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 MUTUAL FUNDS, 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>
Proxy Statement
AMERICAN CENTURY MUTUAL FUNDS, INC.
April 28, 2000
IMPORTANT VOTING INFORMATION INSIDE!
Table of Contents
LETTER FROM THE PRESIDENT
PROXY STATEMENT SUMMARY
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
DETAILED DISCUSSION OF PROXY ISSUES
SHARE OWNERSHIP
PROPOSAL 1: ELIMINATE A FUNDAMENTAL INVESTMENT POLICY OF
SELECT AND HERITAGE.
OTHER MATTERS
Letter From The President
American Century Investment Management, Inc.
4500 Main Street
Kansas City, Missouri 64111
April 28, 2000
Dear American Century Shareholder,
I am writing to inform you of the upcoming Special Meeting of the
shareholders of the American Century Select Fund and the American Century
Heritage Fund. At this meeting, you are being asked to vote on an important
proposal affecting your fund.
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 this proposal
and recommends a vote "FOR" it. If you have any questions regarding
the issue to be voted on or need assistance completing your proxy card, please
contact us at 1-800-345-2021 or 816-531-5575 weekdays from 7 a.m. to 7 p.m., and
Saturdays 9 a.m. to 2 p.m. Central time.
I appreciate you taking the time to consider this important proposal. Thank
you for investing with American Century and for your continued support.
Sincerely,
/*/Robert C. Puff, Jr.
Robert C. Puff, Jr.
President and
Chief Investment Officer
PROXY STATEMENT SUMMARY
The following Q&A is a brief summary of the proposal to be considered at the
Special Meeting. The information below is qualified in its entirety by more
detailed information contained elsewhere in this proxy statement. 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 Friday, June 16, 2000, at 10 a.m. Central time at
American Century's offices at 4500 Main Street, Kansas City, Missouri. This will
be a business meeting only. There will be no presentations about the funds. The
record date for the meeting is the close of business April 14, 2000. Only
shareholders who own shares on the record date are entitled to vote at the
meeting.
WHY ARE THE FUNDS HAVING A SPECIAL MEETING?
Select and Heritage are currently required to invest 80% and 60% of their
assets, respectively, in securities of companies that pay dividends or are
committed to paying dividends or otherwise produce income. This reflects the
funds' strategy to invest in companies that are successful enough to pay
dividends. However, for several years, the importance of dividend payments as an
indication of a company's strength has diminished. An increasing number of
successful companies in the S&P 500, Select's benchmark, and the S&P 400,
Heritage's benchmark, are no longer paying dividends. In addition, those that do
not pay dividends are growing more quickly (on average) than dividend payers.
Because of these changes in the investing landscape, Select and Heritage have
been choosing stocks to meet the funds' primary objective of long-term capital
growth from a declining pool of growing companies that pay dividends. Therefore,
the funds' management teams have proposed the elimination of this investment
policy to allow the funds to seek investments in successful companies regardless
of their dividend-paying histories. The Board of Directors agreed. Because the
policy is fundamental for both of the funds, shareholder approval of the change
is required.
A complete description of the proposed change begins on page _____.
WILL THIS CHANGE SUBSTANTIALLY AFFECT THE WAY SELECT AND HERITAGE ARE
MANAGED?
No. Select and Heritage are both managed with a "conservative growth"
orientation, and that will continue. In an attempt to balance any incremental
risk incurred by the funds from the lack of a dividend-paying policy, the
managers will continue to track volatility carefully. They may choose to invest
more of the funds' assets in "conservative" industries and companies and/or to
take smaller holdings at industry and company levels. These strategies would
broaden diversification and lessen share price volatility, while maintaining the
funds' focus on accelerating growth companies.
HOW DO THE DIRECTORS RECOMMEND THAT I VOTE ON THIS PROPOSAL?
The Directors unanimously recommend that you vote "FOR" the proposal.
WHEN WILL THE CHANGE TO THE FUNDS' FUNDAMENTAL INVESTMENT POLICY TAKE EFFECT IF
IT IS APPROVED?
If approved, the proposed change to the investment policy will be effective
on June 19, 2000.
WHO IS ASKING FOR MY VOTE?
Your Board of Directors is asking you to sign and return the enclosed proxy
card so your votes can be cast at the Special Meeting. In the event the meeting
is adjourned, these proxies also would be voted at the reconvened meeting.
HOW DO I VOTE MY SHARES?
We've made it easy for you. You can vote online, by mail or by fax. To vote
online, just visit https://vote.proxy-direct.com (you will need the control
number that appears on the right-hand side of your proxy card). To vote by mail,
sign and send us the enclosed proxy card in the envelope provided. To vote by
fax, sign the proxy card and fax both sides of the card to [1-888-796-9932]. Or,
you can vote in person at the Special Meeting on June 16, 2000
IF I SEND MY PROXY IN NOW, CAN I CHANGE MY VOTE LATER?
