OMB APPROVAL
OMB Number: 3235-0307
Expires: 05/31/00
Estimated average burden
hours per response: 212.95
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
PRE- EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. [ ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 [X]
AMENDMENT NO. [ ]
(Check appropriate box or boxes.)
JANUS ADVISER SERIES
(Exact Name of Registrant as Specified in Charter)
100 FILLMORE STREET, DENVER, COLORADO 80206-4928
Address of Principal Executive Offices (Zip Code)
REGISTRANT'S TELEPHONE NO., INCLUDING AREA CODE: 303-333-3863
THOMAS A. EARLY - 100 FILLMORE STREET, DENVER, COLORADO 80206-4928
(Name and Address of Agent for Service)
Approximate Date of Proposed Offering: As soon as practicable after the
effective date of this Registration Statement and thereafter from day to day.
It is proposed that this filing will become effective (check appropriate box):
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] on (date) pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[ ] on (date) pursuant to paragraph (a)(1) of Rule 485
[ ] 75 days after filing pursuant to paragraph (a)(2) of Rule 485
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485.
<PAGE>
The Registrant hereby amends the Registration Statement on such date or dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), shall
determine.
<PAGE>
JANUS ADVISER SERIES
Cross Reference Sheet
Between the Prospectuses and Statements of
Additional Information and Form N-1A Item
FORM N-1A ITEM CAPTION IN PROSPECTUSES
PART A
1. Front and Back Cover Pages Cover Pages
2. Risk/Return Summary: Risk/Return Summary
Investments, Risks, and
Performance
3. Risk/Return Summary: Fee Risk/Return Summary
Table
4. Investment Objectives, Investment Objectives, Principal
Principal Investment Investment Strategies, and Risks;
Strategies, and Related Risks Rating Categories
5. Management's Discussion of Not Applicable
Fund Performance
6. Management, Organization, and Management of the Funds
Capital Structure
7. Shareholder Information Shareholder's Guide; Other
Information; Distributions and Taxes
8. Distribution Arrangements Distributions and Taxes
9. Financial Highlights Financial Highlights
Information
<PAGE>
FORM N-1A ITEM CAPTION IN STATEMENTS OF
ADDITIONAL INFORMATION
PART B
10. Cover Page and Table of Cover Page; Table of Contents
Contents
11. Fund History Miscellaneous Information
12. Description of the Fund and Classification, Portfolio Turnover,
Its Investments and Risks Investment Policies and
Restrictions, Investment
Strategies and Risks;
13. Management of the Fund Investment Adviser; Trustees and
Officers
14. Control Persons and Principal Not Applicable
Holders of Securities
15. Investment Advisory and Other Investment Adviser; Custodian,
Services Transfer Agent, and Certain
Affiliations; Portfolio
Transactions and Brokerage;
Trustees and Officers;
Miscellaneous Information
16. Brokerage Allocation and Portfolio Transactions and
Other Practices Brokerage
17. Capital Stock and Other Purchases; Redemptions;
Securities Miscellaneous Information
18. Purchase, Redemption, and Purchases; Redemptions;
Pricing of Shares Miscellaneous Information
19. Taxation of the Fund Income Dividends, Capital Gains
Distributions and Tax Status
20. Underwriters Custodian, Transfer Agent, and
Certain Affiliations
<PAGE>
21. Calculation of Performance Performance Information
Data
22. Financial Statements Not Applicable
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER IS NOT PERMITTED.
[JANUS LOGO]
Subject to Completion
Preliminary Prospectus Dated April 4, 2000
Janus Adviser Series
PROSPECTUS
, 2000
Janus Adviser Growth Fund
Janus Adviser Aggressive Growth Fund
Janus Adviser Capital Appreciation Fund
Janus Adviser Balanced Fund
Janus Adviser Equity Income Fund
Janus Adviser Growth and Income Fund
Janus Adviser Strategic Value Fund
Janus Adviser International Fund
Janus Adviser Worldwide Fund
Janus Adviser Flexible Income Fund
Janus Adviser Money Market Fund
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR
DISAPPROVED OF THESE SECURITIES OR PASSED ON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
[JANUS LOGO]
This prospectus describes eleven mutual funds (the "Funds") with
a variety of investment objectives, including growth of capital,
current income and a combination of growth and income.
<PAGE>
Table of contents
<TABLE>
<S> <C>
RISK/RETURN SUMMARY
Equity Funds............................................. 2
Flexible Income Fund..................................... 10
Money Market Fund........................................ 12
Fees and expenses........................................ 14
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND
RISKS
Equity Funds............................................. 16
Flexible Income Fund..................................... 20
General portfolio policies of the Funds other than Money
Market Fund.............................................. 21
Risks for Equity Funds................................... 24
Risks for Flexible Income Fund........................... 25
Risks common to all Non-Money Market Funds............... 25
Money Market Fund........................................ 27
MANAGEMENT OF THE FUNDS
Investment adviser....................................... 30
Management expenses and expense limits................... 31
Investment personnel..................................... 32
OTHER INFORMATION........................................... 36
DISTRIBUTIONS AND TAXES
Distributions............................................ 37
Taxes.................................................... 38
SHAREHOLDER'S GUIDE
Pricing of Fund Shares................................... 39
Purchases................................................ 39
Exchanges................................................ 39
Redemptions.............................................. 40
Frequent Trading......................................... 40
Shareholder communications............................... 40
FINANCIAL HIGHLIGHTS........................................ 41
GLOSSARY
Glossary of investment terms............................. 42
RATING CATEGORIES
Explanation of rating categories......................... 46
</TABLE>
Table of contents 1
<PAGE>
Risk return summary
EQUITY FUNDS
The Equity Funds are designed for long-term investors who seek growth
of capital and who can tolerate the greater risks associated with
common stock investments. Balanced Fund, Equity Income Fund and Growth
and Income Fund are designed for investors who primarily seek growth
of capital with varying degrees of emphasis on income. Balanced Fund,
Equity Income Fund and Growth and Income Fund are not designed for
investors who desire a consistent level of income.
1. WHAT ARE THE INVESTMENT OBJECTIVES OF THE EQUITY FUNDS?
- --------------------------------------------------------------------------------
DOMESTIC EQUITY FUNDS
- GROWTH FUND seeks long-term growth of capital in a manner
consistent with the preservation of capital.
- AGGRESSIVE GROWTH FUND, CAPITAL APPRECIATION FUND AND STRATEGIC
VALUE FUND seek long-term growth of capital.
- BALANCED FUND seeks long-term capital growth, consistent with
preservation of capital and balanced by current income.
- EQUITY INCOME FUND seeks current income and long-term growth of
capital.
- GROWTH AND INCOME FUND seeks long-term capital growth and current
income.
GLOBAL/INTERNATIONAL EQUITY FUNDS
- INTERNATIONAL FUND seeks long-term growth of capital.
- WORLDWIDE FUND seeks long-term growth of capital in a manner
consistent with the preservation of capital.
The Funds' Trustees may change these objectives without a shareholder
vote and the Funds will notify you of any changes that are material.
If there is a material change to a Fund's objective or policies, you
should consider whether that Fund remains an appropriate investment
for you. There is no guarantee that a Fund will meet its objective.
2. WHAT ARE THE MAIN INVESTMENT STRATEGIES OF THE EQUITY FUNDS?
The portfolio managers apply a "bottom up" approach in choosing
investments. In other words, the Funds' portfolio managers look for
companies with earnings growth potential one at a time, and in the
case of Strategic Value Fund, the Fund's portfolio manager looks for
undervalued companies one at a time. Balanced Fund's, Equity Income
Fund's and Growth and Income Fund's portfolio managers look mostly for
equity and income-producing securities that meet their investment
criteria. If a portfolio manager is unable to find such investments, a
significant portion of a Fund's assets may be in cash or similar
investments.
The Funds may invest without limit in foreign equity and debt
securities and less than 35% of its net assets in high-yield/high risk
bonds.
GROWTH FUND invests primarily in common stocks selected for their
growth potential. Although the Portfolio can invest in companies of
any size, it generally invests in larger, more established companies.
2 Janus Adviser Series
<PAGE>
AGGRESSIVE GROWTH FUND invests primarily in common stocks selected for
their growth potential, and normally invests at least 50% of its
equity assets in medium-sized companies.
CAPITAL APPRECIATION FUND invests primarily in common stocks selected
for their growth potential. The Fund may invest in companies of any
size, from larger, well-established companies to smaller, emerging
companies.
BALANCED FUND normally invests 40-60% of its assets in securities
selected primarily for their growth potential and 40-60% of its assets
in securities selected primarily for their income potential. The Fund
will normally invest at least 25% of its assets in fixed-income
securities.
EQUITY INCOME FUND normally emphasizes investments in common stocks,
and growth potential is a significant investment consideration.
Normally, it invests at least 65% of its invested assets in income-
producing equity securities.
GROWTH AND INCOME FUND normally emphasizes investments in common
stocks. It will normally invest up to 75% of its assets in equity
securities selected primarily for their growth potential, and at least
25% of its assets in securities the portfolio manager believes have
income potential. Equity securities may make up part of this income
component if they currently pay dividends or the portfolio manager
believes they have potential for increasing or commencing dividend
payments.
STRATEGIC VALUE FUND invests primarily in common stocks with the
potential for long-term growth of capital using a "value" approach.
The "value" approach emphasizes investments in companies the portfolio
manager believes are undervalued relative to their intrinsic worth.
The portfolio manager measures value as a function of price/earnings
(P/E) ratios and price/free cash flow. A P/E ratio is the relationship
between the price of a stock and its earnings per share. This figure
is determined by dividing a stock's market price by the Company's
earnings per share amount. Price/free cash flow is the relationship
between the price of a stock and the company's available cash from
operations minus capital expenditures.
The portfolio manager will typically seek attractively valued
companies that are improving their free cash flow and improving their
returns on invested capital. These companies may also include special
situations companies that are experiencing management changes and/or
are temporarily out of favor.
INTERNATIONAL FUND normally invests at least 65% of its total assets
in securities of issuers from at least five different countries,
excluding the United States. Although the Fund intends to invest
substantially all of its assets in issuers located outside the United
States, it may invest in U.S. issuers and it may at times invest all
of its assets in fewer than five countries, or even a single country.
WORLDWIDE FUND invests primarily in common stocks of companies of any
size throughout the world. The Fund normally invests in issuers from
at least five different countries, including the United States. The
Fund may at times invest in fewer than five countries or even a single
country.
3. WHAT ARE THE MAIN RISKS OF INVESTING IN THE EQUITY FUNDS?
The biggest risk is that the Funds' returns may vary, and you could
lose money. If you are considering investing in any of the Equity
Funds, remember that they are each designed for long-term investors
who can accept the risks of investing in a portfolio with significant
common stock holdings. Common stocks tend to be more volatile than
other investment choices.
The value of a Fund's portfolio may decrease if the value of an
individual company in the portfolio decreases or, in the case of
Strategic Value Fund, if the portfolio manager's belief about a
company's
Risk return summary 3
<PAGE>
intrinsic worth is incorrect. The value of a Fund's portfolio could
also decrease if the stock market goes down. If the value of a Fund's
portfolio decreases, a Fund's net asset value (NAV) will also
decrease, which means if you sell your shares in a Fund you would get
back less money.
The income component of Balanced Fund, Equity Income Fund and Growth
and Income Fund portfolios includes fixed-income securities. A
fundamental risk to the income component is that the value of these
securities will fall if interest rates rise. Generally, the value of a
fixed-income portfolio will decrease when interest rates rise, which
means the Fund's NAV may likewise decrease. Another fundamental risk
associated with fixed-income securities is credit risk, which is the
risk that an issuer of a bond will be unable to make principal and
interest payments when due.
INTERNATIONAL FUND AND WORLDWIDE FUND may have significant exposure to
foreign markets. As a result, their returns and NAV may be affected to
a large degree by fluctuations in currency exchange rates or political
or economic conditions in a particular country.
AGGRESSIVE GROWTH FUND, CAPITAL APPRECIATION FUND AND STRATEGIC VALUE
FUND are nondiversified. In other words, they may hold larger
positions in a smaller number of securities than a diversified fund.
As a result, a single security's increase or decrease in value may
have a greater impact on a Fund's NAV and total return.
An investment in these Funds is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency.
4 Janus Adviser Series
<PAGE>
The following information provides some indication of the risks of
investing in the Equity Funds by showing how each of the Equity Funds'
performances have varied over time. These Funds (except Strategic
Value Fund) commenced operations on , 2000 after the
reorganization of the Retirement Shares of Janus Aspen Series into the
Funds. (Strategic Value Fund is a newly organized Fund.) The returns
for the reorganized Funds reflect the performance of the Retirement
Shares of Janus Aspen Series prior to the reorganization. (The
performance of the Retirement Shares prior to May 1, 1997 reflects the
performance of a different class of Janus Aspen Series, restated to
reflect the fees and expenses of the Retirement Shares on May 1, 1997,
ignoring any fee and expense limitations.) The bar charts depict the
change in performance from year-to-year during the period indicated.
The tables compare each Fund's average annual returns for the periods
indicated to a broad-based securities market index.
GROWTH FUND
Annual returns for periods ended 12/31
1994 1995 1996 1997 1998 1999
Best Quarter Worst Quarter
Average annual total return for periods ended 12/31/99
------------------------------------------------------
<TABLE>
<CAPTION>
Since Inception
1 year 5 years (9/13/93)
<S> <C> <C> <C>
Growth Fund % % %
S&P 500 Index* % % %
--------------------------------------------
</TABLE>
* The S&P 500 is the Standard & Poor's Composite Index of 500 stocks,
a widely recognized, unmanaged index of common stock prices.
Risk return summary 5
<PAGE>
AGGRESSIVE GROWTH FUND
Annual returns for periods ended 12/31
1994 1995 1996 1997 1998 1999
Best Quarter Worst Quarter
Average annual total return for periods ended 12/31/99
------------------------------------------------------
<TABLE>
<CAPTION>
Since Inception
1 year 5 years (9/13/93)
<S> <C> <C> <C>
Aggressive Growth Fund % % %
S&P MidCap 400 Index* % % %
--------------------------------------------
</TABLE>
* The S&P MidCap 400 Index is an unmanaged group of 400 domestic
stocks chosen for their market size, liquidity and industry group
representation.
CAPITAL APPRECIATION FUND
Annual returns for periods ended 12/31
1998 1999
Best Quarter Worst Quarter
Average annual total return for periods ended 12/31/99
------------------------------------------------------
<TABLE>
<CAPTION>
Since Inception
1 year (5/1/97)
<S> <C> <C>
Capital Appreciation Fund % %
S&P 500 Index* % %
--------------------------------
</TABLE>
* The S&P 500 is the Standard & Poor's Composite Index of 500 stocks,
a widely recognized, unmanaged index of common stock prices.
6 Janus Adviser Series
<PAGE>
BALANCED FUND
Annual returns for periods ended 12/31
1994 1995 1996 1997 1998 1999
Best Quarter Worst Quarter
Average annual total return for periods ended 12/31/99
------------------------------------------------------
<TABLE>
<CAPTION>
Since Inception
1 year 5 years (9/13/93)
<S> <C> <C> <C>
Balanced Fund % % %
S&P 500 Index* % % %
Lehman Brothers Gov't/Corp Bond Index** % % %
--------------------------------------------
</TABLE>
* The S&P 500 is the Standard & Poor's Composite Index of 500 stocks,
a widely recognized, unmanaged index of common stock prices.
** Lehman Brothers Gov't/Corp Bond Index is composed of all bonds that
are of investment grade with at least one year until maturity.
EQUITY INCOME FUND
Annual returns for periods ended 12/31
1998 1999
Best Quarter Worst Quarter
Average annual total return for periods ended 12/31/99
------------------------------------------------------
<TABLE>
<CAPTION>
Since Inception
1 year (5/1/97)
<S> <C> <C>
Equity Income Fund % %
S&P 500 Index* % %
--------------------------------
</TABLE>
* The S&P 500 is the Standard & Poor's Composite Index of 500 stocks,
a widely recognized, unmanaged index of common stock prices.
Risk return summary 7
<PAGE>
GROWTH AND INCOME FUND
Annual returns for periods ended 12/31
1998 1999
Best Quarter Worst Quarter
Average annual total return for periods ended 12/31/99
------------------------------------------------------
<TABLE>
<CAPTION>
Since Inception
1 year (5/1/98)
<S> <C> <C>
Growth and Income Fund % %
S&P 500 Index* % %
--------------------------------
</TABLE>
* The S&P 500 is the Standard & Poor's Composite Index of 500 stocks,
a widely recognized, unmanaged index of common stock prices.
STRATEGIC VALUE FUND
Since Strategic Value Fund is a newly organized Fund, there is no
performance available as of the date of this Prospectus.
8 Janus Adviser Series
<PAGE>
INTERNATIONAL FUND
Annual returns for periods ended 12/31
1995 1996 1997 1998 1999
Best Quarter Worst Quarter
Average annual total return for periods ended 12/31/99
------------------------------------------------------
<TABLE>
<CAPTION>
Since Inception
1 year (5/2/94)
<S> <C> <C>
International Fund % %
Morgan Stanley Capital International EAFE(R) Index* % %
------------------------------
</TABLE>
* The Morgan Stanley Capital International EAFE(R) Index is a market
capitalization weighted index composed of companies representative
of the market structure of 20 developed market countries in Europe,
Australasia and the Far East.
WORLDWIDE FUND
Annual returns for periods ended 12/31
1994 1995 1996 1997 1998 1999
Best Quarter Worst Quarter
Average annual total return for periods ended 12/31/99
------------------------------------------------------
<TABLE>
<CAPTION>
Since Inception
1 year 5 years (9/13/93)
<S> <C> <C> <C>
Worldwide Fund % % %
Morgan Stanley Capital International World Index* % % %
-----------------------------------------
</TABLE>
* The Morgan Stanley Capital International World Index is a market
capitalization weighted index composed of companies representative
of the market structure of 21 Developed Market countries in North
America, Europe and the Asia/Pacific Region.
The Equity Funds' past performance does not necessarily indicate how
they will perform in the future.
Risk return summary 9
<PAGE>
FLEXIBLE INCOME FUND
Flexible Income Fund is designed for long-term investors who primarily
seek current income.
1. WHAT IS THE INVESTMENT OBJECTIVE OF FLEXIBLE INCOME FUND?
- --------------------------------------------------------------------------------
- FLEXIBLE INCOME FUND seeks to obtain maximum total return,
consistent with preservation of capital.
The Trustees may change this objective without a shareholder vote and
the Fund will notify you of any changes that are material. If there is
a material change to the Fund's objective or policies, you should
consider whether it remains an appropriate investment for you. There
is no guarantee that the Fund will meet its objective.
2. WHAT ARE THE MAIN INVESTMENT STRATEGIES OF FLEXIBLE INCOME FUND?
In addition to considering economic factors such as the effect of
interest rates on the Fund's investments, the portfolio managers apply
a "bottom up" approach in choosing investments. In other words, they
look mostly for income-producing securities that meet their investment
criteria one at a time. If a portfolio manager is unable to find such
investments, the Fund's assets may be in cash or similar investments.
The Fund invests primarily in a wide variety of income-producing
securities such as corporate bonds and notes, government securities
and preferred stock. As a fundamental policy, the Fund will invest at
least 80% of its assets in income-producing securities. The Fund may
own an unlimited amount of high-yield/ high-risk bonds, and these
securities may be a big part of the portfolio.
3. WHAT ARE THE MAIN RISKS OF INVESTING IN FLEXIBLE INCOME FUND?
Although the Fund may be less volatile than funds that invest most of
their assets in common stocks, the Fund's returns and yields will
vary, and you could lose money.
The Fund invests in a variety of fixed-income securities. A
fundamental risk is that the value of these securities will fall if
interest rates rise. Generally, the value of a fixed-income portfolio
will decrease when interest rates rise, which means the Fund's NAV
will likewise decrease. Another fundamental risk associated with
fixed-income funds is credit risk, which is the risk that an issuer
will be unable to make principal and interest payments when due.
The Fund may invest an unlimited amount of their assets in
high-yield/high-risk bonds, also known as "junk" bonds which may be
sensitive to economic changes, political changes, or adverse
developments specific to the company that issued the bond. These
securities generally have a greater credit risk than other types of
fixed-income securities. Because of these factors, the performance and
NAV of the Fund may vary significantly, depending upon their holdings
of junk bonds.
The Fund may invest without limit in foreign debt and equity
securities.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
10 Janus Adviser Series
<PAGE>
The following information provides some indication of the risks of
investing in Flexible Income Fund by showing how Flexible Income
Fund's performance has varied over time. This Fund commenced
operations on , 2000 after the reorganization of the
Retirement Shares of Flexible Income Portfolio of Janus Aspen Series
into the Fund. The following returns reflect the performance of the
Retirement Shares of Janus Aspen Series prior to that date. (The
performance of the Retirement Shares prior to May 1, 1997 reflects the
performance of a different class of Janus Aspen Series, restated to
reflect the fees and expenses of the Retirement Shares on May 1, 1997,
ignoring any fee and expense limitations.) The bar chart depicts the
change in performance from year-to-year during the period indicated.
The table compares the average annual returns of the Fund for the
periods indicated to a broad-based securities market index.
FLEXIBLE INCOME FUND
Annual returns for periods ended 12/31
1994 1995 1996 1997 1998 1999
Best Quarter Worst Quarter
Average annual total return for periods ended 12/31/99
------------------------------------------------------
<TABLE>
<CAPTION>
Since Inception
1 year 5 years (9/13/93)
<S> <C> <C> <C>
Flexible Income Fund % % %
Lehman Brothers Gov't/Corp Bond Index* % % %
--------------------------------------------
</TABLE>
* Lehman Brothers Gov't/Corp Bond Index is composed of all bonds that
are of investment grade with at least one year until maturity.
The Flexible Income Fund's past performance does not necessarily
indicate how it will perform in the future.
Risk return summary 11
<PAGE>
MONEY MARKET FUND
Money Market Fund is designed for investors who seek current income.
1. WHAT IS THE INVESTMENT OBJECTIVE OF MONEY MARKET FUND?
- --------------------------------------------------------------------------------
- MONEY MARKET FUND seeks maximum current income to the extent
consistent with stability of capital.
The Trustees may change this objective without a shareholder vote and
the Fund will notify you of any changes that are material. If there is
a material change in the Fund's objective or policies, you should
consider whether it remains an appropriate investment for you. There
is no guarantee that the Fund will meet its objective.
2. WHAT ARE THE MAIN INVESTMENT STRATEGIES OF MONEY MARKET FUND?
MONEY MARKET FUND will invest only in high-quality, short-term money
market instruments that present minimal credit risks, as determined by
Janus Capital. The Fund invests primarily in high quality debt
obligations and obligations of financial institutions. Debt
obligations may include commercial paper, notes and bonds, and
variable amount master demand notes. Obligations of financial
institutions include certificates of deposit and time deposits.
3. WHAT ARE THE MAIN RISKS OF INVESTING IN MONEY MARKET FUND?
The Fund's yields will vary as the short-term securities in the
portfolio mature and the proceeds are reinvested in securities with
different interest rates. Over time, the real value of the Fund's
yield may be eroded by inflation. Although Money Market Fund invests
only in high-quality, short-term money market instruments, there is a
risk that the value of the securities it holds will fall as a result
of changes in interest rates, an issuer's actual or perceived
credit-worthiness or an issuer's ability to meet its obligations.
An investment in Money Market Fund is not a deposit of a bank and is
not insured or guaranteed by the Federal Deposit Insurance Corporation
or any other government agency. Although the Fund seeks to preserve
the value of your investment at $1.00 per share, it is possible to
lose money by investing in Money Market Fund.
12 Janus Adviser Series
<PAGE>
The following information provides some indication of the risks of
investing in Money Market Fund by showing how Money Market Fund's
performance has varied over time. The Money Market Fund commenced
operations on , 2000 after the reorganization of the
Retirement Shares of Janus Aspen Series into the Fund. The following
returns reflect the performance of the Retirement Shares of Janus
Aspen Series prior to that date. (The performance of the Retirement
Shares prior to May 1, 1997 reflects the performance of a different
class of Janus Aspen Series, restated to reflect fees and expenses of
the Retirement Shares on May 1, 1997, ignoring any fee and expense
limitations.) The bar chart depicts the change in performance from
year to year.
MONEY MARKET FUND
Annual returns for periods ended 12/31
1996 1997 1998 1999
Best Quarter % Worst Quarter %
For the Money Market Fund's current yield, call [the Janus
XpressLine(TM) at 1-888-979-7737.]
Money Market Fund's past performance does not necessarily indicate how
it will perform in the future.
Risk return summary 13
<PAGE>
FEES AND EXPENSES
SHAREHOLDER FEES, such as sales loads, redemption fees or exchange
fees, are charged directly to an investor's account. The Funds are
no-load investments, so you will not pay any shareholder fees when you
buy or sell shares of the Funds.
ANNUAL FUND OPERATING EXPENSES are paid out of a 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 example on the next page
shows, these costs are borne indirectly by all shareholders.
14 Janus Adviser Series
<PAGE>
This table describes the fees and expenses that you may pay if you buy
and hold shares of the Funds. The information shown is based upon
estimated annualized expenses the Funds expect to incur during their
initial fiscal year.
<TABLE>
<CAPTION>
Total Annual Fund Total Annual Fund
Distribution Operating Operating
Management (12b-1) Other Expenses Total Expenses
Fee Fees(1) Expenses Without Waivers(2) Waivers With Waivers(2)
<S> <C> <C> <C> <C> <C> <C>
Growth Fund 0.65% 0.25%
Aggressive Growth Fund 0.65% 0.25%
Capital Appreciation Fund 0.65% 0.25%
Balanced Fund 0.65% 0.25%
Equity Income Fund 0.65% 0.25%
Growth and Income Fund 0.65% 0.25%
Strategic Value Fund 0.65% 0.25%
International Fund 0.65% 0.25%
Worldwide Fund 0.65% 0.25%
Flexible Income Fund 0.65% 0.25%
Money Market Fund 0.25% 0.25%
</TABLE>
- --------------------------------------------------------------------------------
(1) Long-term shareholders may pay more than the economic equivalent of
the maximum front-end sales charges permitted by the National
Association of Securities Dealers, Inc.
(2) All expenses are stated both with and without contractual waivers by
Janus Capital. Janus Capital has contractually agreed to waive each
Fund's total operating expenses (excluding brokerage commissions,
interest, taxes and extraordinary expenses) to the levels indicated
until at least , 2003. These waivers are first applied against
the Management Fee and then against Other Expenses.
- --------------------------------------------------------------------------------
EXAMPLE:
THE FOLLOWING EXAMPLE IS BASED ON EXPENSES WITHOUT WAIVERS. This example
is intended to help you compare the cost of investing in the Funds with
the cost of investing in other mutual funds. The example assumes that
you invest $10,000 in each of the Funds for the time periods indicated,
and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year, and
that the Funds' operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
1 Year 3 Years
------------------------
<S> <C> <C>
Growth Fund
Aggressive Growth Fund
Capital Appreciation Fund
Balanced Fund
Equity Income Fund
Growth and Income Fund
Strategic Value Fund
International Fund
Worldwide Fund
Flexible Income Fund
Money Market Fund
</TABLE>
Risk return summary 15
<PAGE>
Investment objectives, principal investment
strategies and risks
EQUITY FUNDS
This section takes a closer look at the investment objectives of each
of the Equity Funds, their principal investment strategies and certain
risks of investing in the Equity Funds. Strategies and policies that
are noted as "fundamental" cannot be changed without a shareholder
vote.
Please carefully review the "Risks" section of this Prospectus on
pages 24-26 for a discussion of risks associated with certain
investment techniques. We've also included a Glossary with
descriptions of investment terms used throughout this Prospectus.
INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES
DOMESTIC EQUITY FUNDS
GROWTH FUND
Growth Fund seeks long-term growth of capital in a manner consistent
with the preservation of capital. It pursues its objective by
investing primarily in common stocks selected for their growth
potential. Although the Fund can invest in companies of any size, it
generally invests in larger, more established companies.
AGGRESSIVE GROWTH FUND
Aggressive Growth Fund seeks long-term growth of capital. It pursues
its objective by investing primarily in common stocks selected for
their growth potential, and normally invests at least 50% of its
equity assets in medium-sized companies. Medium-sized companies are
those whose market capitalization falls within the range of companies
in the S&P MidCap 400 Index. Market capitalization is a commonly used
measure of the size and value of a company. The market capitalization
within the Index will vary, but as of December 31, 1999, they ranged
from approximately $170 million to $37 billion.
CAPITAL APPRECIATION FUND
Capital Appreciation Fund seeks long-term growth of capital. It
pursues its objective by investing primarily in common stocks selected
for their growth potential.
BALANCED FUND
Balanced Fund seeks long-term capital growth, consistent with
preservation of capital and balanced by current income. It pursues its
objective by normally investing 40-60% of its assets in securities
selected primarily for their growth potential and 40-60% of its assets
in securities selected primarily for their income potential. This Fund
normally invests at least 25% of its assets in fixed-income
securities.
EQUITY INCOME FUND
Equity Income Fund seeks current income and long-term growth of
capital. It pursues its objective by normally emphasizing investments
in common stocks, and growth potential is a significant investment
consideration. The Fund tries to provide a lower level of volatility
than the S&P 500 Index. Normally, it invests at least 65% of its
invested assets in income-producing equity securities including common
and preferred stocks, warrants and securities that are convertible to
common or preferred stocks.
16 Janus Adviser Series
<PAGE>
GROWTH AND INCOME FUND
Growth and Income Fund seeks long-term capital growth and current
income. It normally emphasizes investments in common stocks. It will
normally invest up to 75% of its assets in equity securities selected
primarily for their growth potential, and at least 25% of its assets
in securities the portfolio manager believes have income potential.
Because of this investment strategy, the Fund is not designed for
investors who need consistent income.
STRATEGIC VALUE FUND
Strategic Value Fund seeks long-term growth of capital. It pursues its
objective by investing primarily in common stocks with the potential
for long-term growth of capital using a "value" approach. The "value"
approach the portfolio manager uses emphasizes investments in
companies he believes are undervalued relative to their intrinsic
worth.
The portfolio manager measures value as a function of price/earnings
(P/E) ratios and price/free cash flow. A P/E ratio is the relationship
between the price of a stock and its earnings per share. This figure
is determined by dividing a stock's market price by the company's
earnings per share amount. Price/free cash flow is the relationship
between the price of a stock and its available cash from operations
minus capital expenditures.
The portfolio manager will typically seek attractively valued
companies that are improving their free cash flow and improving their
returns on invested capital. These companies may also include special
situations companies that are experiencing management changes and/or
are temporarily out of favor.
GLOBAL/INTERNATIONAL EQUITY FUNDS
INTERNATIONAL FUND
International Fund seeks long-term growth of capital. Normally, the
Fund pursues its objective by investing at least 65% of its total
assets in securities of issuers from at least five different
countries, excluding the United States. Although the Fund intends to
invest substantially all of its assets in issuers located outside the
United States, it may at times invest in U.S. issuers and it may at
times invest all of its assets in fewer than five countries or even a
single country.
WORLDWIDE FUND
Worldwide Fund seeks long-term growth of capital in a manner
consistent with the preservation of capital. It pursues its objective
by investing primarily in common stocks of companies of any size
throughout the world. The Fund normally invests in issuers from at
least five different countries, including the United States. The Fund
may at times invest in fewer than five countries or even a single
country.
Investment objectives, principal investment strategies and risks 17
<PAGE>
The following questions and answers are designed to help you better understand
the Equity Funds' principal investment strategies.
1. HOW ARE COMMON STOCKS SELECTED?
Each of the Funds may invest substantially all of its assets in common
stocks if its portfolio manager believes that common stocks will
appreciate in value. The portfolio managers generally take a "bottom
up" approach to selecting companies. In other words, they seek to
identify individual companies with earnings growth potential that may
not be recognized by the market at large. They make this assessment by
looking at companies one at a time, regardless of size, country of
organization, place of principal business activity, or other similar
selection criteria. Except for the Balanced Fund, Equity Income Fund
and Growth and Income Fund, realization of income is not a significant
consideration when choosing investments for the Funds. Income realized
on the Funds' investments will be incidental to their objectives. In
the case of Balanced Fund, Equity Income Fund and Growth and Income
Fund, a portfolio manager may consider dividend-paying characteristics
to a greater degree in selecting common stocks.
2. ARE THE SAME CRITERIA USED TO SELECT FOREIGN SECURITIES?
Generally, yes. The portfolio managers seek companies that meet their
selection criteria, regardless of where a company is located. Foreign
securities are generally selected on a stock-by-stock basis without
regard to any defined allocation among countries or geographic
regions. However, certain factors such as expected levels of
inflation, government policies influencing business conditions, the
outlook for currency relationships, and prospects for economic growth
among countries, regions or geographic areas may warrant greater
consideration in selecting foreign securities. There are no
limitations on the countries in which the Funds may invest and the
Funds may at times have significant foreign exposure.
3. WHAT IS A "SPECIAL SITUATION"?
Each Fund may invest in special situations. A special situation arises
when a portfolio manager believes that the securities of an issuer
will be recognized and appreciate in value due to a specific
development with respect to that issuer. Special situations may
include significant changes in a company's allocation of its existing
capital, a restructuring of assets, or a redirection of free cash
flows. For example, issuers undergoing significant capital changes may
include companies involved in spin-offs, sales of divisions, mergers
or acquisitions, companies emerging from bankruptcy, or companies
initiating large changes in their debt to equity ratio. Companies that
are redirecting cash flows may be reducing debt, repurchasing shares
or paying dividends. Special situations may also result from (i)
significant changes in industry structure through regulatory
developments or shifts in competition; (ii) a new or improved product,
service, operation or technological advance; (iii) changes in senior
management; or (iv) significant changes in cost structure.
4. WHAT DOES "MARKET CAPITALIZATION" MEAN?
Market capitalization is the most commonly used measure of the size
and value of a company. It is computed by multiplying the current
market price of a share of the company's stock by the total number of
its shares outstanding. As noted previously, market capitalization is
an important investment criteria for Aggressive Growth Fund. Although
the other Equity Funds offered by this Prospectus do not emphasize
companies of any particular size, Funds with a larger asset base are
more likely to invest in larger, more established issuers.
18 Janus Adviser Series
<PAGE>
5. HOW DO BALANCED FUND, EQUITY INCOME FUND AND GROWTH AND INCOME FUND DIFFER
FROM EACH OTHER?
Growth and Income Fund places a greater emphasis on aggressive growth
stocks and may derive a greater portion of its income from
dividend-paying common stocks. Because of these factors, its NAV can
be expected to fluctuate more than Balanced Fund or Equity Income
Fund. Although Equity Income Fund invests substantially all of its
assets in common stocks, it emphasizes investments in dividend-paying
common stocks and other equity securities characterized by relatively
greater price stability, and thus may be expected to be less volatile
than Growth and Income Fund, as discussed in more detail below.
Balanced Fund places a greater emphasis on the income component of its
portfolio and invests to a greater degree in securities selected
primarily for their income potential. As a result it is expected to be
less volatile than Equity Income Fund and Growth and Income Fund.
6. HOW DOES EQUITY INCOME FUND TRY TO LIMIT PORTFOLIO VOLATILITY?
Equity Income Fund seeks to provide a lower level of volatility than
the stock market at large, as measured by the S&P 500 Index. The lower
volatility sought by this Fund is expected to result primarily from
investments in dividend-paying common stocks and other equity
securities characterized by relatively greater price stability. The
greater price stability sought by Equity Income Fund may be
characteristic of companies that generate above average free cash
flows. A company may use free cash flows for a number of purposes
including commencing or increasing dividend payments, repurchasing its
own stock or retiring outstanding debt. The portfolio manager also
considers growth potential in selecting this Fund's securities and may
hold securities selected solely for their growth potential.
7. HOW ARE ASSETS ALLOCATED BETWEEN THE GROWTH AND INCOME COMPONENTS OF BALANCED
FUND'S AND GROWTH AND INCOME FUND'S PORTFOLIOS?
Balanced Fund and Growth and Income Fund shift assets between the
growth and income components of their portfolios based on the
portfolio managers' analysis of relevant market, financial and
economic conditions. If a portfolio manager believes that growth
securities will provide better returns than the yields then available
or expected on income-producing securities, that Fund will place a
greater emphasis on the growth component.
8. WHAT TYPES OF SECURITIES MAKE UP THE GROWTH COMPONENT OF BALANCED FUND'S,
EQUITY INCOME FUND'S AND GROWTH AND INCOME FUND'S PORTFOLIOS?
The growth component of these Funds' portfolios is expected to consist
primarily of common stocks, but may also include warrants, preferred
stocks or convertible securities selected primarily for their growth
potential.
9. WHAT TYPES OF SECURITIES MAKE UP THE INCOME COMPONENT OF BALANCED FUND'S AND
GROWTH AND INCOME FUND'S PORTFOLIOS?
The income component of Balanced Fund and Growth and Income Fund will
consist of securities that a portfolio manager believes have income
potential. Such securities may include equity securities, convertible
securities and all types of debt securities. Equity securities may be
included in the income component of a Fund if they currently pay
dividends or the portfolio manager believes they have the potential
for either increasing their dividends or commencing dividends, if none
are currently paid.
10. HOW DOES STRATEGIC VALUE FUND'S PORTFOLIO MANAGER DETERMINE THAT A COMPANY
MAY BE UNDERVALUED?
A company may be undervalued when, in the opinion of the Fund's
portfolio manager, the company is selling for a price that is below
its intrinsic worth. A company may be undervalued due to market or
Investment objectives, principal investment strategies and risks 19
<PAGE>
economic conditions, temporary earnings declines, unfavorable
developments affecting the company or other factors. Such factors may
provide buying opportunities at attractive prices compared to
historical or market price-earnings ratios, price/free cash flow, book
value, or return on equity. The portfolio manager believes that buying
these securities at a price that is below its intrinsic worth may
generate greater returns for the Fund than those obtained by paying
premium prices for companies currently in favor in the market.
FLEXIBLE INCOME FUND
This section takes a closer look at the investment objective of
Flexible Income Fund, its principal investment strategies and certain
risks of investing in the Fund. Strategies and policies that are noted
as "fundamental" cannot be changed without a shareholder vote.
Please carefully review the "Risks" section of this Prospectus on
pages 25-26 for a discussion of risks associated with certain
investment techniques. We've also included a Glossary with
descriptions of investment terms used throughout this Prospectus.
INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES
In addition to considering economic factors such as the effect of
interest rates on a Fund's investments, the portfolio managers apply a
"bottom up" approach in choosing investments. In other words, they
look mostly for income-producing securities that meet their investment
criteria one at a time. If a portfolio manager is unable to find such
investments, much of a Fund's assets may be in cash or similar
investments.
Flexible Income Fund seeks to obtain maximum total return, consistent
with preservation of capital. It pursues its objective by primarily
investing in a wide variety of income-producing securities such as
corporate bonds and notes, government securities and preferred stock.
As a fundamental policy, the Fund will invest at least 80% of its
assets in income-producing securities. The Fund may own an unlimited
amount of high-yield/high-risk bonds, and these may be a big part of
the portfolio. This Fund generates total return from a combination of
current income and capital appreciation, but income is usually the
dominant portion.
The following questions and answers are designed to help you better understand
the Fund's principal investment strategies.
1. HOW DO INTEREST RATES AFFECT THE VALUE OF MY INVESTMENT?
Generally, a fixed-income security will increase in value when
interest rates fall and decrease in value when interest rates rise.
Longer-term securities are generally more sensitive to interest rate
changes than shorter-term securities, but they generally offer higher
yields to compensate investors for the associated risks. High-yield
bond prices are generally less directly responsive to interest rate
changes than investment grade issues and may not always follow this
pattern. A bond fund's average-weighted effective maturity and its
duration are measures of how the fund may react to interest rate
changes.
2. HOW DOES THE FUND MANAGE INTEREST RATE RISK?
The Fund may vary the average-weighted effective maturity of its
assets to reflect its portfolio manager's analysis of interest rate
trends and other factors. The Fund's average-weighted effective
maturity will tend to be shorter when the portfolio manager expects
interest rates to rise and longer when its portfolio manager expects
interest rates to fall. The Fund may also use futures, options and
other derivatives to manage interest rate risks.
20 Janus Adviser Series
<PAGE>
3. WHAT IS MEANT BY THE FUND'S "AVERAGE-WEIGHTED EFFECTIVE MATURITY"?
The stated maturity of a bond is the date when the issuer must repay
the bond's entire principal value to an investor. Some types of bonds
may also have an "effective maturity" that is shorter than the stated
date due to prepayment or call provisions. Securities without
prepayment or call provisions generally have an effective maturity
equal to their stated maturity. Dollar-weighted effective maturity is
calculated by averaging the effective maturity of bonds held by the
Fund with each effective maturity "weighted" according to the
percentage of net assets that it represents.
4. WHAT IS MEANT BY THE FUND'S "DURATION"?
A bond's duration indicates the time it will take an investor to
recoup his investment. Unlike average maturity, duration reflects both
principal and interest payments. Generally, the higher the coupon rate
on a bond, the lower its duration will be. The duration of a bond
portfolio is calculated by averaging the duration of bonds held by a
fund with each duration "weighted" according to the percentage of net
assets that it represents. Because duration accounts for interest
payments, the Fund's duration is usually shorter than its average
maturity.
5. WHAT IS A HIGH-YIELD/HIGH-RISK BOND?
A high-yield/high-risk bond (also called a "junk" bond) is a bond
rated below investment grade by major rating agencies (i.e., BB or
lower by Standard & Poor's or Ba or lower by Moody's) or an unrated
bond of similar quality. It presents greater risk of default (the
failure to make timely interest and principal payments) than higher
quality bonds.
GENERAL PORTFOLIO POLICIES OF THE FUNDS OTHER THAN MONEY MARKET FUND
In investing its portfolio assets, a Fund will follow the general
policies listed below. Unless otherwise stated, each of the following
policies applies to all of the Funds other than Money Market Fund. The
percentage limitations included in these policies and elsewhere in
this Prospectus apply at the time of purchase of the security. So, for
example, if a Fund exceeds a limit as a result of market fluctuations
or the sale of other securities, it will not be required to dispose of
any securities.
CASH POSITION
When a portfolio manager believes that market conditions are
unfavorable for profitable investing, or when he or she is otherwise
unable to locate attractive investment opportunities, the Funds' cash
or similar investments may increase. In other words, the Funds do not
always stay fully invested in stocks and bonds. Cash or similar
investments generally are a residual - they represent the assets that
remain after a portfolio manager has committed available assets to
desirable investment opportunities. However, a portfolio manager may
also temporarily increase a Fund's cash position to protect its assets
or maintain liquidity. Partly because the portfolio managers act
independently of each other, the cash positions of the Funds may vary
significantly.
When a Fund's investments in cash or similar investments increase, it
may not participate in market advances or declines to the same extent
that it would if the Fund remained more fully invested in stocks or
bonds.
OTHER TYPES OF INVESTMENTS
The Equity Funds invest primarily in domestic and foreign equity
securities, which may include preferred stocks, common stocks,
warrants and securities convertible into common or preferred stocks.
Balanced
Investment objectives, principal investment strategies and risks 21
<PAGE>
Fund, Equity Income Fund and Growth and Income Fund also invest in
domestic and foreign equity securities with varying degrees of
emphasis on income. The Funds may also invest to a lesser degree in
other types of securities. These securities (which are described in
the Glossary) may include:
- debt securities
- indexed/structured securities
- high-yield/high-risk bonds (less than 35% of each Fund's assets)
- options, futures, forwards, swaps and other types of derivatives for
hedging purposes or for non-hedging purposes such as seeking to
enhance return
- securities purchased on a when-issued, delayed delivery or forward
commitment basis
Flexible Income Fund invests primarily in fixed-income securities
which may include corporate bonds and notes, government securities,
preferred stock, high-yield/high-risk bonds and municipal obligations.
Flexible Income Fund may also invest to a lesser degree in other types
of securities. These securities (which are described in the Glossary)
may include:
- common stocks
- mortgage- and asset-backed securities
- zero coupon, pay-in-kind and step coupon securities
- options, futures, forwards, swaps and other types of derivatives for
hedging purposes or for non-hedging purposes such as seeking to
enhance return
- securities purchased on a when-issued, delayed delivery or forward
commitment basis
ILLIQUID INVESTMENTS
Each Fund may invest up to 15% of its net assets in illiquid
investments. An illiquid investment is a security or other position
that cannot be disposed of quickly in the normal course of business.
For example, some securities are not registered under U.S. securities
laws and cannot be sold to the U.S. public because of SEC regulations
(these are known as "restricted securities"). Under procedures adopted
by the Funds' Trustees, certain restricted securities may be deemed
liquid, and will not be counted toward this 15% limit.
FOREIGN SECURITIES
The Funds may invest without limit in foreign equity and debt
securities. The Funds may invest directly in foreign securities
denominated in a foreign currency and not publicly traded in the
United States. Other ways of investing in foreign securities include
depositary receipts or shares, and passive foreign investment
companies.
SPECIAL SITUATIONS
Each Fund may invest in special situations. A special situation arises
when, in the opinion of a Fund's portfolio manager, the securities of
a particular issuer will be recognized and appreciate in value due to
a specific development with respect to that issuer. Developments
creating a special situation might include, among others, a new
product or process, a technological breakthrough, a management change
or other extraordinary corporate event, or differences in market
supply of and demand for the security. A Fund's
22 Janus Adviser Series
<PAGE>
performance could suffer if the anticipated development in a "special
situation" investment does not occur or does not attract the expected
attention.
PORTFOLIO TURNOVER
The Funds generally intend to purchase securities for long-term
investment although, to a limited extent, a Fund may purchase
securities in anticipation of relatively short-term price gains.
Short-term transactions may also result from liquidity needs,
securities having reached a price or yield objective, changes in
interest rates or the credit standing of an issuer, or by reason of
economic or other developments not foreseen at the time of the
investment decision. A Fund may also sell one security and
simultaneously purchase the same or a comparable security to take
advantage of short-term differentials in bond yields or securities
prices. Changes are made in a Fund's portfolio whenever its portfolio
manager believes such changes are desirable. Portfolio turnover rates
are generally not a factor in making buy and sell decisions.
Increased portfolio turnover may result in higher costs for brokerage
commissions, dealer mark-ups and other transaction costs and may also
result in taxable capital gains. Higher costs associated with
increased portfolio turnover may offset gains in a Fund's performance.
Investment objectives, principal investment strategies and risks 23
<PAGE>
RISKS FOR EQUITY FUNDS
Because the Funds may invest substantially all of their assets in
common stocks, the main risk is the risk that the value of the stocks
they hold might decrease in response to the activities of an
individual company or in response to general market and/or economic
conditions. If this occurs, a Fund's share price may also decrease. A
Fund's performance may also be affected by risks specific to certain
types of investments, such as foreign securities, derivative
investments, non-investment grade debt securities, initial public
offerings (IPOs) or companies with relatively small market
capitalizations. IPOs and other investment techniques may have a
magnified performance impact on a fund with a small asset base. A fund
may not experience similar performance as its assets grow.
The following questions and answers are designed to help you better understand
some of the risks of investing in the Equity Funds.
1. THE FUNDS MAY INVEST IN SMALLER OR NEWER COMPANIES. DOES THIS CREATE ANY
SPECIAL RISKS?
Particularly in the area of technology, many attractive investment
opportunities may be smaller, start-up companies offering emerging
products or services. Smaller or newer companies may suffer more
significant losses as well as realize more substantial growth than
larger or more established issuers because they may lack depth of
management, be unable to generate funds necessary for growth or
potential development, or be developing or marketing new products or
services for which markets are not yet established and may never
become established. In addition, such companies may be insignificant
factors in their industries and may become subject to intense
competition from larger or more established companies. Securities of
smaller or newer companies may have more limited trading markets than
the markets for securities of larger or more established issuers, and
may be subject to wide price fluctuations. Investments in such
companies tend to be more volatile and somewhat more speculative.
2. HOW DOES THE NONDIVERSIFIED STATUS OF AGGRESSIVE GROWTH FUND, CAPITAL
APPRECIATION FUND AND STRATEGIC VALUE FUND, AFFECT THEIR RISK?
Diversification is a way to reduce risk by investing in a broad range
of stocks or other securities. A "nondiversified" portfolio has the
ability to take larger positions in a smaller number of issuers.
Because the appreciation or depreciation of a single stock may have a
greater impact on the NAV of a nondiversified fund, its share price
can be expected to fluctuate more than a comparable diversified fund.
This fluctuation, if significant, may affect the performance of a
Fund.
3. WHAT ARE THE RISKS ASSOCIATED WITH VALUE INVESTING?
If the portfolio manager's perception of a company's worth is not
realized in the time frame he expects, the overall performance of
Strategic Value Fund may suffer. In addition, if the market value of a
company declines Strategic Value Fund's performance could suffer. In
general, the portfolio manager believes these risks are mitigated by
investing in companies that are undervalued in the market in relation
to earnings, dividends and/or assets.
24 Janus Adviser Series
<PAGE>
RISKS FOR FLEXIBLE INCOME FUND
Because the Fund invests substantially all of their assets in
fixed-income securities, they are subject to risks such as credit or
default risks, and decreased value due to interest rate increases. A
Fund's performance may also be affected by risks to certain types of
investments, such as foreign securities and derivative instruments.
The following questions and answers are designed to help you better understand
some of the risks of investing in the Fund.
1. WHAT IS MEANT BY "CREDIT QUALITY" AND WHAT ARE THE RISKS ASSOCIATED WITH IT?
Credit quality measures the likelihood that the issuer will meet its
obligations on a bond. One of the fundamental risks associated with
all fixed-income funds is credit risk, which is the risk that an
issuer will be unable to make principal and interest payments when
due. U.S. government securities are generally considered to be the
safest type of investment in terms of credit risk. Municipal
obligations generally rank between U.S. government securities and
corporate debt securities in terms of credit safety. Corporate debt
securities, particularly those rated below investment grade, present
the highest credit risk.
2. HOW IS CREDIT QUALITY MEASURED?
Ratings published by nationally recognized statistical rating agencies
such as Standard & Poor's Ratings Service and Moody's Investors
Service, Inc. are widely accepted measures of credit risk. The lower a
bond issue is rated by an agency, the more credit risk it is
considered to represent. Lower rated bonds generally pay higher yields
to compensate investors for the associated risk. Please refer to
"Explanation of Rating Categories" on pages 46-47 for a description of
rating categories.
RISKS COMMON TO ALL NON-MONEY MARKET FUNDS
The following questions and answers discuss risks that apply to all Funds other
than Money Market Fund.
1. HOW COULD THE FUNDS' INVESTMENTS IN FOREIGN SECURITIES AFFECT THEIR
PERFORMANCE?
The Funds may invest without limit in foreign securities either
indirectly (e.g., depositary receipts) or directly in foreign markets.
Investments in foreign securities, including those of foreign
governments, may involve greater risks than investing in domestic
securities because the Funds' performance may depend on issues other
than the performance of a particular company. These issues include:
- CURRENCY RISK. As long as a Fund holds a foreign security, its value
will be affected by the value of the local currency relative to the
U.S. dollar. When a Fund sells a foreign denominated security, its
value may be worth less in U.S. dollars even if the security
increases in value in its home country. U.S. dollar denominated
securities of foreign issuers may also be affected by currency risk.
- POLITICAL AND ECONOMIC RISK. Foreign investments may be subject to
heightened political and economic risks, particularly in emerging
markets which may have relatively unstable governments, immature
economic structures, national policies restricting investments by
foreigners, different legal systems, and economies based on only a
few industries. In some countries, there is the risk that the
government may take over the assets or operations of a company or
that the government may impose taxes or limits on the removal of a
Fund's assets from that country.
- REGULATORY RISK. There may be less government supervision of foreign
markets. As a result, foreign issuers may not be subject to the
uniform accounting, auditing and financial reporting standards and
Investment objectives, principal investment strategies and risks 25
<PAGE>
practices applicable to domestic issuers and there may be less
publicly available information about foreign issuers.
- MARKET RISK. Foreign securities markets, particularly those of
emerging market countries, may be less liquid and more volatile than
domestic markets. Certain markets may require payment for securities
before delivery and delays may be encountered in settling securities
transactions. In some foreign markets, there may not be protection
against failure by other parties to complete transactions.
- TRANSACTION COSTS. Costs of buying, selling and holding foreign
securities, including brokerage, tax and custody costs, may be
higher than those involved in domestic transactions.
2. ARE THERE SPECIAL RISKS ASSOCIATED WITH INVESTMENTS IN HIGH-YIELD/HIGH-RISK
BONDS?
High-yield/high-risk bonds (or "junk" bonds) are bonds rated below
investment grade by the primary rating agencies such as Standard &
Poor's and Moody's. The value of lower quality bonds generally is more
dependent on credit risk, or the ability of the issuer to meet
interest and principal payments, than investment grade bonds. Issuers
of high-yield bonds may not be as strong financially as those issuing
bonds with higher credit ratings and are more vulnerable to real or
perceived economic changes, political changes or adverse developments
specific to the issuer.
The junk bond market can experience sudden and sharp price swings.
Because Flexible Income Fund may invest a significant portion of its
assets in high-yield/high-risk bonds, investors should be willing to
tolerate a corresponding increase in the risk of significant and
sudden changes in NAV.
Please refer to "Explanation of Rating Categories" on pages 46-47 for
a description of bond rating categories.
3. HOW DO THE FUNDS TRY TO REDUCE RISK?
The Funds may use futures, options, swaps and other derivative
instruments to "hedge" or protect their portfolios from adverse
movements in securities prices and interest rates. The Funds may also
use a variety of currency hedging techniques, including forward
currency contracts, to manage exchange rate risk. The portfolio
managers believe the use of these instruments will benefit the Funds.
However, a Fund's performance could be worse than if the Fund had not
used such instruments if a portfolio manager's judgement proves
incorrect. Risks associated with the use of derivative instruments are
described in the SAI.
26 Janus Adviser Series
<PAGE>
MONEY MARKET FUND
This section takes a closer look at the investment objective of Money
Market Fund, its principal investment strategies and certain risks of
investing in the Fund. Strategies and policies that are noted as
"fundamental" cannot be changed without a shareholder vote.
Money Market Fund is subject to certain specific SEC rule
requirements. Among other things, the Fund is limited to investing in
U.S. dollar-denominated instruments with a remaining maturity of 397
days or less (as calculated pursuant to Rule 2a-7 under the 1940 Act).
INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES
Money Market Fund seeks maximum current income to the extent
consistent with stability of capital. It pursues its objective by
investing primarily in high quality debt obligations and obligations
of financial institutions. Debt obligations may include commercial
paper, notes and bonds, and variable amount master demand notes.
Obligations of financial institutions include certificates of deposit
and time deposits.
Money Market Fund will:
- invest in high quality, short-term money market instruments that
present minimal credit risks, as determined by Janus Capital
- invest only in U.S. dollar-denominated instruments that have a
remaining maturity of 397 days or less (as calculated pursuant to
Rule 2a-7 under the 1940 Act)
- maintain a dollar-weighted average portfolio maturity of 90 days or
less
TYPES OF INVESTMENTS
Money Market Fund invests primarily in:
- high quality debt obligations
- obligations of financial institutions
The Fund may also invest (to a lesser degree) in:
- U.S. Government Securities (securities issued or guaranteed by the
U.S. government, its agencies and instrumentalities)
- municipal securities
DEBT OBLIGATIONS
The Fund may invest in U.S. dollar denominated debt obligations. Debt
obligations include:
- commercial paper
- notes and bonds
- variable amount master demand notes (the payment obligations on
these instruments may be backed by securities, swap agreements or
other assets, by a guarantee of a third party or solely by the
unsecured promise of the issuer to make payments when due)
- privately issued commercial paper or other securities that are
restricted as to disposition under the federal securities laws
Investment objectives, principal investment strategies and risks 27
<PAGE>
OBLIGATIONS OF FINANCIAL INSTITUTIONS
Examples of obligations of financial institutions include:
- negotiable certificates of deposit, bankers' acceptances, time
deposits and other obligations of U.S. banks (including savings and
loan associations) having total assets in excess of one billion
dollars and U.S. branches of foreign banks having total assets in
excess of ten billion dollars
- Eurodollar and Yankee bank obligations (Eurodollar bank obligations
are dollar-denominated certificates of deposit or time deposits
issued outside the U.S. capital markets by foreign branches of U.S.
banks and by foreign banks. Yankee bank obligations are
dollar-denominated obligations issued in the U.S. capital markets by
foreign banks)
- other U.S. dollar-denominated obligations of foreign banks having
total assets in excess of ten billion dollars that Janus Capital
believes are of an investment quality comparable to obligations of
U.S. banks in which the Fund may invest
Foreign, Eurodollar (and to a limited extent, Yankee) bank obligations
are subject to certain sovereign risks. One such risk is the
possibility that a foreign government might prevent dollar-denominated
funds from flowing across its borders. Other risks include: adverse
political and economic developments in a foreign country; the extent
and quality of government regulation of financial markets and
institutions; the imposition of foreign withholding taxes; and
expropriation or nationalization of foreign issuers.
INVESTMENT TECHNIQUES
The following is a description of other investment techniques that
Money Market Fund may use:
PARTICIPATION INTERESTS
A participation interest gives Money Market Fund a proportionate,
undivided interest in underlying debt securities and sometimes carries
a demand feature.
DEMAND FEATURES
Demand features give Money Market Fund the right to resell securities
at specified periods prior to their maturity dates. Demand features
may shorten the life of a variable or floating rate security, enhance
the instrument's credit quality and provide a source of liquidity.
Demand features are often issued by third party financial
institutions, generally domestic and foreign banks. Accordingly, the
credit quality and liquidity of Money Market Fund's investments may be
dependent in part on the credit quality of the banks supporting Money
Market Fund's investments. This will result in exposure to risks
pertaining to the banking industry, including the foreign banking
industry. Brokerage firms and insurance companies also provide certain
liquidity and credit support.
VARIABLE AND FLOATING RATE SECURITIES
Money Market Fund may invest in securities which have variable or
floating rates of interest. These securities pay interest at rates
that are adjusted periodically according to a specified formula,
usually with reference to an interest rate index or market interest
rate. Variable and floating rate securities are subject to changes in
value based on changes in market interest rates or changes in the
issuer's or guarantor's creditworthiness.
28 Janus Adviser Series
<PAGE>
MORTGAGE- AND ASSET-BACKED SECURITIES
Money Market Fund may purchase fixed or variable rate mortgage-backed
securities issued by the Government National Mortgage Association,
Federal National Mortgage Association, the Federal Home Loan Mortgage
Corporation, or other governmental or government-related entity. The
Fund may purchase other mortgage- and asset-backed securities
including securities backed by automobile loans, equipment leases or
credit card receivables.
Unlike traditional debt instruments, payments on these securities
include both interest and a partial payment of principal. Prepayments
of the principal of underlying loans may shorten the effective
maturities of these securities and may result in the Fund having to
reinvest proceeds at a lower interest rate.
REPURCHASE AGREEMENTS
Money Market Fund may enter into collateralized repurchase agreements.
Repurchase agreements are transactions in which the Fund purchases
securities and simultaneously commits to resell those securities to
the seller at an agreed-upon price on an agreed-upon future date. The
repurchase price reflects a market rate of interest and is
collateralized by cash or securities.
If the seller of the securities underlying a repurchase agreement
fails to pay the agreed resale price on the agreed delivery date,
Money Market Fund may incur costs in disposing of the collateral and
may experience losses if there is any delay in its ability to do so.
Investment objectives, principal investment strategies and risks 29
<PAGE>
Management of the Funds
INVESTMENT ADVISER
Janus Capital, 100 Fillmore Street, Denver, Colorado 80206-4928, is
the investment adviser to each of the Portfolios and is responsible
for the day-to-day management of the investment portfolios and other
business affairs of the Funds.
Janus Capital began serving as investment adviser to Janus Fund in
1970 and currently serves as investment adviser to all of the Janus
retail funds, acts as sub-adviser for a number of private-label mutual
funds and provides separate account advisory services for
institutional accounts.
Janus Capital furnishes continuous advice and recommendations
concerning each Portfolio's investments. Janus Capital also furnishes
certain administrative, compliance and accounting services for the
Portfolios, and may be reimbursed by the Funds for its costs in
providing those services. In addition, Janus Capital employees serve
as officers of the Trust and Janus Capital provides office space for
the Funds and pays the salaries, fees and expenses of all Portfolio
officers and those Trustees who are affiliated with Janus Capital.
Retirement plan service providers, brokers, bank trust departments,
financial advisers and other financial intermediaries may receive fees
for providing recordkeeping, subaccounting and other administrative
services to their customers in connection with investment in the
Funds.
30 Janus Adviser Series
<PAGE>
MANAGEMENT EXPENSES AND EXPENSE LIMITS
Each Fund pays Janus Capital a management fee which is calculated
daily and paid monthly. Each Fund's advisory agreement spells out the
management fee and other expenses that the Funds must pay. Each of the
Funds is subject to the following management fee schedule (expressed
as an annual rate). In addition, each Fund incurs expenses not assumed
by Janus Capital, including the administrative services fee,
distribution fee, transfer agent and custodian fees and expenses,
legal and auditing fees, printing and mailing costs of sending reports
and other information to existing shareholders, and independent
Trustees' fees and expenses.
<TABLE>
<CAPTION>
Average Daily
Net Assets Annual Rate Expense Limit
Fee Schedule of Portfolio Percentage (%) Percentage (%)(1)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Growth Fund All Asset Levels 0.65
Aggressive Growth Fund
Capital Appreciation Fund
Balanced Fund
Equity Income Fund
Growth and Income Fund
Strategic Value Fund
International Fund
Worldwide Fund
- ------------------------------------------------------------------------------------------------------------------
Flexible Income Fund First $300 Million 0.65
Over $300 Million 0.55
- ------------------------------------------------------------------------------------------------------------------
Money Market Fund All Asset Levels 0.25
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Janus Capital has agreed to limit the Funds' total operating expenses
(excluding the distribution fee, administrative services fee, brokerage
commissions, interest, taxes and extraordinary expenses) as indicated until
at least , 2003 for each Fund except Strategic Value Fund. For Strategic
Value Fund, Janus Capital has agreed to limit the Fund's total operating
expenses (excluding the distribution fee, administrative services fee,
brokerage commissions, interest, taxes and extraordinary expenses) as
indicated until at least the next annual renewal of the advisory agreement.
Management of the funds 31
<PAGE>
INVESTMENT PERSONNEL
PORTFOLIO MANAGERS
LAURENCE J. CHANG
- --------------------------------------------------------------------------------
is Executive Vice President and co-manager of Janus Adviser
International Fund and Janus Adviser Worldwide Fund, each of
which he has co-managed since inception. He has also co-managed
Janus Aspen Worldwide Growth Portfolio, Janus Worldwide Fund,
Janus Aspen International Growth Portfolio and Janus Overseas
Fund since December 1999, September 1999, May 1998 and April
1998, respectively. He served as assistant portfolio manager for
Janus Aspen International Growth Portfolio and Janus Overseas
Fund since 1996. Mr. Chang joined Janus Capital in 1993 as a
research analyst. He received an undergraduate degree with honors
in Religion with a concentration in Philosophy from Dartmouth
College and a Masters Degree in Political Science from Stanford
University. Mr. Chang has earned the right to use the Chartered
Financial Analyst designation.
DAVID J. CORKINS
- --------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Adviser Growth and Income Fund and Janus Aspen Growth and Income
Portfolio, each of which he has managed since their inceptions.
He is Executive Vice President and portfolio manager of Janus
Growth and Income Fund which he has managed since August 1997. He
is an assistant portfolio manager of Janus Mercury Fund. He
joined Janus Capital in 1995 as a research analyst specializing
in domestic financial services companies and a variety of foreign
industries. Prior to joining Janus, he was the Chief Financial
Officer of Chase U.S. Consumer Services, Inc., a Chase Manhattan
mortgage business. He holds a Bachelor of Arts in English and
Russian from Dartmouth and received his Master of Business
Administration from Columbia University in 1993.
DAVID C. DECKER
- --------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Adviser Strategic Value Fund, Janus Aspen Strategic Value
Portfolio, Janus Special Situations Fund and Janus Strategic
Value Fund, which he has managed since inception, and an
assistant portfolio manager of Janus Adviser Growth Fund, Janus
Aspen Growth Portfolio and Janus Fund. He joined Janus Capital in
1992 as a research analyst and focused on companies in the
automotive and defense industries prior to managing Janus Special
Situations Fund. He obtained his Master of Business
Administration in Finance from the Fuqua School of Business at
Duke University and a Bachelor of Arts in Economics and Political
Science from Tufts University. Mr. Decker has earned the right to
use the Chartered Financial Analyst designation.
JAMES P. GOFF
- --------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Adviser Aggressive Growth Fund and Janus Aspen Aggressive Growth
Portfolio, both of which he has managed since inception. Mr. Goff
joined Janus Capital in 1988 and has managed Janus Enterprise
Fund since its inception. Mr. Goff managed or co-managed Janus
Venture Fund from December 1993 to February 1997. He holds a
Bachelor of Arts in Economics from Yale University. Mr. Goff has
earned the right to use the Chartered Financial Analyst
designation.
32 Janus Adviser Series
<PAGE>
HELEN YOUNG HAYES
- --------------------------------------------------------------------------------
is Executive Vice President and co-manager of Janus Adviser
Worldwide Fund and Janus Adviser International Fund, each of
which she has co-managed since inception. She also co-manages
Janus Aspen Worldwide Growth Portfolio, Janus Aspen International
Growth Portfolio, Janus Worldwide Fund and Janus Overseas Fund,
all of which she has managed or co-managed since their
inceptions. Ms. Hayes joined Janus Capital in 1987. She holds a
Bachelor of Arts in Economics from Yale University. Ms. Hayes has
earned the right to use the Chartered Financial Analyst
designation.
SHARON S. PICHLER
- --------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Adviser Money Market Fund, Janus Money Market Fund, Janus
Tax-Exempt Money Market Fund and Janus Aspen Money Market Fund
which she has managed since their inceptions. She previously
served as portfolio manager of Janus Government Money Market Fund
from inception to February 1999. She holds a Bachelor of Arts in
Economics from Michigan State University and a Master of Business
Administration from the University of Texas at San Antonio. Ms.
Pichler has earned the right to use the Chartered Financial
Analyst designation.
KAREN L. REIDY
- --------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Adviser Balanced Fund, and Janus Adviser Equity Income Fund,
which she has managed since inception. She is also Executive Vice
President and portfolio manager of Janus Aspen Balanced
Portfolio, Janus Aspen Equity Income Portfolio, Janus Balanced
Fund and Janus Equity Income Fund as of January 2000. She is also
an assistant portfolio manager of Janus Adviser Growth Fund,
Janus Aspen Growth Portfolio and Janus Fund. Prior to joining
Janus Capital in 1995, she worked for Price Waterhouse as a
manager in both the Mergers and Acquisitions and Audit business
units. In this capacity, Ms. Reidy performed due diligence work
for corporate clients and oversaw audit engagements. She received
an undergraduate degree in Accounting from the University of
Colorado in 1989 and passed the CPA exam in 1992. Ms. Reidy has
earned the right to use the Chartered Financial Analyst
designation.
BLAINE P. ROLLINS
- --------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Adviser Growth Fund, which he has managed since inception. He
previously managed Janus Aspen Balanced Portfolio from May 1996
to December 1999 and Janus Aspen Equity Income Portfolio from its
inception to December 1999. Mr. Rollins joined Janus Capital in
1990 and has managed Janus Fund since January 2000, Janus
Balanced Fund from January 1996 through December 1999 and Janus
Equity Income Fund from inception until December 1999. He was an
assistant portfolio manager of Janus Fund from January 1994
through December 1999. Mr. Rollins joined Janus Capital in 1990
and gained experience as a fixed-income trader and equity
research analyst prior to managing Janus Balanced Fund and Janus
Aspen Balanced Portfolio. He holds a Bachelor of Science in
Finance from the University of Colorado and he has earned the
right to use the Chartered Financial Analyst designation.
