AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
INVESTMENT SUBADVISORY AGREEMENT
X.X. XXXXXX INVESTMENT MANAGEMENT INC.
AMERICAN CENTURY INTERNATIONAL BOND FUNDS
(American Century--Xxxxxx International Bond Fund)
Agreement effective this August 1, 1997, between AMERICAN CENTURY
INTERNATIONAL BOND FUNDS (the "Trust"), a business trust organized under the
laws of the Commonwealth of Massachusetts, acting on behalf of American
Century--Xxxxxx International Bond Fund, a portfolio of the Trust (formerly
known as Xxxxxx European Government Bond Fund) (the "Fund"), and American
Century Investment Management, Inc. ("ACIM") a corporation organized under the
laws of the state of Delaware, with offices located at 0000 Xxxx Xxxxxx, Xxxxxx
Xxxx, Xxxxxxxx, 00000-0000, hereby agree with X. X. XXXXXX INVESTMENT MANAGEMENT
INC. (the "Sub-Advisor"), a corporation organized under the laws of the state of
Delaware with offices located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as
follows:
I. INVESTMENT DESCRIPTION - APPOINTMENT. The Trust desires to appoint the
Sub-Advisor to provide certain investment advisory services to the Fund
in accordance with the Fund's Prospectus and Statement of Additional
Information as in effect and as amended from time to time, in such
manner and to such extent as may be approved by the Board of Trustees
of the Trust. The Trust agrees to provide the Sub-Advisor copies of all
amendments to the Fund's Prospectus and Statement of Additional
Information on an ongoing basis. In consideration for the compensation
set forth below the Sub-Advisor accepts the appointment and agrees to
furnish the services described herein.
II. SERVICES AS INVESTMENT SUB-ADVISOR. Subject to the general supervision
of the Board of Trustees of the Trust and of ACIM, the Fund's
investment manager, the Sub-Advisor will (i) act in conformity with the
Trust's Prospectus and Statement of Additional Information, the
Investment Company Act of 1940, the Investment Advisers Act of 1940,
the Internal Revenue Code and all other applicable federal and state
laws and regulations, as the same may from time to time be amended,
(ii) make investment decisions for the fund in accordance with the
Fund's investment objective(s) and policies as stated in the Fund's
Prospectus and Statement of Additional Information and with such
written guidelines as ACIM may from time to time provide to the
Sub-Advisor; (iii) place purchase and sale orders on behalf of the
Fund; (iv) maintain books and records with respect to the securities
transactions of the Fund and furnish the Trust's Board of Trustees such
periodic, regular and special reports as the Board may request; and (v)
treat confidentially and as proprietary information of the Trust all
records and other information related to the Trust and its prior,
present or potential shareholders. The Sub-Advisor will not use such
records and information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification
to and approval in writing by the Trust, which approval shall not be
unreasonably withheld. Such records may not be withheld when the
Sub-Advisor may be exposed to civil or criminal contempt proceedings
for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the Trust. In
providing those services, the Sub-Advisor will supervise the Fund's
investments and conduct a continual program of investment, evaluation
and, if appropriate, sale and reinvestment of the Fund's assets. In
addition, the Sub-Advisor will furnish the Trust or ACIM with whatever
information, including statistical data, the Trust or ACIM may
reasonably request with respect to the instruments that the Fund may
hold or contemplate purchasing.
III. BROKERAGE
A. Securities. In executing transactions for the Fund and
selecting brokers or dealers, the Sub-Advisor will use its
best efforts to obtain the best net price and execution
available and shall execute or direct the execution of all
such transactions as permitted by law and in a manner that
best suits the interest of the Fund and its shareholders. In
assessing the best net price and execution available for any
Fund transaction, the Sub-Advisor will consider all factors it
deems relevant including, but not limited to, breadth of the
market in the security, the price of the security, the
financial condition and execution capability of the broker or
dealer and the reasonableness of any commission for the
specific transaction and on a continuing basis.. Consistent
with this obligation, when the execution and price offered by
two or more brokers or dealers are comparable, the Sub-Advisor
may, at its discretion, execute transactions with brokers and
dealers who provide the Trust with research advice and other
services, but in all instances best net price and execution
shall control.
On occasions when the Sub-Advisor deems the purchase or sale
of a security to be in the best interest of the Fund as well
as its other clients, the Sub-Advisor may to the extent
permitted by applicable law, but shall not be obligated to,
aggregate the securities to be sold or purchased with those of
its other clients. In such event, allocation of the securities
so purchased or sold will be made by the Sub-Advisor in a
manner it considers to be equitable and consistent with its
fiduciary obligations to the Trust and to such other clients.
Securities so allocated will be delivered in proportion to the
consideration paid. The expenses incurred in the transaction
shall be allocated pro-rata.
