liabilities, together with a list of
the Selling Fund's portfolio securities showing the tax costs of such securities
by lot and the holding periods of such securities, as of the Closing Date,
certified by the Treasurer of the Selling Trust.
7.3 The Acquiring Fund shall have received on the Closing Date an
opinion of Vedder, Price, Kaufman & Kammholz, dated as of the Closing Date, in a
form reasonably satisfactory to the Acquiring Fund, covering the following
points:
(a) The Selling Trust is a [business/statutory] trust validly
existing under the laws of the [Commonwealth of Massachusetts/State of Delaware]
(b) This Agreement has been duly authorized, executed and
delivered by the Selling Trust on behalf of the Selling Fund and, assuming due
authorization, execution and delivery of this Agreement by the Acquiring Trust
on behalf of the Acquiring Fund, is a valid and binding obligation of the
Selling Trust on behalf of the Selling Fund enforceable against the Selling Fund
in accordance with its terms, subject as to enforcement to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other laws
relating to or affecting creditors' rights generally and to general equity
principles.
(c) The execution and delivery of this Agreement do not, and
the consummation of the transactions contemplated hereby will not, result in a
violation of the Selling Trust's trust instrument (assuming shareholder approval
has been obtained) or bylaws.
E-11
ARTICLE VIII
FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
AND SELLING FUND
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Selling Fund or the Acquiring Fund, the other
party to this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement:
8.1 This Agreement and the transactions contemplated herein, with
respect to the Selling Fund, shall have been approved by the requisite vote of
the holders of the outstanding shares of the Selling Fund in accordance with the
provisions of the Selling Trust's trust instrument and bylaws, applicable
[Massachusetts/Delaware] state law and the 1940 Act. Certified copies of the
resolutions evidencing such approval shall have been delivered to the Acquiring
Fund. Notwithstanding anything herein to the contrary, neither the Acquiring
Fund nor the Selling Fund may waive the conditions set forth in this paragraph
8.1.
8.2 The Acquiring Trust, on behalf of and with respect to the Acquiring
Fund, shall have entered into or adopted any and all agreements necessary for
the Acquiring Fund's operation as a series of an open-end investment company.
8.3 Before the Closing, the shareholders of the Selling Trust shall
have elected a new board of Trustees, as specified in the Proxy Statement, to
take office immediately prior to the Closing and will serve until the Closing of
the Reorganization.
8.4 Immediately upon delivery to the Selling Fund of the Acquiring Fund
Shares, the individual Trustees of the Selling Fund or any officer duly
authorized by them, on the Acquiring Fund's behalf as the then sole shareholder
of the Acquiring Fund, shall have voted for the following as approved by Selling
Fund Shareholders: (i) ratification as Trustees of the Acquiring Trust the
persons who currently serve as Trustees of the Selling Trust; (ii) an investment
advisory agreement with Janus; (iii) a sub-advisory agreement between Janus and
[Berger Small Cap Value Fund and Berger Mid Cap Value Fund only: Perkins, Wolf,
McDonnell and Company and a new sub-advisory agreement between Janus and a newly
formed subsidiary of Perkins, Wolf, McDonnell and Company] [Berger Small Cap
Value Fund II only: Bay Isle Financial LLC; (iv) a Distribution and Shareholder
Servicing Plan under Rule 12b-1 under the 1940 Act]; and (iv) the adoption of
revised fundamental policies as described in the Proxy Statement distributed in
connection with the special meeting of Selling Fund Shareholders.
8.5 All required consents of other parties and all other consents,
orders and permits of federal, state and local regulatory authorities (including
those of the Commission and of state securities authorities, including any
necessary "no-action" positions and exemptive orders from such federal
authorities) to permit consummation of the transactions contemplated herein
shall have been obtained, except where failure to obtain any such consent, order
or permit would not involve a risk of a material adverse effect on the assets or
properties of the Acquiring Fund or the Selling Fund, provided that either party
hereto may waive any such conditions for itself.
8.6 The post-effective amendment to the Acquiring Trust's Registration
Statement on Form N-1A relating to the Acquiring Fund under the 1933 Act and the
1940 Act, as applicable, shall have become effective, and any additional
post-effective amendments to such Registration Statement as are determined by
the Trustees of the Acquiring Trust to be necessary and appropriate shall have
been filed with the Commission and shall have become effective. To the best
knowledge of the parties to this
E-12
Agreement, no investigation or proceeding for that purpose shall have been
instituted or be pending, threatened or contemplated under the 1933 Act.
8.7 The parties shall have received an opinion of Vedder, Price,
Kaufman & Kammholz addressed to the Acquiring Fund and the Selling Fund
substantially to the effect that, based on certain facts, assumptions and
representations of the parties, for federal income tax purposes:
(a) the transfer of all of the Selling Fund's assets in
exchange for Acquiring Fund Shares and the assumption by the Acquiring Fund of
all of the liabilities of the Selling Fund (followed by the distribution of
Acquiring Fund Shares to the Selling Fund Shareholders in dissolution and
liquidation of the Selling Fund) will constitute a "reorganization" within the
meaning of Section 368(a)(1) of the Code and the Acquiring Fund and the Selling
Fund will each be a "party to a reorganization" within the meaning of Section
368(b) of the Code;
(b) no gain or loss will be recognized by the Acquiring Fund
upon the receipt of the assets of the Selling Fund solely in exchange for
Acquiring Fund Shares and the assumption by the Acquiring Fund of all of the
liabilities of the Selling Fund;
(c) no gain or loss will be recognized by the Selling Fund
upon the transfer of the Selling Fund's assets to the Acquiring Fund solely in
exchange for Acquiring Fund Shares and the assumption by the Acquiring Fund of
all of the liabilities of the Selling Fund or upon the distribution (whether
actual or constructive) of Acquiring Fund Shares to the Selling Fund
Shareholders in exchange for such shareholders' shares of the Selling Fund;
(d) no gain or loss will be recognized by the Selling Fund
Shareholders upon the exchange of their Selling Fund shares for Acquiring Fund
Shares in the Reorganization;
(e) the aggregate tax basis of Acquiring Fund Shares received
by each Selling Fund Shareholder pursuant to the Reorganization will be the same
as the aggregate tax basis of the Selling Fund shares exchanged therefor by such
shareholder. The holding period of Acquiring Fund Shares to be received by the
Selling Fund Shareholder will include the period during which the Selling Fund
shares exchanged therefor were held by such shareholder, provided the Selling
Fund shares are held as capital assets at the time of the Reorganization; and
(f) the tax basis of the Selling Fund's assets acquired by the
Acquiring Fund will be the same as the tax basis of such assets to the Selling
Fund immediately before the Reorganization. The holding period of the assets of
the Selling Fund in the hands of the Acquiring Fund will include the period
during which those assets were held by the Selling Fund.
