-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, W1I7Sw8dIBL/+mrtrN/sxidOLVvyjoS+rzn1DAZoXrEnNdWzCp4qt/y/rulmcQ5z R1uUhX5cD+WNM+v5C7ldiQ== 0000277751-97-000028.txt : 19970627 0000277751-97-000028.hdr.sgml : 19970627 ACCESSION NUMBER: 0000277751-97-000028 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 32 FILED AS OF DATE: 19970626 EFFECTIVENESS DATE: 19970626 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: JANUS INVESTMENT FUND CENTRAL INDEX KEY: 0000277751 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 840592523 STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 002-34393 FILM NUMBER: 97630028 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-01879 FILM NUMBER: 97630029 BUSINESS ADDRESS: STREET 1: 100 FILLMORE ST STREET 2: STE 300 CITY: DENVER STATE: CO ZIP: 80206 BUSINESS PHONE: 3033333863 MAIL ADDRESS: STREET 1: 100 FILLMORE STREET STREET 2: SUITE 300 CITY: DENVER STATE: CO ZIP: 80203 FORMER COMPANY: FORMER CONFORMED NAME: JANUS FUND /MD/ DATE OF NAME CHANGE: 19870701 485BPOS 1 PEA NO. 81-JIF SPECIAL SITUATIONS FUND Registration No. 2-34393 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Pre-Effective Amendment No. /__/ Post-Effective Amendment No. 81 /X/ and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 Amendment No. 64 /X/ (Check appropriate box or boxes.) JANUS INVESTMENT FUND (Exact Name of Registrant as Specified in Charter) 100 Fillmore Street, Denver, Colorado 80206-4928 Address of Principal Executive Offices (Zip Code) Registrant's Telephone No., including Area Code: 303-333-3863 Stephen L. Stieneker - 100 Fillmore Street, Denver, Colorado 80206-4928 (Name and Address of Agent for Service) Approximate Date of Proposed Offering: June 26, 1997 It is proposed that this filing will become effective (check appropriate line): X immediately upon filing pursuant to paragraph (b) of Rule 485. on (date) pursuant to paragraph (b) of Rule 485. 60 days after filing pursuant to paragraph (a)(1) of Rule 485. on (date) pursuant to paragraph (a)(1) of Rule 485. 75 days after filing pursuant to paragraph (a)(2) of Rule 485. on (date) pursuant to paragraph (a)(2) of Rule 485. If appropriate, check the following line: this post-effective amendment designates a new effective date for a previously filed post-effective amendment. Registrant has registered an indefinite number of shares of beneficial interest under the Securities Act of 1933 pursuant to Rule 24f-2(a) and filed a Rule 24f-2 Notice on December 13, 1996, for the fiscal year ended October 31, 1996, with respect to all of its series and classes in existence as of October 31, 1996. JANUS INVESTMENT FUND (Janus Special Situations Fund) Cross Reference Sheet Between the Prospectus and Statement of Additional Information and Form N-1A Item (Cross Reference Sheet for Other Series of Janus Investment Fund are included in a previous post-effective amendment relating to those series) FORM N-1A ITEM CAPTION IN PROSPECTUS PART A 1. Cover Page Cover Page 2. Synopsis Cover Page; Fund at a Glance; Expense Information 3. Condensed Financial Financial Highlights; Performance Terms Information 4. General Description of Fund at a Glance; The Fund in Detail; Registrant Investment Objective and Strategy; Types of Investments; General Portfolio Policies; Additional Risk Factors; Appendix A - Glossary of Investment Terms; Appendix B - Explanation of Rating Categories 5. Management of the Fund Management of the Fund 5A. Management's Discussion of Not Applicable Fund Performance 6. Capital Stock and Other Distributions and Taxes; Shareholder's Securities Manual 7. Purchase of Securities Being Shareholder's Manual Offered 8. Redemption or Repurchase Shareholder's Manual 9. Pending Legal Proceedings Not Applicable FORM N-1A ITEM CAPTION IN STATEMENT OF ADDITIONAL INFORMATION PART B 10. Cover Page Cover Page 11. Table of Contents Table of Contents 12. General Information and Miscellaneous Information History 13. Investment Objectives and Investment Policies, Restrictions and Policies Techniques; Types of Securities and Investment Techniques 14. Management of the Fund Investment Adviser; Officers and Trustees 15. Control Persons and Principal Principal Shareholders Holders of Securities 16. Investment Advisory and Investment Adviser; Custodian, Transfer Other Services Agent and Certain Affiliations; Portfolio Transactions and Brokerage; Officers and Trustees; Miscellaneous Information 17. Brokerage Allocation and Portfolio Transactions and Brokerage Other Practices 18. Capital Stock and Other Purchase of Shares; Redemption of Securities Shares; Miscellaneous Information 19. Purchase, Redemption and Purchase of Shares; Redemption of Pricing of Securities Being Shares; Shareholder Accounts Offered 20. Tax Status Income Dividends, Capital Gains Distributions and Tax Status 21. Underwriters Custodian, Transfer Agent and Certain Affiliations 22. Calculation of Performance Performance Information Data 23. Financial Statements Financial Statements JANUS INVESTMENT FUND JANUS SPECIAL SITUATIONS FUND Supplement Dated June 26, 1997 to Prospectus Dated November 29, 1996 THIS SUPPLEMENT IS INTENDED TO BE USED WITH THE PROSPECTUS DATED NOVEMBER 29, 1996, AND REPLACES THE SUPPLEMENT DATED DECEMBER 12, 1996. THIS SUPPLEMENT, TOGETHER WITH THE PROSPECTUS PREVIOUSLY FURNISHED TO YOU, CONSTITUTE A CURRENT PROSPECTUS. TO REQUEST ANOTHER COPY OF THE PROSPECTUS, PLEASE CALL 1-800-525-3713. I. The address on the inside front cover of the Prospectus is amended as follows: 100 Fillmore Street Denver, CO 80206-4928 1-800-525-3713 http://www.Janus.com II. The following table is added at page 2 of the Prospectus: FINANCIAL HIGHLIGHTS The unaudited information below is for the fiscal period from December 31, 1996 (inception) to April 30, 1997. Janus Special Situations Fund - ------------------------------------------------------------------------------------------------------------------------------------ 1. Net asset value, beginning of period $10.00 - ------------------------------------------------------------------------------------------------------------------------------------ Income from investment operations: 2. Net investment income -- 3. Net gains or (losses) on securities (both realized and unrealized) .82 - ------------------------------------------------------------------------------------------------------------------------------------ 4. Total from investment operations .82 - ------------------------------------------------------------------------------------------------------------------------------------ Less distributions: 5. Dividends (from net investment income) -- 6. Distributions (from capital gains) -- - ------------------------------------------------------------------------------------------------------------------------------------ 7. Total distributions -- - ------------------------------------------------------------------------------------------------------------------------------------ 8. Net asset value, end of period $10.82 - ------------------------------------------------------------------------------------------------------------------------------------ 9. Total return* 8.30% 10. Net assets, end of period (in millions) $124 11. Average net assets for the period (in millions) $91 12. Ratio of gross expenses to average net assets** 1.34% 13. Ratio of net expenses to average net assets** 1.32% 14. Ratio of net investment income to average net assets** 0.13% 15. Portfolio turnover rate** 140% 16. Average commission rate $.0423 - ------------------------------------------------------------------------------------------------------------------------------------
*Total return is not annualized. **Annualized. III. The "Express or Certified Mail" address in the section "How to Open Your Janus Account" on page 7 of the Prospectus and the section "Quick Address and Telephone Reference" on page 8 of the Prospectus are amended as follows: For Overnight Carrier Janus Suite 101 3773 Cherry Creek North Drive Denver, CO 80209-3811 IV. The second paragraph of the section "Investment Adviser" on page 11 of the Prospectus is amended as follows: Janus Capital began serving as investment adviser to certain series of the Trust in 1970 and currently serves as investment adviser to all of the Janus funds, as well as adviser or subadviser to other mutual funds and individual, corporate, charitable and retirement accounts. V. The management fee schedule in the section "Breakdown of Management Expenses and Expense Limits" on page 11 of the Prospectus is amended as follows: As of July 1, 1997, management fees will accrue at the following rates: 0.75% on the first $300 million in assets; 0.70% on the next $200 million in assets; and 0.65% on assets in excess of $500 million. VI. The "Custodian" paragraph of the section "Other Service Providers" on page 12 of the Prospectus is amended as follows: Custodian State Street Bank and Trust Company P.O. Box 0351 Boston, Massachusetts 02117-0351 VII. The first paragraph of the section "Distributions" on page 13 of the Prospectus is amended as follows: To avoid taxation, the Internal Revenue Code requires the Fund to distribute net income and any net gains realized by its investments annually. The Fund's income from dividends and interest and any net realized short-term capital gains are paid to shareholders as ordinary income dividends. Net realized long-term gains are paid to shareholders as capital gains distributions. Dividends and capital gains distributions are declared and paid in December. JANUS SPECIAL SITUATIONS FUND 100 Fillmore Street Denver, CO 80206-4928 (800) 525-3713 - -------------------------------------------------------------------------------- Statement of Additional Information November 29, 1996 as supplemented June 26, 1997 - -------------------------------------------------------------------------------- Janus Special Situations Fund (the "Fund") is a no-load mutual fund that seeks capital appreciation by investing primarily in common stocks. The Fund seeks investments in companies that its portfolio manager believes have been overlooked or undervalued by other investors. Although the Fund emphasizes these types of companies, it may invest in other companies that the portfolio manager believes have the potential for significant capital appreciation. The Fund is a separate series of Janus Investment Fund, a Massachusetts business trust (the "Trust"). Each series of the Trust represents shares of beneficial interest in a separate portfolio of securities and other assets with its own objective and policies. The Fund is managed by Janus Capital Corporation ("Janus Capital"). This Statement of Additional Information ("SAI") is not a Prospectus and should be read in conjunction with the Fund's Prospectus dated November 29, 1996 as supplemented June 26, 1997, which is incorporated by reference into this SAI and may be obtained from the Trust at the above phone number or address. This SAI contains additional and more detailed information about the Fund's operations and activities than the Prospectus. [LOGO] JANUS JANUS SPECIAL SITUATIONS FUND STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS Page - -------------------------------------------------------------------------------- Investment Policies, Restrictions and Techniques ....................... 3 Investment Objective ................................................ 3 Portfolio Policies .................................................. 3 Investment Restrictions ............................................. 3 Types of Securities and Investment Techniques ....................... 4 Illiquid Investments .............................................. 4 Zero Coupon, Pay-In-Kind and Step Coupon Securities ............... 5 Pass-Through Securities ........................................... 5 Depositary Receipts ............................................... 6 Other Income-Producing Securities ................................. 6 High-Yield/High-Risk Securities ................................... 7 Repurchase and Reverse Repurchase Agreements ...................... 7 Futures, Options and Other Derivative Instruments ................. 7 Investment Adviser ..................................................... 14 Custodian, Transfer Agent and Certain Affiliations ..................... 15 Portfolio Transactions and Brokerage ................................... 15 Officers and Trustees .................................................. 17 Purchase of Shares ..................................................... 18 Net Asset Value Determination ....................................... 18 Reinvestment of Dividends and Distributions ......................... 19 Redemption of Shares ................................................... 19 Shareholder Accounts ................................................ 19 Telephone Transactions .............................................. 20 Systematic Redemptions .............................................. 20 Retirement Plans ....................................................... 20 Income Dividends, Capital Gains Distributions and Tax Status ........... 20 Principal Shareholders ................................................. 21 Miscellaneous Information .............................................. 21 Shares of the Trust ................................................. 21 Voting Rights ....................................................... 21 Independent Accountants ............................................. 21 Registration Statement .............................................. 22 Performance Information ................................................ 22 Financial Statements ................................................... 22 - -------------------------------------------------------------------------------- 2 INVESTMENT POLICIES, RESTRICTIONS AND TECHNIQUES INVESTMENT OBJECTIVE As stated in the Prospectus, the Fund's investment objective is capital appreciation. There can be no assurance that the Fund will, in fact, achieve its objective. The investment objective of the Fund is not fundamental and may be changed by the Trustees without shareholder approval. PORTFOLIO POLICIES The Prospectus discusses the types of securities in which the Fund will invest, portfolio policies of the Fund and the investment techniques of the Fund. The Prospectus includes a discussion of portfolio turnover policies. The Fund's portfolio turnover rate (total long-term purchases or sales, whichever is less, divided by the average monthly value of a fund's long-term portfolio securities) for the fiscal period ended April 30, 1997 was 140%. INVESTMENT RESTRICTIONS As indicated in the Prospectus, the Fund is subject to certain fundamental policies and restrictions that may not be changed without shareholder approval. Shareholder approval means approval by the lesser of (i) more than 50% of the outstanding voting securities of the Trust (or the Fund if a matter affects just the Fund), or (ii) 67% or more of the voting securities present at a meeting if the holders of more than 50% of the outstanding voting securities of the Trust (or the Fund) are present or represented by proxy. As fundamental policies, the Fund may not: (1) Own more than 10% of the outstanding voting securities of any one issuer and, as to fifty percent (50%) of the value of its total assets, purchase the securities of any one issuer (except cash items and "government securities" as defined under the Investment Company Act of 1940, as amended (the "1940 Act")), if immediately after and as a result of such purchase, the value of the holdings of the Fund in the securities of such issuer exceeds 5% of the value of the Fund's total assets. (2) Invest 25% or more of the value of its total assets in any particular industry (other than U.S. government securities). (3) Invest directly in real estate or interests in real estate; however, the Fund may own debt or equity securities issued by companies engaged in those businesses. (4) Purchase or sell physical commodities other than foreign currencies unless acquired as a result of ownership of securities (but this limitation shall not prevent the Fund from purchasing or selling options, futures, swaps and forward contracts or from investing in securities or other instruments backed by physical commodities). (5) Lend any security or make any other loan if, as a result, more than 25% of its total assets would be lent to other parties (but this limitation does not apply to purchases of commercial paper, debt securities or repurchase agreements). (6) Act as an underwriter of securities issued by others, except to the extent that the Fund may be deemed an underwriter in connection with the disposition of portfolio securities of the Fund. As a fundamental policy, the Fund may, notwithstanding any other investment policy or limitation (whether or not fundamental), invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objective, policies and limitations as the Fund. The Trustees have adopted additional investment restrictions for the Fund. These restrictions are operating policies of the Fund and may be changed by the Trustees without shareholder approval. The additional investment restrictions adopted by the Trustees to date include the following: (a) The Fund's investments in warrants, valued at the lower of cost or market, may not exceed 5% of the value of its net assets. Included within that amount, but not to exceed 2% of the value of the Fund's net assets, may be warrants that are not listed on the New York or American Stock Exchange. Warrants acquired by the Fund in units or attached to securities shall be deemed to be without value for the purpose of monitoring this policy. (b) The Fund will not (i) enter into any futures contracts and related options for purposes other than bona fide hedging transactions within the meaning of Commodity Futures Trading Commission ("CFTC") regulations if the aggregate initial margin and premiums required to establish positions in futures contracts and related options that do not fall within the definition of bona fide hedging transactions will exceed 5% of the fair market value of the Fund's net assets, after taking into account unrealized profits and unrealized losses on any such contracts it has entered into; and (ii) enter into any futures contracts if the aggregate amount of the Fund's commitments under outstanding futures contracts positions would exceed the market value of its total assets. 3 (c) The Fund does not currently intend to sell securities short, unless it owns or has the right to obtain securities equivalent in kind and amount to the securities sold short without the payment of any additional consideration therefor, and provided that transactions in futures, options, swaps and forward contracts are not deemed to constitute selling securities short. (d) The Fund does not currently intend to purchase securities on margin, except that the Fund may obtain such short-term credits as are necessary for the clearance of transactions, and provided that margin payments and other deposits in connection with transactions in futures, options, swaps and forward contracts shall not be deemed to constitute purchasing securities on margin. (e) The Fund does not currently intend to (i) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (ii) purchase or retain securities issued by other open-end investment companies. Limitations (i) and (ii) do not apply to money market funds or to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. If the Fund invests in a money market fund, Janus Capital will reduce its advisory fee by the amount of any investment advisory and administrative services fees paid to the investment manager of the money market fund. (f) The Fund may not mortgage or pledge any securities owned or held by the Fund in amounts that exceed, in the aggregate, 15% of the Fund's net assets, provided that this limitation does not apply to reverse repurchase agreements, deposits of assets to margin, guarantee positions in futures, options, swaps or forward contracts, or the segregation of assets in connection with such contracts. (g) The Fund does not intend to purchase securities of any issuer (other than U.S. government agencies and instrumentalities or instruments guaranteed by an entity with a record of more than three years' continuous operation, including that of predecessors) with a record of less than three years' continuous operation (including that of predecessors) if such purchase would cause the cost of the Fund's investments in all such issuers to exceed 5% of the Fund's total assets taken at market value at the time of such purchase. (h) The Fund does not currently intend to invest directly in oil, gas, or other mineral development or exploration programs or leases; however, the Fund may own debt or equity securities of companies engaged in those businesses. (i) The Fund may borrow money for temporary or emergency purposes (not for leveraging or investment) in an amount not exceeding 25% of the value of its total assets (including the amount borrowed) less liabilities (other than borrowings). If borrowings exceed 25% of the value of the Fund's total assets by reason of a decline in net assets, the Fund will reduce its borrowings within three business days to the extent necessary to comply with the 25% limitation. This policy shall not prohibit reverse repurchase agreements, deposits of assets to margin or guarantee positions in futures, options, swaps or forward contracts, or the segregation of assets in connection with such contracts. (j) The Fund does not currently intend to purchase any security or enter into a repurchase agreement if, as a result, more than 15% of its net assets would be invested in repurchase agreements not entitling the holder to payment of principal and interest within seven days and in securities that are illiquid by virtue of legal or contractual restrictions on resale or the absence of a readily available market. The Trustees, or the Fund's investment adviser acting pursuant to authority delegated by the Trustees, may determine that a readily available market exists for securities eligible for resale pursuant to Rule 144A under the Securities Act of 1933 ("Rule 144A Securities"), or any successor to such rule, Section 4(2) commercial paper and municipal lease obligations. Accordingly, such securities may not be subject to the foregoing limitation. (k) The Fund may not invest in companies for the purpose of exercising control of management. For purposes of the Fund's restriction on investing in a particular industry, the Fund will rely primarily on industry classifications as published by Bloomberg L.P. To the extent that Bloomberg L.P. classifications are so broad that the primary economic characteristics in a single class are materially different, the Fund may further classify issuers in accordance with industry classifications as published by the Securities and Exchange Commission ("SEC"). TYPES OF SECURITIES AND INVESTMENT TECHNIQUES ILLIQUID INVESTMENTS The Fund may invest up to 15% of its net assets in illiquid investments (i.e., securities that are not readily marketable). The Trustees of the Fund have authorized Janus Capital to make liquidity determinations with respect to its securities, including Rule 144A securities, commercial paper and municipal lease obligations. Under the guidelines established by the Trustees, Janus Capital will consider the following factors: 1) the frequency of trades and quoted prices for the obligation; 2) the number of dealers willing to purchase or sell the security and the number of other potential purchasers; 3) the willingness of dealers to undertake to make a market in the security; and 4) the nature of the security and the nature of marketplace trades, including the time needed to dispose of the security, the method of soliciting offers and the mechanics of the transfer. In the case of commercial 4 paper, Janus Capital will also consider whether the paper is traded flat or in default as to principal and interest and any ratings of the paper by a Nationally Recognized Statistical Rating Organization ("NRSRO"). A foreign security that may be freely traded on or through the facilities of an offshore exchange or other securities market is not deemed to be a restricted security subject to these procedures. ZERO COUPON, PAY-IN-KIND AND STEP COUPON SECURITIES The Fund may invest up to 10% of its assets in zero coupon, pay-in-kind and step coupon securities. Zero coupon bonds are issued and traded at a discount from their face value. They do not entitle the holder to any periodic payment of interest prior to maturity. Step coupon bonds trade at a discount from their face value and pay coupon interest. The coupon rate is low for an initial period and then increases to a higher coupon rate thereafter. The discount from the face amount or par value depends on the time remaining until cash payments begin, prevailing interest rates, liquidity of the security and the perceived credit quality of the issuer. Pay-in-kind bonds normally give the issuer an option to pay cash at a coupon payment date or give the holder of the security a similar bond with the same coupon rate and a face value equal to the amount of the coupon payment that would have been made. Current federal income tax law requires holders of zero coupon securities and step coupon securities to report the portion of the original issue discount on such securities that accrues during a given year as interest income, even though the holders receive no cash payments of interest during the year. In order to qualify as a "regulated investment company" under the Internal Revenue Code of 1986 and the regulations thereunder (the "Code"), the Fund must distribute its investment company taxable income, including the original issue discount accrued on zero coupon or step coupon bonds. Because the Fund will not receive cash payments on a current basis in respect of accrued original-issue discount on zero coupon bonds or step coupon bonds during the period before interest payments begin, in some years the Fund may have to distribute cash obtained from other sources in order to satisfy the distribution requirements under the Code. The Fund might obtain such cash from selling other portfolio holdings which might cause the Fund to incur capital gains or losses on the sale. Additionally, these actions are likely to reduce the assets to which Fund expenses could be allocated and to reduce the rate of return for the Fund. In some circumstances, such sales might be necessary in order to satisfy cash distribution requirements even though investment considerations might otherwise make it undesirable for the Fund to sell the securities at the time. Generally, the market prices of zero coupon, step coupon and pay-in-kind securities are more volatile than the prices of securities that pay interest periodically and in cash and are likely to respond to changes in interest rates to a greater degree than other types of debt securities having similar maturities and credit quality. PASS-THROUGH SECURITIES The Fund may invest in various types of pass-through securities, such as mortgage-backed securities, asset-backed securities and participation interests. A pass-through security is a share or certificate of interest in a pool of debt obligations that have been repackaged by an intermediary, such as a bank or broker-dealer. The purchaser of a pass-through security receives an undivided interest in the underlying pool of securities. The issuers of the underlying securities make interest and principal payments to the intermediary which are passed through to purchasers, such as the Fund. The most common type of pass-through securities are mortgage-backed securities. Government National Mortgage Association ("GNMA") Certificates are mortgage-backed securities that evidence an undivided interest in a pool of mortgage loans. GNMA Certificates differ from bonds in that principal is paid back monthly by the borrowers over the term of the loan rather than returned in a lump sum at maturity. The Fund will generally purchase "modified pass-through" GNMA Certificates, which entitle the holder to receive a share of all interest and principal payments paid and owned on the mortgage pool, net of fees paid to the "issuer" and GNMA, regardless of whether or not the mortgagor actually makes the payment. GNMA Certificates are backed as to the timely payment of principal and interest by the full faith and credit of the U.S. government. The Federal Home Loan Mortgage Corporation ("FHLMC") issues two types of mortgage pass-through securities: mortgage participation certificates ("PCs") and guaranteed mortgage certificates ("GMCs"). PCs resemble GNMA Certificates in that each PC represents a pro rata share of all interest and principal payments made and owned on the underlying pool. FHLMC guarantees timely payments of interest on PCs and the full return of principal. GMCs also represent a pro rata interest in a pool of mortgages. However, these instruments pay interest semiannually and return principal once a year in guaranteed minimum payments. This type of security is guaranteed by FHLMC as to timely payment of principal and interest but it is not guaranteed by the full faith and credit of the U.S. government. The Federal National Mortgage Association ("FNMA") issues guaranteed mortgage pass-through certificates ("FNMA Certificates"). FNMA Certificates resemble GNMA Certificates in that each FNMA Certificate represents a pro rata share of all interest and principal payments made and owned on the underlying pool. This type of security is guaranteed by FNMA as to timely payment of principal and interest but it is not guaranteed by the full faith and credit of the U.S. government. 5 Except for GMCs, each of the mortgage-backed securities described above is characterized by monthly payments to the holder, reflecting the monthly payments made by the borrowers who received the underlying mortgage loans. The payments to the security holders (such as the Fund), like the payments on the underlying loans, represent both principal and interest. Although the underlying mortgage loans are for specified periods of time, such as 20 or 30 years, the borrowers can, and typically do, pay them off sooner. Thus, the security holders frequently receive prepayments of principal in addition to the principal that is part of the regular monthly payments. The Fund's portfolio managers will consider estimated prepayment rates in calculating the average weighted maturity of the Fund. A borrower is more likely to prepay a mortgage that bears a relatively high rate of interest. This means that in times of declining interest rates, higher yielding mortgage-backed securities held by the Fund might be converted to cash and the Fund will be forced to accept lower interest rates when that cash is used to purchase additional securities in the mortgage-backed securities sector or in other investment sectors. Additionally, prepayments during such periods will limit the Fund's ability to participate in as large a market gain as may be experienced with a comparable security not subject to prepayment. Asset-backed securities represent interests in pools of consumer loans and are backed by paper or accounts receivables originated by banks, credit card companies or other providers of credit. Generally, the originating bank or credit provider is neither the obligor or guarantor of the security and interest and principal payments ultimately depend upon payment of the underlying loans by individuals. Tax-exempt asset-backed securities include units of beneficial interests in pools of purchase contracts, financing leases, and sales agreements that may be created when a municipality enters into an installment purchase contract or lease with a vendor. Such securities may be secured by the assets purchased or leased by the municipality; however, if the municipality stops making payments, there generally will be no recourse against the vendor. The market for tax-exempt asset-backed securities is still relatively new. These obligations are likely to involve unscheduled prepayments of principal. DEPOSITARY RECEIPTS The Fund may invest in sponsored and unsponsored American Depositary Receipts ("ADRs"), which are receipts issued by an American bank or trust company evidencing ownership of underlying securities issued by a foreign issuer. ADRs, in registered form, are designed for use in U.S. securities markets. Unsponsored ADRs may be created without the participation of the foreign issuer. Holders of these ADRs generally bear all the costs of the ADR facility, whereas foreign issuers typically bear certain costs in a sponsored ADR. The bank or trust company depositary of an unsponsored ADR may be under no obligation to distribute shareholder communications received from the foreign issuer or to pass through voting rights. The Fund may also invest in European Depositary Receipts ("EDRs"), Global Depositary Receipts ("GDRs") and in other similar instruments representing securities of foreign companies. EDRs are receipts issued by a European financial institution evidencing an arrangement similar to that of ADRs. EDRs, in bearer form, are designed for use in European securities markets. OTHER INCOME-PRODUCING SECURITIES Other types of income producing securities that the Fund may purchase include, but are not limited to, the following types of securities: Variable and floating rate obligations. These types of securities have variable or floating rates of interest and, under certain limited circumstances, may have varying principal amounts. Variable and floating rate securities pay interest at rates that are adjusted periodically according to a specified formula, usually with reference to some interest rate index or market interest rate (the "underlying index"). See also "Inverse Floaters." Standby commitments. These instruments, which are similar to a put, give the Fund the option to obligate a broker, dealer or bank to repurchase a security held by the Fund at a specified price. Tender option bonds. Tender option bonds are generally long-term securities that are coupled with the option to tender the securities to a bank, broker-dealer or other financial institution at periodic intervals and receive the face value of the bond. This type of security is commonly used as a means of enhancing the security's liquidity. Inverse floaters. Inverse floaters are debt instruments whose interest bears an inverse relationship to the interest rate on another security. Certain inverse floaters may have an interest rate reset mechanism that multiplies the effects of change in the underlying index. Such mechanism may increase the volatility of the security's market value. Certain variable rate securities (including certain mortgage-backed securities) pay interest at a rate that varies inversely to prevailing short-term interest rates (sometimes referred to as inverse floaters). For example, upon reset the interest rate payable on a security may go down when the underlying index has risen. The Fund will not invest more than 5% of its assets in inverse floaters. The Fund will purchase standby commitments, tender option bonds and instruments with demand features primarily for the purpose of increasing the liquidity of its portfolio. 6 HIGH-YIELD/HIGH-RISK SECURITIES The Fund intends to invest less than 35% of its net assets in debt securities that are rated below investment grade (e.g., securities rated BB or lower by Standard & Poor's Ratings Services ("Standard & Poor's") or Ba or lower by Moody's Investors Service, Inc. ("Moody's")). Lower rated bonds involve a higher degree of credit risk, which is the risk that the issuer will not make interest or principal payments when due. In the event of an unanticipated default, the Fund would experience a reduction in its income, and could expect a decline in the market value of the securities so affected. The Fund may also invest in unrated debt securities of foreign and domestic issuers. Unrated debt, while not necessarily of lower quality than rated securities, may not have as broad a market. Sovereign debt of foreign governments is generally rated by country. Because these ratings do not take into account individual factors relevant to each issue and may not be updated regularly, Janus Capital may treat such securities as unrated debt. Because of the size and perceived demand of the issue, among other factors, certain municipalities may not incur the costs of obtaining a rating. The Fund's portfolio manager will analyze the credit worthiness of the issuer, as well as any financial institution or other party responsible for payments on the security, in determining whether to purchase unrated municipal bonds. Unrated debt securities will be included in the 35% limit unless the portfolio managers deem such securities to be the equivalent of investment grade securities. REPURCHASE AND REVERSE REPURCHASE AGREEMENTS In a repurchase agreement, the Fund purchases a security and simultaneously commits to resell that security to the seller at an agreed upon price on an agreed upon date within a number of days (usually not more than seven) from the date of purchase. The resale price reflects the purchase price plus an agreed upon incremental amount that is unrelated to the coupon rate or maturity of the purchased security. A repurchase agreement involves the obligation of the seller to pay the agreed upon price, which obligation is in effect secured by the value (at least equal to the amount of the agreed upon resale price and marked-to-market daily) of the underlying security or "collateral." The Fund may engage in a repurchase agreement with respect to any security in which it is authorized to invest. A risk associated with repurchase agreements is the failure of the seller to repurchase the securities as agreed, which may cause the Fund to suffer a loss if the market value of such securities declines before they can be liquidated on the open market. In the event of bankruptcy or insolvency of the seller, the Fund may encounter delays and incur costs in liquidating the underlying security. Repurchase agreements that mature in more than seven days will be subject to the 15% limit on illiquid investments. While it is possible to eliminate all risks from these transactions, it is the policy of the Fund to limit repurchase agreements to those parties whose creditworthiness has been reviewed and found satisfactory by Janus Capital. The Fund may use reverse repurchase agreements to provide cash to satisfy unusually heavy redemption requests or for other temporary or emergency purposes without the necessity of selling portfolio securities. In a reverse repurchase agreement, the Fund sells a portfolio security to another party, such as a bank or broker-dealer, in return for cash and agrees to repurchase the instrument at a particular price and time. While a reverse repurchase agreement is outstanding, the Fund will maintain cash and appropriate liquid assets in a segregated custodial account to cover its obligation under the agreement. The Fund will enter into reverse repurchase agreements only with parties that Janus Capital deems creditworthy. Using reverse repurchase agreements to earn additional income involves the risk that the interest earned on the invested proceeds is less than the expense of the reverse repurchase agreement transaction. This technique may also have a leveraging effect on the Fund's portfolio, although the Fund's intent to segregate assets in the amount of the reverse repurchase agreement minimizes this effect. FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS Futures Contracts. The Fund may enter into contracts for the purchase or sale for future delivery of fixed-income securities, foreign currencies or contracts based on financial indices, including indices of U.S. government securities, foreign government securities, equity or fixed-income securities. U.S. futures contracts are traded on exchanges which have been designated "contract markets" by the CFTC and must be executed through a futures commission merchant ("FCM"), or brokerage firm, which is a member of the relevant contract market. Through their clearing corporations, the exchanges guarantee performance of the contracts as between the clearing members of the exchange. The buyer or seller of a futures contract is not required to deliver or pay for the underlying instrument unless the contract is held until the delivery date. However, both the buyer and seller are required to deposit "initial margin" for the benefit of the FCM when the contract is entered into. Initial margin deposits are equal to a percentage of the contract's value, as set by the exchange on which the contract is traded, and may be maintained in cash or certain other liquid assets by the Fund's custodian for the benefit of the FCM. Initial margin payments are similar to good faith deposits or performance bonds. Unlike margin extended by a securities broker, initial margin payments do not constitute purchasing securities on margin for purposes of the Fund's investment limitations. If the value of either party's position declines, that party will be required to make additional "variation margin" payments for the benefit of the FCM to settle the change in value on a daily basis. The party that has a gain may be entitled to receive all or a portion of this amount. In the event of the bankruptcy of the FCM that holds margin on behalf of the Fund, the Fund may be entitled to a return of margin owed to the Fund only in proportion to the amount received by the 7 FCM's other customers. Janus Capital will attempt to minimize the risk by careful monitoring of the creditworthiness of the FCMs with which the Fund does business and by depositing margin payments in a segregated account with the Fund's custodian. The Fund intends to comply with guidelines of eligibility for exclusion from the definition of the term "commodity pool operator" adopted by the CFTC and the National Futures Association, which regulate trading in the futures markets. The Fund will use futures contracts and related options primarily for bona fide hedging purposes within the meaning of CFTC regulations. To the extent that the Fund holds positions in futures contracts and related options that do not fall within the definition of bona fide hedging transactions, the aggregate initial margin and premiums required to establish such positions will not exceed 5% of the fair market value of the Fund's net assets, after taking into account unrealized profits and unrealized losses on any such contracts it has entered into. Although the Fund will segregate cash and liquid assets in an amount sufficient to cover its open futures obligations, the segregated assets would be available to the Fund immediately upon closing out the futures position, while settlement of securities transactions could take several days. However, because the Fund's cash that may otherwise be invested would be held uninvested or invested in other liquid assets so long as the futures position remains open, the Fund's return could be diminished due to the opportunity losses of foregoing other potential investments. The Fund's primary purpose in entering into futures contracts is to protect the Fund from fluctuations in the value of securities or interest rates without actually buying or selling the underlying debt or equity security. For example, if the Fund anticipates an increase in the price of stocks, and it intends to purchase stocks at a later time, the Fund could enter into a futures contract to purchase a stock index as a temporary substitute for stock purchases. If an increase in the market occurs that influences the stock index as anticipated, the value of the futures contracts will increase, thereby serving as a hedge against the Fund not participating in a market advance. This technique is sometimes known as an anticipatory hedge. To the extent the Fund enters into futures contracts for this purpose, the segregated assets maintained to cover the Fund's obligations with respect to the futures contracts will consist of other liquid assets from its portfolio in an amount equal to the difference between the contract price and the aggregate value of the initial and variation margin payments made by the Fund with respect to the futures contracts. Conversely, if the Fund holds stocks and seeks to protect itself from a decrease in stock prices, the Fund might sell stock index futures contracts, thereby hoping to offset the potential decline in the value of its portfolio securities by a corresponding increase in the value of the futures contract position The Fund could protect against a decline in stock prices by selling portfolio securities and investing in money market instruments, but the use of futures contracts enables it to maintain a defensive position without having to sell portfolio securities. If the Fund owns Treasury bonds and the portfolio managers expect interest rates to increase, the Fund may take a short position in interest rate futures contracts. Taking such a position would have much the same effect as the Fund selling Treasury bonds in its portfolio. If interest rates increase as anticipated, the value of the Treasury bonds would decline, but the value of the Fund's interest rate futures contract will increase, thereby keeping the net asset value of the Fund from declining as much as it may have otherwise. If, on the other hand, the portfolio managers expect interest rates to decline, the Fund may take a long position in interest rate futures contracts in anticipation of later closing out the futures position and purchasing bonds. Although the Fund can accomplish similar results by buying securities with long maturities and selling securities with short maturities, given the greater liquidity of the futures market than the cash market, it may be possible to accomplish the same result more easily and more quickly by using futures contracts as an investment tool to reduce risk. The ordinary spreads between prices in the cash and futures markets, due to differences in the nature of those markets, are subject to distortions. First, all participants in the futures market are subject to initial margin and variation margin requirements. Rather than meeting additional variation margin requirements, investors may close out futures contracts through offsetting transactions which could distort the normal price relationship between the cash and futures markets. Second, the liquidity of the futures market depends on participants entering into offsetting transactions rather than making or taking delivery of the instrument underlying a futures contract. To the extent participants decide to make or take delivery, liquidity in the futures market could be reduced and prices in the futures market distorted. Third, from the point of view of speculators, the margin deposit requirements in the futures market are less onerous than margin requirements in the securities market. Therefore, increased participation by speculators in the futures market may cause temporary price distortions. Due to the possibility of the foregoing distortions, a correct forecast of general price trends by the portfolio managers still may not result in a successful use of futures. Futures Contracts Entail Risks. Although the Fund believes that use of such contracts will benefit the Fund, the Fund's overall performance could be worse than if the Fund had not entered into futures contracts if the portfolio managers' investment judgement proves incorrect. For example, if the Fund has hedged against the effects of a possible decrease in prices of securities held in its portfolio and prices increase instead, the Fund will lose part or all of the benefit of the increased value of these securities because of offsetting losses in its futures positions. In addition, if the Fund has insufficient cash, it may have to sell securities from its portfolio to meet daily variation margin requirements. Those sales may be, but will not necessarily be, at increased prices which reflect the rising market and may occur at a time when the sales are disadvantageous to the Fund. 8 The prices of futures contracts depend primarily on the value of their underlying instruments. Because there are a limited number of types of futures contracts, it is possible that the standardized futures contracts available to the Fund will not match exactly the Fund's current or potential investments. The Fund may buy and sell futures contracts based on underlying instruments with different characteristics from the securities in which it typically invests - for example, by hedging investments in portfolio securities with a futures contract based on a broad index of securities which involves a risk that the futures position will not correlate precisely with the performance of the Fund's investments. Futures prices can also diverge from the prices of their underlying instruments, even if the underlying instruments closely correlate with the Fund's investments. Futures prices are affected by factors such as current and anticipated short-term interest rates, changes in volatility of the underlying instruments and the time remaining until expiration of the contract. Those factors may affect securities prices differently from futures prices. Imperfect correlations between the Fund's investments and its futures positions also may result from differing levels of demand in the futures markets and the securities markets, from structural differences in how futures and securities are traded, and from imposition of daily price fluctuation limits for futures contracts. The Fund may buy or sell futures contracts with a greater or lesser value than the securities it wishes to hedge or is considering purchasing in order to attempt to compensate for differences in historical volatility between the futures contract and the securities, although this may not be successful in all cases. If price changes in the Fund's futures positions are poorly correlated with its other investments, its futures positions may fail to produce desired gains or result in losses that are not offset by the gains in the Fund's other investments. Because futures contracts are generally settled within a day from the date they are closed out, compared with a settlement period of three days for some types of securities, the futures markets can provide superior liquidity to the securities markets. Nevertheless, there is no assurance that a liquid secondary market will exist for any particular futures contract at any particular time. In addition, futures exchanges may establish daily price fluctuation limits for futures contracts and may halt trading if a contract's price moves upward or downward more than the limit in a given day. On volatile trading days when the price fluctuation limit is reached, it may be impossible for the Fund to enter into new positions or close out existing positions. If the secondary market for a futures contract is not liquid because of price fluctuation limits or otherwise, the Fund may not be able to promptly liquidate unfavorable futures positions and potentially could be required to continue to hold a futures position until the delivery date, regardless of changes in its value. As a result, the Fund's access to other assets held to cover its futures positions also could be impaired. Options on Futures Contracts. The Fund may buy and write put and call options on futures contracts. An option on a future gives the Fund the right (but not the obligation) to buy or sell a futures contract at a specified price on or before a specified date. The purchase of a call option on a futures contract is similar in some respects to the purchase of a call option on an individual security. Depending on the pricing of the option compared to either the price of the futures contract upon which it is based or the price of the underlying instrument, ownership of the option may or may not be less risky than ownership of the futures contract or the underlying instrument. As with the purchase of futures contracts, when the Fund is not fully invested it may buy a call option on a futures contract to hedge against a market advance. The writing of a call option on a futures contract constitutes a partial hedge against declining prices of the security or foreign currency which is deliverable under, or of the index comprising, the futures contract. If the future's price at the expiration of the option is below the exercise price, the Fund will retain the full amount of the option premium which provides a partial hedge against any decline that may have occurred in the Fund's portfolio holdings. The writing of a put option on a futures contract constitutes a partial hedge against increasing prices of the security or foreign currency which is deliverable under, or of the index comprising, the futures contract. If the futures' price at expiration of the option is higher than the exercise price, the Fund will retain the full amount of the option premium which provides a partial hedge against any increase in the price of securities which the Fund is considering buying. If a call or put option the Fund has written is exercised, the Fund will incur a loss which will be reduced by the amount of the premium it received. Depending on the degree of correlation between the change in the value of its portfolio securities and changes in the value of the futures positions, the Fund's losses from existing options on futures may to some extent be reduced or increased by changes in the value of portfolio securities. The purchase of a put option on a futures contract is similar in some respects to the purchase of protective put options on portfolio securities. For example, the Fund may buy a put option on a futures contract to hedge its portfolio against the risk of falling prices or rising interest rates. The amount of risk the Fund assumes when it buys an option on a futures contract is the premium paid for the option plus related transaction costs. In addition to the correlation risks discussed above, the purchase of an option also entails the risk that changes in the value of the underlying futures contract will not be fully reflected in the value of the options bought. Forward Contracts. A forward contract is an agreement between two parties in which one party is obligated to deliver a stated amount of a stated asset at a specified time in the future and the other party is obligated to pay a specified amount for the assets at the time of delivery. The Fund may enter into forward contracts to purchase and sell government securities, equity or income securities, foreign currencies or other financial instruments. Forward contracts generally are traded in an interbank 9 market conducted directly between traders (usually large commercial banks) and their customers. Unlike futures contracts, which are standardized contracts, forward contracts can be specifically drawn to meet the needs of the parties that enter into them. The parties to a forward contract may agree to offset or terminate the contract before its maturity, or may hold the contract to maturity and complete the contemplated exchange. The following discussion summarizes the Fund's principal uses of forward foreign currency exchange contracts ("forward currency contracts"). The Fund may enter into forward currency contracts with stated contract values of up to the value of the Fund's assets. A forward currency contract is an obligation to buy or sell an amount of a specified currency for an agreed price (which may be in U.S. dollars or a foreign currency). The Fund will exchange foreign currencies for U.S. dollars and for other foreign currencies in the normal course of business and may buy and sell currencies through forward currency contracts in order to fix a price for securities it has agreed to buy or sell ("transaction hedge"). The Fund also may hedge some or all of its investments denominated in a foreign currency or exposed to foreign currency fluctuations against a decline in the value of that currency relative to the U.S. dollar by entering into forward currency contracts to sell an amount of that currency (or a proxy currency whose performance is expected to replicate or exceed the performance of that currency relative to the U.S. dollar) approximating the value of some or all of its portfolio securities denominated in that currency ("position hedge") or by participating in options or futures contracts with respect to the currency. The Fund also may enter into a forward currency contract with respect to a currency where the Fund is considering the purchase or sale of investments denominated in that currency but has not yet selected the specific investments ("anticipatory hedge"). In any of these circumstances the Fund may, alternatively, enter into a forward currency contract to purchase or sell one foreign currency for a second currency that is expected to perform more favorably relative to the U.S. dollar if the portfolio managers believe there is a reasonable degree of correlation between movements in the two currencies ("cross-hedge"). These types of hedging minimize the effect of currency appreciation as well as depreciation, but do not eliminate fluctuations in the underlying U.S. dollar equivalent value of the proceeds of or rates of return on the Fund's foreign currency denominated portfolio securities. The matching of the increase in value of a forward contract and the decline in the U.S. dollar equivalent value of the foreign currency denominated asset that is the subject of the hedge generally will not be precise. Shifting the Fund's currency exposure from one foreign currency to another removes the Fund's opportunity to profit from increases in the value of the original currency and involves a risk of increased losses to the Fund if its portfolio managers' projection of future exchange rates is inaccurate. Proxy hedges and cross-hedges may result in losses if the currency used to hedge does not perform similarly to the currency in which hedged securities are denominated. Unforeseen changes in currency prices may result in poorer overall performance for the Fund than if it had not entered into such contracts. The Fund will cover outstanding forward currency contracts by maintaining liquid portfolio securities denominated in or whose value is tied to, the currency underlying the forward contract or the currency being hedged. To the extent that the Fund is not able to cover its forward currency positions with underlying portfolio securities, the Fund's custodian will segregate cash or other liquid assets having a value equal to the aggregate amount of the Fund's commitments under forward contracts entered into with respect to position hedges, cross-hedges and anticipatory hedges. If the value of the securities used to cover a position or the value of segregated assets declines, the Fund will find alternative cover or segregate additional cash or liquid assets on a daily basis so that the value of the covered and segregated assets will be equal to the amount of the Fund's commitments with respect to such contracts. As an alternative to segregating assets, the Fund may buy call options permitting the Fund to buy the amount of foreign currency being hedged by a forward sale contract or the Fund may buy put options permitting it to sell the amount of foreign currency subject to a forward buy contract. While forward contracts are not currently regulated by the CFTC, the CFTC may in the future assert authority to regulate forward contacts. In such event, the Fund's ability to utilize forward contracts may be restricted. In addition, the Fund may not always be able to enter into forward contracts at attractive prices and may be limited in its ability to use these contracts to hedge Fund assets. Options on Foreign Currencies. The Fund may buy and write options on foreign currencies in a manner similar to that in which futures or forward contracts on foreign currencies will be utilized. For example, a decline in the U.S. dollar value of a foreign currency in which portfolio securities are denominated will reduce the U.S. dollar value of such securities, even if their value in the foreign currency remains constant. In order to protect against such diminutions in the value of portfolio securities, the Fund may buy put options on the foreign currency. If the value of the currency declines, the Fund will have the right to sell such currency for a fixed amount in U.S. dollars, thereby offsetting, in whole or in part, the adverse effect on its portfolio. Conversely, when a rise in the U.S. dollar value of a currency in which securities to be acquired are denominated is projected, thereby increasing the cost of such securities, the Fund may buy call options on the foreign currency. The purchase of such options could offset, at least partially, the effects of the adverse movements in exchange rates. As in the case of other types of options, however, the benefit to the Fund from purchases of foreign currency options will be reduced by the amount of the premium and related transaction costs. In addition, if currency exchange rates do not move in the direction or to the extent desired, the Fund could sustain losses on transactions in foreign currency options that would require the Fund to forego a portion or all of the benefits of advantageous changes in those rates. 