SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(A) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant __X__
Filed by a Party other than the Registrant _____
Check the appropriate box:
__X__ Preliminary Proxy Statement
_____ Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e)(2)
_____ Definitive Proxy Statement
_____ Definitive Additional materials
_____ Soliciting Material Pursuant to ss.240.14a-l l(c) or ss.240.14a-12
- --------------------------------------------------------------------------------
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
__X__ No fee required.
_____ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
_____ Fee paid previously with preliminary materials.
<PAGE>
[american century logo]
American
Century(sm)
Proxy
Statement
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.
MARCH 20, 1998
Important Voting Information Inside!
<PAGE>
TABLE OF CONTENTS
Letter from the President .....................................................
Proxy Statement Summary .......................................................
Notice of Annual Meeting of Shareholders ......................................
Detailed Discussion of Proxy Issues ...........................................
Share Ownership ...............................................................
Proposal 1: Approval of New Subadvisory Agreement
with RREEF America, L.L.C...................................
Proposal 2: Election of Directors .............................................
Proposal 3: Ratification of Independent Auditors ..............................
Other Matters .................................................................
Appendix I: Proposed New Subadvisory Agreement ................................
<PAGE>
LETTER FROM THE PRESIDENT
American Century Investment Management, Inc,
4500 Main Street
Kansas City, Missouri 64111
March 20, 1998
Dear American Century Shareholder,
I am writing to inform you of the upcoming special meeting of the shareholders
of the American Century Real Estate Fund. At this meeting, you are being asked
to vote on important proposals affecting your fund. The Board of Directors of
your fund unanimously believes that these proposals are in the fund's and your
best interest.
I'm sure that you, like most people, lead a busy life and are tempted to put
this proxy aside for another day. Please don't. When shareholders do not return
their proxies, additional expenses are incurred to pay for follow-up mailings
and telephone calls. Please take a few minutes to review this proxy statement
and sign and return the proxy card today.
The Board of Directors of your fund has unanimously approved these proposals and
recommends a vote "FOR" each proposal. If you have any questions regarding the
issues to be voted on or need assistance in completing your proxy card, please
contact us at 1-800-345-2021.
Thank you for your time in considering these important proposals. Thank you for
investing with American Century and for your continuing support.
Sincerely,
Robert C. Puff Jr.
President
<PAGE>
PROXY STATEMENT SUMMARY
The following Q&A is a brief summary of the proposals to be considered
at the special meeting. The information below is qualified in its entirety by
the more detailed information contained elsewhere in this proxy statement.
Accordingly, please read all the enclosed proxy materials before voting.
When will the Special Meeting be held? Who is eligible to vote?
The meeting will be held on Wednesday, May 20, 1998, at 10 a.m. Central
time at the Company's offices at 4500 Main Street, Kansas City, Missouri. Please
note that this will be a business meeting only. There will be no presentations
about the Fund. The record date for the meeting is the close of business on
March 13, 1998. Only shareholders who own shares at that time are entitled to
vote at the meeting.
Why is the Fund having a Special Meeting?
Because there has been a change in control of the Subadvisor of the
Fund, as described below, it is necessary to have a meeting of shareholders to
approve a new subadvisory agreement. This affects only one of the funds issued
by the Company, and therefore the Board of Directors decided to call a special
meeting of the shareholders of the affected fund only, rather than an annual
meeting of the shareholders of all funds issued by the Company. Since a meeting
is necessary, your Board of Directors determined to give you the opportunity to
elect directors and approve the selection of auditors, as well. Therefore, your
Board of Directors is recommending that shareholders consider the following
proposals:
Proposal
- --------------------------------------------------------------------------------
1. To approve a New Subadvisory Agreement with RREEF America, L.L.C.;
2. To elect a Board of Directors of nine members; and
3. To ratify the selection of Deloitte & Touche LLP as independent auditors.
How do the Directors recommend that I vote on these proposals?
The Directors unanimously recommend that you vote "FOR" each proposal.
What changes are being proposed to the Subadvisory Agreement?
The proposed New Subadvisory Agreement is only slightly different from
the Old Subadvisory Agreement. The changes relate to the acquisition of RREEF
America, L.L.C., and certain affiliates including RREEF Real Estate Securities
Advisers, L.P., the former Subadvisor, by RoProperty Services, B.V., a Dutch
investment management company. The proposed New Subadvisory Agreement does not
change the services to be provided to, or the fee payable by, the Fund.
A full discussion of the proposal to approve the Subadvisory Agreement
begins on page __. Who are the nominees for Director? Have all of them been
elected before?
The Nominating Committee of your Board of Directors has proposed that
shareholders elect nine members to the Board of Directors. All but Dr. Hall have
been elected before. The nominees are:
Thomas A. Brown Lloyd T. Silver, Jr.
Robert W. Doering, M.D. James E. Stowers, Jr.
Andrea C. Hall, Ph.D. James E. Stowers III
D.D. (Del) Hock M. Jeannine Strandjord
Donald H. Pratt
A full discussion of the proposal to elect Directors begins on page __.
What is the "Ratification" of the independent auditors?
The Investment Company Act requires your Board of Directors to select
independent auditors for the Funds and also requires them to submit their
selection to the shareholders for approval (technically called a "ratification")
in any year that an annual shareholders meeting is being held. Although this is
a special meeting, your Board of Directors decided to give you the opportunity
to ratify their selection of auditors at this meeting. Your Board of Directors,
in part to provide uniform auditors for the Funds, selected Deloitte & Touche
LLP in late 1996.
A full discussion of the proposal to ratify the selection of Deloitte &
Touche begins on page ___.
When will the Proposals take effect if they are approved?
If approved, the proposed New Subadvisory Agreement will be effective
immediately and the Subadvisor will begin to receive the fees contemplated
thereby. In accordance with an exemptive order granted by the Securities and
Exchange Commission, RREEF America, L.L.C. is currently providing subadvisory
services to the Fund pursuant to the proposed New Subadvisory Agreement, but the
compensation for such services it would usually receive is being held in escrow
pending shareholder vote on the new agreement. The other proposals also will be
effective immediately upon approval.
Who is asking for my vote?
Your Board of Directors is asking you to sign and return the enclosed
proxy so your votes can be cast at the special meeting. In the unlikely event
the meeting is adjourned, these proxies would also be voted at the reconvened
meeting.
How do I vote my shares?
We've made it easy for you. You can vote by mail or by fax. To vote by
mail, sign and send us the enclosed proxy voting card in the envelope provided.
To vote by fax, sign the proxy voting card and fax both sides of the card to
1-888-PROXY-FAX (1-888-776-9932). Or, you can vote in person at the special
meeting on May 20, 1998.