Such opinion shall be based on customary assumptions and such
representations as Vedder, Price, Kaufman & Kammholz may reasonably request, and
the Selling Fund and Acquiring Fund will cooperate to make and certify the
accuracy of such representations. Notwithstanding anything herein to the
contrary, neither the Acquiring Fund nor the Selling Fund may waive the
condition set forth in this paragraph 8.7.
8.8 The Acquiring Trust's Trustees shall have approved the
establishment of an advisory board comprised of at least four of the former
independent Trustees of the Selling Trust.
E-13
ARTICLE IX
EXPENSES
9.1 Janus will pay reasonable expenses associated with the Acquiring
Fund's and the Selling Fund's participation in the Reorganization, including but
not limited to: (a) expenses associated with the preparation and filing of the
Proxy Materials; (b) postage; (c) printing; (d) accounting fees; (e) legal fees
incurred by each Fund (including fees of counsel to, and independent consultants
retained by, the independent Trustees); (f) solicitation costs of the
transaction; (g) fees payable to the independent Trustees for participation in
any special meetings related to the Reorganization; and (h) other related
administrative or operational costs, including the cost (if any) of continuation
of directors' and officers'/errors and omissions insurance for the independent
Trustees of the Selling Trust and obtaining directors' and officers'/errors and
omissions insurance for the advisory board contemplated by paragraph 8.8.
9.2 The Acquiring Trust and the Selling Trust, on behalf of the
Acquiring Fund and the Selling Fund, respectively, represent and warrant that
they have no obligations to pay any brokers' or finders' fees in connection with
the transactions provided for herein.
ARTICLE X
ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Acquiring Trust, on behalf of the Acquiring Fund, and the
Selling Trust, on behalf of the Selling Fund, agree that neither party has made
to the other party any representation, warranty and/or covenant not set forth
herein and that this Agreement constitutes the entire agreement between the
parties.
10.2 Except as specified in the next sentence set forth in this
paragraph 10.2, the representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant to or in connection with this
Agreement shall not survive the consummation of the transactions contemplated
hereunder. The covenants to be performed after the Closing Date and the
obligations of the Acquiring Fund in paragraph 5.6 shall continue in effect
beyond the consummation of the transactions contemplated hereunder.
ARTICLE XI
TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the
Acquiring Trust and the Selling Trust. In addition, either Acquiring Trust or
the Selling Trust may at its option terminate this Agreement with respect to the
Reorganization at or before the Closing Date due to:
(a) a breach by the other of any representation, warranty or
agreement contained herein to be performed at or before the Closing Date, if not
cured within 30 days; or
(b) a condition herein expressed to be precedent to the
obligations of the terminating party that has not been met if it reasonably
appears that it will not or cannot be met.
11.2 In the event of any such termination, in the absence of willful
default, there shall be no liability for damages on the part of either the
Acquiring Fund, the Selling Fund, the Acquiring Trust or
E-14
the Selling Trust, or their respective Trustees or officers, to the other party
or its Trustees or officers. In the event of willful default, all remedies at
law or in equity of the party adversely affected shall survive.
ARTICLE XII
AMENDMENTS
12.1 This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the officers of the
Acquiring Trust and the Selling Trust as specifically authorized by their
respective Board of Trustees; provided, however, that, following the meeting of
the Selling Fund Shareholders called by the Selling Fund pursuant to paragraph
5.2 of this Agreement, no such amendment may have the effect of changing the
provisions for determining the number of Acquiring Fund Shares to be issued to
the Selling Fund Shareholders under this Agreement to the detriment of such
Shareholders without their further approval.
ARTICLE XIII
HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT;
LIMITATION OF LIABILITY
13.1 The article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13.2 This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
13.3 This Agreement shall be governed by and construed in accordance
with the laws of the [Commonwealth of Massachusetts/State of Delaware].
13.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but, except as provided in
this paragraph, no assignment or transfer hereof or of any rights or obligations
hereunder shall be made by any party without the written consent of the other
party. Nothing herein expressed or implied is intended or shall be construed to
confer upon or give any person, firm or corporation, other than the parties
hereto and their respective successors and assigns, any rights or remedies under
or by reason of this Agreement.
13.5 It is expressly agreed that the obligations of the Acquiring Fund
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents or employees of the Acquiring Trust personally, but shall bind
only the trust property of the Acquiring Fund, as provided in the trust
instrument of the Acquiring Trust. Moreover, no series of the Acquiring Trust
other than the Acquiring Fund shall be responsible for the obligations of the
Acquiring Trust hereunder, and all persons shall look only to the assets of the
Acquiring Fund to satisfy the obligations of the Acquiring Fund hereunder. The
execution and delivery of this Agreement have been authorized by the Trustees of
the Acquiring Trust on behalf of the Acquiring Fund and signed by authorized
officers of the Acquiring Trust, acting as such. Neither the authorization by
such Trustees nor the execution and delivery by such officers shall be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the trust property of the Acquiring Fund as
provided in the trust instrument of the Acquiring Trust.