Management of the funds 33
<PAGE>
SCOTT W. SCHOELZEL
- --------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Adviser Capital Appreciation Fund and Janus Aspen Capital
Appreciation Portfolio, which he has managed since their
inception. He is portfolio manager of Janus Twenty Fund, which he
has managed since August 1997. He previously managed Janus
Olympus Fund from its inception to August 1997. Mr. Schoelzel
joined Janus Capital in January 1994. He holds a Bachelor of Arts
in Business from Colorado College.
RONALD V. SPEAKER
- --------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Adviser Flexible Income Fund and Janus Aspen Flexible Income
Portfolio which he has managed or co-managed since their
inceptions. He previously served as co-manager of Janus Aspen
High-Yield Portfolio, from its inception to May 1998. He managed
Janus Aspen Short-Term Bond Portfolio from its inception through
April 1996. Mr. Speaker joined Janus Capital in 1986. He has
managed or co-managed Janus Flexible Income Fund since December
1991 and previously managed both Janus Short-Term Bond Fund and
Janus Federal Tax-Exempt Fund from their inceptions through
December 1995. He previously served as co-manager of Janus
High-Yield Fund from its inception to February 1998. He holds a
Bachelor of Arts in Finance from the University of Colorado and
he has earned the right to use the Chartered Financial Analyst
designation.
In January 1997, Mr. Speaker settled an SEC administrative action
involving two personal trades made by him in January of 1993.
Without admitting or denying the allegations, Mr. Speaker agreed
to civil money penalty, disgorgement, and interest payments
totaling $37,199 and to a 90-day suspension which ended on April
25, 1997.
ASSISTANT PORTFOLIO MANAGERS
MATTHEW A. ANKRUM
- --------------------------------------------------------------------------------
is an assistant portfolio manager of Janus Adviser Aggressive
Growth Fund, Janus Aspen Aggressive Growth Portfolio and Janus
Enterprise Fund. Mr. Ankrum joined Janus Capital as an intern in
June 1996, and became an equity research analyst in August 1997.
Prior to joining Janus, Mr. Ankrum worked as a corporate finance
analyst at William Blair and Company from 1993-1995. He was also
a fixed-income research analyst at Conseco Capital Management.
Mr. Ankrum has an undergraduate degree in Business Administration
from the University of Wisconsin and a Master of Business
Administration from the University of Chicago. Mr. Ankrum has
earned the right to use the Chartered Financial Analyst
designation.
34 Janus Adviser Series
<PAGE>
RON SACHS
- --------------------------------------------------------------------------------
is an assistant portfolio manager of Janus Adviser Aggressive
Growth Fund, Janus Aspen Aggressive Growth Portfolio and Janus
Enterprise Fund. He is portfolio manager of Janus Orion Fund,
which he has managed since inception. Mr. Sachs joined Janus
Capital in 1996 as a research analyst. Prior to coming to Janus,
he worked as a consultant for Bain & Company and as an attorney
for Willkie, Farr & Gallagher. Mr. Sachs graduated from Princeton
cum laude with an undergraduate degree in Economics. He obtained
his law degree from the University of Michigan. Mr. Sachs has
earned the right to use the Chartered Financial Analyst
designation.
DANIEL D. SCHOEN
- --------------------------------------------------------------------------------
is an assistant portfolio manager of Janus Adviser Money Market
Fund and Janus Aspen Money Market Portfolio. He joined Janus
Capital in July 1993 and has worked as a trader or credit analyst
on Janus Money Market Funds since July 1995. He holds a Bachelor
of Arts in Economics from the University of Colorado.
JOHN H. SCHREIBER
- --------------------------------------------------------------------------------
is an assistant portfolio manager of Janus Adviser Growth Fund,
Janus Aspen Growth Portfolio and Janus Fund. Mr. Schreiber joined
Janus Capital in 1997 as an equity research analyst. Prior to
joining Janus, he was an equity analyst with Fidelity
Investments. Mr. Schreiber holds a Bachelor of Science degree in
Mechanical Engineering from the University of Washington and a
Master of Business Administration from Harvard University. He has
earned the right to use the Chartered Financial Analyst
designation.
Management of the funds 35
<PAGE>
Other information
ADMINISTRATIVE SERVICES FEE
Janus Service Corporation, the Trust's transfer agent, receives an
administrative services fee at an annual rate of up to 0.25% of the
average daily net assets of each Fund for providing or procuring
recordkeeping, subaccounting and other administrative services to
investors in the shares. Janus Service expects to use a significant
portion of this fee to compensate retirement plan service providers,
brokers, bank trust departments, financial advisers and other
financial intermediaries for providing these services to their
customers.
DISTRIBUTION FEE
Under a distribution and service plan adopted in accordance with Rule
12b-1 under the 1940 Act, the Funds may pay Janus Distributors, Inc.,
the Trust's distributor, a fee at an annual rate of up to 0.25% of the
average daily net assets of a Fund. Under the terms of the Plan, the
Trust is authorized to make payments to Janus Distributors for
remittance to retirement plan service providers, brokers, bank trust
departments, financial advisers and other financial intermediaries, as
compensation for distribution and shareholder servicing performed by
such entities. Because 12b-1 fees are paid out of the Funds' assets on
an ongoing basis, they will increase the cost of your investment and
may cost you more than paying other types of sales charges.
DISTRIBUTION OF FUNDS
The Funds are distributed by Janus Distributors, Inc., a member of the
National Association of Securities Dealers, Inc. ("NASD"). To obtain
information about NASD member firms and their associated persons, you
may contact NASD Regulation, Inc. at www.nasdr.com, or the Public
Disclosure Hotline at 800-289-9999. An investor brochure containing
information describing the Public Disclosure Program is available from
NASD Regulation, Inc.
36 Janus Adviser Series
<PAGE>
Distributions and taxes
DISTRIBUTIONS
To avoid taxation of the Funds, the Internal Revenue Code requires
each Fund to distribute net income and any net capital gains realized
on its investments annually. A Fund's income from dividends and
interest and any net realized short-term gains are paid to
shareholders as ordinary income dividends. Net realized long-term
gains are paid to shareholders as capital gains distributions.
FUNDS OTHER THAN MONEY MARKET FUND
DISTRIBUTION SCHEDULE
<TABLE>
<CAPTION>
Dividends Capital Gains
<S> <C> <C>
Balanced Fund, Normally declared and paid in Normally declared and paid in
Equity Income Fund March, June, September and December
and Growth and Income Fund December
-----------------------------------------------------------------------------------------------------------------
All other Equity Funds Normally declared and paid in Normally declared and paid in
December December
-----------------------------------------------------------------------------------------------------------------
Flexible Income Fund Normally declared daily, Normally declared and paid in
Saturdays, Sundays & holidays December
included and paid monthly
</TABLE>
HOW DISTRIBUTIONS AFFECT NAV
Distributions, other than daily income dividends, are paid to
shareholders as of the record date of the distribution of a Fund,
regardless of how long the shares have been held. Undistributed income
and realized gains are included in each Fund's daily NAV. The share
price of a Fund drops by the amount of the distribution, net of any
subsequent market fluctuations. As an example, assume that on December
31, Growth Fund declared a dividend in the amount of $0.25 per share.
If Growth Fund's share price was $10.00 on December 30, the Fund's
share price on December 31 would be $9.75, barring market
fluctuations. Shareholders should be aware that distributions from a
taxable mutual fund are not value-enhancing and may create income tax
obligations.
"BUYING A DIVIDEND"
If you purchase shares of a Fund just before the distribution, you
will pay the full price for the shares and receive a portion of the
purchase price back as a taxable distribution. This is referred to as
"buying a dividend." In the above example, if you bought shares on
December 30, you would have paid $10.00 per share. On December 31, the
Fund would pay you $0.25 per share as a dividend and your shares would
now be worth $9.75 per share. Unless your account is set up as a
tax-deferred account, dividends paid to you would be included in your
gross income for tax purposes, even though you may not have
participated in the increase in NAV of the Fund, whether or not you
reinvested the dividends.
For your convenience, Fund distributions of dividends and capital
gains are automatically reinvested in the Fund. To receive
distributions in cash, contact your financial intermediary. Either
way, the distributions may be subject to taxes, unless your shares are
held in a qualified tax-deferred plan or account.
MONEY MARKET FUND
For the Money Market Fund, dividends representing substantially all of
the net investment income and any net realized gains on sales of
securities are declared daily, Saturdays, Sundays and holidays
included, and distributed on the last business day of each month. If a
month begins on a Saturday, Sunday or holiday, dividends for those
days are declared at the end of the preceding month and distributed on
the first business day of the month.
Distributions and taxes 37
<PAGE>
For your convenience, Fund distributions of dividends and capital
gains are automatically reinvested in the Fund. To receive
distributions in cash, contact your financial intermediary. Either
way, the distributions may be subject to taxes, unless your shares are
held in a qualified tax-deferred plan or account.
TAXES
As with any investment, you should consider the tax consequences of
investing in the Funds. Any time you sell or exchange shares of a fund
in a taxable account, it is considered a taxable event. Depending on
the purchase price and the sale price, you may have a gain or loss on
the transaction. Any tax liabilities generated by your transactions
are your responsibility.
The following discussion is not a complete analysis of the federal tax
implications of investing in the Funds. You may wish to consult your
own tax adviser. Additionally, state or local taxes may apply to your
investment, depending upon the laws of your state of residence.
TAXES ON DISTRIBUTIONS
Dividends and distributions of the Funds are subject to federal income
tax, regardless of whether the distribution is made in cash or
reinvested in additional shares of a Fund. Distributions may be
taxable at different rates depending on the length of time a Fund
holds a security. In certain states, a portion of the dividends and
distributions (depending on the sources of a Fund's income) may be
exempt from state and local taxes. Information regarding the tax
status of income dividends and capital gains distributions will be
mailed to shareholders on or before January 31st of each year. Your
financial intermediary will provide this information to you. Account
tax information will also be sent to the IRS.
Income dividends or capital gains distributions made by a Fund
purchased through a qualified retirement plan will generally be exempt
from current taxation if left to accumulate within the qualified plan.
Generally, withdrawals from qualified plans may be subject to ordinary
income tax and, if made before age 59 1/2, a 10% penalty tax. The tax
status of your investment depends on the features of your qualified
plan. For further information, please contact your plan sponsor.
TAXATION OF THE FUNDS
Dividends, interest and some gains received by the Funds on foreign
securities may be subject to withholding of foreign taxes. The Funds
may from year to year make the election permitted under Section 853 of
the Internal Revenue Code to pass through such taxes to shareholders.
If such election is not made, any foreign taxes paid or accrued will
represent an expense to the Funds.
The Funds do not expect to pay any federal income or excise taxes
because they intend to meet certain requirements of the Internal
Revenue Code.
38 Janus Adviser Series
<PAGE>
Shareholder's guide
INVESTORS MAY NOT PURCHASE OR REDEEM SHARES OF THE FUNDS DIRECTLY.
SHARES MAY BE PURCHASED OR REDEEMED ONLY THROUGH RETIREMENT PLANS,
BROKERS, BANK TRUST DEPARTMENTS, FINANCIAL ADVISERS OR OTHER FINANCIAL
INTERMEDIARIES. CERTAIN FUNDS MAY NOT BE AVAILABLE THROUGH CERTAIN OF
THESE INTERMEDIARIES. CONTACT YOUR BROKER OR OTHER FINANCIAL
INTERMEDIARY OR REFER TO YOUR PLAN DOCUMENTS FOR INSTRUCTIONS ON HOW
TO PURCHASE, REDEEM OR EXCHANGE SHARES.
PRICING OF FUND SHARES
Investments will be processed at the NAV next determined after an
order is received and accepted by a Fund or its agent. In order to
receive a day's price, your order must be received by the close of the
regular trading session of the New York Stock Exchange any day that
the NYSE is open. Securities of the Funds are valued at market value
or, if a market quotation is not readily available, at their fair
value determined in good faith under procedures established by and
under the supervision of the Trustees. Short-term instruments maturing
within 60 days are valued at amortized cost, which approximates market
value. See the SAI for more detailed information.
To the extent a Fund holds securities that are primarily listed on
foreign exchanges that trade on weekends or other days when the Funds
do not price their shares, the NAV of a Fund's shares may change on
days when shareholders will not be able to purchase or redeem the
Fund's shares.
Money Market Fund's securities are valued at their amortized cost.
Amortized cost valuation involves valuing an instrument at its cost
and thereafter assuming a constant amortization to maturity (or such
other date as permitted by Rule 2a-7) of any discount or premium. If
fluctuating interest rates cause the market value of the portfolio to
deviate more than 1/2 of 1% from the value determined on the basis of
amortized cost, the Trustees will consider whether any action, such as
adjusting the share's NAV to reflect current market conditions, should
be initiated to prevent any material dilutive effect on shareholders.
PURCHASES
Purchases of Fund shares may be made only through institutional
channels such as retirement plans, brokers, bank trust departments,
financial advisers or other financial intermediaries. Contact your
broker (or other financial intermediary) or refer to your plan
documents for information on how to invest in each Fund. Only certain
financial intermediaries are authorized to receive purchase orders on
the Funds' behalf.
Each Fund reserves the right to reject any specific purchase order.
Purchase orders may be refused if, in Janus Capital's opinion, they
are of a size that would disrupt the management of a Fund. The Funds
do not permit frequent trading or market timing. Excessive purchases
of Fund shares disrupt portfolio management and drive Fund expenses
higher. Although there is no present intention to do so, the Funds may
discontinue sales of their shares if management and the Trustees
believe that continued sales may adversely affect a Fund's ability to
achieve its investment objective. If sales of a Fund's shares are
discontinued, it is expected that existing plan participants and other
shareholders invested in that Fund would be permitted to continue to
authorize investments in that Fund and to reinvest any dividends or
capital gains distributions, absent highly unusual circumstances.
EXCHANGES
Contact your broker (or other financial intermediary) or consult your
plan documents to exchange into other Funds in Janus Adviser Series.
Be sure to read the prospectus of the Fund you are exchanging into. An
exchange is a taxable transaction (except for qualified plan
accounts).
Shareholder's guide 39
<PAGE>
- You may exchange shares of a Fund only for shares of another Fund in
Janus Adviser Series offered through your broker (or other financial
intermediary) or qualified plan.
- You must meet the minimum investment amount for each Fund.
- The exchange privilege is not intended as a vehicle for short-term
or excessive trading. The Funds do not permit frequent trading or
market timing. Excessive exchanges of Fund shares disrupt portfolio
management and drive Fund expenses higher. The Fund may suspend or
terminate your exchange privilege if you engage in an excessive
pattern of exchanges.
REDEMPTIONS
Redemptions, like purchases, may be effected only through retirement
plans, brokers, bank trust departments, financial advisers and similar
financial intermediaries. Please contact your broker (or other
financial intermediary) or refer to the appropriate plan documents for
details.
Shares of any Fund may be redeemed on any business day. Redemptions
are processed at the NAV next calculated after receipt and acceptance
of the redemption order by the Fund or its agent. Redemption proceeds
will normally be wired the business day following receipt of the
redemption order, but in no event later than seven days after receipt
of such order.
FREQUENT TRADING
Frequent trading of Fund shares in response in short-term fluctuations
in the market -- also known as "market timing" -- may make it very
difficult to manage the Fund's investments. The Funds do not permit
frequent trading or market timing. When market timing occurs, the Fund
may have to sell portfolio securities to have the cash necessary to
redeem the market timer's shares. This can happen at a time when it is
not advantageous to sell any securities, which may harm a Fund's
performance. When large dollar amounts are involved, market timing can
also make it difficult to use long-term investment strategies because
the portfolio manager cannot predict how much cash the Fund will have
to invest. When in Janus Capital's opinion such activity would have a
disruptive effect on portfolio management, the Funds reserve the right
to refuse purchase orders and exchanges into a Fund by any person,
group or commonly controlled account. The Funds may notify a market
timer of rejection of a purchase or exchange order after the day the
order is placed. If a Fund allows a market timer to trade Fund shares,
it may require the market timer to enter into a written agreement to
follow certain procedures and limitations.
SHAREHOLDER COMMUNICATIONS
Shareholders will receive annual and semiannual reports including the
financial statements of the Funds that they have authorized for
investment. Each report from their financial intermediaries will show
the investments owned by each Fund and the market values thereof, as
well as other information about the Funds and their operations. The
Trust's fiscal year ends July 31.
40 Janus Adviser Series
<PAGE>
Financial highlights
Financial highlights are not presented because the Funds did not
commence operations until , 2000.
Financial highlights 41
<PAGE>
Glossary of investment terms
This glossary provides a more detailed description of some of the
types of securities and other instruments in which the Funds may
invest. The Funds may invest in these instruments to the extent
permitted by their investment objectives and policies. The Funds are
not limited by this discussion and may invest in any other types of
instruments not precluded by the policies discussed elsewhere in this
Prospectus. Please refer to the SAI for a more detailed discussion of
certain instruments.
I. EQUITY AND DEBT SECURITIES
BONDS are debt securities issued by a company, municipality,
government or government agency. The issuer of a bond is required to
pay the holder the amount of the loan (or par value of the bond) at a
specified maturity and to make scheduled interest payments.
COMMERCIAL PAPER is a short-term debt obligation with a maturity
ranging from 1 to 270 days issued by banks, corporations and other
borrowers to investors seeking to invest idle cash. The Funds may
purchase commercial paper issued in private placements under Section
4(2) of the Securities Act of 1933.
COMMON STOCKS are equity securities representing shares of ownership
in a company and usually carry voting rights and earns dividends.
Unlike preferred stock, dividends on common stock are not fixed but
are declared at the discretion of the issuer's board of directors.
CONVERTIBLE SECURITIES are preferred stocks or bonds that pay a fixed
dividend or interest payment and are convertible into common stock at
a specified price or conversion ratio.
DEBT SECURITIES are securities representing money borrowed that must
be repaid at a later date. Such securities have specific maturities
and usually a specific rate of interest or an original purchase
discount.
DEPOSITARY RECEIPTS are receipts for shares of a foreign-based
corporation that entitle the holder to dividends and capital gains on
the underlying security. Receipts include those issued by domestic
banks (American Depositary Receipts), foreign banks (Global or
European Depositary Receipts) and broker-dealers (depositary shares).
FIXED-INCOME SECURITIES are securities that pay a specified rate of
return. The term generally includes short-and long-term government,
corporate and municipal obligations that pay a specified rate of
interest or coupons for a specified period of time, and preferred
stock, which pays fixed dividends. Coupon and dividend rates may be
fixed for the life of the issue or, in the case of adjustable and
floating rate securities, for a shorter period.
HIGH-YIELD/HIGH-RISK BONDS are bonds that are rated below investment
grade by the primary rating agencies (e.g., BB or lower by Standard &
Poor's and Ba or lower by Moody's). Other terms commonly used to
describe such bonds include "lower rated bonds," "noninvestment grade
bonds" and "junk bonds."
MORTGAGE- AND ASSET-BACKED SECURITIES are shares in a pool of
mortgages or other debt. These securities are generally pass-through
securities, which means that principal and interest payments on the
underlying securities (less servicing fees) are passed through to
shareholders on a pro rata basis. These securities involve prepayment
risk, which is the risk that the underlying mortgages or other debt
may be refinanced or paid off prior to their maturities during periods
of declining interest rates. In that case, a portfolio manager may
have to reinvest the proceeds from the securities at a lower rate.
Potential market gains on a security subject to prepayment risk may be
more limited than potential market gains on a comparable security that
is not subject to prepayment risk.
PASSIVE FOREIGN INVESTMENT COMPANIES (PFICS) are any foreign
corporations which generate certain amounts of passive income or hold
certain amounts of assets for the production of passive income.
Passive income includes dividends, interest, royalties, rents and
annuities. To avoid taxes and interest that the
42 Janus Adviser Series
<PAGE>
Funds must pay if these investments are profitable, the Funds may make
various elections permitted by the tax laws. These elections could
require that the Funds recognize taxable income, which in turn must be
distributed, before the securities are sold and before cash is
received to pay the distributions.
PAY-IN-KIND BONDS are debt securities that normally give the issuer an
option to pay cash at a coupon payment date or give the holder of the
security a similar bond with the same coupon rate and a face value
equal to the amount of the coupon payment that would have been made.
PREFERRED STOCKS are equity securities that generally pay dividends at
a specified rate and have preference over common stock in the payment
of dividends and liquidation. Preferred stock generally does not carry
voting rights.
REPURCHASE AGREEMENTS involve the purchase of a security by a Fund and
a simultaneous agreement by the seller (generally a bank or dealer) to
repurchase the security from the Fund at a specified date or upon
demand. This technique offers a method of earning income on idle cash.
These securities involve the risk that the seller will fail to
repurchase the security, as agreed. In that case, a Fund will bear the
risk of market value fluctuations until the security can be sold and
may encounter delays and incur costs in liquidating the security.
REVERSE REPURCHASE AGREEMENTS involve the sale of a security by a Fund
to another party (generally a bank or dealer) in return for cash and
an agreement by the Fund to buy the security back at a specified price
and time. This technique will be used primarily to provide cash to
satisfy unusually high redemption requests, or for other temporary or
emergency purposes.
RULE 144A SECURITIES are securities that are not registered for sale
to the general public under the Securities Act of 1933, but that may
be resold to certain institutional investors.
STANDBY COMMITMENTS are obligations purchased by a Fund from a dealer
that give the Fund the option to sell a security to the dealer at a
specified price.
STEP COUPON BONDS are debt securities that trade at a discount from
their face value and pay coupon interest. The discount from the face
value depends on the time remaining until cash payments begin,
prevailing interest rates, liquidity of the security and the perceived
credit quality of the issuer.
STRIP BONDS are debt securities that are stripped of their interest
(usually by a financial intermediary) after the securities are issued.
The market value of these securities generally fluctuates more in
response to changes in interest rates than interest-paying securities
of comparable maturity.
TENDER OPTION BONDS are generally long-term securities that are
coupled with an option to tender the securities to a bank,
broker-dealer or other financial institution at periodic intervals and
receive the face value of the bond. This type of security is commonly
used as a means of enhancing the security's liquidity.
U.S. GOVERNMENT SECURITIES include direct obligations of the U.S.
government that are supported by its full faith and credit. Treasury
bills have initial maturities of less than one year, Treasury notes
have initial maturities of one to ten years and Treasury bonds may be
issued with any maturity but generally have maturities of at least ten
years. U.S. government securities also include indirect obligations of
the U.S. government that are issued by federal agencies and government
sponsored entities. Unlike Treasury securities, agency securities
generally are not backed by the full faith and credit of the U.S.
government. Some agency securities are supported by the right of the
issuer to borrow from the Treasury, others are supported by the
discretionary authority of the U.S. government to purchase the
agency's obligations and others are supported only by the credit of
the sponsoring agency.
Glossary of investment terms 43
<PAGE>
VARIABLE AND FLOATING RATE SECURITIES have variable or floating rates
of interest and, under certain limited circumstances, may have varying
principal amounts. These securities pay interest at rates that are
adjusted periodically according to a specified formula, usually with
reference to some interest rate index or market interest rate. The
floating rate tends to decrease the security's price sensitivity to
changes in interest rates.
WARRANTS are securities, typically issued with preferred stock or
bonds, that give the holder the right to buy a proportionate amount of
common stock at a specified price, usually at a price that is higher
than the market price at the time of issuance of the warrant. The
right may last for a period of years or indefinitely.
WHEN-ISSUED, DELAYED DELIVERY AND FORWARD TRANSACTIONS generally
involve the purchase of a security with payment and delivery at some
time in the future - i.e., beyond normal settlement. The Portfolios do
not earn interest on such securities until settlement and bear the
risk of market value fluctuations in between the purchase and
settlement dates. New issues of stocks and bonds, private placements
and U.S. government securities may be sold in this manner.
ZERO COUPON BONDS are debt securities that do not pay regular interest
at regular intervals, but are issued at a discount from face value.
The discount approximates the total amount of interest the security
will accrue from the date of issuance to maturity. The market value of
these securities generally fluctuates more in response to changes in
interest rates than interest-paying securities.
II. FUTURES, OPTIONS AND OTHER DERIVATIVES
FORWARD CONTRACTS are contracts to purchase or sell a specified amount
of a financial instrument for an agreed upon price at a specified
time. Forward contracts are not currently exchange traded and are
typically negotiated on an individual basis. The Funds may enter into
forward currency contracts to hedge against declines in the value of
securities denominated in, or whose value is tied to, a currency other
than the U.S. dollar or to reduce the impact of currency appreciation
on purchases of such securities. They may also enter into forward
contracts to purchase or sell securities or other financial indices.
FUTURES CONTRACTS are contracts that obligate the buyer to receive and
the seller to deliver an instrument or money at a specified price on a
specified date. The Funds may buy and sell futures contracts on
foreign currencies, securities and financial indices including
interest rates or an index of U.S. government, foreign government,
equity or fixed-income securities. The Funds may also buy options on
futures contracts. An option on a futures contract gives the buyer the
right, but not the obligation, to buy or sell a futures contract at a
specified price on or before a specified date. Futures contracts and
options on futures are standardized and traded on designated
exchanges.
INDEXED/STRUCTURED SECURITIES are typically short- to
intermediate-term debt securities whose value at maturity or interest
rate is linked to currencies, interest rates, equity securities,
indices, commodity prices or other financial indicators. Such
securities may be positively or negatively indexed (i.e. their value
may increase or decrease if the reference index or instrument
appreciates). Indexed/structured securities may have return
characteristics similar to direct investments in the underlying
instruments and may be more volatile than the underlying instruments.
A Fund bears the market risk of an investment in the underlying
instruments, as well as the credit risk of the issuer.
INTEREST RATE SWAPS involve the exchange by two parties of their
respective commitments to pay or receive interest (e.g., an exchange
of floating rate payments for fixed rate payments).
INVERSE FLOATERS are debt instruments whose interest rate bears an
inverse relationship to the interest rate on another instrument or
index. For example, upon reset the interest rate payable on a security
may go down when the underlying index has risen. Certain inverse
floaters may have an interest rate reset
44 Janus Adviser Series
<PAGE>
mechanism that multiplies the effects of change in the underlying
index. Such mechanism may increase the volatility of the security's
market value.
OPTIONS are the right, but not the obligation, to buy or sell a
specified amount of securities or other assets on or before a fixed
date at a predetermined price. The Funds may purchase and write put
and call options on securities, securities indices and foreign
currencies.
Glossary of investment terms 45
<PAGE>
Explanation of rating categories
The following is a description of credit ratings issued by two of the
major credit ratings agencies. Credit ratings evaluate only the safety
of principal and interest payments, not the market value risk of lower
quality securities. Credit rating agencies may fail to change credit
ratings to reflect subsequent events on a timely basis. Although Janus
Capital considers security ratings when making investment decisions,
it also performs its own investment analysis and does not rely solely
on the ratings assigned by credit agencies.
STANDARD & POOR'S
RATINGS SERVICES
<TABLE>
<S> <C>
BOND RATING EXPLANATION
-----------------------------------------------------------------------------------------
Investment Grade
AAA......................... Highest rating; extremely strong capacity to pay principal
and interest.
AA.......................... High quality; very strong capacity to pay principal and
interest.
A........................... Strong capacity to pay principal and interest; somewhat more
susceptible to the adverse effects of changing circumstances
and economic conditions.
BBB......................... Adequate capacity to pay principal and interest; normally
exhibit adequate protection parameters, but adverse economic
conditions or changing circumstances more likely to lead to
a weakened capacity to pay principal and interest than for
higher rated bonds.
Non-Investment Grade
BB, B, CCC, CC, C........... Predominantly speculative with respect to the issuer's
capacity to meet required interest and principal payments.
BB - lowest degree of speculation; C - the highest degree of
speculation. Quality and protective characteristics
outweighed by large uncertainties or major risk exposure to
adverse conditions.
D........................... In default.
</TABLE>
46 Janus Adviser Series
<PAGE>
MOODY'S INVESTORS SERVICE, INC.
<TABLE>
<S> <C>
BOND RATING EXPLANATION
-----------------------------------------------------------------------------------------
Investment Grade
Aaa......................... Highest quality, smallest degree of investment risk.
Aa.......................... High quality; together with Aaa bonds, they compose the
high-grade bond group.
A........................... Upper-medium grade obligations; many favorable investment
attributes.
Baa......................... Medium-grade obligations; neither highly protected nor
poorly secured. Interest and principal appear adequate for
the present but certain protective elements may be lacking
or may be unreliable over any great length of time.
Non-Investment Grade
Ba.......................... More uncertain, with speculative elements. Protection of
interest and principal payments not well safeguarded during
good and bad times.
B........................... Lack characteristics of desirable investment; potentially
low assurance of timely interest and principal payments or
maintenance of other contract terms over time.
Caa......................... Poor standing, may be in default; elements of danger with
respect to principal or interest payments.
Ca.......................... Speculative in a high degree; could be in default or have
other marked shortcomings.
C........................... Lowest-rated; extremely poor prospects of ever attaining
investment standing.
</TABLE>
Unrated securities will be treated as noninvestment grade securities
unless a portfolio manager determines that such securities are the
equivalent of investment grade securities. Securities that have
received ratings from more than one agency are considered investment
grade if at least one agency has rated the security investment grade.
Explanation of rating categories 47
<PAGE>
This page intentionally left blank
<PAGE>
This page intentionally left blank
<PAGE>
[JANUS LOGO]
1-800-525-0020
100 Fillmore Street
Denver, Colorado 80206-4928
janus.com
You can request other information, including a Statement of
Additional Information, free of charge, by contacting your plan
sponsor, broker or financial institution or visiting our Web site at
janus.com. Other information is also available from financial
intermediaries that sell shares of the Funds.
The Statement of Additional Information provides detailed
information about the Funds and is incorporated into this Prospectus
by reference. You may review the Funds' Statement of Additional
Information at the Public Reference Room of the SEC or get text only
copies for a fee, by writing to or calling the Public Reference
Room, Washington, D.C. 20549-6009 (1-800-SEC-0330). You may obtain
the Statement of Additional Information for free from the SEC's Web
site at http://www.sec.gov.
Investment Company Act File No. 811- _____
<PAGE>
THE INFORMATION IN THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT COMPLETE AND
MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
STATEMENT OF ADDITIONAL INFORMATION IS NOT AN OFFER TO SELL THESE SECURITIES AND
IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
IS NOT PERMITTED.
[JANUS LOGO]
Subject to Completion
Preliminary Statement of Additional Information Dated April 4, 2000
Janus Adviser Series
Janus Adviser Growth Fund
Janus Adviser Aggressive Growth Fund
Janus Adviser Capital Appreciation Fund
Janus Adviser Balanced Fund
Janus Adviser Equity Income Fund
Janus Adviser Growth and Income Fund
Janus Adviser Strategic Value Fund
Janus Adviser International Fund
Janus Adviser Worldwide Fund
Janus Adviser Flexible Income Fund
100 Fillmore Street
Denver, CO 80206-4928
(800) 525-0020
Statement of Additional Information
, 2000
This Statement of Additional Information expands upon and
supplements the information contained in the current Prospectus
for the portfolios listed above, each of which is a separate
series of Janus Adviser Series, a Delaware business trust. Each
of these series of the Trust represents shares of beneficial
interest in a separate portfolio of securities and other assets
with its own objective and policies. Each Fund is managed
separately by Janus Capital Corporation.
The shares of the Funds may be purchased only through
institutional channels such as qualified and non-qualified
retirement and pension plans, bank trust departments, brokers,
financial advisers and other financial intermediaries.
This SAI is not a Prospectus and should be read in conjunction
with the Fund's Prospectus dated , 2000, which is
incorporated by reference into this SAI and may be obtained
from your plan sponsor, broker or other financial intermediary.
This SAI contains additional and more detailed information
about the Funds' operations and activities than the Prospectus.
<PAGE>
[JANUS LOGO]
<PAGE>
Table of contents
<TABLE>
<S> <C>
Classification, Portfolio Turnover, Investment Policies and
Restrictions, and Investment Strategies and Risks........... 2
Investment Adviser.......................................... 21
Custodian, Transfer Agent and Certain Affiliations.......... 24
Portfolio Transactions and Brokerage........................ 25
Trustees and Officers....................................... 27
Shares of the Trust......................................... 32
Net Asset Value Determination............................ 32
Purchases................................................ 32
Distribution Plan........................................ 33
Redemptions.............................................. 33
Income Dividends, Capital Gains Distributions and Tax
Status...................................................... 35
Miscellaneous Information................................... 36
Shares of the Trust...................................... 36
Shareholder Meetings..................................... 36
Voting Rights............................................ 36
Independent Accountants.................................. 36
Registration Statement................................... 37
Performance Information..................................... 38
Appendix A.................................................. 40
Explanation of Rating Categories......................... 40
</TABLE>
1
<PAGE>
Classification, portfolio turnover, investment policies
and restrictions, and investment
strategies and risks
CLASSIFICATION
Each Fund is a series of the Trust, an open-end, management investment
company. The Investment Company Act of 1940 ("1940 Act") classifies
mutual funds as either diversified or nondiversified. Aggressive
Growth Fund, Capital Appreciation Fund and Strategic Value Fund are
nondiversified funds. Each of these Funds reserves the right to become
a diversified fund by limiting the investments in which more than 5%
of its total assets are invested. Growth Fund, Balanced Fund, Equity
Income Fund, Growth and Income Fund, and International Fund, Worldwide
Fund and Flexible Income Fund are diversified funds.
PORTFOLIO TURNOVER
The Prospectus includes a discussion of portfolio turnover policies.
Portfolio turnover is calculated by dividing total purchases or sales,
whichever is less, by the average monthly value of a Fund's
securities. These are new funds and, therefore, have no portfolio
turnover history. However, several of the Funds resulted from the
reorganization of corresponding portfolios of Janus Aspen Series
Retirement Shares into the Funds. The annualized portfolio turnover
rates listed below are those of the predecessor funds to each of those
Funds and give an indication of the expected portfolio turnover
percentages of those Funds.
<TABLE>
<CAPTION>
Fund Name 1999
- ------------------------------------------------------------------
<S> <C>
Growth Fund................................................. 53%
Aggressive Growth Fund...................................... 105%
Capital Appreciation Fund................................... 52%
Balanced Fund............................................... 92%
Equity Income Fund.......................................... 114%
Growth and Income Fund...................................... 59%
International Fund.......................................... 80%
Worldwide Fund.............................................. 67%
Flexible Income Fund........................................ 116%
</TABLE>
INVESTMENT POLICIES AND RESTRICTIONS APPLICABLE TO ALL FUNDS
The Funds are subject to certain fundamental policies and restrictions
that may not be changed without shareholder approval. Shareholder
approval means approval by the lesser of (i) more than 50% of the
outstanding voting securities of the Trust (or a particular Fund or
particular class of shares if a matter affects just that Fund or that
class of shares), or (ii) 67% or more of the voting securities present
at a meeting if the holders of more than 50% of the outstanding voting
securities of the Trust (or a particular Fund or class of shares) are
present or represented by proxy. As fundamental policies, each of the
Funds may not:
(1) Own more than 10% of the outstanding voting securities of any one
issuer and, as to fifty percent (50%) of the value of the total assets
of Aggressive Growth Fund, Capital Appreciation Fund and Strategic
Value Fund and as to seventy-five percent (75%) of the value of the
total assets of the other Funds, purchase the securities of any one
issuer (except cash items and "government securities" as defined under
the Investment Company Act of 1940, as amended, if immediately after
and as a result of such purchase, the value of the holdings of a Fund
in the securities of such issuer exceeds 5% of the value of such
Fund's total assets. With respect to the other 50% of the value of its
total assets, Aggressive Growth Fund, Capital Appreciation Fund and
Strategic Value Fund may invest in the securities of as few as two
issuers.
(2) Invest 25% or more of the value of their respective total assets
in any particular industry (other than U.S. government securities).
2
<PAGE>
(3) Invest directly in real estate or interests in real estate;
however, the Funds may own debt or equity securities issued by
companies engaged in those businesses.
(4) Purchase or sell physical commodities other than foreign
currencies unless acquired as a result of ownership of securities (but
this limitation shall not prevent the Funds from purchasing or selling
options, futures, swaps and forward contracts or from investing in
securities or other instruments backed by physical commodities).
(5) Lend any security or make any other loan if, as a result, more
than 25% of a Fund's total assets would be lent to other parties (but
this limitation does not apply to purchases of commercial paper, debt
securities or repurchase agreements).
(6) Act as an underwriter of securities issued by others, except to
the extent that a Fund may be deemed an underwriter in connection with
the disposition of its portfolio securities.
As a fundamental policy, each Fund may, notwithstanding any other
investment policy or limitation (whether or not fundamental), invest
all of its assets in the securities of a single open-end management
investment company with substantially the same fundamental investment
objective, policies and limitations as such Fund.
The Trustees have adopted additional investment restrictions for the
Funds. These restrictions are operating policies of the Funds and may
be changed by the Trustees without shareholder approval. The
additional investment restrictions adopted by the Trustees to date
include the following:
(a) A Fund will not (i) enter into any futures contracts and related
options for purposes other than bona fide hedging transactions within
the meaning of Commodity Futures Trading Commission ("CFTC")
regulations if the aggregate initial margin and premiums required to
establish positions in futures contracts and related options that do
not fall within the definition of bona fide hedging transactions will
exceed 5% of the fair market value of a Fund's net assets, after
taking into account unrealized profits and unrealized losses on any
such contracts it has entered into; and (ii) enter into any futures
contracts if the aggregate amount of such Fund's commitments under
outstanding futures contracts positions would exceed the market value
of its total assets.
(b) The Funds do not currently intend to sell securities short, unless
they own or have the right to obtain securities equivalent in kind and
amount to the securities sold short without the payment of any
additional consideration therefor, and provided that transactions in
futures, options, swaps and forward contracts are not deemed to
constitute selling securities short.
(c) The Funds do not currently intend to purchase securities on
margin, except that the Funds may obtain such short-term credits as
are necessary for the clearance of transactions, and provided that
margin payments and other deposits in connection with transactions in
futures, options, swaps and forward contracts shall not be deemed to
constitute purchasing securities on margin.
(d) A Fund may not mortgage or pledge any securities owned or held by
such Fund in amounts that exceed, in the aggregate, 15% of that Fund's
net asset value, provided that this limitation does not apply to
reverse repurchase agreements, deposits of assets to margin, guarantee
positions in futures, options, swaps or forward contracts, or the
segregation of assets in connection with such contracts.
(e) The Funds may borrow money for temporary or emergency purposes
(not for leveraging or investment) in an amount not exceeding 25% of
the value of their respective total assets (including the amount
borrowed) less liabilities (other than borrowings). If borrowings
exceed 25% of the value of a Fund's total
3
<PAGE>
assets by reason of a decline in net assets, the Fund will reduce its
borrowings within three business days to the extent necessary to
comply with the 25% limitation. This policy shall not prohibit reverse
repurchase agreements, deposits of assets to margin or guarantee
positions in futures, options, swaps or forward contracts, or the
segregation of assets in connection with such contracts.
(f) The Funds do not currently intend to purchase any security or
enter into a repurchase agreement, if as a result, more than 15% of
their respective net assets would be invested in repurchase agreements
not entitling the holder to payment of principal and interest within
seven days and in securities that are illiquid by virtue of legal or
contractual restrictions on resale or the absence of a readily
available market. The Trustees, or the Funds' investment adviser
acting pursuant to authority delegated by the Trustees, may determine
that a readily available market exists for securities eligible for
resale pursuant to Rule 144A under the Securities Act of 1933 ("Rule
144A Securities"), or any successor to such rule, Section 4(2)
commercial paper and municipal lease obligations. Accordingly, such
securities may not be subject to the foregoing limitation.
(g) The Funds may not invest in companies for the purpose of
exercising control of management.
Under the terms of an exemptive order received from the Securities and
Exchange Commission ("SEC"), each of the Funds may borrow money from
or lend money to other funds that permit such transactions and for
which Janus Capital serves as investment adviser. All such borrowing
and lending will be subject to the above limits. A Fund will borrow
money through the program only when the costs are equal to or lower
than the cost of bank loans. Interfund loans and borrowings normally
extend overnight, but can have a maximum duration of seven days. A
Fund will lend through the program only when the returns are higher
than those available from other short-term instruments (such as
repurchase agreements). A Fund may have to borrow from a bank at a
higher interest rate if an interfund loan is called or not renewed.
Any delay in repayment to a lending Fund could result in a lost
investment opportunity or additional borrowing costs.
For the purposes of these investment restrictions, the identification
of the issuer of a municipal obligation depends on the terms and
conditions of the security. When assets and revenues of a political
subdivision are separate from those of the government that created the
subdivision and the security is backed only by the assets and revenues
of the subdivision, the subdivision is deemed to be the sole issuer.
Similarly, in the case of an industrial development bond, if the bond
is backed only by assets and revenues of a nongovernmental user, then
the nongovernmental user would be deemed to be the sole issuer. If,
however, in either case, the creating government or some other entity
guarantees the security, the guarantee would be considered a separate
security that would be treated as an issue of the guaranteeing entity.
For purposes of the Funds' restriction on investing in a particular
industry, the Funds will rely primarily on industry classifications as
published by Bloomberg L.P. To the extent that Bloomberg L.P.
classifications are so broad that the primary economic characteristics
in a single class are materially different, the Funds may further
classify issuers in accordance with industry classifications as
published by the SEC.
INVESTMENT POLICIES APPLICABLE TO CERTAIN FUNDS
BALANCED FUND. As an operational policy, at least 25% of the assets of
Balanced Fund normally will be invested in fixed-income securities.
FLEXIBLE INCOME FUND. As a fundamental policy, this Fund may not
purchase a non-income-producing security if, after such purchase, less
than 80% of the Fund's total assets would be invested in income-
producing securities. Income-producing securities include securities
that make periodic interest payments
4
<PAGE>
as well as those that make interest payments on a deferred basis or
pay interest only at maturity (e.g., Treasury bills or zero coupon
bonds).
INVESTMENT STRATEGIES AND RISKS
Cash Position
As discussed in the Prospectus, when a portfolio manager believes that
market conditions are unfavorable for profitable investing, or when he
is otherwise unable to locate attractive investment opportunities, the
Fund's investment in cash and similar investments may increase.
Securities that the Funds may invest in as a means of receiving a
return on idle cash include commercial paper, certificates of deposit,
repurchase agreements or other short-term debt obligations. The Funds
may also invest in money market funds, including funds managed by
Janus Capital. (See "Investment Company Securities" on page 8).
Illiquid Investments
Each Fund may invest up to 15% of its net assets in illiquid
investments (i.e., securities that are not readily marketable). The
Trustees have authorized Janus Capital to make liquidity
determinations with respect to certain securities, including Rule 144A
Securities, commercial paper and municipal lease obligations purchased
by the Funds. Under the guidelines established by the Trustees, Janus
Capital will consider the following factors: (1) the frequency of
trades and quoted prices for the obligation; (2) the number of dealers
willing to purchase or sell the security and the number of other
potential purchasers; (3) the willingness of dealers to undertake to
make a market in the security; and (4) the nature of the security and
the nature of the marketplace trades, including the time needed to
dispose of the security, the method of soliciting offers and the
mechanics of the transfer. In the case of commercial paper, Janus
Capital will also consider whether the paper is traded flat or in
default as to principal and interest and any ratings of the paper by a
nationally recognized statistical rating organization ("NRSRO"). A
foreign security that may be freely traded on or through the
facilities of an offshore exchange or other established offshore
securities market is not deemed to be a restricted security subject to
these procedures.
If illiquid securities exceed 15% of a Fund's net assets after the
time of purchase the Fund will take steps to reduce in an orderly
fashion its holdings of illiquid securities. Because illiquid
securities may not be readily marketable, a portfolio manager may not
be able to dispose of them in a timely manner. As a result, a Fund may
be forced to hold illiquid securities while their price depreciates.
Depreciation in the price of illiquid securities may cause the net
asset value of a Fund to decline.
Securities Lending
The Funds may lend securities to qualified parties (typically brokers
or other financial institutions) who need to borrow securities in
order to complete certain transactions such as covering short sales,
avoiding failures to deliver securities or completing arbitrage
activities. The funds may seek to earn additional income through
securities lending. Since there is the risk of delay in recovering a
loaned security or the risk of loss in collateral rights if the
borrower fails financially, securities lending will only be made to
parties that Janus Capital deems creditworthy and in good standing. In
addition, such loans will only be made if Janus Capital believes the
benefit from granting such loans justifies the risk. The Funds will
not have the right to vote on securities while they are being lent,
but they will call a loan in anticipation of any important vote. All
loans will be continuously secured by collateral which consists of
cash, U.S. government securities, letters of credit and such other
collateral permitted by the Securities and Exchange Commission and
policies approved by the Trustees. Cash collateral may be invested in
money
5
<PAGE>
market funds advised by Janus Capital to the extent consistent with
exemptive relief obtained from the SEC.
Short Sales
Each Fund may engage in "short sales against the box." This technique
involves selling either a security that a Fund owns, or a security
equivalent in kind and amount to the security sold short that the Fund
has the right to obtain, for delivery at a specified date in the
future. A Fund may enter into a short sale against the box to hedge
against anticipated declines in the market price of portfolio
securities. If the value of the securities sold short increases prior
to the scheduled delivery date, a Fund loses the opportunity to
participate in the gain.
Zero Coupon, Step Coupon and Pay-In-Kind Securities
Each Fund may invest up to 10% (without limit for Flexible Income
Fund) of its assets in zero coupon, pay-in-kind and step coupon
securities. Zero coupon bonds are issued and traded at a discount from
their face value. They do not entitle the holder to any periodic
payment of interest prior to maturity. Step coupon bonds trade at a
discount from their face value and pay coupon interest. The coupon
rate is low for an initial period and then increases to a higher
coupon rate thereafter. The discount from the face amount or par value
depends on the time remaining until cash payments begin, prevailing
interest rates, liquidity of the security and the perceived credit
quality of the issuer. Pay-in-kind bonds normally give the issuer an
option to pay cash at a coupon payment date or give the holder of the
security a similar bond with the same coupon rate and a face value
equal to the amount of the coupon payment that would have been made.
For the purposes of any Fund's restriction on investing in
income-producing securities, income-producing securities include
securities that make periodic interest payments as well as those that
make interest payments on a deferred basis or pay interest only at
maturity (e.g., Treasury bills or zero coupon bonds).
Current federal income tax law requires holders of zero coupon
securities and step coupon securities to report the portion of the
original issue discount on such securities that accrues during a given
year as interest income, even though the holders receive no cash
payments of interest during the year. In order to qualify as a
"regulated investment company" under the Internal Revenue Code of 1986
and the regulations thereunder (the "Code"), a Fund must distribute
its investment company taxable income, including the original issue
discount accrued on zero coupon or step coupon bonds. Because a Fund
will not receive cash payments on a current basis in respect of
accrued original-issue discount on zero coupon bonds or step coupon
bonds during the period before interest payments begin, in some years
that Fund may have to distribute cash obtained from other sources in
order to satisfy the distribution requirements under the Code. A Fund
might obtain such cash from selling other portfolio holdings which
might cause that Fund to incur capital gains or losses on the sale.
Additionally, these actions are likely to reduce the assets to which
Fund expenses could be allocated and to reduce the rate of return for
that Fund. In some circumstances, such sales might be necessary in
order to satisfy cash distribution requirements even though investment
considerations might otherwise make it undesirable for a Fund to sell
the securities at the time.
Generally, the market prices of zero coupon, step coupon and
pay-in-kind securities are more volatile than the prices of securities
that pay interest periodically and in cash and are likely to respond
to changes in interest rates to a greater degree than other types of
debt securities having similar maturities and credit quality.
6
<PAGE>
Pass-Through Securities
The Funds may invest in various types of pass-through securities, such
as mortgage-backed securities, asset-backed securities and
participation interests. A pass-through security is a share or
certificate of interest in a pool of debt obligations that have been
repackaged by an intermediary, such as a bank or broker-dealer. The
purchaser of a pass-through security receives an undivided interest in
the underlying pool of securities. The issuers of the underlying
securities make interest and principal payments to the intermediary
which are passed through to purchasers, such as the Funds. The most
common type of pass-through securities are mortgage-backed securities.
Government National Mortgage Association ("GNMA") Certificates are
mortgage-backed securities that evidence an undivided interest in a
pool of mortgage loans. GNMA Certificates differ from bonds in that
principal is paid back monthly by the borrowers over the term of the
loan rather than returned in a lump sum at maturity. A Fund will
generally purchase "modified pass-through" GNMA Certificates, which
entitle the holder to receive a share of all interest and principal
payments paid and owned on the mortgage pool, net of fees paid to the
"issuer" and GNMA, regardless of whether or not the mortgagor actually
makes the payment. GNMA Certificates are backed as to the timely
payment of principal and interest by the full faith and credit of the
U.S. government.
The Federal Home Loan Mortgage Corporation ("FHLMC") issues two types
of mortgage pass-through securities: mortgage participation
certificates ("PCs") and guaranteed mortgage certificates ("GMCs").
PCs resemble GNMA Certificates in that each PC represents a pro rata
share of all interest and principal payments made and owned on the
underlying pool. FHLMC guarantees timely payments of interest on PCs
and the full return of principal. GMCs also represent a pro rata
interest in a pool of mortgages. However, these instruments pay
interest semiannually and return principal once a year in guaranteed
minimum payments. This type of security is guaranteed by FHLMC as to
timely payment of principal and interest but it is not guaranteed by
the full faith and credit of the U.S. government.
The Federal National Mortgage Association ("FNMA") issues guaranteed
mortgage pass-through certificates ("FNMA Certificates"). FNMA
Certificates resemble GNMA Certificates in that each FNMA Certificate
represents a pro rata share of all interest and principal payments
made and owned on the underlying pool. This type of security is
guaranteed by FNMA as to timely payment of principal and interest but
it is not guaranteed by the full faith and credit of the U.S.
government.
Except for GMCs, each of the mortgage-backed securities described
above is characterized by monthly payments to the holder, reflecting
the monthly payments made by the borrowers who received the underlying
mortgage loans. The payments to the security holders (such as the
Funds), like the payments on the underlying loans, represent both
principal and interest. Although the underlying mortgage loans are for
specified periods of time, such as 20 or 30 years, the borrowers can,
and typically do, pay them off sooner. Thus, the security holders
frequently receive prepayments of principal in addition to the
principal that is part of the regular monthly payments. A portfolio
manager will consider estimated prepayment rates in calculating the
average-weighted maturity of a Fund. A borrower is more likely to
prepay a mortgage that bears a relatively high rate of interest. This
means that in times of declining interest rates, higher yielding
mortgage-backed securities held by a Fund might be converted to cash
and that Fund will be forced to accept lower interest rates when that
cash is used to purchase additional securities in the mortgage-backed
securities sector or in other investment sectors. Additionally,
prepayments during such periods will limit a Fund's ability to
participate in as large a market gain as may be experienced with a
comparable security not subject to prepayment.
7
<PAGE>
Asset-backed securities represent interests in pools of consumer loans
and are backed by paper or accounts receivables originated by banks,
credit card companies or other providers of credit. Generally, the
originating bank or credit provider is neither the obligor nor the
guarantor of the security, and interest and principal payments
ultimately depend upon payment of the underlying loans by individuals.
Tax-exempt asset-backed securities include units of beneficial
interests in pools of purchase contracts, financing leases, and sales
agreements that may be created when a municipality enters into an
installment purchase contract or lease with a vendor. Such securities
may be secured by the assets purchased or leased by the municipality;
however, if the municipality stops making payments, there generally
will be no recourse against the vendor. The market for tax-exempt
asset-backed securities is still relatively new. These obligations are
likely to involve unscheduled prepayments of principal.
Investment Company Securities
From time to time, the Funds may invest in securities of other
investment companies, subject to the provisions of Section 12(d)(1) of
the 1940 Act. The Funds may invest in securities of money market funds
managed by Janus Capital in excess of the limitations of Section
12(d)(1) under the terms of an SEC exemptive order obtained by Janus
Capital and the Janus funds.
Depositary Receipts
The Funds may invest in sponsored and unsponsored American Depositary
Receipts ("ADRs"), which are receipts issued by an American bank or
trust company evidencing ownership of underlying securities issued by
a foreign issuer. ADRs, in registered form, are designed for use in
U.S. securities markets. Unsponsored ADRs may be created without the
participation of the foreign issuer. Holders of these ADRs generally
bear all the costs of the ADR facility, whereas foreign issuers
typically bear certain costs in a sponsored ADR. The bank or trust
company depositary of an unsponsored ADR may be under no obligation to
distribute shareholder communications received from the foreign issuer
or to pass through voting rights. The Funds may also invest in
European Depositary Receipts ("EDRs"), Global Depositary Receipts
("GDRs") and in other similar instruments representing securities of
foreign companies. EDRs and GDRs are securities that are typically
issued by foreign banks or foreign trust companies, although U.S.
banks or U.S. trust companies may issue them. EDRs and GDRs are
structured similar to the arrangements of ADRs. EDRs, in bearer form,
are designed for use in European securities markets.
Depositary Receipts are generally subject to the same sort of risks as
direct investments in a foreign country, such as, currency risk,
political and economic risk, and market risk, because their values
depend on the performance of a foreign security denominated in its
home currency. The risks of foreign investing are addressed in some
detail in the Funds' prospectus.
Municipal Obligations
The Funds may invest in municipal obligations issued by states,
territories and possessions of the United States and the District of
Columbia. The value of municipal obligations can be affected by
changes in their actual or perceived credit quality. The credit
quality of municipal obligations can be affected by, among other
things, the financial condition of the issuer or guarantor, the
issuer's future borrowing plans and sources of revenue, the economic
feasibility of the revenue bond project or general borrowing purpose,
political or economic developments in the region where the security is
issued, and the liquidity of the security. Because municipal
securities are generally traded over-the-counter, the liquidity of a
particular issue often depends on the willingness of dealers to make a
market in the security. The liquidity of some municipal obligations
may be enhanced by demand features, which would enable a Fund to
demand payment on short notice from the issuer or a financial
intermediary.
8
<PAGE>
Other Income-Producing Securities
Other types of income producing securities that the Funds may purchase
include, but are not limited to, the following types of securities:
VARIABLE AND FLOATING RATE OBLIGATIONS. These types of securities have
variable or floating rates of interest and, under certain limited
circumstances, may have varying principal amounts. These securities
pay interest at rates that are adjusted periodically according to a
specified formula, usually with reference to some interest rate index
or market interest rate. The floating rate tends to decrease the
security's price sensitivity to changes in interest rates. These types
of securities are relatively long-term instruments that often carry
demand features permitting the holder to demand payment of principal
at any time or at specified intervals prior to maturity.
In order to most effectively use these investments, a portfolio
manager must correctly assess probable movements in interest rates.
This involves different skills than those used to select most
portfolio securities. If the portfolio manager incorrectly forecasts
such movements, a Fund could be adversely affected by the use of
variable or floating rate obligations.
STANDBY COMMITMENTS. These instruments, which are similar to a put,
give a Fund the option to obligate a broker, dealer or bank to
repurchase a security held by that Fund at a specified price.
TENDER OPTION BONDS. Tender option bonds are relatively long-term
bonds that are coupled with the agreement of a third party (such as a
broker, dealer or bank) to grant the holders of such securities the
option to tender the securities to the institution at periodic
intervals.
INVERSE FLOATERS. Inverse floaters are debt instruments whose interest
bears an inverse relationship to the interest rate on another
security. No Fund will invest more than 5% of its assets in inverse
floaters. Similar to variable and floating rate obligations, effective
use of inverse floaters requires skills different from those needed to
select most portfolio securities. If movements in interest rates are
incorrectly anticipated, a fund could lose money or its NAV could
decline by the use of inverse floaters.
STRIP BONDS. Strip bonds are debt securities that are stripped of
their interest (usually by a financial intermediary) after the
securities are issued. The market value of these securities generally
fluctuates more in response to changes in interest rates than
interest-paying securities of comparable maturity.
The Funds will purchase standby commitments, tender option bonds and
instruments with demand features primarily for the purpose of
increasing the liquidity of their holdings.
Repurchase and Reverse Repurchase Agreements
In a repurchase agreement, a Fund purchases a security and
simultaneously commits to resell that security to the seller at an
agreed upon price on an agreed upon date within a number of days
(usually not more than seven) from the date of purchase. The resale
price consists of the purchase price plus an agreed upon incremental
amount that is unrelated to the coupon rate or maturity of the
purchased security. A repurchase agreement involves the obligation of
the seller to pay the agreed upon price, which obligation is in effect
secured by the value (at least equal to the amount of the agreed upon
resale price and marked-to-market daily) of the underlying security or
"collateral." A risk associated with repurchase agreements is the
failure of the seller to repurchase the securities as agreed, which
may cause a Fund to suffer a loss if the market value of such
securities declines before they can be liquidated on the open market.
In the event of bankruptcy or insolvency of the seller, a Fund may
encounter delays and incur costs in liquidating the underlying
security. Repurchase agreements that mature in more than seven days
are subject to the 15%
9
<PAGE>
limit on illiquid investments. While it is not possible to eliminate
all risks from these transactions, it is the policy of the Funds to
limit repurchase agreements to those parties whose creditworthiness
has been reviewed and found satisfactory by Janus Capital.
A Fund may use reverse repurchase agreements to obtain cash to satisfy
unusually heavy redemption requests or for other temporary or
emergency purposes without the necessity of selling portfolio
securities, or to earn additional income on portfolio securities, such
as Treasury bills or notes. In a reverse repurchase agreement, a Fund
sells a portfolio security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the
instrument at a particular price and time. While a reverse repurchase
agreement is outstanding, a Fund will maintain cash and appropriate
liquid assets in a segregated custodial account to cover its
obligation under the agreement. The Funds will enter into reverse
repurchase agreements only with parties that Janus Capital deems
creditworthy. Using reverse repurchase agreements to earn additional
income involves the risk that the interest earned on the invested
proceeds is less than the expense of the reverse repurchase agreement
transaction. This technique may also have a leveraging effect on the
Fund, although the Fund's intent to segregate assets in the amount of
the reverse repurchase agreement minimizes this effect.
High-Yield/High-Risk Bonds
Flexible Income Fund may invest without limit in bonds that are rated
below investment grade (e.g., bonds rated BB or lower by Standard &
Poor's Ratings Services or Ba or lower by Moody's Investors Service,
Inc.). No other Fund intends to invest 35% or more of its net assets
in such bonds. Lower rated bonds involve a higher degree of credit
risk, which is the risk that the issuer will not make interest or
principal payments when due. In the event of an unanticipated default,
a Fund would experience a reduction in its income, and could expect a
decline in the market value of the bonds so affected.
Any Fund may also invest in unrated bonds of foreign and domestic
issuers. Unrated bonds, while not necessarily of lower quality than
rated bonds, may not have as broad a market. Because of the size and
perceived demand of the issue, among other factors, certain
municipalities may not incur the costs of obtaining a rating. A Fund's
manager will analyze the creditworthiness of the issuer, as well as
any financial institution or other party responsible for payments on
the bond, in determining whether to purchase unrated municipal bonds.
Unrated bonds will be included in the 35% limit of each Fund unless
its manager deems such securities to be the equivalent of investment
grade bonds.
Subject to the above limits, each Fund may purchase defaulted
securities only when its portfolio manager believes, based upon
analysis of the financial condition, results of operations and
economic outlook of an issuer, that there is potential for resumption
of income payments and that the securities offer an unusual
opportunity for capital appreciation. Notwithstanding the portfolio
manager's belief about the resumption of income, however, the purchase
of any security on which payment of interest or dividends is suspended
involves a high degree of risk. Such risk includes, among other
things, the following:
FINANCIAL AND MARKET RISKS. Investments in securities that are in
default involve a high degree of financial and market risks that can
result in substantial or, at times, even total losses. Issuers of
defaulted securities may have substantial capital needs and may become
involved in bankruptcy or reorganization proceedings. Among the
problems involved in investments in such issuers is the fact that it
may be difficult to obtain information about the condition of such
issuers. The market prices of such securities also are subject to
abrupt and erratic movements and above average price volatility, and
the spread between the bid and asked prices of such securities may be
greater than normally expected.
10
<PAGE>
DISPOSITION OF PORTFOLIO SECURITIES. Although these Funds generally
will purchase securities for which their portfolio managers expect an
active market to be maintained, defaulted securities may be less
actively traded than other securities and it may be difficult to
dispose of substantial holdings of such securities at prevailing
market prices. The Funds will limit holdings of any such securities to
amounts that the portfolio managers believe could be readily sold, and
holdings of such securities would, in any event, be limited so as not
to limit the Funds' ability to readily dispose of securities to meet
redemptions.
OTHER. Defaulted securities require active monitoring and may, at
times, require participation in bankruptcy or receivership proceedings
on behalf of the Funds.
Futures, Options and Other Derivative Instruments
FUTURES CONTRACTS. The Funds may enter into contracts for the purchase
or sale for future delivery of fixed-income securities, foreign
currencies or contracts based on financial indices, including indices
of U.S. government securities, foreign government securities, equity
or fixed-income securities. U.S. futures contracts are traded on
exchanges which have been designated "contract markets" by the CFTC
and must be executed through a futures commission merchant ("FCM"), or
brokerage firm, which is a member of the relevant contract market.
Through their clearing corporations, the exchanges guarantee
performance of the contracts as between the clearing members of the
exchange.
The buyer or seller of a futures contract is not required to deliver
or pay for the underlying instrument unless the contract is held until
the delivery date. However, both the buyer and seller are required to
deposit "initial margin" for the benefit of the FCM when the contract
is entered into. Initial margin deposits are equal to a percentage of
the contract's value, as set by the exchange on which the contract is
traded, and may be maintained in cash or certain other liquid assets
by the Funds' custodian or subcustodian for the benefit of the FCM.
Initial margin payments are similar to good faith deposits or
performance bonds. Unlike margin extended by a securities broker,
initial margin payments do not constitute purchasing securities on
margin for purposes of the Fund's investment limitations. If the value
of either party's position declines, that party will be required to
make additional "variation margin" payments for the benefit of the FCM
to settle the change in value on a daily basis. The party that has a
gain may be entitled to receive all or a portion of this amount. In
the event of the bankruptcy of the FCM that holds margin on behalf of
a Fund, that Fund may be entitled to return of margin owed to such
Fund only in proportion to the amount received by the FCM's other
customers. Janus Capital will attempt to minimize the risk by careful
monitoring of the creditworthiness of the FCMs with which the Funds do
business and by depositing margin payments in a segregated account
with the Funds' custodian.
The Funds intend to comply with guidelines of eligibility for
exclusion from the definition of the term "commodity pool operator"
adopted by the CFTC and the National Futures Association, which
regulate trading in the futures markets. The Funds will use futures
contracts and related options primarily for bona fide hedging purposes
within the meaning of CFTC regulations. To the extent that the Funds
hold positions in futures contracts and related options that do not
fall within the definition of bona fide hedging transactions, the
aggregate initial margin and premiums required to establish such
positions will not exceed 5% of the fair market value of a Fund's net
assets, after taking into account unrealized profits and unrealized
losses on any such contracts it has entered into.
Although a Fund will segregate cash and liquid assets in an amount
sufficient to cover its open futures obligations, the segregated
assets would be available to that Fund immediately upon closing out
the futures position, while settlement of securities transactions
could take several days. However, because a Fund's cash that may
otherwise be invested would be held uninvested or invested in other
liquid assets so long as
11
<PAGE>
the futures position remains open, such Fund's return could be
diminished due to the opportunity losses of foregoing other potential
investments.
A Fund's primary purpose in entering into futures contracts is to
protect that Fund from fluctuations in the value of securities or
interest rates without actually buying or selling the underlying debt
or equity security. For example, if the Fund anticipates an increase
in the price of stocks, and it intends to purchase stocks at a later
time, that Fund could enter into a futures contract to purchase a
stock index as a temporary substitute for stock purchases. If an
increase in the market occurs that influences the stock index as
anticipated, the value of the futures contracts will increase, thereby
serving as a hedge against that Fund not participating in a market
advance. This technique is sometimes known as an anticipatory hedge.
To the extent a Fund enters into futures contracts for this purpose,
the segregated assets maintained to cover such Fund's obligations with
respect to the futures contracts will consist of liquid assets from
its portfolio in an amount equal to the difference between the
contract price and the aggregate value of the initial and variation
margin payments made by that Fund with respect to the futures
contracts. Conversely, if a Fund holds stocks and seeks to protect
itself from a decrease in stock prices, the Fund might sell stock
index futures contracts, thereby hoping to offset the potential
decline in the value of its portfolio securities by a corresponding
increase in the value of the futures contract position. A Fund could
protect against a decline in stock prices by selling portfolio
securities and investing in money market instruments, but the use of
futures contracts enables it to maintain a defensive position without
having to sell portfolio securities.
If a Fund owns bonds and the portfolio manager expects interest rates
to increase, that Fund may take a short position in interest rate
futures contracts. Taking such a position would have much the same
effect as that Fund selling bonds in its portfolio. If interest rates
increase as anticipated, the value of the bonds would decline, but the
value of that Fund's interest rate futures contract will increase,
thereby keeping the net asset value of that Fund from declining as
much as it may have otherwise. If, on the other hand, a portfolio
manager expects interest rates to decline, that Fund may take a long
position in interest rate futures contracts in anticipation of later
closing out the futures position and purchasing the bonds. Although a
Fund can accomplish similar results by buying securities with long
maturities and selling securities with short maturities, given the
greater liquidity of the futures market than the cash market, it may
be possible to accomplish the same result more easily and more quickly
by using futures contracts as an investment tool to reduce risk.
The ordinary spreads between prices in the cash and futures markets,
due to differences in the nature of those markets, are subject to
distortions. First, all participants in the futures market are subject
to initial margin and variation margin requirements. Rather than
meeting additional variation margin requirements, investors may close
out futures contracts through offsetting transactions which could
distort the normal price relationship between the cash and futures
markets. Second, the liquidity of the futures market depends on
participants entering into offsetting transactions rather than making
or taking delivery of the instrument underlying a futures contract. To
the extent participants decide to make or take delivery, liquidity in
the futures market could be reduced and prices in the futures market
distorted. Third, from the point of view of speculators, the margin
deposit requirements in the futures market are less onerous than
margin requirements in the securities market. Therefore, increased
participation by speculators in the futures market may cause temporary
price distortions. Due to the possibility of the foregoing
distortions, a correct forecast of general price trends by a portfolio
manager still may not result in a successful use of futures.
Futures contracts entail risks. Although the Funds believe that use of
such contracts will benefit the Funds, a Fund's overall performance
could be worse than if such Fund had not entered into futures
contracts if
12
<PAGE>
the portfolio manager's investment judgement proves incorrect. For
example, if a Fund has hedged against the effects of a possible
decrease in prices of securities held in its portfolio and prices
increase instead, that Fund will lose part or all of the benefit of
the increased value of these securities because of offsetting losses
in its futures positions. In addition, if a Fund has insufficient
cash, it may have to sell securities from its portfolio to meet daily
variation margin requirements. Those sales may be, but will not
necessarily be, at increased prices which reflect the rising market
and may occur at a time when the sales are disadvantageous to such
Fund.
