SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(A) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Co-Registrants __X__
Filed by a Party other than the Registrant _____
Check the appropriate box:
__X__ Preliminary Proxy Statement
_____ Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e)(2)
_____ Definitive Proxy Statement
_____ Definitive Additional materials
_____ Soliciting Material Pursuant to ss.240.14a-l l(c) or ss.240.14a-12
- --------------------------------------------------------------------------------
AMERICAN CENTURY MUTUAL FUNDS, INC.
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
AMERICAN CENTURY PREMIUM RESERVES, INC.
AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC.
(Name of Co-Registrant as Specified in Their Charters)
Payment of Filing Fee (Check the appropriate box):
__X__ No fee required.
_____ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
_____ Fee paid previously with preliminary materials.
[American Century logo and address]
June 2, 1997
Dear American Century Shareholder
I am writing to inform you of the upcoming annual meeting of the
shareholders of your fund. At this meeting, you are being asked to vote on
important proposals effecting your fund. These include the election of
directors, the approval of the management agreement, the ratification of
independent auditors, and the elimination or amendment of certain fundamental
investment restrictions. The Board of Directors of your fund, including myself,
unanimously believes that these proposals are in the fund's and your best
interest.
I'm sure that you, like most people, lead a busy life and are tempted
to put this proxy aside for another day. Please don't. When shareholders do not
return their proxies, additional expenses are incurred to pay for follow-up
mailings and telephone calls. PLEASE TAKE A FEW MINUTES TO REVIEW THIS PROXY
STATEMENT AND SIGN AND RETURN ALL PROXY CARDS TODAY. If you hold shares in more
than one fund, you will receive a separate proxy card for each fund you hold.
Please be sure to sign and return each proxy card regardless of how many you
receive.
The Board of Directors of your fund has unanimously approved these
proposals and recommends a vote "FOR" each proposal. If you have any questions
regarding the issues to be voted on or need assistance in completing your proxy
card, please contact our proxy solicitor D.F. King & Co., Inc. at
1-800-___-____.
Thank you for your time in considering these important proposals. Thank
you for investing with American Century and for your continuing support.
Very truly yours,
James E. Stowers III
President
AMERICAN CENTURY MUTUAL FUNDS, INC.
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
AMERICAN CENTURY PREMIUM RESERVES, INC.
AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC.
American Century Investments
4500 Main Street; P.O. Box 419200
Kansas City, Missouri 64141-6200
(816) ___-____; (800) ___-____
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 30, 1997
NOTICE IS HEREBY GIVEN that a joint annual meeting of shareholders of
the various series ("Funds" and, individually, a "Fund") of American Century
Mutual Funds, Inc., American Century World Mutual Funds, Inc., American Century
Capital Portfolios, Inc., American Century Premium Reserves, Inc. and American
Century Strategic Asset Allocations, Inc., each a Maryland corporation
(individually a "Company" and, collectively, the "Companies"), will be held at
the Companies' offices at 4500 Main Street, Kansas City, Missouri, on July 30,
1997 at _____ p.m. Central Time, for the following purposes:
1. To elect a Board of Directors of nine members to hold office until their
successors are duly elected and qualified;
2. To vote on the approval of a Management Agreement with American Century
Investment Management, Inc.;
3. To ratify the selection of Deloitte & Touche LLP as the independent
auditors of the Companies for each Company's current fiscal year;
4. To approve the adoption of standardized investment limitations by amending
or eliminating certain of the Companies' current fundamental investment
restrictions; and
5. To transact such other business as may properly come before the meeting or
any adjournment thereof.
This is a combined Notice and Proxy Statement for the Funds. The
shareholders of each Fund will vote only on those matters being considered by
their Fund. If you own shares of more than one of the Funds (or more than one
class of a Fund), you have received a separate proxy for each Fund (or class).
Please complete, sign and return all proxies.
Shareholders of record as of the close of business on May 17, 1997 are
the only persons entitled to notice of and to vote at the meeting and any
adjournments thereof. Your attention is directed to the attached Proxy
Statement. YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT
THE MEETING, PLEASE COMPLETE, SIGN, AND RETURN THE ENCLOSED PROXY OR PROXIES AS
SOON AS POSSIBLE IN ORDER TO SAVE FURTHER SOLICITATION EXPENSE. There is
enclosed with the proxy an addressed envelope for which no postage is required.
The Board of Directors of each Company recommends that you cast your
vote:
o FOR the election of the Board of Directors;
o FOR the approval of the Management Agreement;
o FOR the ratification of the independent auditors; and
o FOR the adoption of standardized fundamental investment limitations.
BY ORDER OF THE BOARDS OF DIRECTORS
Dated: June __,1997 William M. Lyons, Executive Vice President
AMERICAN CENTURY INVESTMENTS
4500 Main Street; P.O. Box 419200
Kansas City, Missouri 64141-6200
(816) ___-____; (800) ___-____
PROXY STATEMENT
for
JOINT MEETING OF SHAREHOLDERS OF
AMERICAN CENTURY MUTUAL FUNDS, INC.
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
AMERICAN CENTURY PREMIUM RESERVES, INC.
AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC.
TO BE HELD ON JULY 30, 1997
The enclosed Proxy is solicited by the Board of Directors of the
American Century investment companies listed above in connection with a joint
annual meeting of shareholders to be held on Wednesday, July 30, 1997, at the
Companies' offices at 4500 Main Street, Kansas City, Missouri, at _____ p.m.
Central Time, and any adjournments thereof. In this proxy, an individual company
will be referred to as a "Company," while, as a group, they will be called the
"Companies." The shares of the capital stock of each Company entitled to vote at
the meeting are issued in series representing different investment portfolios. A
single series is called a "Fund," while the series as a group will be called the
"Funds."
The costs of soliciting proxies, including the cost of preparing and
mailing the Notice of Meeting and this Proxy Statement, will be paid by American
Century Investment Management, Inc. (referred to in this Proxy Statement as
"ACIM"), the investment manager of each Fund, as it is required to do under the
management agreement between each of the Companies and ACIM. This Notice of
Meeting and the Proxy Statement is first being mailed to shareholders around
June __, 1997. ACIM, at its expense, has hired the proxy solicitation firm of D.
F. King & Co., Inc. to help solicit proxies for the Meeting. Supplemental
solicitations for the meeting may be made by D. F. King & Co., Inc. or by ACIM,
either personally or by mail, telephone or facsimile.
VOTING OF PROXIES. If you provide a proxy, you may revoke it before the
meeting by mailing written notice of revocation to the Secretary of the
respective Company before the meeting, or personally delivering your revocation
to the Secretary any time prior to the taking of the vote at the meeting. Unless
revoked, Proxies that have been returned by shareholders will be voted in favor
of all proposals. In instances where choices are specified on the Proxy, those
Proxies will be voted as the shareholder has instructed it be voted.
Each Fund may be divided into one or more classes. All classes of
shares of a Fund have identical voting rights, except that if a proposal affects
only one class, only that class gets to vote on it. Of the Proposals to be
considered at the Meeting, only Proposal 2, the approval of management
agreements, will be voted upon separately by class. The number of outstanding
votes of each Fund and each class of a Fund, where applicable, as of the close
of business on April 30, 1997, are shown on Schedule 1, which you will find at
the end of this proxy statement.
Only those shareholders owning shares as of the close of business on
May 17, 1997, may vote at the meeting or any adjournments thereof. Each share of
each series or class gets one vote for each dollar of a Fund's net asset value
the share represents. If we do not receive enough "yes" votes by July 30, 1997,
to approve the proposals being considered at the meeting, the named proxies may
propose adjourning the meeting to allow the gathering of more proxy votes. An
adjournment requires a vote "for" by a majority of the votes present at the
meeting (whether in person or by proxy). The named proxies will vote the "for"
votes they have received in favor of the adjournment, and any "against" or
"abstain" votes will count as votes against adjournment. An abstention on any
proposal will be counted as present for purposes of determining whether a quorum
of shares is present at the meeting with respect to the proposal on which the
abstention is noted, but will be counted as a vote against such proposal.
Under the Rules of the New York Stock Exchange, Proposals 2, 3 and 4
are considered "nondiscretionary" proposals; therefore, brokers who hold Fund
shares in "street name" for customers cannot vote a customer's shares if that
customer has not given the broker specific voting instructions on the proposal.
These "broker non-votes" will be counted as present for the purposes of
Proposals 2, 3 and 4. Proposal 1 is considered a discretionary proposal upon
which brokers may vote their customers' shares.
INVESTMENT MANAGER. ACIM is each Fund's investment manager. American
Century Services Corporation ("ACSC"), an affiliate of American Century,
provides each Fund with transfer agency services. ACIM and ACSC are wholly-owned
subsidiaries of American Century Companies, Inc. ("ACC"). The mailing address of
ACC, ACIM, ACSC and the Funds is P.O. Box 419200, Kansas City, Missouri
64141-6200.
ANNUAL REPORT. Each Fund will furnish, without charge, a copy of its
most recent annual report and semi-annual report upon request. To request these
materials, please call American Century at 1-800-345-2021.
IMPORTANT INFORMATION YOU SHOULD CONSIDER
The following Q&A is a brief summary of the proposals to be considered
at the Annual Meeting of shareholders that may be important to you. As is true
with all summaries, however, perhaps not all of the information or topics that
you may think are important will be included below. As a result, this Q&A is
qualified in its entirety by the more detailed information contained elsewhere
in this Proxy Statement or attached as an Appendix. Accordingly, please read all
the enclosed proxy materials before voting. PLEASE REMEMBER TO VOTE YOUR SHARES
AS SOON AS POSSIBLE.
Q. When will the Annual Meeting be held? Who is eligible to vote?
A. The meeting will be held on Wednesday, July 30, 1997 at 10:00 a.m. at
the Companies' offices at 4500 Main Street, Kansas City, Missouri.
Please note that this will be a business meeting only. There will be no
presentations about the Funds. The record date for the meeting is May
17, 1997. Only shareholders who own shares on that date are entitled to
vote at the meeting. The process of mailing to shareholders the Notice
of Meeting, the proxy and this Proxy Statement began June __, 1997.
Q. What is being voted on at the Annual Meeting?
A. Your Board of Directors is recommending that shareholders consider the
approval of the following proposals:
1. To elect a Board of Directors of nine members.
2. To vote on the approval of a Management Agreement with
American Century Investment Management, Inc.
3. To ratify the selection of Deloitte & Touche LLP as
independent auditors.
4. To approve the adoption of standardized fundamental investment
limitations.
5. To transact such other business which may come before the
meeting, although we are not aware of any other items to be
considered.
Q. How do the Directors recommend that shareholders vote on these
proposals?
A. The Directors unanimously recommend that you vote
1. FOR the election of a Board of Directors of nine members.
2. FOR approval of a Management Agreement with American Century
Investment Management, Inc.
3. FOR the ratification of Deloitte & Touche LLP as the
independent auditors.
4. FOR the adoption of standardized fundamental investment
limitations.
Q. Who are the nominees for Director? Have all of them been elected
before?
A. The Nominating Committee of your Board of Directors has proposed that
shareholders elect a nine member Board of Directors. The nominees are:
Thomas A. Brown Lloyd T. Silver, Jr.
Robert W. Doering, M.D. James E. Stowers, Jr.
D.D. (Del) Hock James E. Stowers III
Linsley L. Lundgaard M. Jeannine Strandjord
Donald H. Pratt
Mr. Hock and Mr. Pratt are being considered by shareholders for the
first time. A full discussion of the proposal to elect Directors begins
on page __.
Q. What changes are being proposed to the Management Agreement?
A. The proposed Management Agreement is only slightly different from the
current Management Agreement. First, the proposed Management Agreement
clarifies that the names "American Century," "Twentieth Century" and
"Benham" belong to American Century Services Corporation, an affiliate
of ACIM. This formalizes an agreement between ACIM and the Funds.
