IDEX II SERIES FUND
INVESTMENT COUNSEL AGREEMENT
for the IDEX II Flexible Income Portfolio Series
This Agreement is entered into as of August 5, 1993, between Idex
Management, Inc., a Delaware corporation (referred to herein as "Idex
Management"), and Janus Capital Corporation, a Colorado corporation (referred to
herein as "Janus Capital"), to provide certain investment counsel services to a
certain series of shares of beneficial interest in the IDEX II Series Fund,
namely, IDEX II Flexible Income Portfolio (the "Portfolio").
WHEREAS, Idex Management entered into a Management and Investment Advisory
Agreement (referred to herein as the "Advisory Agreement"), dated August 5,
1993, with IDEX II Series Fund, a Massachusetts business trust (referred to
herein as the "Trust"), under which Idex Management has agreed, among other
things, to act as investment adviser to the Portfolio.
WHEREAS, the Advisory Agreement provides that Idex Management may engage
Janus Capital to furnish investment information and advice to assist Idex
Management in carrying out its responsibilities under the Advisory Agreement as
investment adviser to the Portfolio; and
WHEREAS, it is the purpose of this Agreement to express the mutual
agreements of the parties hereto with respect to the services to be provided by
Janus Capital to Idex Management and the terms and conditions under which such
services will be rendered.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the parties hereto agree as follows:
1. Services of Janus Capital. Janus Capital shall act as investment counsel
to Idex Management with respect to the Portfolio. In this capacity, Janus
Capital shall have the following responsibilities:
(a) to furnish continuous investment information, advice and
recommendations to Idex Management as to the acquisition, holding or disposition
of any or all of the securities or other assets which the Portfolio may own or
contemplate acquiring from time to time consistent with the Trust's Declaration
of Trust and the investment objectives and policies adopted and declared by the
Trust's Board of Trustees and stated in the Portfolio's current Prospectus;
(b) to cause the officers of Janus Capital to attend meetings of Idex
Management or the Trust and furnish oral or written reports, as Idex Management
may reasonably require, in order to keep Idex Management and its officers and
the Trustees and appropriate officers of the Trust fully informed as to the
condition of the investment portfolio of the Portfolio, the investment
recommendations of Janus Capital, and the investment considerations which have
given rise to those recommendations;
(c) to furnish such statistical and analytical information and reports as
may reasonably be required by Idex Management from time to time; and (d) to
supervise the purchase and sale of securities as directed by the appropriate
officers of the Trust or of Idex Management. In placing the Portfolio's
securities transactions, Janus Capital shall comply with Section 8 of the
Advisory Agreement.
2. Obligations of Idex Management. Idex Management shall have the following
obligations under this Agreement:
(a) to keep Janus Capital continuously and fully informed as to the
composition of the Portfolio's investment portfolio and the nature of the
Portfolio's assets and liabilities from time to time;
(b) to furnish Janus Capital with a certified copy of any financial
statement or report prepared for the Trust with respect to the Portfolio by
certified or independent public accountants, and with copies of any financial
statements or reports made by the Trust to shareholders of the Portfolio or to
any governmental body or securities exchange;
(c) to furnish Janus Capital with any further materials or information
which Janus Capital may reasonably request to enable it to perform its functions
under this Agreement; and
(d) to compensate Janus Capital for its services under this Agreement by
the payment of fees equal to (i) 50% of the fees received by Idex Management for
services rendered under the Advisory Agreement by Idex Management to the
Portfolio during the term of this Agreement, less (ii) 50% of any expense
limitation reimbursement made by Idex Management to the Portfolio. In the event
that this Agreement shall be effective for only part of a period to which any
such fee received by Idex Management is attributable, then an appropriate
proration of the fee that would have been payable hereunder if this Agreement
had remained in effect until the end of such period shall be made, based on the
number of calendar days in such period and the number of calendar days during
the period in which this Agreement was in effect. The fees payable to Janus
Capital hereunder shall be payable upon receipt by Idex Management from the
Portfolio of advisory fees payable to Idex Management under the Advisory
Agreement.
(e) to compensate Janus Capital, in addition to the compensation payable
under paragraph (d) above, as follows: If on December 31 of 1993 and each year
thereafter ("Target Date") the aggregate actual net assets on that date of the
Trust, IDEX Fund, IDEX Fund 3 and any other registered investment company
sponsored by Idex Management, containing the name IDEX or with respect to which
Idex Management acts as investment adviser or administrator, and to which Janus
Capital provides investment advice (the "Advised Funds") are less that the
applicable Target Net Assets specified in Table 1 below, then Idex Management
shall pay to Janus Capital a percentage, as specified in Table 2 below, of the
Net Fee otherwise payable to InterSecurities, Inc., or any other Idex Management
affiliate serving as administrator to the Fund for the calendar year following
such date (the "Administrator").
