Exhibit 4(aaaa)
JANUS INVESTMENT FUND
INVESTMENT ADVISORY AGREEMENT
JANUS MERCURY FUND
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 1st day
of July, 2004, as amended this 1st day of February, 2006, between JANUS
INVESTMENT FUND, a Massachusetts business trust (the "Trust"), and JANUS CAPITAL
MANAGEMENT LLC, a Delaware limited liability company ("JCM").
WITNESSETH:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and has registered its shares for public offering under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Trust is authorized to create separate funds, each with its
own separate investment portfolio of which the beneficial interests are
represented by a separate series of shares; one of such funds created by the
Trust being designated as the Janus Mercury Fund (the "Fund"); and
WHEREAS, the Trust and JCM deem it mutually advantageous that JCM should be
appointed as investment adviser to the Fund.
NOW, THEREFORE, the parties agree as follows:
1. Appointment. The Trust hereby appoints JCM as investment adviser and
manager with respect to the Fund for the period and on the terms set forth in
this Agreement. JCM hereby accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. Investment Advisory Services. JCM shall determine the securities or
other assets to be purchased, sold or held and shall place orders for the
purchase or sale of such securities or other assets with brokers, dealers or
others. JCM shall furnish continuous advice and recommendations to the Fund, and
have authority to act with respect thereto, as to the acquisition, holding, or
disposition of any or all of the securities or other assets which the Fund may
own or contemplate acquiring from time to time. JCM shall give due consideration
to the investment policies and restrictions and the other statements concerning
the Fund in the Trust Instrument, bylaws, and registration statements under the
1940 Act and the 1933 Act, and to the provisions of the Internal Revenue Code,
as amended from time to time, applicable to the Fund as a regulated investment
company. In addition, JCM shall cause its officers to attend meetings and
furnish oral or written reports, as the Trust may reasonably require, in order
to keep the Trustees and appropriate officers of the Trust fully informed as to
the condition of the investment portfolio of the Fund.
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3. Other Services. JCM is hereby authorized (to the extent the Trust has
not otherwise contracted) but not obligated (to the extent it so notifies the
Trustees at least 60 days in advance), to perform (or arrange for the
performance by affiliates of) the management and administrative services
necessary for the operation of the Fund. JCM is specifically authorized, on
behalf of the Trust, to conduct relations with custodians, depositories,
transfer and pricing agents, accountants, attorneys, underwriters, brokers and
dealers, corporate fiduciaries, insurance company separate accounts, insurers,
banks and such other persons in any such other capacity deemed by JCM to be
necessary or desirable. JCM shall generally monitor and report to the Fund's
officers the Fund's compliance with investment policies and restrictions as set
forth in the currently effective prospectus and statement of additional
information relating to the shares of the Fund under the 1933 Act. JCM shall
make reports to the Trustees of its performance of services hereunder upon
request therefor and furnish advice and recommendations with respect to such
other aspects of the business and affairs of the Fund as it shall determine to
be desirable. JCM is also authorized, subject to review by the Trustees, to
furnish such other services as JCM shall from time to time determine to be
necessary or useful to perform the services contemplated by this Agreement.
4. Obligations of Trust. The Trust shall have the following obligations
under this Agreement:
(a) to keep JCM continuously and fully informed as to the composition
of its investment portfolio and the nature of all of its assets
and liabilities from time to time;
(b) to furnish JCM with a certified copy of any financial statement
or report prepared for it by certified or independent public
accountants and with copies of any financial statements or
reports made to its shareholders or to any governmental body or
securities exchange;
(c) to furnish JCM with any further materials or information which
JCM may reasonably request to enable it to perform its function
under this Agreement; and
(d) to compensate JCM for its services and reimburse JCM for its
expenses incurred hereunder in accordance with the provisions
hereof.
5. Compensation. The Trust shall pay to JCM for its investment advisory
services a monthly base fee of 1/12 of 0.64% of the average daily closing net
asset value of the Fund, adjusted by a performance fee as set forth in Schedule
A. For any period less than a month during which this Agreement is in effect,
the base fee shall be prorated according to the proportion which such period
bears to a full month of 28, 29, 30 or 31 days, as the case may be.
6. Expenses Borne by JCM. In addition to the expenses which JCM may incur
in the performance of its investment advisory functions under this Agreement,
and the expenses which it may expressly undertake to incur and pay under other
agreements with the Trust or
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otherwise, JCM shall incur and pay the following expenses relating to the Fund's
operations without reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of the Trust's
officers and its Trustees, except for such Trustees who are not
"interested persons," as defined in the 1940 Act, of JCM; and
(b) Rental of offices of the Trust.
