Exhibit 4(xx)
SUB-ADVISORY AGREEMENT
JANUS ADVISER SMALL COMPANY VALUE FUND
(A SERIES OF JANUS ADVISER SERIES)
This SUB-ADVISORY AGREEMENT (the "Agreement") is entered into effective as
of the 1st day of July 2004, by and between JANUS CAPITAL MANAGEMENT LLC, a
Delaware limited liability company ("Janus") and BAY ISLE FINANCIAL LLC, a
Delaware limited liability company ("Bay Isle").
WHEREAS, Janus has entered into an Investment Advisory Agreement (the
"Advisory Agreement") with Janus Adviser Series, a Delaware statutory trust (the
"Trust") and an open-end, management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), with respect to
Janus Adviser Small Company Value Fund, a series of the Trust (the "Fund")
pursuant to which Janus has agreed to provide investment advisory services with
respect to the Fund; and
WHEREAS, Bay Isle 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"); and
WHEREAS, Janus desires to retain Bay Isle to furnish investment advisory
services with respect to the Fund, and Bay Isle is willing to furnish such
services;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Duties of Bay Isle. Janus hereby engages the services of Bay Isle as
subadviser in furtherance of the Advisory Agreement. Bay Isle agrees to perform
the following duties, subject to the oversight of Janus and to the overall
control of the officers and the Board of Trustees (the "Trustees") of the Trust:
(a) Bay Isle shall manage the investment operations of the Fund
and the composition of its investment portfolio, shall determine without prior
consultation with the Trust or Janus, what securities and other assets of the
Fund will be acquired, held, disposed of or loaned, and shall direct Janus with
respect to the execution of trades in connection with such determinations, in
conformity with the investment objectives, 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 Securities Act of 1933, as amended (the "1933 Act"),
the Advisers Act, the rules thereunder and all other applicable federal and
state laws and regulations, and the provisions of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to the Trust, on behalf of the Fund,
as a regulated investment company;
(b) Bay Isle shall cause its officers to attend meetings and furnish
oral or written reports, as the Trust or Janus may reasonably require, in order
to keep Janus, 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 Bay Isle, and the investment considerations which have given rise
to those decisions;
(c) Bay Isle shall maintain all books and records required to be
maintained by Bay Isle pursuant to the 1940 Act, the Advisers 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 and Janus with such periodic and special reports as the Trustees or
Janus reasonably may request. Bay Isle hereby 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 and the
Advisers Act any records which it maintains for the Trust and which are required
to be maintained under the 1940 Act and the Advisers 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;
(d) Bay Isle shall 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;
(e) Bay Isle shall, on behalf of the Fund, exercise such voting rights,
subscription rights, rights to consent to corporate action and any other rights
pertaining to the Fund's assets that may be exercised, in accordance with any
policy pertaining to the same that may be adopted or agreed to by the Trustees
of the Trust, or, in the event that the Trust retains the right to exercise such
voting and other rights, to furnish the Trust with advice as may reasonably be
requested as to the manner in which such rights should be exercised;
(f) At such times as shall be reasonably requested by the Trustees or
Janus, Bay Isle shall provide the Trustees and Janus 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 shall make
available to the Trustees and Janus any economic, statistical and investment
services normally available to similar investment company clients of Bay Isle;
and
(g) Bay Isle will provide to Janus for regulatory filings and other
appropriate uses materially accurate and complete information relating to Bay
Isle as may be reasonably requested by Janus from time to time and,
notwithstanding anything herein to the contrary, Bay Isle shall be liable to
Janus for all damages, costs and expenses, including without limitation
reasonable attorney's fees (hereinafter referred to collectively as "Damages"),
incurred by Janus as a result of any material inaccuracies or omissions in such
information provided by Bay Isle to Janus, provided, however, that Bay Isle
shall not be liable to the extent that any Damages are based upon inaccuracies
or omissions made in reliance upon information furnished to Bay Isle by Janus.
