INTERIM INVESTMENT SUBADVISORY AGREEMENT
EXHIBIT (d)(3)
THIS INVESTMENT SUBADVISORY
AGREEMENT (“Agreement”) is made effective as of the 16th day of February,
2010, by and among AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. (the
“Corporation”), a Maryland corporation, AMERICAN CENTURY GLOBAL INVESTMENT
MANAGEMENT, INC. (“AGCIM”), a Delaware corporation, and AMERICAN CENTURY
INVESTMENT MANAGEMENT, INC. (the “Subadvisor”), a Delaware
corporation.
WITNESSETH:
WHEREAS, the Corporation is an
open-end management investment company registered with the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended;
and
WHEREAS, ACGIM and Subadvisor
are both investment advisors registered with the Securities and Exchange
Commission under the Investment Advisers Act of 1940, as amended;
and
WHEREAS, the Corporation has
engaged ACGIM to serve as the investment manager for each class of that series
of shares issued by the Corporation known as the VP International Fund (the
“Funds”) pursuant to a Management Agreement (the “Management Agreement”);
and
WHEREAS, the Corporation and
ACGIM now desire to engage Subadvisor as a subadvisor for that portion of the
assets of the Funds that will be invested in cash and cash equivalents (the
“Cash Portion”), and Subadvisor desires to accept such engagement;
and
WHEREAS, the Boards of
Directors of the Corporation, ACGIM and Subadvisor have determined that it is
advisable to enter into this Agreement.
NOW, THEREFORE, in
consideration of the premises and of the covenants and agreements hereinafter
set forth, and intending to be legally bound hereby, the parties hereto covenant
and agree as follows:
1. INVESTMENT DESCRIPTION -
APPOINTMENT. Corporation hereby appoints Subadvisor to provide
certain advisory services to the Funds in accordance with the Funds’ 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
Directors of Corporation. Corporation agrees to provide Subadvisor
copies of all amendments to the Funds’ Prospectus and Statement of Additional
Information on an ongoing basis. Subadvisor hereby accepts the
appointment and agrees to furnish the services described herein.
2. SERVICES
AS INVESTMENT SUBADVISOR.
(a) Subject
to the general supervision of the Board of Directors of Corporation, and of
ACGIM, Subadvisor will (i) act in conformity with the Funds’ 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 regarding the Cash Portion of
the Funds in accordance with the Funds’ investment objective and policies as
stated in the Funds’ Prospectus and Statement of Additional Information and with
such written guidelines as ACGIM may from time to time provide to Subadvisor;
(iii) place purchase and sale orders on behalf of the Funds; and (iv) maintain
books and records with respect to the securities transactions of the Funds and
furnish the Corporation’s Board of Directors such periodic, regular and special
reports as the Board may request.
(b) In
providing those services, Subadvisor will supervise the Funds’ Cash Portion and
conduct a continual program of investment, evaluation and, if appropriate, sale
and reinvestment of the Cash Portion of the Funds’ assets. In
addition, Subadvisor will furnish the Corporation or ACGIM whatever information,
including statistical data, the Corporation or ACGIM may reasonably request with
respect to the instruments that the Fund may hold or contemplate
purchasing.
(c) Subadvisor
will at all times comply with the policies adopted by the Corporation’s Board of
Directors of which it has received written notice. If Subadvisor
believes that a change in any of such policies shall be advisable, it shall
recommend such change to ACGIM and the Board of Directors of the
Corporation. Any change to any such policies whether suggested by
Subadvisor or not shall be approved by the Corporation’s Board of Directors
prior to the implementation of such change, and Subadvisor will be given
reasonable notice of the anticipated change.
3. BROKERAGE.
(a) In
executing transactions for the Funds and selecting brokers or dealers,
Subadvisor will seek 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 is consistent with its fiduciary obligations to the
Funds and its other clients. In assessing the best net price and
execution available for any transaction of a Fund, Subadvisor 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 net
price offered by two or more brokers or dealers are comparable, Subadvisor may,
at its discretion, execute transactions with brokers and dealers who provide the
Funds and/or other accounts over which Subadvisor exercises investment
discretion with research advice and other services, but in all instances best
net price and execution shall control. Subadvisor is authorized to
place purchase and sale orders for the Funds with brokers and/or dealers subject
to the supervision of ACGIM and the Board of
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Directors
of the Corporation and in accordance with the limitations set forth in the
registration statement for the Funds’ shares then in effect.
(b) On
occasions when Subadvisor deems the purchase or sale of a security to be in the
best interest of a Fund as well as one or more of its other clients, Subadvisor
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 Subadvisor in a manner it considers to be equitable and
consistent with its fiduciary obligations to the Corporation and to such other
clients. The Corporation recognizes that, in some cases, this
procedure may limit the size of the position that may be acquired or sold for
the Fund.
