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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ______________ )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[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 Pursuant to Section 240.14a-12
JANUS INVESTMENT FUND
---------------------
(Exact Name of Registrant as Specified in Charter)
151 Detroit Street, Denver, Colorado 80206-4805
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(Address of Principal Executive Offices)
303-333-3863
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(Registrant's Telephone No., including Area Code)
Stephanie Grauerholz-Lofton -- 151 Detroit Street, Denver, Colorado 80206-4805
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(Name and Address of Agent for Service)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED IN THIS
FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A CURRENTLY VALID OMB
CONTROL NUMBER.
SEC 1913 (04-05)
FOR SHAREHOLDERS OF
JANUS RESEARCH FUND (THE "FUND")
(JANUS LOGO)
Dear Shareholder:
Your Fund's Board of Trustees requests your vote on a proposal to change
your Fund's benchmark index to the Morgan Stanley Capital International ("MSCI")
World Growth Index instead of the Russell 1000(R) Index. Your vote is important
since the benchmark index is used for purposes of calculating the
performance-based investment advisory fee the Fund pays to Janus Capital
Management LLC.
This proposal will be presented to shareholders at a Special Meeting of
Shareholders to be held December 14, 2006. We encourage you to read the
Questions and Answers section at the beginning of the enclosed Proxy Statement
as well as the entire Proxy Statement, which describes the proposal.
Janus Research Fund (the "Fund") was launched in February 2005 with the
flexibility to invest in the highest conviction ideas of the Janus equity
research team that manages the Fund, regardless of where geographically those
opportunities are found.
Janus Capital's rationale for changing the benchmark index is based upon
the fact that as the Fund pursued its "go-anywhere" strategy investing in
domestic and international securities, the research team found increased
opportunities for compelling investments in international markets. In
recognition of the increasingly global character of the Fund's portfolio, Janus
Capital proposed, and your Fund's Board of Trustees approved, (1) changing the
name of the Fund to "Janus Global Research Fund" and (2) adopting an additional
investment strategy so that the Fund will normally invest at least 40% of its
net assets in securities of issuers from different countries located throughout
the world, excluding the United States. As a result of these changes, the Fund's
current benchmark index, the Russell 1000(R) Index, which measures the
performance of only U.S. equities, may no longer be the most appropriate
benchmark index for evaluating the Fund's performance. The proposed benchmark
index, the MSCI World Growth Index, which measures the performance of growth
stocks of developed countries around the world, is considered by Janus Capital
and the Fund's Board of Trustees to be a more appropriate benchmark index for
evaluating the Fund's performance, as it better reflects the Fund's investment
policies and the research team's long-term expectations of finding investment
opportunities throughout the world.
The Fund's name will change to "Janus Global Research Fund" on or about
December 31, 2006. The Fund's additional investment strategy will also become
effective on or about December 31, 2006.
YOUR FUND'S BOARD OF TRUSTEES HAS APPROVED THE BENCHMARK INDEX CHANGE AND
BELIEVES THIS CHANGE IS IN THE BEST INTEREST OF SHAREHOLDERS. THE FUND'S BOARD
OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL.
You can vote in one of four ways:
- BY MAIL with the enclosed proxy card;
- BY INTERNET through the website listed in the proxy voting instructions;
- BY TELEPHONE using the toll-free number listed in the proxy voting
instructions; or
- IN PERSON at the Special Meeting of Shareholders on December 14, 2006.
Your vote is extremely important, so please read the enclosed Proxy
Statement carefully and submit your vote. If you have any questions about the
proposal, please call our proxy solicitor, D.F. King & Co., Inc., at
[ ].
Thank you for your consideration of this important proposal. We value you
as a shareholder and look forward to preserving your trust as a valued
shareholder over the long-term.
Sincerely,
/s/ Dennis B. Mullen
Dennis B. Mullen
Chairman of the Board of
Janus Investment Fund
JANUS INVESTMENT FUND
151 DETROIT STREET
DENVER, COLORADO 80206
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
Notice is hereby given that a Special Meeting of Shareholders of Janus
Research Fund (the "Fund"), a series of Janus Investment Fund (the "Trust") has
been called to be held at the JW Marriott Hotel, 150 Clayton Lane, Denver,
Colorado 80206, on December 14, 2006 at 10:00 a.m. Mountain Time (together with
any adjournments or postponements thereof, the "Meeting"). At the Meeting,
shareholders will be asked to vote on the proposal set forth below and to
transact such other business, if any, as may properly come before the Meeting:
Proposal: To approve an amendment to the Fund's investment advisory
agreement, which changes the Fund's benchmark index for purposes
of calculating the performance-based investment advisory fee.
Any shareholder who owned shares of the Fund as of the close of business on
September 15, 2006, will receive notice of the Meeting and will be entitled to
vote at the Meeting.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE URGED TO COMPLETE,
SIGN, AND DATE THE ENCLOSED PROXY CARD(S) AND RETURN IT IN THE ENCLOSED
ADDRESSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES, OR TO
TAKE ADVANTAGE OF THE INTERNET OR TELEPHONIC VOTING PROCEDURES DESCRIBED ON THE
ENCLOSED PROXY CARD(S). IF YOU WISH TO ATTEND THE MEETING AND VOTE YOUR SHARES
IN PERSON AT THAT TIME, YOU WILL STILL BE ABLE TO DO SO.
By order of the Board of Trustees,
/s/ Kelley Abbott Howes
Kelley Abbott Howes
President and Chief Executive Officer
of Janus Investment Fund
, 2006
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and may avoid any delay involved in validating your vote if you fail to sign
your proxy card properly.
1. INDIVIDUAL ACCOUNT: Sign your name exactly as it appears in the
registration on the proxy card.
2. JOINT ACCOUNT: Either party may sign, but the name of the party
signing should conform exactly to the name shown in the registration on the
proxy card.
3. ALL OTHER ACCOUNTS: The capacity of the individual signing the
proxy card should be indicated unless it is reflected in the form of
registration. For example:
<Table>
<Caption>
REGISTRATION VALID SIGNATURE
------------ ---------------
Corporate Account
(1) ABC Corp. ABC Corp.
(2) ABC Corp. John Doe, Treasurer
(3) ABC Corp. c/o John Doe, Treasurer John Doe
(4) ABC Corp. Profit Sharing Plan John Doe, Trustee
Trust Account
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee u/t/d 12/28/78 Jane B. Doe
Custodial or Estate Account
(1) John B. Smith, Cust. f/b/o John B. Smith
John B. Smith, Jr. UGMA
(2) Estate of John B. Smith John B. Smith, Jr., Executor
</Table>
, 2006
JANUS INVESTMENT FUND
JANUS RESEARCH FUND
151 DETROIT STREET
DENVER, COLORADO 80206
SPECIAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
This is a Proxy Statement for Janus Research Fund (the "Fund"), a series of
Janus Investment Fund (the "Trust"). Proxies for a Special Meeting of
Shareholders of the Fund are being solicited by the Board of Trustees (the
"Board," "Board of Trustees" or the "Trustees") of the Trust to approve the
following proposal that has already been approved by the Board:
Proposal: To approve an amendment to the Fund's investment advisory
agreement, which changes the Fund's benchmark index for purposes
of calculating the performance-based investment advisory fee.
Any shareholder who owned shares of the Fund as of the close of business on
September 15, 2006 ("Record Date"), will receive notice of the Meeting and will
be entitled to vote at the Meeting.
The Meeting will be held at the JW Marriott Hotel, 150 Clayton Lane,
Denver, Colorado 80206, on December 14, 2006 at 10:00 a.m. Mountain Time, or at
such later time as may be necessary due to adjournments or postponements thereof
(the "Meeting").
At the Meeting, you will be asked to vote on the proposal. You should read
the entire Proxy Statement before voting. If you have any questions, please call
. The Proxy Statement, Notice of Special Meeting, and the proxy
card(s) are first being mailed to shareholders on or about , 2006.
THE FUND PROVIDES ANNUAL AND SEMIANNUAL REPORTS TO ITS SHAREHOLDERS THAT
HIGHLIGHT RELEVANT INFORMATION, INCLUDING INVESTMENT RESULTS AND A REVIEW OF
PORTFOLIO CHANGES. ADDITIONAL COPIES OF THE FUND'S MOST RECENT ANNUAL REPORT AND
ANY MORE RECENT SEMIANNUAL REPORT ARE AVAILABLE, WITHOUT CHARGE, BY CALLING A
JANUS REPRESENTATIVE AT 1-800-525-3713, VIA THE INTERNET AT WWW.JANUS.COM, OR BY
SENDING A WRITTEN REQUEST TO THE SECRETARY OF THE TRUST AT 151 DETROIT STREET,
DENVER, COLORADO 80206.
QUESTIONS AND ANSWERS
WHAT IS BEING PROPOSED?
The proposal seeks approval of an amendment to the Fund's investment
advisory agreement, which changes the Fund's benchmark index from the Russell
1000(R) Index to the Morgan Stanley Capital International ("MSCI") World Growth
Index. The benchmark index is used to calculate any adjustment upward or
downward to the investment advisory fee paid to Janus Capital Management LLC
("Janus Capital") by the Fund, based upon the investment performance of the Fund
relative to the performance of the benchmark index. Janus Capital is the Fund's
investment adviser pursuant to an Investment Advisory Agreement dated December
2, 2004, as amended January 1, 2006 and June 14, 2006, and which was approved by
shareholders on December 29, 2005 (the "Current Investment Advisory Agreement").
The Current Investment Advisory Agreement contains a performance-based
investment advisory fee structure. The investment advisory fee the Fund pays to
Janus Capital decreases when the Fund is not performing well relative to its
benchmark index and increases during periods when the Fund outperforms its
benchmark index.
WHAT IS THE RECOMMENDATION OF THE BOARD OF TRUSTEES?
The Board of Trustees recommends that shareholders vote FOR the proposal.
WHY IS JANUS CAPITAL PROPOSING TO CHANGE THE FUND'S BENCHMARK INDEX?