B. Foreign Exchange Transactions. The Sub-Advisor is authorized
to effect, on behalf of the Fund, spot and forward foreign
exchange contracts for purposes consistent with the Fund's
investment objectives and policies as described in the Fund's
Prospectus and Statement of Additional Information, as
amended, and with such other operating policies and guidelines
as ACIM may from time to time provide to the Sub-Advisor. The
Sub-Advisor is further authorized to execute such documents as
may be required to effect such transactions. In effecting such
spot and forward foreign exchange contracts and in selecting
counterparties for such contracts, the Sub-Advisor shall use
its best efforts to seek the best overall terms available and
shall execute or direct the execution of all such transactions
as permitted by law and in a manner that best suits the
interests of the Fund and its shareholders.
IV. INFORMATION PROVIDED TO THE TRUST. The Sub-Advisor will keep the Trust
and ACIM informed of developments materially affecting the Fund and
will take initiative to furnish the Trust and ACIM on at least a
quarterly basis with whatever information the Sub-Advisor believes is
appropriate for this purpose. Such regular quarterly reports shall
include (i) a discussion of the Fund's performance relative to its
benchmark, (ii) an assessment of investment decisions and analysis of
the components of the Fund's performance (i.e., bond selection and
currency hedging), (iii) the decisions it has made with respect to the
Fund's assets and the purchase and sale of its portfolio securities,
(iv) the reasons for such decisions and related actions, and (v) the
extent to which those decisions have been implemented.
Sub-Advisor will provide the Trust and ACIM with such investment
records, ledgers, accounting and statistical data, and other
information as the Trust or ACIM requires for the preparation of
registration statements, periodic and other reports and other documents
required by federal and state laws and regulations, and particularly as
may be required for the periodic review, renewal, amendment or
termination of this Agreement, and such additional documents and
information as the Trust and ACIM may reasonably request for the
management of their affairs. At least once annually a representative of
the Sub-Advisor shall attend a meeting of the Board of Trustees to make
a presentation on the Fund's performance during the preceding year.
The Sub-Advisor shall furnish to regulatory authorities any information
or reports in connection with such services as may be lawfully
requested. The Sub-Advisor shall also, at the Trust's request, certify
to the Trust's independent auditors that sales or purchases aggregated
with those of other clients of the Sub-Advisor, as described in Section
3(a) above, were equitably allocated.
In compliance with the requirements of the Investment Company Act of
1940, the Sub-Advisor hereby agrees that all records that it maintains
for the Fund are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's
request. Sub-Advisor further agrees to preserve for the periods of time
prescribed by the Investment Company Act of 1940 and the Investment
Advisers Act of 1940 the records required to be maintained thereunder.
V. LIABILITY AND INDEMNIFICATION OF THE SUB-ADVISOR. The Sub-Advisor shall
be responsible for the exercise of reasonable care in carrying out its
responsibilities hereunder; provided, however, that no provision of
this Agreement shall be construed to protect any trustee, director,
officer, agent or employee of the Sub-Advisor from liability by reason
of negligence, willful malfeasance, bad faith in the performance of
such person's duties or by reason of reckless disregard of obligations
and duties hereunder.
ACIM shall indemnify and hold harmless the Sub-Advisor from and against
all claims, losses, liabilities or damages (including reasonable
attorneys fees and other related expenses), arising from or in
connection with the performance by the Sub-Advisor of its duties
hereunder and not resulting from the Sub-Advisor's negligence, willful
malfeasance, bad faith in the performance of its duties or by reason of
its reckless disregard of obligations and duties hereunder.
VI. COMPENSATION. In consideration of the services rendered pursuant to
this Agreement, ACIM will pay the Sub-Advisor on the first business day
of each month a fee for the previous month at an annual rate computed
as follows:
0.20% of the Fund's average daily net assets up to $200 million; and
0.15% of the Fund's average daily net assets over $200 million.
The Sub-Advisor shall have no right to obtain compensation directly
from the Fund or the Trust for services provided hereunder and agrees
to look solely to ACIM for payment of fees due. Upon termination of
this Agreement before the end of a month, the fee for that month shall
be prorated according to the proportion that such period bears to the
full monthly period and shall be payable upon the date of termination
of this Agreement. For the purpose of determining fees payable to the
Sub-Advisor, the value of the Fund's net assets shall be computed at
the times and in the manner specified in the Fund's Prospectus or
Statement of Additional Information.
VII. EXPENSES. The Sub-Advisor will bear all expenses in connection with the
performance of its services under this Agreement, which expenses shall
not include brokerage fees or commissions in connection with the
execution of securities transactions.