10 The Fund may also write options on foreign currencies. For example, to hedge against a potential decline in the U.S. dollar value of foreign currency denominated securities due to adverse fluctuations in exchange rates, the Fund could, instead of purchasing a put option, write a call option on the relevant currency. If the expected decline occurs, the option will most likely not be exercised and the decline in value of portfolio securities will be offset by the amount of the premium received. Similarly, instead of purchasing a call option to hedge against a potential increase in the U.S. dollar cost of securities to be acquired, the Fund could write a put option on the relevant currency which, if rates move in the manner projected, will expire unexercised and allow the Fund to hedge the increased cost up to the amount of the premium. As in the case of other types of options, however, the writing of a foreign currency option will constitute only a partial hedge up to the amount of the premium. If exchange rates do not move in the expected direction, the option may be exercised and the Fund would be required to buy or sell the underlying currency at a loss which may not be offset by the amount of the premium. Through the writing of options on foreign currencies, the Fund also may lose all or a portion of the benefits which might otherwise have been obtained from favorable movements in exchange rates. The Fund may write covered call options on foreign currencies. A call option written on a foreign currency by the Fund is "covered" if the Fund owns the foreign currency underlying the call or has an absolute and immediate right to acquire that foreign currency without additional cash consideration (or for additional cash consideration held in a segregated account by its custodian) upon conversion or exchange of other foreign currencies held in its portfolio. A call option is also covered if the Fund has a call on the same foreign currency in the same principal amount as the call written if the exercise price of the call held (i) is equal to or less than the exercise price of the call written or (ii) is greater than the exercise price of the call written, if the difference is maintained by the Fund in cash or other liquid assets in a segregated account with the Fund's custodian. The Fund also may write call options on foreign currencies for cross-hedging purposes. A call option on a foreign currency is for cross-hedging purposes if it is designed to provide a hedge against a decline due to an adverse change in the exchange rate in the U.S. dollar value of a security which the Fund owns or has the right to acquire and which is denominated in the currency underlying the option. Call options on foreign currencies which are entered into for cross-hedging purposes are not covered. However, in such circumstances, the Fund will collateralize the option by segregating cash or other liquid assets in an amount not less than the value of the underlying foreign currency in U.S. dollars marked-to-market daily. Options on Securities. In an effort to increase current income and to reduce fluctuations in net asset value, the Fund may write covered put and call options and buy put and call options on securities that are traded on United States and foreign securities exchanges and over-the-counter. The Fund may write and buy options on the same types of securities that the Fund may purchase directly. A put option written by the Fund is "covered" if the Fund (i) segregates cash not available for investment or other liquid assets with a value equal to the exercise price of the put with the Fund's custodian or (ii) holds a put on the same security and in the same principal amount as the put written and the exercise price of the put held is equal to or greater than the exercise price of the put written. The premium paid by the buyer of an option will reflect, among other things, the relationship of the exercise price to the market price and the volatility of the underlying security, the remaining term of the option, supply and demand and interest rates. A call option written by the Fund is "covered" if the Fund owns the underlying security covered by the call or has an absolute and immediate right to acquire that security without additional cash consideration (or for additional cash consideration held in a segregated account by the Fund's custodian) upon conversion or exchange of other securities held in its portfolio. A call option is also deemed to be covered if the Fund holds a call on the same security and in the same principal amount as the call written and the exercise price of the call held (i) is equal to or less than the exercise price of the call written or (ii) is greater than the exercise price of the call written if the difference is maintained by the Fund in cash and other liquid assets in a segregated account with its custodian. The Fund also may write call options that are not covered for cross-hedging purposes. The Fund collateralizes its obligation under a written call option for cross-hedging purposes by segregating cash or other liquid assets in an amount not less than the market value of the underlying security, marked-to-market daily. The Fund would write a call option for cross-hedging purposes, instead of writing a covered call option, when the premium to be received from the cross-hedge transaction would exceed that which would be received from writing a covered call option and its portfolio managers believe that writing the option would achieve the desired hedge. The writer of an option may have no control over when the underlying securities must be sold, in the case of a call option, or bought, in the case of a put option, since with regard to certain options, the writer may be assigned an exercise notice at any time prior to the termination of the obligation. Whether or not an option expires unexercised, the writer retains the amount of the premium. This amount, of course, may, in the case of a covered call option, be offset by a decline in the market value of the underlying security during the option period. If a call option is exercised, the writer experiences a profit or loss from the sale of the underlying security. If a put option is exercised, the writer must fulfill the obligation to buy the underlying security at the exercise price, which will usually exceed the then market value of the underlying security. 11 The writer of an option that wishes to terminate its obligation may effect a "closing purchase transaction." This is accomplished by buying an option of the same series as the option previously written. The effect of the purchase is that the writer's position will be canceled by the clearing corporation. However, a writer may not effect a closing purchase transaction after being notified of the exercise of an option. Likewise, an investor who is the holder of an option may liquidate its position by effecting a "closing sale transaction." This is accomplished by selling an option of the same series as the option previously bought. There is no guarantee that either a closing purchase or a closing sale transaction can be effected. In the case of a written call option, effecting a closing transaction will permit the Fund to write another call option on the underlying security with either a different exercise price or expiration date or both. In the case of a written put option, such transaction will permit the Fund to write another put option to the extent that the exercise price is secured by other liquid assets. Effecting a closing transaction also will permit the Fund to use the cash or proceeds from the concurrent sale of any securities subject to the option for other investments. If the Fund desires to sell a particular security from its portfolio on which it has written a call option, the Fund will effect a closing transaction prior to or concurrent with the sale of the security. The Fund will realize a profit from a closing transaction if the price of the purchase transaction is less than the premium received from writing the option or the price received from a sale transaction is more than the premium paid to buy the option. The Fund will realize a loss from a closing transaction if the price of the purchase transaction is more than the premium received from writing the option or the price received from a sale transaction is less than the premium paid to buy the option. Because increases in the market of a call option generally will reflect increases in the market price of the underlying security, any loss resulting from the repurchase of a call option is likely to be offset in whole or in part by appreciation of the underlying security owned by the Fund. An option position may be closed out only where a secondary market for an option of the same series exists. If a secondary market does not exist, the Fund may not be able to effect closing transactions in particular options and the Fund would have to exercise the options in order to realize any profit. If the Fund is unable to effect a closing purchase transaction in a secondary market, it will not be able to sell the underlying security until the option expires or it delivers the underlying security upon exercise. The absence of a liquid secondary market may be due to the following: (i) insufficient trading interest in certain options, (ii) restrictions imposed by a national securities exchange ("Exchange") on which the option is traded on opening or closing transactions or both, (iii) trading halts, suspensions or other restrictions imposed with respect to particular classes or series of options or underlying securities, (iv) unusual or unforeseen circumstances that interrupt normal operations on an Exchange, (v) the facilities of an Exchange or of the Options Clearing Corporation ("OCC") may not at all times be adequate to handle current trading volume, or (vi) one or more Exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of options (or a particular class or series of options), in which event the secondary market on that Exchange (or in that class or series of options) would cease to exist, although outstanding options on that Exchange that had been issued by the OCC as a result of trades on that Exchange would continue to be exercisable in accordance with their terms. The Fund may write options in connection with buy-and-write transactions. In other words, the Fund may buy a security and then write a call option against that security. The exercise price of such call will depend upon the expected price movement of the underlying security. The exercise price of a call option may be below ("in-the-money"), equal to ("at-the-money") or above ("out-of-the-money") the current value of the underlying security at the time the option is written. Buy-and-write transactions using in-the-money call options may be used when it is expected that the price of the underlying security will remain flat or decline moderately during the option period. Buy-and-write transactions using at-the-money call options may be used when it is expected that the price of the underlying security will remain fixed or advance moderately during the option period. Buy-and-write transactions using out-of-the-money call options may be used when it is expected that the premiums received from writing the call option plus the appreciation in the market price of the underlying security up to the exercise price will be greater than the appreciation in the price of the underlying security alone. If the call options are exercised in such transactions, the Fund's maximum gain will be the premium received by it for writing the option, adjusted upwards or downwards by the difference between the Fund's purchase price of the security and the exercise price. If the options are not exercised and the price of the underlying security declines, the amount of such decline will be offset by the amount of premium received. The writing of covered put options is similar in terms of risk and return characteristics to buy-and-write transactions. If the market price of the underlying security rises or otherwise is above the exercise price, the put option will expire worthless and the Fund's gain will be limited to the premium received. If the market price of the underlying security declines or otherwise is below the exercise price, the Fund may elect to close the position or take delivery of the security at the exercise price and the Fund's return will be the premium received from the put options minus the amount by which the market price of the security is below the exercise price. The Fund may buy put options to hedge against a decline in the value of its portfolio. By using put options in this way, the Fund will reduce any profit it might otherwise have realized in the underlying security by the amount of the premium paid for the put option and by transaction costs. 12 The Fund may buy call options to hedge against an increase in the price of securities that it may buy in the future. The premium paid for the call option plus any transaction costs will reduce the benefit, if any, realized by the Fund upon exercise of the option, and, unless the price of the underlying security rises sufficiently, the option may expire worthless to the Fund. Eurodollar Instruments. The Fund may make investments in Eurodollar instruments. Eurodollar instruments are U.S. dollar-denominated futures contracts or options thereon which are linked to the London Interbank Offered Rate ("LIBOR"), although foreign currency-denominated instruments are available from time to time. Eurodollar futures contracts enable purchasers to obtain a fixed rate for the lending of funds and sellers to obtain a fixed rate for borrowings. The Fund might use Eurodollar futures contracts and options thereon to hedge against changes in LIBOR, to which many interest rate swaps and fixed-income instruments are linked. Swaps and Swap-Related Products. The Fund may enter into interest rate swaps, caps and floors on either an asset-based or liability-based basis, depending upon whether it is hedging its assets or its liabilities, and will usually enter into interest rate swaps on a net basis (i.e., the two payment streams are netted out, with the Fund receiving or paying, as the case may be, only the net amount of the two payments). The net amount of the excess, if any, of the Fund's obligations over its entitlement with respect to each interest rate swap will be calculated on a daily basis and an amount of cash or other liquid assets having an aggregate net asset value at least equal to the accrued excess will be maintained in a segregated account by the Fund's custodian. If the Fund enters into an interest rate swap on other than a net basis, it would maintain a segregated account in the full amount accrued on a daily basis of its obligations with respect to the swap. The Fund will not enter into any interest rate swap, cap or floor transaction unless the unsecured senior debt or the claims-paying ability of the other party thereto is rated in one of the three highest rating categories of at least one NRSRO at the time of entering into such transaction. Janus Capital will monitor the creditworthiness of all counterparties on an ongoing basis. If there is a default by the other party to such a transaction, the Fund will have contractual remedies pursuant to the agreements related to the transaction. The swap market has grown substantially in recent years with a large number of banks and investment banking firms acting both as principals and as agents utilizing standardized swap documentation. Janus Capital has determined that, as a result, the swap market has become relatively liquid. Caps and floors are more recent innovations for which standardized documentation has not yet been developed and, accordingly, they are less liquid than swaps. To the extent the Fund sells (i.e., writes) caps and floors, it will segregate cash or other liquid assets having an aggregate net asset value at least equal to the full amount, accrued on a daily basis, of its obligations with respect to any caps or floors. There is no limit on the amount of interest rate swap transactions that may be entered into by the Fund. These transactions may in some instances involve the delivery of securities or other underlying assets by the Fund or its counterparty to collateralize obligations under the swap. Under the documentation currently used in those markets, the risk of loss with respect to interest rate swaps is limited to the net amount of the payments that the Fund is contractually obligated to make. If the other party to an interest rate swap that is not collateralized defaults, the Fund would risk the loss of the net amount of the payments that it contractually is entitled to receive. The Fund may buy and sell (i.e., write) caps and floors without limitation, subject to the segregation requirement described above. Additional Risks of Options on Foreign Currencies, Forward Contracts and Foreign Instruments. Unlike transactions entered into by the Fund in futures contracts, options on foreign currencies and forward contracts are not traded on contract markets regulated by the CFTC or (with the exception of certain foreign currency options) by the SEC. To the contrary, such instruments are traded through financial institutions acting as market-makers, although foreign currency options are also traded on certain Exchanges, such as the Philadelphia Stock Exchange and the Chicago Board Options Exchange, subject to SEC regulation. Similarly, options on currencies may be traded over-the-counter. In an over-the-counter trading environment, many of the protections afforded to Exchange participants will not be available. For example, there are no daily price fluctuation limits, and adverse market movements could therefore continue to an unlimited extent over a period of time. Although the buyer of an option cannot lose more than the amount of the premium plus related transaction costs, this entire amount could be lost. Moreover, an option writer and a buyer or seller of futures or forward contracts could lose amounts substantially in excess of any premium received or initial margin or collateral posted due to the potential additional margin and collateral requirements associated with such positions. Options on foreign currencies traded on Exchanges are within the jurisdiction of the SEC, as are other securities traded on Exchanges. As a result, many of the protections provided to traders on organized Exchanges will be available with respect to such transactions. In particular, all foreign currency option positions entered into on an Exchange are cleared and guaranteed by the OCC, thereby reducing the risk of counterparty default. Further, a liquid secondary market in options traded on an Exchange may be more readily available than in the over-the-counter market, potentially permitting the Fund to liquidate open positions at a profit prior to exercise or expiration, or to limit losses in the event of adverse market movements. The purchase and sale of exchange-traded foreign currency options, however, is subject to the risks of the availability of a liquid secondary market described above, as well as the risks regarding adverse market movements, margining of options written, the nature of the foreign currency market, possible intervention by governmental authorities and the effects of other political 13 and economic events. In addition, exchange-traded options on foreign currencies involve certain risks not presented by the over-the-counter market. For example, exercise and settlement of such options must be made exclusively through the OCC, which has established banking relationships in applicable foreign countries for this purpose. As a result, the OCC may, if it determines that foreign governmental restrictions or taxes would prevent the orderly settlement of foreign currency option exercises, or would result in undue burdens on the OCC or its clearing member, impose special procedures on exercise and settlement, such as technical changes in the mechanics of delivery of currency, the fixing of dollar settlement prices or prohibitions on exercise. In addition, options on U.S. government securities, futures contracts, options on futures contracts, forward contracts and options on foreign currencies may be traded on foreign exchanges and over-the-counter in foreign countries. Such transactions are subject to the risk of governmental actions affecting trading in or the prices of foreign currencies or securities. The value of such positions also could be adversely affected by (i) other complex foreign political and economic factors, (ii) lesser availability than in the United States of data on which to make trading decisions, (iii) delays in the Fund's ability to act upon economic events occurring in foreign markets during non-business hours in the United States, (iv) the imposition of different exercise and settlement terms and procedures and margin requirements than in the United States, and (v) low trading volume. INVESTMENT ADVISER As stated in the Prospectus, the Fund has an Investment Advisory Agreement with Janus Capital, 100 Fillmore Street, Denver, Colorado 80206-4928. The Advisory Agreement provides that Janus Capital will furnish continuous advice and recommendations concerning the Fund's investments, provide office space for the Fund, and pay the salaries, fees and expenses of all Fund officers and of those Trustees who are affiliated with Janus Capital. Janus Capital also may make payments to selected broker-dealer firms or institutions which perform recordkeeping or other services with respect to shareholder accounts. The minimum aggregate size required for eligibility for such payments, and the factors in selecting the broker-dealer firms and institutions to which they will be made, are determined from time to time by Janus Capital. Janus Capital is also authorized to perform the management and administrative services necessary for the operation of the Fund. The Fund pays custodian and transfer agent fees and expenses, brokerage commissions and dealer spreads and other expenses in connection with the execution of portfolio transactions, legal and accounting expenses, interest and taxes, registration fees, expenses of shareholders' meetings and reports to shareholders, fees and expenses of Trustees who are not affiliated with Janus Capital, costs of preparing, printing and mailing the Fund's Prospectus and SAI to current shareholders, and other costs of complying with applicable laws regulating the sale of Fund shares. Pursuant to the Advisory Agreement, Janus Capital furnishes certain other services, including net asset value determination and Fund accounting, recordkeeping, and blue sky registration and monitoring services, for which the Fund may reimburse Janus Capital for its costs. For the period from inception through June 30, 1997, the Fund agreed to compensate Janus Capital for its services by the monthly payment of a fee at the annual rate of 1% of the first $30 million of the Fund's average daily net assets, 0.75% of the next $270 million of the Fund's average daily net assets, 0.70% of the next $200 million of the Fund's average daily net assets, and 0.65% of the average daily net assets of the Fund in excess of $500 million. As of July 1, 1997, the Fund has agreed to compensate Janus Capital for its services by the monthly payment of a fee at the annual rate of 0.75% on the first $300 million of the Fund's average daily net assets, 0.70% on the next $200 million of the Fund's average daily net assets, and 0.65% of the average daily net assets of the Fund in excess of $500 million. For the fiscal period ended April 30, 1997, the investment advisory fee was $251,309. Janus Capital did not waive any portion of its fee during this period. The current Advisory Agreement became effective on September 10, 1996, and it will continue in effect until June 16, 1998, and thereafter from year to year so long as such continuance is approved annually by a majority of the Fund's Trustees who are not parties to the Advisory Agreement or interested persons of any such party, and by either a majority of the outstanding voting shares or the Trustees of the Fund. The Advisory Agreement i) may be terminated without the payment of any penalty by the Fund or Janus Capital on 60 days' written notice; ii) terminates automatically in the event of its assignment; and iii) generally, may not be amended without the approval by vote of a majority of the Trustees of the Fund, including the Trustees who are not interested persons of the Fund or Janus Capital and, to the extent required by the 1940 Act, the vote of a majority of the outstanding voting securities of the Fund. Janus Capital also performs investment advisory services for other mutual funds, and for individual, charitable, corporate and retirement accounts. Investment decisions for each account managed by Janus Capital, including the Fund, are made independently from those for any other account that is or may in the future become managed by Janus Capital or its affiliates. If, however, a number of accounts managed by Janus Capital are contemporaneously engaged in the purchase or sale of the same security, the orders may be aggregated and/or the transactions may be averaged as to price and allocated equitably to each account. In some cases, this policy might adversely affect the price paid or received by an account or the size of the position obtained or liquidated for an account. Pursuant to an exemptive order granted by the SEC, the Fund and other funds advised by Janus Capital may also transfer daily uninvested cash balances into one or more joint trading accounts. Assets in the joint trading accounts are invested in money market instruments and the proceeds are allocated to the participating Funds on a pro rata basis. 14 Each account managed by Janus Capital has its own investment objective and policies and is managed accordingly by a particular portfolio manager or team of portfolio managers. As a result, from time to time two or more different managed accounts may pursue divergent investment strategies with respect to investments or categories of investments. As indicated in the Prospectus, Janus Capital does not permit portfolio managers to purchase and sell securities for their own accounts except under the limited exceptions contained in Janus Capital's policy regarding personal investing by directors, officers and employees of Janus Capital and the Fund. The policy requires investment personnel and officers of Janus Capital, inside directors of Janus Capital and the Fund and other designated persons deemed to have access to current trading information to pre-clear all transactions in securities not otherwise exempt under the policy. Requests for trading authority will be denied when, among other reasons, the proposed personal transaction would be contrary to the provisions of the policy or would be deemed to adversely affect any transaction known to be under consideration for or to have been effected on behalf of any client account, including the Fund. In addition to the pre-clearance requirement described above, the policy subjects investment personnel, officers and directors/Trustees of Janus Capital and the Fund to various trading restrictions and reporting obligations. All reportable transactions are reviewed for compliance with Janus Capital's policy. Those persons also may be required under certain circumstances to forfeit their profits made from personal trading. The provisions of the policy are administered by and subject to exceptions authorized by Janus Capital. Kansas City Southern Industries, Inc., a publicly traded holding company whose primary subsidiaries are engaged in transportation, information processing and financial services ("KCSI"), owns approximately 83% of Janus Capital. Thomas H. Bailey, the President and Chairman of the Board of Janus Capital, owns approximately 12% of its voting stock and, by agreement with KCSI, selects a majority of Janus Capital's Board. CUSTODIAN, TRANSFER AGENT AND CERTAIN AFFILIATIONS State Street Bank and Trust Company ("State Street"), P.O. Box 0351, Boston, Massachusetts 02117-0351, is the custodian of the domestic securities and cash of the Fund. State Street and the foreign subcustodians selected by it and approved by the Trustees, have custody of the assets of the Fund held outside the U.S. and cash incidental thereto. The custodian and subcustodians hold the Fund's assets in safekeeping and collect and remit the income thereon, subject to the instructions of the Fund. Janus Service Corporation ("Janus Service"), P.O. Box 173375, Denver, Colorado 80217-3375, a wholly-owned subsidiary of Janus Capital, is the Fund's transfer agent. In addition, Janus Service provides certain other administrative, recordkeeping and shareholder relations services to the Fund. For transfer agency and other services, Janus Service receives a fee calculated at an annual rate of .16% of average net assets and, in addition, $4 per open shareholder account. In addition, the Fund pays DST Systems, Inc. ("DST"), a subsidiary of KCSI, license fees at the rate of $2.56 per shareholder account for the use of DST's shareholder accounting system. The Fund pays DST for the use of their portfolio and fund accounting system a base fee paid monthly between $250 to $1,250 based on the number of Janus funds utilizing the system and an asset charge of $1 per million dollars of net assets (not to exceed $500 per month). In addition, the Fund pays DST postage and forms costs of a DST affiliate incurred in mailing Fund shareholder transaction confirmations. The Trustees have authorized the Fund to use another affiliate of DST as introducing broker for certain Fund portfolio transactions as a means to reduce Fund expenses through a credit against the charges of DST and its affiliates with regard to commissions earned by such affiliate. See "Portfolio Transactions and Brokerage." Janus Distributors, Inc. ("Janus Distributors"), 100 Fillmore Street, Denver, Colorado 80206-4928, a wholly-owned subsidiary of Janus Capital, is a distributor of the Fund. Janus Distributors is registered as a broker-dealer under the Securities Exchange Act of 1934 (the "Exchange Act") and is a member of the National Association of Securities Dealers, Inc. Janus Distributors acts as the agent of the Fund in connection with the sale of its shares in all states in which the shares are registered and in which Janus Distributors is qualified as a broker-dealer. Under the Distribution Agreement, Janus Distributors continuously offers the Fund's shares and accepts orders at net asset value. No sales charges are paid by investors. Promotional expenses in connection with offers and sales of shares are paid by Janus Capital. PORTFOLIO TRANSACTIONS AND BROKERAGE Decisions as to the assignment of portfolio business for the Fund and negotiation of its commission rates are made by Janus Capital whose policy is to obtain the "best execution" (prompt and reliable execution at the most favorable security price) of all portfolio transactions. The Fund may trade foreign securities in foreign countries because the best available market for these securities is often on foreign exchanges. In transactions on foreign stock exchanges, brokers' commissions are frequently fixed and are often higher than in the United States, where commissions are negotiated. In selecting brokers and dealers and in negotiating commissions, Janus Capital considers a number of factors, including but not limited to: Janus Capital's knowledge of currently 15 available negotiated commission rates or prices of securities currently available and other current transaction costs; the nature of the security being traded; the size and type of the transaction; the nature and character of the markets for the security to be purchased or sold; the desired timing of the trade; the activity existing and expected in the market for the particular security; confidentiality; the quality of the execution, clearance and settlement services; financial stability of the broker or dealer; the existence of actual or apparent operational problems of any broker or dealer; rebates of commissions by a broker to the Fund or to a third party service provider to the Fund to pay Fund expenses; and research products or services provided. In recognition of the value of the foregoing factors, Janus Capital may place portfolio transactions with a broker or dealer with whom it has negotiated a commission that is in excess of the commission another broker or dealer 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 provided by such broker or dealer viewed in terms of either that particular transaction or of the overall responsibilities of Janus Capital. Research may include furnishing advice, either directly or through publications or writings, as to the value of securities, the advisability of purchasing or selling specific securities and the availability of securities or purchasers or sellers of securities; furnishing seminars, information, analyses and reports concerning issuers, industries, securities, trading markets and methods, legislative developments, changes in accounting practices, economic factors and trends and portfolio strategy; access to research analysts, corporate management personnel, industry experts, economists and government officials; comparative performance evaluation and technical measurement services and quotation services, and products and other services (such as third party publications, reports and analyses, and computer and electronic access, equipment, software, information and accessories that deliver, process or otherwise utilize information, including the research described above) that assist Janus Capital in carrying out its responsibilities. Most broker dealers used by Janus Capital provide research and other services described above. For the fiscal period ended April 30, 1997, the Fund paid $48,582 of its total brokerage commissions to brokers and dealers in transactions identified for execution primarily on the basis of research and other services provided to the Fund on transactions of $32,031,532. Research received from brokers or dealers is supplemental to Janus Capital's own research efforts. Janus Capital may use research products and services in servicing other accounts in addition to the Fund. If Janus Capital determines that any research product or service has a mixed use, such that it also serves functions that do not assist in the investment decision-making process, Janus Capital may allocate the costs of such service or product accordingly. Only that portion of the product or service that Janus Capital determines will assist it in the investment decision-making process may be paid for in brokerage commission dollars. Such allocation may create a conflict of interest for Janus Capital. Janus Capital does not enter into agreements with any brokers regarding the placement of securities transactions because of the research services they provide. It does, however, have an internal procedure for allocating transactions in a manner consistent with its execution policy to brokers that it has identified as providing superior executions and research, research-related products or services which benefit its advisory clients, including the Fund. Research products and services incidental to effecting securities transactions furnished by brokers or dealers may be used in servicing any or all of Janus Capital's clients and such research may not necessarily be used by Janus Capital in connection with the accounts which paid commissions to the broker-dealer providing such research products and services. Janus Capital may consider sales of Fund shares by a broker-dealer or the recommendation of a broker-dealer to its customers that they purchase Fund shares as a factor in the selection of broker-dealers to execute Fund portfolio transactions. Janus Capital may also consider payments made by brokers effecting transactions for the Fund i) to the Fund or ii) to other persons on behalf of the Fund for services provided to the Fund for which it would be obligated to pay. In placing portfolio business with such broker-dealers, Janus Capital will seek the best execution of each transaction. When the Fund purchases or sells a security in the over-the-counter market, the transaction takes place directly with a principal market-maker, without the use of a broker, except in those circumstances where in the opinion of Janus Capital better prices and executions will be achieved through the use of a broker. The Fund's Trustees have authorized Janus Capital to place transactions with DST Securities, Inc. ("DSTS"), a wholly-owned broker-dealer subsidiary of DST. Janus Capital may do so if it reasonably believes that the quality of the transaction and the associated commission are fair and reasonable and if, overall, the associated transaction costs, net of any credits described above under "Custodian, Transfer Agent and Certain Affiliations," are lower than those that would otherwise be incurred. The total amount of brokerage commissions paid by the Fund during the fiscal period ended April 30, 1997, was $233,435. Included in the brokerage commissions paid for the fiscal period was $1,651 paid through DSTS which served to reduce by $1,239 certain out-of-pocket expenses paid by the Fund. Brokerage commissions paid through DSTS for the fiscal period represented .71% of the Fund's aggregate brokerage commissions for such fiscal period, while .01% of the aggregate dollar amount of the Fund's portfolio transactions involving a commission payment were executed through DSTS. The difference between commissions paid to DSTS and expenses reduced constitute commissions paid to an unaffiliated clearing broker. Differences in the percentage of total commissions versus the percentage of total transactions is due, in part, to variations among share prices and number of shares traded, while average price per share commission rates were substantially the same. For the fiscal period ended April 30, 1997, the Fund did not own securities of a regular broker-dealer. 16 OFFICERS AND TRUSTEES The following are the names of the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years. In August 1992, Janus Venture Fund, Inc. and Janus Twenty Fund, Inc. (both separate Maryland corporations) and the Janus Income Series (a Massachusetts business trust comprised of Janus Flexible Income Fund and Janus Intermediate Government Securities Fund series) were reorganized into separate series of the Trust. In general, all references to Trust offices in this section include comparable offices with the respective predecessor funds, unless a Trust office was filled subsequent to the reorganization. Thomas H. Bailey*# - Trustee, Chairman and President 100 Fillmore Street Denver, CO 80206-4928 Trustee, Chairman and President of Janus Aspen Series. Chairman, Chief Executive Officer, Director and President of Janus Capital. Chairman and Director of IDEX Management, Inc., Largo, Florida (50% subsidiary of Janus Capital and investment adviser to a group of mutual funds) ("IDEX"). James P. Craig, III*# - Trustee and Executive Vice President 100 Fillmore Street Denver, CO 80206-4928 Trustee and Executive Vice President of Janus Aspen Series. Chief Investment Officer, Vice President and Director of Janus Capital. Executive Vice President and Portfolio Manager of Janus Fund. Executive Vice President and Co-Manager of Janus Venture Fund. David C. Decker* - Executive Vice President 100 Fillmore Street Denver, CO 80206-4928 Executive Vice President and Portfolio Manager of Janus Special Situations Fund. Formerly, research analyst at Janus Capital (1992-1996). Obtained an M.B.A. in finance from the Fuqua School of Business at Duke University (1990-1992). Steven R. Goodbarn* - Vice President and Chief Financial Officer 100 Fillmore Street Denver, CO 80206-4928 Vice President and Chief Financial Officer of Janus Aspen Series. Vice President of Finance, Treasurer and Chief Financial Officer of Janus Service, Janus Distributors and Janus Capital Director of IDEX and Janus Distributors. Director, Treasurer and Vice President of Finance of Janus Capital International Ltd. Formerly (May 1992-January 1996), Treasurer of Janus Investment Fund and Janus Aspen Series. Glenn P. O'Flaherty* - Treasurer and Chief Accounting Officer 100 Fillmore Street Denver, CO 80206-4928 Treasurer and Chief Accounting Officer of Janus Aspen Series. Director of Fund Accounting of Janus Capital. Kelley Abbott Howes* - Secretary 100 Fillmore Street Denver, CO 80206-4928 Secretary of Janus Aspen Series. President, Janus Distributors, Inc. Associate Counsel of Janus Capital. Formerly (1990 to 1994), with The Boston Company Advisors, Inc., Boston, Massachusetts (mutual fund administration services). William D. Stewart# - Trustee 5330 Sterling Drive Boulder, CO 80302 Trustee of Janus Aspen Series. President of HPS Corporation, Boulder, Colorado (manufacturer of vacuum fittings and valves). Gary O. Loo - Trustee 102 N. Cascade, Suite 500 Colorado Springs, CO 80903 Trustee of Janus Aspen Series. President and a Director of High Valley Group, Inc., Colorado Springs, Colorado (investments). - -------------------------------------------------------------------------------- * Interested person of the Trust and of Janus Capital. # Member of the Trust's Executive Committee. 17 Dennis B. Mullen - Trustee 14103 Denver West Parkway Golden, CO 80401 Trustee of Janus Aspen Series. President and Chief Executive Officer of BC Northwest, L.P., a franchise of Boston Chicken, Inc., Bellevue, Washington (restaurant chain). Formerly (1982 to 1993), Chairman, President and Chief Executive Officer of Famous Restaurants, Inc., Scottsdale, Arizona (restaurant chain). Martin H. Waldinger - Trustee 4940 Sandshore Court San Diego, CA 92130 Trustee of Janus Aspen Series. Private Consultant and Director of Run Technologies, Inc., a software development firm, San Carlos, California. Formerly (1989 to 1993), President and Chief Executive Officer of Bridgecliff Management Services, Campbell, California (a condominium association management company). James T. Rothe - Trustee 102 South Tejon Street, Suite 1100 Colorado Springs, CO 80903 Trustee of Janus Aspen Series. Professor of Business, University of Colorado, Colorado Springs, Colorado. Principal, Phillips-Smith Retail Group, Colorado Springs, Colorado (a venture capital firm). Formerly (1986-1994), Dean of the College of Business, University of Colorado, Colorado Springs, Colorado. The Trustees are responsible for major decisions relating to the Fund's objective, policies and techniques. The Trustees also supervise the operation of the Fund by its officers and review the investment decisions of the officers although they do not actively participate on a regular basis in making such decisions. The Executive Committee of the Trustees shall have and may exercise all the powers and authority of the Board except for matters requiring action by the whole Board pursuant to the Trust's Bylaws or Agreement and Declaration of Trust ("Declaration of Trust"), Massachusetts law or the 1940 Act. The following table shows the aggregate compensation earned by and paid to each Trustee by the Fund described in this SAI and all funds advised and sponsored by Janus Capital (collectively, the "Janus Funds") for the periods indicated. None of the Trustees receive any pension or retirement from the Fund or the Janus Funds. Aggregate Compensation Total Compensation from the from the Fund for fiscal year Janus Funds for calendar year Name of Person, Position ended October 31, 1996** ended December 31, 1996*** - ------------------------------------------------------------------------------------------------------------------------------------ Thomas H. Bailey, Chairman* $0 $0 James P. Craig, III, Trustee* $0 $0 John W. Shepardson, Trustee+ $0 $73,000 William D. Stewart, Trustee $0 $70,000 Gary O. Loo, Trustee $0 $70,000 Dennis B. Mullen, Trustee $0 $67,000 Martin H. Waldinger, Trustee $0 $73,000 James T. Rothe, Trustee++ $0 $0 - ------------------------------------------------------------------------------------------------------------------------------------