13.6 It is expressly agreed that the obligations of the Selling Fund
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents or employees of the Selling
E-15
Trust personally, but shall bind only the trust property of the Selling Fund, as
provided in the trust instrument of the Selling Trust. Moreover, no series of
the Selling Trust other than the Selling Fund shall be responsible for the
obligations of the Selling Trust hereunder, and all persons shall look only to
the assets of the Selling Fund to satisfy the obligations of the Selling Fund
hereunder. The execution and delivery of this Agreement have been authorized by
the Trustees of the Selling Trust on behalf of the Selling Fund and signed by
authorized officers of the Selling Trust, acting as such. Neither the
authorization by such Trustees nor the execution and delivery by such officers
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of
the Selling Fund as provided in the trust instrument of the Selling Trust.
ARTICLE XIV
NOTICES
14.1 Any notice, report, statement or demand required or permitted by
any provisions of this Agreement shall be in writing and shall be deemed duly
given if delivered by hand (including by FedEx or similar express courier) or
transmitted by facsimile or three days after being mailed by prepaid registered
or certified mail, return receipt requested, addressed to the Selling Trust, 210
University Boulevard, Denver, Colorado 80206, Attention: General Counsel, or to
the Acquiring Trust, 100 Fillmore Street, Denver, Colorado 80206, Attention:
General Counsel, or to any other address that the Selling Trust or the Acquiring
Trust shall have last designated by notice to the other party.
E-16
IN WITNESS WHEREOF, the parties have duly executed this Agreement, all
as of the date first written above.
[NAME OF JANUS TRUST]
By:
--------------------------------------
Name:
Title: President
ACKNOWLEDGED:
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
[NAME OF BERGER TRUST]
By:
--------------------------------------
Name:
Title: President
ACKNOWLEDGED:
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
The Undersigned is a party to this
Agreement for the purposes of
paragraph 9.1 only:
JANUS CAPITAL MANAGEMENT LLC
By:
---------------------------------
Name:
Title:
ACKNOWLEDGED:
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
E-17
APPENDIX 1
DIRECTORS AND OFFICERS OF JANUS
Mark Bradley Whiston, 100 Fillmore Street, Denver, Colorado 80206.
Chief Executive Officer and President, Janus Capital Management LLC and Janus
Capital Group Inc.
Loren Michael Starr, 100 Fillmore Street, Denver, Colorado 80206.
Interim Director, Vice President and Chief Financial Officer, Janus Capital
Management LLC. Vice President and Chief Financial Officer, Janus Capital Group
Inc.
Thomas Alan Early, 100 Fillmore Street, Denver, Colorado 80206. Interim
Director, Chief Corporate Affairs Officer, Vice President and General Counsel,
Janus Capital Management LLC. Chief Corporate Affairs Officer, Vice President
and General Counsel, Janus Capital Group Inc.
DIRECTORS OF JANUS GROUP
Mark Bradley Whiston, 100 Fillmore Street, Denver, Colorado 80206.
Chief Executive Officer and President, Janus Capital Management LLC and Janus
Capital Group Inc.
Helen Young Hayes, 100 Fillmore Street, Denver, Colorado 80206.
Managing Director of Investments, Janus Capital Management LLC.
James P. Craig, III, 100 Fillmore Street, Denver, Colorado 80206.
Principal, Opportunity Capital (charitable trust foundation).
Landon H. Rowland, 100 Fillmore Street, Denver, Colorado 80206.
Chairman of the Board, Janus Capital Group Inc. Director, Kansas City Southern
Industries.
Paul F. Basler, 100 Fillmore Street, Denver, Colorado 80206. Partner,
Ironwood Partners, LLC, and Generation Partners, L.P. (investment firms).
Director, Tweedy, Browne Fund Inc. and Carbide/Graphite Group, Inc.
James E. Barnes, 100 Fillmore Street, Denver, Colorado 80206. Retired.
Director, SBC Communications Inc. and Parker Drilling Co.
Andrew Cox, 100 Fillmore Street, Denver, Colorado 80206. Adjunct
professor, Daniels College of Business, University of Denver.
Steven L. Scheid, 100 Fillmore Street, Denver, Colorado 80206X. Former
Vice Chairman, The Charles Schwab Corporation and former President, Schwab
Retail Group.
Robert Skidelsky, 100 Fillmore Street, Denver, Colorado 80206.
Chairman, The Social Market Foundation, London, England. Chair of Political
Economy, Warwick University, Coventry, England. Member, United Kingdom
Parliament's House of Lords.
APPENDIX 2
FEES PAID TO BERGER, BERGER DISTRIBUTORS LLC AND DST
<Table>
<Caption>
AGGREGATE FEE TO
AGGREGATE 12B-1 FEE(2) BERGER DISTRIBUTORS
FUND FISCAL YEAR ADMINISTRATIVE FEE(1) TO BERGER LLC(3) AGGREGATE FEE TO DST(4)
---- ----------- --------------------- ---------------------- ------------------- -----------------------
Berger Small Cap 09/30/02 $0 $4,149,000 $50,000 $1,630,000
Value Fund
Berger Small Cap 09/30/02 $0 $ 5,000 $ 1,000 $ 10,000
Value Fund II
Berger Mid Cap 09/30/02 $0 $1,412,000 $22,000 $ 577,000
Value Fund
</Table>
- ----------
(1) Berger, 210 University Boulevard, Denver, Colorado 80206, performs certain
administrative services for each Fund not otherwise performed by the Fund's
custodian and recordkeeper. Although Berger does not charge an administrative
fee to the Funds pursuant to their Administrative Services Agreements, Berger
may be reimbursed for the expenses incurred in providing such services pursuant
to the Current Advisory Agreements.
(2) Pursuant to 12b-1 plans adopted by each Fund for its Investor Shares and by
the Berger Small Cap Value Fund II for its Service Shares, Berger receives a
12b-1 fee of 0.25% of the average daily net assets of the Investor Shares or
Services Shares class, as the case may be, to finance activities primarily
intended to result in the sale of those shares. In addition, the Service Shares
class of the Berger Small Cap Value Fund II pays Berger a shareholder service
fee of 0.25% of the average daily net assets of the Service Shares class for
providing shareholder and other administrative services. Berger waives the 12b-1
fee to the extent such fee is not paid to a third-party intermediary.
