As filed with the Securities and Exchange Commission on March 14, 2003
File No: 333-103045
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[X] Pre-Effective Amendment No. 1 [ ] Post-Effective Amendment No. ____
(Check appropriate box or boxes)
JANUS ASPEN SERIES
(Exact Name of Registrant as Specified in Charter)
100 FILLMORE STREET
DENVER, COLORADO 80206-4928
(Address of Principal Executive Offices)
303-333-3863
(Area Code and Phone Number)
----------
THOMAS A. EARLY
JANUS ASPEN SERIES
100 FILLMORE STREET
DENVER, COLORADO 80206-4928
(Name and Address of Agent for Service)
Copy to:
CHRISTOPHER E. PALMER
SHEA & GARDNER
1800 MASSACHUSETTS AVE. N.W.
WASHINGTON, DC 20036
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Approximate date of proposed public offering: As soon as practicable after the
Registration Statement becomes effective under the Securities Act of 1933.
Title of Securities Being Offered: Service Shares and Institutional Shares of
Janus Aspen Series Mid Cap Value Portfolio.
No filing fee is due with this filing because the Registrant has registered an
indefinite amount of securities under the Securities Act of 1933 pursuant to
Section 24(f) under the Investment Company Act of 1940.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
JANUS ASPEN SERIES
CONTENT OF REGISTRATION STATEMENT ON FORM N-14
Cover Sheet
Part A - Prospectus/Proxy Statement
Part B - Statement of Additional Information
Statement of Additional Information (12/31/02)*
Annual Report (12/31/01)*
Semi-Annual Report (6/30/02)*
Part C - Other Information
Signature Page
Exhibits
* Incorporated by reference to the Form N-14 filed by registrant on
February 7, 2003 (File No. 333-103045).
(JANUS LOGO)
March 17, 2003
Dear Janus Investor:
We are writing to request your vote on a proposal to reorganize the Janus
Aspen Series Strategic Value Portfolio into the Janus Aspen Series Mid Cap Value
Portfolio. If the reorganization is approved, your investment in the Strategic
Value Portfolio will become an investment in the Mid Cap Value Portfolio. With
similar investment objectives as the Strategic Value Portfolio, the Mid Cap
Value Portfolio is managed by well-regarded value specialist, Perkins, Wolf,
McDonnell and Co., a company in which Janus Capital has agreed to take a
significant ownership interest.
The Trustees of Janus Aspen Series have determined that the proposed
reorganization is in your best interests, and they recommend that you vote for
the proposed reorganization.
PLEASE READ THE ENCLOSED MATERIALS, WHICH PROVIDE INFORMATION ABOUT THE
PROPOSED REORGANIZATION AND THE MID CAP VALUE PORTFOLIO. TO CAST YOUR VOTE,
SIMPLY COMPLETE THE ENCLOSED VOTING INSTRUCTION CARD. WE ASK THAT YOU RETURN
YOUR CARD PROMPTLY. BE SURE TO SIGN THE CARD BEFORE MAILING IT IN THE
POSTAGE-PAID ENVELOPE.
We have retained Georgeson Shareholder Communications, Inc., a professional
proxy solicitation firm, to assist with the solicitation of votes. If you do not
vote your shares, you may receive a phone call from them.
If you have any questions before you vote, please call (866) 238-7096. They
will be happy to help you get your vote in quickly.
Thank you for your vote, and we look forward to continuing to serve your
investment needs.
Sincerely,
/s/ Mark Whiston
Mark Whiston
CEO, Janus Capital Group
JANUS ASPEN SERIES
STRATEGIC VALUE PORTFOLIO
100 FILLMORE STREET
DENVER, COLORADO 80206-4928
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 16, 2003
A special meeting of shareholders of the Strategic Value Portfolio of Janus
Aspen Series will be held at the offices of Janus Capital Management LLC, 3773
Cherry Creek Drive North, Denver, Colorado 80209, on April 16, 2003, at 10:00
a.m. Mountain Time for the following purposes:
1. To approve an Agreement and Plan of Reorganization providing for
the transfer of substantially all the assets and liabilities of the Janus
Aspen Series Strategic Value Portfolio in exchange for shares of the Janus
Aspen Series Mid Cap Value Portfolio; and
2. To transact such other business as may properly come before the
meeting.
Shareholders of record of the Strategic Value Portfolio at the close of
business on February 10, 2003 are entitled to vote at the meeting. Each share
entitles its record owner to one vote, with proportionate voting for fractional
shares.
By direction of the Trustees,
/s/ KELLEY A. HOWES
--------------------------------------
Kelley A. Howes
Secretary
March 17, 2003
JANUS ASPEN SERIES
100 FILLMORE STREET
DENVER, COLORADO 80206-4928
1-800-525-0020
PROSPECTUS AND PROXY STATEMENT
RELATING TO THE ACQUISITION BY THE MID CAP VALUE PORTFOLIO
OF THE ASSETS OF THE STRATEGIC VALUE PORTFOLIO
MARCH 17, 2003
This prospectus and proxy statement (the "Proxy Statement") is being
furnished to you in connection with an agreement and plan of reorganization (the
"Plan"). Under the Plan, shareholders of the Strategic Value Portfolio will
receive shares of the Mid Cap Value Portfolio equal in total value to their
holdings as of the closing date of the reorganization (the "Reorganization"). If
you are invested in Service Shares of the Strategic Value Portfolio, you will be
invested in Service Shares of the Mid Cap Value Portfolio after the
Reorganization. Similarly, if you are invested in Institutional Shares of the
Strategic Value Portfolio, you will be invested in Institutional Shares of the
Mid Cap Value Portfolio after the Reorganization. After the Reorganization is
complete, the Strategic Value Portfolio will be liquidated. The Reorganization
is expected to be effective on or about April 30, 2003.
The Trustees of Janus Aspen Series (the "Trust") determined that the
Reorganization is in the best interest of investors in the Strategic Value
Portfolio, and the Trustees recommend that investors in the Strategic Value
Portfolio vote to approve the Reorganization.
Shares of the Strategic Value Portfolio are sold only in connection with
investment in and payments under variable annuity contracts and variable life
insurance contracts issued by life insurance companies ("Participating Insurance
Companies"). (Although certain qualified plans are eligible to purchase shares,
the Strategic Value Portfolio currently has no qualified plan shareholders.)
Individual contract owners are not the shareholders of the Strategic Value
Portfolio. Rather, the Participating Insurance Companies and their separate
accounts are the shareholders. Each Participating Insurance Company will offer
to its contract owners the opportunity to instruct it as to how it should vote
the Strategic Value Portfolio shares held by it. This Proxy Statement is
therefore furnished to contract owners entitled to give voting instructions with
regard to the Strategic Value Portfolio. When this Proxy Statement refers to
"shares" of a Portfolio it refers to both Institutional Shares and Service
Shares.
This Proxy Statement sets forth concisely the information you should know
about the Reorganization. You should read it carefully and retain it for future
reference.
You can request other information, including a Statement of Additional
Information dated March 17, 2003, free of charge by contacting us at the above
address or telephone number. The SEC maintains a website (www.sec.gov) that
contains the Statement of Additional Information and other material incorporated
by reference, together with other information regarding the Strategic Value
Portfolio and the Mid Cap Value Portfolio.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
<Table>
SUMMARY OF THE PROPOSED REORGANIZATION...................... 3
The Reorganization........................................ 3
Investment Objectives, Policies and Strategies............ 3
Investment Advisers....................................... 4
Fee and Expense Information (Unaudited)................... 4
Purchase and Redemption Procedures........................ 6
Tax Consequences.......................................... 6
PRINCIPAL RISK FACTORS...................................... 6
Common Stock Risk......................................... 6
Smaller or Newer Company Risk............................. 6
Non-Diversification Risk (applies only to the Strategic
Value Portfolio)....................................... 6
Value Risk................................................ 6
Foreign Securities Risk................................... 7
High-Yield/High-Risk Bond Risk............................ 7
THE REORGANIZATION.......................................... 7
The Plan.................................................. 7
Reasons for the Reorganization............................ 7
Federal Income Tax Considerations......................... 9
Description of the Securities to be Issued................ 10
Capitalization (Unaudited)................................ 11
ADDITIONAL INFORMATION ABOUT THE PORTFOLIOS................. 11
VOTING INFORMATION.......................................... 12
SHARE OWNERSHIP............................................. 13
AGREEMENT AND PLAN OF REORGANIZATION........................ A-1
ADDITIONAL INFORMATION ABOUT THE MID CAP VALUE PORTFOLIO.... B-1
</Table>
2
SUMMARY OF THE PROPOSED REORGANIZATION
This section provides a brief summary of the proposed Reorganization,
certain expense information and a summary of the principal risk factors
associated with an investment in the Mid Cap Value Portfolio. You should read
the entire Proxy Statement carefully.
THE REORGANIZATION
At a meeting held on January 31, 2003, the Trustees of the Trust concluded
that the Reorganization is in the best interests of the shareholders of the
Strategic Value Portfolio and the Mid Cap Value Portfolio, and that interests of
shareholders of the two Portfolios will not be diluted as a result of the
Reorganization.
Under the Plan, the Strategic Value Portfolio will transfer substantially
all its assets to the Mid Cap Value Portfolio, and shareholders of the Strategic
Value Portfolio will receive shares of the Mid Cap Value Portfolio in exchange
for their shares of the Strategic Value Portfolio. Each Strategic Value
Portfolio shareholder will receive full and fractional shares of the Mid Cap
Value Portfolio equal in value to the total value of his or her shares of the
Strategic Value Portfolio as of the closing date of the Reorganization, which is
expected to be April 30, 2003. If you are invested in the Strategic Value
Portfolio through a variable contract, as a result of the Reorganization your
investment in the Strategic Value Portfolio will be changed to an investment in
the Mid Cap Value Portfolio. Your investment in the Mid Cap Value Portfolio
immediately after the Reorganization will have the same value as your investment
in the Strategic Value Portfolio immediately prior to the Reorganization.
The Plan provides that Janus Capital Management LLC ("Janus Capital") will
bear all costs and expenses of the Reorganization, including the costs and
expenses incurred in the preparation and mailing of this Proxy Statement.
The implementation of the Reorganization is subject to a number of
conditions set forth in the Plan. Among the significant conditions (which may
not be waived) are the receipt of an opinion of counsel to the effect that the
Reorganization will be treated as a tax-free transaction to the Strategic Value
Portfolio and its shareholders.
This description of the Reorganization is qualified by reference to the
full text of the Plan, which is attached at Appendix A.
INVESTMENT OBJECTIVES, POLICIES AND STRATEGIES
Although the phrasing is somewhat different, both Portfolios have
substantially similar investment objectives. The Strategic Value Portfolio seeks
long-term growth of capital, while the Mid Cap Value Portfolio seeks capital
appreciation.
As to investment policies and strategies, both Portfolios invest primarily
in common stocks using a "value" approach. The Mid Cap Value Portfolio, however,
invests primarily in common stocks of mid-sized companies, while the Strategic
Value Portfolio is not required to invest in companies of any particular
capitalization. As of December 31, 2002, the Strategic Value Portfolio invested
slightly more than 60% of its net assets in common stocks of mid-sized
companies. More specific information about each Portfolio's principal investment
strategies is set forth below.
The Strategic Value Portfolio invests primarily in common stocks with
the potential for long-term growth of capital using a "value" approach. The
"value" approach the portfolio manager uses emphasizes investments in
companies he believes are undervalued relative to their intrinsic worth.
The portfolio manager applies a "bottom up" approach in choosing
investments. In other words, he looks at companies one at a time to
determine if a company is an attractive investment opportunity and is
consistent with the Portfolio's investment policies. If the portfolio
manager is unable to find investments with earnings growth potential, a
significant portion of the Portfolio's assets may be in cash or similar
investments.
The Mid Cap Value Portfolio invests primarily in the common stocks of
mid-sized companies whose stock prices are believed to be undervalued. The
Portfolio invests, under normal circumstances, at least
3
80% of its assets in equity securities of mid-sized companies whose market
capitalization falls, at the time of initial purchase, within the 12-month
average of the capitalization range of the Russell Midcap Index. This
average is updated monthly. Mid Cap Value Portfolio focuses on companies
that have fallen out of favor with the market or are temporarily
misunderstood by the investment community. To a lesser degree, the
Portfolio also invests in companies that demonstrate special situations or
turnarounds, meaning companies that have experienced significant business
problems but are believed to have favorable prospects for recovery. Mid Cap
Value Portfolio's portfolio manager generally looks for companies with: a
low price relative to their assets, earnings, cash flow or business
franchise; products and services that give them a competitive advantage;
and quality balance sheets and strong management. For purposes of the
Portfolio's 80% policies, net assets will take into account borrowings for
investment purposes.
The Strategic Value Portfolio may invest up to 35% of its net assets in
high-yield/high-risk bonds. The Mid Cap Value Portfolio may invest up to 20% of
its net assets in high-yield/high-risk bonds.
Each Portfolio may invest without limit in foreign equity and debt
securities (subject, of course, to its overall investment objectives and
policies set forth above).
For more detailed information about the Mid Cap Value Portfolio, see
Appendix B.
INVESTMENT ADVISERS
Janus Capital, 100 Fillmore Street, Denver, Colorado 80206-4928, is the
investment adviser to the Strategic Value Portfolio and is responsible for the
day-to-day management of the Portfolio. Janus Capital began serving as
investment adviser to Janus Fund in 1970 and currently serves as investment
adviser to all of the Janus retail funds, acts as a subadviser for a number of
private label mutual funds and provides separate account advisory services for
institutional accounts.
Janus Capital also serves as the investment adviser to the Mid Cap Value
Portfolio. With respect to that Portfolio, however, Perkins, Wolf, McDonnell and
Company ("Perkins") serves as subadviser and provides the day-to-day management
of the Portfolio. Perkins, which is located at 310 South Michigan Avenue, Suite
2600, Chicago, Illinois 60604, has been in the investment management business
since 1984 and manages other mutual funds and separate accounts. Janus Capital
has agreed to take a 30% ownership stake in Perkins, a transaction that is
expected to close in April 2003.
FEE AND EXPENSE INFORMATION (UNAUDITED)
The table and the example below shows the fee and expense information for
each Portfolio as well as pro forma fee and expense information on a combined
basis, giving effect to the Reorganization. The Strategic Value Portfolio
information is based on expenses for the fiscal year ended December 31, 2002.
Because the Mid Cap Value Portfolio commenced operations on December 31, 2002,
the information below is based on estimates for the Portfolio's first fiscal
year, which will end December 31, 2003. The pro forma information is estimated.
SHAREHOLDER FEES such as sales load, redemption fees or exchange fees
are charged directly to an investor's account. The Portfolios are no-load
investments, so there are generally no shareholder fees when you buy or
sell shares of the Portfolios. HOWEVER, EACH VARIABLE CONTRACT INVOLVES
FEES AND EXPENSES NOT DESCRIBED IN THIS PROSPECTUS. IF SUCH FEES AND
EXPENSES WERE INCLUDED IN THE TABLE AND EXAMPLE BELOW, THE FEES AND
EXPENSES WOULD BE HIGHER THAN THOSE SHOWN. SEE YOUR CONTRACT PROSPECTUS FOR
MORE INFORMATION REGARDING THOSE CONTRACT FEES AND CHARGES.
Annual FUND OPERATING EXPENSES are paid out of each Portfolio's assets
and include fees for portfolio management, maintenance of shareholder
accounts, shareholder servicing, accounting and other services. You do not
pay these fees directly but, as the example shows below, these costs are
borne indirectly by all shareholders. For each Portfolio, Janus Capital has
agreed to limit the Portfolio's expenses (excluding the
4
distribution fee applicable to Service Shares, brokerage commissions,
interest, taxes and extraordinary expenses) to 1.25% on an annual basis
until at least June 2004.
<Table>
<Caption>
DISTRIBUTION TOTAL ANNUAL FUND TOTAL ANNUAL FUND
MANAGEMENT (12B-1) OTHER OPERATING EXPENSES TOTAL OPERATING EXPENSES
FEE FEE(1) EXPENSES WITHOUT WAIVERS WAIVERS WITH WAIVERS
---------- ------------ -------- ------------------ ------- ------------------
Strategic Value Portfolio
Service Shares.......... 0.65% 0.25% 0.63% 1.53%(2) 0.03% 1.50%(2)
Mid Cap Value Portfolio
Service Shares.......... 0.65% 0.25% 0.44% 1.34%(3) 0.00% 1.34%(3)
Pro Forma Combined
Service Shares.......... 0.65% 0.25% 0.35% 1.25%(3) 0.00% 1.25%(3)
Strategic Value Portfolio
Institutional Shares.... 0.65% 0.00% 0.63% 1.28%(2) 0.03% 1.25%(2)
Mid Cap Value Portfolio
Institutional Shares.... 0.65% 0.00% 0.34% 0.99%(3) 0.00% 0.99%(3)
Pro Forma Combined
Institutional Shares.... 0.65% 0.00% 0.25% 0.90%(3) 0.00% 0.90%(3)
</Table>
- ---------------
(1) Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charges permitted by the National Association
of Securities Dealers, Inc.
(2) Expenses for the Strategic Value Portfolio are based upon expenses for
the year ended December 31, 2002. Expenses are stated both with and
without contractual waivers by Janus Capital. Janus Capital has agreed
to limit the Portfolio's expenses (excluding the distribution fee
applicable to Service Shares, brokerage commissions, interest, taxes
and extraordinary expenses) to 1.25% on an annual basis until at least
June 2004. Waivers are first applied against the management fee and
then against other expenses, and will continue until at least June
2004. All expenses are shown without the effect of any expense offset
arrangements.
(3) Expenses for the Mid Cap Value Portfolio are based upon the estimated
expenses the Portfolio expects to incur during its initial fiscal year,
which will end December 31, 2003. Included in Other Expenses for
Service Shares is a service fee of 0.10% of the average daily net
assets to compensate Janus Services LLC for providing, or arranging for
the provision of recordkeeping, subaccounting and administrative
services to retirement or pension plan participants, variable contract
owners or other underlying investors investing through institutional
channels. There is no similar charge for the Strategic Value Portfolio
or for Institutional Shares of the Mid Cap Value Portfolio. All
expenses are shown without the effect of any expense offset
arrangements.