4. INFORMATION
PROVIDED TO CORPORATION.
(a) Subadvisor
will keep the Corporation and ACGIM informed of developments materially
affecting the Cash Portion of the Funds and will take initiative to furnish the
Corporation and ACGIM on at least quarterly basis with whatever information
Subadvisor and ACGIM believe is appropriate for this purpose. Such
regular quarterly reports shall include information reasonably requested by the
Corporation’s Board of Directors from time to time.
(b) Subadvisor
will provide the Corporation and ACGIM with such investment records, ledgers,
accounting and statistical data, and other information as the Corporation and
ACGIM require 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 Corporation and ACGIM may reasonably request for the management of their
affairs. Subadvisor understands that the Fund and ACGIM will rely on
such information in the preparation of the Corporation’s registration statement,
the Fund’s financial statements, and any such reports, and hereby covenants that
any such information derived from the investment records, ledgers and accounting
records maintained by Subadvisor shall be true and complete in all material
respects.
(c) At
the request of the Board of Directors, a representative of Subadvisor shall
attend meetings of the Board of Directors to make a presentation on each Fund’s
performance and such other matters as the Board of Directors, Subadvisor and
ACGIM believe is appropriate.
(d) Subadvisor
shall furnish to regulatory authorities any information or reports in connection
with such services as may be lawfully requested. Subadvisor shall
also, at the Corporation’s request, certify to the Corporation’s independent
auditors that sales or purchases aggregated with those of other clients of
Subadvisor, as described in Section 3 above, were allocated in a manner it
considers to be equitable.
(e) In
compliance with the requirements of the Investment Company Act, Subadvisor
hereby agrees that all records that it maintains for the Fund are the property
of the Corporation and further agrees to surrender to the Corporation promptly
upon the Corporation’s request any
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of such
records. In addition, Subadvisor agrees to cooperate with the
Corporation and ACGIM when either of them is being examined by any regulatory
authorities, and specifically agrees to promptly comply with any request by such
authorities to provide information or records. Subadvisor 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.
(f) Subadvisor
will be responsible for voting all of each Fund’s investment
securities.
5. FUTURES AND
OPTIONS. Subadvisor’s investment authority shall include the
authority to purchase, sell, cover open positions, and generally to deal in
financial futures contracts and options thereon. Subadvisor will (a)
open and maintain brokerage accounts for financial futures and options (such
accounts hereinafter referred to as “Brokerage Accounts”) on behalf of and in
the name of the Fund, and (b) execute, for and on behalf of the Brokerage
Accounts, standard customer agreements with a broker or
brokers. Subadvisor may, using such of the securities and other
property in the Brokerage Accounts as Subadvisor deems necessary or desirable,
direct the custodian to deposit on behalf of the Fund, original and maintenance
brokerage deposits and other direct payments of cash, cash equivalents, and
securities and other property into such Brokerage Accounts and to such brokers
as Subadvisor deems appropriate. Each Fund represents and warrants
that it is a “qualified eligible client” within the meaning of the CFTC
Regulations Section 4.7 and, as such, consents to treat the Fund in accordance
with the exemption contained in CFTC Regulations Section 4.7(b).
PURSUANT TO AN EXEMPTION FROM THE
COMMODITY FUTURES TRADING COMMISSION (“CFTC”) IN CONNECTION WITH ACCOUNTS OF
QUALIFIED ELIGIBLE CLIENTS, THIS DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT
BEEN, FILED WITH THE CFTC. THE CFTC DOES NOT PASS UPON THE MERITS OF
PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF THE
COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE CFTC HAS NOT
REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS DOCUMENT.
6. CONFIDENTIALITY. The
parties to this Agreement agree that each shall treat as confidential all
information provided by a party to the others regarding such party’s business
and operations, including without limitation the investment activities,
holdings, or identities of shareholders of the Funds. All
confidential information provided by a party hereto shall be used by any other
parties hereto solely for the purposes of rendering services pursuant to this
Agreement and, except as may be required in carrying out the terms of this
Agreement, shall not be disclosed to any third party without the prior consent
of such providing party. The foregoing shall not be applicable to any
information that is publicly available when provided or which thereafter becomes
publicly available other than in contravention of this paragraph. The
foregoing also shall not apply to any information which is required to be
disclosed by any regulatory authority in the lawful and appropriate exercise of
its jurisdiction over a party, by any auditor of the parties hereto, by judicial
or administrative process or otherwise by applicable law
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or
regulation; provided, however, that the disclosing party shall provide
reasonable notice to the other parties hereto prior to any such
disclosure.
