EXHIBIT 99B.23(d)-3b
INTERIM
INVESTMENT ADVISORY AGREEMENT
XXXXXX BALANCED FUND
A SERIES OF XXXXXX INVESTMENT PORTFOLIO TRUST
This INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 16th
day of December, 2002, between JANUS CAPITAL MANAGEMENT LLC, a Delaware limited
liability corporation ("Janus Capital"), and XXXXXX INVESTMENT PORTFOLIO TRUST,
a Delaware statutory trust (the "Trust"), with respect to the XXXXXX BALANCED
FUND, a series of the Trust (the "Fund").
RECITALS
A. The Trust is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), and has
registered its shares for public offering under the Securities Act of 1933, as
amended (the "1933 Act").
B. The Trust is authorized to create separate series of shares, each
with its own separate investment portfolio, one of such series created by the
Trust being the Fund.
X. Xxxxx Capital is engaged in the business of rendering investment
advisory services and is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act").
D. The Trust and Janus Capital deem it mutually advantageous that Janus
Capital should assist the Trustees and officers of the Trust in the management
of the securities portfolio of the Fund.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Appointment. The Trust hereby appoints Janus Capital as investment
adviser and manager with respect to the Fund for the period and on the terms set
forth in this Agreement. Janus Capital hereby accepts such appointment and
agrees to render the services herein set forth, for the compensation herein
provided.
2. Investment Advisory Functions. In its capacity as investment adviser
to the Fund, Janus Capital shall have the following duties and responsibilities:
(a) To manage the investment operations of the Fund and the
composition of its investment portfolio, and to determine without prior
consultation with the Trust, what securities and other assets of the Fund will
be acquired, held, disposed of or loaned, in conformity with the investment
objective, policies and restrictions and the other statements concerning the
Fund in the Trust's trust instrument, as amended from time to time (the "Trust
Instrument"), bylaws and registration statements under the 1940 Act and the 1933
Act, the 1940 Act and the Advisers Act, the rules and regulations thereunder,
and all other applicable federal and state laws and regulations, and the
provisions of the Internal Revenue Code of 1986, as amended, applicable to the
Fund as a regulated investment company;
(b) To 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 decisions of
Janus Capital, and the investment considerations which have given rise to those
decisions;
(c) To place orders for the purchase and sale of securities for
investments of the Fund and for other related transactions as directed by the
appropriate officers of the Trust; to give instructions to the custodian
(including any subcustodian) of the Fund as to deliveries of securities to and
from such custodian and receipt and payments of cash for the account of the
Fund, and advise the Trust on the same day such instructions are given; and to
submit such reports relating to the valuation of the Fund's assets and to
otherwise assist in the calculation of the net asset value of shares of the Fund
as may reasonably be requested;
(d) To maintain all books and records required to be maintained by
Janus Capital pursuant to the 1940 Act and the rules and regulations promulgated
thereunder, as the same may be amended from time to time, with respect to
transactions on behalf of the Fund, and shall furnish the Trustees with such
periodic and special reports as the Trustees reasonably may request. Janus
Capital agrees that all records which it maintains for the Fund or the Trust are
the property of the Trust, agrees to permit the reasonable inspection thereof by
the Trust or its designees and agrees to preserve for the periods prescribed
under the 1940 Act any records which it maintains for the Trust and which are
required to be maintained under the 1940 Act, and further agrees to surrender
promptly to the Trust or its designees any records which it maintains for the
Trust upon request by the Trust; and
(e) At such times as shall be reasonably requested by the Trustees,
to provide the Trustees with economic, operational and investment data and
reports, including without limitation all information and materials reasonably
requested by or requested to be delivered to the Trustees of the Trust pursuant
to Section 15(c) of the 1940 Act, and make available to the Trustees any
economic, statistical and investment services normally available to similar
investment company clients of Janus Capital.
3. Further Obligations. In all matters relating to the performance of
this Agreement, Janus Capital shall act in conformity with the Trust's Trust
Instrument, bylaws and currently effective registration statements under the
1940 Act and the 1933 Act and any amendments or supplements thereto (the
"Registration Statements") and with the written policies, procedures and
guidelines of the Fund, and written instructions and directions of the Trustees
of the Trust and shall comply with the requirements of the 1940 Act, the
Advisers Act, the rules thereunder, and all other applicable federal and state
laws and regulations. The Trust agrees to provide Janus Capital with copies of
the Trust's Trust Instrument, bylaws, Registration Statements, written policies,
procedures and guidelines, and written instructions and directions of the
Trustees, and any amendments or supplements to any of them at, or, if
practicable, before the time such
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materials become effective. Janus Capital shall maintain errors and omissions
insurance in an amount at least equal to that disclosed to the Trustees in
connection with their approval of this Agreement.