EXAMPLE:
The following example is based on expenses without waivers. This example is
intended to help you compare the cost of investing in the Portfolios with the
cost of investing in other mutual funds. The example assumes that you invest
$10,000 in the Portfolio for the time periods indicated and then redeem all of
your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year, and that the Portfolio's operating
expenses remain the same. Since no sales load applies, the results apply whether
or not you redeem your investment at the end of each period. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Strategic Value Portfolio -- Service Shares......... $156 $483 $834 $1,824
Mid Cap Value Portfolio -- Service Shares........... $137 $425 $734 $1,613
Pro Forma Combined -- Service Shares................ $127 $397 $686 $1,511
Strategic Value Portfolio -- Institutional Shares... $130 $406 $702 $1,545
Mid Cap Value Portfolio -- Institutional Shares..... $101 $315 $547 $1,213
Pro Forma Combined -- Institutional Shares.......... $ 92 $287 $498 $1,108
</Table>
5
PURCHASE AND REDEMPTION PROCEDURES
Both Portfolios have the same purchase and redemption procedures, and those
procedures will not change as a result of the proposed Reorganization. The
Portfolios are available only through variable contracts and qualified plans.
See Appendix B or your contract prospectus for information about the purchase
and redemption procedures applicable to you.
TAX CONSEQUENCES
As a condition of the Reorganization, the Trust will have received an
opinion of counsel to the effect that, based on certain facts, assumptions and
representations, the Reorganization will constitute a tax-free reorganization
within the meaning of Section 368(a)(1) of the Internal Revenue Code of 1986, as
amended. If the Reorganization constitutes a tax-free reorganization, no gain or
loss will be recognized by the Portfolios or their shareholders. For more
information, see "Federal Income Tax Considerations," below.
PRINCIPAL RISK FACTORS
The Strategic Value Portfolio and the Mid Cap Value Portfolio have many of
the same risk factors. For example, the main risk of both Portfolios is the risk
inherent in the investment in common stocks. The risk in investing in smaller or
newer companies, however, applies more to the Mid Cap Value Portfolio because of
that Portfolio's policy of investing at least 80% of its assets in mid-sized
companies. It also applies, to somewhat lesser degree to the Strategic Value
Portfolio, because that Portfolio may have significant investments in medium or
small size companies. The risk related to non-diversification applies to the
Strategic Value Portfolio, but not the Mid Cap Value Portfolio. The principal
risk factors applicable to both Portfolios are summarized below.
Common Stock Risk. Because each Portfolio may invest substantially all its
assets in common stocks, the main risk of each Portfolio is the risk that the
value of the stocks it holds might decrease in response to the activities of an
individual company or in response to general market and/or economic conditions.
If this occurs, the Portfolio share price may also decrease.
Smaller or Newer Company Risk. Many attractive investment opportunities
may be smaller, start-up companies offering emerging products or services.
Smaller or newer companies may suffer more significant losses as well as realize
more substantial growth than larger or more established issuers because they may
lack depth of management, be unable to generate funds necessary for growth or
potential development, or be developing or marketing new products or services
for which markets are not yet established and may never become established. In
addition, such companies may be insignificant factors in their industries and
may become subject to intense competition from larger or more established
companies. Securities of smaller or newer companies may have more limited
trading markets than the markets for securities of larger or more established
issuers, or may not be publicly traded at all, and may be subject to wide price
fluctuations. Investments in such companies tend to be more volatile and
somewhat more speculative.
Non-Diversification Risk (applies only to the Strategic Value
Portfolio). Diversification is a way to reduce risk by investing in a broad
range of stocks or other securities. A "non-diversified" portfolio has the
ability to take larger positions in a smaller number of issuers than a
"diversified" portfolio. A non-diversified portfolio has more flexibility to
focus its investments in the most attractive companies identified by the
portfolio manager. Because the appreciation or depreciation of a single stock
may have a greater impact on the NAV of a non-diversified portfolio, its share
price can be expected to fluctuate more than a comparable diversified portfolio.
This fluctuation, if significant, may affect the performance of a
non-diversified Portfolio. The Strategic Value Portfolio is a non-diversified
portfolio, while the Mid Cap Value Portfolio is a diversified portfolio.
"Value" Risk. If the portfolio manager's perception of a company's worth
is not realized in the time frame he expects, the overall performance of the
Portfolio may suffer. In general, the portfolio manager believes this risk is
mitigated by investing in companies that are undervalued in the market in
relation to earnings, dividends and/or assets.
6
Foreign Securities Risk. Within the parameters of its specific investment
policies, each Portfolio may invest without limit in foreign securities either
indirectly (e.g., depositary receipts) or directly in foreign markets.
Investments in foreign securities, including those of foreign governments, may
involve greater risks than investing in domestic securities because the
Portfolio's performance may depend on issues other than the performance of a
particular company. These issues include:
- Currency Risk. As long as a Portfolio holds a foreign security, its
value will be affected by the value of the local currency relative to the
U.S. dollar. When a Portfolio sells a foreign denominated security, its
value may be worth less in U.S. dollars even if the security increases in
value in its home country. U.S. dollar denominated securities of foreign
issuers may also be affected by currency risk.
- Political and Economic Risk. Foreign investments may be subject to
heightened political and economic risks, particularly in emerging markets
which may have relatively unstable governments, immature economic
structures, national policies restricting investments by foreigners,
different legal systems, and economies based on only a few industries. In
some countries, there is the risk that the government may take over the
assets or operations of a company or that the government may impose taxes
or limits on the removal of a Portfolio's assets from the country.
- Regulatory Risk. There may be less government supervision of foreign
markets. As a result, foreign issuers may not be subject to the uniform
accounting, auditing and financial reporting standards and practices
applicable to domestic issuers and there may be less publicly available
information about foreign issuers.
- Market Risk. Foreign securities markets, particularly those of emerging
market countries, may be less liquid and more volatile than domestic
markets. Certain markets may require payment for securities before
delivery and delays may be encountered in settling securities
transactions. In some foreign markets, there may not be protection
against failure by other parties to complete transactions.
- Transaction Costs. Costs of buying, selling and holding foreign
securities, including brokerage, tax and custody costs, may be higher
than those involved in domestic transactions.
High-Yield/High-Risk Bond Risk. High-yield/high-risk bonds (or "junk"
bonds) are bonds rated below investment grade by the primary rating agencies
such as Standard & Poor's Rating Services and Moody's Investors Service, Inc.
The value of lower quality bonds generally is more dependent on credit risk and
default risk than investment grade bonds. Issuers of high-yield bonds may not be
as strong financially as those issuing bonds with higher credit ratings and are
more vulnerable to real or perceived economic changes, political changes or
adverse developments specific to the issuer. In addition, the junk bond market
can experience sudden and sharp price swings.
THE REORGANIZATION
THE PLAN
The terms and conditions under which the Reorganization will be implemented
are set forth in the Plan. Significant provisions of the Plan are summarized
below; however, this summary is qualified in its entirety by reference to the
Plan, which is attached as Appendix A to this Proxy Statement.
The Plan contemplates (i) the Mid Cap Value Portfolio acquiring
substantially all of the assets of the Strategic Value Portfolio in exchange
solely for shares of the Mid Cap Value Portfolio and the assumption by the Mid
Cap Value Portfolio of all of the Strategic Value Portfolio's known liabilities,
if any, as of the closing date, and (ii) the distribution on the closing date of
such shares to the shareholders of Strategic Value Portfolio. Shareholders
holding Service Shares of the Strategic Value Portfolio will receive Service
Shares of the Mid Cap Value Portfolio, and shareholders holding Institutional
Shares of the Strategic Value Portfolio will receive Institutional Shares of the
Mid Cap Value Portfolio.
The value of the assets of the Strategic Value Portfolio to be acquired and
the amount of its liabilities to be assumed by the Mid Cap Value Portfolio and
the net asset value of a share of Strategic Value Portfolio will
7
be determined as of the close of regular trading on the New York Stock Exchange
on the closing date and will be determined in accordance with the valuation
procedures described in the then-current prospectus and Statement of Additional
Information for the Mid Cap Value Portfolio. When market quotations are not
readily available, or events or circumstances that may effect the value of
portfolio securities are identified between the closing of their principal
markets and the time the net asset value (NAV) is determined, securities are
valued at their fair value as determined in good faith under procedures
established by and under the supervision of the Trustees. The Plan provides that
Janus Capital will bear all costs and expenses of the Reorganization, including
the costs and expenses incurred in the preparation and mailing of this Proxy
Statement. The closing date is expected to be on or about April 30, 2003.
As soon as practicable after the closing date, the Strategic Value
Portfolio will distribute pro rata to its shareholders of record the shares of
the Mid Cap Value Portfolio it receives in the Reorganization, so that each
shareholder of Strategic Value Portfolio will receive a number of full and
fractional shares of the Mid Cap Value Portfolio equal in value to his or her
holdings in the Strategic Value Portfolio. Each shareholder will receive shares
of the same class that it previously held in the Strategic Value Portfolio. The
distribution will be accomplished by opening accounts on the books of the Mid
Cap Value Portfolio in the names of the Strategic Value Portfolio shareholders
and by transferring thereto the shares of the Mid Cap Value Portfolio previously
credited to the account of the Strategic Value Portfolio on those books. Each
shareholder account shall be credited with the pro rata number of Mid Cap Value
Portfolio shares due to that shareholder. Accordingly, immediately after the
Reorganization, each former shareholder of the Strategic Value Portfolio will
own shares of the Mid Cap Value Portfolio that will be equal to the value of
that shareholder's shares of the Strategic Value Portfolio immediately prior to
the Reorganization. The Strategic Value Portfolio will be liquidated soon after
the distribution.
If you are invested in the Strategic Value Portfolio through a variable
contract, the Strategic Value Portfolio shares are held by your Participating
Insurance Company in a separate account. In the Reorganization, the
Participating Insurance Company will receive shares of the Mid Cap Value
Portfolio in exchange for its shares of the Strategic Value Portfolio. The value
of your investment in the Mid Cap Value Portfolio immediately after the
Reorganization will equal the value of your investment in the Strategic Value
Portfolio immediately prior to the Reorganization.
The implementation of the Reorganization is subject to a number of
conditions set forth in the Plan. For instance, the Plan may be terminated and
the Reorganization abandoned at any time prior to the closing date by the
Trustees if they determine that the Reorganization would disadvantage either
Portfolio. The Trust's officers may change or postpone the closing date.
REASONS FOR THE REORGANIZATION
At a meeting held on January 31, 2003, the Trustees of the Trust concluded
that the Reorganization is in the best interests of shareholders of the
Strategic Value Portfolio and the Mid Cap Value Portfolio and unanimously voted
to recommend that you vote to approve the Reorganization. The Trustees also
determined that the Reorganization will not result in any dilution of the
interests of shareholders of either Portfolio. In making these determinations,
the Trustees considered a variety of factors, including those discussed below.
Generally Comparable Investment Objectives, Policies and Strategies. The
Trustees considered the fact that the investment objectives, policies and
strategies of the two Portfolios are generally comparable. As explained in more
detail in "Investment Objectives, Policies and Strategies" above, both
Portfolios invest primarily in common stocks using a "value" approach. Although
the Mid Cap Value Portfolio has a policy of investing at least 80% of its assets
in common stocks of mid-size companies, and the Strategic Value Portfolio has no
such policy, the Trustees noted that as of December 31, 2002, the Strategic
Value Portfolio invested slightly more than 60% of its net assets in stocks of
mid-sized companies. The Trustees also noted that the Portfolios had
substantially similar investment objectives; the Strategic Value Portfolio seeks
long-term growth of capital and the Mid Cap Value Portfolio seeks capital
appreciation.
Fees and Expenses. The Trustees considered that both Portfolios have the
same investment advisory fee. The Trustees also considered that, based on asset
projections for 2003, Janus Capital projected lower
8
annual expenses for the Mid Cap Value Portfolio than for the Strategic Value
Portfolio even though the Mid Cap Value Portfolio (but not the Strategic Value
Portfolio) has a service fee of 0.10% to compensate Janus Services LLC for
certain recordkeeping services. The Trustees also considered that, for both
Portfolios, Janus Capital has agreed to limit total annual expenses (not
including the 12b-1 fee applicable to Service Shares) to 1.25% until at least
June 2004.
Performance. Although the Mid Cap Value Portfolio commenced operations on
December 31, 2002, and thus does not have a significant performance record, the
Trustees considered the performance record of the Berger Mid Cap Value Fund,
which is managed by Perkins in the same manner as the Mid Cap Value Portfolio.
The Trustees compared the performance of that fund with the performance of the
Strategic Value Portfolio since the Strategic Value Portfolio commenced
operations on May 1, 2000. Those performance records are set forth below.
AVERAGE ANNUAL RETURNS (AS OF 12/31/02)
<Table>
<Caption>
SINCE INCEPTION OF
STRATEGIC VALUE
1 YEAR ENDED (5/1/00)
------------ ------------------
Janus Aspen Series
Strategic Value Portfolio (Service Shares)............. (23.42%) (12.30%)
Janus Aspen Series
Strategic Value Portfolio (Institutional Shares)....... (23.22%) (12.19%)
Berger Mid Cap Value Fund
(Investor Shares)...................................... (13.09%) 8.00%
</Table>
Shareholder Services. The Trustees also considered that the Reorganization
would have no effect on the level of service provided to shareholders because
both Portfolios are part of the same Trust.
Reorganization Costs. The Trustees also considered that Janus Capital has
agreed to pay the costs of the Reorganization, including the costs of preparing,
printing and mailing this Proxy Statement.
Tax-Free Reorganization. The Trustees also considered that the Trust would
receive an opinion of counsel that the Reorganization would be treated as a
tax-free reorganization.
FEDERAL INCOME TAX CONSIDERATIONS
As a condition to the Reorganization, the Trust will receive a legal
opinion from Shea & Gardner, to the effect that, subject to customary
assumptions and representations, on the basis of the existing provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), the Treasury Regulations
promulgated thereunder and current administrative and judicial interpretations
thereof, for federal income tax purposes:
- the transfer of all or substantially all of the assets of the Strategic
Value Portfolio solely in exchange for the Mid Cap Value Portfolio shares
and the assumption by the Mid Cap Value Portfolio of all known
liabilities of the Strategic Value Portfolio, and the distribution of
such shares to the shareholders of the Strategic Value Portfolio, will
constitute a "reorganization" within the meaning of Section 368(a)(1) of
the Code;
- the Strategic Value Portfolio and the Mid Cap Value Portfolio will each
be a "party to a reorganization" within the meaning of Section 368(b) of
the Code;
- no gain or loss will be recognized by the Strategic Value Portfolio on
the transfer of the assets of the Strategic Value Portfolio to the Mid
Cap Value Portfolio in exchange for the Mid Cap Value Portfolio shares
and the assumption by the Mid Cap Value Portfolio of all known
liabilities of the Strategic Value Portfolio or upon the distribution of
the Mid Cap Value Portfolio shares to the Strategic Value Portfolio
shareholders in exchange for their shares of the Strategic Value
Portfolio;
- the tax basis of the Strategic Value Portfolio's assets acquired by the
Mid Cap Value Portfolio will be the same to the Mid Cap Value Portfolio
as the tax basis of such assets to the Strategic Value Portfolio
9
immediately prior to the reorganization, and the holding period of the
assets of the Strategic Value Portfolio in the hands of the Mid Cap Value
Portfolio will include the period during which those assets were held by
the Strategic Value Portfolio;
- no gain or loss will be recognized by the Mid Cap Value Portfolio upon
the receipt of the assets of the Strategic Value Portfolio solely in
exchange for the Mid Cap Value Portfolio shares and the assumption by the
Mid Cap Value Portfolio of all known liabilities of the Strategic Value
Portfolio;
- no gain or loss will be recognized by shareholders of the Strategic Value
Portfolio upon the receipt of the Mid Cap Value Portfolio shares by such
shareholders, provided such shareholders receive solely the Mid Cap Value
Portfolio shares (including fractional shares) in exchange for their the
Strategic Value Portfolio shares; and
- the aggregate tax basis of the Mid Cap Value Portfolio shares, including
any fractional shares, received by each shareholder of the Strategic
Value Portfolio pursuant to the reorganization will be the same as the
aggregate tax basis of the Strategic Value Portfolio shares held by such
shareholder immediately prior to the reorganization, and the holding
period of the Mid Cap Value Portfolio shares, including fractional
shares, to be received by each shareholder of the Strategic Value
Portfolio will include the period during which the Strategic Value
Portfolio shares exchanged therefore were held by such shareholder
(provided that the Strategic Value Portfolio shares were held as a
capital asset on the date of the reorganization).
The receipt of such an opinion is a condition to the consummation of the
Reorganization. The Trust has not obtained an Internal Revenue Service ("IRS")
private letter ruling regarding the federal income tax consequences of the
Reorganization, and the IRS is not bound by advice of counsel. If the transfer
of the assets of the Strategic Value Portfolio in exchange for the Mid Cap Value
Portfolio shares and the assumption by the Mid Cap Value Portfolio of all known
liabilities of the Strategic Value Portfolio do not constitute a tax-free
reorganization, each Strategic Value Portfolio shareholder generally will
recognize gain or loss equal to the difference between the value of the Mid Cap
Value Portfolio shares such shareholder acquires and the tax basis of such
shareholder's the Strategic Value Portfolio shares. There would still likely be
no federal income tax effect on contract owners because they do not hold the
Portfolio shares directly but instead are invested in the Portfolios through
variable contracts.
As of December 31, 2002, the Strategic Value Portfolio and the Mid Cap
Value Portfolio had unutilized capital loss carryovers of $4,879,486 and $0,
respectively. The final amount of unutilized capital loss carryovers for each
Portfolio is subject to change and will not be determined until the time of the
Reorganization. After and as a result of the Reorganization, these capital loss
carryovers may in part be subject to limitations under applicable tax laws on
the rate at which they may be used in the future to offset capital gains of the
Mid Cap Value Portfolio. As a result, some or all of the capital loss carryovers
may expire unutilized. The Trustees took this factor into account in concluding
that the proposed Reorganization would be in the best interests of the
Portfolios and their shareholders.
