As
Filed with the U.S. Securities and Exchange Commission on January 30,
2009
File
No. _______________
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
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__________________
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FORM
N-14
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__________________
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REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
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| [ ] Pre-Effective Amendment No. |
[]
Post-Effective
Amendment No.
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__________________
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AMERICAN
CENTURY MUTUAL FUNDS, INC.
(Exact
Name of Registrant as Specified in Charter)
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__________________
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4500
MAIN STREET, KANSAS CITY,
MISSOURI 64111
(Address
of Principal Executive
Offices) (Zip
Code)
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REGISTRANT'S
TELEPHONE NUMBER, INCLUDING AREA CODE: (816)
531-5575
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CHARLES
A. ETHERINGTON
4500
MAIN STREET, KANSAS CITY,
MISSOURI 64111
(
Name and Address of
Agent for Service)
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Approximate
Date of Proposed Public Offering: March 2, 2009
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It is proposed that this
Registration Statement will become effective on March 2, 2009 pursuant to
Rule 488 under the Securities Act of
1933.
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| Title of securities being registered: Investor Class shares and Institutional Class shares of Growth Fund | |
| No filing fee is required because the Registrant is relying on Section 24(f) of the Investment Company Act of 1940, as amended . | |
American Century
Investments
4500 Main Street
Kansas City
,
Missouri
64111
March 2, 2009
Dear Shareholder,
I would like to invite you to a special
meeting of shareholders to be held on May 5, 2009 at
10:00 a.m
. You are being asked to vote on
proposed reorganizations involving your fund(s). A brief description of the
proposed reorganizations is provided below while more detailed information is
provided in the enclosed materials. The Boards of Directors of these funds,
including all of the Independent Directors, unanimously approved and recommend
that you vote FOR the proposals.
We are proposing the reorganizations of
the
American Century
Life Sciences Fund and the
American Century
Technology Fund into the
American Century
Growth Fund. If
the proposed reorganizations are approved by shareholders, you will receive
shares of the Growth Fund in exchange for your shares in the Life Sciences Fund
and/or Technology Fund.
The accompanying combined Proxy
Statement and Prospectus includes a detailed description of the proposed
reorganizations and compares, among other things, the investment objectives and
policies, operating expenses and performance history of the Life Sciences Fund
and Technology Fund with that of the Growth Fund.
Your vote is extremely important, no
matter how large or small your holdings. Please review the enclosed materials
and vote online, by phone, or by signing and returning your proxy card in the
enclosed postage-paid envelope. If we do not hear from you after a reasonable
time, you may receive a call from
us or our proxy solicitor,
Broadridge
, reminding you
to vote. If you have any questions or need assistance in completing
your
proxy card, please
contact
Broadridge
at
1-866-615-7264.
Thank you for investing wi
th American Century.
Sincerely,
Jonathan S. Thomas
President and Chief Executive
Officer
American Century
Investments
AMERICAN CENTURY
FUNDS
Life Sciences
Fund
Technology
Fund
IMPORTANT NEWS FOR
SHAREHOLDERS
While we encourage you to read all of
the enclosed Proxy Statement/Prospectus, here is a brief overview of the
proposals you will be asked to vote on. This overview contains limited
information, should be read in conjunction with, and is qualified in its
entirety by reference to the more detailed information contained elsewhere in
the Proxy Statement/Prospectus.
Questions and
Answers
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Q.
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What are the proposals to be voted
on at the special meeting of shareholders?
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A
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Shareholders of
the American Century
Life Sciences
Fund
and
the American Century
Technology
Fund
are being asked to approve the
reorganization of each fund into
the American Century
Growth
Fund
(referred to as the
reorganizations). If approved, this would result in the tax-free
reorganization of those funds into Growth
.
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Q
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When will the special meeting be
held? Who can vote?
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A
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The special meeting will be held
on Tuesday,
May 5, 2009, at
10:00 a.m.
Central Time at American
Century’s office at
4500 Main Street
,
Kansas City
,
Missouri
.
T
his will be a business meeting
only
, as
n
o presentations
about the funds are planned. If you owned shares of
either Life Sciences or Technology
at the close of
business on February 20, 2009, you are entitled to vote, even if you later
sold the shares. Each shareholder is entitled to one vote per dollar of
shares owned, with fractional dollars voting
proportionally.
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Q
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What are the
reorganizations?