7. LIABILITY
AND INDEMNIFICATION.
(a) Subadvisor
shall be responsible for the exercise of reasonable care in carrying out its
responsibilities hereunder; provided, however, that no provision of this
Agreement be construed to protect any trustee, director, officer, agent or
employee of Subadvisor or an affiliate from liability by reason of gross
negligence, willful malfeasance, bad faith in the performance of such person’s
duties hereunder or by reason of reckless disregard of obligations and duties
hereunder. Notwithstanding any other provision of this Agreement, no
party shall be liable for any actions or omissions taken or made pursuant to
this Agreement unless such actions or omissions result from gross negligence,
willful malfeasance, or bad faith in the performance of such party’s duties or
by reason of reckless disregard of obligations and duties
hereunder.
(b) ACGIM
agrees to indemnify and hold harmless Subadvisor and its officers, directors,
employees, agents, affiliates and each person, if any, who controls Subadvisor
within the meaning of the Securities Act of 1933 (collectively, the "Indemnified
Parties" for purposes of this Section 7(b)) against any losses, claims,
expenses, damages or liabilities (including amounts paid in settlement thereof)
or litigation expenses (including legal and other expenses) (collectively,
"Losses"), to which the Indemnified Parties may become subject, insofar as such
Losses result from gross negligence, willful malfeasance or bad faith in the
performance by the Corporation or ACGIM of its respective duties hereunder or
reckless disregard by the Corporation or ACGIM of its respective duties
hereunder. ACGIM will reimburse any legal or other expenses
reasonably incurred by the Indemnified Parties in connection with investigating
or defending any such Losses. ACGIM shall not be liable for
indemnification hereunder if such Losses are attributable to the gross
negligence, willful malfeasance or bad faith of Subadvisor in performing its
obligations under this Agreement. ACGIM shall not be liable for
special, consequential or incidental damages.
(c) Subadvisor
agrees to indemnify and hold harmless ACGIM and the Corporation, and their
respective officers, directors, employees, agents, affiliates and each person,
if any, who controls ACGIM or the Corporation within the meaning of the
Securities Act of 1933 (collectively, the "Indemnified Parties" for purposes of
this Section 7(c)) against any Losses to which the Indemnified Parties may
become subject, insofar as such Losses result from gross negligence, willful
malfeasance, or bad faith in performance by Subadvisor or its affiliates of
their duties hereunder or reckless disregard by Subadvisor or its affiliates of
their duties hereunder. Subadvisor will reimburse any legal or other
expenses reasonably incurred by the Indemnified Parties in connection with
investigating or defending any such Losses. Subadvisor shall not be
liable for indemnification hereunder if such Losses are attributable to the
gross negligence, willful malfeasance or bad faith of ACGIM or the Corporation
in performing their obligations under this Agreement. Subadvisor
shall not be liable for special, consequential or incidental
damages.
(d) Promptly
after receipt by an indemnified party hereunder of notice of the commencement of
action, such indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party hereunder, notify the indemnifying party of the
commencement
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thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 7, except to the extent the indemnifying party shall have been
prejudiced thereby. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish to, assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
(e) If
the indemnifying party assumes the defense of any such action, the indemnifying
party shall not, without the prior written consent of the indemnified parties in
such action, settle or compromise the liability of the indemnified parties in
such action, or permit a default or consent to the entry of any judgment in
respect thereof, unless in connection with such settlement, compromise or
consent, each indemnified party receives from such claimant an unconditional
release from all liability in respect of such claim.
8. COMPENSATION.
(a) In
consideration of the services rendered pursuant to this Agreement, ACGIM will
pay Subadvisor a per annum management fee equal to 0.45%
(“Applicable Fee”).
(b) On
the first business day of each month, ACGIM shall pay Subadvisor the Applicable
Fee for the previous month. The fee for the previous month shall be
calculated by multiplying the Applicable Fee for each Fund by the Cash Portion
of the aggregate average daily closing value of the net assets of all classes of
that Fund 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 of shares for which it is proposed that Subadvisor
serve as investment manager, and for which Subadvisor desires to so serve, the
Corporation, ACGIM and Subadvisor shall enter into an Addendum to this Agreement
setting forth the name of the series, the Applicable Fee, if any, and such other
terms and conditions as are applicable to the management of such series of
shares.
(d) Subadvisor
shall have no right to obtain compensation directly from the Funds or the
Corporation for services provided hereunder and agrees to look solely to ACGIM
for payment of fees due. Upon termination of this Agreement before
the end of a month, or in the event the Agreement begins after the beginning of
the 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.
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9. EXPENSES. Subadvisor
will bear all of its 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.