Janus Capital's equity research analysts select investments for the Fund,
which represent their high conviction investment ideas in all market
capitalizations, styles, and geographies. The Fund was launched in February 2005
with the broad flexibility for the research team to invest in companies of any
size and located anywhere in the world. While the Fund has always had the
ability to have foreign exposure and was expected to have some foreign exposure
as market conditions permitted, the "best ideas" strategies of the Fund combined
with the global nature of Janus Capital's research have resulted in a higher
emphasis on foreign stocks and a global strategy. Using the Fund's current
investment objective and strategies, the research team has found, and continues
to find compelling investment opportunities for the Fund outside of the United
States.
Over the long-term, the Fund expects to continue and may increase its
foreign exposure. As a result, the Fund's name will change to "Janus Global
Research Fund" effective on or about December 31, 2006, and the Fund's
investment polices will be revised so that the Fund will normally invest at
least 40% of its net assets in securities of issuers from different countries
located throughout the world, excluding the United States.
The current benchmark index for evaluating the Fund's performance, the
Russell 1000(R) Index, measures the performance of the 1,000 largest companies
in the Russell 3000(R) Index, and is made up entirely of U.S. companies. The
proposed benchmark,
2
the MSCI World Growth Index, measures the performance of growth stocks of
developed countries around the world, and, as of [date], U.S. companies
constituted [ %] of the index. Given the Fund's evolution to a more global
strategy, Janus Capital believes the MSCI World Growth Index is a more
appropriate benchmark for evaluating the Fund's performance and better reflects
the research team's long-term expectations of locating investment opportunities
throughout the world.
WILL THE CHANGE IN THE BENCHMARK INDEX RESULT IN A CHANGE TO THE INVESTMENT
OBJECTIVE OR STRATEGIES OF THE FUND?
The investment objective will remain the same, which is to seek long-term
growth of capital. The Fund expects to maintain its current investment
parameters of investing in companies of any size and located anywhere in the
world, from larger, well-established companies to smaller, emerging growth
companies. Pursuant to the Fund's additional investment strategy, the Fund will
normally invest at least 40% of its net assets in securities of issuers from
different countries located throughout the world, excluding the United States.
The risks of investment in foreign securities, including those in emerging
markets, are described in the Fund's prospectus.
WHAT EFFECT WILL THE BENCHMARK INDEX CHANGE HAVE UPON THE INVESTMENT ADVISORY
FEE RATE THE FUND PAYS TO JANUS CAPITAL?
The benchmark index change will not alter the base fee component of the
investment advisory fee, which is an annualized rate of 0.64% of the average
daily closing net asset value of the Fund. Whether the change in the benchmark
index to the MSCI World Growth Index results in an increase or decrease in the
performance fee component of the advisory fees that otherwise would have been
paid by the Fund depends on whether the Fund's future performance compares more
favorably with the MSCI World Growth Index or the Russell 1000(R) Index. As
discussed in the Proxy Statement, based on a pro forma analysis of the Fund's
past performance over comparable periods under identical assumptions, Janus
Capital would have been paid less if the performance fee component was
calculated using the MSCI World Growth Index. It is not possible to predict the
effect of the performance adjustment on future overall compensation paid by the
Fund to Janus Capital since any adjustment will depend on the cumulative
performance of the Fund relative to the approved Fund benchmark index, as well
as future changes to the size of the Fund over the specified period of time.
WHAT WILL HAPPEN IF SHAREHOLDERS DO NOT APPROVE THE PROPOSAL?
The Russell 1000(R) Index would remain the Fund's benchmark index for
purposes of calculating the Fund's performance adjustment to the investment
advisory fee paid to Janus Capital by the Fund.
3
HOW DO I VOTE MY SHARES?
You can vote in any one of four ways:
- By mail, by sending the enclosed proxy card (signed and dated) in the
enclosed envelope;
- Through the Internet by going to the website listed on your proxy card;
- By telephone using the toll-free number listed on your proxy card; or
- In person, by attending the Special Meeting of Shareholders on December
14, 2006 (or any adjournment or postponement thereof).
Whichever method you choose, please take the time to read the full text of
the Proxy Statement before you vote.
IF I SEND MY PROXY IN NOW AS REQUESTED, CAN I CHANGE MY VOTE LATER?
Yes. You may revoke your proxy vote at any time before it is voted at the
Meeting by: (i) delivering a written revocation to the Secretary of the Fund at
151 Detroit Street, Denver, Colorado 80206; (ii) submitting a subsequently
executed proxy vote; or (iii) attending the Meeting and voting in person. Even
if you plan to attend the Meeting, we ask that you return the enclosed proxy.
This will help us ensure that an adequate number of shares are present at the
Meeting for consideration of the proposal.
WHAT IS THE REQUIRED VOTE TO APPROVE THE PROPOSAL?
Approval of the proposal will require the affirmative vote of a "majority
of the outstanding voting securities" of the Fund within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act"). This means the
affirmative of the lesser of (i) 67% or more of the shares of the Fund present
at the Meeting if the holders of more than 50% of the outstanding shares are
present or represented by proxy, or (ii) more than 50% of the outstanding shares
(a "1940 Act Majority").
WHOM SHOULD I CALL FOR ADDITIONAL INFORMATION ABOUT THIS PROXY STATEMENT?
Please call D.F. King & Co., Inc. your Fund's proxy solicitor, at
[ ].
4
PROPOSAL
APPROVE AN AMENDMENT TO THE FUND'S INVESTMENT ADVISORY AGREEMENT, WHICH
CHANGES THE FUND'S BENCHMARK INDEX FOR PURPOSES OF CALCULATING THE
PERFORMANCE-BASED INVESTMENT ADVISORY FEE.
INTRODUCTION
On September 6, 2006, the Fund's Board of Trustees, including the Trustees
who are not "interested persons" of the Fund or Janus Capital, approved an
amendment to the Current Investment Advisory Agreement between the Trust, on
behalf of the Fund, and Janus Capital, ("Proposed Advisory Agreement") and
authorized the submission of the Proposed Advisory Agreement to the Fund's
shareholders for approval. The Proposed Advisory Agreement changes the
performance benchmark index used to determine one component of the investment
advisory fee that Janus Capital receives from the Fund. The investment advisory
fee paid by the Fund currently is adjusted downward or upward based upon the
Fund's performance relative to the Russell 1000(R) Index (the "Current Index").
Under the proposal, the fee would instead be adjusted based upon the Fund's
performance relative to the MSCI World Growth Index (the "Proposed Index"). This
means that if the Proposal is approved, the Fund's benchmark index will change
from an index designed as a measure of performance of U.S. companies to an index
designed to be a measure of growth stocks of companies located throughout the
world.
The Proposal is a result of how the Fund has evolved since its inception in
February 2005. Janus Capital's equity research analysts select investments for
the Fund, which represent their high conviction investment ideas in all market
capitalizations, styles, and geographies. The Fund permits broad flexibility for
the research team to invest in companies of any size, and which may be located
anywhere in the world. While the Fund was initially expected to have some
foreign exposure as permitted under its investment strategies, the "best ideas"
strategies of the Fund, combined with the global nature of Janus Capital's
research, have resulted in a higher emphasis on foreign stocks and a global
strategy. Using the Fund's current investment objective and strategies, the
research team has found, and continues to find compelling investment
opportunities outside of the United States.
In recognition of the increasingly global character of the Fund's
portfolio, Janus Capital proposed, and the Fund's Board of Trustees approved,
(1) changing the name of the Fund to "Janus Global Research Fund" and (2)
adopting an additional investment strategy so that the Fund will normally invest
at least 40% of its net assets in securities of issuers from different countries
located throughout the world, excluding the United States. Accordingly, Janus
Capital believes the proposed change of the benchmark index to the MSCI World
Growth Index, which measures the performance of growth stocks of developed
countries around the world, is a more appropriate benchmark index to evaluate
the Fund's performance and better reflects the research team's long-term
expectations of locating investment opportunities throughout the world.
5
The Fund's investment objective to seek long-term growth of capital remains
the same. The strategy to invest in companies of any size and located anywhere
in the world, from larger, well-established companies to smaller, emerging
growth companies remains. The change of the Fund's name to "Janus Global
Research Fund" and additional 40% investment strategy will become effective on
or about December 31, 2006. The risks of investment in foreign securities,
including those in emerging markets, are described in the Fund's prospectus.
If approved, the Proposed Advisory Agreement will take effect on January 1,
2007 or as soon as practicable after shareholder approval is obtained. The
Proposed Advisory Agreement will remain in effect through January 1, 2008, and
thereafter, only as long as its continuance is approved at least annually by (i)
the vote, cast in person at a meeting called for the purpose, of a majority of
the Independent Trustees and (ii) the vote of either a majority of the Trustees
or a majority of the outstanding shares of the Fund. If the Proposed Advisory
Agreement is not approved, the Current Investment Advisory Agreement will
continue in effect through January 1, 2007, and thereafter only as long as its
continuance is approved at least annually as described above.
Except for changes to reflect the name change to "Janus Global Research
Fund" which will become effective on or about December 31, 2006 and the proposed
change to the performance benchmark index, the Proposed Advisory Agreement is
substantially similar to the Current Investment Advisory Agreement. A copy of
the Proposed Advisory Agreement is included as Exhibit A.
JANUS CAPITAL AS INVESTMENT ADVISER
Janus Capital Management LLC, 151 Detroit Street, Denver, Colorado 80206-
4805, is the Fund's investment adviser pursuant to the Current Investment
Advisory Agreement. Janus Capital is a direct subsidiary of Janus Capital Group
Inc. ("JCGI"), a publicly-traded company with principal operations in financial
asset management businesses. JCGI owns approximately 95% of Janus Capital, with
the remaining 5% held by Janus Management Holdings Corporation. The principal
executive officers and directors of Janus Capital, located at 151 Detroit
Street, Denver, Colorado 80206, and their principal occupations are included in
[Exhibit B] to this Proxy Statement. Certain employees of Janus Capital and/or
its affiliates serve as officers of the Trust. Certain officers and interested
Trustees of the Trust are shareholders of JCGI.
Janus Capital (together with its predecessors) has served as an investment
adviser since 1970. As of [September 1, 2006], the Janus funds that Janus
Capital advises consisted of [ ] portfolios offering a broad range of
investment objectives. Janus Capital also serves as subadviser for a number of
private-label mutual funds and provides separate account advisory services for
institutional accounts. As of [ , 2006], Janus Capital had
approximately [$ billion] in assets under management. Janus Capital
currently serves as an investment adviser to other funds that have similar
investment objectives as the Fund, as described in detail in [Exhibit ] to
this Proxy Statement.
