DEF 14A 1 def14a-1apr10.htm DEFINITIVE PROXY STATEMENT def14a-1apr10.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.          )

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AMERICAN CENTURY MUTUAL FUNDS, INC.
(Name of Registrant as Specified In Its Charter)

 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant

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Proxy Statement
April 2, 2010

Important Voting Information Inside

American Century Asset Allocation Portfolios, Inc.
American Century Capital Portfolios, Inc.
American Century Growth Funds, Inc.
American Century Mutual Funds, Inc.
American Century Strategic Asset Allocations, Inc.
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.



 
 
 
 

American Century Investments
4500 Main Street
Kansas City, Missouri 64111

April 2, 2010
 

 
Dear Shareholder,
 
I would like to invite you to an upcoming special meeting of shareholders to be held on June 16, 2010 at 10:30 a.m. Central time.  The shareholder meeting will be held at American Century’s office at 4500 Main Street, Kansas City, Missouri. Shareholders of American Century funds are being asked to vote on the election of one Director to the funds’ Boards of Directors and to approve new management agreements between the funds and their American Century advisor. In addition, shareholders of certain funds are being asked to approve new subadvisory agreements with those funds’ current subadvisors. Finally, some shareholders are being asked to approve an amendment to the Articles of Incorporation relating to their funds.
 
More detailed information is contained in the enclosed materials. The Boards of Directors of these funds, including all of the Independent Directors, unanimously approved and recommend that you vote FOR the proposals.
 
Your vote is extremely important, no matter how large or small your holdings. Please review the enclosed materials and vote online, by phone, or by signing and returning your proxy card(s) in the enclosed postage-paid envelope. If we do not hear from you after a reasonable time, you may receive a call from our proxy solicitor, Broadridge Financial Solutions, Inc., reminding you to vote. If you have any questions or need assistance in completing your proxy card(s), please contact Broadridge at 1-866-450-8467.
 
Thank you for investing with American Century Investments.
 
 
Sincerely,
GRAPHIC
Jonathan S. Thomas
President and Chief Executive Officer
American Century Investments
 
 
 
 
 

American Century Asset Allocation Portfolios, Inc.
American Century Capital Portfolios, Inc.
American Century Growth Funds, Inc.
American Century Mutual Funds, Inc.
American Century Strategic Asset Allocations, Inc.
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.
 
IMPORTANT NEWS FOR SHAREHOLDERS
 
While we encourage you to read all of the proxy materials, you will find a brief overview of the proposals below. The overview and accompanying Q&A contain limited information, should be read in conjunction with, and are qualified by reference to, the more detailed information contained elsewhere in the Proxy Statement.
 
 
Shareholders of each of the issuers listed above (the “Issuers”) are being asked to approve the election of one nominated Director (the “Nominee”) to the Board of Directors of each Issuer.
 
 
Shareholders of each of the Issuers’ funds (the “Funds”) are being asked to approve a management agreement with American Century Investment Management, Inc. (“ACIM”)
 
 
Shareholders of the Equity Index Fund are being asked to approve a subadvisory agreement between ACIM and Northern Trust Investments, N.A.
 
 
Shareholders of the International Value Fund are being asked to approve a subadvisory agreement by and among ACIM, Templeton Investment Counsel, LLC and Franklin Templeton Investments (Asia) Limited.
 
 
Shareholders of American Century Capital Portfolios, Inc., American Century Mutual Funds, Inc. and American Century World Mutual Funds, Inc. are being asked to approve an amendment to those Issuers’ Articles of Incorporation.
 
Questions and Answers
 
Q.
When will the special meeting be held? Who can vote?
 
A.
The special meeting will be held on June 16, 2010, at 10:30 a.m. Central time at American Century’s office at 4500 Main Street, Kansas City, Missouri. Please note, this will be a business meeting only. No presentations about the Funds are planned. If you owned shares of one of the Funds at the close of business on March 19, 2010, you are entitled to vote, even if you later sold the shares. Each shareholder is entitled to one vote per dollar of shares owned, with fractional dollars voting proportionally.

 
 
 
 

Q
 Who is the Nominee for election to the Board of Directors?
 
 
A.
The Nominee, John R. Whitten, currently serves on the Boards of Directors (the “Boards”) but has not previously been elected by shareholders.
 
 
Q.
Why are shareholders being asked to approve management agreements for the Funds?
 
 
A.
On February 16, 2010, Co-Chairman Richard W. Brown succeeded James E. Stowers, Jr., the 86-year-old founder of American Century Investments,  as trustee of a trust that holds a greater-than-25% voting interest in American Century Companies, Inc. (“ACC”). Under the Investment Company Act of 1940 (the “1940 Act”), this voting interest is presumed to represent control of ACC even though it is less than a majority interest. Because ACC is the parent corporation of each Fund’s advisor, the change of trustee is considered a technical assignment of the Funds’ management agreements. Under the 1940 Act, an assignment automatically terminates such agreements. Shareholders are being asked to approve new management agreements that are substantially identical to the terminated agreements. The Funds are currently being managed pursuant to interim management agreements. Further information on the deemed assignment and termination of the agreements is contained in the Proxy Statement.
 
Q.
How are the Funds currently being managed?
 
A.
American Century continues to manage the Funds pursuant to interim management agreements approved by the Funds’ Boards. These agreements are substantially identical to the recently terminated agreements (with the exception of different effective and termination dates) and do not change the Funds, their investment objectives or strategies, fees or services provided.
 
Q.
Who is being asked to approve Fund management agreements?
 
A.
Shareholders of each Fund are being asked to approve the new management agreements. However, because management agreements for new share classes of some Funds took effect after the change of trustee described above, they did not terminate and do not require shareholder approval.
 
 
 
 
 

Q.
Why are some shareholders being asked to approve an amendment to Articles of Incorporation?
 
A.
This proposal is intended to achieve consistency among the Articles of Incorporation of all the Issuers served by the Boards. The law of Maryland, the Issuers’ state of incorporation, permits corporations to provide directors with some protection from personal liability. All of the Issuers whose shareholders are not being asked to approve this amendment already have such a provision in their Articles of Incorporation.
 
Q.
How do the Boards recommend that I vote?
 
A.
The Boards, including all of the Independent Directors, unanimously recommend you vote FOR all of the proposals. For a discussion of the factors the Boards considered in approving these proposals, see the accompanying materials.
 
Q.
My holdings in the Funds are small, why should I vote?
 
A.
Your vote makes a difference. If many shareholders do not vote their proxies, your Fund may not receive enough votes to go forward with its special meeting. This means additional costs will be incurred to solicit votes to determine the outcome of the proposals.
 
Q.
Why are multiple proxy cards enclosed?
 
A.
You will receive a proxy card for each of the Funds in which you are a shareholder. In addition, if you own shares of the same Fund in multiple accounts that are titled differently, you will receive a proxy card for each account.
 
Q.
How do I cast my vote?
 
A.
You may vote online, by phone, by mail or in person at the special meeting. To vote online, access the Web site listed on a proxy card. To vote by telephone, call the toll-free number listed on a proxy card. To vote online or by telephone, you will need the number that appears in the gray box on each of your proxy cards. To vote by mail, complete, sign and send us the enclosed proxy card(s) in the enclosed postage-paid envelope. You also may vote in person at the special meeting on June 16, 2010. If you need more information or have any questions on how to cast your vote, call our proxy solicitor at 1-866-450-8467.
 
Your vote is important. Please vote today and avoid the need
for additional solicitation expenses.

 
 
 
 

AMERICAN CENTURY ASSET ALLOCATION PORTFOLIOS, INC.
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
AMERICAN CENTURY GROWTH FUNDS, INC.
AMERICAN CENTURY MUTUAL FUNDS, INC.
AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC.
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.

4500 Main Street
Kansas City, Missouri 64111
 
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
 
June 16, 2010
 
A special meeting (the “Meeting”) of the shareholders of the above-listed issuers (each an “Issuer” and together the “Issuers”) will be held at 10:30 a.m. Central time on June 16, 2010 at 4500 Main Street, Kansas City, Missouri 64111 to consider the following proposals (each, a “Proposal”):
 
 
1.
To elect one director to the Board of Directors of each Issuer;
 
 
2.
To approve management agreements between each of the Issuers’ funds (the “Funds”) and American Century Investment Management, Inc.;
 
 
3.
Solely with respect to the Equity Index Fund, to approve a subadvisory agreement between American Century Investment Management, Inc. and Northern Trust Investments, N.A.;
 
 
4.
Solely with respect to the International Value Fund, to approve a subadvisory agreement by and among American Century Investment Management, Inc., Templeton Investments Counsel, LLC and Franklin Templeton Investments (Asia) Limited; and
 
 
5.
Solely with respect to American Century Capital Portfolios, Inc., American Century Mutual Funds, Inc. and American Century World Mutual Funds, Inc., to approve an amendment to their Articles of Incorporation.
 
Shareholders of record as of the close of business on March 19, 2010 are entitled to notice of and to vote at the Meeting and any adjournments or postponements thereof. Shareholders of each of the Issuers will vote separately on Proposal 1. Shareholders of each of the Funds will vote separately on Proposal 2. If a Fund has Institutional Class shares, holders of
 
 
 
 
 

those shares will vote separately on Proposal 2. In addition, for the Funds issued by American Century Variable Portfolios, Inc. other than VP Income & Growth, holders of Class I shares will vote with holders of Class III shares, if any, but holders of Class II shares, if any, will vote with holders of Class IV shares, if any. Management Agreements for the following share classes, which launched on March 1, 2010, remain in effect and, accordingly, their shareholders will not be solicited with respect to Proposal 2: C Class shares of the LIVESTRONG¨ Funds, Growth Fund, and Mid Cap Value Fund; C Class shares and R Class shares of the Small Cap Value and International Discovery Funds; A Class shares, C Class shares and R Class shares of the International Opportunities Fund and the New Opportunities Fund; and the Institutional Class shares of the New Opportunities Fund. Shareholders of the Equity Index Fund will vote on Proposal 3. Shareholders of the International Value Fund will vote on Proposal 4. Shareholders of American Century Capital Portfolios, Inc., American Century Mutual Funds, Inc. and American Century World Mutual Funds, Inc. will vote separately on Proposal 5.
 
In the event that a quorum is not present or in the event that a quorum is present but sufficient votes in favor of a Proposal have not been received, the persons named as proxies may propose one or more adjournments of the Meeting to permit further solicitation of proxies as to any Proposal without further notice other than by announcement at the Meeting. However, if the Meeting is adjourned for more than 90 days from the date of the Meeting, then the Funds are required to send a new shareholder meeting notice to shareholders. Any adjournment of the Meeting for the further solicitation of proxies for a Proposal will require the affirmative vote of a majority of the total number of shares entitled to vote on the Proposal that are present in person or by proxy at the Meeting to be adjourned. The persons named as proxies will vote those proxies that they are entitled to vote in their discretion as to any such adjournment. A shareholder vote may be taken on any Proposal on which there is a quorum prior to such adjournment. Such vote will be considered final regardless of whether the Meeting is adjourned to permit additional solicitation with respect to any other Proposal. Unless revoked, proxies that have been properly executed and returned by shareholders without instructions will be voted in favor of the Proposal(s).
 
 
By Order of the Boards of Directors of the Issuers,
 

 
Ward D. Stauffer
Secretary
 
 
 
 
 

AMERICAN CENTURY ASSET ALLOCATION PORTFOLIOS, INC.
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
AMERICAN CENTURY GROWTH FUNDS, INC.
AMERICAN CENTURY MUTUAL FUNDS, INC.
AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC.
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.

 

 
PROXY STATEMENT
 
This Proxy Statement is being furnished in connection with the solicitation of proxies by the Boards of Directors (each a “Board” and collectively the “Boards”) of the above-listed issuers, (each an “Issuer” and together the “Issuers”). The Boards are soliciting the proxies of shareholders of the Issuers for use in connection with a Special Meeting (the “Meeting”) of shareholders that will be held at 10:30 a.m. Central time on June 16, 2010 at American Century’s office at 4500 Main Street, Kansas City, Missouri 64111. Each Issuer has one or more funds that are organized as series of the Issuer (each a “Fund” and collectively the “Funds”). The Meeting notice, this Proxy Statement and one or more proxy cards are being sent to shareholders of record as of the close of business on March 19, 2010 (the “Record Date”) beginning on or about April 2, 2010. Please read this Proxy Statement and keep it for future reference. Each Fund has previously sent its annual report and semiannual report to its shareholders. A copy of a Fund’s most recent annual report and semiannual report may be obtained without charge by writing to the Fund at the address listed above or by calling 1-800-345-2021. If you have any questions regarding this Proxy Statement, please contact our proxy solicitor, Broadridge Financial Solutions, Inc., at 1-866-450-8467.
 
Important Notice Regarding the Availability of Proxy Materials for the Special Meeting of Shareholders to Be Held on June 16, 2010: This Proxy Statement is available on the Internet at the website listed on your proxy card(s). On this website, you also will be able to access the Notice of Special Meeting of Shareholders, the form of proxy cards and any amendments or supplements to the foregoing materials that are required to be furnished to shareholders.
 
 
1

 

Table of Contents
 
PROXY STATEMENT
 
1
 
SUMMARY OF PROPOSALS AND FUNDS VOTING
 
4
    Applicable Only to American Century Variable Portfolios, Inc.:
6
 
PROPOSAL 1: ELECTION OF DIRECTOR
 
6
    Overview and Related Information
6
    Information Regarding the Directors
7
    Qualifications of Directors
9
    Responsibilities of the Boards
10
    Board Leadership Structure and Standing Board Committees
11
    Risk Oversight by the Boards
13
    Board Compensation
13
    Beneficial Ownership of Affiliates by Independent Directors
17
    Officers
17
    Share Ownership
18
    Independent Registered Public Accounting Firm
18
    Required Approval for Proposal 1
20
 
PROPOSAL 2: APPROVAL OF MANAGEMENT AGREEMENTS
 
20
    Overview
20
    Reason for Proposed Management Agreements
21
    Information Regarding ACIM
22
    Description of the Management Agreements
22
    Interim Management Agreements
23
    Proposed Management Agreements
24
    Comparison of the Prior Management Agreements and the Proposed
            Management Agreements
24
    Management Services
24
    Fees and Expenses
24
    Termination
25
    Merger of ACIM and ACGIM
25
    Advisory Services to Other Funds
25
    Basis for the Boards’ Approval of the Proposed Management Agreements
27
    Affiliated Brokerage
31
    Required Approval for Proposal 2
33
 
PROPOSAL 3: APPROVAL OF A SUBADVISORY AGREEMENT  
FOR THE EQUITY INDEX FUND
 
33
    Overview and Related Information
33
    Information Regarding Northern Trust
33
    Comparison of the Prior Subadvisory Agreement and the
            Proposed Subadvisory Agreement
34
    Advisory Services
35
    Expenses
35
    Compensation
35
    Liability of NTI
35
    Additional Information about NTI
36
    Basis for the Board’s Approval of the Proposed NTI Subadvisory Agreement
36
    Required Approval for Proposal 3
37
 
PROPOSAL 4: APPROVAL OF A SUBADVISORY AGREEMENT  
FOR THE INTERNATIONAL VALUE FUND
 
37
 
 
2

 
 
    Overview and Related Information
37
    Information Regarding Templeton and Franklin Asia
37
    Comparison of the Prior Subadvisory Agreements and the Proposed
            Combined Subadvisory Agreement
38
    Advisory Services
39
    Expenses
39
    Compensation
39
    Liability of Templeton and Franklin Asia
40
    Additional Information about Templeton and Franklin Asia
40
    Basis for the Board’s Approval  of the Proposed Combined Subadvisory Agreement
40
    Required Approval for Proposal 4
41
 
PROPOSAL 5: APPROVAL OF AMENDMENT TO THE ARTICLES  OF
INCORPORATION TO LIMIT CERTAIN DIRECTOR LIABILITY  TO THE
EXTENT PERMITTED BY MARYLAND LAW
 
41
    Overview
41
    Scope of Maryland Law
42
    Reason for and Text of Amendment
42
    Required Approval for Proposal 5
43
 
Other Information
 
43
    Meetings of Shareholders
43
    Date, Time and Place of the Meeting
44
    Use and Revocation of Proxies
44
    Voting Rights and Required Votes
45
    Outstanding Shares and Significant Shareholders
46
    Other Service Providers
46
    Pending Litigation
46
 
Where to Find Additional Information
 
47
 
Other Matters and Discretion  of Attorneys Named in the Proxy
 
48
 
Exhibit A
 
A-1
 
Exhibit B
 
B-1
 
Exhibit C
 
C-1
 
Exhibit D
 
D-1
 
Exhibit E
 
E-1
 
Exhibit F
 
F-1
 
Exhibit G
 
G-1
 
Exhibit H
 
H-1
 
Exhibit I
 
I-1
 
Exhibit J
 
J-1
 
Exhibit K
 
K-1
 
 
3

 

SUMMARY OF PROPOSALS AND FUNDS VOTING
 
The following table describes the proposals (each a “Proposal” and together the “Proposals”) to be considered at the Meeting and the shareholders that are entitled to vote on each Proposal:
 
Issuers Solicited
Funds Solicited
Classes Solicited
Proposal 1: To elect one director to the Board of Directors of each Issuer.
All Issuers
All Funds
All Classes
Proposal 2: To approve a management agreement with American Century Investment Management, Inc.
American
Century
Asset Allocation
Portfolios, Inc.
LIVESTRONG Income Portfolio
LIVESTRONG 2015 Portfolio
LIVESTRONG 2020 Portfolio
LIVESTRONG 2025 Portfolio
LIVESTRONG 2030 Portfolio
LIVESTRONG 2035 Portfolio
LIVESTRONG 2040 Portfolio
LIVESTRONG 2045 Portfolio
LIVESTRONG 2050 Portfolio
One Choice Portfolio: Conservative
One Choice Portfolio: Very
   Conservative
One Choice Portfolio: Moderate
One Choice Portfolio: Aggressive
One Choice Portfolio: Very
   Aggressive
All classes to vote as a group except Institutional Class shareholders, if any, will vote separately. C Class shareholders will not be solicited.*
American
Century
Capital
Portfolios, Inc.
Equity Income, Equity Index,
Large Company Value,
Mid Cap Value, NT Large
Company Value,
NT Mid Cap Value, Real Estate,
Small Cap Value, Value
All classes to vote as a group except Institutional Class shareholders, if any, will vote separately. C Class shareholders of Mid Cap Value and Small Cap Value, and R Class shareholders of Small Cap Value will not be solicited.*
American
Century
Growth
Funds, Inc.
Legacy Focused Large Cap
Legacy Large Cap
Legacy Multi Cap
All classes to vote as a group except Institutional Class shareholders will vote separately.
American
Century
Mutual Funds, Inc.
Balanced, Capital Growth, Capital Value,
Focused Growth, Fundamental Equity,
Giftrust, Growth, Heritage,
New Opportunities, NT Growth,
NT Vista, Select, Small Cap Growth,
Ultra, Veedot, Vista
All classes to vote as a group except Institutional Class shareholders, if any, will vote separately. A Class, C Class and R Class shareholders of New Opportunities, and C Class shareholders of Growth and Vista will not be solicited.*
American
Century
Strategic Asset
Allocations, Inc.
Strategic Allocation: Aggressive
Strategic Allocation: Conservative
Strategic Allocation: Moderate
All classes to vote as a group except Institutional Class shareholders will vote separately.
American
Century
Variable
Portfolios, Inc.
VP Balanced, VP Capital Appreciation,
VP Income & Growth
All classes to vote as a group.
VP International, VP Large Company Value,
VP Mid Cap Value, VP Value,
VP Vista, VP Ultra
Class I shareholders and Class III shareholders, if any, to vote as a group, and Class II shareholders, if any, and Class IV shareholders, if any, to vote as a separate group.