If I send my proxy in now as requested, can I change my vote later?
A proxy can be revoked at any time by writing to us, by sending us
another proxy, or by attending the meeting and voting in person. Even if you
plan to attend the meeting and vote in person, we ask that you return the
enclosed proxy. Doing so will help us ensure that an adequate number of shares
are present at the meeting.
If you have any questions regarding the proxy statement or need
assistance in voting your shares, please call us at 1-800-345-2021.
<PAGE>
NOTICE OF SPECIAL MEETING
OF SHAREHOLDERS
To be held on May 20, 1998
American Century Investments
4500 Main Street
P. O. Box 419200
Kansas City, Missouri 64141-6200
1-800-345-2021
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of the
American Century Real Estate Fund (the "Fund"), a series of American Century
Capital Portfolios, Inc., a Maryland corporation (the "Company"), will be held
at the Company's offices at 4500 Main Street, Kansas City, Missouri, on
Wednesday, May 20, 1998, at 10 a.m. Central time, for the following purposes:
1. To approve a New Subadvisory Agreement with RREEF America, L.L.C.;
2. To elect a Board of Directors of nine members to hold office
until their successors are duly elected and qualified;
3. To ratify the selection of Deloitte & Touche LLP as the
independent auditors of the Company; and
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
This is a Notice and Proxy Statement for the Fund. Please complete,
sign and return the enclosed proxy.
Shareholders of record as of the close of business on March 13, 1998,
are the only persons entitled to notice of and to vote at the meeting and any
adjournments thereof. Your attention is directed to the attached Proxy
Statement.
We urge you to mark, sign, date and mail the enclosed proxy in the
postage-paid envelope provided so you will be represented at the meeting.
The Board of Directors of the Company unanimously recommends that you
cast your vote "FOR" each of the proposals.
March 20, 1998 BY ORDER OF THE BOARD OF DIRECTORS
Patrick A. Looby
Vice President
<PAGE>
DETAILED DISCUSSION
OF PROXY ISSUES
March 20, 1998
The enclosed proxy is solicited by the Board of Directors of American
Century Capital Portfolios, Inc. in connection with a special meeting of
shareholders of the American Century Real Estate Fund to be held on Wednesday,
May 20, 1998, at the Company's offices at 4500 Main Street, Kansas City,
Missouri, at 10 a.m. Central time, and any adjournments thereof. In this proxy
statement, the investment company will be referred to as the "Company." The
series of capital stock of the Company for which the special meeting is called,
the American Century Real Estate Fund, shall be referred to as the "Fund."
The costs of soliciting proxies, including the cost of preparing and
mailing the notice of meeting and this proxy statement, will be paid by RREEF
America, L.L.C.(referred to in this Proxy Statement as "New RREEF"), the new
investment subadvisor of the Fund. This notice of meeting and proxy statement
are first being mailed to shareholders around March 20, 1998. Supplemental
solicitations for the meeting may be made by New RREEF or by American Century
Investment Management, Inc. (referred to in the Proxy Statement as "ACIM"), the
investment manager of the Fund.
Voting of proxy. If you provide a proxy, you may revoke it before the
meeting by mailing written notice of revocation to the Secretary of the Company
before the meeting, or personally delivering your revocation to the Secretary
any time prior to the taking of the vote at the meeting. Unless revoked, Proxies
that have been returned by shareholders without instructions will be voted in
favor of all proposals. In instances where choices are specified on the proxy,
those proxies will be voted as the shareholder has instructed.
The Fund is divided into three classes. All classes of shares of the
Fund have identical voting rights, except that where a proposal affects only one
class, only that class gets to vote on it. Of the Proposals to be considered at
the meeting, only Proposal 1, the approval of the New Subadvisory Agreement,
will be voted upon separately by class. The number of outstanding votes of each
class of the Fund, as of the close of business on February 27, 1998, is:
Investor class, 131,549,411.39 votes and Institutional class, 14,379,180.19
votes. The Advisor class had no assets as of February 27, 1998.
Only those shareholders owning shares as of the close of business on
March 13, 1998, may vote at the meeting or any adjournments thereof. Each share
of the Fund gets one vote for each dollar of the Fund's net asset value the
share represents. If we do not receive enough "for" votes by May 20, 1998, to
approve the proposals being considered at the meeting, the named proxies may
propose adjourning the meeting to allow the gathering of more proxy votes. An
adjournment requires a vote "for" by a majority of the votes present at the
meeting (whether in person or by proxy). The named proxies will vote the "for"
votes they have received in favor of the adjournment, and any "against" or
"abstain" votes will count as votes against adjournment.
Abstentions and broker non-votes (i.e., proxies sent in by brokers and
other nominees that cannot be voted on a proposal because instructions have not
been received from the beneficial owners) will be counted for purposes of
determining whether or not a quorum is present for purposes of the meeting.
Abstentions and broker non-votes will, however, be considered to be votes
against the proposals.
Investment Manager. ACIM is the Fund's investment manager. American
Century Services Corporation ("ACSC"), an affiliate of ACIM, provides the Fund
with transfer agency services. ACIM and ACSC are wholly owned subsidiaries of
American Century Companies, Inc. ("ACC"). The mailing address of ACC, ACIM, ACSC
and the Fund is P.O. Box 419200, Kansas City, Missouri 64141-6200.
Investment Subadvisor. New RREEF is the Fund's subadvisor. The mailing
address of New RREEF is 875 N. Michigan Avenue, 41st Floor, Chicago, Illinois
60611.
Annual Report. The Fund will furnish, without charge, a copy of its
most recent annual report and semiannual report upon request. To request these
materials, please call American Century at 1-800-345-2021.
<PAGE>
SHARE OWNERSHIP
The following table sets forth, as of the close of business on February 27,
1998, the share ownership of those shareholders known by ACIM to own more than
5% of the Fund's outstanding shares.
<TABLE>
Percent of
Title of Outstanding
Class Name of Record Owner Shares Owned Shares
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investor
Class Merrill Lynch Trust Company of
California
(FBO RREEF Management Company)
San Francisco, CA 460,570 5.5%
Charles Schwab & Co. Inc.
San Francisco, CA 793,895 9.5%
Institutional
Class Gregory L. Melchor
Palo Alto, CA 84,946 9.3%
Lafayette College
Easton, PA 371,575 40.7%
North Carolina Engineering
Foundation, Inc.