7. Expenses Borne by the Trust. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCM pursuant to Sections 3 and 6
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not "interested persons," as defined in the 1940 Act, of JCM; compensation
of the Fund's custodian, transfer agent, registrar and dividend disbursing
agent; legal, accounting, audit and printing expenses; administrative, clerical,
recordkeeping and bookkeeping expenses; brokerage commissions and all other
expenses in connection with execution of portfolio transactions (including any
appropriate commissions paid to JCM or its affiliates for effecting exchange
listed, over-the-counter or other securities transactions); interest; all
federal, state and local taxes (including stamp, excise, income and franchise
taxes); costs of stock certificates and expenses of delivering such certificates
to purchasers thereof; expenses of local representation in Massachusetts;
expenses of shareholders' meetings and of preparing, printing and distributing
proxy statements, notices, and reports to shareholders; expenses of preparing
and filing reports and tax returns with federal and state regulatory
authorities; all expenses incurred in complying with all federal and state laws
and the laws of any foreign country applicable to the issue, offer, or sale of
shares of the Fund, including, but not limited to, all costs involved in the
registration or qualification of shares of the Fund for sale in any
jurisdiction, the costs of portfolio pricing services and compliance systems,
and all costs involved in preparing, printing and mailing prospectuses and
statements of additional information to Fund shareholders; and all fees, dues
and other expenses incurred by the Trust in connection with the membership of
the Trust in any trade association or other investment company organization.
8. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Fund acting
by vote of at least a majority of its outstanding voting securities, provided in
either case that sixty (60) days advance written notice of termination be given
to JCM at its principal place of business. This Agreement may be terminated by
JCM at any time, without penalty, by giving sixty (60) days advance written
notice of termination to the Trust, addressed to its principal place of
business. The Trust agrees that, consistent with the terms of the Trust
Instrument, the Trust shall cease to use the name "Janus" in connection with the
Fund as soon as reasonably practicable following any termination of this
Agreement if JCM does not continue to provide investment advice to the Fund
after such termination.
9. Assignment. This Agreement shall terminate automatically in the event of
any assignment of this Agreement.
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10. Term. This Agreement shall continue in effect until February 1, 2007,
unless sooner terminated in accordance with its terms, and shall continue in
effect from year to year thereafter only so long as such continuance is
specifically approved at least annually by (a) the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and (b) either the Trustees of the Trust
or the affirmative vote of a majority of the outstanding voting securities of
the Fund. The annual approvals provided for herein shall be effective to
continue this Agreement from year to year if given within a period beginning not
more than ninety (90) days prior to February 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 0000 Xxx) of any party to this Agreement and,
if required by applicable law, (ii) by the affirmative vote of a majority of the
outstanding voting securities of the Fund (as that phrase is defined in Section
2(a)(42) of the 1940 Act).
12. Other Series. The Trustees shall determine the basis for making an
appropriate allocation of the Trust's expenses (other than those directly
attributable to the Fund) between the Fund and the other series of the Trust.
13. Limitation of Personal Liability. All the parties hereto acknowledge
and agree that all liabilities of the Trust arising, directly or indirectly,
under this Agreement, of any and every nature whatsoever, shall be satisfied
solely out of the assets of the Fund and that no Trustee, officer or holder of
shares of beneficial interest of the Trust shall be personally liable for any of
the foregoing liabilities. The Trust Instrument describes in detail the
respective responsibilities and limitations on liability of the Trustees,
officers and holders of shares of beneficial interest of the Trust.
14. Limitation of Liability of JCM. JCM shall not be liable for any error
of judgment or mistake of law or for any loss arising out of any investment or
for any act or omission taken with respect to the Trust, except for willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of reckless disregard of its obligations and duties hereunder and
except to the extent otherwise provided by law. As used in this Section 14,
"JCM" shall include any affiliate of JCM performing services for the Trust
contemplated hereunder and directors, officers and employees of JCM and such
affiliates.
15. Activities of JCM. The services of JCM to the Trust hereunder are not
to be deemed to be exclusive, and JCM and its affiliates are free to render
services to other parties. It is understood that trustees, officers and
shareholders of the Trust are or may become interested in JCM as directors,
officers and shareholders of JCM, that directors, officers, employees and
shareholders of JCM are or may become similarly interested in the Trust, and
that JCM may become interested in the Trust as a shareholder or otherwise.
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16. Certain Definitions. The terms "vote of a majority of the outstanding
voting securities," "assignment" and "interested persons" when used herein,
shall have the respective meanings specified in the 1940 Act, as now in effect
or hereafter amended, and the rules and regulations thereunder, subject to such
orders, exemptions and interpretations as may be issued by the Securities and
Exchange Commission under said Act and as may be then in effect.
17. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of Colorado (without giving effect to the conflicts of laws
principles thereof) and the 1940 Act. To the extent that the applicable laws of
the State of Colorado conflict with the applicable provisions of the 1940 Act,
the latter shall control.