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A
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The following table outlines the
proposed reorganizations and shows what Life Sciences and Technology
shareholders will receive if the reorganizations are
approved:
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Q
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How will the reorganizations
affect my investments in the funds?
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A.
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If approved, you will receive
shares of Growth in exchange for your shares of Life Sciences and
Technology. The reorganizations:
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WILL NOT BE TAXABLE
(See “INFORMATION ABOUT THE
REORGANIZATIONS – Federal Income Tax Consequences of the
Reorganizations”);
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WILL RESULT IN SHAREHOLDERS PAYING
LOWER FUND EXPENSES
(The total operating expenses for the shares of Growth to be received in
the reorganizations are lower than those for the shares of Life Sciences
and Technology
);
and
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•
WILL
BROADEN
YOUR FUND’S
INVESTMENT UNIVERSE
(Growth may not concentrate its
investments in a particular industry, whereas Life Sciences may
concentrate in the medical and health care industries and Technology may
concentrate investments in the technology or telecommunications
industries
.
Additionally, Growth is classified as diversified, whereas Life Sciences
and Technology are classified as nondiversified. A nondiversified fund may
invest in a smaller number of securities than a diversified
fund
).
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Q.
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How will the reorganizations
work?
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A.
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The reorganizations will involve
the following:
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• the transfer of the
net
assets of
each of
Life Sciences and Technology to
Growth in exchange for shares of Growth having equivalent value to the net
assets transferred;
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• the pro rata distribution of
shares of Growth to the shareholders of record of Life Sciences and
Technology in exchange for their shares in Life Sciences and Technology;
and
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• the termination of Life Sciences
and Technology following the reorganizations.
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The reorganizations would take
place on the Closing Date, as defined in the Proxy
Statement/Prospectus.
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Q.
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Will I have to pay any sales
charges on shares received in the reorganizations?
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A.
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No. The Investor Class and
Institutional Class shares to be received in the reorganizations do not
carry a front-end sales charge (load) or contingent deferred sales
charge.
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Q
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How does the Board of Directors of
Life Sciences and Technology recommend that I vote?
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A
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The Board of Directors, including
all of the Independent Directors, unanimously recommend
s
you vote FOR the reorganizations.
For a discussion of the factors the Board considered in approving the
reorganizations, see “Reasons for the Reorganizations”
under the heading “Information
About the Reorganizations.”
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Q.
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My holdings in the funds are
small, why should I vote?
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A
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Your vote makes a difference. If
many shareholders do not vote their proxies, your fund may not receive
enough votes to go forward with its special meeting. This means additional
costs will be incurred to solicit votes to determine the outcome of the
proposals.
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Q.
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What happens if either of
the reorganizations is not approved by shareholders?
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A
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Each reorganization is a separate
transaction, and is not dependent upon the approval of the other
reorganization. If a reorganization does not receive shareholder approval,
American Century may ask for Board approval to liquidate the
affected
fund
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Q.
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How do I cast my
vote?
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A
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You may vote:
•
online –
access the Web site listed on
the
proxy card.
You will need the number that
appears in the gray box on your proxy card.
•
by phone –
call the toll-free number listed
on
your
proxy card.
You will need the number that
appears in the gray box on your proxy card.
•
by mail –
complete, sign and send us the
enclosed proxy card in the enclosed postage-paid
envelope.
•
by
fax, complete and sign the proxy
card and fax both sides to the toll-f
ree number listed on
your
proxy
card.
• in person at the special meeting
on Tuesday,
May 5, 2009
.
If you need more information or
have any questions on how to cast your vote, call our proxy solicitor
at
1-866-615-7264
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Your vote is important. Please vote
today and avoid the need for additional solicitation
expenses.
AMERICAN CENTURY
FUNDS
Life Sciences
Fund
Technology
Fund
4500 Main Street
Kansas City
,
Missouri
64111
NOTICE OF A SPECIAL MEETING OF
SHAREHOLDERS
TO BE HELD ON MAY 5,
2009
To Our Shareholders:
NOTICE IS HEREBY GIVEN that a Special
Meeting of Shareholders (the “Meeting”) of the American Century
f
unds listed above will be held at
4500 Main
Street
,
Kansas City
,
Missouri
on May 5, 2009 at
10:00 a.m.