* An interested person of the Fund and of Janus Capital. Compensated by Janus Capital and not the Fund. ** The Fund had not commenced operations as of October 31, 1996. *** As of December 31, 1996, Janus Funds consisted of two registered investment companies comprised of a total of 29 funds. + Mr. Shepardson retired on March 31, 1997. ++ Mr. Rothe began serving as Trustee on January 1, 1997. PURCHASE OF SHARES As stated in the Prospectus, Janus Distributors is a distributor of the Fund's shares. Shares of the Fund are sold at the net asset value per share as determined at the close of the regular trading session of the New York Stock Exchange (the "NYSE") next occurring after a purchase order is received and accepted by the Fund. The Shareholder's Manual Section of the Prospectus contains detailed information about the purchase of shares. NET ASSET VALUE DETERMINATION As stated in the Prospectus, the net asset value ("NAV") of Fund shares is determined once each day on which the New York Stock Exchange ("NYSE") is open, at the close of its regular trading session (normally 4:00 p.m., New York time, Monday through Friday). The NAV of Fund shares is not determined on days the NYSE is closed (generally, New Year's Day, Martin Luther King Day, 18 Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas). The per share NAV of the Fund is determined by dividing the total value of the Fund's securities and other assets, less liabilities, by the total number of shares outstanding. In determining NAV, securities listed on an Exchange, the NASDAQ National Market and foreign markets are valued at the closing prices on such markets, or if such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Municipal securities held by the Fund are traded primarily in the over-the-counter market. Valuations of such securities are furnished by one or more pricing services employed by the Fund and are based upon a computerized matrix system or appraisals obtained by a pricing service, in each case in reliance upon information concerning market transactions and quotations from recognized municipal securities dealers. Other securities that are traded on the over-the-counter market are valued at their closing bid prices. Foreign securities and currencies are converted to U.S. dollars using the exchange rate in effect at the close of the NYSE. The Fund will determine the market value of individual securities held by it, by using prices provided by one or more professional pricing services which may provide market prices to other funds, or, as needed, by obtaining market quotations from independent broker-dealers. Short-term securities maturing within 60 days are valued on the amortized cost basis. Securities for which quotations are not readily available, and other assets, are valued at fair values determined in good faith under procedures established by and under the supervision of the Trustees. Trading in securities on European and Far Eastern securities exchanges and over-the-counter markets is normally completed well before the close of business on each business day in New York (i.e., a day on which the NYSE is open). In addition, European or Far Eastern securities trading generally or in a particular country or countries may not take place on all business days in New York. Furthermore, trading takes place in Japanese markets on certain Saturdays and in various foreign markets on days which are not business days in New York and on which the Fund's NAV is not calculated. The Fund calculates its NAV per share, and therefore effects sales, redemptions and repurchases of its shares, as of the close of the NYSE once on each day on which the NYSE is open. Such calculation may not take place contemporaneously with the determination of the prices of the foreign portfolio securities used in such calculation. REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS If investors do not elect in writing or by phone to receive their dividends and distributions in cash, all income dividends and capital gains distributions, if any, on the Fund's shares are reinvested automatically in additional shares of the Fund at the NAV determined on the first business day following the record date. Checks for cash dividends and distributions and confirmations of reinvestments are usually mailed to shareholders within ten days after the record date. Any election of the manner in which a shareholder wishes to receive dividends and distributions (which may be made on the New Account Application form or by phone) will apply to dividends and distributions the record dates of which fall on or after the date that the Fund receives such notice. Investors receiving cash distributions and dividends may elect in writing or by phone to change back to automatic reinvestment at any time. REDEMPTION OF SHARES Procedures for redemption of shares are set forth in the Shareholder's Manual section of the Prospectus. Shares normally will be redeemed for cash, although the Fund retains the right to redeem its shares in kind under unusual circumstances, in order to protect the interests of remaining shareholders, by delivery of securities selected from its assets at its discretion. However, the Fund is governed by Rule 18f-1 under the 1940 Act, which requires the Fund to redeem shares solely in cash up to the lesser of $250,000 or 1% of the NAV of the Fund during any 90-day period for any one shareholder. Should redemptions by any shareholder exceed such limitation, the Fund will have the option of redeeming the excess in cash or in kind. If shares are redeemed in kind, the redeeming shareholder might incur brokerage costs in converting the assets to cash. The method of valuing securities used to make redemptions in kind will be the same as the method of valuing portfolio securities described under "Purchase of Shares - Net Asset Value Determination" and such valuation will be made as of the same time the redemption price is determined. The shareholder has the ability to request a review of valuation in-kind redemptions by the Trustee at their next regularly scheduled meeting. The right to require the Fund to redeem its shares may be suspended, or the date of payment may be postponed, whenever (1) trading on the NYSE is restricted, as determined by the SEC, or the NYSE is closed except for holidays and weekends, (2) the SEC permits such suspension and so orders, or (3) an emergency exists as determined by the SEC so that disposal of securities or determination of NAV is not reasonably practicable. SHAREHOLDER ACCOUNTS Detailed information about the general procedures for shareholder accounts and specific types of accounts is set forth in the Prospectus. Applications for specific types of accounts may be obtained by calling the Fund at 1-800-525-3713 or writing to the Fund at P.O. Box 173375, Denver, Colorado 80217-3375. 19 TELEPHONE TRANSACTIONS As stated in the Prospectus, shareholders may initiate a number of transactions by telephone. The Fund, its transfer agent and its distributor disclaim responsibility for the authenticity of instructions received by telephone. Such entities will employ reasonable procedures to confirm that instructions communicated by telephone are genuine. Such procedures may include, among others, requiring personal identification prior to acting upon telephone instructions, providing written confirmation of the transactions and tape recording telephone conversations. SYSTEMATIC REDEMPTIONS As stated in the Shareholder's Manual section of the Prospectus, if you have a regular account or are eligible for normal distributions from a retirement plan, you may establish a systematic redemption option. The payments will be made from the proceeds of periodic redemptions of shares in the account at the NAV. Depending on the size or frequency of the disbursements requested, and the fluctuation in value of the Fund's portfolio, redemptions for the purpose of making such disbursements may reduce or even exhaust the shareholder's account. Either an investor or the Fund, by written notice to the other, may terminate the investor's systematic redemption option without penalty at any time. Information about requirements to establish a systematic redemption option may be obtained by writing or calling the Fund at the address or phone number shown above. RETIREMENT PLANS The Fund offers several different types of tax-deferred retirement plans that an investor may establish to invest in Fund shares, depending on rules prescribed by the Code. The Individual Retirement Account ("IRA") may be used by most individuals who have taxable compensation. Simplified Employee Pension Plans ("SEPs") and Defined Contribution Plans (Profit Sharing or Money Purchase Pension Plans) may be used by most employers, including corporations, partnerships and sole proprietors, for the benefit of business owners and their employees. In addition, the Fund offers a Section 403(b)(7) Plan for employees of educational organizations and other qualifying tax-exempt organizations. Investors should consult their tax advisor or legal counsel before selecting a retirement plan. Contributions under IRAs, SEPs, Defined Contribution Plans and Section 403(b)(7) Plans are subject to specific contribution limitations. Generally, such contributions may be invested at the direction of the participant. The investment is then held by Investors Fiduciary Trust Company as custodian. Each participant's account is charged an annual fee of $12. There is a maximum annual fee of $24 per taxpayer identification number. Distributions from retirement plans generally are subject to ordinary income tax and may be subject to an additional 10% tax if withdrawn prior to age 591/2. Several exceptions to the general rule may apply. Additionally, shareholders generally must start withdrawing retirement plan assets no later than April 1 of the year after they reach age 701/2. Exceptions may apply so please consult your tax advisor. Several methods exist to determine the amount of the minimum annual distribution. Shareholders should consult with their tax advisor or legal counsel prior to receiving any distribution from any retirement plan, in order to determine the income tax impact of any such distribution. To receive additional information about IRAs, SEPs, Defined Contribution Plans and Section 403(b)(7) Plans along with the necessary materials to establish an account, please call the Fund at 1-800-525-3713 or write to the Fund at P.O. Box 173375, Denver, Colorado 80217-3375. No contribution to an IRA, SEP, Defined Contribution Plan or Section 403(b)(7) Plan can be made until the appropriate forms to establish any such plan have been completed. INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAX STATUS It is a policy of the Fund to make distributions of substantially all of its investment income and any net realized capital gains. The Fund declares and makes annual distributions of income (if any). Any capital gains realized during each fiscal year ended October 31, as defined by the Code, are normally declared and payable to shareholders in December. The Fund intends to qualify as a regulated investment company by satisfying certain requirements prescribed by Subchapter M of the Code. The Fund may purchase securities of certain foreign corporations considered to be passive foreign investment companies by the IRS. In order to avoid taxes and interest that must be paid by the Fund, if these instruments are profitable, the Fund may make various elections permitted by the tax laws. However, these elections could require that the Fund recognize taxable income, which in turn must be distributed. Some foreign securities purchased by the Fund may be subject to foreign taxes which could reduce the yield on such securities. The amount of such foreign taxes is expected to be insignificant. Accordingly, the Fund does not intend to make the election permitted under section 853 of the Code to pass through such taxes to shareholders as a foreign tax credit as this would increase 20 the taxable income reported to shareholders and require shareholders to take the credit on their tax returns, complicating the preparation of such returns. As a result, any foreign taxes paid or accrued will represent an expense to the Fund which will reduce its investment company taxable income. PRINCIPAL SHAREHOLDERS As of June 3, 1997, the officers and Trustees of the Fund as a group owned less than 1% of the outstanding shares of the Fund. In addition, as of June 3, 1997, Charles Schwab & Co., Inc. ("Schwab"), 101 Montgomery Street, San Francisco, CA 94104-4122, and National Financial Services, Co. ("National Financial"), P.O. Box 3908, Church Street Station, New York, NY 10008-3908, owned of record 10.49% and 5.23%, respectively, of the Fund's outstanding shares. According to information provided by Schwab and National Financial, this ownership is by nominee only and does not represent beneficial ownership of such shares, because they have no investment discretion or voting power with respect to such shares. To the knowledge of the Fund, no other person owned more than 5% of the outstanding shares of the Fund as of the above date. MISCELLANEOUS INFORMATION The Fund is a series of the Trust, a Massachusetts business trust which was created on February 11, 1986. The Trust is an open-end management investment company registered under the 1940 Act. As of the date of this SAI, the Trust offers 18 other series by other prospectuses. Janus Capital reserves the right to the name "Janus." In the event that Janus Capital does not continue to provide investment advice to the Fund, the Fund must cease to use the name "Janus" as soon as reasonably practicable. Under Massachusetts law, shareholders of the Fund could, under certain circumstances, be held liable for the obligations of the Fund. However, the Declaration of Trust disclaims shareholder liability for acts or obligations of the Fund and requires that notice of this disclaimer be given in each agreement, obligation or instrument entered into or executed by the Fund or the Trustees. The Declaration of Trust also provides for indemnification from the assets of the Fund for all losses and expenses of any Fund shareholder held liable for the obligations of the Fund. Thus, the risk of a shareholder incurring a financial loss on account of its liability as a shareholder of the Fund is limited to circumstances in which the Fund would be unable to meet its obligations. The possibility that these circumstances would occur is remote. The Trustees intend to conduct the operations of the Fund to avoid, to the extent possible, liability of shareholders for liabilities of the Fund. SHARES OF THE TRUST The Trust is authorized to issue an unlimited number of shares of beneficial interest with a par value of one cent per share for each series of the Trust. Shares of the Fund are fully paid and nonassessable when issued. All shares of the Fund participate equally in dividends and other distributions by the Fund, and in residual assets of the Fund in the event of liquidation. Shares of the Fund have no preemptive, conversion or subscription rights. Shares of the Fund may be transferred by endorsement or stock power as is customary, but the Fund is not bound to recognize any transfer until it is recorded on its books. VOTING RIGHTS The present Trustees were elected at a meeting of shareholders held on July 10, 1992, with the exception of Mr. Craig and Mr. Rothe who were appointed by the Trustees as of June 30, 1995 and January 1, 1997, respectively. Under the Declaration of Trust, each Trustee will continue in office until the termination of the Trust or his earlier death, retirement, resignation, bankruptcy, incapacity or removal. Vacancies will be filled by a majority of the remaining Trustees, subject to the 1940 Act. Therefore, no annual or regular meetings of shareholders normally will be held, unless otherwise required by the Declaration of Trust or the 1940 Act. Subject to the foregoing, shareholders have the power to vote to elect or remove Trustees, to terminate or reorganize the Fund, to amend the Declaration of Trust, to bring certain derivative actions and on any other matters on which a shareholder vote is required by the 1940 Act, the Declaration of Trust, the Trust's Bylaws or the Trustees. Each share of the Fund and of each other series of the Trust has one vote (and fractional votes for fractional shares). Shares of all series of the Trust have noncumulative voting rights, which means that the holders of more than 50% of the shares of all series of the Trust voting for the election of Trustees can elect 100% of the Trustees if they choose to do so and, in such event, the holders of the remaining shares will not be able to elect any Trustees. The Fund and each other series of the Trust will vote separately only with respect to those matters that affect only that series or if a portfolio's interest in a matter differs from the interests of other portfolios of the Trust. INDEPENDENT ACCOUNTANTS Price Waterhouse LLP, 950 Seventeenth Street, Suite 2500, Denver, Colorado 80202, independent accountants for the Fund, audit the Fund's annual financial statements and prepare its tax returns. 21 REGISTRATION STATEMENT The Trust has filed with the SEC, Washington, D.C., a Registration Statement under the Securities Act of 1933, as amended, with respect to the securities to which this SAI relates. If further information is desired with respect to the Fund or such securities, reference is made to the Registration Statement and the exhibits filed as a part thereof. PERFORMANCE INFORMATION The Prospectus contains a brief description of how performance is calculated. Quotations of average annual total return for the Fund will be expressed in terms of the average annual compounded rate of return of a hypothetical investment in the Fund over periods of 1, 5, and 10 years (up to the life of the Fund). These are the annual total rates of return that would equate the initial amount invested to the ending redeemable value. These rates of return are calculated pursuant to the following formula: P(1 + T)n = ERV (where P = a hypothetical initial payment of $1,000, T = the average annual total return, n = the number of years and ERV = the ending redeemable value of a hypothetical $1,000 payment made at the beginning of the period). All total return figures reflect the deduction of a proportional share of Fund expenses on an annual basis, and assume that all dividends and distributions are reinvested when paid. The Fund was made available for public sale on December 31, 1996. The lifetime total return, for the period December 31, 1996 through April 30, 1997 was 8.30%. Quotations of the Fund's yield are based on the investment income per share earned during a particular 30-day period (including dividends, if any, and interest), less expenses accrued during the period ("net investment income"), and are computed by dividing net investment income by the net asset value per share on the last day of the period, according to the following formula: YIELD = 2 [(a-b + 1)6 - 1] cd where a = dividend and interest income b = expenses accrued for the period c = average daily number of shares outstanding during the period that were entitled to receive dividends d = maximum net asset value per share on the last day of the period From time to time in advertisements or sales material, the Fund may discuss its performance ratings or other information as published by recognized mutual fund statistical rating services, including, but not limited to, Lipper Analytical Services, Inc., Ibbotson Associates, Micropal or Morningstar or by publications of general interest such as Forbes or Money. The Fund may also compare its performance to that of other selected mutual funds, mutual fund averages or recognized stock market indicators, including, but not limited to, the Standard & Poor's 500 Composite Stock Price Index, the Standard & Poor's 400 Midcap Index, the Dow Jones Industrial Average, the Lehman Brothers Government/Corporate Bond Index, the Lehman Brothers Government/ Corporate 1-3 Year Bond Index, the Lehman Brothers Long Government/Corporate Bond Index, the Lehman Brothers Intermediate Government Bond Index, the Lehman Brothers Municipal Bond Index, the Russell 2000 Index and the NASDAQ composite. In addition, the Fund may compare its total return to the yield on U.S. Treasury obligations and to the percentage change in the Consumer Price Index. Such performance ratings or comparisons may be made with funds that may have different investment restrictions, objectives, policies or techniques than the Fund and such other funds or market indicators may be comprised of securities that differ significantly from the Fund's investments. FINANCIAL STATEMENTS The following unaudited financial statements for the period ended April 30, 1997 are hereby incorporated into this SAI by reference to the Fund's Semiannual Report dated April 30, 1997. A copy of such report accompanies this SAI. DOCUMENTS INCORPORATED BY REFERENCE TO THE SEMIANNUAL REPORT: Schedule of Investments as of April 30, 1997 Statement of Operations for the period December 31, 1996 to April 30, 1997 Statement of Assets and Liabilities as of April 30, 1997 Statement of Changes in Net Assets for the period December 31, 1996 to April 30, 1997 Financial Highlights for the period December 31, 1996 to April 30, 1997 Notes to Financial Statements The portions of such Semiannual Report that are not specifically listed above are not incorporated by reference into this SAI and are not part of the Registration Statement. 22 This page intentionally left blank. This page intentionally left blank. JANUS INVESTMENT FUND PART C - OTHER INFORMATION ITEM 24. Financial Statements and Exhibits List all financial statements and exhibits filed as part of the Registration Statement. (a)(1) Financial Statements Included in the Prospectus: Financial Highlights for Janus Special Situations Fund (a)(2) Financial Statements Incorporated by Reference into the Statement of Additional Information: The Financial Statements for Janus Special Situations Fund dated April 30, 1997, are incorporated by reference into the Statement of Additional Information. (b) Exhibits: Exhibit 1 (a) Agreement and Declaration of Trust dated February 11, 1986 is incorporated herein by reference to Exhibit 1(a) to Post-Effective Amendment No. 79. (b) Certificate of Designation for Janus Growth and Income Fund is incorporated herein by reference to Exhibit 1(b) to Post-Effective Amendment No. 79. (c) Certificate of Designation for Janus Worldwide Fund is incorporated herein by reference to Exhibit 1(c) to Post- Effective Amendment No. 79. (d) Certificate of Designation for Janus Twenty Fund is incorporated herein by reference to Exhibit 1(d) to Post- Effective Amendment No. 80. (e) Certificate of Designation for Janus Flexible Income Fund is incorporated herein by reference to Exhibit 1(e) to Post-Effective Amendment No. 80. (f) Certificate of Designation for Janus Intermediate Government Securities Fund is hereby withdrawn. (g) Certificate of Designation for Janus Venture Fund is incorporated herein by reference to Exhibit 1(g) to Post- Effective Amendment No. 80. C-1 (h) Certificate of Designation for Janus Enterprise Fund is incorporated herein by reference to Exhibit 1(h) to Post- Effective Amendment No. 80. (i) Certificate of Designation for Janus Balanced Fund is incorporated herein by reference to Exhibit 1(i) to Post- Effective Amendment No. 80. (j) Certificate of Designation for Janus Short-Term Bond Fund is incorporated herein by reference to Exhibit 1(j) to Post-Effective Amendment No. 80. (k) Certificate of Designation for Janus Federal Tax-Exempt Fund is filed herein as Exhibit 1(k). (l) Certificate of Designation for Janus Mercury Fund is filed herein as Exhibit 1(l). (m) Certificate of Designation for Janus Overseas Fund is filed herein as Exhibit 1(m). (n) Form of Amendment to the Registrant's Agreement and Declaration of Trust is filed herein as Exhibit 1(n). (o) Form of Certificate of Designation for Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund is filed herein as Exhibit 1(o). (p) Form of Certificate of Designation for Janus High-Yield Fund and Janus Olympus Fund is incorporated herein by reference to Exhibit 1(p) to Post-Effective Amendment No. 68. (q) Certificate of Designation for Janus Equity Income Fund is incorporated herein by reference to Exhibit 1(q) to Post-Effective Amendment No. 72. (r) Form of Certificate of Establishment and Designation for Janus Special Situations Fund is incorporated herein by reference to Exhibit 1(r) to Post-Effective Amendment No. 75. (s) Form of Amendment to Registrant's Agreement and Declaration of Trust is incorporated herein by reference to Exhibit 1(s) to Post-Effective Amendment No. 75. Exhibit 2 (a) Restated Bylaws are incorporated herein by reference to Exhibit 2(a) to Post-Effective Amendment No. 71. C-2 (b) First Amendment to the Bylaws is incorporated herein by reference to Exhibit 2(b) to Post-Effective Amendment No. 71. Exhibit 3 Not Applicable. Exhibit 4 (a) Specimen Stock Certificate for Janus Fund(1) is incorporated herein by reference to Exhibit 4(b) to Post-Effective Amendment No. 79. (b) Specimen Stock Certificate for Janus Growth and Income Fund is incorporated herein by reference to Exhibit 4(b) to Post-Effective Amendment No. 79. (c) Specimen Stock Certificate for Janus Worldwide Fund is incorporated herein by reference to Exhibit 4(c) to Post- Effective Amendment No. 79. (d) Specimen Stock Certificate for Janus Twenty Fund(1) is incorporated herein by reference to Exhibit 4(d) to Post- Effective Amendment No. 80. (e) Specimen Stock Certificate for Janus Flexible Income Fund(1) is incorporated herein by reference to Exhibit 4(e) to Post-Effective Amendment No. 80. (f) Specimen Stock Certificate for Janus Intermediate Government Securities Fund(1) is hereby withdrawn. (g) Specimen Stock Certificate for Janus Venture Fund(1) is incorporated herein by reference to Exhibit 4(g) to Post- Effective Amendment No. 80. (h) Specimen Stock Certificate for Janus Enterprise Fund is incorporated herein by reference to Exhibit 4(h) to Post- Effective Amendment No. 80. - ------------------- (1) Outstanding certificates representing shares of predecessor entity to this series of the Trust are deemed to represent shares of this series. C-3 (i) Specimen Stock Certificate for Janus Balanced Fund is incorporated herein by reference to Exhibit 4(i) to Post- Effective Amendment No. 80. (j) Specimen Stock Certificate for Janus Short-Term Bond Fund is incorporated herein by reference to Exhibit 4(j) to Post-Effective Amendment No. 80. (k) Specimen Stock Certificate for Janus Federal Tax-Exempt Fund is filed herein as Exhibit 4(k). (l) Specimen Stock Certificate for Janus Mercury Fund is filed herein as Exhibit 4(l). (m) Specimen Stock Certificate for Janus Overseas Fund is filed herein as Exhibit 4(m). (n) Revised Specimen Stock Certificates for Janus High-Yield Fund and Janus Olympus Fund are incorporated herein by reference to Exhibit 4(n) to Post-Effective Amendment No. 79. (o) Revised Specimen Stock Certificate for Janus Equity Income Fund is incorporated herein by reference to Exhibit 4(o) to Post-Effective Amendment No. 79. (p) Revised Specimen Stock Certificate for Janus Special Situations Fund is incorporated herein by reference to Exhibit 4(p) to Post-Effective Amendment No. 79. Exhibit 5 (a) Restated form of Investment Advisory Agreement for Janus Fund is incorporated herein by reference to Exhibit 5(a) to Post-Effective Amendment No. 79. (b) Restated form of Investment Advisory Agreement for Janus Growth and Income Fund and Janus Worldwide Fund is incorporated herein by reference to Exhibit 5(b) to Post-Effective Amendment No. 79. (c) Restated form of Investment Advisory Agreement for Janus Twenty Fund and Janus Venture Fund is incorporated herein by reference to Exhibit 5(c) to Post-Effective Amendment No. 79. (d) Restated form of Investment Advisory Agreement for Janus Flexible Income Fund is incorporated herein by reference to Exhibit 5(d) to Post-Effective Amendment No. 79. C-4 (e) Restated form of Investment Advisory Agreement for Janus Enterprise Fund, Janus Balanced Fund and Janus Short- Term Bond Fund is incorporated herein by reference to Exhibit 5(e) to Post-Effective Amendment No. 79. (f) Restated form of Investment Advisory Agreement for Janus Federal Tax-Exempt Fund and Janus Mercury Fund is incorporated herein by reference to Exhibit 5(f) to Post-Effective Amendment No. 79. (g) Restated form of Investment Advisory Agreement for Janus Overseas Fund is incorporated herein by reference to Exhibit 5(g) to Post-Effective Amendment No. 79. (h) Form of Investment Advisory Agreement for Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund is incorporated herein by reference to Exhibit 5(h) to Post-Effective Amendment No. 64. (i) Restated form of Investment Advisory Agreement for Janus High-Yield Fund is incorporated herein by reference to Exhibit 5(i) to Post-Effective Amendment No. 79. (j) Restated form of Investment Advisory Agreement for Janus Olympus Fund is incorporated herein by reference to Exhibit 5(j) to Post-Effective Amendment No. 79. (k) Form of Investment Advisory Agreement for Janus Equity Income Fund is incorporated herein by reference to Exhibit 5(k) to Post-Effective Amendment No. 73. (l) Form of Investment Advisory Agreement for Janus Special Situations Fund is incorporated herein by reference to Exhibit 5(l) to Post-Effective Amendment No. 75. Exhibit 6 Form of Distribution Agreement between Janus Investment Fund and Janus Distributors, Inc. is incorporated herein by reference to Exhibit 6 to Post-Effective Amendment No. 57. Exhibit 7 Not Applicable. Exhibit 8 (a) Custodian Contract between Janus Investment Fund and State Street Bank and Trust Company is incorporated herein by reference to Exhibit 8(a) to Post-Effective Amendment No. 79. C-5 (b) Amendment dated April 25, 1990 of State Street Custodian Contract is incorporated herein by reference to Exhibit 8(b) to Post-Effective Amendment No. 79. (c) Letter Agreement dated February 1, 1991 regarding State Street Custodian Contract is incorporated herein by reference to Exhibit 8(c) to Post-Effective Amendment No. 79. (d) Custodian Contract between Janus Investment Fund and Investors Fiduciary Trust Company filed as Exhibit 8(d) to Post-Effective Amendment No. 79 is hereby withdrawn. (e) Letter Agreement dated October 9, 1992 regarding State Street Custodian Agreement is filed herein as Exhibit 8(e). (f) Letter Agreement dated April 28, 1993 regarding State Street Custodian Agreement is filed herein as Exhibit 8(f). (g) Letter Agreement dated April 4, 1994 regarding State Street Custodian Agreement is filed herein as Exhibit 8(g). (h) Form of Custody Agreement between Janus Investment Fund, on behalf of Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund, and United Missouri Bank, N.A. is filed herein as Exhibit 8(h). (i) Letter Agreement dated December 12, 1995 regarding State Street Custodian Contract is incorporated herein by reference to Exhibit 8(i) to Post-Effective Amendment No. 72. (j) Amendment dated October 11, 1995 of State Street Custodian Contract is incorporated herein by reference to Exhibit 8(j) to Post-Effective Amendment No. 71. (k) Form of Amendment dated September 10, 1996 of State Street Custodian Contract is incorporated herein by reference to Exhibit 8(k) to Post-Effective Amendment No. 75. (l) Letter Agreement dated September 10, 1996 regarding State Street Custodian Contract is incorporated herein by reference to Exhibit 8(l) to Post-Effective Amendment No. 75. (m) Form of Subcustodian Contract between United Missouri Bank, N.A., and State Street Bank and Trust Company is C-6 incorporated herein by reference to Exhibit 8(m) to Post- Effective Amendment No. 75. Exhibit 9 (a) Transfer Agency Agreement with Investors Fiduciary Trust Company filed as Exhibit 9(a) to Post-Effective Amendment No. 79 is hereby withdrawn. (b) Subagency Agreement between Janus Service Corporation and Investors Fiduciary Trust Company filed as Exhibit 9(b) to Post-Effective Amendment No. 79 is hereby withdrawn. (c) Form of Administration Agreement with Janus Capital Corporation for Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund is filed herein as Exhibit 9(c). (d) Transfer Agency Agreement dated December 9, 1994 with Janus Service Corporation for Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund filed as Exhibit 9(d) to Post-Effective Amendment No. 64 is withdrawn. (e) Transfer Agency Agreement dated September 27, 1995 with Janus Service Corporation for Janus Money Market Fund, Janus Government Money Market Fund, Janus Tax-Exempt Money Market Fund, Janus High-Yield Fund and Janus Olympus Fund is incorporated herein by reference to Exhibit 9(e) to Post-Effective Amendment No. 70. (f) Letter Agreement dated December 21, 1995 regarding Janus Service Corporation Transfer Agency Agreement is incorporated herein by reference to Exhibit 9(f) to Post- Effective Amendment No. 72. (g) Letter Agreement dated May 21, 1996 regarding Janus Service Corporation Transfer Agency Agreement is incorporated by reference to Exhibit 9(g) to Post-Effective Amendment No. 73. (h) Form of Amended Administration Agreement with Janus Capital Corporation for Janus Money Market Fund, Janus Government Money Market Fund, and Janus Tax-Exempt Money Market Fund is incorporated by reference to Exhibit 9(h) to Post-Effective Amendment No. 77. (i) Letter Agreement dated September 10, 1996 regarding Janus Service Corporation Transfer Agency Agreement is incorporated herein by reference to Exhibit 9(i) to Post-Effective Amendment No. 76. C-7 Exhibit 10 (a) Opinion and Consent of Messrs. Davis, Graham & Stubbs with respect to shares of Janus Fund is incorporated herein by reference to Exhibit 10 (a) to Post-Effective Amendment No. 79. (b) Opinion and Consent of Fund Counsel with respect to shares of Janus Growth and Income Fund and Janus Worldwide Fund is incorporated herein by reference to Exhibit 10(b) to Post-Effective Amendment No. 79. (c) Opinion and Consent of Fund Counsel with respect to shares of Janus Enterprise Fund, Janus Balanced Fund and Janus Short-Term Bond Fund is incorporated herein by reference to Exhibit 10(c) to Post-Effective Amendment No. 80. (d) Opinion and Consent of Messrs. Sullivan and Worcester with respect to shares of Janus Twenty Fund is filed herein as Exhibit 10(d). (e) Opinion and Consent of Messrs. Sullivan and Worcester with respect to shares of Janus Venture Fund is filed herein as Exhibit 10(e). (f) Opinion and Consent of Messrs. Sullivan and Worcester with respect to shares of Janus Flexible Income Fund is filed herein as Exhibit 10(f). (g) Opinion and Consent of Messrs. Sullivan and Worcester with respect to shares of Janus Intermediate Government Securities Fund is hereby withdrawn. (h) Opinion and Consent of Fund Counsel with respect to shares of Janus Federal Tax-Exempt Fund and Janus Mercury Fund is filed herein as Exhibit 10(h). (i) Opinion and Consent of Fund Counsel with respect to shares of Janus Overseas Fund is filed herein as Exhibit 10(i). (j) Opinion and Consent of Fund Counsel with respect to shares of Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund is filed herein as Exhibit 10(j). (k) Opinion and Consent of Fund Counsel with respect to Institutional Shares of Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund is filed herein as Exhibit 10(k). C-8 (l) Opinion and Consent of Fund Counsel with respect to shares of Janus High-Yield Fund and Janus Olympus Fund is incorporated herein by reference to Exhibit 10(l) to Post-Effective Amendment No. 68. (m) Opinion and Consent of Fund Counsel with respect to shares of Janus Equity Income Fund is incorporated herein by reference to Exhibit 10(m) to Post-Effective Amendment No. 72. (n) Opinion and Consent of Fund Counsel with respect to shares of Janus Special Situations Fund is incorporated herein by reference to Exhibit 10(n) to Post-Effective Amendment No. 75. (o) Opinion and Consent of Fund Counsel with respect to shares of Janus Money Market Fund, Janus Government Money Market Fund, and Janus Tax-Exempt Money Market Fund is incorporated herein by reference to Exhibit 10(o) to Post-Effective Amendment No. 76. Exhibit 11 Consent of Price Waterhouse LLP is filed herein as Exhibit 11. Exhibit 12 Not Applicable. Exhibit 13 Not Applicable. Exhibit 14 (a) Model Individual Retirement Plan is filed herein as Exhibit 14(a). (b) Model Defined Contribution Retirement Plan is incorporated herein by reference to Exhibit 14(b) to Post-Effective Amendment No. 41. (c) Model Section 403(b)(7) Plan is filed herein as Exhibit 14(c). Exhibit 15 Not Applicable. Exhibit 16 (a) Computation of Total Return is incorporated herein by reference as Exhibit 16(a) to Post-Effective Amendment No. 80. (b) Computation of Current Yield and Effective Yield is incorporated herein by reference to Exhibit 16(b) to Post- Effective Amendment No. 67. C-9 Exhibit 17 Powers of Attorney dated as of May 20, 1997, are filed herein as Exhibit 17. Exhibit 18 (a) Form of plan entered into by Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax- Exempt Money Market Fund pursuant to Rule 18f-3 setting forth the separate arrangement and expense allocation of each class of such Funds filed as Exhibit 18 to Post-Effective Amendment No. 66 is withdrawn. (b) Restated form of Rule 18f-3 Plan entered into by Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund is incorporated herein by reference to Exhibit 18(b) to Post-Effective Amendment No. 69. (c) Amended and Restated form of Rule 18f-3 Plan entered into by Janus Money Market Fund, Janus Government Money Market Fund, and Janus Tax-Exempt Money Market Fund is incorporated herein by reference to Exhibit 18(c) to Post-Effective Amendment No. 78. Exhibit 27 Financial Data Schedule for Janus Special Situations Fund is filed herein as Exhibit 27. ITEM 25. Persons Controlled by or Under Common Control with Registrant None C-10 ITEM 26. Number of Holders of Securities The number of record holders of shares of the Registrant as of June 3, 1997, was as follows: Number of Title of Class Record Holders Janus Fund shares 797,477 Janus Growth and Income Fund shares 113,590 Janus Worldwide Fund shares 340,728 Janus Overseas Fund shares 101,511 Janus Twenty Fund shares 344,645 Janus Flexible Income Fund shares 29,454 Janus Venture Fund shares 103,146 Janus Enterprise Fund shares 76,504 Janus Balanced Fund shares 24,396 Janus Short-Term Bond Fund shares 4,674 Janus Federal Tax-Exempt Fund shares 3,902 Janus Mercury Fund shares 205,634 Janus Money Market Fund - Investor Shares 77,022 Janus Money Market Fund - Institutional Shares 59 Janus Money Market Fund - Service Shares 1 Janus Government Money Market Fund - Investor Shares 11,006 Janus Government Money Market Fund - Institutional Shares 7 Janus Government Money Market Fund - Service Shares 2 Janus Tax-Exempt Money Market Fund - Investor Shares 5,483 Janus Tax-Exempt Money Market Fund - Institutional Shares 7 Janus Tax-Exempt Money Market Fund - Service Shares 1 Janus High-Yield Fund shares 8,904 Janus Olympus Fund shares 48,686 Janus Equity Income Fund shares 5,204 Janus Special Situations Fund shares 16,322 ITEM 27. Indemnification Article VIII of Janus Investment Fund's Agreement and Declaration of Trust provides for indemnification of certain persons acting on behalf of the Funds. In general, Trustees and officers will be indemnified against liability and against all expenses of litigation incurred by them in connection with any claim, action, suit or proceeding (or settlement of the same) in which they become involved by virtue of their Fund office, unless their conduct is determined to constitute willful misfeasance, bad faith, gross negligence or reckless disregard of their duties, or unless it has been determined that they have not acted in good faith in the reasonable belief that their actions were in or not opposed to the best interests of the Funds. A determination that a person covered by the indemnification provisions is entitled to indemnification may be made by the court or other body before which the proceeding is brought, or by either a vote of a majority of a quorum of Trustees who are neither "interested persons" of the Trust nor parties to the proceeding or by an independent legal counsel in a written opinion. The Funds also may advance money for these expenses, provided that the Trustee or officer undertakes to repay the Funds if his conduct is later determined to preclude indemnification, and that either he provide security for the undertaking, the Trust be insured against losses resulting from lawful advances or a majority of C-11 a quorum of disinterested Trustees, or independent counsel in a written opinion, determines that he ultimately will be found to be entitled to indemnification. The Trust also maintains a liability insurance policy covering its Trustees and officers. ITEM 28. Business and Other Connections of Investment Adviser The only business of Janus Capital Corporation is to serve as the investment adviser of the Registrant and as investment adviser or subadviser to several other mutual funds and private and retirement accounts. Business backgrounds of the principal executive officers and directors of the adviser that also hold positions with the Registrant are included under "Officers and Trustees" in the currently effective Statements of Additional Information of the Registrant. The remaining principal executive officers of the investment adviser and their positions with the adviser and affiliated entities are: Mark B. Whiston, Vice President and Chief Marketing Officer of Janus Capital Corporation, Director and President of Janus Capital International Ltd.; Marjorie G. Hurd, Vice President of Janus Capital Corporation, Director and President of Janus Service Corporation; and Stephen L. Stieneker, Assistant General Counsel, Chief Compliance Officer and Vice President of Compliance of Janus Capital Corporation. Mr. Michael E. Herman, a director of Janus Capital Corporation, is Chairman of the Finance Committee (1990 to present) of Ewing Marion Kauffman Foundation, 4900 Oak, Kansas City, Missouri 64112. Mr. Michael N. Stolper, a director of Janus Capital Corporation, is President of Stolper & Company, Inc., 525 "B" Street, Suite 1080, San Diego, California 92101, an investment performance consultant. Mr. Thomas A. McDonnell, a director of Janus Capital Corporation, is President, Chief Executive Officer and a Director of DST Systems, Inc., 1055 Broadway, 9th Floor, Kansas City, Missouri 64105, provider of data processing and recordkeeping services for various mutual funds, and is Executive Vice President and a director of Kansas City Southern Industries, Inc., 114 W. 11th Street, Kansas City, Missouri 64105, a publicly traded holding company whose primary subsidiaries are engaged in transportation, information processing and financial services. Mr. Landon H. Rowland, a director of Janus Capital Corporation, is President and Chief Executive Officer of Kansas City Southern Industries, Inc. ITEM 29. Principal Underwriters (a) Janus Distributors, Inc. ("Janus Distributors") serves as a principal underwriter for the Registrant and the Retirement Shares of Janus Aspen Series only. (b) The principal business address, positions with Janus Distributors and positions with Registrant of Steven R. Goodbarn, officer and director of Janus Distributors, are described under "Officers and Trustees" in the Statement of Additional Information included in this Registration Statement. The remaining principal executive officers of Janus Distributors are Kelley Abbott Howes, President, and Jennifer A. Davis, Secretary. Ms. Howes's position with the Registrant is described under "Officers and Trustees" in the Statement of Additional Information. Ms. Davis does not hold any positions with the Registrant. The principal business address of each person is 100 Fillmore Street, Denver, Colorado 80206-4928. C-12 (c) Not applicable. ITEM 30. Location of Accounts and Records The accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the rules promulgated thereunder are maintained by Janus Capital Corporation and Janus Service Corporation, both of which are located at 100 Fillmore Street, Denver, Colorado 80206-4928, and by State Street Bank and Trust Company, P.O. Box 351, Boston, Massachusetts 02101, and United Missouri Bank, P.O. Box 419226, Kansas City, Missouri 64141-6226. ITEM 31. Management Services The Registrant has no management-related service contract which is not discussed in Part A or Part B of this form. ITEM 32. Undertakings (a) Not applicable. (b) Not applicable. (c) The Registrant undertakes to furnish each person to whom a prospectus is delivered with a copy of the Registrant's latest annual report to shareholders, upon request and without charge. C-13 SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this Amendment to its Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Amendment to its Registration Statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Denver, and State of Colorado, on the 26th day of June, 1997. JANUS INVESTMENT FUND By: /s/ Steven R. Goodbarn Steven R. Goodbarn Vice President and Chief Financial Officer (Principal Financial Officer) Janus Investment Fund is organized under the Agreement and Declaration of Trust of the Registrant dated February 11, 1986, a copy of which is on file with the Secretary of State of The Commonwealth of Massachusetts. The obligations of the Registrant hereunder are not binding upon any of the Trustees, shareholders, nominees, officers, agents or employees of the Registrant personally, but bind only the trust property of the Registrant, as provided in the Agreement and Declaration of Trust of the Registrant. The execution of this Amendment to the Registration Statement has been authorized by the Trustees of the Registrant and this Amendment to the Registration Statement has been signed by an authorized officer of the Registrant, acting as such, and neither such authorization by such Trustees nor such execution by such officer shall be deemed to have been made by any of them personally, but shall bind only the trust property of the Registrant as provided in its Declaration of Trust. Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. Signature Title Date Thomas H. Bailey* President June 26, 1997 Thomas H. Bailey (Principal Executive Officer) and Trustee /s/ Glenn P. O'Flaherty Treasurer and Chief June 26, 1997 Glenn P. O'Flaherty Accounting Officer (Principal Accounting Officer) /s/ James P. Craig, III Trustee June 26, 1997 James P. Craig, III Gary O. Loo* Trustee June 26, 1997 Gary O. Loo Dennis B. Mullen* Trustee June 26, 1997 Dennis B. Mullen James T. Rothe* Trustee June 26, 1997 James T. Rothe William D. Stewart* Trustee June 26, 1997 William D. Stewart Martin H. Waldinger* Trustee June 26, 1997 Martin H. Waldinger /s/ Steven R. Goodbarn *By Steven R. Goodbarn Attorney-in-Fact INDEX OF EXHIBITS Exhibit 1(k) Certificate of Designation for Janus Federal Tax-Exempt Fund Exhibit 1(l) Certificate of Designation for Janus Mercury Fund Exhibit 1(m) Certificate of Designation for Janus Overseas Fund Exhibit 1(n) Form of Amendment to the Registrant's Agreement and Declaration of Trust Exhibit 1(o) Form of Certificate of Designation for Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund Exhibit 4(k) Specimen Stock Certificate for Janus Federal Tax-Exempt Fund Exhibit 4(l) Specimen Stock Certificate for Janus Mercury Fund Exhibit 4(m) Specimen Stock Certificate for Janus Overseas Fund Exhibit 8(e) Letter Agreement dated October 9, 1992 Exhibit 8(f) Letter Agreement dated April 28, 1993 Exhibit 8(g) Letter Agreement dated April 4, 1994 Exhibit 8(h) Form of Custody Agreement between Janus Investment Fund on behalf of Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund and United Missouri Bank, N.A. Exhibit 9(c) Form of Administration Agreement with Janus Capital Corporation for Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund Exhibit 10(d) Opinion and Consent of Fund Counsel for Janus Twenty Fund Exhibit 10(e) Opinion and Consent of Fund Counsel for Janus Venture Fund Exhibit 10(f) Opinion and Consent of Fund Counsel for Janus Flexible Income Fund Exhibit 10(h) Opinion and Consent of Fund Counsel for Janus Federal Tax-Exempt Fund and Janus Mercury Fund Exhibit 10(i) Opinion and Consent of Fund Counsel for Janus Overseas Fund Exhibit 10(j) Opinion and Consent of Fund Counsel for Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund Exhibit 10(k) Opinion and Consent of Fund Counsel for Institutional Shares of Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund Exhibit 11 Consent of Price Waterhouse Exhibit 14(a) Model Individual Retirement Plan Exhibit 14(c) Model Section 403(b)(7) Plan Exhibit 17 Powers of Attorney Exhibit 27 Financial Data Schedule EX-99 2 EX 1(K) CERT OF DESIG-JANUS FED TAX-EXEMPT FUND EXHIBIT 1(k) JANUS INVESTMENT FUND CERTIFICATE OF DESIGNATION FOR JANUS FEDERAL TAX-EXEMPT FUND The undersigned, being the Secretary of Janus Investment Fund (hereinafter referred to as the "Trust"), a trust with transferable shares of the type commonly called a Massachusetts business trust, DOES HEREBY CERTIFY that, pursuant to the authority conferred upon the Trustees of the Trust by Section 6.1(b) and Section 9.3 of the Agreement and Declaration of Trust, dated February 11, 1986, and all amendments thereto, (hereinafter referred to as the "Declaration of Trust"), and by the affirmative vote of a Majority of the Trustees at a meeting duly called and held on December 1, 1992, the Declaration of Trust is amended as follows: There is hereby established and designated the Janus Federal Tax-Exempt Fund (hereinafter referred to as the "Tax-Exempt Fund"). The beneficial interest in the Tax-Exempt Fund shall be divided into Shares having a nominal or par value of one cent ($.01) per Share, of which an unlimited number may be issued, which Shares shall represent interests only in the Tax-Exempt Fund. The Shares of the Tax-Exempt Fund shall have the following rights and preferences: (a) Assets Belonging to the Tax-Exempt Fund. Any portion of the Trust Property allocated to the Tax-Exempt Fund, and all consideration received by the Trust for the issue or sale of Shares of the Tax-Exempt Fund, together with all assets in which such consideration is invested or reinvested, all interest, dividends, income, earnings, profits and gains therefrom, and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same may be, shall be held by the Trustees in trust for the benefit of the holders of Shares of the Tax-Exempt Fund and shall irrevocably belong to the Tax-Exempt Fund for all purposes, and shall be so recorded upon the books of account of the Trust, and the Shareholders of any other Fund who are not Shareholders of the Tax-Exempt Fund shall not have, and shall be conclusively deemed to have waived, any claims to 1 Certificate of Designation Janus Federal Tax-Exempt Fund the assets of the Tax-Exempt Fund. Such consideration, assets, interest, dividends, income, earnings, profits, gains and proceeds, together with any General Items allocated to the Tax-Exempt Fund as provided in the following sentence, are herein referred to collectively as "Fund Assets" of the Tax-Exempt Fund, and as assets "belonging to" the Tax-Exempt Fund. In the event that there are any assets, income, earnings, profits, and proceeds thereof, funds, or payments which are not readily identifiable as belonging to any particular Fund (collectively "General Items"), the Trustees shall allocate such General Items to and among any one or more of the Funds established and designated from time to time in such manner and on such basis as they, in their sole discretion, deem fair and equitable; and any General Items so allocated to the Tax-Exempt Fund shall belong to and be part of the Fund Assets of the Tax-Exempt Fund. Each such allocation by the Trustees shall be conclusive and binding upon the Shareholders of all the Funds for all purposes. (b) Liabilities of the Tax-Exempt Fund. The assets belonging to the Tax-Exempt Fund shall be charged with the liabilities in respect of the Tax-Exempt Fund and all expenses, costs, charges and reserves attributable to the Tax-Exempt Fund, and any general liabilities, expenses, costs, charges or reserves of the Trust which are not readily identifiable as pertaining to any particular Fund shall be allocated and charged by the Trustees to and among any one or more of the Funds established and designated from time to time in such manner and on such basis as the Trustees in their sole discretion deem fair and equitable. The indebtedness, expenses, costs, charges and reserves allocated and so charged to the Tax-Exempt Fund are herein referred to as "liabilities of" the Tax-Exempt Fund. Each allocation of liabilities, expenses, costs, charges and reserves by the Trustees shall be conclusive and binding upon the Shareholders of all the Funds for all purposes. Any creditor of the Tax-Exempt Fund may look only to the assets of the Tax-Exempt Fund to satisfy such creditor's debt. (c) Dividends. Dividends and distributions on Shares of the Tax-Exempt Fund may be paid with such frequency as the Trustees may determine, which may be daily or otherwise pursuant to a standing resolution or resolutions adopted only once or with such frequency as the Trustees may determine, to the Shareholders of the Tax-Exempt Fund, from 2 Certificate of Designation Janus Federal Tax-Exempt Fund such of the income, accrued or realized, and capital gains, realized or unrealized, and out of the assets belonging to the Tax-Exempt Fund, as the Trustees may determine, after providing for actual and accrued liabilities of the Tax-Exempt Fund. All dividends and distributions on Shares of the Tax-Exempt Fund shall be distributed pro rata to the Shareholders of the Tax-Exempt Fund in proportion to the number of such Shares held by such holders at the date and time of record established for the payment of such dividends or distributions, except that in connection with any dividend or distribution program or procedure the Trustees may determine that no dividend or distribution shall be payable on Shares as to which the Shareholder's purchase order and/or payment have not been received by the time or times established by the Trustees under such program or procedure, or that dividends or distributions shall be payable on Shares which have been tendered by the holder thereof for redemption or repurchase, but the redemption or repurchase proceeds of which have not yet been paid to such Shareholder. Such dividends and distributions may be made in cash or Shares of the Tax-Exempt Fund or a combination thereof as determined by the Trustees, or pursuant to any program that the Trustees may have in effect at the time for the election by each Shareholder of the mode of the making of such dividend or distribution to that Shareholder. Any such dividend or distribution paid in Shares will be paid at the net asset value thereof as determined in accordance with subsection (h) hereof. (d) Liquidation. In the event of the liquidation or dissolution of the Trust, the Shareholders of the Tax-Exempt Fund shall be entitled to receive, when and as declared by the Trustees, the excess of the Fund Assets over the liabilities of the Tax-Exempt Fund. The assets so distributable to the Shareholders of the Tax-Exempt Fund shall be distributed among such Shareholders in proportion to the number of Shares of the Tax-Exempt Fund held by them and recorded on the books of the Trust. The liquidation of the Tax-Exempt Fund may be authorized by vote of a Majority of the Trustees, subject to the affirmative vote of "a majority of the outstanding voting securities" of the Tax-Exempt Fund, as the quoted phrase is defined in the 1940 Act, determined in accordance with clause (iii) of the definition of "Majority Shareholder Vote" in Section 1.4 of the Declaration of Trust. (e) Voting. The Shareholders shall have the voting rights set forth in or determined under Article 7 of the Declaration of Trust. 