The prices of futures contracts depend primarily on the value of their
underlying instruments. Because there are a limited number of types of
futures contracts, it is possible that the standardized futures
contracts available to a Fund will not match exactly such Fund's
current or potential investments. A Fund may buy and sell futures
contracts based on underlying instruments with different
characteristics from the securities in which it typically
invests - for example, by hedging investments in portfolio securities
with a futures contract based on a broad index of securities - which
involves a risk that the futures position will not correlate precisely
with the performance of such Fund's investments.
Futures prices can also diverge from the prices of their underlying
instruments, even if the underlying instruments closely correlate with
a Fund's investments. Futures prices are affected by factors such as
current and anticipated short-term interest rates, changes in
volatility of the underlying instruments and the time remaining until
expiration of the contract. Those factors may affect securities prices
differently from futures prices. Imperfect correlations between a
Fund's investments and its futures positions also may result from
differing levels of demand in the futures markets and the securities
markets, from structural differences in how futures and securities are
traded, and from imposition of daily price fluctuation limits for
futures contracts. A Fund may buy or sell futures contracts with a
greater or lesser value than the securities it wishes to hedge or is
considering purchasing in order to attempt to compensate for
differences in historical volatility between the futures contract and
the securities, although this may not be successful in all cases. If
price changes in a Fund's futures positions are poorly correlated with
its other investments, its futures positions may fail to produce
desired gains or result in losses that are not offset by the gains in
that Fund's other investments.
Because futures contracts are generally settled within a day from the
date they are closed out, compared with a settlement period of three
days for some types of securities, the futures markets can provide
superior liquidity to the securities markets. Nevertheless, there is
no assurance that a liquid secondary market will exist for any
particular futures contract at any particular time. In addition,
futures exchanges may establish daily price fluctuation limits for
futures contracts and may halt trading if a contract's price moves
upward or downward more than the limit in a given day. On volatile
trading days when the price fluctuation limit is reached, it may be
impossible for a Fund to enter into new positions or close out
existing positions. If the secondary market for a futures contract is
not liquid because of price fluctuation limits or otherwise, a Fund
may not be able to promptly liquidate unfavorable futures positions
and potentially could be required to continue to hold a futures
position until the delivery date, regardless of changes in its value.
As a result, such Fund's access to other assets held to cover its
futures positions also could be impaired.
OPTIONS ON FUTURES CONTRACTS. The Funds may buy and write put and call
options on futures contracts. An option on a future gives a Fund the
right (but not the obligation) to buy or sell a futures contract at a
specified price on or before a specified date. The purchase of a call
option on a futures contract is similar in some respects to the
purchase of a call option on an individual security. Depending on the
pricing of the option compared to either the price of the futures
contract upon which it is based or the price of the
13
<PAGE>
underlying instrument, ownership of the option may or may not be less
risky than ownership of the futures contract or the underlying
instrument. As with the purchase of futures contracts, when a Fund is
not fully invested it may buy a call option on a futures contract to
hedge against a market advance.
The writing of a call option on a futures contract constitutes a
partial hedge against declining prices of the security or foreign
currency which is deliverable under, or of the index comprising, the
futures contract. If the futures price at the expiration of the option
is below the exercise price, a Fund will retain the full amount of the
option premium which provides a partial hedge against any decline that
may have occurred in that Fund's holdings. The writing of a put option
on a futures contract constitutes a partial hedge against increasing
prices of the security or foreign currency which is deliverable under,
or of the index comprising, the futures contract. If the futures price
at expiration of the option is higher than the exercise price, a Fund
will retain the full amount of the option premium which provides a
partial hedge against any increase in the price of securities which
that Fund is considering buying. If a call or put option a Fund has
written is exercised, such Fund will incur a loss which will be
reduced by the amount of the premium it received. Depending on the
degree of correlation between the change in the value of its portfolio
securities and changes in the value of the futures positions, a Fund's
losses from existing options on futures may to some extent be reduced
or increased by changes in the value of portfolio securities.
The purchase of a put option on a futures contract is similar in some
respects to the purchase of protective put options on portfolio
securities. For example, a Fund may buy a put option on a futures
contract to hedge its portfolio against the risk of falling prices or
rising interest rates.
The amount of risk a Fund assumes when it buys an option on a futures
contract is the premium paid for the option plus related transaction
costs. In addition to the correlation risks discussed above, the
purchase of an option also entails the risk that changes in the value
of the underlying futures contract will not be fully reflected in the
value of the options bought.
FORWARD CONTRACTS. A forward contract is an agreement between two
parties in which one party is obligated to deliver a stated amount of
a stated asset at a specified time in the future and the other party
is obligated to pay a specified amount for the assets at the time of
delivery. The Funds may enter into forward contracts to purchase and
sell government securities, equity or income securities, foreign
currencies or other financial instruments. Forward contracts generally
are traded in an interbank market conducted directly between traders
(usually large commercial banks) and their customers. Unlike futures
contracts, which are standardized contracts, forward contracts can be
specifically drawn to meet the needs of the parties that enter into
them. The parties to a forward contract may agree to offset or
terminate the contract before its maturity, or may hold the contract
to maturity and complete the contemplated exchange.
The following discussion summarizes the Funds' principal uses of
forward foreign currency exchange contracts ("forward currency
contracts"). A Fund may enter into forward currency contracts with
stated contract values of up to the value of that Fund's assets. A
forward currency contract is an obligation to buy or sell an amount of
a specified currency for an agreed price (which may be in U.S. dollars
or a foreign currency). A Fund will exchange foreign currencies for
U.S. dollars and for other foreign currencies in the normal course of
business and may buy and sell currencies through forward currency
contracts in order to fix a price for securities it has agreed to buy
or sell ("transaction hedge"). A Fund also may hedge some or all of
its investments denominated in a foreign currency or exposed to
foreign currency fluctuations against a decline in the value of that
currency relative to the U.S. dollar by entering into forward currency
contracts to sell an amount of that currency (or a proxy currency
whose performance is expected to replicate or exceed the performance
of that currency relative to the U.S. dollar) approximating
14
<PAGE>
the value of some or all of its portfolio securities denominated in
that currency ("position hedge") or by participating in options or
futures contracts with respect to the currency. A Fund also may enter
into a forward currency contract with respect to a currency where the
Fund is considering the purchase or sale of investments denominated in
that currency but has not yet selected the specific investments
("anticipatory hedge"). In any of these circumstances a Fund may,
alternatively, enter into a forward currency contract to purchase or
sell one foreign currency for a second currency that is expected to
perform more favorably relative to the U.S. dollar if the portfolio
manager believes there is a reasonable degree of correlation between
movements in the two currencies ("cross-hedge").
These types of hedging minimize the effect of currency appreciation as
well as depreciation, but do not eliminate fluctuations in the
underlying U.S. dollar equivalent value of the proceeds of or rates of
return on a Fund's foreign currency denominated portfolio securities.
The matching of the increase in value of a forward contract and the
decline in the U.S. dollar equivalent value of the foreign currency
denominated asset that is the subject of the hedge generally will not
be precise. Shifting a Fund's currency exposure from one foreign
currency to another removes that Fund's opportunity to profit from
increases in the value of the original currency and involves a risk of
increased losses to such Fund if its portfolio manager's projection of
future exchange rates is inaccurate. Proxy hedges and cross-hedges may
result in losses if the currency used to hedge does not perform
similarly to the currency in which hedged securities are denominated.
Unforeseen changes in currency prices may result in poorer overall
performance for a Fund than if it had not entered into such contracts.
The Funds will cover outstanding forward currency contracts by
maintaining liquid portfolio securities denominated in or whose value
is tied to the currency underlying the forward contract or the
currency being hedged. To the extent that a Fund is not able to cover
its forward currency positions with underlying portfolio securities,
the Funds' custodian will segregate cash or other liquid assets having
a value equal to the aggregate amount of such Fund's commitments under
forward contracts entered into with respect to position hedges,
cross-hedges and anticipatory hedges. If the value of the securities
used to cover a position or the value of segregated assets declines, a
Fund will find alternative cover or segregate additional cash or other
liquid assets on a daily basis so that the value of the covered and
segregated assets will be equal to the amount of such Fund's
commitments with respect to such contracts. As an alternative to
segregating assets, a Fund may buy call options permitting such Fund
to buy the amount of foreign currency being hedged by a forward sale
contract or a Fund may buy put options permitting it to sell the
amount of foreign currency subject to a forward buy contract.
While forward contracts are not currently regulated by the CFTC, the
CFTC may in the future assert authority to regulate forward contracts.
In such event, the Funds' ability to utilize forward contracts may be
restricted. In addition, a Fund may not always be able to enter into
forward contracts at attractive prices and may be limited in its
ability to use these contracts to hedge Fund assets.
OPTIONS ON FOREIGN CURRENCIES. The Funds may buy and write options on
foreign currencies in a manner similar to that in which futures or
forward contracts on foreign currencies will be utilized. For example,
a decline in the U.S. dollar value of a foreign currency in which
portfolio securities are denominated will reduce the U.S. dollar value
of such securities, even if their value in the foreign currency
remains constant. In order to protect against such diminutions in the
value of portfolio securities, a Fund may buy put options on the
foreign currency. If the value of the currency declines, such Fund
will have the right to sell such currency for a fixed amount in U.S.
dollars, thereby offsetting, in whole or in part, the adverse effect
on its portfolio.
15
<PAGE>
Conversely, when a rise in the U.S. dollar value of a currency in
which securities to be acquired are denominated is projected, thereby
increasing the cost of such securities, a Fund may buy call options on
the foreign currency. The purchase of such options could offset, at
least partially, the effects of the adverse movements in exchange
rates. As in the case of other types of options, however, the benefit
to a Fund from purchases of foreign currency options will be reduced
by the amount of the premium and related transaction costs. In
addition, if currency exchange rates do not move in the direction or
to the extent projected, a Fund could sustain losses on transactions
in foreign currency options that would require such Fund to forego a
portion or all of the benefits of advantageous changes in those rates.
The Funds may also write options on foreign currencies. For example,
to hedge against a potential decline in the U.S. dollar value of
foreign currency denominated securities due to adverse fluctuations in
exchange rates, a Fund could, instead of purchasing a put option,
write a call option on the relevant currency. If the expected decline
occurs, the option will most likely not be exercised and the decline
in value of portfolio securities will be offset by the amount of the
premium received.
Similarly, instead of purchasing a call option to hedge against a
potential increase in the U.S. dollar cost of securities to be
acquired, a Fund could write a put option on the relevant currency
which, if rates move in the manner projected, should expire
unexercised and allow that Fund to hedge the increased cost up to the
amount of the premium. As in the case of other types of options,
however, the writing of a foreign currency option will constitute only
a partial hedge up to the amount of the premium. If exchange rates do
not move in the expected direction, the option may be exercised and a
Fund would be required to buy or sell the underlying currency at a
loss which may not be offset by the amount of the premium. Through the
writing of options on foreign currencies, a Fund also may lose all or
a portion of the benefits which might otherwise have been obtained
from favorable movements in exchange rates.
The Funds may write covered call options on foreign currencies. A call
option written on a foreign currency by a Fund is "covered" if that
Fund owns the foreign currency underlying the call or has an absolute
and immediate right to acquire that foreign currency without
additional cash consideration (or for additional cash consideration
held in a segregated account by its custodian) upon conversion or
exchange of other foreign currencies held in its portfolio. A call
option is also covered if a Fund has a call on the same foreign
currency in the same principal amount as the call written if the
exercise price of the call held (i) is equal to or less than the
exercise price of the call written or (ii) is greater than the
exercise price of the call written, if the difference is maintained by
such Fund in cash or other liquid assets in a segregated account with
the Funds' custodian.
The Funds also may write call options on foreign currencies for
cross-hedging purposes. A call option on a foreign currency is for
cross-hedging purposes if it is designed to provide a hedge against a
decline due to an adverse change in the exchange rate in the U.S.
dollar value of a security which a Fund owns or has the right to
acquire and which is denominated in the currency underlying the
option. Call options on foreign currencies which are entered into for
cross-hedging purposes are not covered. However, in such
circumstances, a Fund will collateralize the option by segregating
cash or other liquid assets in an amount not less than the value of
the underlying foreign currency in U.S. dollars marked-to-market
daily.
OPTIONS ON SECURITIES. In an effort to increase current income and to
reduce fluctuations in net asset value, the Funds may write covered
put and call options and buy put and call options on securities that
are traded on United States and foreign securities exchanges and
over-the-counter. The Funds may write and buy options on the same
types of securities that the Funds may purchase directly.
A put option written by a Fund is "covered" if that Fund (i)
segregates cash not available for investment or other liquid assets
with a value equal to the exercise price of the put with the Funds'
custodian or
16
<PAGE>
(ii) holds a put on the same security and in the same principal amount
as the put written and the exercise price of the put held is equal to
or greater than the exercise price of the put written. The premium
paid by the buyer of an option will reflect, among other things, the
relationship of the exercise price to the market price and the
volatility of the underlying security, the remaining term of the
option, supply and demand and interest rates.
A call option written by a Fund is "covered" if that Fund owns the
underlying security covered by the call or has an absolute and
immediate right to acquire that security without additional cash
consideration (or for additional cash consideration held in a
segregated account by the Funds' custodian) upon conversion or
exchange of other securities held in its portfolio. A call option is
also deemed to be covered if a Fund holds a call on the same security
and in the same principal amount as the call written and the exercise
price of the call held (i) is equal to or less than the exercise price
of the call written or (ii) is greater than the exercise price of the
call written if the difference is maintained by that Fund in cash and
other liquid assets in a segregated account with its custodian.
The Funds also may write call options that are not covered for
cross-hedging purposes. A Fund collateralizes its obligation under a
written call option for cross-hedging purposes by segregating cash or
other liquid assets in an amount not less than the market value of the
underlying security, marked-to-market daily. A Fund would write a call
option for cross-hedging purposes, instead of writing a covered call
option, when the premium to be received from the cross-hedge
transaction would exceed that which would be received from writing a
covered call option and its portfolio manager believes that writing
the option would achieve the desired hedge.
The writer of an option may have no control over when the underlying
securities must be sold, in the case of a call option, or bought, in
the case of a put option, since with regard to certain options, the
writer may be assigned an exercise notice at any time prior to the
termination of the obligation. Whether or not an option expires
unexercised, the writer retains the amount of the premium. This
amount, of course, may, in the case of a covered call option, be
offset by a decline in the market value of the underlying security
during the option period. If a call option is exercised, the writer
experiences a profit or loss from the sale of the underlying security.
If a put option is exercised, the writer must fulfill the obligation
to buy the underlying security at the exercise price, which will
usually exceed the then market value of the underlying security.
The writer of an option that wishes to terminate its obligation may
effect a "closing purchase transaction." This is accomplished by
buying an option of the same series as the option previously written.
The effect of the purchase is that the writer's position will be
canceled by the clearing corporation. However, a writer may not effect
a closing purchase transaction after being notified of the exercise of
an option. Likewise, an investor who is the holder of an option may
liquidate its position by effecting a "closing sale transaction." This
is accomplished by selling an option of the same series as the option
previously bought. There is no guarantee that either a closing
purchase or a closing sale transaction can be effected.
In the case of a written call option, effecting a closing transaction
will permit a Fund to write another call option on the underlying
security with either a different exercise price or expiration date or
both. In the case of a written put option, such transaction will
permit a Fund to write another put option to the extent that the
exercise price is secured by deposited liquid assets. Effecting a
closing transaction also will permit a Fund to use the cash or
proceeds from the concurrent sale of any securities subject to the
option for other investments. If a Fund desires to sell a particular
security from its portfolio on which it has written a call option,
such Fund will effect a closing transaction prior to or concurrent
with the sale of the security.
17
<PAGE>
A Fund will realize a profit from a closing transaction if the price
of the purchase transaction is less than the premium received from
writing the option or the price received from a sale transaction is
more than the premium paid to buy the option. A Fund will realize a
loss from a closing transaction if the price of the purchase
transaction is more than the premium received from writing the option
or the price received from a sale transaction is less than the premium
paid to buy the option. Because increases in the market of a call
option generally will reflect increases in the market price of the
underlying security, any loss resulting from the repurchase of a call
option is likely to be offset in whole or in part by appreciation of
the underlying security owned by a Fund.
An option position may be closed out only where a secondary market for
an option of the same series exists. If a secondary market does not
exist, the Fund may not be able to effect closing transactions in
particular options and the Fund would have to exercise the options in
order to realize any profit. If a Fund is unable to effect a closing
purchase transaction in a secondary market, it will not be able to
sell the underlying security until the option expires or it delivers
the underlying security upon exercise. The absence of a liquid
secondary market may be due to the following: (i) insufficient trading
interest in certain options, (ii) restrictions imposed by a national
securities exchange ("Exchange") on which the option is traded on
opening or closing transactions or both, (iii) trading halts,
suspensions or other restrictions imposed with respect to particular
classes or series of options or underlying securities, (iv) unusual or
unforeseen circumstances that interrupt normal operations on an
Exchange, (v) the facilities of an Exchange or of the Options Clearing
Corporation ("OCC") may not at all times be adequate to handle current
trading volume, or (vi) one or more Exchanges could, for economic or
other reasons, decide or be compelled at some future date to
discontinue the trading of options (or a particular class or series of
options), in which event the secondary market on that Exchange (or in
that class or series of options) would cease to exist, although
outstanding options on that Exchange that had been issued by the OCC
as a result of trades on that Exchange would continue to be
exercisable in accordance with their terms.
A Fund may write options in connection with buy-and-write
transactions. In other words, a Fund may buy a security and then write
a call option against that security. The exercise price of such call
will depend upon the expected price movement of the underlying
security. The exercise price of a call option may be below
("in-the-money"), equal to ("at-the-money") or above
("out-of-the-money") the current value of the underlying security at
the time the option is written. Buy-and-write transactions using
in-the-money call options may be used when it is expected that the
price of the underlying security will remain flat or decline
moderately during the option period. Buy-and-write transactions using
at-the-money call options may be used when it is expected that the
price of the underlying security will remain fixed or advance
moderately during the option period. Buy-and-write transactions using
out-of-the-money call options may be used when it is expected that the
premiums received from writing the call option plus the appreciation
in the market price of the underlying security up to the exercise
price will be greater than the appreciation in the price of the
underlying security alone. If the call options are exercised in such
transactions, a Fund's maximum gain will be the premium received by it
for writing the option, adjusted upwards or downwards by the
difference between that Fund's purchase price of the security and the
exercise price. If the options are not exercised and the price of the
underlying security declines, the amount of such decline will be
offset by the amount of premium received.
The writing of covered put options is similar in terms of risk and
return characteristics to buy-and-write transactions. If the market
price of the underlying security rises or otherwise is above the
exercise price, the put option will expire worthless and a Fund's gain
will be limited to the premium received. If the market price of the
underlying security declines or otherwise is below the exercise price,
a Fund may elect
18
<PAGE>
to close the position or take delivery of the security at the exercise
price and that Fund's return will be the premium received from the put
options minus the amount by which the market price of the security is
below the exercise price.
A Fund may buy put options to hedge against a decline in the value of
its portfolio. By using put options in this way, a Fund will reduce
any profit it might otherwise have realized in the underlying security
by the amount of the premium paid for the put option and by
transaction costs.
A Fund may buy call options to hedge against an increase in the price
of securities that it may buy in the future. The premium paid for the
call option plus any transaction costs will reduce the benefit, if
any, realized by such Fund upon exercise of the option, and, unless
the price of the underlying security rises sufficiently, the option
may expire worthless to that Fund.
EURODOLLAR INSTRUMENTS. A Fund may make investments in Eurodollar
instruments. Eurodollar instruments are U.S. dollar-denominated
futures contracts or options thereon which are linked to the London
Interbank Offered Rate ("LIBOR"), although foreign
currency-denominated instruments are available from time to time.
Eurodollar futures contracts enable purchasers to obtain a fixed rate
for the lending of funds and sellers to obtain a fixed rate for
borrowings. A Fund might use Eurodollar futures contracts and options
thereon to hedge against changes in LIBOR, to which many interest rate
swaps and fixed-income instruments are linked.
SWAPS AND SWAP-RELATED PRODUCTS. A Fund may enter into interest rate
swaps, caps and floors on either an asset-based or liability-based
basis, depending upon whether it is hedging its assets or its
liabilities, and will usually enter into interest rate swaps on a net
basis (i.e., the two payment streams are netted out, with a Fund
receiving or paying, as the case may be, only the net amount of the
two payments). The net amount of the excess, if any, of a Fund's
obligations over its entitlement with respect to each interest rate
swap will be calculated on a daily basis and an amount of cash or
other liquid assets having an aggregate net asset value at least equal
to the accrued excess will be maintained in a segregated account by
the Funds' custodian. If a Fund enters into an interest rate swap on
other than a net basis, it would maintain a segregated account in the
full amount accrued on a daily basis of its obligations with respect
to the swap. A Fund will not enter into any interest rate swap, cap or
floor transaction unless the unsecured senior debt or the
claims-paying ability of the other party thereto is rated in one of
the three highest rating categories of at least one NRSRO at the time
of entering into such transaction. Janus Capital will monitor the
creditworthiness of all counterparties on an ongoing basis. If there
is a default by the other party to such a transaction, a Fund will
have contractual remedies pursuant to the agreements related to the
transaction.
The swap market has grown substantially in recent years with a large
number of banks and investment banking firms acting both as principals
and as agents utilizing standardized swap documentation. Janus Capital
has determined that, as a result, the swap market has become
relatively liquid. Caps and floors are more recent innovations for
which standardized documentation has not yet been developed and,
accordingly, they are less liquid than swaps. To the extent a Fund
sells (i.e., writes) caps and floors, it will segregate cash or other
liquid assets having an aggregate net asset value at least equal to
the full amount, accrued on a daily basis, of its obligations with
respect to any caps or floors.
There is no limit on the amount of interest rate swap transactions
that may be entered into by a Fund. These transactions may in some
instances involve the delivery of securities or other underlying
assets by a Fund or its counterparty to collateralize obligations
under the swap. Under the documentation currently used in those
markets, the risk of loss with respect to interest rate swaps is
limited to the net amount of the payments that a Fund is contractually
obligated to make. If the other party to an interest rate swap
19
<PAGE>
that is not collateralized defaults, a Fund would risk the loss of the
net amount of the payments that it contractually is entitled to
receive. A Fund may buy and sell (i.e., write) caps and floors without
limitation, subject to the segregation requirement described above.
ADDITIONAL RISKS OF OPTIONS ON FOREIGN CURRENCIES, FORWARD CONTRACTS
AND FOREIGN INSTRUMENTS. Unlike transactions entered into by the Funds
in futures contracts, options on foreign currencies and forward
contracts are not traded on contract markets regulated by the CFTC or
(with the exception of certain foreign currency options) by the SEC.
To the contrary, such instruments are traded through financial
institutions acting as market-makers, although foreign currency
options are also traded on certain Exchanges, such as the Philadelphia
Stock Exchange and the Chicago Board Options Exchange, subject to SEC
regulation. Similarly, options on currencies may be traded
over-the-counter. In an over-the-counter trading environment, many of
the protections afforded to Exchange participants will not be
available. For example, there are no daily price fluctuation limits,
and adverse market movements could therefore continue to an unlimited
extent over a period of time. Although the buyer of an option cannot
lose more than the amount of the premium plus related transaction
costs, this entire amount could be lost. Moreover, an option writer
and a buyer or seller of futures or forward contracts could lose
amounts substantially in excess of any premium received or initial
margin or collateral posted due to the potential additional margin and
collateral requirements associated with such positions.
Options on foreign currencies traded on Exchanges are within the
jurisdiction of the SEC, as are other securities traded on Exchanges.
As a result, many of the protections provided to traders on organized
Exchanges will be available with respect to such transactions. In
particular, all foreign currency option positions entered into on an
Exchange are cleared and guaranteed by the OCC, thereby reducing the
risk of counterparty default. Further, a liquid secondary market in
options traded on an Exchange may be more readily available than in
the over-the-counter market, potentially permitting a Fund to
liquidate open positions at a profit prior to exercise or expiration,
or to limit losses in the event of adverse market movements.
The purchase and sale of exchange-traded foreign currency options,
however, is subject to the risks of the availability of a liquid
secondary market described above, as well as the risks regarding
adverse market movements, margining of options written, the nature of
the foreign currency market, possible intervention by governmental
authorities and the effects of other political and economic events. In
addition, exchange-traded options on foreign currencies involve
certain risks not presented by the over-the-counter market. For
example, exercise and settlement of such options must be made
exclusively through the OCC, which has established banking
relationships in applicable foreign countries for this purpose. As a
result, the OCC may, if it determines that foreign governmental
restrictions or taxes would prevent the orderly settlement of foreign
currency option exercises, or would result in undue burdens on the OCC
or its clearing member, impose special procedures on exercise and
settlement, such as technical changes in the mechanics of delivery of
currency, the fixing of dollar settlement prices or prohibitions on
exercise.
In addition, options on U.S. government securities, futures contracts,
options on futures contracts, forward contracts and options on foreign
currencies may be traded on foreign exchanges and over-the-counter in
foreign countries. Such transactions are subject to the risk of
governmental actions affecting trading in or the prices of foreign
currencies or securities. The value of such positions also could be
adversely affected by (i) other complex foreign political and economic
factors, (ii) lesser availability than in the United States of data on
which to make trading decisions, (iii) delays in a Fund's ability to
act upon economic events occurring in foreign markets during
non-business hours in the United States, (iv) the imposition of
different exercise and settlement terms and procedures and margin
requirements than in the United States, and (v) low trading volume.
20
<PAGE>
Investment adviser
As stated in the Prospectus, each Fund has an Investment Advisory
Agreement with Janus Capital, 100 Fillmore Street, Denver, Colorado
80206-4928. Each Advisory Agreement provides that Janus Capital will
furnish continuous advice and recommendations concerning the Funds'
investments, provide office space for the Funds, and pay the salaries,
fees and expenses of all Fund officers and of those Trustees who are
affiliated with Janus Capital. Janus Capital also may make payments to
selected broker-dealer firms or institutions which were instrumental
in the acquisition of shareholders for the Funds or other Janus Funds
or which perform recordkeeping or other services with respect to
shareholder accounts. The minimum aggregate size required for
eligibility for such payments, and the factors in selecting the
broker-dealer firms and institutions to which they will be made, are
determined from time to time by Janus Capital. Janus Capital is also
authorized to perform the management and administrative services
necessary for the operation of the Funds.
Retirement plan service providers, brokers, bank trust departments,
financial advisers and other financial intermediaries may receive fees
from the Funds' service providers for providing recordkeeping,
subaccounting and other administrative services to their customers in
connection with investment in the Funds.
The Funds pay custodian and transfer agent fees and expenses,
brokerage commissions and dealer spreads and other expenses in
connection with the execution of portfolio transactions, legal and
accounting expenses, interest and taxes, registration fees, expenses
of shareholders' meetings and reports to shareholders, fees and
expenses of Fund Trustees who are not affiliated with Janus Capital
and other costs of complying with applicable laws regulating the sale
of Fund shares. Pursuant to the Advisory Agreements, Janus Capital
furnishes certain other services, including net asset value
determination, portfolio accounting and recordkeeping, for which the
Funds may reimburse Janus Capital for its costs.
Growth Fund, Aggressive Growth Fund, Capital Appreciation Fund,
Balanced Fund, Equity Income Fund, Growth and Income Fund, Strategic
Value Fund, International Fund and Worldwide Fund have each agreed to
compensate Janus Capital for its services by the monthly payment of a
fee at the annual rate of 0.65% of the average daily net assets of
each Fund. Flexible Income Fund has agreed to compensate Janus Capital
for its services by the monthly payment of a fee at the annual rate of
0.65% of the first $300 million of the average daily net assets of the
Fund, plus 0.55% of the average daily net assets of the Fund in excess
of $300 million. The advisory fee is calculated daily and paid
monthly.
21
<PAGE>
Until, at least, , 2003, provided that Janus Capital remains
investment adviser to the Funds, Janus Capital has agreed to reimburse
each Fund by the amount, if any, that such Fund's normal operating
expenses in any fiscal year, including the investment advisory fee,
but excluding the distribution fee, administrative services fee,
brokerage commissions, interest, taxes and extraordinary expenses,
exceed the following annual rates:
<TABLE>
<CAPTION>
Expense Limit
Fund Name Percentage (%)
- ----------------------------------------------
<S> <C>
Growth Fund
Aggressive Growth Fund
Capital Appreciation Fund
Balanced Fund
Equity Income Fund
Growth and Income Fund
International Fund
Worldwide Fund
Flexible Income Fund
</TABLE>
In addition, Janus Capital has agreed to reimburse Strategic Value
Fund by the amount, if any, that the Fund's normal operating expenses
in any fiscal year, including the investment advisory fee, but
excluding the distribution fee, administrative services fee, brokerage
commissions, interest, taxes and extraordinary expenses, exceed an
annual rate of % of the average daily net assets of the Fund
until at least the next annual renewal of the advisory agreement.
The Advisory Agreement for each of the Funds is dated April 3, 2000
and will continue in effect until July 1, 2001 and thereafter from
year to year so long as such continuance is approved annually by a
majority of the Funds' Trustees who are not parties to the Advisory
Agreements or interested persons of any such party, and by either a
majority of the outstanding voting shares or the Trustees of the
Funds. Each Advisory Agreement (i) may be terminated without the
payment of any penalty by any Fund or Janus Capital on 60 days'
written notice; (ii) terminates automatically in the event of its
assignment; and (iii) generally, may not be amended without the
approval by vote of a majority of the Trustees of the affected Fund,
including the Trustees who are not interested persons of that Fund or
Janus Capital and, to the extent required by the 1940 Act, the vote of
a majority of the outstanding voting securities of that Fund.
Janus Capital acts as sub-adviser for a number of private-label mutual
funds and provides separate account advisor services for institutional
accounts. Investment decisions for each account managed by Janus
Capital, including the Funds, are made independently from those for
any other account that is or may in the future become managed by Janus
Capital or its affiliates. If, however, a number of accounts managed
by Janus Capital are contemporaneously engaged in the purchase or sale
of the same security, the orders may be aggregated and/or the
transactions may be averaged as to price and allocated equitably to
each account. In some cases, this policy might adversely affect the
price paid or received by an account or the size of the position
obtained or liquidated for an account. Pursuant to an exemptive order
granted by the SEC, the Funds and other portfolios advised by Janus
Capital may also transfer daily uninvested cash balances into one or
more joint trading accounts. Assets in the joint trading accounts are
invested in money market instruments and the proceeds are allocated to
the participating portfolios on a pro rata basis.
22
<PAGE>
Kansas City Southern Industries, Inc. ("KCSI"), indirectly through its
wholly owned subsidiary, Stilwell Financial Inc., owns approximately
82% of the outstanding voting stock of Janus Capital. KCSI is a
publicly traded holding company whose primary subsidiaries are engaged
in transportation, information processing and financial services.
Thomas H. Bailey, President and Chairman of the Board of Janus
Capital, owns approximately 12% of Janus Capital's voting stock and,
by agreement with KCSI, selects at least a majority of Janus Capital's
Board, subject to the approval of Stilwell Financial, which cannot be
unreasonably withheld.
[KCSI has announced its intention to separate its transportation and
financial services businesses. KCSI anticipates the separation to be
completed in the first half of 2000. UPDATE]
Each account managed by Janus Capital has its own investment objective
and policies and is managed accordingly by a particular portfolio
manager or team of portfolio managers. As a result, from time to time
two or more different managed accounts may pursue divergent investment
strategies with respect to investments or categories of investments.
The Funds' portfolio managers are not permitted to purchase and sell
securities for their own accounts except under the limited exceptions
contained in the Funds' Code of Ethics ("Code"). The Funds' Code of
Ethics is on file with and available from the SEC through the SEC Web
site at www.sec.gov. The Code applies to Directors/Trustees of Janus
Capital and the Funds, and employees of Janus Capital and the Trust
and requires investment personnel and officers of Janus Capital,
inside Directors/Trustees of Janus Capital and the Funds and certain
other designated employees deemed to have access to current trading
information to pre-clear all transactions in securities not otherwise
exempt under the Code. Requests for trading authorization will be
denied when, among other reasons, the proposed personal transaction
would be contrary to the provisions of the Code or would be deemed to
adversely affect any transaction known to be under consideration for
or to have been effected on behalf of any client account, including
the Funds.
In addition to the pre-clearance requirement described above, the Code
subjects such personnel to various trading restrictions and reporting
obligations. All reportable transactions are required to be reviewed
for compliance with the Code. Those persons also may be required under
certain circumstances to forfeit their profits made from personal
trading.
The provisions of the Code are administered by and subject to
exceptions authorized by Janus Capital.
23
<PAGE>
Custodian, transfer agent and certain affiliations
State Street Bank and Trust Company, P.O. Box 0351, Boston,
Massachusetts 02117-0351 is the custodian of the domestic securities
and cash of the Funds. State Street and the foreign subcustodians it
selects, have custody of the assets of the Funds held outside the U.S.
and cash incidental thereto. The custodians and subcustodians hold the
Funds' assets in safekeeping and collect and remit the income thereon,
subject to the instructions of each Fund.
Janus Service Corporation, P.O. Box 173375, Denver, Colorado
80217-3375, a wholly-owned subsidiary of Janus Capital, is the Funds'
transfer agent. In addition, Janus Service provides certain other
administrative, recordkeeping and shareholder relations services to
the Funds. Janus Service Corporation receives an administrative
services fee at an annual rate of up to 0.25% of the average daily net
assets of the initial class of each Fund for providing or procuring
recordkeeping, subaccounting and other administrative services to
investors in the Funds. Janus Service expects to use a significant
portion of this fee to compensate retirement plan service providers,
brokers, bank trust departments, financial advisers and other
financial intermediaries for providing these services (at an annual
rate of up to 0.25% of the average daily net assets of the shares
attributable to their customers). Services provided by these financial
intermediaries may include but are not limited to recordkeeping,
processing and aggregating purchase and redemption transactions,
providing periodic statements, forwarding prospectuses, shareholder
reports and other materials to existing customers, and other
administrative services.
The Funds will pay DST Systems, Inc., a minority owned subsidiary of
KCSI, license fees at the annual rate of $3.06 per shareholder account
for the equity funds and $3.98 per shareholder account for the
fixed-income funds for the use of DST's shareholder accounting system.
The Funds also pay DST $1.10 per closed shareholder account. The Funds
also pay DST for the use of its portfolio and fund accounting system,
a monthly fee between $250 - $1,250, based on the number of Janus
funds using the system and an asset charge of $1 per million dollars
of net assets (not to exceed $500 per month).
The Trustees have authorized the Funds to use another affiliate of DST
as introducing broker for certain Fund transactions as a means to
reduce Fund expenses through credits against the charges of DST and
its affiliates with regard to commissions earned by such affiliate.
DST charges shown above are net of such credits. See "Portfolio
Transactions and Brokerage."
Janus Distributors, Inc., 100 Fillmore Street, Denver, Colorado
80206-4928, a wholly-owned subsidiary of Janus Capital, is the Trust's
distributor. Janus Distributors is registered as a broker-dealer under
the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc.
24
<PAGE>
Portfolio transactions and brokerage
Decisions as to the assignment of portfolio business for the Funds and
negotiation of its commission rates are made by Janus Capital whose
policy is to obtain the "best execution" (prompt and reliable
execution at the most favorable security price) of all portfolio
transactions. The Funds may trade foreign securities in foreign
countries because the best available market for these securities is
often on foreign exchanges. In transactions on foreign stock
exchanges, brokers' commissions are frequently fixed and are often
higher than in the United States, where commissions are negotiated.
In selecting brokers and dealers and in negotiating commissions, Janus
Capital considers a number of factors, including but not limited to:
Janus Capital's knowledge of currently available negotiated commission
rates or prices of securities currently available and other current
transaction costs; the nature of the security being traded; the size
and type of the transaction; the nature and character of the markets
for the security to be purchased or sold; the desired timing of the
trade; the activity existing and expected in the market for the
particular security; confidentiality; the quality of the execution,
clearance and settlement services; financial stability of the broker
or dealer; the existence of actual or apparent operational problems of
any broker or dealer; rebates of commissions by a broker to a Fund or
to a third party service provider to the Fund to pay Fund expenses;
and research products or services provided. In recognition of the
value of the foregoing factors, Janus Capital may place portfolio
transactions with a broker or dealer with whom it has negotiated a
commission that is in excess of the commission another broker or
dealer would have charged for effecting that transaction if Janus
Capital determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research
provided by such broker or dealer viewed in terms of either that
particular transaction or of the overall responsibilities of Janus
Capital. Research may include furnishing advice, either directly or
through publications or writings, as to the value of securities, the
advisability of purchasing or selling specific securities and the
availability of securities or purchasers or sellers of securities;
furnishing seminars, information, analyses and reports concerning
issuers, industries, securities, trading markets and methods,
legislative developments, changes in accounting practices, economic
factors and trends and portfolio strategy; access to research
analysts, corporate management personnel, industry experts, economists
and government officials; comparative performance evaluation and
technical measurement services and quotation services, and products
and other services (such as third party publications, reports and
analyses, and computer and electronic access, equipment, software,
information and accessories that deliver, process or otherwise utilize
information, including the research described above) that assist Janus
Capital in carrying out its responsibilities. Research received from
brokers or dealers is supplemental to Janus Capital's own research
efforts. Most brokers and dealers used by Janus Capital provide
research and other services described above.
Brokerage commissions will be paid by the Funds to brokers and dealers
in transactions identified for execution primarily on the basis of
research and other services provided to the Funds.
Janus Capital may use research products and services in servicing
other accounts in addition to the Funds. If Janus Capital determines
that any research product or service has a mixed use, such that it
also serves functions that do not assist in the investment
decision-making process, Janus Capital may allocate the costs of such
service or product accordingly. Only that portion of the product or
service that Janus Capital determines will assist it in the investment
decision-making process may be paid for in brokerage commission
dollars. Such allocation may create a conflict of interest for Janus
Capital.
Janus Capital does not enter into agreements with any brokers
regarding the placement of securities transactions because of the
research services they provide. It does, however, have an internal
procedure for allocating transactions in a manner consistent with its
execution policy to brokers that it has identified as providing
superior executions and research, research-related products or
services which benefit its advisory
25
<PAGE>
clients, including the Funds. Research products and services
incidental to effecting securities transactions furnished by brokers
or dealers may be used in servicing any or all of Janus Capital's
clients and such research may not necessarily be used by Janus Capital
in connection with the accounts which paid commissions to the
broker-dealer providing such research products and services.
Janus Capital may consider sales of Fund Shares or shares of other
Janus funds by a broker-dealer or the recommendation of a
broker-dealer to its customers that they purchase Fund Shares as a
factor in the selection of broker-dealers to execute Fund
transactions. Janus Capital may also consider payments made by brokers
effecting transactions for a Fund (i) to the Fund or (ii) to other
persons on behalf of the Fund for services provided to the Fund for
which it would be obligated to pay. In placing Fund business with such
broker-dealers, Janus Capital will seek the best execution of each
transaction.
When the Funds purchase or sell a security in the over-the-counter
market, the transaction takes place directly with a principal
market-maker, without the use of a broker, except in those
circumstances where in the opinion of Janus Capital better prices and
executions will be achieved through the use of a broker.
The Funds' Trustees have authorized Janus Capital to place
transactions with DST Securities, Inc. ("DSTS"), a wholly-owned
broker-dealer subsidiary of DST. Janus Capital may do so if it
reasonably believes that the quality of the transaction and the
associated commission are fair and reasonable and if, overall, the
associated transaction costs, net of any credits described above under
"Custodian, Transfer Agent and Certain Affiliations," are lower than
those that would otherwise be incurred.
26
<PAGE>
Trustees and officers
The following are the names of the Trustees and officers of the Trust,
together with a brief description of their principal occupations
during the last five years.
Thomas H. Bailey, Age 62 - Trustee, Chairman and President*#
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Trustee, Chairman and President of Janus Investment Fund and Janus
Aspen Series. Chairman, Chief Executive Officer, President and
Director of Janus Capital. Director of Janus Distributors, Inc.
James P. Craig, III, Age 43 - Trustee and Vice President*#
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Trustee and Vice President of Janus Investment Fund and Janus Aspen
Series. Chief Investment Officer, Director of Research, Vice Chairman
and Director of Janus Capital. Formerly Executive Vice President and
Portfolio Manager of Janus Aspen Growth Portfolio and Janus Fund.
Formerly Executive Vice President and Co-Manager of Janus Venture Fund
(from inception until December 1999).
Gary O. Loo, Age 59 - Trustee#
102 N. Cascade, Suite 500
Colorado Springs, CO 80903
- --------------------------------------------------------------------------------
Trustee of Janus Investment Fund and Janus Aspen Series. President and
Director of High Valley Group, Inc., Colorado Springs, CO
(investments).
Dennis B. Mullen, Age 56 - Trustee
7500 E. McCormick Parkway, #24
Scottsdale, AZ 85258
- --------------------------------------------------------------------------------
Trustee of Janus Investment Fund and Janus Aspen Series. Private
Investor. Formerly (1997-1998), Chief Financial Officer-Boston Market
Concepts, Boston Chicken, Inc., Golden, CO (restaurant chain);
(1993-1997), President and Chief Executive Officer of BC Northwest,
L.P., a franchise of Boston Chicken, Inc., Bellevue, WA (restaurant
chain).
James T. Rothe, Age 56 - Trustee
102 South Tejon Street, Suite 1100
Colorado Springs, CO 80903
- --------------------------------------------------------------------------------
Trustee of Janus Investment Fund and Janus Aspen Series. Professor of
Business, University of Colorado, Colorado Springs, CO. Principal,
Phillips-Smith Retail Group, Colorado Springs, CO (a venture capital
firm).
- --------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.
#Member of the Trust's Executive Committee.
27
<PAGE>
William D. Stewart, Age 55 - Trustee#
5330 Sterling Drive
Boulder, CO 80302
- --------------------------------------------------------------------------------
Trustee of Janus Investment Fund and Janus Aspen Series. President of
HPS Division of MKS Instruments, Boulder, CO (manufacturer of vacuum
fittings and valves).
Martin H. Waldinger, Age 61 - Trustee
4940 Sandshore Court
San Diego, CA 92130
- --------------------------------------------------------------------------------
Trustee of Janus Investment Fund and Janus Aspen Series. Private
Consultant. Formerly (1993-1996), Director of Run Technologies, Inc.,
a software development firm, San Carlos, CA.
Laurence J. Chang, Age 34 - Executive Vice President, Co-Portfolio Manager Janus
Adviser International Fund and Janus Adviser
Worldwide Fund*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Executive Vice President and Co-Manager of Janus Investment Fund and
Janus Aspen Series. Formerly, an assistant portfolio manager at Janus
Capital (1998-1999). Formerly, a research analyst at Janus Capital
(1993-1998).
David J. Corkins, Age 33 - Executive Vice President, Portfolio Manager Janus
Adviser Growth and Income Fund*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Executive Vice President of Janus Investment Fund and Janus Aspen
Series. Vice President of Janus Capital. Formerly, (1995-1997),
research analyst and assistant portfolio manager at Janus Capital and
(1993-1995), Chief Financial Officer of Chase U.S. Consumer Services,
Inc., a Chase Manhattan mortgage business.
David C. Decker, Age 33 - Executive Vice President, Portfolio Manager of Janus
Adviser Strategic Value Fund
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Executive Vice President and Portfolio Manager of Janus Investment
Fund and Janus Aspen Series. Vice President of Janus Capital.
Formerly, research analyst at Janus Capital (1992-1996).
James P. Goff, Age 35 - Executive Vice President, Portfolio Manager of Janus
Adviser Aggressive Growth Fund*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Executive Vice President and Portfolio Manager of Janus Investment
Fund and Janus Aspen Series. Vice President of Janus Capital.
- --------------------------------------------------------------------------------
#Member of the Trust's Executive Committee.
*Interested person of the Trust and of Janus Capital.
28
<PAGE>
Helen Young Hayes, Age 37 - Executive Vice President, Co-Manager of Janus
Adviser Worldwide Fund and Janus Adviser
International Fund*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Executive Vice President, Co-Manager of Janus Investment Fund and
Janus Aspen Series. Vice President of Janus Capital.
Karen L. Reidy, Age 32 - Executive Vice President, Portfolio Manager of Janus
Adviser Balanced Fund and Janus Adviser Equity Income Fund*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Executive Vice President and Portfolio Manager or Assistant Portfolio
Manager of Janus Investment Fund and Janus Aspen Series. Vice
President of Janus Capital. Formerly, equity analyst at Janus Capital
(1995-1999).
Blaine P. Rollins, Age 32 - Executive Vice President, Portfolio Manager of Janus
Adviser Growth Portfolio*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Executive Vice President and Portfolio Manager of Janus Investment
Fund and Janus Aspen Series. Vice President of Janus Capital.
Formerly, fixed-income trader and equity securities analyst at Janus
Capital (1990-1995).
Scott W. Schoelzel, Age 41 - Executive Vice President, Portfolio Manager of
Janus Adviser Capital Appreciation Fund*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Executive Vice President and Portfolio Manager of Janus Investment
Fund and Janus Aspen Series. Vice President of Janus Capital.
Ronald V. Speaker, age 35 - Executive Vice President, Portfolio Manager of Janus
Adviser Flexible Income Fund*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Executive Vice President and Portfolio Manager of Janus Investment
Fund and Janus Aspen Series. Vice President of Janus Capital.
- --------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.
29
<PAGE>
Thomas A. Early, Age 45 - Vice President and General Counsel*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Vice President and General Counsel of Janus Investment Fund and Janus
Aspen Series. Vice President, General Counsel and Secretary of Janus
Capital. Vice President and General Counsel of Janus Service
Corporation, Janus Distributors, Inc., Janus Capital International,
Ltd. and Janus International (UK) Limited. Director of Janus World
Funds Plc. Formerly (1997 to 1998), Executive Vice President and
General Counsel of Prudential Investments Fund Management LLC, Newark,
NJ. Formerly (1994 to 1997), Vice President and General Counsel of
Prudential Retirement Services, Newark, NJ.
Steven R. Goodbarn, Age 42 - Vice President and Chief Financial Officer*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Vice President and Chief Financial Officer of Janus Investment Fund
and Janus Aspen Series. Vice President of Finance, Treasurer and Chief
Financial Officer of Janus Capital, Janus Service Corporation, and
Janus Distributors, Inc. Director of Janus Service Corporation, Janus
Distributors, Inc. and Janus World Funds Plc. Director, Treasurer and
Vice President of Finance of Janus Capital International Ltd. and
Janus International (UK) Limited. Formerly (1992-1996), Treasurer of
Janus Investment Fund and Janus Aspen Series.
Kelley Abbott Howes, Age 34 - Secretary*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Vice President and Secretary of Janus Investment Fund and Janus Aspen
Series. Vice President and Assistant General Counsel of Janus Capital.
Vice President of Janus Distributors, Inc. Assistant Vice President of
Janus Service Corporation.
Glenn P. O'Flaherty, Age 41 - Treasurer and Chief Accounting Officer*
100 Fillmore Street, Suite 300
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Treasurer and Chief Accounting Officer of Janus Investment Fund and
Janus Aspen Series. Vice President of Janus Capital. Formerly
(1991-1997), Director of Fund Accounting, Janus Capital.
- --------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.
30
<PAGE>
The Trustees are responsible for major decisions relating to each
Fund's objective, policies and techniques. The Trustees also supervise
the operation of the Funds by their officers and review the investment
decisions of the officers although they do not actively participate on
a regular basis in making such decisions.
The Trust's Executive Committee shall have and may exercise all the
powers and authority of the Trustees except for matters requiring
action by all Trustees pursuant to the Trust's Bylaws or Trust
Instrument, Delaware law or the 1940 Act.
Because these Funds had not commenced operations as of the date of
this prospectus, the Trustees have not received compensation from the
Funds yet. The following table shows the aggregate compensation paid
to each Trustee by other funds advised and sponsored by Janus Capital
(collectively, the "Janus Funds") for the periods indicated. None of
the Trustees receives pension or retirement benefits from the Funds or
the Janus Funds.
<TABLE>
<CAPTION>
Aggregate Compensation Aggregate Compensation
from the Funds for from the Janus Funds for
fiscal year ended fiscal year ended
Name of Person, Position December 31, 1999 December 31, 1999**
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Thomas H. Bailey, Chairman and Trustee* $ 0 $ 0
James P. Craig, III, Trustee* $ 0 $ 0
William D. Stewart, Trustee $ 0 $107,333
Gary O. Loo, Trustee $ 0 $107,333
Dennis B. Mullen, Trustee $ 0 $107,333
Martin H. Waldinger, Trustee $ 0 $107,333
James T. Rothe, Trustee $ 0 $107,333
</TABLE>
* An interested person of the Funds and of Janus Capital. Compensated by Janus
Capital and not the Funds.
** As of December 31, 1999, Janus Funds consisted of two registered investment
companies comprised of a total of 32 funds.
31
<PAGE>
Shares of the trust
NET ASSET VALUE DETERMINATION
As stated in the Prospectus, the net asset value ("NAV") of each Fund
is determined once each day on which the NYSE is open, at the close of
its regular trading session (normally 4:00 p.m., New York time, Monday
through Friday). The NAV of the Shares of each Fund is not determined
on days the NYSE is closed (generally, New Year's Day, Martin Luther
King Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas). The per share NAV of each
Fund is determined by dividing the total value of a Fund's securities
and other assets, less liabilities, attributable to the Fund, by the
total number of shares outstanding. In determining NAV, securities
listed on an Exchange, the NASDAQ National Market and foreign markets
are valued at the closing prices on such markets, or if such price is
lacking for the trading period immediately preceding the time of
determination, such securities are valued at their current bid price.
Municipal securities held by the Funds are traded primarily in the
over-the-counter market. Valuations of such securities are furnished
by one or more pricing services employed by the Funds and are based
upon last trade or closing sales prices or a computerized matrix
system or appraisals obtained by a pricing service, in each case in
reliance upon information concerning market transactions and
quotations from recognized municipal securities dealers. Other
securities that are traded on the over-the-counter market are valued
at their closing bid prices. Foreign securities and currencies are
converted to U.S. dollars using the exchange rate in effect at the
close of the NYSE. Each Fund will determine the market value of
individual securities held by it, by using prices provided by one or
more professional pricing services which may provide market prices to
other funds, or, as needed, by obtaining market quotations from
independent broker-dealers. Short-term securities maturing within 60
days are valued on an amortized cost basis. Securities for which
quotations are not readily available, and other assets, are valued at
fair values determined in good faith under procedures established by
and under the supervision of the Trustees.
Trading in securities on European and Far Eastern securities exchanges
and over-the-counter markets is normally completed well before the
close of business on each business day in New York (i.e., a day on
which the NYSE is open). In addition, European or Far Eastern
securities trading generally or in a particular country or countries
may not take place on all business days in New York. Furthermore,
trading takes place in Japanese markets on certain Saturdays and in
various foreign markets on days which are not business days in New
York and on which a Fund's NAV is not calculated. A Fund calculates
its NAV per share, and therefore effects sales, redemptions and
repurchases of its shares, as of the close of the NYSE once on each
day on which the NYSE is open. Such calculation may not take place
contemporaneously with the determination of the prices of the foreign
portfolio securities used in such calculation.
PURCHASES
Shares of the Funds can be purchased only through retirement plans,
brokers, bank trust departments, financial advisers or similar
financial intermediaries. Certain designated organizations are
authorized to receive purchase orders on the Funds' behalf and those
organizations are authorized to designate their agents and affiliates
as intermediaries to receive purchase orders. Purchase orders are
deemed received by a Fund when authorized organizations, their agents
or affiliates receive the order. The Funds are not responsible for the
failure of any designated organization or its agents or affiliates to
carry out its obligations to its customers. Shares of the Funds are
purchased at the NAV per share as determined at the close of the
regular trading session of the NYSE next occurring after a purchase
order is received and accepted by a Fund or its authorized agent. In
order to receive a day's price, your order must be received by the
close of the regular trading session of the NYSE as described above in
"Net Asset Value Determination." Your plan documents contain detailed
information about investing in the different Funds.
32
<PAGE>
DISTRIBUTION PLAN
Under a distribution plan ("Plan") adopted in accordance with Rule
12b-1 under the 1940 Act, the initial class of the Funds may pay Janus
Distributors, the Trust's distributor, a fee at an annual rate of up
to 0.25% of the average daily net assets of the class of the Fund.
Under the terms of the Plan, the Trust is authorized to make payments
to Janus Distributors for remittance to retirement and pension plan
service providers, bank trust departments, brokers, financial advisers
and other financial intermediaries as compensation for distribution
and shareholder servicing performed by such service providers. The
Plan is a compensation type plan and permits the payment at an annual
rate of up to 0.25% of the average daily net assets of the class of a
Fund for activities which are primarily intended to result in sales of
the shares of the Fund, including but not limited to preparing,
printing and distributing prospectuses, Statements of Additional
Information, shareholder reports, and educational materials to
prospective and existing investors; responding to inquiries by
investors; receiving and answering correspondence and similar
activities. On April 3, 2000, Trustees unanimously approved the Plan
which became effective on that date. The Plan and any Rule 12b-1
related agreement that is entered into by the Funds or Janus
Distributors in connection with the Plan will continue in effect for a
period of more than one year only so long as continuance is
specifically approved at least annually by a vote of a majority of the
Trustees, and of a majority of the Trustees who are not interested
persons (as defined in the 1940 Act) of the Trust and who have no
direct or indirect financial interest in the operation of the Plan or
any related agreements ("12b-1 Trustees"). All material amendments to
the Plan must be approved by a majority vote of the Trustees,
including a majority of the 12b-1 Trustees, at a meeting called for
that purpose. In addition, the Plan may be terminated at any time,
without penalty, by vote of a majority of the outstanding shares of
the class of a Fund or by vote of a majority of 12b-1 Trustees.
REDEMPTIONS
Redemptions, like purchases, may only be effected through retirement
plans, brokers, bank trust departments, financial advisers and other
financial intermediaries. Certain designated organizations are
authorized to receive redemption orders on the Funds' behalf and those
organizations are authorized to designate their agents and affiliates
as intermediaries to receive redemption orders. Redemption orders are
deemed received by a Fund when authorized organizations, their agents
or affiliates receive the order. The Funds are not responsible for the
failure of any designated organization or its agents or affiliates to
carry out its obligations to its customers. Shares normally will be
redeemed for cash, although each Fund retains the right to redeem some
or all its shares in kind under unusual circumstances, in order to
protect the interests of remaining shareholders, or to accommodate a
request by a particular shareholder that does not adversely affect the
interest of the remaining shareholders by delivery of securities
selected from its assets at its discretion. However, the Funds are
governed by Rule 18f-1 under the 1940 Act, which requires each Fund to
redeem shares solely in cash up to the lesser of $250,000 or 1% of the
NAV of that Fund during any 90-day period for any one shareholder.
Should redemptions by any shareholder exceed such limitation, a Fund
will have the option of redeeming the excess in cash or in kind. If
shares are redeemed in kind, the redeeming shareholder might incur
brokerage costs in converting the assets to cash. The method of
valuing securities used to make redemptions in kind will be the same
as the method of valuing portfolio securities described under "Shares
of the Trust - Net Asset Value Determination" and such valuation will
be made as of the same time the redemption price is determined.
33
<PAGE>
The right to require the Funds to redeem their shares may be
suspended, or the date of payment may be postponed, whenever (1)
trading on the NYSE is restricted, as determined by the SEC, or the
NYSE is closed except for holidays and weekends, (2) the SEC permits
such suspension and so orders, or (3) an emergency exists as
determined by the SEC so that disposal of securities or determination
of NAV is not reasonably practicable.
34
<PAGE>
Income dividends, capital gains distributions and tax
status
It is a policy of the Funds to make distributions of substantially all
of their investment income and any net realized capital gains. Any
capital gains realized during each fiscal year ended July 31, as
defined by the Code, are normally declared and payable to shareholders
in December. Growth Fund, Aggressive Growth Fund, Capital Appreciation
Fund, Strategic Value Fund, International Fund and Worldwide Fund
declare and make annual distributions of income (if any); Balanced
Fund, Equity Income Fund and Growth and Income Fund declare and make
quarterly distributions of income; and Flexible Income Fund declares
dividends daily and make monthly distributions of income. If a month
begins on a Saturday, Sunday or holiday, dividends for daily dividend
Funds for those days are declared at the end of the preceding month.
The Funds intend to qualify as regulated investment companies by
satisfying certain requirements prescribed by Subchapter M of the
Internal Revenue Code ("Code").
All income dividends and capital gains distributions, if any, on a
Fund's shares are reinvested automatically in additional shares of
that Fund at the NAV determined on the first business day following
the record date.
The Funds may purchase securities of certain foreign corporations
considered to be passive foreign investment companies by the IRS. In
order to avoid taxes and interest that must be paid by the Funds if
these instruments appreciate in value, the Funds may make various
elections permitted by the tax laws. However, these elections could
require that the Funds recognize taxable income, which in turn must be
distributed.
Some foreign securities purchased by the Funds may be subject to
foreign taxes which could reduce the yield on such securities. The
amount of such foreign taxes is expected to be insignificant. The
Funds may from year to year make the election permitted under Section
853 of the Code to pass through such taxes to shareholders. If such
election is not made, any foreign taxes paid or accrued will represent
an expense to each Fund which will reduce its investment company
taxable income.
Income dividends or capital gains distributions made by the shares of
a Fund purchased through a qualified retirement plan will generally be
exempt from current taxation if left to accumulate within the
qualified plan. Generally, withdrawals from qualified plans may be
subject to ordinary income tax and, if made before age 59 1/2, a 10%
penalty tax. The tax status of your investment depends on the features
of your qualified plan. For further information, please contact your
plan sponsor.
35
<PAGE>
Miscellaneous information
Each Fund is a series of the Trust, an open-end management investment
company registered under the 1940 Act and organized as a Delaware
business trust on , 2000. As of the date of this SAI,
the Trust is offering eleven series of shares, known as "Funds," each
of which consists of one class of shares. Additional series and/or
classes may be created from time to time.
Ten of the Funds (listed below) were formed from the reorganization of
the Retirement Shares of corresponding portfolios of Janus Aspen
Series into the Funds on [August 1, 2000]. Strategic Value Fund was a
newly organized fund.
<TABLE>
<CAPTION>
PREDECESSOR FUND (EACH A PORTFOLIO OF JANUS ASPEN SERIES) FUND
--------------------------------------------------------- ----
<S> <C> <C>
Growth Portfolio - Retirement Shares Janus Adviser Growth Fund
Aggressive Growth Portfolio - Retirement Shares Janus Adviser Aggressive Growth Fund
Capital Appreciation Portfolio - Retirement Shares Janus Adviser Capital Appreciation Fund
Balanced Portfolio - Retirement Shares Janus Adviser Balanced Fund
Equity Income Portfolio - Retirement Shares Janus Adviser Equity Income Fund
Growth and Income Portfolio - Retirement Shares Janus Adviser Growth and Income Fund
International Growth Portfolio - Retirement Shares Janus Adviser International Fund
Worldwide Growth Portfolio - Retirement Shares Janus Adviser Worldwide Fund
Flexible Income Portfolio - Retirement Shares Janus Adviser Flexible Income Fund
Money Market Portfolio - Retirement Shares Janus Adviser Money Market Fund
</TABLE>
SHARES OF THE TRUST
The Trust is authorized to issue an unlimited number of shares of
beneficial interest with a par value of $.001 per share for each
series of the Trust. Shares of each Fund are fully paid and
nonassessable when issued. Shares of a Fund participate equally in
dividends and other distributions by the shares of such Fund, and in
residual assets of that Fund in the event of liquidation. Shares of
each Fund have no preemptive, conversion or subscription rights.
SHAREHOLDER MEETINGS
The Trust does not intend to hold annual shareholder meetings.
However, special meetings may be called for a specific Fund or for the
Trust as a whole for purposes such as electing or removing Trustees,
terminating or reorganizing the Trust, changing fundamental policies,
or for any other purpose requiring a shareholder vote under the 1940
Act. Separate votes are taken by each Fund or class only if a matter
affects or requires the vote of only that Fund or class or that Fund's
or class' interest in the matter differs from the interest of other
Funds of the Trust. A shareholder is entitled to one vote for each
share owned.
VOTING RIGHTS
The Trustees are responsible for major decisions relating to each
Fund's policies and objectives; the Trustees oversee the operation of
each Fund by its officers and review the investment decisions of the
officers.
The present Trustees were elected by the initial trustee of the Trust
on , 2000, and were approved by the initial shareholder
on , 2000. Under the Trust Instrument, each Trustee
will continue in office until the termination of the Trust or his
earlier death, retirement, resignation, bankruptcy, incapacity or
removal. Vacancies will be filled by a majority of the remaining
Trustees, subject to the 1940 Act. Therefore, no annual or regular
meetings of shareholders normally will be held, unless otherwise
required by the Trust Instrument or the 1940 Act. Subject to the
foregoing, shareholders have the power to vote to elect or remove
Trustees, to terminate or reorganize their Fund, to amend the Trust
36
<PAGE>
Instrument, to bring certain derivative actions and on any other
matters on which a shareholder vote is required by the 1940 Act, the
Trust Instrument, the Trust's Bylaws or the Trustees.
As mentioned above in "Shareholder Meetings," each share of each
series of the Trust has one vote (and fractional votes for fractional
shares). Shares of all series of the Trust have noncumulative voting
rights, which means that the holders of more than 50% of the shares of
all series of the Trust voting for the election of Trustees can elect
100% of the Trustees if they choose to do so and, in such event, the
holders of the remaining shares will not be able to elect any
Trustees.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 950 Seventeenth Street, Suite 2500,
Denver, Colorado 80202, independent accountants for the Funds, audit
the Funds' annual financial statements and prepare their tax returns.
REGISTRATION STATEMENT
The Trust has filed with the SEC, Washington, D.C., a Registration
Statement under the Securities Act of 1933, as amended, with respect
to the securities to which this SAI relates. If further information is
desired with respect to the Funds or such securities, reference is
made to the Registration Statement and the exhibits filed as a part
thereof.
37
<PAGE>
Performance information
Quotations of average annual total return for the shares of a Fund
will be expressed in terms of the average annual compounded rate of
return of a hypothetical investment in the shares of such Fund over
periods of 1, 5, and 10 years (up to the life of the Fund). These are
the annual total rates of return that would equate the initial amount
invested to the ending redeemable value. These rates of return are
calculated pursuant to the following formula: P(1 + T)(n) = ERV (where
P = a hypothetical initial payment of $1,000, T = the average annual
total return, n = the number of years and ERV = the ending redeemable
value of a hypothetical $1,000 payment made at the beginning of the
period). All total return figures reflect the deduction of a
proportional share of expenses of the shares of a Fund on an annual
basis, and assume that all dividends and distributions are reinvested
when paid.
These Funds commenced operations on , 2000 after the
reorganization of the Retirement Shares of corresponding portfolios of
Janus Aspen Series ("predecessor funds") into the Funds. The following
returns reflect the performance of the Retirement Shares of the
predecessor funds prior to that date. The performance of the
Retirement Shares prior to May 1, 1997 reflects the performance of a
different class of the predecessor funds restated to reflect the fees
and expenses of the Retirement Shares on May 1, 1997, ignoring any fee
and expense limitations.
<TABLE>
<CAPTION>
Average Annual Total Return
-------------------------------------------
Life of
Inception Number Fund
Date of Months One Five Ten (including
Fund Name (of predecessor fund) in Lifetime Year Years Years predecessor fund)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Growth Fund 9/13/93 N/A
Aggressive Growth Fund 9/13/93 N/A
Capital Appreciation Fund 5/1/97 N/A
Balanced Fund 9/13/93 N/A
Equity Income Fund 5/1/97 N/A
Growth and Income Fund 5/1/98 N/A
International Fund 5/2/94 N/A
Worldwide Fund 9/13/93 N/A
Flexible Income Fund 9/13/93 N/A
</TABLE>
Yield quotations for a Fund are based on the investment income per
share earned during a particular 30-day period (including dividends,
if any, and interest), less expenses accrued during the period ("net
investment income"), and are computed by dividing net investment
income by the net asset value per share on the last day of the period,
according to the following formula:
YIELD = 2[(a - b + 1)(6) - 1]
-----
cd
where a = dividend and interest income
b = expenses accrued for the period (net of reimbursements)
c = average daily number of shares outstanding during the period
that were entitled to receive dividends
d = maximum net asset value per share on the last day of the
period
The yield for the 30-day period ending December 31, 1999, for the
predecessor fund of Flexible Income Fund is shown below:
<TABLE>
<S> <C>
Flexible Income Fund %
</TABLE>
From time to time in advertisements or sales material, the Funds may
discuss their performance ratings or other information as published by
recognized mutual fund statistical rating services, including, but not
38
<PAGE>
limited to, Lipper Analytical Services, Inc., Ibbotson Associates,
Micropal or Morningstar, Inc. or by publications of general interest
such as Forbes, Money, The Wall Street Journal, Mutual Funds Magazine,
Kiplinger's or Smart Money. The Funds may also compare their
performance to that of other selected mutual funds (for example, peer
groups created by Lipper or Morningstar), mutual fund averages or
recognized stock market indicators, including, but not limited to, the
Standard & Poor's 500 Composite Stock Price Index, the Standard &
Poor's MidCap 400 Index, the Dow Jones Industrial Average, the Lehman
Brothers Government/Corporate Bond Index, the Lehman Brothers
Government/Corporate 1-3 Year Bond Index, the Lehman Brothers Long
Government/Corporate Bond Index, the Lehman Brothers Intermediate
Government Bond Index, the Lehman Brothers Municipal Bond Index, the
Russell 2000 Index and the NASDAQ composite. In addition, the Funds
may compare their total return or yield to the yield on U.S. Treasury
obligations and to the percentage change in the Consumer Price Index.
Worldwide Fund and International Fund may also compare their
performance to the record of global market indicators, such as the
Morgan Stanley Capital International World Index. Such performance
ratings or comparisons may be made with funds that may have different
investment restrictions, objectives, policies or techniques than the
Funds and such other funds or market indicators may be comprised of
securities that differ significantly from the Funds' investments.
39
<PAGE>
Appendix A
EXPLANATION OF RATING CATEGORIES
The following is a description of credit ratings issued by two of the
major credit ratings agencies. Credit ratings evaluate only the safety
of principal and interest payments, not the market value risk of lower
quality securities. Credit rating agencies may fail to change credit
ratings to reflect subsequent events on a timely basis. Although Janus
Capital considers security ratings when making investment decisions,
it also performs its own investment analysis and does not rely solely
on the ratings assigned by credit agencies.
STANDARD & POOR'S
RATINGS SERVICES
<TABLE>
<S> <C>
BOND RATING EXPLANATION
-----------------------------------------------------------------------------------------
Investment Grade
AAA......................... Highest rating; extremely strong capacity to pay principal
and interest.
AA.......................... High quality; very strong capacity to pay principal and
interest.
A........................... Strong capacity to pay principal and interest; somewhat more
susceptible to the adverse effects of changing circumstances
and economic conditions.
BBB......................... Adequate capacity to pay principal and interest; normally
exhibit adequate protection parameters, but adverse economic
conditions or changing circumstances more likely to lead to
a weakened capacity to pay principal and interest than for
higher rated bonds.
Non-Investment Grade
BB, B, CCC, CC, C........... Predominantly speculative with respect to the issuer's
capacity to meet required interest and principal payments.
BB -- lowest degree of speculation; C -- the highest degree
of speculation. Quality and protective characteristics
outweighed by large uncertainties or major risk exposure to
adverse conditions.
D........................... In default.
</TABLE>
MOODY'S INVESTORS SERVICE, INC.
<TABLE>
<S> <C>
BOND RATING EXPLANATION
-----------------------------------------------------------------------------------------
Investment Grade
Aaa......................... Highest quality, smallest degree of investment risk.
Aa.......................... High quality; together with Aaa bonds, they compose the
high-grade bond group.
