INVESTMENT SUBADVISORY AGREEMENT
THIS INVESTMENT SUBADVISORY AGREEMENT ("Agreement") is made effective as 12:04 a.m. eastern standard
time of the 1st day of January, 2005, 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 that certain Management Agreement between the
Corporation and ACIM dated September 30, 2004 (the "Management Agreement"); and
WHEREAS, ACIM, as part of a corporate restructuring (the "Restructuring"), formed Subadvisor as its
wholly-owned subsidiary on January 1, 2005; and
WHEREAS, the investment management personnel who managed that portion of the assets the Strategic
Allocation Funds that will be invested in foreign equity securities (the "Foreign Portion") prior to the
Restructuring will become employees of Subadvisor on the effective date of the Restructuring and will continue to
provide those advisory services immediately to the Strategic Allocation Funds after the Restructuring; and
WHEREAS, the Corporation and ACIM now desire to engage Subadvisor as a subadvisor for 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 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 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 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 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
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.
(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 as of the date first written above
and shall continue until January 1, 2006 and thereafter so long as such continuance is specifically approved at
least annually by (i) the Board of Directors of the Corporation or (ii) a vote of a majority of the Fund's
outstanding voting securities, provided that in either event the continuance is also approved by a majority of
the Board of Directors who are not interested persons (as defined in the Investment Company Act) of any party to
this Agreement, by a vote cast at a meeting called for the purpose of voting on such approval. This Agreement is
terminable without penalty on 60 days' written notice by (i) the Board of Directors of the Corporation, (ii)-by
vote of holders of a majority of the Strategic Allocation Funds' shares, (iii) by ACIM, or (iv)-by Subadvisor,
and will terminate automatically upon any termination of the investment management agreement between the
Corporation and ACIM. This Agreement will terminate automatically in the event of its assignment. Subadvisor
agrees to notify the Corporation of any circumstances that might result in this Agreement being deemed to be
assigned.
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 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.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their officers
designated below on the day and year first written above.
"Corporation" "ACIM"
AMERICAN CENTURY STRATEGIC AMERICAN CENTURY
ASSET ALLOCATIONS, INC. INVESTMENT MANAGEMENT, INC.
By: ________________________________ By: ________________________________
Name: Xxxxxxxx X. Xxxxxx Name: Xxx X. Xxxxxx
Title: Senior Vice President Title: Vice President
"Subadvisor"
AMERICAN CENTURY GLOBAL
INVESTMENT MANAGEMENT, INC.
By: ________________________________
Name: Xxx X. Xxxxxx
Title: Vice President
Schedule A
(Investment Subadvisory Agreement - ACSAA,
dated January 1, 2005)
Management of Foreign Portion of Strategic Allocation Funds
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Name of Series Applicable Fee
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Strategic Allocation: Conservative First $100 MM ...................0.90%
$100 - 250 MM ..................0.80%
$250 MM - 500 MM.................0.75%
> $500 MM .......................0.70%
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Strategic Allocation: Moderate First $100 MM ...................0.90%
$100 - 250 MM ..................0.80%
$250 MM - 500 MM.................0.75%
> $500 MM .......................0.70%
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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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