A proxy can be revoked at any time by writing to us, by sending us another
proxy card, 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 card. 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 or 816-531-5575 weekdays
from 7 a.m. to 7 p.m., and Saturdays 9 a.m. to 2 p.m. Central time.
NOTICE OF SPECIAL MEETING
OF SHAREHOLDERS
TO BE HELD ON JUNE 16, 2000
American Century Investments
4500 Main Street
P.O. Box 419200
Kansas City, Missouri 64141-6200
1-800-345-2021
816-531-5575
NOTICE IS HEREBY GIVEN that a Special Meeting of shareholders of the American
Century Select Fund and the American Century Heritage Fund (the "funds"), each a
series of American Century Mutual Funds, Inc., a Maryland corporation (the
"company"), will be held at the company's offices at 4500 Main Street, Kansas
City, Missouri, on Friday, June 16, 2000, at 10 a.m. Central time, for the
following purposes:
1. To approve the elimination of a fundamental investment policy of each of
the funds; and
2. 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 funds. Please complete, sign and
return the enclosed proxy card.
Shareholders of record as of the close of business on April 14, 2000, 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 card in the
postage-paid envelope provided so you will be represented at the meeting.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU CAST YOUR
VOTE "FOR" THE PROPOSALS.
April 28, 2000 BY ORDER OF THE BOARD OF DIRECTORS
David C. Tucker
Vice President
DETAILED DISCUSSION
OF PROXY ISSUES
April 28, 2000
The enclosed proxy is solicited by the Board of Directors of American Century
Mutual Funds, Inc. in connection with a Special Meeting of shareholders of the
American Century Select Fund and the American Century Heritage Fund. The Special
Meeting will be held Friday, June 16, 2000, at American Century'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 Select Fund and the
American Century Heritage Fund, will be referred to as the "funds."
The costs of soliciting proxies, including the cost of preparing and mailing
the notice of meeting and this proxy statement, will be paid by American Century
Investment Management, Inc., the funds' investment manager (referred to in the
proxy statement as "ACIM"). This notice of meeting and proxy statement are first
being mailed to shareholders on or around April 28, 2000. [ACIM, at its expense,
has hired the proxy solicitation firm of Alamo Direct to help solicit proxies
for the meeting.] [Supplemental solicitations for the meeting may be made by
Alamo Direct or by ACIM, either personally or by mail, telephone or facsimile].
VOTING OF PROXY. If you vote your proxy now, 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 funds are divided into three classes. All classes of shares of the fund
have identical voting rights, except where a proposal affects only one class.
Where a proposal affects only one class, only that class gets to vote on it.
This issue affects all classes equally, so the classes will not have separate
votes. The number of outstanding votes of each class of each fund, as of the
close of business on April __, 2000, is:
Select Heritage
Investor Class [TO COME] [TO COME]
Institutional Class
Advisor Class
Because the record date is April 14, the total number of votes by class at the
meeting may be different.
Only those shareholders owning shares as of the close of business April 14,
2000, 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 June 16, 2000, 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 vote on a proposal because instructions have not been
received from the beneficial owners) will be counted as "present" for purposes
of determining whether or not a quorum is present for the meeting. Abstentions
and broker non-votes will, however, be considered to be votes against the
proposals.
INVESTMENT MANAGER. American Century Investment Management, Inc. is the
funds' investment manager. American Century Services Corporation provides the
funds with transfer agency services. Both companies are wholly owned
subsidiaries of American Century Companies, Inc. The mailing address for
American Century and the funds is P.O. Box 419200, Kansas City, Missouri
64141-6200.
DISTRIBUTORS. Funds Distributor, Inc. ("FDI") and American Century
Investment Services, Inc. ("ACIS") are the funds' principal underwriters. FDI's
mailing address is 60 State Street, Suite 1300, Boston, Massachusetts 02109.
ACIS's mailing address is P.O. Box 419200, Kansas City, Missouri 64141-6200.
ANNUAL REPORT. Each 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 or 816-531-5575.
SHARE OWNERSHIP
The following table sets forth, as of the close of business on March 31,
2000, the share ownership of those shareholders known by ACIM to own more than
5% of the fund's outstanding shares.
Percent of
Title of Name and Address Outstanding
Class of Record Owner Shares Owned Shares
[TO COME]
As of March 31, 2000, the officers and directors of the fund, as a group,
owned less than 1% of each fund's outstanding shares.
PROPOSAL 1: ELIMINATION OF A FUNDAMENTAL INVESTMENT POLICY
The investment strategy of Select and Heritage, as described in their current
prospectus, is to invest in stocks of companies that they believe will increase
in value over time. Select and Heritage have traditionally invested in stocks of
companies that are successful enough to pay dividends. The funds currently have
the following fundamental investment policy:
Eighty percent (80%) of Select's and 60% of Heritage's assets must
be invested in securities of companies that pay regular dividends,
or have committed to pay dividends, or otherwise produce income.
ACIM has proposed, and the Board of Directors of the funds has approved,
eliminating this fundamental policy.