6
DESCRIPTION OF THE CURRENT INVESTMENT ADVISORY AGREEMENT
Under the Current Investment Advisory Agreement, Janus Capital provides the
Fund with continuing investment management services. Janus Capital is
responsible for the day-to-day management of the Fund and provides continuous
investment advice regarding the purchase and sale of securities held by the
Fund, subject to the Trust's Amended and Restated Agreement and Declaration of
Trust, its Amended and Restated Bylaws, the investment objective, the policies
and restrictions set forth in the Fund's registration statement, the provisions
of the 1940 Act and the Internal Revenue Code of 1986, as amended, and such
other policies and instructions as the Trustees may determine from time to time.
Janus Capital provides office space for the Fund and pays the salaries,
fees and expenses of all Fund officers (splitting a portion of compensation and
expenses of the Fund's Chief Compliance Officer with the Fund) and any Trustee
who is considered an interested person of Janus Capital. Janus Capital provides
certain administrative, compliance, accounting, and other services and is
responsible for the other business affairs of the Fund.
The Fund pays all expenses incident to its organization, operations, and
business not specifically assumed by Janus Capital, including custodian and
transfer agency fees and expenses, brokerage commissions and dealer spreads, and
other expenses in connection with the execution of portfolio transactions, legal
and accounting expenses, interest, taxes, a portion of trade association or
other investment company organization dues and expenses, registration fees,
expenses of shareholders' meetings, reports to shareholders, fees and expenses
of Independent Trustees, and other costs of complying with applicable laws
regulating the sale of Fund shares. Information concerning services provided by
Janus Distributors LLC ("Janus Distributors"), the Fund's distributor, and Janus
Services LLC ("Janus Services"), the Fund's transfer agent, each a wholly-owned
subsidiary of Janus Capital, and a description of any fees paid by the Fund to
Janus Distributors and Janus Services, is provided on page [ ] of this Proxy
Statement.
The Current Investment Advisory Agreement for Janus Research Fund was
initially approved by the Trustees, including all of the Independent Trustees,
on December 2, 2004 and subsequently amended on January 1, 2006 and June 14,
2006. The Fund's Current Investment Advisory Agreement continues in effect until
January 1, 2007 and thereafter from year to year as long as such continuance is
approved at least annually by a majority of the Independent Trustees, and by
either a majority of the outstanding voting securities of the Fund or the
Trustees of the Fund.
The Current Investment Advisory Agreement: (i) may be terminated, without
the payment of any penalty, by Janus Capital, the Trustees of the Trust, or the
shareholders of the Fund acting by vote of at least a majority of its
outstanding voting securities on 60 days advance written notice; (ii) terminates
automatically in the event of its assignment; and (iii) generally, may not be
amended without the approval by vote of a majority of the Trustees of the Fund,
including a majority of the Independent Trustees
7
and, to the extent required by the 1940 Act, the vote of a majority of the
outstanding voting securities of the Fund. The Current Investment Advisory
Agreement was last submitted to a vote of shareholders on December 29, 2005 for
purposes of approving a performance-based investment advisory fee structure and
to make certain conforming changes to clarify Janus Capital's investment
discretion in managing the Fund.
WHAT IS THE SAME BETWEEN THE CURRENT INVESTMENT ADVISORY AGREEMENT AND THE
PROPOSED ADVISORY AGREEMENT?
The Current Investment Advisory Agreement and Proposed Advisory Agreement
are substantially similar. Under both the Current Investment Advisory Agreement
and the Proposed Advisory Agreement, the Fund pays Janus Capital an investment
advisory fee that consists of two components: (i) a base management fee at the
annual rate of 0.64% of the Fund's average daily net assets during the previous
month ("Base Fee"), plus or minus (ii) a performance-fee adjustment
("Performance Adjustment") calculated by applying a variable rate of up to 0.15%
(positive or negative) to the Fund's average daily net assets during the
applicable performance measurement period. The performance measurement period
generally will be the previous 36 months, although no Performance Adjustment is
made until the Current Investment Advisory Agreement has been in effect for at
least 12 months. The Current Investment Advisory Agreement became effective on
January 1, 2006. The first calculation of a Performance Adjustment will occur in
January 2007 for the prior 12-month performance measurement period. After
January 2007 and until month 36 (or January 2009) that the Current Investment
Advisory Agreement has been in effect, the performance measurement period will
be equal to the time that has elapsed since the Current Investment Advisory
Agreement took effect. The Base Fee is calculated and accrued daily. The
Performance Adjustment is calculated monthly in arrears and is accrued evenly
each day throughout the month. The investment advisory fee is paid monthly in
arrears.
Under both the Current Investment Advisory Agreement and the Proposed
Advisory Agreement, the Performance Adjustment may result in an increase or
decrease in the investment advisory fee paid by the Fund, depending upon the
total return performance of the Fund after expenses relative to the performance
of its benchmark index over the performance measurement period. No Performance
Adjustment will be applied unless the difference between the Fund's total return
performance and the investment record of the Fund's benchmark index is 0.50% or
greater (positive or negative) during the applicable performance measurement
period. Because the Performance Adjustment is tied to the Fund's performance
relative to its benchmark index (and not its absolute performance), the
Performance Adjustment could increase Janus Capital's fee even if the Fund's
total return has been negative during the performance measurement period and
could decrease Janus Capital's fee even if the Fund's total return has been
positive during the performance measurement period. For purposes of computing
the Base Fee and the Performance Adjustment, net assets are averaged over
different periods (average daily net assets during the previous month for the
Base Fee, versus average daily net assets during the performance measurement
8
period for the Performance Adjustment). Performance of the Fund is calculated
net of expenses whereas the Fund's benchmark index does not have any fees or
expenses. Reinvestment of dividends and distributions are included in
calculating the performance of both the Fund and the Fund's benchmark index.
Should the Trustees subsequently decide to divide shares of the Fund into
two or more separate classes, the oldest class of shares will be used for
purposes of determining the Performance Adjustment. After Janus Capital
determines whether the Fund's performance was above or below its benchmark index
by comparing the investment performance of the Fund's oldest share class against
the investment record of the Fund's benchmark index, Janus Capital will apply
the same Performance Adjustment (positive or negative) across each other class
of shares of the Fund.
WHAT ARE THE SIGNIFICANT DIFFERENCES BETWEEN THE CURRENT INVESTMENT ADVISORY
AGREEMENT AND THE PROPOSED ADVISORY AGREEMENT?
Other than the change to reflect the name change to "Janus Global Research
Fund," which automatically becomes effective on or about December 31, 2006, and
the date of effectiveness, the primary difference between the Current Investment
Advisory Agreement and the Proposed Advisory Agreement is the benchmark index
used for purposes of measuring the Fund's performance and calculating the
Performance Adjustment to the investment advisory fee the Fund pays to Janus
Capital. Pursuant to the Current Investment Advisory Agreement, the investment
advisory fee is linked to the Fund's performance relative to the Russell 1000(R)
Index. Under the Proposed Advisory Agreement, the investment advisory fee is
linked to the Fund's performance relative to the MSCI World Growth Index. The
Russell 1000(R) Index is a U.S. equity index that measures the performance of
the largest 1,000 companies in the Russell 3000(R) Index. The MSCI World Growth
Index measures the performance of growth stocks in developed countries
throughout the world.
The Trustees and shareholders of the Fund previously approved the Current
Index as the Fund's benchmark index for purposes of evaluating the Fund's
performance and calculating the investment advisory fee the Fund pays to Janus
Capital. Shareholders are now being asked to approve a change in the benchmark
index to the Proposed Index. If approved, the Proposed Advisory Agreement will
become effective on January 1, 2007 or as soon as practicable after shareholder
approval is obtained. For performance measurement periods prior to the effective
date of the Proposed Advisory Agreement, the Current Index will be used for
purposes of evaluating the Fund's performance and calculating the investment
advisory fee. For performance measurement periods after that date, the Proposed
Index will be used for that purpose, and will be implemented on a transitional
basis described under "Implementation of the Change in the Benchmark Index" on
page . If shareholders do not approve the Proposed Advisory Agreement, the
Performance Adjustment will be implemented in January 2007 by measuring the
Fund's performance relative to the Current Index in accordance with the terms of
the Current Investment Advisory Agreement.
9
The Trustees may from time to time determine that another securities index
is a more appropriate benchmark index for purposes of evaluating the Fund's
performance. In that event, the Trustees will approve the substitution of a
successor index for the Fund's benchmark index. However, the calculation of the
Performance Adjustment for any portion of the performance measurement period
prior to the adoption of the successor index will still be based upon the Fund's
performance compared to its former benchmark index. Any change to the Fund's
benchmark index for purposes of calculating the Performance Adjustment is
subject to applicable law. It is currently the position of the staff ("Staff")
of the Securities and Exchange Commission ("SEC") that any changes to the Fund's
benchmark index will require shareholder approval. If there is a change in the
Staff's position, the Trustees will notify the shareholders of such change in
position at such time as the Trustees may determine that a change in the Fund's
benchmark index is appropriate.
INVESTMENT ADVISORY FEE PAID BY THE FUND TO JANUS CAPITAL
As described above, the Performance Adjustment to the investment advisory
fee will be implemented in January 2007. From the date of commencement of
operations of the Fund (February 25, 2005) and until January 2007, the Fund pays
Janus Capital a fee calculated at the annual rate of 0.64% of average daily net
assets. Through March 1, 2007, Janus Capital has agreed by contract to waive its
advisory fee payable by the Fund in an amount equal to the amount, if any, that
the Fund's normal operating expenses in any fiscal year (including the
investment advisory fee, but excluding any brokerage commissions, interest,
taxes and extraordinary expenses) exceed 1.25% of the Fund's average daily net
asset value.
The following table shows the advisory fee paid by the Fund to Janus
Capital before any waiver and the amount waived, if any, including any
applicable advisory fee waiver, for the period February 25, 2005 (commencement
of operations) to April 30, 2006.