This Agreement shall supercede all prior investment advisory agreements
entered into between JCM and the Trust, on behalf of the Fund.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this amended Investment Advisory Agreement as of February 1, 2006.
JANUS CAPITAL MANAGEMENT LLC
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxxx, Chief Financial
Officer and Executive Vice President
JANUS INVESTMENT FUND
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Xxxxxx X. Xxxxx, President and
Chief Executive Officer
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SCHEDULE A
PERFORMANCE ADJUSTMENT
Beginning with the Base Fee payable for February 2006 and in month 13 from
the amended date of this Agreement, the Base Fee shall be adjusted monthly based
upon the investment performance of the Fund in relation to the cumulative
investment record of the Fund's benchmark, the Xxxxxxx 1000 Growth Index (the
"Index"), over the "Performance Period" (such adjustment being referred to
herein as the "Performance Adjustment"). The "Performance Period" is defined as
the shorter of (a) the period from the date of this Agreement through the end of
the month for which the fee is being calculated, and (b) the 36 month period
preceding the end of the month for which the fee is being calculated.
The Performance Adjustment shall be calculated by subtracting the
investment record of the Index from the investment performance of the Fund. If
there is less than a 0.50% difference (plus or minus) between the investment
performance of the Fund and the investment record of the Index, the Fund pays
JCM the Base Fee with no adjustment. If the difference between the investment
performance of the Fund and the investment record of the Index is 0.50% or
greater during any Performance Period, the Base Fee will be subject to an upward
or downward performance adjustment of 1/12 of 0.015% for every full 0.50%
increment by which the Fund outperforms or underperforms the Index. The maximum
percentage used in calculating the Performance Adjustment (positive or negative)
in any month is 1/12 of 0.15%. The Performance Adjustment is applied against the
Fund's average daily net assets during the Performance Period.
For purposes of computing the Base Fee and the Performance Adjustment, net
assets are averaged over different periods (average daily net assets during the
relevant month for the Base Fee versus average daily net assets during the
Performance Period for the Performance Adjustment). The Base Fee is calculated
and accrued daily. The Performance Adjustment is calculated monthly in arrears
and is accrued evenly each day throughout the month. The investment advisory fee
is paid monthly in arrears.
The average daily net asset value of the Fund, or any class thereof, shall
be determined in the manner set forth in the Trust's Amended and Restated
Agreement and Declaration of Trust, Amended and Restated Bylaws and registration
statement, each as may be amended from time to time.
The investment performance of the Fund will be the sum of:
(1) the change in the Fund's net asset value ("NAV") per share during the
Performance Period; plus
(2) the value of the Fund's cash distributions per share accumulated to the
end of the Performance Period; plus
(3) the value of capital gains taxes per share paid or payable on
undistributed realized long-term capital gains accumulated to the end of the
Performance Period;
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expressed as a percentage of the Fund's NAV per share at the beginning of the
Performance Period. For this purpose, the value of distributions per share of
realized capital gains, of dividends per share paid from investment income and
of capital gains taxes per share paid or payable on undistributed realized
long-term capital gains shall be treated as reinvested in shares of the Fund at
the NAV in effect at the close of business on the record date for the payment of
such distributions and dividends and the date on which provision is made for
such taxes, after giving effect to such distributions, dividends and taxes.
The investment record of the Index will be the sum of:
(1) the change in the level of the Index during the Performance Period;
plus
(2) the value, computed consistently with the Index, of cash distributions
made by companies whose securities comprise the Index accumulated to the end of
the Performance Period; expressed as a percentage of the Index level at the
beginning of the Performance Period. For this purpose, cash distributions on the
securities which comprise the Index shall be treated as reinvested in the Index
at least as frequently as the end of each calendar quarter following the payment
of the dividend.
If, consistent with the Trust's Amended and Restated Agreement and
Declaration of Trust and Amended and Restated Bylaws, each as may be further
amended, the Trustees should subsequently decide to divide shares of the Fund
into two or more separate classes, the oldest class of shares will be used for
purposes of determining the Performance Adjustment. From time to time, the
Trustees may, by vote of the Trustees of the Trust voting in person, including a
majority of the Trustees who are not parties to this Agreement or "interested
persons" (as defined in the 0000 Xxx) of any such parties, determine that a
different class of shares of the Fund is the most appropriate for use in
calculating the Performance Adjustment. If a different class of shares
("Successor Class") is substituted in calculating the Performance Adjustment,
the use of that Successor Class of shares for purposes of calculating the
Performance Adjustment may apply to the entire Performance Period so long as
such Successor Class was outstanding at the beginning of such period. If the
Successor Class of shares was not outstanding for all or a portion of the
Performance Period, it may only be used in calculating that portion of the
Performance Adjustment attributable to the period during which such Successor
Class was outstanding and any prior portion of the Performance Period shall be
calculated using the class of shares previously designated.
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