 
4

 
 
American
Century
World Mutual
Funds, Inc.
Emerging Markets, Global Growth,
International Discovery, International
Growth, International Opportunities,
International Stock, International Value,
NT Emerging Markets, NT International
Growth
All classes to vote as a group except Institutional Class shareholders, if any, will vote separately. C Class and R Class shareholders of International Discovery and International Opportunities, and A Class shareholders of International Opportunities will not be solicited.*
Proposal 3: To approve a subadvisory agreement between Northern Trust Investments, N.A. and American Century Investment Management, Inc.
American
Century
Capital
Portfolios, Inc.
Equity Index
All Classes
Proposal 4: To approve a subadvisory agreement by and among Templeton Investment Counsel, LLC, Franklin Templeton Investments (Asia) Limited and American Century Investment Management, Inc.
American
Century
World Mutual
Funds, Inc.
International Value
All Classes
Proposal 5: To approve an amendment to the Articles of Incorporation to limit certain director liability to the extent permitted by Maryland law.
American
Century
Capital
Portfolios, Inc.
All Funds
All Classes
American
Century
Mutual Funds, Inc.
All Funds
All Classes
American
Century
World Mutual
Funds, Inc.
All Funds
All Classes
 
  *
The management agreements relating to these new share classes took effect on March 1, 2010 and were not terminated by the change in control described under Proposal 2. Accordingly, the shareholders of these classes are not being asked to approve new management agreements.
 
Shareholders of record on the Record Date are entitled to notice of and to vote at the Meeting and are entitled to vote at any adjournments or postponements thereof. Shareholders of each Issuer will vote separately on Proposal 1. Shareholders of each of the Funds will vote separately on Proposal 2. If a Fund has Institutional Class shares, holders of those shares will vote separately on Proposal 2 (or will not be solicited, as indicated above). In addition, for the Funds issued by American Century Variable Portfolios, Inc. other than VP Income & Growth, holders of Class I shares will vote with holders of Class III shares, if any, but holders of Class II shares, if any, will vote with holders of Class IV shares, if any. Shareholders of the Equity Index Fund will vote on Proposal 3. Shareholders of the International Value Fund will vote on Proposal 4. Shareholders of American Century Capital Portfolios, Inc., American Century Mutual Funds, Inc. and American Century World Mutual Funds, Inc. will vote separately by Issuer on Proposal 5.
 
 
5

 
 
Applicable Only to American Century Variable Portfolios, Inc.:
 
Shares of VP Balanced, VP Capital Appreciation, VP Income & Growth, VP International, VP Large Company Value, VP Mid Cap Value, VP Ultra, VP Value and VP Vista (the “VP Funds”), all series of American Century Variable Portfolios, Inc., are sold only to separate accounts of certain insurance companies in connection with the issuance of variable annuity contracts and/or variable life insurance contracts by the insurance companies. With respect to Proposal 1, to elect one director of American Century Variable Portfolios, Inc., and with respect to Proposal 2, to approve new management agreements, insurance company separate accounts, as shareholders of a VP Fund, will request voting instructions from the owners of variable life insurance policies and variable annuity contracts (“Variable Contract Owners”) of the separate accounts, and will vote the accounts’ shares in the VP Fund in accordance with the voting instructions received. Each separate account is required to vote its shares of a VP Fund in accordance with instructions received from Variable Contract Owners. Each separate account will vote shares of a VP Fund held in each of its respective variable accounts for which no voting instructions have been received in the same proportion as the separate account votes shares held by variable accounts for which it has received instructions. Shares held by an insurance company in its general account, if any, must be voted in the same proportions as the votes cast with respect to shares held in all of the insurance company’s variable accounts in the aggregate. Such proportional voting may result in a relatively small number of Variable Contract Owners determining the outcome of a proposal. Proposal 1 and Proposal 2 are the only proposals described in this Proxy Statement that relate to American Century Variable Portfolios, Inc.
 
 
The Boards recommend that you vote FOR each Proposal.
 
PROPOSAL 1: ELECTION OF DIRECTOR
 
 
Overview and Related Information
 
Each of the following eight individuals currently serves on the Boards: Jonathan S. Thomas, Thomas A. Brown, Andrea C. Hall, James A. Olson, Donald H. Pratt, Gale E. Sayers, M. Jeannine Strandjord and John R. Whitten. Each of these individuals, with the exception of Mr. Whitten, previously has been elected by each Issuer’s shareholders. Mr. Whitten was appointed to the Board in 2008 to fill the vacancy created by the resignation of another director. The other members of the Boards have nominated Mr. Whitten for election by shareholders at the Meeting. Hereafter the current Board members will be referred to as the “Directors,” and Mr. Whitten will be referred to as the “Nominee.” It is being proposed that the shareholders of each Issuer approve the Nominee. If approved by the shareholders, the Nominee will continue to serve until his death, retirement, resignation or removal from office. The mandatory retirement age for directors who are not “interested persons” (hereinafter “Independent Directors”), as that term is defined in the Investment Company Act of 1940 (the “1940 Act”), is 72. However, the
 
 
6

 

mandatory retirement age may be extended or changed with the approval of the remaining Independent Directors.
 
Further information regarding each of the Directors is listed below. Mr. Thomas is the only Director who is an “interested person” as that term is defined in the 1940 Act because Mr. Thomas serves as President and Chief Executive officer of American Century Companies, Inc. (“ACC”), the parent company of American Century Investment Management, Inc. (“ACIM”) and American Century Global Investment Management, Inc. (“ACGIM”). ACIM and ACGIM are referred to collectively as the “Advisors.” The remaining Directors, including the Nominee, are not “interested persons” under the 1940 Act and therefore will be referred to as “Independent Directors.”
 
The Nominee has consented to continue to serve as a director, if elected. In case he shall be unable or shall fail to serve as a director by virtue of an unexpected occurrence, persons named as proxies will vote in their discretion for such other nominee as the Independent Directors may recommend.
 
Information Regarding the Directors
 
The following table presents certain information about the Directors (including the Nominee). The mailing address for each Director is 4500 Main Street, Kansas City, Missouri 64111.
 
Independent Directors

 
Thomas A. Brown
 
Year of Birth: 1940
 
Offices with the Issuers: Director
 
Length of Time Served: Since 1980
 
Principal Occupation During the Past Five Years: Managing Member, Associated Investments, LLC (real estate investment company); Brown Cascade Properties, LLC (real estate investment company) (2001 to 2009)
 
Number of Funds in Fund Complex Overseen by Director: 63
 
Other Directorships Held by Director: None
 
Education/Other Professional Experience: BS in Mechanical Engineering, University of Kansas; formerly, Chief Executive Officer, Associated Bearings Company; formerly, Area Vice President, Applied Industrial Technologies (bearings and power transmission company)


Andrea C. Hall
 
Year of Birth: 1945
 
Offices with the Issuers: Director
 
Length of Time Served: Since 1997
 
Principal Occupation During the Past Five Years: Retired as Advisor to the President, Midwest Research Institute (not-for-profit research organization) (June 2006)
 
Number of Funds in Fund Complex Overseen by Director: 63
 
Other Directorships Held by Director: None
 
Education/Other Professional Experience: BS in Biology, Florida State University; PhD in Biology, Georgetown University; formerly, Senior Vice President and Director of Research Operations, Midwest Research Institute

 
 
7

 

James A. Olson
 
Year of Birth: 1942
 
Offices with the Issuers: Director
 
Length of Time Served: Since 2007
 
Principal Occupation During the Past Five Years: Member, Plaza Belmont LLC (private equity fund manager); Chief Financial Officer, Plaza Belmont LLC (September 1999 to September 2006)
 
Number of Funds in Fund Complex Overseen by Director: 63
 
Other Directorships Held by Director: Saia, Inc. and Entertainment Properties Trust
 
Education/Other Professional Experience: BS in Business Administration and MBA, St. Louis University; CPA; 21 years of experience as a partner in the accounting firm of Ernst & Young LLP

 
Donald H. Pratt
 
Year of Birth: 1937
 
Offices with the Issuers: Director, Chairman of the Board
 
Length of Time Served: Since 1995
 
Principal Occupation During the Past Five Years: Chairman and Chief Executive Officer, Western Investments, Inc. (real estate company)
 
Number of Funds in Fund Complex Overseen by Director: 63
 
Other Directorships Held by Director: None
 
Education/Other Professional Experience: BS in Industrial Engineering, Wichita State University; MBA, Harvard Business School; serves on the Board of Governors of the Independent Directors Council and Investment Company Institute; formerly, Chairman of the Board, Butler Manufacturing Company (metal buildings producer)

 
Gale E. Sayers
 
Year of Birth: 1943
 
Offices with the Issuers: Director
 
Length of Time Served: Since 2000
 
Principal Occupation During the Past Five Years: President, Chief Executive Officer and Founder, Sayers40, Inc. (technology products and services provider)
 
Number of Funds in Fund Complex Overseen by Director: 63
 
Other Directorships Held by Director: None
 
Education/Other Professional Experience: BS in Physical Education and M.Ed. in Educational Administration, University of Kansas; Recipient of the Ernst & Young Entrepreneur of the Year Award; inducted into the Chicago Entrepreneurship Hall of Fame and the National Football League Hall of Fame


M. Jeannine Strandjord
 
Year of Birth: 1945
 
Offices with the Issuers: Director
 
Length of Time Served: Since 1994
 
Principal Occupation During the Past Five Years: Retired, formerly, Senior Vice President, Process Excellence, Sprint Corporation (telecommunications company) (January 2005 to September 2005)
 
Number of Funds in Fund Complex Overseen by Director: 63
 
Other Directorships Held by Director: DST Systems Inc., Euronet Worldwide Inc., Charming Shoppes, Inc.
 
Education/Other Professional Experience: BS in Business Administration and Accounting, University of Kansas; CPA; formerly, Senior Vice President of Financial Services and Treasurer and Chief Financial Officer, Global Markets Group; Sprint Corporation; formerly, with the accounting firm of Ernst & Whinney

 
 
8

 

John R. Whitten
 
Year of Birth: 1946
 
Offices with the Issuers: Director
 
Length of Time Served: Since 2008
 
Principal Occupation During the Past Five Years: Project Consultant, Celanese Corp. (industrial chemical company)
 
Number of Funds in Fund Complex Overseen by Director: 63
 
Other Directorships Held by Director: Rudolph Technologies, Inc.
 
Professional Education/Experience: BS in Business Administration, Cleveland State University; CPA; formerly, Chief Financial Officer and Treasurer, Applied Industrial Technologies, Inc.; thirteen years of experience with accounting firm Deloitte & Touche LLP

 
Interested Director

 
Jonathan S. Thomas
 
Year of Birth: 1963
 
Offices with the Issuers: Director and President
 
Length of Time Served: Since 2007
 
Principal Occupation During the Past Five Years: President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: Chief Executive Officer and Manager, American Century Services, LLC (“ACS”); Executive Vice President, American Century Investment Management (“ACIM”) and American Century Global Investment Management (“ACGIM”); Director, ACIM, ACGIM, American Century Investment Services, Inc. (“ACIS”) and other ACC subsidiaries; Global Chief Operating Officer and Managing Director, Morgan Stanley (investment management) (March 2000 to November 2005)
 
Number of Funds in Fund Complex Overseen by Director: 104
 
Other Directorships Held by Director: None
 
Education/Other Professional Experience: BA in Economics, University of Massachusetts; MBA, Boston College; formerly held senior leadership roles with Fidelity Investments, Boston Financial Services and Bank of America; serves on the Board of Governors of the Investment Company Institute

 
Qualifications of Directors
 
Generally, no one factor was decisive in the original selection of the Directors to the Boards, nor in the nomination of the Nominee. Qualifications considered by the Board to be important to the selection and retention of Directors include the following: (i) the individual’s business and professional experience and accomplishments; (ii) the individual’s educational background and accomplishments; (iii) the individual’s experience and expertise performing senior policy-making functions in business, government, education, accounting, law and/or administration; (iv) how the individual’s expertise and experience would contribute to the mix of relevant skills and experience on the Board; (v) the individual’s ability to work effectively with the other members of the Board;  and (vi) the individual’s ability and willingness to make the time commitment necessary to serve as an effective director. In addition, the individual’s ability to review and critically evaluate information, their ability to evaluate fund service providers, their ability to
 
 
9

 
 
exercise good business judgment on behalf of fund shareholders, their prior service on the Boards, and their familiarity with the Funds are considered important assets.
 
When assessing potential new directors, the Boards have a policy of considering individuals from various and diverse backgrounds. Such diverse backgrounds may include differences in professional experience, education, individual skill sets and other individual attributes. The Boards’ Policy and Procedures for Director Nominations is attached as Exhibit A. Each Director’s individual educational and professional experience is summarized in the table above and was considered as part of his or her nomination to, or retention on, the Boards.
 
Responsibilities of the Boards
 
The Boards are responsible for overseeing the Advisors’ management and operations of the Funds pursuant to the management agreements. Directors also have significant responsibilities under the federal securities law. Among other things, they
 
oversee the performance of the Funds;
monitor the quality of the advisory and shareholder services provided by the Advisors;
review annually the fees paid to the Advisors for their services;
monitor potential conflicts of interest between the Funds and the Advisors;
monitor custody of assets and the valuation of securities; and
oversee the Funds' compliance program.
 
In performing their duties, Board members receive detailed information about the Funds and the Advisors regularly throughout the year, and meet at least quarterly with management of the Advisors to review reports about fund operations. The directors’ role is to provide oversight and not to provide day-to-day management.
 
The Boards have all powers necessary or convenient to carry out their responsibilities. Consequently, the Boards may adopt bylaws providing for the regulation and management of the affairs of the Issuers and may amend and repeal them to the extent that such bylaws do not reserve that right to the Issuers’ shareholders. They may increase or reduce the number of Board members and may, subject to the 1940 Act, fill Board vacancies. Board members also may elect and remove such officers and appoint and terminate such agents as they consider appropriate. They may establish and terminate committees consisting of two or more directors who may exercise the powers and authority of the Boards as determined by the directors. They may, in general, delegate such authority as they consider desirable to any officer of the Issuers, to any Board committee and to any agent or employee of the Issuers or to any custodian, transfer or investor servicing agent, principal underwriter or other service provider for a Fund.
 
 
10

 
 
The Boards met six times in 2009. Each Director then in office attended at least 75% of the aggregate of the total number of Board meetings, and the total number of meetings held by all Board committees on which the Director served, with the exception of Gale Sayers who attended one of the two Governance Committee meetings. Unlike public operating companies, mutual funds do not typically hold annual meetings. Accordingly, the Issuers do not have a policy pertaining to attendance at annual shareholder meetings by directors.
 
To communicate with the Boards, or a member of the Boards, a shareholder should send a written communication addressed to the attention of the corporate secretary (the “Corporate Secretary”) at American Century Funds, P.O. Box 418210, Kansas City, Missouri 64141-9210. Shareholders who prefer to communicate by email may send their comments to corporatesecretary@americancentury.com. The Corporate Secretary will forward all such communications to each member of the Compliance and Shareholder Communications Committee, or if applicable, the individual director(s) and/or committee chair named in the correspondence. However, if a shareholder communication is addressed exclusively to the Fund’s independent directors, the Corporate Secretary will forward the communication to the Compliance and Shareholder Communications Committee chair, who will determine the appropriate action.
 
Board Leadership Structure and Standing Board Committees
 
Donald H. Pratt currently serves as the independent Chairman of the Board and has served in such capacity since 2005. Of the Boards’ eight members, Jonathan S. Thomas is the only member who is an “interested person” as that term is defined in the 1940 Act. The remaining members are Independent Directors. The Independent Directors meet separately, as needed and at least in conjunction with each quarterly meeting of the Boards, to consider a variety of matters that are scheduled to come before the Boards and meet periodically with the Funds’ Chief Compliance Officer and Fund auditors. They are advised by independent legal counsel. No Independent Director may serve as an officer or employee of a Fund. The Boards have also established several committees, as described below. Each committee is comprised solely of Independent Directors, except the Executive Committee. The Boards believe that the current leadership structure, with Independent Directors filling all but one position on the Boards, with an Independent Director serving as Chairman of the Boards, and with the Board committees comprised only of Independent Directors (with the exception of the Executive Committee), is appropriate and allows for independent oversight of the Funds.
 
Each Board has an Audit Committee that approves the Issuer’s engagement of the independent registered public accounting firm and recommends approval of such engagement to the Independent Directors. The committee also oversees the activities of the accounting firm, receives regular reports regarding fund accounting, oversees securities valuation (approving the
 
 
11

 
 
Funds’ valuation policy and receiving reports regarding instances of fair valuation thereunder) and receives regular reports from the Advisors’ internal audit department. The committee currently consists of Thomas A. Brown, Andrea C. Hall, James A. Olson and Gale E. Sayers. It met four times in 2009.
 
Each Board has a Governance Committee that is responsible for reviewing Board procedures and committee structures. The committee also considers and recommends individuals for nomination as directors, and may recommend the creation of new committees. The names of potential director candidates may be drawn from a number of sources, including recommendations from members of the Board, manage­ment (in the case of Interested Directors only) and shareholders. Shareholders may submit director nominations at any time to the Corporate Secretary, American Century Funds, P.O. Box 418210, Kansas City, MO 64141-9210. When submitting nominations, shareholders should include the name, age and address of the candidate, as well as a detailed resume of the candidate’s qualifications and a signed statement from the candidate of his/her willingness to serve on the Boards. Shareholders submitting nominations should also include information concerning the number of Fund shares and length of time held by the shareholder, and if applicable, similar information for the potential candidate. All nominations submitted by shareholders will be forwarded to the chair of the Governance Committee for consideration. The Corporate Secretary will maintain copies of such materials for future reference by the committee when filling Board positions.
 
If this process yields more than one desirable candidate, the committee will rank them by order of preference depending on their qualifications and the Funds’ needs. The candidate(s) may then be contacted to evaluate their interest and be interviewed by the full committee. Based upon its evaluation and any appropriate background checks, the committee will decide whether to recommend a candidate’s nomination to the Boards.
 
The Governance Committee also may recommend the creation of new committees, evaluate the membership structure of new and existing committees, consider the frequency and duration of Board and committee meetings and otherwise evaluate the responsibilities, processes, resources, performance and compensation of the Boards. The committee currently consists of Donald H. Pratt, Andrea C. Hall, John R. Whitten and Gale E. Sayers. None of its members are “interested persons” as that term is defined in the 1940 Act. The committee operates pursuant to a written charter, which is included as Exhibit B. It met two times in 2009.
 
Each Board also has a Compliance and Shareholder Communications Committee, which reviews the results of the Funds’ compliance testing program, meets regularly with the Funds’ Chief Compliance Officer, reviews shareholder communications, reviews quarterly reports regarding the quality of shareholder service provided by the Advisors, and monitors implementation of the Funds’ Code of Ethics. The committee currently consists of Donald H. Pratt, M. Jeannine Strandjord and John R. Whitten. It met four times in 2009.
 
