EXHIBIT (d)(5)
INVESTMENT SUB-ADVISORY AGREEMENT
THIS AGREEMENT, made this 23rd day of May, 2007, by and between XXXXXXXXX
INVESTMENT COUNSEL, LLC ("TIC"), a Delaware limited liability company registered
as an Investment Adviser under the Investment Advisers Act of 1940 and FRANKLIN
XXXXXXXXX INVESTMENTS (ASIA) LIMITED ("FTIA"), a company existing under the laws
of Hong Kong registered as an Investment Adviser under the Investment Advisers
Act of 1940.
WHEREAS, American Century Global Investment Management, Inc. ("the
"Adviser"), pursuant to a Management Agreement with American Century World
Mutual Funds, Inc. ("ACWMF") dated March 30, 2006 (the "Investment Advisory
Agreement") is the investment adviser to the American Century International
Value Fund (the "Fund");
WHEREAS, ACWMF is an open-end diversified management investment company of
the series type, registered under the Investment Company Act of 1940, as amended
(the "1940 Act");
WHEREAS, the Fund is represented by a separate class of capital stock of
ACWMF;
WHEREAS, TIC, pursuant to an Investment Sub-Advisory Agreement (the "TIC
Sub-Advisory Agreement") with the Adviser dated March 30, 2006, has been
retained to render investment advisory services with respect to the Fund;
WHEREAS, TIC and FTIA are each registered as an investment adviser under
the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and are
engaged in the business of supplying investment management services, each as an
independent contractor;
WHEREAS, TIC and FTIA are affiliates and are under common control and
management; and
WHEREAS Xxxxx Xxxx, lead portfolio manager for the Fund, is now residing in
Hong Kong and will be employed by FTIA, and TIC wishes to enter into this
agreement with FTIA to enable Xx. Xxxx to continue to perform his
responsibilities as lead portfolio manager of the Fund during his employment
with FTIA.
NOW, THEREFORE, in consideration of the premises and the terms and
conditions hereinafter set forth, it is agreed as follows:
1. APPOINTMENT OF FTIA
In accordance with and subject to the TIC Sub-Advisory Agreement, TIC
hereby appoints FTIA to perform portfolio selection services described herein
for investment and reinvestment of the Fund's investment assets, subject to the
instructions and supervision of TIC and the control and direction of ACWMF's
Board of Directors, for the period and on the terms hereinafter set forth. FTIA
accepts such appointment and agrees to furnish
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the services hereinafter set forth for the compensation herein provided. TIC
will continue to have full responsibility for all investment advisory services
provided by TIC and/or FTIA to the Fund. FTIA shall for all purposes herein be
deemed to be an independent contractor and shall, except as expressly provided
or authorized, have no authority to act for or represent the Fund, TIC or the
Adviser in any way or otherwise be deemed an agent of the Fund, TIC or the
Adviser.
2. OBLIGATIONS OF AND SERVICES TO BE PROVIDED BY FTIA
(a) FTIA shall provide the following services and assume the following
obligations with respect to the Fund:
(1) The investment of the assets of the Fund shall at all times be subject
to the applicable provisions of the Articles of Incorporation, the
Bylaws, the Registration Statement, the current Prospectus and the
Statement of Additional Information of ACWMF relating to the Fund and
shall conform to the investment objectives, policies and restrictions
of the Fund as set forth in such documents and as interpreted from
time to time by the Board of Directors of ACWMF and by the Adviser and
TIC. Within the framework of the investment objectives, policies and
restrictions of the Fund, and subject to the supervision of the
Adviser, TIC and the Fund's Board of Directors, both FTIA and TIC
shall have the responsibility for the making and execution of all
investment decisions for the Fund.
(2) In carrying out its obligations to manage the investments and
reinvestments of the assets of the Fund, FTIA shall: (1) obtain and
evaluate pertinent economic, statistical, financial and other
information affecting the economy generally and individual companies
or industries the securities of which are included in the Fund's
investment portfolio or are under consideration for inclusion therein;
(2) formulate and implement a continuous investment program for the
Fund consistent with the investment objective and related investment
policies for the Fund as set forth in ACWMF's registration statement,
as amended; and (3) take such steps as are necessary to implement the
aforementioned investment program by purchase and sale of securities
including the placing, or directing the placement through an affiliate
of FTIA, of orders for such purchases and sales.