(3) Berger Distributors LLC, 210 University Boulevard, Denver, Colorado 80206,
an affiliate of Berger, is the principal underwriter and distributor of each
Fund's shares. Berger Distributors LLC also performs certain shareholder
servicing on behalf of each Fund for which it receives a fee from the Fund based
on certain service levels and is reimbursed for reasonable out-of-pocket
expenses.
(4) DST Systems, Inc. ("DST"), P.O. Box 219958, Kansas City, Missouri 64121,
serves as each Fund's transfer agent and dividend-disbursing agent. Janus Group
owns approximately 33% of the outstanding shares of DST and, therefore, DST may
be considered an affiliate of both Berger and Janus.
APPENDIX 3
DATES RELATING TO INVESTMENT
ADVISORY AND SUBADVISORY AGREEMENTS
<Table>
<Caption>
DATE OF CURRENT AGREEMENT CURRENT AGREEMENT
CURRENT LAST APPROVED BY LAST APPROVED BY REASON SUBMITTED TO
FUND AGREEMENT AGREEMENT TRUSTEES SHAREHOLDERS SHAREHOLDERS
---- --------- --------- ----------------- ----------------- -------------------
Berger Small Cap Value Investment Advisory February 1, 1997 March 8, 2002 February 14, 1997 In connection with the
Fund Agreement with Berger as amended reorganization of the
Financial Group LLC October 1, 1999 Fund into the Berger
Funds family
Subadvisory Agreement February 1, 1997 March 8, 2002 February 14, 1997 In connection with the
with Perkins, Wolf, as amended reorganization of the
McDonnell and Company November 17, Fund into the Berger
1999 Funds family
Berger Small Cap Value Investment Advisory March 28, 2002 March 7, 2002 March 28, 2002 Approval by initial
Fund II Agreement with Berger shareholder
Financial Group LLC
Subadvisory Agreement March 28, 2002 March 7, 2002 March 28, 2002 Approval by initial
with Bay Isle shareholder
Financial LLC
Berger Mid Cap Value Investment Advisory July 7, 1998 as March 8, 2002 March 7, 1998 Approval by initial
Fund Agreement with Berger amended, October shareholder
Financial Group LLC October 1, 1999
and May 17,
2000
Subadvisory Agreement July 7, 1998 as March 8, 2002 March 7, 1998 Approval by initial
with PWM, Wolf, amended shareholder
McDonnell and Company March 17, 2000
</Table>
APPENDIX 4
BENEFICIAL OWNERS OF 5%
OR MORE OF FUND SHARES
AS OF DECEMBER 31, 2002
[WILL NEED TO BE UPDATED]
<Table>
<Caption>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENTAGE
FUND NAME BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF FUND
--------- ------------------- -------------------- ----------
Berger Small Cap Value Fund - Charles Schwab & Co. Inc. 6,846,154.55 10.64%
Investor Shares Reinvest Account Beneficial
101 Montgomery Street
San Francisco, CA 94104
National Financial Services 14,303,454.53 22.23%
Corporation Beneficial
For the Exclusive Benefit of
Customers
200 Liberty St., Fl. 5
New York, NY 10281-5500
Merrill Lynch Pierce Fenner & 7,345,693.97 11.42%
Smith Inc. Beneficial
For the Sole Benefit of
Customers
4800 Deer Lake Drive East
Jacksonville, FL 32246
Northern Trust Co. 3,841,441.95 5.97%
FBO Triad Hospitals Inc. Beneficial
P.O. Box 92956
Chicago, IL 60675-2956
Berger Small Cap Value Fund - Charles Schwab & Co. Inc. 6,789,429.62 12.43%
Institutional Shares Reinvest Account Beneficial
101 Montgomery Street
San Francisco, CA 94104
National Financial Services 5,550,413.30 10.16%
Corporation Beneficial
For the Exclusive Benefit of
Customers
200 Liberty St., Fl. 5
New York, NY 10281-5500
State Street Bank & Trust Co. 7,024,466.15 12.86%
Customers Beneficial
FBO Super Saver 401(k) for
Empl. of Part. Amr. Corp.