 
12

 
 
Each Board has a Fund Performance Review Committee that meets quarterly to review the investment activities and strategies used to manage fund assets and monitor investment performance. The committee regularly receives reports from the Advisors’ chief investment officer, portfolio managers and other investment personnel concerning the Funds’ efforts to achieve their investment objectives. The committee also receives information regarding fund trading activities and monitors derivative usage. It currently consists of all of the Independent Directors. The committee met four times in 2009.
 
Finally, each Board has an Executive Committee that performs the functions of the Board between Board meetings, subject to the limitations on its power set out in the Maryland General Corporation Law and except for matters requiring the action of the entire Board under the 1940 Act. The committee currently consists of Donald H. Pratt, Jonathan S. Thomas and M. Jeannine Strandjord. It did not meet in 2009.
 
Risk Oversight by the Boards
 
As previously disclosed, the Boards oversee the management of the Issuers and the Funds and meet at least quarterly with management of the Advisors to review reports and receive information regarding fund operations. Risk oversight relating to the Issuers and the Funds is one component of the Boards’ oversight and is undertaken in connection with the duties of the Boards. As described above, the Boards’ committees assist the Boards in overseeing various types of risks relating to the Issuers and the Funds, including, but not limited to, investment risk, operational risk and enterprise risk. The Boards receive regular reports from each committee regarding the committee’s areas of responsibility and, through those reports and its regular interactions with management of the Advisors during and between meetings, analyzes, evaluates, and provides feedback on the Advisors’ risk management processes. In addition, the Boards receive information regarding, and have discussions with senior management of the Advisors about, the Advisors’ enterprise risk management systems and strategies, including an annual review of the Advisors’ risk management practices. Within the past 12 months, members of the Board’s Governance Committee have participated in industry conferences discussing directors’ role in risk oversight. There can be no assurance that all elements of risk, or even all elements of material risk, will be disclosed to or identified by the Boards.
 
Board Compensation
 
Each Independent Director receives compensation for service as a member of the Boards based on a schedule that takes into account the number of meetings attended and the assets of the Funds for which the meetings are held. None of the Interested Directors or officers of the Funds receives compensation from the Funds. Compensation expenses are allocated to the Issuers based in part on their relative net assets. Under the terms of each management agreement with the Advisors, the Funds are responsible for paying such fees and expenses. For each Issuer’s last fiscal year, each Issuer
 
 
13

 
 
and the American Century Family of Funds paid the Independent Directors the amounts shown in the following table. Note that the table reflects multiple overlapping periods, so that total compensation shown for any one fiscal year includes compensation also counted for other fiscal years.
 
Issuer
FYE of
Issuer
Thomas A.
Brown
Andrea C.
Hall
James A.
Olson
American Century
Capital Portfolios, Inc.
3/31/2009
$42,949
$42,196
$42,419
   Total Compensation
   from the American
   Century Family of Funds
   for FYE 3/31/2009(1)
 
$166,577
$163,577
$164,577
American Century Asset
Allocation Portfolios, Inc.
7/31/2009
$4,284
$4,183
$4,244
American Century
Growth Funds, Inc.
7/31/2009
 $216
 $213
 $213
   Total Compensation from
   the American Century
   Family of Funds for FYE
   7/31/2009(2)
 
$162,680
$159,680
$160,680
American Century
Mutual Funds, Inc.
10/31/2009
$69,477
$68,618
$69,477
   Total Compensation from
   the American Century
   Family of Funds for FYE
   10/31/2009(3)
 
$160,257
$158,257
$160,257
American Century
Strategic Asset
Allocations, Inc.
11/30/2009
$11,784
$11,739
$11,892
American Century World
Mutual Funds, Inc.
11/30/2009
$13,890
$15,520
$14,024
   Total Compensation from
   the American Century
   Family of Funds for FYE
   11/30/2009(4)
 
$158,782
$158,282
$160,282
American Century
Variable Portfolios, Inc.
12/31/2009
$10,722
$10,652
$10,694
   Total Compensation from
   the American Century
   Family of Funds for FYE
   12/31/2009(5)
 
$160,308
$159,808
$159,808
 
Issuer
FYE of
Issuer
Donald H.
Pratt
Gale E.
Sayers
M. Jeannine
Strandjord
John R.
Whitten
American Century
Capital Portfolios, Inc.
3/31/2009
$49,933
$40,649
$43,214
$36,927
   Total Compensation
   from the American
   Century Family of Funds
   for FYE 3/31/2009(1)
 
$193,577
$157,577
$167,577
$142,744

 
14

 
 
Issuer
FYE of
Issuer
Donald H.
Pratt
Gale E.
Sayers
M. Jeannine
Strandjord
John R.
Whitten
American Century Asset
Allocation Portfolios, Inc.
7/31/2009
$4,984
$3,961
$4,304
$3,924
American Century
Growth Funds, Inc.
7/31/2009
 $252
 $202
 $218
 $197
   Total Compensation from
   the American Century
   Family of Funds for FYE
   7/31/2009(2)
 
$189,680
$151,680
$163,680
$148,680
American Century
Mutual Funds, Inc.
10/31/2009
$81,611
$57,287
$69,477
$64,279
   Total Compensation from
   the American Century
   Family of Funds for FYE
   10/31/2009(3)
 
$188,257
$132,077
$160,257
$148,257
American Century
Strategic Asset
Allocations, Inc.
11/30/2009
$13,967
$9,519
$11,892
$11,001
American Century World
Mutual Funds, Inc.
11/30/2009
$16,481
$11,149
$14,024
$12,973
   Total Compensation from
   the American Century
   Family of Funds for FYE
   11/30/2009(4)
 
$188,282
$127,923
$160,282
$148,282
American Century
Variable Portfolios, Inc.
12/31/2009
$12,671
$9,234
$10,813
$10,125
   Total Compensation from
   the American Century
   Family of Funds for FYE
   12/31/2009(5)
 
$189,808
$137,808
$161,808
$151,808

1
Includes deferred compensation as follows: Mr. Brown, $25,115; Dr. Hall, $121,000; Mr. Olson, $155,577; Mr. Pratt, $22,437; Mr. Sayers $157,577 and Mr. Whitten, $103,744.
 
2
Includes deferred compensation as follows: Mr. Brown, $23,936; Dr. Hall, $69,267; Mr. Olson, $136,680; Mr. Pratt, $21,552; Mr. Sayers, $151,680; and Mr. Whitten, $107,680.
 
3
Includes deferred compensation as follows: Mr. Brown, $23,051; Dr. Hall, $29,467; Mr. Olson, $69,477; Mr. Pratt, $20,888; Mr. Sayers, $132,077; and Mr. Whitten, $103,257.
 
4
Includes deferred compensation as follows: Mr. Brown, $22,756; Dr. Hall, $19,133; Mr. Olson, $122,782; Mr. Pratt, $20,667; Mr. Sayers, $127,923; and Mr. Whitten, $101,782.
 
5
Includes deferred compensation as follows: Mr. Brown, $22,462; Mr. Olson, $112,308; Mr. Pratt, $20,446; Mr. Sayers, $137,808; and Mr. Whitten, $100,308.
 
None of the Issuers currently provides any pension or retirement benefits to the Directors except pursuant to the American Century Mutual Funds’ Independent Directors’ Deferred Compensation Plan adopted by the Issuers. Under the plan, the Independent Directors may defer receipt of all or any part of the fees to be paid to them for serving as Directors of the Funds. All deferred fees are credited to accounts established in the names of the directors. The
 
 
15

 
 
amounts credited to each account then increase or decrease, as the case may be, in accordance with the performance of one or more American Century funds selected by the director. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts credited to the account. Directors are allowed to change their designation of funds from time to time.
 
No deferred fees are payable until such time as a director resigns, retires or otherwise ceases to be a member of the Board. Directors may receive deferred fee account balances either in a lump sum payment or in substantially equal installment payments to be made over a period not to exceed 10 years. Upon the death of a director, all remaining deferred fee account balances are paid to the director’s beneficiary or, if none, to the director’s estate.
 
The plan is an unfunded plan and, accordingly, the Funds have no obligation to segregate assets to secure or fund the deferred fees. To date, the Funds have voluntarily funded their obligations. The rights of directors to receive their deferred fee account balances are the same as the rights of a general unsecured creditor of the Funds. The plan may be terminated at any time by the administrative committee of the plan. If terminated, all deferred fee account balances will be paid in a lump sum.
 
Exhibit C to this Proxy Statement shows the dollar range the Directors beneficially owned as of December 31, 2009 in the equity securities of any of the Funds, and, on an aggregate basis, equity securities of all of the Issuers.
 
On December 23, 1999, American Century Services, LLC (ACS), an affiliate of the Advisors, entered into an agreement with DST Systems, Inc. (DST) under which DST would provide back office software and support services for transfer agency services provided by ACS (the “Agreement”). ACS pays DST fees based in part on the number of accounts and the number and type of transactions processed for those accounts. For the 12 months ended December 31, 2009, DST received $18,230,115 in fees from ACS. DST’s revenue for the calendar year ended December 31, 2009, was approximately $2.2 billion.
 
Ms. Strandjord is a director of DST and a holder of 21,345 shares and possesses options to acquire an additional 55,890 shares of DST common stock, the sum of which is less than one percent (1%) of the shares outstanding. Because of her official duties as a director of DST, she may be deemed to have an “indirect interest” in the Agreement. However, the Boards were not required to nor did they approve or disapprove the Agreement, since the provision of the services covered by the Agreement is within the discretion of ACS. DST was chosen by ACS for its industry-leading role in providing cost-effective back office support for mutual fund service providers such as ACS. DST is the largest mutual fund transfer agent, servicing more than 121.1 million mutual fund accounts on its shareholder recordkeeping system. Ms. Strandjord’s role as a director of DST was not considered by ACS; she was not involved in any way with the negotiations between ACS and DST; and her status as a director
 
 
16

 

of either DST or the Funds was not a factor in the negotiations. The Boards and counsel to the Independent Directors of the Funds have concluded that the existence of this Agreement does not impair Ms. Strandjord’s ability to serve as an independent director under the 1940 Act.
 
Beneficial Ownership of Affiliates by Independent Directors
 
No Independent Director or his or her immediate family members beneficially owned shares of the Advisors, the Issuers’ principal underwriter or any other person directly or indirectly controlling, controlled by, or under common control with the Advisors or the Issuers’ principal underwriter as of December 31, 2009.
 
Officers
 
The following table presents certain information about the executive officers of the Issuers. Each officer serves as an officer for each of the 104 investment companies in the American Century Family of Funds, unless otherwise noted. No officer is compensated for his or her service as an officer of the Funds. The listed officers are interested persons of the Funds and are appointed or re-appointed on an annual basis. The mailing address for each of the officers listed below is 4500 Main Street, Kansas City, Missouri 64111.
 

Name (Age)
Offices with
the Issuers
Principal Occupation During the Past Five Years
Jonathan
Thomas
(47)
Director
and President
since 2007
President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: Chief Executive Officer and Manager, ACS; Executive Vice President, ACIM, ACGIM; Director, ACIM, ACGIM and other ACC subsidiaries; Managing Director, Morgan Stanley (March 2000 to November 2005)
Barry Fink
(55)
Executive
Vice President
since 2007
Chief Operating Officer and Executive Vice President, ACC (September 2007 to present); President, ACS (October 2007 to present); Managing Director, Morgan Stanley (2000 to 2007); Global General Counsel, Morgan Stanley (2000 to 2006). Also serves as: Manager, ACS and Director, ACC, ACIS and other ACC subsidiaries
Maryanne
Roepke
(54)
Chief
Compliance
Officer
since 2006
and Senior
Vice President
since 2000
Chief Compliance Officer, American Century funds, ACIM, ACGIM and ACS (August 2006 to present); Assistant Treasurer, ACC (January 1995 to August 2006); and Treasurer and Chief Financial Officer, various American Century funds (July 2000 to August 2006). Also serves as: Senior Vice President, ACS
Charles
Etherington
(52)
General
Counsel
since 2007
and Senior
Vice President
since 2006
Attorney, ACC (February 1994 to present); Vice President, ACC (November 2000 to present), General Counsel, ACC (March 2007 to present); Also serves as General Counsel, ACIM, ACGIM, ACS and other ACC subsidiaries; and Senior Vice President, ACIM, ACGIM and ACS

 
17

 
 
Name (Age)
Offices with
the Issuers
Principal Occupation During the Past Five Years
Robert
Leach
(43)
Vice President,
Treasurer and
Chief Financial
Officer since
2006
Vice President, ACS (February 2000 to present); and Controller, various American Century funds (1997 to September 2006)
David
Reinmiller
(46)
Vice President
since 2000
Attorney, ACC (January 1994 to present); Associate General Counsel, ACC (January 2001 to present); Chief Compliance Officer, American Century funds, ACIM and ACGIM (January 2001 to February 2005). Also serves as Associate General Counsel, ACIM, ACGIM, ACS, ACIS and other ACC subsidiaries; Vice President, ACIM, ACGIM and ACS
Ward
Stauffer
(49)
Secretary
since 2005
Attorney, ACC (June 2003 to Present)
 
Share Ownership
 
As of March 19, 2010, each director and officer individually, and as a group, owned beneficially less than 1% of the outstanding shares of each class of the Funds. For more information about significant share ownership of the Funds, see “Other Information—Outstanding Shares and Significant Shareholders.”
 
Independent Registered Public Accounting Firm
 
The Audit Committees and each Board selected the independent public accounting firm of Deloitte & Touche LLP to serve as independent registered public accountants of the Issuers for their most recent fiscal year. Representatives of Deloitte & Touche are not expected to be present at the Meeting, but will have the opportunity to make a statement if they wish, and will be available should any matter arise requiring their presence.
 
Fees Paid to Independent Registered Public Accounting Firm
 
The aggregate fees paid to Deloitte & Touche LLP and other member firms of Deloitte Touche Tahmatsu and their respective affiliates (collectively referred to as the “Deloitte Entities”) for professional services rendered by the Deloitte Entities for the audit of the annual financial statements of the Funds and other professional services for the fiscal years ended as indicated below were:
 
Issuer
    Audit Fees (a)
Audit Related
Fees (b)
Tax
Fees (c)
All Other
Fees (d)
American Century Asset Allocation Portfolios, Inc.
07/31/2009
$114,612
$0
$0
$0
07/31/2008
$76,990
$0
$0
$0
American Century Capital Portfolios, Inc
03/31/2009
$166,905
$0
$0
$0
03/31/2008
$157,806
$0
$1,498
$0

 
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Issuer
    Audit Fees (a)
Audit Related
Fees (b)
Tax
Fees (c)
All Other
Fees (d)
American Century Growth Funds, Inc.
07/31/2009
$44,065
$0
$0
$0
07/31/2008
$45,980
$0
$0
$0
American Century Mutual Funds, Inc.
10/31/2009
$281,906
$0
$0
$0
10/31/2008
$317,528
$0
$0
$0
American Century Strategic Asset Allocations, Inc.
11/30/2009
$79,469
$0
$0
$0
11/30/2008
$67,248
$0
$0
$0
American Century Variable Portfolios, Inc.
12/31/2009
$165,859
$0
$0
$0
12/31/2008
$164,383
$0
$0
$0
American Century World Mutual Funds, Inc.
11/30/2009
$204,457
$0
$0
$0
11/30/2008
$239,403
$0
$0
$0
 
(a) Audit Fees
 
These fees relate to professional services rendered by the Deloitte Entities for the audits of the Funds’ annual financial statements or services normally provided by an independent registered public accounting firm in connection with statutory and regulatory filings or engagements. These services included the audits of the financial statements of the Funds, issuance of consents, income tax provision procedures and assistance with review of documents filed with the Securities and Exchange Commission.
 
(b) Audit Related Fees
 
These fees relate to assurance and related services by the Deloitte Entities in connection with semi-annual financial statements.
 
(c) Tax Fees
 
These fees relate to professional services rendered by the Deloitte Entities for tax compliance, tax advice, and tax planning. These services relate to the review of the Funds’ federal and state income tax returns, and review of excise tax calculations and returns.
 
(d) All Other Fees
 
These fees relate to products and services provided by the Deloitte Entities other than those reported under “Audit Fees,” “Audit Related Fees,” and “Tax Fees.”
 
Audit Committee Pre-Approval Policies and Procedures
 
The Audit Committee approves the engagement of the accountant prior to the accountant rendering any audit or non-audit services to the Issuers. The aggregate non-audit fees billed by the Deloitte Entities for services rendered
 
 
19

 
 
to the Advisors and service affiliates for the years ended December 31, 2008 and December 31, 2009 were $93,552 and $55,065, respectively.
 
The Audit Committee considered and concluded that the provisions for non-audit services to the Advisors and their affiliates that did not require pre-approval are compatible with maintaining Deloitte’s independence, and has determined that the provision of these services do not compromise Deloitte’s independence.
 
Required Approval for Proposal 1
 
Proposal 1, the election of the Nominee, must be approved by a plurality of the votes cast in person or by proxy at the Meeting at which a quorum exists. The shareholders of each Issuer, voting together as a single class that includes the votes of the shares of each Fund that is a series of that Issuer, will vote separately for the election of the Nominee to that Issuer’s Board. Approval of the Proposal by an Issuer is not contingent upon approval of the Proposal by any other Issuer.
 
The Boards Recommend that the Shareholders Vote to Elect the Nominee.

PROPOSAL 2: APPROVAL OF MANAGEMENT AGREEMENTS
 
 
Overview
 
American Century Investment Management, Inc. (“ACIM”) and American Century Global Investment Management, Inc. (“ACGIM” and, together with ACIM, the “Advisors”) currently serve as investment advisors to the Funds. The Advisors previously served as investment advisors to the Funds pursuant to management agreements approved by Fund shareholders (the “Prior Management Agreements”). The Prior Management Agreements terminated automatically on February 16, 2010 (the “Termination Date”) due to a deemed “change of control” of the Advisors’ parent company, American Century Companies, Inc. (“ACC”). The change in control is described in further detail below. To ensure the continuity of the investment advisory services to the Funds after the aforementioned termination of the Prior Management Agreements, and before shareholder approval of new management agreements described below (“Proposed Management Agreements”), the Boards approved interim management agreements between the Advisors and the Issuers on behalf of the respective Funds (the “Interim Management Agreements”). The Advisors are currently managing the Funds pursuant to the Interim Management Agreements. Shareholders of the Funds are being asked to approve Proposed Management Agreements with ACIM.* The Proposed Management Agreements are identical

__________________________________
 
  *
Management agreements for new share classes of the Funds that were launched after the Termination Date did not terminate, have not been replaced by Interim Management Agreements, and do not require approval of Proposed Management Agreements.

 
20

 
 
to the Prior Management Agreements except for (i) the date, (ii) the substitution of ACIM for ACGIM as advisor of those Funds currently managed by ACGIM, and (iii) certain other non-material changes. A form of the Proposed Management Agreements is attached as Exhibit D.
 
Reason for Proposed Management Agreements
 
You are being asked to approve the Proposed Management Agreements in order to ensure the continued provision of advisory services to the Funds. Under the 1940 Act, the change in trustee of the Trust described below may technically be considered a “change in control” of ACC and, therefore, also a change in control of the Advisors even though there has been no change to their management and none is anticipated. The “change in control” resulted in the assignment and automatic termination of the Prior Management Agreements, as required under their terms and the 1940 Act.
 