Second, with respect to the Twentieth Century International Growth and
Twentieth Century International Discovery, the proposed Management
Agreement will change the fee schedule for those Funds to reflect
voluntary fee waivers by ACIM which have been in effect since August 1,
1996. The proposed Management Agreement does not change the fee payable
by any of the remaining Funds.
A full discussion of the proposal to approve Management Agreements
begins on page __.
Q. What is the "ratification" of the independent auditors? Have
shareholders voted on Deloitte & Touche LLP before?
A. The Investment Company Act not only requires your Board of Directors to
select independent auditors for the Funds, but also requires them to
submit their selection to the shareholders for approval (technically
called a "ratification") in any year that an annual shareholders
meeting is being held. Shareholders have not voted on Deloitte & Touche
LLP previously. Your Board of Directors, in part to provide uniform
auditors for the Funds, selected Deloitte & Touche LLP for the first
time in late 1996. This meeting is the first opportunity for
shareholders to vote on that selection.
A full discussion of the proposal to ratify the selection of Deloitte &
Touche LLP begins on page __.
Q. Why are shareholders being asked to adopt standardized fundamental
investment restrictions?
A. Currently the Funds have fundamental investment restrictions which vary
between Companies and between Funds within the same Company. The funds
also have investment restrictions which reflect legal and other
requirements which are no longer applicable to the Funds. In the
interest of efficiency in fund management and compliance, ACIM has
analyzed the fundamental investment restrictions and policies of the
Funds in an effort to formulate a standard set of policies for all
Funds which reflect current industry practice and will allow the Funds
to respond to changes in regulatory and industry practice without the
expense and delay of a shareholder vote.
It should be noted that the adoption of the proposed changes is not
expected to substantially affect the way the Funds are managed.
Some of the proposed changes sound quite technical. A full discussion
of all of the specific changes, as well as a further discussion of the
benefits of standardization, begins on page __.
Q. When will the proposals take effect if they are approved?
A. If approved, the proposed Management Agreement and the proposed changes
to the fundamental investment restrictions will be effective on August
1, 1997. The other proposals do not involve any changes from the Funds'
current operations, so they will be effective immediately upon
approval.
Q. Who is asking for your vote?
A. Your Board of Directors is asking you to sign and return the enclosed
proxy so your votes can be cast at the Annual Meeting. In the unlikely
event your Fund's meeting is adjourned, these proxies would also be
voted at the reconvened meeting.
Q. If shareholders send their proxies in now as requested, can they change
their vote later?
A. Yes. A proxy can be revoked at any time by writing to us, or by sending
us another proxy, or by attending the meeting and voting in person.
Even if you plan to attend the meeting to vote in person, we ask that
you return the enclosed proxy. Doing so will help us ensure that an
adequate number of shares are present at the meeting.
Q. How do shareholders vote their shares?
A. You can vote by mail or in person at the meeting. The most convenient
way to vote is to complete, sign and mail the enclosed proxy voting
card to us in the enclosed postage-paid envelope. We will vote your
shares exactly as you tell us. If you simply sign the card and return
it, we will follow the recommendation of your Board of Directors and
vote your shares "FOR" all of the proposals. If you have any questions
regarding the enclosed proxy statement or need assistance in voting
your shares, please call our proxy solicitor, D.F. King & Co., Inc.
at 1-800-___-____.
SHARE OWNERSHIP
The following table sets forth, as of April 30, 1997, the share
ownership of those shareholders known by ACIM to own more than 5% of a Fund's
outstanding shares.
Owners of More than 5%:
- --------------------------------------------------------------------------------
Percent of Outstanding
Name of Beneficial Owner Shares Beneficially Owned Shares
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROPOSAL 1: ELECTION OF DIRECTORS
At the meeting, the shareholders of each Company will be asked to elect
nine members of that Company's Board of Directors. It is intended that the
enclosed Proxy will be voted for the election of the nine persons named below as
Directors, unless such authority has been withheld in the Proxy. The term of
office of each person elected will be or until his or her successor is duly
elected and shall qualify. The Companies do not intend to hold regular annual
meetings of shareholders. Information regarding each nominee is set forth
following his or her name below.
- --------------------------------------- --------- -------------------------------------------------------------------
NAME AGE PRINCIPAL OCCUPATION
- --------------------------------------- --------- -------------------------------------------------------------------
Thomas A. Brown 57 Chief Executive Officer, Associated Bearing Company
Robert W. Doering, M.D. 64 Retired, formerly General Surgeon
D.D. (Del) Hock 62 Chairman, Public Service Company of Colorado; Director,
Serv-Tech, Inc.; Director, Hathaway Corporation
Linsley L. Lundgaard 72 Retired, formerly Vice President and National Sales Manager,
Flour Milling Division, Cargill, Inc.
Donald H. Pratt 59 President and Director, Butler Manufacturing Company
Lloyd T. Silver, Jr. 69 President, LSC, Inc., Manufacturers Representative
James E. Stowers, Jr.* 73 Chairman of the Board and Director, ACC, ACSC and ACIM
James E. Stowers III* 38 President, Chief Executive Officer and Director, ACC, ACSC and
ACIM
M. Jeannine Strandjord 51 Senior Vice President and Treasurer, Sprint Corporation;
Director, DST Systems, Inc.
- --------------------------------------- --------- -------------------------------------------------------------------
* Denotes directors who are "interested persons" (as defined by the Investment Company Act) of ACIM. Messrs.
Stowers, Jr. And Stowers III are considered interested persons since they serve as officers of, and have
ownership positions in, ACC and its affiliated entities. Messrs. Stowers, Jr. and Stowers III also serve in
similar capacities for other funds managed by ACIM and its affiliates. Mr. Stowers, Jr. controls ACC by virtue
of his ownership of a majority of its voting stock. Mr. Stowers, Jr. is the father of Mr. Stowers III.
The following table sets forth the year each nominee became a Director:
Brown Doering Hock Lundgaard Pratt Silver Stowers, Jr. Stowers III Strandjord
----- ------- ---- --------- ----- ------ ------------ ----------- ----------
American Century 1980 1968 1996 1958 1995 1979 1958 1990 1994
Mutual Funds, Inc.
American Century 1991 1991 1996 1991 1995 1991 1991 1991 1994
World Mutual
Funds, Inc.
American Century 1993 1993 1996 1993 1995 1993 1993 1993 1994
Capital
Portfolios, Inc.
American Century 1993 1993 1996 1993 1995 1993 1993 1993 1994
Premium Reserves,
Inc.
American Century 1996 1996 1996 1996 1996 1996 1996 1996 1996
Strategic Asset
Allocations, Inc.
Each of the nominees was unanimously nominated by the Board of
Directors' and each has agreed to serve as a Director. If any unforeseen event
prevents one or more of the nominees from serving as a Director, your votes will
be cast (unless you have elected to withhold authority as to the election of
Directors) for the election of such person or persons as the Board of Directors
shall propose for the replacement candidate. Unless otherwise instructed, the
proxies will vote for the re-election of each Director.
The Board of Directors of each Company has established four standing
committees: an Executive Committee, an Audit Committee, a Compliance Committee
and a Nominating Committee.
Messrs. Stowers, Jr., Stowers III and Lundgaard serve on the Executive
Committee of the Board of Directors. The committee performs the functions of the
Board of Directors between meetings of the Board, subject to the limitations on
its power set out in the Maryland Corporation Law, and except for matters
required by the Investment Company Act to be acted upon by the whole Board.
Messrs. Lundgaard (chairman), Doering and Hock and Ms. Strandjord serve
on the Audit Committee. The functions of the Audit Committee include
recommending the engagement of the funds' independent auditors, reviewing the
arrangements for and scope of the annual audit, reviewing comments made by the
independent auditors with respect to internal controls and the considerations
given or the corrective action taken by management and reviewing nonaudit
services provided by the independent auditors.
Messrs. Brown (chairman), Pratt and Silver serve on the Compliance
Committee. The functions of the Compliance Committee include reviewing the
results of the funds' compliance testing program, reviewing quarterly reports
from the manager to the Board regarding various compliance matters and
monitoring compliance with the Funds' Code of Ethics.
The Nominating Committee has as its principal role the consideration
and recommendation of individuals for nomination as directors. The names of
potential director candidates are drawn from a number of sources, including
recommendations from members of the Board, management and shareholders. This
committee also reviews and makes recommendations to the Board with respect to
the composition of Board committees and other Board-related matters, including
its organization, size, composition, responsibilities, functions and
compensation. The members of the nominating committee are Messrs. Pratt
(chairman), Lundgaard and Stowers III.
For the twelve months ended December 31, 1996, the Board of Directors
of each Company met eleven times. The Audit Committee met six times and the
Compliance Committee met three times during the same period. The Nominating
Committee did not meet during the period. No director attended fewer than 75% of
the total number of Directors' meetings and the meetings held by all committees
on which such Director served.
In addition to Messrs. Stowers, Jr. and Stowers III, the following
individuals, except as noted, are executive officers of each of the Companies:
William M. Lyons, 41, Executive Vice President, Chief Operating
Officer, and General Counsel. Prior to 1996, Mr. Lyons was Executive Vice
President and General Counsel. Mr. Lyons is also Executive Vice President, Chief
Operating Officer, and General Counsel of American Century, ACSC, and ACC.
Robert T. Jackson, 51, Executive Vice President and Principal Financial
Officer. Prior to 1995, Mr. Jackson was Executive Vice President of Kemper
Corporation. Mr. Jackson is also Executive Vice President and Principal
Financial Officer of American Century, ACSC, and ACC.
Maryanne Roepke CPA, 41, Vice President, Treasurer, and Principal
Accounting Officer. Ms. Roepke is also Vice President of ACSC.
Patrick A. Looby, 38, Vice President and Associate General Counsel. Mr.
Looby is also Vice President and Associate General Counsel of ACSC.
Merele A. May, 34, Controller of American Century Mutual Funds, Inc.,
American Century Capital Portfolios, Inc., and American Century Strategic Asset
Allocations, Inc.
C. Jean Wade CPA, 33, Controller of American Century Mutual Funds,
Inc., American Century Premium Reserves, Inc., and American Century Strategic
Asset Allocations, Inc.
Robert J. Leach CPA, 31, Controller of American Century World Mutual
Funds, Inc.
COMPENSATION. The Directors of the Companies serve as Directors for 32
of the 69 funds advised by American Century. Each non-interested Director, i.e.,
all directors other than Mr. Stowers Jr. and Mr. Stowers III, receives for
service as a member of the Board of all 32 funds an annual director's fee of
$44,000, and an additional fee of $1,000 per regular Board meeting attended and
$500 per special Board meeting and committee meeting attended. In addition,
these directors that also serve as chairman of a committee of the Board of
Directors receive an additional $2,000 for acting as chairman. These fees and
expenses are divided among the 32 funds based upon their relative net assets.
Under the terms of the management agreement with ACIM, the Funds are responsible
for paying such fees and expenses.
The following table sets forth the total compensation received by each
non-interested Director from each Company for its most recent fiscal year, as
well as the total compensation received by each Director from the American
Century family of funds as a whole for the twelve months ended December 31,
1996. Messrs. Stowers, Jr. and Stowers III receive no compensation from the
Funds for serving as a Director. The salaries of Messrs. Stowers, Jr. and
Stowers III are paid by American Century. No officer of the Funds received
compensation from the Funds during its most recent fiscal year. No director
receives pension or retirement benefits from any Fund.
- --------------------------------------- ----------- ----------- ---------- ------------- --------- ---------- ------------
Fund Brown Doering Hock Lundgaard Pratt Silver Strandjord
- --------------------------------------- ----------- ----------- ---------- ------------- --------- ---------- ------------
American Century Mutual Funds, Inc.*
- ---------------------------------------
American Century World Mutual Funds,
Inc.
- ---------------------------------------
American Century Capital Portfolios,
Inc.
- ---------------------------------------
American Century Premium Reserves,
Inc.