Raleigh, NC 86,173 9.4%
Arntz Builders General Partnership
Novato, CA 140,177 15.4%
Eugene S. Arntz Foundation
Novato, CA 46,633 5.1%
Colorado Cement Masons
Pension Trust Fund
Denver, CO 79,063 8.7%
Trustees of Arntz Builders
Profit Sharing Trust
Novato, CA 57,261 6.3%
</TABLE>
PROPOSAL 1:
APPROVAL OF
SUBADVISORY AGREEMENT WITH
RREEF AMERICA, L.L.C.
RREEF Real Estate Securities Advisers, L.P. ("RESA") served as the
investment subadvisor to the Fund from June 13, 1997 to January 27, 1998
pursuant to an investment subadvisory agreement between ACIM and RESA (the "Old
Subadvisory Agreement"). RESA was a California limited partnership.
The Old Subadvisory Agreement provided that RESA would make investment
decisions for the Fund in accordance with the Fund's investment objectives,
policies, restrictions and whatever additional written guidelines it may receive
from ACIM from time to time and that in providing those services, RESA would
supervise the Fund's investments and conduct a continual program of investment
evaluation and, if appropriate, sale and reinvestment of the Fund's assets. All
investments made by RESA were subject to approval or ratification by ACIM. For
such services, ACIM paid RESA a monthly fee on the first business day of each
month at an annual rate computed at 0.425% of the Fund's average daily net
assets.
The Old Subadvisory Agreement also provided, in accordance with the
Investment Company Act of 1940, as amended (the "Investment Company Act"), that
it would terminate automatically in the event of its assignment and may be
terminated by the Fund at any time without payment of any penalty on 60 days'
written notice by ACIM, a majority of Directors of the Fund in office at the
time, or by vote of a majority of the Fund's outstanding votes. The Old
Subadvisory Agreement was last approved by shareholders of the Fund on May 8,
1997.
On January 27, 1998, substantially all of the assets of RESA and
certain of its affiliates were acquired (the "Acquisition") by an indirect,
wholly-owned subsidiary of RoProperty Services, B.V. ("RoProperty Services"), a
Dutch investment management company. The new entity, New RREEF, adopted the name
RREEF America, L.L.C. As a result of the Acquisition, the Old Subadvisory
Agreement automatically terminated on January 27, 1998, and it became necessary
to enter into a new subadvisory agreement with New RREEF (the "New Subadvisory
Agreement"), in order to continue uninterrupted the investment management of the
Fund.
The terms of the New Subadvisory Agreement between the Fund, New RREEF
and ACIM are identical in all substantive respects to the terms of the Old
Subadvisory Agreement, except for the changes noted below. Under the New
Subadvisory Agreement, New RREEF will supervise the Fund's investments and
conduct a continual program of investment evaluation and, if appropriate, sell
and reinvest the Fund's assets, on the same terms and conditions as under the
Old Subadvisory Agreement. The monthly fee payable by ACIM to New RREEF for such
services will be at an annual rate computed at 0.425% of the Fund's average
daily net assets, the same fee paid under the Old Subadvisory Agreement. Actual
fees paid to RREEF under the Old Subadvisory Agreement for the last fiscal year
are set forth below under "Supplemental Information Regarding RREEF." Such fees
would have been the same had the New Subadvisory Agreement been in effect. The
New Subadvisory Agreement appears as Appendix I to this Proxy Statement.
The only substantive change to the Old Subadvisory Agreement is the
addition of escrow provisions to permit the escrow procedures described below
during the period from February 18, 1998 to the date of shareholder approval of
the proposed New Subadvisory Agreement, if it is obtained. In addition, language
relating to the merger between the RREEF Securities Fund with the Fund in June,
1997 was deleted as it was no longer necessary. No other changes were or will be
made to the New Subadvisory Agreement at this time.
As noted above, when RREEF was acquired by RoProperty Services, the Old
Subadvisory Agreement terminated in accordance with its terms and the Investment
Company Act. ACIM and New RREEF entered into the New Subadvisory Agreement on
the same day so that the Fund's investment management program would continue
uninterrupted. The Investment Company Act, however, generally requires that (i)
a majority of the noninterested members of the Board of Directors of the Fund
approve the New Subadvisory Agreement and (ii) shareholders approve the New
Subadvisory Agreement, in each case prior to New RREEF receiving any fees under
the New Subadvisory Agreement other than reimbursement of its expenses.
In anticipation of the Acquisition and in accordance with the
Investment Company Act, the Board of Directors of the Fund met to consider the
New Subadvisory Agreement and to evaluate whether the terms of the New
Subadvisory Agreement were in the best interests of the Fund and its
shareholders. At the meeting, RREEF represented that New RREEF would continue to
serve as investment subadvisor after the closing of the Acquisition and prior to
obtaining shareholder approval in a manner consistent with its fiduciary duty to
provide investment subadvisory services to the Fund. In addition, RREEF
represented that there would be no material changes in personnel providing
material services to the Fund pursuant to the New Subadvisory Agreement and no
adverse change in the resources available to New RREEF in connection with
providing subadvisory services to the Fund. On January 23, 1998, the Board of
Directors, including the noninterested Directors, unanimously approved the
proposed New Subadvisory Agreement.
The Investment Company Act generally prohibits New RREEF from receiving
its subadvisory fee under the New Subadvisory Agreement prior to shareholders
approving the New Subadvisory Agreement. In order to permit New RREEF to receive
such subadvisory fees, the Fund, RREEF, New RREEF and ACIM sought and obtained
from the Securities and Exchange Commission on February 18, 1998 an exemption
from the Investment Company Act (the "Exemptive Order"). Pursuant to the
Exemptive Order, any investment subadvisory fees that New RREEF would otherwise
have been paid between the date of the Exemptive Order and the date on which
shareholders vote to approve or disapprove the New Subadvisory Agreement will be
placed in an escrow account, and will be paid to New RREEF only if shareholders
approve the proposed New Subadvisory Agreement. If shareholders do not approve
the New Subadvisory Agreement, New RREEF will receive only reimbursement of its
out of pocket expenses with respect to the investment subadvisory services it
provided to the Fund and the balance of any money held in escrow will be
remitted to the Fund. If the New Subadvisory Agreement is approved by the Fund's
shareholders, it will become effective immediately, and will remain in effect,
unless earlier terminated, until May 8, 1999, and will continue from
year-to-year thereafter, subject to approval annually by the Board of Directors
of the Fund, including a majority of the noninterested Directors, or by
affirmative vote of a majority of the outstanding votes of the Fund. In order to
comply with the Investment Company Act, between January 27, 1998 and the date of
the Exemptive Order, New RREEF received no fees for acting as subadvisor, other
than reimbursement for its actual out of pocket expenses.