, Central Time for the following
purposes:
For
shareholders of the Life Sciences Fund:
To approve an agreement and plan of
reorganization providing for,
effective
May 29, 2009 or such other date as
American Century may decide, (i) the transfer of Life Sciences’ assets into
the
Growth
Fund
, a series of American Century Mutual
Funds, Inc. solely in exchange for newly issued shares of Growth, and (ii) the
subsequent distribution by Life Sciences of such shares to its shareholders in
exchange for their shares in Life Sciences.
For
shareholders of the Technology Fund:
To approve an agreement and plan of
reorganization providing for, effective May 29, 2009 or such other date as
American Century may decide, (i) the transfer of Technology’s assets into
Growth, a series of American Century Mutual Funds, Inc. solely in exchange for
newly issued shares of Growth, and (ii) the subsequent distribution by
Technology of such shares to its shareholders in exchange for their shares in
Technology.
It is not anticipated that any matters
other than the approval of the reorganizations will be brought before the
meeting. If, however, any other business is properly brought before the Meeting,
proxies will be voted in accordance with the judgment of the persons designated
as proxies.
The Board of Directors of the
aforementioned funds have fixed the close of business on February 20, 2009, as
the record date for the determination of shareholders entitled to notice of, and
to vote at, the Meeting or any adjournment thereof.
You are cordially invited to attend the
Meeting. Shareholders are requested and encouraged to vote online, by phone, or
by dating, signing and returning each enclosed proxy card in the postage-paid
envelope provided for that purpose. If you intend to attend the Meeting in
person, you may register your presence with the registrar and vote your shares
in person, even if you have previously voted your shares by
proxy.
If you properly execute and return the
enclosed proxy card(s) in time to be voted at the Meeting, your shares
represented by the proxies will be voted at the Meeting in accordance with your
instructions. Unless revoked, proxies that have been returned by shareholders
without instructions will be voted in favor of the
reorganizations.
The enclosed proxies are being solicited
on behalf of the Board of Directors of the funds.
The Board of Directors of
Life Sciences and Technology
unanimously recommends that
the shareholders of the funds vote FOR the reorganizations.
By Order of the Board of Directors of
the funds,
Ward D. Stauffer
Secretar
y
March 2, 2009
COMBINED PROXY STATEMENT AND
PROSPECTUS
March 2, 2009
Reorganization of
LIFE SCIENCES FUND
AND
TECHNOLOGY FUND
each, a series of American Century World
Mutual Funds, Inc.
,
in exchange for shares
of
GROWTH FUND
a series of American Century Mutual
Funds, Inc.
Each
f
und has the following
address:
4500 Main Street
Kansas City
,
Missouri
64111
Telephone No.:
1-800-345-2021
This document is a combined Proxy
Statement and Prospectus and we refer to it as the Proxy Statement/Prospectus.
We are sending you this Proxy Statement/Prospectus in connection with the
Special Meeting of Shareholders (the “Meeting”) for the Life
Sciences Fund (“Life Sciences”) and the
Technology
Fund (“Technology”), each a series of
American Century World Mutual Funds, Inc. (“ACWMF”)
. The Meeting will be held at 4500 Main
Street, Kansas City, Missouri on May 5, 2009
at 10:00 a.m.
Central Time. We intend to mail this
Proxy Statement/Prospectus, the enclosed Notice of a Special Meeting of
Shareholders and the enclosed proxy card on or about
March 2, 2009
, to all shareholders entitled to vote
at the Meeting.
At the Meeting, we are asking
shareholders of Life Sciences
to consider:
Proposal
1:
To approve an agreement and plan of
reorganization providing for, effective May 29, 2009, or on such other date
as American Century may decide, (i) the transfer of Life Sciences'
assets
into the Growth Fund (“Growth”), a
series of American Century Mutual Funds, Inc.
(“ACMF”) solely in exchange for newly
issued shares of Growth, and (ii) the subsequent distribution by Life Sciences
of such shares to its shareholders in exchange for their shares of Life
Sciences.
We are asking shareholders of Technology
to consider:
Proposal
2:
To approve an agreement and plan of
reorganization providing for, effective May 29, 2009, or on such other
date as American Century may decide, (i) the transfer of Technology's assets
into Growth, a series of
ACMF, solely in exchange for newly issued shares of Growth, and (ii) the
subsequent distribution by Technology of such shares to its shareholders in
exchange for their shares of Technology.