15 Rosemont Road
Westwood, MA 02090-2329
Berger Small Cap Value Fund II - Charles Schwab & Co. Inc. 95,575.92 14.66%
Investor Shares Reinvest Account Beneficial
101 Montgomery Street
San Francisco, CA 94104
</Table>
<Table>
<Caption>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENTAGE
FUND NAME BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF FUND
--------- ------------------- -------------------- ----------
National Financial Services 57,624.08 8.84%
Corporation Beneficial
For the Exclusive Benefit of
Customers
200 Liberty St., Fl. 5
New York, NY 10281-5500
Berger Small Cap Value Fund II - Charles Schwab & Co. Inc. 119,148.94 52.28%
Institutional Shares Reinvest Account Beneficial
101 Montgomery Street
San Francisco, CA 94104
Berger Financial Group LLC 99,000.00 43.44%
210 University Blvd. Record
Denver, CO 80206-4616
Berger Small Cap Value Fund II - National Financial Services 36,433.12 83.86%
Service Shares Corporation Beneficial
For the Exclusive Benefit of
Customers
200 Liberty St., Fl. 5
New York, NY 10281-5500
I. Makino & M. Govier & G. 6,504.04 14.97%
Bornmann Tr. Beneficial
FBO Musashi Auto Parts
Associates
Retirement Savings Plan
195 Brydges Dr.
Battle Creek, MI 49015-1040
Berger Mid Cap Value Fund - Charles Schwab & Co. Inc. 22,961,672.92 38.35%
Investor Shares Reinvest Account Beneficial
101 Montgomery Street
San Francisco, CA 94104
National Financial Services 7,920,439.64 13.23%
Corporation Beneficial
For the Exclusive Benefit of
Customers
200 Liberty St., Fl. 5
New York, NY 10281-5500
Merrill Lynch Pierce Fenner & 3,397,416.74 5.67%
Smith Inc. Beneficial
For the Sole Benefit of
Customers
4800 Deer Lake Drive East
Jacksonville, FL 32246
Berger Mid Cap Value Fund - Charles Schwab & Co. Inc. 8,807,490.16 92.28%
Institutional Shares Reinvest Account Beneficial
101 Montgomery Street
San Francisco, CA 94104
</Table>
Appendix 4-2
APPENDIX 5
FUND SHARES OWNED BY
TRUSTEES, OFFICERS AND NOMINEES
<Table>
<Caption>
NAME OF TRUSTEE BERGER SMALL CAP VALUE BERGER SMALL CAP VALUE
OR NOMINEE FUND FUND II BERGER MID CAP VALUE FUND
--------------- ---------------------- ---------------------- -------------------------
SHARES SHARES SHARES
OWNED PERCENTAGE OWNED PERCENTAGE OWNED PERCENTAGE
------ ---------- ------ ---------- ------ ----------
Michael Owen
Dennis Baldwin
Katherine A. Cattanach
Paul R. Knapp
Harry T. Lewis, Jr.
William Sinclaire
Albert C. Yates
Jack R. Thompson
Trustees and Officers as
a Group
Thomas H. Bailey
William F. McCalpin 0 0% 0 0% 0 0%
John W. McCarter, Jr. 0 0% 0 0% 0 0%
Dennis B. Mullen 0 0% 0 0% 0 0%
James T. Rothe 0 0% 0 0% 0 0%
William D. Stewart 0 0% 0 0% 0 0%
Martin H. Waldinger 0 0% 0 0% 0 0%
</Table>
DOLLAR RANGE OF VALUE OF
FUND SHARES OWNED BY
TRUSTEES AND NOMINEES
<Table>
<Caption>
ALL FUNDS
OVERSEEN OR TO BE
OVERSEEN IN
NAME OF TRUSTEE BERGER SMALL CAP BERGER SMALL CAP BERGER MID CAP BERGER FUND
OR NOMINEE VALUE FUND VALUE FUND II VALUE FUND COMPLEX
--------------- ---------------- ---------------- -------------- -----------------
Michael Owen
Dennis Baldwin
Katherine A. Cattanach
Paul R. Knapp
Harry T. Lewis, Jr.
William Sinclaire
Albert C. Yates
Jack R. Thompson
Thomas H. Bailey
William F. McCalpin None None None None
John W. McCarter, Jr. None None None None
Dennis B. Mullen None None None None
James T. Rothe None None None None
William D. Stewart None None None None
Martin H. Waldinger None None None None
</Table>
5-2
APPENDIX 6
TRUSTEES AND OFFICERS OF THE TRUSTS*
<Table>
<Caption>
POSITION(S)
HELD WITH NUMBER
THE TRUSTS, OF FUNDS
TERM OF IN FUND
OFFICE AND COMPLEX OTHER
LENGTH OF OVERSEEN DIRECTORSHIPS
NAME, ADDRESS TIME PRINCIPAL OCCUPATIONS DURING THE PAST 5 BY HELD BY
AND DATE OF BIRTH SERVED YEARS TRUSTEE TRUSTEE
----------------- ----------- --------------------------------------- -------- -------------
INDEPENDENT TRUSTEES
Michael Owen Chairman of Dean of Zayed University (since September 18 n/a
210 University Blvd. the Board and 2000). Formerly self-employed as a financial
Suite 800 Trustee; 10 and management consultant, and in real estate
Denver, CO 80206 years development (from June 1999 to September
2000). Dean (from 1993 to June 1999), and a
DOB: 1937 member of the Finance faculty (from 1989 to
1993), of the College of Business, Montana
State University. Formerly, Chairman and
Chief Executive Officer of Royal Gold, Inc.
(mining) (1976 to 1989).
Dennis E. Baldwin Trustee; 10 President, Baldwin Financial Counseling 18 n/a
210 University Blvd. years (since July 1991). Formerly, Vice President
Suite 800 and Denver Office Manager of Merrill Lynch
Denver, CO 80206 Capital Markets (1978 to 1990).
DOB: 1928
Katherine A. Cattanach Vice Chair of General Partner/Managing Principal (since 18 n/a
CFA 210 University the Board and September 1987), Sovereign Financial
Blvd. Trustee; 8 Services, Inc. (investment consulting firm).
Suite 800 years Executive Vice President (1981 to 1988),
Denver, CO 80206 Captiva Corporation, Denver, Colorado
(private investment management firm). Ph.D.
DOB: 1945 in Finance (Arizona State University).
</Table>
<Table>
<Caption>
POSITION(S)
HELD WITH NUMBER
THE TRUSTS, OF FUNDS
TERM OF IN FUND
OFFICE AND COMPLEX OTHER
LENGTH OF OVERSEEN DIRECTORSHIPS
NAME, ADDRESS TIME PRINCIPAL OCCUPATIONS DURING THE PAST 5 BY HELD BY
AND DATE OF BIRTH SERVED YEARS TRUSTEE TRUSTEE
----------------- ----------- --------------------------------------- -------- -------------
Paul R. Knapp Trustee; 8 Executive Officer of DST Systems, Inc. 18 n/a
210 University Blvd. years ("DST"), a publicly traded information and
Suite 800 transaction processing company, which acts as
Denver, CO 80206 the Funds' transfer agent (since October
2000). DST is 33% owned by Janus Group, which
DOB: 1945 indirectly owns approximately 89.5% of Berger
Financial Group LLC. Mr. Knapp owns common
shares and options convertible into common
shares of DST which, in the aggregate and
assuming exercise of the options, would
result in his owning less than 1/2 of 1% of
DST's common shares. Mr. Knapp is also
President of Vermont Western Assurance, Inc.,
a wholly owned subsidiary of DST (since
December 2000). Director and Vice President
(February 1998 to November 2000) of West Side
Investments, Inc. (investments), a wholly
owned subsidiary of DST; President, Chief
Executive Officer and a director (September
1997 to October 2000) of DST Catalyst, Inc.,
an international financial markets
consulting, software and computer services
company (now DST International, a subsidiary
of DST).