3 Certificate of Designation Janus Federal Tax-Exempt Fund (f) Redemption by Shareholder. Each holder of Shares of the Tax-Exempt Fund shall have the right at such times as may be permitted by the Trust, but no less frequently than once each week, to require the Trust to redeem all or any part of his Shares of the Tax-Exempt Fund at a redemption price equal to the net asset value per Share of the Tax-Exempt Fund next determined in accordance with subsection (h) hereof after the Shares are properly tendered for redemption; provided, that the Trustees may from time to time, in their discretion, determine and impose a fee for such redemption. Payment of the redemption price shall be in cash; provided, however, that if the Trustees determine, which determination shall be conclusive, that conditions exist which make payment wholly in cash unwise or undesirable, the Trust may make payment wholly or partly in Securities or other assets belonging to the Tax-Exempt Fund at the value of such Securities or assets used in such determination of net asset value. Notwithstanding the foregoing, the Trust may postpone payment of the redemption price and may suspend the right of the holders of Shares of the Tax-Exempt Fund to require the Trust to redeem Shares of the Tax-Exempt Fund during any period or at any time when and to the extent permissible under the 1940 Act. (g) Redemption at the Option of the Trust. Each Share of the Tax-Exempt Fund shall be subject to redemption at the option of the Trust at the redemption price which would be applicable if such Share were then being redeemed by the Shareholder pursuant to subsection (f) hereof: (i) at any time, if the Trustees determine in their sole discretion that failure to so redeem may have materially adverse consequences to the holders of the Shares of the Trust or of any Fund, or (ii) upon such other conditions with respect to maintenance of Shareholder accounts of a minimum amount as may from time to time be determined by the Trustees and set forth in the then current Prospectus of the Tax-Exempt Fund. Upon such redemption the holders of the Shares so redeemed shall have no further right with respect thereto other than to receive payment of such redemption price. (h) Net Asset Value. The net asset value per Share of the Tax-Exempt Fund at any time shall be the quotient obtained by dividing the value of the net assets of the Tax-Exempt Fund at such time (being the current value of the assets belonging to the Tax-Exempt Fund, less its then existing liabilities) by the total number of Shares of the Tax-Exempt Fund then outstanding, all determined in accordance with the methods and procedures, including without limitation those with respect to rounding, established by the Trustees from time to time. The Trustees 4 Certificate of Designation Janus Federal Tax-Exempt Fund may determine to maintain the net asset value per Share of the Tax-Exempt Fund at a designated constant dollar amount and in connection therewith may adopt procedures not inconsistent with the 1940 Act for the continuing declaration of income attributable to the Tax-Exempt Fund as dividends payable in additional Shares of the Tax-Exempt Fund at the designated constant dollar amount and for the handling of any losses attributable to the Tax-Exempt Fund. Such procedures may provide that in the event of any loss each Shareholder shall be deemed to have contributed to the shares of beneficial interest account of the Tax-Exempt Fund his pro rata portion of the total number of Shares required to be canceled in order to permit the net asset value per share of the Tax-Exempt Fund to be maintained, after reflecting such loss, at the designated constant dollar amount. Each Shareholder of the Tax-Exempt Fund shall be deemed to have expressly agreed, by his investment in the Tax-Exempt Fund, to make the contribution referred to in the preceding sentence in the event of any such loss. (i) Transfer. All Shares of the Tax-Exempt Fund shall be transferable, but transfers of Shares of the Tax-Exempt Fund will be recorded on the Share transfer records of the Trust applicable to the Tax-Exempt Fund only at such times as Shareholders shall have the right to require the Trust to redeem Shares of the Tax-Exempt Fund and at such other times as may be permitted by the Trustees. (j) Equality. All Shares of the Tax-Exempt Fund shall represent an equal proportionate interest in the assets belonging to the Tax-Exempt Fund (subject to the liabilities of the Tax-Exempt Fund), and each Share of the Tax-Exempt Fund shall be equal to each other Share thereof; but the provisions of this sentence shall not restrict any distinctions permissible under subsection (c) hereof that may exist with respect to dividends and distributions on Shares of the Tax-Exempt Fund. The Trustees may from time to time divide or combine the Shares of the Tax-Exempt Fund into a greater or lesser number of Shares of the Tax-Exempt Fund without thereby changing the proportionate beneficial interest in the assets belonging to the Tax-Exempt Fund or in any way affecting the rights of the holders of Shares of any other Fund. (k) Rights of Fractional Shares. Any fractional Share of the Tax-Exempt Fund shall carry proportionately all the 5 Certificate of Designation Janus Federal Tax-Exempt Fund rights and obligations of a whole Share of the Tax-Exempt Fund, including rights and obligations with respect to voting, receipt of dividends and distributions, redemption of Shares, and liquidation of the Trust or of the Tax-Exempt Fund. (l) Conversion Rights. Subject to compliance with the requirements of the 1940 Act, the Trustees shall have the authority to provide that holders of Shares of the Tax-Exempt Fund shall have the right to convert said Shares into Shares of one or more other Funds in accordance with such requirements and procedures as the Trustees may establish. (m) Amendment, etc. Subject to the provisions and limitations of Section 9.3 of the Declaration of Trust and applicable law, this Certificate of Designation may be amended by an instrument in writing signed by a Majority of the Trustees (or by an officer of the Trust pursuant to the vote of a Majority of the Trustees), provided that, if any amendment adversely affects the rights of the Shareholders of the Tax-Exempt Fund, such amendment may be adopted by an instrument in writing signed by a Majority of the Trustees (or by an officer of the Trust pursuant to the vote of a Majority of the Trustees) when authorized to do so by the vote in accordance with Section 7.1 of the Declaration of Trust of the holders of a majority of all the Shares of the Tax-Exempt Fund outstanding and entitled to vote. (n) Incorporation of Defined Terms. All capitalized terms which are not defined herein shall have the same meanings as are assigned to those terms in the Declaration of Trust filed with the Secretary of State of the Commonwealth of Massachusetts. The Trustees further direct that, upon the execution of this Certificate of Designation, the Trust take all necessary action to file a copy of this Certificate of Designation with the Secretary of State of The Commonwealth of Massachusetts and at any other place required by law or by the Declaration of Trust. IN WITNESS WHEREOF, the undersigned has set her hand and seal this 11th day of February, 1993. /s/ Janice M. Teague Janice M. Teague, Secretary 6 EX-99 3 EX 1(L) CERT OF DESIG-JANUS MERCURY FUND EXHIBIT 1(l) JANUS INVESTMENT FUND CERTIFICATE OF DESIGNATION FOR JANUS MERCURY FUND The undersigned, being the Secretary of Janus Investment Fund (hereinafter referred to as the "Trust"), a trust with transferable shares of the type commonly called a Massachusetts business trust, DOES HEREBY CERTIFY that, pursuant to the authority conferred upon the Trustees of the Trust by Section 6.1(b) and Section 9.3 of the Agreement and Declaration of Trust, dated February 11, 1986, and all amendments thereto, (hereinafter referred to as the "Declaration of Trust"), and by the affirmative vote of a Majority of the Trustees at a meeting duly called and held on December 1, 1992, the Declaration of Trust is amended as follows: There is hereby established and designated the Janus Mercury Fund (hereinafter referred to as the "Mercury Fund"). The beneficial interest in the Mercury Fund shall be divided into Shares having a nominal or par value of one cent ($.01) per Share, of which an unlimited number may be issued, which Shares shall represent interests only in the Mercury Fund. The Shares of the Mercury Fund shall have the following rights and preferences: (a) Assets Belonging to the Mercury Fund. Any portion of the Trust Property allocated to the Mercury Fund, and all consideration received by the Trust for the issue or sale of Shares of the Mercury Fund, together with all assets in which such consideration is invested or reinvested, all interest, dividends, income, earnings, profits and gains therefrom, and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same may be, shall be held by the Trustees in trust for the benefit of the holders of Shares of the Mercury Fund and shall irrevocably belong to the Mercury Fund for all purposes, and shall be so recorded upon the books of account of the Trust, and the Shareholders of any other Fund who are not Shareholders of the Mercury Fund shall not have, and shall be conclusively deemed to have waived, any claims to the assets of the Mercury Fund. Such consideration, assets, interest, dividends, income, earnings, profits, gains and proceeds, together with any General Items allocated to the Mercury Fund as provided in the following sentence, are herein referred to collectively as "Fund Assets" of the 1 Certificate of Designation Janus Mercury Fund Mercury Fund, and as assets "belonging to" the Mercury Fund. In the event that there are any assets, income, earnings, profits, and proceeds thereof, funds, or payments which are not readily identifiable as belonging to any particular Fund (collectively "General Items"), the Trustees shall allocate such General Items to and among any one or more of the Funds established and designated from time to time in such manner and on such basis as they, in their sole discretion, deem fair and equitable; and any General Items so allocated to the Mercury Fund shall belong to and be part of the Fund Assets of the Mercury Fund. Each such allocation by the Trustees shall be conclusive and binding upon the Shareholders of all the Funds for all purposes. (b) Liabilities of the Mercury Fund. The assets belonging to the Mercury Fund shall be charged with the liabilities in respect of the Mercury Fund and all expenses, costs, charges and reserves attributable to the Mercury Fund, and any general liabilities, expenses, costs, charges or reserves of the Trust which are not readily identifiable as pertaining to any particular Fund shall be allocated and charged by the Trustees to and among any one or more of the Funds established and designated from time to time in such manner and on such basis as the Trustees in their sole discretion deem fair and equitable. The indebtedness, expenses, costs, charges and reserves allocated and so charged to the Mercury Fund are herein referred to as "liabilities of" the Mercury Fund. Each allocation of liabilities, expenses, costs, charges and reserves by the Trustees shall be conclusive and binding upon the Shareholders of all the Funds for all purposes. Any creditor of the Mercury Fund may look only to the assets of the Mercury Fund to satisfy such creditor's debt. (c) Dividends. Dividends and distributions on Shares of the Mercury Fund may be paid with such frequency as the Trustees may determine, which may be daily or otherwise pursuant to a standing resolution or resolutions adopted only once or with such frequency as the Trustees may determine, to the Shareholders of the Mercury Fund, from such of the income, accrued or realized, and capital gains, realized or unrealized, and out of the assets belonging to the Mercury Fund, as the Trustees may determine, after providing for actual and accrued liabilities of the Mercury Fund. All dividends and distributions on Shares of the Mercury Fund shall be distributed pro rata to the Shareholders of the Mercury Fund in proportion to the number 2 Certificate of Designation Janus Mercury Fund of such Shares held by such holders at the date and time of record established for the payment of such dividends or distributions, except that in connection with any dividend or distribution program or procedure the Trustees may determine that no dividend or distribution shall be payable on Shares as to which the Shareholder's purchase order and/or payment have not been received by the time or times established by the Trustees under such program or procedure, or that dividends or distributions shall be payable on Shares which have been tendered by the holder thereof for redemption or repurchase, but the redemption or repurchase proceeds of which have not yet been paid to such Shareholder. Such dividends and distributions may be made in cash or Shares of the Mercury Fund or a combination thereof as determined by the Trustees, or pursuant to any program that the Trustees may have in effect at the time for the election by each Shareholder of the mode of the making of such dividend or distribution to that Shareholder. Any such dividend or distribution paid in Shares will be paid at the net asset value thereof as determined in accordance with subsection (h) hereof. (d) Liquidation. In the event of the liquidation or dissolution of the Trust, the Shareholders of the Mercury Fund shall be entitled to receive, when and as declared by the Trustees, the excess of the Fund Assets over the liabilities of the Mercury Fund. The assets so distributable to the Shareholders of the Mercury Fund shall be distributed among such Shareholders in proportion to the number of Shares of the Mercury Fund held by them and recorded on the books of the Trust. The liquidation of the Mercury Fund may be authorized by vote of a Majority of the Trustees, subject to the affirmative vote of "a majority of the outstanding voting securities" of the Mercury Fund, as the quoted phrase is defined in the 1940 Act, determined in accordance with clause (iii) of the definition of "Majority Shareholder Vote" in Section 1.4 of the Declaration of Trust. (e) Voting. The Shareholders shall have the voting rights set forth in or determined under Article 7 of the Declaration of Trust. (f) Redemption by Shareholder. Each holder of Shares of the Mercury Fund shall have the right at such times as may be permitted by the Trust, but no less frequently than once each week, to require the Trust to redeem all or any 3 Certificate of Designation Janus Mercury Fund part of his Shares of the Mercury Fund at a redemption price equal to the net asset value per Share of the Mercury Fund next determined in accordance with subsection (h) hereof after the Shares are properly tendered for redemption; provided, that the Trustees may from time to time, in their discretion, determine and impose a fee for such redemption. Payment of the redemption price shall be in cash; provided, however, that if the Trustees determine, which determination shall be conclusive, that conditions exist which make payment wholly in cash unwise or undesirable, the Trust may make payment wholly or partly in Securities or other assets belonging to the Mercury Fund at the value of such Securities or assets used in such determination of net asset value. Notwithstanding the foregoing, the Trust may postpone payment of the redemption price and may suspend the right of the holders of Shares of the Mercury Fund to require the Trust to redeem Shares of the Mercury Fund during any period or at any time when and to the extent permissible under the 1940 Act. (g) Redemption at the Option of the Trust. Each Share of the Mercury Fund shall be subject to redemption at the option of the Trust at the redemption price which would be applicable if such Share were then being redeemed by the Shareholder pursuant to subsection (f) hereof: (i) at any time, if the Trustees determine in their sole discretion that failure to so redeem may have materially adverse consequences to the holders of the Shares of the Trust or of any Fund, or (ii) upon such other conditions with respect to maintenance of Shareholder accounts of a minimum amount as may from time to time be determined by the Trustees and set forth in the then current Prospectus of the Mercury Fund. Upon such redemption the holders of the Shares so redeemed shall have no further right with respect thereto other than to receive payment of such redemption price. (h) Net Asset Value. The net asset value per Share of the Mercury Fund at any time shall be the quotient obtained by dividing the value of the net assets of the Mercury Fund at such time (being the current value of the assets belonging to the Mercury Fund, less its then existing liabilities) by the total number of Shares of the Mercury Fund then outstanding, all determined in accordance with the methods and procedures, including without limitation those with respect to rounding, established by the Trustees from time to time. The Trustees may determine to maintain the net asset value per Share of the Mercury Fund at a 4 Certificate of Designation Janus Mercury Fund designated constant dollar amount and in connection therewith may adopt procedures not inconsistent with the 1940 Act for the continuing declaration of income attributable to the Mercury Fund as dividends payable in additional Shares of the Mercury Fund at the designated constant dollar amount and for the handling of any losses attributable to the Mercury Fund. Such procedures may provide that in the event of any loss each Shareholder shall be deemed to have contributed to the shares of beneficial interest account of the Mercury Fund his pro rata portion of the total number of Shares required to be canceled in order to permit the net asset value per share of the Mercury Fund to be maintained, after reflecting such loss, at the designated constant dollar amount. Each Shareholder of the Mercury Fund shall be deemed to have expressly agreed, by his investment in the Mercury Fund, to make the contribution referred to in the preceding sentence in the event of any such loss. (i) Transfer. All Shares of the Mercury Fund shall be transferable, but transfers of Shares of the Mercury Fund will be recorded on the Share transfer records of the Trust applicable to the Mercury Fund only at such times as Shareholders shall have the right to require the Trust to redeem Shares of the Mercury Fund and at such other times as may be permitted by the Trustees. (j) Equality. All Shares of the Mercury Fund shall represent an equal proportionate interest in the assets belonging to the Mercury Fund (subject to the liabilities of the Mercury Fund), and each Share of the Mercury Fund shall be equal to each other Share thereof; but the provisions of this sentence shall not restrict any distinctions permissible under subsection (c) hereof that may exist with respect to dividends and distributions on Shares of the Mercury Fund. The Trustees may from time to time divide or combine the Shares of the Mercury Fund into a greater or lesser number of Shares of the Mercury Fund without thereby changing the proportionate beneficial interest in the assets belonging to the Mercury Fund or in any way affecting the rights of the holders of Shares of any other Fund. (k) Rights of Fractional Shares. Any fractional Share of the Mercury Fund shall carry proportionately all the rights and obligations of a whole Share of the Mercury Fund, including rights and obligations with respect to voting, 5 Certificate of Designation Janus Mercury Fund receipt of dividends and distributions, redemption of Shares, and liquidation of the Trust or of the Mercury Fund. (l) Conversion Rights. Subject to compliance with the requirements of the 1940 Act, the Trustees shall have the authority to provide that holders of Shares of the Mercury Fund shall have the right to convert said Shares into Shares of one or more other Funds in accordance with such requirements and procedures as the Trustees may establish. (m) Amendment, etc. Subject to the provisions and limitations of Section 9.3 of the Declaration of Trust and applicable law, this Certificate of Designation may be amended by an instrument in writing signed by a Majority of the Trustees (or by an officer of the Trust pursuant to the vote of a Majority of the Trustees), provided that, if any amendment adversely affects the rights of the Shareholders of the Mercury Fund, such amendment may be adopted by an instrument in writing signed by a Majority of the Trustees (or by an officer of the Trust pursuant to the vote of a Majority of the Trustees) when authorized to do so by the vote in accordance with Section 7.1 of the Declaration of Trust of the holders of a majority of all the Shares of the Mercury Fund outstanding and entitled to vote. (n) Incorporation of Defined Terms. All capitalized terms which are not defined herein shall have the same meanings as are assigned to those terms in the Declaration of Trust filed with the Secretary of State of the Commonwealth of Massachusetts. The Trustees further direct that, upon the execution of this Certificate of Designation, the Trust take all necessary action to file a copy of this Certificate of Designation with the Secretary of State of The Commonwealth of Massachusetts and at any other place required by law or by the Declaration of Trust. IN WITNESS WHEREOF, the undersigned has set her hand and seal this 11th day of February, 1993. /s/ Janice M. Teague Janice M. Teague, Secretary 6 EX-99 4 EX 1(M) CERT OF DESIG-JANUS OVERSEAS FUND EXHIBIT 1(m) JANUS INVESTMENT FUND CERTIFICATE OF DESIGNATION FOR JANUS OVERSEAS FUND The undersigned, being the Secretary of Janus Investment Fund (hereinafter referred to as the "Trust"), a trust with transferable shares of the type commonly called a Massachusetts business trust, DOES HEREBY CERTIFY that, pursuant to the authority conferred upon the Trustees of the Trust by Section 6.1(b) and Section 9.3 of the Agreement and Declaration of Trust, dated February 11, 1986, and all amendments thereto, (hereinafter referred to as the "Declaration of Trust"), and by the affirmative vote of a Majority of the Trustees at a meeting duly called and held on December 3, 1993, the Declaration of Trust is amended as follows: There is hereby established and designated the Janus Overseas Fund (hereinafter referred to as the "Overseas Fund"). The beneficial interest in the Overseas Fund shall be divided into Shares having a nominal or par value of one cent ($.01) per Share, of which an unlimited number may be issued, which Shares shall represent interests only in the Overseas Fund. The Shares of the Overseas Fund shall have the following rights and preferences: (a) Assets Belonging to the Overseas Fund. Any portion of the Trust Property allocated to the Overseas Fund, and all consideration received by the Trust for the issue or sale of Shares of the Overseas Fund, together with all assets in which such consideration is invested or reinvested, all interest, dividends, income, earnings, profits and gains therefrom, and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same may be, shall be held by the Trustees in trust for the benefit of the holders of Shares of the Overseas Fund and shall irrevocably belong to the Overseas Fund for all purposes, and shall be so recorded upon the books of account of the Trust, and the Shareholders of any other Fund who are not Shareholders of the Overseas Fund shall not have, and shall be conclusively deemed to have waived, any claims to the assets of the Overseas Fund. Such consideration, assets, interest, dividends, income, earnings, profits, gains and proceeds, together with any General Items allocated to the Overseas Fund as provided in the following sentence, are herein referred to collectively as "Fund Assets" of the Overseas Fund, and as assets "belonging to" the Overseas Fund. In the event that there are any assets, income, earnings, profits, and proceeds thereof, funds, or payments which are not readily identifiable as belonging to any particular Fund (collectively "General Items"), the Trustees shall allocate such General Items to and among any one or more of the Funds established and designated from time to - 1 - Certificate of Designation Janus Overseas Fund time in such manner and on such basis as they, in their sole discretion, deem fair and equitable; and any General Items so allocated to the Overseas Fund shall belong to and be part of the Fund Assets of the Overseas Fund. Each such allocation by the Trustees shall be conclusive and binding upon the Shareholders of all the Funds for all purposes. (b) Liabilities of the Overseas Fund. The assets belonging to the Overseas Fund shall be charged with the liabilities in respect of the Overseas Fund and all expenses, costs, charges and reserves attributable to the Overseas Fund, and any general liabilities, expenses, costs, charges or reserves of the Trust which are not readily identifiable as pertaining to any particular Fund shall be allocated and charged by the Trustees to and among any one or more of the Funds established and designated from time to time in such manner and on such basis as the Trustees in their sole discretion deem fair and equitable. The indebtedness, expenses, costs, charges and reserves allocated and so charged to the Overseas Fund are herein referred to as "liabilities of" the Overseas Fund. Each allocation of liabilities, expenses, costs, charges and reserves by the Trustees shall be conclusive and binding upon the Shareholders of all the Funds for all purposes. Any creditor of the Overseas Fund may look only to the assets of the Overseas Fund to satisfy such creditor's debt. (c) Dividends. Dividends and distributions on Shares of the Overseas Fund may be paid with such frequency as the Trustees may determine, which may be daily or otherwise pursuant to a standing resolution or resolutions adopted only once or with such frequency as the Trustees may determine, to the Shareholders of the Overseas Fund, from such of the income, accrued or realized, and capital gains, realized or unrealized, and out of the assets belonging to the Overseas Fund, as the Trustees may determine, after providing for actual and accrued liabilities of the Overseas Fund. All dividends and distributions on Shares of the Overseas Fund shall be distributed pro rata to the Shareholders of the Overseas Fund in proportion to the number of such Shares held by such holders at the date and time of record established for the payment of such dividends or distributions, except that in connection with any dividend or distribution program or procedure the Trustees may determine that no dividend or distribution shall be payable on Shares as to which the Shareholder's purchase order and/or payment have not been received by the time or times established by the Trustees under such program or procedure, or that dividends or distributions shall be payable on Shares which have been tendered by the holder thereof for redemption or repurchase, but the redemption or repurchase proceeds of which have not yet been paid to such Shareholder. Such dividends and distributions may be made in cash or Shares of the Overseas Fund or a combination thereof as - 2 - Certificate of Designation Janus Overseas Fund determined by the Trustees, or pursuant to any program that the Trustees may have in effect at the time for the election by each Shareholder of the mode of the making of such dividend or distribution to that Shareholder. Any such dividend or distribution paid in Shares will be paid at the net asset value thereof as determined in accordance with subsection (h) hereof. (d) Liquidation. In the event of the liquidation or dissolution of the Trust, the Shareholders of the Overseas Fund shall be entitled to receive, when and as declared by the Trustees, the excess of the Fund Assets over the liabilities of the Overseas Fund. The assets so distributable to the Shareholders of the Overseas Fund shall be distributed among such Shareholders in proportion to the number of Shares of the Overseas Fund held by them and recorded on the books of the Trust. The liquidation of the Overseas Fund may be authorized by vote of a Majority of the Trustees, subject to the affirmative vote of "a majority of the outstanding voting securities" of the Overseas Fund, as the quoted phrase is defined in the 1940 Act, determined in accordance with clause (iii) of the definition of "Majority Shareholder Vote" in Section 1.4 of the Declaration of Trust. (e) Voting. The Shareholders shall have the voting rights set forth in or determined under Article 7 of the Declaration of Trust. (f) Redemption by Shareholder. Each holder of Shares of the Overseas Fund shall have the right at such times as may be permitted by the Trust, but no less frequently than once each week, to require the Trust to redeem all or any part of his Shares of the Overseas Fund at a redemption price equal to the net asset value per Share of the Overseas Fund next determined in accordance with subsection (h) hereof after the Shares are properly tendered for redemption; provided, that the Trustees may from time to time, in their discretion, determine and impose a fee for such redemption. Payment of the redemption price shall be in cash; provided, however, that if the Trustees determine, which determination shall be conclusive, that conditions exist which make payment wholly in cash unwise or undesirable, the Trust may make payment wholly or partly in Securities or other assets belonging to the Overseas Fund at the value of such Securities or assets used in such determination of net asset value. Notwithstanding the foregoing, the Trust may postpone payment of the redemption price and may suspend the right of the holders of Shares of the Overseas Fund to require the Trust to redeem Shares of the Overseas Fund during any period or at any time when and to the extent permissible under the 1940 Act. - 3 - Certificate of Designation Janus Overseas Fund (g) Redemption at the Option of the Trust. Each Share of the Overseas Fund shall be subject to redemption at the option of the Trust at the redemption price which would be applicable if such Share were then being redeemed by the Shareholder pursuant to subsection (f) hereof: (i) at any time, if the Trustees determine in their sole discretion that failure to so redeem may have materially adverse consequences to the holders of the Shares of the Trust or of any Fund, or (ii) upon such other conditions with respect to maintenance of Shareholder accounts of a minimum amount as may from time to time be determined by the Trustees and set forth in the then current Prospectus of the Overseas Fund. Upon such redemption the holders of the Shares so redeemed shall have no further right with respect thereto other than to receive payment of such redemption price. (h) Net Asset Value. The net asset value per Share of the Overseas Fund at any time shall be the quotient obtained by dividing the value of the net assets of the Overseas Fund at such time (being the current value of the assets belonging to the Overseas Fund, less its then existing liabilities) by the total number of Shares of the Overseas Fund then outstanding, all determined in accordance with the methods and procedures, including without limitation those with respect to rounding, established by the Trustees from time to time. The Trustees may determine to maintain the net asset value per Share of the Overseas Fund at a designated constant dollar amount and in connection therewith may adopt procedures not inconsistent with the 1940 Act for the continuing declaration of income attributable to the Overseas Fund as dividends payable in additional Shares of the Overseas Fund at the designated constant dollar amount and for the handling of any losses attributable to the Overseas Fund. Such procedures may provide that in the event of any loss each Shareholder shall be deemed to have contributed to the shares of beneficial interest account of the Overseas Fund his pro rata portion of the total number of Shares required to be canceled in order to permit the net asset value per share of the Overseas Fund to be maintained, after reflecting such loss, at the designated constant dollar amount. Each Shareholder of the Overseas Fund shall be deemed to have expressly agreed, by his investment in the Overseas Fund, to make the contribution referred to in the preceding sentence in the event of any such loss. (i) Transfer. All Shares of the Overseas Fund shall be transferable, but transfers of Shares of the Overseas Fund will be recorded on the Share transfer records of the Trust applicable to the Overseas Fund only at such times as Shareholders shall have the right to require the Trust to redeem Shares of the Overseas Fund and at such other times as may be permitted by the Trustees. - 4 - Certificate of Designation Janus Overseas Fund (j) Equality. All Shares of the Overseas Fund shall represent an equal proportionate interest in the assets belonging to the Overseas Fund (subject to the liabilities of the Overseas Fund), and each Share of the Overseas Fund shall be equal to each other Share thereof; but the provisions of this sentence shall not restrict any distinctions permissible under subsection (c) hereof that may exist with respect to dividends and distributions on Shares of the Overseas Fund. The Trustees may from time to time divide or combine the Shares of the Overseas Fund into a greater or lesser number of Shares of the Overseas Fund without thereby changing the proportionate beneficial interest in the assets belonging to the Overseas Fund or in any way affecting the rights of the holders of Shares of any other Fund. (k) Rights of Fractional Shares. Any fractional Share of the Overseas Fund shall carry proportionately all the rights and obligations of a whole Share of the Overseas Fund, including rights and obligations with respect to voting, receipt of dividends and distributions, redemption of Shares, and liquidation of the Trust or of the Overseas Fund. (l) Conversion Rights. Subject to compliance with the requirements of the 1940 Act, the Trustees shall have the authority to provide that holders of Shares of the Overseas Fund shall have the right to convert said Shares into Shares of one or more other Funds in accordance with such requirements and procedures as the Trustees may establish. (m) Amendment, etc. Subject to the provisions and limitations of Section 9.3 of the Declaration of Trust and applicable law, this Certificate of Designation may be amended by an instrument in writing signed by a Majority of the Trustees (or by an officer of the Trust pursuant to the vote of a Majority of the Trustees), provided that, if any amendment adversely affects the rights of the Shareholders of the Overseas Fund, such amendment may be adopted by an instrument in writing signed by a Majority of the Trustees (or by an officer of the Trust pursuant to the vote of a Majority of the Trustees) when authorized to do so by the vote in accordance with Section 7.1 of the Declaration of Trust of the holders of a majority of all the Shares of the Overseas Fund outstanding and entitled to vote. - 5 - Certificate of Designation Janus Overseas Fund (n) Incorporation of Defined Terms. All capitalized terms which are not defined herein shall have the same meanings as are assigned to those terms in the Declaration of Trust filed with the Secretary of State of the Commonwealth of Massachusetts. The Trustees further direct that, upon the execution of this Certificate of Designation, the Trust take all necessary action to file a copy of this Certificate of Designation with the Secretary of State of The Commonwealth of Massachusetts and at any other place required by law or by the Declaration of Trust. IN WITNESS WHEREOF, the undersigned has set her hand and seal this 10th day of February, 1994. /s/ Janice M. Teague Janice M. Teague, Secretary - 6 - ACKNOWLEDGMENT STATE OF COLORADO ) CITY AND : COUNTY OF DENVER ) On this 10th day of February, 1994, before me personally came Janice M. Teague, Secretary of Janus Investment Fund, to me known, and known to me to be the person described in and who executed the foregoing instrument, and acknowledged that she had executed the same as her free act and deed. Witness my hand and official seal. /s/ Dexter S. Buck Notary Public My commission expires 9/14/96 EX-99 5 EX 1(N) FORM OF AMEND TO AGMT & DEC OF TRST EXHIBIT 1(n) JANUS INVESTMENT FUND Form of Certificate of Amendment The undersigned, being the Secretary of Janus Investment Fund, a trust with transferable shares of the type commonly called a Massachusetts business trust (the "Trust"), DOES HEREBY CERTIFY that, pursuant to the authority conferred upon the Trustees of the Trust by Section 9.3 of the Agreement and Declaration of Trust, dated February 11, 1986, as amended to date (hereinafter, as so amended, referred to as the "Declaration of Trust"), and by the affirmative vote of a Majority of the Trustees at a meeting duly called and held on ______________, the Declaration of Trust is amended as follows: 1. Section 1.4 ("Definitions") of the Declaration of Trust is hereby amended by adding a new definition, "Class" or "Classes," which shall read in its entirety as follows: "Class" or "Classes" shall mean any class of Shares of a Series authorized by the Trustees to represent differing interests in such Series pursuant to the provisions of Section 6.1. 2. The definition of "Majority Shareholder Vote" set forth in Section 1.4 of the Declaration of Trust is hereby amended and restated in its entirety to read as follows: "Majority Shareholder Vote," as used with respect to the election of any Trustee at a meeting of Shareholders, shall mean the vote for the election of such Trustee of a plurality of all outstanding Shares of the Trust, without regard to Series or Class, represented in person or by proxy and entitled to vote thereon, provided that a quorum determined as provided in Section 7.5 hereof) is present; and as used with respect to any other action required or permitted to be taken by Shareholders, shall mean the vote for such action of the holders of that majority of all outstanding Shares (or, where a separate vote of Shares of any particular Series or Class is to be taken, the affirmative vote of that majority of the outstanding Shares of that Series or Class) of the Trust which consists of: (i) a majority of all Shares (or of Shares of the particular Series or Class) represented in person or by proxy and entitled to vote on such action at the meeting of Shareholders at which such action is to be taken, provided that a quorum (determined as provided in Section 7.5 hereof) is present, or (ii) if such action is to be -1- taken by written consent of Shareholders, a majority of all Shares (or of Shares of the particular Series or Class) issued and outstanding and entitled to vote on such action; and as used with respect to any action requiring the affirmative vote of "a majority of the outstanding voting securities", as the quoted phrase is defined in the 1940 Act, of the Trust or of any Fund, shall mean the vote for such action at a meeting of Shareholders of the smallest majority of all outstanding Shares of the Trust (or of Shares of the particular Series or Class) entitled to vote on such action which satisfies such 1940 Act voting requirement. 3. Section 6.1 ("Description of Funds and Shares") of the Declaration of Trust is hereby amended and restated in its entirety to read as follows: SECTION 6.1 Description of Funds and Shares. (a) Shares; Funds; Series and Classes of Shares. The beneficial interest in the Trust shall be divided into Shares having a nominal or par value of one cent ($.01) per Share, of which an unlimited number may be issued. The Trustees shall have the power, without any requirement of Shareholder approval, from time to time: (i) to establish and designate one or more separate, distinct and independent Funds, in addition to the Funds established and designated by Section 6.2 hereof, into which the assets of the Trust shall be divided; (ii) to authorize a separate Series of Shares for each such additional Fund (each of which Series shall represent interests only in the Fund with respect to which such Series was authorized); and (iii) to establish and designate two or more separate Classes of Shares for any Series by, from time to time, setting or changing in one or more respects provisions applicable to such Class or Classes relating to sales charges, expenses, any rights of redemption and the price, terms and manner of redemption, special and relative rights as to dividends and distributions and on liquidation, sinking or purchase fund provisions, conversion rights and (subject to Article VII hereof) conditions under which the Shareholders of the several Classes shall have separate voting rights or no voting rights (but no such provision that adversely affects the holders of Shares of any Series or Class shall become effective unless approved in compliance with Section 9.3). Except as otherwise provided as to a particular Fund herein, or in the Certificate of Designation therefor, the Trustees shall have all the rights and powers, and be subject to all the duties and obligations, with respect -2- to each such Fund and the assets and affairs thereof as they have under this Declaration of Trust, with respect to the Trust and the Trust Property in general. (b) Establishment, etc. of Funds; Authorization of Shares and Classes. In order to establish and designate any Fund in addition to the Fund established and designated in Section 6.2 hereof and to authorize the Shares thereof, a Majority of the Trustees (or an officer of the Trust pursuant to the vote of a Majority of the Trustees) shall execute an instrument setting forth such establishment and designation and the relative rights and preferences of the Shares of the Series or Classes representing interests in such Fund and the manner in which the same may be amended (a "Certificate of Designation"), which may provide that the number of Shares of such Series which may be issued is unlimited, or may limit the number issuable. At any time that there are outstanding no Shares of any particular Series or Class previously established and designated, including any Series or Class representing interests in the Fund established and designated in Section 6.2 hereof, the Trustees may by an instrument executed by a Majority of the Trustees (or by an officer of the Trust pursuant to the vote of a Majority of the Trustees) terminate such Series or Class and the establishment and designation thereof and the authorization of its Shares (a "Certificate of Termination"). Each Certificate of Designation, Certificate of Termination and any instrument amending a Certificate of Designation shall have the status of an amendment to this Declaration of Trust, and shall be filed and become effective as provided in Section 9.4 hereof. (c) Character of Separate Funds and Shares Thereof. Each Fund established hereunder shall be a separate component of the assets of the Trust, and the holders of Shares of the Series representing the beneficial interest in the assets of that Fund shall be considered Shareholders of such Fund, but such Shareholders shall also be considered Shareholders of the Trust for purposes of receiving reports and notices and, except as otherwise provided herein or in the Certificate of Designation of a particular Fund as to such Fund, or as required by the 1940 Act or other applicable law, the right to vote, all without distinction by Series. (d) Consideration for Shares. The Trustees may issue Shares of any Series for such consideration (which may include property subject to, or acquired in connection with the assumption of, -3- liabilities) and on such terms as they may determine (or for no consideration if pursuant to a Share dividend or split-up), all without action or approval of the Shareholders. All Shares when so issued on the terms determined by the Trustees shall be fully paid and nonassessable (but may be subject to mandatory contribution back to the Trust as provided in Section 6.2(h) hereof). The Trustees may classify or reclassify any unissued Shares, or any Shares of any Series or Class previously issued and reacquired by the Trust, into Shares of one or more other Funds that may be established and designated from time to time. 4. Section 7.1 ("Voting Powers") of the Declaration of Trust is hereby amended and restated in its entirety to read as follows: SECTION 7.1 Voting Powers. The Shareholders shall have power to vote only (i) for the election or removal of Trustees as provided in Sections 4.1(c) and (e) hereof, (ii) with respect to the approval or termination in accordance with the 1940 Act of any contract with a Contracting Party as provided in Section 5.2 hereof as to which Shareholder approval is required by the 1940 Act, (iii) with respect to any termination or reorganization of the Trust or any Fund to the extent and as provided in Sections 9.1 and 9.2 hereof, (iv) with respect to any amendment of this Declaration of Trust to the extent and as provided in Section 9.3 hereof, (v) to the same extent as the stockholders of a Massachusetts business corporation as to whether or not a court action, proceeding or claim should or should not be brought or maintained derivatively or as a class action on behalf of the Trust or any Fund, or the Shareholders of any of them (provided, however, that a Shareholder of a particular Fund shall not in any event be entitled to maintain a derivative or class action on behalf of any other Fund or the Shareholders thereof), and (vi) with respect to such additional matters relating to the Trust as may be required by the 1940 Act, this Declaration of Trust, the Bylaws or any registration of the Trust with the Commission (or any successor agency) or any State, or as the Trustees may consider necessary or desirable. If and to the extent that the Trustees shall determine that such action is required by law or by this Declaration of Trust , they shall cause each matter required or permitted to be voted upon at a meeting or by written consent of Shareholders to be submitted to a separate vote of the outstanding Shares of each Fund entitled to vote thereon; provided, that (i) when expressly required by the 1940 Act or by other law, actions of Shareholders shall be taken by Single Class Voting of all -4- outstanding Shares of each Series or Class whose holders are entitled to vote thereon; and (ii) when the Trustees determine that any matter to be submitted to a vote of Shareholders affects only the rights or interests of Shareholders of one or more but not all Funds or of one or more but not all Classes of a single Fund, then only the Shareholders of the Funds or Classes so affected shall be entitled to vote thereon. 5. Section 7.5 ("Quorum and Required Vote") of the Declaration of Trust is hereby amended and restated in its entirety to read as follows: SECTION 7.5 Quorum and Required Vote. Thirty percent (30%) of the Shares entitled to vote on a matter shall be a quorum for the transaction of business with respect to such matter at a Shareholders' meeting, but any lesser number shall be sufficient for adjournments. Any adjourned session or sessions may be held within a reasonable time after the date set for the original meeting without the necessity of further notice. A Majority Shareholder Vote at a meeting at which a quorum is present shall decide any question, except when a different vote is required or permitted by any provision of the 1940 Act or other applicable law or by this Declaration of Trust or the Bylaws, or when the Trustees shall in their discretion require a larger vote or the vote of a majority or larger fraction of the Shares of one or more particular Series or Classes. 6. Section 9.3 ("Amendments; etc.") of the Declaration of Trust is hereby amended and restated in its entirety to read as follows: SECTION 9.3 Amendments; etc. All rights granted to the Shareholders under this Declaration of Trust are granted subject to the reservation of the right to amend this Declaration of Trust as herein provided, except that no amendment shall repeal the limitations on personal liability of any Shareholder or Trustee or the prohibition of assessment upon the Shareholders (otherwise than as permitted under Section 6.2(h)) without the express consent of each Shareholder or Trustee involved. Subject to the foregoing, the provisions of this Declaration of Trust (whether or not related to the rights of Shareholders) may be amended at any time, so long as such amendment does not adversely affect the rights of any Shareholder with respect to which such amendment is or purports to be applicable and so long as such amendment is not in contravention of applicable law, including the 1940 Act, by an -5- instrument in writing signed by a Majority of the Trustees (or by an officer of the Trust pursuant to the vote of a Majority of the Trustees). Any amendment to this Declaration of Trust that adversely affects the rights of all Shareholders may be adopted at any time by an instrument in writing signed by a Majority of the Trustees (or by an officer of the Trust pursuant to a vote of a Majority of the Trustees) when authorized to do so by the vote in accordance with Section 7.1 hereof of Shareholders holding a majority of all the Shares outstanding and entitled to vote, without regard to Series, or if said amendment adversely affects the rights of the Shareholders of less than all of the Funds or of less than all of the Classes of Shares of any Fund, by the vote of the holders of a majority of all the Shares entitled to vote of each Fund or of each Class, as the case may be, so affected. Subject to the foregoing, any such amendment shall be effective when the terms thereof have been duly adopted, as aforesaid. A certificate (which may be a part of such instrument) to the effect that such amendment has been duly adopted, and setting forth the circumstances thereof, shall be executed and acknowledged by a Trustee or officer of the Trust and filed as provided in Section 9.4 hereof (but such filing shall not be a prerequisite to the effectiveness of such amendment). -6- IN WITNESS WHEREOF, the undersigned has set her hand and seal this ____ day of ____________, 1994. ________________________________________ Janice M. Teague, Secretary STATE OF COLORADO ) ) ss. CITY AND COUNTY OF DENVER ) BEFORE ME, the undersigned authority, on this day personally appeared Janice M. Teague, Secretary of Janus Investment Fund, who, being by me first duly sworn, stated on her oath that the foregoing document is true and correct and that she executed the same for the purposes and consideration therein expressed and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE this ____ day of ___________, 1994. My Commission Expires: ________________________________________ _________________________ Notary Public -7- EX-99 6 EX 1(O) FORM OF CERT OF DESIG-JANUS MMFUNDS EXHIBIT 1(o) JANUS INVESTMENT FUND Form of Certificate of Designation The undersigned, being the Secretary of Janus Investment Fund (hereinafter referred to as the "Trust"), a trust with transferable shares of the type commonly called a Massachusetts business trust, DOES HEREBY CERTIFY that, pursuant to the authority conferred upon the Trustees of the Trust by Section 6.1(b) and Section 9.3 of the Agreement and Declaration of Trust, dated February 11, 1986, as amended to date (hereinafter, as so amended, referred to as the "Declaration of Trust"), and by the affirmative vote of a Majority of the Trustees at a meeting duly called and held on _____________, 1994, the Declaration of Trust was amended to establish and designate new a Series of Shares of the Trust, the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund]. The text of the resolution setting forth such establishment and designation is as follows: There is hereby established and designated the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund]. The beneficial interest in the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] shall be divided into Shares having a nominal or par value of one cent ($.01) per Share, consisting of three separate Classes. An unlimited number of Shares of each Class may be issued, which Shares shall represent interests only in the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund]. The Shares of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] shall have the following rights and preferences: (a) Assets Belonging to the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund]. Any portion of the Trust Property allocated to the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund], and all consideration received by the Trust for the issue or sale of Shares of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund], together with all assets in which such consideration is invested or reinvested, all interest, dividends, income, earnings, profits and gains therefrom, and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same may be, shall be held by the Trustees in trust for the benefit of the holders of Shares of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] and shall irrevocably belong to the [Janus Money Market Fund] [Janus Government Money - 1 - Market Fund] [Janus Tax-Exempt Money Market Fund] for all purposes, and shall be so recorded upon the books of account of the Trust, and the Shareholders of any other Fund who are not Shareholders of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] shall not have, and shall be conclusively deemed to have waived, any claims to the assets of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund]. Such consideration, assets, interest, dividends, income, earnings, profits, gains and proceeds, together with any General Items allocated to the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] as provided in the following sentence, are herein referred to collectively as "Fund Assets" of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund], and as assets "belonging to" the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund]. In the event that there are any assets, income, earnings, profits, and proceeds thereof, funds, or payments which are not readily identifiable as belonging to any particular Fund (collectively "General Items"), the Trustees shall allocate such General Items to and among any one or more of the Funds of the Trust in such manner and on such basis as they, in their sole discretion, deem fair and equitable; and any General Items so allocated to the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] shall belong to and be part of the Fund Assets of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund]. Each such allocation by the Trustees shall be conclusive and binding upon the Shareholders and creditors of all the Funds for all purposes. (b) Liabilities of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund]. The assets belonging to the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] shall be charged with the liabilities incurred by or arising in respect of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax- - 2 - Exempt Money Market Fund] and all expenses, costs, charges and reserves attributable to the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund], which may be allocated among the different Classes of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] as the Trustees may from time to time determine to be appropriate, and any general liabilities, expenses, costs, charges or reserves of the Trust which are not readily identifiable as pertaining to any particular Fund shall be allocated and charged by the Trustees to and among any one or more of the Funds of the Trust in such manner and on such basis as the Trustees in their sole discretion deem fair and equitable. The liabilities, expenses, costs, charges and reserves allocated and so charged to the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] are herein referred to as "liabilities of" the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund]. Each allocation of liabilities, expenses, costs, charges and reserves by the Trustees shall be conclusive and binding upon the Shareholders of all the Funds for all purposes. Any creditor of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] may look only to the assets of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] to satisfy such creditor's claims, and the creditors of a particular Class of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] may look only to the share of that Class in the assets of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] to satisfy their claims. (c) Dividends. Dividends and distributions on Shares of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] may be paid with such frequency as the Trustees may determine, which may be daily or otherwise pursuant to a standing resolution or resolutions adopted only once or with such frequency as the Trustees may determine, to the Shareholders of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund], from such of the income, accrued or realized, and capital gains, realized or unrealized, and out of the - 3 - assets belonging to the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund], as the Trustees may determine, after providing for actual and accrued liabilities of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund]. Dividends and distributions shall be in such amounts as may be declared from time to time by the Trustees, and such dividends and distributions may vary as between the Classes of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] to reflect differing allocations among such Classes of the liabilities of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] and any resultant differences between the net asset value of such several Classes, to such extent and for such purposes as the Trustees may deem appropriate, but dividends and distributions on the Shares of a particular Class shall be distributed pro rata to the Shareholders of that Class in proportion to the number of such Shares held by such holders at the