A........................... Upper-medium grade obligations; many favorable investment
attributes.
Baa......................... Medium-grade obligations; neither highly protected nor
poorly secured. Interest and principal appear adequate for
the present but certain protective elements may be lacking
or may be unreliable over any great length of time.
Non-Investment Grade
Ba.......................... More uncertain, with speculative elements. Protection of
interest and principal payments not well safeguarded during
good and bad times.
B........................... Lack characteristics of desirable investment; potentially
low assurance of timely interest and principal payments or
maintenance of other contract terms over time.
Caa......................... Poor standing, may be in default; elements of danger with
respect to principal or interest payments.
Ca.......................... Speculative in a high degree; could be in default or have
other marked shortcomings.
C........................... Lowest-rated; extremely poor prospects of ever attaining
investment standing.
</TABLE>
Unrated securities will be treated as noninvestment grade securities
unless the portfolio manager determines that such securities are the
equivalent of investment grade securities. Securities that have
received ratings from more than one agency are considered investment
grade if at least one agency has rated the security investment grade.
40
<PAGE>
This page intentionally left blank.
<PAGE>
[JANUS LOGO]
1-800-525-0020
100 Fillmore Street
Denver, Colorado 80206-4928
janus.com
<PAGE>
The information in this Statement of Additional Information is not complete and
may be changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
Statement of Additional Information is not an offer to sell these securities and
is not soliciting an offer to buy these securities in any state where the offer
is not permitted.
[JANUS LOGO]
Subject to Completion
Preliminary Statement of Additional Information Dated April 4, 2000
Janus Adviser Series
Money Market Fund
100 Fillmore Street
Denver, CO 80206-4928
(800) 525-0020
Statement of Additional Information
, 2000
This Statement of Additional Information expands upon and
supplements the information contained in the current Prospectus
for the Money Market Fund. The Fund is a separate series of
Janus Adviser Series, a Delaware trust.
The shares of the Fund may be purchased only through
institutional channels such as qualified and non-qualified
retirement and pension plans, bank trust departments, brokers,
financial advisers and other financial intermediaries.
This SAI is not a Prospectus and should be read in conjunction
with the Prospectus dated , 2000, which is
incorporated by reference into this SAI and may be obtained
from your plan sponsor, broker or other financial intermediary.
This SAI contains additional and more detailed information
about the Fund's operations and activities than the Prospectus.
<PAGE>
[JANUS LOGO]
<PAGE>
Table of contents
<TABLE>
<S> <C>
Investment Restrictions and
Investment Strategies....................................... 2
Performance Data............................................ 10
Determination of Net Asset Value............................ 12
Investment Adviser.......................................... 13
Custodian, Transfer Agent
and Certain Affiliations.................................... 15
Portfolio Transactions and Brokerage........................ 16
Trustees and Officers....................................... 17
Purchase of Shares.......................................... 21
Distribution Plan........................................... 22
Redemption of Shares........................................ 23
Dividends and Tax Status.................................... 24
Miscellaneous Information................................... 25
Shares of the Trust...................................... 25
Shareholder Meetings..................................... 25
Voting Rights............................................ 25
Independent Accountants.................................. 25
Registration Statement................................... 26
Appendix A.................................................. 27
Description of Securities Ratings........................ 27
Appendix B.................................................. 30
Description of Municipal Securities...................... 30
</TABLE>
1
<PAGE>
Investment restrictions and investment strategies
INVESTMENT RESTRICTIONS
The Fund has adopted certain fundamental investment restrictions that
cannot be changed without shareholder approval. Shareholder approval
means approval by the lesser of (i) more than 50% of the outstanding
voting securities of the Trust (or the Fund or class of shares if a
matter affects just the Fund or class of shares), or (ii) 67% or more
of the voting securities present at a meeting if the holders of more
than 50% of the outstanding voting securities of the Trust (or the
Fund or class of shares) are present or represented by proxy.
As used in the restrictions set forth below and as used elsewhere in
this SAI, the term "U.S. Government Securities" shall have the meaning
set forth in the Investment Company Act of 1940, as amended (the "1940
Act"). The 1940 Act defines U.S. Government Securities as securities
issued or guaranteed by the United States government, its agencies or
instrumentalities. U.S. Government Securities may also include
repurchase agreements collateralized and municipal securities escrowed
with or refunded with escrowed U.S. government securities.
The Fund has adopted the following fundamental policies:
(1) With respect to 75% of its assets, the Fund may not purchase a
security other than a U.S. Government Security, if, as a result, more
than 5% of its total assets would be invested in the securities of a
single issuer or the Fund would own more than 10% of the outstanding
voting securities of any single issuer. (As noted in the Prospectus,
the Fund is currently subject to the greater diversification standards
of Rule 2a-7, which are not fundamental.)
(2) The Fund may not purchase securities if 25% or more of the value
of its total assets would be invested in the securities of issuers
conducting their principal business activities in the same industry;
provided that: (i) there is no limit on investments in U.S. Government
Securities or in obligations of domestic commercial banks (including
U.S. branches of foreign banks subject to regulations under U.S. laws
applicable to domestic banks and, to the extent that its parent is
unconditionally liable for the obligation, foreign branches of U.S.
banks); (ii) this limitation shall not apply to the Fund's investments
in municipal securities; (iii) there is no limit on investment in
issuers domiciled in a single country; (iv) financial service
companies are classified according to the end users of their services
(for example, automobile finance, bank finance and diversified finance
are each considered to be a separate industry); and (v) utility
companies are classified according to their services (for example,
gas, gas transmission, electric, and telephone are each considered to
be a separate industry).
(3) The Fund may not act as an underwriter of securities issued by
others, except to the extent that it may be deemed an underwriter in
connection with the disposition of its portfolio securities.
(4) The Fund may not lend any security or make any other loan if, as a
result, more than 25% of its total assets would be lent to other
parties (but this limitation does not apply to purchases of commercial
paper, debt securities or repurchase agreements).
(5) The Fund may not purchase or sell real estate or any interest
therein, except that the Fund may invest in debt obligations secured
by real estate or interests therein or securities issued by companies
that invest in real estate or interests therein.
(6) The Fund may borrow money for temporary or emergency purposes (not
for leveraging) in an amount not exceeding 25% of the value of its
total assets (including the amount borrowed) less liabilities (other
than borrowings). If borrowings exceed 25% of the value of the Fund's
total assets by reason of a decline in net assets, it will reduce its
borrowings within three business days to the extent necessary to
comply with the 25% limitation. Reverse repurchase agreements or the
segregation of assets in connection with such agreements shall not be
considered borrowing for the purposes of this limit.
2
<PAGE>
(7) The Fund may, notwithstanding any other investment policy or
restriction (whether or not fundamental), invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objectives, policies and
restrictions as the Fund.
Investment restriction (1) is intended to reflect the requirements
under Section 5(b)(1) of the 1940 Act for a diversified fund. Rule
2a-7 provides that money market funds that comply with the
diversification limits of Rule 2a-7 are deemed to comply with the
diversification limits of Section 5(b)(1). Thus, the Fund interprets
restriction (1) in accordance with Rule 2a-7. Accordingly, if
securities are subject to a guarantee provided by a non-controlled
person, the Rule 2a-7 diversification tests apply to the guarantor,
and the diversification test in restriction (1) does not apply to the
issuer.
The Fund has adopted the following nonfundamental investment
restrictions that may be changed by the Trustees without shareholder
approval:
(1) The Fund may not invest in securities or enter into repurchase
agreements with respect to any securities if, as a result, more than
10% of its net assets would be invested in repurchase agreements not
entitling the holder to payment of principal within seven days and in
other securities that are not readily marketable ("illiquid
securities"). The Trustees, or the Fund's investment adviser acting
pursuant to authority delegated by the Trustees, may determine that a
readily available market exists for certain securities such as
securities eligible for resale pursuant to Rule 144A under the
Securities Act of 1933, or any successor to such rule, Section 4(2)
commercial paper and municipal lease obligations. Accordingly, such
securities may not be subject to the foregoing limitation.
(2) The Fund may not purchase securities on margin, or make short
sales of securities, except for short sales against the box and the
use of short-term credit necessary for the clearance of purchases and
sales of portfolio securities.
(3) The Fund may not pledge, mortgage, hypothecate or encumber any of
its assets except to secure permitted borrowings or in connection with
permitted short sales.
(4) The Fund may not invest in companies for the purpose of exercising
control of management.
Under the terms of an exemptive order received from the Securities and
Exchange Commission ("SEC"), the Fund may borrow money from or lend
money to other funds that permit such transactions and for which Janus
Capital serves as investment adviser. All such borrowing and lending
will be subject to the above limits. The Fund will borrow money
through the program only when the costs are equal to or lower than the
cost of bank loans. Interfund loans and borrowings normally extend
overnight, but can have a maximum duration of seven days. The Fund
will lend through the program only when the returns are higher than
those available from other short-term instruments (such as repurchase
agreements). The Fund may have to borrow from a bank at a higher
interest rate if an interfund loan is called or not renewed. Any delay
in repayment to a lending Fund could result in a lost investment
opportunity or additional borrowing costs.
For purposes of the Fund's policies on investing in particular
industries, the Fund will rely primarily on industry or industry group
classifications as published by Bloomberg L.P. To the extent that
Bloomberg L.P. industry classifications are so broad that the primary
economic characteristics in a single industry are materially
different, the Fund may further classify issuers in accordance with
industry classifications as published by the SEC.
3
<PAGE>
INVESTMENT STRATEGIES
The Fund may invest only in "eligible securities" as defined in Rule
2a-7 adopted under the 1940 Act. Generally, an eligible security is a
security that (i) is denominated in U.S. dollars and has a remaining
maturity of 397 days or less (as calculated pursuant to Rule 2a-7);
(ii) is rated, or is issued by an issuer with short-term debt
outstanding that is rated, in one of the two highest rating categories
by any two nationally recognized statistical rating organizations
("NRSROs") or, if only one NRSRO has issued a rating, by that NRSRO
(the "Requisite NRSROs") or is unrated and of comparable quality to a
rated security, as determined by Janus Capital; and (iii) has been
determined by Janus Capital to present minimal credit risks pursuant
to procedures approved by the Trustees. In addition, the Fund will
maintain a dollar-weighted average portfolio maturity of 90 days or
less. A description of the ratings of some NRSROs appears in Appendix
A.
Under Rule 2a-7, the Fund may not invest more than five percent of its
total assets in the securities of any one issuer other than U.S.
Government Securities, provided that in certain cases it may invest
more than 5% of its assets in a single issuer for a period of up to
three business days. Investment in demand features, guarantees and
other types of instruments or features are subject to the
diversification limits under Rule 2a-7.
Pursuant to Rule 2a-7, the Fund will invest at least 95% of its total
assets in "first-tier" securities. First-tier securities are eligible
securities that are rated, or are issued by an issuer with short-term
debt outstanding that is rated, in the highest rating category by the
Requisite NRSROs or are unrated and of comparable quality to a rated
security. In addition, the Fund may invest in "second-tier" securities
which are eligible securities that are not first-tier securities.
However, the Fund may not invest in a second-tier security if
immediately after the acquisition thereof it would have invested more
than (i) the greater of one percent of its total assets or one million
dollars in second-tier securities issued by that issuer, or (ii) five
percent of its total assets in second-tier securities.
The following discussion of types of securities in which the Fund may
invest supplements and should be read in conjunction with the
Prospectus.
Participation Interests
The Fund may purchase participation interests in loans or securities
in which it may invest directly. Participation interests are generally
sponsored or issued by banks or other financial institutions. A
participation interest gives the Fund an undivided interest in the
underlying loans or securities in the proportion that the Fund's
interest bears to the total principal amount of the underlying loans
or securities. Participation interests, which may have fixed, floating
or variable rates, may carry a demand feature backed by a letter of
credit or guarantee of a bank or institution permitting the holder to
tender them back to the bank or other institution. For certain
participation interests, the Fund will have the right to demand
payment, on not more than seven days' notice, for all or a part of the
Fund's participation interest. The Fund intends to exercise any demand
rights it may have upon default under the terms of the loan or
security, to provide liquidity or to maintain or improve the quality
of the Fund's investment portfolio. The Fund will only purchase
participation interests that Janus Capital determines present minimal
credit risks.
Variable and Floating Rate Notes
The Fund also may purchase variable and floating rate demand notes of
corporations, which are unsecured obligations redeemable upon not more
than 30 days' notice. These obligations include master demand notes
that permit investment of fluctuating amounts at varying rates of
interest pursuant to direct arrangements with the issuer of the
instrument. The issuer of these obligations often has the right, after
a
4
<PAGE>
given period, to prepay the outstanding principal amount of the
obligations upon a specified number of days' notice. These obligations
generally are not traded, nor generally is there an established
secondary market for these obligations. To the extent a demand note
does not have a seven day or shorter demand feature and there is no
readily available market for the obligation, it is treated as an
illiquid investment.
Securities with ultimate maturities of greater than 397 days may be
purchased only pursuant to Rule 2a-7. Under that Rule, only those
long-term instruments that have demand features which comply with
certain requirements and certain variable rate U.S. Government
Securities may be purchased. The rate of interest on securities
purchased by the Fund may be tied to short-term Treasury or other
government securities or indices on securities that are permissible
investments of the Fund, as well as other money market rates of
interest. The Fund will not purchase securities whose values are tied
to interest rates or indices that are not appropriate for the duration
and volatility standards of a money market fund.
Mortgage- and Asset-Backed Securities
The Fund may invest in mortgage-backed securities, which represent an
interest in a pool of mortgages made by lenders such as commercial
banks, savings and loan institutions, mortgage bankers, mortgage
brokers and savings banks. Mortgage-backed securities may be issued by
governmental or government-related entities or by non-governmental
entities such as banks, savings and loan institutions, private
mortgage insurance companies, mortgage bankers and other secondary
market issuers.
Interests in pools of mortgage-backed securities differ from other
forms of debt securities which normally provide for periodic payment
of interest in fixed amounts with principal payments at maturity or
specified call dates. In contrast, mortgage-backed securities provide
periodic payments which consist of interest and, in most cases,
principal. In effect, these payments are a "pass-through" of the
periodic payments and optional prepayments made by the individual
borrowers on their mortgage loans, net of any fees paid to the issuer
or guarantor of such securities. Additional payments to holders of
mortgage-backed securities are caused by prepayments resulting from
the sale of the underlying residential property, refinancing or
foreclosure, net of fees or costs which may be incurred.
As prepayment rates of individual pools of mortgage loans vary widely,
it is not possible to predict accurately the average life of a
particular security. Although mortgage-backed securities are issued
with stated maturities of up to forty years, unscheduled or early
payments of principal and interest on the underlying mortgages may
shorten considerably the effective maturities. Mortgage-backed
securities may have varying assumptions for average life. The volume
of prepayments of principal on a pool of mortgages underlying a
particular security will influence the yield of that security, and the
principal returned to the Fund may be reinvested in instruments whose
yield may be higher or lower than that which might have been obtained
had the prepayments not occurred. When interest rates are declining,
prepayments usually increase, with the result that reinvestment of
principal prepayments will be at a lower rate than the rate applicable
to the original mortgage-backed security.
The Fund may invest in mortgage-backed securities that are issued by
agencies or instrumentalities of the U.S. government. The Government
National Mortgage Association ("GNMA") is the principal federal
government guarantor of mortgage-backed securities. GNMA is a
wholly-owned U.S. government corporation within the Department of
Housing and Urban Development. GNMA Certificates are debt securities
which represent an interest in one mortgage or a pool of mortgages
which are insured by the Federal Housing Administration or the Farmers
Home Administration or are guaranteed by the Veterans Administration.
The Fund may also invest in pools of conventional mortgages which are
issued or guaranteed by agencies of the U.S. government. GNMA
pass-through securities are considered to be
5
<PAGE>
riskless with respect to default in that (i) the underlying mortgage
loan portfolio is comprised entirely of government-backed loans and
(ii) the timely payment of both principal and interest on the
securities is guaranteed by the full faith and credit of the U.S.
government, regardless of whether or not payments have been made on
the underlying mortgages. GNMA pass-through securities are, however,
subject to the same market risk as comparable debt securities.
Therefore, the market value of the Fund's GNMA securities can be
expected to fluctuate in response to changes in prevailing interest
rate levels.
Residential mortgage loans are pooled also by the Federal Home Loan
Mortgage Corporation ("FHLMC"). FHLMC is a privately managed, publicly
chartered agency created by Congress in 1970 for the purpose of
increasing the availability of mortgage credit for residential
housing. FHLMC issues participation certificates ("PCs") which
represent interests in mortgages from FHLMC's national portfolio. The
mortgage loans in FHLMC's portfolio are not U.S. government backed;
rather, the loans are either uninsured with loan-to-value ratios of
80% or less, or privately insured if the loan-to-value ratio exceeds
80%. FHLMC guarantees the timely payment of interest and ultimate
collection of principal on FHLMC PCs; the U.S. government does not
guarantee any aspect of FHLMC PCs.
The Federal National Mortgage Association ("FNMA") is a
government-sponsored corporation owned entirely by private
shareholders. It is subject to general regulation by the Secretary of
Housing and Urban Development. FNMA purchases residential mortgages
from a list of approved seller/servicers which include savings and
loan associations, savings banks, commercial banks, credit unions and
mortgage bankers. FNMA guarantees the timely payment of principal and
interest on the pass-through securities issued by FNMA; the U.S.
government does not guarantee any aspect of the FNMA pass-through
securities.
The Fund may also invest in privately-issued mortgage-backed
securities to the extent permitted by their investment restrictions.
Mortgage-backed securities offered by private issuers include
pass-through securities comprised of pools of conventional residential
mortgage loans; mortgage-backed bonds which are considered to be debt
obligations of the institution issuing the bonds and which are
collateralized by mortgage loans; and collateralized mortgage
obligations ("CMOs") which are collateralized by mortgage-backed
securities issued by GNMA, FHLMC or FNMA or by pools of conventional
mortgages.
Asset-backed securities represent direct or indirect participation in,
or are secured by and payable from, assets other than mortgage-backed
assets such as motor vehicle installment sales contracts, installment
loan contracts, leases of various types of real and personal property
and receivables from revolving credit agreements (credit cards).
Asset-backed securities have yield characteristics similar to those of
mortgage-backed securities and, accordingly, are subject to many of
the same risks.
Securities Lending
The Fund may lend securities to qualified parties (typically brokers
or other financial institutions) who need to borrow securities in
order to complete certain transactions such as covering short sales,
avoiding failures to deliver securities or completing arbitrage
activities. The Fund may seek to earn additional income through
securities lending. Since there is the risk of delay in recovering a
loaned security or the risk of loss in collateral rights if the
borrower fails financially, securities lending will only be made to
parties that Janus Capital deems creditworthy and in good standing. In
addition, such loans will only be made if Janus Capital believes the
benefit from granting such loans justifies the risk. The Fund will not
have the right to vote on securities while they are being lent, but it
will call a loan in anticipation of any important vote. All loans will
be continuously secured by collateral which consists of cash, U.S.
government securities, letters of credit and such other collateral
permitted by the Securities and Exchange Commission and policies
approved by the Trustees. Cash collateral may be invested in money
market funds advised by Janus to the extent consistent with exemptive
relief obtained from the SEC.
6
<PAGE>
Reverse Repurchase Agreements
Reverse repurchase agreements are transactions in which the Fund sells
a security and simultaneously commits to repurchase that security from
the buyer at an agreed upon price on an agreed upon future date. The
resale price in a reverse repurchase agreement reflects a market rate
of interest that is not related to the coupon rate or maturity of the
sold security. For certain demand agreements, there is no agreed upon
repurchase date and interest payments are calculated daily, often
based upon the prevailing overnight repurchase rate. The Fund will use
the proceeds of reverse repurchase agreements only to satisfy
unusually heavy redemption requests or for other temporary or
emergency purposes without the necessity of selling portfolio
securities.
Generally, a reverse repurchase agreement enables the Fund to recover
for the term of the reverse repurchase agreement all or most of the
cash invested in the portfolio securities sold and to keep the
interest income associated with those portfolio securities. Such
transactions are only advantageous if the interest cost to the Fund of
the reverse repurchase transaction is less than the cost of obtaining
the cash otherwise. In addition, interest costs on the money received
in a reverse repurchase agreement may exceed the return received on
the investments made by the Fund with those monies.
When Issued and Delayed Delivery Securities
The Fund may purchase securities on a when-issued or delayed delivery
basis. The Fund will enter into such transactions only when it has the
intention of actually acquiring the securities. To facilitate such
acquisitions, the Fund's custodian will segregate cash or high quality
liquid assets in an amount at least equal to such commitments. On
delivery dates for such transactions, the Fund will meet its
obligations from maturities, sales of the segregated securities or
from other available sources of cash. If it chooses to dispose of the
right to acquire a when-issued security prior to its acquisition, the
Fund could, as with the disposition of any other portfolio obligation,
incur a gain or loss due to market fluctuation. At the time Fund will
record the transaction as a purchase and thereafter reflect the value
of such securities in determining its net asset value.
Investment Company Securities
From time to time, the Fund may invest in securities of other
investment companies. The Fund is subject to the provisions of Section
12(d)(1) of the 1940 Act. The Fund may invest in securities of money
market funds managed by Janus Capital in excess of the limitations of
Section 12(d)(1) under the terms of an SEC exemptive order obtained by
Janus Capital and the Janus Funds.
Debt Obligations
Money Market Fund may invest in U.S. dollar denominated debt
obligations. In general, sales of these securities may not be made
absent registration under the Securities Act of 1933 or the
availability of an appropriate exemption. Pursuant to Section 4(2) of
the 1933 Act or Rule 144A adopted under the 1933 Act, however, some of
these securities are eligible for resale to institutional investors,
and accordingly, Janus Capital may determine that a liquid market
exists for such a security pursuant to guidelines adopted by the
Trustees.
Obligations of Financial Institutions
The Fund may invest in obligations of financial institutions. Examples
of obligations in which the Fund may invest include negotiable
certificates of deposit, bankers' acceptances, time deposits and other
obligations of U.S. banks (including savings and loan associations)
having total assets in excess of
7
<PAGE>
one billion dollars and U.S. branches of foreign banks having total
assets in excess of ten billion dollars. The Fund may also invest in
Eurodollar and Yankee bank obligations as discussed below and other
U.S. dollar-denominated obligations of foreign banks having total
assets in excess of ten billion dollars that Janus Capital believes
are of an investment quality comparable to obligations of U.S. banks
in which the Fund may invest.
Certificates of deposit represent an institution's obligation to repay
funds deposited with it that earn a specified interest rate over a
given period. Bankers' acceptances are negotiable obligations of a
bank to pay a draft which has been drawn by a customer and are usually
backed by goods in international trade. Time deposits are
non-negotiable deposits with a banking institution that earn a
specified interest rate over a given period. Fixed time deposits,
which are payable at a stated maturity date and bear a fixed rate of
interest, generally may be withdrawn on demand by the Fund but may be
subject to early withdrawal penalties and that could reduce the Fund's
yield. Unless there is a readily available market for them, time
deposits that are subject to early withdrawal penalties and that
mature in more than seven days will be treated as illiquid securities.
Eurodollar bank obligations are dollar-denominated certificates of
deposit or time deposits issued outside the U.S. capital markets by
foreign branches of U.S. banks and by foreign banks. Yankee bank
obligations are dollar-denominated obligations issued in the U.S.
capital markets by foreign banks.
Foreign, Eurodollar (and to a limited extent, Yankee) bank obligations
are subject to certain sovereign risks. One such risk is the
possibility that a foreign government might prevent dollar-denominated
funds from flowing across its borders. Other risks include: adverse
political and economic developments in a foreign country; the extent
and quality of government regulation of financial markets and
institutions; the imposition of foreign withholding taxes; and
exploration or nationalization of foreign issuers.
U.S. Government Securities
Money Market Fund may invest in U.S. Government Securities. U.S.
Government Securities shall have the meaning set forth in the 1940
Act. The 1940 Act defines U.S. Government Securities to include
securities issued or guaranteed by the U.S. Government, its agencies
and instrumentalities. U.S. Government Securities may also include
repurchase agreements collateralized by and municipal securities
escrowed with or refunded with U.S. government securities. U.S.
Government Securities in which the Fund may invest include U.S.
Treasury securities and obligations issued or guaranteed by U.S.
government agencies and instrumentalities that are backed by the full
faith and credit of the U.S. government, such as those guaranteed by
the Small Business Administration or issued by the Government National
Mortgage Association. In addition, U.S. Government Securities in which
the Fund may invest include securities supported primarily or solely
by the creditworthiness of the issuer, such as securities of the
Federal National Mortgage Association, the Federal Home Loan Mortgage
Corporation and the Tennessee Valley Authority. There is no guarantee
that the U.S. government will support securities not backed by its
full faith and credit. Accordingly, although these securities have
historically involved little risk of loss of principal if held to
maturity, they may involve more risk than securities backed by the
full faith and credit of the U.S. government.
Municipal Leases
The Fund may invest in municipal leases. Municipal leases frequently
have special risks not normally associated with general obligation or
revenue bonds. Municipal leases are municipal securities which may
take the form of a lease or an installment purchase or conditional
sales contract. Municipal leases are issued by state and local
governments and authorities to acquire a wide variety of equipment and
facilities.
8
<PAGE>
Leases and installment purchase or conditional sale contracts (which
normally provide for title to the leased asset to pass eventually to
the government issuer) have evolved as a means for governmental
issuers to acquire property and equipment without meeting the
constitutional and statutory requirements for the issuance of debt.
The debt-issuance limitations of many state constitutions and statutes
are deemed to be inapplicable because of the inclusion in many leases
or contracts of "non-appropriation" clauses that provide that the
governmental issuer has no obligation to make future payments under
the lease or contract unless money is appropriated for such purpose by
the appropriate legislative body on a yearly or other periodic basis.
The Fund will only purchase municipal leases subject to a
non-appropriation clause when the payment of principal and accrued
interest is backed by an unconditional irrevocable letter of credit,
or guarantee of a bank or other entity that meets the criteria
described in the Prospectus under "Taxable Investments."
In evaluating municipal lease obligations, Janus Capital will consider
such factors as it deems appropriate, including: (a) whether the lease
can be canceled; (b) the ability of the lease obligee to direct the
sale of the underlying assets; (c) the general creditworthiness of the
lease obligor; (d) the likelihood that the municipality will
discontinue appropriating funding for the leased property in the event
such property is no longer considered essential by the municipality;
(e) the legal recourse of the lease obligee in the event of such a
failure to appropriate funding; (f) whether the security is backed by
a credit enhancement such as insurance; and (g) any limitations which
are imposed on the lease obligor's ability to utilize substitute
property or services other than those covered by the lease obligation.
If a lease is backed by an unconditional letter of credit or other
unconditional credit enhancement, then Janus Capital may determine
that a lease is an eligible security solely on the basis of its
evaluation of the credit enhancement.
Municipal leases, like other municipal debt obligations, are subject
to the risk of non-payment. The ability of issuers of municipal leases
to make timely lease payments may be adversely impacted in general
economic downturns and as relative governmental cost burdens are
allocated and reallocated among federal, state and local governmental
units. Such non-payment would result in a reduction of income to the
Fund, and could result in a reduction in the value of the municipal
lease experiencing non-payment and a potential decrease in the net
asset value of the Fund.
9
<PAGE>
Performance data
The Fund may provide current annualized and effective annualized yield
quotations of the Fund based on the Fund's daily dividends. These
quotations may from time to time be used in advertisements,
shareholder reports or other communications to shareholders. All
performance information supplied by the Fund in advertising is
historical and is not intended to indicate future returns.
In performance advertising, the Fund may compare any of its
performance information with data published by independent evaluators
such as Morningstar, Inc., Lipper Analytical Services, Inc., or
CDC/Wiesenberger, Donoghue's Money Fund Report or other companies
which track the investment performance of investment companies ("Fund
Tracking Companies"). The Fund may also compare its performance
information with the performance of recognized stock, bond and other
indices, including but not limited to the Municipal Bond Buyers
Indices, the Salomon Brothers Bond Index, the Lehman Brothers Bond
Index, the Standard & Poor's 500 Composite Stock Price Index, the Dow
Jones Industrial Average, U.S. Treasury bonds, bills or notes and
changes in the Consumer Price Index as published by the U.S.
Department of Commerce. The Fund may refer to general market
performance over past time periods such as those published by Ibbotson
Associates (for instance, its "Stocks, Bonds, Bills and Inflation
Yearbook"). The Fund may also refer in such materials to mutual fund
performance rankings and other data published by Fund Tracking
Companies. Performance advertising may also refer to discussions of
the Fund and comparative mutual fund data and ratings reported in
independent periodicals, such as newspapers and financial magazines.
Any current yield quotation of the Fund's shares which is used in such
a manner as to be subject to the provisions of Rule 482(d) under the
Securities Act of 1933, as amended, shall consist of an annualized
historical yield, carried at least to the nearest hundredth of one
percent, based on a specific seven calendar day period. The current
yield of the Fund's shares shall be calculated by (a) determining the
net change during a seven calendar day period in the value of a
hypothetical account having a balance of one share at the beginning of
the period, (b) dividing the net change by the value of the account at
the beginning of the period to obtain a base period return, and (c)
multiplying the quotient by 365/7 (i.e., annualizing). For this
purpose, the net change in account value will reflect the value of
additional shares purchased with dividends declared on the original
share and dividends declared on both the original share and any such
additional shares, but will not reflect any realized gains or losses
from the sale of securities or any unrealized appreciation or
depreciation on portfolio securities. In addition, the Fund may
advertise effective yield quotations. Effective yield quotations are
calculated by adding 1 to the base period return, raising the sum to a
power equal to 365/7, and subtracting 1 from the result (i.e.,
compounding).
Income calculated for the purpose of determining the yield of the
Fund's shares differs from income as determined for other accounting
purposes. Because of the different accounting methods used, and
because of the compounding assumed in yield calculations, the yield
quoted for the Fund's shares may differ from the rate of distribution
the Fund paid over the same period or the rate of income reported in
the Fund's financial statements.
10
<PAGE>
Although published yield information is useful to investors in
reviewing the performance of the Fund's shares, investors should be
aware that the yield fluctuates from day to day and that the Fund's
yield for any given period is not an indication or representation by
the Fund of future yields or rates of return on the Fund's shares. The
Fund's yield is not fixed or guaranteed, and an investment in the Fund
is not insured. Accordingly, the Fund's yield information may not
necessarily be used to compare Fund shares with investment
alternatives which, like money market instruments or bank accounts,
may provide a fixed rate of interest. In addition, because investments
in the Fund are not insured or guaranteed, the yield information may
not necessarily be used to compare the Fund with investment
alternatives which are insured or guaranteed.
The Fund commenced operations on , 2000 after the
reorganization of the Retirement Shares of Janus Aspen Series Money
Market Portfolio into the Fund. The following yields reflect the
performance of Janus Aspen Series Money Market Portfolio Retirement
Shares prior to that date. The current yield and effective yield for
the seven day period ended December 31, 1999, were 5.70% and 5.86%,
respectively.
11
<PAGE>
Determination of net asset value
Pursuant to the rules of the SEC, the Trustees have established
procedures to stabilize the Fund's net asset value at $1.00 per share.
These procedures include a review of the extent of any deviation of
net asset value per share as a result of fluctuating interest rates,
based on available market rates, from the Fund's $1.00 amortized cost
price per share. Should that deviation exceed 1/2 of 1%, the Trustees
will consider whether any action should be initiated to eliminate or
reduce material dilution or other unfair results to shareholders. Such
action may include redemption of shares in kind, selling portfolio
securities prior to maturity, reducing or withholding dividends and
utilizing a net asset value per share as determined by using available
market quotations. The Fund i) will maintain a dollar-weighted average
portfolio maturity of 90 days or less; ii) will not purchase any
instrument with a remaining maturity greater than 397 days or subject
to a repurchase agreement having a duration of greater than 397 days;
iii) will limit portfolio investments, including repurchase
agreements, to those U.S. dollar-denominated instruments that Janus
Capital has determined present minimal credit risks pursuant to
procedures established by the Trustees; and iv) will comply with
certain reporting and recordkeeping procedures. The Trust has also
established procedures to ensure that portfolio securities meet the
Fund's high quality criteria.
12
<PAGE>
Investment adviser
As stated in the Prospectus, the Fund has an Investment Advisory
Agreement with Janus Capital, 100 Fillmore Street, Denver, Colorado
80206-4928. The Advisory Agreement provides that Janus Capital will
furnish continuous advice and recommendations concerning the Fund's
investments, provide office space for the Fund and pay the salaries,
fees and expenses of all Fund officers and of those Trustees who are
affiliated with Janus Capital. Janus Capital also may make payments to
selected broker-dealer firms or institutions which were instrumental
in the acquisition of shareholders for the Fund or which performed
services with respect to shareholder accounts. The minimum aggregate
size required for eligibility for such payments, and the factors in
selecting the broker-dealer firms and institutions to which they will
be made, are determined from time to time by Janus Capital. Janus
Capital is also authorized to perform the management and
administrative services necessary for the operation of the Fund.
Retirement plan service providers, brokers, bank trust departments,
financial advisers and other financial intermediaries may receive fees
from the Fund's service providers for providing recordkeeping,
subaccounting and other administrative services to their customers in
connection with investment in the Fund.
The Fund pays custodian agent fees and expenses, brokerage commissions
and dealer spreads and other expenses in connection with the execution
of portfolio transactions, legal and accounting expenses, interest and
taxes, registration fees, expenses of shareholders' meetings, and
reports to shareholders, fees and expenses of Trustees who are not
affiliated with Janus Capital, and other costs of complying with
applicable laws regulating the sale of Fund shares. Pursuant to the
Advisory Agreement, Janus Capital furnishes certain other services,
including net asset value determination, portfolio accounting and
record keeping for which the Fund may reimburse Janus Capital for its
costs.
The Fund has agreed to compensate Janus Capital for its advisory
services by the monthly payment of a fee at the annual rate of 0.25%
of the Fund's average daily net assets. The advisory fee is calculated
daily and paid monthly.
Until, at least, , 2003, provided Janus Capital remains
investment adviser to the Fund, Janus Capital has agreed to reimburse
the Fund by the amount, if any, that such Fund's normal operating
expenses in any fiscal year, including the investment advisory fee,
but excluding the distribution fee, administration fee, brokerage
commissions, interest, taxes and extraordinary expenses, exceed % of
average daily net assets.
The Advisory Agreement is dated April 3, 2000 and will continue in
effect until July 1, 2001, and thereafter from year to year so long as
such continuance is approved annually by a majority of the Fund's
Trustees who are not parties to the Advisory Agreement or interested
persons of any such party, and by either a majority of the outstanding
voting shares or the Trustees. The Advisory Agreement i) may be
terminated without the payment of any penalty by the Fund or Janus
Capital on 60 days' written notice; ii) terminates automatically in
the event of its assignment; and iii) generally, may not be amended
without the approval by vote of a majority of the Trustees, including
the Trustees who are not interested persons of the Fund or Janus
Capital and, to the extent required by the 1940 Act, the vote of a
majority of the outstanding voting securities of the Fund.
Janus Capital also acts as sub-advisor for a number of private-label
mutual funds and provides separate account advisory services for
institutional accounts. Investment decisions for each account managed
by Janus Capital, including the Fund, are made independently from
those for any other account that is or may in the future become
managed by Janus Capital or its affiliates. If, however, a number of
accounts managed by Janus Capital are contemporaneously engaged in the
purchase or sale of the same security, the orders may be aggregated
and/or the transactions may be averaged as to price and allocated
equitably to
13
<PAGE>
each account. In some cases, this policy might adversely affect the
price paid or received by an account or the size of the position
obtained or liquidated for an account. Pursuant to an exemptive order
granted by the SEC, the Funds and other funds advised by Janus Capital
may also transfer daily uninvested cash balances into one or more
joint trading accounts. Assets in the joint trading accounts are
invested in money market instruments and the proceeds are allocated to
the participating funds on a pro rata basis.
Kansas City Southern Industries, Inc. ("KCSI"), indirectly through its
wholly owned subsidiary, Stilwell Financial Inc., owns approximately
82% of the outstanding voting stock of Janus Capital. KCSI is a
publicly traded holding company whose primary subsidiaries are engaged
in transportation, information processing and financial services.
Thomas H. Bailey, President and Chairman of the Board of Janus
Capital, owns approximately 12% of Janus Capital's voting stock and,
by agreement with KCSI, selects at least a majority of Janus Capital's
Board, subject to the approval of Stilwell Financial, which cannot be
unreasonably withheld.
[KCSI has announced its intention to separate its transportation and
financial services businesses. KCSI anticipates the separation to be
completed in the first half of 2000. UPDATE.]
Each account managed by Janus Capital has its own investment objective
and is managed in accordance with that objective by a particular
portfolio manager or team of portfolio managers. As a result, from
time to time two or more different managed accounts may pursue
divergent investment strategies with respect to investments or
categories of investments.
The portfolio manager is not permitted to purchase and sell securities
for his own accounts except under the limited exceptions contained in
the Fund's Code of Ethics ("Code"). The Fund's Code of Ethics is on
file with and available from the SEC through the SEC Web site at
www.sec.gov. The Code applies to Directors/Trustees of Janus Capital
and the Fund, and employees of Janus Capital and the Trust and
requires investment personnel and officers of Janus Capital, inside
Directors/Trustees of Janus Capital and the Fund and certain other
designated employees deemed to have access to current trading
information to pre-clear all transactions in securities not otherwise
exempt under the Code. Requests for trading authorization will be
denied when, among other reasons, the proposed personal transaction
would be contrary to the provisions of the Code or would be deemed to
adversely affect any transaction known to be under consideration for
or to have been effected on behalf of any client account, including
the Fund.
In addition to the pre-clearance requirement described above, the Code
subjects such personnel to various trading restrictions and reporting
obligations. All reportable transactions are required to be reviewed
for compliance with the Code. Those persons also may be required under
certain circumstances to forfeit their profits made from personal
trading.
The provisions of the Code are administered by and subject to
exceptions authorized by Janus Capital.
14
<PAGE>
Custodian, transfer agent and certain affiliations
Citibank, N.A., 111 Wall Street, 24th Floor, Zone 5, New York, NY
10043, is the Fund's custodian. The custodian holds the Fund's assets
in safekeeping and collects and remits the income thereon, subject to
the instructions of the Fund.
Janus Service Corporation, P.O. Box 173375, Denver, Colorado
80217-3375, a wholly-owned subsidiary of Janus Capital, is the Fund's
transfer agent. In addition, Janus Service provides certain other
administrative, recordkeeping and shareholder relations services to
the Fund. Janus Service receives an administrative services fee at an
annual rate of up to 0.25% of the average daily net assets of the
initial class of the Fund for providing or procuring recordkeeping,
subaccounting and other administrative services to investors in the
shares of the Fund. Janus Service expects to use a significant portion
of this fee to compensate retirement plan service providers, brokers,
bank trust departments, financial advisers and other financial
intermediaries for providing these services (at an annual rate of up
to 0.25% of the average daily net assets of the shares attributable to
their customers). Services provided by these financial intermediaries
may include but are not limited to recordkeeping, processing and
aggregating purchase and redemption transactions, providing periodic
statements, forwarding prospectuses, shareholder reports and other
materials to existing customers, and other administrative services.
Janus Distributors, Inc. ("Janus Distributors"), 100 Fillmore Street,
Denver, Colorado 80206-4928, a wholly-owned subsidiary of Janus
Capital, is a distributor of the Fund. Janus Distributors is
registered as a broker-dealer under the Securities Exchange Act of
1934 (the "Exchange Act") and is a member of the National Association
of Securities Dealers, Inc.
The Fund pays DST Systems, Inc., a minority owned subsidiary of KCSI,
license fees at the rate of $3.98 per shareholder account for the use
of DST's shareholder accounting system. The Fund also pays DST $1.10
per closed shareholder account. The Fund pays DST for the use of its
portfolio and fund accounting system, a monthly fee between $250 to
$1,250, based on the number of Janus funds using the system and an
asset charge of $1 per million dollars of net assets (not to exceed
$500 per month).
The Trustees have authorized the Fund to use another affiliate of DST
as introducing broker for certain Fund transactions as a means to
reduce Fund expenses through credits against the charges of DST and
its affiliates with regard to commissions earned by such affiliate.
See "Portfolio Transactions and Brokerage."
15
<PAGE>
Portfolio transactions and brokerage
Decisions as to the assignment of portfolio business for the Fund and
negotiation of its commission rates are made by Janus Capital whose
policy is to obtain the "best execution" (prompt and reliable
execution at the most favorable security price) of all portfolio
transactions.
In selecting brokers and dealers and in negotiating commissions, Janus
Capital considers a number of factors, including but not limited to:
Janus Capital's knowledge of currently available negotiated commission
rates or prices of securities currently available and other current
transaction costs; the nature of the security being traded; the size
and type of the transaction; the nature and character of the markets
for the security to be purchased or sold; the desired timing of the
trade; the activity existing and expected in the market for the
particular security; confidentiality; the quality of the execution,
clearance and settlement services; financial stability of the broker
or dealer; the existence of actual or apparent operational problems of
any broker or dealer; and research products or services provided. In
recognition of the value of the foregoing factors, Janus Capital may
place portfolio transactions with a broker or dealer with whom it has
negotiated a commission that is in excess of the commission another
broker or dealer would have charged for effecting that transaction if
Janus Capital determines in good faith that such amount of commission
was reasonable in relation to the value of the brokerage and research
provided by such broker or dealer viewed in terms of either that
particular transaction or of the overall responsibilities of Janus
Capital. These research and other services may include, but are not
limited to, general economic and security market reviews, industry and
company reviews, evaluations of securities, recommendations as to the
purchase and sale of securities, and access to third party
publications, computer and electronic equipment and software. Research
received from brokers or dealers is supplemental to Janus Capital's
own research efforts.
The Fund generally buys and sells securities in principal and agency
transactions in which no commissions are paid. However, the Fund may
engage an agent and pay commissions for such transactions if Janus
Capital believes that the net result of the transaction to the Fund
will be no less favorable than that of contemporaneously available
principal transactions.
Janus Capital may use research products and services in servicing
other accounts in addition to the Fund. If Janus Capital determines
that any research product or service has a mixed use, such that it
also serves functions that do not assist in the investment
decision-making process, Janus Capital may allocate the costs of such
service or product accordingly. Only that portion of the product or
service that Janus Capital determines will assist it in the investment
decision-making process may be paid for in brokerage commission
dollars. Such allocation may create a conflict of interest for Janus
Capital.
Janus Capital may consider sales of Fund shares or shares of other
Janus funds by a broker-dealer or the recommendation of a
broker-dealer to its customers that they purchase such shares as a
factor in the selection of broker-dealers to execute Fund
transactions. Janus Capital may also consider payments made by brokers
effecting transactions for a Fund i) to the Fund or ii) to other
persons on behalf of the Fund for services provided to the Fund for
which it would be obligated to pay. In placing portfolio business with
such broker-dealers, Janus Capital will seek the best execution of
each transaction.
When the Fund purchases or sells a security in the over-the-counter
market, the transaction takes place directly with a principal
market-maker, without the use of a broker, except in those
circumstances where in the opinion of Janus Capital better prices and
executions will be achieved through the use of a broker.
16
<PAGE>
Trustees and officers
The following are the names of the Trustees and officers of Janus
Adviser Series, a Delaware business trust of which the Fund is a
series, together with a brief description of their principal
occupations during the last five years.
Thomas H. Bailey, Age 62 - Trustee, Chairman and President*#
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Trustee, Chairman and President of Janus Investment Fund and Janus
Aspen Series. Chairman, Chief Executive Officer, President and
Director of Janus Capital. Director of Janus Distributors, Inc.
James P. Craig, III, Age 43 - Trustee and Vice President*#
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Trustee and Vice President of Janus Investment Fund and Janus Aspen
Series. Chief Investment Officer, Director of Research, Vice Chairman
and Director of Janus Capital. Formerly Executive Vice President and
Portfolio Manager of Janus Aspen Growth Portfolio and Janus Fund.
Formerly Executive Vice President and Co-Manager of Janus Venture Fund
(from inception until December 1999).
Gary O. Loo, Age 59 - Trustee#
102 N. Cascade, Suite 500
Colorado Springs, CO 80903
- --------------------------------------------------------------------------------
Trustee of Janus Investment Fund and Janus Aspen Series. President and
a Director of High Valley Group, Inc., Colorado Springs, CO
(investments).
Dennis B. Mullen, Age 56 - Trustee
7500 E. McCormick Parkway, #24
Scottsdale, AZ 85258
- --------------------------------------------------------------------------------
Trustee of Janus Investment Fund and Janus Aspen Series. Private
Investor. Formerly (1997-1998), Chief Financial Officer - Boston
Market Concepts, Boston Chicken, Inc., Golden, CO (restaurant chain);
(1993-1997), President and Chief Executive Officer of BC Northwest,
L.P., a franchise of Boston Chicken, Inc., Bellevue, WA (restaurant
chain).
- --------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.
#Member of the Executive Committee.
17
<PAGE>
James T. Rothe, Age 56 - Trustee
102 South Tejon Street, Suite 1100
Colorado Springs, CO 80903
- --------------------------------------------------------------------------------
Trustee of Janus Investment Fund and Janus Aspen Series. Professor of
Business, University of Colorado, Colorado Springs, CO. Principal,
Phillips-Smith Retail Group, Colorado Springs, CO (a venture capital
firm).
William D. Stewart, Age 55 - Trustee#
5330 Sterling Drive
Boulder, CO 80302
- --------------------------------------------------------------------------------
Trustee of Janus Investment Fund and Janus Aspen Series. President of
HPS Division of MKS Instruments, Boulder, CO (manufacturer of vacuum
fittings and valves).
Martin H. Waldinger, Age 61 - Trustee
4940 Sandshore Court
San Diego, CA 92130
- --------------------------------------------------------------------------------
Trustee of Janus Investment Fund and Janus Aspen Series. Private
Consultant. Formerly (1993 to 1996), Director of Run Technologies,
Inc., a software development firm, San Carlos, CA.
Sharon S. Pichler, Age 50 - Executive Vice President and Portfolio Manager*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Executive Vice President and Portfolio Manager of Janus Investment
Fund and Janus Aspen Series. Vice President of Janus Capital.
Thomas A. Early, Age 45 - Vice President and General Counsel*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Vice President and General Counsel of Janus Investment Fund and Janus
Aspen Series. Vice President, General Counsel and Secretary of Janus
Capital. Vice President and General Counsel of Janus Service
Corporation, Janus Distributors, Inc., Janus Capital International,
Ltd. and Janus International (UK) Limited. Director of Janus World
Funds Plc. Formerly (1997 to 1998), Executive Vice President and
General Counsel of Prudential Investments Fund Management LLC, Newark,
NJ. Formerly (1994 to 1997), Vice President and General Counsel of
Prudential Retirement Services, Newark, NJ.
- --------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.
18
<PAGE>
Steven R. Goodbarn, Age 42 - Vice President and Chief Financial Officer*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Vice President and Chief Financial Officer of Janus Investment Fund
and Janus Aspen Series. Vice President of Finance, Treasurer and Chief
Financial Officer of Janus Capital, Janus Service Corporation, and
Janus Distributors, Inc. Director of Janus Service Corporation and
Janus Distributors, Inc. and Janus World Funds Plc. Director,
Treasurer and Vice President of Finance of Janus Capital International
Ltd. and Janus International (UK) Limited. Formerly (1992-1996),
Treasurer of Janus Investment Fund and Janus Aspen Series.
Kelly Abbott Howes, Age 34 - Secretary*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Vice President and Secretary of Janus Investment Fund and Janus Aspen
Series. Vice President and Assistant General Counsel of Janus Capital.
Vice President of Janus Distributors, Inc. Assistant Vice President of
Janus Service Corporation.
Glenn P. O'Flaherty, Age 41 - Treasurer and Chief Accounting Officer*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Treasurer and Chief Accounting Officer of Janus Investment Fund and
Janus Aspen Series. Vice President of Janus Capital. Formerly
(1991-1997), Director of Fund Accounting, Janus Capital.
- --------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.
19
<PAGE>
The Trustees are responsible for major decisions relating to the
Fund's objective, policies and techniques. The Trustees also supervise
the operation of the Fund by its officers and review the investment
decisions of the officers although they do not actively participate on
a regular basis in making such decisions.
The Trust's Executive Committee shall have and may exercise all the
powers and authority of the Trustees except for matters requiring
action by all Trustees pursuant to the Trust's Bylaws or Trust
Instrument, Delaware law or the 1940 Act.
The Money Market Funds Committee, consisting of Messrs. Loo, Mullen
and Rothe, monitors the compliance with policies and procedures
adopted particularly for money market funds.
Because the Fund has not commenced operations as of the date of this
prospectus, the Trustees have not received compensation from the Fund
yet. The following table shows the aggregate compensation paid to each
Trustee by other funds advised and sponsored by Janus Capital
(collectively, the "Janus Funds") for the periods indicated. None of
the Trustees receive pension or retirement benefits from the Fund or
the Janus Funds.
<TABLE>
<CAPTION>
Aggregate Compensation Total Compensation
from the Fund for from the Janus Funds for
fiscal year ended calendar year ended
Name of Person, Position December 31, 1999 December 31, 1999**
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Thomas H. Bailey, Chairman and Trustee* $ 0 $ 0
James P. Craig, III, Trustee* $ 0 $ 0
William D. Stewart, Trustee $ 0 $107,333
Gary O. Loo, Trustee $ 0 $107,333
Dennis B. Mullen, Trustee $ 0 $107,333
Martin H. Waldinger, Trustee $ 0 $107,333
James T. Rothe, Trustee $ 0 $107,333
</TABLE>
* An interested person of the Fund and of Janus Capital. Compensated by Janus
Capital and not the Fund.
** As of December 31, 1999, Janus Funds consisted of two registered investment
companies comprised of a total of 32 funds.
20
<PAGE>
Purchase of Shares
Shares of the Fund can be purchased only through institutional
channels such as retirement plans, brokers, bank trust departments,
financial advisers or similar financial intermediaries. Certain
designated organizations are authorized to receive purchase orders on
the Fund's behalf, and those organizations are authorized to designate
their agents and affiliates as intermediaries to receive purchase
orders. Purchase orders are deemed received by the Fund when
authorized organizations, their agents or affiliates receive the
order. The Fund is not responsible for the failure of any designated
organization or its agents or affiliates to carry out its obligations
to its customers. Shares of the Fund are purchased at the NAV per
share as determined at the close of regular trading session of the New
York Stock Exchange next occurring after a purchase order is received
and accepted by the Fund or its authorized agent. In order to receive
a day's dividend, your order must be received by the close of the
regular trading session of the NYSE. Your plan documents contain
detailed information about investing in the Fund.
21
<PAGE>
Distribution plan
Under a distribution plan ("Plan") adopted in accordance with Rule
12b-1 under the Investment Company Act of 1940 (the "1940 Act"), the
Fund may pay Janus Distributors, Inc., the Trust's distributor, a fee
at an annual rate of up to 0.25% of the average daily net assets of
the initial class of the Fund. Under the terms of the Plan, the Trust
is authorized to make payments to Janus Distributors for remittance to
retirement and pension plan service providers, bank trust departments,
brokers, financial advisers and other financial intermediaries as
compensation for distribution and shareholder servicing performed by
such service providers. The Plan is a compensation type plan and
permits the payment at an annual rate of up to 0.25% of the average
daily net assets of the initial class of the Fund for activities which
are primarily intended to result in sales of the Fund, including but
not limited to preparing, printing and distributing prospectuses,
Statements of Additional Information, shareholder reports, and
educational materials to prospective and existing investors;
responding to inquiries by investors; receiving and answering
correspondence and similar activities. On April 3, 2000, Trustees
unanimously approved the Plan which became effective on that date. The
Plan and any Rule 12b-1 related agreement that is entered into by the
Fund or Janus Distributors in connection with the Plan will continue
in effect for a period of more than one year only so long as
continuance is specifically approved at least annually by a vote of a
majority of the Trustees, and of a majority of the Trustees who are
not interested persons (as defined in the 1940 Act) of the Trust and
who have no direct or indirect financial interest in the operation of
the Plan or any related agreements ("12b-1 Trustees"). All material
amendments to the Plan must be approved by a majority vote of the
Trustees, including a majority of the 12b-1 Trustees, at a meeting
called for that purpose. In addition, the Plan may be terminated at
any time, without penalty, by vote of a majority of the outstanding
shares of the class of the Fund or by vote of a majority of 12b-1
Trustees.
22
<PAGE>
Redemption of Shares
Redemptions, like purchases, may only be effected through
institutional channels such as retirement plans, brokers, bank trust
departments, financial advisers and other financial intermediaries.
Certain designated organizations are authorized to receive redemption
orders on the Fund's behalf and those organizations are authorized to
designate their agents and affiliates as intermediaries to receive
redemption orders. Redemption orders are deemed received by the Fund
when authorized organizations, their agents or affiliates receive the
order. The Fund is not responsible for the failure of any designated
organization or its agents or affiliates to carry out its obligations
to its customers. Shares normally will be redeemed for cash, although
the Fund retains the right to redeem some or all of the shares in kind
under unusual circumstances, in order to protect the interests of
remaining shareholders, or to accommodate a request by a particular
shareholder that does not adversely affect the interest of the
remaining shareholders, by delivery of securities selected from its
assets at its discretion. However, the Fund is governed by Rule 18f-1
under the 1940 Act, which requires the Fund to redeem shares solely in
cash up to the lesser of $250,000 or 1% of the net asset value of the
Fund during any 90-day period for any one shareholder. Should
redemptions by any shareholder exceed such limitation, the Fund will
have the option of redeeming the excess in cash or in kind. If shares
are redeemed in kind, the redeeming shareholder might incur brokerage
costs in converting the assets to cash. The method of valuing
securities used to make redemptions in kind will be the same as the
method of valuing portfolio securities described under "Determination
of Net Asset Value" and such valuation will be made as of the same
time the redemption price is determined.
The right to require the Fund to redeem its shares may be suspended,
or the date of payment may be postponed, whenever (1) trading on the
NYSE is restricted, as determined by the SEC, or the NYSE is closed
except for holidays and weekends, (2) the SEC permits such suspension
and so orders, or (3) an emergency exists as determined by the SEC so
that disposal of securities or determination of NAV is not reasonably
practicable.
23
<PAGE>
Dividends and tax status
Dividends representing substantially all of the net investment income
and any net realized gains on sales of securities are declared daily,
Saturdays, Sundays and holidays included, and distributed on the last
business day of each month. If a month begins on a Saturday, Sunday,
or holiday, dividends for those days are declared at the end of the
preceding month and distributed on the first business day of the
month. The Fund intends to qualify as a regulated investment company
by satisfying certain requirements prescribed by Subchapter M of the
Code. Accordingly, the Fund will invest no more than 25% of its total
assets in a single issuer (other than U.S. government securities).
All income dividends on the Fund's shares are reinvested automatically
in additional shares of the Fund at the NAV determined on the first
business day following the record date.
Some money market securities employ a trust or other similar structure
to modify the maturity, price characteristics, or quality of financial
assets. For example, put features can be used to modify the maturity
of a security, or interest rate adjustment features can be used to
enhance price stability. If the structure does not perform as
intended, adverse tax or investment consequences may result. Neither
the Internal Revenue Service nor any other regulatory authority has
ruled definitively on certain legal issues presented by structured
securities. Future tax or other regulatory determinations could
adversely affect the value, liquidity, or tax treatment of the income
received from these securities or the nature and timing of
distributions made by a Fund.
Income dividends or capital gains distributions made by the shares of
the Fund purchased through a qualified retirement plan will generally
be exempt from current taxation if left to accumulate within the
qualified plan. Generally, withdrawals from qualified plans may be
subject to ordinary income tax and, if made before age 59 1/2, a 10%
penalty tax. The tax status of your investment depends on the features
of your qualified plan. For further information, please contact your
plan sponsor.
24
<PAGE>
Miscellaneous information
The Fund is an open-end management investment company registered under
the 1940 Act as a series of the Trust, which was organized as a
Delaware business trust on , 2000. The Trust Instrument
permits the Trustees to issue an unlimited number of shares of
beneficial interest from an unlimited number of series and classes of
shares. As of the date of this SAI, the Trust consists of eleven
series of shares, known as "Funds," each of which consists of one
class of shares. Additional series and/or classes may be created from
time to time.
Ten of the Funds (listed below) were formed from the reorganization of
the Retirement Shares of corresponding portfolios of Janus Aspen
Series into the Funds on [August 1, 2000]. Strategic Value Fund was a
newly organized Fund.
<TABLE>
<CAPTION>
PREDECESSOR FUND (EACH A PORTFOLIO OF JANUS ASPEN SERIES) FUND
--------------------------------------------------------- ----
<S> <C> <C>
Growth Portfolio - Retirement Shares Janus Adviser Growth Fund
Aggressive Growth Portfolio - Retirement Shares Janus Adviser Aggressive Growth Fund
Capital Appreciation Portfolio - Retirement Shares Janus Adviser Capital Appreciation Fund
Balanced Portfolio - Retirement Shares Janus Adviser Balanced Fund
Equity Income Portfolio - Retirement Shares Janus Adviser Equity Income Fund
Growth and Income Portfolio - Retirement Shares Janus Adviser Growth and Income Fund
International Growth Portfolio - Retirement Shares Janus Adviser International Fund
Worldwide Growth Portfolio - Retirement Shares Janus Adviser Worldwide Fund
Flexible Income Portfolio - Retirement Shares Janus Adviser Flexible Income Fund
Money Market Portfolio - Retirement Shares Janus Adviser Money Market Fund
</TABLE>
SHARES OF THE TRUST
The Trust is authorized to issue an unlimited number of shares of
beneficial interest with a par value of $0.001 per share for each
series of the Trust. Shares of each series of the Trust are fully paid
and nonassessable when issued. The shares of the Fund participate
equally in dividends and other distributions by the Fund, and in
residual assets of the Fund in the event of liquidation. Shares of the
Fund have no preemptive, conversion or subscription rights.
SHAREHOLDER MEETINGS
The Trust does not intend to hold annual shareholder meetings.
However, special meetings may be called for the Fund or for the Trust
as a whole for purposes such as electing or removing Trustees,
terminating or reorganizing the Trust, changing fundamental policies,
or for any other purpose requiring a shareholder vote under the 1940
Act. Separate votes are taken by each Fund or class only if a matter
affects or requires the vote of only that Fund or class or that Fund's
or class' interest in the matter differs from the interest of the
other Funds or class of the Trust. A shareholder is entitled to one
vote for each share owned.
VOTING RIGHTS
The Trustees are responsible for major decisions relating to the
Fund's policies and objectives; the Trustees oversee the operation of
the Fund by its officers.
The present Trustees were elected by the initial trustee of the Trust
on , 2000, and were approved by the initial shareholder on
, 2000. Under the Trust Instrument, each Trustee will
continue in office until the termination of the Trust or his earlier
death, retirement, resignation, bankruptcy, incapacity or removal.
Vacancies will be filled by a majority of the remaining Trustees,
subject to the 1940 Act. Therefore, no annual or regular meetings of
shareholders normally will be held, unless otherwise required by the
Trust Instrument or the 1940 Act. Subject to the foregoing,
shareholders have
25
<PAGE>
the power to vote to elect or remove Trustees, to terminate or
reorganize the Fund, to amend the Trust Instrument, to bring certain
derivative actions and on any other matters on which a shareholder
vote is required by the 1940 Act, the Trust Instrument, the Trust's
Bylaws or the Trustees.
As mentioned in "Shareholder Meetings", each share of each series of
the Trust has one vote (and fractional votes for fractional shares).
Shares of all series of the Trust have noncumulative voting rights,
which means that the holders of more than 50% of the shares of all
series of the Trust voting for the election of Trustees can elect 100%
of the Trustees if they choose to do so and, in such event, the
holders of the remaining shares will not be able to elect any
Trustees. Each Fund or class of the Trust will vote separately only
with respect to those matters that affect only that Fund or class or
if an interest of the Fund or class in the matter differs from the
interests of other Funds or classes of the Trust.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 950 Seventeenth Street, Suite 2500,
Denver, Colorado 80202, independent accountants for the Fund, audit
the Fund's annual financial statements and prepare its tax returns.
REGISTRATION STATEMENT
The Trust has filed with the Securities and Exchange Commission,
Washington, D.C., a Registration Statement under the Securities Act of
1933, as amended, with respect to the securities to which this SAI
relates. If further information is desired with respect to the Fund or
such securities, reference is made to the Registration Statement and
the exhibits filed as a part thereof.
26
<PAGE>
Appendix A
DESCRIPTION OF SECURITIES RATINGS
Moody's and Standard & Poor's
MUNICIPAL AND CORPORATE BONDS AND MUNICIPAL LOANS
The two highest ratings of Standard & Poor's Ratings Services ("S&P")
for municipal and corporate bonds are AAA and AA. Bonds rated AAA have
the highest rating assigned by S&P to a debt obligation. Capacity to
pay interest and repay principal is extremely strong. Bonds rated AA
have a very strong capacity to pay interest and repay principal and
differ from the highest rated issues only in a small degree. The AA
rating may be modified by the addition of a plus (+) or minus (-) sign
to show relative standing within that rating category.
The two highest ratings of Moody's Investors Service, Inc. ("Moody's")
for municipal and corporate bonds are Aaa and Aa. Bonds rated Aaa are
judged by Moody's to be of the best quality. Bonds rated Aa are judged
to be of high quality by all standards. Together with the Aaa group,
they comprise what are generally known as high-grade bonds. Moody's
states that Aa bonds are rated lower than the best bonds because
margins of protection or other elements make long-term risks appear
somewhat larger than Aaa securities. The generic rating Aa may be
modified by the addition of the numerals 1, 2 or 3. The modifier 1
indicates that the security ranks in the higher end of the Aa rating
category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates that the issue ranks in the lower end of such
rating category.
SHORT TERM MUNICIPAL LOANS
S&P's highest rating for short-term municipal loans is SP-1. S&P
states that short-term municipal securities bearing the SP-1
designation have a strong capacity to pay principal and interest.
Those issues rated SP-1 which are determined to possess a very strong
capacity to pay debt service will be given a plus (+) designation.
Issues rated SP-2 have satisfactory capacity to pay principal and
interest with some vulnerability to adverse financial and economic
changes over the term of the notes.
Moody's highest rating for short-term municipal loans is MIG-1/VMIG-1.
Moody's states that short-term municipal securities rated MIG-1/VMIG-1
are of the best quality, enjoying strong protection from established
cash flows of funds for their servicing or from established and
broad-based access to the market for refinancing, or both. Loans
bearing the MIG-2/VMIG-2 designation are of high quality, with margins
of protection ample although not so large as in the MIG-1/VMIG-1
group.
OTHER SHORT-TERM DEBT SECURITIES
Prime-1 and Prime-2 are the two highest ratings assigned by Moody's
for other short-term debt securities and commercial paper, and A-1 and
A-2 are the two highest ratings for commercial paper assigned by S&P.
Moody's uses the numbers 1, 2 and 3 to denote relative strength within
its highest classification of Prime, while S&P uses the numbers 1, 2
and 3 to denote relative strength within its highest classification of
A. Issuers rated Prime-1 by Moody's have a superior ability for
repayment of senior short-term debt obligations and have many of the
following characteristics: leading market positions in
well-established industries, high rates of return on funds employed,
conservative capitalization structure with moderate reliance on debt
and ample asset protection, broad margins in earnings coverage of
fixed financial charges and high internal cash generation, and well
established access to a range of financial markets and assured sources
of alternate liquidity. Issuers rated Prime-2 by Moody's have a strong
ability for repayment of senior short-term debt obligations and
display many of the same characteristics displayed by issuers rated
Prime-1, but to a lesser degree. Issuers rated A-1 by S&P carry a
strong degree of safety regarding timely
27
<PAGE>
repayment. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus (+) designation. Issuers rated
A-2 by S&P carry a satisfactory degree of safety regarding timely
repayment.
FITCH
<TABLE>
<S> <C>
BOND RATING EXPLANATION
-----------------------------------------------------------------------------------------
F-1+........................ Exceptionally strong credit quality. Issues assigned this
rating are regarded as having the strongest degree of
assurance for timely payment.
F-1......................... Very strong credit quality. Issues assigned this rating
reflect an assurance for timely payment only slightly less
in degree than issues rated F-1+.
F-2......................... Good credit quality. Issues assigned this rating have a
satisfactory degree of assurance for timely payments, but
the margin of safety is not as great as the F-1+ and F-1
ratings.
</TABLE>
DUFF & PHELPS INC.
<TABLE>
<S> <C>
BOND RATING EXPLANATION
-----------------------------------------------------------------------------------------
Duff 1+..................... Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or ready access to
alternative sources of funds, is clearly outstanding, and
safety is just below risk-free U.S. Treasury short-term
obligations.
Duff 1...................... Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection
factors. Risk factors are minor.
Duff 1-..................... High certainty of timely payment. Liquidity factors are
strong and supported by good fundamental protection factors.
Risk factors are very small.
Duff 2...................... Good certainty of timely payment. Liquidity factors and
company fundamentals are sound. Although ongoing funding
needs may enlarge total financing requirements, access to
capital markets is good. Risk factors are small.
</TABLE>
THOMSON BANKWATCH, INC.
<TABLE>
<S> <C>
BOND RATING EXPLANATION
-----------------------------------------------------------------------------------------
TBW-1....................... The highest category; indicates a very high degree of
likelihood that principal and interest will be paid on a
timely basis.
TBW-2....................... The second highest category; while the degree of safety
regarding timely repayment of principal and interest is
strong, the relative degree of safety is not as high as for
issues rated TBW-1.
TBW-3....................... The lowest investment grade category; indicates that while
more susceptible to adverse developments (both internal and
external) than obligations with higher ratings, capacity to
service principal and interest in a timely fashion is
considered adequate.
TBW-4....................... The lowest rating category; this rating is regarded as
non-investment grade and therefore speculative.
</TABLE>
28
<PAGE>
IBCA, INC.
<TABLE>
<S> <C>
BOND RATING EXPLANATION
-----------------------------------------------------------------------------------------
A1+......................... Obligations supported by the highest capacity for timely
repayment. Where issues possess a particularly strong credit
feature, a rating of A1+ is assigned.
A2.......................... Obligations supported by a good capacity for timely
repayment.
A3.......................... Obligations supported by a satisfactory capacity for timely
repayment.
B........................... Obligations for which there is an uncertainty as to the
capacity to ensure timely repayment.
C........................... Obligations for which there is a high risk of default or
which are currently in default.
</TABLE>
29
<PAGE>
Appendix B
DESCRIPTION OF MUNICIPAL SECURITIES
MUNICIPAL NOTES generally are used to provide for short-term capital
needs and usually have maturities of one year or less. They include
the following:
1. Project Notes, which carry a U.S. government guarantee, are issued
by public bodies (called "local issuing agencies") created under the
laws of a state, territory, or U.S. possession. They have maturities
that range up to one year from the date of issuance. Project Notes are
backed by an agreement between the local issuing agency and the
Federal Department of Housing and Urban Development. These Notes
provide financing for a wide range of financial assistance programs
for housing, redevelopment, and related needs (such as low-income
housing programs and renewal programs).
2. Tax Anticipation Notes are issued to finance working capital needs
of municipalities. Generally, they are issued in anticipation of
various seasonal tax revenues, such as income, sales, use and business
taxes, and are payable from these specific future taxes.
3. Revenue Anticipation Notes are issued in expectation of receipt of
other types of revenues, such as Federal revenues available under the
Federal Revenue Sharing Programs.
4. Bond Anticipation Notes are issued to provide interim financing
until long-term financing can be arranged. In most cases, the
long-term bonds then provide the money for the repayment of the Notes.