<Table>
<Caption>
ADVISORY FEE WAIVERS
------------ -------
$349,639 $70,326
</Table>
IMPACT OF PROPOSED CHANGE TO THE BENCHMARK INDEX ON THE INVESTMENT ADVISORY FEE
RATE
Because the change in the Fund's benchmark index will be implemented
prospectively, the future impact on the investment advisory fee rate paid by the
Fund to Janus Capital will depend upon the Fund's future performance relative to
the Proposed Index. In addition, the Fund has not completed a 12-month
performance measurement period. However, the past performance of the Current
Index, the Proposed Index, and the Fund can be used to show what the impact
would have been on the investment advisory fee rate for the period from March 1,
2006 through July 31, 2006 if the advisory fee had been adjusted based upon the
Fund's performance relative to the performance of either the Current Index or
the Proposed Index during that
10
period. This hypothetical example assumes that each index was in place during
the entire period and is based upon a performance measurement period beginning
with the Fund's inception on February 25, 2005 (such that the first Performance
Adjustment is based upon an initial 12-month performance measurement period).
The following table shows: (i) the dollar amount of the pro forma advisory
fee that would have been paid by the Fund, before and after all applicable
waivers, for the period from March 1, 2006 through July 31, 2006 using the
Current Index as the benchmark index; (ii) the dollar amount of the pro forma
advisory fee that would have been paid by the Fund, before and after all
applicable waivers, using the Proposed Index as the benchmark index; and (iii)
the difference between the pro forma fees of each index, net of any waivers.
Such difference is positive when the amount of the pro forma Proposed Index
advisory fees would have been larger than the amount of the pro forma Current
Index advisory fees and negative when the amount of the pro forma Proposed Index
advisory fees would have been smaller than the amount of the pro forma Current
Index advisory fees.
<Table>
<Caption>
DIFFERENCE
PRO FORMA ADVISORY FEE PRO FORMA ADVISORY FEE BETWEEN
BASED UPON CURRENT INDEX BASED UPON PROPOSED INDEX PRO FORMA
----------------------------------------- ----------------------------------------- CURRENT AND
ADVISORY FEE ADVISORY FEE ADVISORY FEE ADVISORY FEE PROPOSED
BEFORE AFTER BEFORE AFTER INDEX
WAIVERS ($) WAIVERS ($) WAIVERS ($) WAIVERS ($) WAIVERS ($) WAIVERS ($) ADVISORY FEES
------------ ----------- ------------ ------------ ----------- ------------ -------------
520,250 70,326 449,924 501,326 70,326 431,000 (18,924)
</Table>
As reflected above in the table, the Fund would have paid $18,924 less to
Janus Capital had the Proposed Index been in place during this hypothetical
period, as compared to the Current Index during the same hypothetical period.
Please keep in mind that under the terms of the Proposed Advisory
Agreement, the change in the Fund's benchmark index will actually occur on a
gradual basis over the 36-month period following shareholder approval of the
Proposed Advisory Agreement. See "Implementation of the Change in the Benchmark
Index" on page .
COMPARISON OF PROPOSED AND CURRENT BENCHMARK INDICES
If the proposal is approved by shareholders, the Fund will change its
benchmark index from the Current Index, the Russell 1000(R) Index to the
Proposed Index, the MSCI World Growth Index. The MSCI World Growth Index is a
market capitalization weighted index composed of companies which exhibit growth
attributes that are representative of the market structure of developed market
countries in North America, Europe, and the Asia/Pacific Region. MSCI World
Growth Index securities are classified as "growth" securities because of the
high price to book valuation, relative to each MSCI country index. As of [date],
U.S. companies constituted [ %] of the index.
The Current Index, the Russell 1000(R) Index, measures the performance of
the 1,000 largest companies in the Russell 3000(R) Index, and is made up
entirely of U.S. companies. Janus Capital's research is global in nature and
Janus Capital has
11
continued to find compelling investment opportunities for the Fund outside the
United States. Janus Capital believes the Proposed Index better reflects the
investment universe of the Fund, as the Proposed Index measures the performance
of global growth stocks and is therefore believed to be more appropriate for
evaluating the Fund's performance.
The following chart shows how the returns of the Fund, the Current Index,
and the Proposed Index have performed for the period of March 1, 2005 through
August 31, 2006.
(CHART)
<Table>
<Caption>
PROPOSED INDEX- MSCI CURRENT INDEX - RUSSELL
WORLD GROWTH INDEX (%) JANUS RESEARCH FUND (%) 1000(R) INDEX (%)
---------------------- ----------------------- -----------------------
03/05 -1.91 -1.80 -1.82
04/05 -2.20 -2.44 -1.90
05/05 2.60 4.49 4.84
06/05 0.47 2.70 -0.37
07/05 4.14 5.35 4.89
08/05 0.89 1.75 -1.29
09/05 2.21 2.81 0.46
10/05 -2.13 -1.94 -0.97
11/05 3.24 4.14 4.31
12/05 2.18 2.50 -0.31
01/06 4.61 6.99 1.76
02/06 -1.02 -0.97 -0.16
03/06 2.49 2.93 1.48
04/06 2.31 1.50 -0.14
05/06 -3.85 -4.91 -3.39
06/06 -0.16 0.16 -0.39
07/06 -0.81 -1.15 -1.90
08/06 2.65 3.89 3.12
</Table>
The following chart compares the calendar year performance of both the
Current Index and the Proposed Index for the past five years. The chart shows
that the two benchmarks have performed differently at times over this period.
(CHART)
<Table>
<Caption>
RUSSELL 1000(R) INDEX (%) MSCI WORLD GROWTH INDEX (%)
------------------------- ---------------------------
2001 -12.45 -19.38
2002 -21.65 -19.90
2003 29.89 28.08
2004 11.40 10.90
2005 6.27 9.41
</Table>
12
IMPLEMENTATION OF THE CHANGE IN THE BENCHMARK INDEX
If the proposal is approved, the change in the Fund's benchmark index will
be implemented on a prospective basis beginning January 1, 2007 or as soon as
practicable following the date of shareholder approval. However, because the
Performance Adjustment is based upon a rolling 36-month performance measurement
period, comparisons to the Proposed Index will not be fully implemented for 36
months after the effective date of the Proposed Advisory Agreement. During this
transition period, the Fund's returns will be compared to a 36-month blended
index return that reflects the performance of the Current Index for the portion
of the performance measurement period prior to adoption of the Proposed Index,
and the performance of the Proposed Index for the remainder of the period. For
periods following the first full 36-month performance measuring period, the
performance measurement period would reflect one less month of the Current
Index's performance. At the conclusion of the transition period, the performance
of the Current Index would be eliminated from the Performance Adjustment
calculation, and the calculation would include only the performance of the
Proposed Index.
HOW THE PERFORMANCE ADJUSTMENT WORKS
If the average daily net assets of the Fund remain constant during a 36
month performance measurement period, current net assets will be the same as
average net assets over the performance measurement period and the maximum
Performance Adjustment will be equivalent to an annual rate of 0.15% of current
net assets. When current net assets vary from net assets over the 36 month
performance measurement period, the Performance Adjustment, as a percentage of
current assets, may vary significantly, including at a rate more or less than
0.15%, depending upon whether the net assets of the Fund had been increasing or
decreasing (and the amount of such increase or decrease) during the performance
measurement period. Note that if net assets for the Fund were increasing during
the performance measurement period, the total positive or negative Performance
Adjustment, measured in dollars, would be greater than if the net assets of the
Fund had not increased during the performance measurement period.
The Fund is a newer fund that commenced operations on February 25, 2005
and, accordingly, the net assets of the Fund are expected to be increasing
during the initial performance measurement periods, which is likely to result in
a Performance Adjustment that will be a smaller percentage of the Fund's current
assets than would be the case if the Fund's net assets remained constant during
the entire performance measurement period. The net assets of the Fund as of
August 31, 2006 were $ .
The following hypothetical examples illustrate the application of the
Performance Adjustment for the Fund. The examples assume that the average daily
net assets of the Fund remain constant during a 36-month performance measurement
period. The Performance Adjustment would be a smaller percentage of current
assets if the net assets of the Fund were increasing during the performance
measurement period, and a
13
greater percentage of current assets if the net assets of the Fund were
decreasing during the performance measurement period. All numbers in the
examples are rounded to the nearest hundredth percent.
The monthly maximum positive or negative Performance Adjustment of 1/12th
of 0.15% of average net assets during the prior 36 months occurs if the Fund
outperforms or underperforms its benchmark index by 6.00% or more over the same
period. The Performance Adjustment is made in even increments for every 0.50%
difference in the total return performance of the Fund compared to the
investment record of its benchmark index (applying either the Current Index or
Proposed Index).
EXAMPLE 1: FUND OUTPERFORMS ITS BENCHMARK BY 6%
If the Fund has outperformed its benchmark index by 6% during the preceding
36 months, the Fund would calculate the investment advisory fee as follows:
<Table>
<Caption>
MONTHLY MONTHLY PERFORMANCE TOTAL ADVISORY FEE RATE
BASE FEE RATE ADJUSTMENT RATE FOR THAT MONTH
--------------- ------------------- -----------------------
1/12th of 0.64% 1/12th of 0.15% 1/12th of 0.79%
</Table>
EXAMPLE 2: FUND PERFORMANCE TRACKS ITS BENCHMARK
If the Fund has tracked the performance of its benchmark index during the
preceding 36 months, the Fund would calculate the investment advisory fee as
follows:
<Table>
<Caption>
MONTHLY MONTHLY PERFORMANCE TOTAL ADVISORY FEE RATE
BASE FEE RATE ADJUSTMENT RATE FOR THAT MONTH
--------------- ------------------- -----------------------
1/12th of 0.64% 0.00 1/12th of 0.64%
</Table>
EXAMPLE 3: FUND UNDERPERFORMS ITS BENCHMARK BY 6%
If the Fund has underperformed its benchmark index by 6% during the
preceding 36 months, the Fund would calculate the investment advisory fee as
follows:
<Table>
<Caption>
MONTHLY MONTHLY PERFORMANCE TOTAL ADVISORY FEE RATE
BASE FEE RATE ADJUSTMENT RATE FOR THAT MONTH
--------------- ------------------- -----------------------
1/12th of 0.64% 1/12th of -0.15% 1/12th of 0.49%
</Table>
Under extreme circumstances, involving underperformance and a rapidly
shrinking asset base, the dollar amount of the Performance Adjustment could be
more than the dollar amount of the Base Fee. In such circumstances, Janus
Capital would reimburse the Fund.