Approval of the New Subadvisory Agreement requires the affirmative vote
of the holders of a majority of the outstanding votes of each class of the Fund.
For this purpose, the term "majority of the outstanding votes" means the vote of
(i) 67% or more of the votes of the Fund present at the meeting, so long as the
holders of more than 50% of the Fund's outstanding votes are present or
represented by proxy; or (ii) more than 50% of the outstanding votes of the
Fund, whichever is less.
THE DIRECTORS OF THE FUND UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE
"FOR" THE APPROVAL OF THE NEW SUBADVISORY AGREEMENT.
SUPPLEMENTAL INFORMATION REGARDING NEW RREEF
RESA served as the Fund's investment subadvisor since the Fund's
inception on June 13, 1997, the date the Fund merged with the RREEF Real Estate
Securities Fund. RESA served as the investment advisor to the RREEF Real Estate
Securities Fund from September 21, 1995, its inception date, until its merger
with the Fund. New RREEF is an indirect subsidiary of RoProperty Services, B.V.
a Dutch investment management company with a global presence. In addition to the
Fund, New RREEF provides investment management services for other private
institutional accounts.
For the period ended December 31, 1997, ACIM paid $157,974 to RREEF for
its services under the Old Subadvisory Agreement.
The directors and principal executive officers of New RREEF and their
principal occupations are listed below.
Name Title or Status Principal Occupation
- ---- --------------- --------------------
King, Jr., Donald A.(1) Member of Management Member of Management
Board, Executive Board, Executive Officer,
Officer RREEF America, L.L.C.;
Member of Management
Board, Sr. Vice
President, RREEF
Management, L.L.C.
King, James D. Member of Management Member of Management
Board, Executive Board, Executive Officer,
Officer RREEF America, L.L.C.;
Member of Management
Board, Sr. Vice
President, RREEF
Management, L.L.C.
Greig, D. Wylie Member of Management Member of Management
Board, Executive Board, Executive Officer,
Officer RREEF America, L.L.C.;
Member of Management
Board, Sr. Vice
President, RREEF
Management, L.L.C.
Steppe, Stephen M. Member of Management Member of Management
Board, Executive Board, Executive Officer,
Officer RREEF America, L.L.C.;
Member of Management
Board, Sr. Vice
President, RREEF
Management, L.L.C.
Callan, Patrick J. Member of Management Member of Management
Board, Executive Board, Executive Officer,
Officer RREEF America, L.L.C.;
Member of Management
Board, Sr. Vice
President, RREEF
Management, L.L.C.
Egan, Gerald E. Member of Management Member of Management
Board, Executive Board, Executive Officer,
Officer RREEF America, L.L.C.;
Member of Management
Board, Sr. Vice
President, RREEF
Management, L.L.C.
de Kreij, Jan A. Member of Management Managing Director and
Rodamco N.V., Board, Executive Vice Chairman Rodamco
Coolsingel 120,3000 Officer N.V.; Managing Director,
AZ Rotterdam, The RoProperty Services B.V.;
Netherlands Vice President of
Executive Committee,
Robeco Group
Bartram, Chris J. Member of Management Managing Director,
Haslemere Estates Board, Executive Haslemere Estate
Management Limited Officer Management Limited
46 Berkeley Square
London W1X 6LA
- ----------
(1) Unless otherwise noted, the address for all Management Board Members is 875
N. Michigan Avenue, 41st Floor, Chicago IL 60611.
PROPOSAL 2:
ELECTION OF DIRECTORS
Nominees
At the meeting, the shareholders of the Fund will be asked to elect nine members
of the Company's Board of Directors. It is intended that the enclosed Proxy will
be voted for the election of the nine persons named below as Directors, unless
such authority has been withheld in the Proxy. The term of office of each person
elected will be for one year or until his or her successor is duly elected and
shall qualify. The Company does not intend to hold regular annual meetings of
shareholders. Information regarding each nominee is set forth following his or
her name below.
Name Age Principal Occupation
(Year Elected Director)
- ------------------------------------------------------------------------------
Thomas A. Brown 57 Director of Plains States
(1993) Development, Applied Industrial
Technologies, Inc.
Robert W. Doering, M.D. 64 Retired, formerly General
(1993) Surgeon
Andrea C. Hall, Ph.D. 53 Senior Vice President,
(1997) Midwest Research Institute
D.D. (Del) Hock 62 Retired, formerly Chairman, Public
(1996) Service Company of Colorado;
Director, Serv-Tech, Inc.;
Director, Hathaway Corporation;
Director, J.D. Edwards & Company
Donald H. Pratt 59 President and Director, Butler
(1995) Manufacturing Company
Lloyd T. Silver, Jr. 69 President, LSC, Inc.,
(1993) Manufacturers Representative
James E. Stowers, Jr.* 73 Chairman of the Board and
(1993) Director, ACC, ACSC and ACIM
James E. Stowers III* 38 Chief Executive Officer and
(1993) Director, ACC; President, Chief
Executive Officer and Director
ACSC and ACIM
M. Jeannine Strandjord 51 Senior Vice President and
(1994) Treasurer, Sprint Corporation;
Director, DST Systems, Inc.
* Denotes directors who are "interested persons" (as defined by the Investment
Company Act) of ACIM. Messrs. Stowers, Jr. And Stowers III are considered
interested persons since they serve as officers of, and have ownership interests
in, ACC and its affiliated entities. Messrs. Stowers, Jr. and Stowers III also
serve in similar capacities for other funds managed by ACIM and its affiliates.
Mr. Stowers, Jr. controls ACC by virtue of his ownership of a majority of its
voting stock. Mr. Stowers, Jr. is the father of Mr. Stowers III.
The directors and officers as a group own less than 1% of the
outstanding shares of the Fund.
Each of the nominees was unanimously nominated by the Board of
Directors and each has agreed to serve as a Director. If any unforeseen event
prevents one or more of the nominees from serving as a Director, your votes will
be cast (unless you have elected to withhold authority as to the election of
Directors) for the election of such person or persons as the Board of Directors
shall nominate. Unless otherwise instructed, the proxies will vote for the
re-election of each Director.
COMMITTEES
The Board of Directors of the Company has established four standing
committees: an Executive Committee, an Audit Committee, a Compliance Committee
and a Nominating Committee.
Messrs. Stowers, Jr., Stowers III and Pratt serve on the Executive
Committee of the Board of Directors. The committee performs the functions of the
Board of Directors between meetings of the Board, subject to the limitations on
its power set out in the Maryland Corporation Law, and except for matters
required by the Investment Company Act to be acted upon by the whole Board.