Each of the above proposed
reorganizations shall hereinafter be individually referred to as a
“Reorganization” and collectively referred to as the “Reorganizations.” Each of
the aforemen
tioned
f
unds shall individually be
referred to as a “Fund” and collectively referred to as the “Funds.” Each of the
above referenced corporations may hereinafter be referred to as a “Corporation”
and collectively referred to as the “Corporations.”
Your Board is seeking your proxy to vote
FOR
the
proposals.
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THESE SECURITIES HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS
THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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This Proxy Statement/Prospectus is a
proxy statement of
Life
Sciences and Technology
for
use in connection with the solicitation of your proxy to vote your shares at the
Meeting, and serves as a prospectus for
Growth
under the Securities Act of 1933, as
amended (the “Securities Act”), in connection with the issuance of shares to you
pursuant to the terms of the Reorganizations.
This Proxy Statement/Prospectus sets
forth concisely the information about the Funds that you should know before
considering the Reorganizations, and should be retained for future reference.
T
his Proxy Statement/Prospectus is
accompanied by the prospectus for Growth, dated March 1, 2009. The Statement of
Additional Information, dated March 2, 2009, relating to this Proxy
Statement/Prospectus, contains additional information and has been filed by the
Funds with the Securities and Exchange Commission (“SEC”) and is incorporated
herein by reference. In addition, each of the following documents is
incorporated by reference (and legally considered to be part of the Proxy
Statement/Prospectus):
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1.
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A prospectus for
Growth
,
dated March 1,
2009;
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2.
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A prospectus for Life
Sciences
,
dated April 1,
2008;
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3.
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A prospectus for
Technology
,
dated April 1,
2008;
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4.
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A statement of additional
information for Life Sciences and Technology
,
dated April 1,
2008;
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5.
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A statement of additional
information for Growth
,
dated March 1,
2009;
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6.
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A combined a
nnual report dated,
November 30, 2008
,
for Life Sciences and Technology;
and
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7.
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An annual report
,
dated October 31,
2008
,
for
Growth.
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References to the above-listed documents
include any supplements to such documents in effect as of the date of this Proxy
Statement/Prospectus. Copies of these materials and other information about the
Funds may be obtained without charge by writing to or calling American Century
Investments at the address and telephone number shown above. They are also
available electronically at American Century’s Web site at
americancentury.com.
NO PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROXY STATEMENT/PROSPECTUS AND IN THE MATERIALS EXPRESSLY INCORPORATED
HEREIN BY REFERENCE AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
FUNDS.
THE SHARES OFFERED BY THIS PROXY
STATEMENT/PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK. THESE SHARES ARE NOT FEDERALLY INSURED BY, GUARANTEED BY,
OBLIGATIONS OF OR OTHERWISE SUPPORTED BY THE
U.S.
GOVERNMENT, THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENTAL
AGENCY. AN INVESTMENT IN THE FUNDS INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE
LOSS OF PRINCIPAL AMOUNT INVESTED.
Table of Contents
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SUMMARY
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9
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Introduction
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9
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Closing
Dates
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10
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Reasons
for the Proposed Reorganizations
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10
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Comparison
of Investment Objectives, Policies and Risks
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11
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Purchase,
Redemption and Exchange of Shares
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12
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Comparative
Fee Tables
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15
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Fund
Performance History
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16
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The
Investment Advisors
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20
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INFORMATION
ABOUT THE REORGANIZATIONS
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27
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Terms
of the Agreements and Plans of Reorganization
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27
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Costs
of the Reorganizations
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27
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Reasons
for the Reorganizations
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28
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Federal
Income Tax Consequences of the Reorganizations
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29
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Fund
Capitalization
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30
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Material
Differences Between Rights of Shareholders
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30
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INFORMATION
ABOUT THE FUNDS
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33
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General
Information
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33
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Date,
Time and Place of Meeting
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33
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Use
and Revocation of Proxies
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34
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Voting
Rights and Required Votes
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34
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Record
Date and Outstanding Shares
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34
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Security
Ownership of Certain Beneficial Owners and Management of the
Funds
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35
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Other
Service Providers
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37
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WHERE
TO FIND ADDITIONAL INFORMATION
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37
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OTHER
MATTERS AND DISCRETION OF ATTORNEYS NAMED IN THE PROXY
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38
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FORM
OF AGREEMENT AND PLAN OF REORGANIZATION
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Exhibit
A
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MANAGEMENT’S
DISCUSSION OF FUND PERFORMANCE
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Exhibit
B
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FINANCIAL
HIGHLIGHTS
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Exhibit
C
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FUNDAMENTAL
INVESTMENT LIMITATIONS
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Exhibit
D
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SUMMARY
This summary is qualified in its
entirety by the additional information contained elsewhere in this Proxy
Statement/Prospectus, or incorporated by reference into this Proxy
Statement/Prospectus. A form of the Agreements and Plans of Reorganization
pursuant to which the Reorganizations will be conducted is attached to this
Proxy Statement/Prospectus as Exhibit A. For
additional
information, please read the
Growth
prospectus, which accompanies this Proxy
Statement/Prospectus.