ACIM is a wholly owned subsidiary of ACC, and ACGIM is a wholly owned subsidiary of ACIM. ACC’s certificate of incorporation provides for three classes of common stock: Class A, Class B and Class C. Class A common stock represents one vote per share; Class B common stock represents 10,000 votes per share; and Class C common stock has no voting rights. Class B shares are entitled to elect 75% of ACC’s Board of Directors. A trust (the “Trust”) holds Class B shares that represent approximately 40% of the combined voting power of the common stock. Prior to the Termination Date, James E. Stowers, Jr. served as the trustee of the Trust. Pursuant to the trust agreement governing the Trust (hereinafter the “Trust Agreement”), as trustee of the Trust, Mr. Stowers had the ability to vote and to dispose of the Class B shares owned by the Trust. Under Section 2(a)(9) of the 1940 Act, Mr. Stowers’ control of greater than 25% of the voting securities created a presumption that he controlled ACC.
 
On the Termination Date, pursuant to the terms of the Trust Agreement, Mr. Richard W. Brown succeeded Mr. Stowers as the trustee of the Trust. Mr. Brown currently serves as co-chairman of the Board of Directors of ACC and also serves as co-chairman of the Board of Directors of Stowers Resource Management, Inc. (“SRM”) and chairman of the Board of Directors of the Stowers Institute for Medical Research (“SIMR”). As trustee, Mr. Brown has the responsibility to manage the affairs of the Trust, which include managing the Trust property, distributing income to its beneficiaries, voting the shares of ACC stock held by the Trust, and complying with the Trust Agreement’s dispositive provisions upon the occurrence of specific events.  During his lifetime, Mr. Brown may designate other qualified individuals and corporations to act as trustee. Should he fail to do so, David A. Welte shall become the successor trustee.  Mr. Welte currently serves as a member of the Board of Directors of ACC and also serves as Executive Vice President and General Counsel of SRM and as a member of the Board of Directors of SRM and SIMR. Should neither Mr. Brown nor Mr. Welte be able to act as trustee or designate someone to act in his place, a majority of the members of the
 
 
21

 

Executive Committee of the SRM Board of Directors shall make such appointment. Pursuant to the terms of the Trust Agreement, the ultimate beneficiary of the Trust, including the ACC stock held by the Trust, is SRM, SIMR or another tax-exempt member of the Stowers Group of Companies.*
 
Information Regarding ACIM
 
ACIM is a wholly owned subsidiary of ACC and has been providing management and advisory services to the American Century family of funds since 1958. Currently, ACGIM is wholly owned by ACIM. However, in order to streamline American Century’s corporate organization, ACGIM is being merged into ACIM as of June 16, 2010. This merger will not change in any way how the Funds are managed, the personnel who manage the Funds, the advisory fees for such management services or any other matter relating to the operations of the Funds. The only change is that the named party in all advisory agreements will be ACIM. The following table lists the names, positions and principal occupations of the directors and principal executive officer of ACIM:
 
Name
Position with ACIM
Principal Occupation
Enrique Chang
President, Chief
Executive Officer and
Chief Investment Officer
Chief Investment Officer
James E.
Stowers, Jr.
Director
Founder, Co-Chairman and Director, ACC; Director, ACIM, ACS, ACIS and other ACC subsidiaries
Jonathan S.
Thomas
Executive Vice
President, Director
President and Chief Executive Officer, ACC; Chief Executive Officer and Manager, ACS; Director, ACIM, ACIS and other ACC subsidiaries
 
Officers of the Advisors and the Funds who own ACC stock are Otis Cowan, Charles Etherington, David Reinmiller, Maryanne Roepke and Ward Stauffer.  The address for the Advisors and each of their officers and directors is 4500 Main Street, Kansas City, Missouri 64111.
 
Description of the Management Agreements
 
The Advisors previously served as investment advisors to each of the Funds pursuant to the Prior Management Agreements, and currently serve as investment advisors pursuant to the Interim Management Agreements. The table included as Exhibit E shows the dates of the Interim Management Agreements, as well as the dates and reason the Prior Management Agreements were last submitted to shareholders for approval. Under the Proposed Management Agreements, ACIM will provide the same services to
 
__________________________________
 
  *
The Stowers Group of Companies is a not-for-profit biomedical research organization dedicated to finding the keys to the causes, treatment and prevention of disease.

 
22

 

the Funds as were provided by the Advisors under the Prior and Interim Management Agreements.
 
Each of the Prior Management Agreements, as required by Section 15 of the 1940 Act, provides for its automatic termination in the event of its assignment (as defined by the 1940 Act). Any change in control of the Advisors or their parent company may cause an assignment. As previously described, on February 16, 2010, there was a deemed change in control of the Advisors’ parent company, ACC, which caused an “assignment” of the Prior Management Agreements resulting in their automatic termination. Accordingly, the Boards have determined it to be in the best interests of each Fund and its shareholders to approve a new management agreement between ACIM and the respective Issuers on behalf of each Fund. Each Board, including the Independent Directors, approved the Proposed Management Agreements and recommended their approval by shareholders, as required by the 1940 Act.
 
To ensure the continuity of the investment advisory services to the Funds after the aforementioned termination of the Prior Management Agreements, and before shareholder approval of the Proposed Management Agreements, the Boards approved Interim Management Agreements between the Advisors and the Issuers on behalf of the Funds in accordance with Rule 15a-4 of the 1940 Act. See “Basis for the Boards’ Approval of the Proposed Management Agreements” for a discussion of the factors the Boards considered in their approval of the Proposed Management Agreements.
 
Interim Management Agreements
 
    The terms of the Interim Management Agreements are substantially identical to those of the corresponding Prior Management Agreements. However, there are differences relating to effective dates, duration and termination provisions as described below.
 
The Interim Management Agreements were effective upon the termination of the Prior Management Agreements and will continue to be effective until the earlier of (i) 150 days following the date of their execution or (ii) the effective date of the Proposed Management Agreements (provided such agreements have been approved in the manner required under the 1940 Act), unless terminated sooner in accordance with their terms. If shareholders of the Funds do not approve the Proposed Management Agreements on behalf of their respective Funds, the Boards will take such action as they deem to be in the best interests of the Funds, which may include further solicitation of shareholders. In addition, each Interim Management Agreement may be terminated with respect to any Fund by the Board, by a vote of a majority of the outstanding voting securities (as defined by the 1940 Act) of such Fund, or by the Advisors without payment of any penalty, upon 60 days’ written notice to the other party.
 
The rate of compensation paid to the Advisors by each Fund under the Interim Management Agreements is the same as that paid under the corresponding Prior Management Agreements.
 
 
23

 
 
Proposed Management Agreements
 
The Boards have unanimously approved and recommended that shareholders approve the Proposed Management Agreements with ACIM on behalf of their respective Funds. The approval of a Proposed Management Agreement by one Fund is not contingent upon the approval of a Proposed Management Agreement by any other Fund, including Funds that are series of the same Issuer. The Advisors’ fee under each Prior Management Agreement on behalf of the respective Funds and share classes will be the same under the corresponding Proposed Management Agreement. A form of the Proposed Management Agreements is attached as Exhibit D. The description of the terms of the Proposed Management Agreements is qualified in its entirety by reference to Exhibit D.
 
Comparison of the Prior Management Agreements and the Proposed Management Agreements
 
The terms of the Proposed Management Agreements are substantially identical to those of the corresponding Prior Management Agreements except for (i) the date, (ii) the substitution of ACIM for ACGIM as advisor of those Funds currently managed by ACGIM, and (iii) certain other non-material changes.
 
Management Services
 
The investment management services to be provided by ACIM to each Fund under the Proposed Management Agreements are the same as those currently provided by the Advisors to each Fund under the Prior Management Agreements. Both the Prior Management Agreements and the Proposed Management Agreements provide that each Fund’s advisor will (i) maintain a continuous investment program and decide which investments to buy and sell for each Fund’s portfolio and (ii) select brokers and dealers to carry out portfolio securities transactions for each Fund.
 
Fees and Expenses
 
The provisions of the Proposed Management Agreements regarding expenses are identical to the provisions of the Prior Management Agreements. Under the terms of the Prior Management Agreements and the Proposed Management Agreements, each Fund’s advisor will pay all of the expenses of each class of each Fund, other than interest, taxes, brokerage commissions, extraordinary expenses, the fees and expenses of the Independent Directors (including counsel fees), and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act.
 
 
24

 
 
The fees payable by each Fund to its advisor under both the Prior Management Agreements and the Proposed Management Agreements are identical and are set forth in Exhibit F. Additionally, Exhibit G sets forth the aggregate amount of fees paid to the Advisors and the amount and purpose of any material payments to the Advisors by a Fund during the last fiscal year.
 
Termination
 
Each Prior Management Agreement and Proposed Management Agreement provides that it will terminate automatically in the event of its assignment (as defined in the 1940 Act). In addition, the Prior Management Agreements and the Proposed Management Agreements each are terminable with respect to a Fund at any time, without payment of any penalty, by the Board of each Fund or by a vote of the majority of a Fund’s outstanding voting securities on 60 days’ written notice to the Fund’s advisor, or by the Fund’s advisor upon 60 days’ written notice to the Fund.
 
Merger of ACIM and ACGIM
 
As noted above, for reasons of organizational simplification, American Century has determined to merge ACGIM into ACIM, resulting in a single investment advisor. This merger will eliminate the need for multiple investment management agreements with certain Issuers, previously necessary because of the separation of duties between the two entities. Prior to the merger, ACIM was responsible for management of all domestic strategies, including cash management for all Funds, while ACGIM was responsible for all international strategies. This division of duties, based primarily on the location of the various investment management teams, sometimes resulted in an Issuer having more than one investment management agreement. For instance, a Fund managed with an international strategy had an investment management agreement with ACGIM for the international management duties, and a subadvisory agreement with ACIM regarding the management of such Fund’s cash position.
 
The combination of the Advisors into a single entity will eliminate the need for multiple investment management agreements without changing the nature, quality or extent of the services provided. There will be no change in portfolio managers as a result of this combination, or in how the Funds are managed, and the change will be seamless and transparent to shareholders in the Funds. This decision is unrelated to the change of control that necessitated this proxy and the merger does not require the approval of Fund shareholders.
 
Advisory Services to Other Funds
 
The following table provides information regarding non-American Century mutual funds for which the Advisors provide investment advisory services and that have investment objectives and strategies that are similar to those of the Funds. All of the information below is provided for the calendar year ended December 31, 2009.
 
 
25

 
 
Fund
2009 Average
Net Assets ($)
Actual
Management
Fee Received ($)
Effective Management
Fee (as a percentage of average daily net assets)
The following funds are managed pursuant to a similar investment strategy as American Century Growth.
Principal LargeCap
Growth Fund II
939,055,675
3,306,528
0.352%
The following funds are managed (or, in some cases, a portion of a fund is managed) pursuant to a similar investment strategy as American Century Vista.
John Hancock Vista Fund
159,791,307
690,234
0.432%
John Hancock Vista Trust
101,583,346
441,788
0.435%
NVIT Multi-Manager
Mid Cap Growth Fund
153,215,692
684,346
0.447%
A portion of the following fund’s assets is managed pursuant to a similar investment strategy as American Century International Discovery.
NVIT Multi-Manager
International Growth Fund
81,838,115
531,728
0.650%
A portion of the following fund’s assets is managed pursuant to a similar investment strategy as American Century Value.
NVIT Multi-Manager
Multi Cap Value Fund
4,240,631
14,575
0.344%
A portion of the following fund’s assets is managed pursuant to a similar investment strategy as American Century Growth. Another portion is managed pursuant to a similar investment strategy as American Century Global Growth.
VALIC Growth Fund
482,139,892
2,322,420
0.482%
The following fund is managed pursuant to a similar investment strategy as American Century International Growth.
VALIC International
Growth I Fund
218,553,455
1,412,684
0.646%
A portion of the following fund’s assets is managed pursuant to a similar investment strategy as American Century International Opportunities. Another portion is managed pursuant to a similar investment strategy as American Century International Discovery.
Laudus International
MarketMasters Fund
261,049,817
2,139,657
0.820%
The following funds are managed (or, in some cases, a portion of a fund is managed) pursuant to a similar investment strategy as American Century Mid Cap Value.
MML Mid Cap Value Fund
319,826,391
1,440,084
0.450%
Northwestern Mutual
 Mid Cap Value Portfolio
67,348,567
372,790
0.554%
NVIT Multi-Manager
Mid Cap Value Fund
128,246,269
575,935
0.449%
A portion of the following fund’s assets is managed pursuant to a similar investment strategy as American Century Small Cap Value. Another portion is managed pursuant to a similar investment strategy as American Century Mid Cap Value.
ING American Century
Small-Mid Cap Value Portfolio
88,116,856
551,973
0.626%

 
26

 
 
Fund
2009 Average
Net Assets ($)
Actual
Management
Fee Received ($)
Effective Management
Fee (as a percentage of average daily net assets)
The following funds are managed (or, in some cases, a portion of a fund is managed) pursuant to a similar investment strategy as American Century Large Company Value.
Transamerica American Century Large Company Value VP
373,877,652
1,417,422
0.379%
VALIC Core Value
51,626,133
234,254
0.454%
Northwestern Mutual Large Company Value Portfolio
34,701,773
163,410
0.471%
 
Basis for the Boards’ Approval of the Proposed Management Agreements
 
At the meetings held on March 29, 2010, after considering all information presented, the Boards, including the Independent Directors, unanimously approved each Proposed Management Agreement and determined to recommend that shareholders approve the Proposed Management Agreements. The Boards requested and reviewed extensive data and information compiled by the Advisors and certain independent providers of evaluation data concerning the Funds and services provided to the Funds by the Advisors. The Boards oversee on a continuous basis and evaluate at their quarterly meetings, directly and through the committees of the Boards, the nature and quality of significant services provided by the Advisors, the investment performance of the Funds, shareholder services, audit and compliance functions and a variety of other matters relating to the Funds’ operations. The information considered and the discussions held at the meetings included, but were not limited to:
 
 
the nature, extent and quality of investment management, shareholder services and other services provided to the Funds;
 
 
the wide range of programs and services the Advisors provide to the Funds and their shareholders on a routine and non-routine basis;
 
 
the compliance policies, procedures, and regulatory experience of the Advisors;
 
 
data comparing the cost of owning the Funds to the cost of owning a similar fund;
 
 
the fact that there will be no changes to the fees, services, or personnel providing such services as compared to the Prior Management Agreements;
 
 
data comparing the Funds’ performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies;
 
 
financial data showing the profitability of the Funds to the Advisors and the overall profitability of the Advisors;
 
 
data comparing services provided and charges to other non-fund investment management clients of the Advisors; and
 
 
consideration of collateral benefits derived by the Advisors from the management of the Funds and potential economies of scale relating thereto.

 
27

 
 
The Boards also considered whether there was any reason for not continuing the existing arrangement with the consolidated Advisors. In this regard, the Boards were mindful of the potential disruptions of the Funds’ operations and various risks, uncertainties and other effects that could occur as a result of a decision not to continue such relationship. In particular, the Boards recognized that most shareholders have invested in the Funds on the strength of the Advisors’ industry standing and reputation and in the expectation that the Advisors will have a continuing role in providing advisory services to the Funds.
 
The Boards considered all of the information provided by the Advisors, the independent data providers, and the Boards’ independent counsel, and evaluated such information for each fund the Boards oversee. The Boards did not identify any single factor as being all-important or controlling, and each Director may have attributed different levels of importance to different factors. In deciding to approve the Proposed Management Agreements under the terms ultimately determined by the Boards to be appropriate, the Boards based their decision on a number of factors, including the following:
 
Nature, Extent and Quality of Services – Generally. Under the Proposed Management Agreements, ACIM is responsible for providing or arranging for all services necessary for the operation of the Funds. The Boards noted that under the Proposed Management Agreements, ACIM provides or arranges at its own expense a wide variety of services including:
 
 
constructing and designing the Funds
 
 
portfolio security selection
 
 
initial capitalization/funding
 
 
securities trading
 
 
Fund administration
 
 
custody of Fund assets
 
 
daily valuation of each Fund’s portfolio
 
 
shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping and communications
 
 
legal services
 
 
regulatory and portfolio compliance
 
 
financial reporting
 
 
marketing and distribution
 
The Boards noted that many of these services have expanded over time both in terms of quantity and complexity in response to shareholder demands, competition in the industry, changing distribution channels and the changing regulatory environment.
 
Investment Management Services. The nature of the investment management services to be provided to the Funds is complex and would provide Fund shareholders access to professional money management, instant
 
 
28

 
 
diversification of their investments within an asset class, the opportunity to easily diversify among asset classes, and liquidity. In evaluating investment performance, the Boards expect ACIM to manage each Fund in accordance with its investment objectives and approved strategies. In providing these services, ACIM utilizes teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance and other systems to conduct their business. The Boards, directly and through their Fund Performance Review Committees, regularly review investment performance information for each Fund, together with comparative information for appropriate benchmarks and/or peer groups of similarly-managed funds, over different time horizons. If performance concerns are identified, the underperforming Fund receives special reviews until performance improves, during which time the Boards discuss with the Advisors the reasons for such underperformance and any efforts being undertaken to improve performance.
 
Shareholder and Other Services. Under the Proposed Management Agreements, ACIM will also provide the Funds with a comprehensive package of transfer agency, shareholder, and other services. The Boards, directly and through the various committees of the Boards, regularly review reports and evaluations of such services. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services provided, staffing levels, shareholder satisfaction (as measured by external as well as internal sources), technology support, new products and services offered to fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. Certain aspects of shareholder and transfer agency service level efficiency and the quality of securities trading activities are measured by independent third party providers and are presented in comparison to other fund groups not managed by the Advisors.
 
Costs and Profitability. The Advisors provided detailed information concerning their cost of providing various services to the Funds, their profitability in managing the Funds, their overall profitability, and their financial condition. The Independent Directors reviewed with the Advisors the methodology used to prepare this financial information. The financial information was considered in evaluating the Advisors’ financial condition, ACIM’s ability to continue to provide services under the Proposed Management Agreements, and the reasonableness of the proposed management fees. The Boards concluded that the Advisors’ profits were reasonable in light of the services to be provided to the Funds.
 
Ethics. The Boards generally consider the Advisors’ commitment to providing quality services to shareholders and to conducting their business ethically. They noted that the Advisors’ practices generally meet or exceed industry best practices.
 
 
29

 
 
Economies of Scale. The Boards also reviewed information provided by the Advisors regarding the possible existence of economies of scale in connection with the management of the Funds. The Boards concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. The Boards concluded that the Advisors are appropriately sharing economies of scale through their competitive fee structure, offering competitive fees from fund inception, fee breakpoints as each Fund increases in size, and through reinvestment in its business to provide shareholders additional content and services.
 