COMPARISON OF CURRENT AND PRO FORMA EXPENSES
The following tables describe the shareholder fees and annual fund
operating expenses that you may pay if you buy and hold shares of the Fund under
the current fee structure and the pro forma fee structure applying both the
Current Index and Proposed Index, without giving effect to any fee waivers. For
purposes of pro forma calculations, it is assumed the Performance Adjustment
would have been in effect and
14
calculated over the period February 25, 2005 to April 30, 2006 (from Fund
inception through the end of the most recent semiannual period). The fees and
expenses shown were determined based upon net assets as of April 30, 2006. For
the February 25, 2005 to April 30, 2006 period, the Fund outperformed the
Current Index and the April 30, 2006 daily net assets were higher than the
trailing 14-month average daily net assets, resulting in the pro forma
management fee shown in the Annual Fund Operating Expenses table below for the
Fund. For the February 25, 2005 to April 30, 2006 period, the Fund outperformed
the Proposed Index and the fiscal year end average daily net assets were higher
than the trailing 14-month average daily net assets, resulting in the pro forma
management fee shown in the Annual Fund Operating Expenses table below for the
Fund.
Shareholder fees are those paid directly from your investment and may
include sales loads, redemption fees, or exchange fees. The Fund is a no-load
investment, so you will generally not pay any fees when you buy or sell shares
of the Fund.
Annual fund operating expenses are paid out of the Fund's assets and
include fees for portfolio management, maintenance of shareholder accounts,
shareholder servicing, accounting, and other services. You do not pay these fees
directly but, as the examples show, these costs are borne indirectly by all
shareholders.
The Trust, on behalf of the Fund, has entered into an expense waiver
agreement with Janus Capital. In the expense waiver agreement, Janus Capital has
agreed to reduce certain annual fund operating expenses to the extent that total
operating expenses exceed a specific percentage of average daily net assets,
subject to certain limitations described in the expense waiver agreement.
Additional details with respect to the expense waiver agreement are described in
the footnotes to the Annual Fund Operating Expenses table listed below. As a
result of the expense waiver agreement, the actual Total Annual Operating
Expenses may be less than the amount listed in the table.
SHAREHOLDER FEES (PAID DIRECTLY FROM INVESTMENT)(1)
(CURRENT AND PRO FORMA STRUCTURE)
<Table>
Maximum Sales Charge (Load) Imposed on Purchases........ None
Redemption Fee (as a % of amount redeemed).............. None(2)
</Table>
---------------
(1) For shares purchased through an intermediary, your financial intermediary
may charge a separate fee for purchases and sales of shares.
(2) The Fund may charge a fee to cover the cost of sending a wire transfer for
redemptions, and your bank may charge an additional fee to receive the wire.
15
ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
<Table>
<Caption>
TOTAL ANNUAL
MANAGEMENT OTHER OPERATING
FEE EXPENSES EXPENSES(1)
---------- -------- ------------
Current as of 4/30/06
(unaudited)............... 0.64% 0.50% 1.14%
Pro Forma Based upon Current
Index..................... 0.66% 0.50% 1.16%
Pro Forma Based upon
Proposed Index............ 0.65% 0.50% 1.15%
</Table>
EXAMPLES:
THE FOLLOWING EXAMPLES ARE BASED UPON EXPENSES WITHOUT WAIVERS AS SHOWN IN
THE TABLES ABOVE. These examples are intended to help you compare the cost of
investing in the Fund under both the current fee structure and the pro forma fee
structure applying both the Current Index and the Proposed Index with the cost
of investing in other mutual funds. The examples assume that you invest $10,000
in the Fund for the time periods indicated. Since no sales load applies, the
results apply whether or not you redeem your shares at the end of the periods
shown. The examples also assume that your investment has a 5% return each year
and that the Fund's operating expenses without waivers remain the same. Although
your actual costs may be higher or lower, based upon these assumptions, your
costs would be:
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Current....................... $116 $362 $628 $1,386
Pro Forma Based upon Current
Index....................... $118 $368 $638 $1,409
Pro Forma Based upon Proposed
Index....................... $117 $365 $633 $1,394
</Table>
---------------
(1) Total Annual Operating Expenses do not reflect the application of a
contractual expense waiver by Janus Capital. Janus Capital has contractually
agreed to waive the Fund's total operating expenses (excluding items not
normally considered operating expenses such as brokerage commissions,
interest, taxes, and extraordinary expenses) to the extent such operating
expenses exceed 1.25% of average daily net assets on the fiscal year ending
date in which the agreement is in effect. Because a fee waiver will have a
positive effect on a Fund's performance, a fee waiver that is in place
during a given Performance Measurement Period when the Performance
Adjustment applies may affect the Performance Adjustment in a way that is
favorable to Janus Capital. It is possible that the cumulative dollar amount
of additional compensation ultimately payable to Janus Capital for that
period will, under some circumstances, exceed the cumulative dollar amount
of fees waived by Janus Capital for that period. The current agreement will
be in effect until [March 1, 2007], unless terminated, revised, or extended.
Additionally, the current agreement does not contain any provisions allowing
for the recoupment of any fees waived. Currently, the Fund is not operating
above the 1.25% expense limit.
16
BOARD APPROVAL AND RECOMMENDATION
The investment advisory agreement for the Fund provides that the Fund shall
pay to Janus Capital a monthly base fee at the rate of 1/12 of 0.64% of the
average daily net asset value of the Fund. In addition, commencing with the
month of January 2007, the advisory fee is subject to a positive or negative
adjustment based on the total return performance of the Fund relative to the
performance of a specified benchmark index (the "Benchmark Index") over the
applicable "Performance Period." The maximum positive or negative fee adjustment
for any month is 1/12 of 0.15% of the monthly average net assets of the Fund.
The original and current Benchmark Index for measuring the performance
adjustment was the Russell 1000(R) Index (the "Current Index"), which measures
the performance of U.S. equity securities.
On September 6, 2006, the Board of Trustees, including all of the
Independent Trustees, upon the recommendation of Janus Capital, voted
unanimously to approve (1) changing the name of the Fund to "Janus Global
Research Fund," effective December 31, 2006; (2) effective December 31, 2006,
including as the Fund's investment policies that the Fund will normally invest
at least 40% of its net assets in securities of issuers from different countries
located throughout the world, excluding the United States; and (3) an amendment
to the investment advisory agreement for the Fund to change the Benchmark Index
from the Current Index to the Morgan Stanley Capital International World Growth
Index (the "Proposed Index"). The Board recommended that the shareholders of the
Fund approve that amendment at a meeting of shareholders called to be held on
December 14, 2006.
If the proposed amendment to the investment advisory agreement is approved
by shareholders, the Current Index would continue to be used to measure
Benchmark Index performance for any portion of a Performance Period through the
end of the calendar month in which shareholder approval is obtained, and the
Proposed Index would be used for any portion of a Performance Period commencing
after that month.
The Fund was launched in February 2005 with the flexibility to invest in
the highest conviction ideas of the Janus Capital equity research team that
manages the Fund, regardless of where geographically those opportunities are
found. As the Fund pursued its "go-anywhere" strategy, the research team
continued to find compelling investments for the Fund in both domestic and
international markets. In view of the increased holdings of foreign securities
in the Fund's portfolio, the change of the Fund's name, and the revisions to the
Fund's investment policies, the Board of Trustees concluded that the Proposed
Index, which measures the performance of growth stocks of developed countries
around the world, is a more appropriate Benchmark Index for evaluating the
Fund's performance, and better reflects the research team's long-term
expectations of finding investment opportunities throughout the world.
In approving the change in the Benchmark Index for the Fund, the Trustees
considered various information provided by Janus Capital, including, among other
17
information: (1) the dollar amount of the pro forma advisory fee that would have
been paid by the Fund, before and after all applicable waivers, for the period
from March 1, 2006 through July 31, 2006 using the Current Index as the
Benchmark Index and based upon a Performance Period beginning with the Fund's
inception on February 25, 2005; (2) the dollar amount of the pro forma advisory
fee that would have been paid by the Fund, before and after all applicable
waivers, using the Proposed Index as the Benchmark Index over the same time
period; (3) the difference between the pro forma fees of each index, net of any
waivers; (4) a chart that compared the returns of the Current and Proposed
Indexes from the Fund's inception through July 31, 2006, which showed that the
returns of the Fund have corresponded more closely to those of the Proposed
Index over the period; and (5) a chart that compared the calendar year
performance of both the Current Index and the Proposed Index for the past five
years, which showed that the two benchmarks have performed differently at times
over that period. The Trustees also met in executive session with their
independent legal counsel to review and discuss the proposed change in the
Benchmark Index, and considered information and analysis provided by the
Trustees' independent fee consultant. The Trustees concluded that the Proposed
Index was a more appropriate Benchmark Index for evaluating the Fund's
performance.
SHAREHOLDER COMMUNICATIONS
The Trustees provide for shareholders to send written communications to the
Trustees via regular mail. Written communications to the Trustees, or to an
individual Trustee, should be sent to the attention of the Trust's Secretary at
the address of the Trust's principal executive office. All such communications
received by the Trust's Secretary shall be promptly forwarded to the individual
Trustee to whom they are addressed or to the full Board of Trustees, as
applicable. If a communication does not indicate a specific Trustee, it will be
sent to the Chairperson of the Nominating and Governance Committee and the
outside counsel to the Independent Trustees for further distribution as deemed
appropriate by such persons. The Trustees may further develop and refine this
process as deemed necessary or desirable.
FUND SERVICE PROVIDERS
WHO SERVES AS MY FUND'S TRANSFER AGENT?