- ---------------------------------------
American Century Strategic Asset
Allocations, Inc.
- --------------------------------------- ----------- ----------- ---------- ------------- --------- ---------- ------------
Total Compensation from All American
Century funds
- --------------------------------------- ----------- ----------- ---------- ------------- --------- ---------- ------------
* Includes amounts deferred at the election of the Directors under the American Century Mutual Funds Deferred
Compensation Plan for Non-Interested Directors. The total amount of deferred compensation included in the
preceding table is as follows: Mr. Brown, $__________; Dr. Doering, $__________; Mr. Hock, $_______;
Mr. Lundgaard, $___________; Mr. Pratt, $___________; Mr. Silver, $_________; and Ms. Strandjord, $__________.
DEFERRED COMPENSATION. In December 1992, American Century Mutual Funds,
Inc. adopted the American Century Mutual Funds Deferred Compensation Plan for
Non-Interested Directors (the "Plan"). Under the Plan, the non-interested person
Directors may defer receipt of all or any art of the fees to be paid to them for
serving as Directors of American Century Mutual Funds, Inc.
Under the Plan, all deferred fees are credited to an account
established in the name of the participating Director. The amounts credited to
the account then increase or decrease, as the case may be, in accordance with
the performance of one or more of the Funds issued by American Century Mutual
Funds, Inc. that are selected by the participating 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 participating
Director resigns, retires or otherwise ceases to be a member of the Board of
Directors. Directors may receive deferred fee account balances in either a lump
sum payment or in payments made over a period not to exceed ten 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, American Century Mutual
Funds, Inc. has no obligation to segregate assets to secure or fund the deferred
fees. The rights of Directors to receive their deferred fee account balances are
the same as rights of a general unsecured creditor of the Company. 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.
VOTING INFORMATION. Each nominee will be re-elected to the Board of
Directors of a Company if he or she receives the approval of a majority of the
votes of that Company represented at the meeting, provided at least a quorum
(50% of the outstanding votes), is represented in person or by proxy. By
completing the Proxy, you give the named proxies the right to cast your votes.
If you elect to withhold authority for any nominees, you may do so by striking a
line through the nominee name on the Proxy, as further explained on the Proxy
itself.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS
VOTE "FOR" ALL NOMINEES.
PROPOSAL 2: APPROVAL OF MANAGEMENT AGREEMENTS
SUMMARY. American Century has served as investment manager to the
Companies since their inception. Each Company currently has a separate
Management Agreement with American Century with respect to each class of shares
offered by the Company. With respect to each class of shares offered, these
agreements are identical in all respects with the exception of the management
fee, pursuant to which American Century provides, or arranges for the provision
of, all services required by a Fund, and pays essentially all of the expenses of
a fund in exchange for one "all-inclusive" fee (the "Management Agreement"). For
each of the Funds, the Proposal would add to the existing management agreement a
provision which would clarify American Century's ownership of the names
"American Century," "Twentieth Century" and "Benham" which appear as part of the
names of the Funds. The proposal would also consolidate the Management
Agreements into one management agreement between a Company and American Century
which would include all classes of shares offered. With respect to the Investor
Class of Twentieth Century International Growth and Twentieth Century
International Discovery funds issued by American Century World Mutual Funds,
Inc., the Proposal would change the management fee charged to each Fund. The
complete text of the proposed Management Agreement is set forth in Exhibit A to
this Proxy Statement.
The current Management Agreements between ACIM and American Century
Mutual Funds, Inc., American Century World Mutual Funds, Inc., and American
Century Premium Reserves, Inc. were approved by the respective shareholders of
those corporations on July 29, 1994. The current Management Agreements between
ACIM and American Century Capital Portfolios, Inc. and American Century
Strategic Asset Allocations, Inc. were approved by the shareholders of those
corporations on August 18, 1993, and February 1, 1996, respectively.
DESCRIPTION OF MANAGEMENT AGREEMENT. The functions and responsibilities
of ACIM under the existing agreements and the Proposed Management Agreement are
identical. All of the agreements require ACIM to:
supervise and manage the investment portfolios of the Funds and
direct the purchase and sale of investment securities, subject
only to any directions of the Boards of Directors, and
pay all the expenses of the Funds except brokerage, taxes,
interest, portfolio insurance, fees and expenses of the
non-interested person Directors (including counsel fees) and
extraordinary expenses.
As manager, ACIM provides the Companies with the physical facilities
and personnel required to carry on the business, such as office space, office
furniture, fixtures and equipment, office supplies, computer hardware and
software, and salaried and hourly paid personnel. In exchange for the services
it provides, ACIM receives a specified percentage fee of the assets of each Fund
managed. ACIM may at its expense employ others to supply all or any part of the
required facilities and personnel.
With the exception of the Investor Class of the Twentieth Century
International Growth and Twentieth Century International Discovery funds
discussed below, the proposed Management Agreements retain the currently
existing "all-inclusive" fees on all series of shares, which are as follows:
- ------------------------------------------------------- ------------------------
Fund Applicable Fee
American Century Equity Income Fund
- -------------------------------------------------------
Advisor Class
- -------------------------------------------------------
Investor Class
- -------------------------------------------------------
Institutional Class
- -------------------------------------------------------
American Century Value Fund
- -------------------------------------------------------
Advisor Class
- -------------------------------------------------------
Investor Class
- -------------------------------------------------------
Institutional Class
- -------------------------------------------------------
American Century Strategic Allocation: Aggressive
- -------------------------------------------------------
Advisor Class
- -------------------------------------------------------
Investor Class
- -------------------------------------------------------
American Century Strategic Allocation: Conservative
- -------------------------------------------------------
Advisor Class
- -------------------------------------------------------
Investor Class
- -------------------------------------------------------
American Century Strategic Allocation: Moderate
- -------------------------------------------------------
Advisor Class
- -------------------------------------------------------
Investor Class
- -------------------------------------------------------
Benham Bond Fund
- -------------------------------------------------------
Advisor Class
- -------------------------------------------------------
Investor Class
- -------------------------------------------------------
Benham Cash Reserve Fund
- -------------------------------------------------------
Advisor Class
- -------------------------------------------------------
Investor Class
- -------------------------------------------------------
Benham Intermediate-Term Bond Fund
- -------------------------------------------------------
Advisor Class
- -------------------------------------------------------
Investor Class
- -------------------------------------------------------
Benham Limited-Term Bond Fund
- -------------------------------------------------------
Advisor Class
- -------------------------------------------------------
Investor Class
- -------------------------------------------------------
Benham Premium Bond Fund
- -------------------------------------------------------
Benham Premium Capital Reserve Fund
- -------------------------------------------------------
Benham Premium Government Reserve Fund
- -------------------------------------------------------
Twentieth Century Balanced Fund
- -------------------------------------------------------
Advisor Class
- -------------------------------------------------------
Investor Class
- -------------------------------------------------------
Institutional Class
- -------------------------------------------------------
Twentieth Century Emerging Markets Fund
- -------------------------------------------------------
Advisor Class
- -------------------------------------------------------
Investor Class
- -------------------------------------------------------
Institutional Class
- -------------------------------------------------------
Twentieth Century Giftrust Fund
- -------------------------------------------------------
Twentieth Century Growth Fund
- -------------------------------------------------------
Advisor Class
- -------------------------------------------------------
Investor Class
- -------------------------------------------------------
Institutional Class
- -------------------------------------------------------
Twentieth Century Heritage Fund
- -------------------------------------------------------
Advisor Class
- -------------------------------------------------------
Investor Class
- -------------------------------------------------------
Institutional Class
- -------------------------------------------------------
Twentieth Century International Discovery Fund
- -------------------------------------------------------
Advisor Class
- -------------------------------------------------------
Institutional Class
- -------------------------------------------------------
Twentieth Century International Growth Fund
- -------------------------------------------------------
Advisor Class
- -------------------------------------------------------
Institutional Class
- -------------------------------------------------------
Twentieth Century New Opportunities Fund
- -------------------------------------------------------
Twentieth Century Select Fund
- -------------------------------------------------------
Advisor Class
- -------------------------------------------------------
Investor Class
- -------------------------------------------------------
Institutional Class
- -------------------------------------------------------
Twentieth Century Ultra Fund
- -------------------------------------------------------
Advisor Class
- -------------------------------------------------------
Investor Class
- -------------------------------------------------------
Institutional Class
- -------------------------------------------------------
Twentieth Century Vista Fund
- -------------------------------------------------------
Advisor Class
- -------------------------------------------------------
Investor Class
- -------------------------------------------------------
Institutional Class
- ------------------------------------------------------- ------------------------
The following table sets forth the "all-inclusive fee," as a percentage
of a Fund's average daily net assets, paid by each Fund to ACIM under the
current Management Agreements during the most recent fiscal year:
- ----------------------------------------------------------- ------------------------- ------------------------------
Fund Management Fees Average Net Assets
American Century Equity Income Fund
- -----------------------------------------------------------
Advisor Class
- -----------------------------------------------------------
Investor Class
- -----------------------------------------------------------
Institutional Class
- -----------------------------------------------------------
American Century Value Fund
- -----------------------------------------------------------
Advisor Class
- -----------------------------------------------------------
Investor Class
- -----------------------------------------------------------
Institutional Class
- -----------------------------------------------------------
American Century Strategic Allocation: Aggressive
- -----------------------------------------------------------
Advisor Class
- -----------------------------------------------------------
Investor Class
- -----------------------------------------------------------
American Century Strategic Allocation: Conservative
- -----------------------------------------------------------
Advisor Class
- -----------------------------------------------------------
Investor Class
- -----------------------------------------------------------
American Century Strategic Allocation: Moderate
- -----------------------------------------------------------
Advisor Class
- -----------------------------------------------------------
Investor Class
- -----------------------------------------------------------
Benham Bond Fund
- -----------------------------------------------------------
Advisor Class
- -----------------------------------------------------------
Investor Class
- -----------------------------------------------------------
Benham Cash Reserve Fund
- -----------------------------------------------------------
Advisor Class
- -----------------------------------------------------------
Investor Class
- -----------------------------------------------------------
Benham Intermediate-Term Bond Fund
- -----------------------------------------------------------
Advisor Class
- -----------------------------------------------------------
Investor Class
- -----------------------------------------------------------
Benham Limited-Term Bond Fund
- -----------------------------------------------------------
Advisor Class
- -----------------------------------------------------------
Investor Class
- -----------------------------------------------------------
Benham Premium Bond Fund
- -----------------------------------------------------------
Benham Premium Capital Reserve Fund
- -----------------------------------------------------------
Benham Premium Government Reserve Fund
- -----------------------------------------------------------
Twentieth Century Balanced Fund
- -----------------------------------------------------------
Advisor Class
- -----------------------------------------------------------
Investor Class
- -----------------------------------------------------------
Institutional Class
- -----------------------------------------------------------
Twentieth Century Emerging Markets Fund
- -----------------------------------------------------------
Advisor Class
- -----------------------------------------------------------
Investor Class
- -----------------------------------------------------------
Institutional Class
- -----------------------------------------------------------
Twentieth Century Giftrust Fund
- -----------------------------------------------------------
Twentieth Century Growth Fund
- -----------------------------------------------------------
Advisor Class
- -----------------------------------------------------------
Investor Class
- -----------------------------------------------------------
Institutional Class
- -----------------------------------------------------------
Twentieth Century Heritage Fund
- -----------------------------------------------------------
Advisor Class
- -----------------------------------------------------------
Investor Class
- -----------------------------------------------------------
Institutional Class
- -----------------------------------------------------------
Twentieth Century International Discovery Fund
- -----------------------------------------------------------
Advisor Class
- -----------------------------------------------------------
Investor Class
- -----------------------------------------------------------
Institutional Class
- -----------------------------------------------------------
Twentieth Century International Growth Fund
- -----------------------------------------------------------
Advisor Class
- -----------------------------------------------------------
Investor Class
- -----------------------------------------------------------
Institutional Class
- -----------------------------------------------------------
Twentieth Century New Opportunities Fund
- -----------------------------------------------------------
Twentieth Century Select Fund
- -----------------------------------------------------------
Advisor Class
- -----------------------------------------------------------
Investor Class
- -----------------------------------------------------------
Institutional Class
- -----------------------------------------------------------
Twentieth Century Ultra Fund
- -----------------------------------------------------------
Advisor Class
- -----------------------------------------------------------
Investor Class
- -----------------------------------------------------------
Institutional Class
- -----------------------------------------------------------
Twentieth Century Vista Fund
- -----------------------------------------------------------
Advisor Class
- -----------------------------------------------------------
Investor Class
- -----------------------------------------------------------
Institutional Class
- ----------------------------------------------------------- ------------------------- ------------------------------
INTERNATIONAL GROWTH AND INTERNATIONAL DISCOVERY. Effective August 1,
1996, ACIM voluntarily waived a portion of its management fee with respect to
the Investor Class of the Twentieth Century International Growth and Twentieth
Century International Discovery funds issued by American Century World Mutual
Funds, Inc. The proposed Management Agreement between American Century World
Mutual Funds, Inc. and ACIM reflects this reduced management fee structure. If
approved, the proposed Management Agreements provide for the following
management fees for those Funds:
Fund Current Fee Proposed Fee
Twentieth Century International Growth 1.90% of the first $1 billion 1.50% of the first $1 billion
-Investor Class 1.25% of the next $1 billion 1.20% of the next $1 billion
1.00% over $2 billion 1.10% over $2 billion
Twentieth Century International Discovery 2.00% 1.75% of the first $500 million
-Investor Class 1.40% of the next $500 million
1.20% over $1 billion
Due to the 0.1% increase in the third breakpoint of the proposed
management fee for the Investor Class of Twentieth Century International Growth,
if the fund grows to more than approximately $6 billion in net assets, the
proposed fee will result in higher management fees being paid by the Fund. As of
April 30, 1997, the net assets of International Growth were approximately $1.5
billion.