Comparison to Other Funds’ Fees. Both the Prior and Proposed Management Agreements provide that each Fund pay its advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Funds, other than brokerage expenses, taxes, interest, extraordinary expenses, and the fees and expenses of the Funds’ Independent Directors (including their independent legal counsel) and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the 1940 Act. Under the unified fee structure, such advisor is responsible for providing all investment advisory, custody, audit, administrative, compliance, recordkeeping, marketing and shareholder services, or arranging and supervising third parties to provide such services. By contrast, most other funds are charged a variety of fees, including an investment advisory fee, a transfer agency fee, an administrative fee, distribution charges and other expenses. Other than their investment advisory fees and any applicable Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The Boards believe the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since the unified fee cannot be increased without a vote of Fund shareholders, it shifts to the Advisors the risk of increased costs of operating the Funds and provides a direct incentive to minimize administrative inefficiencies. Part of the Boards’ analysis of fee levels involves reviewing certain evaluative data compiled by an independent provider and comparing each Fund’s unified fee to the total expense ratio of other funds in the Fund’s peer group. The Boards concluded that the management fee to be paid by each Fund to ACIM under the Proposed Management Agreements is reasonable in light of the services to be provided to the Fund.
 
Comparison to Fees and Services Provided to Other Clients of the Advisors. The Boards also requested and received information from the Advisors concerning the nature of the services, fees, and profitability of their advisory services to advisory clients other than the Funds. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Funds. The Boards analyzed this information and concluded that the fees charged and services provided to the Funds were reasonable by comparison.
 
 
30

 
 
Collateral or “Fall-Out” Benefits Derived by the Advisors. The Boards considered the existence of collateral benefits the Advisors may receive as a result of their relationship with the Funds. They concluded that the Advisors’ primary business is managing mutual funds and they generally do not use fund or shareholder information to generate profits in other lines of business, and therefore do not derive any significant collateral benefits from them. The Boards noted that the Advisors receive proprietary research from broker-dealers that execute fund portfolio transactions and concluded that this research is likely to benefit Fund shareholders. The Boards also determined that the Advisors are able to provide investment management services to certain clients other than the Funds, at least in part, due to their existing infrastructure built to serve the fund complex. The Boards concluded, however, that the assets of those other clients are not material to the analysis and, in any event, are included with the assets of the Funds to determine breakpoints in each Fund’s fee schedule, provided they are managed using the same investment team and strategy.
 
Conclusion of the Boards. As a result of this process, the Boards, in the absence of particular circumstances and assisted by the advice of their independent legal counsel, taking into account all of the factors discussed above and the information provided by the Advisors and others, concluded that the Proposed Investment Management Agreements should be approved and recommend their approval to shareholders.
 
Affiliated Brokerage
 
American Century Investment Services, Inc. (the Funds’ distributor) and the Advisors are wholly owned, directly or indirectly, by ACC. JPMorgan Chase & Co. (JPM) is an equity investor in ACC. The Funds paid J.P. Morgan Securities Inc. (JPMS) and JP Morgan Cazenove Limited (JPMC), subsidiaries of JPM, the following brokerage commissions for the fiscal years shown:
 
Fund
Year End
Aggregate Amount
of Commissions
Paid to Affiliated Brokers
Percentage of
Dollar Amount of
Portfolio Transactions
   
     JPMS
     JPMC
    JPMS
    JPMC
American Century Capital Portfolios, Inc.
Equity Income
3/31/09
$362,578
$0
1.76%
Equity Index
3/31/09
$0
$0
0%
Large Company Value
3/31/09
$18,895
$0
0.88%
Mid Cap Value
3/31/09
$19,242
$0
1.17%
NT Large Company Value
3/31/09
$1,243
$0
0.32%
NT Mid Cap Value
3/31/09
$3,403
$0
0.95%
Real Estate
3/31/09
$26,872
$0
0.79%
Small Cap Value
3/31/09
$0
$0
0%
Value
3/31/09
$83,692
$0
2.39%
American Century Growth Funds, Inc.
Legacy Focused Large Cap
7/31/09
$192
$0
1.58%
Legacy Large Cap
7/31/09
$640
$0
1.23%
Legacy Multi Cap
7/31/09
$648
$0
0.86%
 
 
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American Century Mutual Funds, Inc.
Balanced
10/31/09
$39
$0
0.07%
Capital Growth
10/31/09
$5,424
$0
9.32%
Capital Value
10/31/09
$2,262
$0
2.65%
Focused Growth
10/31/09
$573
$0
4.39%
Fundamental Equity
10/31/09
$3,624
$0
0.47%
Giftrust
10/31/09
$141,584
$0
4.97%
Growth
10/31/09
$719,198
$0
10.49%
Heritage
10/31/09
$341,718
$0
5.87%
New Opportunities
10/31/09
$15,993
$0
1.78%
NT Growth
10/31/09
$33,502
$0
9.02%
NT Vista
10/31/09
$12,736
$0
3.56%
Select
10/31/09
$92,320
$3,638
8.92%
0.35%
Small Cap Growth
10/31/09
$54,163
$0
1.77%
Ultra
10/31/09
$408,939
$7,668
8.44%
0.13%
Veedot
10/31/09
$6,560
$0
0.79%
Vista
10/31/09
$456,725
$0
4.71%
American Century Strategic Asset Allocations, Inc.
Strategic Allocation:
Conservative
11/30/09
$15,900
$341
2.87%
0.06%
Strategic Allocation: Moderate
11/30/09
$104,892
$3,455
3.72%
0.15%
Strategic Allocation: Aggressive
11/30/09
$94,466
$2,479
4.45%
0.14%
American Century Variable Portfolios, Inc.
VP Balanced
12/31/09
$29
$0
0.13%
VP Capital Appreciation
12/31/09
$49,952
$0
4.40%
VP Income & Growth
12/31/09
$53
$0
0.05%
VP International
12/31/09
$53,333
$7,593
3.14%
0.63%
VP Large Company Value
12/31/09
$80
$0
1.71%
VP Mid Cap Value
12/31/09
$26,989
$0
1.89%
VP Ultra
12/31/09
$17,319
$334
6.14%
0.10%
VP Value
12/31/09
$117,515
$0
6.05%
VP Vista
12/31/09
$8,603
$0
2.98%
American Century World Mutual Funds, Inc.
Emerging Markets
11/30/09
$187,209
6.25%
Global Growth
11/30/09
$37,073
$3,758
4.07%
0.52%
International Discovery
11/30/09
$332,590
$89,054
6.36%
2.60%
International Growth
11/30/09
$186,144
$36,414
3.17%
0.92%
International Opportunities
11/30/09
$3,965
$265
0.40%
0.08%
International Stock
11/30/09
$9,404
$1,444
4.26%
0.96%
International Value
11/30/09
NT Emerging Markets
11/30/09
$18,631
$17
5.21%
0.01%
NT International Growth
11/30/09
$16,099
$2,718
3.01%
0.75%
 
 
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Required Approval for Proposal 2
 
Each Fund and, in some cases, each class is separately being asked to approve the Proposed Management Agreements. If a Fund has an Institutional Class of shares, the holders of those shares will vote on the Proposed Management Agreement separately from the other share classes of the Fund. For VP Funds other than VP Income & Growth, holders of Class I shares will vote with holders of Class III shares, if any, but holders of Class II shares, if any, will vote with holders of Class IV shares, if any. (All classes of VP Income & Growth will vote together as a group.)  Separate class votes on Proposal 2 are required in these cases because the affected classes have different unified management fees under the Proposed Management Agreements than the other classes of the applicable Fund due to different arrangements for shareholder and administrative services. Proposal 2, the approval of the Proposed Management Agreements, must be approved in accordance with Section 15(a) of the 1940 Act, which requires the approval of the lesser of (i) more than 50% of the outstanding shares of the Fund or, where applicable, class or (ii) 67% or more of the shares of the Fund or, where applicable, class present or represented by proxy at the Meeting if more than 50% of such shares are present or represented by proxy.
 
The Boards Recommend that the Shareholders
Vote to Approve the Proposed Management Agreements.

 
PROPOSAL 3: APPROVAL OF A SUBADVISORY AGREEMENT
FOR THE EQUITY INDEX FUND
 
Overview and Related Information
 
American Century Investment Management, Inc. (“ACIM”) currently serves as investment advisor to the Equity Index Fund. As described in Proposal 2, ACIM’s parent company, ACC, recently experienced a deemed change in control, which in turn resulted in the automatic termination of the current subadvisory agreement between ACIM and the Equity Index Fund’s subadvisor, Northern Trust Investments, N.A. (“NTI”). A proposed subadvisory agreement must be approved by the shareholders of the Equity Index Fund in order to ensure the continued provision of advisory services to the Equity Index Fund by NTI.
 
Information Regarding Northern Trust
 
NTI is a national banking association and an investment advisor registered under the Investment Advisers Act of 1940, as amended. It primarily manages assets for institutional and individual separately managed accounts, investment companies and bank common and collective funds. NTI is a subsidiary of The Northern Trust Company (“TNTC”).
 
TNTC is an Illinois state chartered banking organization and a member of the Federal Reserve System. Formed in 1889, TNTC administers and manages assets for individuals, personal trusts, defined contribution and
 
 
33

 
 
benefit plans and other institutional and corporate clients. TNTC is the principal subsidiary of Northern Trust Corporation (“NTC”), a company that is regulated by the Board of Governors of the Federal Reserve System as a financial holding company under the U.S. Bank Holding Company Act of 1956, as amended.
 
NTC is a public company headquartered in the United States at 50 South LaSalle Street, Chicago, Illinois 60603 and trades on NASDAQ under the ticker symbol NTRS. As of December 31, 2009, employees, retirees and directors beneficially owned approximately 14.8% of NTC’s common stock.
 
NTC, through its subsidiaries, has for more than 100 years managed the assets of individuals, institutions and corporations. As of December 31, 2009, NTI and its affiliates had assets under custody of $3.7 trillion and assets under investment management of $627.2 billion.
 
The address of the NTI directors and principal executive officer is 50 South LaSalle St., Chicago, IL 60603. The following table lists the names and principal occupations of the NTI directors and principal executive officer:
 
Name
Principal Occupation
Robert Browne
Executive Vice President, Chief Investment Officer and Director of NTI
Jeffrey Cohodes
Executive Vice President, Chief Operating Officer and Director of NTI
Mark Gossett, CFA
Executive Vice President and Director of NTI
Stephen Potter
Chairman, President, Chief Executive Officer and Director of NTI
Alan Robertson
Executive Vice President and Director of NTI
Joyce St. Clair
Director of NTI
Lloyd A. Wennlund
Executive Vice President and Director of NTI. Also serves as President, Northern Trust Securities, Inc.; President, Northern Funds and Northern Institutional Funds; and Head of Product Management, Northern Trust Global Investments.
 
Comparison of the Prior Subadvisory Agreement and the Proposed Subadvisory Agreement
 
NTI previously provided investment subadvisory services to the Equity Index Fund pursuant to a subadvisory agreement between ACIM and NTI dated August 1, 2007 (the “Prior NTI Subadvisory Agreement”). If approved by shareholders of the Equity Index Fund, under the proposed subadvisory agreement (the “Proposed NTI Subadvisory Agreement”) NTI will provide the same services to the Equity Index Fund. A form of the Proposed NTI Subadvisory Agreement is provided in Exhibit H. To ensure the continuity of investment advisory services to the Equity Index Fund after the termination of the Prior NTI Subadvisory Agreement, and before shareholder approval of the Proposed NTI Subadvisory Agreement, the Board approved an interim agreement between the Advisor and NTI on behalf of the Equity Index Fund (the “Interim NTI Subadvisory Agreement”) in accordance with Rule 15a-4 of the 1940 Act. See “Basis for the Board’s Approval of the Proposed NTI
 
 
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Subadvisory Agreement” for a discussion of the factors the Board considered in its approval of the Proposed NTI Subadvisory Agreement. The following paragraphs briefly discuss certain provisions contained in the Proposed NTI Subadvisory Agreement.
 
Advisory Services
 
Pursuant to the Prior NTI Subadvisory Agreement and Proposed NTI Subadvisory Agreement, and subject to the supervision of the Advisor, NTI will provide the following services for the Equity Index Fund: (i) make investment decisions for the Equity Index Fund in accordance with its investment objective and policies as stated in its prospectus and statement of additional information and with such written guidelines as ACIM may provide to the subadvisor; (ii) place purchase and sale orders on behalf of the Equity Index Fund; (iii) maintain books and records with respect to the securities transactions of the Equity Index Fund; and (iv) furnish the Board such regular and special reports with respect to the fund as the Board may reasonably request. NTI will also supervise the fund’s investments and conduct a continual program of investment, evaluation and, if appropriate, sale and reinvestment of the fund’s assets.
 
Expenses
 
Both the Prior NTI Subadvisory Agreement and the Proposed NTI Subadvisory Agreement provide that the subadvisor will pay its organizational, operational and business expenses but is not obligated to pay any expenses of ACIM or expenses of the Equity Index Fund such as brokerage fees, commissions in connection with the execution of securities transactions, taxes, interest and custodian fees and expenses.
 
Compensation
 
The fees to be paid to NTI under the Proposed NTI Subadvisory Agreement are the same as the fees paid under the Prior NTI Subadvisory Agreement. Both agreements provide that NTI receive a fee equal to two basis points (0.02%) on the first $500,000,000 of assets in the fund, and one basis point (0.01%) on all amounts in excess of $500,000,000. The fees are paid by ACIM out of the management fee it receives from the Equity Index Fund. The terms of both agreements provide that ACIM will pay NTI a management fee payable monthly in arrears on the first business day of each month. For the fiscal year ended March 31, 2009, ACIM paid NTI subadvisory fees of $119,454.
 
Liability of NTI
 
Under the terms of both the Prior NTI Subadvisory Agreement and the Proposed NTI Subadvisory Agreement, NTI will not be liable to the Equity Index Fund for any loss due solely to a mistake of investment judgment. However, NTI will be liable for any loss which is incurred by reason of an act or omission of its employee, partner, director or affiliate, if such act or
 
 
35

 

omission involves a willful misfeasance, bad faith or gross negligence, or breach of its duties or obligations, whether such duties are express or implied.
 
Additional Information about NTI
 
In addition to serving as the investment subadvisor to the Equity Index Fund, NTI also serves as subadvisor to the following mutual funds having similar investment objectives to the Equity Index Fund:
 
Fund Name
Assets Under
Management as of
December 31, 2009
Northern Trust’s Rate of Compensation
DWS S&P 500
Index Fund
$2.5 billion
First $2.0 billion, 0.015%; next $2.0 billion, 0.01%; over $4.0 billion, 0.005%
Guidestone Equity
Index Fund
$382.9 million
First $100 million, 0.04%; next $250 million, 0.02%; balance, 0.005%
MassMutual Select
Indexed Equity Fund
$1.6 billion
First $1 billion, 0.01%; balance, 0.0075%
USAA S&P 500
Index Fund
$2.7 billion
First $1.5 billion, 0.02%; next $1.5 billion, 0.01%; balance, 0.005%
DWS Equity 500
Index VIP
$756.3 million
First $2.0 billion, 0.015%; next $2.0 billion, 0.01%; over $4.0 billion, 0.005%
MML Equity
Index Fund
$305.8 million
First $1 billion, 0.1%;
over $1 billion, 0.0075%
 
In connection with providing investment subadvisory services to the funds listed above, NTI has not waived or reduced its fees below the amounts specified in NTI’s investment subadvisory contracts with these parties.
 
Basis for the Board’s Approval of the Proposed NTI Subadvisory Agreement
 
At its meeting held on March 29, 2010, the fund’s Board, including the Independent Directors, considered and approved the Proposed NTI Subadvisory Agreement between ACIM and NTI with respect to the Equity Index Fund. In approving the Proposed NTI Subadvisory Agreement, the Board considered the following criteria relevant to NTI:
 
 
The nature of the investment management services provided to the fund;
 
 
NTI’s breadth of experience in index fund management;
 
 
Data comparing the fund’s performance to appropriate benchmarks; and
 
 
The compliance policies, procedures, and regulatory experience of NTI.
 
The Board also considered NTI’s positive track record with respect to complying with American Century’s stringent requirements for trading practices and soft dollar arrangements.
 
Under the subadvisory agreement, the subadvisor is responsible for managing the investment operations and composition of the fund, including the purchase, retention, and disposition of the investments held by the fund. In performing its evaluation, the Board considered information received in
 
 
36

 
 
connection with the approval of the Proposed NTI Subadvisory Agreement, as well as information provided on an ongoing basis at its regularly scheduled Board and committee meetings. The Board did not consider the profitability of NTI because the subadvisor is paid from the unified fee of ACIM as a result of arm’s length negotiations.
 
After considering all information presented, and while no single factor was determinative, the fund’s Board, including the Independent Directors, unanimously approved the Proposed NTI Subadvisory Agreement and determined to recommend that shareholders of the Equity Index Fund approve the Proposed NTI Subadvisory Agreement.
 
Required Approval for Proposal 3
 
Proposal 3, the approval of the Proposed NTI Subadvisory Agreement, must be approved in accordance with Section 15(a) of the 1940 Act, which requires the approval of the lesser of (i) more than 50% of the outstanding shares of the fund or (ii) 67% or more of the shares of the fund present or represented by proxy at the Meeting if more than 50% of such shares are present or represented by proxy.
 
The Board of American Century Capital Portfolios, Inc. Recommends
that the Shareholders of the Equity Index Fund Vote
to Approve the Proposed NTI Subadvisory Agreement.

 
PROPOSAL 4: APPROVAL OF A SUBADVISORY AGREEMENT
FOR THE INTERNATIONAL VALUE FUND
 
Overview and Related Information
 
American Century Global Investment Management, Inc. (“ACGIM”) currently serves as investment advisor to the International Value Fund. As described in Proposal 2, ACGIM’s ultimate parent company, ACC, recently experienced a deemed change in control which in turn resulted in the automatic termination of the current subadvisory agreements between ACGIM and the International Value Fund’s subadvisor, Templeton Investment Counsel, LLC (“Templeton”) and between Templeton and Franklin Templeton Investments (Asia) Limited (“Franklin Asia”). A proposed subadvisory agreement must be approved by the shareholders of the International Value Fund in order to ensure the continued provision of advisory services to the International Value Fund by Templeton and Franklin Asia.
 
Information Regarding Templeton and Franklin Asia
 
Templeton is a wholly owned subsidiary of Templeton Worldwide, Inc. (“TWI”).  Franklin Asia is a wholly owned subsidiary of Templeton Asset Management Ltd. (“TAM”), which is a wholly owned subsidiary of Templeton International, Inc. (“TII”). TII is a wholly owned subsidiary of TWI, which is a wholly owned subsidiary of Franklin Resources, Inc. (“FRI”). Templeton, TWI and TII are located at 500 E. Broward Blvd, Suite 2100, Ft. Lauderdale, FL 33394. Franklin Asia is located at 8 Connaught Road Central, Chater House-17th
 
 
37

 
 
Floor, Hong Kong. TAM is located at 7 Temasek Blvd., Suntec Tower 1, Singapore. FRI is located at One Franklin Parkway, San Mateo, CA 94403.
 
    The address for the principal executive officer of Templeton is 500 E. Broward Blvd, Suite 2100, Fort Lauderdale, FL 33394.  Templeton is a limited liability company, managed by its sole member, TWI.  The following table lists the name and principal occupations of Templeton’s principal executive officer:
 
Name
Principal Occupation
Donald Francis Reed
Chief Executive Officer of Templeton.  Also serves as Director, Chief Executive Officer and President of Franklin Templeton Investments Corp.
 