VIII. SERVICES TO OTHER COMPANIES OR ACCOUNTS. The Trust understands that the
Sub-Advisor now acts, will continue to act as investment advisor to one
or more other investment companies or series of investment companies.
The Trust has no objection to the Sub-Advisor so acting, provided that,
as described in Section 3 above, whenever the Fund and one or more
other accounts or investment companies advised by the Sub-Advisor have
funds available for investment, investments suitable and appropriate
for each will be allocated equitably to each entity in accordance with
procedures. Similarly, opportunities to sell securities will be
allocated in an equitable manner. In addition, the Trust understands
that the persons employed by the Sub-Advisor to assist in the
performance of the Sub-Advisor's duties hereunder will not devote their
full time to such service and nothing contained herein shall be deemed
to limit or restrict the right of the Sub-Advisor or any affiliate of
the Sub-Advisor to engage in and devote time and attention to other
business or to render services of whatever kind or nature.
IX. TERM OF AGREEMENT. This Agreement shall become effective as of the date
the Fund commences its investment operations and shall continue for a
two-year term and thereafter so long as such continuance is
specifically approved at least annually by (i) the Board of Trustees of
the Trust or (ii) a vote of a "majority" (as defined in the Investment
Company Act of 1940, as amended) of the Fund's outstanding voting
securities, provided that in either event the continuance is also
approved by a majority of the Board of Trustees who are not "interested
persons" (as defined in said Act) of any part to this Agreement, by a
vote cast in person at a meeting called for the purpose of voting on
such approval. This Agreement is terminable, without penalty on 60
days' written notice, by ACIM, the Board of Trustees of the Trust, or
by vote of holders of a majority of the Fund's shares, or upon twelve
months' written notice by the Sub-Advisor, and will terminate
automatically upon any termination of the management agreement between
the Trust and ACIM. In addition, this Agreement will also terminate
automatically in the event of its assignment (as defined in said Act).
The Sub-Advisor agrees to notify the Trust of any circumstances that
might result in this Agreement being deemed to be assigned.
X. REPRESENTATIONS OF THE TRUST AND THE SUB-ADVISOR. The Trust represents
that (i) a copy of its Agreement and Declaration of Trust, dated August
28, 1991, together with all amendments thereto, is on file in the
office of the Secretary of the Commonwealth of Massachusetts, (ii) the
appointment of the Sub-Advisor has been duly authorized, and (iii) it
has acted and will continue to act in conformity with the Investment
Company Act of 1940, as amended, and other applicable laws.
The Sub-Advisor represents that it is authorized to perform the
services described herein.
XI. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of
the change, waiver, discharge or termination is sought.
XII. LIMITATION OF LIABILITY. This Agreement has been executed on behalf of
the Trust by the undersigned officer of the Trust solely in his
capacity as an officer of the Trust. No shareholder, trustee, officer,
employee or agent of the Trust shall be subject to claims against or
obligations of the Trust to any extent whatsoever.
XIII. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto.
XIV. GOVERNING LAW. This Agreement shall be governed in accordance with the
laws of the Commonwealth of Massachusetts.
XV. INDEPENDENT CONTRACTOR. In the performance of its duties hereunder, the
Sub-Advisor is and shall be an independent contractor and, unless
otherwise expressly provided or authorized, shall have no authority to
act for or represent the Trust or ACIM in any way, or otherwise be
deemed to be an agent of the Trust or ACIM.
XVI. SEVERABILITY. If any provision of this agreement shall be held or made
invalid by a court decision, statute, rule or similar authority, the
remainder of this Agreement shall not be affected thereby.
XVII. NOTICES. Notices hereunder shall be addressed as follows:
To the Sub-Advisor: X.X. XXXXXX INVESTMENT MANAGEMENT INC.
Attention: Xx. Xxxx Xxxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to:
X.X. XXXXXX INVESTMENT MANAGEMENT INC.
Attention: Mr. Xxxxx Xxxxx
00 Xxxx Xxxxxx
Xxxxxx XXXX 0XX
To the Trust: AMERICAN CENTURY INTERNATIONAL BOND FUNDS
Attention: Xxxxxxx X. Xxxxx
Executive Vice President
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, XX 00000-0000
To ACIM: AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
Attention: Xxxxx X. Xxxxxxx, III
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, XX 00000-0000
XVIII. PROMOTION AND DISTRIBUTION. The Sub-Advisor shall have no
responsibility or authority to promote the sale or distribution of the
Trust's shares in any manner.
Executed as of the 1st day of August 1997.
X.X. XXXXXX INVESTMENT MANAGEMENT INC.
/s/Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title: Vice President
AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
/s/Xxxxxx X. Puff
Xxxxxx X. Puff
President
AMERICAN CENTURY INTERNATIONAL BOND FUNDS
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
President and Chief Executive Officer
