IDEX II SERIES FUND
ON BEHALF OF IDEX II BALANCED PORTFOLIO
INVESTMENT COUNSEL AGREEMENT
This Agreement is entered into as of September 30, 1994 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").
WHEREAS, Idex Management entered into a Management and Investment Advisory
Agreement (referred to herein as the "Advisory Agreement"), dated September 30,
1994 with IDEX II Series Fund, a Massachusetts business trust (referred to
herein as the "Fund") on behalf of the IDEX II Series Fund Balanced Portfolio
(the "Portfolio"), 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.
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;
(b) to cause its officers to attend meetings of Idex Management or the Fund
and furnish oral or written reports, as Idex Management may reasonably require,
in order to keep Idex Management and its officers and the Trustees of the Fund
and appropriate officers of the Fund 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 Fund or of Idex Management.
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 Portfolio by certified or independent
public accountants, and with copies of any financial statements or reports made
by the Portfolio to is 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 functions
under this Agreement;
- 1 -
(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
pursuant to Section 6 of the Advisory Agreement for services rendered by Idex
Management to the Portfolio during the term of this Agreement, less (ii) 50% of
any amount reimbursed to the Portfolio by Idex Management pursuant to the
provisions of Section 4 (d) of the Advisory Agreement. 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
fees payable to Idex Management under Section 6 of the Advisory Agreement; and
(e) to compensate Janus Capital, in addition to the compensation payable
under paragraph (d) above, as follows: If on December 31 of 1994 and each year
thereafter ("Target Date") the aggregate actual net assets on that date of the
Portfolio, any other Portfolios of the Fund with respect to which Idex
Management acts as investment advisor, IDEX Fund and 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 than 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, 1994 (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).
- 2 -
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 shall be passed on to the Fund or incorporated in investment
advice by Idex Management to the Fund. Idex Management may direct Janus Capital
to furnish its investment information, advice and recommendations directly to
officers or Trustees of the Fund.
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
Fund. This prohibition, however, shall not prevent the purchase from the Fund of
shares issued by the Fund 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 Fund's current prospectus in accordance with Section 22(d)
of the Investment Company Act of 1940, as amended (the" 1940 Act").
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 1940 Act, neither Janus Capital nor its officers, directors,
employees or agents shall be subject to any liability to the Fund or any
shareholders of the Fund 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 Fund's Declaration of Trust, Bylaws, and current prospectus and with the
instructions and direction of Idex Management and the Fund's 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 Fund 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 Fund 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 Fund. This
Agreement may be terminated at any time by Janus Capital by giving 60 days'
written notice of such termination to the Fund 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 one year from the date hereof 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 Fund 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 Fund or 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).
10. Amendments. This Agreement may be amended only with the approval by the
affirmative vote of a majority of the outstanding voting securities (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 Fund 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.
- 3 -
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ATTEST: JANUS CAPITAL CORPORATION
/s/ Xxxx X. Xxxxxxxx
Executive Vice President
______________________________ 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
- 4 -