The address for the managing director (principal executive officer) and each director of Franklin Asia is 8 Connaught Road Central, Chater House-17th Floor, Hong Kong. The following table lists the names and principal occupations of Franklin Asia’s managing director and other directors:
 
Name
Principal Occupation
Mark Banks Browning
Managing Director of Franklin Asia and all Asia operations
David Wan Chang
Director of Franklin Asia and Regional Head of Greater China operations
David Wood Hudson
Director of Franklin Asia and Senior Managing Director of Darby Investments’ Asia operations
Allan Hung Lam
Director of Franklin Asia and Portfolio Manager for various emerging markets portfolios
Gregory Eugene McGowan
Director of Franklin Asia and Director, Executive Vice President and General Counsel of TII and TWI
Dr. Joseph Mark Mobius
Chairman and Director of Franklin Asia and Portfolio Manager, officer and/or director for various advisory affiliates
Jed Andrew Plafker
Director of Franklin Asia and Executive Managing Director, Franklin Templeton International Advisor Services
Wai Kwok Tom Wu
Director of Franklin Asia and Portfolio Manager for various advisory affiliates
 
Comparison of the Prior Subadvisory Agreements and the Proposed Combined Subadvisory Agreement
 
Templeton previously provided investment subadvisory services to the International Value Fund pursuant to a subadvisory agreement between ACGIM and Templeton dated March 30, 2006 (the “Prior Templeton Subadvisory Agreement”). In addition, Franklin Asia previously provided investment subadvisory services to the International Value Fund pursuant to a subadvisory agreement between Templeton and Franklin Asia dated  May 23, 2007, which appointed Franklin Asia as an additional advisor to the International Value Fund (“Prior Franklin Asia Subadvisory Agreement”, together with the Prior Templeton Subadvisory Agreement, the “Prior Agreements”).  If approved by shareholders of the International Value Fund, Templeton and Franklin Asia will provide the same services to the International Value Fund pursuant to one combined subadvisory agreement (the “Proposed Combined Subadvisory Agreement”). A form of the Proposed
 
 
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Combined Subadvisory Agreement is provided in Exhibit I. To ensure the continuity of investment subadvisory services to the International Value Fund after the termination of the Prior Agreements, and before shareholder approval of the Proposed Combined Subadvisory Agreement, the fund’s Board approved interim agreements between ACGIM and Templeton and between Templeton and Franklin Asia on behalf of the International Value Fund (the “Interim Subadvisory Agreements”) in accordance with Rule 15a-4 of the 1940 Act. See “Basis for the Board’s Approval of the Proposed Combined Subadvisory Agreement” for a discussion of the factors the Board considered in its approval of the Proposed Combined Subadvisory Agreement. The following paragraphs briefly discuss certain provisions contained in the Proposed Combined Subadvisory Agreement.
 
Advisory Services
 
Pursuant to the Prior Agreements, and subject to the supervision of ACGIM, and pursuant to the Proposed Combined Subadvisory Agreement, and subject to the supervision of American Century Investment Management, Inc. (“ACIM”), Templeton and Franklin Asia will provide the following services for the International Value Fund: (i) manage the investments and reinvestments of fund assets; (ii) formulate and implement a continuous investment program consistent with the fund’s investment objective and related investment policies as set forth in the registration statement; and (iii) select brokers and dealers to carry out portfolio securities transactions.
 
Expenses
 
The Prior Agreements and the Proposed Combined Subadvisory Agreement provide that Templeton and Franklin Asia will each pay all expenses incurred by it in connection with its activities under the relevant subadvisory agreement.
 
Compensation
 
The fees to be paid to Templeton under the Proposed Combined Subadvisory Agreement are the same as the fees paid under the Prior Templeton Subadvisory Agreement. Both agreements provide that Templeton be paid a monthly fee at an annual rate of 0.50% of the first $100 million of the fund’s average daily net assets and 0.40% of average daily net assets over $100 million. For the fiscal years ending November 2009, 2008 and 2007, ACGIM paid Templeton subadvisory fees of $428,561, $335,442, and $342,815, respectively. The fees are paid by the fund’s advisor out of the management fee it receives from the International Value Fund. The terms of both agreements provide that the fund’s advisor will pay Templeton its fee monthly in arrears on the first business day of each month.  ACGIM did not pay Franklin Asia directly for its services under the Prior Franklin Asia Subadvisory Agreement, and ACIM will not pay Franklin Asia directly for its services under the Proposed Combined Subadvisory Agreement.
 
 
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Liability of Templeton and Franklin Asia
 
Under the terms of both the Prior Agreements and the Proposed Combined Subadvisory Agreement, Templeton and Franklin Asia will not be liable to the International Value Fund for any error of judgment, mistake of law, or for any loss arising out of any investment. However, Templeton and Franklin Asia will each be liable for willful misfeasance, bad faith or gross negligence, or reckless disregard for its obligations and duties.
 
Additional Information about Templeton and Franklin Asia
 
In addition to serving as the investment subadvisor to the International Value Fund, Templeton and Franklin Asia together also serve as advisor or subadvisor to the following mutual funds having similar investment objectives to the International Value Fund:
 
Fund Name
Assets Under
Management
Templeton’s  Rate of Compensation
Templeton
Global
Opportunities
Trust
$900,897,000
0.75% of the value of net assets up to and including $1 billion; 0.73% of the value of net assets over $1 billion up to and including $5 billion; 0.71% of the value of net assets over $5 billion up to and including $10 billion; 0.69% of the value of net assets over $10 billion up to and including $15 billion; 0.67% of the value of net assets over $15 billion up to and including $200 billion; and 0.65% of the value of net assets over $20 billion
Northwestern
Mutual Series
Fund, Inc. –
International
Equity Portfolio
$1,208,334,000
annual rate of 0.50% on the first $100 million of the average net assets reduced to 0.35% on the next $50 million, 0.30% on the next $350 million, 0.25% on the next $500 million, 0.20% on the next $500 million and 0.15% in excess of $1.5 billion
 
In connection with providing investment advisory or subadvisory services to the funds listed above, neither Templeton nor Franklin Asia has waived or reduced its fees below the amounts specified in Templeton or Franklin Asia’s investment subadvisory contracts with these parties.
 
Basis for the Board’s Approval
of the Proposed Combined Subadvisory Agreement
 
At its meeting held on March 29, 2010, the fund’s Board, including the Independent Directors, considered and approved the Proposed Combined Subadvisory Agreement between ACIM, Templeton and Franklin Asia with respect to the International Value Fund. In approving the Proposed Combined Subadvisory Agreement, the Board considered the following criteria relevant to Templeton and Franklin Asia:
 
 
The nature of the investment management services provided to the fund;
 
 
Templeton and Franklin Asia’s breadth of experience in international fund management;
 
 
Data comparing the fund’s performance to appropriate benchmarks and a peer group of other funds with similar objectives and strategies; and
 
 
The compliance policies, procedures, and regulatory experience of Templeton and Franklin Asia.

 
40

 
 
The Board also considered Templeton and Franklin Asia’s positive track record with respect to complying with American Century’s stringent requirements for trading practices and soft dollar arrangements.
 
Under the Proposed Combined Subadvisory Agreement, Templeton and Franklin Asia are responsible for managing the investment operations and composition of the fund, including the purchase, retention, and disposition of the investments held by the fund. In performing its evaluation, the Board considered information received in connection with the approval of the Proposed Combined Subadvisory Agreement, as well as information provided on an ongoing basis at its regularly scheduled Board and committee meetings. The Board did not consider the profitability of Templeton because Templeton is paid from the unified fee of the fund’s advisor as a result of arm’s length negotiations.
 
After considering all information presented, and while no single factor was determinative, the fund’s Board, including the Independent Directors, unanimously approved the Proposed Combined Subadvisory Agreement and determined to recommend that shareholders of the International Value Fund approve the Proposed Combined Subadvisory Agreement.
 
Required Approval for Proposal 4
 
Proposal 4, the approval of the Proposed Combined Subadvisory Agreement, must be approved in accordance with Section 15(a) of the 1940 Act, which requires the approval of the lesser of (i) more than 50% of the outstanding shares of the fund or (ii) 67% or more of the shares of the fund present or represented by proxy at the Meeting if more than 50% of such shares are present or represented by proxy.
 
The Board of American Century World Mutual Funds, Inc.
Recommends that the Shareholders of the International Value Fund Vote
to Approve the Proposed Combined Subadvisory Agreement.
 
 
PROPOSAL 5: APPROVAL OF AMENDMENT TO THE ARTICLES
OF INCORPORATION TO LIMIT CERTAIN DIRECTOR LIABILITY
TO THE EXTENT PERMITTED BY MARYLAND LAW
 
Overview
 
Directors of public companies, including American Century Capital Portfolios, Inc., American Century Mutual Funds, Inc. and American Century World Mutual Funds, Inc. (collectively the “Amending Issuers”), may be subject to substantial personal liability for actions taken or omitted by them as directors, as well as significant expense in defending their conduct. Under the law of Maryland, the Amending Issuers’ state of incorporation, corporations are permitted to provide directors with some protection from personal liability. However, there are limits to the protection afforded, as described below. The Issuers described in this Proxy Statement, other than the Amending Issuers, have provisions in their Articles of Incorporation reflecting the protections allowed
 
 
41

 

under Maryland law. This Proposal is intended to achieve consistency among the Articles of Incorporation of all Issuers served by the Boards.
 
Scope of Maryland Law
 
Maryland law authorizes a Maryland corporation to include in its Articles of Incorporation a provision that limits the ability of the corporation and its shareholders to recover monetary damages from a director. However, Maryland law does not permit a corporation to limit the liability of a director (i) to the extent that it is proved that the person actually received an improper benefit or profit in money, property or services, or (ii) to the extent that a judgment or other final adjudication adverse to the person is entered in a proceeding based on a finding that the person’s action, or failure to act, was the result of active and deliberative dishonesty and was material to the cause of action adjudicated in the proceeding.
 
Under Maryland law, the directors have the ultimate responsibility for managing the business affairs of a corporation. In discharging this function, the law holds directors to a fiduciary duty of care to the corporation and its shareholders. The duty of care requires the exercise of an informed business judgment. The Maryland law that affords additional protection to directors from personal liability does not change a director’s duty of care, and a breach of such duty would remain a valid basis for an action for an injunction or other equitable relief by or on behalf of a corporation.
 
In addition to the express limitations of Maryland law with respect to limiting a director’s liability, Section 17(h) of the 1940 Act provides that no provision of the charter instruments of a registered investment company shall “protect or purport to protect any director or officer of the company against liability to the company or to its security holders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office.”
 
The Staff of the Securities and Exchange Commission has taken the view that, to the extent the provisions of a state’s corporate law or a corporation’s charter instruments are inconsistent with the 1940 Act, the provisions of the 1940 Act are pre-emptive.
 
Reason for and Text of Amendment
 
The Board of Directors of each Amending Issuer has determined that the ability of such Issuers to encourage the continued services of its directors and to attract other qualified and experienced individuals will be enhanced by amending the Amending Issuers’ Articles of Incorporation to limit the personal liability of directors to the full extent permitted by Maryland Law.
 
The Board of Directors of each Amending Issuer has unanimously approved, and recommends to the shareholders for their approval and adoption, an amendment to such Issuers’ respective Articles of Incorporation adding a new Article Tenth as follows:
 
 
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TENTH: No director of this corporation shall be personally liable for monetary damages to the corporation or any stockholder, except to the extent that such exclusion from liability shall be limited pursuant to Section 5-418 of the Courts and Judicial Proceedings Article of the Annotated Code of Maryland or Section 17 of the Investment Company Act of 1940 (or any successor provisions thereof).
 
It should be noted that the directors have an interest in, and may benefit from, the proposed Article Tenth. However, the Board of Directors of each Amending Issuer strongly believes that the proposed Article Tenth is in the best interests of such Issuer and its shareholders and recommends a vote for the adoption of the amendment.
 
As noted above, the Issuers described in this proxy statement other than the Amending Issuers already have the same or a similar provision in their respective Articles of Incorporation and, as a result, their shareholders are not being asked to take action on this proposal.
 
Required Approval for Proposal 5
 
Proposal 5, the Amendment of the Articles of Incorporation, must be approved by a majority of all votes cast on the matter. The shareholders of each Amending Issuer, voting together as a single class that includes the votes of the shares of each Fund that is a series of an Amending Issuer, will vote separately for the amendment of that Issuer’s Articles of Incorporation. Approval of the Proposal by the shareholders of an Amending Issuer is not contingent upon approval of the Proposal by the shareholders of another Amending Issuer.
 
The Boards of the Amending Issuers Recommend that their Shareholders
 Vote to Approve the Proposed Amendment to the Articles of Incorporation.
 
Other Information
 
Meetings of Shareholders
 
The Funds are not required to hold annual shareholder meetings, unless required to do so in order to elect directors and for such other purposes as may be prescribed by law or the Funds’ Articles of Incorporation. Special meetings of the shareholders may be called by the directors for the purpose of taking action upon any other matter deemed by the directors to be necessary or desirable. A meeting of the shareholders may be held at any place designated by the directors. Written notice of any meeting is required to be given by the directors.
 
This Proxy Statement is being furnished in connection with the solicitation of proxies by the Boards. Proxies may be solicited by officers of the Funds and the Advisors, their affiliates, employees and agents, as well as a paid proxy solicitation firm. In addition, financial intermediaries may solicit the proxy of the beneficial owners of the shares. It is anticipated that the solicitation of proxies will be primarily by mail, internet, telephone, facsimile or personal
 
 
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interview. Shareholders who communicate proxies by telephone or by other electronic means have the same power and authority to issue, revoke or otherwise change their voting instructions as shareholders submitting proxies in written form. Telephonic solicitations will follow procedures designed to ensure accuracy and prevent fraud. The Advisors or an affiliate thereof may reimburse banks, brokers and others for their reasonable expenses in forwarding proxy solicitation materials to beneficial owners of Fund shares, and may reimburse certain officers or employees that it may employ for their reasonable expenses in assisting in the solicitation of proxies from such beneficial owners. The expenses associated with this Proxy Statement are anticipated to include the following: (a) expenses associated with the preparation of this Proxy Statement; (b) the costs of printing and mailing the proxy materials and other materials used in connection with the proxy solicitation; (c) accounting and legal fees incurred in connection with the preparation of this Proxy Statement or in connection with the proxy solicitation; (d) solicitation, tabulation and related processing costs (including the costs of a third party solicitor and tabulation agent); and (e) other related administrative or operational costs. The Advisors and the Funds will each bear 50% of such expenses.
 
American Century Services, LLC (“ACS”), the transfer agent and administrator of the Funds, has entered into a contract with Broadridge Financial Solutions, Inc. (“Broadridge”) pursuant to which Broadridge will provide certain project management, telephone solicitation, and internet and telephonic voting services in addition to providing for the printing and mailing of the proxy statement. The fees to be paid to Broadridge under the contract are estimated to be $4.3 million in the aggregate.
 
Date, Time and Place of the Meeting
 
The Meeting will be held on June 16, 2010 at the principal executive offices of American Century, 4500 Main Street, Kansas City, Missouri 64111, at 10:30 a.m. Central time. To obtain directions to be able to attend the Meeting and vote in person, please call 1-800-345-2021.
 
Use and Revocation of Proxies
 
A shareholder executing and returning a proxy has the power to revoke it at any time prior to its exercise by executing a superseding proxy (i.e., a later-dated and signed proxy), by submitting a notice of revocation to the Secretary of the Funds or by subsequently registering his or her vote by telephone or over the Internet. In addition, although mere attendance at the Meeting will not revoke a proxy, a shareholder of record present at the Meeting may withdraw his or her proxy and vote in person. All shares represented by properly executed proxies received at or prior to the Meeting, unless such proxies previously have been revoked, will be voted at the Meeting in accordance with the directions on the proxies. If no direction is indicated on a properly executed proxy, such shares will be voted “FOR” approval of the applicable Proposals. It is not anticipated that any matters other than the approval of the Proposals will be brought before the Meeting. If, however, any other business properly is
 
 
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brought before the Meeting, proxies will be voted in accordance with the judgment of the persons designated on such proxies.
 
Voting Rights and Required Votes
 
A quorum of shareholders is necessary to hold a valid meeting. Shareholders entitled to vote one-third of the issued and outstanding shares of each Issuer, Fund or class must be present in person or by proxy to constitute a quorum for purposes of voting on proposals relating to that Issuer, Fund or class. Shareholders are entitled to one vote per dollar of net asset value represented by their shares, with fractional dollars voting proportionally. Shareholders of each Issuer vote separately on Proposal 1 (Election of Director). Shareholders of each of the Funds will vote separately on Proposal 2. If a Fund has an Institutional Class, holders of those shares will vote separately on Proposal 2. Additionally, for VP Funds other than VP Income & Growth, holders of Class I shares will vote with holders of Class III shares, if any, but holders of Class II Shares, if any, will vote with holders of Class IV shares, if any. Only shareholders of the Equity Index Fund vote on Proposal 3 (Approval of Proposed Subadvisory Agreement with NTI) and only shareholders of the International Value Fund vote on Proposal 4 (Approval of Proposed Subadvisory Agreement with Templeton and Franklin Asia). Only shareholders of American Century Capital Portfolios, Inc., American Century Mutual Funds, Inc. and American Century World Mutual Funds, Inc. vote on Proposal 5 (Approval of Amendment to Articles of Incorporation). Approval of Proposal 1 requires the approval of a plurality of the votes cast in person or by proxy at the Meeting at which a quorum exists. Approval of Proposals 2, 3 and 4 requires the approval of the lesser of (i) more than 50% of the outstanding shares of the applicable Fund or, if applicable, class or (ii) 67% or more of the shares of that Fund or, if applicable, class present or represented by proxy at the Meeting if more than 50% of such shares are present or represented by proxy. Approval of Proposal 5 requires approval by a majority of all votes cast in the matter. Broker-dealer firms holding shares of any of the Funds in “street name” for the benefit of their customers and clients will request the instructions of such customers and clients on how to vote their shares before the Meeting. Each Issuer, Fund, or class will include shares held of record by broker-dealers as to which such authority has been granted in its tabulation of the total number of shares present for purposes of determining whether the necessary quorum of shareholders exists. Properly executed proxies that are returned but that are marked “abstain” or with respect to which a broker-dealer has declined to vote on any proposal (“broker non-votes”) will be treated as shares that are present but which have not been voted. For this reason, abstentions and broker non-votes will have the effect of a “no” vote for purposes of obtaining the requisite approval of the proposals. In the event that a quorum is not present or in the event that a quorum is present but sufficient votes in favor of a Proposal have not been received, the persons named as proxies may propose one or more adjournments of the Meeting to permit further solicitation of proxies as to any Proposal without further notice other than by announcement at the Meeting. Any adjournment of the Meeting
 
 
45

 
 
for the further solicitation of proxies for a Proposal will require the affirmative vote of a majority of the total number of shares entitled to vote on the Proposal that are present in person or by proxy at the Meeting to be adjourned. However, if the Meeting is adjourned for more than ninety days, then the Funds are required to send a new shareholder meeting notice to shareholders. The persons named as proxies will vote those proxies that they are entitled to vote in their discretion as to any such adjournment.
 
