EXHIBIT 99B.23(d)-2
INTERIM
INVESTMENT ADVISORY AGREEMENT
XXXXXX GROWTH FUND, INC.
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 GROWTH FUND, INC., a
Maryland corporation (the "Fund").
RECITALS
A. The Fund 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").
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").
C. The Fund and Janus Capital deem it mutually advantageous that Janus
Capital should assist the Directors and officers of the Fund 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 Fund 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 Fund, 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 Fund's articles of incorporation, as amended from time to time (the
"Charter"), 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 Fund may reasonably require, in order to keep the
Directors and appropriate officers of the Fund 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 supervise the purchase and sale of securities for investments
of the Fund and for other related transactions as directed by the appropriate
officers of the Fund; 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 Fund 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 Directors with such
periodic and special reports as the Directors reasonably may request. Janus
Capital agrees that all records which it maintains for the Fund are the property
of the Fund, agrees to permit the reasonable inspection thereof by the Fund or
its designees and agrees to preserve for the periods prescribed under the 1940
Act any records which it maintains for the Fund and which are required to be
maintained under the 1940 Act, and further agrees to surrender promptly to the
Fund or its designees any records which it maintains for the Fund upon request
by the Fund; and
(e) At such times as shall be reasonably requested by the Directors,
to provide the Directors 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 Directors of the Fund pursuant
to Section 15(c) of the 1940 Act, and make available to the Directors 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 Fund's Charter,
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 Directors of the Fund 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
Fund agrees to provide Janus Capital with copies of the Fund's Charter, bylaws,
Registration Statements, written policies, procedures and guidelines, and
written instructions and directions of the Directors, and any amendments or
supplements to any of them at, or, if practicable, before the time such
materials become effective. Janus Capital shall maintain errors and omissions
insurance in an amount at least equal to that disclosed to the Directors in
connection with their approval of this Agreement.
4. Obligations of Fund. The Fund shall have the following obligations
under this Agreement:
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(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 Fund shall pay to Janus Capital for its
services under this Agreement a fee, payable in United States dollars, at an
annual rate of 0.75% of the first $500 million of average daily net assets of
the Fund, 0.70% of the next $500 million 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 Fund'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 Fund. The Fund assumes and shall pay all
expenses incidental to its operations and business not specifically assumed or
agreed to be paid by Janus Capital hereunder or otherwise, including, but not
limited to, any compensation, fees or reimbursements which the Fund pays to its
Directors 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
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(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 Maryland; 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 Fund in connection with the membership
of the Fund 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 Fund 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 Fund 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
Fund's officers and Directors, except for such Directors who are not
interested persons of Xxxxxx Associates or Janus Capital; and
(ii) Rental of offices of the Fund.
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 Fund 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
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
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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 Fund shall retain the right to
direct the placement of all portfolio transactions, and the Directors of the
Fund may establish policies or guidelines to be followed by Janus Capital in
placing portfolio transactions for the Fund 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
Directors. 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 Fund 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 Directors of the
Fund 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 Directors,
including a majority of the Directors 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 Directors shall determine the basis for
making an appropriate allocation of the Company's expenses (other than those
directly attributable to the Fund) between the Fund and other investment
companies managed by Janus Capital or its affiliates.
11. 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 11, "Janus Capital" shall include any affiliate of Janus Capital
performing services for the Fund contemplated hereunder and directors, officers
and employees of Janus Capital and such affiliates.
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12. Activities of Janus Capital. The services of Janus Capital to the
Fund 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 Directors, officers and shareholders of the Fund
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
Fund, and that Janus Capital may become interested in the Fund as a shareholder
or otherwise.
13. 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.
14. 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.
15. 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 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.
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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 GROWTH FUND, INC.
By:
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Xxxx X. Xxxxxxxx
President
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