FEES AND EXPENSE COMPARISON. The following table sets forth for the
Investor Class of the Twentieth Century International Growth and Twentieth
Century International Discovery, the total fees and expenses paid for the most
recent fiscal year, what that total would have been had the Proposed Management
Agreements been in effect, and the difference between the two. The proposed
Management Agreements do not represent a change in fees for the remaining Funds.
- ------------------------------------------------ ------------------------- -------------------------- ---------------
Aggregate Fees and Aggregate Fees and Change from
Expenses Under Current Expenses Under Proposed Current
Fund Agreements Management Agreements Agreements
Twentieth Century International Growth Fund
- ------------------------------------------------
Investor Class
- ------------------------------------------------
Twentieth Century International Discovery Fund
- ------------------------------------------------
Investor Class
- ------------------------------------------------ ------------------------- -------------------------- ---------------
* Assumes that net assets throughout the period remained constant at $_____ and
$_____, the net assets of International Growth and International Discovery,
respectfully, as of April 30, 1997. ** Without American Century's voluntary fee
waiver, which resulted in actual net fees of $_______ and $_______for Twentieth
Century International Growth and Twentieth Century International Discovery,
respectively.
ADDITIONAL INFORMATION REGARDING ACIM. ACIM is a wholly-owned
subsidiary of American Century Companies, Inc. ("ACC"), a financial services
firm headquartered in Kansas City, Missouri. ACC's principal offices are located
at 4500 Main Street, Kansas City, Missouri 64111. James E. Stowers, Jr., James
E. Stowers III, and Dennis von Waaden, Senior Vice President of ACSC, constitute
the Board of Directors of ACIM. Mr. Stowers, Jr., Chairman of the Board of the
Companies and ACC, controls ACC by virtue of his ownership of a majority of its
voting stock.
VOTING INFORMATION. For a class of a Fund to approve the proposal, the
Management Agreements must receive an affirmative vote of a majority of the
outstanding votes of each class. For this purpose, the term "majority of the
outstanding votes" means the vote of (i) 67% or more of the votes of a class
present at the meeting, so long as the holders of more than 50% of a class'
outstanding votes are present or represented by proxy; or (ii) more than 50% of
the outstanding votes of the class, whichever is less.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS
VOTE "FOR" THE APPROVAL OF THE MANAGEMENT AGREEMENTS.
PROPOSAL 3: RATIFICATION OF INDEPENDENT AUDITORS
The Investment Company Act, which is the primary federal law that
regulates the Companies, requires every registered investment company be audited
at least once a year by independent auditors selected by the Board of Directors
including a majority of the Directors who are not "interested persons" (as
defined in the Investment Company Act). The Investment Company Act also requires
that the selection be submitted for ratification or rejection by the
shareholders at their next meeting following the selection.
At the meeting, the shareholders of each Company will be asked to
ratify the selection of Deloitte & Touche LLP as each Company's independent
auditors. The Board of Directors chose Deloitte & Touche upon the recommendation
of the Audit Committee of the Board following an exhaustive selection process
during which the Audit Committee reviewed proposals and conducted interviews
with representatives from each of the so-called "big six" accounting firms and
one regional firm with significant investment company experience. The Board
selected Deloitte & Touche based upon its expertise as an auditor of investment
companies, the quality of its audit services, its commitment of experienced
audit personnel to the Funds, its tax and international experience in the mutual
fund area, and its use and commitment of technology in performing its audit
functions.
Deloitte & Touche has no direct or material indirect financial interest
in the Companies, ACIM, or ACC, other than receipt of fees for services to the
Companies. Deloitte & Touche representatives will be present at the meeting and
will have an opportunity to make a statement to the shareholders and to respond
to questions.
The approval of a majority of the votes of each Company represented at
the meeting, provided at least a quorum (50% of the outstanding votes plus one
vote) is represented in person or by proxy, is necessary to ratify the selection
of the independent auditors. Unless otherwise instructed, the proxies will vote
for the ratification of the selection of Deloitte & Touche LLP as each Company's
independent auditors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS
VOTE "FOR" THE RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP.
PROPOSAL 4: ADOPTION OF STANDARDIZED FUNDAMENTAL INVESTMENT RESTRICTIONS
BENEFITS OF ADOPTING STANDARDIZED INVESTMENT RESTRICTIONS
The primary purpose of this Proposal is to revise the Funds' investment
restrictions to conform to restrictions which are or are expected to become
standards for similar types of funds managed by ACIM. The Directors have
concurred with ACIM's efforts to analyze the fundamental and non-fundamental
investment restrictions of the various funds offered by the American Century
family of mutual funds and, where practical and appropriate to a Fund's
investment objective and policies, propose to shareholders adoption of standard
fundamental restrictions and elimination of certain other fundamental
restrictions. In many cases, when fundamental restrictions are eliminated, a
similar non-fundamental restriction will replace them. It should be noted that,
when these restrictions are non-fundamental, ACIM cannot simply change the
policy when it so desires. Rather, the Board of Directors must approve any
amendment to the restrictions. The Board of Directors may approve an amendment,
for example, to respond to developments in the marketplace, or changes in
federal or state law.
It is NOT anticipated that any of the sub-proposals will substantially
affect the way the Funds are currently managed. ACIM is presenting them to
shareholders for approval because ACIM believes that increased standardization
will help to promote operational efficiencies and facilitate monitoring of
compliance with both fundamental and non-fundamental investment restrictions.
Although adoption of a particular new or revised restrictions is not likely to
have a significant impact on the current investment techniques employed by the
Funds, it will contribute to the overall objectives of standardization. Set
forth below, as a sub-section of this Proposal, is a detailed description of
each of the proposed changes. You will be given the option to approve all, some,
or none of the proposed changes on the proxy card enclosed with your proxy
statement.
A listing of the proposed standard fundamental investment restrictions
to be adopted by each Company are set forth in Exhibit B. A listing of the
current fundamental investment restrictions of each Company are set forth in
Exhibits C through G.
CHANGE #1 TO ELIMINATE THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
DIVERSIFICATION OF INVESTMENTS (ALL FUNDS)
The current fundamental investment limitation of the Funds issued by
American Century Mutual Funds, Inc. and American Century World Mutual Funds,
Inc. regarding diversification of investments provides that a Fund cannot
purchase the securities of an issuer if the purchase would cause more than 5% of
the corporation's assets at market to be invested in the securities of such
issuer, except United States government securities, or if the purchase would
cause more than 10% of the outstanding voting securities of any one issuer to be
held in the corporation's portfolio. The remaining Funds apply this limitation
to 75% of their total assets. It is proposed that shareholders approve
eliminating this fundamental investment limitation.
The Funds have elected to be "diversified open-end management
investment companies" under the Investment Company Act, which requires the
limitations contained in the current fundamental restriction to apply to 75% of
the total assets of the Funds. The current policy of certain of the Funds is
more restrictive, applying the limitations on ownership to 100% of the Funds'
portfolio, while other Funds apply the Investment Company Act standard. The
primary purpose of the proposed change with respect to those Funds applying the
more restrictive standard is to allow the funds to invest in accordance with the
limits contained in the Investment Company Act. This would allow large funds the
flexibility to purchase larger amounts of issuers' securities when American
Century deems an opportunity attractive. The new policy would allow the
investment policies of the Funds to conform with the definition of "diversified"
as it appears in the Investment Company Act. With respect to those Funds
currently applying the Investment Company Act standard, the elimination of the
fundamental policy will allow the Funds to respond more quickly if that standard
is changed in the future, as well as other legal, regulatory, and market
developments, without the delay or expense of a future shareholder vote. The
elimination of the fundamental policy would also conform the limitations of the
Funds with the limitation which is expected to become standard for all
diversified funds managed by American Century. Adoption of this change is not
expected to immediately affect the operation of the Funds. If the proposal is
approved, it will take effect August 1, 1997.
CHANGE #2 TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING THE
ISSUANCE OF SENIOR SECURITIES (ALL FUNDS)
The Funds' current fundamental investment limitation regarding the
issuance of senior securities states that a Fund shall not issue any senior
security.
It is proposed that shareholders approve replacing the Funds' current
fundamental investment limitation with the following fundamental investment
limitation governing the issuance of senior securities:
"The Fund shall not issue senior securities, except as permitted
under the Investment Company Act of 1940."
The primary purpose of this proposed change is to revise the Fund's
fundamental senior securities limitation to conform to a limitation that is
expected to become the standard for all funds managed by ACIM. If the proposal
is approved, the new fundamental senior securities limitation will also require
shareholder approval to modify.
The proposed limitation clarifies that the Funds may issue senior
securities to the full extent permitted under the Investment Company Act.
Although the definition of a "senior security" involves complex statutory and
regulatory concepts, a senior security is generally thought of as an obligation
of a fund which has a claim to the fund's assets or earnings that takes
precedence over the claims of the fund's shareholders. The Investment Company
Act generally prohibits mutual funds from issuing senior securities; however,
mutual funds are permitted to engage in certain types of transactions that might
be considered "senior securities" as long as certain conditions are satisfied.
For example, a transaction which obligates a fund to pay money at a future date
(e.g., the purchase of securities to be settled on a date that is farther away
than the normal settlement period) may be considered a "senior security." A
mutual fund is permitted to enter into this type of transaction if it maintains
a segregated account containing liquid securities in an amount to its obligation
to pay cash for the securities at a future date. Funds would utilize
transactions that may be considered "senior securities" only in accordance with
applicable regulatory requirements under the Investment Company Act.
Adoption of the proposed limitation on senior securities is not
expected to affect the way in which each fund is managed, the investment
performance of the fund, or the securities or instruments in which the fund
invests. However, adoption of a standardized fundamental investment limitation
will facilitate ACIM's investment compliance efforts and will allow the Fund to
respond to developments in the mutual fund industry and the Investment Company
Act which may make the use of permissible senior securities advantageous.