date and time of record established for the payment of such dividends or distributions. Notwithstanding the foregoing, the Trustees may determine, in connection with any dividend or distribution program or procedure, that no dividend or distribution shall be payable on Shares as to which the Shareholder's purchase order and/or payment have not been received by the time or times established by the Trustees under such program or procedure, or that dividends or distributions shall be payable on Shares which have been tendered by the holder thereof for redemption or repurchase, but the redemption or repurchase proceeds of which have not yet been paid to such Shareholder. Dividends and distributions on the Shares of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] may be made in cash or Shares of any Class of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] or a combination thereof as determined by the Trustees, or pursuant to any program that the Trustees may have in effect at the time for the election by each Shareholder of the mode of the making of such dividend or distribution to that Shareholder. Any such dividend or distribution paid in Shares will be paid at the net asset value thereof as determined in accordance with subsection (h) hereof, but without any load or sales charge. - 4 - (d) Liquidation. In the event of the liquidation or dissolution of the Trust, the Shareholders of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] shall be entitled to receive, when and as declared by the Trustees, the excess of the Fund Assets over the liabilities of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund]. The assets so distributable to the Shareholders of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] shall be allocated among the Classes of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] in proportion to the respective aggregate net asset value of the outstanding Shares thereof, and shall be distributed to the Shareholders of each such Class in proportion to the number of Shares of that Class held by them and recorded on the books of the Trust. The liquidation of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund], or of any Class thereof, may be authorized by vote of a Majority of the Trustees, subject to the affirmative vote of "a majority of the outstanding voting securities" of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] or such Class, as the quoted phrase is defined in the 1940 Act, determined in accordance with last clause of the definition of "Majority Shareholder Vote" in Section 1.4 of the Declaration of Trust. (e) Voting. The Shareholders shall have the voting rights set forth in or determined under Article VII of the Declaration of Trust. (f) Redemption by Shareholder. Each holder of Shares of any Class of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] shall have the right at such times as may be permitted by the Trust, but no less frequently than once each week, to require the Trust to redeem all or any part of such Shares at a redemption price equal to the net asset value per Share of such Class next determined in accordance with subsection (h) hereof after the Shares are properly tendered for redemption; provided, that the Trustees may from time to time, in their discretion, determine and impose a fee for such redemption. Payment of the redemption price shall be - 5 - in cash; provided, however, that if the Trustees determine, which determination shall be conclusive, that conditions exist which make payment wholly in cash unwise or undesirable, the Trust may make payment wholly or partly in Securities or other assets belonging to the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] at the value of such Securities or assets used in such determination of net asset value. Notwithstanding the foregoing, the Trust may postpone payment of the redemption price and may suspend the right of the holders of Shares of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] or any Class thereof to require the Trust to redeem Shares of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] during any period or at any time when and to the extent permissible under the 1940 Act. (g) Redemption at the Option of the Trust. Each Share of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] shall be subject to redemption at the option of the Trust at the redemption price which would be applicable if such Share were then being redeemed by the Shareholder pursuant to subsection (f) hereof: (i) at any time, if the Trustees determine in their sole discretion that failure to so redeem may have materially adverse consequences to the holders of the Shares of the Trust or of any Fund, or (ii) upon such other conditions with respect to maintenance of Shareholder accounts of a minimum amount as may from time to time be determined by the Trustees and set forth in the then current Prospectus of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund]. Upon such redemption the holders of the Shares so redeemed shall have no further right with respect thereto other than to receive payment of such redemption price. (h) Net Asset Value. Subject to the provisions of the two sentences immediately following, the net asset value per Share of any Class of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market] Fund at any time shall be the quotient obtained by dividing the value of the net assets of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] or the share of such Class in such assets, - 6 - as the case may be, at such time (being the current value of the assets belonging to the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund], or the share of such Class therein, less the then-existing liabilities of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund], or the share of such Class in such liabilities) by the total number of Shares of that Class then outstanding, all determined in accordance with the methods and procedures, including without limitation those with respect to rounding, established by the Trustees from time to time. The aggregate net asset value of the several Classes of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] shall be separately computed, and may vary from one another. The Trustees shall establish procedures for the allocation of investment income or capital gains and expenses and liabilities of the separate Classes of Shares of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] among the several Classes of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund], in order to reflect the varying net asset values of, and the liabilities and expenses attributable to, such Classes. The Trustees may determine to maintain the net asset value per Share of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] at a designated constant dollar amount and in connection therewith may adopt procedures not inconsistent with the 1940 Act for the continuing declaration of income attributable to the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] as dividends payable in additional Shares of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] at the designated constant dollar amount and for the handling of any losses attributable to the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund]. Such procedures may provide that in the event of any loss each Shareholder shall be deemed to have contributed to the shares of beneficial interest account of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] such Shareholder's pro rata portion of the total number of Shares required to be canceled - 7 - in order to permit the net asset value per share of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] to be maintained, after reflecting such loss, at the designated constant dollar amount. Each Shareholder of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] shall be deemed by his purchase of Shares of any Class thereof to have expressly agreed to make the contribution referred to in the preceding sentence in the event of any such loss. (i) Transfer. All Shares of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] shall be transferable, but transfers of Shares of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] will be recorded on the Share transfer records of the Trust applicable to the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] only at such times as Shareholders shall have the right to require the Trust to redeem Shares of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] and at such other times as may be permitted by the Trustees. (j) Equality. All Shares of each Class of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] shall represent an equal proportionate interest in the share of such Class in the assets belonging to the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund], subject to a like share of the liabilities of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund], adjusted for any liabilities specifically allocable to that Class, and each Share of any such Class shall be equal to each other Share thereof; but the interests represented by the Shares of the different Classes of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] shall reflect any distinctions among the several Classes of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] existing under this Certificate of Designation. The Trustees may from time to time divide or combine the Shares of the [Janus - 8 - Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund], or any Class of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund], into a greater or lesser number of Shares of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] Fund or Class without thereby changing the proportionate beneficial interest in the assets belonging to the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market] Fund or in any way affecting the rights of the holders of Shares of any other Fund or Class. (k) Rights of Fractional Shares. Any fractional Share of any Series or Class shall carry proportionately all the rights and obligations of a whole Share of that Series or Class, including rights and obligations with respect to voting, receipt of dividends and distributions, redemption of Shares, and liquidation of the Trust or of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund]. (l) Conversion Rights. Subject to compliance with the requirements of the 1940 Act, the Trustees shall have the authority to provide that holders of Shares of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] shall have the right to convert said Shares into Shares of one or more other Funds of the Trust, that holders of any Class of Shares of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] shall have the right to convert such Shares into Shares of one or more other Classes of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund], and that Shares of any Class of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] shall be automatically converted into Shares of another Class of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund], in each case in accordance with such requirements and procedures as the Trustees may establish. - 9 - (m) Amendment, etc. Subject to the provisions and limitations of Section 9.3 of the Declaration of Trust and applicable law, this Certificate of Designation may be amended by an instrument signed in writing by a Majority of the Trustees (or by an officer of the Trust pursuant to the vote of a Majority of the Trustees), provided that, if any amendment adversely affects the rights of the holders of Shares of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund], or of any Class thereof, such amendment may be adopted by an instrument signed in writing by a Majority of the Trustees (or by an officer of the Trust pursuant to the vote of a Majority of the Trustees) when authorized to do so by the vote in accordance with Section 7.1 of the Declaration of Trust of the holders of a majority of all the Shares of the [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund], or of the affected Class thereof, as the case may be, outstanding and entitled to vote. (n) Incorporation of Defined Terms. All capitalized terms which are not defined herein shall have the same meanings as are assigned to those terms in the Declaration of Trust filed with the Secretary of State of the Commonwealth of Massachusetts. The Trustees further direct that, upon the execution of this Certificate of Designation, the Trust take all necessary action to file a copy of this Certificate of Designation with the Secretary of State of The Commonwealth of Massachusetts and at any other place required by law or by the Declaration of Trust. IN WITNESS WHEREOF, the undersigned has set her hand and seal this ____ day of ___________, 1994. ________________________________________ Janice M. Teague, Secretary - 10 - STATE OF COLORADO ) ) ss. CITY AND COUNTY OF DENVER ) BEFORE ME, the undersigned authority, on this day personally appeared Janice M. Teague, Secretary of Janus Investment Fund, who, being by me first duly sworn, stated on her oath that the foregoing document is true and correct and that she executed the same for the purposes and consideration therein expressed and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE this ____ day of ___________, 1994. My Commission Expires: ________________________________________ _________________________ Notary Public - 11 - EX-99 7 EX 4(K) SPECIMEN STOCK CERT-JANUS FED TAX-EXEMPT EXHIBIT 4(k) [LOGO] JANUS INVESTMENT FUND (A Massachusetts Business Trust) JANUS FEDERAL TAX-EXEMPT FUND SHARES OF BENEFICIAL INTEREST ACCOUNT NO. THIS CERTIFIES that SPECIMEN CUSIP 471023 SEE REVERSE FOR CERTAIN DEFINITIONS Is the owner of ________________ shares of beneficial interest in the JANUS FEDERAL TAX-EXEMPT FUND series of Janus Investment Fund (the "Fund"), fully paid and nonassessable, the said shares being issued and held subject to the provisions of the Agreement and Declaration of Trust of the Fund, and all amendments thereto, copies of which are on file with the Secretary of The Commonwealth of Massachusetts. The said owner by accepting this certificate agrees to and is bound by all of the said provisions. The shares represented hereby are transferable in writing by the owner thereof in person or by attorney upon surrender of this certificate to the Fund properly endorsed for transfer (see the reverse side hereof). This certificate is executed on behalf of the Trustees of the Fund as Trustees and not individually and the obligations hereof are not binding upon any of the Trustees, officers or shareholders individually but are binding only upon the assets and property of the JANUS FEDERAL TAX-EXEMPT FUND series of Janus Investment Fund. This certificate is not valid unless countersigned by the Transfer Agent. Witness the facsimile seal of the Fund and the facsimile signatures of its duly authorized officers. Dated: /s/ Janice M. Teague /s/ Thomas H. Bailey SECRETARY PRESIDENT [SEAL] COUNTERSIGNED INVESTORS FIDUCIARY TRUST COMPANY (KANSAS CITY MISSOURI) TRANSFER AGENT BY JANUS SERVICE CORPORATION (DENVER COLORADO) SUBTRANSFER AGENT AUTHORIZED SIGNATURE EX-99 8 EX 4(L) SPECIMEN STOCK CERT-JANUS MERCURY FUND EXHIBIT 4(m) [LOGO] JANUS INVESTMENT FUND (A Massachusetts Business Trust) JANUS OVERSEAS FUND SHARES OF BENEFICIAL INTEREST ACCOUNT NO. THIS CERTIFIES that SPECIMEN CUSIP 471023 SEE REVERSE FOR CERTAIN DEFINITIONS Is the owner of ________________ shares of beneficial interest in the JANUS OVERSEAS FUND series of Janus Investment Fund (the "Fund"), fully paid and nonassessable, the said shares being issued and held subject to the provisions of the Agreement and Declaration of Trust of the Fund, and all amendments thereto, copies of which are on file with the Secretary of The Commonwealth of Massachusetts. The said owner by accepting this certificate agrees to and is bound by all of the said provisions. The shares represented hereby are transferable in writing by the owner thereof in person or by attorney upon surrender of this certificate to the Fund properly endorsed for transfer (see the reverse side hereof). This certificate is executed on behalf of the Trustees of the Fund as Trustees and not individually and the obligations hereof are not binding upon any of the Trustees, officers or shareholders individually but are binding only upon the assets and property of the JANUS OVERSEAS FUND series of Janus Investment Fund. This certificate is not valid unless countersigned by the Transfer Agent. Witness the facsimile seal of the Fund and the facsimile signatures of its duly authorized officers. Dated: /s/ Janice M. Teague /s/ Thomas H. Bailey SECRETARY PRESIDENT [SEAL] COUNTERSIGNED INVESTORS FIDUCIARY TRUST COMPANY (KANSAS CITY MISSOURI) TRANSFER AGENT BY JANUS SERVICE CORPORATION (DENVER COLORADO) SUBTRANSFER AGENT AUTHORIZED SIGNATURE EX-99 9 EX 4(M) SPECIMEN STOCK CERT-JANUS OVERSEAS FUND EXHIBIT 4(m) [LOGO] JANUS INVESTMENT FUND (A Massachusetts Business Trust) JANUS OVERSEAS FUND SHARES OF BENEFICIAL INTEREST ACCOUNT NO. THIS CERTIFIES that SPECIMEN CUSIP 471023 SEE REVERSE FOR CERTAIN DEFINITIONS Is the owner of ________________ shares of beneficial interest in the JANUS OVERSEAS FUND series of Janus Investment Fund (the "Fund"), fully paid and nonassessable, the said shares being issued and held subject to the provisions of the Agreement and Declaration of Trust of the Fund, and all amendments thereto, copies of which are on file with the Secretary of The Commonwealth of Massachusetts. The said owner by accepting this certificate agrees to and is bound by all of the said provisions. The shares represented hereby are transferable in writing by the owner thereof in person or by attorney upon surrender of this certificate to the Fund properly endorsed for transfer (see the reverse side hereof). This certificate is executed on behalf of the Trustees of the Fund as Trustees and not individually and the obligations hereof are not binding upon any of the Trustees, officers or shareholders individually but are binding only upon the assets and property of the JANUS OVERSEAS FUND series of Janus Investment Fund. This certificate is not valid unless countersigned by the Transfer Agent. Witness the facsimile seal of the Fund and the facsimile signatures of its duly authorized officers. Dated: /s/ Janice M. Teague /s/ Thomas H. Bailey SECRETARY PRESIDENT [SEAL] COUNTERSIGNED INVESTORS FIDUCIARY TRUST COMPANY (KANSAS CITY MISSOURI) TRANSFER AGENT BY JANUS SERVICE CORPORATION (DENVER COLORADO) SUBTRANSFER AGENT AUTHORIZED SIGNATURE EX-99 10 EX 8(E) LETTER AGMT DATED 10/09/92 EXHIBIT 8(e) JANUS GROUP OF MUTUAL FUNDS P.O. Box 173375 Denver, Colorado 80217-3375 800/5252-3713 LETTER AGREEMENT October 9, 1992 State Street Bank and Trust Company 1776 Heritage Drive No. Quincy, MA 02171 Gentlemen: Please be advised that Janus Investment Fund (the "Fund") has established several new series of shares as noted below. In accordance with the Additional Funds provision in Section 16 of the Custodian Contract dated July 31, 1986, as amended, between the Fund and State Street Bank and Trust Company ("State Street"), the Fund hereby requests confirmation that State Street will act as custodian for foreign securities for the new series under the terms of the contract. Newly Organized Series: Janus Balanced Fund Janus Enterprise Fund Janus Short-Term Bond Fund Reorganized Series: Janus Twenty Fund (formerly Janus Twenty Fund, Inc.) Janus Venture Fund (formerly Janus Venture Fund, Inc.) Janus Flexible Income Fund (formerly a series of Janus Income Series) Janus Intermediate Government Securities Fund (formerly a series of Janus Income Series) The new series established pursuant to the reorganization of Janus Twenty Fund, Inc., Janus Venture Fund, Inc. and Janus Income Series (including the series Janus Flexible Income Fund and Janus Intermediate Government Securities Fund) render the separate Custodian Contracts between such funds and State Street unnecessary. Accordingly, this letter also serves as notification of termination of such Custodian Contracts. Please indicate your acceptance of the foregoing by executing two copies of this Letter Agreement, returning one copy to the Fund and retaining one copy for your records. JANUS INVESTMENT FUND By /s/ David C. Tucker David C. Tucker, Vice President STATE STREET BANK AND TRUST COMPANY By /s/ ___________________________ Agreed to this 26 day of October, 1992 EX-99 11 EX 8(F) LETTER AGMT DATED 04/28/93 EXHIBIT 8(f) LETTER AGREEMENT April 28, 1993 State Street Bank and Trust Company 1776 Heritage Drive Mutual Fund Services A2 East No. Quincy, MA 02171 Gentlemen: Please be advised that Janus Investment Fund (the "Fund") has established Janus Mercury Fund and Janus Federal Tax-Exempt Fund as two new series of the Fund. In accordance with the Additional Funds provision in Section 16 of the Custodian Contract dated July 31, 1986, as amended, between the Fund and State Street Bank and Trust Company ("State Street"), the Fund hereby requests confirmation that State Street will act as custodian for foreign securities for the new series under the terms of the contract. Please indicate your acceptance of the foregoing by executing two copies of this Letter Agreement, returning one copy to the Fund and retaining one copy for your records. JANUS INVESTMENT FUND /s/ David C. Tucker David C. Tucker, Vice President STATE STREET BANK AND TRUST COMPANY By /s/ Angela M. Mildram Angela Mildram, Assistant Vice President Agreed to this 11th day of May, 1993 CC: Steven R. Goodbarn Janice M. Teague EX-99 12 EX 8(G) LETTER AGMT DATED 04/04/94 EXHIBIT 8(g) JANUS FUNDS P.O. Box 173375 Denver, Colorado 80217-3375 800 525-3713 LETTER AGREEMENT April 4, 1994 Mr. Donald DeMarco, Vice President State Street Bank and Trust Company One Heritage Drive Mutual Fund Services P2 North No. Quincy, MA 02171 Dear Mr. DeMarco: Please be advised that Janus Investment Fund (the "Fund") has established Janus Overseas Fund as a new series of the Fund. Pursuant to Section 16 of the Custodian Contract dated July 31, 1986, as amended, between the Fund and State Street Bank and Trust Company ("State Street"), the Fund hereby requests confirmation that State Street will act as custodian for the new series under the terms of the contract. Please indicate your acceptance of the foregoing by executing two copies of this Letter Agreement, returning one copy to the Fund and retaining one copy for your records. JANUS INVESTMENT FUND /s/ Janice M. Teague Janice M. Teague, Secretary STATE STREET BANK AND TRUST COMPANY By /s/_________________________ Agreed to this 6 day of April, 1994 CC: Deborah E. Bielicke Steven R. Goodbarn Stephen L. Stieneker David C. Tucker EX-99 13 EX 8(H) FORM OF CUSTODY AGMT-JIF-JANUS MMFS EXHIBIT 8(h) FORM OF CUSTODY AGREEMENT Dated _______________, 199_ Between UMB BANK, N.A. and JANUS INVESTMENT FUND on behalf of Janus Money Market Fund Janus Government Money Market Fund Janus Tax-Exempt Money Market Fund Table of Contents SECTION PAGE 1. Appointment of Custodian 1 2. Definitions 1 (a) Securities 1 (b) Assets 1 (c) Instructions and Special Instructions 1 3. Delivery of Corporate Documents 2 4. Powers and Duties of Custodian and Domestic Subcustodian 3 (a) Safekeeping 3 (b) Manner of Holding Securities 3 (c) Free Delivery of Assets 5 (d) Exchange of Securities 5 (e) Purchase of Assets 5 (f) Sales of Assets 6 (g) Options 7 (h) Futures Contracts 7 (i) Segregated Accounts 8 (j) Depositary Receipts 8 (k) Corporate Actions' Put Bonds, Called Bonds, Etc. 8 (l) Interest Bearing Deposits 9 (m) Foreign Exchange Transactions Other than as Principal 9 (n) Pledges or Loans of Securities 10 (o) Stock Dividends, Rights, Etc. 10 (p) Routine Dealings 10 (q) Collections 11 (r) Bank Accounts 11 (s) Dividends, Distributions and Redemptions 11 (t) Shares of a Fund purchased by such Fund 11 (u) Shares of a Fund purchased from such Fund 11 (v) Proxies and Notices; Compliance with the Shareholders Communication Act of 1985 12 (w) Books and Records 12 (x) Opinion of Fund's Independent Certified Public Accountants 13 (y) Reports by Independent Certified Public Accountants 13 (z) Bills and Others Disbursements 13 5. Subcustodians 13 (a) Domestic Subcustodians 13 (b) Special Subcustodians 14 (c) Termination of a Subcustodian 14 6. Standard of Care 14 (a) General Standard of Care 14 (b) Actions Prohibited by Applicable Law, Events Beyond Custodian's Control, Armed Conflict, Sovereign Risk, Etc. 14 (c) Liability for Past Records 15 (d) Advice of Counsel 15 (e) Advice of the Fund and Others 15 (f) Instructions Appearing to be Genuine 15 (g) Exceptions from Liability 16 7. Liability of the Custodian for Actions of Others 16 (a) Domestic Subcustodians 16 (b) Securities Systems, Interim Subcustodians, Special Subcustodians, Securities Depositories and Clearing Agencies 16 (c) Defaults of Insolvencies of Brokers, Banks, Etc. 16 (d) Reimbursement of Expenses 17 8. Indemnification (a) Indemnification by Fund 17 (b) Indemnification by Custodian 17 9. Advances 17 10. Liens 18 11. Compensation 18 12. Powers of Attorney 19 13. Termination and Assignment 19 14. Additional Funds 19 15. Notices 19 16. Miscellaneous 20 CUSTODY AGREEMENT This agreement made as of this day of , 199_, between UMB Bank, n.a., a national banking association with its principal place of business located at Kansas City, Missouri (hereinafter "Custodian"), and Janus Investment Fund (the "Trust" on behalf of each of the Funds set forth on Appendix B hereto, together with such additional Funds which shall from time to time be made parties to this Agreement in the manner set forth herein (individually, a "Fund" and collectively, the "Funds"). WITNESSETH: WHEREAS, each Fund is a separate series of the Trust representing shares of beneficial interest in a separate portfolio of assets; and WHEREAS, the Trust is registered as an open-end management investment company under the Investment Company Act of 1940, as amended; and WHEREAS, each Fund desires to appoint Custodian as its custodian for the custody of Assets (as hereinafter defined) owned by such Fund which Assets are to be held in such accounts as such Fund may establish from time to time; and WHEREAS, Custodian is willing to accept such appointment on the terms and conditions hereof. NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties hereto, intending to be legally bound, mutually covenant and agree as follows: 1. APPOINTMENT OF CUSTODIAN. Each Fund hereby appoints the Custodian as custodian of Assets belonging to each such Fund which have been or may be from time to time deposited with the Custodian. Custodian accepts such appointment as a custodian and agrees to perform the duties and responsibilities of Custodian as set forth herein on the conditions set forth herein. 2. DEFINITIONS. For purposes of this Agreement, the following terms shall have the meanings so indicated: (a) "Security" or "Securities" shall mean stocks, bonds, bills, rights, script, warrants, interim certificates and all negotiable or nonnegotiable paper commonly known as Securities and other instruments or obligations. (b) "Assets" shall mean Securities, monies and other property held by the Custodian for the benefit of a Fund. (c)(1) "Instructions", as used herein, shall mean: (i) a tested telex, a written (including, without limitation, facsimile transmission) request, direction, instruction or certification signed or initialed by or on behalf of a Fund by an Authorized Person (as hereinafter defined); (ii) a telephonic or other oral communication from a person the Custodian reasonably believes to be an Authorized Person; or (iii) a communication effected directly between an electro-mechanical or electronic device or system (including, without limitation, computers) on behalf of a Fund. Instructions in the form of oral communications shall be confirmed by the appropriate Fund by tested telex or in writing in the manner set forth in clause (i) above, but the lack of such confirmation shall in no way affect any action taken by the Custodian in reliance upon oral Instructions which it reasonably believes to be genuine prior to the Custodian's receipt of such confirmation. Each Fund authorizes the Custodian to record any and all telephonic or other oral Instructions communicated to the Custodian. (2) "Special Instructions", as used herein, shall mean Instructions countersigned or confirmed in writing by the Treasurer or any Assistant Treasurer of a Fund or any other person designated by the Treasurer of such Fund in writing, which countersignature or confirmation shall be included on the same instrument containing the Instructions or on a separate instrument relating thereto. (3) Instructions and Special Instructions shall be delivered to the Custodian at the address and/or telephone, facsimile transmission or telex number agreed upon from time to time by the Custodian and the Funds. (4) Where appropriate, Instructions and Special Instructions shall be continuing instructions. 3. DELIVERY OF CORPORATE DOCUMENTS. Each of the parties to this Agreement represents that its execution does not violate any of the provisions of its respective charter, articles of incorporation, articles of association or bylaws and all required corporate action to authorize the execution and delivery of this Agreement has been taken. The Trust has furnished the Custodian with copies, properly certified or authenticated, '-with all amendments or supplements thereto, of the following documents: (a) Certificate of Incorporation (or equivalent document) of the Trust as in effect on the date hereof; (b) By-Laws of the Trust as in effect on the date hereof; (c) Resolutions of the Trustees of the Trust appointing the Custodian and approving the form of this Agreement; and (d) Each Fund's current prospectus and statements of additional information. The Trust or each Fund, as appropriate, shall promptly furnish the Custodian with copies of any updates' amendments or supplements to the foregoing documents. In addition, the Trust has delivered or will promptly deliver to the Custodian, copies of the Resolution(s) of its Trustees and all amendments or supplements thereto, properly certified or authenticated, designating certain officers or employees of each such Fund who will have continuing authority to certify to the Custodian: (a) the names, titles, signatures and scope of authority of all officers and employees authorized to give Instructions or any other notice, request, direction, instruction, certificate or instrument on behalf of each Fund, and (b) the names, titles and signatures of those persons authorized to countersign or confirm Special Instructions on behalf of each Fund (in both cases collectively, the "Authorized Persons" and individually, an "Authorized Person"). Such Resolutions and certificates many be accepted and relied upon by the Custodian as conclusive evidence of the facts set forth therein and shall be considered to be in full force and effect until delivery to the Custodian of a similar Resolution or certificate to the contrary. Upon delivery of a certificate which deletes or does not include the name(s) of a person previously authorized to give Instructions or to countersign or confirm Special Instructions, such persons shall no longer be considered an Authorized Person. Unless the resolution and certificate specifically limit the authority of an Authorized Person to specific matters or require that the approval of anyone else will first have been obtained, the Custodian will be under no obligation to inquire into the right of the person giving such Instructions or Special Instructions to do so. Notwithstanding any of the foregoing, no Instructions or Special Instructions received by the Custodian from a Fund will be deemed to authorize or permit any director, trustee, officer, employee, or agent of such Fund to withdraw any of the Assets of such Fund upon the mere receipt of such authorization, Special Instructions or Instructions from such director, trustee, officer, employee or agent. 4. POWERS AND DUTIES OF CUSTODIAN AND DOMESTIC SUBCUSTODIAN. Except for Assets held by any Subcustodian appointed pursuant to Section 5(b) of this Agreement, the Custodian shall have and perform the powers and duties hereinafter set forth in this Section 4. For purposes of this Section 4 all references to powers and duties of the "Custodian" shall also refer to any Domestic Subcustodian appointed pursuant to Section 5(a). (a) Safekeeping. The Custodian will keep safely the Assets of each Fund which are delivered to it from time to time. The Custodian shall not be responsible for any property of a Fund held or received by such Fund and not delivered to the Custodian. (b) Manner of Holding Securities. (1) The Custodian shall at all times hold Securities of each Fund either: (i) by physical possession of the share certificates or other instruments representing such Securities in registered or bearer form; or (ii) in book-entry form by a Securities System (as hereinafter defined) in accordance with the provisions of subparagraph (3) below. (2) The Custodian may hold registrable portfolio Securities which have been delivered to it in physical form, by registering the same in the name of the appropriate Fund or its nominee, or in the name of the Custodian or its nominee, for whose actions such Fund and Custodian, respectively, shall be fully responsible. Upon the receipt of Instructions, the Custodian shall hold such Securities in street certificate form, so called, with or without any indication of fiduciary capacity. However, unless it receives Instructions to the contrary, the Custodian will register all such portfolio Securities in the name of the Custodian's authorized nominee. All such Securities shall be held in an account of the Custodian containing only assets of the appropriate Fund or only assets held by the Custodian as a fiduciary, provided that the records of the Custodian shall indicate at all times the Fund or other customer for which such Securities are held in such accounts and the respective interests therein. (3) The Custodian may deposit and/or maintain domestic Securities owned by a Fund in, and each Fund hereby approves use of: (a) The Depository Trust Company; (b) The Participants Trust Company; and (c) any book-entry system as provided in (i) Subpart O of Treasury Circular No. 300, 31 CFR 306.115, (ii) Subpart B of Treasury Circular Public Debt Series No. 27-76, 31 CFR 350.2, or (iii) the book-entry regulations of federal agencies substantially in the form of 31 CFR 306.115. Upon the receipt of Special Instructions, the Custodian may deposit and/or maintain domestic Securities owned by a Fund in any other domestic clearing agency registered with the Securities and Exchange Commission ("SEC") under Section 17A of the Securities Exchange Act of 1934 (or as may otherwise be authorized by the SEC to serve in the capacity of depository or clearing agent for the Securities or other assets of investment companies) which acts as a Securities depository. Each of the foregoing shall be referred to in this Agreement as a "Securities System", and all such Securities Systems shall be listed on the attached Appendix A. Use of a Securities System shall be in accordance with applicable Federal Reserve Board and SEC rules and regulations, if any, and subject to the following provisions: (i) The Custodian may deposit the Securities directly or through one or more agents or Subcustodians which are also qualified to act as custodians for investment companies. (ii) The Custodian shall deposit and/or maintain the Securities in a Securities System, provided that such Securities are represented in an account ("Account") of the Custodian in the Securities System that includes only assets held by the Custodian as a fiduciary, custodian or otherwise for customers. (iii)The books and records of the Custodian shall at all times identify those Securities belonging to any one or more Funds which are maintained in a Securities System. (iv) The Custodian shall pay for Securities purchased for the account of a Fund only upon (a) receipt of advice from the Securities System that such Securities have been transferred to the Account of the Custodian in accordance with the rules of the Securities System, and (b) the making of an entry on the records of the Custodian to reflect such payment and transfer for the account of such Fund. The Custodian shall transfer Securities sold for the account of a Fund only upon (a) receipt of advice from the Securities System that payment for such Securities has been transferred to the Account of the Custodian in accordance with the rules of the Securities System, and (b) the making of an entry on the records of the Custodian to reflect such transfer and payment for the account of such Fund. Copies of all advices from the Securities System relating to transfers of Securities for the account of a Fund shall be maintained for such Fund by the Custodian. The Custodian shall deliver to a Fund on the next succeeding business day daily transaction reports which shall include each day's transactions in the Securities System for the account of such Fund. Such transaction reports shall be delivered to such Fund or any agent designated by such Fund pursuant to Instructions, by computer or in such other manner as such Fund and Custodian may agree. (v) The Custodian shall promptly provide the Funds with reports obtained by the Custodian or any Subcustodian with respect to a Securities System's accounting system, internal accounting control and procedures for safeguarding Securities deposited in the Securities Systems. (vi) Upon receipt of Special Instructions, the Custodian shall terminate the use of any Securities System on behalf of a Fund as promptly as practicable and shall take all actions reasonably practicable to safeguard the Securities of such Fund maintained with such Securities System. (c) Free Delivery of Assets. Notwithstanding any other provision of this Agreement, the Custodian, upon receipt of Special Instructions, will undertake to make free delivery of Assets, provided such Assets are on hand and available, in connection with a Fund's transactions and to transfer such Assets to such broker, dealer, Subcustodian, bank, agent, Securities System or otherwise as specified in such Special Instructions. (d) Exchange of Securities. Upon receipt of Instructions, the Custodian will exchange portfolio Securities held by it for a Fund for other Securities or cash paid in connection with any reorganization, recapitalization, merger, consolidation, or conversion of convertible Securities, and will deposit any such Securities in accordance with the terms of any reorganization or protective plan. Without Instructions, the Custodian is authorized to exchange Securities held by it in temporary form for Securities in definitive form, to surrender Securities for transfer into a name or nominee name as permitted in Section 4(b)(2), to effect an exchange of shares in a stock split or when the par value of the stock is changed, to sell any fractional shares, and, upon receiving payment therefor, to surrender bonds or other Securities held by it at maturity or call, except that the Custodian shall not surrender any convertible security (except mandatory conversions) held by a Fund without appropriate Instructions. (e) Purchases of Assets (1) Securities Purchases. In accordance with Instructions, the Custodian shall, with respect to a purchase of Securities, pay for such Securities out of monies held for a Fund's account for which the purchase was made, but only insofar as monies are available therein for such purpose, and receive the portfolio Securities so purchased. Unless the Custodian has received Special Instructions to the contrary, such payment will be made only upon receipt of Securities by the Custodian, a clearing corporation of a national Securities exchange of which the Custodian is a member, or a Securities System in accordance with the provisions of Section 4(b)(3) hereof. Notwithstanding the foregoing, upon receipt of Instructions: (i) in connection with a repurchase agreement, the Custodian may release funds to a Securities System prior to the receipt of advice from the Securities system that the Securities underlying such repurchase agreement have been transferred by book-entry into the Account maintained with such Securities System by the Custodian, provided that the Custodian's instructions to the Securities System require that the Securities System may make payment of such funds to the other party to the repurchase agreement only upon transfer by book-entry of the Securities underlying the repurchase agreement into such Account; (ii) in the case of Interest Bearing Deposits, currency deposits, and other deposits, foreign exchange transactions, futures contracts or options, pursuant to Sections 4(g), 4(h), 4(l), and 4(m) hereof, the Custodian may make payment therefor before receipt of an advice of transaction; and (iii) in the case of Securities as to which payment for the Security and receipt of the instrument evidencing the Security are under generally accepted trade practice or the terms of the instrument representing the Security expected to take place in different locations or through separate parties, such as commercial paper which is indexed to foreign currency exchange rates, derivatives and similar Securities, the Custodian may make payment for such Securities prior to delivery thereof in accordance with such generally accepted trade practice or the terms of the instrument representing such Security. (2) Other Assets Purchased. Upon receipt of Instructions and except as otherwise provided herein, the Custodian shall pay for and receive other Assets for the account of a Fund as provided in Instructions. (f) Sales of Assets. (1) Securities Sold. In accordance with Instructions, the Custodian will, with respect to a sale, deliver or cause to be delivered the Securities designated as sold to the broker or other person specified in the Instructions relating to such sale. Unless the Custodian has received Special Instructions to the contrary, such delivery shall be made only upon receipt of payment therefor in the form of: (a) cash, certified check' bank cashier's check, bank credit, or bank wire transfer; (b) credit to the account of the Custodian with a clearing corporation of a national Securities exchange of which the Custodian is a member; or (c) credit to the Account of the Custodian with a Securities System, in accordance with the provisions of Section 4(b)(3) hereof. Notwithstanding the foregoing, Securities held in physical form may be delivered and paid for in accordance with ,street delivery custom" to a broker or its clearing agent, against delivery to the Custodian of a receipt for such Securities, provided that the Custodian shall have taken reasonable steps to ensure prompt collection of the payment for, or return of, such Securities by the broker or its clearing agent, and provided further that the Custodian shall not be responsible for the selection of or the failure or inability to perform of such broker or its clearing agent or for any related loss arising from delivery or custody of such Securities prior to receiving payment therefor. (2) Other Assets Sold. Upon receipt of Instructions and except as otherwise provided herein' the Custodian shall receive payment for and deliver other Assets for the account of a Fund as provided in Instructions. (g) Options. (1) Upon receipt of Instructions relating to the purchase of an option or sale of a covered call option, the Custodian shall: (a) receive and retain confirmations or other documents, if any, evidencing the purchase or writing of the option by a Fund; (b) if the transaction involves the sale of a covered call option, deposit and maintain in a segregated account the Securities (either physically or by book-entry in a Securities System) subject to the covered call option written on behalf of such Fund; and (c) pay, release and/or transfer such Securities' cash or other Assets in accordance with any notices or other communications evidencing the expiration, termination or exercise of such options which are furnished to the Custodian by the Options Clearing Corporation (the "OCC"), the securities or options exchanges on which such options were traded, or such other organization as may be responsible for handling such option transactions. (2) Upon receipt of Instructions relating to the sale of a naked option (including stock index and commodity options), the Custodian, the appropriate Fund and the broker-dealer shall enter into an agreement to comply with the rules of the OCC or of any registered national securities exchange or similar organization(s). Pursuant to that agreement and such Fund's Instructions, the Custodian shall: (a) receive and retain confirmations or other documents, if any, evidencing the writing of the option; (b) deposit and maintain in a segregated account, Securities (either physically or by book-entry in a Securities System), cash and/or other Assets; and (c) pay, release and/or transfer such Securities, cash or other Assets in accordance with any such agreement and with any notices or other communications evidencing the expiration, termination or exercise of such option which are furnished to the Custodian by the OCC, the securities or options exchange on which such options were traded, or such other organization as may be responsible for handling such option transactions. (3) The appropriate Fund and the broker-dealer shall be responsible for determining the quality and quantity of assets held in any segregated account established in compliance with applicable margin maintenance requirements and the performance of other terms of any option contract. (h) Futures Contracts. Upon receipt of Instructions, the Custodian shall enter into a futures margin procedural agreement among the appropriate Fund, the Custodian and the designated futures commission merchant (a "Procedural Agreement"). Under the Procedural Agreement the Custodian shall: (a) receive and retain confirmations, if any, evidencing the purchase or sale of a futures contract or an option on a futures contract by such Fund; (b) deposit and maintain in a segregated account cash, Securities and/or other Assets designated as initial, maintenance or variation "margin" deposits intended to secure such Fund's performance of its obligations under any futures contracts purchased or sold, or any options on futures contracts written by such Fund, in accordance with the provisions of any Procedural Agreement designed to comply with the provisions of the Commodity Futures Trading Commission and/or any commodity exchange or contract market (such as the Chicago Board of Trade), or any similar organization(s), regarding such margin deposits; and (c) release Assets from and/or transfer Assets into such margin accounts only in accordance with any such Procedural Agreements. The appropriate Fund and such futures commission merchant shall be responsible for determining the type and amount of Assets held in the segregated account or paid to the broker-dealer in compliance with applicable margin maintenance requirements and the performance of any futures contract or option on a futures contract in accordance with its terms. (i) Segregated Accounts. Upon receipt of Instructions, the Custodian shall establish and maintain on its books a segregated account or accounts for and on behalf of a Fund, into which account or accounts may be transferred Assets of such Fund, including Securities maintained by the Custodian in a Securities System pursuant to Paragraph (b)(3) of this Section 4, said account or accounts to be maintained (i) for the purposes set forth in Sections 4(g), 4(h) and 4(n) and (ii) for the purpose of compliance by such Fund with the procedures required by the SEC Investment Company Act Release Number 10666 or any subsequent release or releases relating to the maintenance of segregated accounts by registered investment companies, or (iii) for such other purposes as may be set forth, from time to time, in Special Instructions. The Custodian shall not be responsible for the determination of the type or amount of Assets to be held in any segregated account referred to in this paragraph, or for compliance by the Fund with required procedures noticed in (ii) above. (j) Depositary Receipts. Upon receipt of Instructions, the Custodian shall surrender or cause to be surrendered Securities to the depositary used for such Securities by an issuer of American Depositary Receipts, Global Depository Receipts or European Depositary Receipts (hereinafter referred to, collectively, as "ADRs"), against a written receipt therefor adequately describing such Securities and written evidence satisfactory to the Custodian that the depositary has received instructions to issue ADRs with respect to such Securities in the name of the Custodian or a nominee of the Custodian, for delivery in accordance with such instructions. Upon receipt of Instructions, the Custodian shall surrender or cause to be surrendered ADRs to the issuer thereof, against a written receipt therefor adequately describing the ADRs surrendered and written evidence satisfactory to the Custodian that the issuer of the ADRs has received instructions to cause its depository to deliver the Securities underlying such ADRs in accordance with such instructions. (k) Corporate Actions, Put Bonds, Called Bonds, Etc. Upon receipt of Instructions, the Custodian shall: (a) deliver warrants, puts, calls, rights or similar Securities to the issuer or trustee thereof (or to the agent of such issuer or trustee) for the purpose of exercise or sale, provided that the new Securities, cash or other Assets, if any, acquired as a result of such actions are to be delivered to the Custodian; and (b) deposit Securities upon invitations for tenders thereof, provided that the consideration for such Securities is to be paid or delivered to the Custodian, or the tendered Securities are to be returned to the Custodian. Notwithstanding any provision of this Agreement to the contrary, the Custodian shall take all necessary action, unless otherwise directed to the contrary in Instructions, to comply with the terms of all mandatory or compulsory exchanges, calls, tenders, redemptions, or similar rights of security ownership, and shall notify the appropriate Fund of such action in writing by facsimile transmission or in such other manner as such Fund and Custodian may agree in writing. The Fund agrees that if it gives an Instruction for the performance of an act on the last permissible date of a period established by any optional offer or on the last permissible date for the performance of such act, the Fund shall hold the Bank harmless from any adverse consequences in connection with acting upon or failing to act upon such Instructions unless such adverse consequences result from the willful misfeasance or bad faith of Custodian, its employees or agents. (l) Interest Bearing Deposits. Upon receipt of Instructions directing the Custodian to purchase interest bearing fixed term and call deposits (hereinafter referred to, collectively, as "Interest Bearing Deposits") for the account of a Fund, the Custodian shall purchase such Interest Bearing Deposits in the name of such Fund with such banks or trust companies, including the Custodian, any Subcustodian or any subsidiary or affiliate of the Custodian (hereinafter referred to as "Banking Institutions"), and in such amounts as such Fund may direct pursuant to Instructions. Such Interest Bearing Deposits may be denominated in U.S. dollars or other currencies, as such Fund may determine and direct pursuant to Instructions. The responsibilities of the Custodian to a Fund for Interest Bearing Deposits issued by the Custodian shall be that of a U.S. bank for a similar deposit. With respect to Interest Bearing Deposits other than those issued by the Custodian, (a) the Custodian shall be responsible for the collection of income and the transmission of cash to and from such accounts; and (b) the Custodian shall have no duty with respect to the selection of the Banking Institution or for the failure of such Banking Institution to pay upon demand. (m) Foreign Exchange Transactions Other than as Principal. (1) Upon receipt of Instructions, the Custodian shall settle foreign exchange contracts or options to purchase and sell foreign currencies for spot and future delivery on behalf of and for the account of a Fund with such currency brokers or Banking Institutions as such Fund may determine and direct pursuant to Instructions. Each Fund accepts full responsibility for its use of third party foreign exchange brokers and for execution of said foreign exchange contracts and understands that the Fund shall be responsible for any and all costs and interest charges which may be incurred as a result of the failure or delay of its third party broker to deliver foreign exchange. The Custodian shall have no responsibility with respect to the selection of the currency brokers or Banking Institutions with which a Fund deals or, so long as the Custodian acts in accordance with Instructions, for the failure of such brokers or Banking Institutions to comply with the terms of any contract or option. (2) Notwithstanding anything to the contrary contained herein, upon receipt of Special Instructions the Custodian may, in connection with a foreign exchange contract, make free outgoing payments of cash in the form of U.S. Dollars or foreign currency prior to receipt of confirmation of such foreign exchange contract or confirmation that the countervalue currency completing such contract has been delivered or received. (n) Pledges or Loans of Securities. (1) Upon receipt of Instructions from a Fund, the Custodian will release or cause to be released Securities held in custody to the pledgees designated in such Instructions by way of pledge or hypothecation to secure loans incurred by such Fund with various lenders including but not limited to the Custodian; provided, however, that the Securities shall be released only upon payment to the Custodian of the monies borrowed, except that in cases where additional collateral is required to secure existing borrowings, further Securities may be released or delivered, or caused to be released or delivered for that purpose upon receipt of Special Instructions. Upon receipt of Instructions, the Custodian will pay, but only from funds available for such purpose, any such loan upon re-delivery to it of the Securities pledged or hypothecated therefor and upon surrender of the note or notes evidencing such loan. In lieu of delivering collateral to a pledgee, the Custodian, on the receipt of Instructions, shall transfer the pledged Securities to a segregated account for the benefit of the pledgee. (2) Upon receipt of ~, and execution of a separate Securities Lending Agreement, the Custodian will release Securities held in custody to the borrower designated in borrowed Instructions and may, except as otherwise provided