The Strategic Value Portfolio may sell securities before the
Reorganization, whether in the ordinary course of business or in anticipation of
the Reorganization. After the Closing, the Mid Cap Value Portfolio may dispose
of certain securities received by it from the Strategic Value Portfolio. Such
sales may result in transaction costs and capital gains (or losses). The
Portfolios expect the capital gains (if any) to be insignificant.
DESCRIPTION OF THE SECURITIES TO BE ISSUED
The Trust is registered with the Securities and Exchange Commission as an
open-end management investment company, generally called a mutual fund. The
Trust is authorized to issue shares of beneficial interest in separate
Portfolios. Each Portfolio offers more than one class of shares. Shares of a
Portfolio participate equally in other dividends and other distributions of that
Portfolio (with differences among the classes due to different expense
structures). In the event of a liquidation, shareholders would be entitled to
share pro rata in the net assets of the Portfolio available for distribution
based on the value of their
10
shareholdings. Shares of each Portfolio have no preemptive, conversion or
subscription rights. When issued, each share is fully paid and non-assessable by
the Trust, has no preemptive or subscription rights, and is fully transferable.
The Trustees do not intend to hold annual meetings of shareholders of the
Portfolios. However, special meetings may be called for a specific Portfolio or
for the Trust as a whole for purposes such as electing or removing Trustees,
terminating or reorganizing the Trust, changing fundamental policies, or for any
other purpose requiring a shareholder vote under the Investment Company Act of
1940. Separate votes are taken by each Portfolio only if a matter affects or
requires the vote of only that Portfolio or that Portfolio's interest in the
matter differs from the interest of other Portfolios. Shareholders are entitled
to one vote for each share owned.
Under Delaware law, shareholders of the Portfolios could, under certain
circumstances, be held liable for the obligations of their Portfolio. However,
the Trust's Trust Instrument disclaims shareholder liability for acts or
obligations of the Portfolios and requires that notice of this disclaimer be
given in each agreement, obligation or instrument entered into or executed by
the Portfolios or the Trustees. The Trust Instrument also provides for
indemnification from the assets of the Portfolios for all losses and expenses of
any Portfolio shareholder held liable for the obligations of their Portfolio.
Thus, the risk of a shareholder incurring a financial loss on account of its
liability as a shareholder of one of the Portfolios is limited to circumstances
in which their Portfolio 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 Portfolios to avoid, to the extent possible,
liability of shareholders for liabilities of their Portfolio.
CAPITALIZATION (UNAUDITED)
The following table shows the capitalization of the Strategic Value
Portfolio and the Mid Cap Value Portfolio as of January 31, 2003, and the pro
forma combined capitalization of both Portfolios as if the Reorganization had
occurred on that date.
<Table>
<Caption>
STRATEGIC VALUE MID CAP VALUE PRO FORMA
PORTFOLIO PORTFOLIO COMBINED
--------------- ------------- -----------
Net assets (both classes)................... $13,874,664 $476,734 $14,351,398
Shares outstanding (both classes)........... 2,005,515 50,000 1,633,668
Service Shares net assets................... $10,676,593 $476,734 $11,153,327
Service Shares net asset value per share.... $ 6.92 $ 9.53 $ 9.53
Service Shares outstanding.................. 1,542,161 50,000 1,170,314
Institutional Shares net assets............. $ 3,198,071 N/A $ 3,198,071
Institutional Shares net asset value per
share..................................... $ 6.90 N/A $ 6.90
Institutional Shares outstanding............ 463,354 N/A 463,354
</Table>
ADDITIONAL INFORMATION ABOUT THE PORTFOLIOS
Additional information about the Mid Cap Value Portfolio is included in
Appendix B to this Proxy Statement. Further information about the Mid Cap Value
Portfolio is included in the Statement of Additional Information of Janus Aspen
Series with respect to seven of its Portfolios, dated December 31, 2002. The
portions of that document relating to the Mid Cap Value Portfolio are
incorporated herein by reference. Additional information about the Strategic
Value Portfolio is included in the prospectus for the Service Shares of that
Portfolio, dated May 1, 2002, the prospectus for the Institutional Shares of
that Portfolio, dated May 1, 2002, and the Statement of Additional Information
of Janus Aspen Series, dated May 1, 2002. Those prospectuses and the portions of
the Statement of Additional Information relating to the Strategic Value
Portfolio are incorporated herein by reference. These documents are available
upon request and without charge by calling 1-800-525-0020 or by contacting Janus
Capital at 100 Fillmore Street, Denver, Colorado 80206-4928.
11
The Strategic Value Portfolio and the Mid Cap Value Portfolio are subject
to informational requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940 and in accordance therewith file reports and
other information, including proxy material and charter documents, with the
Securities and Exchange Commission ("SEC"). These items may be inspected and
copied at the public reference facilities maintained by the SEC at 450 5th
Street, N.W., Washington, D.C. 20549, and at the SEC's regional offices in New
York at 233 Broadway, New York, New York 10279, and in Chicago at 175 West
Jackson Boulevard, Suite 900, Chicago, Illinois 60604. Copies of such items can
be obtained from the Public Reference Branch, Office of Consumer Affairs, SEC,
Washington, D.C. 20549, at prescribed rates. The information is also available
through the Edgar database available at the SEC's website (www.sec.gov).
VOTING INFORMATION
Shareholders of the Strategic Value Portfolio as of the record date of
February 10, 2003, are entitled to vote on the Plan. Shareholders of both
Service Shares and Institutional Shares will vote together as a single group. As
of the record date, there were 1,952,374 shares of the Strategic Value Portfolio
outstanding. Each full share of the Portfolio will have one vote, and each
fractional share will have a proportional fractional vote.
Under the requirements of the federal securities laws, each Participating
Insurance Company must vote all the Portfolio shares it holds in accordance with
voting instructions received from its contract owners. Specifically, if you, as
a contract owner, submit properly executed voting instructions, the Portfolio
shares related to your account as of the record date will be voted according to
your instructions. If you submit a properly executed voting instruction card but
omit voting instructions, the shares allocated to your account will be voted for
the Plan. Finally, if you do not submit properly executed voting instructions,
the Portfolio shares allocated to your account will be voted in proportion to
the aggregate voting instructions received with respect to your Participating
Insurance Company.
This solicitation is being made primarily by the mailing of this Proxy
Statement and the accompanying voting instruction card. Supplementary
solicitations may be made by mail, telephone, telegraph, facsimile, electronic
means or by personal interview. In addition, Georgeson Shareholder
Communications, Inc. ("GS"), a professional proxy solicitation firm, may be paid
to solicit shareholders of the Strategic Value Portfolio. The total cost of such
services is estimated to be $3,500. The cost of preparing, printing and mailing
this proxy statement, and all other costs incurred in connection with the
solicitation of proxies, including the fees of GS, will be paid by Janus
Capital. In addition, Janus Capital may reimburse Participating Insurance
Companies and other entities for their reasonable expenses in forwarding
solicitation materials to persons having voting rights with respect to the
Strategic Value Portfolio.
For voting instructions to be effective, they must be received prior to the
close of business on April 15, 2003. You may revoke your instructions, but to be
effective, we must receive written notice of your revocation prior to the close
of business on April 15, 2003. Alternatively, you may attend the meeting and
vote in person, in which case any prior instructions you provided will be
automatically revoked.
To be adopted, the Plan must be approved by a majority of outstanding
shares of the Strategic Value Portfolio, which is defined as the lesser of (a) a
vote of 67% or more of Portfolio shares whose holders are present in person or
represented by proxy at the meeting if the holders of more than 50% of all
outstanding Portfolio shares are present in person or represented by proxy at
the meeting, or (b) a vote of more than 50% of all outstanding Portfolio shares.
Therefore, if you vote to abstain, that vote will have the same effect as a vote
against the Plan.
The Trust may arrange to have votes recorded by telephone. If the Trust
records votes by telephone, it will use procedures designed to authenticate
identities of persons having voting rights, to allow persons having voting
rights to authorize voting in accordance with their instructions and to confirm
that their instructions have been properly recorded. Votes recorded by telephone
may be revoked in the same manner as votes submitted by mail or may be revoked.
12
SHARE OWNERSHIP
The Trustees and officers of the Trust can not own shares of the Portfolios
without purchasing an insurance contract through a Participating Insurance
Company or investing through a qualified plan. As a result, as of December 31,
2002, the Trustees and officers of the Trust, as a group, owned beneficially or
of record less than 1% of the outstanding shares of each class of each
Portfolio.
The table below lists the shareholders owning beneficially or of record 5%
or more of the Strategic Value Portfolio's outstanding shares as of February 10,
2003. All shareholders listed in the table are Participating Insurance
Companies, who own Portfolio shares through their separate accounts, and
therefore pass through voting rights to their contract owners. As of December
31, 2002, all outstanding shares of the Mid Cap Value Portfolio were owned by
Janus Capital.
<Table>
<Caption>
PERCENTAGE OWNERSHIP OF
SERVICE SHARES SERVICE SHARES
PARTICIPATING INSURANCE COMPANY STRATEGIC VALUE PORTFOLIO
NAME AND ADDRESS AS OF 2/10/2003
- ------------------------------- -------------------------
PFL Life Insurance Co....................................... 71.93%
4333 Edgewood Road, NE
Cedar Rapids, Iowa 52499
Travelers Insurance Co...................................... 15.54%
1 Tower Square
Hartford, Connecticut 06183
MONY America Variable Account L-CSVUL....................... 12.38%
1740 Broadway, Mail Drop 6-35
New York, New York 10019
</Table>
<Table>
<Caption>
PERCENTAGE OWNERSHIP OF
INSTITUTIONAL SHARES INSTITUTIONAL SHARES
PARTICIPATING INSURANCE COMPANY STRATEGIC VALUE PORTFOLIO
NAME AND ADDRESS AS OF 2/10/2003
- ------------------------------- -------------------------
Western Reserve Life........................................ 99%
P.O. Box 5068
Clearwater, Florida 33758
</Table>
13
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this day of , 2003, by and between Janus Aspen Series, a Delaware
business trust (the "Trust"), on behalf of the Strategic Value Portfolio series
of the Trust (the "Predecessor Fund"), and the Mid Cap Value Portfolio series of
the Trust (the "Successor Fund").
All references in this Agreement to action taken by the Predecessor Fund or
the Successor Fund shall be deemed to refer to action taken by the Trust on
behalf of the respective portfolio series.
This Agreement is intended to be and is adopted as a plan of reorganization
and liquidation within the meaning of Section 368(a) of the United States
Internal Revenue Code of 1986, as amended (the "Code"). The reorganization (the
"Reorganization") will consist of the transfer by the Predecessor Fund of all or
substantially all of its assets to the Successor Fund, in exchange solely for
Service Shares in the Successor Fund ("Successor Fund Shares") having a net
asset value equal to the net asset value of the Predecessor Fund, the assumption
by the Successor Fund of all the liabilities of the Predecessor Fund, and the
distribution of the Successor Fund Shares to the shareholders of the Predecessor
Fund in complete liquidation of the Predecessor Fund as provided herein, all
upon the terms and conditions hereinafter set forth in this Agreement.
Shares of beneficial interest of the Predecessor Fund (the "Predecessor
Fund Shares") and the Successor Fund Shares are divided into two classes of
voting shares, designated Service Shares and Institutional Shares.
WHEREAS, the Board of Trustees of the Trust has determined that it is in
the best interests of the Predecessor Fund and the Successor Fund, respectively,
that the assets of the Predecessor Fund be acquired by the Successor Fund
pursuant to this Agreement and in accordance with the applicable statutes of the
State of Delaware and that the interests of existing shareholders will not be
diluted as a result of this transaction;
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. PLAN OF REORGANIZATION
1.1 Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, the Trust shall
(i) transfer all or substantially all of the assets of the Predecessor
Fund, as set forth in paragraph 1.2, to the Successor Fund;
(ii) cause the Successor Fund to deliver to the Predecessor Fund (A)
Successor Fund Service Shares determined by dividing the portion of the net
asset value of the Assets (as defined below) (such net asset value computed
as set forth in paragraph 2.2 hereof and referred to as the "Predecessor
Fund Value") attributable to the Predecessor Fund Service Shares by the net
asset value ("NAV") of a Successor Fund Service Share (computed as set
forth in paragraph 2.2), and (B) Successor Fund Institutional Shares
determined by dividing the portion of the Predecessor Fund Value
attributable to the Predecessor Fund Institutional Shares by the NAV of a
Successor Fund Institutional Share (computed as set forth in paragraph
2.2); and
(iii) cause the Successor Fund to assume all the liabilities of the
Predecessor Fund, as set forth in paragraph 1.2. Such transactions shall
take place at the closing provided for in paragraph 2.1 (the "Closing").
1.2 The assets of the Predecessor Fund to be acquired by the Successor
Fund (collectively, the "Assets") shall consist of all property, including,
without limitation, all cash, securities, commodities and futures interests, and
dividends or interest receivable which are owned by the Predecessor Fund and any
deferred or prepaid expenses shown as an asset on the books of the Predecessor
Fund on the closing date
A-1
provided in paragraph 2.1 (the "Closing Date"). All liabilities, expenses,
costs, charges and reserves of the Predecessor Fund, to the extent that they
exist at or after the Closing, shall after the Closing attach to the Successor
Fund and may be enforced against the Successor Fund to the same extent as if the
same had been incurred by the Successor Fund.
1.3 The Predecessor Fund will distribute pro rata to its shareholders of
record, determined as of immediately after the close of business on the Closing
Date (the "Current Shareholders"), the corresponding New Shares received by the
Trust pursuant to paragraph 1.1. Current Shareholders owning Predecessor Fund
Service Shares shall receive Successor Fund Service Shares, and Current
Shareholders owning Predecessor Fund Institutional Shares shall receive
Successor Fund Institutional Shares. Such distribution and liquidation will be
accomplished by the transfer of the Successor Fund Shares then credited to the
accounts of the Predecessor Fund on the books of the Successor Fund to open
accounts on the share records of the Successor Fund in the names of the Current
Shareholders and representing the respective pro rata number of the Successor
Fund Shares due such shareholders. All issued and outstanding shares of the
Predecessor Fund will simultaneously be canceled on the books of the Trust. The
Successor Fund shall not issue certificates representing the Successor Fund
Shares in connection with such exchange. Ownership of Successor Fund Shares will
be shown on the books of the Trust's transfer agent. As soon as practicable
after the Closing, the Trust shall take all steps necessary to effect a complete
liquidation of the Predecessor Fund.
2. CLOSING AND CLOSING DATE
2.1 The Closing Date shall be April 30, 2003, or such later date as the
parties may agree to in writing. All acts taking place at the Closing shall be
deemed to take place simultaneously as of immediately after the close of
business on the Closing Date unless otherwise agreed to by the parties. The
close of business on the Closing Date shall be as of the close of the regular
trading session of the New York Stock Exchange. The Closing shall be held at the
offices of Janus Capital Management LLC ("Janus Capital"), 100 Fillmore Street,
Denver, Colorado 80206-4928, or at such other time and/or place as the parties
may agree.
2.2 The Trust shall cause Janus Services LLC (the "Transfer Agent"),
transfer agent of the Predecessor Fund, to deliver at the Closing a certificate
of an authorized officer stating that its records contain the names and
addresses of the Current Shareholders and the number and percentage ownership of
outstanding shares of the Predecessor Fund owned by each such shareholder
immediately prior to the Closing. The Successor Fund shall issue and deliver a
confirmation evidencing the Successor Fund Shares to be credited on the Closing
Date to the Secretary of the Trust or provide evidence satisfactory to the Trust
that such Successor Fund Shares have been credited to the accounts of the
Predecessor Fund on the books of the Successor Fund. At the Closing, each party
shall deliver to the other such bills of sales, checks, assignments, share
certificates, if any, receipts or other documents as such other party or its
counsel may reasonably request.
3. REPRESENTATIONS AND WARRANTIES
3.1 The Trust, on behalf of the Predecessor Fund, hereby represents and
warrants to the Successor Fund as follows:
(i) the Trust is duly organized, validly existing and in good standing
under the laws of the State of Delaware and has full power and authority to
conduct its business as presently conducted;
(ii) the Trust has full power and authority to execute, deliver and
carry out the terms of this Agreement on behalf of the Predecessor Fund;
(iii) the execution and delivery of this Agreement on behalf of the
Predecessor Fund and the consummation of the transactions contemplated
hereby are duly authorized and no other proceedings on the part of the
Trust or the shareholders of the Predecessor Fund (other than as
contemplated in paragraph 4.1(vi)) are necessary to authorize this
Agreement and the transactions contemplated hereby;
(iv) this Agreement has been duly executed by the Trust on behalf of
the Predecessor Fund and constitutes its valid and binding obligation,
enforceable in accordance with its terms, subject to applicable
A-2
bankruptcy, reorganization, insolvency, moratorium and other rights
affecting creditors' rights generally, and general equitable principles;
(v) neither the execution and delivery of this Agreement by the Trust
on behalf of the Predecessor Fund, nor the consummation by the Trust on
behalf of the Predecessor Fund of the transactions contemplated hereby will
conflict with, result in a breach or violation of or constitute (or with
notice, lapse of time or both) a breach of or default under, the Trust
Instrument or By-Laws of the Trust, as each may be amended, or any statute,
regulation, order, judgment or decree, or any instrument, contract or other
agreement to which the Trust is a party or by which the Trust or any of its
assets is subject or bound; and
(vi) no authorization, consent or approval of any governmental or
other public body or authority or any other party is necessary for the
execution and delivery of this Agreement by the Trust on behalf of the
Predecessor Fund or the consummation of any transactions contemplated
hereby by the Trust, other than as shall be obtained at or prior to the
Closing.
