INTERIM INVESTMENT SUBADVISORY AGREEMENT
EXHIBIT (d)(2)
INTERIM
INVESTMENT SUBADVISORY AGREEMENT
THIS INVESTMENT SUBADVISORY
AGREEMENT (“Agreement”) is made effective as of the 16th day of February,
2010, by and among AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC. (the
“Corporation”), a Maryland corporation, AMERICAN CENTURY INVESTMENT MANAGEMENT,
INC. (“ACIM”), a Delaware corporation, and AMERICAN CENTURY GLOBAL 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, ACIM 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 ACIM to serve as the investment manager for the Strategic Allocation:
Conservative Fund, Strategic Allocation: Moderate Fund, and Strategic
Allocation: Aggressive Fund (collectively, the “Strategic Allocation Funds”)
pursuant to a Management Agreement between the Corporation and ACIM (the
“Management Agreement”); and
WHEREAS, the Corporation and
ACIM now desire to engage Subadvisor as a subadvisor for the portion of the
assets the Strategic Allocation Funds that will be invested in foreign equity
securities (the “Foreign Portion”), and Subadvisor desires to accept such
engagement; and
WHEREAS, the Boards of
Directors of the Corporation, ACIM 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 Strategic Allocation Funds in accordance with
the Strategic Allocation 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 Strategic Allocation 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
ACIM, Subadvisor will (i) act in conformity with the Strategic Allocation 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 Foreign
Portion of the Strategic Allocation Funds in accordance with the Strategic
Allocation Funds’ investment objective and policies as stated in the Strategic
Allocation Funds’ Prospectus and Statement of Additional Information and with
such written guidelines as ACIM may from time to time provide to Subadvisor;
(iii) place purchase and sale orders on behalf of the Strategic Allocation
Funds; and (iv) maintain books and records with respect to the securities
transactions of the Strategic Allocation 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 Strategic Allocation
Funds’ Foreign Portion and conduct a continual program of investment, evaluation
and, if appropriate, sale and reinvestment of the Foreign Portion of the
Strategic Allocation Funds’ assets. In addition, Subadvisor will
furnish the Corporation or ACIM whatever information, including statistical
data, the Corporation or ACIM may reasonably request with respect to the
instruments that the Strategic Allocation Funds 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 ACIM 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 Strategic Allocation 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 Strategic Allocation Funds and its other
clients. In assessing the best net price and execution available for
any Strategic Allocation Funds transaction, 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
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may, at
its discretion, execute transactions with brokers and dealers who provide the
Strategic Allocation 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 Strategic Allocation Funds
with brokers and/or dealers subject to the supervision of ACIM and the Board of
Directors of the Corporation and in accordance with the limitations set forth in
the registration statement for the Strategic Allocation 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 the Strategic Allocation Funds 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 Strategic Allocation Funds.
4. INFORMATION
PROVIDED TO CORPORATION.
(a) Subadvisor
will keep the Corporation and ACIM informed of developments materially affecting
the Foreign Portion of the Strategic Allocation Funds and will take initiative
to furnish the Corporation and ACIM on at least quarterly basis with whatever
information Subadvisor and ACIM 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 ACIM with such investment records, ledgers,
accounting and statistical data, and other information as the Corporation and
ACIM 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 ACIM may reasonably request for the management of their
affairs. Subadvisor understands that the Strategic Allocation Funds
and ACIM will rely on such information in the preparation of the Corporation’s
registration statement, the Strategic Allocation Funds’ 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 the
Strategic Allocation Funds’ performance and such other matters as the Board of
Directors, Subadvisor and ACIM 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
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(e) In
compliance with the requirements of the Investment Company Act, Subadvisor
hereby agrees that all records that it maintains for the Strategic Allocation
Funds are the property of the Corporation and further agrees to surrender to the
Corporation promptly upon the Corporation’s
request any of such records. In addition, Subadvisor agrees to
cooperate with the Corporation and ACIM 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) ACGIM will be responsible for
voting all of the Strategic Allocation Funds’ 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 Strategic Allocation Funds, 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 Strategic Allocation Funds,
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. The Strategic
Allocation Funds 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 Strategic Allocation Funds 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 Strategic Allocation
Funds. All confidential information provided by a party
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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 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) ACIM
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 ACIM of its respective duties hereunder or
reckless disregard by the Corporation or ACIM of its respective duties
hereunder. ACIM will reimburse any legal or other expenses reasonably
incurred by the Indemnified Parties in connection with investigating or
defending any such Losses. ACIM 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. ACIM shall not be liable for
special, consequential or incidental damages.
(c) Subadvisor
agrees to indemnify and hold harmless ACIM and the Corporation, and their
respective officers, directors, employees, agents, affiliates and each person,
if any, who controls ACIM 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
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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 ACIM 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 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 (the “Applicable
Fee”) as set
forth on Schedule
A.
(b) On
the first business day of each month, ACIM 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 the Strategic Allocation Funds
by the Foreign Portion of the aggregate average daily closing value of the net
assets of all classes of the Strategic Allocation Funds 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, ACIM 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.
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(d) Subadvisor
shall have no right to obtain compensation directly from the Strategic
Allocation Funds or the Corporation 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, 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.
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 Strategic Allocation Fund until the earlier of (i) 150 days
from the Effective Date, or (ii) the date as of which the shareholders of such
Strategic Allocation Fund approve a new subadvisory agreement.
12. REPRESENTATIONS
OF ACIM, SUBADVISOR AND CORPORATION.
(a) ACIM
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. ACIM 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 ACIM represent and warrant that (i) the appointment of
Subadvisor has been duly authorized; and (ii) each of them has full power and
authority to
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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
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 ACIM in any way, or otherwise be deemed to be an
agent of the Corporation or ACIM.
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.
|
“Corporation”
|
“ACIM”
|
|
AMERICAN
CENTURY STRATEGIC ASSET ALLOCATIONS, INC.
|
AMERICAN
CENTURY INVESTMENT MANAGEMENT, INC.
|
| By: /s/ Xxxxxxx X. Xxxxxxxxxxx | By: /s/ Xxxxx X. Xxxxxxxxxx |
|
Xxxxxxx X.
Xxxxxxxxxxx
|
Xxxxx X.
Xxxxxxxxxx
|
|
Senior Vice
President
|
Vice
President
|
|
“Subadvisor”
|
|
|
AMERICAN
CENTURY GLOBAL INVESTMENT MANAGEMENT, INC.
|
|
| By: /s/ Xxxx X. Xxxxx | |
|
Xxxx X.
Xxxxx
|
|
|
Vice
President
|
9
Schedule
A
(Investment
Subadvisory Agreement – ACSAA)
Management
of Foreign Portion of Strategic Allocation Funds
|
Name of Series
|
Applicable Fee
|
|
Strategic
Allocation: Conservative
|
First
$100 MM 0.90%
|
|
$100
– 250 MM 0.80%
|
|
|
$250
MM – 500 MM 0.75%
|
|
|
>
$500 MM 0.70%
|
|
|
Strategic
Allocation: Moderate
|
First
$100 MM 0.90%
|
|
$100
– 250 MM 0.80%
|
|
|
$250
MM – 500 MM 0.75%
|
|
|
>
$500 MM 0.70%
|
|
|
Strategic
Allocation: Aggressive
|
First
$100 MM 0.90%
|
|
$100
– 250 MM 0.80%
|
|
|
$250
MM – 500 MM 0.75%
|
|
|
>
$500 MM 0.70%
|
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