below, deliver such Securities prior to the receipt of collateral, if any, for such borrowing, provided that, in case of loans of Securities held by a Securities System that are secured by cash collateral, the Custodian's instructions to the Securities System shall require that the Securities System deliver the Securities of the appropriate Fund to the borrower thereof only upon receipt of the collateral for such borrowing. The Custodian shall have no responsibility or liability for any loss arising from the delivery of securities prior to the receipt of collateral. Upon receipt of Instructions and the loaned Securities, the Custodian will release the collateral to the borrower. (o) Stock Dividends, Rights, Etc. The Custodian shall receive and collect all stock dividends, rights, and other items of like nature on behalf of a Fund and, upon receipt of Instructions, take action with respect to the same as directed in such Instructions. (p) Routine Dealings. The Custodian will, in general, attend to all routine and mechanical matters in accordance with industry standards in connection with the sale, exchange, substitution, purchase, transfer, or other dealings with Securities or other property of each Fund except as may be otherwise provided in this Agreement or directed from time to time by Instructions or Special Instructions from any particular Fund. The Custodian may also make payments to itself or others from the Assets for disbursements and out-of-pocket expenses incidental to handling Securities or other similar items relating to its duties under this Agreement, provided that all such payments shall be accounted for to the appropriate Fund. q. Collections. The Custodian shall (a) collect amounts due and payable to each Fund with respect to portfolio Securities and other Assets; (b) promptly credit to the account of each Fund all income and other payments relating to portfolio Securities and other Assets held by the Custodian hereunder upon Custodian's receipt of such income or payments or as otherwise agreed in writing by the Custodian and any particular Fund; (c) promptly endorse and deliver any instruments required to effect such collection; and (d) promptly execute ownership and other certificates and affidavits for all federal, state, local and foreign tax purposes in connection with receipt of income or other payments with respect to portfolio Securities and other Assets' or in connection with the transfer of such Securities or other Assets; provided, however, that with respect to portfolio Securities registered in so-called street name, or physical Securities with variable interest rates, the Custodian shall use its best efforts to collect amounts due and payable to any such Fund. The Custodian shall notify a Fund in writing by facsimile transmission or in such other manner as such Fund and Custodian may agree in writing if any amount payable with respect to portfolio Securities or other Assets is not received by the Custodian when due. The Custodian shall not be required to institute suit or take other extraordinary action to enforce collection except upon receipt of Instructions and being indemnified to its satisfaction against the cost and expense of such suit or other actions. (r) Deposit Accounts. The Custodian will open and maintain one or more special purpose deposit accounts in the name of the Custodian, on behalf of a Fund, subject only to draft or order by Custodian upon receipt of Instructions. All monies received by the Custodian from or for the account of a Fund shall be deposited in said accounts. Barring events not under the control of the Custodian, at 9:00 a.m., New York time, on the second business day after deposit of any check into an account, the Custodian agrees to make Fed Funds available to a Fund in the amount of the check. Deposits made by Federal Reserve wire will be available to such Fund immediately and ACH wires will be available to the Fund on the next business day. Income earned on the portfolio Securities will be credited to the Fund's deposit account. The Custodian will be entitled to reverse any credited amounts where credits have been made and monies are not finally collected. If monies are collected after such reversal, the Custodian may open and maintain accounts in its own banking department, or in such other banks or trust companies as any be designated by it or by the Fund in writing, all such accounts, however, to be in the name of Custodian, on behalf of a Fund, and subject only to its draft or order. Funds received and held for the account of different Funds shall be maintained in separate accounts established for each Fund (s) Dividends, Distributions and Redemptions. To enable each Fund to pay dividends or other distributions to shareholders of such Fund and to make payment to shareholders who have requested repurchase or redemption of their shares of such Fund (collectively, the "Shares"), the Custodian shall release cash or Securities insofar as available. In the case of cash, the Custodian shall, upon the receipt of Instructions, transfer funds by check or wire transfer to any account at any bank or trust company designated by the Fund in such Instructions. In the case of Securities, the Custodian shall, upon the receipt of Special Instructions, make such transfer to any entity or account designated by each such Fund in such Special Instructions. (t) Shares of a Fund purchased by such Fund. Whenever any Shares are repurchased or redeemed by a Fund, the Fund or its agent shall advise the Custodian of the aggregate dollar amount to be paid for such Shares and shall confirm such advice in writing. Upon receipt of such advice, the Custodian shall charge such aggregate dollar amount to the account of the Fund and either deposit the same in the account maintained for purposes of paying for the redemption of Shares or deliver the same in accordance with such advice. The Custodian shall not have any duty or responsibility to determine that Shares have been removed from the proper shareholder account or accounts or that the proper number of Shares have been cancelled and removed from the shareholder records. (u) Shares of a Fund purchased from such Fund. Whenever Shares are purchased from a Fund, the Fund will deposit or cause to be deposited with the Custodian the amount received for such Shares. The Custodian shall not have any duty or responsibility to determine that Shares purchased from a Fund have been added to the proper shareholder account or accounts or that the proper number of such Shares have been added to the shareholder records. (v) Proxies and Notices; Compliance with the Shareholders Communication Act of 1985. The Custodian shall deliver or cause to be delivered to the appropriate Fund all forms of proxies, all notices of meetings, and any other notices or announcements affecting or relating to Securities owned by such Fund that are received by the Custodian, any Subcustodian, or any nominee of either of them, and, upon receipt of Instructions, the Custodian shall execute and deliver, or cause such Subcustodian or nominee to execute and deliver, such proxies or other authorizations as may be required. Except as directed pursuant to Instructions, neither the Custodian nor any Subcustodian or nominee shall vote upon any such Securities, or execute any proxy to vote thereon, or give any consent or take any other action with respect thereto. The Custodian will not release the identity of a Fund to an issuer which requests such information pursuant to the Shareholder Communication Act of 1985 for the specific purpose of direct communications between such issuer and the Fund unless such Fund directs the Custodian otherwise in writing. (w) Books and Records. The Custodian shall maintain such records relating to its activities under this Agreement as are required to be maintained by Rule 31a-1 under the Investment Company Act of 1940 ("the 1940 Act") and to preserve them for the periods prescribed in Rule 31a-2 under the 1940 Act. These records shall be open for inspection by duly authorized officers, employees or agents (including independent public accountants) of the appropriate Fund during normal business hours of the Custodian. The Custodian shall provide accountings relating to its activities under this Agreement as shall be agreed upon by each Fund and the Custodian. (x) Opinion of Trust's Independent Certified Public Accountants. The Custodian shall take all reasonable action as the Trust may request to obtain from year to year favorable opinions from the Trust's independent certified public accountants with respect to the Custodian's activities hereunder and in connection with the preparation of each such Fund's periodic reports to the SEC and with respect to any other requirements of the SEC. (y) Reports by Independent Certified Public Accountants. The Custodian shall deliver to the Trust a written report prepared by the Custodian's independent certified public accountants with respect to the services provided by the Custodian under this Agreement, including, without limitation, the Custodian's accounting system, internal accounting control and procedures for safeguarding cash, Securities and other Assets, including cash, Securities and other Assets deposited and/or maintained in a Securities System or with a Subcustodian. Such report shall be of sufficient scope and in sufficient detail as may reasonably be required by the Trust and as may reasonably be obtained by the Custodian. (z) Bills and Other Disbursements. Upon receipt of Instructions, the Custodian shall pay, or cause to be paid, all bills, statements, or other obligations of a Fund. 5. SUBCUSTODIANS. From time to time, in accordance with the relevant provisions of this Agreement, the Custodian may appoint one or more Domestic Subcustodians or Special Subcustodians (as each are hereinafter defined) to act on behalf of any one or more Funds. A Domestic Subcustodian, in accordance with the provisions of this Agreement, may also appoint a Special Subcustodian to act on behalf of any one or more Funds. For purposes of this Agreement, all Domestic Subcustodians and Special Subcustodians shall be referred to collectively as "Subcustodians". (a) Domestic Subcustodians. The Custodian may, at any time and from time to time, appoint any bank as defined in Section 2(a)(5) of the 1940 Act or any trust company or other entity, any of which meet the requirements of a custodian under Section 17(f) of the 1940 Act and the rules and regulations thereunder, to act for the Custodian on behalf of any one or more Funds as a Subcustodian for purposes of holding Assets of such Fund(s) and performing other functions of the Custodian within the United States (a "Domestic Subcustodian"). Each Fund shall approve in writing the appointment of the proposed Domestic Subcustodian; and the Custodian's appointment of any such Domestic Subcustodian shall not be effective without such prior written approval of the Fund(s). Each such duly approved Domestic Subcustodian shall be listed on Appendix A attached hereto, as it may be amended, from time to time. (b) Special Subcustodians. Upon receipt of Special Instructions, the Custodian shall, on behalf of a Fund, appoint one or more banks, trust companies or other entities designated in such Special Instructions to act for the Custodian on behalf of such Fund as a Subcustodian for purposes of: (i) effecting third-party repurchase transactions with banks, brokers, dealers or other entities through the use of a common custodian or subcustodian; (ii) providing depository and clearing agency services with respect to certain variable rate demand note Securities' (iii) providing depository and clearing agency services with respect to dollar denominated Securities, and (iv) effecting any other transactions designated by such Fund in such Special Instructions. Each such designated subcustodian (hereinafter referred to as a "Special Subcustodian") shall be listed on Appendix A attached hereto, as it may be amended from time to time. In connection with the appointment of any Special Subcustodian, the Custodian shall enter into a subcustodian agreement with the Special Subcustodian in form and substance approved by the appropriate Fund in Special Instructions. The Custodian shall not amend any subcustodian agreement entered into with a Special Subcustodian, or waive any rights under such agreement, except upon prior approval pursuant to Special Instructions. (c) Supervision of Subcustodians. The Custodian shall (i) cause each Domestic Subcustodian and (ii) use its best efforts to cause each Special Subcustodian to perform all of its obligations in accordance with the terms and conditions of the subcustodian agreement under which the Subcustodian serves. (d) Termination of a Subcustodian. The Custodian may, at any time in its discretion upon at least 60 days' notice to the appropriate Fund(s), terminate any Subcustodian of such Fund(s) in accordance with the termination provisions under the applicable subcustodian agreement, and upon the receipt of Special Instructions, the Custodian will terminate any Subcustodian in accordance with the termination provisions under the applicable subcustodian agreement. 6. STANDARD OF CARE. (a) General Standard of Care. The Custodian shall hold harmless and indemnify a Fund for all losses, damages, liabilities and reasonable costs and expenses suffered or incurred by such Fund resulting from the negligence or willful misfeasance of the Custodian, its directors, officers, employees, or agents; provided, however, in no event shall be Custodian be liable for special, indirect or consequential damages arising under or in connection with this Agreement. (b) Actions Prohibited by Applicable Law. Events Beyond Custodian's Control, Sovereign Risk, Etc. In no event shall the Custodian or any Domestic Subcustodian incur liability hereunder if the Custodian or any Subcustodian or Securities System, or any subcustodian, Securities System, Securities Depository or Clearing Agency utilized by the Custodian or any such Subcustodian, or any nominee of the Custodian or any Subcustodian (individually, a person") is prevented, forbidden or delayed from performing, or omits to perform, any act or thing which this Agreement provides shall be performed or omitted to be performed, by reason of: (i) any provision of any present or future law or regulation or other of the United States of America, or any state thereof, or of any foreign country, or political subdivision thereof or of any court of competent jurisdiction (and neither the Custodian nor any other Person shall be obligated to take any action contrary thereto); or (ii) any event beyond the control of the Custodian or other Person such as armed conflict, riots, strikes, lockouts, labor disputes, equipment or transmission failures (unless caused by the negligence or willful misconduct of the Custodian), natural disasters, or failure of the mails, transportation, communications or power supply (unless caused by the negligence or willful misfeasance of Custodian, its agents or employees); or (iii) any "Sovereign Risk. "A "Sovereign Risk" shall mean nationalization, expropriation, devaluation, revaluation, confiscation, seizure, cancellation, destruction or similar action by any governmental authority, de facto or de jure; or enactment, promulgation, imposition or enforcement by any such governmental authority of currency restrictions, exchange controls, taxes, levies or other charges affecting a Fund's Assets; or acts of armed conflict, terrorism, insurrection or revolution; or any other act or event beyond the Custodian's or such other Person's control. (c) Mitigation by Custodian. Upon the occurrence of any event which causes or may cause any loss, damage or expense to the Funds, the Custodian shall (i) cause any Domestic Subcustodian to and (ii) use its best efforts to cause any Special Subcustodian to, use all commercially reasonable efforts and take all reasonable steps under the circumstances to mitigate the effects of such event and to avoid continuing harm to the Funds. (d) Liability for Past Records. Neither the Custodian nor any Domestic Subcustodian shall have any liability in respect of any loss, damage or expense suffered by a Fund, insofar as such loss, damage or expense arises from the performance of the Custodian or any Domestic Subcustodian in reliance upon records that were maintained for such Fund by entities other than the Custodian or any Domestic Subcustodian prior to the Custodian's employment hereunder. (d) Advice of Counsel. The Custodian and all Domestic Subcustodians shall be entitled to receive and act upon advice of counsel of its own choosing and acceptable to the Funds on all matters. The Custodian and all Domestic Subcustodians shall be without liability for any actions reasonably taken or omitted in good faith pursuant to the advice of such counsel. (e) Advice of the Fund and Others. The Custodian and any Domestic Subcustodian may rely upon the advice of any Fund and upon statements of such Fund's accountants and other persons believed by it in good faith to be expert in matters upon which they are consulted, and neither the Custodian nor any Domestic Subcustodian shall be liable for any actions taken or omitted, in good faith, pursuant to such advice or statements. (f) Instructions Appearing to be Genuine. The Custodian and all Domestic Subcustodians shall be fully protected and indemnified in acting as a custodian hereunder upon any Resolutions of the Trustees, Instructions, Special Instructions, advice, notice request, consent, certificate, instrument or paper appearing to it to be genuine and to have been properly executed and shall, unless otherwise specifically provided herein, be entitled to receive as conclusive proof of any fact or matter required to be ascertained from any Fund hereunder a certificate signed by any officer of such Fund authorized to countersign or confirm Special Instructions. (g) Exceptions from Liability. Without limiting the generality of any other provisions hereof, neither the Custodian nor any Domestic Subcustodian shall be under any duty or obligation to inquire into, nor be liable for: (i) the validity of the issue of any Securities purchased by or for any Fund, the legality of the purchase thereof or evidence of ownership required to be received by any such Fund, or the propriety of the decision to purchase or amount paid therefor; (ii) the legality of the sale of any Securities by or for any Fund, or the propriety of the amount for which the same were sold; or (iii)any other expenditures, encumbrances of Securities, borrowings or similar actions with respect to any Fund's Assets; and may, until notified to the contrary, presume that all Instructions or SpecialInstructions received by it are not in conflict with or in any way contrary to any provisions of any the Trust's Declaration of Trust or By-Laws or votes or proceedings of the shareholders of a Fund or the Trustees of the Trust, or the Trust's currently effective Registration Statement on file with the SEC. 7. LIABILITY OF THE CUSTODIAN FOR ACTIONS OF OTHERS. (a) Domestic Subcustodians The Custodian shall be liable for the acts or omissions of any Domestic Subcustodian to the same extent as if such actions or omissions were performed by the Custodian itself. (b) Securities Systems, Special Subcustodians. Securities Depositories and Clearing Agencies The Custodian shall not be liable to any Fund for any loss, damage or expense suffered or incurred by such Fund resulting from or occasioned by the actions or omissions of a Securities System, Special Subcustodian, or Securities Depository and Clearing Agency unless such loss, damage or expense is caused by, or results from, the negligence or willful misfeasance of the Custodian. (c) Defaults or Insolvencies of Brokers, Banks, Etc. The Custodian shall not be liable for any loss, damage or expense suffered or incurred by any Fund resulting from or occasioned by the actions, omissions, neglects, defaults or insolvency of any broker, bank, trust company or any other person with whom the Custodian may deal (other than any of such entities acting as a Subcustodian, Securities System or Securities Depository and Clearing Agency, for whose actions the liability of the Custodian is set out elsewhere in this Agreement) unless such loss, damage or expense is caused by, or results from, the negligence or willful misfeasance of the Custodian. (d) Reimbursement of Expenses. Each Fund agrees to reimburse the Custodian for all out-of-pocket expenses incurred by the Custodian in connection with this Agreement, but excluding salaries and usual overhead expenses. 8. INDEMNIFICATION. (a) Indemnification by Fund. Subject to the limitations set forth in this Agreement, each Fund agrees to indemnify and hold harmless the Custodian and its nominees from all losses, damages and expenses (including attorneys' fees) suffered or incurred by the Custodian or its nominee caused by or arising from actions taken by the Custodian, its employees or agents in the performance of its duties and obligations under this Agreement, including, but not limited to, any indemnification obligations undertaken by the Custodian under any relevant subcustodian agreement; provided, however, that such indemnity shall not apply to the extent the Custodian is liable under Sections 6 or 7 hereof. If any Fund requires the Custodian to take any action with respect to Securities, which action involves the payment of money or which may, in the opinion of the Custodian, result in the Custodian or its nominee assigned to such Fund being liable for the payment of money or incurring liability of some other form, such Fund, as a prerequisite to requiring the Custodian to take such action, shall provide indemnity to the Custodian in an amount and form satisfactory to it. (b) Indemnification by Custodian. Subject to the limitations set forth in this Agreement and in addition to the obligations provided in Sections 6 and 7, the Custodian agrees to indemnify and hold harmless each Fund from all losses, damages and expenses suffered or incurred by each such Fund caused by the gross negligence or willful misfeasance of the Custodian. 9. ADVANCES. In the event that, pursuant to Instructions, the Custodian or any Subcustodian, Securities System, or Securities Depository or Clearing Agency acting either directly or indirectly under agreement with the Custodian (each of which for purposes of this Section 9 shall be referred to as "Custodian"), makes any payment or transfer of funds on behalf of any Fund as to which there would be, at the close of business on the date of such payment or transfer, insufficient funds held by the Custodian on behalf of any such Fund, the Custodian may, in its discretion without further Instructions, provide an advance ("Advance,) to any such Fund in an amount sufficient to allow the completion of the transaction by reason of which such payment or transfer of funds is to be made. In addition, in the event the Custodian is directed by Instructions to make any payment or transfer of funds on behalf of any Fund as to which it is subsequently determined that such Fund has overdrawn its cash account with the Custodian as of the close of business on the date of such payment or transfer, said overdraft shall constitute an Advance. Any Advance shall be payable by the Fund on behalf of which the Advance was made on demand by Custodian, unless otherwise agreed by such Fund and the Custodian, and shall accrue interest from the date of the Advance to the date of payment by such Fund to the Custodian at a rate agreed upon in writing from time to time by the Custodian and such Fund. It is understood that any transaction in respect of which the Custodian shall have made an Advance, including but not limited to a foreign exchange contract or transaction in respect of which the Custodian is not acting as a principal, is for the account of and at the risk of the Fund on behalf of which the Advance was made, and not, by reason of such Advance, deemed to be a transaction undertaken by the Custodian for its own account and risk. The Custodian and each of the Funds which are parties to this Agreement acknowledge that the purpose of Advances is to finance temporarily the purchase or sale of Securities for prompt delivery in accordance with the settlement terms of such transactions or to meet emergency expenses not reasonably foreseeable by a Fund. The Custodian shall promptly notify the appropriate Fund of any Advance. Such notification shall be sent by facsimile transmission or in such other manner as such Fund and the Custodian may agree. 10. COMPENSATION. The Custodian agrees that it shall not look to the Funds or the Trust for compensation for its services provided under this Agreement. The Custodian shall be compensated entirely by Janus Capital Corporation, the Funds' administrator, pursuant to the Administration Agreement between Janus Capital Corporation and the Trust dated December 9, 1994, a copy of which has been provided to the Custodian. Each Fund will pay to the Custodian such compensation as is agreed to in writing by the Custodian and each such Fund from time to time. Such compensation, together with all amounts for which the Custodian is to be reimbursed in accordance with Section 7(e), shall be billed to each such Fund and paid in cash to the Custodian. 11. POWERS OF ATTORNEY. Upon request, each Fund shall deliver to the Custodian such proxies, powers of attorney or other instruments as may be reasonable and necessary or desirable in connection with the performance by the Custodian or any Subcustodian of their respective obligations under this Agreement or any applicable subcustodian agreement. 12. TERMINATION AND ASSIGNMENT. Any Fund or the Custodian may terminate this Agreement by notice in writing, delivered or mailed, postage prepaid (certified mail, return receipt requested) to the other not less than 60 days prior to the date upon which such termination shall take effect. Upon termination of this Agreement, the appropriate Fund shall pay to the Custodian such fees as may be due the Custodian hereunder as well as its reimbursable disbursements, costs and expenses paid or incurred. Upon termination of this Agreement, the Custodian shall deliver, at the terminating party's expense, all Assets held by it hereunder to the appropriate Fund or as otherwise designated by such Fund by Special Instructions. Upon such delivery, the Custodian shall have no further obligations or liabilities under this Agreement except as to the final resolution of matters relating to activity occurring prior to the effective date of termination. This Agreement may not be assigned by the Custodian or any Fund without the respective consent of the other, duly authorized by a resolution by its Board of Directors or Trustees. 13. ADDITIONAL FUNDS. An additional Fund or Funds may become a party to this Agreement after the date hereof by an instrument in writing to such effect signed by such Fund or Funds and the Custodian. If this Agreement is terminated as to one or more of the Funds (but less than all of the Funds) or if an additional Fund or Funds shall become a party to this Agreement, there shall be delivered to each party an Appendix B or an amended Appendix B, signed by each of the additional Funds (if any) and each of the remaining Funds as well as the Custodian, deleting or adding such Fund or Funds, as the case may be. The termination of this Agreement as to less than all of the Funds shall not affect the obligations of the Custodian and the remaining Funds hereunder as set forth on the signature page hereto and in Appendix B as revised from time to time. 14. NOTICES As to each Fund, notices, requests, instructions and other writings delivered to Janus Investment Fund, 100 Fillmore Street, Suite 300, Denver, CO 80206-4923, postage prepaid, or to such other address as any particular Fund may have designated to the Custodian in writing, shall be deemed to have been properly delivered or given to a Fund. Notices, requests, instructions and other writings delivered to the Securities Administration Department of the Custodian at its office at 928 Grand Avenue, Kansas City, Missouri, or mailed postage prepaid, to the Custodian's Securities Administration Department, Post Office Box 226, Kansas City, Missouri 64141, or to such other addresses as the Custodian may have designated to each Fund in writing, shall be deemed to have been properly delivered or given to the Custodian hereunder; provided, however, that procedures for the delivery of Instructions and Special Instructions shall be governed by Section 2(c) hereof. 15. MISCELLANEOUS. (a) This Agreement is executed and delivered in the State of Missouri and shall be governed by the laws of such state. (b) All of the terms and provisions of this Agreement shall be binding upon, and inure to the benefit of, and be enforceable by the respective successors and assigns of the parties hereto. (c) No provisions of this Agreement may be amended, modified or waived, in any manner except in writing, properly executed by both parties hereto; provided, however, Appendix A may be amended from time to time as Domestic Subcustodians, Special Subcustodians, and Securities Depositories and Clearing Agencies are approved or terminated according to the terms of this Agreement. (d) The captions in this Agreement are included for convenience of reference only, and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. (e) This Agreement shall be effective as of the date of execution hereof. (f) This Agreement may be executed simultaneously in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. (g) The following terms are defined terms within the meaning of this Agreement, and the definitions thereof are found in the following sections of the Agreement: Term Section ADR's 4(j) Advance 9 Assets 2 Authorized Person 3 Banking Institution 4(1) Domestic Subcustodian 5(a) Instruction Z Interest Bearing Deposit 4(1) Liability 10 OCC 4(g)(2) Person 6(b) Procedural Agreement 4(h) SEC 4(b)(3) Securities 2 Securities Depositories and 5(b) Clearing Agencies Securities System 4(b)(3) Shares 4(s) Sovereign Risk 6(b) Special Instruction 2 Special Subcustodian 5(c) Subcustodian 5 1940 Act 4(v) (h) If any part, term or provision of this Agreement is held to be illegal, in conflict with any law or otherwise invalid by any court of competent jurisdiction, the remaining portion or portions shall be considered severable and shall not be affected, and the rights and obligations of the parties shall be construed and enforced as if this Agreement did not contain the particular part, term or provision held to be illegal or invalid. (i) This Agreement constitutes the entire understanding and agreement of the parties hereto with respect to the subject matter hereof, and accordingly supersedes, as of the effective date of this Agreement, any custodian agreement heretofore in effect between the Fund and the Custodian. IN WITNESS WHEREOF, the parties hereto have caused this Custody Agreement to be executed by their respective duly authorized officers. ATTEST: JANUS INVESTMENT FUND, on behalf of Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund By:_____________________________________ Name:___________________________________ Title:__________________________________ ATTEST: UMB BANK. N.A. By:_____________________________________ Name:___________________________________ Title:__________________________________ APPENDIX A CUSTODY AGREEMENT DOMESTIC SUBCUSTODIANS: United Missouri Trust Company of New York SECURITIES SYSTEMS: Federal Book Entry Depository Trust Company Participant's Trust Company SPECIAL SUBCUSTODIANS: Bank of New York Nations Bank of North Carolina Chemical Bank Bankers Trust ____________________________________ UMB Bank, n.a. By:_________________________________ By:_____________________________________ Title:______________________________ Title:__________________________________ Date:_______________________________ ____________________________________ By:_________________________________ Title:______________________________ Date:_______________________________ ____________________________________ By:_________________________________ Title:______________________________ Date:_______________________________ APPENDIX B CUSTODY AGREEMENT The following open-end management investment companies ("Funds"), each of which is a separate series of Janus Investment Fund, are hereby made parties to the Custody Agreement dated _____________, 199_, with UMB Bank, n.a. ("Custodian"), and agree to be bound by all the terms and conditions contained in said Agreement as of this ___ day of _______________, 1995. JANUS MONEY MARKET FUND By:_____________________________________ Title:__________________________________ Address:________________________________ JANUS GOVERNMENT MONEY MARKET FUND By:_____________________________________ Title:__________________________________ Address:________________________________ JANUS TAX-EXEMPT MONEY MARKET FUND By:_____________________________________ Title:__________________________________ Address:________________________________ EX-99 14 EX 9(C) FORM OF ADMIN AGMT-JCC-JANUS MMFS EXHIBIT 9(c) JANUS INVESTMENT FUND FORM OF ADMINISTRATION AGREEMENT THIS ADMINISTRATION AGREEMENT (the "Agreement") is made this 9th day of December, 1994, between JANUS INVESTMENT FUND, a Massachusetts business trust (the "Trust"), on behalf of [Janus Money Market Fund] [Janus Government Money Market Fund] [Janus Tax-Exempt Money Market Fund] (the "Fund"), a separate series of the Trust and JANUS CAPITAL CORPORATION, a Colorado corporation ("JCC"). W I T N E S S E T H: 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 of the Trust; and WHEREAS, the Fund may offer shares in multiple classes representing interest in the same portfolio of investments but having potentially different distribution charges, exchange rights and investment minimum requirements (the "Classes"); and WHEREAS, the Trust and JCC have entered into a separate agreement for the provision of investment advisory services; and WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should assist the Trustees and officers of the Trust in the administration of the Fund. NOW, THEREFORE, the parties agree as follows: Administrative Services. JCC shall furnish or arrange for the following services to the Fund incidental to its operations and business: provision of custody, transfer agency, and fund accounting services; provision of shareholder servicing; provision of office facilities and personnel necessary to carry on the business of the Fund; preparation and filing of all documents necessary to obtain and maintain registration and qualification of the shares of each Class with the Securities and Exchange Commission and state securities commissions; clerical, recordkeeping and bookkeeping services; preparation of reports for distribution to shareholders of the Fund; preparation of prospectuses, statements of additional information and proxy statements for the Fund or any Class thereof; preparation and filing of the Fund's required tax reports; preparation of materials for all meetings of the Trustees (as such materials pertain to a Fund or any Class thereof); preparation and review of contracts to which the Fund is a party; monitoring and reporting to Fund officers the Fund's compliance with investment policies and restrictions as set forth in the currently effective prospectus and statement of additional information of the Fund. Other Services. JCC is hereby authorized to furnish advice and recommendations with respect to such other aspects of the business and affairs of the Fund as the Fund shall determine to be desirable. Obligations of Trust. The Trust shall have the following obligations under this Agreement: o to keep JCC continuously and fully informed as to the composition of the Fund's investment portfolio and the nature of all of its assets and liabilities from time to time; o to furnish JCC 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; o to furnish JCC with certified copies of the minutes of any and all meetings of the Trustees of the Trust, together with any exhibits presented to the Trustees at such meetings; o to furnish JCC with any further materials or information which JCC may reasonably request to enable it to perform its functions under this Agreement; and o to compensate JCC for its services and reimburse JCC for its expenses incurred hereunder in accordance with the provisions hereof. Compensation. The Fund shall pay JCC for its administrative services a fee calculated in the manner set forth on Appendix A hereto. 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. Expenses Borne by JCC. Except for those expenses borne by the Trust pursuant to Section 6 below, JCC shall bear all expenses incurred in connection with the operation of the Fund. Expenses Borne by the Trust. The Trust shall bear the following expenses: any compensation, fees, or reimbursements which the Trust pays to its Trustees who are not interested persons of JCC ("Independent Trustees"); fees and expenses of counsel to the Independent Trustees; fees and expenses of consultants to the Fund; audit expenses; brokerage commissions and all other expenses in connection with execution of portfolio transactions; interest; all federal, state and local taxes (including stamp, excise, income and franchise taxes); expenses of shareholder meetings, including the preparation, printing and distribution of proxy statements, notices and reports to shareholders; any litigation and other extraordinary expenses. Termination. This Agreement may be terminated at any time, without penalty, by the Trustees of the Trust, or by the shareholders of the Trust acting by vote of at least a majority of its outstanding voting securities (as defined in the 1940 Act), provided in either case that sixty (60) days advance written notice of termination be given to JCC at its principal place of business. This Agreement may be terminated by JCC 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. Term. This Agreement shall continue in effect until June 16, 1996, and for successive annual periods thereafter unless sooner terminated in accordance with Section 7 hereof. Amendments. This Agreement may be amended by the parties only if such amendment is in writing and signed by the parties to this Agreement. 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 each Fund and the other series of the Trust. The Trustees shall determine the basis for making an appropriate allocation of the Fund's expenses (other than those directly attributable to a Class) between each Class of the Fund. JCC will furnish to the Trustees such information as to the nature and amounts of the expenses incurred by JCC in performing its obligations under this Agreement as the Trustees may reasonably require in order to enable the Trustees to allocate expenses as provided in paragraphs (a) and (b) of this Section 10. 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's Declaration of Trust, as amended from time to time, is on file in the Office of the Secretary of State of the Commonwealth of Massachusetts. Such Declaration of Trust describes in detail the respective responsibilities and limitations on liability of the Trustees, officers and holders of shares of beneficial interest of the Trust. Limitation of Liability of JCC. JCC shall not be liable for any error of judgment or mistake of law, for any loss arising out of this Agreement, 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 12, "JCC" shall include any affiliate of JCC performing services for the Trust contemplated hereunder and directors, officers and employees of JCC and such affiliates. Activities of JCC. The services of JCC to the Trust hereunder are not to be deemed to be exclusive, and JCC 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 JCC as directors, officers and shareholders of JCC, that directors, officers, employees and shareholders of JCC are or may become similarly interested in the Trust, and that JCC may become interested in the Trust as a shareholder or otherwise. 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 CORPORATION By: ___________________________________ Name: _________________________________ Title: ________________________________ JANUS INVESTMENT FUND By: ___________________________________ Name: _________________________________ Title: ________________________________ APPENDIX A In accordance with Section 4 of this Agreement, the Fund shall compensate JCC for services provided to each Class of the Fund in accordance with the following schedule: I. [JANUS MONEY MARKET FUND - JANUS INSTITUTIONAL MONEY FUND] [JANUS GOVERNMENT MONEY MARKET FUND - JANUS INSTITUTIONAL GOVERNMENT MONEY FUND] [JANUS TAX-EXEMPT MONEY MARKET FUND - JANUS INSTITUTIONAL TAX-EXEMPT MONEY FUND] will pay to JCC for its administrative services a monthly fee, payable on the last day of each month during which or part of which this Agreement is in effect, of 1/365 of 0.15% of the closing aggregate net asset value of the shares of such Class for each day of such month. II. [JANUS MONEY MARKET FUND - INVESTOR SHARES] [JANUS GOVERNMENT MONEY MARKET FUND - INVESTOR SHARES] [JANUS TAX-EXEMPT MONEY MARKET FUND - INVESTOR SHARES] will pay to JCC for its administrative services a monthly fee, payable on the last day of each month during which or part of which this Agreement is in effect, of 1/365 of 0.50% of the closing aggregate net asset value of the shares of each such Class for each day of such month. EX-23 15 EX 10(D) OPINION AND CONSENT OF FUND COUNSEL EXHIBIT 10(d) SULLIVAN & WORCESTER One Post Office Square Boston, Massachusetts 02109 (617) 338-2800 Telecopier No. 617-338-2880 TWX: 710-321-1976 August 6, 1992 Janus Investment Fund 100 Fillmore Street, Suite 300 Denver, Colorado 80206 Re: Reorganization of Janus Twenty Fund Ladies and Gentlemen: You have requested our opinion as to certain questions of Massachusetts law applicable to Janus Investment Fund, a Massachusetts trust with transferable shares (the "Trust" or "you"), relating to the following facts: The trustees of the Trust (the "Trustees") have voted to amend the Trust's Agreement and Declaration of Trust, dated February 11, 1986, as theretofore amended (as in effect before such amendment, the "Declaration", and as so amended, the "Declaration, as amended") to establish and designate an additional Fund of the Trust, designated as "Janus Twenty Fund" (the "New Fund"), and to authorize a Series of shares of beneficial interest representing interests therein (the "New Shares"), and caused to be filed in the office of the Secretary of State of The Commonwealth of Massachusetts a certificate of designation (the "Certificate") setting forth the terms of such amendment. The Trustees have also approved a proposed Agreement and Plan of Reorganization and Liquidation (the "Plan", and the transactions called for thereby, the "Reorganization"), under which Janus Twenty Fund, Inc., a Maryland business corporation (the "Old Fund"), would be reorganized into the New Fund. Under the Plan, the assets of the Old Fund would be transferred, subject to all of the liabilities of the Old Fund, to the New Fund, in exchange for a number of New Shares (the "Reorganization Shares") equal to the number of shares of the Old Fund then outstanding, after which the Reorganization Shares would be distributed pro rata to the stockholders of the Old Fund. Following such distribution, the Old Fund would be dissolved. You have filed with the Securities and Exchange Commission (the "SEC"), under the Securities Act of 1933, as amended (the "Securities Act"), Post-effective Amendment No. 46 (the "Securities Act Amendment"), and under the Investment Company Act of 1940, as amended, Post-effective Amendment No. 29 (collectively with the Securities Act Amendment, the "Amendments"), to your -2- registration statement on Form N-1A (the "Registration Statement") reflecting the establishment and designation of the New Fund and the authorization of the New Shares. The terms of the proposed Reorganization are summarized in the proxy statement (the "Proxy Statement") which has been filed with the SEC for a meeting of the stockholders of the Old Fund at which, among other things, the Plan and the Reorganization will be presented for approval by the stockholders of the Old Fund, and after which (if such approval is given) the Plan will be signed by and on behalf of the Trust and the Old Fund, and the transfers of assets, subject to liabilities, and issuances of Reorganization Shares contemplated thereby will be made. We have reviewed the Declaration, the Certificate, the Bylaws of the Trust, the Proxy Statement, the Plan, the Prospectus and Statement of Additional Information (the "Prospectus") for the New Fund forming part of the Registration Statement, as amended by the Amendments, the actions taken by the initial Trustee of the Trust to organize the Trust, the actions taken by the current Trustees to designate and establish the New Fund and to authorize the New Shares, to authorize the execution, delivery and performance of the Plan and the issuance of the Reorganization Shares pursuant thereto, certificates of officers of the Trust and of public officials as to matters of fact, and such other documents and instruments, certified or otherwise identified to our satisfaction, and such questions of law and fact, as we have considered necessary or appropriate for purposes of the opinions expressed herein. We have assumed the genuineness of the signatures on, and the authenticity of, all documents furnished to us, and the conformity to the originals of documents submitted to us as copies, certified or otherwise, which facts we have not independently verified. Based upon and subject to the foregoing, we hereby advise you that, in our opinion, under the laws of The Commonwealth of Massachusetts: 1. The Trust is duly organized and validly existing under Massachusetts laws as a trust with transferable shares of the type commonly called a Massachusetts business trust. 2. The Certificate was duly authorized by all requisite action of the Trustees and duly executed by officers of the Trust thereunto duly authorized, has been filed with the office of the Secretary of State of The Commonwealth of Massachusetts, and is effective to establish and designate the New Fund as a separate Fund of the Trust, and no action of the shareholders of the Trust (the "Shareholders") was required in such connection. 3. The New Shares have been duly authorized by all requisite action of the Trustees, and no action of the Shareholders is required in such connection. -3- 4. When issued to the Old Fund in exchange for the assets, subject to the liabilities, thereof and distributed to the stockholders of the Old Fund in accordance with the terms of the Plan, the Reorganization Shares will be legally and validly issued and fully paid shares of beneficial interest of the Trust, representing interests in the New Fund, and will be non-assessable, either by the Trust or by the New Fund. 5. When New Shares are issued by the Trust after consummation of the Reorganization to persons who purchase such New Shares in the manner, and for consideration actually received by the Trust of the kinds and in the amounts, contemplated by the Declaration, as amended, and by the Registration Statement, as amended by the Amendments, at times at which the Trust is validly existing as a Massachusetts trust with transferable shares, the New Fund has not been terminated and the Certificate has not been amended, and at which the action taken by the Trustees to authorize the issue thereof has not been amended or rescinded, such New Shares will be legally and validly issued and fully paid shares of beneficial interest of the Trust, representing interests in the New Fund, and will be non-assessable, either by the Trust or by the New Fund. With respect to the opinions stated in paragraphs 4 and 5, above, we wish to point out that the shareholders of a Massachusetts business trust may under some circumstances be subject to assessment at the instance of creditors to pay the obligations of such trust in the event that its assets are insufficient for the purpose. This letter expresses our opinions as to the provisions of the Declaration and the laws of The Commonwealth of Massachusetts applying to business trusts generally, but does not extend to the Massachusetts Securities Act, or to federal securities or other laws. We hereby consent to the filing of this opinion with the SEC in connection with the filing of the Amendments, as an exhibit to the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act. Very truly yours, /s/ Sullivan & Worcester SULLIVAN & WORCESTER EX-23 16 EX 10(E) OPINION AND CONSENT OF FUND COUNSEL EXHIBIT 10(e) SULLIVAN & WORCESTER One Post Office Square Boston, Massachusetts 02109 (617) 338-2800 Telecopier No. 617-338-2880 TWX: 710-321-1976 August 6, 1992 Janus Investment Fund 100 Fillmore Street, Suite 300 Denver, Colorado 80206 Re: Reorganization of Janus Venture Fund Ladies and Gentlemen: You have requested our opinion as to certain questions of Massachusetts law applicable to Janus Investment Fund, a Massachusetts trust with transferable shares (the "Trust" or "you"), relating to the following facts: The trustees of the Trust (the "Trustees") have voted to amend the Trust's Agreement and Declaration of Trust, dated February 11, 1986, as theretofore amended (as in effect before such amendment, the "Declaration", and as so amended, the "Declaration, as amended") to establish and designate an additional Fund of the Trust, designated as "Janus Venture Fund" (the "New Fund"), and to authorize a Series of shares of beneficial interest representing interests therein (the "New Shares"), and caused to be filed in the office of the Secretary of State of The Commonwealth of Massachusetts a certificate of designation (the "Certificate") setting forth the terms of such amendment. The Trustees have also approved a proposed Agreement and Plan of Reorganization and Liquidation (the "Plan", and the transactions called for thereby, the "Reorganization"), under which Janus Venture Fund, Inc., a Maryland business corporation (the "Old Fund"), would be reorganized into the New Fund. Under the Plan, the assets of the Old Fund would be transferred, subject to all of the liabilities of the Old Fund, to the New Fund, in exchange for a number of New Shares (the "Reorganization Shares") equal to the number of shares of the Old Fund then outstanding, after which the Reorganization Shares would be distributed pro rata to the stockholders of the Old Fund. Following such distribution, the Old Fund would be dissolved. You have filed with the Securities and Exchange Commission (the "SEC"), under the Securities Act of 1933, as amended (the "Securities Act"), Post-effective Amendment No. 47 (the "Securities Act Amendment"), and under the Investment Company Act of 1940, as amended, Post-effective Amendment No. 30 (collectively with the Securities Act Amendment, the "Amendments"), to your -2- registration statement on Form N-1A (the "Registration Statement") reflecting the establishment and designation of the New Fund and the authorization of the New Shares. The terms of the proposed Reorganization are summarized in the proxy statement (the "Proxy Statement") which has been filed with the SEC for a meeting of the stockholders of the Old Fund at which, among other things, the Plan and the Reorganization will be presented for approval by the stockholders of the Old Fund, and after which (if such approval is given) the Plan will be signed by and on behalf of the Trust and the Old Fund, and the transfers of assets, subject to liabilities, and issuances of Reorganization Shares contemplated thereby will be made. We have reviewed the Declaration, the Certificate, the Bylaws of the Trust, the Proxy Statement, the Plan, the Prospectus and Statement of Additional Information (the "Prospectus") for the New Fund forming part of the Registration Statement, as amended by the Amendments, the actions taken by the initial Trustee of the Trust to organize the Trust, the actions taken by the current Trustees to designate and establish the New Fund and to authorize the New Shares, to authorize the execution, delivery and performance of the Plan and the issuance of the Reorganization Shares pursuant thereto, certificates of officers of the Trust and of public officials as to matters of fact, and such other documents and instruments, certified or otherwise identified to our satisfaction, and such questions of law and fact, as we have considered necessary or appropriate for purposes of the opinions expressed herein. We have assumed the genuineness of the signatures on, and the authenticity of, all documents furnished to us, and the conformity to the originals of documents submitted to us as copies, certified or otherwise, which facts we have not independently verified. Based upon and subject to the foregoing, we hereby advise you that, in our opinion, under the laws of The Commonwealth of Massachusetts: 1. The Trust is duly organized and validly existing under Massachusetts laws as a trust with transferable shares of the type commonly called a Massachusetts business trust. 2. The Certificate was duly authorized by all requisite action of the Trustees and duly executed by officers of the Trust thereunto duly authorized, has been filed with the office of the Secretary of State of The Commonwealth of Massachusetts, and is effective to establish and designate the New Fund as a separate Fund of the Trust, and no action of the shareholders of the Trust (the "Shareholders") was required in such connection. 