CHANGE #3 TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING BORROWING
(ALL FUNDS)
The Funds' current fundamental investment limitation concerning
borrowing states generally that a Fund shall not borrow money with respect to
any series of its stock, except in an amount not in excess of 5% of the total
assets of the fund, and then only for emergency and extraordinary purposes,
which shall not prohibit the escrow and collateral arrangements in connection
with investment in interest rate futures contracts and related options.
It is proposed that shareholders approve replacing the Fund's current
fundamental investment limitation with the following fundamental investment
limitation governing borrowing:
"The Fund shall not borrow money, except that the Fund may borrow money
for temporary or emergency purposes (not for leveraging or investment)
in an amount not exceeding 33-1/3% of the Fund's total assets
(including the amount borrowed) less liabilities (other than
borrowings)."
The primary purpose of the proposed change to the fundamental
investment limitation concerning borrowing is to conform it to a limitation that
is expected to become standard for all funds managed by ACIM. If the proposal is
approved, the amended fundamental borrowing limitation cannot be changed without
a future vote of shareholders.
Adoption of the proposed limitation is not currently expected to affect
the way the Funds are managed, the investment performance of the Funds, or the
securities or instruments in which the Funds invest. However, the funds' current
limitation restricts borrowing to 5% of total assets, rather than the 33 1/3% in
the proposed limitation. The proposed limitation therefore would allow a Fund to
purchase a security while borrowings representing more than 5% of total assets
are outstanding. While the funds have no current intention to purchase
securities while borrowings equal to 5% of its total assets are outstanding, the
flexibility to do so may be beneficial to the Fund at a future date.
The proposed change will therefore have no current impact on the Fund.
However, adoption of a standardized fundamental investment limitation will
facilitate ACIM's investment compliance efforts and will enable the Fund to
respond more promptly if circumstances suggest such a change in the future.
CHANGE #4 TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING LENDING
(ALL FUNDS)
The Funds' current fundamental investment limitations concerning
lending states generally that a Fund shall not lend its portfolio securities
except to unaffiliated persons, and is subject to the rules and regulations
adopted under the Investment Company Act. No such rules and regulations have
been promulgated, but it is the corporation's policy that such loans must be
secured continuously by cash collateral maintained on a current basis in an
amount at least equal to the market value of the securities loaned, or by
irrevocable letters of credit. During the existence of the loan, the corporation
must continue to receive the equivalent of the interest and dividends paid by
the issuer on the securities loaned and interest on the investment of the
collateral; the corporation must have the right to call the loan and obtain the
securities loaned at any time on five days' notice, including the right to call
the loan to enable the corporation to vote the securities. To comply with the
regulations of certain state securities administrators, such loans may not
exceed one-third of the corporation's net assets taken at market. It is the
policy of the corporation not to permit interest on loaned securities of any
series to exceed 10% of the annual gross income of that series (without offset
for realized capital gains).
It is proposed that shareholders approve the replacement of the
foregoing investment limitations with the following amended fundamental
limitation concerning lending (which, if approved, could not be changed without
a future vote of shareholders):
"The Fund may not lend any security or make any other loan if, as a
result, more than 33-1/3% of the Fund's total assets would be lent to
other parties, except, (i) through the purchase of debt securities in
accordance with its investment objective, policies and limitations, or
(ii) by engaging in repurchase agreements with respect to portfolio
securities."
The proposal is not expected to significantly affect the way in which
any of the Funds is managed, the investment performance of the Funds, or the
securities or instruments in which the funds invest. However, the proposed
limitation would clarify the Funds' ability to invest in direct debt instruments
such as loans and loan participations, which are interests in amounts owed to
another party by a company, government or other borrower. These types of
securities may have additional risks beyond conventional debt securities because
they may provide less legal protection for the Fund, or there may be a
requirement that the Fund supply additional cash to a borrower on demand.
Finally, the adoption of standardized investment limitations proposed
will advance the goals of investment limitation standardization.
CHANGE #5 TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
CONCENTRATION OF INVESTMENTS IN A PARTICULAR INDUSTRY (ALL FUNDS)
The Funds currently have a fundamental investment limitation regarding
the concentration of investments in a particular industry which states generally
that a Fund shall not concentrate its investment in a particular company or a
particular industry by investing more than 25% of the assets of each series,
exclusive of cash and government securities, in securities of any one industry.
Shareholders are being asked to approve amendment of the above
investment limitation. As proposed, the Funds' current fundamental investment
limitation will be replaced by the following fundamental investment limitation
which will govern concentration of investments:
"The Fund shall not concentrate its investments in securities of
issuers in a particular industry (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities)."
The primary purpose of the proposed amendment is to adopt a
concentration limitation that is expected to become the standard for all funds
managed by ACIM. If the proposal is approved, the new fundamental concentration
limitation may not be changed without a future vote of shareholders.
While the proposed change will have no current impact on the Fund,
adoption of the proposed standardized fundamental investment limitation will
advance the goals of standardization.
CHANGE #6 TO ELIMINATE THE FUNDAMENTAL INVESTMENT LIMITATION REGARDING
INVESTMENTS IN ILLIQUID SECURITIES (ALL FUNDS)
Each Fund currently has a fundamental investment limitation concerning
illiquid securities that provides that a Fund shall not invest more than 15% of
its assets in illiquid investments, except for any fund intended to be a money
market fund, which shall not invest more than 10% of its assets in illiquid
investments.
It is proposed that shareholders approve replacing this fundamental
limitation with the following non-fundamental limitation that could be changed
by vote of the Directors in response to regulatory, market, legal, or other
developments without further approval by shareholders.
"As an operating policy, The Fund may not purchase any security or
enter into a repurchase agreement if, as a result, more than 15% of its
net assets (10% for money market funds) would be invested in repurchase
agreements not entitling the holder to payment of principal and
interest within seven days and in securities that are illiquid by
virtue of legal or contractual restrictions on resale or the absence of
a readily available market."
Under the rules established by the Securities and Exchange Commission,
mutual funds are required to price their shares daily and to offer daily
redemptions with payment to follow within seven days of the redemption request.
In order to ensure that funds can satisfy these requirements, the SEC requires
mutual funds to limit their holdings in illiquid securities to 15% of their net
assets because illiquid securities may be difficult to value daily and difficult
to sell promptly at an acceptable price. The percentage limitation restricting
the amount the Fund may invest in illiquid securities has been changed by the
SEC over time. For example, prior to 1993, the percentage limit on a fund's
investment in illiquid securities was 10%.
In order to be able to take advantage of regulatory and market
developments, we are asking that shareholders approve the proposal and thereby
eliminate this fundamental investment limitation and replace it with a
non-fundamental limitation on illiquid securities. While non-fundamental
investment limitations can be changed without shareholder approval, such changes
still require the approval of your Board of Directors. Making the Funds'
limitation non-fundamental will allow the Funds to respond more quickly to
legal, regulatory, and market developments without the expense of a future
shareholder vote.
If this proposal is approved by shareholders, the specific types of
securities that may be deemed illiquid will be determined by ACIM, utilizing the
guidelines that it currently uses.
The types of securities that may be considered illiquid by ACIM will
vary over time based on changing market and regulatory conditions. In
determining the liquidity of each Fund's investments, ACIM may consider various
factors, including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer undertakings
to make a market, (4) the nature of the security (including any demand or tender
features), or (5) the nature of the marketplace for trades (including the
ability to assign or offset the Fund's rights and obligations relating to the
investment). Currently, ACIM anticipates treating repurchase agreements maturing
in more than seven days, over-the-counter options, non-government stripped
fixed-rate mortgage backed securities, and some government stripped, fixed-rate
mortgage backed securities, loans and other direct debt instruments, and swap
agreements as illiquid securities.
The proposed change will have no significant impact on the Funds.
However, adoption of a standardized non-fundamental investment limitation will
facilitate ACIM's investment compliance efforts and will enable the Funds to
respond more promptly if circumstances suggest such a change in the future.
CHANGE #7 TO ELIMINATE THE FUNDAMENTAL LIMITATION CONCERNING INVESTMENT IN
OTHER INVESTMENT COMPANIES (ALL FUNDS EXCEPT STRATEGIC ALLOCATION:
CONSERVATIVE, STRATEGIC ALLOCATION: MODERATE AND STRATEGIC
ALLOCATION: AGGRESSIVE)
The Fund's current fundamental limitation concerning investment in
other investment companies states that a Fund shall not invest in the securities
of other investment companies except by purchases in the open market involving
only customary brokers' commissions and no sales charges. Shareholders are being
asked to approve the elimination of this policy.
The ability of mutual funds to invest in other investment companies is
restricted by rules under the Investment Company Act. These restrictions will
remain applicable to the Funds whether or not they are recited in a fundamental
limitation. As a result, elimination of the above fundamental limitation is not
expected to have any impact on the Funds' investment practices, except to the
extent that regulatory requirements may change in the future.
The funds issued by American Century Strategic Asset Allocations, Inc.
are not currently subject to the fundamental restriction on investment in other
investment companies.
CHANGE #8 TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
INVESTMENTS IN REAL ESTATE (ALL FUNDS)
The Funds currently have a fundamental investment limitation regarding
the purchase of real estate which states generally that a fund shall not
purchase or sell real estate. In the opinion of management, this restriction
does not currently preclude investment in securities of corporations that deal
in real estate.
Shareholders are being asked to approve amendment of the above
investment limitation. As proposed, the Funds' current fundamental investment
limitation will be replaced by the following fundamental investment limitation
which will govern future purchases and sales of real estate:
"The Fund may not purchase or sell real estate unless acquired as a
result of ownership of securities or other instruments. This policy
shall not prevent the Fund from investment in securities or other
instruments backed by real estate or securities of companies that deal
in real estate or are engaged in the real estate business."
The primary purpose of the proposed amendment is to clarify the types
of securities in which the Fund is authorized to invest and to conform the
Fund's fundamental real estate limitation to a limitation that is expected to
become the standard for all funds managed by ACIM. If the proposal is approved,
the new fundamental real estate limitation may not be changed without a future
vote of shareholders.
The proposed limitation would make it explicit that each of the Funds
may acquire a security or other instrument whose payments of interest and
principal may be secured by a mortgage or other right to foreclose on real
estate, in the event of default. Any investments in these securities are, of
course, subject to the Fund's investment objective and policies and to other
limitations regarding diversification and concentration. The proposed limitation
also specifically permits the Fund to sell real estate acquired as a result of
ownership of securities or other instruments. However, in light of the types of
securities in which the Funds regularly invest, ACIM considers this to be a
remote possibility.
To the extent that a Fund buys securities and instruments of companies
in the real estate business, the fund's performance will be affected by the
condition of the real estate market. This industry is sensitive to factors such
as changes in real estate values and property taxes, overbuilding, variations in
rental income, and interest rates. Performance could also be affected by the
structure, cash flow, and arrangement skill of real estate companies.
While the proposed change will have no current impact on the Funds,
adoption of the proposed standardized fundamental investment limitation will
advance the goals of standardization.
CHANGE #9 TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
UNDERWRITING (ALL FUNDS)
The Fund currently is subject to a fundamental investment limitation
concerning underwriting that provides that a Fund shall not underwrite any
securities.
It is proposed that shareholders approve replacing the current
limitation with the following amended fundamental investment limitation
concerning underwriting:
"The Fund shall not act as an underwriter of securities issued by
others, except to the extent that the Fund may be considered an
underwriter within the meaning of the Securities Act of 1933 in the
disposition of restricted securities."
The primary purpose of the proposed amendment is to clarify that the
Fund is not prohibited from selling restricted securities if, as a result of the
sale, the Fund would be considered an underwriter under federal securities laws.
It is also intended to revise the Fund's fundamental limitation on underwriting
so that it conforms to a limitation which is expected to become standard for all
funds managed by ACIM. While the proposed change will have no current impact on
the Fund, adoption of the proposed standardized fundamental investment
limitation will advance the goals of standardization.