Ms. Strandjord (chair), Dr. Doering and Mr. Hock serve on the Audit
Committee. The functions of the Audit Committee include recommending the
engagement of the Fund's independent auditors, reviewing the arrangements for
and scope of the annual audit, reviewing comments made by the independent
auditors with respect to internal controls and the considerations given or the
corrective action taken by management and reviewing nonaudit services provided
by the independent auditors.
Messrs. Brown (chair), Pratt and Silver and Dr. Hall serve on the
Compliance Committee. The functions of the Compliance Committee include
reviewing the results of the Fund's compliance testing program, reviewing
quarterly reports from ACIM to the Board regarding various compliance matters
and monitoring compliance with the Fund's Code of Ethics.
The Nominating Committee has as its principal role the consideration
and recommendation of individuals for nomination as directors. This committee
also reviews and makes recommendations to the Board with respect to the
composition of Board committees and other Board-related matters, including its
organization, size, composition, responsibilities, functions and compensation.
The members of the Nominating Committee are Messrs. Pratt (chair), Stowers III
and Hock.
For the twelve months ended December 31, 1997, the Board of Directors
of the Company met 6 times. During the same period, the Audit Committee met 4
times, the Compliance Committee met 4 times, and the Executive Committee met
twice. The Nominating Committee did not meet during the period. No director
attended fewer than 75% of the total number of Board meetings or meetings of
committees on which such Director served.
EXECUTIVE OFFICERS
In addition to Messrs. Stowers, Jr. and Stowers III, the following
individuals, except as noted, are executive officers of the Fund:
Richard W. Ingram, 42, President. Mr. Ingram became President in 1998.
Mr. Ingram is also Executive Vice President of Funds Distributor, Inc., the
Fund's distributor ("FDI".)
Christopher J. Kelley, 33, Vice President. Mr. Kelley became Vice
President in 1998. Mr. Kelley is also Vice President and Associate General
Counsel of FDI.
Mary A. Nelson, 33, Vice President. Ms. Nelson became Vice President in
1998. Ms. Nelson is also Vice President of FDI.
Maryanne L. Roepke CPA, 41, Vice President, Treasurer, and Principal
Accounting Officer. Ms. Roepke assumed these positions in 1993. Ms. Roepke is
also Vice President of ACSC.
Patrick A. Looby, 38, Vice President, Secretary, and Associate General
Counsel. Mr. Looby assumed these positions in 1993. Mr. Looby is also Vice
President and Associate General Counsel of ACSC.
Merele A. May, 34, Controller. Mr. May became Controller in 1993.
COMPENSATION
The Directors of the Company serve as Directors for 32 of the 66 funds
advised by ACIM and its affiliates. Each non-interested Director, i.e., all
directors other than Mr. Stowers, Jr. and Mr. Stowers III, receives for service
as a member of the Board of all 32 funds an annual director's fee of $44,000,
and an additional fee of $1,000 per regular Board meeting attended and $500 per
special Board meeting and committee meeting attended. In addition, these
directors that also serve as chairman of a committee of the Board of Directors
receive an additional $2,000 for acting as chairman. These fees and expenses are
divided among the 32 funds based upon their relative net assets. Under the terms
of the management agreement with ACIM, the Funds are responsible for paying such
fees and expenses.
The following table sets forth the total compensation received by each
non-interested Director from the Company for its most recent fiscal year, as
well as the total compensation received by each Director from the American
Century family of funds as a whole for the twelve months ended December 31,
1997. Messrs. Stowers, Jr. and Stowers III receive no compensation from the
Funds for serving as a Director. The salaries of Messrs. Stowers, Jr. and
Stowers III are paid by ACIM. No officer of the Funds received compensation from
the Funds during its most recent fiscal year. No director receives pension or
retirement benefits from the Funds.
<TABLE>
Linsley L.
Brown Doering Hall(1) Hock Pratt Silver Strandjord Lundgaard
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$1,416 1,168 208 1,168 1,416 1,156 1,152 999
Total Compensation
From all American
Century Funds $60,000 49,500 8,833 49,500 60,000 49,000 48,833 42,333
(1) Dr. Hall replaced Mr. Lundgaard as a director effective November 1, 1997.
</TABLE>
* Includes amounts deferred at the election of the Directors under the American
Century Mutual Funds Deferred Compensation Plan for Non-Interested Directors.
The total amount of deferred compensation included in the preceding table is as
follows: Mr. Brown, $6,900; Mr. Hock, $42,333; Mr. Lundgaard, $18,167; Mr.
Pratt, $15,180; Mr. Silver, $42,333; and Ms. Strandjord, $36,590.
DEFERRED COMPENSATION
In September 1997, the Corporation adopted the Amended and Restated
American Century Mutual Funds Deferred Compensation Plan for Non-Interested
Directors (the "Plan"). Under the Plan, the non-interested person Directors may
defer receipt of all or any part of the fees to be paid to them for serving as
Directors of American Century Mutual Funds, Inc.
Under the Plan, all deferred fees are credited to an account
established in the name of the participating Director. The amounts credited to
the account then increase or decrease, as the case may be, in accordance with
the performance of one or more of the funds in the American Century family of
fund that are selected by the participating Director. The account balance
continues to fluctuate in accordance with the performance of the selected fund
or funds until final payment of all amounts credited to the account. Directors
are allowed to change their designation of Funds from time to time.
No deferred fees are payable until such time as a participating
Director resigns, retires or otherwise ceases to be a member of the Board of
Directors. Directors may receive deferred fee account balances in either a lump
sum payment or in payments made over a period not to exceed ten years. Upon the
death of a Director, all remaining deferred fee account balances are paid to the
Director's beneficiary or, if none, to the Director's estate.
The Plan is an unfunded plan and, accordingly, the Company has no
obligation to segregate assets to secure or fund the deferred fees. The rights
of Directors to receive their deferred fee account balances are the same as
rights of a general unsecured creditor of the Company. The Plan may be
terminated at any time by the administrative committee of the Plan. If
terminated, all deferred fee account balances will be paid in a lump sum.
VOTING INFORMATION
Each nominee will be re-elected to the Board of Directors of the
Company if he or she receives the approval of a plurality of the votes of that
Company represented at the meeting, provided at least a quorum (50% of the
outstanding votes), is represented in person or by proxy. By completing the
proxy, you give the named proxies the right to cast your votes. If you elect to
withhold authority for any nominees, you may do so by striking a line through
the nominee name on the proxy, as further explained on the proxy itself.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
ALL NOMINEES.