Introduction
This Proxy Statement/Prospectus is
furnished to you because you are entitled to vote on one or more of the
proposals described in this Proxy Statement/Prospectus that will be considered
at the Meeting. The Meeting will be held on
May 5, 2009
.
The following is a brief summary of the
proposals that will be voted on at the Meeting:
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1.
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It is being proposed that Growth
acquire the
net
assets of Life
Sciences, in exchange for Investor Class and Institutional Class shares of
Growth (the “Life Sciences/Growth Exchange”). Immediately following the
Life Sciences/Growth Exchange, Life Sciences will distribute the Investor
Class and Institutional Class shares of Growth to holders of the Investor
Class and Institutional Class shares of Life Sciences, respectively (the
“Life Sciences Fund Distribution”). The Life Sciences/Growth Exchange and
the Life Sciences Fund Distribution are collectively referred to in this
Proxy Statement/Prospectus as the “Life Sciences Fund Reorganization.” If
approved, as a result of the Life Sciences Fund Reorganization, each
holder of Investor Class and Institutional Class shares of Life Sciences
will receive the same percentage of the aggregate number of Investor Class
and Institutional Class shares of Growth issued in the Life Sciences Fund
Reorganization as he or she owned in Life Sciences, having a total net
asset value (“NAV”) equal to the total NAV of his or her Life Sciences
holdings on the Closing Date (as hereafter defined).
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2.
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It is being proposed that Growth
acquire the
net
assets of Technology,
in exchange for Investor Class and Institutional Class shares of Growth
(the “Technology/Growth Exchange”). Immediately following the
Technology/Growth Exchange, Technology will distribute the Investor Class
and Institutional Class shares of Growth to holders of the Investor Class
and Institutional Class shares of Technology, respectively (the
“Technology Fund Distribution”). The Technology/Growth Exchange and the
Technology Fund Distribution are collectively referred to in this Proxy
Statement/Prospectus as the “Technology Fund Reorganization.” If approved,
as a result of the Technology Fund Reorganization, each holder of Investor
Class and Institutional Class shares of Technology will receive the same
percentage of the aggregate number of Investor Class and Institutional
Class shares of Growth issued in the Technology Fund Reorganization as he
or she owned in Technology, having a total NAV equal to the total NAV of
his or her Technology holdings on the Closing Date (as hereafter
defined).
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The Board
of Directors of the aforementioned Funds shall be collectively referred to as
the “Boards.” The Boards, including Directors who are not “interested persons”
within the meaning of Section 2(a)(19) of the Investment Company Act of 1940, as
amended (“1940 Act”), have concluded that the Reorganizations are in the best
interests of shareholders of Life Sciences, Technology and Growth.
Consummation of either Reorganization is
not conditioned upon the consummation of the other Reorganization. If a
Reorganization does not receive shareholder approval, American Century may ask
the Board of Directors of
American Century World Mutual Funds, Inc. (“ACWMF
Board
”)
for
approval to liquidate the affected
Fund.
Each Reorganization will be a tax-free
event under applicable provisions of the Internal Revenue Code, as amended, so
that no gain or loss will be recognized by the Funds or
Life Sciences’ or Technology’s
shareholders. As a
condition to its Reorganization, each Fund will receive an opinion of Reed
Smith, LLP that the Reorganization will be considered a tax-free
“reorganization” under applicable provisions of the Internal Revenue Code of
1986, as amended, so that no gain or loss will be recognized by either Life
Sciences
or
Technology
(
or their respective
shareholders
) or
Growth
. The tax basis of
the shares of Growth received by Life Sciences and Technology shareholders will
be the same as the tax basis of their shares in Life Sciences and
Technology.