CHANGE #10 TO AMEND THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING
COMMODITIES (ALL FUNDS)
Each Fund currently is subject to a fundamental investment limitation
that provides that a Fund shall not purchase or sell commodities or commodity
contracts, except that certain funds may, for non-speculative purposes, buy or
sell interest rate futures contracts on debt securities (debt futures and bond
index futures) and related options.
It is proposed that shareholders approve replacing the current
limitation with the following amended fundamental investment limitation
concerning commodities:
"The Fund may not purchase or sell physical commodities unless acquired
as a result of ownership of securities or other instruments; provided
that this policy shall not prohibit the Fund from purchasing or selling
options and futures contracts or from investing in securities or other
instruments backed by physical commodities."
The proposed amendment is intended to allow appropriate Funds to have
the flexibility to invest in futures contracts and related options, including
financial futures such as interest rate and stock index futures (S&P 500, etc.).
ACIM recognizes that investment in futures contracts and related options may not
be appropriate for all funds. If the proposed amendment is approved, ACIM and
the Board of Directors will determine the appropriateness of investment in
futures contracts (including financial futures) and related options on a
fund-by-fund basis. ACIM would propose that the Board of Directors adopt a
non-fundamental limitation allowing investment in certain types of futures
contracts and related options for those Funds for which the Directors and
American Century determine such investment is appropriate. The adoption of such
a non-fundamental limitation by the Board of Directors of a Fund will be
accompanied by appropriate disclosure of such policy in the Prospectus and/or
Statement of Additional Information of such Fund.
The proposed amendment to revise the Fund's fundamental limitation on
commodities will also serve the purpose of conforming the limitation with the
limitation which is expected to become standard for all funds managed by
American Century. While the proposed change will have no significant impact on
the Funds, adoption of the proposed standardized fundamental investment
limitation will advance the goals of standardization.
CHANGE #11 TO ELIMINATE THE FUNDAMENTAL LIMITATION CONCERNING INVESTMENTS IN
ISSUERS WITH LESS THAN THREE YEARS OF CONTINUOUS OPERATIONS (ALL
FUNDS EXCEPT STRATEGIC ALLOCATION: CONSERVATIVE, STRATEGIC
ALLOCATION: MODERATE AND STRATEGIC ALLOCATION: AGGRESSIVE)
The Fund's current fundamental investment limitation concerning
investments in companies with less than three years of continuous operations
(often called "unseasoned issuers") provides that a Fund shall not invest in
securities of companies that, including predecessors, have a record of less than
three years of continuous operation.
We are asking shareholders to approve the elimination of the above
fundamental investment limitation.
Certain states, when they had the authority to regulate mutual funds,
required that funds limit their investments in companies which have less than
three years of continuous operation. These states no longer have the authority
to regulate the Funds. Neither the SEC or the Investment Company Act have this
restriction. ACIM does not believe that a blanket prohibition against these
types of investments is in the best interests of the Funds, especially for those
funds that tend to invest in smaller companies. Accordingly, it is recommending
the change. Additionally, the elimination of the fundamental limitation will
advance the goals of standardization.
ACIM recognizes that the investment in securities of companies with
less than three years of continuous operating history may not be appropriate for
all of the Funds. If the proposed amendment is approved, ACIM and the Board of
Directors of the Funds will determine the appropriateness of such investments on
a fund-by-fund basis. ACIM would propose that the Board of Directors adopt a
non-fundamental limitation allowing investment in securities of issuers with
less than three years continuous operating history for those Funds for which the
Directors and ACIM determine such investment is appropriate. The adoption of
such a non-fundamental limitation by the Board of Directors of a Fund will be
accompanied by appropriate disclosure of such policy in the Prospectus and/or
Statement of Additional Information of such Fund.
Funds issued by American Century Strategic Asset Allocations, Inc. are
not currently subject to the fundamental restriction on investment in companies
with less than three years continuous operating history.
CHANGE #12 TO ELIMINATE THE FUNDAMENTAL LIMITATION CONCERNING SHORT SALES (ALL
FUNDS)
The Funds' current fundamental investment limitation concerning short
sales of securities provides that a Fund shall not sell securities short (unless
it owns, or by virtue of its ownership of other securities, has the right to
obtain securities equivalent in kind and amount to the securities sold).
We are asking shareholders to approve the elimination of this
fundamental investment limitation. If the proposal is approved, the current
fundamental limitation will be replaced with a non-fundamental limitation which
could be changed without a vote of shareholders. The proposed non-fundamental
limitation is as follows:
"As an operating policy, the Fund shall not sell securities short,
unless it owns or has the right to obtain securities equivalent in kind
and amount to the securities sold short, and provided that transaction
in futures contracts and options are not deemed to constitute selling
securities short."
In a short sale, an investor sells a borrowed security and has a
corresponding obligation to the lender to return the identical security. In an
investment technique known as a short sale "against the box," an investor sells
short while owning the same securities in the same amount, or having the right
to obtain equivalent securities. The investor could have the right to obtain
equivalent securities, for example, through its ownership of warrants, options,
or convertible bonds.
ACIM recognizes that short sales may not be appropriate for all of the
Funds. If the proposal is approved, ACIM and the Board of Directors of the Funds
will determine the appropriateness of short sales on a fund-by-fund basis.
Appropriate disclosure of this practice will also be included in such Fund's
Prospectus and/or Statement of Additional Information.
Elimination of the Funds' fundamental limitation on short selling is
unlikely to affect the Funds' investment techniques at this time. Fund
management believes that efforts to standardize the Funds' investment
limitations with those of the other Funds in the American Century family of
funds will facilitate ACIM's investment compliance efforts.
CHANGE #13 TO ELIMINATE THE FUNDAMENTAL INVESTMENT LIMITATION CONCERNING MARGIN
PURCHASES OF SECURITIES (ALL FUNDS)
The Funds' currently have a fundamental investment limitation
concerning purchasing securities on margin that generally provides that a Fund
shall not purchase securities on margin; however, the Fund may make margin
deposits in connection with the use of any financial instrument or any
transaction in securities permitted by its fundamental policies.
It is proposed that shareholders of the Fund approve the elimination of
this fundamental investment limitation. If the proposal is approved, the
Directors intend to replace the current fundamental limitation with a
non-fundamental limitation which could be changed without a vote of
shareholders. The proposed non-fundamental limitation is as follows:
"As an operating policy, the Fund shall not purchase securities on
margin, except that the Fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin."
Margin purchases involve the purchase of securities with money borrowed
from a broker. "Margin" is the cash or eligible securities that the borrower
places with a broker as collateral against the loan. The current fundamental
limitation prohibits a Fund from purchasing securities on margin, except to
obtain such short-term credits as may be necessary for the clearance of
transactions. Policies of the SEC also allow mutual funds to purchase securities
on margin for initial and variation margin payments made in connection with the
purchase and sale of futures contracts and options on futures contracts. With
these exceptions, mutual funds are prohibited from entering into most types of
margin purchases by applicable SEC policies. The proposed non-fundamental
limitation would parallel the SEC's policies.
Although elimination of the Funds' fundamental limitation on margin
purchases is unlikely to affect any Fund's investment techniques at this time,
in the event of a change in federal regulatory requirements, the Funds may alter
its investment practices in the future. We believe that efforts to standardize
investment limitations will facilitate American Century's investment compliance
efforts.
It may seem to most shareholders that the 13 proposals to modify
fundamental investment policies are technical and somewhat difficult to
understand. ACIM believes, however, that adopting uniform limitations, as well
as ones that are appropriate to the Funds, are in the best interests of Fund
shareholders. Your Board of Directors supports those efforts. ACCORDINGLY, THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
ADOPTION OF STANDARDIZED FUNDAMENTAL INVESTMENT RESTRICTIONS.
OTHER MATTERS
The Board of Directors knows of no other business to be brought before
the meeting. However, if any other matters are properly brought before the
meeting, it is the intention that proxies which do not contain specific
restrictions to the contrary will be voted on such matters in accordance with
the judgment of the persons named in the enclosed form of proxy.
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The Funds do not hold annual shareholder meetings. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a subsequent
shareholder meeting should send their written proposals to William M. Lyons,
Executive Vice President, American Century Investments, P.O. Box 419200, Kansas
City, Missouri 64141-6200.
NOTICE TO BANKS, BROKER-DEALERS, AND VOTING
TRUSTEES AND THEIR NOMINEES
Please advise the applicable Fund(s), in care of American Century.,
P.O. Box 419200, Kansas City, Missouri 64141-6200, whether other persons are
beneficial owners of shares for which proxies are being solicited and, if so,
the number of copies of the Proxy Statement you wish to receive in order to
supply copies to the beneficial owners of the respective shares.
Dated: June __, 1997 William M. Lyons
Executive Vice President
- ----------------------------------------------------------------------------------------------------------------------
Schedule 1
- ----------------------------------------------------------------------------------------------------------------------
NUMBER OF OUTSTANDING VOTES AS OF APRIL 30, 1997
REGISTERED INVESTMENT NUMBER OF VOTES AS OF,
COMPANY INVESTMENT PORTFOLIO APRIL 30,1997
American Century Capital
Portfolios, Inc. American Century Equity Income Fund
Advisor Class
Investor Class
Institutional Class
------------------------------------------------------- ----------------------------
American Century Value Fund
Advisor Class
Investor Class
Institutional Class
------------------------------------------------------- ----------------------------
American Century Mutual Funds,
Inc. Benham Bond Fund
Advisor Class
Investor Class
------------------------------------------------------- ----------------------------
Benham Cash Reserve Fund
Advisor Class
Investor Class
------------------------------------------------------- ----------------------------
Benham Intermediate-Term Bond Fund
Advisor Class
Investor Class
------------------------------------------------------- ----------------------------
Benham Limited-Term Bond Fund
Advisor Class
Investor Class
------------------------------------------------------- ----------------------------
Twentieth Century Balanced Fund
Advisor Class
Investor Class
Institutional Class
------------------------------------------------------- ----------------------------
Twentieth Century Giftrust Fund
------------------------------------------------------- ----------------------------
------------------------------------------------------- ----------------------------
Twentieth Century Growth Fund
Advisor Class
Investor Class
Institutional Class
------------------------------------------------------- ----------------------------
Twentieth Century Heritage Fund
Advisor Class
Investor Class
Institutional Class
------------------------------------------------------- ----------------------------
Twentieth Century New Opportunities Fund
------------------------------------------------------- ----------------------------
Twentieth Century Select Fund
Advisor Class
Investor Class
Institutional Class
------------------------------------------------------- ----------------------------
Twentieth Century Ultra Fund
Advisor Class
Investor Class
Institutional Class
Twentieth Century Vista Fund
Advisor Class
Investor Class
Institutional Class
------------------------------------------------------- ----------------------------
American Century Premium
Reserves, Inc. Benham Premium Bond Fund
------------------------------------------------------- ----------------------------
Benham Premium Capital Reserve Fund
------------------------------------------------------- ----------------------------
Benham Premium Government Reserve Fund
------------------------------------------------------- ----------------------------
American Century Strategic
Asset Allocations, Inc. American Century Strategic Allocation: Aggressive
Advisor Class
Investor Class
------------------------------------------------------- ----------------------------
American Century Strategic Allocation: Conservative
Advisor Class
Investor Class
------------------------------------------------------- ----------------------------
American Century Strategic Allocation: Moderate
Advisor Class
Investor Class
------------------------------------------------------- ----------------------------
American Century World Mutual Twentieth Century International Discovery Fund
Funds, Inc.
Advisor Class
Investor Class
Institutional Class
------------------------------------------------------- ----------------------------
Twentieth Century International Growth Fund
Advisor Class
Investor Class
Institutional Class
EXHIBIT A
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT ("Agreement") is made as of the 1st day of
August, 1997, by and between ____________________________________, a Maryland
corporation (hereinafter called the "Corporation"), and AMERICAN CENTURY
INVESTMENT MANAGEMENT, INC., a Delaware corporation (hereinafter called the
"Investment Manager").