Previously (1991 to October 2000),
Chairman, President, Chief Executive
Officer and a director of Catalyst
Institute (international public policy
research organization focused primarily
on financial markets and institutions);
also (1991 to September 1997),
Chairman, President, Chief Executive
Officer and a director of Catalyst
Consulting (international financial
institutions business consulting firm).
Harry T. Lewis, Jr. Trustee; 10 Lewis Investments (since June 1988) 18 Director,
210 University Blvd. years (self-employed private investor). Formerly, National Fuel
Suite 800 Senior Vice President, Rocky Mountain Region, Corporation
Denver, CO 80206 of Dain Bosworth Incorporated and member of (oil & gas
that firm's Management Committee (1981 to production);
DOB: 1933 1988). Advisory
Director,
Otologics, LLC,
(implantable
hearing aid);
Member of
Community
Advisory Board,
Wells Fargo
Bank-Denver
</Table>
Appendix 6-2
<Table>
<Caption>
POSITION(S)
HELD WITH NUMBER
THE TRUSTS, OF FUNDS
TERM OF IN FUND
OFFICE AND COMPLEX OTHER
LENGTH OF OVERSEEN DIRECTORSHIPS
NAME, ADDRESS TIME PRINCIPAL OCCUPATIONS DURING THE PAST 5 BY HELD BY
AND DATE OF BIRTH SERVED YEARS TRUSTEE TRUSTEE
----------------- ----------- --------------------------------------- -------- -------------
William Sinclaire Trustee; 10 President (since January 1998), Santa Clara 18 n/a
210 University Blvd. years LLC (privately owned agricultural company).
Suite 800 President (January 1963 to January 1998),
Denver, CO 80206 Sinclaire Cattle Co. (privately owned
agricultural company).
DOB: 1928
Albert C. Yates Trustee; 1 President (since 1990), Chancellor and 18 Director,
210 University Blvd. 1/2 years Professor of Chemistry-Department of Adolph Coors
Suite 800 Chemistry, of Colorado State University. Company
Denver, CO 80206 Formerly Executive Vice President and Provost (brewing
(1983 to 1990), Academic Vice President and company);
DOB: 1941 Provost (1981 to 1983) and Professor of Director,
Chemistry (1981 to 1990) of Washington State Centennial Bank
University. Vice President and University of the West
Dean for Graduate Studies and Research and
Professor of Chemistry of the University of
Cincinnati (1977 to 1981).
</Table>
<Table>
<Caption>
POSITION(S)
HELD WITH NUMBER
THE TRUSTS, OF FUNDS
TERM OF IN FUND
OFFICE AND COMPLEX OTHER
LENGTH OF OVERSEEN DIRECTORSHIPS
NAME, ADDRESS TIME PRINCIPAL OCCUPATIONS DURING THE PAST 5 BY HELD BY
AND DATE OF BIRTH SERVED YEARS TRUSTEE TRUSTEE
----------------- ----------- --------------------------------------- -------- -------------
INTERESTED TRUSTEES AND OFFICERS OF THE TRUST
Jack R. Thompson* President and President and a director since May 1999 22 n/a
210 University Blvd. Trustee; 3 (Executive Vice President from February 1999
Suite 800 1/2 years to May 1999) of Berger Growth Fund and Berger
Denver, CO 80206 Large Cap Growth Fund. President and a
trustee since May 1999 (Executive Vice
DOB: 1949 President from February 1999 to May 1999) of
Berger Investment Portfolio Trust, Berger
Institutional Products Trust, Berger
Worldwide Funds Trust, Berger Worldwide
Portfolios Trust and Berger Omni Investment
Trust. President and Chief Executive Officer
(since June 1999) (Executive Vice President
from February 1999 to June 1999) of Berger
Financial Group LLC (formerly Berger LLC).
Director, President and Chief Executive
Officer of Stilwell Management, Inc. (since
September 1999). President and Chief
Executive Officer of Berger/Bay Isle LLC
(since May 1999). Self-employed as a
consultant from July 1995 through February
1999.
</Table>
- ----------
*Mr. Thompson is considered an interested person of the Trusts due to his
positions held at Berger Financial Group LLC (or its affiliated companies).
Appendix 6-3
<Table>
<Caption>
POSITION(s) HELD WITH THE TRUSTS,
TERM OF OFFICE AND LENGTH OF TIME PRINCIPAL OCCUPATIONS DURING THE PAST 5
NAME, ADDRESS AND AGE SERVED YEARS
--------------------- --------------------------------- ---------------------------------------
Jay W. Tracey, CFA Executive Vice President (since August Executive Vice President of the Berger
210 University Blvd. 2000) and Portfolio Manager (since Funds (since August 2000). Executive Vice
Denver, CO 80206 June 2000) President and Chief Investment Officer of
Berger Financial Group LLC (since June
DOB: 1954 2000). Portfolio manager of the Berger
Growth Fund (since August 2000; sole
portfolio manager from August 2000 to July
2002; and team portfolio manager since July
2002). Team portfolio manager (since
December 2001) of the Berger Mid Cap Growth
Fund. Portfolio manager of the Berger
Small Company Growth Fund. Formerly, Vice
President and portfolio manager at
OppenheimerFunds, Inc. (September 1994 to
May 2000).
Steven L. Fossel, CFA Vice President (since August 2000) and Vice President of the Berger Funds (since
210 University Blvd. Portfolio Manager (since June 2000) August 2000). Portfolio manager (since
Denver, CO 80206 December 2001) of the Berger Large Cap
Growth Fund (team portfolio manager from
DOB: 1968 January 2001 through December 2001; interim
portfolio manager from June 2000 to January
2001). Vice President and portfolio
manager of Berger Financial Group LLC
(since June 2000); senior equity analyst
with Berger Financial Group LLC (from March
1998 to June 2000). Formerly, vice
president (from January 1996 to February
1998), equity analyst (from August 1992 to
February 1998) and assistant portfolio
manager (from January 1997 to February
1998) with Salomon Brothers Asset
Management.