3.2 The Trust, on behalf of the Successor Fund, hereby represents and
warrants to the Predecessor Fund as follows:
(i) the Trust is duly organized, validly existing and in good standing
under the laws of the State of Delaware and has full power and authority to
conduct its business as presently conducted;
(ii) the Trust has full power and authority to execute, deliver and
carry out the terms of this Agreement on behalf of the Successor Fund;
(iii) the execution and delivery of this Agreement on behalf of the
Successor Fund and the consummation of the transactions contemplated hereby
are duly authorized and no other proceedings on the part of the Trust or
the shareholders of the Successor Fund are necessary to authorize this
Agreement and the transactions contemplated hereby;
(iv) this Agreement has been duly executed by the Trust on behalf of
the Successor Fund and constitutes its valid and binding obligation,
enforceable in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium and other rights affecting
creditors' rights generally, and general equitable principles;
(v) neither the execution and delivery of this Agreement by the Trust
on behalf of the Successor Fund, nor the consummation by the Trust on
behalf of the Successor Fund of the transactions contemplated hereby will
conflict with, result in a breach or violation of or constitute (or with
notice, lapse of time or both constitute) a breach of or default under, the
Trust Instrument or By-Laws of the Trust, as each may be amended, or any
statute, regulation, order, judgment or decree, or any instrument, contract
or other agreement to which the Trust is a party or by which the Trust or
any of its assets is subject or bound; and
(vi) no authorization, consent or approval of any governmental or
other public body or authority or any other party is necessary for the
execution and delivery of this Agreement by the Trust on behalf of the
Successor Fund or the consummation of any transactions contemplated hereby
by the Trust, other than as shall be obtained at or prior to the Closing.
4. CONDITIONS PRECEDENT
4.1 The obligations of the Trust on behalf of each of the Predecessor Fund
and the Successor Fund to effectuate the Reorganization shall be subject to the
satisfaction of the following conditions:
(i) the Trust shall have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form N-14 under
the Securities Act of 1933, as amended (the "Securities Act") and such
amendment or amendments thereto as are determined by the Board of Trustees
of the Trust to be necessary and appropriate to effect the registration of
the Successor Fund Shares (the "Registration Statement"), and the
Registration Statement shall have become effective, and no stop-
A-3
order suspending the effectiveness of the Registration Statement shall have
been issued, and no proceeding for that purpose shall have been initiated
or threatened by the Commission (and not withdrawn or terminated);
(ii) the applicable Successor Fund Shares shall have been duly
qualified for offering to the public in all states in which such
qualification is required for consummation of the transactions contemplated
hereunder;
(iii) all representations and warranties of the Trust on behalf of the
Predecessor Fund contained in this Agreement shall be true and correct in
all material respects as of the date hereof and as of the Closing, with the
same force and effect as if then made, and the Trust on behalf of the
Successor Fund shall have received a certificate of an officer of the Trust
acting on behalf of the Predecessor Fund to that effect in form and
substance reasonably satisfactory to the Trust on behalf of the Successor
Fund;
(iv) all representations and warranties of the Trust on behalf of the
Successor Fund contained in this Agreement shall be true and correct in all
material respects as of the date hereof and as of the Closing, with the
same force and effect as if then made, and the Trust on behalf of the
Predecessor Fund shall have received a certificate of an officer of the
Trust acting on behalf of the Successor Fund to that effect in form and
substance reasonably satisfactory to the Trust on behalf of the Predecessor
Fund;
(v) the Trust on behalf of each of the Predecessor Fund and the
Successor Fund shall have received an opinion from Shea & Gardner regarding
certain tax matters in connection with the Reorganization.
5. EXPENSES
All of the expenses and costs of the Reorganization and the transactions
contemplated thereby shall be borne by Janus Capital.
6. ENTIRE AGREEMENT
The Trust agrees on behalf of each of the Predecessor Fund and the
Successor Fund that this Agreement constitutes the entire agreement between the
parties.
7. TERMINATION
This Agreement and the transactions contemplated hereby may be terminated
and abandoned by resolution of the Board of Trustees of the Trust, at any time
prior to the Closing Date, if circumstances should develop that, in the opinion
of the Board, make proceeding with the Agreement inadvisable.
8. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the parties.
9. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to the parties hereto at their
principal place of business.
10. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
10.1 The Article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.2 This Agreement may be executed in any number of counterparts each of
which shall be deemed an original.
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10.3 This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware.
10.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
10.5 It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the trustees, shareholders, nominees, officers,
agents or employees of the Trust personally, but shall bind only the trust
property of the Trust, as provided in the Trust Instrument of the Trust. The
execution and delivery by such officers of the Trust shall not be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, but shall bind only the trust property of the Trust as provided in
the Trust Instrument of the Trust. The Trust is a series company with a single
series and has entered into this Agreement on behalf of the Predecessor Fund and
the Successor Fund.
10.6 The sole remedy of a party hereto for a breach of any representation
or warranty made in this Agreement by the other party shall be an election by
the non-breaching party not to complete the transactions contemplated herein.
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
executed as of the date set forth above.
<Table>
ATTEST: JANUS ASPEN SERIES
For and on behalf of Mid Cap Value Portfolio
By:
- ----------------------------------------------------- -------------------------------------------------
Name: Name:
Secretary Title:
ATTEST: JANUS ASPEN SERIES
For and on behalf of Strategic Value Portfolio
By:
- ----------------------------------------------------- -------------------------------------------------
Name: Name:
Secretary Title:
</Table>
A-5
APPENDIX B
ADDITIONAL INFORMATION ABOUT
THE MID CAP VALUE PORTFOLIO
RISK/RETURN SUMMARY
Mid Cap Value Portfolio is designed for long-term investors who primarily
seek growth of capital and who can tolerate the greater risks associated with
common stock investments.
1. WHAT IS THE INVESTMENT OBJECTIVE OF MID CAP VALUE PORTFOLIO?
- MID CAP VALUE PORTFOLIO seeks capital appreciation.
The Portfolio's objective and principal investment policies are
non-fundamental policies, which means the Portfolio's Trustees may change the
objective or the Portfolio's principal investment policies without a shareholder
vote. The Portfolio will notify you at least 60 days before making any changes
to its objective or principal investment policies. If there is a material change
to the Portfolio's objective or principal investment policies, you should
consider whether the Portfolio remains an appropriate investment for you. There
is no guarantee that the Portfolio will meet its objective.
2. WHAT ARE THE MAIN INVESTMENT STRATEGIES OF MID CAP VALUE PORTFOLIO?
Within the parameters of its specific investment policies discussed below,
the Portfolio may invest without limit in foreign equity and debt securities.
Within the parameters of its specific investment policies discussed below,
the Portfolio will limit its investment in high-yield/high-risk bonds to less
than 20% of its net assets.
MID CAP VALUE PORTFOLIO invests primarily in common stocks selected for
their capital appreciation potential. In pursuing that goal, the Portfolio
primarily invests in the common stocks of mid-sized companies whose stock prices
are believed to be undervalued. The Portfolio invests, under normal
circumstances, at least 80% of its assets in equity securities of mid-sized
companies whose market capitalization falls, at the time of initial purchase,
within the 12-month average of the capitalization range of the Russell Midcap
Index. This average is updated monthly.
Mid Cap Value Portfolio focuses on companies that have fallen out of favor
with the market or are temporarily misunderstood by the investment community. To
a lesser degree, the Portfolio also invests in companies that demonstrate
special situations or turnarounds, meaning companies that have experienced
significant business problems but are believed to have favorable prospects for
recovery. Mid Cap Value Portfolio's portfolio manager generally looks for
companies with:
- A low price relative to their assets, earnings, cash flow or business
franchise
- Products and services that give them a competitive advantage
- Quality balance sheets and strong management.
For purposes of the Portfolio's 80% policy, net assets will take into
account borrowings for investment purposes.
3. WHAT ARE THE MAIN RISKS OF INVESTING IN MID CAP VALUE PORTFOLIO?
The biggest risk is that the Portfolio's returns may vary, and you could
lose money. Mid Cap Value Portfolio is designed for long-term investors who can
accept the risks of investing in a portfolio with significant common stock
holdings. Common stocks tend to be more volatile than other investment choices.
The value of the Portfolio's holdings may decrease if the value of an
individual company in the Portfolio decreases or if a portfolio manager's belief
about a company's intrinsic worth is incorrect. The value of the
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Portfolio's holdings could also decrease if the stock market goes down. If the
value of the Portfolio's holdings decreases, the Portfolio's net asset value
(NAV) will also decrease, which means if you sell your shares in a Portfolio you
may get back less money.
MID CAP VALUE PORTFOLIO'S share price may fluctuate more than that of funds
primarily invested in large companies. Mid-sized companies may pose greater
market, liquidity and information risks because of narrow product lines, limited
financial resources, less depth in management or a limited trading market for
their stocks. The Portfolio's investments are often focused in a small number of
business sectors, which may pose greater market and liquidity risks.
An investment in the Portfolio is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
Since the Portfolio did not commence operations until December 31, 2002,
performance information is not included for the Portfolio. The performance of
the Portfolio will be compared to the following benchmark:
- Mid Cap Value Portfolio -- Russell Midcap Value Index
4. WHAT ARE THE EXPENSES OF INVESTING IN MID CAP VALUE PORTFOLIO?
Expense information is included in the "Fees and Expense Information"
section of the Proxy Statement.
INVESTMENT OBJECTIVE,
PRINCIPAL INVESTMENT STRATEGIES AND RISKS
This section takes a closer look at the investment objective of Mid Cap
Value Portfolio and its principal investment strategies. Information on the
risks of investing in Mid Cap Value Portfolio is included in the "Principal Risk
Factors" section of the Proxy Statement. Strategies and policies that are noted
as "fundamental" cannot be changed without a shareholder vote.
We've included a Glossary with descriptions of investment terms used
throughout this Appendix.
INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES
MID CAP VALUE PORTFOLIO
Mid Cap Value Portfolio seeks capital appreciation. It invests primarily in
common stocks selected for their capital appreciation potential. In pursuing
that goal, the Portfolio primarily invests in the common stocks of mid-sized
companies whose stock prices are believed to be undervalued. The Portfolio
invests, under normal circumstances, at least 80% of its assets in equity
securities of mid-sized companies whose market capitalization falls, at the time
of initial purchase, within the 12-month average of the capitalization range of
the Russell Midcap Index. This average is updated monthly.
The following questions and answers are designed to help you better
understand Mid Cap Value Portfolio's principal investment strategies.
1. HOW ARE COMMON STOCKS SELECTED BY PERKINS FOR MID CAP VALUE PORTFOLIO?
Mid Cap Value Portfolio's portfolio managers focus on companies that have
fallen out of favor with the market or are temporarily misunderstood by the
investment community. The portfolio managers of Mid Cap Value Portfolio look for
companies with strong fundamentals and competent management. They generally look
for companies with products and services that give them a competitive advantage.
2. ARE THE SAME CRITERIA USED TO SELECT FOREIGN SECURITIES?
Generally, yes. The portfolio managers seek companies that meet their
selection criteria, regardless of where a company is located. Foreign securities
are generally selected on a stock-by-stock basis without regard to any defined
allocation among countries or geographic regions. However, certain factors such
as expected
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levels of inflation, government policies influencing business conditions, the
outlook for currency relationships, and prospects for economic growth among
countries, regions or geographic areas may warrant greater consideration in
selecting foreign securities. There are no limitations on the countries in which
the Portfolio may invest and the Portfolio may at times have significant foreign
exposure.
3. WHAT DOES "MARKET CAPITALIZATION" MEAN?
Market capitalization is the most commonly used measure of the size and
value of a company. It is computed by multiplying the current market price of a
share of the company's stock by the total number of its shares outstanding. As
noted previously, market capitalization is an important investment criteria for
the Portfolio.
GENERAL PORTFOLIO POLICIES
The percentage limitations included in these policies and elsewhere in this
Appendix apply at the time of purchase of a security. So, for example, if the
Portfolio exceeds a limit as a result of market fluctuations or the sale of
other securities, it will not be required to dispose of any securities.
CASH POSITION
For the Mid Cap Value Portfolio, when the portfolio managers believe that
market conditions are unfavorable for profitable investing, or when they are
otherwise unable to locate attractive investment opportunities, the Portfolio's
cash or similar investments may increase. In other words, the Portfolio does not
always stay fully invested in stocks and bonds. Cash or similar investments
generally are a residual -- they represent the assets that remain after the
portfolio managers have committed available assets to desirable investment
opportunities. However, the portfolio managers may also temporarily increase the
Portfolio's cash position to, for example, protect its assets, maintain
liquidity or meet unusually large redemptions. The Portfolio's cash position may
also increase temporarily due to unusually large cash inflows.
When the Portfolio's investments in cash or similar investments increase,
it may not participate in market advances or declines to the same extent that it
would if the Portfolio remained more fully invested in stocks or bonds.
OTHER TYPES OF INVESTMENTS
Mid Cap Value Portfolio invests primarily in domestic equity securities,
which may include preferred stocks, common stocks and securities convertible
into common or preferred stocks. To a lesser degree, the Portfolio may invest in
other types of domestic and foreign securities and use other investment
strategies, which are described in the Glossary. These securities (which are
described in the Glossary) may include:
- debt securities
- indexed/structured securities
- high-yield/high-risk bonds (less than 20% of the Portfolio's assets)
- options, futures, forwards, swaps and other types of derivatives and
exchange traded funds individually or in combination for hedging purposes
(including to gain exposure to the stock market pending investment of
cash balances or to meet liquidity needs) or for non-hedging purposes
such as seeking to enhance return
- short sales (no more than 8% of the Portfolio's assets may be invested in
"naked" short sales)
- securities purchased on a when-issued, delayed delivery or forward
commitment basis
ILLIQUID INVESTMENTS
The Portfolio may invest up to 15% of its net assets in illiquid
investments. An illiquid investment is a security or other position that cannot
be disposed of quickly in the normal course of business. For example,
B-3
some securities are not registered under U.S. securities laws and cannot be sold
to the U.S. public because of SEC regulations (these are known as "restricted
securities"). Under procedures adopted by the Portfolio's Trustees, certain
restricted securities may be deemed liquid, and will not be counted toward this
15% limit.
FOREIGN SECURITIES
Within the parameters of its specific investment policies, the Portfolio
may invest without limit in foreign equity and debt securities. The Portfolio
may invest directly in foreign securities denominated in a foreign currency and
not publicly traded in the United States. Other ways of investing in foreign
securities include depositary receipts or shares and passive foreign investment
companies.
SPECIAL SITUATIONS
The Portfolio may invest in special situations. A special situation arises
when, in the opinion of a portfolio manager, the securities of a particular
issuer will be recognized and appreciate in value due to a specific development
with respect to that issuer. Special situations may include significant changes
in a company's allocation of its existing capital, a restructuring of assets, or
a redirection of free cash flow. Developments creating a special situation might
include, among others, a new product or process, a technological breakthrough, a
management change or other extraordinary corporate event, or differences in
market supply of and demand for the security. The Portfolio's performance could
suffer if the anticipated development in a "special situation" investment does
not occur or does not attract the expected attention.
PORTFOLIO TURNOVER
The Portfolio generally intends to purchase securities for long-term
investment, although, to the extent permitted by its specific investment
policies, the Portfolio may purchase securities in anticipation of relatively
short-term price gains. Short-term transactions may also result from liquidity
needs, securities having reached a price or yield objective, changes in interest
rates or the credit standing of an issuer, or by reason of economic or other
developments not foreseen at the time of the investment decision. The Portfolio
may also sell one security and simultaneously purchase the same or a comparable
security to take advantage of short-term differentials in bond yields or
securities prices. Portfolio turnover is affected by market conditions, changes
in the size of the Portfolio, the nature of the Portfolio's investments and the
investment styles of the portfolio managers. Changes are made in the Portfolio's
holdings whenever its portfolio managers believe such changes are desirable.
Portfolio turnover rates are generally not a factor in making buy and sell
decisions.
MANAGEMENT OF THE PORTFOLIO
INVESTMENT ADVISER AND SUBADVISER
Janus Capital serves as the investment adviser to the Portfolio and Perkins
serves as subadviser to the Portfolio. More information about Janus Capital and
Perkins is included in the "Investment Advisers" section of the proxy statement.
MANAGEMENT EXPENSES
The Portfolio pays Janus Capital a management fee which is calculated daily
and paid monthly. The Portfolio's advisory agreement spells out the management
fee and other expenses that the Portfolio must pay. Janus Capital pays Perkins a
subadvisory fee from its management fee for managing the Portfolio.
The shares of the Portfolio incur expenses not assumed by Janus Capital,
including the distribution fee (Service Shares only), transfer agent and
custodian fees and expenses, legal and auditing fees, printing and mailing costs
of sending reports and other information to existing shareholders, and
independent Trustees' fees
B-4
and expenses. The Portfolio is subject to the following management fee schedule
(expressed as an annual rate).
<Table>
<Caption>
AVERAGE DAILY NET ANNUAL RATE EXPENSE LIMIT
PORTFOLIO ASSETS OF PORTFOLIO PERCENTAGE (%) PERCENTAGE (%)(1)
- --------- ------------------- -------------- -----------------
Mid Cap Value Portfolio............... All Asset Levels 0.65 1.25
</Table>
- ---------------
(1) Janus Capital has agreed to limit the Portfolio's expenses (excluding the
distribution fee, brokerage commissions, interest, taxes and extraordinary
expenses) as indicated until at least June 2004.
PERKINS PORTFOLIO MANAGERS
Jeff Kautz is Co-Manager of Mid Cap Value Portfolio, which he has managed
since its inception. Mr. Kautz has served as a research analyst for the value
products of Perkins since October 1997. He has been a portfolio manager for
Berger Mid Cap Value Fund since February 2002. Mr. Kautz has earned the right to
use the Chartered Financial Analyst designation.
Robert H. Perkins is Co-Manager of Mid Cap Value Portfolio, which he has
managed since its inception. Robert Perkins has been a portfolio manager since
1970 and serves as President and a director of Perkins. He has been a portfolio
manager for Berger Mid Cap Value Fund and Berger Small Cap Value Fund since 1998
and 1985, respectively.