WHEREAS, the Corporation has adopted a Multiple Class Plan dated as of
September 3, 1996 (as the same may be amended from time to time, the "Multiple
Class Plan"), pursuant to Rule 18f-3 of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), and
WHEREAS, the Multiple Class Plan establishes four classes of shares for
certain series of shares of the Corporation: the Investor Class, the
Institutional Class, the Service Class, and the Advisor Class; and
WHEREAS, the parties hereto desire to enter into this Agreement to
arrange for investment management services to be provided by Investment Manager
for all classes of shares issued by the Corporation.
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 series of shares of the
Corporation contemplated as of the date hereof, and each class of each
subsequent series of shares as the Corporation shall select the Investment
Manager to manage. 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 series, determine what
securities shall be purchased or sold by each series, 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 series 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: (1) the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and any rules and regulations promulgated thereunder;
(2) any other applicable provisions of law; (3) the Articles of Incorporation of
the Corporation as amended from time to time; (4) the Bylaws of the Corporation
as amended from time to time; (5) the Multiple Class Plan; and (6) the
registration statement(s) of the Corporation, as amended from time to time,
filed under the Securities Act of 1933 and the Investment Company Act.
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 of the Corporation, its executive committee, or any committee or
officers of the Corporation 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 series of the Corporation's shares that it shall
manage other than interest, taxes, brokerage commissions, extraordinary
expenses, the fees and expenses of those directors who are not "interested
persons" as defined in the Investment Company Act (hereinafter referred to as
the "Independent Directors") (including counsel fees), and expenses incurred in
connection with the provision of shareholder services and distribution services
under the Master Distribution and Shareholder Services Plan adopted by the
Corporation and dated September 3, 1996. The Investment Manager will provide the
Corporation with all physical facilities and personnel required to carry on the
business of each class of each series of the Corporation's shares 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 Corporation, 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 series, such fee to be retained by
the Corporation 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 class and series.
6. Management Fees.
(a) In consideration of the services provided by the Investment
Manager, each class of each series of shares of the Corporation managed by the
Investment Manager shall pay to the Investment Manager a per annum management
fee (hereinafter, the "Applicable Fee") as follows:
Name of Series Name of Class Applicable Fee Rate
Investor Class ____%
Institutional Class ____%
Advisor Class ____%
(b) On the first business day of each month, each class of each series
of shares set forth above shall pay the management fee at the rate specified by
subparagraph (a) of this paragraph 6 to the Investment Manager for the previous
month. The fee for the previous month shall be calculated by multiplying the
Applicable Fee set forth above for each class and series by the aggregate
average daily closing value of the net assets of each class and series during
the previous month, and further multiplying that product by a fraction, the
numerator of which shall be the number of days in the previous month, and the
denominator of which shall be 365 (366 in leap years).
( c ) In the event that the Board of Directors of the Corporation 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
Corporation and the Investment Manager may enter into an Addendum to this
Agreement setting forth the name of the series, the Applicable Fee and such
other terms and conditions as are applicable to the management of such series 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 Corporation. 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 of the Corporation, including a majority of the
Independent Directors, and the shareholders of the Corporation.
8. Continuation of Agreement. This Agreement shall continue in effect,
unless sooner terminated as hereinafter provided, for a period of two years from
the execution hereof, and for as long thereafter as its continuance is
specifically approved at least annually (a) by the Board of Directors of the
Corporation or by the vote of a majority of the outstanding class of voting
securities of each series and (b) by the vote of a majority of the Directors of
the Corporation, 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.
9. Termination. This Agreement may be terminated by the Investment
Manager at any time without penalty upon giving the Corporation 60 days' written
notice, and may be terminated at any time without penalty by the Board of
Directors of the Corporation or by vote of a majority of the outstanding voting
securities of each class of each series on 60 days' written notice to the
Investment Manager.
10. Effect of Assignment. This Agreement shall automatically terminate
in the event of assignment by the Investment Manager, the term "assignment" for
this purpose having 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 Corporation), 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 Corporation or to any
shareholder of the Corporation 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 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 series of shares of the Corporation managed by the Investment Manager.
14. Use of the Names "American Century", "Twentieth Century", and
"Benham. The names "American Century", "Twentieth Century", and "Benham" and all
rights to the use of the names "American Century", "Twentieth Century", and
"Benham" are the exclusive property of American Century Services Corporation
("ACSC"). ACSC has consented to, and granted a non-exclusive license for, the
use by the Corporation of the names "American Century", "Twentieth Century", and
"Benham" in the name of the Corporation and any series of shares thereof. Such
consent and non-exclusive license may be revoked by ACSC in its discretion if
ACSC, the Investment Manager, or a subsidiary or affiliate of either of them is
not employed as the investment adviser of each series of shares of the
Corporation. In the event of such revocation, the Corporation and each series of
shares thereof using the names "American Century", "Twentieth Century", or
"Benham" shall cease using the names "American Century", "Twentieth Century", or
"Benham", unless otherwise consented to by ACSC or any successor to its interest
in such names.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers as of the day and year
first above written.
___________________________________ AMERICANCENTURY INVESTMENT
MANAGEMENT, INC.
By: By:
Name: Name:
Title: Title:
Attest:______________________________ Attest:_____________________________
Name:_______________________ Name:_______________________
Title:______________________ Title:_____________________
EXHIBIT B
Proposed Standard Fundamental Investment Restrictions
The Fund shall not issue senior securities, except as permitted under the
Investment Company Act of 1940.
The Fund shall not borrow money, except that the Fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in an
amount not exceeding 33-1/3% of the Fund's total assets (including the
amount borrowed) less liabilities (other than borrowings).
The Fund shall not lend any security or make any other loan if, as a result,
more than 33-1/3% of the Fund's total assets would be lent to other parties,
except, (i) through the purchase of debt securities in accordance with its
investment objective, policies and limitations, or (ii) by engaging in
repurchase agreements with respect to portfolio securities.
The Fund shall not concentrate its investments in securities of issuers in a
particular industry (other than securities issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities).
The Fund shall not purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments. This policy shall not prevent
the Fund from investment in securities or other instruments backed by real
estate or securities of companies that deal in real estate or are engaged in
the real estate business.
The Fund shall not act as an underwriter of securities issued by others, except
to the extent that the Fund may be considered an underwriter within the
meaning of the Securities Act of 1933 in the disposition of restricted
securities.
The Fund shall not purchase or sell physical commodities unless acquired as a
result of ownership of securities or other instruments; provided that this
limitation shall not prohibit the Fund from purchasing or selling options
and futures contracts or from investing in securities or other instruments
backed by physical commodities.
The Fund shall not invest for purposes of exercising control over management.
EXHIBIT C
Current Fundamental Investment Restrictions
AMERICAN CENTURY MUTUAL FUNDS, INC.
Additional fundamental policies that may be changed only with
shareholder approval provide that, with the exception of New Opportunities, each
series of shares:
1. Shall not invest more than 15% of its assets in illiquid investments,
except for any fund intended to be a money market fund, which shall not
invest more than 10% of its assets in illiquid investments.
2. Shall not invest in the securities of companies that, including
predecessors, have a record of less than three years of continuous
operation.
3. Shall not lend its portfolio securities except to unaffiliated persons,
and is subject to the rules and regulations adopted under the
Investment Company Act. No such rules and regulations have been
promulgated, but it is the corporation's policy that such loans must be
secured continuously by cash collateral maintained on a current basis
in an amount at least equal to the market value of the securities
loaned, or by irrevocable letters of credit. During the existence of
the loan, the corporation must continue to receive the equivalent of
the interest and dividends paid by the issuer on the securities loaned
and interest on the investment of the collateral; the corporation must
have the right to call the loan and obtain the securities loaned at any
time on five days' notice, including the right to call the loan to
enable the corporation to vote the securities. To comply with the
regulations of certain state securities administrators, such loans may
not exceed one-third of the corporation's net assets taken at market.
It is the policy of the corporation not to permit interest on loaned
securities of any series to exceed 10% of the annual gross income of
that series (without offset for realized capital gains).
4. Shall not purchase the security of any one issuer if such purchase
would cause more than 5% of the corporation's assets at market to be
invested in the securities of such issuer, except United States
government securities, or if the purchase would cause more than 10% of
the outstanding voting securities of any one issuer to be held in the
corporation's portfolio.
5. Shall not invest for control or for management, or concentrate its
investment in a particular company or a particular industry. No more
than 25% of the assets of each series, exclusive of cash and government
securities, will be invested in securities of any one industry. The
corporation's policy in this respect includes the statement "The
management's definition of the phrase `any one industry' shall be
conclusive unless clearly unreasonable." That statement may be
ineffective because it may be an attempt to waive a provision of the
law, and such waivers are void.
6. Shall not buy securities on margin nor sell short (unless it owns, or
by virtue of its ownership of, other securities has the right to obtain
securities equivalent in kind and amount to the securities sold);
however, the corporation's funds may make margin deposits in connection
with the use of any financial instrument or any transaction in
securities permitted by their fundamental policies.
7. Shall not invest in the securities of other investment companies except
by purchases in the open market involving only customary brokers'
commissions and no sales charges.
8. Shall not issue any senior security.
9. Shall not underwrite any securities.
10 Shall not purchase or sell real estate. (In the opinion of management,
this restriction will not preclude the corporation from investing in
securities of corporations that deal in real estate).
11. Shall not purchase or sell commodities or commodity contracts; except
that Limited-Term Bond, Intermediate-Term Bond, Benham Bond,
Limited-Term Tax-Exempt, Intermediate-Term Tax-Exempt and Long-Term
Tax-Exempt may, for non-speculative purposes, buy or sell interest rate
futures contracts on debt securities (debt futures and bond index
futures) and related options.
12. Shall not borrow any money with respect to any series of its stock,
except in an amount not in excess of 5% of the total assets of the
series, and then only for emergency and extraordinary purposes; this
does not prohibit the escrow and collateral arrangements in connection
with investment in interest rate futures contracts and related options
by Limited-Term Bond, Intermediate-Term Bond, Benham Bond, Limited-Term
Tax Exempt, Intermediate-Term Tax-Exempt and Long-term Tax-Exempt.
Paragraphs 3, 5, 8 and 9 shall also apply as fundamental
policies of New Opportunities. Paragraphs 1, 2, 6, 7, 10, 11 and 12 shall also
apply to New Opportunities, but shall not be considered fundamental policies.
Paragraph 4 shall apply to New Opportunities with respect to 75% of its
portfolio and shall not be considered a fundamental policy.
EXHIBIT D
Current Fundamental Investment Restrictions
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
Additional fundamental policies that may be changed only with
shareholder approval provide that, with the exception of the Emerging Markets
Fund, each series of shares:
1. Shall not invest more than 15% of its assets in illiquid investments.
2. Shall not invest in the securities of companies that, including
predecessors, have a record of less than three years of continuous
operation.
3. Shall not lend its portfolio securities except to unaffiliated persons
and subject to the rules and regulations adopted under the Investment
Company Act. No such rules and regulations have been issued, but it is
our policy that such loans must be secured continuously by cash
collateral maintained on a current basis in an amount at least equal to
the market value of the securities loaned, or by irrevocable letters of
credit. During the existence of the loan, the fund must continue to
receive the equivalent of the interest and dividends paid by the issuer
on the securities loaned and interest on the investment of the
collateral; the fund must have the right to call the loan and obtain
the securities loaned at any time on five days' notice, including the
right to call the loan to enable the fund to vote the securities. To
comply with the regulations of certain state securities administrators,
such loans may not exceed one-third of the fund's net assets taken at
market.
4. Shall not purchase the security of any one issuer if such purchase
would cause more than 5% of the fund's assets at market to be invested
in the securities of such issuer, except U.S. government securities, or
if the purchase would cause more than 10% of the outstanding voting
securities of any one issuer to be held in the fund's portfolio.