4. Obligations of Trust. The Trust shall have the following obligations
under this Agreement:
(a) To keep Janus Capital continuously and fully informed as to the
composition of the investment portfolio of the Fund and the nature of all of the
Fund's assets and liabilities from time to time;
(b) To furnish Janus Capital with a certified copy of any financial
statement or report prepared for the Fund by certified or independent public
accountants and with copies of any financial statements or reports made to the
Fund's shareholders or to any governmental body or securities exchange;
(c) To furnish Janus Capital with any further materials or
information which Janus Capital may reasonably request to enable it to perform
its function under this Agreement; and
(d) To compensate Janus Capital for its services in accordance with
the provisions of Section 5 hereof.
5. Compensation. (a) The Trust shall pay to Janus Capital for its
services under this Agreement a fee, payable in United States dollars, at an
annual rate of 0.70% of the first $1 billion of average daily net assets of the
Fund and 0.65% on any part of the average daily net assets of the Fund in excess
of $1 billion. This fee shall be computed and accrued daily and payable monthly
as of the last day of each month during which or part of which this Agreement is
in effect. For the month during which this Agreement becomes effective and the
month during which it terminates, however, there shall be an appropriate
proration of the fee payable for such month based on the number of calendar days
of such month during which this Agreement is effective.
(a) The compensation earned by Janus Capital under this Agreement
shall be held in an interest-bearing escrow account with the Trust's custodian
or a bank. If a majority of the outstanding voting securities (as defined in the
0000 Xxx) of the Fund approve an investment advisory agreement with Janus
Capital within 150 days of the day and year first written above, the amount in
the escrow account (including interest thereon) shall be paid to Janus Capital.
If a majority of the outstanding voting securities (as defined in the 0000 Xxx)
of the Fund do not approve an investment advisory agreement with Janus Capital
within 150 days of the day and year first written above, Janus Capital shall be
paid, out of the escrow account, the lesser of (i) any costs incurred by Janus
Capital in performing this Agreement (plus interest earned on that amount while
in escrow) or (ii) the total amount in the escrow account (plus interest
earned).
6. Expenses.
(a) Expenses Paid by the Trust. The Trust assumes and shall pay all
expenses incidental to its operations and business not specifically assumed or
agreed to be paid by Janus
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Capital hereunder or otherwise, including, but not limited to, any compensation,
fees or reimbursements which the Trust pays to its Trustees who are not
interested persons of Xxxxxx Associates or Janus Capital; compensation of the
Fund's custodian, transfer agent, registrar and dividend disbursing agent and
other service providers; 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 Janus Capital 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 the 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 preparing, printing and mailing prospectuses and
statements of additional information to shareholders of the Fund; 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.
To the extent that Janus Capital shall perform any of the above described
administrative and clerical functions, including transfer agency, registry,
dividend disbursing, recordkeeping, bookkeeping, accounting and blue sky
monitoring and registration functions, and the preparation of reports and
returns, the Trust shall pay to Janus Capital compensation for, or reimburse
Janus Capital for its expenses incurred in connection with, such services as
Janus Capital and the Trust shall agree from time to time, any other provision
of this Agreement notwithstanding.
(b) Expenses Paid by Janus Capital. Janus Capital shall pay all its own
costs and expenses incurred in fulfilling its obligations under this Agreement.
In addition to such costs and expenses, Janus Capital shall incur and pay the
following expenses relating to the Fund's operations:
(i) Reasonable compensation, fees and related expenses of the
Trust's officers and Trustees, except for such Trustees who are not
interested persons of Xxxxxx Associates or Janus Capital; and
(ii) Rental of offices of the Trust.
7. Brokerage Commissions. For purposes of this Agreement, brokerage
commissions paid by the Fund upon the purchase or sale of its portfolio
securities shall be considered a cost of securities of the Fund and shall be
paid by the Fund. Absent instructions from the Trust to the contrary, Janus
Capital is authorized and directed to place Fund portfolio transactions only
with brokers and dealers who render satisfactory service in the execution of
orders at the most favorable prices and at reasonable commission rates,
provided, however, that Janus Capital may pay a broker an amount of commission
for effecting a securities transaction in excess of the amount of commission
another broker would have charged 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 services provided by such
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broker viewed in terms of either that particular transaction or the overall
responsibilities of Janus Capital. Janus Capital is also authorized to consider
sales of Fund shares as a factor in selecting broker-dealers to execute Fund
portfolio transactions. In placing portfolio business with such broker-dealers,
Janus Capital shall seek the best execution of each transaction. Subject to the
terms of this Agreement and the applicable requirements and provisions of the
law, including the 1940 Act and the Securities Exchange Act of 1934, as amended,
and in the event that Janus Capital or an affiliate is registered as a
broker-dealer, Janus Capital may select a broker with which it or any of its
affiliates or the Fund is affiliated. Janus Capital or such affiliated broker
may effect or execute Fund portfolio transactions, whether on a securities
exchange or in the over-the-counter market, and receive separate compensation
from the Fund therefor. Notwithstanding the foregoing, the Trust shall retain
the right to direct the placement of all portfolio transactions, and the
Trustees of the Trust may establish policies or guidelines to be followed by
Janus Capital in placing portfolio transactions for the Trust pursuant to the
foregoing provisions. Janus Capital shall report on the placement of portfolio
transactions in the prior fiscal quarter at each quarterly meeting of such
Trustees. To the extent consistent with applicable law, purchase or sell orders
for the Fund may be aggregated with simultaneous purchase or sell orders for
other clients of Janus Capital. Whenever Janus Capital simultaneously places
orders to purchase or sell the same security on behalf of the Fund and one or
more other clients of Janus Capital, such orders will be allocated as to price
and amount among all such clients in a manner reasonably believed by Janus
Capital to be fair and equitable to each client. The Trust recognizes that in
some cases, this procedure may adversely affect the results obtained for the
Fund.