Thomas M. Perkins has been the lead Co-Manager of Mid Cap Value Portfolio
since its inception. Thomas Perkins has been a portfolio manager since 1974 and
joined Perkins as a portfolio manager in 1998. He has been a portfolio manager
for Berger Mid Cap Value Fund since its inception in 1998. Previously, he was a
portfolio manager of valuation sensitive growth portfolios for Alliance Capital
from 1984 to June 1998. As lead Co-Manager, Thomas Perkins is responsible for
the daily decisions of Mid Cap Value Portfolio's security selection.
OTHER INFORMATION
DISTRIBUTION FEE
Under a distribution and service plan adopted in accordance with Rule 12b-1
under the 1940 Act, the Service Shares may pay Janus Distributors LLC, the
Portfolio's distributor, a fee at an annual rate of up to 0.25% of the average
daily net assets of the shares of the Portfolio. Under the terms of the Plan,
the Portfolio is authorized to make payments to Janus Distributors LLC for
remittance to insurance companies and qualified plan service providers as
compensation for distribution and shareholder servicing performed by such
entities. Because 12b-1 fees are paid out of the Service Shares' assets on an
ongoing basis, they will increase the cost of your investment and may cost you
more than paying other types of sales charges. There is no distribution fee for
the Institutional Shares.
CONFLICTS OF INTEREST
The shares of the Portfolio are available only to variable annuity and
variable life separate accounts of insurance companies that are unaffiliated
with Janus Capital and to certain qualified retirement plans. Although the
Portfolio does not currently anticipate any disadvantages to policy owners
because the Portfolio offers its shares to such entities, there is a possibility
that a material conflict may arise. The Trustees monitor events in order to
identify any disadvantages or material irreconcilable conflicts and to determine
what action, if any, should be taken in response. If a material disadvantage or
conflict occurs, the Trustees may require one or more insurance company separate
accounts or qualified plans to withdraw its investments in the Portfolio or
substitute shares of another Portfolio. If this occurs, the Portfolio may be
forced to sell its securities at disadvantageous prices. In addition, the
Trustees may refuse to sell shares of the Portfolio to any separate account or
qualified plan or may suspend or terminate the offering of the Portfolio's
shares if such action is required by law or regulatory authority or is in the
best interests of the Portfolio's shareholders. It is possible
B-5
that a qualified plan investing in the Portfolio could lose its qualified plan
status under the Internal Revenue Code, which could have adverse tax
consequences on insurance company separate accounts investing in the Portfolio.
Janus Capital intends to monitor such qualified plans and the Portfolio may
discontinue sales to a qualified plan and require plan participants with
existing investments in the Portfolio to redeem those investments if a plan
loses (or in the opinion of Janus Capital is at risk of losing) its qualified
plan status.
DISTRIBUTION OF THE PORTFOLIO
The Portfolio is distributed by Janus Distributors LLC, which is a member
of the National Association of Securities Dealers, Inc. ("NASD"). To obtain
information about NASD member firms and their associated persons, you may
contact NASD Regulation, Inc. at www.nasdr.com, or the Public Disclosure Hotline
at 800-289-9999. An investor brochure containing information describing the
Public Disclosure Program is available from NASD Regulation, Inc.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS
To avoid taxation of the Portfolio, the Internal Revenue Code requires the
Portfolio to distribute net income and any net gains realized on its investments
at least annually. The Portfolio's income from dividends and interest and any
net realized short-term gains are paid to shareholders as ordinary income
dividends. Net realized long-term gains are paid to shareholders as capital
gains distributions.
Distribution Schedule. Dividends for the Portfolio are normally declared
and distributed in June and December. Capital gains are normally declared and
distributed in June for the Portfolio.
How Distributions Affect the Portfolio's NAV. Distributions, other than
daily income dividends, are paid to shareholders as of the record date of the
distribution of the Portfolio, regardless of how long the shares have been held.
Undistributed income and realized gains are included in the daily NAV of the
Portfolio's shares. The share price of the Portfolio drops by the amount of the
distribution, net of any subsequent market fluctuations. For example, assume
that on December 31, the shares of Mid Cap Value Portfolio declared a dividend
in the amount of $0.25 per share. If the price of Mid Cap Value Portfolio's
shares was $10.00 on December 30, the share price on December 31 would be $9.75,
barring market fluctuations.
TAXES
Taxes on Distributions. Because shares of the Portfolio may be purchased
only through variable insurance contracts and qualified plans, it is anticipated
that any income dividends or capital gains distributions made by the shares of
the Portfolio will be exempt from current taxation if left to accumulate within
the variable insurance contract or qualified plan. Generally, withdrawals from
such contracts or plans may be subject to ordinary income tax and, if made
before age 59 1/2, a 10% penalty tax. The tax status of your investment depends
on the features of your qualified plan or variable insurance contract. Further
information may be found in your plan documents or in the prospectus of the
separate account offering such contract.
Taxation of the Portfolio. Dividends, interest and some gains received by
the Portfolio on foreign securities may be subject to tax withholding or other
foreign taxes. The Portfolio may from year to year make the election permitted
under Section 853 of the Internal Revenue Code to pass through such taxes to
shareholders as a foreign tax credit. If such an election is not made, any
foreign taxes paid or accrued will represent an expense to the Portfolio.
The Portfolio does not expect to pay any federal income or excise taxes
because it intends to meet certain requirements of the Internal Revenue Code. In
addition, because the shares of the Portfolio are sold in connection with
variable insurance contracts, the Portfolio intends to qualify under the
Internal Revenue Code with respect to the diversification requirements related
to the tax-deferred status of insurance company separate accounts.
B-6
SHAREHOLDER'S GUIDE
INVESTORS MAY NOT PURCHASE OR REDEEM SHARES OF THE PORTFOLIO DIRECTLY.
SHARES MAY BE PURCHASED OR REDEEMED ONLY THROUGH VARIABLE INSURANCE CONTRACTS
OFFERED BY THE SEPARATE ACCOUNTS OF PARTICIPATING INSURANCE COMPANIES OR THROUGH
QUALIFIED RETIREMENT PLANS. REFER TO THE PROSPECTUS FOR THE PARTICIPATING
INSURANCE COMPANY'S SEPARATE ACCOUNT OR YOUR PLAN DOCUMENTS FOR INSTRUCTIONS ON
PURCHASING OR SELLING OF VARIABLE INSURANCE CONTRACTS AND ON HOW TO SELECT THE
PORTFOLIO AS AN INVESTMENT OPTION FOR A CONTRACT OR A QUALIFIED PLAN.
PRICING OF PORTFOLIO SHARES
Investments will be processed at the NAV next calculated after an order is
received and accepted by the Portfolio or its agent. In order to receive a day's
price, your order must be received by the close of the regular trading session
of the New York Stock Exchange. Securities of the Portfolio are valued at market
value or, if a market quotation is not readily available, at their fair value
determined in good faith under procedures established by and under the
supervision of the Trustees. Short-term instruments maturing within 60 days are
valued at amortized cost, which approximates market value.
Because foreign securities markets may operate on days that are not
business days in the United States, the value of the Portfolio's holdings may
change on days when you will not be able to purchase or redeem the Portfolio's
shares.
PURCHASES
Purchases of shares may be made only by the separate accounts of insurance
companies for the purpose of funding variable insurance contracts or by
qualified plans. Refer to the prospectus of the appropriate insurance company
separate account or your plan documents for information on how to invest in the
shares of the Portfolio. Participating insurance companies and certain other
designated organizations are authorized to receive purchase orders on the
Portfolio's behalf.
The Portfolio is not intended for excessive trading or market timing.
Excessive purchases of Portfolio shares disrupt portfolio management and drive
Portfolio expenses higher. The Portfolio reserves the right to reject any
specific purchase order, including exchange purchases, for any reason. For
example, purchase orders may be refused if the Portfolio would be unable to
invest the money effectively in accordance with its investment policies or would
otherwise be adversely affected due to the size of the transaction, frequency of
trading or other factors. The Portfolio may also suspend or terminate your
exchange privilege if you engage in an excessive pattern of exchanges. For more
information about the Portfolio's policy on market timing, see "Excessive
Trading," below.
Although there is no present intention to do so, the Portfolio may
discontinue sales of its shares if management and the Trustees believe that
continued sales may adversely affect the Portfolio's ability to achieve its
investment objective. If sales of the Portfolio's shares are discontinued, it is
expected that existing policy owners and plan participants invested in the
Portfolio would be permitted to continue to authorize investment in the
Portfolio and to reinvest any dividends or capital gains distributions, absent
highly unusual circumstances.
The Portfolio may discontinue sales to a qualified plan and require plan
participants with existing investments in the shares to redeem those investments
if the plan loses (or in the opinion of Janus Capital, is at risk of losing) its
qualified plan status.
REDEMPTIONS
Redemptions, like purchases, may be effected only through the separate
accounts of participating insurance companies or through qualified plans. Please
refer to the appropriate separate account prospectus or plan documents for
details.
B-7
Shares of the Portfolio may be redeemed on any business day. Redemptions
are processed at the NAV next calculated after receipt and acceptance of the
redemption order by the Portfolio or its agent. Redemption proceeds will
normally be wired the business day following receipt of the redemption order,
but in no event later than seven days after receipt of such order.
EXCESSIVE TRADING
Frequent trading into and out of the Portfolio can disrupt portfolio
investment strategies and increase portfolio expenses for all shareholders,
including long-term shareholders who do not generate these costs. The Portfolio
is not intended for market timing or excessive trading. The Portfolio and its
agents reserve the right to reject any purchase request (including exchange
purchases if permitted by your insurance company or plan sponsor) by any
investor or group of investors indefinitely if they believe that any combination
of trading activity in the account(s) is attributable to market timing or is
otherwise excessive or potentially disruptive to the Portfolio. The Portfolio
may refuse purchase orders (including exchange purchases) for any reason without
prior notice, particularly orders that the Portfolio believes are made on behalf
of market timers.
The trading history of accounts under common ownership or control may be
considered in enforcing these policies. Transactions placed through the same
insurance company or plan sponsor on an omnibus basis may be deemed part of a
group for the purpose of this policy and may be rejected in whole or in part by
the Portfolio. Transactions accepted by your insurance company or plan sponsor
in violation of our excessive trading policy are not deemed accepted by the
Portfolio and may be cancelled or revoked by the Portfolio on the next business
day following receipt by your intermediary.
SHAREHOLDER COMMUNICATIONS
Shareholders will receive annual and semiannual reports including the
financial statements of the shares of the Portfolio that they have authorized
for investment. Each report will show the investments owned by the Portfolio and
the market values thereof, as well as other information about the Portfolio and
its operations. The Portfolio's fiscal year ends December 31.
FINANCIAL HIGHLIGHTS
No financial highlights are presented for the Portfolio because it did not
commence operations until December 31, 2002.
GLOSSARY OF INVESTMENT TERMS
This glossary provides a more detailed description of some of the types of
securities, investment strategies and other instruments in which the Portfolio
may invest. The Portfolio may invest in these instruments to the extent
permitted by its investment objective and policies. The Portfolio is not limited
by this discussion and may invest in any other types of instruments not
precluded by the policies discussed elsewhere in this Appendix.
I. EQUITY AND DEBT SECURITIES
Bonds are debt securities issued by a company, municipality, government or
government agency. The issuer of a bond is required to pay the holder the amount
of the loan (or par value of the bond) at a specified maturity and to make
scheduled interest payments.
Commercial paper is a short-term debt obligation with a maturity ranging
from 1 to 270 days issued by banks, corporations and other borrowers to
investors seeking to invest idle cash. The Portfolio may purchase commercial
paper issued in private placements under Section 4(2) of the Securities Act of
1933.
Common stocks are equity securities representing shares of ownership in a
company and usually carry voting rights and earn dividends. Unlike preferred
stock, dividends on common stock are not fixed but are declared at the
discretion of the issuer's board of directors.
B-8
Convertible securities are preferred stocks or bonds that pay a fixed
dividend or interest payment and are convertible into common stock at a
specified price or conversion ratio.
Debt securities are securities representing money borrowed that must be
repaid at a later date. Such securities have specific maturities and usually a
specific rate of interest or an original purchase discount.
Depositary receipts are receipts for shares of a foreign-based corporation
that entitle the holder to dividends and capital gains on the underlying
security. Receipts include those issued by domestic banks (American Depositary
Receipts), foreign banks (Global or European Depositary Receipts) and broker-
dealers (depositary shares).
Equity securities generally include domestic and foreign common stocks;
preferred stocks; securities convertible into common stocks or preferred stocks;
warrants to purchase common or preferred stocks; and other securities with
equity characteristics.
Exchange traded funds are index-based investment companies which hold
substantially all of their assets in securities representing their specific
index.
Fixed-income securities are securities that pay a specified rate of return.
The term generally includes short and long-term government, corporate and
municipal obligations that pay a specified rate of interest, dividends or
coupons for a specified period of time. Coupon and dividend rates may be fixed
for the life of the issue or, in the case of adjustable and floating rate
securities, for a shorter period.
High-yield/High-risk bonds are bonds that are rated below investment grade
by the primary rating agencies (e.g., BB or lower by Standard & Poor's and Ba or
lower by Moody's). Other terms commonly used to describe such bonds include
"lower rated bonds," "noninvestment grade bonds" and "junk bonds."
Mortgage- and asset-backed securities are shares in a pool of mortgages or
other debt. These securities are generally pass-through securities, which means
that principal and interest payments on the underlying securities (less
servicing fees) are passed through to shareholders on a pro rata basis. These
securities involve prepayment risk, which is the risk that the underlying
mortgages or other debt may be refinanced or paid off prior to their maturities
during periods of declining interest rates. In that case, a portfolio manager
may have to reinvest the proceeds from the securities at a lower rate. Potential
market gains on a security subject to prepayment risk may be more limited than
potential market gains on a comparable security that is not subject to
prepayment risk.
Passive foreign investment companies (PFICs) are any foreign corporations
which generate certain amounts of passive income or hold certain amounts of
assets for the production of passive income. Passive income includes dividends,
interest, royalties, rents and annuities. To avoid taxes and interest that the
Portfolio must pay if these investments are profitable, the Portfolio may make
various elections permitted by the tax laws. These elections could require that
the Portfolio recognize taxable income, which in turn must be distributed,
before the securities are sold and before cash is received to pay the
distributions.
Pay-in-kind bonds are debt securities that 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.
Preferred stocks are equity securities that generally pay dividends at a
specified rate and have preference over common stock in the payment of dividends
and liquidation. Preferred stock generally does not carry voting rights.
Rule 144A securities are securities that are not registered for sale to the
general public under the Securities Act of 1933, but that may be resold to
certain institutional investors.
Standby commitments are obligations purchased by the Portfolio from a
dealer that give the Portfolio the option to sell a security to the dealer at a
specified price.
B-9
Step coupon bonds are debt securities that trade at a discount from their
face value and pay coupon interest. The discount from the face 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.
Strip bonds are debt securities that are stripped of their interest
(usually by a financial intermediary) after the securities are issued. The
market value of these securities generally fluctuates more in response to
changes in interest rates than interest-paying securities of comparable
maturity.
Tender option bonds are generally long-term securities that are coupled
with an 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.
U.S. government securities include direct obligations of the U.S.
government that are supported by its full faith and credit. Treasury bills have
initial maturities of less than one year, Treasury notes have initial maturities
of one to ten years and Treasury bonds may be issued with any maturity but
generally have maturities of at least ten years. U.S. government securities also
include indirect obligations of the U.S. government that are issued by federal
agencies and government sponsored entities. Unlike Treasury securities, agency
securities generally are not backed by the full faith and credit of the U.S.
government. Some agency securities are supported by the right of the issuer to
borrow from the Treasury, others are supported by the discretionary authority of
the U.S. government to purchase the agency's obligations and others are
supported only by the credit of the sponsoring agency.
Variable and floating rate 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").
The floating rate tends to decrease the security's price sensitivity to changes
in interest rates.
Warrants are securities, typically issued with preferred stock or bonds,
that give the holder the right to buy a proportionate amount of common stock at
a specified price. The specified price is usually higher than the market price
at the time of issuance of the warrant. The right may last for a period of years
or indefinitely.
Zero coupon bonds are debt securities that do not pay regular interest at
regular intervals, but are issued at a discount from face value. The discount
approximates the total amount of interest the security will accrue from the date
of issuance to maturity. The market value of these securities generally
fluctuates more in response to changes in interest rates than interest-paying
securities.
II. FUTURES, OPTIONS AND OTHER DERIVATIVES
Forward contracts are contracts to purchase or sell a specified amount of a
financial instrument for an agreed upon price at a specified time. Forward
contracts are not currently exchange traded and are typically negotiated on an
individual basis. The Portfolio may enter into forward currency contracts to
hedge against declines in the value of securities denominated in, or whose value
is tied to, a currency other than the U.S. dollar or to reduce the impact of
currency appreciation on purchases of such securities. It may also enter into
forward contracts to purchase or sell securities or other financial indices.
Futures contracts are contracts that obligate the buyer to receive and the
seller to deliver an instrument or money at a specified price on a specified
date. The Portfolio may buy and sell futures contracts on foreign currencies,
securities and financial indices including indices of U.S. government, foreign
government, equity or fixed-income securities. The Portfolio may also buy
options on futures contracts. An option on a futures contract gives the buyer
the right, but not the obligation, to buy or sell a futures contract at a
specified price on or before a specified date. Futures contracts and options on
futures are standardized and traded on designated exchanges.
Indexed/structured securities are typically short- to intermediate-term
debt securities whose value at maturity or interest rate is linked to
currencies, interest rates, equity securities, indices, commodity prices or
other financial indicators. Such securities may be positively or negatively
indexed (i.e., their value may
B-10
increase or decrease if the reference index or instrument appreciates).
Indexed/structured securities may have return characteristics similar to direct
investments in the underlying instruments and may be more volatile than the
underlying instruments. The Portfolio bears the market risk of an investment in
the underlying instruments, as well as the credit risk of the issuer.