3. The New Shares have been duly authorized by all requisite action of the Trustees, and no action of the Shareholders is required in such connection. -3- 4. When issued to the Old Fund in exchange for the assets, subject to the liabilities, thereof and distributed to the stockholders of the Old Fund in accordance with the terms of the Plan, the Reorganization Shares will be legally and validly issued and fully paid shares of beneficial interest of the Trust, representing interests in the New Fund, and will be non-assessable, either by the Trust or by the New Fund. 5. When New Shares are issued by the Trust after consummation of the Reorganization to persons who purchase such New Shares in the manner, and for consideration actually received by the Trust of the kinds and in the amounts, contemplated by the Declaration, as amended, and by the Registration Statement, as amended by the Amendments, at times at which the Trust is validly existing as a Massachusetts trust with transferable shares, the New Fund has not been terminated and the Certificate has not been amended, and at which the action taken by the Trustees to authorize the issue thereof has not been amended or rescinded, such New Shares will be legally and validly issued and fully paid shares of beneficial interest of the Trust, representing interests in the New Fund, and will be non-assessable, either by the Trust or by the New Fund. With respect to the opinions stated in paragraphs 4 and 5, above, we wish to point out that the shareholders of a Massachusetts business trust may under some circumstances be subject to assessment at the instance of creditors to pay the obligations of such trust in the event that its assets are insufficient for the purpose. This letter expresses our opinions as to the provisions of the Declaration and the laws of The Commonwealth of Massachusetts applying to business trusts generally, but does not extend to the Massachusetts Securities Act, or to federal securities or other laws. We hereby consent to the filing of this opinion with the SEC in connection with the filing of the Amendments, as an exhibit to the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act. Very truly yours, /s/ Sullivan & Worcester SULLIVAN & WORCESTER EX-23 17 EX 10(F) OPINION AND CONSENT OF FUND COUNSEL EXHIBIT 10(f) SULLIVAN & WORCESTER One Post Office Square Boston, Massachusetts 02109 (617) 338-2800 Telecopier No. 617-338-2880 TWX: 710-321-1976 August 6, 1992 Janus Investment Fund 100 Fillmore Street, Suite 300 Denver, Colorado 80206 Re: Reorganization of Janus Flexible Income Fund Ladies and Gentlemen: You have requested our opinion as to certain questions of Massachusetts law applicable to Janus Investment Fund, a Massachusetts trust with transferable shares (the "Trust" or "you"), relating to the following facts: The trustees of the Trust (the "Trustees") have voted to amend the Trust's Agreement and Declaration of Trust, dated February 11, 1986, as theretofore amended (as in effect before such amendment, the "Declaration", and as so amended, the "Declaration, as amended") to establish and designate an additional Fund of the Trust, designated as "Janus Flexible Income Fund" (the "New Fund"), and to authorize a Series of shares of beneficial interest representing interests therein (the "New Shares"), and caused to be filed in the office of the Secretary of State of The Commonwealth of Massachusetts a certificate of designation (the "Certificate") setting forth the terms of such amendment. The Trustees have also approved a proposed Agreement and Plan of Reorganization and Liquidation (the "Plan", and the transactions called for thereby, the "Reorganization"), under which Janus Flexible Income Fund (the "Old Fund"), a separate series of Janus Income Series, a Massachusetts business trust with transferable shares (the "Income Series Trust") would be reorganized into the New Fund. Under the Plan, the assets of the Old Fund would be transferred, subject to the liabilities of the Old Fund, to the New Fund, in exchange for a number of New Shares (the "Reorganization Shares") equal to the number of shares of the Old Fund then outstanding, after which the Reorganization Shares would be distributed pro rata to the stockholders of the Old Fund. Following such distribution, and consummation of a similar transaction involving Janus Intermediate Government Securities Fund, the Income Series Trust would be terminated. You have filed with the Securities and Exchange Commission (the "SEC"), under the Securities Act of 1933, as amended (the -2- "Securities Act"), Post-effective Amendment No. 46 (the "Securities Act Amendment"), and under the Investment Company Act of 1940, as amended, Post-effective Amendment No. 29 (collectively with the Securities Act Amendment, the "Amendments"), to your registration statement on Form N-1A (the "Registration Statement") reflecting the establishment and designation of the New Fund and the authorization of the New Shares. The terms of the proposed Reorganization are summarized in the proxy statement (the "Proxy Statement") which has been filed with the SEC for a meeting of the stockholders of the Old Fund at which, among other things, the Plan and the Reorganization will be presented for approval by the stockholders of the Old Fund, and after which (if such approval is given) the Plan will be signed by and on behalf of the Trust and the Old Fund, and the transfers of assets, subject to liabilities, and issuances of Reorganization Shares contemplated thereby will be made. We have reviewed the Declaration, the Certificate, the Bylaws of the Trust, the Proxy Statement, the Plan, the Prospectus and Statement of Additional Information (the "Prospectus") for the New Fund forming part of the Registration Statement, as amended by the Amendments, the actions taken by the initial Trustee of the Trust to organize the Trust, the actions taken by the current Trustees to designate and establish the New Fund and to authorize the New Shares, to authorize the execution, delivery and performance of the Plan and the issuance of the Reorganization Shares pursuant thereto, certificates of officers of the Trust and of public officials as to matters of fact, and such other documents and instruments, certified or otherwise identified to our satisfaction, and such questions of law and fact, as we have considered necessary or appropriate for purposes of the opinions expressed herein. We have assumed the genuineness of the signatures on, and the authenticity of, all documents furnished to us, and the conformity to the originals of documents submitted to us as copies, certified or otherwise, which facts we have not independently verified. Based upon and subject to the foregoing, we hereby advise you that, in our opinion, under the laws of The Commonwealth of Massachusetts: 1. The Trust is duly organized and validly existing under Massachusetts laws as a trust with transferable shares of the type commonly called a Massachusetts business trust. 2. The Certificate was duly authorized by all requisite action of the Trustees and duly executed by officers of the Trust thereunto duly authorized, has been filed with the office of the Secretary of State of The Commonwealth of Massachusetts, and is effective to establish and designate the New Fund as a separate Fund of the Trust, and no action of the shareholders of the Trust (the "Shareholders") was required in such connection. -3- 3. The New Shares have been duly authorized by all requisite action of the Trustees, and no action of the Shareholders is required in such connection. 4. When issued to the Old Fund in exchange for the assets, subject to the liabilities, thereof and distributed to the stockholders of the Old Fund in accordance with the terms of the Plan, the Reorganization Shares will be legally and validly issued and fully paid shares of beneficial interest of the Trust, representing interests in the New Fund, and will be non-assessable, either by the Trust or by the New Fund. 5. When New Shares are issued by the Trust after consummation of the Reorganization to persons who purchase such New Shares in the manner, and for consideration actually received by the Trust of the kinds and in the amounts, contemplated by the Declaration, as amended, and by the Registration Statement, as amended by the Amendments, at times at which the Trust is validly existing as a Massachusetts trust with transferable shares, the New Fund has not been terminated and the Certificate has not been amended, and at which the action taken by the Trustees to authorize the issue thereof has not been amended or rescinded, such New Shares will be legally and validly issued and fully paid shares of beneficial interest of the Trust, representing interests in the New Fund, and will be non-assessable, either by the Trust or by the New Fund. With respect to the opinions stated in paragraphs 4 and 5, above, we wish to point out that the shareholders of a Massachusetts business trust may under some circumstances be subject to assessment at the instance of creditors to pay the obligations of such trust in the event that its assets are insufficient for the purpose. This letter expresses our opinions as to the provisions of the Declaration and the laws of The Commonwealth of Massachusetts applying to business trusts generally, but does not extend to the Massachusetts Securities Act, or to federal securities or other laws. We hereby consent to the filing of this opinion with the SEC in connection with the filing of the Amendments, as an exhibit to the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act. Very truly yours, /s/ Sullivan & Worcester SULLIVAN & WORCESTER EX-23 18 EX 10(H) OPINION AND CONSENT OF FUND COUNSEL EXHIBIT 10(h) JANUS GROUP OF MUTUAL FUNDS 100 Fillmore Street, Suite 300 Denver, Colorado 80206-4923 303/333-3863 February 18, 1993 Janus Investment Fund 100 Fillmore Street, Suite 300 Denver, CO 80206-9916 RE: Public Offering of Janus Federal Tax-Exempt Fund Shares and Janus Mercury Fund Shares of Janus Investment Fund Gentlemen: I have acted as counsel for Janus Investment Fund, a Massachusetts business trust (the "Trust"), in connection with the filing with the Securities and Exchange Commission of a post-effective amendment to the Trust's registration statement with respect to the proposed sale of shares of beneficial interest, $0.01 par value (the "Shares"), of the Janus Federal Tax-Exempt Fund and Janus Mercury Fund. I have examined the Trust's Agreement and Declaration of Trust and Bylaws, as amended, the proceedings of its trustees relating to the authorization, issuance and proposed sale of the Shares, and such other records and documents as I have deemed relevant. Based upon such examination, it is my opinion that upon the issuance and sale of the Shares in the manner contemplated by the aforesaid registration statement, such Shares will be legally issued, fully paid and nonassessable. I hereby consent to the filing of this opinion as an exhibit to the above referenced registration statement. This opinion is for the exclusive use of the Trust in connection with the filing of such registration statement with the Securities and Exchange Commission (and certain state securities commissions) and is not to be used, circulated, quoted, relied upon or otherwise referred to by any other person or for any other purpose. This opinion is given as of the date hereof and I render no opinion and disclaim any obligation to revise or supplement this opinion based upon any change in applicable law or any factual matter that occurs or comes to my attention after the date hereof. Very truly yours, /s/ David C. Tucker David C. Tucker EX-23 19 EX 10(I) OPINION AND CONSENT OF FUND COUNSEL EXHIBIT 10(i) JANUS FUNDS P.O. Box 173375 Denver, Colorado 80217-3375 800/525-3713 February 11, 1994 Janus Investment Fund 100 Fillmore Street, Suite 300 Denver, Colorado 80206-9916 Re: Public Offering of Janus Overseas Fund Gentlemen: I have acted as counsel for Janus Investment Fund, a Massachusetts business trust (the "Trust"), in connection with the filing with the Securities and Exchange Commission of a post-effective amendment to the Trust's registration statement with respect to the proposed sale of shares of beneficial interest, $0.01 par value (the "Shares"), of the Janus Overseas Fund. I have examined the Trust's Agreement and Declaration of Trust and Bylaws, as amended, the proceedings of its trustees relating to the authorization, issuance and proposed sale of the Shares, and such other records and documents as I have deemed relevant. Based upon such examination, it is my opinion that upon the issuance and sale of the Shares in the manner contemplated by the aforesaid registration statement, such Shares will be legally issued, fully paid and nonassessable. I hereby consent to the filing of this opinion as an exhibit to the above-referenced registration statement. This opinion is for the exclusive use of the Trust in connection with the filing of such registration statement with the Securities and Exchange Commission (and certain state securities commissions) and is not to be used, circulated, quoted, relied upon or otherwise referred to by any other person or for any other purpose. This opinion is given as of the date hereof and I render no opinion and disclaim any obligation to revise or supplement this opinion based upon any change in applicable law or any factual matter that occurs or comes to my attention after the date hereof. Very truly yours, /s/ Deborah E. Bielicke Deborah E. Bielicke DEB:el EX-23 20 EX 10(J) OPINION AND CONSENT OF FUND COUNSEL EXHIBIT 10(j) JANUS GROUP OF MUTUAL FUNDS 100 Fillmore Street, Suite 300 Denver, Colorado 80206-4923 303/333-3863 November 22, 1994 Janus Investment Fund 100 Fillmore Street, Suite 300 Denver, Colorado 80206-9916 Re: Public Offering of Janus Money Market Fund, Janus Government Money Market Fund, and Janus Tax-Exempt Money Market Fund Gentlemen: I have acted as counsel for Janus Investment Fund, a Massachusetts business trust (the "Trust"), in connection with the filing with the Securities and Exchange Commission of a post-effective amendment to the Trust's registration statement with respect to the proposed sale of shares of beneficial interest, $0.01 par value (the "Shares"), of Janus Money Market Fund, Janus Government Money Market Fund, and Janus Tax-Exempt Money Market Fund. I have examined the Trust's Agreement and Declaration of Trust and Bylaws, as amended, the proceedings of its trustees relating to the authorization, issuance and proposed sale of the Shares, and such other records and documents as I have deemed relevant. Based upon such examination, it is my opinion that upon the issuance and sale of the Shares in the manner contemplated by the aforesaid post-effective amendment to the Trust's registration statement, such Shares will be legally issued, fully paid and nonassessable. I hereby consent to the filing of this opinion as an exhibit to the above referenced registration statement. This opinion is for the exclusive use of the Trust in connection with the filing of such post-effective amendment to the Trust's registration statement with the Securities and Exchange Commission (and certain state securities commissions) and is not to be used, circulated, quoted, relied upon or otherwise referred to by any other person or for any other purpose. This opinion is given as of the date hereof and I render no opinion and disclaim any obligation to revise or supplement this opinion based upon any change in applicable law or any factual matter that occurs or comes to my attention after the date hereof. Very truly yours, /s/ David C. Tucker David C. Tucker EX-23 21 EX 10(K) OPINION AND CONSENT OF FUND COUNSEL EXHIBIT 10(k) JANUS FUNDS P.O. Box 173375 Denver, Colorado 80217-3375 800/525-3713 February 10, 1995 Janus Investment Fund 100 Fillmore Street, Suite 300 Denver, Colorado 80206-9916 Re: Public Offering of Janus Money Market Fund - Institutional Shares; Janus Government Money Market Fund - Institutional Shares; and Janus Tax-Exempt Money Market Fund - Institutional Shares Gentlemen: I have acted as counsel for Janus Investment Fund, a Massachusetts business trust (the "Trust"), in connection with the filing with the Securities and Exchange Commission of a post-effective amendment to the Trust's registration statement with respect to the proposed sale of a second class of shares of beneficial interest, $0.01 par value (the "Institutional Shares"), of Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund. I have examined the Trust's Agreement and Declaration of Trust and Bylaws, as amended, the proceedings of its trustees relating to the authorization, issuance and proposed sale of the Institutional Shares, and such other records and documents as I have deemed relevant. Based upon such examination, it is my opinion that upon the issuance and sale of the Institutional Shares in the manner contemplated by the aforesaid post-effective amendment to the Trust's registration statement, such Institutional Shares will be legally issued, fully paid and nonassessable. I hereby consent to the filing of this opinion as an exhibit to the above- referenced registration statement. This opinion is for the exclusive use of the Trust in connection with the filing of such post-effective amendment to the Trust's registration statement with the Securities and Exchange Commission (and certain state securities commissions) and is not to be used, circulated, quoted, relied upon or otherwise referred to by any other person or for any other purpose. This opinion is given as of the date hereof and I render no opinion and disclaim any obligation to revise or supplement this opinion based upon any change in applicable law or any factual matter that occurs or comes to my attention after the date hereof. Very truly yours, /s/ Deborah E. Bielicke Deborah E. Bielicke EX-23 22 EX 11 CONSENT OF PRICE WATERHOUSE EXHIBIT 11 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the reference to us under the heading "Independent Accountants" in the Statement of Additional Information constituting part of this Post-Effective Amendment No. 81 to the Registration Statement on Form N-1A of Janus Investment Fund. /s/ Price Waterhouse LLP PRICE WATERHOUSE LLP Denver, Colorado June 26, 1997 EX-99 23 EX 14(A) MODEL INDIVIDUAL RETIREMENT PLAN EXHIBIT 14(a) IRA CUSTODIAL AGREEMENT AND DISCLOSURE STATEMENT [LOGO] JANUS FUNDS CUSTODIAL AGREEMENT - -------------------------------------------------------------------------------- INTRODUCTION The Depositor, by signing the Application, and the Custodian, by accepting the Application, have established this Individual Retirement Custodial Account Agreement (the "Agreement") sponsored by Janus Investment Fund. The Application is a part of this Agreement. The Individual Retirement Custodial Account is established within the meaning of Section 408 (a) of the Internal Revenue Code of 1986, as amended, or any successor statute (hereafter referred to as the "Code"). It is agreed by the Depositor and the Custodian that the terms and conditions of the Individual Retirement Custodial Account are as stated in this Agreement, which shall be effective as of the date the Application is accepted by the Custodian. 5305-A Individual Retirement Custodial Account ARTICLE I Contributions Paragraph 1.1 - The Custodian may accept additional cash contributions on behalf of the Depositor for a tax year of the Depositor. The total cash contributions are limited to $2,000 for the tax year unless the contribution is a rollover contribution described in section 402(c) (but only after December 31, 1992), 403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to a simplified employee pension plan as described in section 408(k). Rollover contributions before January 1, 1993, include rollovers described in section 402(a)(5), 402(a)(6), 402(a)(7), 403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to a simplified employee pension plan as described in section 408(k). ARTICLE II Nonforfeitable Benefits Paragraph 2.1 - The Depositor's interest in the balance in the custodial account is nonforfeitable. ARTICLE III Investments Paragraph 3.1 - No part of the custodial funds may be invested in life insurance contracts, nor may the assets of the custodial account be commingled with other property except in a common trust fund or common investment fund (within the meaning of section 408(a)(5)). Paragraph 3.2 - No part of the custodial funds may be invested in collectibles (within the meaning of section 408(m)) except as otherwise permitted by section 408(m)(3) which provides an exemption for certain gold and silver coins and coins issued under the laws of any state. ARTICLE IV Distribution of the Account Paragraph 4.1 - Notwithstanding any provision of this Agreement to the contrary, the distribution of the Depositor's interest in the custodial account shall be made in accordance with the following requirements and shall otherwise comply with section 408(a)(6) and Proposed Regulations section 1.408-8, including the incidental death benefit provisions of Proposed Regulations section 1.401(a)(9)-2, the provisions of which are incorporated by reference. Paragraph 4.2 - Unless otherwise elected by the time distributions are required to begin to the Depositor under paragraph 4.3, or to the surviving spouse under paragraph 4.4, other than in the case of a life annuity, life expectancies shall be recalculated annually. Such election shall be irrevocable as to the Depositor and the surviving spouse and shall apply to all subsequent years. The life expectancy of a nonspouse beneficiary may not be recalculated. Paragraph 4.3 - The Depositor's entire interest in the custodial account must be, or begin to be, distributed by the Depositor's required beginning date, (April 1 following the calendar year end in which the Depositor reaches age 701/2). By that date, the Depositor may elect, in a manner acceptable to the Custodian, to have the balance in the custodial account distributed in: (a) A single sum payment. (b) An annuity contract that provides equal or substantially equal monthly, quarterly, or annual payments over the life of the Depositor. (c) An annuity contract that provides equal or substantially equal monthly, quarterly, or annual payments over the joint and last survivor lives of the Depositor and his or her designated beneficiary. (d) Equal or substantially equal annual payments over a specified period that may not be longer than the Depositor's life expectancy. (e) Equal or substantially equal annual payments over a specified period that may not be longer than the joint life and last survivor expectancy of the Depositor and his or her designated beneficiary. Paragraph 4.4 - If the Depositor dies before his or her entire interest is distributed to him or her, the entire remaining interest will be distributed as follows: (a) If the Depositor dies on or after distribution of his or her interest has begun, distribution must continue to be made in accordance with paragraph 4.3. (b) If the Depositor dies before distribution of his or her interest has begun, the entire remaining interest will, at the election of the Depositor or, if the Depositor has not so elected, at the election of the beneficiary or beneficiaries, either (i) Be distributed by the December 31 of the year containing the fifth anniversary of the Depositor's death, or (ii) Be distributed in equal or substantially equal payments over the life or life expectancy of the designated beneficiary or beneficiaries starting by December 31 of the year following the year of the Depositor's death. If, however, the beneficiary is the Depositor's surviving spouse, then this distribution is not required to begin before December 31 of the year in which the Depositor would have turned age 701/2. (c) Except where distribution in the form of an annuity meeting the requirements of section 408(b)(3) and its related regulations has irrevocably commenced, distributions are treated as having begun on the Depositor's required beginning date, even though payments may actually have been made before that date. (d) If the Depositor dies before his or her entire interest has been distributed and if the beneficiary is other than the surviving spouse, no additional cash contributions or rollover contributions may be accepted in the account. Paragraph 4.5 - In the case of a distribution over life expectancy in equal or substantially equal annual payments, to determine the minimum annual payment for each year, divide the Depositor's entire interest in the custodial account as of the close of business on December 31 of the preceding year by the life expectancy of the Depositor (or the joint life and last survivor expectancy of the Depositor and the Depositor's designated beneficiary, or the life expectancy of the designated beneficiary, whichever applies). In the case of distributions under paragraph 4.3, determine the initial life expectancy (or joint life and last survivor expectancy) using the attained ages of the Depositor and designated beneficiary as of their birthdays in the year the Depositor reaches age 701/2. In the case of a distribution in accordance with paragraph 4.4(b)(ii), determine life expectancy using the attained age of the designated beneficiary as of the beneficiary's birthday in the year distributions are required to commence. CUSTODIAL AGREEMENT - -------------------------------------------------------------------------------1 Paragraph 4.6 - The owner of two or more individual retirement accounts may use the "alternative method" described in Notice 88-38, 1988-1 C.B. 524, to satisfy the minimum distribution requirements described above. This method permits an individual to satisfy these requirements by taking from one individual retirement account the amount required to satisfy the requirement for another. ARTICLE V Disclosure and Reporting Paragraph 5.1 - The Depositor agrees to provide the Custodian with information necessary for the Custodian to prepare any reports required under section 408(i) and Regulations sections 1.408-5 and 1.408-6. Paragraph 5.2 - The Custodian agrees to submit reports to the Internal Revenue Service and the Depositor prescribed by the Internal Revenue Service. ARTICLE VI Miscellaneous Paragraph 6.1 - Notwithstanding any other articles which may be added or incorporated, the provisions of Articles I through III and this sentence will be controlling. Any additional articles that are not consistent with section 408(a) and the related regulations will be invalid. ARTICLE VII Amendment Paragraph 7.1 - This Agreement will be amended from time to time to comply with the provisions of the Code and related regulations. Other amendments may be made with the consent of the persons whose signatures appear below. ARTICLE VIII Definitions and Other Paragraph 8.1 - Definitions. The following definitions shall apply to terms used in this Agreement: a. "Application" shall mean the IRA Application submitted by the Depositor to the Custodian. b. "Code" shall mean the Internal Revenue Code of 1986, as amended, including any regulations, procedures, rulings, or notices issued thereunder. c. "Company" shall mean Janus Investment Fund. d. "Custodial Account" shall mean the custodial account established under this Agreement. e. "Custodian" shall mean Investors Fiduciary Trust Company and any successor custodian. f. "Depositor" shall mean the individual establishing this IRA by completing and signing the Application. Paragraph 8.2 - Investment of Contributions. Contributions shall be invested in shares of available series of the Company in accordance with the Depositor's written instructions in the Application, and with subsequent written instructions of the Depositor (or, following the death of the Depositor, his or her beneficiary) in a form acceptable to and filed with the Custodian. By giving such instructions, the Depositor (or beneficiary, where applicable) will be deemed to have acknowledged receipt of the then current prospectus for any shares in which the Depositor (or beneficiary) directs the Custodian to invest contributions. The Depositor, by making a rollover contribution, as described in Article I, hereby certifies that the contribution meets all requirements for rollover contributions. The amount of each contribution shall be applied to the purchase of such shares at the price and in the manner in which such shares are then being publicly offered by the Company in accordance with the then current prospectus, and such shares shall be credited to the Custodial Account. All dividends and capital gain distributions received on the shares of the fund held in each Custodial Account shall be reinvested in such shares which shall be credited to such Custodial Account. If any distribution on shares of the fund may be received at the election of the shareholder in additional shares or in cash or other property, the Custodian shall elect to receive such distribution in additional shares. The Custodian shall not be liable for interest on any cash balance in the Custodial Account. All Company shares acquired by the Custodian shall be registered in the name of the Custodian or its registered nominee. Paragraph 8.3 - Voting with respect to shares. The Custodian shall not vote any of the shares of a Company mutual fund held in the Custodial Account except in accordance with written instructions of the Depositor, timely received, in a form acceptable to the Custodian. Paragraph 8.4 - Alternative Distribution Methods: Notwithstanding Article IV, a Depositor may elect in writing in a form acceptable to and filed with the Custodian, to have the balance in the Custodial Account distributed only in a lump sum or in substantially equal payments over a period that does not exceed the Depositor's life expectancy or the joint and last survivor life expectancy of the Depositor and his or her designated beneficiary. For this purpose, life expectancies must be determined by using applicable Internal Revenue Service tables. Such election shall be irrevocable as to the Depositor and the surviving spouse and shall apply to all subsequent years. The life expectancy of a nonspouse beneficiary may not be recalculated. To receive an annuity distribution, a Depositor may roll over a lump sum distribution to purchase an individual retirement annuity payable in equal or substantially equal payments over the Depositor's life expectancy or the joint and last survivor life expectancy of the Depositor and his or her designated beneficiary. The distribution option should be reviewed in the year the Depositor reaches age 701/2 to make sure the requirements of Code Section 408(a)(6) have been met. Consistent with paragraph 4.6 of Article IV, the Custodian is not obligated to make any distribution absent a specific written direction, in a form acceptable to and filed with the Custodian, from the Depositor or designated beneficiary to do so. Paragraph 8.5 - Amendment and Termination. The Depositor may at any time and from time to time terminate this Agreement in whole or in part by delivering to the Custodian a signed written notice of such termination, in a form acceptable to the Custodian. The Depositor and the Custodian delegate to the Company the right to amend this Agreement (including retroactive amendments) by written notice to the Custodian and the Depositor. The Depositor shall be deemed to have consented to any such amendment, provided that (a) no amendment shall cause or permit any part of the assets of the Custodial Account to be diverted to purposes other than for the exclusive benefit of the Depositor or his or her beneficiaries; (b) any amendment which affects the rights, duties or responsibilities of the Custodian may only be made with the Custodian's consent; and (c) no amendment shall be made except in accordance with any applicable laws and regulations affecting this Agreement and the Custodial Account. Paragraph 8.6 - Resignation or Removal of Custodian. The Custodian may resign at any time upon thirty (30) days notice in writing to the Depositor and the Company. Upon such resignation, the Depositor delegates to the Company the responsibility to appoint a successor custodian under this Agreement. The Company at any time may remove the Custodian upon 30 days written notice to that effect in a form acceptable to and filed with the Custodian. Such notice must include designation of a successor custodian. The successor custodian shall satisfy the requirements of section 408(h) of the Code. Upon receipt by the Custodian of written acceptance of such appointment by the successor custodian, the Custodian shall transfer and pay over to such successor the assets of and records relating to the Custodial Account. The Custodian is authorized, however, to reserve such sum of money as it may deem advisable for payment of all its fees, compensation, costs and expenses, or for payment of any other liability constituting a charge on or against the assets of the Custodial Account CUSTODIAL AGREEMENT 2------------------------------------------------------------------------------- or on or against the Custodian, and where necessary may liquidate shares in the Custodial Account for such payments. Any balance of such reserve remaining after the payment of all such items shall be paid over to the successor custodian. The Custodian shall not be liable for the acts or omissions of any successor custodian. Paragraph 8.7 - Custodian's Annual Fees: The Depositor shall be charged by the Custodian for its services under this Agreement in such amount as the Custodian shall establish from time to time. Sufficient shares may be liquidated from the Custodial Account to pay the fee. The annual fee in effect on the date of this Agreement is set forth in the Application. A different fee may be substituted at any time upon written notice to the Depositor. A Depositor who does not consent to such new fee should terminate this Agreement pursuant to paragraph 8.5 of Article VIII within 30 days of the notice of the new fee. If no such termination is made within 30 days of the notice of the new fee, the Depositor will be deemed to have consented to the new fee. Paragraph 8.8 - Other Fees and Expenses. Any income or other taxes of any kind whatsoever that may be levied or assessed upon or with respect to the Custodial Account or the income thereof, any transfer taxes incurred in connection with the investment and reinvestment of the assets of the Custodial Account, all other reasonable administrative expenses incurred by the Custodian with respect to any such taxes, or with respect to any controversies concerning the Custodial Account, including, but not limited to, fees for legal services rendered to the Custodian and related costs, and such reasonable compensation to the Custodian for acting in that capacity with respect to any such taxes or controversies, may, in the discretion of the Custodian, be charged against and paid from the assets of the Custodial Account. Sufficient shares may be liquidated from the Custodial Account to pay any such taxes, expenses and compensation. Paragraph 8.9 - Inalienability of Assets: No interest, right or claim in or to any part of the Custodial Account, nor any assets held therein or benefits provided hereunder shall be subject to alienation, assignment, garnishment, attachment, execution or levy of any kind, and any attempt to cause any such interest, right, claim, assets or benefits to be so subjected shall not be recognized, except to the extent as may be required by law. Paragraph 8.10 - Exchange Privilege: With respect to any Company shares held in the Custodial Account, the Depositor (or beneficiary, where applicable) may, upon submission of written or oral instructions in a form acceptable to and filed with the Custodian, cause shares of any fund to be exchanged for shares of any other fund of the Company meeting the requirements of this Agreement, upon the terms and within the limitations imposed by the then current prospectus of the fund of the Company whose shares are acquired in the exchange. By giving such instructions, the Depositor (or beneficiary) will be deemed to have acknowledged receipt of such prospectus. Paragraph 8.11 - Designation of Beneficiary. The Depositor may designate a beneficiary or change or revoke the designation of a beneficiary, by written notice in a form acceptable to and filed with the Custodian, prior to the complete distribution of the balance in the Custodial Account. If the Depositor has not by the date of his or her death properly designated a beneficiary in accordance with the preceding sentence, or if no designated beneficiary survives the Depositor, the Depositor's beneficiary shall be his or her estate. If a beneficiary dies before receiving his or her entire interest in the Custodial Account, his or her remaining interest in the Custodial Account shall be paid to the beneficiary's estate. Paragraph 8.12 - Responsibility as to Contributions or Distributions. The Custodian will not under any circumstances be responsible for the timing, purpose or propriety of any contribution or of any distribution made hereunder, nor shall the Custodian incur any liability or responsibility for any tax imposed on account of any such contribution or distribution. Paragraph 8.13 - Other Limits on Responsibilities of the Custodian. The Custodian shall not incur any liability or responsibility in taking or omitting to take any action based on any notice, election, instruction or any written instrument believed by the Custodian to be genuine and to have been properly executed. The Custodian shall be under no duty of inquiry with respect to any such notice, election, instruction or written instrument, but in its discretion may request any tax waivers, proof of signatures or other evidence which it reasonably deems necessary for its protection. The Depositor and the successors of the Depositor including any executor or administrator of the Depositor shall, to the extent permitted by law, indemnify the Custodian and its successors and assigns against any and all claims, actions or liabilities of the Custodian to the Depositor or the successors or beneficiaries of the Depositor whatsoever (including without limitation all reasonable expenses incurred in defending against or settlement of such claims, actions or liabilities) which may arise in connection with this Agreement or the Custodial Account, except those due to the Custodian's own bad faith, gross negligence or willful misconduct. The Custodian shall not be under any duty to take any action not specified in this Agreement, unless the Depositor shall furnish it with instructions in proper form and such instructions shall have been specifically agreed to by the Custodian, or to defend or engage in any suit with respect hereto unless it shall have first agreed in writing to do so and shall have been fully indemnified to its satisfaction. Paragraph 8.14 - Notices. All written notices required or permitted to be given by the Custodian shall be deemed to have been given when sent by mail to the Depositor at the Depositor's last address of record provided to the Custodian. All written notices required or permitted to be given to the Custodian shall be deemed to have been given when received by the Custodian if mailed to the Custodian at Janus Funds, P.O. Box 173375, Denver, Colorado 80217-3375 or such other address as the Custodian shall provide to the Depositor from time to time. Paragraph 8.15 - Timing of Contributions. A contribution is deemed to have been made on the last day of the preceding taxable year if the contribution is made by the deadline for filing the Depositor's income tax return (not including extensions) and if the Depositor designates the contribution as a contribution for the preceding taxable year in a manner acceptable to the Custodian. However, shares shall be purchased on the day such contribution is received by the Custodian. The Custodian will not be liable or responsible for any consequences of postal delays or delays resulting from an incomplete Application or a designation made in an unacceptable form. Applications received postmarked after the deadline will be treated as a contribution for the Depositor's current tax year. Improperly completed applications will be returned to the sender. Paragraph 8.16 - Governing Law. This Agreement and the Custodial Account shall be construed, administered and enforced according to the laws of the State of Missouri. Paragraph 8.17 - When Effective. This Agreement shall not become effective until acceptance of the Application by the Custodian at its principal offices, as evidenced by a written confirmation to the Depositor. DISCLOSURE STATEMENT - -------------------------------------------------------------------------------3 INTRODUCTION The following information is provided to you in accordance with the requirements of the Internal Revenue Code (the "Code") and Treasury regulations and should be reviewed in conjunction with the Individual Retirement Custodial Account Agreement (the "Custodial Agreement"), the Application for your IRA (the "Application"), and the prospectus for the Janus mutual funds that are allowable investments for your IRA. The provisions of the Custodial Agreement, Application and prospectus govern in any instance where the Disclosure Statement is incomplete or appears to conflict. This Disclosure Statement reflects the provisions of the Internal Revenue Code in effect on January 1, 1993. This Disclosure Statement provides a nontechnical summary of the law. Please consult with your tax advisor for more complete information and refer to IRS Publication 590, Individual Retirement Arrangements. I. IRA STATUTORY REQUIREMENTS An IRA is a trust or custodial account established for the exclusive benefit of you and your beneficiaries. Current law requires that your IRA agreement be in writing and that it meet the following requirements: 1. All contributions should be in U.S. dollars and should be drawn on U.S. banks and, for any taxable year, cannot exceed 100% of your compensation or $2,000, whichever is less, unless the contribution is a rollover contribution or an employer contribution to a simplified employee pension plan ("SEP"). 2. The custodian or trustee must be a bank or other institution or person that is approved by the Internal Revenue Service to administer your IRA in accordance with current tax laws. 3. None of your IRA assets may be invested in life insurance contracts or commingled with the assets of other people except in a common trust fund or common investment fund. 4. Your interest in your IRA account is nonforfeitable. 5. Distribution from your IRA must be in accordance with certain minimum distribution rules, which are explained in Section VII. II. RIGHT TO REVOKE You may revoke your IRA at any time within seven days of the time your Application is signed. To revoke your IRA, mail or deliver a written notice stating "I hereby elect to revoke my Janus Funds IRA." Sign your name exactly as it appears on your Application, include your social security number, and mail the notice to: Janus Funds P.O. Box 173375 Denver, Colorado 80217-3375 Your notice will be considered mailed on the date of postmark, or the date of certification or registration if it is sent by certified or registered mail. When the Custodian receives the proper notice of revocation, you will be entitled to a refund of your full IRA contribution, without any adjustment for expenses or market fluctuations. If your have any questions concerning your right of revocation, please call 1-800-525-3713. III. ELIGIBILITY You may make regular contributions to an IRA if you receive compensation from employment, earnings from self-employment, or alimony, and you have not reached age 701/2 by the end of the tax year for which the contribution is made. In addition, if you are married and file a joint tax return, you may make contributions to an IRA for your spouse whether or not your spouse receives compensation. You may make a rollover contribution to an IRA if you have received an eligible rollover distribution from a qualified retirement plan or tax-sheltered annuity or an eligible distribution from another IRA and elect rollover treatment within 60 days. You may also make a trustee-to-trustee transfer from another IRA. Finally, your employer may contribute to your IRA, and if your employer sponsors a simplified employee pension ("SEP"), your employer can make contributions to a SEP/IRA on your behalf. IV. CONTRIBUTIONS A. REGULAR CONTRIBUTIONS You may contribute each year up to $2,000 or 100% of your compensation, whichever is less, to your IRA. If you also establish a spousal IRA for your spouse, you may contribute up to $2,250 or 100% of your compensation, if less, which may be split between the two IRA's as you choose, provided that no more than $2,000 may be contributed to either your IRA or the spousal IRA. If your spouse has compensation in excess of $250, you and your spouse can make a larger total contribution if you each contribute to a regular IRA. If your employer contributes to your IRA, the contribution is treated as compensation paid to you, whether or not the contribution is deductible, unless the contribution is made under a SEP (see below). Compensation for these purposes means wages, salaries, professional fees, or other amounts derived from or received for personal services actually rendered. It includes earned income from self employment and alimony or separate maintenance payments includable in income. It does not include pension or annuity payments or deferred compensation. B. Time for Making Regular Contributions You may make regular contributions to your IRA and/or your spousal IRA anytime during a year, up to and including the due date for filing your tax return for the year (without extensions). No regular contributions may be made to an IRA for the calendar year in which you reach age 701/2 or later years. No regular contributions to a spousal IRA may be made for years in which your spouse is age 701/2 or older. C. Deductibility Regular IRA contributions are fully deductible unless you or your spouse are active participants in a tax-qualified plan of an employer. If you or your spouse are active participants in such a plan, then your allowable deduction for regular IRA contributions is reduced or eliminated if your Adjusted Gross Income ("AGI") exceeds certain levels. (If you file separately and are married but live apart from your spouse at all times during the year, you will be considered to be single when applying the following rules regarding deduction limitations.) The deductible amount is determined as follows: 1. If you (and your spouse) are not active participants in a tax-qualified plan, any contribution up to the maximum amount is deductible. 2. If you (or your spouse) are an active participant in a tax-qualified plan, and (a) your AGI is $25,000 or less ($40,000 for a married couple filing a joint return and $0 for a married person filing separately), any contribution up to the maximum amount is deductible; (b) your AGI is $35,000 or more ($50,000 for a married couple filing a joint return and $10,000 for a married person filing separately), no IRA contribution is deductible; (c) your AGI is between $25,000 and $35,000 ($40,000 and $50,000 for a married couple filing a joint return and $0 to $10,000 for a married person filing separately), the deductible amount is reduced. In the case of a regular IRA, the reduction is $0.20 for each $1.00 of AGI over $25,000 ($40,000 for a married couple filing a joint return and $10,000 for a married person filing separately). For a spousal IRA, the reduction is $0.225 for each $1.00 of AGI over $40,000 if filing jointly. The limit will not be reduced below $200 unless it is eliminated entirely. To the extent that the deductibility of IRA contributions is reduced or eliminated, then nondeductible contributions may be made to your IRA. Earnings on all IRA contributions, whether or not the contributions themselves are deductible, are tax-deferred until receipt. You must designate the amount of nondeductible IRA contributions when filing your tax return for the year. If you overstate the amount of your nondeductible contributions you must pay a $100 penalty, unless you can show that such overstatement was due to reasonable cause. If you fail to report nondeductible IRA contributions you will be subject to a $50 penalty, unless your failure was due to reasonable cause. DISCLOSURE STATEMENT 4------------------------------------------------------------------------------- D. Rollover Contributions 1. Amounts Eligible for Rollover from Plans and Tax-Sheltered Annuities You may make a rollover contribution to your IRA of an "eligible rollover distribution" from an employer tax-qualified plan (an "employer plan") or a tax-sheltered annuity (including a 403(b)(7) account). The administrator of the employer plan or the payor of a distribution from the tax-sheltered annuity should be able to tell you what portion of your payment is an eligible rollover distribution. The following types of payments cannot be rolled over: Non-Taxable Payments. In general, only the "taxable portion" of your payment is an eligible rollover distribution. If you have made "after-tax" employee contributions to the plan or annuity, these contributions will be non-taxable when they are paid to you, and they cannot be rolled over. (After-tax employee contributions generally are contributions you made from your own pay that were already taxed.) Payments Spread Over Long Periods. You cannot roll over a payment if it is part of a series of equal (or almost equal) payments that are made at least once a year and that will last for o your lifetime (or your life expectancy), or o your lifetime and your beneficiary's lifetime (or life expectancies), or o a period of ten years or more. Required Minimum Payments. Beginning in the year you reach age 701/2, a certain portion of your payment cannot be rolled (or transferred) over because it is a "required minimum payment" that must be paid to you. 2. Direct Rollover Generally, payment from an employer plan or a tax-sheltered annuity that is an "eligible rollover distribution," as described above, will be subject to a mandatory 20% income tax withholding. However, to avoid the 20% withholding you can choose to perform a direct rollover. In a direct rollover, the eligible rollover distribution is paid directly from the plan or tax-sheltered annuity to your IRA. If you choose a direct rollover, you are not taxed on a payment until you later take it out of the IRA. 3. Rollover of Plan Payments Paid To You A payment to you of an eligible rollover distribution from an employer plan or tax-sheltered annuity is taxed in the year you receive it unless, within 60 days, you roll it over to an IRA (or another plan that accepts rollovers). If you do not roll it over, special tax rules may apply. If any portion of the payment to you is an eligible rollover distribution, the payor is required by law to withhold 20% of that amount. This amount is sent to the IRS as income tax withholding. Sixty-Day Rollover Option. If you have an eligible rollover distribution paid to you, you can still decide to roll over all or part of it to an IRA (or another employer plan that accepts rollovers). If you decide to roll over, you must make the rollover within 60 days after you receive the payment. The portion of your payment that is rolled over will not be taxed until you take it out of the IRA (or the employer plan). You can roll over up to 100% of the eligible rollover distribution, including an amount equal to the 20% that was withheld. If you choose to roll over 100%, you must find other money within the 60-day period to contribute to the IRA or the employer plan to replace the 20% that was withheld. (On the other hand, if you roll over only the 80% that you received, you will be taxed on the 20% that was withheld). See the Special Tax Notice Regarding Plan Payments, that must be provided by the plan administrator or payor of your employer plan or tax-sheltered annuity, for additional information on the rules governing rollover and taxation of plan distributions, or consult your tax advisor for more details. You should maintain a separate IRA account for any rollovers of funds from an employer plan if you want to preserve your ability to later roll over these funds and earnings into another employer plan. Similarly, you should maintain a separate account for any rollover of funds from a tax-sheltered annuity. You can make a rollover from a tax-qualified plan of your spouse's employer if you received all or a part of your spouse's share as a result of his or her death. A spouse or former spouse who is a recipient of a distribution made under a qualified domestic relations order may roll over all or part of the distribution. Because complex rules apply to the distribution and rollover of payments from employer plans and tax-sheltered annuities, you should seek competent tax advice whenever you contemplate receiving a distribution from a qualified plan or tax-sheltered annuity or an IRA funded by a rollover from a qualified plan or tax-sheltered annuity. 