10. SERVICES TO OTHER COMPANIES OR
ACCOUNTS. The Corporation understands that Subadvisor or its
affiliates now acts and will continue to act as investment advisor to other
clients and the Corporation has no objection to Subadvisor so
acting. In addition, the Corporation understands that the persons
employed by Subadvisor to assist in the performance of Subadvisor’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 Subadvisor or any
affiliate of Subadvisor to engage in and devote time and attention to other
business or to render services of whatever kind or nature. Further,
from time to time, Subadvisor may refer or introduce certain institutional
investors and existing clients of Subadvisor and its affiliates to
the Corporation. The Corporation understands that nothing herein
shall be deemed to limit or restrict the right of Subadvisor, in the event
Subadvisor’s clients purchase shares of the Corporation, to subsequently suggest
or induce such clients to redeem such shares and open a separate advisory
account with Subadvisor.
11. TERM OF
AGREEMENT. This Agreement shall become effective for each Fund
as of the date first set forth above (the “Effective Date”) and shall continue
in effect for each Fund until the earlier of (i) 150 days from the Effective
Date, or (ii) the date as of which the shareholders of each Fund approve a new
subadvisory agreement.
12. REPRESENTATIONS
OF ACGIM, SUBADVISOR AND CORPORATION.
(a) ACGIM
and Subadvisor each hereby represents that it is registered as an investment
advisor under the Investment Advisers Act of 1940, that it will use its
reasonable best efforts to maintain such registration, and that it will promptly
notify the other if it ceases to be so registered, if its registration is
suspended for any reason, or if it is notified by any regulatory organization or
court of competent jurisdiction that it should show cause why its registration
should not be suspended or terminated. ACGIM and Subadvisor each
further represents that it is registered under the laws of all jurisdictions in
which the conduct of its business hereunder requires such
registration.
(b) The
Corporation and ACGIM represent and warrant that (i) the appointment of
Subadvisor has been duly authorized; and (ii) each of them has full power and
authority to execute and deliver this Agreement and to perform the services
contemplated hereunder, and such execution, delivery and performance will not
cause either to be in violation of its Articles of Incorporation, Bylaws, or any
material laws.
(c) Subadvisor
represents and warrants that (i) its service as subadvisor hereunder has been
duly authorized; (ii) it has full power and authority to execute and deliver
this Agreement and to perform the services contemplated hereunder, and such
execution, delivery and performance will not cause it to be in violation of its
organizational documents, its Bylaws or material laws; (iii) it will at all
times in the performance of its duties hereunder act in conformity
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with the
provisions of 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 be amended from time to time; and (iv) it has
all controls necessary to perform its obligations under and comply with the
representations and warranties it made in this Agreement.
13. 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.
14. LIMITATION OF
LIABILITY. This Agreement has been executed on behalf of the
Corporation by the undersigned officer of the Corporation solely in his capacity
as an officer of the Corporation.
15. ENTIRE
AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto on the subject matter described herein.
16. INDEPENDENT
CONTRACTOR. In the performance of its duties hereunder,
Subadvisor is and shall be an independent contractor and, unless otherwise
expressly provided or authorized, shall have no authority to act for or
represent the Corporation or ACGIM in any way, or otherwise be deemed to be an
agent of the Corporation or ACGIM.
17. SEVERABILITY. If
any provision of this Agreement shall be held or made invalid by a court
decision, statue, rule or similar authority, the remainder of this Agreement
shall not be affected thereby.
18. NOTICES. All
notices and other communications hereunder shall be given or made in writing and
shall be delivered personally, or sent by telex, telecopy, express delivery or
registered or certified mail, postage prepaid, return receipt requested, to the
party or parties to whom they are directed at each party’s address of
record. Any notice, demand or other communication given in a manner
prescribed in this Section shall be deemed to have been delivered on
receipt.
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IN WITNESS WHEREOF, the
parties hereto have caused this instrument to be duly executed by their officers
designated below to be effective as of the day and year first written
above.
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“Corporation”
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“ACGIM”
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AMERICAN
CENTURY VARIABLE PORTFOLIOS, INC.
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AMERICAN
CENTURY GLOBAL INVESTMENT MANAGEMENT, INC.
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| /s/ Xxxxxxx X. Xxxxxxxxxxx | /s/ Xxxxx X. Xxxxxxxxxx |
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Xxxxxxx
X. Xxxxxxxxxxx
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Xxxxx
X. Xxxxxxxxxx
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Senior
Vice President
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Vice
President
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“Subadvisor”
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AMERICAN
CENTURY INVESTMENT MANAGEMENT, INC.
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| /s/ Xxxx X. Xxxxx | |
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Xxxx
X. Xxxxx
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Vice
President
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