Interest rate swaps involve the exchange by two parties of their respective
commitments to pay or receive interest (e.g., an exchange of floating rate
payments for fixed rate payments).
Inverse floaters are debt instruments whose interest rate bears an inverse
relationship to the interest rate on another instrument or index. For example,
upon reset the interest rate payable on a security may go down when the
underlying index has risen. 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.
Options are the right, but not the obligation, to buy or sell a specified
amount of securities or other assets on or before a fixed date at a
predetermined price. The Portfolio may purchase and write put and call options
on securities, securities indices and foreign currencies. The Portfolio may
purchase or write such options individually or in combination.
III. OTHER INVESTMENTS, STRATEGIES AND/OR TECHNIQUES
Repurchase agreements involve the purchase of a security by the Portfolio
and a simultaneous agreement by the seller (generally a bank or dealer) to
repurchase the security from the Portfolio at a specified date or upon demand.
This technique offers a method of earning income on idle cash. These securities
involve the risk that the seller will fail to repurchase the security, as
agreed. In that case, the Portfolio will bear the risk of market value
fluctuations until the security can be sold and may encounter delays and incur
costs in liquidating the security.
Reverse repurchase agreements involve the sale of a security by the
Portfolio to another party (generally a bank or dealer) in return for cash and
an agreement by the Portfolio to buy the security back at a specified price and
time. This technique will be used primarily to provide cash to satisfy unusually
high redemption requests, or for other temporary or emergency purposes.
Short sales in which the Portfolio may engage may be of two types, short
sales "against the box" or "naked" short sales. Short sales against the box
involve selling either a security that the Portfolio owns, or a security
equivalent in kind or amount to the security sold short that the Portfolio has
the right to obtain, for delivery at a specified date in the future. Naked short
sales involve selling a security that the Portfolio borrows and does not own.
The Portfolio may enter into a short sale to hedge against anticipated declines
in the market price of a security or to reduce portfolio volatility. If the
value of a security sold short increases prior to the scheduled delivery date,
the Portfolio loses the opportunity to participate in the gain. For "naked"
short sales, the Portfolio will incur a loss if the value of a security
increases during this period because it will be paying more for the security
than it has received from the purchaser in the short sale and if the price
declines during this period, the Portfolio will realize a short-term capital
gain. Although the Portfolio's potential for gain as a result of a short sale is
limited to the price at which it sold the security short less the cost of
borrowing the security, its potential for loss is theoretically unlimited
because there is no limit to the cost of replacing the borrowed security.
When-issued, delayed delivery and forward commitment transactions generally
involve the purchase of a security with payment and delivery at some time in the
future -- i.e., beyond normal settlement. The Portfolio does not earn interest
on such securities until settlement and bears the risk of market value
fluctuations in between the purchase and settlement dates. New issues of stocks
and bonds, private placements and U.S. government securities may be sold in this
manner.
B-11
JANUS ASPEN SERIES
100 FILLMORE STREET
DENVER, COLORADO 80206-4928
STATEMENT OF ADDITIONAL INFORMATION
MARCH 17, 2003
This Statement of Additional Information ("SAI") expands upon and
supplements the information contained in the combined prospectus and proxy
statement (the "Proxy Statement") dated March 17, 2003, describing the Agreement
and Plan of Reorganization under which shareholders of the Strategic Value
Portfolio will receive shares of the Mid Cap Value Portfolio (the
"Reorganization").
This SAI is not a prospectus and should be read in conjunction with the
Proxy Statement. A copy of the Proxy Statement may be obtained without charge by
contacting Janus Capital Management LLC ("Janus Capital"), at 100 Fillmore
Street, Denver, Colorado 80206-4928 or by telephoning Janus Capital toll-free at
1-800-525-3713. Attached to this SAI are the following documents, portions of
which are incorporated herein by reference (which means that those portions are
legally part of this SAI):
1. The Statement of Additional Information of Janus Aspen Series,
dated December 31, 2002; and
2. The Annual Report of Janus Aspen Series for the year ended
December 31, 2001.
3. The Semi-Annual Report of Janus Aspen Series for the period
ended June 30, 2002.
TABLE OF CONTENTS
Additional Information about the Mid Cap Value Portfolio .................. B-2
Financial Statements ...................................................... B-2
Pro Forma Financial Statements ............................................ B-2
B-1
ADDITIONAL INFORMATION ABOUT
THE MID CAP VALUE PORTFOLIO
Additional information regarding the Mid Cap Value Portfolio is
included in the Statement of Additional Information, dated December 31, 2002, of
Janus Aspen Series. That document accompanies this SAI, and the information in
that document relating to the Mid Cap Value Portfolio is incorporated by
reference herein.
FINANCIAL STATEMENTS
Historical financial information regarding the Strategic Value
Portfolio is included in the Annual Report of Janus Aspen Series, dated December
31, 2001 and the Semi-Annual Report of Janus Aspen Series dated June 30, 2002.
Those documents accompany this SAI, and the portions of those documents relating
to the Strategic Value Portfolio are incorporated by reference herein. The Mid
Cap Value Portfolio commenced operations on December 31, 2002, and therefore no
historical financial information is provided.
PRO FORMA FINANCIAL STATEMENTS
The unaudited pro forma combined financial statements included in this
SAI are presented for the information of the reader and may not necessarily be
representative of what the actual combined financial statements would have been
had the Reorganization occurred on January 31, 2003. The unaudited schedule of
investments, and the statement of assets and liabilities, reflect the combined
financial position of the Strategic Value Portfolio and the Mid Cap Value
Portfolio at January 31, 2003. The unaudited statement of operations reflects
the combined results of operations of the Strategic Value Portfolio and the Mid
Cap Value Portfolio for period ended January 31, 2003. The statements have been
derived from the books and records of the Portfolios utilized in calculating
daily net asset value at the date indicated above for both Portfolios under
accounting principles generally accepted in the United States of America and the
investment company industry. The historical cost of investment securities will
be carried forward to the surviving entity and the results of operations of the
Strategic Value Portfolio for pre-combination periods will not be restated.
B-2
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
<Table>
<Caption>
Janus Aspen Janus Aspen
Strategic Value Mid Cap Value
As of January 31, 2003 Portfolio Portfolio Adjustment Proforma
- ---------------------- --------------- -------------- -------------- --------------
Assets:
Investments at cost $ 15,182,649 $ 493,905 $ 15,676,554
Investments at value $ 13,766,484 $ 475,620 $ 14,242,104
Cash 109,246 16,389 125,636
Receivables:
Investments sold 44,291 -- 44,291
Portfolio shares sold -- -- --
Dividends 4,238 153 4,391
Interest 937 -- 937
Due from Advisor -- 7,192 7,192
Other assets 126 -- 126
Variation Margin -- 1,570 1,570
Total Assets 13,925,323 500,924 14,426,248
Liablilities:
Payables:
Investments purchased 4,857 17,233 22,091
Portfolio shares repurchased -- --
Advisory fees 4,690 281 4,971
Accrued expenses 30,387 6,676 37,063
Forward currency contracts 10,724 -- 10,724
Total Liablilities 50,659 24,190 74,849
Net Assets $ 13,874,664 $ 476,734 $ 14,351,398
Net Assets - Institutional Shares $ 3,198,071 N/A $ 3,198,071
Shares Outstanding, $0.001 Par Value
(unlimited shares authorized) 463,354 N/A 463,354
Net Asset Value Per Share $ 6.90 N/A $ 6.90
Net Assets - Service Shares $ 10,676,593 $ 476,734 $ 11,153,327
Shares Outstanding, $0.001 Par Value
(unlimited shares authorized) 1,542,161 50,000 (421,847)(A) 1,170,314
Net Asset Value Per Share $ 6.92 $ 9.53 $ 9.53
</Table>
(A) Reflects new shares issued. (Calculation: Net Assets / NAV per share)
STATEMENT OF OPERATIONS (UNAUDITED)
<Table>
<Caption>
Janus Aspen Janus Aspen
Strategic Value Mid Cap Value
For the 12 months ended January 31, 2003 Portfolio Portfolio* Adjustment Proforma
- ---------------------------------------- --------------- ------------- ------------ ------------
Investment Income:
Interest $ 47,924 $ 151 $ 48,075
Dividends 174,696 261 174,958
Foreign tax withheld (1,417) -- (1,417)
Total Investment Income 221,203 412 221,616
Expenses:
Advisory fees 146,154 281 -- 146,435
Transfer agent expenses 2,281 263 -- 2,544
Registration fees 70,394 1,315 (500)(A) 71,209
System fees 17,247 1,052 (1,052)(A) 17,247
Custodian fees 22,442 2,630 (1,000)(A) 24,072
Insurance expense 75 -- -- 75
Audit fees 11,473 1,052 (1,052)(A) 11,473
Distribution fees - Service Shares 45,064 108 -- 45,172
Service fees N/A 43 17,968(B) 18,011
Other expenses 27,967 1,096 (500)(A) 28,563
Total Expenses 343,097 7,841 13,864 364,802
Expense and Fee Offsets (666) -- -- (666)
Net Expenses 342,431 7,841 13,864 364,136
Excess Expense Reimbursement (12,065) (7,192) -- (19,257)
Net Expenses After Reimbursement 330,366 649 13,864 344,879
Net investment Income/(Loss) (109,163) (236) (123,263)
Net Realized and Unrealized Gain/(Loss) on Investments:
Net realized gain/(loss) from securities transactions (4,338,710) 280 (4,338,430)
Net realized gain/(loss) from foreign currency transactions (34,467) -- (34,467)
Change in net unrealized appreciation or depreciation of
Investments and foreign currency (1,931,162) (23,310) (1,954,473)
Net Realized and Unrealized Gain/(Loss) on Investments (6,304,339) (23,030) (6,327,369)
Net Increase/Decrease in Net Assets Resulting from Operations $ (6,413,502) $ (23,266) $ (6,450,632)
</Table>
(A) Reflects adjustment in expenses due to elimination of duplicative services.
(B) Reflects adjustment in expenses due to effects of new contractual rates.
*The Mid Cap Value Portfolio commenced operations on December 31, 2002.
SCHEDULE OF INVESTMENTS
For the period ended January 31, 2003
<Table>
<Caption>
Shares
Janus Aspen Janus Aspen
Strategic Mid Cap
Value Portfolio Value Portfolio Combined
Common Stock 95.0%
Aerospace and Defense - Equipment 2.0%
Alliant Techsystems, Inc.* 5,160 -- 5,160
Apparel Manufacturers 1.2%
Liz Claiborne, Inc. 5,685 -- 5,685
Applications Software 0.0%
IONA Technologies (ADR)* -- 420 420
Automotive - Cars and Light Trucks 2.3%
General Motors Corp. (A) 3,750 -- 3,750
Nissan Motor Company, Ltd.** (A) 25,000 -- 25,000
Automotive - Truck Parts and Equipment 5.4%
Autoliv, Inc. -- 240 240
Lear Corp.* 19,010 -- 19,010
Magna International, Inc. - Class A -- 90 90
Business to Business/E - Commerce 0.0%
webMethods, Inc.* -- 305 305
Broadcast Services and Programming 9.9%
Liberty Media Corp. - Class A* (A) 142,479 -- 142,479
Building - Residential and Commercial 0.0%
Standard Pacific Corp. -- 100 100
Building and Construction - Miscellaneous 0.0%
Dycom Industries, Inc.* -- 375 375
Building Products - Cement and Aggregate 2.8%
Cemex S.A. de C.V.(ADR) 21,435 -- 21,435
Casino Hotels 1.3%
Station Casinos, Inc.* 10,450 -- 10,450
Chemicals - Specialty 1.5%
Cytec Industries, Inc.* 7,500 -- 7,500
Commercial Banks 0.2%
Compass Bancshares, Inc. -- 160 160
Greater Bay Bancorp -- 200 200
Mercantile Bankshares Corp. -- 195 195
SouthTrust Corp. -- 330 330
Commercial Services - Finance 1.7%
Moody's Corp. 5,880 -- 5,880
Computer Services 3.9%
Ceridian Corp.* 38,760 -- 38,760
Computers 3.5%
Apple Computer, Inc.* 35,210 -- 35,210
Computers - Memory Devices 0.1%
Advanced Digital Information Corp.* -- 500 500
Silicon Storage Technology, Inc.* -- 1,070 1,070
Computers - Peripheral Equipment 0.0%
InFocus Corp.* -- 400 400
Containers - Paper and Plastic 2.8%
Packaging Corporation of America* 23,950 -- 23,950
Diagnostic Equipment 0.0%
Cytyc Corp.* -- 245 245
Distribution/Wholesale 0.1%
Genuine Parts Co. -- 245 245
<Caption>
Market Value
Janus Aspen Janus Aspen
Strategic Mid Cap
Value Portfolio Value Portfolio Combined
Common Stock
Aerospace and Defense - Equipment
Alliant Techsystems, Inc.* 280,498 -- 280,498
Apparel Manufacturers
Liz Claiborne, Inc. 163,273 -- 163,273
Applications Software
IONA Technologies (ADR)* -- 1,176 1,176
Automotive - Cars and Light Trucks
General Motors Corp. (A) 136,238 -- 136,238
Nissan Motor Company, Ltd.** (A) 190,303 -- 190,303
326,541
Automotive - Truck Parts and Equipment
Autoliv, Inc. -- 5,222 5,222
Lear Corp.* 766,103 -- 766,103
Magna International, Inc. - Class A -- 5,130 5,130
776,455
Business to Business/E - Commerce
webMethods, Inc.* -- 3,398 3,398
Broadcast Services and Programming
Liberty Media Corp. - Class A* (A) 1,420,516 -- 1,420,516
Building - Residential and Commercial
Standard Pacific Corp. -- 2,525 2,525
Building and Construction - Miscellaneous
Dycom Industries, Inc.* -- 4,819 4,819
Building Products - Cement and Aggregate
Cemex S.A. de C.V.(ADR) 402,978 -- 402,978
Casino Hotels
Station Casinos, Inc.* 190,086 -- 190,086
Chemicals - Specialty
Cytec Industries, Inc.* 218,775 -- 218,775
Commercial Banks
Compass Bancshares, Inc. -- 5,109 5,109
Greater Bay Bancorp -- 3,418 3,418
Mercantile Bankshares Corp. -- 7,342 7,342
SouthTrust Corp. -- 8,600 8,600
24,469
Commercial Services - Finance
Moody's Corp. 246,254 -- 246,254
Computer Services
Ceridian Corp.* 555,818 -- 555,818
Computers
Apple Computer, Inc.* 505,616 -- 505,616
Computers - Memory Devices
Advanced Digital Information Corp.* -- 3,425 3,425
Silicon Storage Technology, Inc.* -- 3,028 3,028
6,453
Computers - Peripheral Equipment
InFocus Corp.* -- 2,428 2,428
Containers - Paper and Plastic
Packaging Corporation of America* 401,642 -- 401,642
Diagnostic Equipment
Cytyc Corp.* -- 2,842 2,842
Distribution/Wholesale
Genuine Parts Co. -- 7,228 7,228
</Table>
<Table>
<Caption>
Shares
Janus Aspen Janus Aspen
Strategic Mid Cap
Value Portfolio Value Portfolio Combined
Diversified Financial Services 0.6%
Citigroup, Inc. (A) 2,416 -- 2,416
Diversified Operations 4.3%
Cendant Corp.* -- 575 575
Federal Signal Corp. -- 255 255
Harsco Corp. -- 155 155
SPX Corp.* 6,355 -- 6,355
Tyco International, Ltd. (A) 22,375 -- 22,375
Electronic Components - Miscellaneous 0.1%
Fairchild Semiconductor International, Inc. - Class A* -- 300 300
Vishay Intertechnology, Inc.* -- 225 225
Electronic Components - Semiconductors 0.0%
Adaptec, Inc.* -- 800 800
Electronic Design Automation 2.7%
Cadence Design Systems, Inc.* 38,170 -- 38,170
Engineering - Research and Development 0.1%
Fluor Corp. -- 180 180
Enterprise Software/Services 3.1%
Computer Associates International, Inc. 33,210 -- 33,210
Informatica Corp.* -- 435 435
Finance - Commercial 0.0%
CIT Group, Inc. -- 150 150
Finance - Consumer Loans 2.8%
SLM Corp. (A) 3,745 -- 3,745
Finance - Credit Cards 0.7%
American Express Co. (A) 2,695 -- 2,695