Janus Services, P.O. Box 173375, Denver, Colorado 80217, a wholly-owned
subsidiary of Janus Capital, serves as the Fund's transfer agent pursuant to an
Amended and Restated Transfer Agency Agreement ("Transfer Agency Agreement")
between Janus Services and the Trust. Pursuant to the Transfer Agency Agreement,
the Fund reimburses Janus Services for out-of-pocket expenses incurred by Janus
Services in connection with services rendered. In addition, for services
provided, including, but not limited to, establishing and maintaining
shareholder accounts, recording ownership of shares on the Trust's books,
mailing shareholder reports, recording reinvestments of dividends and
distributions, and coordinating with banks, broker-dealers and other
18
financial intermediaries who represent Fund shareholders, Janus Services
receives from the Fund an asset-weighted average annual fee based upon the
proportion of the Fund's net assets sold directly and the proportion of the
Fund's net assets sold through financial intermediaries. The applicable annual
fee rates are 0.16% of the daily closing net asset value of Fund shares sold
directly to shareholders and 0.21% of the daily closing net asset value of Fund
shares sold through financial intermediaries. In addition, the Fund pays Janus
Services a monthly fee calculated at an annual rate of $4.00 per open
shareholder account. Janus Services intends to continue to provide the same
services after implementation of the Proposed Advisory Agreement. The Fund paid
$89,076 to Janus Services for the 12-month period ended April 30, 2006.
WHO SERVES AS MY FUND'S DISTRIBUTOR?
Janus Distributors, a wholly-owned subsidiary of Janus Capital, located at
151 Detroit Street, Denver, Colorado 80206, serves as distributor of the Trust
pursuant to an Amended and Restated Distribution Agreement between the Trust and
Janus Distributors. Janus Distributors does not receive compensation from the
Trust for services rendered. Janus Distributors intends to continue to provide
the same services after implementation of the Proposed Advisory Agreement.
WHO SERVES AS MY FUND'S ADMINISTRATOR?
Janus Capital serves as administrator to the Trust, performing internal
accounting, recordkeeping, blue sky monitoring and registration functions of the
Trust. Janus Capital may be reimbursed by the Trust for certain administrative
and clerical functions it provides to the Fund as well as for reasonable costs
it incurs in performing certain functions. Janus Capital intends to continue to
provide the same administrative services after implementation of the Proposed
Advisory Agreement.
ADDITIONAL INFORMATION
QUORUM AND VOTING
Shareholders of the Fund will vote together at the Meeting. Each holder of
a whole or fractional share shall be entitled to one vote for each whole or
fractional dollar value of net asset value held in such shareholder's name. If
you are not the owner of record, but your shares are instead held for your
benefit by a financial intermediary such as a retirement plan service provider,
broker-dealer, bank trust department, insurance company, or other financial
intermediary, that financial intermediary may request that you provide
instruction on how to vote the shares you beneficially own. Your financial
intermediary will provide you with additional information.
Thirty percent of the outstanding shares entitled to vote at the Meeting
shall be a quorum for the transaction of business at the Meeting. Any lesser
number is sufficient for adjournments. In the event that the necessary quorum to
transact business or the
19
vote required to approve the proposal is not obtained at the Meeting, the
persons named as proxies may propose one or more adjournments of the Meeting, in
accordance with applicable law, to permit further solicitation of proxies. Any
such adjournment will require the affirmative vote of the holders of a majority
of the shares of the Fund, present in person or by proxy at the Meeting. The
persons named as proxies will vote the proxies (including broker non-votes and
abstentions) in favor of adjournment if they determine additional solicitation
is warranted and in the interests of the Fund's shareholders.
"Broker non-votes" are shares held by a broker or nominee for which an
executed proxy is received by the Trust, but are not voted because instructions
have not been received from beneficial owners or persons entitled to vote and
the broker or nominee does not have discretionary voting power. Abstentions and
"broker non-votes" are counted as shares eligible to vote at the Meeting in
determining whether a quorum is present, but do not represent votes cast with
respect to adjournment or the proposal. Accordingly, assuming the presence of a
quorum, abstentions and "broker non-votes" will have the effect of a vote
against the proposal.
Approval of the proposal will require the affirmative vote of a 1940 Act
Majority of the Fund's shareholders eligible to vote at the Meeting.
SHARE OWNERSHIP
As of the close of business on the Record Date, there were
outstanding shares of the Fund with a per share net asset value of
$ .
Beneficial owners of 5% or more of the outstanding shares of the Fund as of
the Record Date are shown below. To the best knowledge of the Trust, no person
beneficially owned more than 5% of the outstanding shares of the Fund except as
shown below. To the best knowledge of the Trust, entities shown as owning 25% or
more of the Fund, unless otherwise indicated, are not the beneficial owners of
such shares.
<Table>
<Caption>
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES PERCENTAGE OF FUND
------------------------------------ ---------------- ------------------
</Table>
SOLICITATION OF PROXIES
The cost of preparing, printing and mailing the proxy card(s) and this
Proxy Statement and all other costs incurred with the solicitation of proxies,
including any additional solicitation made by letter, telephone, or otherwise
will be paid by Janus Capital. In addition to solicitation by mail, officers and
representatives of the Trust, officers and employees of Janus Capital or its
affiliates, and certain financial services firms and their representatives,
without extra compensation, may conduct additional solicitations personally, by
telephone, or by any other means available.
20
Janus Capital has engaged D.F. King & Co., Inc. ("D.F. King"), a
professional proxy solicitation firm, to assist in the solicitation of proxies,
at an estimated cost of $ , plus expenses. Such expenses will be paid
by Janus Capital. Among other things, D.F. King will be: (i) required to
maintain the confidentiality of all shareholder information; (ii) prohibited
from selling or otherwise disclosing shareholder information to any third party;
and (iii) required to comply with applicable telemarketing laws.
Brokers, banks, and other fiduciaries may be required to forward soliciting
material to their principals on behalf of the Fund and to obtain authorization
for the execution of proxies. For those services, they will be reimbursed by
Janus Capital for their expenses to the extent Janus Capital or the Fund would
have directly borne those expenses.
As the Meeting date approaches, certain shareholders whose votes have not
been received, may receive telephone calls from a representative of D.F. King.
Authorization to permit D.F. King to execute proxies may be obtained by
telephonic or electronically transmitted instructions from shareholders of the
Fund. Proxies that are obtained telephonically will be recorded in accordance
with the procedures described below. The Fund believes that these procedures are
reasonably designed to ensure that both the identity of the shareholder casting
the vote and the voting instructions of the shareholder are accurately
determined.
In all cases where a telephonic proxy is solicited, the representative is
required to ask for each shareholder's full name, address, title (if the
shareholder is authorized to act on behalf of an entity, such as a corporation),
and to confirm that the shareholder has received the Proxy Statement and proxy
card(s) in the mail. If the information solicited agrees with the information
provided to D.F. King, then the D.F. King representative has the responsibility
to explain the process, read the proposal listed on the proxy card, and ask for
the shareholder's instructions on the proposal. Although the D.F. King
representative is permitted to answer questions about the process, he or she is
not permitted to recommend to the shareholder how to vote. The D.F. King
representative may read any recommendation set forth in this Proxy Statement.
The D.F. King representative will record the shareholder's instructions. Within
72 hours, the shareholder will be sent a confirmation of his or her vote asking
the shareholder to call D.F. King immediately if his or her instructions are not
accurately reflected in the confirmation.
Telephone Touch-Tone Voting. Shareholders may provide their voting
instructions through telephone touch-tone voting by following the instructions
on the enclosed proxy card(s). Shareholders will have an opportunity to review
their voting instructions and make any necessary changes before submitting their
voting instructions and terminating their telephone call.
Internet Voting. Shareholders may provide their voting instructions
through Internet voting by following the instructions on the enclosed proxy
card(s). Shareholders who vote via the Internet, in addition to confirming their
voting instructions prior to submission and terminating their Internet link,
will, upon request, receive an e-mail
21
confirming their voting instructions. If a shareholder wishes to participate in
the Meeting but does not wish to give a proxy by telephone or via the Internet,
the shareholder may still submit the proxy card(s) originally sent with the
Proxy Statement in the postage paid envelope provided, or attend the Meeting in
person. Shareholders requiring additional information regarding the proxy or
replacement proxy card(s), may contact D.F. King at [TOLL-FREE NUMBER]. Any
proxy given by a shareholder is revocable until voted at the Meeting.
Revoking a Proxy. Any shareholder submitting a proxy has the power to
revoke it at any time before it is exercised by submitting to the Secretary of
the Trust at 151 Detroit Street, Denver, Colorado 80206, a written notice of
revocation or a subsequently executed proxy or by attending the Meeting and
voting in person. All properly executed and unrevoked proxies received in time
for the Meeting will be voted as specified in the proxy, or, if no specification
is made, will be voted FOR the proposal described in this Proxy Statement.
Shares Held by Accounts of Insurance Companies. Shares of the Fund may be
held by certain separate accounts of insurance companies to fund benefits
payable under certain variable annuity contracts and variable life insurance
policies. Your insurance company may request that you provide it with voting
instructions for your beneficially held shares of any such separate account. If
you do not provide voting instructions to your insurance company, it may vote
all of the shares held in that separate account in the same proportions as the
voting actually received from other variable contract holders for that separate
account.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of a Fund's portfolio securities are
placed on behalf of the Fund by Janus Capital, or its agent. The Fund does not
allocate portfolio transactions on the basis of the sale of Fund shares,
although brokerage firms whose customers purchase shares of the Fund may execute
transactions for the Fund and receive brokerage commissions.
LEGAL MATTERS
Information regarding material pending legal proceedings involving Janus
Capital or the Fund is attached as [Exhibit E] to this Proxy Statement.
SHAREHOLDER PROPOSAL FOR SUBSEQUENT MEETINGS
The Fund is not required, and does not intend, to hold annual shareholder
meetings. Under the terms of a settlement reached between Janus Capital and the
SEC in August 2004, commencing in 2005 and not less than every fifth calendar
year thereafter, the Trust will hold a meeting of shareholders to elect
Trustees. Shareholder meetings may be called from time to time as described in
the Amended and Restated Agreement and Declaration of Trust and the Trust's
Amended and Restated Bylaws. Under the proxy rules of the SEC, shareholder
proposals that meet certain conditions
22
may be included in the Fund's proxy statement for a particular meeting. Those
rules currently require that for future meetings, the shareholder must be a
record or beneficial owner of the Fund shares either (i) with a value of at
least $2,000 or (ii) in an amount representing at least 1% of the Fund's
securities to be voted, at the time the proposal is submitted and for one year
prior thereto, and must continue to own such shares through the date on which
the meeting is held. Another requirement relates to the timely receipt by the
Fund of any such proposal. Under those rules, a proposal must have been
submitted within a reasonable time before the Fund began to print and mail this
Proxy Statement in order to be included in this Proxy Statement. A proposal
submitted for inclusion in the Fund's proxy material for the next special
meeting after the meeting to which this Proxy Statement relates must be received
by the Fund within a reasonable time before the Fund begins to print and mail
the proxy materials for that meeting.