<PAGE>
PROPOSAL 3:
RATIFICATION OF INDEPENDENT
AUDITORS
The Investment Company Act, which is the primary federal law that
regulates the Company, requires every registered investment company be audited
at least once a year by independent auditors selected by the Board of Directors
including a majority of the Directors who are not "interested persons" (as
defined in the Investment Company Act). The Investment Company Act also requires
that the selection be submitted for ratification by the shareholders at their
next meeting following the selection.
At the meeting, the shareholders of the Company will be asked to ratify
the selection of Deloitte & Touche LLP as the Company's independent auditors.
The Board of Directors chose Deloitte & Touche upon the recommendation of the
Audit Committee of the Board. The Board selected Deloitte & Touche based upon
its expertise as an auditor of investment companies, the quality of its audit
services, its commitment of experienced audit personnel to the Fund, its tax and
international experience in the mutual fund area, and its use and commitment of
technology in performing its audit functions.
Deloitte & Touche has no direct or material indirect financial interest
in the Company, ACIM, or ACC, other than receipt of fees for services to the
Company. Deloitte & Touche representatives will be present at the meeting and
will have an opportunity to make a statement to the shareholders and to respond
to questions.
The approval of a majority of the votes of the Company represented at
the meeting, provided at least a quorum is represented in person or by proxy, is
necessary to ratify the selection of the independent auditors. Unless otherwise
instructed, the proxies will vote for the ratification of the selection of
Deloitte & Touche LLP as the Company's independent auditors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
THE RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE L.L.P.
OTHER MATTERS
Other business to be brought before the meeting.
The Board of Directors knows of no other business to be brought before
the meeting. However, if any other matters are properly brought before the
meeting, it is the intention that proxies which do not contain specific
restrictions to the contrary will be voted on such matters in accordance with
the judgment of the persons named in the enclosed form of proxy.
Submission of Shareholder proposals.
The Fund does not hold annual shareholder meetings. Shareholders
wishing to submit proposals for inclusion in a proxy statement for a subsequent
shareholder meeting should send their written proposals to Patrick A. Looby,
Vice President, American Century Investments, P.O. Box 419200, Kansas City,
Missouri 64141-6200.
Notice to banks, broker-dealers, and voting trustees and their nominees.
Please advise the Fund, in care of American Century Investments, P.O.
Box 419200, Kansas City, Missouri 64141-6200, whether other persons are
beneficial owners of shares for which proxies are being solicited and, if so,
the number of copies of the proxy statement you wish to receive in order to
supply copies to the beneficial owners of the respective shares.
March 20, 1998 Patrick A. Looby
Vice President
<PAGE>
APPENDIX I
INVESTMENT SUBADVISORY AGREEMENT
THIS INVESTMENT SUBADVISORY AGREEMENT ("Agreement") is made as
of the 27th day of January, 1998, by and among AMERICAN CENTURY CAPITAL
PORTFOLIOS, INC. ("ACCP"), a Maryland corporation acting on behalf of American
Century Real Estate Fund (the "ACRE Fund"), a series of shares of ACCP, AMERICAN
CENTURY INVESTMENT MANAGEMENT, INC. ("ACIM"), a Delaware corporation, and RREEF
AMERICA L.L.C., f/k/a ROMEO AMERICA L.L.C. (the "Subadvisor"), a Delaware
limited liability company.
WITNESSETH:
WHEREAS, ACCP 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 the Subadvisor are both investment advisors
registered with the Securities and Exchange Commission under the Investment
Advisers Act of 1940, as amended; and
WHEREAS, ACCP has engaged ACIM to serve as the investment
manager for the ACRE Fund pursuant to a Management Agreement dated May 8, 1997;
and
WHEREAS, ACCP and ACIM desire to engage the Subadvisor as a
subadvisor for the ACRE Fund, and the Subadvisor desires to accept such
engagement; and
WHEREAS, the Boards of Directors of ACCP, ACIM and the
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. ACCP desires to
appoint the Subadvisor to provide certain advisory services to the ACRE Fund in
accordance with the ACRE 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 Directors of ACCP. ACCP agrees to
provide the Subadvisor copies of all amendments to the ACRE Fund's Prospectus
and Statement of Additional Information on an ongoing basis. In consideration
for the compensation set forth below, the Subadvisor 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 ACCP, and of ACIM, the Subadvisor will (i) act in conformity with
the ACRE Fund'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 ACRE Fund in accordance with the ACRE Fund's investment
objective and policies as stated in the ACRE Fund's Prospectus and Statement of
Additional Information and with such written guidelines as ACIM may from time to
time provide to the Subadvisor; (iii) place purchase and sale orders on behalf
of the ACRE Fund; (iv) maintain books and records with respect to the securities
transactions of the ACRE Fund and furnish ACCP's Board of Directors such
periodic, regular and special reports as the Board may request; and (v) treat
confidentially and as proprietary information of ACCP all records and other
information related to ACCP and its prior, present or potential shareholders.
The Subadvisor 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 ACCP, which approval shall not
be unreasonably withheld. Such records may not be withheld when the Subadvisor
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 ACCP, but in any case the Subadvisor will provide
reasonable notice to ACCP prior to disclosing any such records or information.
(b) In providing those services, the Subadvisor will
supervise the ACRE Fund's investments and conduct a continual program of
investment, evaluation and, if appropriate, sale and reinvestment of the ACRE
Fund's assets. In addition, the Subadvisor will furnish ACCP or ACIM whatever
information, including statistical data, ACCP or ACIM may reasonably request
with respect to the instruments that the ACRE Fund may hold or contemplate
purchasing.
(c) The Subadvisor will at all times comply with the
policies adopted by ACCP's Board of Directors of which it has received written
notice. If the Subadvisor shall believe that a change in any of such policies
shall be advisable, it shall recommend such change to ACIM and the Board of
Directors of ACCP. Any change to any such policies shall be approved by ACCP's
Board of Directors prior to the implementation of such change.
3. BROKERAGE.
(a) In executing transactions for the ACRE Fund and
selecting brokers or dealers, the Subadvisor 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 ACRE Fund and its shareholders. In assessing the best
net price and execution available for any ACRE Fund transaction, the 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 price
offered by two or more brokers or dealers are comparable, the Subadvisor may, at
its discretion, execute transactions with brokers and dealers who provide the
ACRE Fund with research advice and other services, but in all instances best net
price and execution shall control. The Subadvisor is authorized to place
purchase and sale orders for the ACRE Fund with brokers and/or dealers subject
to the supervision of ACIM and the Board of Directors of ACCP and in accordance
with the limitations set forth in the registration statement for the ACRE Fund
shares then in effect.