Finance - Investment Bankers/Brokers 0.1%
Edwards (A.G.), Inc. -- 125 125
Franklin Resources, Inc. -- 145 145
Legg Mason, Inc. -- 105 105
Finance - Mortgage Loan Banker 5.1%
Countrywide Financial Corp. -- 95 95
Fannie Mae (A) 5,185 -- 5,185
Freddie Mac (A) 7,075 -- 7,075
Food - Dairy Products 1.5%
Dean Foods Co.* 5,455 -- 5,455
Food - Wholesale/Distribution 0.1%
Supervalu, Inc. -- 400 400
Footwear and Related Apparel 0.0%
Wolverine World Wide, Inc. -- 330 330
Health Care Cost Containment 0.1%
McKesson Corp. -- 185 185
Home Furnishings 0.1%
Furniture Brands International, Inc.* -- 400 400
La-Z-Boy, Inc. -- 225 225
Hotels and Motels 0.0%
Fairmont Hotels & Resorts, Inc. (New York Shares) -- 210 210
Instruments - Controls 0.0%
Mettler-Toledo International, Inc.* -- 155 155
Internet Telephony 0.0%
Openwave Systems, Inc.* -- 1,250 1,250
Investment Management and Advisory Services 0.0%
Waddell & Reed Financial, Inc. - Class A -- 255 255
<Caption>
Market Value
Janus Aspen Janus Aspen
Strategic Mid Cap
Value Portfolio Value Portfolio Combined
Diversified Financial Services
Citigroup, Inc. (A) 83,062 -- 83,062
Diversified Operations
Cendant Corp.* -- 6,371 6,371
Federal Signal Corp. -- 4,139 4,139
Harsco Corp. -- 4,445 4,445
SPX Corp.* 235,771 -- 235,771
Tyco International, Ltd. (A) 358,224 -- 358,224
608,950
Electronic Components - Miscellaneous
Fairchild Semiconductor International, Inc. - Class A* -- 3,282 3,282
Vishay Intertechnology, Inc.* -- 2,324 2,324
5,606
Electronic Components - Semiconductors
Adaptec, Inc.* -- 4,736 4,736
Electronic Design Automation
Cadence Design Systems, Inc.* 378,646 -- 378,646
Engineering - Research and Development
Fluor Corp. -- 5,353 5,353
Enterprise Software/Services
Computer Associates International, Inc. 444,018 -- 444,018
Informatica Corp.* -- 3,036 3,036
447,054
Finance - Commercial
CIT Group, Inc. -- 2,985 2,985
Finance - Consumer Loans
SLM Corp. (A) 397,831 -- 397,831
Finance - Credit Cards
American Express Co. (A) 95,753 -- 95,753
Finance - Investment Bankers/Brokers
Edwards (A.G.), Inc. -- 3,571 3,571
Franklin Resources, Inc. -- 4,834 4,834
Legg Mason, Inc. -- 5,254 5,254
13,659
Finance - Mortgage Loan Banker
Countrywide Financial Corp. -- 5,240 5,240
Fannie Mae (A) 335,470 -- 335,470
Freddie Mac (A) 396,059 -- 396,059
736,769
Food - Dairy Products
Dean Foods Co.* 211,763 -- 211,763
Food - Wholesale/Distribution
Supervalu, Inc. -- 5,952 5,952
Footwear and Related Apparel
Wolverine World Wide, Inc. -- 4,934 4,934
Health Care Cost Containment
McKesson Corp. -- 5,260 5,260
Home Furnishings
Furniture Brands International, Inc.* -- 8,572 8,572
La-Z-Boy, Inc. -- 4,563 4,563
13,135
Hotels and Motels
Fairmont Hotels & Resorts, Inc. (New York Shares) -- 4,635 4,635
Instruments - Controls
Mettler-Toledo International, Inc.* -- 4,724 4,724
Internet Telephony
Openwave Systems, Inc.* -- 1,538 1,538
Investment Management and Advisory Services
Waddell & Reed Financial, Inc. - Class A -- 4,664 4,664
</Table>
<Table>
<Caption>
Shares
Janus Aspen Janus Aspen
Strategic Mid Cap
Value Portfolio Value Portfolio Combined
Life and Health Insurance 0.1%
Lincoln National Corp. -- 160 160
Machinery - Construction and Mining 0.0%
Joy Global, Inc.* -- 445 445
Machinery - General Industrial 0.0%
Manitowoc Company, Inc. -- 100 100
Machinery - Pumps 0.0%
Tecumseh Products Co. - Class A -- 55 55
Medical - Hospitals 0.0%
Province Healthcare Co.* -- 600 600
Tenet Healthcare Corp.* -- 150 150
Medical - Nursing Home 0.1%
Manor Care, Inc.* -- 320 320
Medical Instruments 0.0%
Beckman Coulter, Inc. -- 75 75
Medical Labs and Testing Services 0.0%
Laboratory Corporation of America Holdings* -- 110 110
Multi-Line Insurance 0.0%
Old Republic International Corp. -- 180 180
Multimedia 2.2%
McGraw-Hill Companies, Inc. 2,905 -- 2,905
Viacom, Inc. - Class B* (A) 3,590 -- 3,590
Networking Products 0.0%
Polycom, Inc.* -- 365 365
Non-Hazardous Waste Disposal 2.2%
Allied Waste Industries, Inc.* 30,605 -- 30,605
Republic Services, Inc.* -- 350 350
Oil - Field Services 0.1%
Key Energy Services, Inc.* -- 555 555
Tidewater Inc. -- 200 200
Oil and Gas Drilling 0.0%
Precision Drilling Corp.* -- 75 75
Oil Companies - Exploration and Production 5.2%
Apache Corp. 7,745 -- 7,745
Cimarex Energy Co.* -- 280 280
Devon Energy Corp. -- 110 110
Kerr-McGee Corp. -- 115 115
Murphy Oil Corp.* -- 60 60
Newfield Exploration Co.* -- 50 50
Noble Energy, Inc. -- 65 65
Ocean Energy, Inc. 12,100 350 12,450
Stone Energy Corp.* -- 200 200
Tom Brown, Inc.* -- 200 200
Oil Companies - Integrated 0.0%
Marathon Oil Corp. -- 300 300
Oil Refining and Marketing 2.0%
SK Corp.** 26,300 -- 26,300
Paper and Related Products 0.9%
Rayonier, Inc. 2,885 110 2,995
Temple-Inland, Inc. -- 110 110
Petrochemicals 0.3%
Reliance Industries, Ltd. 6,693 -- 6,693
<Caption>
Market Value
Janus Aspen Janus Aspen
Strategic Mid Cap
Value Portfolio Value Portfolio Combined
Life and Health Insurance
Lincoln National Corp. -- 5,160 5,160
Machinery - Construction and Mining
Joy Global, Inc.* -- 4,935 4,935
Machinery - General Industrial
Manitowoc Company, Inc. -- 2,292 2,292
Machinery - Pumps
Tecumseh Products Co. - Class A -- 2,343 2,343
Medical - Hospitals
Province Healthcare Co.* -- 3,960 3,960
Tenet Healthcare Corp.* -- 2,699 2,699
6,659
Medical - Nursing Home
Manor Care, Inc.* -- 6,150 6,150
Medical Instruments
Beckman Coulter, Inc. -- 2,416 2,416
Medical Labs and Testing Services
Laboratory Corporation of America Holdings* -- 2,943 2,943
Multi-Line Insurance
Old Republic International Corp. -- 4,885 4,885
Multimedia
McGraw-Hill Companies, Inc. 172,034 -- 172,034
Viacom, Inc. - Class B* (A) 138,395 -- 138,395
310,429
Networking Products
Polycom, Inc.* -- 4,117 4,117
Non-Hazardous Waste Disposal
Allied Waste Industries, Inc.* 299,317 -- 299,317
Republic Services, Inc.* -- 7,168 7,168
306,485
Oil - Field Services
Key Energy Services, Inc.* -- 5,139 5,139
Tidewater Inc. -- 5,820 5,820
10,959
Oil and Gas Drilling
Precision Drilling Corp.* -- 2,556 2,556
Oil Companies - Exploration and Production
Apache Corp. 483,365 -- 483,365
Cimarex Energy Co.* -- 5,230 5,230
Devon Energy Corp. -- 4,983 4,983
Kerr-McGee Corp. -- 4,804 4,804
Murphy Oil Corp.* -- 2,532 2,532
Newfield Exploration Co.* -- 1,654 1,654
Noble Energy, Inc. -- 2,321 2,321
Ocean Energy, Inc. 226,633 6,556 233,189
Stone Energy Corp.* -- 6,802 6,802
Tom Brown, Inc.* -- 4,996 4,996
749,876
Oil Companies - Integrated
Marathon Oil Corp. -- 6,270 6,270
Oil Refining and Marketing
SK Corp.** 290,339 -- 290,339
Paper and Related Products
Rayonier, Inc. 122,266 4,662 126,928
Temple-Inland, Inc. -- 4,754 4,754
131,682
Petrochemicals
Reliance Industries, Ltd. 38,545 -- 38,545
</Table>
<Table>
<Caption>
Shares
Janus Aspen Janus Aspen
Strategic Mid Cap
Value Portfolio Value Portfolio Combined
Pharmacy Services 0.1%
Omnicare, Inc. -- 315 315
Pipelines 5.3%
Kinder Morgan Management LLC* 23,942 -- 23,942
Printing - Commercial 1.7%
Valassis Communications, Inc.* 10,690 -- 10,690
Publishing - Periodicals 0.0%
Reader's Digest Association, Inc. -- 350 350
Recreational Centers 0.2%
Bally Total Fitness Holding Corp.* 3,510 -- 3,510
Reinsurance 5.4%
Berkshire Hathaway, Inc. - Class B* (A) 345 -- 345
Everest Re Group, Ltd. -- 90 90
IPC Holdings, Ltd. -- 160 160
Real Estate Investment Trusts - Apartments 0.0%
Home Properties of New York, Inc. -- 145 145
Retail - Apparel and Shoe 0.1%
Ann Taylor Stores Corp.* -- 170 170
Foot Locker, Inc. -- 475 475
Talbots, Inc. -- 180 180
Retail - Drug Store 0.0%
CVS Corp. -- 125 125
Retail - Regional Department Stores 0.0%
Federated Department Stores, Inc.* -- 175 175
Retail - Restaurants 0.0%
Wendy's International, Inc. -- 185 185
Retail - Toy Store 1.4%
Toys "R" Us, Inc.* 21,400 500 21,900
Retail - Video Rental 1.1%
Blockbuster, Inc. - Class A 11,765 -- 11,765
Satellite Telecommunications 2.5%
EchoStar Communications Corp.* 13,840 -- 13,840
Savings/Loan/ Thrifts 0.0%
Astoria Financial Corp. -- 185 185
Semiconductor Equipment 0.0%
Asyst Technologies, Inc.* -- 300 300
Steel - Producers 0.0%
Nucor Corp. -- 120 120
Super-Regional Banks 0.0%
PNC Bank Corp. -- 120 120
Telephone - Integrated 0.0%
Telephone and Data Systems, Inc. -- 55 55
Television 0.1%
SBS Broadcasting S.A.* 950 -- 950
Tobacco 0.6%
Vector Group, Ltd. 7,149 -- 7,149
Toys 0.9%
Mattel, Inc. 6,390 -- 6,390
Transportation - Air Freight 0.1%
Airborne, Inc. -- 250 250
CNF, Inc. -- 150 150
Transportation - Marine 2.3%
Grupo TMM S.A.(ADR) - Class A* 76,625 -- 76,625
Teekay Shipping Corp. - New York Shares -- 125
Wireless Equipment 0.0%
Stratex Networks, Inc.* -- 1,000 1,000
<Caption>
Market Value
Janus Aspen Janus Aspen
Strategic Mid Cap
Value Portfolio Value Portfolio Combined
Pharmacy Services
Omnicare, Inc. -- 8,136 8,136
Pipelines
Kinder Morgan Management LLC* 764,947 -- 764,947
Printing - Commercial
Valassis Communications, Inc.* 248,649 -- 248,649
Publishing - Periodicals
Reader's Digest Association, Inc. -- 4,508 4,508
Recreational Centers
Bally Total Fitness Holding Corp.* 29,273 -- 29,273
Reinsurance
Berkshire Hathaway, Inc. - Class B* (A) 767,280 -- 767,280
Everest Re Group, Ltd. -- 4,542 4,542
IPC Holdings, Ltd. -- 4,638 4,638
776,460
Real Estate Investment Trusts - Apartments
Home Properties of New York, Inc. -- 4,740 4,740
Retail - Apparel and Shoe
Ann Taylor Stores Corp.* -- 3,164 3,164
Foot Locker, Inc. -- 4,798 4,798
Talbots, Inc. -- 4,678 4,678
12,640
Retail - Drug Store
CVS Corp. -- 2,828 2,828
Retail - Regional Department Stores
Federated Department Stores, Inc.* -- 4,554 4,554
Retail - Restaurants
Wendy's International, Inc. -- 5,023 5,023
Retail - Toy Store
Toys "R" Us, Inc.* 193,456 4,520 197,976
Retail - Video Rental
Blockbuster, Inc. - Class A 153,416 -- 153,416
Satellite Telecommunications
EchoStar Communications Corp.* 359,148 -- 359,148
Savings/Loan/ Thrifts
Astoria Financial Corp. -- 4,801 4,801
Semiconductor Equipment
Asyst Technologies, Inc.* -- 2,070 2,070
Steel - Producers
Nucor Corp. -- 4,789 4,789
Super-Regional Banks
PNC Bank Corp. -- 5,285 5,285
Telephone - Integrated
Telephone and Data Systems, Inc. -- 2,360 2,360
Television
SBS Broadcasting S.A.* 13,994 -- 13,994
Tobacco
Vector Group, Ltd. 92,294 -- 92,294
Toys
Mattel, Inc. 127,800 -- 127,800
Transportation - Air Freight
Airborne, Inc. -- 3,848 3,848
CNF, Inc. -- 4,518 4,518
8,366
Transportation - Marine
Grupo TMM S.A.(ADR) - Class A* 321,825 -- 321,825
Teekay Shipping Corp. - New York Shares -- 4,876 4,876
326,701
Wireless Equipment
Stratex Networks, Inc.* -- 2,699 2,699
</Table>
<Table>
<Caption>
Shares
Janus Aspen Janus Aspen
Strategic Mid Cap
Value Portfolio Value Portfolio Combined
Total Common Stocks (cost $ 14,519,187 $ 394,113 $ 14,913,300
Corporate Bonds 1.4%
Tobacco 1.4%
Vector Group, Ltd., 6.25% 300,000 -- 300,000
convertible subordinated notes, due 7/15/08*** (A)
Total Corporate Bonds (cost $ 300,000 $ -- $ 300,000
Preferred Stock 2.1%
Automotive - Cars and Light Trucks 2.1%
General Motors Corp. - Series B, convertible, 5.25% (A) 13,100 -- 13,100
Total Preferred Stock (cost $ 356,464 $ -- $ 356,464
Short-Term U.S. Government Agencies 0.7%
Freddie Mac, 1.18%, 1/3/03 0.7% -- 100,000 100,000
Total Short - Term U.S. Government Agencies (cost $ -- $ 100,000 $ 100,000
Total Investments (total cost $ 15,175,651 $ 494,113 $ 15,669,764
Cash, Receivables and Other Assets, net of Liabilities
Net Assets
<Caption>
Market Value
Janus Aspen Janus Aspen
Strategic Mid Cap
Value Portfolio Value Portfolio Combined
) $ 13,257,673 $ 375,624 $ 13,633,297
Corporate Bonds
Tobacco
Vector Group, Ltd., 6.25% 205,875 -- 205,875
convertible subordinated notes, due 7/15/08*** (A)
) $ 205,875 $ -- $ 205,875
Preferred Stock
Automotive - Cars and Light Trucks
General Motors Corp. - Series B, convertible, 5.25% (A) 302,938 -- 302,938
) $ 302,938 $ -- $ 302,938
Short-Term U.S. Government Agencies
Freddie Mac, 1.18%, 1/3/03 -- 100,000 100,000
) $ -- $ 100,000 $ 100,000
99.2% $ 13,766,486 $ 475,624 $ 14,242,110
0.8% $ 108,179 $ 1,110 $ 109,289
100% $ 13,874,664 $ 476,734 $ 14,351,398
</Table>
Notes to Pro Forma Schedule of Investments
ADR American Depository Receipt
* Non-income producing security.
** A portion of this security has been segregated by the custodian to cover
margin or segregation requirements on open futures contracts and forward
currency contracts.
***Securities are exempt from the registration requirements of the Securities
Act of 1933 or other provisions and may be deemed to be restricted for resale.
(A) Securities that do not meet the definition of mid-cap equity securities
(equity securities of mid-sized companies whose market capitalization falls, at
the time of initial purchase, within the 12-month average of the capitalization
range of the Russell Midcap Index). These 13 securities had a market value of
$4,827,944 as of January 31, 2002, which constitutes 34% of the net assets of
the pro forma combined Portfolio shown in the Schedule of Investments. Because
the Mid Cap Value Portfolio has a policy of investing at least 80% of assets in
mid-cap equity securities, if the reorganization had occurred on January 31,
2003, some of the identified securities would have been sold as part of the
reorganization. When the reorganization actually occurs, securities may have to
be sold to meet the 80% policy, but the Portfolios have not identified which, if
any, securities will be sold. In particular, the Portfolios have not determined
to sell any of the securities identified in Statement of Investments as not
meeting the definition of a mid-cap equity security.
ASPEN STRATEGIC VALUE PORTFOLIO
<Table>
<Caption>
CURRENCY SOLD AND SETTLEMENT DATE UNITS CURRENCY VALUE IN $ U.S. UNREALIZED GAIN/(LOSS)
- --------------------------------- ----- ------------------------ ----------------------
Japanese Yen 2/21/03 21,500,000 $ 179,409 $ (4,849)
South Korean Won 2/25/03 65,000,000 55,769 (3,352)
South Korean Won 5/9/03 255,000,000 217,458 (2,522)
--------- ---------
$ 452,636 $ (10,723)
</Table>
JANUS ASPEN MID CAP VALUE PORTFOLIO
<Table>
Financial Futures - Short
2 Contracts S&P MidCap 400 Index
expires March 2003, principal
amount $88,380, value $83,370
cumulative appreciation............... $5,010
</Table>
Summary of Investments by Country, January 31, 2003
<Table>
<Caption>
% of investment
Market Value Securities
JANUS ASPEN JANUS ASPEN
STRATEGIC MID CAP
COUNTRY VALUE PORTFOLIO VALUE PORTFOLIO COMBINED COMBINED
Bahamas -- 4,876 4,876 0.0%
Bermuda 358,224 9,180 367,404 2.6%
Canada -- 12,321 12,321 0.1%
India 38,545 -- 38,545 0.3%
Ireland -- 1,176 1,176 0.0%
Japan 190,303 -- 190,303 1.4%
Luxembourg 13,994 -- 13,994 0.1%
Mexico 724,803 -- 724,803 5.1%
South Korea 290,339 -- 290,339 2.0%
Sweden -- 5,222 5,222 0.0%
United States 12,150,278 442,849 12,593,127 88.4%*
------------ --------- ------------ ------
$ 13,766,486 $ 475,624 $ 14,242,110 100.0%
</Table>
* Includes Short-Term Securities ( 87.7% excluding Short-Term Securities)
Notes to Pro Forma Financial Statements
NOTE 1 - REORGANIZATION:
The Trustees approved a reorganization transaction on January 31, 2003, in which
the Janus Aspen Series Strategic Value Portfolio will transfer its assets to the
Janus Aspen Series Mid Cap Value Portfolio. After the reorganization, the
surviving Portfolio will carry forward the financial statement history of the
Janus Aspen Series Mid Cap Value Portfolio because the post-reorganization
Portfolio will most closely resemble the Mid Cap Value Portfolio, considering
that the investment advisers, investment objectives, policies and restrictions,
and expense structure, will remain the same as it was before the reorganization.
