B-1 STATEMENT OF ADDITIONAL INFORMATION Dated May 1 ...

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PortfolioPortfolio Manager(s)Dollar Range ofOwnership of Securities 7International Growth Portfolio Thomas A. Carroll AKathleen M. BrooksAInternational Equity Portfolio Gary P. Motyl ADr. Guang YangASelect Bond Portfolio R. David Ells AHigh Yield Bond Portfolio Andrew T. Wassweiler ABalanced Portfolio David R. Keuler CAndrew T. WassweilerAJill M. GrueningerAR. David Ells AThomas A. CarrollAWilliam R. WalkerAAsset Allocation Portfolio David R. Keuler AAndrew T. WassweilerAJill M. GrueningerAR. David Ells AThomas A. CarrollAWilliam R. WalkerA7 Key to Dollar Ranges:A. NoneB. $1 - $10,000C. $10,001 - $50,000D. $50,001 - $100,000E. $100,001 - $500,000F. $500,001 - $1,000,000G. Over $1,000,000* Information as of February 28, 2009, as such person was not acting in the capacity of portfolio manager as ofDecember 31, 2008.** Information as of March 31, 2009, as such person was not acting in the capacity of portfolio manager as ofDecember 31, 2008.B-92
APPENDIX E - Legal ProceedingsTempletonIn 2003 and 2004, multiple lawsuits were filed against Franklin Resources, Inc., and certain of itsinvestment adviser subsidiaries, among other defendants, alleging violations of federal securities and statelaws and seeking, among other relief, monetary damages, restitution, removal of fund trustees, directors,investment managers, administrators, and distributors, rescission of management contracts and 12-b1plans, and/or attorney’s fees and costs. Specifically, the lawsuits claim breach of duty with respect toalleged arrangements to permit market timing and/or late trading activity, or breach of duty with respectto the valuation of the portfolio securities of certain Templeton funds managed by Franklin Resources,Inc. subsidiaries, allegedly resulting in market timing activity. The lawsuits are styled as class actions, orderivative actions on behalf of either the named funds or Franklin Resources, Inc. and have beenconsolidated for pretrial purposes along with hundreds of other similar lawsuits against other mutual fundcompanies. All of the Franklin Templeton Investments mutual funds that were named in the litigation asdefendants have since been dismissed, as have the independent trustees to those funds.Franklin Resources, Inc. previously disclosed these private lawsuits in its regulatory filings and on itspublic website. Any material updates regarding these matters will be disclosed in Franklin Resources,Inc.’s Form 10-Q or Form 10-K filings with the U.S. Securities and Exchange Commission.Janus CapitalIn the fall of 2003, the Securities and Exchange Commission (“SEC”), the Office of the New York StateAttorney General (“NYAG”), the Colorado Attorney General (“COAG”), and the Colorado Division ofSecurities (“CDS”) announced that they were investigating alleged frequent trading practices in themutual fund industry. On August 18, 2004, Janus Capital announced that it had reached final settlementswith the SEC, the NYAG, the COAG, and the CDS related to such regulators’ investigations into JanusCapital’ frequent trading arrangements.A number of civil lawsuits were brought against Janus Capital and certain of its affiliates, the Janus funds,and related entities and individuals based on allegations similar to those announced by the aboveregulators and were filed in several state and federal jurisdictions. Such lawsuits alleged a variety oftheories for recovery including, but not limited to, the federal securities laws, other federal statutes(including ERISA), and various common law doctrines. The Judicial Panel on Multidistrict Litigationtransferred these actions to the U.S. District Court for the District of Maryland (the “Court”) forcoordinated proceedings. On September 29, 2004, five consolidated amended complaints were filed withthe Court, four of which still remain: (i) claims by a putative class of investors in certain Janus fundsasserting claims on behalf of the investor class (Marini et al. v. Janus Investment Fund et al., U.S. DistrictCourt, District of Maryland, Case No. 04-CV-00497); (ii) derivative claims by investors in certain Janusfunds ostensibly on behalf of such funds (Steinberg et al. v. Janus Capital Management LLC et al., U.S.District Court, District of Maryland, Case No. 04-CV-00518); (iii) claims on behalf of participants in theJanus 401(k) plan (Wangberger v. Janus Capital Group, Inc., 401(k) Advisory Committee , et al., U.S.District Court, District of Maryland, Case No. JFM-05-2711); and (iv) claims by a putative class ofshareholders of Janus Capital Group Inc. (“JCGI”) asserting claims on behalf of the shareholders(Wiggins et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818). Each of the complaints initially named JCGI and/or Janus Capital as a defendant. In addition,the following were also named as defendants in one or more of the actions: Janus Investment Fund(“JIF”), Janus Aspen Series (“JAS”), Janus Adviser Series (“JAD”), Janus Distributors LLC, INTECHInvestment Management LLC (“INTECH”) (formerly named Enhanced Investment Technologies, LLC),Bay Isle Financial LLC (“Bay Isle”), Perkins Investment Management LLC (“Perkins”) (formerly namedPerkins, Wolf, McDonnell and Company, LLC), the Advisory Committee of the Janus 401(k) plan, andthe current or former directors of JCGI.B-93