4. Rollovers from Other IRAs You may also make a rollover contribution of amounts held in another IRA. There are no limits on the amount of rollover contributions made to an IRA from another IRA, except you may not roll over (or transfer) the required minimum amount (described in VII.D.). However, the distribution from the first IRA must be rolled over within 60 days of receipt and no more than one distribution per year from an IRA may be rolled over into another IRA. 5. Tax-Deferral on IRA Rollover or Trustee-to-Trustee Transfer An effective rollover allows you to postpone paying taxes on the amount distributed from an employer plan, tax-sheltered annuity or IRA until it is withdrawn from the recipient IRA. You do not report the distribution as income and you do not take a deduction for the rollover contribution. Earnings on your rollover IRA are tax- deferred until receipt. (Similarly, a trustee-to-trustee transfer is not treated as a distribution and the amount transferred and earnings are tax-deferred until receipt.) E. SEP Contributions If your employer has established a simplified employee pension ("SEP"), your employer may make contributions to your SEP/IRA. If the SEP contains a salary reduction arrangement, you may elect to reduce your salary by up to the lesser of 15% of compensation or $7,000 (indexed); and have that amount contributed to your SEP/IRA. The maximum SEP contribution, including salary reduction amounts and employer contributions, is the lesser of 15% of compensation or $30,000. SEP contributions are not included in your taxable income. V. EXCESS CONTRIBUTIONS Amounts contributed to an IRA which exceed the maximum allowable contribution are treated as "excess contributions" and are subject to a nondeductible 6% penalty tax for each year in which the excess remains in the IRA. Excess contributions may be corrected and the 6% penalty tax avoided by withdrawal of the excess and any earnings thereon before the due date (including extensions) of the federal income tax return for the tax year for which the excess contribution was made. No deduction may be taken for the excess contributions and the earnings must be included in taxable income for the year the contribution was made. The earnings withdrawn may be subject to a 10% premature distribution tax if you are under age 591/2. See Section VII.B. An excess contribution may be withdrawn after the due date of the federal income tax return (including extensions) with the following consequences: (a) If your total contribution for the tax year for which the excess contribution was made is $2,250 or less (or below the limit of your employer's SEP contribution) the excess contribution may be withdrawn without being included in income or being subject to the 10% premature distribution tax. No deduction may be taken for the excess contribution. Any earnings withdrawn will be includable in income in the year received as a distribution and will be subject to any 10% premature distribution tax that may apply. (b) If your total contribution for the tax year the excess contribution was made exceeds $2,250 (or, if higher, the limit of your employer's DISCLOSURE STATEMENT - -------------------------------------------------------------------------------5 SEP contribution) any excess contribution and any earnings on the excess withdrawn after the due date for the federal income tax return (including extensions), will be includable in income in the year received and will be subject to any 10% premature distribution tax that may apply. Additionally, no deduction may be taken for the excess contribution for the year in which it is made. (c) Any excess contribution withdrawn after the due date for the tax filing (including extensions) for the year for which the contribution was made is subject to the 6% penalty tax on the amount of the excess contribution for the taxable year in which made and each tax year that it is still in your IRA at the end of the year. You may also correct an excess contribution to your IRA by treating the excess amount as contributed to your IRA in a subsequent year to the extent that the excess, when aggregated with your IRA contribution (if any) for the subsequent year, does not exceed the maximum amount for that year. You may be entitled to a deduction for the amount of the excess contribution that is applied in the subsequent year. VI. INVESTMENT OF ACCOUNT AND FINANCIAL DISCLOSURE The assets in your IRA will be invested in Janus mutual fund shares in accordance with your instructions and Article VIII, paragraphs 8.2 and 8.10 of the Custodial Agreement. Growth in the value of your IRA cannot be guaranteed or projected. However, the income and operating expenses of each allowable investment that you select for your IRA will affect the value of its shares and, therefore, the value of your IRA. The Janus Funds prospectus for such shares contains information regarding current income and expenses of each of these investments. Reasonable fees and other expenses of maintaining your IRA may be charged to you or your IRA. The current annual Custodian's fee is set forth in the Application. A new fee may be substituted from time to time as provided in paragraph 8.7 of the Custodial Agreement. VII. DISTRIBUTIONS A. Taxation of Distribution as Ordinary Income In general, you must include distributions from your IRA in your gross income for the year in which the distributions are received. There is a 10% additional income tax assessed against premature distributions to the extent such distributions are includable in income, as described in B. below. You may exclude from your income that portion of a distribution that constitutes a return of your properly reported nondeductible contributions. The amount of the distribution excludable from income is the portion that bears the same ratio to the total distribution that your aggregate nondeductible contributions (not distributed in prior years) bear to the balance at the end of the year (calculated after adding back distributions made during the year) of your IRA. For this purpose, all of your IRAs are treated as a single IRA, and all distributions from an IRA during a taxable year are to be treated as one distribution. In addition, your gross income does not include any distribution from an IRA that is properly rolled over. Except as provided in D. below, you may roll over all or any part of property received in a distribution of assets, within 60 days of receipt, into another IRA or individual retirement annuity, and maintain the tax-deferred status of such assets. A rollover from an IRA to another may be made once every twelve months. Also, certain qualifying distributions which were rolled over into an IRA from employer tax-qualified plans may be rolled over into another employer tax-qualified plan. (You should seek competent tax advice regarding these rollovers.) As explained in Section V, certain distributions of excess contributions are not included in income. In addition, IRA contributions for a taxable year which do not exceed the contribution limits for such year may also be withdrawn without being included in income or being subject to a 10% premature distribution tax, as long as such contributions and earnings thereon are withdrawn prior to the due date (including extensions) of your federal income tax return for the tax year for which the contribution was made. The earnings withdrawn must be included in taxable income for the year in which the contribution was made and may be subject to the 10% premature distribution tax. B. Tax on Premature Distributions To the extent they are included in income, distributions from your IRA made before you reach age 591/2 will be subject to a 10% additional income tax (in addition to being taxable as ordinary income) unless the distribution is subject to an exception, including, a distribution made on account of your death or disability, or a distribution that is one of a scheduled series of payments over your life expectancy or the joint life expectancies of you and your beneficiary. C. Tax on Excess Distributions There is a 15% excise tax assessed against annual distributions from tax-favored retirement plans, including IRAs, which exceed the greater of $150,000 or $112,500 adjusted after 1988 to reflect cost-of-living increases. To determine whether you have distributions in excess of this limit, you must aggregate the amounts of all distributions received by you during the calendar year from all retirement plans, including IRAs. If you had account balances or accrued benefits equal to at least $562,500 as of August 1, 1986, you may have a portion of the excess distributions exempted from the 15% additional tax. Please consult with you tax advisor for more complete information, including the availability of favorable elections. D. Required Minimum Distributions 1. During Your Life The minimum distribution rules require that for your "701/2 year," and each year thereafter, you must make withdrawals from your IRA accounts that are at least equal to the "minimum distribution." Your 701/2 year is the calendar year that contains the date six months after your 70th birthday. Generally, you must withdraw an amount equal to at least the minimum distribution by December 31 of each year. However, for your 701/2 year, you may wait to withdraw the minimum distribution until April 1 of the following year. (This means that if you wait to make your withdrawal for the 701/2 year until April 1 of the following year, your total withdrawal in that year must equal the minimum distributions for two years - a withdrawal by April 1 that is equal to the minimum distribution for the 701/2 year and a second withdrawal by December 31 that is equal to the minimum distribution for that year.) In each year thereafter, you must withdraw the minimum distribution for the year by December 31. The amount of the minimum distribution is usually determined by dividing the account balance of your IRA, as of December 31 of the prior year, by a divisor (determined by Internal Revenue Service actuarial tables) that is based on your life expectancy or the joint life and last survivor expectancy for you and your beneficiary. See Article IV of the Custodial Agreement for a more detailed explanation of how to calculate the minimum distribution. The distributions must also satisfy the minimum distribution incidental benefit rule, which generally will require distributions over a period less than the joint and last survivor expectancy of you and your designated beneficiary unless your beneficiary is your spouse or is no more than ten years younger than you. The IRS provides tables for determining the distribution needed to satisfy incidental benefit requirements. The minimum distribution required must be calculated separately for each IRA you own, but the amounts so determined may be totalled and taken from any one or more of your IRAs. You will be subject to a 50% excise tax on the amount by which the distribution you actually received in any year falls short of the minimum distribution required for the year. You may take your distribution in: o a lump sum; o equal or substantially equal payments over a specified period no longer than your life expectancy or the joint life and last survivor expectancy of you and your designated beneficiary. Also, as described in Section VII.A., you may roll over your lump sum distribution to purchase an individual retirement annuity payable in equal or substantially equal payments over your life or the joint and last survivor lives of you and your designated beneficiary. (See Article IV and paragraph 8.4, of the Custodial Agreement and IRS Publication 590, Individual Retirement Arrangements, for a full description of permissible distribution methods.) DISCLOSURE STATEMENT - -------------------------------------------------------------------------------- 2. After Your Death If you die before you reach age 701/2, distribution must be made to your beneficiary by December 31 of the fifth year following the year of your death unless, by December 31 of the year following your death, your beneficiary begins receiving distributions over a period not extending beyond your beneficiary's life expectancy. When your beneficiary is your spouse, however, distributions can be postponed until December 31 of the year in which you would have reached age 701/2, at which time your spouse must take them over a period not extending beyond his or her life expectancy. (See Article IV of the Custodial Agreement and IRS Publication 590, Individual Retirement Arrangements, for a more detailed explanation of how to calculate your minimum distribution.) If you die after your required beginning date, the balance in the Custodial Account must continue to be paid at least as rapidly as under the method of payment being used prior to your death. If your beneficiary is your spouse, your beneficiary can elect to treat your IRA as his or her own IRA. The minimum distribution required must be calculated separately for each IRA, but the amounts so determined may be totalled and taken from any one or more IRAs. A payee is subject to a 50% excise tax on the amount by which a distribution for the year falls short of the minimum distribution required. Your beneficiary may take his or her distribution in: o a lump sum; o equal or substantially equal payments over a specified period no longer than his or her life expectancy. Also, as described in Section VII.A., a spousal beneficiary may roll over a lump sum distribution to purchase an individual retirement annuity payable in equal or substantially equal payments over his or her life expectancy. (See Article IV and paragraph 8.4, of the Custodial Agreement and IRS Publication 590, Individual Retirement Arrangements, for a full description of permissible distribution methods.) 3. Further Information This explanation only summarizes the minimum distribution rules. Other rules and exceptions may apply to you that are not discussed in this summary, including rules which, in some cases, would prevent you from using certain options described above. You should consult your personal tax advisor or IRS Publication 590, Individual Retirement Arrangements, for more detailed information. VIII. LOSS OF TAX-EXEMPT STATUS OF IRA If you engage in any of the prohibited transactions listed in Section 4975 of the Code (such as any sale, exchange, or leasing of any property between you and your IRA) or if you take a loan from your IRA, your account will be disqualified and the entire balance of your account will be treated as if it had been distributed to you as of the first day of the year in which the prohibited transaction occurred. The fair market value of your IRA will be included in income in the year the prohibited transaction takes place and, if you are under age 591/2 at the time, you may be subject to the 10% penalty tax on premature distributions. Should you or your beneficiary pledge all or any portion of your IRA as security for a loan, the portion so pledged will be treated as if distributed to you, will be included in your income, and may be subject to the 10% premature distribution penalty during the year in which the pledge occurred. IX. OTHER TAX CONSIDERATIONS A. Federal Income Tax Withholding Federal income tax will be withheld on amounts distributed from your IRA unless you elect not to have withholding apply. Generally, tax will be withheld at a 10% rate. At the time of distribution from your IRA, you will be notified of your right to elect not to have withholding apply and will be provided with the appropriate election form. If your IRA distribution is to be delivered outside of the U.S., you may elect not to have withholding apply only if you certify to the Custodian that you are not a U.S. citizen residing overseas or a "tax avoidance expatriate" as described in Section 877 of the Internal Revenue Code. (The distribution may also be subject to state withholding laws.) B. Distribution not Eligible for Lump-Sum Averaging or Capital Gains Treatment No distribution to you or anyone else from your account can qualify for capital gains treatment under the federal income tax laws or for the five- or ten-year averaging available with respect to certain lump sum distributions from other types of retirement plans. The distribution is taxed to the person receiving it as ordinary income. C. Gift Tax If you elect during your lifetime to have all or any part of your account payable to a beneficiary at or after your death, the election will not subject you to any gift tax liability. D. Reporting for Tax Purposes You must report deductible IRA contributions and distributions on your tax Form 1040 or 1040A for the taxable year in which the contributions or distributions were made. If you make any nondeductible contributions, you must include the amount of such nondeductible contributions and the aggregate account balance of all your IRAs as of the end of the calendar year on Form 8606. Additional reporting is required in the event that special taxes or penalties described herein are due. You must file Form 5329 with the IRS for each taxable year in which the contribution limits are exceeded, a premature distribution takes place, less than the required minimum amount is distributed from your IRA, or excess distributions are made. X. IRS APPROVAL & INFORMATION This IRA has not been submitted to the IRS for approval as to form because it incorporates Form 5305-A issued by the IRS. This Disclosure Statement provides only a summary of the laws governing IRAs. You should consult your personal tax advisor or IRS Publication 590, Individual Retirement Arrangements, for more detailed information. This publication is available from your local IRS office or by calling 1-800-TAX-FORMS. P.O. Box 173375 Denver, CO 80217-3375 1-800-525-3713 [LOGO] JANUS FUNDS Funds distributed by Janus Distributors, Inc. Member NASD. (6/96) EX-99 24 EX 14(C) MODEL SECTION 403(B)(7) PLAN EXHIBIT 14(c) JANUS 403(b)(7) TAX-SHELTERED CUSTODY AGREEMENT The Employer signing the accompanying Application on behalf of the Employee named in said Application establishes this Custodial Agreement with Investors Fiduciary Trust Company as authorized by Section 403(b)(7) of the Internal Revenue Code in order to provide for the Employee's retirement. This Custody Agreement shall be effective upon acceptance by Investors Fiduciary Trust Company of its appointment as Custodian as specified in the Application. - -------------------------------------------------------------------------------- ARTICLE 1 - DEFINITIONS As used in this Custody Agreement, the following terms shall have the meaning hereinafter set forth, unless different meaning is plainly required by the context: 1.01 Account means the Account established hereunder for the benefit of the Employee. 1.02 Application means the Application by which this Custody Agreement, as may be amended from time to time, is established by the Employer on behalf of the Employee. The statements contained in the Application shall be incorporated into this Custody Agreement. 1.03 Beneficiary means the person or persons (including a trust or estate) designated in writing by the Employee to receive any benefit vested under this Custody Agreement in the event of such Employee's death. 1.04 Code means the Internal Revenue Code of 1986, as amended from time to time. 1.05 Custodian means Investors Fiduciary Trust Company or any successor thereto. 1.06 Custody Agreement means this Agreement and the Application, as the same may be amended from time to time. 1.07 Employee means a person: (a) who performs services as an Employee directly for the Employer; and (b) who has entered into a Salary Reduction Agreement with the Employer under which the Employer will reduce the Employee's salary by the amount specified in the most recent Salary Reduction Agreement and contribute such amount to the Account in accordance with this Custody Agreement. 1.08 Employer means the Employer named in the Application, which shall be any corporation or other entity that is: (a) exempt from taxation under Section 501(a) of the Code by virtue of qualification under Section 501(c)(3) of the Code; or (b) a state, political subdivision of a state, or an agency or instrumentality of any one of the foregoing, provided the Employee performs services for an educational organization described in Section 170(b)(1)(A)(ii) of the Code. 1.09 Plan Year means the calendar year. 1.10 Salary Reduction Agreement means the agreement between the Employer and the Employee pursuant to which the Employer shall reduce the Employee's salary by a designated amount and periodically contribute such amount to the Account. 1.11 Shares means the Shares of those regulated investment companies whose investment advisor is Janus Capital Corporation, or its successors, and which Shares are authorized by the Sponsor for the investment of contributions to the Account. 1.12 Sponsor means Janus Capital Corporation. - -------------------------------------------------------------------------------- ARTICLE 2 - ESTABLISHMENT OF ACCOUNT The Custodian shall open an Account established by the Employer for the benefit of the Employee. The Employee shall be the beneficial owner of all Shares held in or credited to the Account. - -------------------------------------------------------------------------------- ARTICLE 3 - CONTRIBUTIONS 3.1 Receipt of Contributions: All contributions to the Account shall be made in cash. The Custodian shall accept and hold in the Account such contributions as it may receive from time to time and shall invest such contributions in the class(es) of Shares most recently specified by the Employee in accordance with Article 4. 3.2 Employer Contributions: The Employer shall make contributions to the Employee's account in accordance with the Salary Reduction Agreement described in Section 1.10, subject to the limitations in Section 3.5. In addition, the Employer may make contributions to the Account on behalf of the Employee in accordance with any retirement plan, fund or program covering the Employee and established by the Employer. 3.3 Employee Contributions: The Employee may make voluntary after-tax contributions to the Account. All such contributions shall be separately maintained and shall not be commingled with Employer contributions. 3.4 Transfers: The Employee or the Employer may transfer, or cause to be transferred, in cash or Shares, to the Account: (a) all or a portion of the assets of an annuity contract or another custodial account established pursuant to Section 403(b) of the Code; or (b) all or a portion of the assets of an Individual Retirement Account or Individual Retirement Annuity, provided such assets are attributable solely to a rollover contribution from one or more such annuity contracts or custodial accounts. Similarly, the Employee may arrange for the transfer of all or a portion of the assets in the Account to an annuity contract or another custodial account established pursuant to Section 403(b) of the Code, or to an Individual Retirement Account or Individual Retirement Annuity. 3.5 Contribution Limitations: Annual contributions (excluding amounts representing rollover contributions from a prior 403(b) plan or Individual Retirement Account or Annuity) to an Employee's Account may not exceed the limitations specified in Sections 403(b)(2), 402(g) or 415(c)(1) of the Code unless an election is made by the Employee under Section 415(c)(4) of the Code. - -------------------------------------------------------------------------------- ARTICLE 4 - INVESTMENT OF ACCOUNT ASSETS Each contribution to the Account shall be applied to the purchase of full and fractional Shares of the class(es) designated in the Application, and shall be credited to and held in such Account with a notation as to cost. Contributions shall continue to be invested in such Shares, unless subsequent contrary telephone or written instructions, in a form acceptable to the Custodian, to invest in another class of Shares are received by the Custodian from the Employee. The Employee may exchange a class of Shares by submitting telephone or written instructions to the Custodian. All dividends and capital gains distributions received on the Shares held in the Account (unless received in additional Shares) shall be reinvested in additional Shares, which shall be credited to such Account. If any distribution of such Shares may be received at the election of the Custodian in additional Shares or in cash, the Custodian shall elect to receive it in additional Shares. All Shares acquired by the Custodian shall be registered in the name of the Custodian or its nominee. - -------------------------------------------------------------------------------- ARTICLE 5 - DISTRIBUTIONS 5.1 Retirement or Termination Benefits: If an Employee retires or leaves the employ of the Employer for any reason other than death, the Employer shall make no further contributions on such Employee's behalf, and the Custodian shall maintain the Account until it receives written instructions from the Employee to distribute the Account in accordance with Section 5.3. No distribution shall be made to the Employee or his beneficiaries before the Employee attains age 59 1/2 unless the Employee or Beneficiary furnishes Custodian written notice and proof that the Employee has: (a) become disabled within the meaning of Section 72(m)(7) of the Code; (b) died; (c) left the service of the Employer; or (d) been determined by the Employer to have encountered "financial hardship" as defined and determined pursuant to Section 403(b)(7)(A)(ii) of the Code and the regulations promulgated thereunder; PROVIDED, any distribution made due to financial hardship may not exceed the amount of Employer contributions made to the Account pursuant to a Salary Reduction Agreement, exclusive of earnings thereon. Furthermore, distributions from the Account must comply with the minimum distribution requirements of Section 403(b)(10) of the Code and the regulations thereunder. 5.2 Death Benefits: Each Employee shall have the right, by written notice on a form approved by the Custodian, to designate or to change Beneficiary to receive the benefit amount payable by reason of the Employee's death. Such benefit amount shall consist of the balance of the Employee's account, and except as otherwise herein provided, shall be paid or commenced to be paid to the Beneficiary within thirty (30) days of the Custodian's receipt of proper notification of the person(s) entitled thereto. Distribution of any such death benefit shall be made in any of the forms specified in Section 5.3. The method of distribution shall be determined by the Beneficiary, provided that in the event of the Beneficiary's inability or failure to act within a reasonable period of time, the Custodian shall distribute the Account in a single payment in kind. A designation of beneficiary form shall be deemed legally valid only when submitted to the Custodian fully completed and duly executed. Any such designation may be revoked by the Employee at any time, and shall be automatically revoked upon receipt by the Custodian of a subsequent, valid designation of beneficiary form bearing a later execution date. If more than one Beneficiary shall have been designated, the amount of the benefit shall be paid to the Beneficiaries as provided in the designation of beneficiary form otherwise in equal parts. However, no part of any death benefit shall be paid to a Beneficiary who is not living at the time of the Employee's death. If any Beneficiary is then deceased, the parts to which the living Beneficiaries are entitled shall be increased proportionately. If a Beneficiary entitled to a distribution under the provisions of this Section 5.2 should die before receiving full distribution of the amount to which he or she is entitled, the remaining balance shall be distributed in a single payment to the deceased Beneficiary's spouse, children, or personal representative, in accordance with the class distribution and preference order as set forth in the next following paragraph. In all such cases, the Custodian shall determine the person(s) to be paid, at its absolute discretion and with full immunity. If no Beneficiary should survive the Employee, or in the absence of a valid designation of beneficiary in effect at the time of an Employee's death, the Custodian shall, upon receipt of a certified copy of the death certificate or other appropriate evidence of the fact of death satisfactory to the Custodian, make distribution of the deceased Employee's Account to the person(s) of the following class and in the following order of preference: (a) the deceased Employee's spouse, but if no such spouse shall survive the Employee; then to (b) the descendants, per stirpes, of the deceased Employee, but if there should be no descendants; then to (c) the personal representative of the deceased Employee. The Custodian may conclusively rely upon the accuracy of all matters reported to it by any source ordinarily presumed to be knowledgeable respecting the matters so reported. The Custodian shall have no higher duty than the exercise of good faith, and shall incur no liability by reason of any action taken in reliance upon inaccurate or fraudulent information reported by any source assumed to be reliable, or by reason of incomplete information in its possession at the time of such distribution. Any distribution of the Account of an Employee may be made in cash or in Shares (or partly in each), and shall be made within thirty (30) days following receipt by the Custodian of information deemed by it sufficient upon which to base such distribution; PROVIDED, however, that the Custodian shall incur no liability respecting fluctuations in the value of the Account of a deceased Employee in the event of a delay occasioned by the Custodian's good faith decision to await additional evidence or information bearing on the Beneficiary. Upon full and complete distribution of the Employee's Account pursuant to the provisions of this Section 5.2, the Custodian shall be fully discharged from all liability respecting such Account. In the event of reasonable doubt respecting the proper course of action to be taken, the Custodian may at its sole and absolute discretion resolve such doubt by judicial determination, which shall be binding on all parties claiming any interest in the Account of the deceased Employee. In such event, all court costs, legal expenses, reasonable compensation for time expended by the Custodian in the performance of its duties, and other appropriate and pertinent expenses and cost shall be collected by the Custodian from the deceased Employee's Account. Notwithstanding any provision elsewhere herein to the contrary, (a) if the Employee dies on or after the date on which payment from the Account has commenced but before the entire interest in such Account has been distributed, the remaining portion of such interest shall be distributed to the Employee's Beneficiary at least as rapidly as under the method of distribution being used as of the date of such Employee's death, and (b) if the Employee dies before any such distribution has commenced, the entire interest of such Employee in the Account shall be distributed to the Beneficiary within five years of the death of the Employee; PROVIDED, however that if (i) any portion of the Account is payable to (or for the benefit of) a designated Beneficiary (within the meaning of Section 72(s)(4) of the Code), (ii) such portion is to be distributed over the life of such designated Beneficiary over a period not extending beyond the life expectancy of such designated Beneficiary (determined as of the date of the Employee's death), and (iii) such distribution begins no later than one year after the Employee's death, then the foregoing five-year limitation shall not apply to such portion of the deceased Account. 5.3 Distribution Options: At the time benefits are paid in accordance with Section 5.1 or 5.2, the entire value of the Employee's Account shall be distributed in cash or Shares in any of the following ways as directed by the Employee, or, in the event of death, by the Beneficiary: (a) in a lump sum; (b) in equal or substantially equal installments over a period of time, not extending beyond the life expectancy of the Employee (or Beneficiary), determined as of the commencement of such installments; or (c) in equal or substantially equal installments over a period of time not extending beyond the joint and last survivor expectancies of the Employee and his or her spouse, determined as of the commencement of such installments. In determining the installments specified in (b) and (c) above, the Employee (or Beneficiary) shall ensure that the payment amounts will comply with the Code and regulations promulgated thereunder with respect to required minimum payments in such cases (with life expectancy payments to include any current earnings on the unpaid balance of the Employee's Account). (CONTINUED ON NEXT PAGE) P.O. Box 173375, Denver, Colorado 80217-3375 [LOGO] JANUS Funds distributed by Janus Distributors, Inc. Member NASD (1/97) JANUS 403(b)(7) TAX-SHELTERED CUSTODY AGREEMENT (Continued) 5.4 Withdrawal of Excess Contributions: If the Custodian should at any time receive notice from the Employer or Employee that any contribution on behalf of the Employee exceeded the limitations set forth in Article 3 of this Agreement, the Custodian shall, as soon as practical after the receipt of such notification, distribute to such Employee from the Account, Shares representing the amount of such excess contribution and the net income attributable thereto. If the excess contribution is not withdrawn before the end of the Employee's taxable year, the amount of the excess contribution must be included in the Employee's taxable income and shall be subject to a 6% penalty tax for each taxable year until the excess is eliminated. Notwithstanding any of the above provisions, if such excess contribution is not withdrawn before the end of the Employee's taxable year, the Employee may direct the Custodian to retain the excess contribution in the Account, providing such excess is used to reduce the permissible contribution for the current taxable year. - -------------------------------------------------------------------------------- ARTICLE 6 - THE CUSTODIAN 6.1 Limitations on Custodian's Responsibilities: The Custodian shall not be responsible in any way for determining the permissible amount of contributions, the collection of contributions under this Custody Agreement, the purpose or propriety of any distribution made pursuant to Article 5 hereof, or any other action or non-action taken at the direction of the Employee, Employer or Beneficiary. The Employee, Beneficiary, and the executor or administrator of either of them, as appropriate, shall at all times fully indemnify and save harmless the Custodian, its successors and assigns, from any liability arising from distributions so made or actions or non-actions so taken, and from any and all other liability whatsoever which may arise in connection with this Custody Agreement, except liability arising from the negligence or willful misconduct of the Custodian. The Custodian shall be under no duty to take any action other than as herein specified with respect to the Account unless the Employee shall furnish the Custodian with instructions in proper form and such instructions shall have been specifically agreed to by the Custodian in writing; or to defend or engage in any suit with respect to the Account unless the Custodian shall first have agreed in writing to do so and shall have been fully indemnified to the satisfaction of the Custodian. The Custodian may conclusively rely upon and shall be protected in acting upon any written order from the Employer, Employee or Beneficiary, or any other notice, request, consent, certificate, or other instrument or paper believed by it to be genuine and to have been properly executed, and, so long as it acts in good faith, in taking or omitting to take any other action. No amendment to this Custody Agreement shall place any greater burden on the Custodian without its written consent. The Custodian may appoint such agents, attorneys, or other parties and delegate to such persons such ministerial and limited discretionary duties, including, but not limited to: (a) acceptance and investment of contributions; (b) maintenance of Employee's Account records; (c) maintenance of Employee's beneficiary designations; and (d) collection and remittance of Custodian fees. The Custodian may submit any question arising hereunder or in respect of the Account to counsel, including its own counsel, and shall be protected in the acting on the advice of such counsel. 6.2 Reports: The Custodian shall keep accurate and detailed records of all receipts, investments, disbursements, and other transactions hereunder. The Custodian shall keep such records, and file with the Internal Revenue Service such returns and other information concerning the Account, as may be required of it under the Code and any regulations promulgated thereunder. The Employee and Custodian shall furnish to each other such information relevant to the Account as may be required under the Code and any regulations issued, or forms adopted, by the Treasury Department thereunder. 6.3 Voting and Other Action: The Custodian shall deliver or cause to be delivered to the Employee all notices, prospectuses, financial statements, proxies and proxy soliciting materials relating to the Shares held in the Account. The Custodian shall not vote any Shares held hereunder except in accordance with the written instructions of the Employee. 6.4 Fee and Expenses: In consideration of its services hereunder, the Custodian shall receive an annual maintenance fee according to the published fee schedule which has been delivered to the Employee. Any income taxes or other taxes of any kind whatsoever that may be levied or assessed upon, or in respect of the Account, shall be paid from the assets of the Account. Any transfer taxes incurred in connection with the investment of the assets of the Account, and all other administrative expenses incurred by the Custodian in the performance of its duties, including fees for legal services rendered to the Custodian, shall similarly be paid from the assets of the Account. The Custodian may change the published fee schedule with respect to Plan Years beginning at least forty-five (45) days after the Custodian gives the Employee written notice of such change. 6.5 Resignation or Removal: The Custodian may resign at any time upon thirty (30) days' notice in writing to the Sponsor, and the Custodian may be removed by the Sponsor at any time upon thirty (30) days' notice in writing to the Custodian. Upon such resignation or removal, the Sponsor shall appoint a successor Custodian, which successor shall be a "bank" as defined in Section 408(n) of the Code. Upon receipt by the Custodian of written acceptance of such appointment by the successor Custodian, the Custodian shall transfer and pay over to such successor the assets of the account and all records pertaining thereto, provided that any successor Custodian shall agree not to dispose of any such records without the Custodian's consent. The Custodian is authorized, however, to reserve such sum of money or Shares as it may deem advisable for payment of all its fees, compensation, costs, and expenses, or for payment of any liabilities constituting a charge on or against the assets of the Account or on or against the Custodian, with any balance of such reserve remaining after the payment of all such items to be paid over to the successor Custodian. The successor Custodian shall hold the assets paid over to it under terms similar to those of this Plan that qualify under Section 403(b) of the Code. If, within thirty (30) days after the Custodian's resignation or removal, the Sponsor has not appointed a successor Custodian which has accepted such appointment, the Custodian may appoint such successor. The Custodian shall not be liable for the acts or omissions of such successor, whether or not it makes such appointment. - -------------------------------------------------------------------------------- ARTICLE 7 - AMENDMENT The Custody Agreement may at any time and from time to time be amended in whole or in part by the Sponsor mailing to the Employer and Employee a written copy of such amendment; provided, however, the Sponsor shall not have the right to amend the Custody Agreement in such a manner as to: (a) deprive any Employee of any benefit to which he or she was entitled under the Custody Agreement by reason of contributions made prior to the amendment, unless such amendment is necessary to conform the Custody Agreement to, or satisfy the conditions of, any law, governmental regulation or ruling, and to permit the Custody Agreement and the Account to meet the requirements of Section 403(b) of the Code or any similar statute; (b) cause or permit the Account to be diverted to purposes other than for the exclusive benefit of the Employee or Beneficiary; or (c) cause or permit any part of the Account to revert to or become the property of the Employer. - -------------------------------------------------------------------------------- ARTICLE 8 - TERMINATION OF ACCOUNT The Custodian may elect to terminate the Account if, within thirty (30) days after its resignation or removal pursuant to Section 6.5, the Sponsor has not appointed a successor Custodian which has accepted such appointment. Upon termination of the Account in any manner provided for in this Article 8 and in Article 6, this Custody Agreement shall be considered to be rescinded and of no force and effect, and the Custodian shall be relieved from all further liability with respect to this Custody Agreement, the Account and all assets thereof so distributed, and any determination by the Custodian of the mode of distributing the assets of the Account. - -------------------------------------------------------------------------------- ARTICLE 9 - MISCELLANEOUS 9.1 Prohibited Diversion: At no time shall it be possible for any part of the assets of the Account to be used for, or diverted to, purposes other than for the exclusive benefit of the Employee or the Employee's Beneficiary except as specifically provided in this Custody Agreement. 9.2 Inalienability of Benefits: Except as provided in Sections 3.4 and 6.4, the assets of the Account shall be nonforfeitable and non-transferable, and shall not be subject to the claims of the Employee's creditors or to alienation, assignment, trustee process, garnishment, attachment, execution or levy of any kind except by the Custodian for its fees and for the expenses of the Account; and no attempt to cause such assets to be so subjected shall be recognized except to such extent as may be required by law or provided for herein; provided, however, that nothing contained in this Custody Agreement prevents the Custodian from complying with the provisions of a qualified domestic relations order (as defined in Section 414(p) of the Code). This Custody Agreement specifically permits distribution to an alternate payee pursuant to a qualified domestic relations order at any time, irrespective of whether the Employee has attained his earliest retirement age (as defined under Section 414(p) of the Code) under this Custody Agreement. Nothing in this Section 9.2 gives an Employee a right to receive distribution at a time otherwise not permitted under this Custody Agreement, nor does it permit the alternate payee to receive a form of payment not otherwise permitted under this Custody Agreement. 9.3 Taxes: The tax treatment of any contributions to the Account and of any earnings of the Account depends, among other things, upon the nature of the Employer, the relationship of the Employee to the Employer, and the amount of contributions made in any Plan Year to the Account (and to other plans, accounts or contracts with the benefit of special tax treatment) for the benefit of the Employee. The Custodian and the Sponsor assume no responsibility with respect to such matters, nor shall any term or provision of this Custody Agreement be construed so as to place any such responsibility upon either one of them. 9.4 Condition of Custody Agreement: The Account is established with the intent that it shall qualify under Section 403(b) of the Code as that section exists at the time the Account is established. Notwithstanding any other provision contained in this Custody Agreement, if the Internal Revenue Service determines that because of some inadequacy in the provisions of this original Account, the Account initially fails to so qualify, all of the assets of the Account shall be distributed to the Employee, and the Custody Agreement shall be considered to be rescinded and of no force and effect, unless such inadequacy is removed by a retroactive amendment. The Sponsor forthwith shall notify the Custodian in writing of any determination made with respect to the qualified status of the Custody Agreement. 9.5 Notices by the Custodian: Any notice from the Custodian to the Employer, Employee, or Beneficiary provided for in this Custody Agreement shall be effective if sent by first class mail to such person at the last address on the Custodian's records. 9.6 Construction: Wherever used in the Custody Agreement, the masculine gender shall include the feminine gender, and singular shall include the plural, unless the context indicates otherwise. 9.7 Governing Laws: This Agreement shall be construed and administered in accordance with the laws of the State of Missouri. P.O. Box 173375, Denver, Colorado 80217-3375 [LOGO] JANUS Funds distributed by Janus Distributors, Inc. Member NASD (1/97) EX-99 25 EX 17 POWER OF ATTORNEY (BAILEY) EXHIBIT 17 JANUS INVESTMENT FUND (the "Trust") POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes, and appoints Steven R. Goodbarn his true and lawful attorney and agent in his name, place, and stead on his behalf (a) to sign and cause to be filed amendments to the registration statement of the Trust under the Securities Act of 1933, the Investment Company Act of 1940 and the laws and regulations of the various states, if applicable, and all consents and exhibits thereto; (b) to withdraw such registration statement or any amendments or exhibits and make requests for acceleration in connection therewith; (c) to take all other action of whatever kind or nature in connection with such registration statement, and all amendments thereto, which said attorney may deem advisable; and (d) to make, file, execute, amend, and withdraw documents of every kind, and to take other action of whatever kind he may elect, for the purpose of complying with all laws relating to the sale of securities of the Trust, hereby ratifying and confirming all actions of said attorney hereunder, provided that this Power of Attorney is ratified to be effective by the Trustees with respect to each filing or withdrawal of such registration statement and all amendments, consents, and exhibits thereto. IN WITNESS WHEREOF, the undersigned has hereby set his hand as of this 20th day of May, 1997. Signature Title Date /s/ Thomas H. Bailey Chairman, May 20, 1997 Thomas H. Bailey (Principal Executive Officer) President and Trustee EX-99 26 EX 17 POWER OF ATTORNEY (CRAIG) EXHIBIT 17 JANUS INVESTMENT FUND (the "Trust") POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes, and appoints Thomas H. Bailey and Steven R. Goodbarn, and each of them, severally, his true and lawful attorneys and agents in his name, place, and stead on his behalf (a) to sign and cause to be filed amendments to the registration statement of the Trust under the Securities Act of 1933, the Investment Company Act of 1940 and the laws and regulations of the various states, if applicable, and all consents and exhibits thereto; (b) to withdraw such registration statement or any amendments or exhibits and make requests for acceleration in connection therewith; (c) to take all other action of whatever kind or nature in connection with such registration statement, and all amendments thereto, which said attorneys may deem advisable; and (d) to make, file, execute, amend, and withdraw documents of every kind, and to take other action of whatever kind they may elect, for the purpose of complying with all laws relating to the sale of securities of the Trust, hereby ratifying and confirming all actions of any of said attorneys hereunder, provided that this Power of Attorney is ratified to be effective by the Trustees with respect to each filing or withdrawal of such registration statement and all amendments, consents, and exhibits thereto. Said attorneys may act jointly or severally, and the action of one shall being the undersigned as if two or more had acted together. IN WITNESS WHEREOF, the undersigned has hereby set his hand as of this 20th day of May, 1997. Signature Title Date /s/ James P. Craig Trustee May 20, 1997 James P. Craig, III EX-99 27 EX 17 POWER OF ATTORNEY (LOO) EXHIBIT 17 JANUS INVESTMENT FUND (the "Trust") POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes, and appoints Thomas H. Bailey and Steven R. Goodbarn, and each of them, severally, his true and lawful attorneys and agents in his name, place, and stead on his behalf (a) to sign and cause to be filed amendments to the registration statement of the Trust under the Securities Act of 1933, the Investment Company Act of 1940 and the laws and regulations of the various states, if applicable, and all consents and exhibits thereto; (b) to withdraw such registration statement or any amendments or exhibits and make requests for acceleration in connection therewith; (c) to take all other action of whatever kind or nature in connection with such registration statement, and all amendments thereto, which said attorneys may deem advisable; and (d) to make, file, execute, amend, and withdraw documents of every kind, and to take other action of whatever kind they may elect, for the purpose of complying with all laws relating to the sale of securities of the Trust, hereby ratifying and confirming all actions of any of said attorneys hereunder, provided that this Power of Attorney is ratified to be effective by the Trustees with respect to each filing or withdrawal of such registration statement and all amendments, consents, and exhibits thereto. Said attorneys may act jointly or severally, and the action of one shall being the undersigned as if two or more had acted together. IN WITNESS WHEREOF, the undersigned has hereby set his hand as of this 20th day of May, 1997. Signature Title Date /s/ Gary O. Loo Trustee May 20, 1997 Gary O. Loo EX-99 28 EX 17 POWER OF ATTORNEY (MULLEN) EXHIBIT 17 JANUS INVESTMENT FUND (the "Trust") POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes, and appoints Thomas H. Bailey and Steven R. Goodbarn, and each of them, severally, his true and lawful attorneys and agents in his name, place, and stead on his behalf (a) to sign and cause to be filed amendments to the registration statement of the Trust under the Securities Act of 1933, the Investment Company Act of 1940 and the laws and regulations of the various states, if applicable, and all consents and exhibits thereto; (b) to withdraw such registration statement or any amendments or exhibits and make requests for acceleration in connection therewith; (c) to take all other action of whatever kind or nature in connection with such registration statement, and all amendments thereto, which said attorneys may deem advisable; and (d) to make, file, execute, amend, and withdraw documents of every kind, and to take other action of whatever kind they may elect, for the purpose of complying with all laws relating to the sale of securities of the Trust, hereby ratifying and confirming all actions of any of said attorneys hereunder, provided that this Power of Attorney is ratified to be effective by the Trustees with respect to each filing or withdrawal of such registration statement and all amendments, consents, and exhibits thereto. Said attorneys may act jointly or severally, and the action of one shall being the undersigned as if two or more had acted together. IN WITNESS WHEREOF, the undersigned has hereby set his hand as of this 20th day of May, 1997. Signature Title Date /s/ Dennis B. Mullen Trustee May 20, 1997 Dennis B. Mullen EX-99 29 EX 17 POWER OF ATTORNEY (ROTHE) EXHIBIT 17 JANUS INVESTMENT FUND (the "Trust") POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes, and appoints Thomas H. Bailey and Steven R. Goodbarn, and each of them, severally, his true and lawful attorneys and agents in his name, place, and stead on his behalf (a) to sign and cause to be filed amendments to the registration statement of the Trust under the Securities Act of 1933, the Investment Company Act of 1940 and the laws and regulations of the various states, if applicable, and all consents and exhibits thereto; (b) to withdraw such registration statement or any amendments or exhibits and make requests for acceleration in connection therewith; (c) to take all other action of whatever kind or nature in connection with such registration statement, and all amendments thereto, which said attorneys may deem advisable; and (d) to make, file, execute, amend, and withdraw documents of every kind, and to take other action of whatever kind they may elect, for the purpose of complying with all laws relating to the sale of securities of the Trust, hereby ratifying and confirming all actions of any of said attorneys hereunder, provided that this Power of Attorney is ratified to be effective by the Trustees with respect to each filing or withdrawal of such registration statement and all amendments, consents, and exhibits thereto. Said attorneys may act jointly or severally, and the action of one shall being the undersigned as if two or more had acted together. IN WITNESS WHEREOF, the undersigned has hereby set his hand as of this 20th day of May, 1997. Signature Title Date /s/ James T. Rothe Trustee May 20, 1997 James T. Rothe EX-99 30 EX 17 POWER OF ATTORNEY (STEWART) EXHIBIT 17 JANUS INVESTMENT FUND (the "Trust") POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes, and appoints Thomas H. Bailey and Steven R. Goodbarn, and each of them, severally, his true and lawful attorneys and agents in his name, place, and stead on his behalf (a) to sign and cause to be filed amendments to the registration statement of the Trust under the Securities Act of 1933, the Investment Company Act of 1940 and the laws and regulations of the various states, if applicable, and all consents and exhibits thereto; (b) to withdraw such registration statement or any amendments or exhibits and make requests for acceleration in connection therewith; (c) to take all other action of whatever kind or nature in connection with such registration statement, and all amendments thereto, which said attorneys may deem advisable; and (d) to make, file, execute, amend, and withdraw documents of every kind, and to take other action of whatever kind they may elect, for the purpose of complying with all laws relating to the sale of securities of the Trust, hereby ratifying and confirming all actions of any of said attorneys hereunder, provided that this Power of Attorney is ratified to be effective by the Trustees with respect to each filing or withdrawal of such registration statement and all amendments, consents, and exhibits thereto. Said attorneys may act jointly or severally, and the action of one shall being the undersigned as if two or more had acted together. IN WITNESS WHEREOF, the undersigned has hereby set his hand as of this 20th day of May, 1997. Signature Title Date /s/ William D. Stewart Trustee May 20, 1997 William D. Stewart EX-99 31 EX 17 POWER OF ATTORNEY (WALDINGER) EXHIBIT 17 JANUS INVESTMENT FUND (the "Trust") POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes, and appoints Thomas H. Bailey and Steven R. Goodbarn, and each of them, severally, his true and lawful attorneys and agents in his name, place, and stead on his behalf (a) to sign and cause to be filed amendments to the registration statement of the Trust under the Securities Act of 1933, the Investment Company Act of 1940 and the laws and regulations of the various states, if applicable, and all consents and exhibits thereto; (b) to withdraw such registration statement or any amendments or exhibits and make requests for acceleration in connection therewith; (c) to take all other action of whatever kind or nature in connection with such registration statement, and all amendments thereto, which said attorneys may deem advisable; and (d) to make, file, execute, amend, and withdraw documents of every kind, and to take other action of whatever kind they may elect, for the purpose of complying with all laws relating to the sale of securities of the Trust, hereby ratifying and confirming all actions of any of said attorneys hereunder, provided that this Power of Attorney is ratified to be effective by the Trustees with respect to each filing or withdrawal of such registration statement and all amendments, consents, and exhibits thereto. Said attorneys may act jointly or severally, and the action of one shall being the undersigned as if two or more had acted together. IN WITNESS WHEREOF, the undersigned has hereby set his hand as of this 20th day of May, 1997. Signature Title Date /s/ Martin H. Waldinger Trustee May 20, 1997 Martin H. Waldinger EX-27 32 EX 27 FINANCIAL DATA SCHEDULE-SPECIAL SITUATIONS
6 This schedule contains summary financial information extracted from financial statements dated October 31, 1996 included in the Fund's Annual Report and is qualified in its entirely by reference to such financial statement. 3 JANUS SPECIAL SITUATIONS FUND 1,000 U.S. DOLLARS YEAR OCT-31-1997 DEC-31-1996 APR-30-1997 1.000 117,886 124,442 5,726 594 0 130,762 5,998 0 522 6,520 0 117,889 11,478 0 38 0 (235) 0 6,550 124,242 278 159 0 399 38 (235) 6,550 6,315 0 0 0 0 13,026 (1,548) 0 117,889 0 0 0 0 251 0 407 91,325 10.000 0.000 0.820 0.000 0.000 0.000 10.820 1.34 0 0.000
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