5. Construction Loan Notes are sold to provide construction financing.
After successful completion and acceptance, many projects receive
permanent financing through the Federal Housing Administration under
the Federal National Mortgage Association ("Fannie Mae") or the
Government National Mortgage Association ("Ginnie Mae").
6. Tax-Exempt Commercial Paper is a short-term obligation with a
stated maturity of 365 days or less. It is issued by agencies of state
and local governments to finance seasonal working capital needs or as
short-term financing in anticipation of longer term financing.
MUNICIPAL BONDS, which meet longer term capital needs and generally
have maturities of more than one year when issued, have three
principal classifications:
1. General Obligation Bonds are issued by such entities as states,
counties, cities, towns, and regional districts. The proceeds of these
obligations are used to fund a wide range of public projects,
including construction or improvement of schools, highways and roads,
and water and sewer systems. The basic security behind General
Obligation Bonds is the issuer's pledge of its full faith and credit
and taxing power for the payment of principal and interest. The taxes
that can be levied for the payment of debt service may be limited or
unlimited as to the rate or amount of special assessments.
2. Revenue Bonds in recent years have come to include an increasingly
wide variety of types of municipal obligations. As with other kinds of
municipal obligations, the issuers of revenue bonds may consist of
virtually any form of state or local governmental entity, including
states, state agencies, cities, counties, authorities of various
kinds, such as public housing or redevelopment authorities, and
special districts, such as water, sewer or sanitary districts.
Generally, revenue bonds are secured by the revenues or net revenues
derived from a particular facility, group of facilities, or, in some
cases, the proceeds of a special excise or other specific revenue
source. Revenue bonds are issued to finance a wide variety of capital
projects including electric, gas, water and sewer systems; highways,
bridges, and tunnels; port and airport facilities; colleges and
universities; and hospitals. Many of these bonds provide additional
security in the form of a debt service reserve fund to be used to make
principal and interest payments. Various forms of credit enhancement,
such as a bank letter of credit or municipal bond insurance, may also
be employed in revenue bond issues. Housing authorities have a wide
range of security, including partially or fully insured mortgages,
rent subsidized and/or collateralized mortgages, and/or the net
revenues from housing or other
30
<PAGE>
public projects. Some authorities provide further security in the form
of a state's ability (without obligation) to make up deficiencies in
the debt service reserve fund.
In recent years, revenue bonds have been issued in large volumes for
projects that are privately owned and operated (see 3 below).
3. Private Activity Bonds are considered municipal bonds if the
interest paid thereon is exempt from Federal income tax and are issued
by or on behalf of public authorities to raise money to finance
various privately operated facilities for business and manufacturing,
housing and health. These bonds are also used to finance public
facilities such as airports, mass transit systems and ports. The
payment of the principal and interest on such bonds is dependent
solely on the ability of the facility's user to meet its financial
obligations and the pledge, if any, of real and personal property as
security for such payment.
While, at one time, the pertinent provisions of the Internal Revenue
Code permitted private activity bonds to bear tax-exempt interest in
connection with virtually any type of commercial or industrial project
(subject to various restrictions as to authorized costs, size
limitations, state per capita volume restrictions, and other matters),
the types of qualifying projects under the Code have become
increasingly limited, particularly since the enactment of the Tax
Reform Act of 1986. Under current provisions of the Code, tax-exempt
financing remains available, under prescribed conditions, for certain
privately owned and operated rental multi-family housing facilities,
nonprofit hospital and nursing home projects, airports, docks and
wharves, mass commuting facilities and solid waste disposal projects,
among others, and for the refunding (that is, the tax-exempt
refinancing) of various kinds of other private commercial projects
originally financed with tax-exempt bonds. In future years, the types
of projects qualifying under the Code for tax-exempt financing are
expected to become increasingly limited.
Because of terminology formerly used in the Internal Revenue Code,
virtually any form of private activity bond may still be referred to
as an "industrial development bond," but more and more frequently
revenue bonds have become classified according to the particular type
of facility being financed, such as hospital revenue bonds, nursing
home revenue bonds, multi-family housing revenues bonds, single family
housing revenue bonds, industrial development revenue bonds, solid
waste resource recovery revenue bonds, and so on.
OTHER MUNICIPAL OBLIGATIONS, incurred for a variety of financing
purposes, include: municipal leases, which may take the form of a
lease or an installment purchase or conditional sale contract, are
issued by state and local governments and authorities to acquire a
wide variety of equipment and facilities such as fire and sanitation
vehicles, telecommunications equipment and other capital assets.
Municipal leases frequently have special risks not normally associated
with general obligation or revenue bonds. Leases and installment
purchase or conditional sale contracts (which normally provide for
title to the leased asset to pass eventually to the government issuer)
have evolved as a means for governmental issuers to acquire property
and equipment without meeting the constitutional and statutory
requirements for the issuance of debt. The debt-issuance limitations
of many state constitutions and statutes are deemed to be inapplicable
because of the inclusion in many leases or contracts of
"non-appropriation" clauses that provide that the governmental issuer
has no obligation to make future payments under the lease or contract
unless money is appropriated for such purpose by the appropriate
legislative body on a yearly or other periodic basis. To reduce this
risk, the Fund will only purchase municipal leases subject to a
non-appropriation clause when the payment of principal and accrued
interest is backed by an unconditional irrevocable letter of credit,
or guarantee of a bank or other entity that meets the criteria
described in the Prospectus.
31
<PAGE>
Tax-exempt bonds are also categorized according to whether the
interest is or is not includible in the calculation of alternative
minimum taxes imposed on individuals, according to whether the costs
of acquiring or carrying the bonds are or are not deductible in part
by banks and other financial institutions, and according to other
criteria relevant for Federal income tax purposes. Due to the
increasing complexity of Internal Revenue Code and related
requirements governing the issuance of tax-exempt bonds, industry
practice has uniformly required, as a condition to the issuance of
such bonds, but particularly for revenue bonds, an opinion of
nationally recognized bond counsel as to the tax-exempt status of
interest on the bonds.
32
<PAGE>
This page intentionally left blank.
<PAGE>
[JANUS LOGO]
(800) 525-0020
100 Fillmore Street
Denver, Colorado 80206-4928
janus.com
JANUS ADVISER SERIES
PART C - OTHER INFORMATION
ITEM 23 EXHIBITS
Exhibit 1 Trust Instrument
Exhibit 2 Bylaws
Exhibit 3 Not Applicable
Exhibit 4 (a) Form of Investment Advisory Agreement for Growth
Fund
(b) Form of Investment Advisory Agreement for
Aggressive Growth Fund
(c) Form of Investment Advisory Agreement for Capital
Appreciation Fund
(d) Form of Investment Advisory Agreement for Balanced
Fund
(e) Form of Investment Advisory Agreement for Equity
Income Fund
(f) Form of Investment Advisory Agreement for Growth
and Income Fund
(g) Form of Investment Advisory Agreement for
Strategic Value Fund
(h) Form of Investment Advisory Agreement for
International Fund
(i) Form of Investment Advisory Agreement for
Worldwide Fund
(j) Form of Investment Advisory Agreement Flexible
Income Fund
(k) Form of Investment Advisory Agreement for Money
Market Fund
<PAGE>
Exhibit 5 Form of Distribution Agreement between Janus
Adviser Series and Janus Distributors, Inc.
Exhibit 6 Not Applicable
Exhibit 7 (a) Form of Custodian Agreement between Janus Adviser
Series and State Street Bank and Trust Company*
(b) Form of Global Custody Services Agreement between
Janus Adviser Series, on behalf of Janus Adviser
Money Market Fund and Citibank, N.A.*
Exhibit 8 (a) Form of Transfer Agency Agreement with Janus
Service Corporation
(b) Form of Administrative Services Agreement with
Janus Service Corporation
Exhibit 9 Opinion and Consent of Fund Counsel *
Exhibit 10 Consent of PricewaterhouseCoopers LLP
Exhibit 11 Not Applicable
Exhibit 12 Not Applicable
Exhibit 13 Form of Distribution and Shareholder Servicing
Plan
Exhibit 14 Code of Ethics
Exhibit 15 Powers of Attorney
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None
* To be filed by amendment.
<PAGE>
ITEM 25. INDEMNIFICATION
Article IX of Janus Adviser Series' Trust Instrument provides for
indemnification of certain persons acting on behalf of the Funds. In general,
Trustees and officers will be indemnified against liability and against all
expenses of litigation incurred by them in connection with any claim, action,
suit or proceeding (or settlement of the same) in which they become involved by
virtue of their office in connection with the Funds, unless their conduct is
determined to constitute willful misfeasance, bad faith, gross negligence or
reckless disregard of their duties, or unless it has been determined that they
have not acted in good faith in the reasonable belief that their actions were in
the best interests of the Funds. A determination that a person covered by the
indemnification provisions is entitled to indemnification may be made by the
court or other body before which the proceeding is brought, or by either a vote
of a majority of a quorum of Trustees who are neither "interested persons" of
the Trust nor parties to the proceeding or by an independent legal counsel in a
written opinion. The Funds also may advance money for these expenses, provided
that the Trustee or officer undertakes to repay the Funds if his conduct is
later determined to preclude indemnification, and that either he provide
security for the undertaking, the Trust be insured against losses resulting from
lawful advances or a majority of a quorum of disinterested Trustees, or
independent counsel in a written opinion, determines that he ultimately will be
found to be entitled to indemnification. The Trust also maintains a liability
insurance policy covering its Trustees and officers.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
The only business of Janus Capital Corporation is to serve as the
investment adviser of the Registrant and as investment adviser or subadviser to
several other mutual funds, and for individual, charitable, corporate, private
and retirement accounts. Business backgrounds of the principal executive
officers and directors of the adviser that also hold positions with the
Registrant are included under "Officers and Trustees" in the Statements of
Additional Information included in this Registration Statement. The remaining
principal executive officers of the investment adviser and their positions with
the adviser and affiliated entities are: Mark B. Whiston, Vice President and
Chief Marketing Officer of Janus Capital Corporation, Director and President of
Janus Capital International Ltd., Director of Janus World Funds Plc; Marjorie G.
Hurd, Vice President and Chief Operations Officer of Janus Capital Corporation,
Director and President of Janus Service Corporation; Thomas A. Early, Vice
President, General Counsel and Secretary of Janus Capital Corporation, Vice
President and General Counsel of Janus Service Corporation, Janus Distributors,
Inc. and Janus Capital International, Ltd., Director of Janus World Funds Plc,
and Stephen L. Stieneker, Vice President, Public Affairs and Vice President of
Compliance of Janus Capital Corporation. Mr. Michael E. Herman, a director of
Janus Capital Corporation, is Chairman of the Finance Committee (1990 to
present) of Ewing Marion Kauffman Foundation, 4900 Oak, Kansas City, Missouri
64112. Mr. Michael N. Stolper, a director of Janus Capital Corporation, is
President of Stolper & Company, Inc., 525 "B" Street, Suite 1080, San Diego,
California 92101, an investment performance consultant. Mr. Thomas A. McDonnell,
a director of Janus Capital Corporation, is President, Chief Executive Officer
and a
<PAGE>
Director of DST Systems, Inc., 333 West 11th Street, 5th Floor, Kansas
City, Missouri 64105, provider of data processing and recordkeeping services for
various mutual funds, and is Executive Vice President and a director of Kansas
City Southern Industries, Inc., 114 W. 11th Street, Kansas City, Missouri 64105,
a publicly traded holding company whose primary subsidiaries are engaged in
transportation and financial services. Mr. Landon H. Rowland, a director of
Janus Capital Corporation, is President and Chief Executive Officer of Kansas
City Southern Industries, Inc.
ITEM 27. PRINCIPAL UNDERWRITERS
(a) Janus Distributors, Inc. ("Janus Distributors") serves as
principal underwriter for the Registrant, Janus Aspen Series
and Janus Investment Fund.
(b) The principal business address, positions with Janus
Distributors and positions with Registrant of Thomas A.
Early, Kelley Abbott Howes and Steven R. Goodbarn, officers
and directors of Janus Distributors, are described under
"Officers and Trustees" in the Statement of Additional
Information included in this Registration Statement. The
remaining principal executive officer of Janus Distributors
is Marjorie G. Hurd, Director and President. Ms. Hurd does
not hold any positions with the Registrant. Ms. Hurd's
principal business address is 100 Fillmore Street, Denver,
Colorado 80206-4928
(c) Not Applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
The accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules promulgated
thereunder are maintained by Janus Capital Corporation and Janus Service
Corporation, both of which are located at 100 Fillmore Street, Denver, Colorado
80206-4928 and by State Street Bank and Trust Company, P.O. Box 0351, Boston,
Massachusetts 02117-0351 and Citibank, N.A., 111 Wall STREET, 24TH Floor, Zone
5, New York, NY 10043.
ITEM 29. MANAGEMENT SERVICES
The Registrant has no management-related service contract which is not
discussed in Part A or Part B of this form.
<PAGE>
ITEM 30. UNDERTAKINGS
The Registrant undertakes to file one or more post-effective amendments
for the Registrant, using financial statements which need not be certified,
within four to six months of the later of the effective date of this
Registration or commencement of operations of the Registrant.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Denver, and State of Colorado, on the 4th of April,
2000.
JANUS ADVISER SERIES
By: /s/ Thomas H. Bailey
Thomas H. Bailey, President
Janus Adviser Series is organized under a Trust Instrument dated April 3,
2000. The obligations of the Registrant hereunder are not binding upon any of
the Trustees, shareholders, nominees, officers, agents or employees of the
Registrant personally, but bind only the trust property of the Registrant, as
provided in the Trust Instrument. The execution of this Registration Statement
has been authorized by the Trustees of the Registrant and this Registration
Statement has been signed by an authorized officer of the Registrant, acting as
such, and neither such authorization by such Trustees nor such execution by such
officer shall be deemed to have been made by any of them personally, but shall
bind only the trust property of the Registrant as provided in its Trust
Instrument.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Thomas H. Bailey President April 4, 2000
Thomas H. Bailey (Principal Executive
Officer) and Trustee
/s/ Steven R. Goodbarn Vice President and April 4, 2000
Steven R. Goodbarn Chief Financial Officer
(Principal Financial Officer)
/s/ Glenn P. O'Flaherty Treasurer and Chief April 4, 2000
Glenn P. O'Flaherty Accounting Officer
(Principal Accounting Officer)
/s/ James P. Craig, III Trustee April 4, 2000
James P. Craig, III
<PAGE>
GARY O. LOO* Trustee April 4, 2000
Gary O. Loo
DENNIS B. MULLEN* Trustee April 4, 2000
Dennis B. Mullen
JAMES T. ROTHE* Trustee April 4, 2000
James T. Rothe
WILLIAM D. STEWART* Trustee April 4, 2000
William D. Stewart
MARTIN H. WALDINGER* Trustee April 4, 2000
Martin H. Waldinger
/s/ Steven R. Goodbarn
*By Steven R. Goodbarn
Attorney-in-Fact
<PAGE>
INDEX OF EXHIBITS
EXHIBIT NUMBER EXHIBIT TITLE
Exhibit 1 Trust Instrument
Exhibit 2 Bylaws
Exhibit 4 Form of Investment Advisory Agreements
Exhibit 5 Form of Distribution Agreement
Exhibit 8 (a) Form of Transfer Agency Agreement with
Janus Service Corporation
Exhibit 8 (b) Form of Administrative Services
Agreement with Janus Service Corporation
Exhibit 10 Consent of PricewaterhouseCoopers LLP
Exhibit 13 Form of Distribution Plan
Exhibit 14 Code of Ethics
Exhibit 15 Powers of Attorney
Exhibit 1
JANUS ADVISER SERIES
TRUST INSTRUMENT
DATED MARCH 22, 2000
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I -- DEFINITIONS.................................................... 1
ARTICLE II -- THE TRUSTEES.................................................. 2
Section 1 Management of the Trust................................. 2
Section 2 Initial Trustees; Election and Number of Trustees....... 2
Section 3 Term of Office of Trustees.............................. 2
Section 4 Vacancies; Appointment of Trustees...................... 3
Section 5 Temporary Vacancy or Absence............................ 3
Section 6 Chairman................................................ 3
Section 7 Action by the Trustees.................................. 3
Section 8 Ownership of Trust Property............................. 4
Section 9 Effect of Trustees Not Serving.......................... 4
Section 10 Trustees, etc. as Shareholders.......................... 4
ARTICLE III -- POWERS OF THE TRUSTEES....................................... 5
Section 1 Powers.................................................. 5
Section 2 Certain Transactions.................................... 7
ARTICLE IV -- SERIES; CLASSES; SHARES....................................... 8
Section 1 Establishment of Series or Class........................ 8
Section 2 Shares of Beneficial Interest........................... 8
Section 3 Investment in the Trust................................. 9
Section 4 Assets and Liabilities of Series........................ 9
Section 5 Ownership and Transfer of Shares........................ 10
Section 6 Status of Shares; Limitation of
Shareholder Liability................................... 10
ARTICLE V -- DISTRIBUTIONS AND REDEMPTIONS................................. 11
Section 1 Distributions........................................... 11
Section 2 Redemptions............................................. 11
Section 3 Determination of Net Asset Value........................ 12
Section 4 Suspension of Right of Redemption....................... 12
Section 5 Redemptions Necessary for Qualification as
Regulated Investment Company............................ 12
ARTICLE VI -- SHAREHOLDERS' VOTING POWERS AND MEETINGS...................... 13
Section 1 Voting Powers........................................... 13
Section 2 Meetings of Shareholders................................ 13
Section 3 Quorum; Required Vote................................... 13
- i -
<PAGE>
ARTICLE VII -- CONTRACTS WITH SERVICE PROVIDERS............................. 14
Section 1 Investment Adviser...................................... 14
Section 2 Principal Underwriter................................... 14
Section 3 Transfer Agency, Shareholder Services, and
Administration Agreements............................... 15
Section 4 Custodian............................................... 15
Section 5 Parties to Contracts with Service Providers............. 15
ARTICLE VIII -- EXPENSES OF THE TRUST AND SERIES............................ 15
ARTICLE IX -- LIMITATION OF LIABILITY AND INDEMNIFICATION................... 16
Section 1 Limitation of Liability................................. 16
Section 2 Indemnification......................................... 17
Section 3 Indemnification of Shareholders......................... 18
ARTICLE X -- MISCELLANEOUS.................................................. 19
Section 1 Trust Not a Partnership................................. 19
Section 2 Trustee Action; Expert Advice; No Bond or Surety........ 19
Section 3 Record Dates............................................ 19
Section 4 Termination of the Trust................................ 19
Section 5 Reorganization.......................................... 20
Section 6 Trust Instrument........................................ 21
Section 7 Applicable Law.......................................... 21
Section 8 Amendments.............................................. 22
Section 9 Fiscal Year............................................. 22
Section 10 Severability............................................ 22
Section 11 Use of the Name "Janus"..................................22
- ii -
<PAGE>
JANUS ADVISER SERIES
TRUST INSTRUMENT
THIS TRUST INSTRUMENT IS MADE ON MARCH 22, 2000, by the Trustees, to
establish a business trust for the investment and reinvestment of funds
contributed to the Trust by investors. The Trustees declare that all money and
property contributed to the Trust shall be held and managed in trust pursuant to
this Trust Instrument. The name of the Trust created by this Trust Instrument is
Janus Adviser Series.
ARTICLE I
DEFINITIONS
Unless otherwise provided or required by the context:
(a) "Bylaws" means the Bylaws of the Trust adopted by the Trustees, as
amended from time to time;
(b) "Class" means any class of Shares of a Series established pursuant to
Article IV;
(c) "Commission," "Interested Person," and "Principal Underwriter" have the
meanings provided in the 1940 Act;
(d) "Covered Person" means a person so defined in Article IX, Section 2;
(e) "Delaware Act" means Chapter 38 of Title 12 of the Delaware Code
entitled "Treatment of Delaware Business Trusts," as amended from time to time;
(f) "Majority Shareholder Vote" means "the vote of a majority of the
outstanding voting securities" as defined in the 1940 Act;
(g) "Net Asset Value" means the net asset value of each Series of the
Trust, determined as provided in Article V, Section 3;
(h) "Outstanding Shares" means Shares shown in the books of the Trust or
its transfer agent as then issued and outstanding, but does not include Shares
which have been repurchased or redeemed by the Trust and which are held in the
treasury of the Trust;
(i) "Series" means a series of Shares established pursuant to Article IV;
(j) "Shareholder" means a record owner of Outstanding Shares;
- 1 -
<PAGE>
(k) "Shares" means the equal proportionate transferable units of interest
into which the beneficial interest of each Series or Class is divided from time
to time (including whole Shares and fractions of Shares);
(l) "Trust" means Janus Adviser Series established hereby, and reference to
the Trust, when applicable to one or more Series, refers to that Series;
(m) "Trustees" means the persons who have signed this Trust Instrument, so
long as they shall continue in office in accordance with the terms hereof, and
all other persons who may from time to time be duly qualified and serving as
Trustees in accordance with Article II, in all cases in their capacities as
Trustees hereunder;
(n) "Trust Property" means any and all property, real or personal, tangible
or intangible, which is owned or held by or for the Trust or any Series or the
Trustees on behalf of the Trust or any Series;
(o) The "1940 Act" means the Investment Company Act of 1940, as amended
from time to time.
ARTICLE II
THE TRUSTEES
Section 1. MANAGEMENT OF THE TRUST. The business and affairs of the Trust
shall be managed by or under the direction of the Trustees, and they shall have
all powers necessary or desirable to carry out that responsibility. The Trustees
may execute all instruments and take all action they deem necessary or desirable
to promote the interests of the Trust. Any determination made by the Trustees in
good faith as to what is in the interests of the Trust shall be conclusive.
Section 2. INITIAL TRUSTEE; ELECTION AND NUMBER OF TRUSTEES. The initial
Trustee shall be the person initially signing this Trust Instrument. The number
of Trustees (other than the initial Trustee) shall be fixed from time to time by
a majority of the Trustees; provided, that there shall be at least two (2)
Trustees. The Shareholders shall elect the Trustees (other than the initial
Trustee) on such dates as the Trustees may fix from time to time.
Section 3. TERM OF OFFICE OF TRUSTEES. Each Trustee shall hold office for
life or until his successor is elected or the Trust terminates; except that (a)
any Trustee may resign by delivering to the other Trustees or to any Trust
officer a written resignation effective upon such delivery or a later date
specified therein; (b) any Trustee who requests to be retired, or who has become
physically or mentally incapacitated or is otherwise unable to
- 2 -
<PAGE>
serve, may be retired by a written instrument signed by a majority of the other
Trustees, specifying the effective date of retirement; (c) any Trustee shall be
retired or removed with or without cause at any time upon the unanimous written
request of the remaining Trustees; and (d) any Trustee may be removed at any
meeting of the Shareholders by a vote of at least two-thirds of the Outstanding
Shares.
Section 4. VACANCIES; APPOINTMENT OF TRUSTEES. Whenever a vacancy shall
exist, regardless of the reason for such vacancy, the remaining Trustees shall
appoint any person as they determine in their sole discretion to fill that
vacancy, consistent with the limitations under the 1940 Act. Such appointment
shall be made by a written instrument signed by a majority of the Trustees or by
a resolution of the Trustees, duly adopted and recorded in the records of the
Trust, specifying the effective date of the appointment. The Trustees may
appoint a new Trustee as provided above in anticipation of a vacancy expected to
occur because of the retirement, resignation, or removal of a Trustee, or an
increase in number of Trustees, provided that such appointment shall become
effective only at or after the expected vacancy occurs. As soon as any such
Trustee has accepted his appointment in writing, the trust estate shall vest in
the new Trustee, together with the continuing Trustees, without any further act
or conveyance, and he shall be deemed a Trustee hereunder.
Section 5. TEMPORARY VACANCY OR ABSENCE. Whenever a vacancy in the Trustees
shall occur, until such vacancy is filled, or while any Trustee is absent from
his domicile (unless that Trustee has made arrangements to be informed about,
and to participate in, the affairs of the Trust during such absence), or is
physically or mentally incapacitated, the remaining Trustees shall have all the
powers hereunder and their certificate as to such vacancy, absence, or
incapacity shall be conclusive. Any Trustee may, by power of attorney, delegate
his powers as Trustee for a period not to exceed six (6) months, unless
otherwise extended for one or more additional consecutive six (6) month periods,
to any other Trustee or Trustees.
Section 6. CHAIRMAN. The Trustees shall appoint one of their number to be
Chairman of the Trustees. The Chairman shall preside at all meetings of the
Trustees, shall be responsible for the execution of policies established by the
Trustees and the administration of the Trust.
Section 7. ACTION BY THE TRUSTEES. The Trustees shall act by majority vote
at a meeting duly called (including at a telephonic meeting, unless the 1940 Act
requires that a particular action be taken only at a meeting of the Trustees in
person) at which a quorum is present or by written consent of a majority of
Trustees (or such greater number as may be required by applicable law) without a
meeting. A majority of the Trustees shall constitute a
- 3 -
<PAGE>
quorum at any meeting. Meetings of the Trustees may be called orally or in
writing by the Chairman of the Trustees or by any two other Trustees. Notice of
the time, date and place of all Trustees meetings shall be given to each Trustee
by telephone, facsimile or other electronic mechanism sent to his home or
business address at least twenty-four hours in advance of the meeting or by
written notice mailed to his home or business address at least seventy-two hours
in advance of the meeting. Notice need not be given to any Trustee who attends
the meeting without objecting to the lack of notice or who signs a waiver of
notice either before or after the meeting. Subject to the requirements of the
1940 Act, the Trustees by majority vote may delegate to any Trustee or Trustees
authority to approve particular matters or take particular actions on behalf of
the Trust. Any written consent or waiver may be provided and delivered to the
Trust by facsimile or other similar electronic mechanism.
Section 8. OWNERSHIP OF TRUST PROPERTY. The Trust Property of the Trust and
of each Series shall be held separate and apart from any assets now or hereafter
held in any capacity other than as Trustee hereunder by the Trustees or any
successor Trustees. All of the Trust Property and legal title thereto shall at
all times be considered as vested in the Trustees on behalf of the Trust, except
that the Trustees may cause legal title to any Trust Property to be held by or
in the name of the Trust, or in the name of any person as nominee. No
Shareholder shall be deemed to have a severable ownership in any individual
asset of the Trust or of any Series or any right of partition or possession
thereof, but each Shareholder shall have, as provided in Article IV, a
proportionate undivided beneficial interest in the Trust or Series represented
by Shares.
Section 9. EFFECT OF TRUSTEES NOT SERVING. The death, resignation,
retirement, removal, incapacity, or inability or refusal to serve of the
Trustees, or any one of them, shall not operate to annul the Trust or to revoke
any existing agency created pursuant to the terms of this Trust Instrument.
Section 10. TRUSTEES, ETC. AS SHAREHOLDERS. Subject to any restrictions in
the Bylaws, any Trustee, officer, agent or independent contractor of the Trust
may acquire, own and dispose of Shares to the same extent as any other
Shareholder; the Trustees may issue and sell Shares to and buy Shares from any
such person or any firm or company in which such person is interested, subject
only to any general limitations herein.
- 4 -
<PAGE>
ARTICLE III
POWERS OF THE TRUSTEES
Section 1. POWERS. The Trustees in all instances shall act as principals,
free of the control of the Shareholders. The Trustees shall have full power and
authority to take or refrain from taking any action and to execute any contracts
and instruments that they may consider necessary or desirable in the management
of the Trust. The Trustees shall not in any way be bound or limited by current
or future laws or customs applicable to trust investments, but shall have full
power and authority to make any investments which they, in their sole
discretion, deem proper to accomplish the purposes of the Trust. The Trustees
may exercise all of their powers without recourse to any court or other
authority. Subject to any applicable limitation herein or in the Bylaws or
resolutions of the Trust, the Trustees shall have power and authority, without
limitation:
(a) To invest and reinvest cash and other property, and to hold cash or
other property uninvested, without in any event being bound or limited by any
current or future law or custom concerning investments by trustees, and to sell,
exchange, lend, pledge, mortgage, hypothecate, write options on and lease any or
all of the Trust Property; to invest in obligations, securities and assets of
any kind, and without regard to whether they may mature before the possible
termination of the Trust; and without limitation to invest all or any part of
its cash and other property in securities issued by a registered investment
company or series thereof, subject to the provisions of the 1940 Act;
(b) To operate as and carry on the business of a registered investment
company, and exercise all the powers necessary and proper to conduct such a
business;
(c) To adopt Bylaws not inconsistent with this Trust Instrument providing
for the conduct of the business of the Trust and to amend and repeal them to the
extent such right is not reserved to the Shareholders;
(d) To elect and remove such officers and appoint and terminate such agents
as they deem appropriate;
(e) To employ as custodian of any assets of the Trust, subject to any
provisions herein or in the Bylaws, one or more banks, trust companies or
companies that are members of a national securities exchange, or other entities
permitted by the Commission to serve as such;
(f) To retain one or more transfer agents and Shareholder servicing agents,
or both;
- 5 -
<PAGE>
(g) To provide for the distribution of Shares either through a Principal
Underwriter or distributor as provided herein or by the Trust itself, or both,
or pursuant to a distribution plan of any kind;
(h) To set record dates in the manner provided for herein or in the Bylaws;
(i) To delegate such authority as they consider desirable to any officers
of the Trust and to any agent, independent contractor, manager, investment
adviser, custodian or underwriter;
(j) To sell or exchange any or all of the assets of the Trust, subject to
Article X, Section 4;
(k) To vote or give assent, or exercise any rights of ownership, with
respect to other securities or property; and to execute and deliver powers of
attorney delegating such power to other persons;
(l) To exercise powers and rights of subscription or otherwise which in any
manner arise out of ownership of securities;
(m) To hold any security or other property (i) in a form not indicating any
trust, whether in bearer, book entry, unregistered or other negotiable form, or
(ii) either in the Trust's or Trustees' own name or in the name of a custodian
or a nominee or nominees, subject to safeguards according to the usual practice
of business trusts or investment companies;
(n) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes, and with
separate Shares representing beneficial interests in such Series, and to
establish separate Classes, all in accordance with the provisions of Article IV;
(o) To the full extent permitted by Section 3804 of the Delaware Act, to
allocate assets, liabilities and expenses of the Trust to a particular Series
and liabilities and expenses to a particular Class or to apportion the same
between or among two or more Series or Classes, provided that any liabilities or
expenses incurred by a particular Series or Class shall be payable solely out of
the assets belonging to that Series or Class as provided for in Article IV,
Section 4;
(p) To consent to or participate in any plan for the liquidation,
reorganization, consolidation or merger of any corporation or concern whose
securities are held by the Trust; to consent to any contract, lease, mortgage,
purchase, or sale of property by such corporation or concern; and to pay calls
or subscriptions with respect to any security held by the Trust;
- 6 -
<PAGE>
(q) To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not limited to,
claims for taxes;
(r) To make distributions of income and of capital gains to Shareholders in
the manner hereinafter provided for;
(s) To borrow money;
(t) To establish committees for such purposes, with such membership, and
with such responsibilities as the Trustees may consider proper;
(u) To issue, sell, repurchase, redeem, cancel, retire, acquire, hold,
resell, reissue, dispose of and otherwise deal in Shares; to establish terms and
conditions regarding the issuance, sale, repurchase, redemption, cancellation,
retirement, acquisition, holding, resale, reissuance, disposition of or dealing
in Shares; and, subject to Articles IV and V, to apply to any such repurchase,
redemption, retirement, cancellation or acquisition of Shares any funds or
property of the Trust or of the particular Series with respect to which such
Shares are issued; and
(v) To carry on any other business in connection with or incidental to any
of the foregoing powers, to do everything necessary or desirable to accomplish
any purpose or to further any of the foregoing powers, and to take every other
action incidental to the foregoing business or purposes, objects or powers.
The clauses above shall be construed as objects and powers, and the
enumeration of specific powers shall not limit in any way the general powers of
the Trustees. Any action by one or more of the Trustees in their capacity as
such hereunder shall be deemed an action on behalf of the Trust or the
applicable Series, and not an action in an individual capacity. No one dealing
with the Trustees shall be under any obligation to make any inquiry concerning
the authority of the Trustees, or to see to the application of any payments made
or property transferred to the Trustees or upon their order. In construing this
Trust Instrument, the presumption shall be in favor of a grant of power to the
Trustees.
Section 2. CERTAIN TRANSACTIONS. Except as prohibited by applicable law,
the Trustees may, on behalf of the Trust, buy any securities from or sell any
securities to, or lend any assets of the Trust to, any Trustee or officer of the
Trust or any firm of which any such Trustee or officer is a member acting as
principal, or have any such dealings with any investment adviser, administrator,
distributor or transfer agent for the Trust or with any Interested Person of
such person. The Trust may employ any such person or entity in which such person
is an Interested Person, as broker, legal counsel, registrar, investment
adviser, administrator, distributor, transfer agent,
- 7 -
<PAGE>
dividend disbursing agent, custodian or in any other capacity upon customary
terms.
ARTICLE IV
SERIES; CLASSES; SHARES
Section 1. ESTABLISHMENT OF SERIES OR CLASSES. The Trust shall consist of
one or more Series. The Trustees hereby establish the Series listed in Schedule
A attached hereto and made a part hereof. Each additional Series shall be
established by the adoption of a resolution of the Trustees. The Trustees may
divide the Shares of any Series into Classes. In such case each Class of a
Series shall represent interests in the assets of that Series. The Trustees may
designate the relative rights and preferences of the Shares of each Series or
Class. The Trust shall maintain separate and distinct records for each Series
and hold and account for the assets thereof separately from the other assets of
the Trust or of any other Series. A Series may issue any number of Shares and
need not issue Shares. Each Share of a Series shall represent an equal
beneficial interest in the net assets of such Series. Each holder of Shares of a
Series or Class shall be entitled to receive his pro rata share of all
distributions made with respect to such Series or Class. Upon redemption of his
Shares, such Shareholder shall be paid solely out of the funds and property of
such Series. The Trustees may change the name of any Series or Class. At any
time that there are no shares outstanding of any particular Series (or Class)
previously established and designated, the Trustees may by a majority vote
abolish that Series (or Class) and rescind the establishment and designation
thereof.
Section 2. SHARES OF BENEFICIAL INTEREST. The beneficial interest in the
Trust shall be divided into Shares of one or more separate and distinct Series
or Classes established by the Trustees. The number of Shares of each Series and
Class is unlimited and each Share shall have a par value of $0.001 per Share.
All Shares issued hereunder shall be fully paid and nonassessable. Shareholders
shall have no preemptive or other right to subscribe to any additional Shares or
other securities issued by the Trust. The Trustees shall have full power and
authority, in their sole discretion and without obtaining Shareholder approval:
to issue original or additional Shares at such times and on such terms and
conditions as they deem appropriate; to issue fractional Shares and Shares held
in the treasury; to establish and to change in any manner Shares of any Series
or Classes with such preferences, terms of conversion, voting powers, rights and
privileges as the Trustees may determine (but the Trustees may not change
Outstanding Shares in a manner materially adverse to the Shareholders of such
Shares); to divide or combine the Shares of any Series or Classes into a greater
or lesser number; to classify or reclassify any unissued Shares of any Series or
Classes into one or more Series or Classes of Shares; to abolish any one or
- 8 -
<PAGE>
more Series or Classes of Shares; to issue Shares to acquire other assets
(including assets subject to, and in connection with, the assumption of
liabilities) and businesses; and to take such other action with respect to the
Shares as the Trustees may deem desirable. Shares held in the treasury shall not
confer any voting rights on the Trustees and shall not be entitled to any
dividends or other distributions declared with respect to the Shares.
Section 3. INVESTMENT IN THE TRUST. The Trustees shall accept investments
in any Series from such persons and on such terms as they may from time to time
authorize. At the Trustees' discretion, such investments, subject to applicable
law, may be in the form of cash or securities in which that Series is authorized
to invest, valued as provided in Article V, Section 3. Investments in a Series
shall be credited to each Shareholder's account in the form of full or
fractional Shares at the Net Asset Value per Share next determined after the
investment is received or accepted as may be determined by the Trustees;
provided, however, that the Trustees may, in their sole discretion, (a) impose a
sales charge upon investments in any Series or Class or (b) determine the Net
Asset Value per Share of the initial capital contribution. The Trustees shall
have the right to refuse to accept investments in any Series at any time without
any cause or reason therefor whatsoever.
Section 4. ASSETS AND LIABILITIES OF SERIES. All consideration received by
the Trust for the issue or sale of Shares of a particular Series, together with
all assets in which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof (including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be), shall
be held and accounted for separately from the other assets of the Trust and
every other Series and are referred to as "assets belonging to" that Series. The
assets belonging to a particular Series shall belong only to that Series for all
purposes, and to no other Series, subject only to the rights of creditors of
that particular Series. Any assets, income, earnings, profits, and proceeds
thereof, funds, or payments which are not readily identifiable as belonging to
any particular Series shall be allocated by the Trustees between and among one
or more Series as the Trustees deem fair and equitable. Each such allocation
shall be conclusive and binding upon the Shareholders of all Series for all
purposes, and such assets, earnings, income, profits or funds, or payments and
proceeds thereof shall be referred to as assets belonging to that Series. The
assets belonging to a Series shall be so recorded upon the books of the Trust,
and shall be held by the Trustees in trust for the benefit of the Shareholders
of that Series. The assets belonging to a Series shall be charged with the
liabilities of that Series and all expenses, costs, charges and reserves
attributable to that Series, except that liabilities and expenses allocated
solely to a particular Class shall be borne by that Class. Any general
liabilities, expenses, costs, charges or reserves of the Trust which are not
readily identifiable as belonging to any
- 9 -
<PAGE>
particular Series or Class shall be allocated and charged by the Trustees
between or among any one or more of the Series or Classes in such manner as the
Trustees deem fair and equitable. Each such allocation shall be conclusive and
binding upon the Shareholders of all Series or Classes for all purposes.
Without limiting the foregoing, but subject to the right of the Trustees to
allocate general liabilities, expenses, costs, charges or reserves as herein
provided, the debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to a particular Series shall be
enforceable against the assets of such Series only, and not against the assets
of the Trust generally or of any other Series. Notice of this contractual
limitation on liabilities among Series may, in the Trustees' discretion, be set
forth in the certificate of trust of the Trust (whether originally or by
amendment) as filed or to be filed in the Office of the Secretary of State of
the State of Delaware pursuant to the Delaware Act, and upon the giving of such
notice in the certificate of trust, the statutory provisions of Section 3804 of
the Delaware Act relating to limitations on liabilities among Series (and the
statutory effect under Section 3804 of setting forth such notice in the
certificate of trust) shall become applicable to the Trust and each Series. Any
person extending credit to, contracting with or having any claim against any
Series may look only to the assets of that Series to satisfy or enforce any
debt, liability, obligation or expense incurred, contracted or otherwise
existing with respect to that Series. No Shareholder or former Shareholder of
any Series shall have a claim on or any right to any assets allocated or
belonging to any other Series. No Shareholder or former Shareholder of any
particular Series shall have any claim or right to institute suit against the
Trust or any Series with respect to any matter that does not directly affect
that particular Series.
Section 5. OWNERSHIP AND TRANSFER OF SHARES. The Trust shall maintain a
register containing the names and addresses of the Shareholders of each Series
and Class thereof, the number of Shares of each Series and Class held by such
Shareholders, and a record of all Share transfers. The register shall be
conclusive as to the identity of Shareholders of record and the number of Shares
held by them from time to time. The Trustees may authorize the issuance of
certificates representing Shares and adopt rules governing their use. The
Trustees may make rules governing the transfer of Shares, whether or not
represented by certificates.
Section 6. STATUS OF SHARES; LIMITATION OF SHAREHOLDER LIABILITY. Shares
shall be deemed to be personal property giving Shareholders only the rights
provided in this Trust Instrument. Every Shareholder, by virtue of having
acquired a Share, shall be held expressly to have assented to and agreed to be
bound by the terms of this Trust Instrument and to have become a party hereto.
No Shareholder shall be personally liable for the debts, liabilities,
obligations and expenses incurred by, contracted for, or otherwise
- 10 -
<PAGE>
existing with respect to, the Trust or any Series. Neither the Trust nor the
Trustees shall have any power to bind any Shareholder personally or to demand
payment from any Shareholder for anything, other than as agreed by the
Shareholder. Shareholders shall have the same limitation of personal liability
as is extended to shareholders of a private corporation for profit incorporated
in the State of Delaware. Every written obligation of the Trust or any Series
shall contain a statement to the effect that such obligation may only be
enforced against the assets of the Trust or such Series; however, the omission
of such statement shall not operate to bind or create personal liability for any
Shareholder or Trustee.
ARTICLE V
DISTRIBUTIONS AND REDEMPTIONS
Section 1. DISTRIBUTIONS. The Trustees may declare and pay dividends and
other distributions from the assets belonging to each Series. The amount and
payment of dividends or distributions and their form, whether they are in cash,
Shares or other Trust Property, shall be determined by the Trustees. Dividends
and other distributions may be paid pursuant to a standing resolution adopted
once or more often as the Trustees determine. All dividends and other
distributions on Shares of a particular Series shall be distributed pro rata to
the Shareholders of that Series in proportion to the number of Shares of that
Series they held on the record date established for such payment, except that
such dividends and distributions shall appropriately reflect expenses allocated
to a particular Class of such Series. The Trustees may adopt and offer to
Shareholders such dividend reinvestment plans, cash dividend payout plans or
similar plans as the Trustees deem appropriate.
Section 2. REDEMPTIONS. Each Shareholder of a Series shall have the right
at such times as may be permitted by the Trustees to require the Series to
redeem all or any part of his Shares at a redemption price per Share equal to
the Net Asset Value per Share. In the absence of such resolution, the redemption
price per Share shall be the Net Asset Value next determined after receipt by
the Series of a request for redemption in proper form less such charges as are
determined by the Trustees and described in any required disclosure document.
The Trustees may specify conditions, prices, and places of redemption, and may
specify binding requirements for the proper form or forms of requests for
redemption. Payment of the redemption price may be wholly or partly in
securities or other assets at the value of such securities or assets used in
such determination of Net Asset Value, or may be in cash. Upon redemption,
Shares may be reissued from time to time. The Trustees may require Shareholders
to redeem Shares for any reason under terms set by the Trustees, including the
failure of a Shareholder to supply a personal identification number if required
to do so, or to have the minimum investment required, or to
- 11 -
<PAGE>
pay when due for the purchase of Shares issued to him. To the extent permitted
by law, the Trustees may retain the proceeds of any redemption of Shares
required by them for payment of amounts due and owing by a Shareholder to the
Trust or any Series or Class. Notwithstanding the foregoing, the Trustees may
postpone payment of the redemption price and may suspend the right of the
Shareholders to require any Series or Class to redeem Shares during any period
of time when and to the extent permissible under the 1940 Act.
Section 3. DETERMINATION OF NET ASSET VALUE. The Trustees shall cause the
Net Asset Value of Shares of each Series or Class to be determined from time to
time in a manner consistent with applicable laws and regulations. The Trustees
may delegate the power and duty to determine Net Asset Value per Share to one or
more Trustees or officers of the Trust or to a custodian, depository or other
agent appointed for such purpose. The Net Asset Value of Shares shall be
determined separately for each Series or Class at such times as may be
prescribed by the Trustees or, in the absence of action by the Trustees, as of
the close of the regular trading session on the New York Stock Exchange on each
day for all or part of which such Exchange is open for unrestricted trading.
Section 4. SUSPENSION OF RIGHT OF REDEMPTION. If, as referred to in Section
2 of this Article, the Trustees postpone payment of the redemption price and
suspend the right of Shareholders to redeem their Shares, such suspension shall
take effect at the time the Trustees shall specify, but not later than the close
of business on the business day next following the declaration of suspension.
Thereafter Shareholders shall have no right of redemption or payment until the
Trustees declare the end of the suspension. If the right of redemption is
suspended, a Shareholder may either withdraw his request for redemption or
receive payment based on the Net Asset Value per Share next determined after the
suspension terminates.
Section 5. REDEMPTIONS NECESSARY FOR QUALIFICATION AS REGULATED INVESTMENT
COMPANY. If the Trustees shall determine that direct or indirect ownership of
Shares of any Series has or may become concentrated in any person to an extent
which would disqualify any Series as a regulated investment company under the
Internal Revenue Code, then the Trustees shall have the power (but not the
obligation) by lot or other means they deem equitable to (a) call for redemption
by any such person of a number, or principal amount, of Shares sufficient to
maintain or bring the direct or indirect ownership of Shares into conformity
with the requirements for such qualification and (b) refuse to transfer or issue
Shares to any person whose acquisition of Shares in question would, in the
Trustees' judgment, result in such disqualification. Any such redemption shall
be effected at the redemption price and in the manner provided in this Article.
Shareholders shall upon demand disclose to the Trustees in writing such
information concerning direct and indirect ownership of Shares as the Trustees
deem necessary to comply with the requirements of any taxing authority.
- 12 -
<PAGE>
ARTICLE VI
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. VOTING POWERS. The Shareholders shall have power to vote only
with respect to (a) the election of Trustees as provided in Section 2 of this
Article; (b) the removal of Trustees as provided in Article II, Section 3(d);
(c) any investment advisory or management contract as provided in Article VII,
Section 1; (d) any termination of the Trust as provided in Article X, Section 4;
(e) the amendment of this Trust Instrument to the extent and as provided in
Article X, Section 8; and (f) such additional matters relating to the Trust as
may be required or authorized by law, this Trust Instrument, or the Bylaws or
any registration of the Trust with the Commission or any State, or as the
Trustees may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares shall be
voted by individual Series or Class, except (a) when required by the 1940 Act,
Shares shall be voted in the aggregate and not by individual Series or Class,
and (b) when the Trustees have determined that the matter affects the interests
of more than one Series or Class, then the Shareholders of all such affected
Series or Classes shall be entitled to vote thereon. Each whole Share shall be
entitled to one vote as to any matter on which it is entitled to vote, and each
fractional Share shall be entitled to a proportionate fractional vote. There
shall be no cumulative voting in the election of Trustees. Shares may be voted
in person or by proxy or in any manner provided for in the Bylaws. The Bylaws
may provide that proxies may be given by any electronic or telecommunications
device or in any other manner, but if a proposal by anyone other than the
officers or Trustees is submitted to a vote of the Shareholders of any Series or
Class, or if there is a proxy contest or proxy solicitation or proposal in
opposition to any proposal by the officers or Trustees, Shares may be voted only
in person or by written proxy. Until Shares of a Series are issued, as to that
Series the Trustees may exercise all rights of Shareholders and may take any
action required or permitted to be taken by Shareholders by law, this Trust
Instrument or the Bylaws.
Section 2. MEETINGS OF SHAREHOLDERS. The first Shareholders' meeting shall
be held to elect Trustees at such time and place as the Trustees designate.
Special meetings of the Shareholders of any Series or Class may be called by the
Trustees and shall be called by the Trustees upon the written request of
Shareholders owning at least two-thirds of the Outstanding Shares of such Series
or Class entitled to vote. Shareholders shall be entitled to at least fifteen
days' notice of any meeting, given as determined by the Trustees.
Section 3. QUORUM; REQUIRED VOTE. One-third of the Outstanding Shares of
each Series or Class, or one-third of the Outstanding Shares of the Trust,
entitled to vote in person or by proxy shall be a quorum
- 13 -
<PAGE>
for the transaction of business at a Shareholders' meeting with respect to such
Series or Class, or with respect to the entire Trust, respectively. Any lesser
number shall be sufficient for adjournments. Any adjourned session of a
Shareholders' meeting may be held within a reasonable time without further
notice. Except when a larger vote is required by law, this Trust Instrument or
the Bylaws, a majority of the Outstanding Shares voted in person or by proxy
shall decide any matters to be voted upon with respect to the entire Trust and a
plurality of such Outstanding Shares shall elect a Trustee; provided, that if
this Trust Instrument or applicable law permits or requires that Shares be voted
on any matter by individual Series or Classes, then a majority of the
Outstanding Shares of that Series or Class (or, if required by law, a Majority
Shareholder Vote of that Series or Class) voted in person or by proxy on the
matter shall decide that matter insofar as that Series or Class is concerned.
Shareholders may act as to the Trust or any Series or Class by the written
consent of a majority (or such greater amount as may be required by applicable
law) of the Outstanding Shares of the Trust or of such Series or Class, as the
case may be.
ARTICLE VII
CONTRACTS WITH SERVICE PROVIDERS
Section 1. INVESTMENT ADVISER. Subject to a Majority Shareholder Vote, the
Trustees may enter into one or more investment advisory contracts on behalf of
the Trust or any Series, providing for investment advisory services, statistical
and research facilities and services, and other facilities and services to be
furnished to the Trust or Series on terms and conditions acceptable to the
Trustees. Any such contract may provide for the investment adviser to effect
purchases, sales or exchanges of portfolio securities or other Trust Property on
behalf of the Trustees or may authorize any officer or agent of the Trust to
effect such purchases, sales or exchanges pursuant to recommendations of the
investment adviser. The Trustees may authorize the investment adviser to employ
one or more sub-advisers. Any reference in this Trust Instrument to the
investment adviser shall be deemed to include such sub-advisers, unless the
context otherwise requires.
Section 2. PRINCIPAL UNDERWRITER. The Trustees may enter into contracts on
behalf of the Trust or any Series or Class, providing for the distribution and
sale of Shares by the other party, either directly or as sales agent, on terms
and conditions acceptable to the Trustees. The Trustees may adopt a plan or
plans of distribution with respect to Shares of any Series or Class and enter
into any related agreements, whereby the Series or Class finances directly or
indirectly any activity that is primarily intended to result in sales of its
Shares, subject to the requirements of Section 12 of the 1940
- 14 -
<PAGE>
Act, Rule 12b-1 thereunder, and other applicable rules and regulations.
Section 3. TRANSFER AGENCY, SHAREHOLDER SERVICES, AND ADMINISTRATION
AGREEMENTS. The Trustees, on behalf of the Trust or any Series or Class, may
enter into transfer agency agreements, Shareholder service agreements, and
administration and management agreements with any party or parties on terms and
conditions acceptable to the Trustees.
Section 4. CUSTODIAN. The Trustees shall at all times place and maintain
the securities and similar investments of the Trust and of each Series in
custody meeting the requirements of Section 17(f) of the 1940 Act and the rules
thereunder. The Trustees, on behalf of the Trust or any Series, may enter into
an agreement with a custodian on terms and conditions acceptable to the
Trustees, providing for the custodian, among other things, to (a) hold the
securities owned by the Trust or any Series and deliver the same upon written
order or oral order confirmed in writing, (b) receive and receipt for any moneys
due to the Trust or any Series and deposit the same in its own banking
department or elsewhere, (c) disburse such funds upon orders or vouchers, and
(d) employ one or more sub-custodians.
Section 5. PARTIES TO CONTRACTS WITH SERVICE PROVIDERS. The Trustees may
enter into any contract referred to in this Article with any entity, although
one more of the Trustees or officers of the Trust may be an officer, director,
trustee, partner, shareholder, or member of such entity, and no such contract
shall be invalidated or rendered void or voidable because of such relationship.
No person having such a relationship shall be disqualified from voting on or
executing a contract in his capacity as Trustee and/or Shareholder, or be liable
merely by reason of such relationship for any loss or expense to the Trust with
respect to such a contract or accountable for any profit realized directly or
indirectly therefrom.
Any contract referred to in Sections 1 and 2 of this Article shall be
consistent with and subject to the applicable requirements of Section 15 of the
1940 Act and the rules and orders thereunder with respect to its continuance in
effect, its termination, and the method of authorization and approval of such
contract or renewal. No amendment to a contract referred to in Section 1 of this
Article shall be effective unless assented to in a manner consistent with the
requirements of Section 15 of the 1940 Act, and the rules and orders thereunder.
ARTICLE VIII
EXPENSES OF THE TRUST AND SERIES
Subject to Article IV, Section 4, the Trust or a particular Series shall
pay, or shall reimburse the Trustees from the Trust estate or the assets
belonging to the particular Series, for their
- 15 -
<PAGE>
expenses and disbursements, including, but not limited to, interest charges,
taxes, brokerage fees and commissions; expenses of issue, repurchase and
redemption of Shares; certain insurance premiums; applicable fees, interest
charges and expenses of third parties, including the Trust's investment
advisers, managers, administrators, distributors, custodians, transfer agents
and fund accountants; fees of pricing, interest, dividend, credit and other
reporting services; costs of membership in trade associations;
telecommunications expenses; funds transmission expenses; auditing, legal and
compliance expenses; costs of forming the Trust and its Series and maintaining
its existence; costs of preparing and printing the prospectuses of the Trust and
each Series, statements of additional information and Shareholder reports and
delivering them to Shareholders; expenses of meetings of Shareholders and proxy
solicitations therefor; costs of maintaining books and accounts; costs of
reproduction, stationery and supplies; fees and expenses of the Trustees;
compensation of the Trust's officers and employees and costs of other personnel
performing services for the Trust or any Series; costs of Trustee meetings;
Commission registration fees and related expenses; state or foreign securities
laws registration fees and related expenses; and for such non-recurring items as
may arise, including litigation to which the Trust or a Series (or a Trustee or
officer of the Trust acting as such) is a party, and for all losses and
liabilities by them incurred in administering the Trust. The Trustees shall have
a lien on the assets belonging to the appropriate Series, or in the case of an
expense allocable to more than one Series, on the assets of each such Series,
prior to any rights or interests of the Shareholders thereto, for the
reimbursement to them of such expenses, disbursements, losses and liabilities.
This Article shall not preclude the Trust from directly paying any of the
aforementioned fees and expenses.
ARTICLE IX
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. LIMITATION OF LIABILITY. All persons contracting with or having
any claim against the Trust or a particular Series shall look only to the assets
of the Trust or such Series for payment under such contract or claim; and
neither the Trustees nor any of the Trust's officers, employees or agents,
whether past, present or future, shall be personally liable therefor. Every
written instrument or obligation on behalf of the Trust or any Series shall
contain a statement to the foregoing effect, but the absence of such statement
shall not operate to make any Trustee or officer of the Trust liable thereunder.
Provided they have exercised reasonable care and have acted under the reasonable
belief that their actions are in the best interest of the Trust, the Trustees
and officers of the Trust shall not be responsible or liable for any act or
omission or for neglect or wrongdoing of them
- 16 -
<PAGE>
or any officer, agent, employee, investment adviser or independent contractor of
the Trust, but nothing contained in this Trust Instrument or in the Delaware Act
shall protect any Trustee or officer of the Trust against liability to the Trust
or to Shareholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
Section 2. INDEMNIFICATION. (a) Subject to the exceptions and limitations
contained in subsection (b) below:
(i) every person who is, or has been, a Trustee, officer or employee
of the Trust ("Covered Person") shall be indemnified by the Trust or
the appropriate Series to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him
in connection with any claim, action, suit or proceeding in which he
becomes involved as a party or otherwise by virtue of his being or
having been a Covered Person and against amounts paid or incurred by
him in the settlement thereof, whether or not he is a Covered Person
at the time such expenses are incurred;
(ii) as used herein, the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits or proceedings
(civil, criminal or other, including appeals), actual or threatened,
and the words "liability" and "expenses" shall include, without
limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office, or (B) not to have acted in good faith in the
reasonable belief that his action was in the best interest of the
Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Covered Person did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office: (A) by the court or
other body approving the settlement; (B) by at least a majority of
those Trustees who are neither Interested Persons of the Trust nor are
parties to the matter based upon a review of readily available facts
(as opposed to a full trial-type
- 17 -
<PAGE>
inquiry); or (C) by written opinion of independent legal counsel based
upon a review of readily available facts (as opposed to a full
trial-type inquiry).
(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not be exclusive of
or affect any other rights to which any Covered Person may now or hereafter be
entitled, and shall inure to the benefit of the heirs, executors and
administrators of a Covered Person.
(d) To the maximum extent permitted by applicable law, expenses in
connection with the preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in subsection (a) of this
Section may be paid by the Trust or applicable Series from time to time prior to
final disposition thereof upon receipt of an undertaking by or on behalf of such
Covered Person that such amount will be paid over by him to the Trust or
applicable Series if it is ultimately determined that he is not entitled to
indemnification under this Section; provided, however, that either (i) such
Covered Person shall have provided appropriate security for such undertaking,
(ii) the Trust is insured against losses arising out of any such advance
payments or (iii) either a majority of the Trustees who are neither Interested
Persons of the Trust nor parties to the matter, or independent legal counsel in
a written opinion, shall have determined, based upon a review of readily
available facts (as opposed to a full trial-type inquiry) that there is reason
to believe that such Covered Person will not be disqualified from
indemnification under this Section.
(e) Any repeal or modification of this Article IX by the Shareholders of
the Trust, or adoption or modification of any other provision of the Trust
Instrument or Bylaws inconsistent with this Article, shall be prospective only,
to the extent that such repeal or modification would, if applied
retrospectively, adversely affect any limitation on the liability of any Covered
Person or indemnification available to any Covered Person with respect to any
act or omission which occurred prior to such repeal, modification or adoption.
Section 3. INDEMNIFICATION OF SHAREHOLDERS. If any Shareholder or former
Shareholder of any Series shall be held personally liable solely by reason of
his being or having been a Shareholder and not because of his acts or omissions
or for some other reason, the Shareholder or former Shareholder (or his heirs,
executors, administrators or other legal representatives or in the case of any
entity, its general successor) shall be entitled out of the assets belonging to
the applicable Series to be held harmless from and indemnified against all loss
and expense arising from such liability. The Trust, on behalf of the affected
Series, shall, upon request by such Shareholder, assume the defense of any such
claim
- 18 -
<PAGE>
made against such Shareholder for any act or obligation of the Series and
satisfy any judgment thereon from the assets of the Series.
ARTICLE X
MISCELLANEOUS
Section 1. TRUST NOT A PARTNERSHIP. This Trust Instrument creates a trust
and not a partnership. No Trustee shall have any power to bind personally either
the Trust's officers or any Shareholder.
Section 2. TRUSTEE ACTION; EXPERT ADVICE; NO BOND OR SURETY. The exercise
by the Trustees of their powers and discretion hereunder in good faith and with
reasonable care under the circumstances then prevailing shall be binding upon
everyone interested. Subject to the provisions of Article IX, the Trustees shall
not be liable for errors of judgment or mistakes of fact or law. The Trustees
may take advice of counsel or other experts with respect to the meaning and
operation of this Trust Instrument, and subject to the provisions of Article IX,
shall not be liable for any act or omission in accordance with such advice or
for failing to follow such advice. The Trustees shall not be required to give
any bond as such, nor any surety if a bond is obtained.
Section 3. RECORD DATES. The Trustees may fix in advance a date up to one
hundred twenty (120) days before the date of any Shareholders' meeting, or the
date for the payment of any dividends or other distributions, or the date for
the allotment of rights, or the date when any change or conversion or exchange
of Shares shall go into effect as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting, or
entitled to receive payment of such dividend or other distribution, or to
receive any such allotment of rights, or to exercise such rights in respect of
any such change, conversion or exchange of Shares. Any Shareholder who was a
Shareholder at the date and time so fixed shall be entitled to vote at such
meeting or any adjournment thereof.
Section 4. TERMINATION OF THE TRUST. (a) This Trust shall have perpetual
existence. Subject to a Majority Shareholder Vote of the Trust or of each Series
to be affected, the Trustees may
(i) sell and convey all or substantially all of the assets of the
Trust or any affected Series to another Series or to another entity
which is an open-end investment company as defined in the 1940 Act, or
is a series thereof, for adequate consideration, which may include the
assumption of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of the Trust or any
- 19 -
<PAGE>
affected Series, and which may include shares of or interests in such
Series, entity, or series thereof; or
(ii) at any time sell and convert into money all or substantially all
of the assets of the Trust or any affected Series.
Upon making reasonable provision for the payment of all known liabilities of the
Trust or any affected Series in either (i) or (ii), by such assumption or
otherwise, the Trustees shall distribute the remaining proceeds or assets (as
the case may be) ratably among the Shareholders of the Trust or any affected
Series; however, the payment to any particular Class of such Series may be
reduced by any fees, expenses or charges allocated to that Class.
(b) The Trustees may take any of the actions specified in subsection (a)
(i) and (ii) above without obtaining a Majority Shareholder Vote of the Trust or
any Series if a majority of the Trustees determines that the continuation of the
Trust or Series is not in the best interests of the Trust, such Series, or their
respective Shareholders as a result of factors or events adversely affecting the
ability of the Trust or such Series to conduct its business and operations in an
economically viable manner. Such factors and events may include the inability of
the Trust or a Series to maintain its assets at an appropriate size, changes in
laws or regulations governing the Trust or the Series or affecting assets of the
type in which the Trust or Series invests, or economic developments or trends
having a significant adverse impact on the business or operations of the Trust
or such Series.
(c) Upon completion of the distribution of the remaining proceeds or assets
pursuant to subsection (a), the Trust or affected Series shall terminate and the
Trustees and the Trust shall be discharged of any and all further liabilities
and duties hereunder with respect thereto and the right, title and interest of
all parties therein shall be canceled and discharged. Upon termination of the
Trust, following completion of winding up of its business, the Trustees shall
cause a certificate of cancellation of the Trust's certificate of trust to be
filed in accordance with the Delaware Act, which certificate of cancellation may
be signed by any one Trustee.
Section 5. REORGANIZATION. Notwithstanding anything else herein, to change
the Trust's form of organization the Trustees may, without Shareholder approval,
(a) cause the Trust to merge or consolidate with or into one or more entities,
if the surviving or resulting entity is the Trust or another open-end management
investment company under the 1940 Act, or a series thereof, that will succeed to
or assume the Trust's registration under the 1940 Act, or (b) cause the Trust to
incorporate under the laws of Delaware. Any agreement of merger or consolidation
or certificate of merger may be signed by a majority of Trustees and facsimile
- 20 -
<PAGE>
signatures conveyed by electronic or telecommunication means shall be valid.
Pursuant to and in accordance with the provisions of Section 3815(f) of the
Delaware Act, an agreement of merger or consolidation approved by the Trustees
in accordance with this Section 5 may effect any amendment to the Trust
Instrument or effect the adoption of a new trust instrument of the Trust if it
is the surviving or resulting trust in the merger or consolidation.
Section 6. TRUST INSTRUMENT. The original or a copy of this Trust
Instrument and of each amendment hereto or Trust Instrument supplemental shall
be kept at the office of the Trust where it may be inspected by any Shareholder.
Anyone dealing with the Trust may rely on a certificate by a Trustee or an
officer of the Trust as to the authenticity of the Trust Instrument or any such
amendments or supplements and as to any matters in connection with the Trust.
The masculine gender herein shall include the feminine and neuter genders.
Headings herein are for convenience only and shall not affect the construction
of this Trust Instrument. This Trust Instrument may be executed in any number of
counterparts, each of which shall be deemed an original.
Section 7. APPLICABLE LAW. This Trust Instrument and the Trust created
hereunder are governed by and construed and administered according to the
Delaware Act and the applicable laws of the State of Delaware; provided,
however, that there shall not be applicable to the Trust, the Trustees or this
Trust Instrument (a) the provisions of Section 3540 of Title 12 of the Delaware
Code, or (b) any provisions of the laws (statutory or common) of the State of
Delaware (other than the Delaware Act) pertaining to trusts which relate to or
regulate (i) the filing with any court or governmental body or agency of trustee
accounts or schedules of trustee fees and charges, (ii) affirmative requirements
to post bonds for trustees, officers, agents or employees of a trust, (iii) the
necessity for obtaining court or other governmental approval concerning the
acquisition, holding or disposition of real or personal property, (iv) fees or
other sums payable to trustees, officers, agents or employees of a trust, (v)
the allocation of receipts and expenditures to income or principal, (vi)
restrictions or limitations on the permissible nature, amount or concentration
of trust investments or requirements relating to the titling, storage or other
manner of holding of trust assets, or (vii) the establishment of fiduciary or
other standards of responsibilities or limitations on the acts or powers of
trustees, which are inconsistent with the limitations or liabilities or
authorities and powers of the Trustees set forth or referenced in this Trust
Instrument. The Trust shall be of the type commonly called a Delaware business
trust, and, without limiting the provisions hereof, the Trust may exercise all
powers which are ordinarily exercised by such a trust under Delaware law. The
Trust specifically reserves the right to exercise any of the powers or
- 21 -
<PAGE>
privileges afforded to trusts or actions that may be engaged in by trusts under
the Delaware Act, and the absence of a specific reference herein to any such
power, privilege or action shall not imply that the Trust may not exercise such
power or privilege or take such actions.
Section 8. AMENDMENTS. The Trustees may, without any Shareholder vote,
amend or otherwise supplement this Trust Instrument by making an amendment, a
Trust Instrument supplemental hereto or an amended and restated trust
instrument; provided, that Shareholders shall have the right to vote on any
amendment (a) which would affect the voting rights of Shareholders granted in
Article VI, Section 1, (b) to this Section 8, (c) required to be approved by
Shareholders by law or by the Trust's registration statement(s) filed with the
Commission, and (d) submitted to them by the Trustees in their discretion. Any
amendment submitted to Shareholders which the Trustees determine would affect
the Shareholders of any Series or Class shall be authorized by vote of the
Shareholders of such Series or Class and no vote shall be required of
Shareholders of a Series or Class not affected. Notwithstanding anything else
herein, any amendment to Article IX which would have the effect of reducing the
indemnification and other rights provided thereby to Trustees, officers,
employees, and agents of the Trust or to Shareholders or former Shareholders,
and any repeal or amendment of this sentence, shall each require the affirmative
vote of the holders of two-thirds of the Outstanding Shares of the Trust
entitled to vote thereon.
Section 9. FISCAL YEAR. The fiscal year of the Trust shall end on a
specified date as set forth in the Bylaws. The Trustees may change the fiscal
year of the Trust without Shareholder approval.
Section 10. SEVERABILITY. The provisions of this Trust Instrument are
severable. If the Trustees determine, with the advice of counsel, that any
provision hereof conflicts with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have constituted
a part of this Trust Instrument; provided, however, that such determination
shall not affect any of the remaining provisions of this Trust Instrument or
render invalid or improper any action taken or omitted prior to such
determination. If any provision hereof shall be held invalid or unenforceable in
any jurisdiction, such invalidity or unenforceability shall attach only to such
provision only in such jurisdiction and shall not affect any other provision of
this Trust Instrument.
Section 11. USE OF THE NAME "JANUS". Janus Capital Corporation ("Janus")
has consented to the use by the Trust and by each Series thereof to the
identifying word "Janus" in the name of the Trust and of each Series. Such
consent is conditioned upon the Trust's employment of Janus as investment
adviser to the Trust and
- 22 -
<PAGE>
to each Series. As between Janus and the Trust, Janus shall control the use of
such name insofar as such name contains the identifying word "Janus." Janus may
from time to time use the identifying word "Janus" in other connections and for
other purposes, including without limitation in the names of other investment
companies, corporations or businesses that it may manage, advise, sponsor or own
or in which it may have a financial interest. Janus may require the Trust or any
Series to cease using the identifying word "Janus" in the name of the Trust or
any Series if the Trust or Series ceases to employ Janus or a subsidiary or
affiliate thereof as investment adviser.
IN WITNESS WHEREOF, the undersigned, being the initial Trustee, has
executed this Trust Instrument as of the date first above written.
__________________________
as Trustee and not
individually
100 Fillmore Street
Denver, Colorado 80206
STATE OF COLORADO)
CITY OF DENVER ) ss:
BEFORE ME THIS 22ND DAY OF MARCH, 2000, personally appeared the above-named
, known to me to be the person who executed the foregoing
instrument and who acknowledged that he executed the same.
__________________________
Notary Public
My Commission expires___________________________.