(3) In connection with the purchase and sale of securities of the Fund,
FTIA shall arrange for the transmission to the Adviser and the
Custodian for the Fund on a daily basis such confirmation, trade
tickets and other documents as may be necessary to enable them to
perform their administrative responsibilities with respect to the
Fund's investment portfolio. With respect to portfolio securities to
be purchased or sold through the Depository Trust Company, FTIA shall
arrange for the automatic transmission of the I.D. confirmation of the
trade to the Custodian of the Fund. FTIA shall render such reports to
the Adviser and/or to ACWMF's Board of Directors concerning the
investment activity and portfolio composition of the Fund in such form
and at such intervals as the Adviser
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or the Board may from time to time require.
(4) FTIA shall, in the name of the Fund, place or direct the placement of
orders for the execution of portfolio transactions in accordance with
the policies with respect thereto, as set forth in ACWMF's
Registration Statement, as amended from time to time, and under the
Securities Act of 1933 and the 1940 Act. In connection with the
placement of orders for the execution of the Fund's portfolio
transactions, FTIA shall create and maintain all necessary brokerage
records of the Fund in accordance with all applicable laws, rules and
regulations, including but not limited to, records required by Section
31(a) of the 1940 Act. All records shall be the property of ACWMF and
shall be available for inspection and use by the Securities and
Exchange Commission, ACWMF or any person retained by ACWMF. Where
applicable, such records shall be maintained by FTIA for the period
and in the place required by Rule 31a-2 under the 1940 Act.
(5) In placing orders or directing the placement of orders for the
execution of portfolio transactions, FTIA shall select brokers and
dealers for the execution of the Fund's transactions. In selecting
brokers or dealers to execute such orders, FTIA is expressly
authorized to consider the fact that a broker or dealer has furnished
statistical, research or other information or services which enhance
FTIA's investment research and portfolio management capability
generally. It is further understood in accordance with Section 28(e)
of the Securities Exchange Act of 1934, as amended, that FTIA may
negotiate with and assign to a broker a commission which may exceed
the commission which another broker would have charged for effecting
the transaction if FTIA determines in good faith that the amount of
commission charged was reasonable in relation to the value of
brokerage and/or research services (as defined in Section 28(e))
provided by such broker, viewed in terms either of the Fund or FTIA's
overall responsibilities to FTIA's discretionary accounts.
(b) FTIA shall use the same skill and care in providing services to the
Fund as it uses in providing services to fiduciary accounts for which it has
investment responsibility. FTIA will conform with all applicable rules and
regulations of the U.S. Securities and Exchange Commission.
3. EXPENSES
During the term of this Agreement, FTIA will pay all expenses incurred by
it in connection with its activities under this Agreement.
4. COMPENSATION
(a) In payment for the investment sub-advisory services to be rendered by
FTIA in respect of the Fund hereunder, TIC shall pay to FTIA as full
compensation for all services hereunder a fee equal to seven-tenths of the
advisory fee paid to TIC by the Adviser, which fee shall be payable in U.S.
dollars on the first business day of each
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month as compensation for the services to be rendered and obligations assumed by
FTIA during the preceding month. The advisory fee under this Agreement shall be
payable on the first business day of the first month following the effective day
of this Agreement and shall be reduced by the amount of any advance payments
made by TIC relating to the previous month.
(b) If this Agreement is terminated prior to the end of any month, the
monthly fee shall be prorated for the portion of any month in which this
Agreement is in effect which is not a complete month according to the proportion
which the number of calendar days in the month during which the Agreement is in
effect bears to the total number of calendar days in the month, and shall be
payable within 10 days after the date of termination.
5. RENEWAL AND TERMINATION
This Agreement shall become effective as of the date first written above
and shall continue until July 31, 2008, and shall continue thereafter so long as
such continuance is specifically approved at least annually by (i) the Board of
Directors of ACWMF 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
vote of the majority of the Board of Directors who are not interested persons of
any party to this Agreement, by a vote cast at a meeting called for the purpose
of voting on such approval. The annual approvals provided for herein shall be
effective to continue this Agreement from year to year if given within a period
beginning not more than ninety (90) days prior to July 31 of each applicable
year, notwithstanding the fact that more than three hundred sixty-five (365)
days may have elapsed since the date on which such approval was last given. This
Agreement may be terminated at any time without payment of penalty: (i) by
ACWMF's Board of Directors or by a vote of a majority of the outstanding voting
securities of the Fund on sixty days' prior written notice, or (ii) by the
Adviser or either party hereto upon sixty days' prior written notice to the
other parties. This Agreement will terminate automatically upon its assignment,
upon any termination of the Investment Advisory Agreement or in the event of its
assignment, and upon any termination of the TIC Sub-Advisory Agreement or in the
event of its assignment. The terms "interested person," "assignment" and "vote
of a majority of the outstanding voting securities" shall have the meanings set
forth in the 1940 Act.