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2. Further Obligations. In all matters relating to the performance of
this Agreement, Bay Isle 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
and Janus 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. Janus agrees to provide to Bay Isle copies of the Trust's Trust
Instrument, bylaws, Registration Statement, written policies, procedures and
guidelines and written instructions and directions of the Trustees and Janus,
and any amendments or supplements to any of them at, or, if practicable, before
the time such materials become effective.
3. Obligations of Janus. Janus shall have the following obligations
under this Agreement:
(a) To keep Bay Isle continuously and fully informed (or cause the
custodian of the Fund's assets to keep Bay Isle so 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 Bay Isle 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 Bay Isle with any further materials or information
which Bay Isle may reasonably request to enable it to perform its function under
this Agreement; and
(d) To compensate Bay Isle for its services in accordance with the
provisions of Section 4 hereof.
4. Compensation. Janus shall pay to Bay Isle for its services under
this Agreement a fee, payable in United States dollars, at an annual rate of
0.74% of the Fund's average daily net assets, provided, however, that such fee
shall be net of any reimbursement of expenses paid by Janus to the Fund. 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.
5. Expenses. Bay Isle shall pay all its own costs and expenses incurred
in rendering its service under this Agreement.
6. Representations of Bay Isle. Bay Isle hereby represents, warrants
and covenants to Janus as follows:
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(a) Bay Isle: (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this Agreement
remains in effect; (ii) is not prohibited by the 1940 Act or the Advisers Act
from performing the services contemplated by this Agreement; (iii) has met, and
will continue to meet for so long as this Agreement remains in effect, any other
applicable federal or state requirements, or the applicable requirements of any
regulatory or industry self-regulatory organization necessary to be met in order
to perform the services contemplated by this Agreement; (iv) has the legal and
corporate authority to enter into and perform the services contemplated by this
Agreement; and (v) will immediately notify Janus of the occurrence of any event
that would disqualify Bay Isle from serving as an investment adviser of an
investment company pursuant to Section 9(a) of the 1940 Act or otherwise, and of
the institution of any administrative, regulatory or judicial proceeding against
Bay Isle that could have a material adverse effect upon Bay Isle's ability to
fulfill its obligations under this Agreement.
(b) Bay Isle has adopted a written code of ethics complying with
the requirements of Rule 17j-1 under the 1940 Act and will provide Janus with a
copy of such code of ethics, together with evidence of its adoption. Within 45
days after the end of the last calendar quarter of each year that this Agreement
is in effect, the president or a vice president of Bay Isle shall certify to
Janus that Bay Isle has complied with the requirements of Rule 17j-1 during the
previous year and that there has been no violation of Bay Isle's code of ethics
or, if such a violation has occurred, that appropriate action was taken in
response to such violation. Upon the written request of Janus, Bay Isle shall
permit Janus, its employees or its agents to examine the reports required to be
made to Bay Isle by Rule 17j-1(c)(1) and all other records relevant to Bay
Isle's code of ethics.
(c) Bay Isle has provided Janus with a copy of its Form ADV as
most recently filed with the U.S. Securities and Exchange Commission ("SEC") and
will, promptly after filing any amendment to its Form ADV with the SEC, furnish
a copy of such amendment to Janus.
7. Representations of Janus. Janus hereby represents, warrants and
covenants to Bay Isle as follows:
(a) Janus (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this Agreement
remains in effect; (ii) is not prohibited by the 1940 Act or the Advisers Act
from fulfilling its obligations under this Agreement; (iii) has met, and will
continue to meet for so long as this Agreement remains in effect, any other
applicable federal or state requirements, or the applicable requirements of any
regulatory or industry self-regulatory organization necessary to be met in order
to fulfill its obligations under this Agreement; (iv) has the legal and
corporate authority to enter into and perform this Agreement; and (v) will
immediately notify Bay Isle of the occurrence of any event that would disqualify
Janus from serving as an investment adviser of an investment company pursuant to
Section 9(a) of the 1940 Act or otherwise, and of the institution of any
administrative, regulatory or judicial proceeding against Janus that could have
a material adverse effect upon Janus' ability to fulfill its obligations under
this Agreement.