- 23 -
<PAGE>
SCHEDULE A
- -------------------------------------------------------------
SERIES OF THE TRUST
- -------------------------------------------------------------
Janus Adviser Growth Fund
- -------------------------------------------------------------
Janus Adviser Aggressive Growth Fund
- -------------------------------------------------------------
Janus Adviser Capital Appreciation Fund
- -------------------------------------------------------------
Janus Adviser Balanced Fund
- -------------------------------------------------------------
Janus Adviser Equity Income Fund
- -------------------------------------------------------------
Janus Adviser Growth and Income Fund
- -------------------------------------------------------------
Janus Adviser Strategic Value Fund
- -------------------------------------------------------------
Janus Adviser International Fund
- -------------------------------------------------------------
Janus Adviser Worldwide Fund
- -------------------------------------------------------------
Janus Adviser Flexible Income Fund
- -------------------------------------------------------------
Janus Adviser Money Market Fund
- -------------------------------------------------------------
- 24 -
EXHIBIT 2
JANUS ADVISER SERIES
A Delaware Trust
BYLAWS
MARCH 22, 2000
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I NAME OF TRUST, PRINCIPALOFFICE AND SEAL.............................1
Section 1. Principal Office..............................................1
Section 2. Seal..........................................................1
ARTICLE II MEETINGS OF TRUSTEES...............................................1
Section 1. Regular Meetings..............................................1
Section 2. Action Without a Meeting......................................2
Section 3. Compensation of Trustees......................................2
ARTICLE III COMMITTEES........................................................2
Section 1. Organization..................................................2
Section 2. Executive Committee...........................................3
Section 3. Nominating Committee..........................................3
Section 4. Audit Committee...............................................3
Section 5. Other Committees..............................................3
Section 6. Proceedings and Quorum........................................3
Section 7. Compensation of Committee Members.............................3
ARTICLE IV OFFICERS...........................................................4
Section 1. General.......................................................4
Section 2. Election, Tenure and Qualifications of Officers...............4
Section 3. Vacancies and Newly Created Officers..........................4
Section 4. Removal and Resignation.......................................4
Section 5. President.....................................................5
-i-
<PAGE>
Section 6. Vice President................................................5
Section 7. Chief Financial Officer, Treasurer and Assistant Treasurers...5
Section 8. Secretary and Assistant Secretaries...........................6
Section 9. Subordinate Officers..........................................7
Section 10. Compensation of Officers......................................7
Section 11. Surety Bond...................................................7
ARTICLE V MEETINGS OF SHAREHOLDERS............................................8
Section 1. Annual Meetings...............................................8
Section 2. Special Meetings..............................................8
Section 3. Notice of Meetings............................................8
Section 4. Validity of Proxies...........................................9
Section 5. Place of Meeting.............................................10
Section 6. Action Without a Meeting.....................................10
ARTICLE VI SHARES OF BENEFICIAL INTEREST.....................................10
Section 1. Share Certificates...........................................10
Section 2. Transfer of Shares...........................................12
Section 3. Lost, Stolen or Destroyed Certificates.......................11
ARTICLE VII CUSTODY OF SECURITIES............................................12
Section 1. Employment of a Custodian....................................12
Section 2. Termination of Custodian Agreement...........................12
Section 3. Other Arrangements...........................................13
ARTICLE VIII FISCAL YEAR AND ACCOUNTANT......................................13
Section 1. Fiscal Year..................................................13
Section 2. Accountant...................................................13
-ii-
<PAGE>
ARTICLE IX AMENDMENTS........................................................13
Section 1. General......................................................13
Section 2. By Shareholders Only.........................................13
ARTICLE X NET ASSET VALUE....................................................14
Section 1. Determination of Net Asset Value.............................14
ARTICLE XI MISCELLANEOUS.....................................................14
Section 1. Inspection of Books..........................................14
Section 2. Severability.................................................15
Section 3. Headings.....................................................15
- iii-
<PAGE>
BYLAWS
OF
JANUS ADVISER SERIES
(A DELAWARE TRUST)
These bylaws of Janus Adviser Series (the "Trust"), a Delaware business
trust, are subject to the Trust Instrument of the Trust dated March 22, 2000, as
from time to time amended, supplemented or restated (the "Trust Instrument").
Capitalized terms used herein have the same meaning as in the Trust Instrument.
ARTICLE I
NAME OF TRUST, PRINCIPAL
OFFICE AND SEAL
SECTION 1. PRINCIPAL OFFICE. The principal office of the Trust shall be located
in Denver, Colorado, or such other location as the Trustees may from time to
time determine. The Trust may establish and maintain other offices and places of
business as the Trustees may from time to time determine.
SECTION 2. SEAL. The Trustees may adopt a seal which shall be in such form and
have such inscription as the Trustees may from time to time determine. Any
Trustee or officer of the Trust shall have authority to affix the seal to any
document requiring the same.
ARTICLE II
MEETINGS OF TRUSTEES
SECTION 1. REGULAR MEETINGS. Meetings of the Trustees may be held at such places
and such times as the Trustees may from time to time determine. Such meetings
may be called orally or in
- 1 -
<PAGE>
writing by the Chairman of the Trustees or by any two other Trustees. Each
Trustee shall be given notice of any meeting as provided in Article II, Section
7, of the Trust Instrument.
SECTION 2. ACTION WITHOUT A MEETING. Actions may be taken by the Trustees
without a meeting or by a telephone meeting, as provided in Article II, Section
7, of the Trust Instrument.
SECTION 3. COMPENSATION OF TRUSTEES. Each Trustee may receive such compensation
from the Trust for his or her services and reimbursement for his or her expenses
as may be fixed from time to time by the Trustees.
ARTICLE III
COMMITTEES
SECTION 1. ORGANIZATION. The Trustees may designate one or more committees of
the Trustees. The Chairmen of such committees shall be elected by the Trustees.
The number composing such committees and the powers conferred upon the same
shall be determined by the vote of a majority of the Trustees. All members of
such committees shall hold office at the pleasure of the Trustees. The Trustees
may abolish any such committee at any time in their sole discretion. Any
committee to which the Trustees delegate any of their powers shall maintain
records of its meetings and shall report its actions to the Trustees. The
Trustees shall have the power to rescind any action of any committee, but no
such recision shall have retroactive effect. The Trustees shall have the power
at any time to fill vacancies in the committees. The Trustees may delegate to
these committees any of its powers, except the power to declare a dividend or
distribution on Shares, authorize the issuance of Shares, recommend to
Shareholders any action requiring Shareholders' approval, amend these Bylaws,
approve any merger or Share exchange, approve or terminate any contract with an
Investment Adviser, Transfer Agent, Custodian or Principal Underwriter, or to
take any other action required by applicable law to be taken by the Trustees.
- 2 -
<PAGE>
SECTION 2. EXECUTIVE COMMITTEE. The Trustees may elect from their own number an
Executive Committee which shall have any or all the powers of the Trustees when
the Trustees are not in session. The President shall automatically be a member
of the Executive Committee.
SECTION 3. NOMINATING COMMITTEE. The Trustees may elect from their own number a
Nominating Committee which shall have the power to select and nominate Trustees
who are not Interested Persons, and shall have such other powers and perform
such other duties as may be assigned to it from time to time by the Trustees.
SECTION 4. AUDIT COMMITTEE. The Trustees may elect from their own number an
Audit Committee which shall have the power to review and evaluate the audit
function, including recommending independent certified public accountants, and
shall have such other powers and perform such other duties as may be assigned to
it from time to time by the Trustees.
SECTION 5. OTHER COMMITTEES. The Trustees may appoint other committees whose
members need not be Trustees. Each such committee shall have such powers and
perform such duties as may be assigned to it from time to time by the Trustees,
but shall not exercise any power which may lawfully be exercised only by the
Trustees or a committee thereof.
SECTION 6. PROCEEDINGS AND QUORUM. In the absence of an appropriate resolution
of the Trustees, each committee may adopt such rules and regulations governing
its proceedings, quorum and manner of acting as it shall deem proper and
desirable. In the event any member of any committee is absent from any meeting,
the members present at the meeting, whether or not they constitute a quorum, may
appoint a member of the Trustees to act in the place of such absent member.
SECTION 7. COMPENSATION OF COMMITTEE MEMBERS. Each committee member may receive
such compensation from the Trust for his or her services and reimbursement for
his or her expenses as may be fixed from time to time by the Trustees.
- 3 -
<PAGE>
ARTICLE IV
OFFICERS
SECTION 1. GENERAL. The officers of the Trust shall be a President, a Treasurer,
a Secretary, and may include one or more Vice Presidents, Assistant Treasurers
or Assistant Secretaries, and such other officers as the Trustees may from time
to time elect. It shall not be necessary for any Trustee or other officer to be
a Shareholder of the Trust.
SECTION 2. ELECTION, TENURE AND QUALIFICATIONS OF OFFICERS. The officers of the
Trust, except those appointed as provided in Section 9 of this Article, shall be
elected by the Trustees. Each officer elected by the Trustees shall hold office
until his or her successor shall have been elected and qualified or until his or
her earlier resignation. Any person may hold one or more offices of the Trust
except that no one person may serve concurrently as both President and
Secretary. A person who holds more than one office in the Trust may not act in
more than one capacity to execute, acknowledge, or verify an instrument required
by law to be executed, acknowledged, or verified by more than one officer. No
officer need be a Trustee.
SECTION 3. VACANCIES AND NEWLY CREATED OFFICERS. Whenever a vacancy shall occur
in any office, regardless of the reason for such vacancy, or if any new office
shall be created, such vacancies or newly created offices may be filled by the
Trustees at any meeting or, in the case of any office created pursuant to
Section 9 of this Article, by any officer upon whom such power shall have been
conferred by the Trustees.
SECTION 4. REMOVAL AND RESIGNATION. Any officer may be removed from office by
the vote of a majority of the Trustees given at any meeting of the Trustees. In
addition, any officer or agent appointed in accordance with the provisions of
Section 9 of this Article may be removed, with or without cause, by any officer
upon whom such power of removal shall have been conferred by the Trustees. Any
officer may resign from office at any time by delivering a written resignation
- 4 -
<PAGE>
to the Trustees, the President, the Secretary, or any Assistant Secretary.
Unless otherwise specified therein, such resignation shall take effect upon
delivery.
SECTION 5. PRESIDENT. The President shall be the chief executive officer of the
Trust. Subject to the direction of the Trustees, the President shall have
general charge of the business affairs, policies and property of the Trust and
general supervision over its officers, employees and agents. In the absence of
the Chairman of the Trustees or if no Chairman of the Trustees has been elected,
the President shall preside at all Shareholders' meetings and at all meetings of
the Trustees and shall in general exercise the powers and perform the duties of
the Chairman of the Trustees. Except as the Trustees may otherwise order, the
President shall have the power to grant, issue, execute or sign such powers of
attorney, proxies, agreements or other documents as may be deemed advisable or
necessary in the furtherance of the interests of the Trust or any Series or
Class thereof. The President also shall have the power to employ attorneys,
accountants and other advisers and agents for the Trust. The President shall
exercise such other powers and perform such other duties as the Trustees may
from time to time assign to the President.
SECTION 6. VICE PRESIDENT. The Trustees may from time to time elect one or more
Vice Presidents who shall have such powers and perform such duties as may from
time to time be assigned to them by the Trustees or the President. At the
request or in the absence or disability of the President, the Vice President
(or, if there are two or more Vice Presidents, then the first appointed of the
Vice Presidents present and able to act) may perform all the duties of the
President and, when so acting, shall have all the powers of and be subject to
all the restrictions upon the President.
SECTION 7. CHIEF FINANCIAL OFFICER. The Chief Financial Officer of the Trust
shall have general charge of the finances of the Trust. The Chief Financial
Officer shall make annual reports regarding the business and financial condition
of the Trust as soon as possible after the close of the Trust's fiscal year and
shall furnish such other reports concerning the business and financial
- 5 -
<PAGE>
condition of the Trust as the Trustees may from time to time require. The Chief
Financial Officer shall perform all acts incidental to the office of Chief
Financial Officer, subject to the supervision of the Trustees, and shall perform
such additional duties as the Trustees may from time to time designate. The
Chief Financial Officer shall be responsible to and shall report to the
Trustees. In the absence of the Chief Financial Officer, the Treasurer may
perform all duties of the Chief Financial Officer.
SECTION 7A. TREASURER AND ASSISTANT TREASURERS. The Treasurer shall be the
principal accounting officer of the Trust, and shall have general charge of the
Trust's books of account, accounting records and accounting procedures. The
Treasurer shall deliver all funds and securities of the Trust to such company as
the Trustees shall retain as custodian in accordance with the Trust Instrument,
these Bylaws, and applicable law. The Treasurer shall have such other duties and
powers as may be prescribed from time to time by the Trustees or the Chief
Financial Officer, and shall render to the Trustees, whenever they may require
it, an account of all his transactions as Treasurer. The Treasurer shall be
responsible to and shall report to the Trustees, but in the ordinary conduct of
the Trust's business, shall be under the supervision of the Chief Financial
Officer of the Trust.
Any Assistant Treasurer shall have such duties and powers as shall be
prescribed from time to time by the Trustees or the Treasurer, and shall be
responsible to and shall report to the Treasurer, and in the absence of the
Treasurer, may perform all duties of the Treasurer.
SECTION 8. SECRETARY AND ASSISTANT SECRETARIES. The Secretary shall record all
votes and proceedings of the meetings of Trustees and Shareholders in books to
be kept for that purpose. The Secretary shall be responsible for giving and
servicing of all notices of the Trust. The Secretary shall have custody of any
seal of the Trust. The Secretary shall be responsible for the records of the
Trust, including the Share register and such other books and papers as the
Trustees may direct and such books, reports, certificates and other documents
required by law. All of such records and documents shall at all reasonable times
be kept open by the Secretary for
- 6 -
<PAGE>
inspection by any Trustee. The Secretary shall perform all acts incidental to
the office of Secretary, subject to the supervision of the Trustees, and shall
perform such additional duties as the Trustees may from time to time designate.
Any Assistant Secretary may perform such duties of the Secretary as the
Trustees or the Secretary may assign, and, in the absence of the Secretary, may
perform all the duties of the Secretary.
SECTION 9. SUBORDINATE OFFICERS. The Trustees may appoint from time to time such
other officers and agents as they may deem advisable, each of whom shall have
such title, hold office for such period, have such authority and perform such
duties as the Trustees may determine. The Trustees may delegate from time to
time to one or more officers or committees of Trustees the power to appoint any
such subordinate officers or agents and to prescribe their respective rights,
terms of office, authorities and duties. Any officer or agent appointed in
accordance with the provisions of this Section 9 may be removed, either with or
without cause, by any officer upon whom such power of removal shall have been
conferred by the Trustees.
SECTION 10. COMPENSATION OF OFFICERS. Each officer may receive such compensation
from the Trust for his or her services and reimbursement for his or her expenses
as may be fixed from time to time by the Trustees.
SECTION 11. SURETY BOND. The Trustees may require any officer or agent of the
Trust to execute a bond (including, without limitation, any bond required by the
Investment Company Act of 1940 and the rules and regulations of the Securities
and Exchange Commission) to the Trust in such sum and with such surety or
sureties as the Trustees may determine, conditioned upon the faithful
performance of his or her duties to the Trust, including responsibility for
negligence and for the accounting of any of the Trust's property, funds or
securities that may come into his or her hands.
- 7 -
<PAGE>
ARTICLE V
MEETINGS OF SHAREHOLDERS
SECTION 1. ANNUAL MEETINGS. There shall be no annual Shareholders' meetings
except as required by law or as hereinafter provided.
SECTION 2. SPECIAL MEETINGS. Special meetings of Shareholders of the Trust or
any Series or Class shall be called by the President, Vice-President or
Secretary whenever ordered by the Trustees, and shall be held at such time and
place as may be stated in the notice of the meeting.
Special meetings of the Shareholders of the Trust or of any Series or Class
shall be called by the Secretary upon the written request of Shareholders owning
at least two-thirds of the Outstanding Shares entitled to vote at such meeting,
provided that (1) such request shall state the purposes of such meeting and the
matters proposed to be acted on, and (2) the Shareholders requesting such
meeting shall have paid to the Trust the reasonably estimated cost of preparing
and mailing the notice thereof, which the Secretary shall determine and specify
to such Shareholders.
If the Secretary fails for more than thirty days to call a special meeting,
the Trustees or the Shareholders requesting such a meeting may, in the name of
the Secretary, call the meeting by giving the required notice. If the meeting is
a meeting of Shareholders of any Series or Class, but not a meeting of all
Shareholders of the Trust, then only a special meeting of Shareholders of such
Series or Class shall be called and only Shareholders of such Series or Class
shall be entitled to notice of and to vote at such meeting.
SECTION 3. NOTICE OF MEETINGS. Except as provided in Section 2 of this Article,
the Secretary shall cause written notice of the place, date and time, and, in
the case of a special meeting, the purpose or purposes for which the meeting is
called. Notice shall be given as determined by the Trustees at least fifteen
days before the date of the meeting. The written notice of any meeting
- 8 -
<PAGE>
may be delivered or mailed, postage prepaid, to each Shareholder entitled to
vote at such meeting. If mailed, notice shall be deemed to be given when
deposited in the United States mail directed to the Shareholder at his or her
address as it appears on the records of the Trust. Notice of any Shareholders'
meeting need not be given to any Shareholder if a written waiver of notice,
executed before or after such meeting, is filed with the record of such meeting,
or to any Shareholder who is present at such meeting in person or by proxy.
Notice of adjournment of a Shareholders' meeting to another time or place need
not be given, if such time and place are announced at the meeting at which the
adjournment is taken, or reasonable notice is given to persons present at the
meeting, and the adjourned meeting is held within a reasonable time after the
date set for the original meeting. At the adjourned meeting the Trust may
transact any business which might have been transacted at the original meeting.
If after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to Shareholders of record
entitled to vote at such meeting. Any irregularities in the notice of any
meeting or the nonreceipt of any such notice by any of the Shareholders shall
not invalidate any action otherwise properly taken at any such meeting.
SECTION 4. VALIDITY OF PROXIES. Subject to the provisions of the Trust
Instrument, Shareholders entitled to vote may vote either in person or by proxy,
provided that either (1) a written instrument authorizing such proxy to act has
been signed and dated by the Shareholder or by his or her duly authorized
attorney, or (2) the Trustees adopt by resolution an electronic, telephonic,
computerized or other alternative to execution of a written instrument
authorizing the proxy to act, but if a proposal by anyone other than the
officers or Trustees is submitted to a vote of the Shareholders of the Trust or
of any Series or Class, or if there is a proxy contest or proxy solicitation or
proposal in opposition to any proposal by the officers or Trustees, Shares may
be voted only in person or by written proxy. Unless the proxy provides
otherwise, it shall not be valid for more than eleven months before the date of
the meeting. All proxies shall be delivered to the Secretary or other person
responsible for recording the proceedings before being voted. A proxy with
respect to Shares held in the name of two or more persons shall be valid if
executed by one of them unless at or prior to exercise of such proxy the Trust
receives a specific written
- 9 -
<PAGE>
notice to the contrary from any one of them. Unless otherwise specifically
limited by their terms, proxies shall entitle the Shareholder to vote at any
adjournment of a Shareholders' meeting. A proxy purporting to be executed by or
on behalf of a Shareholder shall be deemed valid unless challenged at or prior
to its exercise, and the burden of proving invalidity shall rest on the
challenger. At every meeting of Shareholders, unless the voting is conducted by
inspectors, all questions concerning the qualifications of voters, the validity
of proxies, and the acceptance or rejection of votes, shall be decided by the
chairman of the meeting. Subject to the provisions of the Trust Instrument or
these Bylaws, all matters concerning the giving, voting or validity of proxies
shall be governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if the Trust
were a Delaware corporation and the Shareholders were shareholders of a Delaware
corporation.
SECTION 5. PLACE OF MEETING. All special meetings of Shareholders shall be held
at the principal place of business of the Trust or at such other place as the
Trustees may from time to time designate.
SECTION 6. ACTION WITHOUT A MEETING. Any action to be taken by Shareholders may
be taken without a meeting if a majority (or such other amount as may be
required by law) of the Outstanding Shares entitled to vote on the matter
consent to the action in writing and such written consents are filed with the
records of the Shareholders' meetings. Such written consent shall be treated for
all purposes as a vote at a meeting of the Shareholders held at the principal
place of business of the Trust.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
SECTION 1. SHARE CERTIFICATES. No certificates certifying the ownership of
Shares shall be issued except as the Trustees may otherwise authorize from time
to time. The Trustees may issue certificates to a Shareholder of any Series or
Class for any purpose and the issuance of a
- 10 -
<PAGE>
certificate to one or more Shareholders shall not require the issuance of
certificates to all Shareholders. If the Trustees authorize the issuance of
Share certificates, then such certificates shall be in the form prescribed from
time to time by the Trustees and shall be signed by the President or a Vice
President and by the Treasurer, Assistant Treasurer, Secretary or Assistant
Secretary of the Trust. Such signatures may be facsimiles if the certificate is
signed by a transfer agent or Shareholder servicing agent or by a registrar,
other than a Trustee, officer or employee of the Trust. If any officer who has
signed any such certificate or whose facsimile signature has been placed thereon
shall have ceased to be such an officer before the certificate is issued, then
such certificate may be issued by the Trust with the same effect as if he or she
were such an officer at the date of issue. The Trustees may at any time
discontinue the issuance of Share certificates and may, by written notice to
each Shareholder, require the surrender of Share certificates to the Trust for
cancellation. Such surrender and cancellation shall not affect the ownership of
Shares in the Trust.
In lieu of issuing certificates of Shares, the Trustees or the transfer
agent or Shareholder servicing agent may either issue receipts or may keep
accounts upon the books of the Trust for record holders of such Shares. In
either case, the record holders shall be deemed, for all purposes, to be holders
of certificates for such Shares as if they accepted such certificates and shall
be held to have expressly consented to the terms thereof.
SECTION 2. TRANSFER OF SHARES. The Shares of the Trust shall be transferable
only by a transfer recorded on the books of the Trust by the Shareholder of
record in person or by his or her duly authorized attorney or legal
representative. The Shares of the Trust may be freely transferred, and the
Trustees may, from time to time, adopt rules and regulations regarding the
method of transfer of such Shares. The Trust shall be entitled to treat the
holder of record of any Share or Shares as the absolute owner for all purposes,
and shall not be bound to recognize any legal, equitable or other claim or
interest in such Share or Shares on the part of any other person except as
otherwise expressly provided by law.
- 11 -
<PAGE>
Shares of any portfolio of the Trust that are repurchased or redeemed
by the Trust will be held in the treasury. Shares which are held in the treasury
may be reissued and sold by the Trust.
SECTION 3. LOST, STOLEN OR DESTROYED CERTIFICATES. If any Share certificate
should become lost, stolen or destroyed, a duplicate Share certificate may be
issued in place thereof, upon such terms and conditions as the Trustees may
prescribe, including, but not limited to, requiring the owner of the lost,
stolen or destroyed certificate to give the Trust a bond or other indemnity, in
such form and in such amount as the Trustees may direct and with such surety or
sureties as may be satisfactory to the Trustees sufficient to indemnify the
Trust against any claim that may be made against it on account of the alleged
loss, theft or destruction of any such certificate or the issuance of such new
certificate.
ARTICLE VII
CUSTODY OF SECURITIES
SECTION 1. EMPLOYMENT OF A CUSTODIAN. The Trust shall at all times place and
maintain all funds, securities and similar investments of the Trust and of each
Series in the custody of a Custodian, including any sub-custodian for the
Custodian ("Custodian"). The Custodian shall be one or more banks or trust
companies of good standing having an aggregate capital surplus, and undivided
profits of not less than two million dollars ($2,000,000), or such other
financial institutions or other entities as shall be permitted by rule or order
of the Securities and Exchange Commission. The Custodian shall be appointed from
time to time by the Trustees, who shall determine its remuneration.
SECTION 2. TERMINATION OF CUSTODIAN AGREEMENT. Upon termination of the Custodian
Agreement or inability of the Custodian to continue to serve, the Trustees shall
promptly appoint a successor Custodian, but in the event that no successor
Custodian can be found who has the required qualifications and is willing to
serve, the Trustees shall promptly call a special meeting of the Shareholders to
determine whether the Trust shall function without a Custodian or shall be
liquidated. If so directed by resolution of the Trustees or by vote of a
majority of Outstanding
- 12 -
<PAGE>
Shares of the Trust, the Custodian shall deliver and pay over all property of
the Trust or any Series held by it as specified in such vote.
SECTION 3. OTHER ARRANGEMENTS. The Trust may make such other arrangements for
the custody of its assets (including deposit arrangements) as may be required by
any applicable law, rule or regulation.
ARTICLE VIII
FISCAL YEAR AND ACCOUNTANT
SECTION 1. FISCAL YEAR. The fiscal year of the Trust shall, unless otherwise
ordered by the Trustees, be twelve calendar months ending on the 31st day of
July.
SECTION 2. ACCOUNTANT. The Trust shall employ independent certified public
accountants as its accountant ("Accountant") to examine the accounts of the
Trust and to sign and certify financial statements filed by the Trust. The
Accountant's certificates and reports shall be addressed both to the Trustees
and to the Shareholders.
ARTICLE IX
AMENDMENTS
SECTION 1. GENERAL. Except as provided in Section 2 of this Article, all Bylaws
of the Trust shall be subject to amendment, alteration or repeal, and new Bylaws
may be made by the affirmative vote of a majority of either: (1) the Outstanding
Shares of the Trust entitled to vote at any meeting; or (2) the Trustees at any
meeting.
SECTION 2. BY SHAREHOLDERS ONLY. After the issue of any Shares of the Trust, no
amendment, alteration or repeal of this Article shall be made except by the
affirmative vote of the holders of either: (a) more than two-thirds of the
Trust's Outstanding Shares present at a meeting at which
- 13 -
<PAGE>
the holders of more than fifty percent of the Outstanding Shares are present in
person or by proxy, or (b) more than fifty percent of the Trust's Outstanding
Shares.
ARTICLE X
NET ASSET VALUE
SECTION 1. DETERMINATION OF NET ASSET VALUE. The term "Net Asset Value" of any
Series shall mean that amount by which the assets belonging to that Series
exceed its liabilities, all as determined by or under the direction of the
Trustees. Such value per Share shall be determined separately for each Series
and shall be determined on such days and at such times as the Trustees may
determine. Such determination shall be made with respect to securities for which
market quotations are readily available, at the market value of such securities;
and with respect to other securities and assets, at the fair value as determined
in good faith by the Trustees, provided, however, that the Trustees, without
Shareholder approval, may alter the method of appraising portfolio securities
insofar as permitted under the Investment Company Act of 1940 and the rules,
regulations and interpretations thereof promulgated or issued by the Securities
and Exchange Commission or insofar as permitted by any order of the Securities
and Exchange Commission applicable to the Series. The Trustees may delegate any
of their powers and duties under this Section 1 with respect to appraisal of
assets and liabilities. At any time the Trustees may cause the Net Asset Value
per Share last determined to be determined again in a similar manner and may fix
the time when such redetermined values shall become effective.
ARTICLE XI
MISCELLANEOUS
SECTION 1. INSPECTION OF BOOKS. The Trustees shall from time to time determine
whether and to what extent, and at what times and places, and under what
conditions the accounts and books of the Trust or any Series or Class shall be
open to the inspection of Shareholders. No Shareholder
- 14 -
<PAGE>
shall have any right to inspect any account or book or document of the Trust
except as conferred by law or otherwise by the Trustees or by resolution of
Shareholders.
SECTION 2. SEVERABILITY. The provisions of these Bylaws are severable. If the
Trustees determine, with the advice of counsel, that any provision hereof
conflicts with the Investment Company Act of 1940, the regulated investment
company provisions of the Internal Revenue Code or with other applicable laws
and regulations, the conflicting provision shall be deemed never to have
constituted a part of these Bylaws; provided, however, that such determination
shall not affect any of the remaining provisions of these Bylaws or render
invalid or improper any action taken or omitted prior to such determination. If
any provision hereof shall be held invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall attach only to such provision only in
such jurisdiction and shall not affect any other provision of these Bylaws.
SECTION 3. HEADINGS. Headings are placed in these Bylaws for convenience of
reference only and in case of any conflict, the text of these Bylaws rather than
the headings shall control.
- 15 -
Exhibit 4(a)
JANUS ADVISER SERIES
INVESTMENT ADVISORY AGREEMENT
JANUS ADVISER GROWTH FUND
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 3rd day
of April, 2000, between JANUS ADVISER SERIES, a Delaware business trust (the
"Trust"), and JANUS CAPITAL CORPORATION, a Colorado corporation ("JCC").
W I T N E S S E T H:
WHEREAS, the Trust is or will be registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has registered or will register 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 Adviser Growth Fund (the "Fund"); and
WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should
assist the Trustees and officers of the Trust in the management of the
securities portfolio of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. INVESTMENT ADVISORY SERVICES. JCC shall furnish continuous advice and
recommendations to the Fund as to the acquisition, holding, or disposition of
any or all of the securities or other assets which the Fund may own or
contemplate acquiring from time to time. JCC shall give due consideration to the
investment policies and restrictions and the other statements concerning the
Fund in the Trust Instrument, bylaws, and registration statements under the 1940
Act and the 1933 Act, and to the provisions of the Internal Revenue Code, as
amended from time to time, applicable to the Fund as a regulated investment
company and as a funding vehicle for variable insurance contracts. In addition,
JCC shall cause its officers to attend meetings and furnish oral or written
reports, as the Trust may reasonably require, in order to keep the Trustees and
appropriate officers of the Trust fully informed as to the condition of the
investment portfolio of the Fund, the investment recommendations of JCC, and the
investment considerations which have given rise to those recommendations. JCC
shall supervise the purchase and sale of securities as directed by the
appropriate officers of the Trust.
<PAGE>
2. OTHER SERVICES. JCC 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. JCC 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 JCC to be
necessary or desirable. JCC shall generally monitor and report to Fund officers
the Fund's compliance with investment policies and restrictions as set forth in
the currently effective prospectus and statement of additional information
relating to the shares of the Fund under the Securities Act of 1933, as amended.
JCC 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. JCC is also authorized, subject to review by the Trustees, to
furnish such other services as JCC shall from time to time determine to be
necessary or useful to perform the services contemplated by this Agreement.
3. OBLIGATIONS OF TRUST. The Trust shall have the following obligations
under this Agreement:
(a) to keep JCC 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 JCC 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 JCC with any further materials or information which
JCC may reasonably request to enable it to perform its function
under this Agreement; and
(d) to compensate JCC for its services and reimburse JCC for its
expenses incurred hereunder in accordance with the provisions
hereof.
4. COMPENSATION. The Trust shall pay to JCC for its investment advisory
services a fee, calculated and payable for each day that this Agreement is in
effect, of 1/365 of 0.65% of the daily closing net asset value of the Fund
(1/366 of 0.65% of the daily closing net asset value of the Fund in a leap
year).
5. EXPENSES BORNE BY JCC. In addition to the expenses which JCC may incur
in the performance of its investment advisory functions under this Agreement,
and the expenses which it
<PAGE>
may expressly undertake to incur and pay under other agreements with the Trust
or otherwise, JCC shall incur and pay the following expenses relating to the
Fund's operations without reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of the Trust's
officers and its Trustees, except for such Trustees who are not
interested persons of JCC; and
(b) Rental of offices of the Trust.
6. EXPENSES BORNE BY THE TRUST. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCC pursuant to Sections 2 and 5
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not interested persons of JCC; 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 JCC or its affiliates for effecting exchange listed, over-the-counter or
other securities transactions); interest; all federal, state and local taxes
(including stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to purchasers thereof;
expenses of local representation in Delaware; expenses of shareholders' meetings
and of preparing, printing and distributing proxy statements, notices, and
reports to shareholders; expenses of preparing and filing reports and tax
returns with federal and state regulatory authorities; all expenses incurred in
complying with all federal and state laws and the laws of any foreign country
applicable to the issue, offer, or sale of shares of the Fund, including, but
not limited to, all costs involved in the registration or qualification of
shares of the Fund for sale in any jurisdiction, the costs of portfolio pricing
services and compliance systems, and all costs involved in preparing, printing
and mailing prospectuses and statements of additional information to fund
shareholders; and all fees, dues and other expenses incurred by the Trust in
connection with the membership of the Trust in any trade association or other
investment company organization.
7. TREATMENT OF INVESTMENT ADVICE. The Trust shall treat the investment
advice and recommendations of JCC as being advisory only, and shall retain full
control over its own investment policies. However, the Trustees may delegate to
the appropriate officers of the Trust, or to a committee of the Trustees, the
power to authorize purchases, sales or other actions affecting the portfolio of
the Fund in the interim between meetings of the Trustees.
8. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Trust
acting by vote of at least a majority of its outstanding voting securities,
provided in either case that sixty (60) days advance written notice of
termination be given to JCC at its principal place of business. This Agreement
may be terminated by JCC at any time, without penalty, by giving sixty (60) days
advance written notice of termination
<PAGE>
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 JCC does not continue
to provide investment advice to the Fund after such termination.
9. ASSIGNMENT. This Agreement shall terminate automatically in the event of
any assignment of this Agreement.
10. TERM. This Agreement shall continue in effect until July 1, 2001,
unless sooner terminated in accordance with its terms, and shall continue in
effect from year to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and by either the Trustees of the Trust
or the affirmative vote of a majority of the outstanding voting securities of
the Trust. The annual approvals provided for herein shall be effective to
continue this Agreement from year to year if given within a period beginning not
more than ninety (90) days prior to July 1 of each applicable year,
notwithstanding the fact that more than three hundred sixty-five (365) days may
have elapsed since the date on which such approval was last given.
11. AMENDMENTS. This Agreement may be amended by the parties only if such
amendment is specifically approved (i) by a majority of the Trustees, including
a majority of the Trustees who are not interested persons (as that phrase is
defined in Section 2(a)(19) of the 1940 Act) of JCC 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.
<PAGE>
14. LIMITATION OF LIABILITY OF JCC. JCC 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,
"JCC" shall include any affiliate of JCC performing services for the Trust
contemplated hereunder and directors, officers and employees of JCC and such
affiliates.
15. ACTIVITIES OF JCC. The services of JCC to the Trust hereunder are not
to be deemed to be exclusive, and JCC 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 JCC as directors,
officers and shareholders of JCC, that directors, officers, employees and
shareholders of JCC are or may become similarly interested in the Trust, and
that JCC 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.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the date and year first
above written.
JANUS CAPITAL CORPORATION
BY:
Steven R. Goodbarn, Vice President
JANUS ADVISER SERIES
BY:
Thomas H. Bailey, President
Exhibit 4(b)
JANUS ADVISER SERIES
INVESTMENT ADVISORY AGREEMENT
JANUS ADVISER AGGRESSIVE GROWTH FUND
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 3rd day
of April, 2000, between JANUS ADVISER SERIES, a Delaware business trust (the
"Trust"), and JANUS CAPITAL CORPORATION, a Colorado corporation ("JCC").
W I T N E S S E T H:
WHEREAS, the Trust is or will be registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has registered or will register 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 Adviser Aggressive Growth Fund (the "Fund");
and
WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should
assist the Trustees and officers of the Trust in the management of the
securities portfolio of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. INVESTMENT ADVISORY SERVICES. JCC shall furnish continuous advice and
recommendations to the Fund as to the acquisition, holding, or disposition of
any or all of the securities or other assets which the Fund may own or
contemplate acquiring from time to time. JCC shall give due consideration to the
investment policies and restrictions and the other statements concerning the
Fund in the Trust Instrument, bylaws, and registration statements under the 1940
Act and the 1933 Act, and to the provisions of the Internal Revenue Code, as
amended from time to time, applicable to the Fund as a regulated investment
company and as a funding vehicle for variable insurance contracts. In addition,
JCC shall cause its officers to attend meetings and furnish oral or written
reports, as the Trust may reasonably require, in order to keep the Trustees and
appropriate officers of the Trust fully informed as to the condition of the
investment portfolio of the Fund, the investment recommendations of JCC, and the
investment considerations which have given rise to those recommendations. JCC
shall supervise the purchase and sale of securities as directed by the
appropriate officers of the Trust.
<PAGE>
2. OTHER SERVICES. JCC 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. JCC 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 JCC to be
necessary or desirable. JCC shall generally monitor and report to Fund officers
the Fund's compliance with investment policies and restrictions as set forth in
the currently effective prospectus and statement of additional information
relating to the shares of the Fund under the Securities Act of 1933, as amended.
JCC 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. JCC is also authorized, subject to review by the Trustees, to
furnish such other services as JCC shall from time to time determine to be
necessary or useful to perform the services contemplated by this Agreement.
3. OBLIGATIONS OF TRUST. The Trust shall have the following obligations
under this Agreement:
(a) to keep JCC 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 JCC 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 JCC with any further materials or information which
JCC may reasonably request to enable it to perform its function
under this Agreement; and
(d) to compensate JCC for its services and reimburse JCC for its
expenses incurred hereunder in accordance with the provisions
hereof.
4. COMPENSATION. The Trust shall pay to JCC for its investment advisory
services a fee, calculated and payable for each day that this Agreement is in
effect, of 1/365 of 0.65% of the daily closing net asset value of the Fund
(1/366 of 0.65% of the daily closing net asset value of the Fund in a leap
year).
5. EXPENSES BORNE BY JCC. In addition to the expenses which JCC may incur
in the performance of its investment advisory functions under this Agreement,
and the expenses which it may expressly undertake to incur and pay under other
agreements with the Trust or otherwise, JCC
<PAGE>
shall incur and pay the following expenses relating to the Fund's operations
without reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of the Trust's
officers and its Trustees, except for such Trustees who are not
interested persons of JCC; and
(b) Rental of offices of the Trust.
6. EXPENSES BORNE BY THE TRUST. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCC pursuant to Sections 2 and 5
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not interested persons of JCC; 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 JCC or its affiliates for effecting exchange listed, over-the-counter or
other securities transactions); interest; all federal, state and local taxes
(including stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to purchasers thereof;
expenses of local representation in Delaware; expenses of shareholders' meetings
and of preparing, printing and distributing proxy statements, notices, and
reports to shareholders; expenses of preparing and filing reports and tax
returns with federal and state regulatory authorities; all expenses incurred in
complying with all federal and state laws and the laws of any foreign country
applicable to the issue, offer, or sale of shares of the Fund, including, but
not limited to, all costs involved in the registration or qualification of
shares of the Fund for sale in any jurisdiction, the costs of portfolio pricing
services and compliance systems, and all costs involved in preparing, printing
and mailing prospectuses and statements of additional information to fund
shareholders; and all fees, dues and other expenses incurred by the Trust in
connection with the membership of the Trust in any trade association or other
investment company organization.
7. TREATMENT OF INVESTMENT ADVICE. The Trust shall treat the investment
advice and recommendations of JCC as being advisory only, and shall retain full
control over its own investment policies. However, the Trustees may delegate to
the appropriate officers of the Trust, or to a committee of the Trustees, the
power to authorize purchases, sales or other actions affecting the portfolio of
the Fund in the interim between meetings of the Trustees.
8. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Trust
acting by vote of at least a majority of its outstanding voting securities,
provided in either case that sixty (60) days advance written notice of
termination be given to JCC at its principal place of business. This Agreement
may be terminated by JCC 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
<PAGE>
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 JCC does not continue to provide investment
advice to the Fund after such termination.
9. ASSIGNMENT. This Agreement shall terminate automatically in the event of
any assignment of this Agreement.
10. TERM. This Agreement shall continue in effect until July 1, 2001,
unless sooner terminated in accordance with its terms, and shall continue in
effect from year to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and by either the Trustees of the Trust
or the affirmative vote of a majority of the outstanding voting securities of
the Trust. The annual approvals provided for herein shall be effective to
continue this Agreement from year to year if given within a period beginning not
more than ninety (90) days prior to July 1 of each applicable year,
notwithstanding the fact that more than three hundred sixty-five (365) days may
have elapsed since the date on which such approval was last given.
11. AMENDMENTS. This Agreement may be amended by the parties only if such
amendment is specifically approved (i) by a majority of the Trustees, including
a majority of the Trustees who are not interested persons (as that phrase is
defined in Section 2(a)(19) of the 1940 Act) of JCC 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.
<PAGE>
14. LIMITATION OF LIABILITY OF JCC. JCC 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,
"JCC" shall include any affiliate of JCC performing services for the Trust
contemplated hereunder and directors, officers and employees of JCC and such
affiliates.
15. ACTIVITIES OF JCC. The services of JCC to the Trust hereunder are not
to be deemed to be exclusive, and JCC 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 JCC as directors,
officers and shareholders of JCC, that directors, officers, employees and
shareholders of JCC are or may become similarly interested in the Trust, and
that JCC 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.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the date and year first
above written.
JANUS CAPITAL CORPORATION
BY:
Steven R. Goodbarn, Vice President
JANUS ADVISER SERIES
BY:
Thomas H. Bailey, President
Exhibit 4(c)
JANUS ADVISER SERIES
INVESTMENT ADVISORY AGREEMENT
JANUS ADVISER CAPITAL APPRECIATION FUND
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 3rd day
of April, 2000, between JANUS ADVISER SERIES, a Delaware business trust (the
"Trust"), and JANUS CAPITAL CORPORATION, a Colorado corporation ("JCC").
W I T N E S S E T H:
WHEREAS, the Trust is or will be registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has registered or will register 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 ADVISER CAPITAL APPRECIATION Fund (the
"Fund"); and
WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should
assist the Trustees and officers of the Trust in the management of the
securities portfolio of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. INVESTMENT ADVISORY SERVICES. JCC shall furnish continuous advice and
recommendations to the Fund as to the acquisition, holding, or disposition of
any or all of the securities or other assets which the Fund may own or
contemplate acquiring from time to time. JCC shall give due consideration to the
investment policies and restrictions and the other statements concerning the
Fund in the Trust Instrument, bylaws, and registration statements under the 1940
Act and the 1933 Act, and to the provisions of the Internal Revenue Code, as
amended from time to time, applicable to the Fund as a regulated investment
company and as a funding vehicle for variable insurance contracts. In addition,
JCC shall cause its officers to attend meetings and furnish oral or written
reports, as the Trust may reasonably require, in order to keep the Trustees and
appropriate officers of the Trust fully informed as to the condition of the
investment portfolio of the Fund, the investment recommendations of JCC, and the
investment considerations which have given rise to those recommendations. JCC
shall supervise the purchase and sale of securities as directed by the
appropriate officers of the Trust.
<PAGE>
2. OTHER SERVICES. JCC 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. JCC 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 JCC to be
necessary or desirable. JCC shall generally monitor and report to Fund officers
the Fund's compliance with investment policies and restrictions as set forth in
the currently effective prospectus and statement of additional information
relating to the shares of the Fund under the Securities Act of 1933, as amended.
JCC 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. JCC is also authorized, subject to review by the Trustees, to
furnish such other services as JCC shall from time to time determine to be
necessary or useful to perform the services contemplated by this Agreement.
3. OBLIGATIONS OF TRUST. The Trust shall have the following obligations
under this Agreement:
(a) to keep JCC 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 JCC 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 JCC with any further materials or information which
JCC may reasonably request to enable it to perform its function
under this Agreement; and
(d) to compensate JCC for its services and reimburse JCC for its
expenses incurred hereunder in accordance with the provisions
hereof.
4. COMPENSATION. The Trust shall pay to JCC for its investment advisory
services a fee, calculated and payable for each day that this Agreement is in
effect, of 1/365 of 0.65% of the daily closing net asset value of the Fund
(1/366 of 0.65% of the daily closing net asset value of the Fund in a leap
year).
5. EXPENSES BORNE BY JCC. In addition to the expenses which JCC may incur
in the performance of its investment advisory functions under this Agreement,
and the expenses which it
<PAGE>
may expressly undertake to incur and pay under other agreements with the Trust
or otherwise, JCC shall incur and pay the following expenses relating to the
Fund's operations without reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of the Trust's
officers and its Trustees, except for such Trustees who are not
interested persons of JCC; and
(b) Rental of offices of the Trust.
6. EXPENSES BORNE BY THE TRUST. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCC pursuant to Sections 2 and 5
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not interested persons of JCC; 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 JCC or its affiliates for effecting exchange listed, over-the-counter or
other securities transactions); interest; all federal, state and local taxes
(including stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to purchasers thereof;
expenses of local representation in Delaware; expenses of shareholders' meetings
and of preparing, printing and distributing proxy statements, notices, and
reports to shareholders; expenses of preparing and filing reports and tax
returns with federal and state regulatory authorities; all expenses incurred in
complying with all federal and state laws and the laws of any foreign country
applicable to the issue, offer, or sale of shares of the Fund, including, but
not limited to, all costs involved in the registration or qualification of
shares of the Fund for sale in any jurisdiction, the costs of portfolio pricing
services and compliance systems, and all costs involved in preparing, printing
and mailing prospectuses and statements of additional information to fund
shareholders; and all fees, dues and other expenses incurred by the Trust in
connection with the membership of the Trust in any trade association or other
investment company organization.
7. TREATMENT OF INVESTMENT ADVICE. The Trust shall treat the investment
advice and recommendations of JCC as being advisory only, and shall retain full
control over its own investment policies. However, the Trustees may delegate to
the appropriate officers of the Trust, or to a committee of the Trustees, the
power to authorize purchases, sales or other actions affecting the portfolio of
the Fund in the interim between meetings of the Trustees.
8. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Trust
acting by vote of at least a majority of its outstanding voting securities,
provided in either case that sixty (60) days advance written notice of
termination be given to JCC at its principal place of business. This Agreement
may be terminated by JCC 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
<PAGE>
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 JCC does not continue to provide investment
advice to the Fund after such termination.
9. ASSIGNMENT. This Agreement shall terminate automatically in the event of
any assignment of this Agreement.
10. TERM. This Agreement shall continue in effect until July 1, 2001,
unless sooner terminated in accordance with its terms, and shall continue in
effect from year to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and by either the Trustees of the Trust
or the affirmative vote of a majority of the outstanding voting securities of
the Trust. The annual approvals provided for herein shall be effective to
continue this Agreement from year to year if given within a period beginning not
more than ninety (90) days prior to July 1 of each applicable year,
notwithstanding the fact that more than three hundred sixty-five (365) days may
have elapsed since the date on which such approval was last given.
11. AMENDMENTS. This Agreement may be amended by the parties only if such
amendment is specifically approved (i) by a majority of the Trustees, including
a majority of the Trustees who are not interested persons (as that phrase is
defined in Section 2(a)(19) of the 1940 Act) of JCC 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.
<PAGE>
14. LIMITATION OF LIABILITY OF JCC. JCC 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,
"JCC" shall include any affiliate of JCC performing services for the Trust
contemplated hereunder and directors, officers and employees of JCC and such
affiliates.
15. ACTIVITIES OF JCC. The services of JCC to the Trust hereunder are not
to be deemed to be exclusive, and JCC 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 JCC as directors,
officers and shareholders of JCC, that directors, officers, employees and
shareholders of JCC are or may become similarly interested in the Trust, and
that JCC 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.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the date and year first
above written.
JANUS CAPITAL CORPORATION
BY:
Steven R. Goodbarn, Vice President
JANUS ADVISER SERIES
BY:
Thomas H. Bailey, President
Exhibit 4(d)
JANUS ADVISER SERIES
INVESTMENT ADVISORY AGREEMENT
JANUS ADVISER BALANCED FUND
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 3rd day
of April, 2000, between JANUS ADVISER SERIES, a Delaware business trust (the
"Trust"), and JANUS CAPITAL CORPORATION, a Colorado corporation ("JCC").
W I T N E S S E T H:
WHEREAS, the Trust is or will be registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has registered or will register 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 Adviser Balanced Fund (the "Fund"); and
WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should
assist the Trustees and officers of the Trust in the management of the
securities portfolio of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. INVESTMENT ADVISORY SERVICES. JCC shall furnish continuous advice and
recommendations to the Fund as to the acquisition, holding, or disposition of
any or all of the securities or other assets which the Fund may own or
contemplate acquiring from time to time. JCC shall give due consideration to the
investment policies and restrictions and the other statements concerning the
Fund in the Trust Instrument, bylaws, and registration statements under the 1940
Act and the 1933 Act, and to the provisions of the Internal Revenue Code, as
amended from time to time, applicable to the Fund as a regulated investment
company and as a funding vehicle for variable insurance contracts. In addition,
JCC shall cause its officers to attend meetings and furnish oral or written
reports, as the Trust may reasonably require, in order to keep the Trustees and
appropriate officers of the Trust fully informed as to the condition of the
investment portfolio of the Fund, the investment recommendations of JCC, and the
investment considerations which have given rise to those recommendations. JCC
shall supervise the purchase and sale of securities as directed by the
appropriate officers of the Trust.
<PAGE>
2. OTHER SERVICES. JCC 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. JCC 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 JCC to be
necessary or desirable. JCC shall generally monitor and report to Fund officers
the Fund's compliance with investment policies and restrictions as set forth in
the currently effective prospectus and statement of additional information
relating to the shares of the Fund under the Securities Act of 1933, as amended.
JCC 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. JCC is also authorized, subject to review by the Trustees, to
furnish such other services as JCC shall from time to time determine to be
necessary or useful to perform the services contemplated by this Agreement.
3. OBLIGATIONS OF TRUST. The Trust shall have the following obligations
under this Agreement:
(a) to keep JCC 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 JCC 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 JCC with any further materials or information which
JCC may reasonably request to enable it to perform its function
under this Agreement; and
(d) to compensate JCC for its services and reimburse JCC for its
expenses incurred hereunder in accordance with the provisions
hereof.
4. COMPENSATION. The Trust shall pay to JCC for its investment advisory
services a fee, calculated and payable for each day that this Agreement is in
effect, of 1/365 of 0.65% of the daily closing net asset value of the Fund
(1/366 of 0.65% of the daily closing net asset value of the Fund in a leap
year).
5. EXPENSES BORNE BY JCC. In addition to the expenses which JCC may incur
in the performance of its investment advisory functions under this Agreement,
and the expenses which it may expressly undertake to incur and pay under other
agreements with the Trust or otherwise, JCC shall incur and pay the following
expenses relating to the Fund's operations without reimbursement from the Fund:
<PAGE>
(a) Reasonable compensation, fees and related expenses of the Trust's
officers and its Trustees, except for such Trustees who are not
interested persons of JCC; and
(b) Rental of offices of the Trust.
6. EXPENSES BORNE BY THE TRUST. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCC pursuant to Sections 2 and 5
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not interested persons of JCC; 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 JCC or its affiliates for effecting exchange listed, over-the-counter or
other securities transactions); interest; all federal, state and local taxes
(including stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to purchasers thereof;
expenses of local representation in Delaware; expenses of shareholders' meetings
and of preparing, printing and distributing proxy statements, notices, and
reports to shareholders; expenses of preparing and filing reports and tax
returns with federal and state regulatory authorities; all expenses incurred in
complying with all federal and state laws and the laws of any foreign country
applicable to the issue, offer, or sale of shares of the Fund, including, but
not limited to, all costs involved in the registration or qualification of
shares of the Fund for sale in any jurisdiction, the costs of portfolio pricing
services and compliance systems, and all costs involved in preparing, printing
and mailing prospectuses and statements of additional information to fund
shareholders; and all fees, dues and other expenses incurred by the Trust in
connection with the membership of the Trust in any trade association or other
investment company organization.
7. TREATMENT OF INVESTMENT ADVICE. The Trust shall treat the investment
advice and recommendations of JCC as being advisory only, and shall retain full
control over its own investment policies. However, the Trustees may delegate to
the appropriate officers of the Trust, or to a committee of the Trustees, the
power to authorize purchases, sales or other actions affecting the portfolio of
the Fund in the interim between meetings of the Trustees.
8. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Trust
acting by vote of at least a majority of its outstanding voting securities,
provided in either case that sixty (60) days advance written notice of
termination be given to JCC at its principal place of business. This Agreement
may be terminated by JCC 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 JCC does not continue to provide investment advice to the Fund
after such termination.
<PAGE>
9. ASSIGNMENT. This Agreement shall terminate automatically in the event of
any assignment of this Agreement.
10. TERM. This Agreement shall continue in effect until July 1, 2001,
unless sooner terminated in accordance with its terms, and shall continue in
effect from year to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and by either the Trustees of the Trust
or the affirmative vote of a majority of the outstanding voting securities of
the Trust. The annual approvals provided for herein shall be effective to
continue this Agreement from year to year if given within a period beginning not
more than ninety (90) days prior to July 1 of each applicable year,
notwithstanding the fact that more than three hundred sixty-five (365) days may
have elapsed since the date on which such approval was last given.
11. AMENDMENTS. This Agreement may be amended by the parties only if such
amendment is specifically approved (i) by a majority of the Trustees, including
a majority of the Trustees who are not interested persons (as that phrase is
defined in Section 2(a)(19) of the 1940 Act) of JCC 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.
<PAGE>
14. LIMITATION OF LIABILITY OF JCC. JCC 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,
"JCC" shall include any affiliate of JCC performing services for the Trust
contemplated hereunder and directors, officers and employees of JCC and such
affiliates.
15. ACTIVITIES OF JCC. The services of JCC to the Trust hereunder are not
to be deemed to be exclusive, and JCC 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 JCC as directors,
officers and shareholders of JCC, that directors, officers, employees and
shareholders of JCC are or may become similarly interested in the Trust, and
that JCC 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.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the date and year first
above written.
JANUS CAPITAL CORPORATION
BY:
Steven R. Goodbarn, Vice President
JANUS ADVISER SERIES
BY:
Thomas H. Bailey, President
Exhibit 4(e)
JANUS ADVISER SERIES
INVESTMENT ADVISORY AGREEMENT
JANUS ADVISER EQUITY INCOME FUND
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 3rd day
of April, 2000, between JANUS ADVISER SERIES, a Delaware business trust (the
"Trust"), and JANUS CAPITAL CORPORATION, a Colorado corporation ("JCC").
W I T N E S S E T H:
WHEREAS, the Trust is or will be registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has registered or will register 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 ADVISER EQUITY INCOME Fund (the "Fund"); and
WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should
assist the Trustees and officers of the Trust in the management of the
securities portfolio of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. INVESTMENT ADVISORY SERVICES. JCC shall furnish continuous advice and
recommendations to the Fund as to the acquisition, holding, or disposition of
any or all of the securities or other assets which the Fund may own or
contemplate acquiring from time to time. JCC shall give due consideration to the
investment policies and restrictions and the other statements concerning the
Fund in the Trust Instrument, bylaws, and registration statements under the 1940
Act and the 1933 Act, and to the provisions of the Internal Revenue Code, as
amended from time to time, applicable to the Fund as a regulated investment
company and as a funding vehicle for variable insurance contracts. In addition,
JCC shall cause its officers to attend meetings and furnish oral or written
reports, as the Trust may reasonably require, in order to keep the Trustees and
appropriate officers of the Trust fully informed as to the condition of the
investment portfolio of the Fund, the investment recommendations of JCC, and the
investment considerations which have given rise to those recommendations. JCC
shall supervise the purchase and sale of securities as directed by the
appropriate officers of the Trust.
<PAGE>
2. OTHER SERVICES. JCC 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. JCC 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 JCC to be
necessary or desirable. JCC shall generally monitor and report to Fund officers
the Fund's compliance with investment policies and restrictions as set forth in
the currently effective prospectus and statement of additional information
relating to the shares of the Fund under the Securities Act of 1933, as amended.
JCC 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. JCC is also authorized, subject to review by the Trustees, to
furnish such other services as JCC shall from time to time determine to be
necessary or useful to perform the services contemplated by this Agreement.
3. OBLIGATIONS OF TRUST. The Trust shall have the following obligations
under this Agreement:
(a) to keep JCC 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 JCC 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 JCC with any further materials or information which
JCC may reasonably request to enable it to perform its function
under this Agreement; and
(d) to compensate JCC for its services and reimburse JCC for its
expenses incurred hereunder in accordance with the provisions
hereof.
4. COMPENSATION. The Trust shall pay to JCC for its investment advisory
services a fee, calculated and payable for each day that this Agreement is in
effect, of 1/365 of 0.65% of the daily closing net asset value of the Fund
(1/366 of 0.65% of the daily closing net asset value of the Fund in a leap
year).
5. EXPENSES BORNE BY JCC. In addition to the expenses which JCC may incur
in the performance of its investment advisory functions under this Agreement,
and the expenses which it may expressly undertake to incur and pay under other
agreements with the Trust or otherwise, JCC shall incur and pay the following
expenses relating to the Fund's operations without reimbursement from the Fund:
<PAGE>
(a) Reasonable compensation, fees and related expenses of the Trust's
officers and its Trustees, except for such Trustees who are not
interested persons of JCC; and
(b) Rental of offices of the Trust.
6. EXPENSES BORNE BY THE TRUST. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCC pursuant to Sections 2 and 5
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not interested persons of JCC; 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 JCC or its affiliates for effecting exchange listed, over-the-counter or
other securities transactions); interest; all federal, state and local taxes
(including stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to purchasers thereof;
expenses of local representation in Delaware; expenses of shareholders' meetings
and of preparing, printing and distributing proxy statements, notices, and
reports to shareholders; expenses of preparing and filing reports and tax
returns with federal and state regulatory authorities; all expenses incurred in
complying with all federal and state laws and the laws of any foreign country
applicable to the issue, offer, or sale of shares of the Fund, including, but
not limited to, all costs involved in the registration or qualification of
shares of the Fund for sale in any jurisdiction, the costs of portfolio pricing
services and compliance systems, and all costs involved in preparing, printing
and mailing prospectuses and statements of additional information to fund
shareholders; and all fees, dues and other expenses incurred by the Trust in
connection with the membership of the Trust in any trade association or other
investment company organization.
7. TREATMENT OF INVESTMENT ADVICE. The Trust shall treat the investment
advice and recommendations of JCC as being advisory only, and shall retain full
control over its own investment policies. However, the Trustees may delegate to
the appropriate officers of the Trust, or to a committee of the Trustees, the
power to authorize purchases, sales or other actions affecting the portfolio of
the Fund in the interim between meetings of the Trustees.
8. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Trust
acting by vote of at least a majority of its outstanding voting securities,
provided in either case that sixty (60) days advance written notice of
termination be given to JCC at its principal place of business. This Agreement
may be terminated by JCC 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 JCC does not continue to provide investment advice to the Fund
after such termination.
<PAGE>
9. ASSIGNMENT. This Agreement shall terminate automatically in the event of
any assignment of this Agreement.
10. TERM. This Agreement shall continue in effect until July 1, 2001,
unless sooner terminated in accordance with its terms, and shall continue in
effect from year to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and by either the Trustees of the Trust
or the affirmative vote of a majority of the outstanding voting securities of
the Trust. The annual approvals provided for herein shall be effective to
continue this Agreement from year to year if given within a period beginning not
more than ninety (90) days prior to July 1 of each applicable year,
notwithstanding the fact that more than three hundred sixty-five (365) days may
have elapsed since the date on which such approval was last given.
11. AMENDMENTS. This Agreement may be amended by the parties only if such
amendment is specifically approved (i) by a majority of the Trustees, including
a majority of the Trustees who are not interested persons (as that phrase is
defined in Section 2(a)(19) of the 1940 Act) of JCC 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.
<PAGE>
14. LIMITATION OF LIABILITY OF JCC. JCC 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,
"JCC" shall include any affiliate of JCC performing services for the Trust
contemplated hereunder and directors, officers and employees of JCC and such
affiliates.
15. ACTIVITIES OF JCC. The services of JCC to the Trust hereunder are not
to be deemed to be exclusive, and JCC 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 JCC as directors,
officers and shareholders of JCC, that directors, officers, employees and
shareholders of JCC are or may become similarly interested in the Trust, and
that JCC 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.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the date and year first
above written.
JANUS CAPITAL CORPORATION
BY:
Steven R. Goodbarn, Vice President
JANUS ADVISER SERIES
BY:
Thomas H. Bailey, President
Exhibit 4(f)
JANUS ADVISER SERIES
INVESTMENT ADVISORY AGREEMENT
JANUS ADVISER GROWTH AND INCOME FUND
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 3rd day
of April, 2000, between JANUS ADVISER SERIES, a Delaware business trust (the
"Trust"), and JANUS CAPITAL CORPORATION, a Colorado corporation ("JCC").
W I T N E S S E T H:
WHEREAS, the Trust is or will be registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has registered or will register 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 Adviser Growth and Income Fund (the "Fund");
and
WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should
assist the Trustees and officers of the Trust in the management of the
securities portfolio of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. INVESTMENT ADVISORY SERVICES. JCC shall furnish continuous advice and
recommendations to the Fund as to the acquisition, holding, or disposition of
any or all of the securities or other assets which the Fund may own or
contemplate acquiring from time to time. JCC shall give due consideration to the
investment policies and restrictions and the other statements concerning the
Fund in the Trust Instrument, bylaws, and registration statements under the 1940
Act and the 1933 Act, and to the provisions of the Internal Revenue Code, as
amended from time to time, applicable to the Fund as a regulated investment
company and as a funding vehicle for variable insurance contracts. In addition,
JCC shall cause its officers to attend meetings and furnish oral or written
reports, as the Trust may reasonably require, in order to keep the Trustees and
appropriate officers of the Trust fully informed as to the condition of the
investment portfolio of the Fund, the investment recommendations of JCC, and the
investment considerations which have given rise to those recommendations. JCC
shall supervise the purchase and sale of securities as directed by the
appropriate officers of the Trust.
<PAGE>
2. OTHER SERVICES. JCC 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. JCC 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 JCC to be
necessary or desirable. JCC shall generally monitor and report to Fund officers
the Fund's compliance with investment policies and restrictions as set forth in
the currently effective prospectus and statement of additional information
relating to the shares of the Fund under the Securities Act of 1933, as amended.
JCC 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. JCC is also authorized, subject to review by the Trustees, to
furnish such other services as JCC shall from time to time determine to be
necessary or useful to perform the services contemplated by this Agreement.
3. OBLIGATIONS OF TRUST. The Trust shall have the following obligations
under this Agreement:
(a) to keep JCC 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 JCC 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 JCC with any further materials or information which
JCC may reasonably request to enable it to perform its function
under this Agreement; and
(d) to compensate JCC for its services and reimburse JCC for its
expenses incurred hereunder in accordance with the provisions
hereof.
4. COMPENSATION. The Trust shall pay to JCC for its investment advisory
services a fee, calculated and payable for each day that this Agreement is in
effect, of 1/365 of 0.65% of the daily closing net asset value of the Fund
(1/366 of 0.65% of the daily closing net asset value of the Fund in a leap
year).
5. EXPENSES BORNE BY JCC. In addition to the expenses which JCC may incur
in the performance of its investment advisory functions under this Agreement,
and the expenses which it may expressly undertake to incur and pay under other
agreements with the Trust or otherwise, JCC shall incur and pay the following
expenses relating to the Fund's operations without reimbursement from the Fund:
<PAGE>
(a) Reasonable compensation, fees and related expenses of the Trust's
officers and its Trustees, except for such Trustees who are not
interested persons of JCC; and
(b) Rental of offices of the Trust.
6. EXPENSES BORNE BY THE TRUST. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCC pursuant to Sections 2 and 5
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not interested persons of JCC; 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 JCC or its affiliates for effecting exchange listed, over-the-counter or
other securities transactions); interest; all federal, state and local taxes
(including stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to purchasers thereof;
expenses of local representation in Delaware; expenses of shareholders' meetings
and of preparing, printing and distributing proxy statements, notices, and
reports to shareholders; expenses of preparing and filing reports and tax
returns with federal and state regulatory authorities; all expenses incurred in
complying with all federal and state laws and the laws of any foreign country
applicable to the issue, offer, or sale of shares of the Fund, including, but
not limited to, all costs involved in the registration or qualification of
shares of the Fund for sale in any jurisdiction, the costs of portfolio pricing
services and compliance systems, and all costs involved in preparing, printing
and mailing prospectuses and statements of additional information to fund
shareholders; and all fees, dues and other expenses incurred by the Trust in
connection with the membership of the Trust in any trade association or other
investment company organization.
7. TREATMENT OF INVESTMENT ADVICE. The Trust shall treat the investment
advice and recommendations of JCC as being advisory only, and shall retain full
control over its own investment policies. However, the Trustees may delegate to
the appropriate officers of the Trust, or to a committee of the Trustees, the
power to authorize purchases, sales or other actions affecting the portfolio of
the Fund in the interim between meetings of the Trustees.
8. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Trust
acting by vote of at least a majority of its outstanding voting securities,
provided in either case that sixty (60) days advance written notice of
termination be given to JCC at its principal place of business. This Agreement
may be terminated by JCC 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 JCC does not continue to provide investment advice to the Fund
after such termination.
<PAGE>
9. ASSIGNMENT. This Agreement shall terminate automatically in the event of
any assignment of this Agreement.
10. TERM. This Agreement shall continue in effect until July 1, 2001,
unless sooner terminated in accordance with its terms, and shall continue in
effect from year to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and by either the Trustees of the Trust
or the affirmative vote of a majority of the outstanding voting securities of
the Trust. The annual approvals provided for herein shall be effective to
continue this Agreement from year to year if given within a period beginning not
more than ninety (90) days prior to July 1 of each applicable year,
notwithstanding the fact that more than three hundred sixty-five (365) days may
have elapsed since the date on which such approval was last given.
11. AMENDMENTS. This Agreement may be amended by the parties only if such
amendment is specifically approved (i) by a majority of the Trustees, including
a majority of the Trustees who are not interested persons (as that phrase is
defined in Section 2(a)(19) of the 1940 Act) of JCC 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.
<PAGE>
14. LIMITATION OF LIABILITY OF JCC. JCC 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,
"JCC" shall include any affiliate of JCC performing services for the Trust
contemplated hereunder and directors, officers and employees of JCC and such
affiliates.
15. ACTIVITIES OF JCC. The services of JCC to the Trust hereunder are not
to be deemed to be exclusive, and JCC 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 JCC as directors,
officers and shareholders of JCC, that directors, officers, employees and
shareholders of JCC are or may become similarly interested in the Trust, and
that JCC 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.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the date and year first
above written.
JANUS CAPITAL CORPORATION
BY:
Steven R. Goodbarn, Vice President
JANUS ADVISER SERIES
BY:
Thomas H. Bailey, President
Exhibit 4(g)
JANUS ADVISER SERIES
INVESTMENT ADVISORY AGREEMENT
JANUS ADVISER STRATEGIC VALUE FUND
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 3rd day
of April, 2000, between JANUS ADVISER SERIES, a Delaware business trust (the
"Trust"), and JANUS CAPITAL CORPORATION, a Colorado corporation ("JCC").
W I T N E S S E T H:
WHEREAS, the Trust is or will be registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has registered or will register 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 Adviser Strategic Value Fund (the "Fund");
and
WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should
assist the Trustees and officers of the Trust in the management of the
securities portfolio of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. INVESTMENT ADVISORY SERVICES. JCC shall furnish continuous advice and
recommendations to the Fund as to the acquisition, holding, or disposition of
any or all of the securities or other assets which the Fund may own or
contemplate acquiring from time to time. JCC shall give due consideration to the
investment policies and restrictions and the other statements concerning the
Fund in the Trust Instrument, bylaws, and registration statements under the 1940
Act and the 1933 Act, and to the provisions of the Internal Revenue Code, as
amended from time to time, applicable to the Fund as a regulated investment
company and as a funding vehicle for variable insurance contracts. In addition,
JCC shall cause its officers to attend meetings and furnish oral or written
reports, as the Trust may reasonably require, in order to keep the Trustees and
appropriate officers of the Trust fully informed as to the condition of the
investment portfolio of the Fund, the investment recommendations of JCC, and the
investment considerations which have given rise to those recommendations. JCC
shall supervise the purchase and sale of securities as directed by the
appropriate officers of the Trust.