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APPENDIX F - Proxy Voting Policies
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stocks that make up that index. Str
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Interest rate swaps do not involve
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the Adviser or Sub-Adviser will not
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Forward Contracts. The Portfolios m
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principal amount as the call writte
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Options on Foreign Currencies. The
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securities. The issuers of the unde
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the former pools. However, timely p
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CMO residuals are generally purchas
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utilize the underlying assets may r
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include range floaters which are a
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par unless the price of the underly
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to changes in interest rates genera
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corresponding floaters. The underly
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A Portfolio will not enter into suc
Page 42 and 43: egulations. The presence of an issu
Page 44 and 45: Portfolio TurnoverPortfolio turnove
Page 46 and 47: The ability of the Portfolio to ach
Page 48 and 49: Advisors, LLC, in accordance with t
Page 50 and 51: OWNERSHIP OF SHARES OF THE FUNDAll
Page 52 and 53: on the next $50 million, 0.50% on t
Page 54 and 55: Independent Registered Public Accou
Page 56 and 57: Name of Portfolio 2008 2007 2006Int
Page 58 and 59: Broker High Yield Bond BalancedAsse
Page 60 and 61: and cost of trade execution of Port
Page 62 and 63: Effective April 30, 2008, the Fund
Page 64 and 65: TAXES AND DIVIDENDSEach Portfolio i
Page 66 and 67: APPENDIX A - Credit RatingsDescript
Page 68 and 69: F2Good credit quality. A satisfacto
Page 70 and 71: . Moody’s Commercial Paper (short
Page 72 and 73: Plus (+) or minus (-)The ratings fr
Page 74 and 75: APPENDIX B - Directors and Officers
Page 76 and 77: Name, Address, andYear of BirthDavi
Page 78 and 79: APPENDIX C - Ownership of Shares of
Page 80 and 81: SMALL CAP VALUE PORTFOLIOGeneral Ac
Page 82 and 83: APPENDIX D - Portfolio ManagersOthe
Page 84 and 85: PortfolioManager(s)FundRegisteredIn
Page 86 and 87: Compensation of Portfolio ManagersM
Page 88 and 89: management firms. Performance is pr
Page 90 and 91: Portfolio managers are eligible for
Page 94 and 95: On August 25, 2005, the Court enter
Page 96 and 97: MSA’s Equity Trading Department s
Page 98 and 99: ERISA ClientsIn the case of client
Page 100 and 101: Shareholder Ability to Call Special
Page 102 and 103: • Exercise price• Participation
Page 104 and 105: Amend Quorum RequirementsVote propo
Page 106 and 107: Vote proposals to increase blank ch
Page 108 and 109: employees of Investment Manager and
Page 110 and 111: will not support the position of a
Page 112 and 113: company specifies the voting, divid
Page 114 and 115: egarding whether Investment Manager
Page 116 and 117: 3. The issuer is an entity particip
Page 118 and 119: manager(s) are responsible for maki
Page 120 and 121: Global Corporate Governance: Invest
Page 122 and 123: 13. The Proxy Group will review the
Page 124 and 125: determined by those investment comm
Page 126 and 127: T. Rowe Price has adopted these Pro
Page 128 and 129: shareholders and the effect on shar
Page 130 and 131: portfolio company could have influe
Page 132 and 133: The Proxy Voting Service will refer
Page 134 and 135: that substantially differs from dom
Page 136 and 137: 15. Janus will generally vote in fa
Page 138 and 139: 46. For shareholder proposals outsi
Page 140 and 141: 2. Staggered BoardIf a company has
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proposed for a legitimate business
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APPENDIX G - Portfolio Holdings Dis
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ICP Securities LLCIntermonte Securi
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