Closing Dates
If all of the requisite approvals are
obtained and certain conditions are either met or waived, it is anticipated that
the Reorganizations will be consummated following the close of business on May
29, 2009 or on such other date as American Century may decide (the “Closing
Date”) and that shareholders of Life Sciences and Technology will receive shares
of Growth by the next business day following the Closing
Date.
Reasons for the Proposed
Reorganizations
The advisor to Life Sciences, American
Century Global Investment Management, Inc. (“ACGIM”)
,
and the advisor to Technology, American
Century Investment Management, Inc. (“ACIM”) (ACGIM and ACIM, collectively
referred to as “American Century” or the “Advisor”)
,
have recommended the proposed
R
eorganizations to the ACWMF Board
because
they believe that the Reorganizations
will result in a more viable investment for shareholders of
both
Life Sciences and Technology
(collectively, the “Acquired
Funds”)
. In
making its recommendation
,
the Advisor has indicated that, despite
efforts to increase sales, the Acquired Funds have not grown to a viable
size. In addition, the Advisor noted that, as shown below in the
“Comparative Fee Tables,” shareholders of the Acquired Funds
are
expected
to benefit from a
reduction in expenses as a result of the
Reorganizations.
In considering the Advisor’s
recommendation with respect to the proposed Reorganizations, the ACWMF Board
took into consideration a number of factors, including: (1) the viability of
each of
the Acquired Funds absent approval of
the proposed Reorganizations and the greater long-term viability of Growth; (2)
the relative compatibility of the investment objectives and policies of
each of
the Acquired Funds
with
Growth; (3) the comparative investment
performance of Life Sciences
to Growth
,
and
Technology
to
Growth; (4) the fact that the
Reorganizations are expected to be “tax-free” for federal income tax purposes
(and that the Funds will receive an opinion of counsel to this effect); (5) that
the proposed Reorganizations are expected to result in lower fees, as a
percentage of net assets, for shareholders of
both
Life Sciences and Technology;
and
(6) the undertaking by American Century
to pay all costs and expenses of preparing, printing and mailing this Proxy
Statement/Prospectus and solicitation expenses of the
Reorganizations.
For a more detailed discussion of the
factors considered by the
ACWMF
Board in approving the Reorganizations,
see “Reasons for the
Proposed
Reorganizations.”
Comparison of Investment Objectives,
Policies and Risks
Investment
Objectives
The investment objectives of Life
Sciences, Technology and Growth are substantially similar. Life
Sciences and Technology seek capital growth, whereas Growth seeks long-term
capital growth.
Investment Exposure
The portfolio managers for Growth look
for stocks of larger-sized companies. Although the portfolio managers
intend to invest the fund’s assets primarily in
U.S.
stocks, the fund may invest in
securities of foreign companies, including companies located in emerging
markets. Life Sciences and Technology may invest in
U.S.
and foreign companies of any
size.
To achieve its objective, Life Sciences
invests at least 80% of its assets in companies that engage in the business of
providing products and services that help promote health and wellness. Life
science companies generally own, operate or support healthcare facilities
(including, among others, hospitals, outpatient surgery facilities, dialysis
centers, dental centers and physical therapy centers); design, manufacture or
sell pharmaceuticals, biopharmaceuticals, medical research facilities, and
medical devices and supplies; or provide biotechnology needed to improve
agriculture, aquaculture, forestry, chemicals, household products and
cosmetics/personal care products, environmental cleanup, food processing, and
forensic medicine.
To achieve its objective, Technology
invests at least 80% of its assets in companies that the portfolio managers
believe are principally engaged in offering, using or developing products,
processes or services that provide or will benefit significantly from
technological advancements or improvements. The portfolio managers consider
technology and telecommunications-related industries to include among others,
computers (including software, products and electronic components),
semiconductors, networking, internet and on-line service providers, office
automation, telecommunications, communications equipment, information technology
and commercial services, media and information services, electronics, electrical
equipment, electronic equipment, and defense and aerospace.