<PAGE>
2. OTHER SERVICES. JCC 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. JCC 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 JCC to be
necessary or desirable. JCC shall generally monitor and report to Fund officers
the Fund's compliance with investment policies and restrictions as set forth in
the currently effective prospectus and statement of additional information
relating to the shares of the Fund under the Securities Act of 1933, as amended.
JCC 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. JCC is also authorized, subject to review by the Trustees, to
furnish such other services as JCC shall from time to time determine to be
necessary or useful to perform the services contemplated by this Agreement.
3. OBLIGATIONS OF TRUST. The Trust shall have the following obligations
under this Agreement:
(a) to keep JCC 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 JCC 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 JCC with any further materials or information which
JCC may reasonably request to enable it to perform its function
under this Agreement; and
(d) to compensate JCC for its services and reimburse JCC for its
expenses incurred hereunder in accordance with the provisions
hereof.
4. COMPENSATION. The Trust shall pay to JCC for its investment advisory
services a fee, calculated and payable for each day that this Agreement is in
effect, of 1/365 of 0.65% of the daily closing net asset value of the Fund
(1/366 of 0.65% of the daily closing net asset value of the Fund in a leap
year).
5. EXPENSES BORNE BY JCC. In addition to the expenses which JCC may incur
in the performance of its investment advisory functions under this Agreement,
and the expenses which it may expressly undertake to incur and pay under other
agreements with the Trust or otherwise, JCC
<PAGE>
shall incur and pay the following expenses relating to the Fund's operations
without reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of the Trust's
officers and its Trustees, except for such Trustees who are not
interested persons of JCC; and
(b) Rental of offices of the Trust.
6. EXPENSES BORNE BY THE TRUST. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCC pursuant to Sections 2 and 5
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not interested persons of JCC; 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 JCC or its affiliates for effecting exchange listed, over-the-counter or
other securities transactions); interest; all federal, state and local taxes
(including stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to purchasers thereof;
expenses of local representation in Delaware; expenses of shareholders' meetings
and of preparing, printing and distributing proxy statements, notices, and
reports to shareholders; expenses of preparing and filing reports and tax
returns with federal and state regulatory authorities; all expenses incurred in
complying with all federal and state laws and the laws of any foreign country
applicable to the issue, offer, or sale of shares of the Fund, including, but
not limited to, all costs involved in the registration or qualification of
shares of the Fund for sale in any jurisdiction, the costs of portfolio pricing
services and compliance systems, and all costs involved in preparing, printing
and mailing prospectuses and statements of additional information to fund
shareholders; and all fees, dues and other expenses incurred by the Trust in
connection with the membership of the Trust in any trade association or other
investment company organization.
7. TREATMENT OF INVESTMENT ADVICE. The Trust shall treat the investment
advice and recommendations of JCC as being advisory only, and shall retain full
control over its own investment policies. However, the Trustees may delegate to
the appropriate officers of the Trust, or to a committee of the Trustees, the
power to authorize purchases, sales or other actions affecting the portfolio of
the Fund in the interim between meetings of the Trustees.
8. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Trust
acting by vote of at least a majority of its outstanding voting securities,
provided in either case that sixty (60) days advance written notice
<PAGE>
of termination be given to JCC at its principal place of business. This
Agreement may be terminated by JCC 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 JCC does not continue to provide investment
advice to the Fund after such termination.
9. ASSIGNMENT. This Agreement shall terminate automatically in the event of
any assignment of this Agreement.
10. TERM. This Agreement shall continue in effect until July 1, 2001,
unless sooner terminated in accordance with its terms, and shall continue in
effect from year to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and by either the Trustees of the Trust
or the affirmative vote of a majority of the outstanding voting securities of
the Trust. The annual approvals provided for herein shall be effective to
continue this Agreement from year to year if given within a period beginning not
more than ninety (90) days prior to July 1 of each applicable year,
notwithstanding the fact that more than three hundred sixty-five (365) days may
have elapsed since the date on which such approval was last given.
11. AMENDMENTS. This Agreement may be amended by the parties only if such
amendment is specifically approved (i) by a majority of the Trustees, including
a majority of the Trustees who are not interested persons (as that phrase is
defined in Section 2(a)(19) of the 1940 Act) of JCC 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.
<PAGE>
14. LIMITATION OF LIABILITY OF JCC. JCC 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,
"JCC" shall include any affiliate of JCC performing services for the Trust
contemplated hereunder and directors, officers and employees of JCC and such
affiliates.
15. ACTIVITIES OF JCC. The services of JCC to the Trust hereunder are not
to be deemed to be exclusive, and JCC 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 JCC as directors,
officers and shareholders of JCC, that directors, officers, employees and
shareholders of JCC are or may become similarly interested in the Trust, and
that JCC 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.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the date and year first
above written.
JANUS CAPITAL CORPORATION
BY:
Steven R. Goodbarn, Vice President
JANUS ADVISER SERIES
BY:
Thomas H. Bailey, President
Exhibit 4(h)
JANUS ADVISER SERIES
INVESTMENT ADVISORY AGREEMENT
JANUS ADVISER INTERNATIONAL FUND
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 3rd day
of April, 2000, between JANUS ADVISER SERIES, a Delaware business trust (the
"Trust"), and JANUS CAPITAL CORPORATION, a Colorado corporation ("JCC").
W I T N E S S E T H:
WHEREAS, the Trust is or will be registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has registered or will register 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 Adviser International Fund (the "Fund"); and
WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should
assist the Trustees and officers of the Trust in the management of the
securities portfolio of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. INVESTMENT ADVISORY SERVICES. JCC shall furnish continuous advice and
recommendations to the Fund as to the acquisition, holding, or disposition of
any or all of the securities or other assets which the Fund may own or
contemplate acquiring from time to time. JCC shall give due consideration to the
investment policies and restrictions and the other statements concerning the
Fund in the Trust Instrument, bylaws, and registration statements under the 1940
Act and the 1933 Act, and to the provisions of the Internal Revenue Code, as
amended from time to time, applicable to the Fund as a regulated investment
company and as a funding vehicle for variable insurance contracts. In addition,
JCC shall cause its officers to attend meetings and furnish oral or written
reports, as the Trust may reasonably require, in order to keep the Trustees and
appropriate officers of the Trust fully informed as to the condition of the
investment portfolio of the Fund, the investment recommendations of JCC, and the
investment considerations which have given rise to those recommendations. JCC
shall supervise the purchase and sale of securities as directed by the
appropriate officers of the Trust.
<PAGE>
2. OTHER SERVICES. JCC 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. JCC 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 JCC to be
necessary or desirable. JCC shall generally monitor and report to Fund officers
the Fund's compliance with investment policies and restrictions as set forth in
the currently effective prospectus and statement of additional information
relating to the shares of the Fund under the Securities Act of 1933, as amended.
JCC 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. JCC is also authorized, subject to review by the Trustees, to
furnish such other services as JCC shall from time to time determine to be
necessary or useful to perform the services contemplated by this Agreement.
3. OBLIGATIONS OF TRUST. The Trust shall have the following obligations
under this Agreement:
(a) to keep JCC 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 JCC 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 JCC with any further materials or information which
JCC may reasonably request to enable it to perform its function
under this Agreement; and
(d) to compensate JCC for its services and reimburse JCC for its
expenses incurred hereunder in accordance with the provisions
hereof.
4. COMPENSATION. The Trust shall pay to JCC for its investment advisory
services a fee, calculated and payable for each day that this Agreement is in
effect, of 1/365 of 0.65% of the daily closing net asset value of the Fund
(1/366 of 0.65% of the daily closing net asset value of the Fund in a leap
year).
5. EXPENSES BORNE BY JCC. In addition to the expenses which JCC may incur
in the performance of its investment advisory functions under this Agreement,
and the expenses which it
<PAGE>
may expressly undertake to incur and pay under other agreements with the Trust
or otherwise, JCC shall incur and pay the following expenses relating to the
Fund's operations without reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of the Trust's
officers and its Trustees, except for such Trustees who are not
interested persons of JCC; and
(b) Rental of offices of the Trust.
6. EXPENSES BORNE BY THE TRUST. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCC pursuant to Sections 2 and 5
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not interested persons of JCC; 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 JCC or its affiliates for effecting exchange listed, over-the-counter or
other securities transactions); interest; all federal, state and local taxes
(including stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to purchasers thereof;
expenses of local representation in Delaware; expenses of shareholders' meetings
and of preparing, printing and distributing proxy statements, notices, and
reports to shareholders; expenses of preparing and filing reports and tax
returns with federal and state regulatory authorities; all expenses incurred in
complying with all federal and state laws and the laws of any foreign country
applicable to the issue, offer, or sale of shares of the Fund, including, but
not limited to, all costs involved in the registration or qualification of
shares of the Fund for sale in any jurisdiction, the costs of portfolio pricing
services and compliance systems, and all costs involved in preparing, printing
and mailing prospectuses and statements of additional information to fund
shareholders; and all fees, dues and other expenses incurred by the Trust in
connection with the membership of the Trust in any trade association or other
investment company organization.
7. TREATMENT OF INVESTMENT ADVICE. The Trust shall treat the investment
advice and recommendations of JCC as being advisory only, and shall retain full
control over its own investment policies. However, the Trustees may delegate to
the appropriate officers of the Trust, or to a committee of the Trustees, the
power to authorize purchases, sales or other actions affecting the portfolio of
the Fund in the interim between meetings of the Trustees.
8. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Trust
acting by vote of at least a majority of its outstanding voting securities,
provided in either case that sixty (60) days advance written notice of
termination be given to JCC at its principal place of business. This Agreement
may be terminated by JCC at any time, without penalty, by giving sixty (60) days
advance written notice of termination
<PAGE>
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 JCC does not continue
to provide investment advice to the Fund after such termination.
9. ASSIGNMENT. This Agreement shall terminate automatically in the event of
any assignment of this Agreement.
10. TERM. This Agreement shall continue in effect until July 1, 2001,
unless sooner terminated in accordance with its terms, and shall continue in
effect from year to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and by either the Trustees of the Trust
or the affirmative vote of a majority of the outstanding voting securities of
the Trust. The annual approvals provided for herein shall be effective to
continue this Agreement from year to year if given within a period beginning not
more than ninety (90) days prior to July 1 of each applicable year,
notwithstanding the fact that more than three hundred sixty-five (365) days may
have elapsed since the date on which such approval was last given.
11. AMENDMENTS. This Agreement may be amended by the parties only if such
amendment is specifically approved (i) by a majority of the Trustees, including
a majority of the Trustees who are not interested persons (as that phrase is
defined in Section 2(a)(19) of the 1940 Act) of JCC 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.
<PAGE>
14. LIMITATION OF LIABILITY OF JCC. JCC 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,
"JCC" shall include any affiliate of JCC performing services for the Trust
contemplated hereunder and directors, officers and employees of JCC and such
affiliates.
15. ACTIVITIES OF JCC. The services of JCC to the Trust hereunder are not
to be deemed to be exclusive, and JCC 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 JCC as directors,
officers and shareholders of JCC, that directors, officers, employees and
shareholders of JCC are or may become similarly interested in the Trust, and
that JCC 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.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the date and year first
above written.
JANUS CAPITAL CORPORATION
BY:
Steven R. Goodbarn, Vice President
JANUS ADVISER SERIES
BY:
Thomas H. Bailey, President
Exhibit 4(i)
JANUS ADVISER SERIES
INVESTMENT ADVISORY AGREEMENT
JANUS ADVISER WORLDWIDE FUND
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 3rd day
of April, 2000, between JANUS ADVISER SERIES, a Delaware business trust (the
"Trust"), and JANUS CAPITAL CORPORATION, a Colorado corporation ("JCC").
W I T N E S S E T H:
WHEREAS, the Trust is or will be registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has registered or will register 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 Adviser Worldwide Fund (the "Fund"); and
WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should
assist the Trustees and officers of the Trust in the management of the
securities portfolio of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. INVESTMENT ADVISORY SERVICES. JCC shall furnish continuous advice and
recommendations to the Fund as to the acquisition, holding, or disposition of
any or all of the securities or other assets which the Fund may own or
contemplate acquiring from time to time. JCC shall give due consideration to the
investment policies and restrictions and the other statements concerning the
Fund in the Trust Instrument, bylaws, and registration statements under the 1940
Act and the 1933 Act, and to the provisions of the Internal Revenue Code, as
amended from time to time, applicable to the Fund as a regulated investment
company and as a funding vehicle for variable insurance contracts. In addition,
JCC shall cause its officers to attend meetings and furnish oral or written
reports, as the Trust may reasonably require, in order to keep the Trustees and
appropriate officers of the Trust fully informed as to the condition of the
investment portfolio of the Fund, the investment recommendations of JCC, and the
investment considerations which have given rise to those recommendations. JCC
shall supervise the purchase and sale of securities as directed by the
appropriate officers of the Trust.
<PAGE>
2. OTHER SERVICES. JCC 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. JCC 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 JCC to be
necessary or desirable. JCC shall generally monitor and report to Fund officers
the Fund's compliance with investment policies and restrictions as set forth in
the currently effective prospectus and statement of additional information
relating to the shares of the Fund under the Securities Act of 1933, as amended.
JCC 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. JCC is also authorized, subject to review by the Trustees, to
furnish such other services as JCC shall from time to time determine to be
necessary or useful to perform the services contemplated by this Agreement.
3. OBLIGATIONS OF TRUST. The Trust shall have the following obligations
under this Agreement:
(a) to keep JCC 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 JCC 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 JCC with any further materials or information which
JCC may reasonably request to enable it to perform its function
under this Agreement; and
(d) to compensate JCC for its services and reimburse JCC for its
expenses incurred hereunder in accordance with the provisions
hereof.
4. COMPENSATION. The Trust shall pay to JCC for its investment advisory
services a fee, calculated and payable for each day that this Agreement is in
effect, of 1/365 of 0.65% of the daily closing net asset value of the Fund
(1/366 of 0.65% of the daily closing net asset value of the Fund in a leap
year).
5. EXPENSES BORNE BY JCC. In addition to the expenses which JCC may incur
in the performance of its investment advisory functions under this Agreement,
and the expenses which it
<PAGE>
may expressly undertake to incur and pay under other agreements with the Trust
or otherwise, JCC shall incur and pay the following expenses relating to the
Fund's operations without reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of the Trust's
officers and its Trustees, except for such Trustees who are not
interested persons of JCC; and
(b) Rental of offices of the Trust.
6. EXPENSES BORNE BY THE TRUST. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCC pursuant to Sections 2 and 5
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not interested persons of JCC; 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 JCC or its affiliates for effecting exchange listed, over-the-counter or
other securities transactions); interest; all federal, state and local taxes
(including stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to purchasers thereof;
expenses of local representation in Delaware; expenses of shareholders' meetings
and of preparing, printing and distributing proxy statements, notices, and
reports to shareholders; expenses of preparing and filing reports and tax
returns with federal and state regulatory authorities; all expenses incurred in
complying with all federal and state laws and the laws of any foreign country
applicable to the issue, offer, or sale of shares of the Fund, including, but
not limited to, all costs involved in the registration or qualification of
shares of the Fund for sale in any jurisdiction, the costs of portfolio pricing
services and compliance systems, and all costs involved in preparing, printing
and mailing prospectuses and statements of additional information to fund
shareholders; and all fees, dues and other expenses incurred by the Trust in
connection with the membership of the Trust in any trade association or other
investment company organization.
7. TREATMENT OF INVESTMENT ADVICE. The Trust shall treat the investment
advice and recommendations of JCC as being advisory only, and shall retain full
control over its own investment policies. However, the Trustees may delegate to
the appropriate officers of the Trust, or to a committee of the Trustees, the
power to authorize purchases, sales or other actions affecting the portfolio of
the Fund in the interim between meetings of the Trustees.
8. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Trust
acting by vote of at least a majority of its outstanding voting securities,
provided in either case that sixty (60) days advance written notice of
termination be given to JCC at its principal place of business. This Agreement
may be terminated by JCC at any time, without penalty, by giving sixty (60) days
advance written notice of termination
<PAGE>
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 JCC does not continue
to provide investment advice to the Fund after such termination.
9. ASSIGNMENT. This Agreement shall terminate automatically in the event of
any assignment of this Agreement.
10. TERM. This Agreement shall continue in effect until July 1, 2001,
unless sooner terminated in accordance with its terms, and shall continue in
effect from year to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and by either the Trustees of the Trust
or the affirmative vote of a majority of the outstanding voting securities of
the Trust. The annual approvals provided for herein shall be effective to
continue this Agreement from year to year if given within a period beginning not
more than ninety (90) days prior to July 1 of each applicable year,
notwithstanding the fact that more than three hundred sixty-five (365) days may
have elapsed since the date on which such approval was last given.
11. AMENDMENTS. This Agreement may be amended by the parties only if such
amendment is specifically approved (i) by a majority of the Trustees, including
a majority of the Trustees who are not interested persons (as that phrase is
defined in Section 2(a)(19) of the 1940 Act) of JCC 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.
<PAGE>
14. LIMITATION OF LIABILITY OF JCC. JCC 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,
"JCC" shall include any affiliate of JCC performing services for the Trust
contemplated hereunder and directors, officers and employees of JCC and such
affiliates.
15. ACTIVITIES OF JCC. The services of JCC to the Trust hereunder are not
to be deemed to be exclusive, and JCC 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 JCC as directors,
officers and shareholders of JCC, that directors, officers, employees and
shareholders of JCC are or may become similarly interested in the Trust, and
that JCC 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.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the date and year first
above written.
JANUS CAPITAL CORPORATION
BY:
Steven R. Goodbarn, Vice President
JANUS ADVISER SERIES
BY:
Thomas H. Bailey, President
Exhibit 4(j)
JANUS ADVISER SERIES
INVESTMENT ADVISORY AGREEMENT
JANUS ADVISER FLEXIBLE INCOME FUND
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 3rd day
of April, 2000, between JANUS ADVISER SERIES, a Delaware business trust (the
"Trust"), and JANUS CAPITAL CORPORATION, a Colorado corporation ("JCC").
W I T N E S S E T H:
WHEREAS, the Trust is or will be registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has registered or will register 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 Adviser Flexible Income Fund (the "Fund");
and
WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should
assist the Trustees and officers of the Trust in the management of the
securities portfolio of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. INVESTMENT ADVISORY SERVICES. JCC shall furnish continuous advice and
recommendations to the Fund as to the acquisition, holding, or disposition of
any or all of the securities or other assets which the Fund may own or
contemplate acquiring from time to time. JCC shall give due consideration to the
investment policies and restrictions and the other statements concerning the
Fund in the Trust Instrument, bylaws, and registration statements under the 1940
Act and the 1933 Act, and to the provisions of the Internal Revenue Code, as
amended from time to time, applicable to the Fund as a regulated investment
company and as a funding vehicle for variable insurance contracts. In addition,
JCC shall cause its officers to attend meetings and furnish oral or written
reports, as the Trust may reasonably require, in order to keep the Trustees and
appropriate officers of the Trust fully informed as to the condition of the
investment portfolio of the Fund, the investment recommendations of JCC, and the
investment considerations which have given rise to those recommendations. JCC
shall supervise the purchase and sale of securities as directed by the
appropriate officers of the Trust.
<PAGE>
2. OTHER SERVICES. JCC 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. JCC 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 JCC to be
necessary or desirable. JCC shall generally monitor and report to Fund officers
the Fund's compliance with investment policies and restrictions as set forth in
the currently effective prospectus and statement of additional information
relating to the shares of the Fund under the Securities Act of 1933, as amended.
JCC 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. JCC is also authorized, subject to review by the Trustees, to
furnish such other services as JCC shall from time to time determine to be
necessary or useful to perform the services contemplated by this Agreement.
3. OBLIGATIONS OF TRUST. The Trust shall have the following obligations
under this Agreement:
(a) to keep JCC 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 JCC 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 JCC with any further materials or information which
JCC may reasonably request to enable it to perform its function
under this Agreement; and
(d) to compensate JCC for its services and reimburse JCC for its
expenses incurred hereunder in accordance with the provisions
hereof.
4. COMPENSATION. The Trust shall pay to JCC for its investment advisory
services a fee, calculated and payable for each day that this Agreement is in
effect, of 1/365 of 0.65% of the first $300,000,000 of the daily closing net
asset value of the Fund, plus 1/365 of 0.55% of the daily closing net asset
value of the Fund in excess of $300,000,000 (1/366 of 0.65% of the first
$300,000,000 of the daily closing net asset value of the Fund, plus 1/366 of
0.55% of the daily closing net asset value of the Fund in excess of $300,000,000
in a leap year).
<PAGE>
5. EXPENSES BORNE BY JCC. In addition to the expenses which JCC may incur
in the performance of its investment advisory functions under this Agreement,
and the expenses which it may expressly undertake to incur and pay under other
agreements with the Trust or otherwise, JCC shall incur and pay the following
expenses relating to the Fund's operations without reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of the Trust's
officers and its Trustees, except for such Trustees who are not
interested persons of JCC; and
(b) Rental of offices of the Trust.
6. EXPENSES BORNE BY THE TRUST. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCC pursuant to Sections 2 and 5
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not interested persons of JCC; 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 JCC or its affiliates for effecting exchange listed, over-the-counter or
other securities transactions); interest; all federal, state and local taxes
(including stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to purchasers thereof;
expenses of local representation in Delaware; expenses of shareholders' meetings
and of preparing, printing and distributing proxy statements, notices, and
reports to shareholders; expenses of preparing and filing reports and tax
returns with federal and state regulatory authorities; all expenses incurred in
complying with all federal and state laws and the laws of any foreign country
applicable to the issue, offer, or sale of shares of the Fund, including, but
not limited to, all costs involved in the registration or qualification of
shares of the Fund for sale in any jurisdiction, the costs of portfolio pricing
services and compliance systems, and all costs involved in preparing, printing
and mailing prospectuses and statements of additional information to fund
shareholders; and all fees, dues and other expenses incurred by the Trust in
connection with the membership of the Trust in any trade association or other
investment company organization.
7. TREATMENT OF INVESTMENT ADVICE. The Trust shall treat the investment
advice and recommendations of JCC as being advisory only, and shall retain full
control over its own investment policies. However, the Trustees may delegate to
the appropriate officers of the Trust, or to a committee of the Trustees, the
power to authorize purchases, sales or other actions affecting the portfolio of
the Fund in the interim between meetings of the Trustees.
8. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Trust
acting by vote of at least a majority of its outstanding voting securities,
provided in either case that sixty (60) days advance written notice
<PAGE>
of termination be given to JCC at its principal place of business. This
Agreement may be terminated by JCC 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 JCC does not continue to provide investment
advice to the Fund after such termination.
9. ASSIGNMENT. This Agreement shall terminate automatically in the event of
any assignment of this Agreement.
10. TERM. This Agreement shall continue in effect until July 1, 2001,
unless sooner terminated in accordance with its terms, and shall continue in
effect from year to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and by either the Trustees of the Trust
or the affirmative vote of a majority of the outstanding voting securities of
the Trust. The annual approvals provided for herein shall be effective to
continue this Agreement from year to year if given within a period beginning not
more than ninety (90) days prior to July 1 of each applicable year,
notwithstanding the fact that more than three hundred sixty-five (365) days may
have elapsed since the date on which such approval was last given.
11. AMENDMENTS. This Agreement may be amended by the parties only if such
amendment is specifically approved (i) by a majority of the Trustees, including
a majority of the Trustees who are not interested persons (as that phrase is
defined in Section 2(a)(19) of the 1940 Act) of JCC 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.
<PAGE>
14. LIMITATION OF LIABILITY OF JCC. JCC 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,
"JCC" shall include any affiliate of JCC performing services for the Trust
contemplated hereunder and directors, officers and employees of JCC and such
affiliates.
15. ACTIVITIES OF JCC. The services of JCC to the Trust hereunder are not
to be deemed to be exclusive, and JCC 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 JCC as directors,
officers and shareholders of JCC, that directors, officers, employees and
shareholders of JCC are or may become similarly interested in the Trust, and
that JCC 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.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the date and year first
above written.
JANUS CAPITAL CORPORATION
BY:
Steven R. Goodbarn, Vice President
JANUS ADVISER SERIES
BY:
Thomas H. Bailey, President
Exhibit 4(k)
JANUS ADVISER SERIES
INVESTMENT ADVISORY AGREEMENT
JANUS ADVISER MONEY MARKET FUND
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 3rd day
of April, 2000, between JANUS ADVISER SERIES, a Delaware business trust (the
"Trust"), and JANUS CAPITAL CORPORATION, a Colorado corporation ("JCC").
W I T N E S S E T H:
WHEREAS, the Trust is or will be registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has registered or will register 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 Adviser Money Market Fund (the "Fund"); and
WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should
assist the Trustees and officers of the Trust in the management of the
securities portfolio of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. INVESTMENT ADVISORY SERVICES. JCC shall furnish continuous advice and
recommendations to the Fund as to the acquisition, holding, or disposition of
any or all of the securities or other assets which the Fund may own or
contemplate acquiring from time to time. JCC shall give due consideration to the
investment policies and restrictions and the other statements concerning the
Fund in the Trust Instrument, bylaws, and registration statements under the 1940
Act and the 1933 Act, and to the provisions of the Internal Revenue Code, as
amended from time to time, applicable to the Fund as a regulated investment
company and as a funding vehicle for variable insurance contracts. In addition,
JCC shall cause its officers to attend meetings and furnish oral or written
reports, as the Trust may reasonably require, in order to keep the Trustees and
appropriate officers of the Trust fully informed as to the condition of the
investment portfolio of the Fund, the investment recommendations of JCC, and the
investment considerations which have given rise to those recommendations. JCC
shall supervise the purchase and sale of securities as directed by the
appropriate officers of the Trust.
<PAGE>
2. OTHER SERVICES. JCC 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. JCC 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 JCC to be
necessary or desirable. JCC shall generally monitor and report to Fund officers
the Fund's compliance with investment policies and restrictions as set forth in
the currently effective prospectus and statement of additional information
relating to the shares of the Fund under the Securities Act of 1933, as amended.
JCC 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. JCC is also authorized, subject to review by the Trustees, to
furnish such other services as JCC shall from time to time determine to be
necessary or useful to perform the services contemplated by this Agreement.
3. OBLIGATIONS OF TRUST. The Trust shall have the following obligations
under this Agreement:
(a) to keep JCC 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 JCC 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 JCC with any further materials or information which
JCC may reasonably request to enable it to perform its function
under this Agreement; and
(d) to compensate JCC for its services and reimburse JCC for its
expenses incurred hereunder in accordance with the provisions
hereof.
4. COMPENSATION. The Trust shall pay to JCC for its investment advisory
services a fee, calculated and payable for each day that this Agreement is in
effect, of 1/365 of 0.25% of the daily closing net asset value of the Fund
(1/366 of 0.25% of the daily closing net asset value of the Fund in a leap
year).
5. EXPENSES BORNE BY JCC. In addition to the expenses which JCC may incur
in the performance of its investment advisory functions under this Agreement,
and the expenses which it
<PAGE>
may expressly undertake to incur and pay under other agreements with the Trust
or otherwise, JCC shall incur and pay the following expenses relating to the
Fund's operations without reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of the Trust's
officers and its Trustees, except for such Trustees who are not
interested persons of JCC; and
(b) Rental of offices of the Trust.
6. EXPENSES BORNE BY THE TRUST. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCC pursuant to Sections 2 and 5
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not interested persons of JCC; 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 JCC or its affiliates for effecting exchange listed, over-the-counter or
other securities transactions); interest; all federal, state and local taxes
(including stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to purchasers thereof;
expenses of local representation in Delaware; expenses of shareholders' meetings
and of preparing, printing and distributing proxy statements, notices, and
reports to shareholders; expenses of preparing and filing reports and tax
returns with federal and state regulatory authorities; all expenses incurred in
complying with all federal and state laws and the laws of any foreign country
applicable to the issue, offer, or sale of shares of the Fund, including, but
not limited to, all costs involved in the registration or qualification of
shares of the Fund for sale in any jurisdiction, the costs of portfolio pricing
services and compliance systems, and all costs involved in preparing, printing
and mailing prospectuses and statements of additional information to fund
shareholders; and all fees, dues and other expenses incurred by the Trust in
connection with the membership of the Trust in any trade association or other
investment company organization.
7. TREATMENT OF INVESTMENT ADVICE. The Trust shall treat the investment
advice and recommendations of JCC as being advisory only, and shall retain full
control over its own investment policies. However, the Trustees may delegate to
the appropriate officers of the Trust, or to a committee of the Trustees, the
power to authorize purchases, sales or other actions affecting the portfolio of
the Fund in the interim between meetings of the Trustees.
8. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Trust
acting by vote of at least a majority of its outstanding voting securities,
provided in either case that sixty (60) days advance written notice of
termination be given to JCC at its principal place of business. This Agreement
may be terminated by JCC at any time, without penalty, by giving sixty (60) days
advance written notice of termination
<PAGE>
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 JCC does not continue
to provide investment advice to the Fund after such termination.
9. ASSIGNMENT. This Agreement shall terminate automatically in the event of
any assignment of this Agreement.
10. TERM. This Agreement shall continue in effect until July 1, 2001,
unless sooner terminated in accordance with its terms, and shall continue in
effect from year to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and by either the Trustees of the Trust
or the affirmative vote of a majority of the outstanding voting securities of
the Trust. The annual approvals provided for herein shall be effective to
continue this Agreement from year to year if given within a period beginning not
more than ninety (90) days prior to July 1 of each applicable year,
notwithstanding the fact that more than three hundred sixty-five (365) days may
have elapsed since the date on which such approval was last given.
11. AMENDMENTS. This Agreement may be amended by the parties only if such
amendment is specifically approved (i) by a majority of the Trustees, including
a majority of the Trustees who are not interested persons (as that phrase is
defined in Section 2(a)(19) of the 1940 Act) of JCC 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.
<PAGE>
14. LIMITATION OF LIABILITY OF JCC. JCC 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,
"JCC" shall include any affiliate of JCC performing services for the Trust
contemplated hereunder and directors, officers and employees of JCC and such
affiliates.
15. ACTIVITIES OF JCC. The services of JCC to the Trust hereunder are not
to be deemed to be exclusive, and JCC 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 JCC as directors,
officers and shareholders of JCC, that directors, officers, employees and
shareholders of JCC are or may become similarly interested in the Trust, and
that JCC 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.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the date and year first
above written.
JANUS CAPITAL CORPORATION
BY:
Steven R. Goodbarn, Vice President
JANUS ADVISER SERIES
BY:
Thomas H. Bailey, President
Exhibit 5(a)
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (THE "AGREEMENT") IS MADE AS OF THE 3RD day of
April, 2000, by and between Janus Adviser Series, a business trust organized and
existing under the laws of the State of Delaware, ("the Trust") on behalf of
each of its portfolios, whether now existing or hereafter created (each a "Fund"
or collectively the "Funds"), and Janus Distributors, Inc., a corporation
organized and existing under the laws of the State of Colorado ("Distributor" or
"JDI").
WITNESSETH:
WHEREAS, the Trust is or will be engaged in business as an open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"); and
WHEREAS, the Distributor is or will be registered as a broker-dealer under
the Securities Exchange Act of 1934, as amended (the "1934 Act") and the laws of
each state or jurisdiction in which the Distributor engages in business to the
extent such law requires, and is a member of the National Association of
Securities Dealers, Inc. (the "NASD"), (such registrations and membership are
referred to collectively as the "Registrations"); and
WHEREAS, the Trust has adopted on behalf of the initial class of shares of
each Fund a Distribution and Shareholder Servicing Plan pursuant to Rule 12b-1
under the 1940 Act; and
WHEREAS, the Trust desires the Distributor to act as the underwriter for
the public offering of each Fund;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. APPOINTMENT. The Trust appoints JDI to act as distributor of the shares.
2. DELIVERY OF FUND DOCUMENTS. The Trust has furnished the Distributor with
properly certified or authenticated copies of each of the following in effect on
the date hereof and shall furnish the Distributor from time to time properly
certified or authenticated copies of all amendments or supplements thereto:
(a) Trust Instrument;
(b) Bylaws; and
1
<PAGE>
(c) Resolutions of the Trustees (hereinafter referred to as the
"Trustees") selecting the Distributor as distributor and approving
this form of agreement and authorizing its execution.
The Trust shall furnish the Distributor promptly with copies of any
registration statements filed by it with the Securities and Exchange Commission
(the "SEC") under the Securities Act of 1933, as amended, (the "1933 Act") or
the 1940 Act, together with any financial statements and exhibits included
therein, and all amendments or supplements thereto hereafter filed.
The Trust shall also furnish the Distributor with such other certificates
or documents as the Distributor may from time to time, in its discretion,
reasonably deem necessary or appropriate in order to properly perform its duties
under this Agreement.
3. SOLICITATION OF ORDERS FOR PURCHASE OF SHARES.
(a) Subject to the provisions of Paragraphs 4 and 7 hereof, and to such
minimum purchase requirements as may from time to time be indicated in the
Prospectus or Statement of Additional Information of the shares of each Fund,
the Distributor is authorized to solicit, as agent on behalf of the Trust,
unconditional orders for purchases of each Fund's shares authorized for issuance
and registered under the 1933 Act, provided that:
(1) The Distributor shall act solely as a disclosed agent on behalf of and
for the account of the Trust;
(2) The Distributor shall confirm or arrange with the transfer agent for
the shares to confirm all purchases of the shares. Such confirmation
shall conform to the requirements of Rule 10b-10 under the 1934 Act
and shall clearly state that the Distributor is acting as agent in the
transaction;
(3) The Distributor shall have no liability for payment for purchases of
shares it sells as agent;
(4) Each order to purchase shares of a Fund received by the Distributor
shall be subject to acceptance by an officer of the Trust and entry of
the order on such Fund's records or shareholder accounts and is not
binding until so accepted and entered; and
(5) With respect to the initial class of shares of each Fund, the
Distributor may appoint sub-agents or distribute through dealers
(pursuant to the Distribution and Shareholder Servicing Agreement
applicable to that class, a form of which is attached hereto as
Exhibit A), the Distributor's own sales representatives or otherwise
as the Distributor may determine from time to time.
2
<PAGE>
The purchase price of a Fund's shares to the public shall be the public
offering price described in Paragraph 6 hereof.
(b) In consideration of the rights granted to the Distributor under this
Agreement, the Distributor will use its best efforts (but only in states and
jurisdictions in which the Distributor may lawfully do so) to solicit from
investors unconditional orders to purchase shares of each Fund. The Trust shall
make available to the Distributor without cost to the Distributor the currently
effective Prospectus and Statement of Additional Information for the shares of
each Fund and all information, financial statements and other papers that the
Distributor requires for use in connection with the distribution of shares. The
Trust shall provide such materials in the form of camera ready copies, computer
diskettes, or other form reasonably requested by Distributor, to enable
Distributor to provide one copy or diskette to each shareholder of record (it
being understood that the shareholders of record shall be responsible for
providing copies of such materials to the beneficial owners in accordance with
applicable law).
4. SOLICITATION OF ORDERS TO PURCHASE SHARES BY FUND. The rights granted to
the Distributor shall be non-exclusive in that the Trust reserves the right to
otherwise solicit purchases from, and sell shares to, investors, including
without limitation the right to issue shares in connection with the merger or
consolidation of any other investment company, trust or personal holding company
with a Fund, or a Fund's acquisition, by the purchase or otherwise, of all or
substantially all of the assets of an investment company, trust or personal
holding company, or substantially all of the outstanding shares or interests of
any such entity.
5. COMPENSATION AND EXPENSES. The Trust shall pay all charges of its
transfer, shareholder recordkeeping, dividend disbursing and redemption agents,
if any; all expenses of preparation, printing and mailing of confirmations; all
expenses of preparation and printing of annual or more frequent revisions of
each Fund's Prospectus and Statement of Additional Information and of supplying
copies thereof to shareholders; all expenses of registering and maintaining the
Registrations of the Trust under the 1940 Act and the sale of the Trust's shares
under the 1933 Act; all expenses of qualifying and maintaining qualifications of
each Fund and of the shares for sale under securities laws of various states or
other jurisdictions and of registration and qualification of each Fund under all
laws applicable to the Trust or its business activities. The Distributor may
receive from the Trust any amounts authorized for payment to the Distributor out
of the Distribution and Shareholder Servicing Plan. The Distributor may use such
payments, in its discretion, to compensate dealers, third party service
providers, or other entities who provide distribution-related services to the
extent permitted by the Distribution and Shareholder Servicing Plan.
6. PUBLIC OFFERING PRICE. All solicitations by the Distributor pursuant to
this Agreement shall be for orders to purchase shares of a Fund at the public
offering price. The public offering price for each accepted subscription for a
Fund's shares will be the net asset value per share next determined by the Trust
after it accepts such subscription. The net asset value per share of the shares
shall be determined in the manner provided in the Trust's Trust Instrument as
3
<PAGE>
now in effect or as it may be amended, and as reflected in the then current
Prospectus and Statement of Additional Information covering the shares.
7. SUSPENSION OF SALES. If and whenever the determination of a Fund's net
asset value is suspended and until such suspension is terminated, no further
orders for shares shall be accepted by the Trust except such unconditional
orders placed with the Trust and accepted by it before the suspension. In
addition, the Trust reserves the right to suspend sales of shares of a Fund if,
in the judgment of the Trustees, it is in the best interest of the Fund to do
so, such suspension to continue for such period as may be determined by the
Trustees; and in that event, (i) at the direction of the Trust, the Distributor
shall suspend its solicitation of orders to purchase shares of such Fund until
otherwise instructed by the Trust and (ii) no orders to purchase shares of such
Fund shall be accepted by the Trust while such suspension remains in effect
unless otherwise directed by its Trustees.
8. AUTHORIZED REPRESENTATIONS. The Distributor is not authorized by the
Trust to give on behalf of any Fund any information or to make any
representations in connection with the sale of shares other than the information
and representations contained in such Fund's registration statement filed with
the SEC under the 1933 Act and/or the 1940 Act, covering shares, as such
registration statement or such Fund's Prospectus or Statement of Additional
Information may be amended or supplemented from time to time, or contained in
shareholder reports or other material that may be prepared by or on behalf of
such Fund or approved by such Fund for the Distributor's use.
9. REGISTRATION OF ADDITIONAL SHARES. The Trust hereby agrees to register
an indefinite number of shares pursuant to Rule 24f-2 under the 1940 Act. The
Trust will, in cooperation with the Distributor, take such action as may be
necessary from time to time to qualify the shares of each Fund (so registered or
otherwise qualified for sale under the 1933 Act), in any state or jurisdiction
mutually agreeable to the Distributor and the Trust, and to maintain such
qualification; provided, however, that nothing herein shall be deemed to prevent
the Trust from registering the shares without approval of the Distributor in any
state it deems appropriate.
10. CONFORMITY WITH LAW. The Distributor agrees that in soliciting orders
to purchase shares it shall duly conform in all respects with applicable federal
and state laws and with the rules and regulations of the NASD. The Distributor
will use its best efforts to maintain its Registrations in good standing during
the term of this Agreement and will promptly notify the Trust in the event of
the suspension or termination of any of the Registrations.
11. INDEPENDENT CONTRACTOR. The Distributor shall be an independent
contractor and neither the Distributor, nor any of its officers, directors,
employees, or representatives is or shall be an employee of the Trust in the
performance of the Distributor's duties hereunder. The Distributor shall be
responsible for its own conduct and the employment, control, and conduct of its
agents and employees and for injury to such agents or employees or to others
through its agents and employees and agrees to pay or to insure that persons
other than the Trust will pay all employee taxes due with respect to the
activities of its agents and employees.
4
<PAGE>
12. INDEMNIFICATION. The Distributor agrees to indemnify and hold harmless
the Trust and each of the Trustees and its officers, employees and
representatives and each person, if any, who controls the Trust within the
meaning of Section 15 of the 1933 Act against any and all losses, liabilities,
damages, claims and expenses (including the reasonable costs of investigating or
defending any alleged loss, liability, damage, claim or expense and reasonable
legal counsel fees incurred in connection therewith) to which the Trust or such
Trustees, officers, employees, representatives, or controlling person or persons
may become subject under the 1933 Act, under any other statute, at common law,
or otherwise, arising out of the acquisition of any shares of any Fund by any
person which (i) may be based upon any wrongful act by the Distributor or any of
the Distributor's directors, officers, employees or representatives, or (ii) may
be based upon any untrue statement or alleged untrue statement of a material
fact contained in a registration statement, Prospectus, Statement of Additional
Information, shareholder report or other information covering shares of such
Fund filed or made public by the Trust or any amendment thereof or supplement
thereto or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, if such statement or omission was made in reliance upon information
furnished to such Fund by the Distributor in writing. In no case (i) is the
Distributor's indemnity in favor of the Trust, or any person indemnified, to be
deemed to protect the Trust or such indemnified person against any liability to
which the Trust or such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of its or such
person's duties or by reason of its or such person's reckless disregard of its
or such person's obligations and duties under this Agreement, or (ii) is the
Distributor to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Trust or any person
indemnified unless the Trust or such person, as the case may be, shall have
notified the Distributor in writing of the claim within a reasonable time after
the summons, or other first written notification, giving information of the
nature of the claim served upon the Trust or upon such person (or after the
Trust or such person shall have received notice of such service on any
designated agent). However, failure to notify the Distributor of any such claim
shall not relieve the Distributor from any liability that the Distributor may
have to the Trust or any person against whom such action is brought otherwise
than on account of the Distributor's indemnity agreement contained in this
Paragraph.
The Distributor shall be entitled to participate, at its own expense, in
the defense, or, if Distributor so elects, to assume the defense of any suit
brought to enforce any such claim but, if the Distributor elects to assume the
defense, such defense shall be conducted by legal counsel chosen by the
Distributor and satisfactory to the persons indemnified who are defendants in
the suit. In the event that the Distributor elects to assume the defense of any
such suit and retain such legal counsel, persons indemnified who are defendants
in the suit shall bear the fees and expenses of any additional legal counsel
retained by them. If the Distributor does not elect to assume the defense of any
such suit, the Distributor will reimburse persons indemnified who are defendants
in such suit for the reasonable fees of any legal counsel retained by them in
such litigation.
5
<PAGE>
The Trust agrees to indemnify and hold harmless the Distributor and each of
its directors, officers, employees, and representatives and each person, if any,
who controls the Distributor within the meaning of Section 15 of the 1933 Act
against any and all losses, liabilities, damages, claims or expenses (including
the reasonable costs of investigating or defending any alleged loss, liability,
damage, claim or expenses and reasonable legal counsel fees incurred in
connection therewith) to which the Distributor or such of its directors,
officers, employees, representatives or controlling person or persons may become
subject under the 1933 Act, under any other statute, at common law, or otherwise
arising out of the acquisition of any shares by any person which (i) may be
based upon any wrongful act by the Trust or any of the Trustees, or the Trust's
officers, employees or representatives other than the Distributor, or (ii) may
be based upon any untrue statement or alleged untrue statement of a material
fact contained in a registration statement, Prospectus, Statement of Additional
Information, shareholder report or other information covering shares filed or
made public by the Trust or any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading unless
such statement or omission was made in reliance upon information furnished by
the Distributor to the Trust. In no case (i) is the Trust's indemnity in favor
of the Distributor or any person indemnified to be deemed to protect the
Distributor or such indemnified person against any liability to which the
Distributor or such indemnified person would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of its or
such person's duties or by reason of its or such person's reckless disregard of
its or such person's obligations and duties under this Agreement, or (ii) is the
Trust to be liable under its indemnity agreement contained in this Paragraph
with respect to any claim made against the Distributor or any person indemnified
unless the Distributor, or such person, as the case may be, shall have notified
the Trust in writing of the claim within a reasonable time after the summons, or
other first written notification, giving information of the nature of the claim
served upon the Distributor or upon such person (or after the Distributor or
such person shall have received notice of such service on any designated agent).
However, failure to notify the Trust of any such claim shall not relieve the
Trust from any liability which the Trust may have to the Distributor or any
person against whom such action is brought otherwise than on account of the
Trust's indemnity agreement contained in this Paragraph.
The Trust shall be entitled to participate, at its own expense, in the
defense or, if the Trust so elects, to assume the defense of any suit brought to
enforce such claim but, if the Trust elects to assume the defense, such defense
shall be conducted by legal counsel chosen by the Trust and satisfactory to the
persons indemnified who are defendants in the suit. In the event that the Trust
elects to assume the defense of any such suit and retain such legal counsel, the
persons indemnified who are defendants in the suit shall bear the fees and
expenses of any additional legal counsel retained by them. If the Trust does not
elect to assume the defense of any such suit, the Trust will reimburse the
persons indemnified who are defendants in such suit for the reasonable fees and
expenses of any legal counsel retained by them in such litigation.
13. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall become
effective as of the date first written above and unless terminated as provided
herein, shall remain
6
<PAGE>
in effect through July 1, 2001, and from year to year thereafter with respect to
each class of shares of each Fund, but only so long as such continuance is
specifically approved at least annually (a) by a vote of a majority of the
Trustees who are not parties to this Agreement or interested persons of any such
party, voting in person at a meeting called for the purpose of voting on such
approval, and (b) by the vote of either a majority of the Trustees or a majority
of the outstanding shares of the Fund. If the continuance of this Agreement is
not approved as to a class of shares of a Fund or a Fund as a whole, the
Distributor may continue to render to that class of shares or Fund the services
described herein in the manner and to the extent permitted by the 1940 Act and
the rules and regulations thereunder, and this Agreement shall continue with
respect to a class of shares of the Funds, or those Funds as a whole that have
approved its continuance. This Agreement may be terminated with respect to a
class of shares of a Fund or a Fund as a whole, without the payment of any
penalty, on 60 days' written notice, (a) by a vote of a majority of the Trustees
or by a vote of a majority of the outstanding voting securities of such class of
shares of the Fund or of the Fund, (b) in the case of the class of shares of a
Fund, by a vote of a majority of the Trustees who are not interested persons of
the Trust and have no direct or indirect financial interest in the operation of
the Distribution and Shareholder Servicing Plan for such shares or in any
agreements related to such Distribution and Shareholder Servicing Plan (c) by
the Distributor. Without prejudice to any other remedies of the Trust, the Trust
may terminate this Agreement at any time immediately on written notice in the
event of the Distributor's failure to fulfill any of its obligations hereunder,
including the termination or suspension of any of the Registrations. This
Agreement will automatically terminate in the event of its assignment.
In interpreting the provisions of this Paragraph 13, the definitions
contained in Section 2(a) of the 1940 Act (particularly the definitions of
"interested person," "assignment," and "majority of the outstanding voting
securities") shall be applied.
14. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged, or terminated orally, but only by an instrument in
writing signed by each party against which enforcement of the change, waiver,
discharge, or termination is sought. If the Trust should at any time deem it
necessary or advisable in the best interests of a Fund or class that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the SEC or any other governmental authority or to obtain any
advantage under state or Federal or tax laws and notifies the Distributor of the
form of such amendment, and the reasons therefore, and if the Distributor should
decline to assent to such amendment, the Trust may terminate this Agreement as
to that Fund or class forthwith. If the Distributor should at any time request
that a change be made in the Trust's Trust Instrument or Bylaws or in its
methods of doing business, or in the registration statement, the Prospectus or
the Statement of Additional Information of any Fund, in order to comply with any
requirements of Federal or state law or regulations of the SEC, or of a national
securities association of which the Distributor is or may be a member, relating
to the sale of shares, and the Trust should not make such necessary changes
within a reasonable time, the Distributor may terminate this Agreement as to
that Fund or class forthwith.
7
<PAGE>
15. LIMITATION OF PERSONAL LIABILITY. The parties to this Agreement
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 Trust and that no Trustee, officer,
employee or agent, or holder of shares of beneficial interest of the Trust,
whether past, present or future, shall be personally liable for any of such
liabilities.
16. NOTIFICATION BY THE TRUST. The Trust agrees to advise the Distributor
immediately:
(a) of any request by the SEC for amendments to the Trust's
Registration Statement insofar as it relates to the shares of any of the Funds,
the Prospectus or the Statement of Additional Information or for additional
information;
(b) in the event of the issuance by the SEC of any stop order
suspending the effectiveness of the Trust's Registration Statement insofar as it
relates to the shares of any of the Funds, the Prospectus or the Statement of
Additional Information or the initiation of any proceeding for that purpose;
(c) of the occurrence of any material event which makes untrue any
statement made in the Trust's Registration Statement insofar as it relates to
the shares of any of the Funds, the Prospectus or the Statement of Additional
Information or which requires the making of a change in order to make the
statements therein not misleading; and
(d) of all actions of the SEC with respect to any amendments to the
Trust's Registration Statement insofar as they are related to the shares of any
of the Funds, the Prospectus or the Statement of Additional Information which
may from time to time be filed with the SEC under the 1933 Act.
17. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only, and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
8
<PAGE>
18. NOTICE. Any notice required or permitted to be given by a party to this
Agreement or to any other party hereunder shall be deemed sufficient if
delivered in person or sent by registered or certified mail, postage prepaid,
addressed by the party giving notice to each such other party at the address
provided below or to the last address furnished by each such other party to the
party giving notice.
If to the Trust: 100 Fillmore Street
Denver, Colorado 80206
Attn: Secretary
If to the Distributor: 100 Fillmore Street
Denver, Colorado 80206
Attn: Secretary
IN WITNESS WHEREOF, the parties have executed this Agreement.
ATTEST: JANUS ASPEN SERIES
BY:
Thomas H. Bailey
President
ATTEST: JANUS DISTRIBUTORS, INC.
BY:
Kelley Abbott Howes
Vice President
9
Exhibit 8(a)
TRANSFER AGENCY AGREEMENT
This Agreement is made as of April 3, 2000, by and between Janus Adviser
Series, a Delaware business trust (the "Trust") and Janus Service Corporation, a
Colorado corporation ("JSC").
The Trust desires to appoint JSC as its transfer agent and JSC desires to
accept such appointment.
1. APPOINTMENT. Subject to the conditions set forth in this Agreement, the
Trust hereby appoints JSC as its transfer agent and JSC hereby accepts such
appointment.
2. SERVICES. JSC agrees that it will perform or arrange for the performance
by others of all of the customary services of a transfer agent of an investment
company in accordance with the policies and practices of the Trust as disclosed
in its registration materials or otherwise communicated to JSC from time to
time, including, without limitation, the following: recording the ownership,
transfer, conversion, and cancellation of ownership of shares of the Trust on
the books of the Trust; establishing and maintaining shareholder accounts;
preparing shareholder meeting lists, mailing proxies, receiving and tabulating
proxies; mailing shareholder reports and prospectuses; recording reinvestments
of dividends and distributions in Trust shares; preparing and mailing
confirmation forms to shareholders and dealers for purchases and redemptions of
Trust shares and other transactions for which confirmations are required; and
cooperating with insurance companies, qualified plans, broker-dealers and
financial intermediaries who represent shareholders of the Trust.
3. RECORDS. JSC shall maintain such books and records relating to
transactions effected by JSC pursuant to this Agreement as are required by the
Investment Company Act of 1940 (the "1940 Act"), or by rules or regulations
thereunder, to be maintained by the Trust or its transfer agent with respect to
such transactions. JSC shall preserve, or cause to be preserved, any such books
and records for the period and in the manner prescribed by any such law, rule,
or regulation, and shall furnish the Trust such information as to such
transactions and at such times as may be reasonably required by it to comply
with applicable laws and regulations. To the extent required by the 1940 Act and
the rules and regulations thereunder, JSC agrees that all records maintained by
JSC relating to the services performed by JSC pursuant to this Agreement are the
property of the Trust and will be preserved and will be surrendered promptly to
the Trust upon request.
4. SHARE REGISTRATION. All requisite steps will be taken by the Trust from
time to time when and as necessary to register the Trust's shares for sale with
the SEC and in all states in which the Trust's shares shall at the time be
offered for sale and require registration.
5. COMPENSATION AND EXPENSES. The Trust shall reimburse JSC for
out-of-pocket expenses incurred by JSC in connection with its performance of
services rendered under this Agreement. JSC shall bill the Trust as soon as
practicable after the end of each calendar month for the expenses for that
month. The Trust shall promptly pay to JSC the amount of such billing. In
addition, JSC may receive from the initial class of shares of the Trust a fee at
an annual rate of up
<PAGE>
to .25% of the average daily net assets of the initial class of shares of the
Trust, to compensate JSC for providing, or arranging for the provision of
recordkeeping, subaccounting and administrative services to retirement or
pension plan participants or other underlying investors investing through
institutional channels.
6. INDEMNIFICATION.
a. JSC shall not be responsible for, and the Trust shall hold harmless
and indemnify JSC from and against, any loss by or liability to the Trust or a
third party (including reasonable attorney's fees and costs) in connection with
any claim or suit asserting any such liability arising out of or attributable to
actions taken or omitted by JSC or any of its agents pursuant to this Agreement,
unless JSC's actions or omissions constitute gross negligence or willful
misconduct. The Trust will be responsible for, and will have the right to
conduct or control the defense of, any litigation asserting liability against
which JSC is indemnified hereunder. JSC will not be under any obligation to
prosecute or defend any action or suit with respect to the agency relationship
hereunder, which, in its opinion, may involve it in expense or liability for
which it is indemnified hereunder, unless the Trust will, as often as requested,
furnish JSC with reasonable, satisfactory security and indemnity against such
expense or liability.
b. JSC will hold harmless and indemnify the Trust from and against any
loss or liability (including reasonable attorney's fees and costs) arising out
of any failure by JSC to comply with the terms of this Agreement due to JSC's
gross negligence or willful misconduct.
7. TERMINATION OF AGREEMENT.
a. This Agreement may be terminated by either party upon receipt of
sixty (60) days' written notice from the other party.
b. The Trust, in addition to any other rights and remedies, shall have
the right to terminate this Agreement immediately upon the occurrence at any
time of any of the following events:
(1) Any interruption or cessation of operations of JSC or its
assigns that materially interferes with the business operation of the Trust;
(2) The bankruptcy of JSC or its assigns or the appointment of a
receiver for JSC or its assigns;
(3) Any merger, consolidation, or sale of substantially all the
assets of JSC or its assigns;
(4) Failure by JSC or its assigns to perform its duties in
accordance with this Agreement, which failure materially adversely affects the
business operations of the Trust and which failure continues for ten (10) days
after receipt of written notice from JSC.
-2-
<PAGE>
c. In the event of termination, the Trust will promptly pay JSC all
amounts due to JSC hereunder.
d. In the event of termination, JSC will use its best efforts to
transfer the books and records of the Trust to the designated successor agent
and to provide other information relating to its services provided hereunder for
reasonable compensation therefore.
8. ASSIGNMENT.
a. Neither this Agreement nor any rights or obligations hereunder may
be assigned by either party without the written consent of the other; provided,
however, that any such assignment shall be subject to the prior written approval
of the Trust and no such assignment will relieve JSC of any of its obligations
hereunder. JSC may, however, employ agents to assist it in performing its duties
hereunder.
b. This Agreement will inure to the benefit of and be binding upon the
parties and their respective successors and assigns.
9. GOVERNING LAW. This Agreement shall be governed by the laws of the State
of Colorado.
10. AMENDMENTS. No provisions of this Agreement may be amended or modified
in any manner, except by a written agreement properly authorized and executed by
both parties hereto.
11. LIMITATION OF PERSONAL LIABILITY. The parties to this Agreement
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 Trust and that no Trustee, officer or
holder of shares of beneficial interest of the Trust shall be personally liable
for any of such liabilities.
JANUS ADVISER SERIES
BY:
Name: Thomas H. Bailey
Title: President
JANUS SERVICE CORPORATION
BY:
Name: Marjorie G. Hurd
Title: President
Exhibit 8(b)
JANUS ADVISER SERIES
ADMINISTRATIVE SERVICES AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT (THE "AGREEMENT") IS MADE THIS 3RD
day of April, 2000, between JANUS ADVISER SERIES, a Delaware business trust (the
"Trust"), and JANUS CAPITAL CORPORATION, a Colorado corporation ("JCC").
W I T N E S S E T H:
WHEREAS, the Trust is or will be registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has registered or will register 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 (each a "Fund"); and
WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should
assist the Trustees and officers of the Trust in the administration of the Trust
and the Funds.
NOW, THEREFORE, the parties agree as follows:
1. ADMINISTRATIVE SERVICES. JCC shall perform or cause to be performed
all necessary and appropriate internal accounting, recordkeeping, and
blue sky monitoring and registration functions of the Funds, including
the preparation of reports and returns incidental thereto.
2. COMPENSATION. The Funds shall reimburse to JCC on a monthly basis the
reasonable costs incurred by JCC in performing the functions described
herein, including without limitation the salaries of JCC personnel
performing those functions, costs of third party service providers
engaged to perform such functions, applicable systems costs, and other
ancillary costs such as costs associated with DTC confirms and the
costs of the pricing feed into such systems.
3. TERMINATION. This Agreement may be terminated at any time, without
penalty, by either party by giving sixty (60) days advance written
notice of termination to the other party, addressed to the principal
place of business of that other party.
4. ALLOCATION AMONG SERIES. The Trustees shall determine the basis for
making an appropriate allocation of the Trust's expenses (other than
those directly attributable to a Fund) between and among the Funds.
<PAGE>
5. 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 Trust 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.
6. LIMITATION OF LIABILITY OF JCC. JCC 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 6, "JCC" shall include any
affiliate of JCC performing services for the Trust contemplated
hereunder and directors, officers and employees of JCC and such
affiliates.
7. ACTIVITIES OF JCC. The services of JCC to the Trust hereunder are not
to be deemed to be exclusive, and JCC 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
JCC as directors, officers and shareholders of JCC, that directors,
officers, employees and shareholders of JCC are or may become
similarly interested in the Trust, and that JCC may become interested
in the Trust as a shareholder or otherwise.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Administrative Services Agreement as of the date and year first
above written.
JANUS CAPITAL CORPORATION
By: ______________________________________
Steven R. Goodbarn, Vice President
JANUS ADVISER SERIES
By: _____________________________________
Thomas H. Bailey, President
Exhibit 10
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the reference to us under the heading "Independent
Accountants" in the Statement of Additional Information constituting part of
this Initial Registration Statement on Form N-8A and Form N-1A of Janus Adviser
Series.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Denver, Colorado
April 4, 2000
Exhibit 13
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN
JANUS ADVISER SERIES
WHEREAS, Janus Adviser Series ("the Trust") engages in business as an
open-end management investment company and is or will be registered as such
under the Investment Company Act of 1940, as amended (the "Act");
WHEREAS, shares of beneficial interest of the Trust will initially be
divided into multiple series ("Funds"), each with an initial class of shares
(and additional classes may be added in the future);
WHEREAS, Janus Distributors, Inc. ("JDI" or "Distributor") serves as the
distributor of the initial class of shares pursuant to a Distribution Agreement
dated April 3, 2000, as amended from time to time, between JDI and the Trust;
and
NOW, THEREFORE, the Company hereby adopts on behalf of the Trust with
respect to the initial class of shares of each Fund, and the Distributor hereby
agrees to the terms of, the Plan, in accordance with Rule 12b-1 under the Act on
the following terms and conditions:
1. The Trust shall pay to the Distributor, as the distributor of the
initial class of shares, a fee for distribution of the shares at the rate of up
to 0.25% on an annualized basis of the average daily net assets of the initial
class of shares, provided that, at any time such payment is made, whether or not
this Plan continues in effect, the making thereof will not cause the limitation
upon such payments established by this Plan to be exceeded. Such fee shall be
calculated and accrued daily and paid at such intervals as the Trustees shall
determine, subject to any applicable restriction imposed by rules of the
National Association of Securities Dealers, Inc.
2. The amount set forth in paragraph 1 of this Plan shall be paid for the
Distributor's services as distributor of the initial class of shares in
connection with any activities or expenses primarily intended to result in the
sale of the initial class of shares, including, but not limited to, payment of
compensation, including incentive compensation, to securities dealers and other
financial institutions and organizations (collectively, the "Service Providers")
to obtain various distribution related and/or administrative services for the
investors in the initial class of shares (including plan participants in the
case of qualified plans that invest in the initial class of shares). These
services may include, but are not limited to the following functions: printing
and delivering prospectuses, statements of additional information, shareholder
reports, proxy statements and marketing materials related to the initial class
of shares to prospective and existing investors; providing educational materials
regarding the initial class of shares; providing facilities to answer questions
from prospective and existing investors about the Funds; receiving and answering
correspondence; complying with federal and state securities laws pertaining to
the sale of initial class of shares; and assisting investors in completing
application forms and selecting dividend and other accounts options. The
Distributor is also authorized to engage directly in any activities relating to
the purposes of this plan. In addition, this Plan hereby
<PAGE>
authorizes payment by the Trust of the cost of preparing, printing and
distributing prospectuses and statements of additional information relating to
the initial class of shares to prospective investors and of implementing and
operating the Plan. Payments under the Plan are not tied exclusively to actual
distribution and service expenses, and the payments may exceed distribution and
service expenses actually incurred.
3. This Plan shall not take effect until it, together with any related
agreements, has been approved by votes of a majority of both (a) the Trustees of
the Trust and (b) those Trustees of the Trust who are not "interested persons"
of the Trust (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or any agreements related to it
(the "Rule 12b-1 Trustees"), cast in person at a meeting (or meetings) called
for the purpose of voting on this Plan and such related agreements.
4. After approval as set forth in paragraph 3, this Plan shall take effect
as of the date of execution. The Plan shall continue in full force and effect as
to the initial class of shares of each Fund of the Trust for so long as such
continuance is specifically approved at least annually in the manner provided
for approval of this Plan in paragraph 3.
5. The Distributor shall provide to the Trustees of the Trust, and the
Trustees shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made.
6. This Plan may be terminated as to the initial class of shares of any
Fund of the Trust at any time, without payment of any penalty, by vote of the
Trustees of the Trust, by vote of a majority of the Rule 12b-1 Trustees, or by a
vote of a majority of the outstanding voting securities of the initial class of
shares of the Trust.
7. This Plan may not be amended to increase materially the amount of
distribution fee provided for in paragraph 1 hereof for any Fund unless such
amendment is approved by a vote of a majority of the outstanding voting
securities (as defined in the Act) of the initial class of shares of that Fund
and no material amendment to the Plan shall be made unless approved in the
manner provided for approval and annual renewal in paragraph 3 hereof.
8. While this Plan is in effect, the selection and nomination of Trustees
who are not "interested persons" (as defined in the Act) of the Trust shall be
committed to the discretion of the Trustees who are not such interested persons.
9. The Trust shall preserve copies of this Plan and any related agreements
and all reports made pursuant to paragraph 5 hereof, for a period of not less
than six years from the date of this Plan, any such agreement or any such
report, as the case may be, the first two years in an easily accessible place.
<PAGE>
IN WITNESS WHEREOF, the Trust, on behalf of the initial class of shares of
each Fund, and the Distributor have executed this Distribution Plan as of the
3rd day of April, 2000.
JANUS ADVISER SERIES
By:_______________________________________
Name: Thomas H. Bailey
Title: President
JANUS DISTRIBUTORS, INC.
By:_______________________________________
Name: Kelley Abbott Howes
Title: Vice President
Exhibit 14
[GRAPHIC OMITTED][GRAPHIC OMITTED]
JANUS ETHICS RULES
"ACT IN THE BEST INTEREST OF OUR INVESTORSCEARN THEIR
CONFIDENCE WITH EVERY ACTION"
________________________________________________________________________________
CODE OF ETHICS
INSIDER TRADING POLICY
GIFT POLICY
OUTSIDE EMPLOYMENT POLICY
________________________________________________________________________________
LAST REVISED MARCH 1, 2000
________________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
DEFINITIONS....................................................................1
INTRODUCTION...................................................................4
CAUTION REGARDING PERSONAL TRADING ACTIVITIES.........................4
COMMUNICATIONS WITH OUTSIDE TRUSTEES/DIRECTORS........................4
CODE OF ETHICS.................................................................5
OVERVIEW..............................................................5
GENERAL PROHIBITIONS..................................................5
TRADING RESTRICTIONS..................................................6
EXCLUDED TRANSACTIONS........................................6
DISCLOSURE OF CONFLICTS......................................7
PRECLEARANCE.................................................7
TRADING BAN ON PORTFOLIO MANAGERS AND ASSISTANT PORTFOLIO
MANAGERS.....................................................8
BAN ON IPOs AND HOT ISSUES...................................8
60 DAY RULE..................................................8
BLACKOUT PERIOD..............................................8
FIFTEEN DAY RULE.............................................8
SEVEN DAY RULE...............................................9
SHORT SALES..................................................9
HEDGE FUNDS, INVESTMENT CLUBS, AND OTHER INVESTMENTS.........9
PRECLEARANCE PROCEDURES...............................................9
GENERAL PRECLEARANCE.........................................9
PRECLEARANCE REQUIREMENTS FOR INVESTMENT PERSONNEL..........10
PRECLEARANCE OF COMPANY STOCK...............................10
PRECLEARANCE OF TENDER OFFERS AND STOCK PURCHASE PLANS......11
FOUR DAY EFFECTIVE PERIOD...................................11
REPORTING REQUIREMENTS...............................................11
ACCOUNT STATEMENTS..........................................11
HOLDINGS REPORTS............................................12
PERSONAL SECURITIES TRANSACTION REPORTS.....................12
NON-INFLUENCE AND NON-CONTROL ACCOUNTS......................12
OTHER REQUIRED FORMS.................................................13
ACKNOWLEDGMENT OF RECEIPT FORM..............................13
ANNUAL CERTIFICATION FORM...................................13
OUTSIDE DIRECTOR/TRUSTEE REPRESENTATION FORM................13
INSIDER TRADING POLICY........................................................14
BACKGROUND INFORMATION...............................................14
WHO IS AN INSIDER?..........................................15
WHEN IS INFORMATION NONPUBLIC?..............................15
WHAT IS MATERIAL INFORMATION?...............................15
WHEN IS INFORMATION MISAPPROPRIATED?........................15
PENALTIES FOR INSIDER TRADING...............................16
WHO IS A CONTROLLING PERSON?................................16
PROCEDURES TO IMPLEMENT POLICY.......................................16
<PAGE>
IDENTIFYING MATERIAL INSIDE INFORMATION.....................16
REPORTING INSIDE INFORMATION................................17
WATCH AND RESTRICTED LISTS..................................17
PROTECTING INFORMATION......................................18
RESPONSIBILITY TO MONITOR TRANSACTIONS......................19
RECORD RETENTION............................................19
TENDER OFFERS...............................................19
GIFT POLICY...................................................................20
GIFT GIVING..........................................................20
GIFT RECEIVING.......................................................20
CUSTOMARY BUSINESS AMENITIES.........................................20
OUTSIDE EMPLOYMENT POLICY.....................................................21
PENALTY GUIDELINES............................................................22
OVERVIEW.............................................................22
PENALTY GUIDELINES ................................................22
SUPERVISORY AND COMPLIANCE PROCEDURES.........................................23
SUPERVISORY PROCEDURES...............................................23
PREVENTION OF VIOLATIONS....................................23
DETECTION OF VIOLATIONS.....................................23
COMPLIANCE PROCEDURES................................................24
REPORTS OF POTENTIAL DEVIATIONS OR VIOLATIONS...............24
ANNUAL REPORTS..............................................24
RECORDS 24
INSPECTION..................................................25
CONFIDENTIALITY.............................................25
FILING OF REPORTS...........................................25
THE ETHICS COMMITTEE.................................................25
MEMBERSHIP OF THE COMMITTEE.................................25
COMMITTEE MEETINGS..........................................25
SPECIAL DISCRETION..........................................26
GENERAL INFORMATION ABOUT THE ETHICS RULES....................................27
DESIGNEES...................................................27
ENFORCEMENT.................................................27
INTERNAL USE................................................27
FORMS.........................................................................28
<PAGE>
JANUS ETHICS RULES
"ACT IN THE BEST INTEREST OF OUR INVESTORS - EARN THEIR
CONFIDENCE WITH EVERY ACTION"
- --------------------------------------------------------------------------------
DEFINITIONS
- --------------------------------------------------------------------------------
The following definitions are used throughout this document. You are responsible
for reading and being familiar with each definition.