Janice M. Teague** Vice President (since November 1998) Vice President (since November 1998) and
210 University Blvd. and Assistant Secretary (since Assistant Secretary (since February 2000
Denver, CO 80206 February 2002) and previously from September 1996 to
November 1998) and Secretary (November 1998
DOB: 1954 to February 2000) of the Berger Funds.
Vice President (since October 1997),
Secretary (since November 1998) and
Assistant Secretary (October 1996 through
November 1998) with Berger Financial Group
LLC. Vice President and Secretary with
Berger Distributors LLC (since August
1998). Vice President and Secretary of Bay
Isle Financial LLC (since January 2002).
</Table>
Appendix 6-4
<Table>
<Caption>
POSITION(s) HELD WITH THE TRUSTS,
TERM OF OFFICE AND LENGTH OF TIME PRINCIPAL OCCUPATIONS DURING THE PAST 5
NAME, ADDRESS AND AGE SERVED YEARS
--------------------- --------------------------------- ---------------------------------------
Andrew J. Iseman Vice President (since March 2001) Vice President of Investment Operations of
210 University Blvd. Janus Capital Management LLC (since January
Denver, CO 80206 2003). Vice President of the Berger Funds
(since March 2001). Vice President (since
DOB: 1964 September 1999) and Chief Operating Officer
(since November 2000) of Berger Financial
Group LLC. Manager (since September 1999)
and Director (June 1999 to September 1999)
of Berger Distributors LLC. Vice
President-Operations (February 1999 to
November 2000) of Berger Financial Group
LLC. Associate (November 1998 to February
1999) with DeRemer & Associates (a
consulting firm). Vice President-Operations
(February 1997 to November 1998) and
Director of Research and Development (May
1996 to February 1997) of Berger Financial
Group LLC.
Anthony R. Bosch** Vice President (since February 2000) Vice President of the Berger Funds (since
210 University Blvd. February 2000). Vice President (since June
Denver, CO 80206 1999) and Chief Legal Officer (since August
2000) with Berger Financial Group LLC.
DOB: 1965 Vice President and Chief Compliance Officer
with Berger Distributors LLC (since
September 2001). Vice President of Bay
Isle Financial LLC (since January 2002).
Formerly, Assistant Vice President of
Federated Investors, Inc. (December 1996
through May 1999), and Attorney with the
U.S. Securities and Exchange Commission
(June 1990 through December 1996).
Brian S. Ferrie Vice President (since November 1998) Vice President of the Berger Funds (since
210 University Blvd. November 1998). Vice President (since
Denver, CO 80206 February 1997), Treasurer and Chief
Financial Officer (since March 2001) and
DOB: 1958 Chief Compliance Officer (from August 1994
to March 2001) with Berger Financial Group
LLC. Vice President (since May 1996),
Treasurer and Chief Financial Officer
(since March 2001) and Chief Compliance
Officer (from May 1996 to September 2001)
with Berger Distributors LLC.
John A. Paganelli Vice President (since November 1998) Vice President (since November 1998),
210 University Blvd. and Treasurer (since March 2001) Treasurer (since March 2001) and Assistant
Denver, CO 80206 Treasurer (November 1998 to March 2001) of
the Berger Funds. Vice President (since
DOB: 1967 November 1998) and Manager of Accounting
(January 1997 through November 1998) with
Berger Financial Group LLC. Formerly,
Manager of Accounting (December 1994
through October 1996) and Senior Accountant
(November 1991 through December 1994) with
Palmeri Fund Administrators, Inc.
</Table>
Appendix 6-5
<Table>
<Caption>
POSITION(s) HELD WITH THE TRUSTS,
TERM OF OFFICE AND LENGTH OF TIME PRINCIPAL OCCUPATIONS DURING THE PAST 5
NAME, ADDRESS AND AGE SERVED YEARS
--------------------- --------------------------------- ---------------------------------------
Sue Vreeland** Secretary (since February 2000) Secretary of the Berger Funds (since
210 University Blvd. February 2000). Assistant Vice President
Denver, CO 80206 (since April 2002) and Assistant Secretary
(since June 1999) of Berger Financial Group
DOB: 1948 LLC. Assistant Secretary of Berger
Distributors LLC (since June 1999) and Bay
Isle Financial LLC (since December 2001).
Formerly, Assistant Secretary of the Janus
Funds (from March 1994 to May 1999),
Assistant Secretary of Janus Distributors,
Inc. (from June 1995 to May 1997) and
Manager of Fund Administration for Janus
Capital Corporation (from February 1992 to
May 1999).
David C. Price, CPA Assistant Vice President (since March Assistant Vice President (since March 2001)
210 University Blvd. 2001) of the Berger Funds. Assistant Vice
Denver, CO 80206 President-Compliance (since March 2001) and
Manager-Compliance (October 1998 through
DOB: 1969 March 2001) with Berger Financial Group
LLC. Formerly, Senior Auditor (July 1996
through August 1998) and Auditor (August
1993 through June 1996) with
PricewaterhouseCoopers LLP, a public
accounting firm.
Lance V. Campbell, CFA, CPA Assistant Treasurer (since March 2001) Assistant Treasurer (since March 2001) of
210 University Blvd. the Berger Funds. Assistant Vice President
Denver, CO 80206 (since January 2002) and Manager of
Investment Accounting (August 1999 through
DOB: 1972 January 2002) with Berger Financial Group
LLC. Formerly, Senior Auditor (December
1998 through August 1999) and Auditor
(August 1997 through December 1998) with
PricewaterhouseCoopers LLP, a public
accounting firm, and Senior Fund Accountant
(January 1996 through July 1997) with
INVESCO Funds Group.
</Table>
- ----------
* In connection with the Reorganization, it is anticipated that the
officers of the Trusts set forth above will resign and that the Boards
would elect new officers who are affiliated with Janus. Certain officers
of the Trusts own interests in Berger, own shares of Stilwell and/or
have options to acquire shares of Stilwell.