Outstanding Shares and Significant Shareholders
 
Only holders of record of shares at the close of business on March 19, 2010 (the “Record Date”) are entitled to vote on the Proposals at the Meeting or any adjournment thereof. Exhibit J sets forth the number of shares issued and outstanding and the number of votes entitled to vote on each Proposal as of the Record Date.
 
Exhibit K to this Proxy Statement lists those persons who, as of the Record Date, owned of record or beneficially 5% or more of the outstanding shares of any class of shares entitled to vote together on a Proposal.
 
Other Service Providers
 
American Century Services, LLC serves as transfer agent and administrator of the American Century Funds. American Century Investment Services, Inc. serves as distributor to the Funds. Both entities are affiliates of the Advisors and are located at 4500 Main Street, Kansas City, Missouri 64111.
 
Pending Litigation
 
The Advisors are named as defendants in two pending lawsuits that relate to investments held by two Funds in publicly-traded offshore Internet gaming companies in 2005 and 2006.1 The Advisors believe these suits are without merit and are vigorously defending them. The Seidl case, which relates to the Ultra Fund’s former investments in PartyGaming Plc, is pending in the U.S. District Court for the Southern District of New York. The Gomes case, which relates to the International Discovery Fund’s former investments in BWIN Interactive Entertainment AG, is pending in the U.S. District Court for the Western District of Missouri. 2 In both actions the plaintiffs allege that the Funds invested in publicly-traded companies that were running Internet gambling businesses in violation of U.S. laws, that the Funds’ former investments in them were improper, and that losses on those investments
________________________________
 
1
The Advisors also purchased shares of online gaming companies for other Funds’ portfolios, but these purchases are not the subject of pending litigation. In addition to the Advisors, defendants in these lawsuits include certain past and present officers, directors and employees of the Advisors, affiliates of the Advisors and the Funds.
 
2
The Gomes complaint also cites former investments in NETeller Plc, a global online payments business. International Discovery sold its entire NETeller position in October 2005 for a net gain.

 
46

 

entitle the plaintiffs to compensation under various federal and state law theories.
 
The Advisors reject the plaintiffs’ contentions and expect to be vindicated in the courts based on (among other reasons) a recent ruling by the U.S. District Court for the Southern District of New York dismissing a similar case against another investment advisor. That decision was recently upheld on an appeal to the U.S. Court of Appeals for the Second Circuit. In any event, the Advisors do not believe the lawsuits are likely to have a material adverse effect on the Funds or the Advisors’ ability to provide services to the Funds.
 
The Advisors contend that, at the time of the investments in question, the legal status of online gaming in the U.S. was unclear. Investments in these companies were being recommended by analysts from a number of reputable U.S. investment firms, and the Advisors believed that the potential for positive investment results outweighed the potential risk of future adverse action by the U.S. against offshore gaming businesses.  Over a period of months, Ultra invested approximately $81.0 million in PartyGaming and International Discovery invested approximately $20.5 million in BWIN, positions that never amounted to more than 0.53% and 0.91% of the Funds’ respective assets. The Funds completely liquidated their holdings in these companies prior to the enactment of clarifying federal legislation in October 2006. Realized losses were approximately $16.1 million for Ultra and $12.0 million for International Discovery, which represented 0.10% and 0.85% of their respective portfolio values at the time.
 

Where to Find Additional Information
 
The Issuers are subject to the informational requirements of the Securities Act of 1933, the Securities Exchange Act of 1934, and the 1940 Act, and in accordance therewith file reports and other information with the SEC. Reports, proxy and information statements, and other information filed by the Issuers, on behalf of the Funds, can be obtained by calling or writing the Funds and can also be inspected and copied by the public at the public reference facilities maintained by the SEC in Washington, DC located at Room 1580, 100 F Street, N.E., Washington DC 20549. Copies of such material can be obtained at prescribed rates from the Public Reference Branch, Office of Consumer Affairs and Information Services, SEC, Washington DC 20549, or obtained electronically from the EDGAR database on the SEC’s website (www.sec.gov).
 
 
47

 

Other Matters and Discretion
of Attorneys Named in the Proxy
 
The Issuers are not required, and do not intend, to hold regular annual meetings of shareholders. Shareholders wishing to submit proposals for consideration for inclusion in a proxy statement for the next meeting of shareholders should send their written proposals to Corporate Secretary, American Century Funds, P.O. Box 418210, Kansas City, Missouri, 64141-9210, or by e-mail to corporatesecretary@americancentury.com so that they are received within a reasonable time before any such meeting.
 
No business other than the matters described above is expected to come before the Meeting, but should any other matter requiring a vote of shareholders arise, including any question as to an adjournment or postponement of the Meeting, the persons named on the enclosed proxy card(s) will vote on such matters according to their best judgment in the interests of the Issuers.
 

Shareholders are requested to complete, date and sign
the enclosed proxy card(s) and return it in the enclosed envelope,
which needs no postage if mailed in the united states.
 
 
48

 

Exhibit A 
Policy and Procedures for Director Nominations
 
The Governance Committee (“Committee”) is responsible for identifying, evaluating and recommending qualified candidates for election to the Board of Directors of the American Century Kansas City Funds (the “Funds”). The Board of Directors has determined that each member of the Committee is not an “interested person” of the Funds under applicable laws and regulations.
 
The Committee will consider director candidates submitted by shareholders. Any shareholder wishing to submit a candidate for consideration should send the following information to the Corporate Secretary, American Century Funds, 4500 Main Street, Kansas City, MO 64111-7709:
 
Shareholder’s name, the Fund name and number of Fund shares owned and length of period held;
 
Name, age and address of the candidate;
 
A detailed resume describing among other things the candidate’s educational background, occupation, employment history, financial knowledge and expertise and material outside commitments (e.g., memberships on other boards and committees, charitable foundations, etc.);
 
Any other information relating to the candidate that is required to be disclosed in solicitations of proxies for election of directors in an election contest pursuant to Regulation 14A under the Securities Exchange Act of 1934;
 
A supporting statement which (i) describes the candidate’s reasons for seeking election to the Board of Directors and (ii) documents his/her ability to satisfy the director qualifications described below;
 
A signed statement from the candidate confirming his/her willingness to serve on the Board of Directors.
 
The Corporate Secretary will promptly forward such materials to the Committee Chair. The Corporate Secretary also will maintain copies of such materials for future reference by the Committee when filling Board positions.
 
Shareholders may submit potential director candidates at any time pursuant to these procedures. The Committee will consider such candidates if a vacancy arises or if the Board decides to expand its membership, and at such other times as the Committee deems necessary or appropriate.
 
When assessing potential new directors, the Committee considers individuals from various and diverse backgrounds. While the selection of qualified directors is a complex process that requires consideration of many intangible factors, the Committee believes that candidates should, at a minimum, meet the following criteria:
 
 
A-1

 
 
Candidates should possess broad training, experience and a successful track record at senior policy-making levels in business, government, education, technology, accounting, law and/or administration.
 
Candidates should possess the highest personal and professional ethics, integrity and values, and be committed to representing the long-term interests of all shareholders.
 
Candidates should have an inquisitive and objective perspective, strength of character and the mature judgment essential to effective decision-making.
 
Candidates should possess expertise that is useful to the Funds and complementary to the background and experience of other Board members.
 
Candidates should be willing to devote sufficient time to Board and Committee activities and to enhance their knowledge of the Funds’ operations and industry.
 
The Committee is willing to consider candidates submitted by a variety of sources (including, without limit, incumbent directors, shareholders, investment advisor management and third party search firms) when reviewing candidates to fill vacancies and/or expand the Board. If a vacancy arises or the Board decides to expand its membership, the Committee asks each independent director to submit a list of potential candidates for consideration. The Committee then evaluates each potential candidate’s educational background, employment history, outside commitments and other relevant factors to determine whether he/she is potentially qualified to serve on the Board. At that time, the Committee also will consider potential nominees submitted by shareholders in accordance with the procedures described above. The Committee seeks to identify and recruit the best available candidates, and it will evaluate qualified shareholder nominees on the same basis as those identified through other sources.
 
After completing this process, the Committee will determine whether one or more candidates are sufficiently qualified to warrant further investigation. If the process yields more than one desirable candidate, the Committee will rank them by order of preference, depending on their respective qualifications and the Funds’ needs and determine which of the qualified candidates should be interviewed. The Committee Chair, or another director designated by the Committee Chair, will then contact such candidates to evaluate their potential interest and to set up interviews with the full Committee. All such interviews will be held in person or by conference telephone call, and will include only the candidate and the Committee members. Based upon interview results and appropriate background checks, the Committee will then decide whether it will recommend a candidate’s nomination to the full Board.
 
The Committee believes this process has consistently produced highly qualified, independent Board members to date. However, the Committee reserves the right to amend or modify this policy and the process, formally or informally, at any time in its sole discretion.
 
 
A-2

 

Exhibit B 
Charter of the Governance Committee
of the Board of Directors
 
Organization
 
The Committee shall consist of at least three independent directors, including a chair and such other independent directors as the Board shall appoint. An “independent director” is a director who meets the definition of “independence” as set forth under applicable laws and regulations, and who is otherwise independent as determined by the Board.
 
Statement of Purpose
 
The purpose of the Committee shall be to identify individuals qualified to become members of the Board; recommend to the Board such qualified individuals to be elected to the Board to fill any vacancies; to review and assess the adequacy of the Board's ongoing adherence to industry corporate governance best practices and make recommendations as to any appropriate changes; and handle other matters as the Board or the Committee chair deems appropriate.
 
Duties and Powers
 
The Committee shall develop criteria to identify and evaluate prospective candidates for the Board.
 
The Committee shall recommend to the Board potential nominees to the Board, and the re-nomination of incumbent directors as appropriate.
 
The Committee shall nominate the Chair of the Board, the Vice Chair, and all other officers.
 
The Committee shall recommend to the Board the annual compensation of the members of the Board.
 
The Committee shall oversee an evaluation by members of the Board of the service of members of the Board, including a self-evaluation by each member of the Board of his or her service on the Board and evaluation of Board/Management effectiveness.
 
The committee shall periodically evaluate the governance practices of the Board and its committees, and review and assess the adequacy of the Board’s adherence to industry corporate governance best practices.
 
The Committee shall recommend to the Board the membership composition of Board committees, including the Chair and members of each committee.
 
The Committee shall have the authority to retain such outside counsel, experts, and other advisors as it determines appropriate to assist it in the full performance of its functions.
 
The Committee shall meet as often as it may be deemed necessary or appropriate in its judgment, either in person or telephonically, and at such times and places as the Committee shall determine; provided, however, that the Committee shall meet no less than two times per year in the discharge of its duties. The Committee shall meet in executive session, without management present, at least once per year. The Committee shall make regular reports to the Board on its activities.
 
The Committee shall recommend policies for Board approval and review them periodically.

 
B-1

 

Exhibit C 
Share Ownership of Directors
 
Fund Name (Dollar Range
of Equity Securities in the Fund)*
Aggregate Dollar Range
of Equity Securities in
All Registered Investment
Companies Overseen
or to be Overseen by
Director in Family of
Investment Companies
Interested Director
Jonathan S.
Thomas(1)
American Century Asset Allocation Portfolios, Inc.
  LIVESTRONG 2025 (more than $100,000)
  LIVESTRONG 2035 ($10,001-$50,000)
  LIVESTRONG 2045 ($10,001-$50,000)
American Century Capital Portfolios, Inc.
  Large Company Value (more than $100,000)
  Real Estate ($10,001-$50,000)
American Century Mutual Funds, Inc.
  Capital Growth ($10,001-$50,000)
  Focused Growth ($1-$10,000)
  Fundamental Equity ($1-$10,000)
  Growth ($50,001-$100,000)
  Heritage ($1-$10,000)
  Select ($1-$10,000)
  Small Cap Growth (more than $100,000)
  Veedot ($1-$10,000)
  Vista ($1-$10,000)
American Century World Mutual Funds, Inc.
  Emerging Markets (more than $100,000)
  Global Growth (more than $100,000)
  International Discovery ($10,001-$50,000)
  International Growth ($10,001-$50,000)
  International Stock ($1-$10,000)
More than $100,000
Independent Directors
Thomas A.
Brown(1)
American Century Capital Portfolios, Inc.
  Equity Income ($1-$10,000)
  Mid Cap Value ($1-$10,000)
  Small Cap Value ($1-$10,000)
  Value ($10,001-$50,000)
American Century Mutual Funds, Inc.
  Capital Value ($1-$10,000)
  Focused Growth ($1-$10,000)
  Growth ($1-$10,000)
  Heritage ($1-$10,000)
American Century World Mutual Funds, Inc.
  Emerging Markets ($10,001-$50,000)
  Global Growth ($10,001-$50,000)
  International Discovery ($10,001-$50,000)
  International Growth ($10,001-$50,000)
  International Stock ($1-$10,000)
More than $100,000

 
C-1

 


 
Fund Name (Dollar Range
of Equity Securities in the Fund)*
Aggregate Dollar Range
of Equity Securities in
All Registered Investment
Companies Overseen
or to be Overseen by
Director in Family of
Investment Companies
 
American Century Strategic Asset Allocations, Inc.
  Strategic Allocation: Aggressive
      ($10,001-  $50,000)
  Strategic Allocation: Conservative
      (more than $100,000)
American Century Asset Allocation Portfolios, Inc.
  One Choice Portfolio: Aggressive
       ($10,001-$50,000)
American Century Growth Funds, Inc.
  Legacy Focused Large Cap ($1-$10,000)
  Legacy Large Cap ($1-$10,000)
  Legacy Multi Cap ($1-$10,000)
 
Andrea C.
Hall(1)
American Century Capital Portfolios, Inc.
  Equity Income (more than $100,000)
  Real Estate ($10,001-$50,000)
  Value ($10,001-$50,000)
American Century Mutual Funds, Inc.
  Balanced ($10,001-$50,000)
  Growth ($10,001-$50,000)
  Small Cap Growth ($10,001-$50,000)
  Ultra ($10,001-$50,000)
  Vista (more than $100,000)
American Century World Mutual Funds, Inc.
  Emerging Markets ($10,001-$50,000)
  International Discovery ($50,001-$100,000)
  International Growth ($50,001-$100,000)
More than $100,000
 
James A.
Olson
American Century Mutual Funds, Inc.
  Select ($50,001-$100,000)
American Century Capital Portfolios, Inc.
  Mid Cap Value (more than $100,000)
American Century Strategic Asset Allocations, Inc.
  Strategic Allocation: Moderate
       ($50,001-$100,000)
American Century World Mutual Funds, Inc.
  Emerging Markets ($50,001-$100,000)
More than $100,000
   
Donald
H. Pratt(1)
American Century Capital Portfolios, Inc.
  Real Estate ($10,001-$50,000)
  Small Cap Value ($50,001-$100,000)
  Value ($50,001-$100,000)
American Century Mutual Funds, Inc.
  Growth ($10,001-$50,000)
  Heritage ($50,001-$100,000)
  Small Cap Growth ($10,001-$50,000)
  Ultra ($10,001-$50,000)
American Century World Mutual Funds, Inc.
  Emerging Markets ($50,001-$100,000)
  International Discovery ($10,001-$50,000)
More than $100,000
   

 
C-2

 
 
 
Fund Name (Dollar Range
of Equity Securities in the Fund)*
Aggregate Dollar Range
of Equity Securities in
All Registered Investment
Companies Overseen
or to be Overseen by
Director in Family of
Investment Companies
Gale E. Sayers(1)
None
None
M. Jeannine Strandjord(1)
American Century Capital Portfolios, Inc.
  Equity Income ($50,001-$100,000)
  Large Company Value ($1-$10,000)
  Value (more than $100,000)
American Century Mutual Funds, Inc.
  Ultra ($50,001-$100,000)
American Century World Mutual Funds, Inc.
  Emerging Markets ($50,001-100,000)
  Global Growth ($50,001-$100,000)
  International Discovery (more than $100,000)
More than $100,000
John R.
Whitten(1)
American Century Capital Portfolios, Inc.
  Small Cap Value ($1-$10,000)
American Century Asset Allocation Portfolios, Inc.
  LIVESTRONG 2015 (more than $100,000)
American Century Mutual Funds, Inc.
  Heritage ($50,001-$100,000)
  Veedot ($50,001-$100,000)
American Century World Mutual Funds, Inc.
  International Discovery ($50,001-$100,000)
More than $100,000
 
  *
Note – Funds not listed are funds in which no securities are owned by the Directors.
 
  1
This director owns shares of one or more registered investment companies in the American Century Investment family of funds that are not overseen by this board.
 
 
C-3

 
 
 Exhibit D
 
Form of Proposed Management Agreement
 
THIS MANAGEMENT AGREEMENT (“Agreement”) is effective as of the 16th day of June, 2010, by and between [ISSUER], a Maryland corporation (hereinafter called the “Company”), and AMERICAN CENTURY INVESTMENT MANAGEMENT, INC., a Delaware corporation (hereinafter called the “Investment Manager”).
 
WHEREAS, a majority of those members of the Board of Directors of the Company (collectively, the “Board of Directors”, and each individually a “Director”) who are not “interested persons” as defined in the Investment Company Act of 1940 (the “Investment Company Act”) (hereinafter referred to as the “Independent Directors”), has approved this Agreement as it relates to each series of shares of the Company set forth on Schedule A attached hereto (the “Funds”).
 
NOW, THEREFORE, IN CONSIDERATION of the mutual promises and agreements herein contained, the parties agree as follows:
 
1.
Investment Management Services. The Investment Manager shall supervise the investments of each class of each Fund. In such capacity, the Investment Manager shall either directly, or through the utilization of others as contemplated by Section 7 below, maintain a continuous investment program for each Fund, determine what securities shall be purchased or sold by each Fund, secure and evaluate such information as it deems proper and take whatever action is necessary or convenient to perform its functions, including the placing of purchase and sale orders. In performing its duties hereunder, the Investment Manager will manage the portfolio of all classes of shares of a particular Fund as a single portfolio.
 
2.
Compliance with Laws. All functions undertaken by the Investment Manager hereunder shall at all times conform to, and be in accordance with, any requirements imposed by:
 
 
(a)
the Investment Company Act and any rules and regulations promulgated thereunder;
 
 
(b)
any other applicable provisions of law;
 
 
(c)
the Articles of Incorporation of the Company as amended from time to time;
 
 
(d)
the Bylaws of the Company as amended from time to time;
 
 
(e)
the Multiple Class Plan of the Company as amended from time to time; and
 
 
(f)
the registration statement(s) of the Company, as amended from time to time, filed under the Securities Act of 1933 and the Investment Company Act.
 
 
D-1

 
 
3.
Board Supervision. All of the functions undertaken by the Investment Manager hereunder shall at all times be subject to the direction of the Board of Directors, its executive committee, or any committee or officers of the Company acting under the authority of the Board of Directors.
 
4.
Payment of Expenses. The Investment Manager will pay all of the expenses of each class of each Fund, other than interest, taxes, brokerage commissions, extraordinary expenses, the fees and expenses of the Independent Directors (including counsel fees), and expenses incurred in connection with the provision of shareholder services and distribution services under a plan adopted pursuant to Rule 12b-1 under the Investment Company Act. The Investment Manager will provide the Company with all physical facilities and personnel required to carry on the business of each class of each Fund that it shall manage, including but not limited to office space, office furniture, fixtures and equipment, office supplies, computer hardware and software and salaried and hourly paid personnel. The Investment Manager may at its expense employ others to provide all or any part of such facilities and personnel.
 