1. "Access Person" shall mean:
1) Any trustee, director, officer or Advisory Person of the Janus Funds
or JCC;
2) Any director or officer of JDI who in the ordinary course of his or
her business makes, participates in or obtains information regarding
the purchase or sale of securities for the Janus Funds or for the
advisory clients or whose functions or duties as part of the ordinary
course of his or her business relate to the making of any
recommendation to the Janus Funds or advisory clients regarding the
purchase or sale of securities; and
3) Any other persons designated by the Ethics Committee as having access
to current trading information.
2. "Advisory Person" shall mean:
1) ANY EMPLOYEE OF THE JANUS FUNDS OR JCC (OR OF ANY COMPANY IN A CONTROL
relationship to the Janus Funds or JCC) who in connection with his or
her regular functions or duties, makes, participates in or obtains
information regarding the purchase or sale of a security by the Funds
or for the account of advisory clients, or whose functions relate to
the making of any recommendations with respect to such purchases and
sales; and
2) Any natural person in a control relationship to the Funds or JCC who
obtains information concerning recommendations made to the Funds or
for the account of Clients with regard to the purchase or sale of a
security.
3. "Beneficial Ownership" shall be interpreted in the same manner as it would
be under Rule 16a-1(a)(2) under the Securities Exchange Act of 1934 in
determining whether a person is subject to the provisions of Section 16
except that the determination of direct or indirect Beneficial Ownership
shall apply to all Covered Securities which an Access Person has or
acquires. For example, in addition to a person's own accounts the term
"Beneficial Ownership" encompasses securities held in the name of a spouse
or equivalent domestic partnership, minor children, a relative sharing your
home, or certain trusts under which you or a related party is a
beneficiary, or held under other arrangements indicating a sharing of
financial interest.
4. "Company Stock" is any stock or option issued by Janus, Stilwell Financial,
Inc. ("Stilwell") or Kansas City Southern Industries, Inc. ("KCSI").
1
<PAGE>
5. "Control" shall have the same meaning as that set forth in Section 2(a)(9)
of the 1940 Act.
6. "Covered Persons" are all Directors, Trustees, officers, and full-time,
part-time or temporary employees of Janus, and persons working at Janus on
a contract basis.
7. "Covered Securities" generally include all securities (including Company
Stock), whether publicly or privately traded, and any option, future,
forward contract or other obligation involving a security or index thereof,
including an instrument whose value is derived or based on any of the above
(a "derivative"). The term Covered Security includes any separate security,
which is convertible into or exchangeable for, or which confers a right to
purchase such security. The following investments are not Covered
Securities:
o shares of registered open-end investment companies (e.g., mutual
funds);
o direct obligations of the U.S. government (e.g., Treasury securities),
or any derivative thereof;
o securities representing a limited partnership interest in a real
estate limited partnership;
o high-quality money market instruments, such as certificates of
deposit, bankers acceptances, repurchase agreements, commercial paper,
and U.S. government agency obligations;
o insurance contracts, including life insurance or annuity contracts;
o direct investments in real estate, business franchises or similar
ventures; and
o physical commodities (including foreign currencies), or any
derivatives thereof.
8. "Designated Compliance Representatives" are David Kowalski and Ernie
Overholt or their designee(s).
9. "Designated Legal Representatives" are Bonnie Howe and Heidi Walter or
their designee(s).
10. "Designated Trading Operations Representatives" are Lesa Finney, John
Porro, and Mark Farrell.
11. "Directors" are directors of JCC.
12. "Executive Committee" is comprised of Thomas Bailey, Jim Craig, Thomas
Early, Steve Goodbarn, Margie Hurd, and Mark Whiston.
13. "Executive Investment Committee" is comprised of Jim Craig, Jim Goff, Helen
Hayes, Warren Lammert, and Scott Schoelzel.
14. "Ethics Committee" is comprised of Thomas Early, Steve Goodbarn, David
Kowalski and Ernie Overholt.
15. "Initial Public Offering" means an offering of securities registered under
the Securities Act of 1933, the issuer of which, immediately before the
registration, was not subject to the reporting requirements of sections 13
or 15(d) of the Securities Exchange Act of 1934.
16. "Inside Trustees and Directors" are Trustees and Directors who are also
employed by Janus.
2
<PAGE>
17. "Investment Personnel" shall mean (i) a person who makes decisions
regarding the purchase or sale of securities by or on behalf of the Janus
Funds or advisory clients and any person such as an analyst or trader who
directly assists in the process, and (ii) any natural person who controls
the Janus Funds or JCC and who obtains information concerning
recommendations made to the Funds regarding the purchase or sale of Covered
Securities by the Funds.
18. "Janus" is Janus Investment Fund, Janus Aspen Series, Janus Capital
Corporation, Janus Service Corporation, Janus Distributors, Inc., Janus
Capital International Ltd., Janus International (UK) Ltd., Janus Capital
Trust Manager Ltd., Janus Universal Funds, and Janus World Funds Plc.
19. "Janus Funds" are Janus Investment Fund, Janus Aspen Series, Janus
Universal Funds, and Janus World Funds Plc.
20. "JCC" is Janus Capital Corporation, Janus Capital International Ltd., Janus
International (UK) Ltd. and Janus Capital Trust Manager Ltd.
21. "JDI" is Janus Distributors, Inc.
22. "JDI's Operations Manager" is Dana Stephens and/or her designee(s).
23. "Limited Offering" means an offering that is exempt from registration under
the Securities Act of 1933 pursuant to section 4(2) or section 4(6) or
pursuant to rule 504, rule 505 or rule 506 thereunder.
24. "NASD" is the National Association of Securities Dealers, Inc.
25. "Non-Access Person" is any person that is not an Access Person.
26. "Outside Directors" are Directors who are not employed by Janus.
27. "Outside Trustees" are Trustees who are not "interested persons" of the
Janus Funds within the meaning of Section 2(a)(9) of the 1940 Act.
28. "Registered Persons" are persons registered with the NASD by JDI.
29. "Security Held or to be Acquired" means any Covered Security which, within
the most recent 15 days (i) is or has been held by the Janus Funds; or (ii)
is being or has been considered by the Janus Funds or JCC for purchase.
30. "SEC" is Securities and Exchange Commission.
31. "Trustees" are trustees of Janus Investment Fund and Janus Aspen Series.
These definitions may be updated from time to time to reflect changes in
personnel.
3
<PAGE>
- --------------------------------------------------------------------------------
INTRODUCTION
- --------------------------------------------------------------------------------
These Ethics Rules ("Rules") apply to all Covered Persons. The Rules apply
to transactions for your personal accounts and any other accounts you
Beneficially Own. You may be deemed the beneficial owner of any account in which
you have a direct or indirect financial interest. Such accounts include, among
others, accounts held in the name of your spouse or equivalent domestic
partnership, your minor children, a relative sharing your home, or certain
trusts under which you or such persons are a beneficiary.
The Rules are intended to ensure that you (i) at all times place first the
interests of the Janus Funds, investment companies for which Janus serves as
subadviser, and other advisory clients ("Clients"); (ii) conduct all personal
trading consistent with the Rules and in such a manner as to avoid any actual or
potential conflict of interest or any abuse of your position of trust and
responsibility; and (iii) not use any material nonpublic information in
securities trading. The Rules also establish policies regarding other matters,
such as outside employment and the giving or receiving of gifts.
You are required to read and retain these Rules and to sign and return the
attached Acknowledgment of Receipt Form to Compliance upon commencement of
employment or other services. On an annual basis thereafter, you will be
required to complete an Annual Certification Form. The Annual Certification Form
confirms that (i) you have received, read and asked any questions necessary to
understand the Rules; (ii) you agree to conduct yourself in accordance with the
Rules; and (iii) you have complied with the Rules during such time as you have
been associated with Janus. Depending on your status, you may be required to
submit additional reports and/or obtain clearances as discussed more fully
below.
Unless otherwise defined, all capitalized terms shall have the same meaning
as set forth in the Definitions section.
CAUTION REGARDING PERSONAL TRADING ACTIVITIES
Certain personal trading activities may be risky not only because of the
nature of the transactions, but also because action necessary to close out a
position may become prohibited for some Covered Persons while the position
remains open. For example, you may not be able to close out short sales and
transactions in derivatives. Furthermore, if JCC becomes aware of material
nonpublic information, or if a Client is active in a given security, some
Covered Persons may find themselves "frozen" in a position. JCC will not bear
any losses in personal accounts resulting from the application of these Rules.
COMMUNICATIONS WITH OUTSIDE TRUSTEES/DIRECTORS
As a regular business practice, JCC attempts to keep Directors and Trustees
informed with respect to its investment activities through reports and other
information provided to them in connection with board meetings and other events.
In addition, Janus personnel are encouraged to respond to inquiries from
Directors and Trustees, particularly as they relate to general strategy
considerations or economic or market conditions affecting Janus. However, it is
JCC's policy not to communicate specific trading information and/or advice on
specific issues to Outside Directors and Outside Trustees (i.e., no information
should be given on securities for which current activity is being considered for
Clients). Any pattern of repeated requests by such Directors or Trustees should
be reported to the Chief Compliance Officer or the Compliance Manager.
4
<PAGE>
- --------------------------------------------------------------------------------
CODE OF ETHICS
- --------------------------------------------------------------------------------
OVERVIEW
In general, it is unlawful for persons affiliated with investment
companies, their principal underwriters or their investment advisers to engage
in personal transactions in securities held or to be acquired by a registered
investment company, if such personal transactions are made in contravention of
rules which the SEC has adopted to prevent fraudulent, deceptive and
manipulative practices. Such rules require each registered investment company,
investment adviser and principal underwriter to adopt its own written code of
ethics containing provisions reasonably necessary to prevent its employees from
engaging in such conduct, and to maintain records, use reasonable diligence, and
institute such procedures as are reasonably necessary to prevent violations of
such code. This Code of Ethics ("Code") and information reported hereunder will
enable Janus to fulfill these requirements.
GENERAL PROHIBITIONS
The following activities are prohibited for applicable Covered Persons
(remember, if you work at Janus full-time, part-time, temporarily or on a
contract basis, or you are a Trustee or Director, you are a Covered Person).
Persons who violate any prohibition may be required to disgorge any profits
realized in connection with such violation to a charitable organization selected
by the Ethics Committee and may be subject to other sanctions imposed by the
Ethics Committee, as outlined in the Penalty Guidelines.
1. Covered Persons may not cause a Client to take action, or to fail to take
action, for personal benefit, rather than to benefit such Client. For
example, a Covered Person would violate this Code by causing a Client to
purchase a security owned by the Covered Person for the purpose of
supporting or increasing the price of that security or by causing a Client
to refrain from selling a security in an attempt to protect a personal
investment, such as an option on that security.
2. Covered Persons may not use knowledge of portfolio transactions made or
contemplated for Clients to profit, or cause others to profit, by the
market effect of such transactions.
3. Covered Persons may not disclose current portfolio transactions made or
contemplated for Clients as well as any other nonpublic information to
anyone outside of Janus.
4. Covered Persons may not engage in fraudulent conduct in connection with the
purchase or sale of a Security Held or to be Acquired by a Client,
including without limitation:
1) Employing any device, scheme or artifice to defraud any Client;
2) Making to any Client any untrue statement of material fact or omitting
to state to any Client a material fact necessary in order to make the
statements made, in light of the circumstances under which they are
made, not misleading;
3) Engaging in any act, practice or course of business which operates or
would operate as a fraud or deceit upon any Client;
4) Engaging in any manipulative practice with respect to any Client; or
5
<PAGE>
5) Investing in derivatives to evade the restrictions of this Code.
Accordingly, individuals may not use derivatives to take positions in
securities that would be otherwise prohibited by the Code if the
positions were taken directly.
5. Investment Personnel may not serve on the board of directors of a publicly
traded company without prior written authorization from the Ethics
Committee. No such service shall be approved without a finding by the
Ethics Committee that the board service would not be inconsistent with the
interests of Clients. If board service is authorized by the Ethics
Committee, the Investment Personnel serving as director normally should be
isolated from those making investment decisions with respect to the company
involved through "Chinese Walls" or other procedures.
TRADING RESTRICTIONS
The trading restrictions of the Code apply to all direct or indirect
acquisitions or dispositions of Covered Securities, whether by purchase, sale,
tender offers, stock purchase plan, gift, inheritance, or otherwise. Unless
otherwise noted, the following trading restrictions are applicable to any
transaction in a Covered Security Beneficially Owned by a Covered Person.
Outside Directors and Outside Trustees are exempt from certain trading
restrictions because of their limited access to current information regarding
Client investments.
Any disgorgement of profits required under any of the following provisions
shall be donated to a charitable organization selected by the Ethics Committee,
as outlined in the Penalty Guidelines. However, if disgorgement is required as a
result of trades by a portfolio manager that conflicted with that manager's own
Clients, disgorgement proceeds shall be paid directly to such Clients. If
disgorgement is required under more than one provision, the Ethics Committee
shall determine in its sole discretion the provision that shall control.1
EXCLUDED TRANSACTIONS
Some or all of the trading restrictions listed below do not apply to the
following transactions; however, these transactions must still be reported to
Compliance (see Reporting Requirements):
o Tender offer transactions are exempt from all trading restrictions
except preclearance.
- --------
1 Unless otherwise noted, restrictions on personal transactions apply
to transactions involving Covered Securities, including any derivative thereof.
When determining the amount of disgorgement required with respect to a
derivative, consideration will be given to price differences in both the
derivative and the underlying securities, with the lesser amount being used for
purposes of computing disgorgement. For example, in determining whether
reimbursement is required when the applicable personal trade is in a derivative
and the Client transaction is in the underlying security, the amount shall be
calculated using the lesser of (a) the difference between the price paid or
received for the derivative and the closing bid or ask price (as appropriate)
for the derivative on the date of the Client transaction, or (b) the difference
between the last sale price, or the last bid or ask price (as appropriate) of
the underlying security on the date of the derivative transaction, and the price
received or paid by the Client for the underlying security. Neither preclearance
nor disgorgement shall be required if such person=s transaction is to close,
sell or exercise a derivative within five days of its expiration.
6
<PAGE>
o The acquisition of securities through stock purchase plans are exempt
from all trading restrictions except preclearance, the trading ban on
portfolio managers and assistant portfolio managers, and the seven day
rule. (Note: the sales of securities acquired through a stock purchase
plan are subject to all of the trading restrictions of the Code).
o The acquisition of securities through stock dividends, automatic
dividend reinvestment plans, stock splits, reverse stock splits,
mergers, consolidations, spin-offs, or other similar corporate
reorganizations or distributions generally applicable to all holders
of the same class of such securities are exempt from all trading
restrictions. The acquisition of securities through the EXERCISE OF
RIGHTS ISSUED BY AN ISSUER PRO RATA to all holders of a class of
securities, to the extent the rights were acquired in the issue are
exempt from all trading restrictions.
o Non-discretionary transactions in Company Stock (e.g., the acquisition
of securities through Stilwell or KCSI's Employee Stock Purchase Plan
("ESPP") or the receipt of options in Company Stock as part of a
compensation or benefit plan) are exempt from all trading
restrictions. Discretionary transactions in Company Stock issued by
JCC are exempt from all trading restrictions. Discretionary
transactions in Company Stock issued by Stilwell or KCSI (e.g.,
exercising options or selling ESPP Stock) are exempt from all trading
restrictions except preclearance (See procedures for Preclearance of
Company Stock).
o The acquisition of securities by gift or inheritance is exempt from
all trading restrictions. (Note: the sales of securities acquired by
gift or inheritance ARE subject to all trading restrictions of the
Code).
o Transactions in options on and securities based on the following
indexes are exempt from all trading restrictions: S&P 500 Index, S&P
MidCap 400 Index, S&P 100 Index, FTSE 100 Index or Nikkei 225 Index.
DISCLOSURE OF CONFLICTS
If an Investment Person is planning to invest or make a recommendation to
invest in a security for a Client, and such person has a material interest in
the security, such person must first disclose such interest to his or her
manager or the Chief Investment Officer. The manager or Chief Investment Office
shall conduct an independent review of the recommendation to purchase the
security for Clients. The manager or Chief Investment Officer may review the
recommendation only if he or she has no material interest in the security. A
material interest is Beneficial Ownership of any security (including
derivatives, options, warrants or rights), offices, directorships, significant
contracts, or interests or relationships that are likely to affect such person's
judgment.
PRECLEARANCE
Access Persons (except Outside Directors and Outside Trustees) must obtain
preclearance prior to engaging in any personal transaction in Covered
Securities. (See Preclearance Procedures below).
7
<PAGE>
TRADING BAN ON PORTFOLIO MANAGERS AND ASSISTANT PORTFOLIO MANAGERS
Portfolio managers and their assistants are prohibited from trading
personally in Covered Securities. However, the following types of transactions
are exempt from this policy, but are subject to all applicable provisions of the
Rules, including preclearance:
o Purchases or sales of Company Stock;
o The sale of any security that is not held by any Client; and
o The sale of any security in order to raise capital to fund a
significant life event. For example, purchasing a home or automobile,
or paying medical or education expenses.
BAN ON IPOs AND HOT ISSUES
Covered Persons (except Outside Directors and Outside Trustees) may not
purchase securities in an initial public offering or in a secondary offering
that constitutes a "hot issue" as defined in NASD rules. Such securities may be
purchased or received, however, where the individual has an existing right to
purchase the security based on his or her status as an investor, policyholder or
depositor of the issuer. In addition, securities issued in reorganizations are
also outside the scope of this prohibition if the transaction involves no
investment decision on the part of the Covered Person except in connection with
a shareholder vote.
60 DAY RULE
Access Persons (except Outside Directors and Outside Trustees) shall
disgorge any profits realized in the purchase and sale, or sale and purchase, of
the same or equivalent Covered Securities within sixty (60) calendar days if a
Client held or traded the security during the sixty (60) calendar day period.
BLACKOUT PERIOD
No Access Person may engage in a transaction in a Covered Security when
such person knows or should have known at the time there to be pending, on
behalf of any Client, a "buy" or "sell" order in that same security. The
existence of pending orders will be checked by Compliance as part of the
Preclearance process. Preclearance may be given when any pending Client order is
completely executed or withdrawn.
FIFTEEN DAY RULE
Any Access Person (except Outside Directors and Outside Trustees) who buys
or sells a Covered Security within fifteen calendar days before such security is
bought or sold on behalf of any Client must disgorge any price advantage
realized. The price advantage shall be the favorable spread, if any, between the
price paid or received by such person and the least favorable price paid or
received by a client during such period.2 The Ethics Committee has the authority
by unanimous action to exempt any person from the fifteen-day rule if such
person is selling a security to raise capital to fund a significant life event.
For example, purchasing a home or automobile, or paying medical or education
expenses. In order for the Ethics
___________________________
2 Personal purchases are matched only against subsequent Client purchases
and personal sales are matched only against subsequent Client sales for purposes
of this restriction.
8
<PAGE>
Committee to consider such exemption, the life event must occur within thirty
(30) calendar days of the security transaction, and the person must provide
written confirmation of the event.
SEVEN DAY RULE
Any portfolio manager or assistant portfolio manager who buys or sells a
Covered Security within seven calendar days before or after he or she trades in
that security on behalf of a Client shall disgorge any profits realized on such
transaction.
SHORT SALES
Any Access Person who sells short a Covered Security that such person knows
or should have known is held long by any Client shall disgorge any profit
realized on such transaction. This prohibition shall not apply, however, to
securities indices or derivatives thereof (such as futures contracts on the S&P
500 index). Client ownership of Covered Securities will be checked as part of
the Preclearance process.
HEDGE FUNDS, INVESTMENT CLUBS, AND OTHER INVESTMENTS
No Access Person (except Outside Directors and Outside Trustees) may
participate in hedge funds, partnerships, investment clubs, or similar
investment vehicles, unless such person does not have any direct or indirect
influence or control over the trading. Covered Persons wishing to rely upon this
provision must submit a Certification of Non-Influence and Non-Control Form to
the Compliance Manager for approval. (See Non-Influence and Non-Control Accounts
section below.)
PRECLEARANCE PROCEDURES
Access Persons must obtain preclearance for all applicable transactions in
Covered Securities in which such person has a Beneficial Interest. A
Preclearance Form must be completed and forwarded to Compliance. Compliance
shall promptly notify the person of approval or denial of the transaction.
Notification of approval or denial of the transaction may be given verbally;
however, it shall be confirmed in writing within seventy-two (72) hours of
verbal notification. When preclearance has been approved, the person then has
four business days from and including the day of first notification to execute
the trade.
GENERAL PRECLEARANCE
General preclearance shall be obtained from an authorized person from each
of the following three groups:
o A DESIGNATED LEGAL OR COMPLIANCE REPRESENTATIVE, who will present the
personal investment to the attendees of the weekly investment meeting,
whereupon an opportunity will be given to orally object. An attendee
of the weekly investment meeting shall object to such clearance if
such person knows of a conflict with a pending Client transaction or a
transaction known by such attendee to be under consideration for a
Client. Objections to such clearance should also take into account,
among other factors, whether the investment opportunity should be
reserved for a Client. If no objections are raised, the Designated
Legal or Compliance Representative shall so indicate by signing the
Preclearance Form. Such approval shall not be required for sales of
securities not held by any Clients.
9
<PAGE>
In place of this authorization, Investment Personnel are required to
obtain approvals from all Executive Investment Committee members as
noted in the section below entitled Preclearance Requirements for
Investment Personnel.
o A DESIGNATED TRADING OPERATIONS REPRESENTATIVE, who may provide
clearance if such Representative knows at the time of the request of
no pending "buy" or "sell" order in the security on behalf of a Client
and no such trades are known by such person to be under consideration.
o The COMPLIANCE MANAGER, OR A DESIGNATED LEGAL OR COMPLIANCE
REPRESENTATIVE IF THE COMPLIANCE MANAGER IS NOT AVAILABLE, who may
provide clearance if no legal prohibitions are known by such person to
exist with respect to the proposed trade. Approvals for such clearance
should take into account, among other factors, the existence of any
Watch List or Restricted List and, to the extent reasonably
practicable, recent trading activity and holdings of Clients.
NO authorized person may preclear a transaction in which such person has a
Beneficial Interest.
PRECLEARANCE REQUIREMENTS FOR INVESTMENT PERSONNEL
Trades by Investment Personnel may not be precleared by presentation at the
weekly investment meeting. Instead, Investment Personnel must obtain the
following management approvals. However, such approvals shall not be required
for sales of securities not held by any Clients:
o TRADES IN EQUITY SECURITIES require prior written approval from all
members of the Executive Investment Committee, Investment Person's
manager and either Ron Speaker or Sandy Rufenacht;
o TRADES IN DEBT SECURITIES require prior written approval from all
senior fixed income portfolio managers, either Jim Craig or two other
Executive Investment Committee members, and Investment Person's
manager.
A portfolio manager may not preclear his or her own transaction.
PRECLEARANCE OF COMPANY STOCK
Officers of Janus and certain persons designated by Compliance who wish to
make discretionary transactions in Stilwell or KCSI securities, or derivatives
thereon, must preclear such transactions. A Company Stock Preclearance Form must
be completed and forwarded to Compliance. Compliance shall promptly notify the
person of approval or denial for the transaction. Notification of approval or
denial for the transaction may be given verbally; however, it shall be confirmed
in writing within seventy-two (72) hours of verbal notification. When
preclearance has been approved, the person then has four business days from and
including the day of first notification to execute the trade.
If such persons are subject to the provisions of Section 16(b) of the
Securities Exchange Act of 1934, trading will generally be allowed only in the
ten (10) business day period beginning seventy-two (72) hours after Stilwell or
KCSI files its quarterly results with the SEC (e.g., 10Q or 10K filing, not
earnings release). To preclear the trade, the Compliance Manager or such other
Representative shall discuss the transaction with Janus's General Counsel or
Chief Financial Officer.
10
<PAGE>
PRECLEARANCE OF TENDER OFFERS AND STOCK PURCHASE PLANS
Access Persons (other than Outside Directors and Outside Trustees) who wish
to participate in a tender offer or stock purchase plan must preclear such
trades only with the Compliance Manager prior to submitting notice to
participate in such tender offer or notice of participation in such stock
purchase plan to the applicable company. To preclear the trade, the Compliance
Manager shall consider all material factors relevant to a potential conflict of
interest between the Access Person and Clients. In addition, any increase of
$100 or more to a pre-existing stock purchase plan must be precleared.
FOUR DAY EFFECTIVE PERIOD
Clearances to trade will be in effect for only four trading/business days
from and including the date of the last Authorized Person's signature (which may
not be provided more than one day after the first Authorized Person's
signature). For tender offers, stock purchase plans, exercise of Company Stock
and similar transactions, the date the request is submitted to the company
processing the transaction will be considered the trade date for purposes of
this requirement. Open orders, including stop loss orders, will generally not be
allowed unless such order is expected to be completed within the four day
effective period. It is necessary to re-preclear transactions not executed
within the four day effective period.
REPORTING REQUIREMENTS
ACCOUNT STATEMENTS
ACCESS PERSONS (other than Outside Trustees) and REGISTERED PERSONS must
notify Compliance of each brokerage account in which they have a Beneficial
Interest and must arrange for their brokers or financial institutions to provide
to Compliance, on a timely basis, duplicate account statements and confirmations
showing all transactions in brokerage or commodities accounts in which they have
a Beneficial Interest. A Personal Brokerage Account Disclosure Form should be
completed for this purpose.
PLEASE NOTE THAT, EVEN IF SUCH PERSON DOES NOT TRADE COVERED SECURITIES IN
A PARTICULAR BROKERAGE OR COMMODITIES ACCOUNT (E.G., TRADING MUTUAL FUNDS IN A
SCHWAB ACCOUNT), THE REPORTING OF DUPLICATE ACCOUNT STATEMENTS AND CONFIRMATIONS
IS STILL REQUIRED. HOWEVER, IF SUCH PERSON ONLY USES A PARTICULAR BROKERAGE
ACCOUNT FOR CHECKING ACCOUNT PURPOSES, AND NOT INVESTMENT PURPOSES, HE OR SHE
MAY IN LIEU OF REPORTING DUPLICATE ACCOUNT STATEMENTS, REPORT DUPLICATE TRADE
CONFIRMATIONS AND MAKE A QUARTERLY REPRESENTATION TO COMPLIANCE INDICATING THAT
NO INVESTMENT TRANSACTIONS OCCURRED IN THE ACCOUNT DURING THE CALENDAR QUARTER.
Reporting of accounts that do not allow any trading in Covered Securities (e.g.,
a mutual fund account held directly with the fund sponsor) is not required.
Covered Persons must notify Compliance of each reportable account at the
time it is opened, and annually thereafter, including the name of the firm and
the name under which the account is carried. A Personal Brokerage Account
Disclosure Form should be completed for this purpose.
Certain transactions might not be reported through a brokerage account,
such as private placements, inheritances or gifts. In these instances, Access
Persons must report these transactions within ten (10) calendar days using a
Personal Securities Transaction Report as noted below.
- --------------------------------------------------------------------------------
REGISTERED PERSONS ARE REMINDED THAT THEY MUST ALSO INFORM ANY BROKERAGE FIRM
WITH WHICH THEY OPEN AN ACCOUNT, AT THE TIME THE ACCOUNT IS OPENED, THAT THEY
ARE REGISTERED WITH JDI.
- --------------------------------------------------------------------------------
11
<PAGE>
NON-ACCESS PERSONS who engage in an aggregate of $25,000 or more of
transactions in Covered Securities within a calendar year must provide
Compliance with an Annual Transaction Report listing all such transactions in
all accounts in which such person has a Beneficial Interest. Compliance will
request this information annually and will spot check all or a portion of such
transactions or accounts.
HOLDINGS REPORTS
ACCESS PERSONS (other than Outside Trustees) must, within ten (10) calendar
days after becoming an Access Person, provide Compliance with a Holdings Report
which lists all Covered Securities beneficially held and any brokerage accounts
through which such securities are maintained. In addition, such persons must
provide a brief description of any positions held (e.g., director, officer,
other) with for-profit entities other than Janus. The report must contain
information current as of no more than thirty (30) calendar days from the time
the report is submitted.
PERSONAL SECURITIES TRANSACTION REPORTS
ACCESS PERSONS (other than Outside Trustees) must provide a Personal
Securities Transaction Report within ten (10) calendar days after any month end
showing all transactions in Covered Securities for which confirmations are known
by such person to not have been timely provided to Janus, and all such
transactions that are not effected in brokerage or commodities accounts,
including without limitation non-brokered private placements, and transactions
in securities that are in certificate form, which may include gifts,
inheritances, and other transactions in Covered Securities.
OUTSIDE TRUSTEES need only report a transaction in a Covered Security if
such person, at the time of that transaction, knew or, in the ordinary course of
fulfilling his or her official duties as a Trustee should have known, that,
during the fifteen-day period immediately preceding the date of his or her
personal transaction, such security was purchased or sold by, or was being
considered for purchase or sale on behalf of, any Janus Fund for which such
person acts as Trustee.
SUCH PERSONS MUST PROMPTLY COMPLY WITH ANY REQUEST OF THE COMPLIANCE MANAGER TO
PROVIDE TRANSACTION REPORTS REGARDLESS OF WHETHER THEIR BROKER HAS BEEN
INSTRUCTED TO PROVIDE DUPLICATE CONFIRMATIONS. SUCH REPORTS MAY BE REQUESTED,
FOR EXAMPLE, TO CHECK THAT ALL APPLICABLE CONFIRMATIONS ARE BEING RECEIVED OR TO
SUPPLEMENT THE REQUESTED CONFIRMATIONS WHERE A BROKER IS DIFFICULT TO WORK WITH
OR OTHERWISE FAILS TO PROVIDE DUPLICATE CONFIRMATIONS ON A TIMELY BASIS.
NON-INFLUENCE AND NON-CONTROL ACCOUNTS
The Rules shall not apply to any account, partnership, or similar
investment vehicle over which a Covered Person has no direct or indirect
influence or control. Covered Persons wishing to rely upon this provision are
required to receive approval from the Ethics Committee. In order to request such
approval, a Certification of Non-Influence and Non-Control Form must be
submitted to the Compliance Manager.
Any account beneficially owned by a Covered Person that is managed by JCC
in a discretionary capacity is not covered by these Rules so long as such person
has no direct or indirect influence or control over the account. The employment
relationship between the account-holder and the individual managing the
12
<PAGE>
account, in the absence of other facts indicating control, will not be deemed to
give such account-holder influence or control over the account.
OTHER REQUIRED FORMS
In addition to the Preclearance Form, Preclearance Form for Company Stock,
Personal Brokerage Account Disclosure Form, Holdings Report, Report of Personal
Securities Transactions, Annual Transaction Report, and Certification of
Non-Influence and Non-Control Form discussed above, the following forms
(available through Lotus Notes) must be completed if applicable to you:
ACKNOWLEDGMENT OF RECEIPT FORM
Each Covered Person must provide Compliance with an Acknowledgment of
Receipt Form within ten (10) calendar days of commencement of employment or
other services certifying that he or she has received a current copy of the
Rules and acknowledges, as a condition of employment, that he or she will comply
with the Rules in their entirety.
ANNUAL CERTIFICATION FORM
Each Covered Person must provide Compliance annually within thirty (30)
calendar days from date of request with an Annual Certification Form certifying
that he or she:
1) Has received, read and understands the Rules;
2) Has complied with the requirements of the Rules; and
3) Has disclosed or reported all open brokerage and commodities accounts,
personal holdings and personal securities transactions required to be
disclosed or reported pursuant to the requirements of the Rules.
OUTSIDE DIRECTOR/TRUSTEE REPRESENTATION FORM
All Outside Directors and Outside Trustees must, upon commencement of
services and annually thereafter, provide Compliance with an Outside
Director/Trustee Representation Form. The Form declares that such persons agree
to refrain from trading in any securities when they are in possession of any
information regarding trading recommendations made or proposed to be made to any
Client by Janus or its officers or employees.
13
<PAGE>
- -------------------------------------------------------------------------------
INSIDER TRADING POLICY
- -------------------------------------------------------------------------------
BACKGROUND INFORMATION
The term "insider trading" is not defined in the federal securities
statutes, but generally is used to refer to the use of material nonpublic
information to trade in securities (whether or not one is an "insider") or to
communications of material nonpublic information to others.
While the law concerning insider trading can be complex and unclear, you
should assume that the law prohibits:
o Trading by an insider, while in possession of material nonpublic
information,
o Trading by a non-insider, while in possession of material nonpublic
information, where the information was disclosed to the non-insider
(either directly or through one or more intermediaries) in violation
of an insider's duty to keep it confidential,
o Communicating material nonpublic information to others in breach of a
duty not to disclose such information, and
o Misappropriating confidential information for securities trading
purposes, in breach of a duty owed to the source of the information to
keep the information confidential.
Trading based on material nonpublic information about an issuer does not
violate this policy unless the trader (i) is an "insider" with respect to an
issuer; (ii) receives the information from an insider or from someone that the
trader knows received the information from an insider, either directly or
indirectly, or (iii) misappropriates the nonpublic information or obtains or
misuses it in breach of a duty of trust and confidence owed to the source of the
information. Accordingly, trading based on material nonpublic information about
an issuer can be, but is not necessarily, a violation of this Policy. Trading
while in possession of material nonpublic information relating to a tender offer
is prohibited under this Policy regardless of how such information was obtained.
Application of the law of insider trading to particular transactions can be
difficult, particularly if it involves a determination about trading based on
material nonpublic information. You legitimately may be uncertain about the
application of this Policy in particular circumstances. If you have any
questions regarding the application of the Policy or you have any reason to
believe that a violation of the Policy has occurred or is about to occur, you
should contact the Chief Compliance Officer or the Compliance Manager.
The following discussion is intended to help you understand the principal
concepts involved in insider trading.
14
<PAGE>
WHO IS AN INSIDER?
The concept of "insider" is broad. It includes officers, directors and
employees of a company. In addition, a person can be a "temporary insider" if he
or she enters into a special confidential relationship in the conduct of a
company's affairs and as a result is given access to information solely for the
company's purposes. A temporary insider can include, among others, a company's
attorneys, accountants, consultants, bank lending officers, and the employees of
such organizations. In addition, one or more of the Janus entities may become a
temporary insider of a company it advises or for which it performs other
services. To be considered an insider, the company must expect the outsider to
keep the disclosed nonpublic information confidential and/or the relationship
must at least imply such a duty.
WHEN IS INFORMATION NONPUBLIC?
Information remains nonpublic until it has been made public. Information
becomes public when it has been effectively communicated to the marketplace,
such as by a public filing with the SEC or other governmental AGENCY, INCLUSION
IN THE DOW JONES "TAPE" OR PUBLICATION IN THE WALL STREET JOURNAL or another
publication of general circulation. Moreover, sufficient time must have passed
so that the information has been disseminated widely.
WHAT IS MATERIAL INFORMATION?
Trading on inside information is not a basis for liability unless the
information is material. "Material information" generally means information for
which there is a substantial likelihood that a reasonable investor would
consider it important in making his or her investment decisions, or information
that is reasonably certain to have a substantial effect on the price of a
company's securities. Information that should be considered material includes,
but is not limited to: dividend changes, earnings estimates, changes in
previously released earnings estimates, significant merger or acquisition
proposals or agreements, major litigation, liquidation problems, and
extraordinary management developments.
material information may also relate to the MARKET for a company's
securities. Information about a significant order to purchase or sell securities
may, in some contexts, be deemed material. Similarly, prepublication information
regarding reports in the financial press also may be deemed material. For
example, the Supreme Court upheld the criminal convictions of insider trading
defendants who capitalized on prepublication INFORMATION ABOUT THE WALL STREET
JOURNAL'S "Heard on the Street" column.
WHEN IS INFORMATION MISAPPROPRIATED?
The misappropriation theory prohibits trading on the basis of non-public
information by a corporate "outsider" in breach of a duty owed not to a trading
party, but to the source of confidential information. Misappropriation of
information occurs when a person obtains the non-public information through
deception or in breach of a duty of trust and loyalty to the source of the
information.
15
<PAGE>
PENALTIES FOR INSIDER TRADING
Penalties for trading on or communicating material nonpublic information
are severe, both for individuals involved in such unlawful conduct and their
employers or other controlling persons. A person can be subject to some or all
of the penalties below even if he or she does not personally benefit from the
violation.
Penalties include:
o Civil injunctions
o Treble damages
o Disgorgement of profits
o Jail sentences for up to 10 years
o Fines up to $1,000,000 (or $2,500,000 for corporations and other
entities)
o Civil penalties for the person who committed the violation of up to
three times the profit gained or loss avoided, whether or not the
person actually benefited, and
o Civil penalties for the employer or other controlling person of up to
the greater of $1,000,000 or three times the amount of the profit
gained or loss avoided.
In addition, any violation of the law may result in serious sanctions by
Janus, including termination of employment.
WHO IS A CONTROLLING PERSON?
Included as controlling persons are Janus and its Directors, Trustees and
officers. If you are a Director, Trustee or officer, you have a duty to act to
prevent insider trading. Failure to fulfill such a duty may result in penalties
as described above.
PROCEDURES TO IMPLEMENT POLICY
The following procedures have been established to aid the Directors,
Trustees, officers and employees of Janus in avoiding insider trading, and to
aid Janus in preventing, detecting and imposing sanctions against insider
trading.
IDENTIFYING MATERIAL INSIDE INFORMATION
Before trading for yourself or others, including the Janus Funds or other
Clients, in the securities of a company about which you may have potential
inside information, ask yourself the following questions:
o To whom has this information been provided? Has the information been
effectively communicated to the marketplace?
16
<PAGE>
o Has this information been obtained from either the issuer or from
another source in breach of a duty to that source to keep the
information confidential?
o Is the information material? Is this information that an investor
would consider important in making his or her investment decisions? Is
this information that would affect the market price of the securities
if generally disclosed?
Special caution should be taken with respect to potential inside
information regarding JCC. Although JCC's shares are not publicly traded, JCC's
parent, KCSI, is a publicly traded company. KCSI owns 82% of the stock of JCC.
As a result, potential inside information regarding JCC may affect trading in
KCSI stock and should be reported pursuant to the procedures set forth below.
The following is a non-exclusive list of situations that Investment Personnel
should report immediately pursuant to the procedures below: (i) participation in
private placements; (ii) the receipt of any information from an issuer pursuant
to a confidentiality agreement; (iii) participation on or receipt of information
from a bankruptcy committee of an issuer; and (iv) receipt of information
regarding earnings or sales figures in advance of the public release of those
numbers.
REPORTING INSIDE INFORMATION
If, after consideration of the above, you believe that the information is
material and nonpublic, or if you have questions as to whether the information
is material and nonpublic, you should take the following steps:
o Do not purchase or sell the securities on behalf of yourself or
others, including Clients.
o Do not communicate the information inside or outside of Janus, other
than to the Chief Compliance Officer or the Compliance Manager.
o Immediately advise the Chief Compliance Officer or Compliance Manager
of the nature and source of such information. The Chief Compliance
Officer or Compliance Manager will review the information with the
Ethics Committee.
o Depending upon the determination made by the Ethics Committee, or by
the Chief Compliance Officer until the Committee can be convened, you
may be instructed to continue the prohibition against trading and
communication and the Compliance Manager will place the security on a
Restricted List or Watch List, as described below. Alternatively, if
it is determined that the information obtained is not material
nonpublic information, you may be allowed to trade and communicate the
information.
WATCH AND RESTRICTED LISTS
Whenever the Ethics Committee or the Chief Compliance Officer determines
that a Director, Trustee, officer or employee of Janus is in possession of
material nonpublic information with respect to a company (regardless of whether
it is currently owned by any Client) such company will either be placed on a
Watch List or on a Restricted List.
17
<PAGE>
WATCH LIST
If the security is placed on a Watch List, the flow of the information to
other Janus personnel will be restricted in order to allow such persons to
continue their ordinary investment activities. This procedure is commonly
referred to as a "Chinese Wall."
RESTRICTED LIST
If the Ethics Committee or the Chief Compliance Officer determines that
material nonpublic information is in the possession of a Director, Trustee,
officer, or employee of Janus and cannot be adequately isolated through the use
of a Chinese Wall, the company will be placed on the Restricted List. While a
company is on the Restricted List, no Investment Person shall initiate or
recommend any transaction in any Client account, and no Access Person shall be
precleared to transact in any account in which he or she has a beneficial
interest, with respect to the securities of such company. The Ethics Committee
or the Chief Compliance Officer will also have the discretion of placing a
company on the Restricted List even though no "break in the Chinese Wall" has or
is expected to occur with respect to the material nonpublic information about
the company. Such action may be taken by such persons for the purpose of
avoiding any appearance of the misuse of material nonpublic information.
The Ethics Committee or the Chief Compliance Officer will be responsible
for determining whether to remove a particular company from the Watch List or
Restricted List. The only persons who will have access to the Watch List or
Restricted List are members of the Ethics Committee, Designated Legal or
Compliance Representatives and such persons who are affected by the information.
The Watch List and Restricted List are highly confidential and should, under no
circumstances, be discussed with or disseminated to anyone other than the
persons noted above.
PROTECTING INFORMATION
Directors, Trustees, officers and employees of Janus shall not disclose any
nonpublic information (whether or not it is material) relating to Janus or its
securities transactions to any person outside Janus (unless such disclosure has
been authorized by the Chief Compliance Officer). Material nonpublic information
may not be communicated to anyone, including any Director, Trustee, officer or
employee of Janus, except as provided in this Policy. Access to such information
must be restricted. For example, access to files containing material nonpublic
information and computer files containing such information should be restricted,
and conversations containing such information, if appropriate at all, should be
conducted in private.
To insure the integrity of the Chinese Wall and to avoid unintended
disclosures, it is important that all employees take the following steps with
respect to confidential or nonpublic information:
o Do not discuss confidential information in public places such as
elevators, hallways or social gatherings.
o To the extent practical, limit access to the areas of the firm where
confidential information could be observed or overheard to employees
with a business need for being in the area.
o Avoid use of speakerphones in areas where unauthorized persons may
overhear conversations.
18
<PAGE>
o Avoid use of wireless and cellular phones, or other means of
communication, which may be intercepted.
o Where appropriate, maintain the confidentiality of Client identities
by using code names or numbers for confidential projects.
o Exercise care to avoid placing documents containing confidential
information in areas where they may be read by unauthorized persons
and to store such documents in secure locations when they are not in
use.
o Destroy copies of confidential documents no longer needed for a
project unless required to be saved pursuant to applicable record
keeping policies or requirements.
RESPONSIBILITY TO MONITOR TRANSACTIONS
Compliance will monitor transactions of Clients and employees for which
reports are received to detect the existence of any unusual trading activities
with respect to companies on the Watch and Restricted Lists. Compliance will
immediately report any unusual trading activity directly to the Compliance
Manager, and in his or her absence, the Chief Compliance Officer, who will be
responsible for determining what, if any, action should be taken.
RECORD RETENTION
Compliance shall maintain copies of the Watch List and Restricted List for
a minimum of six years.
TENDER OFFERS
Tender offers represent a particular concern in the law of insider trading
for two reasons. First, tender offer activity often produces extraordinary
fluctuations in the price of the target company's securities. Trading during
this time period is more likely to attract regulatory attention (and produces a
disproportionate percentage of insider trading cases). Second, the SEC has
adopted a rule which expressly forbids trading and "tipping" while in possession
of material nonpublic information regarding a tender offer received from the
tender offeror, the target company or anyone acting on behalf of either. Janus
employees and others subject to this Policy should exercise particular caution
any time they become aware of nonpublic information relating to a tender offer.
19
<PAGE>
- --------------------------------------------------------------------------------
GIFT POLICY
- --------------------------------------------------------------------------------
GIFTS MAY BE GIVEN (OR ACCEPTED) only if they are in accordance with
normally accepted business practices and do not raise any question of
impropriety. A question of impropriety may be raised if a gift influences or
gives the appearance of influencing the recipient. The following outlines
Janus's policy on giving and receiving gifts to help us maintain those standards
and is applicable to all Inside Directors and Inside Trustees, officers and
employees of Janus.
GIFT GIVING
Neither you nor members of your immediate family may give any gift, series
of gifts, or other thing of value, including cash, loans, personal services, or
special discounts ("Gifts") in excess of $100 per year to any Client or any one
person or entity that does or seeks to do business with or on behalf of Janus or
any Client (collectively referred to herein as "Business Relationships").
GIFT RECEIVING
Neither you nor members of your immediate family may receive any Gift of
material value from any single Business Relationship. A Gift will be considered
material in value if it influences or gives the appearance of influencing the
recipient.
In the event the aggregate fair market value of all Gifts received by you
from any single Business Relationship is estimated to exceed $250 in any
12-month period, you must immediately notify your manager. Managers that receive
such notification must report this information to the Compliance Manager if it
appears that such Gifts may have improperly influenced the receiver. If the Gift
is made in connection with the sale or distribution of registered investment
company or variable contract securities, the aggregate fair market value of all
such Gifts received by you from any single Business Relationship may never
exceed $100 in any 12-month period.
Occasionally, Janus employees are invited to attend or participate in
conferences, tour a company's facilities, or meet with representatives of a
company. Such invitations may involve traveling and may require overnight
lodging. Generally, Janus must pay for all travel and lodging expenses provided
in connection with such activities. However, if appropriate, and with prior
approval from your manager, you may accept travel related amenities if the costs
are considered insubstantial and are not readily ascertainable.
The solicitation of a gift is prohibited (i.e., you may not request a gift,
such as tickets to a sporting event, be given to you).
CUSTOMARY BUSINESS AMENITIES
Customary business amenities are not considered gifts so long as such
amenities are business related (e.g., if you are accepting tickets to a sporting
event, the offerer must go with you), reasonable in cost, appropriate as to time
and place, and neither so frequent nor so costly as to raise any question of
impropriety. Customary business amenities which you and, if appropriate, your
guests, may accept (or give) include an occasional meal, a ticket to a sporting
event or the theater, greens fees, an invitation to a reception or cocktail
party, or comparable entertainment.
20
<PAGE>
- --------------------------------------------------------------------------------
OUTSIDE EMPLOYMENT POLICY
- --------------------------------------------------------------------------------
No Inside Director, Inside Trustee, officer or employee of Janus shall
accept employment or compensation as a result of any business activity (other
than a passive investment), outside the scope of his relationship with Janus
unless such person has provided prompt written notice of such employment or
compensation to the Chief Compliance Officer (or, for Registered Persons, to
JDI's Operations Manager), and, in the case of securities-related employment or
compensation, has received the prior written approval of the Ethics Committee.
Registered Persons are reminded to update and submit their Outside Business
Activity Disclosure forms as appropriate pursuant to JDI's Written Supervisory
Procedures and applicable NASD rules.
21
<PAGE>
- --------------------------------------------------------------------------------
PENALTY GUIDELINES
- --------------------------------------------------------------------------------
OVERVIEW
Covered Persons who violate any of the requirements, restrictions, or
prohibitions of the Rules may be subject to sanctions imposed by the Ethics
Committee. The following guidelines shall be used by the Compliance Manager for
recommending remedial actions for Covered Persons who violate prohibitions or
disregard requirements of the Rules. Deviations from the Fifteen-Day Rule are
not considered to be violations under the Rules and, therefore, are not subject
to the penalty guidelines.
Upon learning of a potential deviation from, or violation of the Rules, the
Compliance Manager will provide a written recommendation of remedial action to
the Ethics Committee. The Ethics Committee has full discretion to approve such
recommendation or impose other sanctions it deems appropriate. The Ethics
Committee will take into consideration, among other things, whether the
violation was a technical violation of the Rules or inadvertent oversight (i.e.,
ill-gotten profits versus general oversight). The guidelines are designed to
promote consistency and uniformity in the imposition of sanctions and
disciplinary matters.
PENALTY GUIDELINES
Outlined below are the guidelines for the sanctions that may be imposed on
Covered Persons who fail to comply with the Rules:
o 1st violation- Compliance will send a memorandum of reprimand to the
person, copying his or her supervisor. The memorandum will generally
reinforce the person's responsibilities under the Rules, educate the
person on the severity of personal trading violations and inform the
person of the possible penalties for future violations of the Rules;
o 2nd violation- Janus's Chief Investment Officer, James Craig, will
meet with the person to discuss the violations in detail and will
reinforce the importance of complying with the Rules;
o 3rd violation- Janus's Chairman of the Board, Thomas Bailey, will meet
with the person to discuss the violations in detail and will reinforce
the importance of complying with the Rules;
o 4th violation- The Executive Committee will impose such sanctions as
it deems appropriate, including without limitation, a letter of
censure, fines, withholding of bonus payments, or suspension or
termination of employment or personal trading privileges.
In addition to the above disciplinary sanctions, such persons may be
required to disgorge any profits realized in connection with such violation. All
disgorgement proceeds collected will be donated to a charitable organization
selected by the Ethics Committee. The Ethics Committee may determine to impose
any of the sanctions set forth in item 4 above, including termination,
immediately and without notice if it determines that the severity of any
violation or violations warrants such action. All sanctions imposed will be
documented in such person's personal trading file maintained by Janus, and will
be reported to the Executive Committee.
22
<PAGE>
- --------------------------------------------------------------------------------
SUPERVISORY AND COMPLIANCE PROCEDURES
- --------------------------------------------------------------------------------
The Chief Compliance Officer and Compliance Manager are responsible for
implementing supervisory and compliance review procedures. Supervisory
procedures can be divided into two classifications: prevention of violations and
detection of violations. Compliance review procedures include preparation of
special and annual reports, record maintenance and review, and confidentiality
preservation.
SUPERVISORY PROCEDURES
PREVENTION OF VIOLATIONS
To prevent violations of the Rules, the Compliance Manager should, in
addition to enforcing the procedures outlined in the Rules:
1. Review and update the Rules as necessary, at least once annually,
including but not limited to a review of the Code by the Chief
Compliance Officer, the Ethics Committee and/or counsel;
2. Answer questions regarding the Rules, or refer the same to the Chief
Compliance Officer;
3. Request from all persons upon commencement of services, and annually
thereafter, any applicable forms and reports as required by the Rules;
4. Identify all Access Persons and notify them of their responsibilities
and reporting requirements;
5. Write letters to the securities firms requesting duplicate
confirmations and account statements where necessary; and
6. With such assistance from the Human Resources Department as may be
appropriate, maintain a continuing education program consisting of the
following:
1) Orienting Covered Persons who are new to Janus to the Rules, and
2) Further educating Covered Persons by distributing memos or other
materials that may be issued by outside organizations such as the
Investment Company Institute discussing the issue of insider
trading and other issues raised by the Rules.
DETECTION OF VIOLATIONS
To detect violations of these Rules, the Compliance Manager should, in
addition to enforcing the procedures outlined in the Rules:
o Implement procedures to review holding and transaction reports,
confirmations, forms and statements relative to applicable
restrictions, as provided under the Code; and
23
<PAGE>
o Implement procedures to review the Restricted and Watch Lists
relative to applicable personal and Client trading activity, as
provided under the Policy.
Spot checks of certain information are permitted as noted under the Code.
COMPLIANCE PROCEDURES
REPORTS OF POTENTIAL DEVIATIONS OR VIOLATIONS
Upon learning of a potential deviation from, or violation of the Rules, the
Compliance Manager shall report such violation to the Chief Compliance Officer,
together with all documents relating to the matter. The Chief Compliance Officer
shall either present the information at the next regular meeting of the Ethics
Committee, or conduct a special meeting. The Ethics Committee shall thereafter
take such action as it deems appropriate (see Penalty Guidelines).
ANNUAL REPORTS
The Compliance Manager shall prepare a written report to the Ethics
Committee and the Trustees at least annually. The written report to the Trustees
shall include any certification required by Rule 17j-1. This report shall set
forth the following information, and shall be confidential:
o Copies of the Rules, as revised, including a summary of any
changes made since the last report;
o Identification of any material issues arising under the Rules
including material violations requiring significant remedial
action since the last report;
o Identification of any material conflicts that arose since the
last report; and
o Recommendations, if any, regarding changes in existing
restrictions or procedures based upon Janus's experience under
these Rules, evolving industry practices, or developments in
applicable laws or regulations.
The Trustees must initially approve these Rules within the time frame
required by Rule 17-1. Any material changes to these Rules must be approved
within six months.
RECORDS
Compliance shall maintain the following records on behalf of each Janus
entity:
o A copy of this Code and any amendment thereof which is or at any
time within the past five years has been in effect.
o A record of any violation of this Code, or any amendment thereof,
and of any action taken as a result of such violation.
24
<PAGE>
o Files for personal securities transaction confirmations and
account statements, all reports and other forms submitted by
Covered Persons pursuant to these Rules and any other pertinent
information.
o A list of all persons who are, or have been, required to make
reports pursuant to these Rules.
o A list of persons who are, or within the last five years have
been responsible for, reviewing transaction and holdings reports.
o A copy of each report made to the Trustees pursuant to this Code.
INSPECTION
The records and reports maintained by Compliance pursuant to the Rules
shall at all times be available for inspection, without prior notice, by any
member of the Ethics Committee.
CONFIDENTIALITY
All procedures, reports and records monitored, prepared or maintained
pursuant to these Rules shall be considered confidential and proprietary to
Janus and shall be maintained and protected accordingly. Except as otherwise
required by law or this Policy, such matters shall not be disclosed to anyone
other than to members of the Ethics Committee, as requested.
FILING OF REPORTS
To the extent that any report, form acknowledgment or other document is
required to be in writing and signed, such documents may be submitted in by
e-mail or other electronic form approved by Compliance. Any report filed with
the Chief Compliance Officer or Compliance Manager of JCC shall be deemed filed
with the Janus Funds.
THE ETHICS COMMITTEE
The purpose of this Section is to describe the Ethics Committee. The Ethics
Committee is created to provide an effective mechanism for monitoring compliance
with the standards and procedures contained in the Rules and to take appropriate
action at such times as violations or potential violations are discovered.
MEMBERSHIP OF THE COMMITTEE
The Committee consists of Thomas A. Early, Vice President and General
Counsel; Steven R. Goodbarn, Vice President of Finance, Treasurer and Chief
Financial Officer; David Kowalski, Vice President and Chief Compliance Officer;
and Ernie C. Overholt, Compliance Manager. The Compliance Manager currently
serves as the Chairman of the Committee. The composition of the Committee may be
changed from time to time.
COMMITTEE MEETINGS
The Committee shall generally meet every four months or as often as
necessary to review operation of the compliance program and to consider
technical deviations from operational procedures, inadvertent oversights, or any
other potential violation of the Rules. Deviations alternatively may be
addressed by
25
<PAGE>
including them in the employee's personnel records maintained by Janus.
Committee meetings are primarily intended for consideration of the general
operation of the compliance program and substantive or serious departures from
standards and procedures in the Rules.
Such other persons may attend a Committee meeting, at the discretion of the
Committee, as the Committee shall deem appropriate. Any individual whose conduct
has given rise to the meeting also may be called upon, but shall not have the
right, to appear before the Committee.
It is not required that minutes of Committee meetings be maintained; in
lieu of minutes the Committee may issue a report describing any action taken.
The report shall be included in the confidential file maintained by the
Compliance Manager with respect to the particular employee or employees whose
conduct has been the subject of the meeting.
SPECIAL DISCRETION
The Committee shall have the authority by unanimous action to exempt any
person or class of persons or transaction or class of transactions from all or a
portion of the Rules, provided that:
o The Committee determines, on advice of counsel, that the
particular application of all or a portion of the Rules is not
legally required;
o The Committee determines that the likelihood of any abuse of the
Rules by such exempted person(s) or as a result of such exempted
transaction is remote;
o The terms or conditions upon which any such exemption is granted
is evidenced in writing; and
o The exempted person(s) agrees to execute and deliver to the
Compliance Manager, at least annually, a signed Acknowledgment
Form, which Acknowledgment shall, by operation of this provision,
include such exemptions and the terms and conditions upon which
it was granted.
The Committee shall also have the authority by unanimous action to impose
such additional requirements or restrictions as it, in its sole discretion,
determines appropriate or necessary, as outlined in the Penalty Guidelines.
Any exemption, and any additional requirement or restriction, may be
withdrawn by the Committee at any time (such withdrawal action is not required
to be unanimous).
26
<PAGE>
- --------------------------------------------------------------------------------
GENERAL INFORMATION ABOUT THE ETHICS RULES
- --------------------------------------------------------------------------------
DESIGNEES
The Compliance Manager and the Chief Compliance Officer may appoint
designees to carry out their functions pursuant to these Rules.
ENFORCEMENT
In addition to the penalties described in the Penalty Guidelines and
elsewhere in the Rules, upon discovering a violation of the Rules, the Janus
entity with which you are associated may impose such sanctions as it deems
appropriate, including without limitation, a letter of censure or suspension or
termination of employment or personal trading privileges of the violator. All
material violations of the Rules and any sanctions imposed with respect thereto
shall be reported periodically to the Directors and Trustees and the directors
of any other Janus entity which has been directly affected by the violation.
INTERNAL USE
The Rules are intended solely for internal use by Janus and do not
constitute an admission, by or on behalf of such companies, their controlling
persons or persons they control, as to any fact, circumstance or legal
conclusion. The Rules are not intended to evidence, describe or define any
relationship of control between or among any persons. Further, the Rules are not
intended to form the basis for describing or defining any conduct by a person
that should result in such person being liable to any other person, except
insofar as the conduct of such person in violation of the Rules may constitute
sufficient cause for Janus to terminate or otherwise adversely affect such
person's relationship with Janus.
27
Exhibit 15
JANUS ADVISER SERIES (THE "TRUST")
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes,
and appoints Steven R. Goodbarn and Thomas A. Early, his true and lawful
attorneys and agents in his name, place, and stead on his behalf (a) to sign and
cause to be filed the registration statement of the Trust under the Securities
Act of 1933, the Investment Company Act of 1940 and the laws and regulations of
the various states, if applicable, amendments thereto, and all consents and
exhibits thereto; (b) to withdraw such registration statement or any amendments
or exhibits and make requests for acceleration in connection therewith; (c) to
take all other action of whatever kind or nature in connection with such
registration statement, and all amendments thereto, which said attorney may deem
advisable; and (d) to make, file, execute, amend, and withdraw documents of
every kind, and to take other action of whatever kind he may elect, for the
purpose of complying with all laws relating to the sale of securities of the
Trust, hereby ratifying and confirming all actions of said attorney hereunder,
provided that this Power of Attorney is ratified to be effective by the Trustees
with respect to each filing or withdrawal of such registration statement and all
amendments, consents, and exhibits thereto.
IN WITNESS WHEREOF, the undersigned has hereby set his hand as of this 3rd
day of April, 2000.
SIGNATURE TITLE DATE
/s/Thomas H. Bailey Chairman, April 3, 2000
Thomas H. Bailey (Principal Executive Officer)
President and Trustee
<PAGE>
JANUS ADVISER SERIES (THE "TRUST")
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes,
and appoints Thomas H. Bailey, Steven R. Goodbarn and Thomas A. Early, his true
and lawful attorneys and agents in his name, place, and stead on his behalf (a)
to sign and cause to be filed the registration statement of the Trust under the
Securities Act of 1933, the Investment Company Act of 1940 and the laws and
regulations of the various states, if applicable, amendments thereto, and all
consents and exhibits thereto; (b) to withdraw such registration statement or
any amendments or exhibits and make requests for acceleration in connection
therewith; (c) to take all other action of whatever kind or nature in connection
with such registration statement, and all amendments thereto, which said
attorneys may deem advisable; and (d) to make, file, execute, amend, and
withdraw documents of every kind, and to take other action of whatever kind they
may elect, for the purpose of complying with all laws relating to the sale of
securities of the Trust, hereby ratifying and confirming all actions of any of
said attorneys hereunder, provided that this Power of Attorney is ratified to be
effective by the Trustees with respect to each filing or withdrawal of such
registration statement and all amendments, consents, and exhibits thereto. Said
attorneys may act jointly or severally, and the action of one shall bind the
undersigned as fully as if two or more had acted together.
IN WITNESS WHEREOF, the undersigned has hereby set his hand as of this 3rd
day of April, 2000.
SIGNATURE TITLE DATE
/s/James P. Craig Trustee April 3, 2000
James P. Craig, III
<PAGE>
JANUS ADVISER SERIES (THE "TRUST")
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes,
and appoints Thomas H. Bailey, Steven R. Goodbarn and Thomas A. Early, his true
and lawful attorneys and agents in his name, place, and stead on his behalf (a)
to sign and cause to be filed the registration statement of the Trust under the
Securities Act of 1933, the Investment Company Act of 1940 and the laws and
regulations of the various states, if applicable, amendments thereto, and all
consents and exhibits thereto; (b) to withdraw such registration statement or
any amendments or exhibits and make requests for acceleration in connection
therewith; (c) to take all other action of whatever kind or nature in connection
with such registration statement, and all amendments thereto, which said
attorneys may deem advisable; and (d) to make, file, execute, amend, and
withdraw documents of every kind, and to take other action of whatever kind they
may elect, for the purpose of complying with all laws relating to the sale of
securities of the Trust, hereby ratifying and confirming all actions of any of
said attorneys hereunder, provided that this Power of Attorney is ratified to be
effective by the Trustees with respect to each filing or withdrawal of such
registration statement and all amendments, consents, and exhibits thereto. Said
attorneys may act jointly or severally, and the action of one shall bind the
undersigned as fully as if two or more had acted together.
IN WITNESS WHEREOF, the undersigned has hereby set his hand as of this 3rd
day of April, 2000.
SIGNATURE TITLE DATE
/s/Gary O. Loo Trustee April 3, 2000
Gary O. Loo
<PAGE>
JANUS ADVISER SERIES (THE "TRUST")
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes,
and appoints Thomas H. Bailey, Steven R. Goodbarn and Thomas A. Early, his true
and lawful attorneys and agents in his name, place, and stead on his behalf (a)
to sign and cause to be filed the registration statement of the Trust under the
Securities Act of 1933, the Investment Company Act of 1940 and the laws and
regulations of the various states, if applicable, amendments thereto, and all
consents and exhibits thereto; (b) to withdraw such registration statement or
any amendments or exhibits and make requests for acceleration in connection
therewith; (c) to take all other action of whatever kind or nature in connection
with such registration statement, and all amendments thereto, which said
attorneys may deem advisable; and (d) to make, file, execute, amend, and
withdraw documents of every kind, and to take other action of whatever kind they
may elect, for the purpose of complying with all laws relating to the sale of
securities of the Trust, hereby ratifying and confirming all actions of any of
said attorneys hereunder, provided that this Power of Attorney is ratified to be
effective by the Trustees with respect to each filing or withdrawal of such
registration statement and all amendments, consents, and exhibits thereto. Said
attorneys may act jointly or severally, and the action of one shall bind the
undersigned as fully as if two or more had acted together.
IN WITNESS WHEREOF, the undersigned has hereby set his hand as of this 3rD
day of April, 2000.
SIGNATURE TITLE DATE
/s/Dennis B. Mullen Trustee April 3, 2000
Dennis B. Mullen
<PAGE>
JANUS ADVISER SERIES (THE "TRUST")
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes,
and appoints Thomas H. Bailey, Steven R. Goodbarn and Thomas A. Early, his true
and lawful attorneys and agents in his name, place, and stead on his behalf (a)
to sign and cause to be filed the registration statement of the Trust under the
Securities Act of 1933, the Investment Company Act of 1940 and the laws and
regulations of the various states, if applicable, amendments thereto, and all
consents and exhibits thereto; (b) to withdraw such registration statement or
any amendments or exhibits and make requests for acceleration in connection
therewith; (c) to take all other action of whatever kind or nature in connection
with such registration statement, and all amendments thereto, which said
attorneys may deem advisable; and (d) to make, file, execute, amend, and
withdraw documents of every kind, and to take other action of whatever kind they
may elect, for the purpose of complying with all laws relating to the sale of
securities of the Trust, hereby ratifying and confirming all actions of any of
said attorneys hereunder, provided that this Power of Attorney is ratified to be
effective by the Trustees with respect to each filing or withdrawal of such
registration statement and all amendments, consents, and exhibits thereto. Said
attorneys may act jointly or severally, and the action of one shall bind the
undersigned as fully as if two or more had acted together.
IN WITNESS WHEREOF, the undersigned has hereby set his hand as of this 3rd
day of April, 2000.
SIGNATURE TITLE DATE
/s/James T. Rothe Trustee April 3, 2000
James T. Rothe
<PAGE>
JANUS ADVISER SERIES (THE "TRUST")
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes,
and appoints Thomas H. Bailey, Steven R. Goodbarn and Thomas A. Early, his true
and lawful attorneys and agents in his name, place, and stead on his behalf (a)
to sign and cause to be filed the registration statement of the Trust under the
Securities Act of 1933, the Investment Company Act of 1940 and the laws and
regulations of the various states, if applicable, amendments thereto, and all
consents and exhibits thereto; (b) to withdraw such registration statement or
any amendments or exhibits and make requests for acceleration in connection
therewith; (c) to take all other action of whatever kind or nature in connection
with such registration statement, and all amendments thereto, which said
attorneys may deem advisable; and (d) to make, file, execute, amend, and
withdraw documents of every kind, and to take other action of whatever kind they
may elect, for the purpose of complying with all laws relating to the sale of
securities of the Trust, hereby ratifying and confirming all actions of any of
said attorneys hereunder, provided that this Power of Attorney is ratified to be
effective by the Trustees with respect to each filing or withdrawal of such
registration statement and all amendments, consents, and exhibits thereto. Said
attorneys may act jointly or severally, and the action of one shall bind the
undersigned as fully as if two or more had acted together.
IN WITNESS WHEREOF, THE UNDERSIGNED HAS HEREBY SET HIS HAND AS OF THIS 3RD
day of April, 2000.
SIGNATURE TITLE DATE
/s/William D. Stewart Trustee April 3, 2000
William D. Stewart
<PAGE>
JANUS ADVISER SERIES (THE "TRUST")
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes,
and appoints Thomas H. Bailey, Steven R. Goodbarn and Thomas A. Early, his true
and lawful attorneys and agents in his name, place, and stead on his behalf (a)
to sign and cause to be filed the registration statement of the Trust under the
Securities Act of 1933, the Investment Company Act of 1940 and the laws and
regulations of the various states, if applicable, amendments thereto, and all
consents and exhibits thereto; (b) to withdraw such registration statement or
any amendments or exhibits and make requests for acceleration in connection
therewith; (c) to take all other action of whatever kind or nature in connection
with such registration statement, and all amendments thereto, which said
attorneys may deem advisable; and (d) to make, file, execute, amend, and
withdraw documents of every kind, and to take other action of whatever kind they
may elect, for the purpose of complying with all laws relating to the sale of
securities of the Trust, hereby ratifying and confirming all actions of any of
said attorneys hereunder, provided that this Power of Attorney is ratified to be
effective by the Trustees with respect to each filing or withdrawal of such
registration statement and all amendments, consents, and exhibits thereto. Said
attorneys may act jointly or severally, and the action of one shall bind the
undersigned as fully as if two or more had acted together.
IN WITNESS WHEREOF, the undersigned has hereby set his hand as of this 3rd
day of April, 2000.
SIGNATURE TITLE DATE
/s/Martin H. Waldinger Trustee April 3, 2000
Martin H. Waldinger