(b) On occasions when the Subadvisor deems the purchase
or sale of a security to be in the best interest of the ACRE Fund as well as one
or more of its other clients, the 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 the Subadvisor in a manner
it considers to be equitable and consistent with its fiduciary obligations to
ACCP 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.
4. INFORMATION PROVIDED TO ACCP.
(a) The Subadvisor will keep ACCP and ACIM informed of
developments materially affecting the ACRE Fund and will take initiative to
furnish ACCP and ACIM on at least quarterly basis with whatever information the
Subadvisor and ACIM believe is appropriate for this purpose. Such regular
quarterly reports shall include (i) a discussion of the ACRE Fund's performance
relative to its benchmark; (ii) an assessment of investment decisions and
analysis of the components of the ACRE Fund's performance; (iii) the decisions
it has made with respect to the ACRE 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.
(b) The Subadvisor will provide ACCP and ACIM with such
investment records, ledgers, accounting and statistical data, and other
information as ACCP 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 ACCP and ACIM may reasonably request for
the management of their affairs. At least twice annually a representative of the
Subadvisor shall attend a meeting of the Board of Directors to make a
presentation on the ACRE Fund's performance during the preceding six and twelve
months periods, as well as such other time periods as the Subadvisor and ACIM
believe is appropriate.
(c) The Subadvisor shall furnish to regulatory
authorities any information or reports in connection with such services as may
be lawfully requested. The Subadvisor shall also, at ACCP's request, certify to
ACCP's independent auditors that sales or purchases aggregated with those of
other clients of the Subadvisor, as described in Section 3 above, were equitably
allocated.
(d) In compliance with the requirements of the
Investment Company Act, the Subadvisor hereby agrees that all records that it
maintains for the ACRE Fund are the property of ACCP and further agrees to
surrender to ACCP promptly upon ACCP's request any of such records. In addition,
the Subadvisor agrees to cooperate with ACCP 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. The Subadvisor further agrees to preserve for the periods of time
prescribed by the Investment Company Act and the Investment Advisers Act the
records required to be maintained thereunder.
5. LIABILITY AND INDEMNIFICATION.
(a) The 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 the Subadvisor or an
affiliate from liability by reason of gross negligence, willful malfeasance, bad
faith in the performance of such person's duties or by reason of reckless
disregard of obligations and duties hereunder. 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 the
Subadvisor and its officers, directors, employees, agents, affiliates and each
person, if any, who controls the Subadvisor within the meaning of the Securities
Act of 1933 (collectively, the "Indemnified Parties" for purposes of this
Section 5(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 (a) a breach by
ACCP or ACIM of a material provision of this Agreement, (b) gross negligence,
willful malfeasance or bad faith in the performance by ACCP or ACIM of its
respective duties or reckless disregard by ACCP or ACIM of its respective duties
hereunder, or (c) any violation by ACCP or ACIM of any applicable law or
regulation where the Subadvisor was not contributing to or a part of the
violation. 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 or misconduct of the Subadvisor
in performing its obligations under this Agreement.
(c) The Subadvisor agrees to indemnify and hold
harmless ACIM and ACCP, and their respective officers, directors, employees,
agents, affiliates and each person, if any, who controls ACIM or ACCP within the
meaning of the Securities Act of 1933 (collectively, the "Indemnified Parties"
for purposes of this Section 5(c)) against any Losses to which the Indemnified
Parties may become subject, insofar as such Losses result from (a) a breach by
the Subadvisor of a material provision of this Agreement, (b) gross negligence,
willful malfeasance, or bad faith in performance by the Subadvisor or its
affiliates of their duties or reckless disregard by the Subadvisor or its
affiliates of their duties hereunder, or (c) any violation by the Subadvisor of
any applicable law or regulation where neither ACCP or ACIM was contributing to
or was a part of the violation. The Subadvisor will reimburse any legal or other
expenses reasonably incurred by the Indemnified Parties in connection with
investigating or defending any such Losses. The Subadvisor shall not be liable
for indemnification hereunder if such Losses are attributable to the gross
negligence or misconduct of ACIM or ACCP in performing their obligations under
this Agreement.
(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 5. 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 5 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.
6. COMPENSATION.
(a) In consideration of the services rendered pursuant
to this Agreement, ACIM will pay the Subadvisor a per annum management fee (the
"Applicable Fee"), as follows:
Name of Series Applicable Fee
- -------------- --------------
American Century Real Estate Fund 0.425%
(b) On the first business day of each month, ACIM shall
pay the Subadvisor the Applicable Fee for the previous month. The fee for the
previous month shall be calculated by multiplying the Applicable Fee for such
series by the aggregate average daily closing value of all classes of the
series' net assets 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 ACCP
shall determine to issue any additional series of shares for which it is
proposed that the Subadvisor serve as investment manager, ACCP, ACIM and the
Subadvisor shall enter into an Addendum to this Agreement setting forth the name
of the series, the Applicable Fee and such other terms and conditions as are
applicable to the management of such series of shares.
(d) The Subadvisor shall have no right to obtain
compensation directly from the ACRE Fund or ACCP 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.
(e) Notwithstanding anything else set forth herein,
ACIM shall deposit into an interest bearing escrow account maintained by an
unaffiliated financial institution the Applicable Fee earned by the Subadvisor
from and after the later of (i) the day on which the acquisition of the
Subadvisor by ROMEO U.S. Group, Inc., a Delaware corporation, is closed (the
"Closing") and (ii) the date on which relief from Section 15(a) of the
Investment Company Act of 1940 is granted (the "Order Date") (Investment Company
Act of 1940, File No. 812-10932, filed with the Securities Exchange Commission,
December 29, 1997, as amended February 3, 1998) to but not including the date on
which the shareholders of the ACRE Fund have approved this Agreement; provided,
however, that any fees (other than expenses) earned by the Subadvisor during the
time period between the Closing and the Order Date shall not be paid into the
escrow account by ACIM and shall be refunded to the ACRE Fund. As soon as
practicable after the date on which this Agreement is approved by the
shareholders of the ACRE Fund in accordance with Section 15(a) of 1940, as
amended, ACIM agrees to deliver to the escrow agent a certificate from an
officer of ACIM who is not affiliated with the Subadvisor stating that this
Agreement has been approved by the shareholders of the ACRE Fund and that moneys
held in escrow are to be delivered to the Subadvisor.