Shareholders wishing to submit a proposal for inclusion in a proxy
statement subsequent to the Meeting, if any, should send their written proposal
to the Secretary of the Trust at 151 Detroit Street, Denver, Colorado 80206
within a reasonable time before the Fund begins to print and mail the proxy
materials for that meeting. Notice of shareholder proposals to be presented at
the Meeting must have been received within a reasonable time before the Fund
began to mail this Proxy Statement. The timely submission of a proposal does not
guarantee its inclusion in the proxy materials.
23
REPORTS TO SHAREHOLDERS AND FINANCIAL STATEMENTS
The Annual Report to shareholders of the Fund, including financial
statements of the Fund, has previously been sent to shareholders. THE FUND
PROVIDES ANNUAL AND SEMIANNUAL REPORTS TO ITS SHAREHOLDERS THAT HIGHLIGHT
RELEVANT INFORMATION, INCLUDING INVESTMENT RESULTS AND A REVIEW OF PORTFOLIO
CHANGES. ADDITIONAL COPIES OF THE FUND'S MOST RECENT ANNUAL REPORT AND ANY MORE
RECENT SEMIANNUAL REPORT ARE AVAILABLE, WITHOUT CHARGE, BY CALLING A JANUS
REPRESENTATIVE AT 1-800-525-3713, VIA THE INTERNET AT WWW.JANUS.COM, OR BY
SENDING A WRITTEN REQUEST TO THE SECRETARY OF THE TRUST AT 151 DETROIT STREET,
DENVER, COLORADO 80206.
To avoid sending duplicate copies of materials to households, the Fund
mails only one copy of each report to shareholders having the same last name and
address on the Fund's records. The consolidation of these mailings benefits the
Fund through reduced mailing expenses. If a shareholder wants to receive
multiple copies of these materials or to receive only one copy in the future,
the shareholder should contact the Fund's transfer agent, Janus Services, at
1-800-525-3713 or notify the Fund's transfer agent in writing at P.O. Box
173375, Denver, CO, 80217-3375.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board of Trustees is not aware of any matters that will be presented
for action at the Meeting other than the matters described in this Proxy
Statement. Should any other matters requiring a vote of shareholders arise, the
proxy in the accompanying form will confer upon the person or persons entitled
to vote the shares represented by such proxy the discretionary authority to vote
the shares as to any other matters in accordance with their best judgment in the
interest of the Trust and/or Fund.
PLEASE COMPLETE, SIGN, AND RETURN THE ENCLOSED PROXY CARD(S) OR VOTE BY
INTERNET OR TELEPHONE PROMPTLY. NO POSTAGE IS REQUIRED IF YOU MAIL YOUR PROXY
CARD(S) IN THE UNITED STATES.
By order of the Board of Trustees,
/s/ Kelley Abbott Howes
Kelley Abbott Howes
President and Chief Executive Officer
of Janus Investment Fund
24
INDEX OF EXHIBITS
<Table>
EXHIBIT A: Proposed Advisory Agreement
EXHIBIT B: Principal Executive Officers of Janus Capital and Their
Principal Occupations
EXHIBIT C: Trust Officers/Directors and Their Principal Occupations
EXHIBIT D: Legal Matters
EXHIBIT E: Other Funds Managed by Janus Capital with Similar Investment
Objectives
</Table>
EXHIBIT A
JANUS INVESTMENT FUND
INVESTMENT ADVISORY AGREEMENT
JANUS RESEARCH FUND
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 2nd day
of December, 2004, as amended this 1st day of January, 2006, [and this] 14th day
of June, [2006,][2006 and this day of , 200 ,] between JANUS
INVESTMENT FUND, a Massachusetts business trust (the "Trust"), and JANUS CAPITAL
MANAGEMENT LLC, a Delaware limited liability company ("JCM").
W I T N E S S E T H:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and has registered its shares for public offering under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Trust is authorized to create separate funds, each with its
own separate investment portfolio of which the beneficial interests are
represented by a separate series of shares; one of such funds created by the
Trust being designated as the Janus Research 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, and have authority to act with respect thereto, as to the
acquisition, holding, or disposition of any or all of the securities or
other assets which the Fund may own or contemplate acquiring from time to
time. JCM shall give due consideration to the investment policies and
restrictions and the other statements concerning the Fund in the Trust
Instrument, bylaws, and registration statements under the 1940 Act and the
1933 Act, and to the provisions of the Internal Revenue Code, as amended
from time to time, applicable to the Fund as a regulated investment
company. 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
A-1
and appropriate officers of the Trust fully informed as to the condition of
the investment portfolio of the Fund.
3. Other Services. JCM is hereby authorized (to the extent the Trust
has not otherwise contracted) but not obligated (to the extent it so
notifies the Trustees at least 60 days in advance), to perform (or arrange
for the performance by affiliates of) the management and administrative
services necessary for the operation of the Fund. JCM is specifically
authorized, on behalf of the Trust, to conduct relations with custodians,
depositories, transfer and pricing agents, accountants, attorneys,
underwriters, brokers and dealers, corporate fiduciaries, insurance company
separate accounts, insurers, banks and such other persons in any such other
capacity deemed by JCM to be necessary or desirable. JCM shall generally
monitor and report to the Fund's officers the Fund's compliance with
investment policies and restrictions as set forth in the currently
effective prospectus and statement of additional information relating to
the shares of the Fund under the 1933 Act. JCM shall make reports to the
Trustees of its performance of services hereunder upon request therefor and
furnish advice and recommendations with respect to such other aspects of
the business and affairs of the Fund as it shall determine to be desirable.
JCM is also authorized, subject to review by the Trustees, to furnish such
other services as JCM shall from time to time determine to be necessary or
useful to perform the services contemplated by this Agreement.
4. Obligations of Trust. The Trust shall have the following
obligations under this Agreement:
(a) to keep JCM continuously and fully informed as to the
composition of its investment portfolio and the nature of all of its
assets and liabilities from time to time;
(b) to furnish JCM with a certified copy of any financial statement
or report prepared for it by certified or independent public accountants
and with copies of any financial statements or reports made to its
shareholders or to any governmental body or securities exchange;
(c) to furnish JCM with any further materials or information which
JCM may reasonably request to enable it to perform its function under
this Agreement; and
(d) to compensate JCM for its services and reimburse JCM for its
expenses incurred hereunder in accordance with the provisions hereof.
[5.] [5.] Compensation. The Trust shall pay to JCM for its services
pursuant to this Agreement a monthly base fee of 1/12 of 0.64% of the
average daily closing net asset value of the Fund [for any calendar month
(the "Base Fee"),] adjusted by a performance fee as set forth in Schedule
A. For any period less than a month during which this Agreement is in
effect, the [base fee][Base Fee] shall be
A-2
prorated according to the proportion which such period bears to a full
month of 28, 29, 30 or 31 days, as the case may be.
6. Expenses Borne by JCM. In addition to the expenses which JCM may
incur in the performance of its investment advisory functions and other
services under this Agreement, and the expenses which it may expressly
undertake to incur and pay under other agreements with the Trust or
otherwise, JCM shall incur and pay the following expenses relating to the
Fund's operations without reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of the
Trust's officers and its Trustees, except for such Trustees who
are not "interested persons," as defined in the 1940 Act, of
JCM, and except as otherwise provided in Section 7; and
(b) Rental of offices of the Trust.
7. Expenses Borne by the Trust. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCM pursuant to Sections 3 and
6 hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees
who are not "interested persons," as defined in the 1940 Act, of JCM;
compensation and related expenses of the Chief Compliance Officer of the
Trust and compliance staff, as authorized from time to time by the Trustees
of the Trust; compensation of the Fund's custodian, transfer agent,
registrar and dividend disbursing agent; legal, accounting, audit and
printing expenses; administrative, clerical, recordkeeping and bookkeeping
expenses; brokerage commissions and all other expenses in connection with
execution of portfolio transactions (including any appropriate commissions
paid to JCM or its affiliates for effecting exchange listed,
over-the-counter or other securities transactions); interest; all federal,
state and local taxes (including stamp, excise, income and franchise
taxes); costs of stock certificates and expenses of delivering such
certificates to purchasers thereof; expenses of local representation in
Massachusetts; expenses of shareholders' meetings and of preparing,
printing and distributing proxy statements, notices, and reports to
shareholders; expenses of preparing and filing reports and tax returns with
federal and state regulatory authorities; all expenses incurred in
complying with all federal and state laws and the laws of any foreign
country applicable to the issue, offer, or sale of shares of the Fund,
including, but not limited to, all costs involved in the registration or
qualification of shares of the Fund for sale in any jurisdiction, the costs
of portfolio pricing services and compliance systems, and all costs
involved in preparing, printing and mailing prospectuses and statements of
additional information to Fund shareholders; and all fees, dues and other
expenses incurred by the Trust in connection with the membership of the
Trust in any trade association or other investment company organization.
8. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Fund
acting by
A-3
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 January 1,
2007, unless sooner terminated in accordance with its terms, and shall
continue in effect from year to year thereafter only so long as such
continuance is specifically approved at least annually by (a) the vote of a
majority of the Trustees of the Trust who are not parties hereto or
interested persons of any such party, cast in person at a meeting called
for the purpose of voting on the approval of the terms of such renewal, and
(b) either the Trustees of the Trust or the affirmative vote of a majority
of the outstanding voting securities of the Fund. The annual approvals
provided for herein shall be effective to continue this Agreement from year
to year if given within a period beginning not more than ninety (90) days
prior to January 1 of each applicable year, notwithstanding the fact that
more than three hundred sixty-five (365) days may have elapsed since the
date on which such approval was last given.
11. Amendments. This Agreement may be amended by the parties only if
such amendment is specifically approved (i) by a majority of the Trustees,
including a majority of the Trustees who are not interested persons (as
that phrase is defined in Section 2(a)(19) of the 1940 Act) of any party to
this Agreement and, if required by applicable law, (ii) by the affirmative
vote of a majority of the outstanding voting securities of the Fund (as
that phrase is defined in Section 2(a)(42) of the 1940 Act).