5. Shall not invest for control or for management, or concentrate its
investment in a particular company or a particular industry. No more
than 25% of the assets of the fund, exclusive of cash and U.S.
government securities, will be invested in securities of any open
industry.
6. Shall not buy securities on margin nor sell short (unless it owns or by
virtue of its ownership of other securities has the right to obtain
securities equivalent in kind and amount to the securities sold);
however, the fund may make margin deposits in connection with the use
of any financial instrument or any transaction in securities permitted
by its fundamental policies.
7. Shall not invest in the securities of other investment companies except
by purchases in the open market involving only customary brokers'
commissions and no sales charges.
8. Shall not issue any senior security.
9. Shall not underwrite any securities.
10. Shall not purchase or sell real estate. (In the opinion of management,
this restriction will not preclude the corporation from investing in
securities of corporations that deal in real estate.
11. Shall not purchase or sell commodities or commodity contracts.
12. Shall not borrow any money, except from banks or trust companies in an
amount not in excess of 5% of the total assets of the fund, and then
only for emergency and extraordinary purposes.
Paragraphs 3, 5, 8 and 9 shall apply as fundamental policies
of the Emerging Markets Fund. Paragraphs 1, 2, 6, 7, 10, 11 and 12 shall also
apply to the Emerging Markets Fund, but shall not be considered fundamental
policies. Paragraph 4 shall apply to the Emerging Markets Fund with respect to
75% of its portfolio and shall not be considered a fundamental policy.
EXHIBIT E
Current Fundamental Investment Restrictions
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
Additional fundamental policies that may be changed only with
shareholder approval provided that neither series of shares.
1. Shall invest more than 15% of its assets in illiquid investments.
2. Shall invest in the securities of companies that, including
predecessors, have a record of less than three years of continuous
operation.
3. Shall lend its portfolio securities except to unaffiliated persons and
subject to the rules and regulations adopted under the Investment
Company Act of 1940. No such rules and regulations have been issued,
but it is our policy that such loans must be secured continuously by
cash collateral maintained on a current basis in an amount at least
equal to the market value of the securities loaned or by irrevocable
letters of credit. During the existence of the loan, a fund must
continue to receive the equivalent of the interest and dividends paid
by the issuer on the securities loaned and interest on the investment
of the collateral; the fund must have the right to call the loan and
obtain the securities loaned at any time on five days' notice,
including the right to call the loan to enable the fund to vote the
securities. To comply with the regulations of certain state securities
administrators, such loans may not exceed one-third of the fund's net
assets valued at market.
4. Shall with regard to 75% of its portfolio, purchase the security of any
one issuer if such purchase would cause more than 5%of the fund's
assets at market to be invested in the securities of such issuer,
except U.S. government securities or if the purchase would cause more
than 10% of the outstanding voting securities of any one issuer to be
held in a fund's portfolio.
5. Shall invest for control or for management or concentrate its
investment in a particular company or a particular industry. No more
than 25% of the assets of a fund, exclusive of cash and U.S. government
securities, will be invested in securities of any one industry.
6. Shall buy securities on margin and sell short (unless it owns or by
virtue of its ownership of other securities has the right to obtain
securities equivalent in kind and amount to the securities sold without
additional cost); however, a fund may make margin deposits in
connection with the use of any financial instrument or any transaction
securities permitted by its fundamental policies.
7. Shall invest in the securities of other investment companies except by
purchases in the open market involving only customary brokers'
commission and no sales charges.
8. Shall issue any senior security.
9. Shall underwrite any securities.
10. Shall borrow any money, except in an amount not in excess of 5% of the
total assets of the series and then only for emergency and
extraordinary purposes. Note: This investment restriction does not
prohibit escrow and collateral arrangements in connections with
investment in futures contracts and related options by a fund.
11. Shall purchase or sell real estate, except that a fund may purchase
securities of issuers that deal in real estate and may purchase
securities that are secured by interests in real estate.
EXHIBIT F
Current Fundamental Investment Restrictions
AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC
Additional fundamental policies that may be changed only with
shareholder approval provide that each series of shares:
1. Shall not, with regard to 75% of its portfolio, purchase the security
of any one issuer if such purchase would cause more than 5% of the
fund's assets at market to be invested in the securities of such
issuer, except U.S. government securities, or if the purchase would
cause more then 10% of the outstanding voting securities of any one
issuer to be held in a fund's portfolio.
2. Shall not invest for control or for management or concentrate its
investment in a particular company or a particular industry. No more
than 25% of the assets of a fund, exclusive of cash and U.S. government
securities, will be invested in securities of any one industry.
3. Shall not buy securities on margin nor sell short (unless it owns or by
virtue of its ownership of other securities has the right to obtain
securities equivalent in kind and amount to the securities sold without
additional cost); however, a fund may make margin deposits in
connection with the use of any financial instrument or any transaction
in securities permitted by its fundamental policies.
4. Shall not issue any senior security.
5. Shall not underwrite any securities.
6. Shall not invest more than 15% of its assets in illiquid investments.
7. Shall not lend its portfolio securities except to unaffiliated persons
and subject to the rules and regulations adopted under the Investment
Company Act. No such rules and regulations have been issued, but it is
American Century's policy that such loans must be secured continuously
by cash collateral maintained on a current basis in an amount at least
equal to the market value of the securities loaned or by irrevocable
letters of credit. During the existence of the loan, a fund must
continue to receive the equivalent of the interest and dividends paid
by the issuer on the securities loaned an interest on the investment of
the collateral; the fund must have the right to call the loan and
obtain the securities loaned at any time on five days' notice,
including the right to call the loan to enable the fund to vote the
securities. To comply with the regulations of certain state securities
administrators, such loans may not exceed one-third of the fund's net
assets valued at market.
8. Shall not borrow any money, except in an amount not in excess of 5% of
the total assets of the fund and then only for emergency and
extraordinary purposes. Note: This investment restriction does not
prohibit escrow and collateral arrangements in connection with
investment in futures contracts and related options by a fund.
9. Shall not purchase or sell real estate, except that a fund may purchase
securities of issuers that deal in real estate and may purchase
securities that are secured by interests in real estate
EXHIBIT G
Current Fundamental Investment Restrictions
AMERICAN CENTURY PREMIUM RESERVES, INC.
Fundamental policies may be changed only with shareholder approval
provide that no series of shares:
1. Intended to be designated as a money market fund shall invest more than
10% of its assets in illiquid investments, while no non-money market
series of shares shall invest more than 15% of its assets in illiquid
investments.
2. Shall lend its portfolio securities except to unaffiliated persons and
subject to the rules and regulations adopted under the Investment
Company Act of 1940. No such rules and regulations have been issued,
but it is the fund's policy that such loans must be secured
continuously by cash collateral maintained on a current basis in an
amount at least equal to the market value of the securities loaned or
by irrevocable letters of credit. During the existence of the loan, a
fund must continue to receive the equivalent of the interest and
dividends paid by the issuer on the securities loaned and interest on
the investment of the collateral; the fund must have the right to call
the loan and obtain the securities loaned at any time on five days'
notice, including the right to call the loan to enable the fund to vote
the securities. To comply with the regulations of certain state
securities administrators, such loan may not exceed one-third of the
fund's net assets taken at market.
3. Shall, with regard to 75% of its portfolio, purchase the security of
any one issuer if such purchase would cause more than 5% of a fund's
assets at market to e invested in the securities of such issuer, except
U.S. government securities, or if the purchase would cause more than
10% of the outstanding voting securities of any one issuer to be held
in a fund's portfolio. Note: As a mater of operating policy and not a
fundamental policy, Premium Government Reserve and Premium Capital
Reserve have elected to comply with Rule 2a-7 under the Investment
Company Act, which required diversification of 100% of their respective
portfolios, not 75% as stated in this restriction.
4. Shall invest for control or for management, or concentrate its
investment in a particular company or a particular industry. No more
than 25% of the assets of a fund, exclusive of cash and U.S. government
securities, will be invested in securities of any one industry.
5. Shall buy securities on margin or sell short (unless it owns or by
virtue of its ownership of other securities has the right to obtain
securities equivalent in kind and amount to the securities sold);
however, a fund may make margin deposits in connection with the use of
any financial instrument or any transaction in securities permitted by
its fundamental policies.
6. Shall invest in the securities of other investment companies except by
purchases in the open market involving only customary brokers'
commission and no sales charges.
7. Shall issue any senior security.
8. Shall underwrite any securities.
9. Shall purchase or sell commodities or commodity contracts except that
premium Bond may, for non-speculative purposes, buy or sell interest
rate futures contracts on debt securities (debt futures and bond index
futures) and related options.
10. Shall borrow any money, except in an amount not in excess of 5% of the
total assets of the series, and then only for emergency and
extraordinary purposes. Note: This investment restrictions does not
prohibit escrow and collateral arrangements in connections with
investment in interest rate futures contracts and related options by
Premium Bond.
PROXY CARD #1 (BACK)
Please indicate your vote by placing an "X" in the appropriate box below. The
Board of Directors recommends a vote "FOR" each proposal.
1. Election of nine members of the Company's Board of Directors
to serve indefinite terms until their successors are duly
elected and qualified;
FOR ALL NOMINEES ___ WITHHOLD AUTHORITY ___ INSTRUCTION: To withhold authority to vote for
except asmarked to the FOR ALL NOMINEES any individual nominee, strike a line through
contrary below the nominee's name in the list below
Thomas A. Brown Robert W. Doering, M.D. D.D. (Del) Hock Linsley L. Lundgaard
Donald H. Pratt Lloyd T. Silver, Jr. James E. Stowers, Jr. James E. Stowers III
M. Jeannine Strandjord
FOR AGAINST ABSTAIN
2. Approval of Management Agreement with American Century
Investment Management, Inc. ___ ___ ___
3. Ratification of the selection of the Company's independent
auditors for its current fiscal year. ___ ___ ___
4. Approval of the proposed changes to the Fund's investment
restrictions. ___ ___ ___
___ To vote against the proposed changes to one or more of the
specific fundamental investment restrictions, but to approve
the others, place an "X" in the box at the left AND indicate
the number(s) (as set forth in the proxy statement) of the
investment restrictions you do not want to change on this
line:___________________________
PLEASE SIGN AND DATE THE FRONT OF THIS CARD
PROXY CARD (FRONT)
[NAME OF FUND]--[NAME OF CLASS]
(A series of [NAME OF COMPANY])
PROXY Annual Meeting of Shareholders, July 30, 1997 PROXY
This proxy is solicited on behalf of the Board of Directors of the
Company indicated above and relates to proposals which apply to the Company or
to the series or class of the Company indicated above. By signing below, I (we)
appoint as proxies William M. Lyons and Patrick A. Looby and each of them (with
power of substitution) to vote for the undersigned all shares of common stock I
own in the Fund. The authority I am (we are) granting applies to the
above-referenced meeting and any adjournments of that meeting, with all the
power I (we) would have if personally present. The shares represented by this
proxy will be voted as instructed. Unless indicated to the contrary, this proxy
shall be deemed to grant authority to vote "FOR" all proposals relating to the
Company or the series or class, as applicable.
YOUR VOTE IS IMPORTANT. Please date and sign this proxy below and
return it in the enclosed envelope to: Alamo Direct, 280 Oser Avenue, Hauppauge,
NY 11788. This proxy will not be voted unless it is dated and signed exactly as
instructed on this card.
If shares are held by an individual, sign your name
exactly as it appears on this card. If shares are
held jointly, either party may sign, but the name of
the party signing should conform exactly to the name
shown on this proxy card. If shares are held by a
corporation, partnership or similar account, the name
and the capacity of the individual signing the proxy
card should be indicated - for example: "ABC Corp.,
John Doe, Treasurer."
Sign exactly as name appears on this card.
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Dated ______________________, 1997