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(b) Janus has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and will provide Bay Isle with a
copy of such code of ethics, together with evidence of its adoption.
(c) Janus has provided Bay Isle with a copy of its Form ADV as
most recently filed with the U.S. Securities and Exchange Commission ("SEC") and
will, promptly after filing any amendment to its Form ADV with the SEC, furnish
a copy of such amendment to Bay Isle.
8. Term. This Agreement shall become effective as of the date first set
forth above and shall continue in effect until July 1, 2005 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 the Trust, Janus or Bay Isle,
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 July 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.
9. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees or by the shareholders of the Fund acting by vote of at
least a majority of its outstanding voting securities, provided in any such case
that 60 days' advance written notice of termination be given to Bay Isle at its
principal place of business. This Agreement may be terminated (i) by Janus or by
Bay Isle at any time, without penalty by giving 60 days' advance written notice
of termination to the other party, or (ii) by Janus or the Trust without advance
notice if Bay Isle becomes unable to discharge its duties and obligations under
this Agreement. In addition, the Agreement shall terminate, without penalty,
upon termination of the Advisory Agreement.
10. Assignment. This Agreement shall automatically terminate in the
event of its assignment.
11. Amendments. This Agreement may be amended by the parties only in a
written instrument signed by the parties to this Agreement and 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 the Trust or Janus, Bay Isle or
their affiliates, and (ii) if required by applicable law, 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. Limitation on Personal Liability. 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
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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.
13. Limitation of Liability of Bay Isle. Janus will not seek to hold Bay
Isle, and Bay Isle 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, "Bay Isle" shall include any
affiliate of Bay Isle performing services for the Fund contemplated hereunder
and directors, officers and employees of Bay Isle and such affiliates.
14. Activities of Bay Isle. The services of Bay Isle hereunder are not
to be deemed to be exclusive, and Bay Isle is 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 Bay
Isle 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 or a dissimilar nature. It is understood that Trustees, officers and
shareholders of the Trust are or may become interested in Bay Isle as directors,
officers and shareholders of Bay Isle, that directors, officers, employees and
shareholders of Bay Isle are or may become similarly interested in the Trust,
and that Bay Isle may become interested in the Trust as a shareholder or
otherwise.
15. Third Party Beneficiary. The parties expressly acknowledge and agree
that the Trust is a third party beneficiary of this Agreement and that the Trust
shall have the full right to xxx upon and enforce this Agreement in accordance
with its terms as if it were a signatory hereto. Any oversight, monitoring or
evaluation of the activities of Bay Isle by Janus, the Trust or the Fund shall
not diminish or relieve in any way the liability of Bay Isle for any of its
duties and responsibilities under this Agreement.
16. Notices. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered personally or
by overnight delivery service or mailed by certified or registered mail, return
receipt requested and postage prepaid, or sent by facsimile addressed to the
parties at their respective addresses set forth below, or at such other address
as shall be designated by any party in a written notice to the other party.
(a) To Janus at:
Janus Capital Management LLC
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Phone: (000) 000-0000
Fax: (000) 000-0000
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(b) To Bay Isle at:
Bay Isle Financial LLC
000 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: President
Phone: (000) 000-0000
Fax: (000) 000-0000
(c) To the Trust at:
Janus Adviser Series
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Phone: (000) 000-0000
Fax: (000) 000-0000
17. Certain Definitions. The terms "vote of a majority of the
outstanding voting securities," "assignment," "approved at least annually," and
"interested persons" 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 SEC under the 1940 Act and as may be then in effect.
18. 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.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers designated below as of the day and year first
above written.
JANUS CAPITAL MANAGEMENT LLC
By: /s/Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, Chief Financial Officer
and Senior Vice President
BAY ISLE FINANCIAL LLC
By: /s/Xxxxxxx Xxxxxx
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Name:_____________________________________
Title:____________________________________
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