5.
Account Fees. The Company, by resolution of the Board of Directors, including a majority of the Independent Directors, may from time to time authorize the imposition of a fee as a direct charge against shareholder accounts of any class of one or more of the Funds, such fee to be retained by the Company or to be paid to the Investment Manager to defray expenses which would otherwise be paid by the Investment Manager in accordance with the provisions of paragraph 4 of this Agreement. At least sixty days prior written notice of the intent to impose such fee must be given to the shareholders of the affected Fund or Fund class.
 
6.
Management Fees.
 
 
(a)
In consideration of the services provided by the Investment Manager, each class of each Fund shall pay to the Investment Manager a management fee that is calculated as described in this Section 6 using the fee schedules set forth on Schedule A.
 
 
(b)
Definitions
 
 
(1)
An “Investment Team” is the Portfolio Managers that the Investment Manager has designated to manage a given portfolio.
 
 
(2)
An “Investment Strategy” is the processes and policies implemented by the Investment Manager for pursuing a particular investment objective managed by an Investment Team.
 
 
(3)
A “Primary Strategy Portfolio” is each Fund, as well as any other series of any other registered investment company for which the Investment Manager, or an affiliated investment advisor, serves as the investment manager and for which American Century Investment Services, Inc. serves as the distributor.
 
 
(4)
A “Secondary Strategy Portfolio” of a Fund is another account managed by the Investment Manager that is managed by the same Investment Team but is not a Primary Strategy Portfolio.
 
 
D-2

 
 
 
(5)
The “Secondary Strategy Share Ratio” of a Fund is calculated by dividing the net assets of the Fund by the sum of the net assets of the Primary Strategy Portfolios that share a common Investment Strategy.
 
 
(6)
The “Secondary Strategy Assets” of a Fund is the sum of the net assets of the Fund’s Secondary Strategy Portfolios multiplied by the Fund’s Secondary Strategy Share Ratio.
 
 
(7)
The “Investment Strategy Assets” of a Fund is the sum of the net assets of the Fund and the Fund’s Secondary Strategy Assets.
 
 
(8)
The “Per Annum Fee Dollar Amount” is the dollar amount resulting from applying the applicable Fee Schedule for a class of a Fund using the Investment Strategy Assets.
 
 
(9)
The “Per Annum Fee Rate” for a class of a Fund is the percentage rate that results from dividing the Per Annum Fee Dollar Amount for the class of a Fund by the Investment Strategy Assets of the Fund.
 
 
(c)
Daily Management Fee Calculation. For each calendar day, each class of each Fund shall accrue a fee calculated by multiplying the Per Annum Fee Rate for that class by the net assets of the class on that day, and further dividing that product by 365 (366 in leap years).
 
 
(d)
Monthly Management Fee Payment. On the first business day of each month, each class of each Fund shall pay the management fee to the Investment Manager for the previous month. The fee for the previous month shall be the sum of the Daily Management Fee Calculations for each calendar day in the previous month.
 
 
(e)
Additional Series or Classes. In the event that the Board of Directors shall determine to issue any additional series or classes of shares for which it is proposed that the Investment Manager serve as investment manager, the Company and the Investment Manager may enter into an Addendum to this Agreement setting forth the name of the series and/or classes, the fee schedule for each and such other terms and conditions as are applicable to the management of such series and/or classes, or, in the alternative, enter into a separate management agreement that relates specifically to such series and/or classes of shares.
 
7.
Subcontracts. In rendering the services to be provided pursuant to this Agreement, the Investment Manager may, from time to time, engage or associate itself with such persons or entities as it determines is necessary or convenient in its sole discretion and may contract with such persons or entities to obtain information, investment advisory and management services, or such other services as the Investment Manager deems appropriate. Any fees, compensation or expenses to be paid to any such person or entity shall be paid by the Investment Manager, and no obligation to such person or entity shall be incurred on behalf of the Company. Any arrangement entered into pursuant to this paragraph shall, to the extent required by law, be subject to the approval of the Board of Directors,
 
 
D-3

 
 
 
including a majority of the Independent Directors, and the shareholders of the Company.
 
8.
Continuation of Agreement. This Agreement shall become effective for each Fund as of the date first set forth above (the “Effective Date”) and shall continue in effect for each Fund for a period of two years from the Effective Date, unless sooner terminated as hereinafter provided, and shall continue in effect from year to year thereafter for each Fund only as long as such continuance is specifically approved at least annually (i) by either the Board of Directors or by the vote of a majority of the outstanding voting securities of such Fund, and (ii) by the vote of a majority of the Directors who are not parties to the Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. The annual approvals provided for herein shall be effective to continue this Agreement from year to year if given within a period beginning not more than 90 days prior to the date on which it would otherwise terminate in each applicable year, notwithstanding the fact that more than 365 days may have elapsed since the date on which such approval was last given.
 
9.
Termination. This Agreement may be terminated, with respect to any Fund, by the Investment Manager at any time without penalty upon giving the Company 60 days’ written notice, and may be terminated, with respect to any Fund, at any time without penalty by the Board of Directors or by vote of a majority of the outstanding voting securities of each class of such Fund on 60 days’ written notice to the Investment Manager.
 
10.
Effect of Assignment. This Agreement shall automatically terminate with respect to any Fund in the event of its assignment by the Investment Manager. The term “assignment” for this purpose has the meaning defined in Section 2(a)(4) of the Investment Company Act.
 
11.
Other Activities. Nothing herein shall be deemed to limit or restrict the right of the Investment Manager, or the right of any of its officers, directors or employees (who may also be a Director, officer or employee of the Company), to engage in any other business or to devote time and attention to the management or other aspects of any other business, whether of a similar or dissimilar nature, or to render services of any kind to any other corporation, firm, individual or association.
 
12.
Standard of Care. In the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of its obligations or duties hereunder on the part of the Investment Manager, it, as an inducement to it to enter into this Agreement, shall not be subject to liability to the Company or to any shareholder of the Company for any act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security.
 
13.
Separate Agreement. The parties hereto acknowledge that certain provisions of the Investment Company Act, in effect, treat each series of shares of an investment company as a separate investment company. Accordingly, the parties hereto hereby acknowledge and agree that, to the
 
 
D-4

 
 
 
extent deemed appropriate and consistent with the Investment Company Act, this Agreement shall be deemed to constitute a separate agreement between the Investment Manager and each Fund.
 
14.
Use of the Name “American Century”. The name “American Century” and all rights to the use of the name “American Century” are the exclusive property of American Century Proprietary Holdings, Inc. (“ACPH”). ACPH has consented to, and granted a non-exclusive license for, the use by the Company of the name “American Century” in the name of the Company and any Fund. Such consent and non-exclusive license may be revoked by ACPH in its discretion if ACPH, the Investment Manager, or a subsidiary or affiliate of either of them is not employed as the investment adviser of each Fund. In the event of such revocation, the Company and each Fund using the name “American Century” shall cease using the name “American Century” unless otherwise consented to by ACPH or any successor to its interest in such name.
 
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective duly authorized officers to be effective as of the day and year first above written.
 
American Century Investment Management, Inc.
[ISSUER]
   
 
David H. Reinmiller
Vice President
 
Charles A. Etherington
Senior Vice President
 
 
D-5

 

Exhibit E 
Dates of Prior Management Agreements
 
Fund
Interim
Management
Agreement
Date
Date Prior
Management
Agreement Last
Submitted to
Shareholders
Purpose of Last
Submission to Shareholders
Equity Income (Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
Equity Income
(All other classes)
02/16/2010
07/30/1997
Consolidation of Management Agreements by Issuer
Equity Index
02/16/2010
02/25/1999
Consent of Sole Shareholder
Large Company Value
(Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
Large Company Value
(All other classes)
02/16/2010
07/28/1999
Consent of Sole Shareholder
Mid Cap Value (Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
Mid Cap Value (All other classes)
02/16/2010
07/30/2004
Consent of Sole Shareholder
Real Estate (Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
Real Estate (All other classes)
02/16/2010
12/17/1999
Approval of fee change
NT Large Company Value
02/16/2010
05/15/2006
Consent of Sole Shareholder
NT Mid Cap Value
02/16/2010
05/15/2006
Consent of Sole Shareholder
Small Cap Value
(Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
Small Cap Value (All other classes)
02/16/2010
07/30/1998
Consent of Sole Shareholder
Value (Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
Value (All other classes)
02/16/2010
07/30/1997
Consolidation of Management Agreements by Issuer
Legacy Large Cap
(Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
Legacy Large Cap (All other classes)
02/16/2010
05/31/2006
Consent of Sole Shareholder
Legacy Focused Large Cap
(Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
Legacy Focused Large Cap
(All other classes)
02/16/2010
05/31/2006
Consent of Sole Shareholder
Legacy Multi Cap
(Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
Legacy Multi Cap (All other classes)
02/16/2010
05/31/2006
Consent of Sole Shareholder
Balanced (Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
Balanced (All other classes)
02/16/2010
07/30/1997
Consolidation of Management Agreements by Issuer
Capital Growth
02/16/2010
02/26/2004
Consent of Sole Shareholder

 
E-1

 
 
Capital Value (Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
Capital Value (All other classes)
02/16/2010
03/30/1999
Consent of Sole Shareholder
Focused Growth
02/16/2010
09/28/2007
Consent of Sole Shareholder
Fundamental Equity
02/16/2010
11/30/2004
Consent of Sole Shareholder
Giftrust
02/16/2010
07/30/1997
Consolidation of Management Agreements by Issuer
Growth (Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
Growth (All other classes)
02/16/2010
07/30/1997
Consolidation of Management Agreements by Issuer
Heritage (Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
Heritage (All other classes)
02/16/2010
07/30/1997
Consolidation of Management Agreements by Issuer
New Opportunities
02/16/2010
07/30/1997
Consolidation of Management Agreements by Issuer
NT Growth
02/16/2010
05/15/2006
Consent of Sole Shareholder
NT Vista
02/16/2010
05/15/2006
Consent of Sole Shareholder
Select (Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
Select (All other classes)
02/16/2010
07/30/1997
Consolidation of Management Agreements by Issuer
Small Cap Growth
02/16/2010
05/31/2001
Consent of Sole Shareholder
Ultra (Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
Ultra (All other classes)
02/16/2010
07/30/1997
Consolidation of Management Agreements by Issuer
Veedot
02/16/2010
11/26/1999
Consent of Sole Shareholder
Vista (Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
Vista (All other classes)
02/16/2010
07/30/1997
Consolidation of Management Agreements by Issuer
Strategic Allocation:
Conservative (Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
Strategic Allocation: Conservative
(All other classes)
02/16/2010
07/30/1997
Consolidation of Management Agreements by Issuer
Strategic Allocation: Moderate
 (Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
Strategic Allocation: Moderate
(All other classes)
02/16/2010
07/30/1997
Consolidation of Management Agreements by Issuer
Strategic Allocation:  Aggressive
(Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
Strategic Allocation: Aggressive
(All other classes)
02/16/2010
07/30/1997
Consolidation of Management Agreements by Issuer
Emerging Markets
(Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change

 
E-2

 
 
Emerging Markets
 (All other classes)
02/16/2010
07/30/1997
Consolidation of Management Agreements by Issuer
Global Growth (Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
Global Growth (All other classes)
02/16/2010
11/30/1998
Consent of Sole Shareholder
International Discovery
(Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
International Discovery
 (All other classes)
02/16/2010
07/30/1997
Approval of fee change
International Growth
(Advisor Class)
02/16/2010
06/27/2007
Approval of fee structure change
International Growth
(All other classes)
02/16/2010
07/30/1997
Approval of fee change
International Opportunities
02/16/2010
05/31/2001
Consent of Sole Shareholder
International Stock
02/16/2010
03/31/2005
Consent of Sole Shareholder
International Value
02/16/2010
03/10/2006
Consent of Sole Shareholder
NT Emerging Markets
02/16/2010
05/15/2006
Consent of Sole Shareholder
NT International Growth
02/16/2010
05/15/2006
Consent of Sole Shareholder
VP Balanced
02/16/2010
11/16/1998
Approval of Management Agreement
VP Capital Appreciation
02/16/2010
11/16/1998
Approval of Management Agreement
VP Income & Growth
02/16/2010
11/16/1998
Approval of Management Agreement
VP International
02/16/2010
11/16/1998
Approval of Management Agreement
VP Large Company Value
02/16/2010
03/03/2006
Approval of Management Agreement
VP Mid Cap Value
02/16/2010
11/16/1998
Approval of Management Agreement
VP Ultra
02/16/2010
04/27/2001
Consent of Sole Shareholder
VP Value
02/16/2010
11/16/1998
Approval of Management Agreement
VP Vista
02/16/2010
04/27/2001
Consent of Sole Shareholder

 
E-3

 

Exhibit F 
 
Contractual Advisory Fee Rate Paid to the Advisor under the Prior
Management Agreements and Payable to the Advisor under the Proposed
Management Agreements
 
The Advisor receives a unified management fee (the “Management Fee”) based on a percentage of the daily net assets of each class of shares of a Fund. The Management Fee for a class is determined daily in a multi-step process. The calculation of the fee involves the following steps:
 
Calculation of Per Annum Fee Rate: First, the Strategy Assets for each Fund are determined by adding the assets of each Fund to the assets, if any, of certain other accounts managed by the Advisor that have very similar investment objectives and the same management team as each Fund (the “Strategy Assets”). Next, the Per Annum Fee Rate is calculated by applying each Fund’s Fee Schedule (shown below) to the Strategy Assets (such calculation will apply the asset break point levels shown in the Fee Schedule) and dividing the result by the Strategy Assets. This results in a Per Annum Fee Rate, expressed in basis points, for each Fund.
 
Calculation of Total Management Fee: The Management Fee for each class of a Fund is calculated by multiplying the Per Annum Fee Rate times the net assets of that class on that day, and dividing that product by 365 (366 in leap years).
 
Applicable only to LIVESTRONG and One Choice Funds: Unlike the other funds, those issued by American Century Asset Allocation Portfolios, Inc. invest only in shares of other American Century funds. Because a unified management fee is charged at the underlying fund level, the LIVESTRONG and One Choice Funds are not charged a separate unified management fee. However, as the LIVESTRONG Funds invest in the Institutional Class of the underlying funds, all classes of the LIVESTRONG Funds except Institutional Class are charged an Administrative Fee, which covers the administrative services provided or caused to be provided by the Advisor to those classes. The Administrative Fee is calculated in the same way as the Total Management Fee is calculated for all other funds, as described above. The amount of the Administrative Fee is shown in the chart below.
 
 
F-1

 

Fee Schedules
 
Series
Investment
Strategy Assets
All classes
except
Institutional
Institutional
AMERICAN CENTURY ASSET ALLOCATION PORTFOLIOS, INC.
All LIVESTRONG Portfolios
All Assets
0.20%
0.00%
All One Choice Portfolios
All Assets
0.00%
N/A
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
Value
First $2.5 billion
1.000%
0.800%
Next $2.5 billion
0.950%
0.750%
Next $2.5 billion
0.900%
0.700%
Over $7.5 billion
0.850%
0.650%
Small Cap Value
First $2.5 billion
1.250%
1.050%
Over $2.5 billion
1.000%
0.800%
Mid Cap Value, NT Mid Cap Value
All Assets
1.000%
0.800%
Large Company Value,
NT Large Company Value
First $1.0 billion
0.900%
0.700%
Next $4.0 billion
0.800%
0.600%
Over $5.0 billion
0.700%
0.500%
Equity Income
First $2.5 billion
1.000%
0.800%
Next $2.5 billion
0.950%
0.750%
Next $5.0 billion
0.900%
0.700%
Next $5.0 billion
0.850%
0.650%
Over $15.0 billion
0.800%
0.600%
Equity Index
First $500 million
0.490%
0.290%
Next $500 million
0.390%
0.190%
Next $500 million
0.380%
0.180%
Next $500 million
0.370%
0.170%
Next $500 million
0.360%
0.160%
Over $2.5 billion
0.350%
0.150%
Real Estate
First $100 million
1.200%
1.000%
Next $900 million
1.150%
0.950%
Next $1 billion
1.100%
0.900%
Over $2 billion
1.050%
0.850%
AMERICAN CENTURY GROWTH FUNDS, INC.
Legacy Large Cap,
Legacy Focused Large Cap
First $500 million
1.100%
0.900%
Next $500 million
1.050%
0.850%
Next $4 billion
1.000%
0.800%
Next $5 billion
0.990%
0.790%
Next $5 billion
0.980%
0.780%
Next $5 billion
0.970%
0.770%
Next $5 billion
0.950%
0.750%
Next $5 billion
0.900%
0.700%
Over $30 billion
0.800%
0.600%
Legacy Multi Cap
First $500 million
1.150%
0.950%
 
Next $500 million
1.100%
0.900%
 
Next $4 billion
1.050%
0.850%
 
Next $5 billion
1.040%
0.840%

 
F-2

 
 
Series
Investment
Strategy Assets
All classes
except
Institutional
Institutional
 
Next $5 billion
1.030%
0.830%
Next $5 billion
1.020%
0.820%
Next $5 billion
1.000%
0.800%
Next $5 billion
0.950%
0.750%
Over $30 billion
0.850%
0.650%
AMERICAN CENTURY MUTUAL FUNDS, INC.
Ultra, Growth, Select,
Capital Growth,
Fundamental Equity,
Focused Growth,
NT Growth
First $2.5 billion
1.000%
0.800%
Next $2.5 billion
0.995%
0.795%
Next $2.5 billion
0.980%
0.780%
Next $2.5 billion
0.970%
0.770%
Next $2.5 billion
0.960%
0.760%
Next $2.5 billion
0.950%
0.750%
Next $2.5 billion
0.940%
0.740%
Next $2.5 billion
0.930%
0.730%
Next $2.5 billion
0.920%
0.720%
Next $2.5 billion
0.910%
0.710%
Next $5 billion
0.900%
0.700%
Over $30 billion
0.800%
0.600%
Vista, NT Vista
All Assets
1.000%
0.800%
Heritage
All Assets
1.000%
0.800%
Giftrust
All Assets
1.000%
N/A
New Opportunities,
Small Cap Growth
First $250 million
1.500%
1.300%
Next $250 million
1.250%
1.050%
Next $250 million
1.150%
0.95%
Over $750 million
1.100%
0.900%
Veedot
First $500 million
1.250%
1.050%
Next $500 million
1.100%
0.900%
Over $1 billion
1.000%
0.800%
Balanced
First $1 billion
0.900%
0.700%
Over $1billion
0.800%
0.600%
Capital Value
First $500 million
1.100%
0.900%
Next $500 million
1.000%
0.800%
Over $1 billion
0.900%
0.700%
AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC.
Strategic Allocation: Conservative
First $500 million
1.000%
0.800%
Next $500 million
0.950%
0.750%
Next $2 billion
0.900%
0.700%
Next $2 billion
0.850%
0.650%
Over $5 billion
0.800%
0.600%
Strategic Allocation: Moderate
First $1 billion
1.100%
0.900%
Next $2 billion
1.000%
0.800%
Next $2 billion
0.950%
0.750%
Over $5 billion
0.900%
0.700%

 
F-3

 
 
Series
Investment
Strategy Assets
All classes
except Institutional
Institutional
Strategic Allocation: Aggressive
First $1 billion