12. Other Series. The Trustees shall determine the basis for making
an appropriate allocation of the Trust's expenses (other than those
directly attributable to the Fund) between the Fund and the other series of
the Trust.
13. Limitation of Personal Liability. All the parties hereto
acknowledge and agree that all liabilities of the Trust arising, directly
or indirectly, under this Agreement, of any and every nature whatsoever,
shall be satisfied solely out of the assets of the Fund and that no
Trustee, officer or holder of shares of beneficial interest of the Trust
shall be personally liable for any of the foregoing liabilities. The Trust
Instrument describes in detail the respective responsibilities and
limitations on liability of the Trustees, officers and holders of shares of
beneficial interest of the Trust.
A-4
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 Securities and Exchange Commission under said Act and as
may be then in effect.
17. Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Colorado (without giving effect to the
conflicts of laws principles thereof) and the 1940 Act. To the extent that
the applicable laws of the State of Colorado conflict with the applicable
provisions of the 1940 Act, the latter shall control.
This Agreement shall supercede all prior investment advisory agreements
entered into between JCM and the Trust, on behalf of the Fund.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of January 1, 2006.
JANUS CAPITAL MANAGEMENT LLC
By:
----------------------------------
David R. Martin, Chief Financial
Officer and Executive Vice
President
JANUS INVESTMENT FUND
By:
----------------------------------
Kelley A. Howes, President and
Chief Executive Officer
A-5
SCHEDULE A
PERFORMANCE ADJUSTMENT
[BEGINNING][(COMMENCING] WITH [THE BASE FEE][MONTHLY FEES] PAYABLE FOR
JANUARY [2006 AND IN MONTH 13 FROM THE AMENDED DATE OF THIS AGREEMENT, THE BASE
FEE SHALL BE][2007)]
[The monthly fee shall consist of the Base Fee, as] adjusted[ monthly]
based upon the investment performance of the Fund in relation to the cumulative
investment record of [the Fund's][one or more] benchmark[, the Russell 1000
Index (the "Index"),] [indexes] over the "Performance Period" (such adjustment
being referred to herein as the "Performance Adjustment")[ as described below.]
The "Performance Period" is defined as the shorter of: (a) the period from [the
date of this Agreement][January 1, 2006] through the end of the month [preceding
the month] for which the fee is being calculated[, and]; [or] (b) the 36 month
period preceding[ the end of] the month for which the fee is being calculated.
[The Russell 1000 Index (the "Prior Index") is the benchmark through
[December 31, 2006]; and the Morgan Stanley Capital International World Growth
Index (the "Successor Index") is the benchmark commencing [January 1, 2007].
Therefore, in calculating the Performance Adjustment for any Performance Period
that commences prior to January 1, 2007, the Prior Index shall be used for that
portion of the period preceding that date, and, for any Performance Period that
ends after [December 31, 2006], the Successor Index shall be used for that
portion of the period subsequent to that date.]
[The Performance Adjustment shall be calculated by subtracting the
investment record of the Index from the investment performance of the Fund. If
there is less than a 0.50% difference (plus or minus) between the investment
performance of the Fund and the investment record of the Index, the Fund pays
JCM the Base Fee with no adjustment. If the difference between the investment
performance of the Fund and the investment record of the Index is 0.50% or
greater during any Performance Period, the Base Fee will be subject to an upward
or downward performance adjustment of 1/12 of 0.0125% for every full 0.50%
increment by which the Fund outperforms or underperforms the Index. The maximum
percentage used in calculating the Performance Adjustment (positive or negative)
in any month is 1/12 of 0.15%. The Performance Adjustment is applied against the
Fund's average daily net assets during the Performance Period.]
[The Performance Adjustment for any month commencing in January 2007 shall
be derived from the difference between: (1) the positive or negative Total
Return of the Measuring Class of shares of the Fund over the Performance Period
ending at the end of the next preceding month, less (2) the positive or negative
percentage change in the benchmark index over that period (or sum of the
percentage changes in the benchmark indexes if two benchmarks are used during
that period). If the difference is less than a positive or negative 0.50%, the
Fund shall pay the Base Fee for that month, without a Performance Adjustment. If
the difference is 0.50% or more, the Fund shall pay the
A-6
Base Fee plus or minus a Performance Adjustment of 1/12 of 0.0125% (or
approximately 0.00104%) for each full positive or negative 0.50% of the
Performance Adjustment multiplied by the average daily net assets of the Fund
during the Performance Period, provided, however, that a Performance Adjustment
for any month shall not exceed 1/12 of .15% (or 0.0125%) of the average net
assets during the Performance Period.]
For purposes of computing the Base Fee and [the Performance Adjustment][any
adjustment], net assets are averaged over different periods (average daily net
assets during the relevant month for the Base Fee versus average daily net
assets during the Performance Period for the [Performance
Adjustment][adjustment]). The Base Fee is calculated and accrued daily. The
[Performance Adjustment][adjustment] is calculated monthly in arrears and is
accrued evenly each day throughout the month. The investment advisory fee is
paid monthly in arrears.
The average daily net asset value of the Fund, or any class thereof, shall
be determined in the manner set forth in the Trust's Amended and Restated
Agreement and Declaration of Trust, Amended and Restated Bylaws and registration
statement, each as may be amended from time to time.
The [investment performance][Total Return of the Measuring Class of shares]
of the Fund will be the sum of:
(1) the change in the [Fund's ]net asset value [("NAV") ]per share [of
the Measuring Class ("NAV")] during the Performance Period; plus
(2) the value of the [Fund's cash][per share] distributions [per share
]accumulated [to][on] the [end of][Measuring Class during] the Performance
Period; plus
(3) the value of capital gains taxes per share paid or payable on
undistributed realized long-term capital gains accumulated to the end of
the Performance Period;
expressed as a percentage of the Fund's NAV per share at the beginning of the
Performance Period. For this purpose, the value of distributions per share of
realized capital gains, of dividends per share paid from investment income and
of capital gains taxes per share paid or payable on undistributed realized
long-term capital gains shall be treated as reinvested in shares of the Fund at
the NAV in effect at the close of business on the record date for the payment of
such distributions and dividends and the date on which provision is made for
such taxes, after giving effect to such distributions, dividends and taxes.
The [investment record of the Index][change in the benchmark index or
indexes] will be the sum of:
(1) the change in the level of the [Index][index (or the blended
change in the level of the indexes, as applicable)] during the Performance
Period; plus
(2) the value, computed consistently with the [Index][index], of cash
distributions made by companies whose securities comprise the
[Index][index] accumulated
A-7
to the end of the Performance Period[;] [(or, as applicable, the value of
cash distributions made by companies whose securities comprise the Prior
Index, accumulated through December 31, 2006, plus the value of cash
distributions made by companies whose securities comprise the Successor
Index, accumulated on and after January 1, 2007 to the end of the
Performance Period, in each computed consistently with the respective
index)], expressed as a percentage of the [Index][index] level at the
beginning of the Performance Period. For this purpose, cash distributions
on the securities which comprise the [Index][index] shall be treated as
reinvested in the [Index][index] at least as frequently as the end of each
calendar quarter following the payment of the dividend.
[If, consistent with the Trust's Amended and Restated Agreement and
Declaration of Trust and Amended and Restated Bylaws, each as may be further
amended, the Trustees should subsequently decide to divide][The "Measuring
Class" of] shares of the Fund [into two or more separate classes,][shall
initially be] the oldest class of shares[ will be used for purposes of
determining the Performance Adjustment][.] From time to time, the Trustees may,
by vote of the Trustees of the Trust voting in person, including a majority of
the Trustees who are not parties to this Agreement or "interested persons" (as
defined in the 1940 Act) of any such parties, determine that a different class
of shares of the Fund is the most appropriate for use in calculating the
Performance Adjustment. If a different class of shares ("Successor Class") is
substituted in calculating the Performance Adjustment, the use of that Successor
Class of shares for purposes of calculating the Performance Adjustment may apply
to the entire Performance Period so long as such Successor Class was outstanding
at the beginning of such period. If the Successor Class of shares was not
outstanding for all or a portion of the Performance Period, it may only be used
in calculating that portion of the Performance Adjustment attributable to the
period during which such Successor Class was outstanding and any prior portion
of the Performance Period shall be calculated using the class of shares
previously designated.
A-8
PROXY JANUS RESEARCH FUND PROXY
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 14, 2006
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF JANUS INVESTMENT FUND
("TRUST"). The undersigned, revoking previous proxies, hereby appoints Kelley
A. Howes, Jesper Nergaard, and Stephanie Grauerholz-Lofton or any of them, as
attorneys and proxies, with full power of substitution to each, to vote the
shares which the undersigned is entitled to vote at the Special Meeting of
Shareholders ("Meeting") of Janus Research Fund to be held at the JW Marriott
Hotel, 150 Clayton Lane, Denver, CO on December 14, 2006 at 10:00 a.m. Mountain
Time and at any adjournment(s) or postponement(s) of such Meeting. As to any
other matter that properly comes before the Meeting or any adjournment(s) or
postponement(s) thereof, the persons appointed above may vote in accordance with
their best judgment. The undersigned hereby acknowledges receipt of the
accompanying Proxy Statement and Notice of Special Meeting.
[VOTE VIA THE INTERNET:]
[VOTE VIA THE TELEPHONE:]
NOTE: Please sign exactly as your name(s) appears on the Proxy.
If you are signing this Proxy for a corporation, estate, trust or
other fiduciary capacity, for example, as a trustee, please state
that capacity or title along with your signature.
<Table>
----------------------------------- ----------
Signature Date
----------------------------------- ----------
Signature (Joint Owners) Date
</Table>
WHEN THIS PROXY IS PROPERLY EXECUTED, THE SHARES REPRESENTED HEREBY WILL BE
VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR
THE PROPOSAL SET FORTH BELOW.
PLEASE MARK A BOX BELOW IN BLUE OR BLACK INK AS FOLLOWS. EXAMPLE: [X]
- APPROVE AN AMENDMENT TO THE JANUS RESEARCH FUND'S INVESTMENT ADVISORY
AGREEMENT, WHICH CHANGES THE BENCHMARK INDEX FOR PURPOSES OF CALCULATING
THE PERFORMANCE-BASED INVESTMENT ADVISORY FEE.
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FOR AGAINST ABSTAIN
[ ] [ ] [ ]
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