The transaction is expected to be effective on or about April 30, 2003. The
unaudited pro forma portfolio of investments, and unaudited statement of assets
and liabilities and statement of operations should be read in conjunction with
the historical financial statements of each Portfolio which are incorporated by
reference in the Statements of Additional Information.
NOTE 2 - SECURITY VALUATION:
Securities are valued at the closing price for securities traded on a principal
exchange (U.S. or foreign) and on the NASDAQ National Market. Securities traded
on over-the-counter markets and listed securities for which no sales are
reported are valued at the latest bid price obtained from one or more dealers
making a market for such securities or by a pricing service approved by the
Janus Aspen Series Trustees. Short-term securities maturing within 60 days are
valued at amortized cost, which approximates market value. Foreign securities
are converted to U.S. dollars using exchange rates at the close of the New York
Stock Exchange. When market quotations are not readily available, or events or
circumstances that may affect the value of portfolio securities are identified
between the closing of their principle markets and the time the net asset value
(NAV) is determined, securities are valued at their fair value as determined in
good faith under procedures adopted by and under the supervision of the Janus
Aspen Series Trustees.
NOTE 3 - CAPITAL SHARES:
The unaudited pro forma net asset value per share assumes additional shares of
the Janus Aspen Series Mid Cap Value Portfolio issued in connection with the
proposed acquisition of the Janus Aspen Series Strategic Value Portfolio as of
January 31, 2002. The number of additional shares issued was calculated by
dividing the value of the assets, net of liabilities, of the Janus Aspen Series
Strategic Value Portfolio by the net asset value of the Janus Aspen Series Mid
Cap Value Portfolio share.
NOTE 4 - UNAUDITED PRO FORMA ADJUSTMENTS:
The accompanying unaudited pro forma financial statements reflect changes in
Portfolio shares as if the reorganization had taken place on January 31, 2003.
The fee structures of both Portfolios were materially consistent with one
another, except that the Service Shares of the Mid CapValue Portfolio, but not
the Service Shares of the Strategic Value Portfolio, are subject to a service
fee at an annual rate of 0.10% of average daily net assets to compensate Janus
Services LLC for providing, or arranging for the provision of, recordkeeping,
subaccounting and administrative services to retirement or pension plan
participants, variable contract owners or other underlying investors through
institutional channels.
NOTE 5 - REORGANIZATION COSTS:
Janus Capital Management LLC ("Janus Capital"), the investment adviser to the
Portfolios, will bear all costs in connection with this reorganization.
NOTE 6 - FEDERAL INCOME TAXES:
It is the policy of the Portfolios to comply with the requirements of Subchapter
M of the Internal Revenue Code applicable to regulated investment companies and
to distribute substantially all of their net investment income and any net
realized gains to their shareholders. Therefore, a federal income tax or excise
tax provision is not required. In addition, by distributing during each calendar
year substantially all of its net investment income and net realized capital
gains, each Portfolio intends not to be subject to any federal excise tax.
The surviving Portfolio intends to offset any net capital gains with any
available capital loss carryforward until each carryforward has been fully
utilized or expires. The amount of capital loss carryforward, which may offset
the Janus Aspen Series Strategic Value Portfolio's capital gains in any given
year, may be limited as a result of previous reorganizations. In addition, no
capital gain distribution shall be made until the capital loss carryforward has
been fully utilized or expires.
JANUS ASPEN SERIES
PART C -- OTHER INFORMATION
ITEM 15. INDEMNIFICATION
Article IX of Janus Aspen Series' Trust Instrument provides for indemnification
of certain persons acting on behalf of the Portfolios. 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 office in connection with the Portfolios, 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
the best interests of the Portfolios. 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 Portfolios also may advance money for these expenses,
provided that the Trustee or officer undertakes to repay the Portfolios 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 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.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
ITEM 16. EXHIBITS
Exhibit 1 (a) Trust Instrument dated May 19, 1993, is incorporated herein by
reference to Registrant's Registration Statement on Form N-1A
filed with the Securities and Exchange Commission on May 20,
1993 (File No. 33-63212).
C-1
(b) Amendments to Trust Instrument are incorporated herein by
reference to Exhibit 1(b) to Post-Effective Amendment No. 7,
filed on February 14, 1996 (File No. 33-63212).
(c) Amendment to Trust Instrument dated December 10, 1996 is
incorporated herein by reference to Exhibit 1(c) to
Post-Effective Amendment No. 10, filed on February 13, 1997
(File No. 33-63212).
(d) Amendment to Trust Instrument dated September 14, 1999 is
incorporated herein by reference to Exhibit 1(d) to
Post-Effective Amendment No. 20, filed on October 26, 1999
(File No. 33-63212).
(e) Amendment to Trust Instrument dated December 14, 1999 is
incorporated herein by reference to Exhibit 1(e) to
Post-Effective Amendment No. 23, filed on February 16, 2000
(File No. 33-63212).
(f) Form of Amendment to Trust Instrument dated July 28, 2000, is
incorporated by reference to Exhibit 1(f) to Post-Effective
Amendment No. 25, filed on February 14, 2001 (File No.
33-63212).
(g) Form of Amendment to Trust Instrument dated August 1, 2000, is
incorporated herein by reference to Exhibit 1(g) to
Post-Effective Amendment No. 25, filed on February 14, 2001
(File No. 33-63212).
(h) Form of Amendment to Trust Instrument dated February 12, 2001,
is incorporated herein by reference to Exhibit 1(h) to
Post-Effective Amendment No. 25, filed on February 14, 2001
(File No. 33-63212).
(i) Form of Amendment to Trust Instrument dated July 31, 2001, is
incorporated herein by reference to Exhibit 1(i) to
Post-Effective Amendment No. 26, filed on June 1, 2001 (File
No. 33-63212).
(j) Amendment to Trust Instrument dated September 13, 2001, is
incorporated herein by reference to Exhibit 1(j) to
Post-Effective Amendment No. 27, filed on October 18, 2001
(File No. 33-63212).
(k) Fourteenth Amendment to Trust Instrument dated September 18,
2002, is incorporated herein by reference to Exhibit 1(k) to
Post-Effective Amendment No. 30, filed on October 17, 2002
(File No. 33-63212).
(l) Fifteenth Amendment to Trust Instrument dated October 14,
2002, is incorporated herein by reference to Exhibit 1(l) to
Post-Effective Amendment No. 30, filed on October 17, 2002
(File No. 33-63212).
C-2
(m) Sixteenth Amendment to Trust Instrument dated January 31, 2003
is incorporated herein by reference to Exhibit 1(m) to Form
N-14, filed on February 7, 2003 (File No. 333-103045).
Exhibit 2 (a) Restated Bylaws are incorporated herein by reference to
Exhibit 2(a) to Post-Effective Amendment No. 7, filed on
February 14, 1996 (File No. 33-63212).
(b) First Amendment to the Bylaws is incorporated herein by
reference to Exhibit 2(b) to Post-Effective Amendment No. 7,
filed on February 14, 1996 (File No. 33-63212).
(c) Second Amendment to Bylaws dated September 18, 2002, is
incorporated herein by reference to Exhibit 2(c) to
Post-Effective Amendment No. 30, filed on October 17, 2002
(File No. 33-63212).
Exhibit 3 Not Applicable
Exhibit 4 Form of Agreement and Plan of Reorganization is filed herein as
Exhibit A to Part A of this Registration Statement.
Exhibit 5 Not Applicable
Exhibit 6 (a) Investment Advisory Agreement for Mid Cap Value Portfolio is
incorporated herein by reference to Exhibit 4(y) to
Post-Effective Amendment No. 31, filed on December 30, 2002
(File No. 33-63212).
(b) Investment Sub-Advisory Agreement for Mid Cap Value Portfolio
is incorporated herein by reference to Exhibit 4(cc) to
Post-Effective Amendment No. 31, filed on December 30, 2002
(File No. 33-63212).
Exhibit 7 (a) Amended Distribution Agreement is incorporated herein by
reference to Post-Effective Amendment No. 17, filed on
February 26, 1999 (File No. 33-63212).
(b) Amended Distribution Agreement dated September 14, 1999 is
incorporated herein by reference to Post-Effective Amendment
No. 20, filed on October 26, 1999 (File No. 33-63212).
(c) Form of Distribution and Shareholder Services Agreement for
Service Shares for Qualified Plans is incorporated herein by
reference to Post-Effective Amendment No. 20, filed on October
26, 1999 (File No. 33-63212).
C-3
(d) Form of Distribution and Shareholder Services Agreement for
Service Shares for Insurance Companies is incorporated herein
by reference to Post-Effective Amendment No. 20, filed on
October 26, 1999 (File No. 33-63212).
(e) Form of Amended and Restated Distribution Agreement, dated
September 13, 2001, is incorporated herein by reference to
Exhibit 5(e) to Post-Effective Amendment No. 27, filed on
October 18, 2001 (File No. 33-63212).
(f) Form of Transfer and Assumption Agreement between Janus
Distributors, Inc. and Janus Distributors LLC, dated April 1,
2002, is incorporated herein by reference to Exhibit 5(h) to
Post-Effective Amendment No. 29, filed on April 29, 2002 (File
No. 33-63212).
(g) Amended and Restated Distribution Agreement between Janus
Aspen Series and Janus Distributors LLC, dated June 18, 2002,
is incorporated herein by reference to Exhibit 5(i) to
Post-Effective Amendment No. 30, filed on October 17, 2002
(File No. 33-63212).
Exhibit 8 Not Applicable
Exhibit 9 (a) Form of Custody Agreement between Janus Aspen Series and
Investors Fiduciary Trust Company is incorporated herein by
reference to Exhibit 8(a) to Post-Effective Amendment No. 11,
filed on April 30, 1997 (File No. 33-63212).
(b) Form of Custodian Contract between Janus Aspen Series and
State Street Bank and Trust Company is incorporated herein by
reference to Exhibit 8(b) to Post-Effective Amendment No. 11,
filed on April 30, 1997 (File No. 33-63212).
(c) Letter Agreement dated April 4, 1994 regarding State Street
Custodian Agreement is incorporated herein by reference to
Exhibit 8(c) to Post-Effective Amendment No. 11, filed on
April 30, 1997 (File No. 33-63212).
(d) Amendment dated October 11, 1995 of State Street Custodian
Contract is incorporated herein by reference to Exhibit 8(e)
to Post-Effective Amendment No. 7, filed on February 14, 1996
(File No. 33-63212).
(e) Letter Agreement dated September 10, 1996 regarding State
Street Custodian is incorporated herein by reference to
Exhibit 8(f) to Post-Effective Amendment No. 9, filed on
October 24, 1996 (File No. 33-63212).
C-4
(f) Form of Letter Agreement dated September 9, 1997, regarding
State Street Custodian Contract is incorporated herein by
reference to Exhibit 8(h) to Post-Effective Amendment No. 14,
filed on October 24, 1997 (File No. 33-63212).
(g) Amendment to Custodian Contract is incorporated herein by
reference to Exhibit 7(k) to Post-Effective Amendment No. 24,
filed on April 14, 2000 (File No. 33-63212).
(h) Foreign Custody Agreement to State Street Bank and Trust
Company Contract, dated December 5, 2000, is incorporated
herein by reference to Exhibit 7(l) to Post-Effective
Amendment No. 25, filed on February 14, 2001 (File No.
33-63212).
(i) Foreign Custody Manager Addendum to Global Custodial Services
Agreement with Citibank, N.A., dated December 5, 2000, is
incorporated herein by reference to Exhibit 7(m) to
Post-Effective Amendment No. 25, filed on February 14, 2001
(File No. 33-63212).
(j) Amendment to State Street Bank and Trust Company Custodian
Contract, dated December 5, 2000, is incorporated herein by
reference to Exhibit 7(n) to Post-Effective Amendment No. 25,
filed on February 14, 2001 (File No. 33-63212).
(k) Form of Amendment to State Street Bank and Trust Company
Custodian Contract, dated December 5, 2000, is incorporated
herein by reference to Exhibit 7(o) to Post-Effective
Amendment No. 25, filed on February 14, 2001 (File No.
33-63212).
(l) Form of Letter Agreement with State Street Bank and Trust
Company, dated May 1, 2001, is incorporated herein by
reference to Exhibit 7(p) to Post-Effective Amendment No. 25,
filed on February 14, 2001 (File No. 33-63212).
(m) Form of Letter Agreement with State Street Bank and Trust
Company, dated June 1, 2001, is incorporated herein by
reference to Exhibit 7(q) to Post-Effective Amendment No. 26,
filed on June 1, 2001 (File No. 33-63212).
(n) Form of Letter Agreement with State Street Bank and Trust
Company, dated December 31, 2002, is incorporated herein by
reference to Exhibit 7(r) to Post-Effective Amendment No. 30,
filed on October 17, 2002 (File No. 33-63212).
C-5
(o) Form of Letter Agreement with State Street Bank and Trust
Company, dated December 31, 2002, is incorporated herein by
reference to Exhibit 7(s) to Post-Effective Amendment No. 30,
filed on October 17, 2002 (File No. 33-63212).
Exhibit 10 (a) Form of Distribution and Shareholder Servicing Plan for
Service Shares between Janus Distributors, Inc. and Janus
Aspen Series is incorporated herein by reference to Exhibit
13(b) to Post-Effective Amendment No. 20, filed on October 26,
1999 (File No. 33-63212).
(b) Amended and Restated Rule 18f-3 Plan, dated September 13,
2001, is incorporated herein by reference to Exhibit 15(e) to
Post-Effective Amendment No. 27, filed on October 18, 2001
(File No. 33-63212).
Exhibit 11 Opinion and Consent of Shea & Gardner is incorporated herein by
reference to Exhibit 11 to Form N-14, filed on February 7, 2003
(File No. 333-103045).
Exhibit 12 Form of Tax Opinion of Shea & Gardner is incorporated herein by
reference to Exhibit 12 to Form N-14, filed on February 7, 2003
(File No. 333-103045).
Exhibit 13 (a) Form of Model Participation Agreement is incorporated herein
by reference to Exhibit 9(c) to Post-Effective Amendment No.
11, filed on April 30, 1997 (File No. 33-63212).
(b) Form of Amended and Restated Transfer Agency Agreement, dated
September 13, 2001, is incorporated herein by reference to
Exhibit 8(d) to Post-Effective Amendment No. 27, filed on
October 18, 2001 (File No. 33-63212).
(c) Form of Transfer and Assumption Agreement between Janus
Service Corporation and Janus Services LLC, dated April 1,
2002, is incorporated herein by reference to Exhibit 8(e) to
Post-Effective Amendment No. 29, filed on April 29, 2002 (File
No.33-63212).
(d) Amended and Restated Transfer Agency Agreement between Janus
Aspen Series and Janus Services LLC, dated June 18, 2002, is
incorporated herein by reference to Exhibit 8(f) to
Post-Effective Amendment No. 30, filed on October 17, 2002
(File No. 33-63212).
Exhibit 14 Consent of PricewaterhouseCoopers LLP is filed herein.
Exhibit 15 Not Applicable
Exhibit 16 Powers of Attorney are incorporated herein by reference to Exhibit
16 to Form N-14, filed on December 12, 2002 by registrant.
C-6
Exhibit 17 Voting Instruction Forms is incorporated herein by reference to
Exhibit 17 to Form N-14, filed on February 7, 2003 (File No.
333-103045).
ITEM 17. UNDERTAKINGS
(1) The undersigned registrant agrees that prior to any public reoffering of the
securities registered through the use of a prospectus which is a part of this
registration statement by any person or party who is deemed to be an underwriter
within the meaning of Rule 145(c) of the Securities Act, the reoffering
prospectus will contain the information called for by the applicable
registration form for reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of the applicable
form.
(2) The undersigned registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as a part of an amendment to the registration
statement and will not be used until the amendment is effective, and that, in
determining any liability under the 1933 Act, each post-effective amendment
shall be deemed to be a new registration statement for the securities offered
therein, and the offering of the securities at that time shall be deemed to be
the initial bona fide offering of them.
C-7
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has been
signed on behalf of the registrant, in the City of Denver, and State of
Colorado, on the 14th day of March, 2003.
JANUS ASPEN SERIES
By: /s/ Loren M. Starr
-----------------------------
Loren M. Starr, President and
Chief Executive Officer
As required by the Securities Act of 1933, this Registration Statement has been
signed below by the following persons in the capacities and on the dates
indicated.
<Table>
<Caption>
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ Loren M. Starr President and March 14, 2003
- ------------------------- Chief Executive Officer
Loren M. Starr (Principal Executive Officer)
/s/ Anita E. Falicia Vice President, Chief Financial March 14, 2003
- ------------------------- Officer and Treasurer
Anita E. Falicia (Principal Accounting Officer)
Thomas H. Bailey* Trustee March 14, 2003
- -------------------------
Thomas H. Bailey
William F. McCalpin* Trustee March 14, 2003
- -------------------------
William F. McCalpin
John W. McCarter, Jr.* Trustee March 14, 2003
- -------------------------
John W. McCarter, Jr.
Dennis B. Mullen* Trustee March 14, 2003
- -------------------------
Dennis B. Mullen
</Table>
C-8
<Table>
James T. Rothe* Trustee March 14, 2003
- -------------------------
James T. Rothe
William D. Stewart* Trustee March 14, 2003
- -------------------------
William D. Stewart
Martin H. Waldinger* Trustee March 14, 2003
- -------------------------
Martin H. Waldinger
/s/ Thomas A. Early
- -------------------------
*By Thomas A. Early
Attorney-in-Fact
</Table>
C-9
INDEX OF EXHIBITS
<Table>
<Caption>
EXHIBIT NUMBER EXHIBIT TITLE
- -------------- -------------
14 Consent of PricewaterhouseCoopers LLP
</Table>
C-10