6. GENERAL PROVISIONS
(a) FTIA may rely on information reasonably believed by it to be accurate
and reliable. Except as may otherwise be provided by the 1940 Act, neither FTIA
nor its officers, directors, employees or agents shall be subject to any
liability for any error of judgment or mistake of law or for any loss arising
out of any investment or other act or omission in the performance by FTIA of its
duties under this Agreement or for any loss or damage resulting from the
imposition by any government or exchange control restrictions which might affect
the liquidity of the Fund's assets, or from acts or omissions of custodians or
securities depositories, or from any war or political act of any foreign
government to which such assets might be exposed, provided that nothing herein
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shall be deemed to protect, or purport to protect, FTIA against any liability to
ACWMF or to its shareholders to which FTIA would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder, or by reason of FTIA's reckless disregard of its obligations
and duties hereunder.
(b) ACWMF's Board of Directors understands that the value of investments
made for the Fund may go up as well as down, is not guaranteed and that
investment decisions will not always be profitable. FTIA has not made and is not
making any guarantees, including any guarantee as to any specific level of
performance of the Fund. ACWMF's Board of Directors acknowledge that the Fund is
designed for investors seeking international diversification and is not intended
as a complete investment program. They also understand that investment decisions
made on behalf of the Fund by FTIA are subject to various market and business
risks, and that investing in securities of companies in emerging countries
involves special risks which are not typically associated with investing in U.S.
companies. Risks include but are not limited to, foreign currency fluctuations,
investment and repatriation restrictions, and political and social instability.
Although FTIA intends to invest in companies located in countries which FTIA
considers to have relatively stable and friendly governments, ACWMF's Board of
Directors accepts the possibility that countries in which FTIA invests may
expropriate or nationalize properties of foreigners, may impose confiscatory
taxation or exchange controls, including suspending currency transfers from a
given country, or may be subject to political or diplomatic developments that
could affect investments in those countries.
(c) This Agreement shall not be or become effective unless and until it is
or has been approved by the Board of Directors of ACWMF, including a majority of
the Directors who are not "interested persons" to parties to this Agreement, by
a vote cast in person at a meeting called for the purpose of voting upon such
approval.
(d) TIC understands that FTIA now acts, will continue to act, or may act in
the future, as investment adviser to fiduciary and other managed accounts,
including other investment companies, and TIC has no objection to FTIA so
acting, provided that FTIA duly performs all obligations under this Agreement.
TIC also understands that FTIA may give advice and take action with respect to
any of its other clients or for its own account which may differ from the timing
or nature of action taken by FTIA with respect to the Fund. Nothing in this
Agreement shall impose upon FTIA any obligation to purchase or sell or to
recommend for purchase or sale, with respect to the Fund, any security which
FTIA or its shareholders, directors, officers, employees or affiliates may
purchase or sell for its or their own account(s) or for the account of any other
client.
(e) Except to the extent necessary to perform its obligations hereunder,
nothing herein shall be deemed to limit or restrict the right of FTIA, or the
right of any of its officers, directors or employees who may also be an officer,
director or employee of ACWMF, or person otherwise affiliated with ACWMF (within
the meaning of the 0000 Xxx) to engage in any other business or to devote time
and attention to the management or other aspects of any other business, whether
of a similar or dissimilar nature, or to render services of any kind to any
other trust, corporation, firm, individual or association.
(f) Each party agrees to perform such further acts and execute such further
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documents as are necessary to effectuate the purposes hereof. This Agreement
shall be construed and enforced in accordance with and governed by the laws of
the State of Florida. The captions in this Agreement are included for
convenience only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
(g) Any notice under this Agreement shall be in writing, addressed and
delivered or mailed postage pre-paid to the appropriate party at the following
address: TIC at 000 Xxxx Xxxxxxx Xxxx., Xxxxx 0000, Xxxx Xxxxxxxxxx, Xxxxxxx
00000, and FTIA at 00xx Xxxxx, Xxxxxx Xxxxx, 0 Xxxxxxxxx Xxxx Xxxxxxx, Xxxx
Kong.
(h) FTIA agrees to notify TIC of any change in FTIA's officers and
directors within a reasonable time after such change.
(i) Adviser will vote the Fund's investment securities in accordance with
its proxy voting policy and procedures. FTIA shall not be responsible for any
such voting.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date first above written.
XXXXXXXXX INVESTMENT COUNSEL, LLC
By: /s/ Xxxx X. Xxxxx
-------------------------------------
Name: Xxxx X. Xxxxx
Title: President
FRANKLIN XXXXXXXXX INVESTMENTS (ASIA) LIMITED
By: /s/ Xxxxxxx X. XxXxxxx
-------------------------------------
Name: Xxxxxxx X. XxXxxxx
Title: Director
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