** [Ms. Teague, Mr. Bosch and Ms. Vreeland are also officers of Bay Isle.
However, on or before December 31, 2002, it is anticipated that Ms.
Teague, Mr. Bosch and Ms. Vreeland will resign and Bay Isle will elect
new officers.] [Will this take place in December 2002 or March 2003?]
Appendix 6-6
[PRELIMINARY COPY]
BERGER OMNI INVESTMENT TRUST
210 UNIVERSITY BOULEVARD
DENVER, COLORADO 80206
BERGER SMALL CAP VALUE FUND
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
MARCH 7, 2003
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF
BERGER OMNI INVESTMENT TRUST
The undersigned Shareholder(s) of the Berger Small Cap Value Fund (the
"Fund"), a series of the Berger Omni Investment Trust (the "Trust") hereby
appoint(s) Anthony R. Bosch, Thomas A. Early, Kelley Abbot Howes and Janice M.
Teague (each with full power of substitution), the proxy or proxies of the
undersigned to attend the Special Meeting of Shareholders (the "Special
Meeting") of the Fund to be held on March 7, 2003, and any adjournments thereof,
to vote all of the shares of the Fund that the signer would be entitled to vote
if personally present at the Special Meeting and on any other matters brought
before the Special Meeting, all as set forth in the Notice of Special Meeting of
Shareholders. Said proxies are directed to vote or refrain from voting pursuant
to the Proxy Statement as checked below.
All properly executed proxies will be voted as directed herein by the
signing Shareholder(s). If no direction is given when the duly executed proxy is
returned, such shares will be voted FOR each Proposal. Please date, sign and
return promptly.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS
PORTION FOR YOUR RECORDS.
---------------------------------------------------------
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN
THIS PORTION ONLY.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS A VOTE "FOR" THE
PROPOSALS TO:
Proposal 1: Approve an Investment Advisory Agreement with Janus Capital
Management LLC.
[ ] For [ ] Against [ ] Abstain
Proposal 2: Approve a Subadvisory Agreement between Janus Capital
Management LLC and Perkins, Wolf, McDonnell and Company and a
Subadvisory Agreement between Janus Capital Management LLC and
a newly formed subsidiary of Perkins, Wolf, McDonnell and
Company.
[ ] For [ ] Against [ ] Abstain
Proposal 3: (a) Approve the change to the fundamental policy relating
to diversification.
[ ] For [ ] Against [ ] Abstain
(b) Approve the change to the fundamental policy relating
to concentration.
[ ] For [ ] Against [ ] Abstain
(c) Approve the change to the fundamental policy relating
to borrowing.
[ ] For [ ] Against [ ] Abstain
(d) Approve the change to the fundamental policy relating
to senior securities.
[ ] For [ ] Against [ ] Abstain
(e) Approve the change to the fundamental policy relating
to underwriting.
[ ] For [ ] Against [ ] Abstain
(f) Approve the change to the fundamental policy relating
to lending.
[ ] For [ ] Against [ ] Abstain
(g) Approve the change to the fundamental policy relating
to real estate.
[ ] For [ ] Against [ ] Abstain
(h) Approve the change to the fundamental policy relating
to commodities.
[ ] For [ ] Against [ ] Abstain
(i) Approve the change to the fundamental policy relating
to investment companies.
[ ] For [ ] Against [ ] Abstain
(j) Approve the repeal of the fundamental policy relating
to investing for control or management.
[ ] For [ ] Against [ ] Abstain
(k) Approve the repeal of the fundamental policy relating
to officer and trustee investments.
[ ] For [ ] Against [ ] Abstain
(l) Approve the repeal of the fundamental policy relating
to joint trading accounts.
[ ] For [ ] Against [ ] Abstain
2
(m) Approve the repeal of the fundamental policy relating
to unseasoned companies.
[ ] For [ ] Against [ ] Abstain
(n) Approve the repeal of the fundamental policy relating
to 10% ownership.
[ ] For [ ] Against [ ] Abstain
(o) Approve the repeal of the fundamental policy relating
to pledging.
[ ] For [ ] Against [ ] Abstain
(p) Approve the repeal of the fundamental policy relating
to the use of margin and short sales.
[ ] For [ ] Against [ ] Abstain
(q) Approve the repeal of the fundamental policy relating
to illiquid securities.
[ ] For [ ] Against [ ] Abstain
(r) Approve the repeal of the fundamental policy relating
to oil, gas and mineral leases.
[ ] For [ ] Against [ ] Abstain
(s) Approve the repeal of the fundamental policy relating
to warrants.
[ ] For [ ] Against [ ] Abstain
(t) Approve the change in the investment objective from
fundamental to non-fundamental.
[ ] For [ ] Against [ ] Abstain
Proposal 4: Elect seven Trustees to the Board of Trustees.
Nominees: (1) Thomas H. Bailey, (2) William F. McCalpin, (3)
John W. McCarter, Jr., (4) Dennis B. Mullen, (5) James T.
Rothe, (6) William D. Stewart, (7) Martin H. Waldinger.
-------------------------------------------------------------
INSTRUCTION: To withhold authority to vote for any individual
nominee(s), write the number(s) on the line immediately above.
[ ] FOR all nominees listed [ ] WITHHOLD authority to
(except as noted in vote for all nominees
space provided) listed
3
Proposal 5: Approve an Agreement and Plan of Reorganization, whereby the
Fund would be reorganized into Janus Small Cap Value Fund, a
newly created series of the Janus Funds.
[ ] For [ ] Against [ ] Abstain
The undersigned acknowledges receipt with this proxy card of a copy of
the Notice of Special Meeting of Shareholders and the Proxy Statement. Your
signature(s) on this proxy card should be exactly as your name or names appear
on this proxy card. If the shares are held jointly, each holder should sign. If
signing is by attorney, executor, administrator, trustee or guardian, please
print your full title below your signature.
Dated: _____________, 2003
- -------------------------------------- --------------------------------------
Signature Signature
4