8. Effectiveness, Duration and Termination. This Agreement, unless
sooner terminated as provided herein, shall become effective as of the day and
year first written above, and shall remain in effect until the earlier of: (i)
150 days from the date hereof or (ii) a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of the Fund approve an investment
advisory agreement with Janus Capital. This Agreement may also be terminated at
any time, without the payment of any penalty, upon ten (10) days' written notice
to Janus Capital, by the affirmative vote of a majority of the Trustees of the
Trust or by the affirmative vote of the outstanding securities (as defined in
the 0000 Xxx) of the Fund. This Agreement will automatically and immediately
terminate in the event of its assignment, as such term is defined in the 1940
Act.
9. 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 of the Fund
or Xxxxxx Associates or Janus Capital and, (ii) if required by applicable law,
by the affirmative vote of a majority of the outstanding voting securities of
the Fund.
10. Allocation of Expenses. 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 any other series of the
Trust and between the Fund and other investment companies managed by Janus
Capital or its affiliates.
11. Limitation on Personal Liability. NOTICE IS HEREBY GIVEN that the
Trust is a statutory trust organized under the Delaware Statutory Trust Act
pursuant to a Certificate of
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Trust filed in the office of the Secretary of State of the State of Delaware.
All parties to this Agreement acknowledge and agree that the Trust is a series
trust and all debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to a particular series shall be
enforceable against the assets held with respect to such series only, and not
against the assets of the Trust generally or against the assets held with
respect to any other series and further that no Trustee, officer or holder of
shares of beneficial interest of the Trust shall be personally liable for any of
the foregoing.
12. Limitation of Liability of Janus Capital. Janus Capital shall not
be liable for any error of judgment or mistake of law or for any loss arising
out of any investment or for any act or omission taken with respect to the Fund,
except for willful misfeasance, bad faith or gross negligence in the performance
of its duties, or by reason of reckless disregard of its obligations and duties
hereunder and except to the extent otherwise provided by law. As used in this
Section 12, "Janus Capital" shall include any affiliate of Janus Capital
performing services for the Trust contemplated hereunder and directors, officers
and employees of Janus Capital and such affiliates.
13. Activities of Janus Capital. The services of Janus Capital to the
Trust hereunder are not to be deemed to be exclusive, and Janus Capital and its
affiliates are free to render services to other parties, so long as its services
under this Agreement are not materially adversely affected or otherwise impaired
thereby. Nothing in this Agreement shall limit or restrict the right of any
director, officer or employee of Janus Capital to engage in any other business
or to devote his or her time and attention in part to the management or other
aspects of any other business, whether of a similar nature or a dissimilar
nature. It is understood that Trustees, officers and shareholders of the Trust
are or may become interested in Janus Capital as directors, officers and
shareholders of Janus Capital, that directors, officers, employees and
shareholders of Janus Capital are or may become similarly interested in the
Trust, and that Janus Capital may become interested in the Trust as a
shareholder or otherwise.
14. 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.
Where the effect of a requirement of the federal securities laws reflected in
any provision of this Agreement is made less restrictive by a rule, regulation,
order, interpretation or other authority of the Securities and Exchange
Commission, whether of special or general application, such provision shall be
deemed to incorporate the effect of such rule, regulation, order, interpretation
or other authority.
15. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Colorado (without giving effect to the conflicts of
laws principles thereof) and the 1940 Act. To the extent that the applicable
laws of the State of Colorado conflict with the applicable provisions of the
1940 Act, the latter shall control.
16. Miscellaneous. The headings in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions thereof or otherwise affect
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their construction or effect. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors.
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Investment Advisory Agreement as of the date and year
first above written.
JANUS CAPITAL MANAGEMENT LLC
By:
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Name:
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Title:
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XXXXXX INVESTMENT PORTFOLIO
TRUST, with respect to the series
known as the Xxxxxx Balanced Fund
By:
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Xxxx X. Xxxxxxxx
President
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