Table 1
Advised Funds
Target Date Target Net Assets
December 31, 1993 (and $950 million
December 31 of each
year thereafter)
The Net Fee of the Administrator shall be the fee received by the
Administrator from Idex Management less any reimbursement from the Administrator
in connection with any applicable Fund expense limitation. The percentage of the
Net Fee so payable to Janus Capital shall be determined by the percentage that
on the applicable Target Date the aggregate actual net assets of the Advised
Funds are less than the applicable Target Net Assets of the Advised Funds
("Shortfall of Target") in accordance with Table 2 below:
Table 2
Shortfall of Target Percentage of Net Fee
5% - 10% 10%
Over 10% - 20% 20%
Over 20% - 30% 30%
Over 30% 40%
No fees shall be payable to Janus Capital under this paragraph (e) for any
year if, for the five-year period ending December 31 of the preceding year, the
respective total returns of a majority of the Advised Funds that have the
objective of investing primarily in equity securities with such a five-year
record (and with respect to which Janus Capital shall have provided investment
advice for all of such five years and for the then current year) are not in the
top one-third of their respective fund categories as determined by Lipper
Analytical Services, Inc. or its successor (or if no successor exists, by a
mutually agreed upon statistical service).
3. Treatment of Investment Advice. Idex Management shall treat the
investment information, advice and recommendations of Janus Capital as being
advisory only, and shall determine the extent to which such advice and
recommendations relating to the Portfolio shall be passed on to the Trust or
incorporated in investment advice by Idex Management relating to the Portfolio.
Idex Management may direct Janus Capital to furnish its investment information,
advice and recommendations directly to officers or trustees of the Trust.
4. Purchases by Affiliates. Neither Janus Capital nor any of its officers
or Directors shall take a long or short position in the securities issued by the
Portfolio. This prohibition, however, shall not prevent the purchase from the
Portfolio of shares issued by the Portfolio by the officers and Directors of
Janus Capital (or deferred benefit plans established for their benefit) at the
current price available to the public, or at such price with reductions in sales
charge as may be permitted in the
Portfolio's current prospectus in accordance with Section 22(d) of the
Investment Company Act of 1940.
5. Liability of Janus Capital. Janus Capital may rely on information
reasonably believed by it to be accurate and reliable. Except as may otherwise
be provided by the Investment Company Act of 1940, as amended (the "1940 Act"),
neither Janus Capital nor its officers, directors, employees or agents shall be
subject to any liability to the Trust or any shareholders of the Portfolio for
any error of judgment, mistake of law or any loss arising out of any investment
or other act or omission in the course of, connected with or arising out of any
service to be rendered hereunder, except by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties under this Agreement.
6. Compliance With Laws. Janus Capital represents that it is, and will
continue to be throughout the term of this Agreement, an investment adviser
registered under all applicable federal and state laws. In all matters relating
to the performance of this Agreement, Janus Capital will act in conformity with
the Trust's Declaration of Trust, Bylaws, and current registration statement
applicable to the Portfolio and with the instructions and direction of Idex
Management and the Trust's Board of Trustees, and will conform to and comply
with the 1940 Act and all other applicable federal or state laws and
regulations.
7. Termination. This Agreement shall terminate automatically upon the
termination of the Advisory Agreement. This Agreement may be terminated at any
time, without penalty, by Idex Management or by the Trust by giving 60 days'
written notice of such termination to Janus Capital at its principal place of
business, provided that such termination is approved by the Board of Trustees of
the Trust or by vote of a majority of the outstanding voting securities (as that
phrase is defined in Section 2(a)(42) of the 0000 Xxx) of the Portfolio. This
Agreement may be terminated at any time by Janus Capital by giving 60 days'
written notice of such termination to the Trust and Idex Management at their
respective principal places of business.
8. Assignment. This Agreement shall terminate automatically in the event of
any assignment (as that term is defined in Section 2(a)(4) of the 0000 Xxx) of
this Agreement.
9. Term. This Agreement shall continue in effect, unless sooner terminated
in accordance with its terms, for an initial term ending April 22, 1994 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
(as that term is defined in Section 2(a)(19) of the 0000 Xxx) 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
Portfolio (as that phrase is defined in Section 2(a)(42) of the 1940 Act).
10. Amendments. This Agreement may be amended only with the approval by the
affirmative vote of a majority of the outstanding voting securities of the
Portfolio (as that phrase is defined in Section 2(a)(42) of the 0000 Xxx) and
the approval by the vote of a majority of the Trustees of the Trust who are not
parties hereto or interested persons (as that term is defined in
Section 2(a) (19) of the 0000 Xxx) of any such party, cast in person at a
meeting called for the purpose of voting on the approval of such amendment.
11. Prior Agreements. This Agreement supersedes all prior agreements
between the parties relating to the subject matter hereof, and all such prior
agreements are deemed terminated upon the effectiveness of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
Attest: JANUS CAPITAL CORPORATION
/s/ Xxxxxx X. Xxxxxx /s/ Xxxx X. Xxxxxxxx
__________________________ By: __________________________
Attest: IDEX MANAGEMENT, INC.
/s/ Xxxxxxx X. Xxxxxx /s/ G. Xxxx Xxxxxx
__________________________ By: __________________________
Xxxxxxx X. Xxxxxx, Secretary G. Xxxx Xxxxxx
President and Chief
Executive Officer