7. EXPENSES. The 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.
8. SERVICES TO OTHER COMPANIES OR ACCOUNTS. ACCP understands
that the Subadvisor or its affiliates now acts and will continue to act as
investment advisor to other clients. ACCP has no objection to the Subadvisor so
acting, provided that, as described in Section 3 above, whenever the ACRE Fund
and one or more other client of the Subadvisor have funds available for
investment, investments suitable and appropriate for each will be allocated
equitably to each entity in accordance with procedures, with no preference given
to other clients. Similarly, opportunities to sell securities will be allocated
in an equitable manner, with no preference given to other clients. In addition,
ACCP understands that the persons employed by the Subadvisor to assist in the
performance of the 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 the Subadvisor of any affiliate of the 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, the Subadvisor may refer
or introduce certain institutional investors and existing clients of the
Subadvisor and its affiliates to ACCP. ACCP understands that nothing herein
shall be deemed to limit or restrict the right of the Subadvisor, in the event
the Subadvisor's clients purchase shares of ACCP, to subsequently suggest or
induce such clients to redeem such shares and open a separate advisory account
with the Subadvisor.
9. TERMS OF AGREEMENT. This Agreement shall become effective
as of the date first written above and shall continue until May 8, 1999 and
thereafter so long as such continuance is specifically approved at least
annually by (i) the Board of Directors of ACCP 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 the Board of Directors of ACCP, or by vote of holders of a majority of
the ACRE Fund's shares, or upon six months' written notice by the Subadvisor,
and will terminate automatically upon any termination of the investment
management agreement between ACCP and ACIM. This Agreement will terminate
automatically in the event of its assignment. The Subadvisor agrees to notify
ACCP of any circumstances that might result in this Agreement being deemed to be
assigned.
10. REPRESENTATIONS OF ACIM, THE SUBADVISOR AND ACCP.
(a) ACIM and the Subadvisor each hereby represents that
it is registered as an investment advisor under the Investment Advisers Act,
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 the 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) ACCP and ACIM represent and warrant that (i) the
appointment of the 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) The Subadvisor represents and warrants that (i) its
service as subadvisor hereunder has been duly authorized; and (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.
11. 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.
12. LIMITATION OF LIABILITY. This Agreement has been executed
on behalf of ACCP by the undersigned officer of ACCP solely in his capacity as
an officer of ACCP.
13. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto on the subject matter described herein.
14. INDEPENDENT CONTRACTOR. In the performance of its duties
hereunder, the Subadvisor is and shall be an independent contractor and, unless
otherwise expressly provided or authorized, shall have no authority to act for
or represent ACCP or ACIM in any way, or otherwise be deemed to be an agent of
ACCP or ACIM.
15. 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.
16. 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 the following addresses, or at such other addresses as may be
designated by notice from such party to all other parties.
To the Subadvisor:
RREEF America, L.L.C.
875 North Michigan Avenue, 41st Floor
Chicago, Illinois 60611
Attention: Kim G. Redding
Copy to: Barry H. Braitman, Esq.
(312) 266-9300 (office number)
(312) 266-9346 (telecopy number)
To ACCP or ACIM:
American Century Investments
4500 Main Street
Kansas City, Missouri 64111
Attention: Patrick A. Looby, Esq.
(816) 340-4349 (office number)
(816) 340-4964 (telecopy number)
Any notice, demand or other communication given in a manner prescribed in this
Section shall be deemed to have been delivered on receipt.
<PAGE>
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.
RREEF AMERICA L.L.C. AMERICAN CENTURY CAPITAL
PORTFOLIOS, INC.
By:/s/Kim G. Redding By:/s/Patrick A. Looby
Name: Kim G. Redding Name: Patrick A. Looby
Title: Senior Vice President Title: Vice President
AMERICAN CENTURY
INVESTMENT MANAGEMENT, INC.
By:/s/Robert C. Puff Jr.
Name: Robert C. Puff Jr.
Title: President
[american century logo]
American
Century(reg.sm)
[9705 [recycled logo]
SH-BKT-8601-B] Recycled
<PAGE>
PROXY CARD (BACK)
Please indicate your vote by placing an "X" in the appropriate box below. The
Board of Directors recommends a vote "FOR" each proposal.
1. Approval of Subadvisory Agreement with RREEF America, L.L.C.
2. Election of nine members of the Company's Board of Directors
to serve indefinite terms until their successors are duly
elected and qualified;
<TABLE>
<S> <C> <C>
FOR ALL NOMINEES ___ WITHHOLD AUTHORITY ___ INSTRUCTION: To withhold authority to vote for
except asmarked to the FOR ALL NOMINEES any individual nominee, strike a line through
contrary below the nominee's name in the list below
Thomas A. Brown Robert W. Doering, M.D. Andrea C. Hall D.D. (Del) Hock
Donald H. Pratt Lloyd T. Silver, Jr. James E. Stowers, Jr. James E. Stowers III
M. Jeannine Strandjord
FOR AGAINST ABSTAIN
3. Ratification of the selection of the Company's independent
auditors for its current fiscal year. ___ ___ ___
PLEASE SIGN AND DATE THE FRONT OF THIS CARD
</TABLE>
<PAGE>
PROXY CARD (FRONT)
American Century Real Estate Fund--[NAME OF CLASS]
(A series of American Century Capital Portfolios, Inc.)
PROXY Special Meeting of Shareholders, May 20, 1998 PROXY
This proxy is solicited on behalf of the Board of Directors of American
Century Capital Portfolios, Inc. and relates to proposals which apply to the
American Century Real Estate Fund. By signing below, I (we) appoint as proxies
Patrick A. Looby, Charles A. Etherington and Janet A. Nash and each of them
(with power of substitution) to vote for the undersigned all shares of common
stock I own in the Fund. The authority I am (we are) granting applies to the
above-referenced meeting and any adjournments of that meeting, with all the
power I (we) would have if personally present. The shares represented by this
proxy will be voted as instructed. Unless indicated to the contrary, this proxy
shall be deemed to grant authority to vote "FOR" all proposals relating to the
Company or the series or class, as applicable.
YOUR VOTE IS IMPORTANT. Please date and sign this proxy below and
return it in the enclosed envelope to: American Century Investments, c/o Proxy
Tabulator, P.O. Box 9043, Smithtown, NY 11787-9831. This proxy will not be voted
unless it is dated and signed exactly as instructed on this card.
If shares are held by an individual, sign your name
exactly as it appears on this card. If shares are
held jointly, either party may sign, but the name of
the party signing should conform exactly to the name
shown on this proxy card. If shares are held by a
corporation, partnership or similar account, the name
and the capacity of the individual signing the proxy
card should be indicated - for example: "ABC Corp.,
John Doe, Treasurer."
Sign exactly as name appears on this card.
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Dated ______________________, 1997