The proposed elimination of this fundamental investment policy will not
substantially change the basic growth objective of Select and Heritage, nor will
it substantially change the type of securities selected for their portfolios.
Those securities will be, as they have been in the past, securities (primarily
common stocks) that ACIM believes have better-than-average prospects for
appreciation.
ACIM believes, however, that the current dividend payment requirement
unnecessarily limits the funds' choice of investment opportunities. In pursuing
their investment objectives, both Select and Heritage look for successful
companies with earnings and revenues that are growing at an accelerating rate.
An increasing number of these companies, however, have elected to forego paying
dividends, and instead invest earnings back into the growth of the company. In
addition, numerous other firms have elected to use the cash they would otherwise
use to pay dividends to instead engage in share buyback programs. By engaging in
buyback programs, the companies create additional earnings per share growth and
additional value for existing shareholders. The number of dividend-paying
companies also has decreased through mergers and acquisitions, and ACIM believes
that continued consolidation will cause a further decrease in the number of such
companies.
Since 1990, dividend-paying companies included in the S&P 500, Select's
benchmark, have decreased from 96.70% of the index (based on market
capitalization) to 74.80% of the index in 1999. Similarly, for Heritage's
benchmark, the S&P 400, dividend-paying companies decreased from 75.34% in 1990
to 52.67% of the index in 1999.
More importantly, the non-dividend-paying companies are, on average, growing
at a much faster rate than those that pay dividends. Given their accelerating
growth style, it is a company's growth rate that particularly interests ACIM
when choosing investments for Select and Heritage. In 1999, the weighted average
sales growth rate for the non-dividend-paying companies in the S&P 500 was
31.51%, and for the S&P 400 was 24.57%. For the same period, the dividend-paying
companies' sales growth rate was 13.23% for the S&P 500, and 11.19% for the S&P
400. It is this disparity that has prompted ACIM to propose this change in
investment policy.
With more and more of these successful companies refusing to pay dividends,
eliminating the dividend payment requirement will allow the funds to invest more
of their assets in these growing companies if they represent attractive
investment opportunities. This will allow the funds to own a broader and deeper
variety of investments. This change is being proposed by ACIM with the intent of
enhancing the long-term performance potential of the funds.
ACIM will continue to manage the risk and volatility of the funds. It will
utilize several strategies to manage risk, including the possible lowering of
holding sizes at industry and company levels. Doing so should broaden
diversification and lessen share price volatility. ACIM also may consider
increasing investments in industries and companies that are considered
"conservative," and will continue to track and control the funds' volatility
versus their respective benchmarks. The funds will continue looking for
investments that have accelerating growth and otherwise fit the funds' core
investment strategies.
In addition, ACIM will not completely eliminate investments in companies that
pay dividends. ACIM will have internal guidelines for each of the funds
governing the size of the dividend-paying portion, but such guidelines may be
revised without a shareholder vote. This will allow the funds to quickly react
to changing market conditions.
The proposed change will allow the funds to invest more of their assets in
companies with greater appreciation potential than is currently possible. Even
with the risk monitoring measures undertaken by ACIM, such securities also may
have greater downside risk. ACIM does not believe, however, that the general
risk potential of the funds will be materially increased by the proposed change.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE PROPOSED AMENDMENT.
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 that 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 funds do 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 Charles A. Etherington, 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 funds, in care of American Century Investments, P.O. Box
419200, Kansas City, Missouri 64141-6200, whether other people 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.
April 28, 2000 David C. Tucker
Vice President
<PAGE>
PROXY CARD (FRONT)
American Century Select Fund--[NAME OF CLASS]
American Century Heritage Fund--[NAME OF CLASS]
(Each series of American Century Mutual Funds, Inc.)
PROXY Special Meeting of Shareholders, June 16, 2000 PROXY
This proxy is solicited on behalf of the Board of Directors of American
Century Mutual Funds, Inc. and relates to proposals that apply to the American
Century Select Fund and the American Century Heritage Fund. By signing below, I
(we) appoint as proxies David C. Tucker, David H. Reinmiller and Janet A. Nash
and each of them (with power of substitution) to vote for the undersigned all
shares of common stock I (we) 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
either return it in the enclosed envelope to: American Century Investments, c/o
Proxy Tabulator, P.O. Box 9043, Smithtown, NY 11787-9831 or fax both sides to
1-888-796-9932. If you prefer, you can vote online at
https://vote.proxy-direct.com. This proxy will not be voted unless it is dated
and signed exactly as instructed on this card.
Control number: XXX XXXX XXXX XXX
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.
------------------------------------------
------------------------------------------
Dated ______________________, 2000
<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" the proposal.
1. To eliminate a fundamental investment policy that requires
80% of Select's and 60% of Heritage's assets to be invested in
securities of companies that pay regular dividends, or have
committed to pay dividends, or otherwise produce income.
[ ] For [ ] Against [ ] Abstain
PLEASE SIGN AND DATE THE FRONT OF THIS CARD