The Fund's portfolio managers do not
attempt to time the market. Instead, under normal market conditions, they intend
to keep the Funds essentially fully invested in stocks regardless of the
movement of stock prices generally. When the managers believe it is
prudent, Growth may invest a portion of its assets in debt securities, options,
preferred stock and equity-equivalent securities. Life Sciences and
Technology may purchase preferred stock, equity-equivalent securities, forward
currency exchange contracts, notes, bonds and other debt securities of
companies, and obligations of domestic or foreign governments and their
agencies. The Life Sciences and Technology managers also may purchase
put options (i.e., the right to sell a security at a specified price by a
certain date) for some securities that the fund holds in order to hedge against
adverse price fluctuations of those securities. The managers may purchase put
options to cover up to 10%
of
Life Sciences or Technology
assets.
Futures contracts, a type of derivative
security, can help the Funds’ cash assets remain liquid while performing more
like stocks. The Funds have a policy governing futures and similar derivative
securities to help manage the risk of these types of
investments.
Stock Selection
Process
The Funds' portfolio managers look for
stocks of companies they believe will increase in value over time, using a
bottom-up approach to stock selection. This means that the managers make their
investment decisions based primarily on their analysis of individual companies,
rather than on broad economic forecasts. T
he
portfolio managers track financial
information for thousands of individual companies to identify and evaluate
trends in earnings, revenues and other business fundamentals.
Management of Growth is based on the belief that, over the long
term, stock price movements follow growth in earnings, reve
nues and/or cash flow.
Management of Life Sciences and
Technology is based on the belief that, over the long term, stock price
movements follow growth in earnings and revenues.
Under normal market conditions,
Growth’
s
portfolio will primarily consist of
securities of companies demonstrating business improvement. Analytical
indicators helping to identify signs of business improvement could include
accelerating earnings or revenue growth rates, increasing cash flows, or other
indications of the relative strength of a company’s business. These
techniques help the portfolio managers buy or hold the stocks of companies they
believe have favorable growth prospects and sell the stocks of companies whose
characteristics no longer meet their criteria.
The Life Sciences and Technology
portfolio managers’ principal analytical technique involves the identification
of companies with earnings and revenues that are not only growing, but growing
at an accelerating pace. This includes companies whose growth rates, although
still negative, are less negative than prior periods, and companies whose growth
rates are expected to accelerate. In addition to locating strong companies with
earnings and revenue growth, the portfolio managers invest in companies that
experience a change in their business that may stimulate future revenue and
earnings acceleration and lead to positive investor perception. The change
typically is the result of key events including: entry into a new market,
development of a new product, obtaining a new patent or license, or, for Life
Sciences, the presentation of clinical data showing efficacy for a new drug or
medical device. The portfolio managers
for Life Sciences and
Technology
also believe
that it is important to diversify the
F
und
s
’ holdings across geographical regions
and different countries. For this reason, the portfolio managers also consider
the prospects for relative economic growth among countries or regions, economic
and political conditions, expected inflation rates, currency exchange
fluctuations, and tax considerations when making
investments.
Investment
Limitations
Each Fund has fundamental investment
limitations, which may not be changed with
out
shareholder approval. With
the exception of the Funds’ respective polic
ies
regarding concentration of
investments
and
diversification
, the
fundamental limitations of the Funds are identical.
With respect to the concentration
polic
y,
Growth may not concentrate its
investments in securities of issuers in a particular industry (other than
securities issued or guaranteed by the
U.S.
government or any of its agencies or
instrumentalities). However, Technology may concentrate its
investments in securities of issuers engaged in the technology or
telecommunications industries and related industry groups and Life Sciences may
concentrate its investments in securities of issuers or engaged in the medical
and health care industry and related industry groups.
Growth is diversified as defined in the
1940 Act. Diversified means that, with respect to 75% of its total assets, the
Fund will not invest more than 5% of its total assets in the securities of a
single issuer or own more than 10% of the outstanding voting securities of a
single issuer (other than U.S. government securities and securities of other
investment companies). Life Sciences and Technology are nondiversified.
Nondiversified means that a fund may invest a greater portion of its assets in a
smaller number of securities than a diversified fund. Although Life Sciences’
and Technology’s portfolio managers expect that the Funds will ordinarily
satisfy the requirements of a diversified fund, their nondiversified status
gives each Fund more flexibility to invest heavily in the most attractive
companies identified by its methodology.
A complete list of each fund’s
investment limitations is attached as Exhibit D to this Proxy
Statement/Prospectus.
Comparison of Principal
Risks
Because the Funds have similar
investment objectives and strategies, many of the risks associated with
investing in the Funds are similar. The following summarizes and
compares the principal risks of investing in the Funds, as disclosed in each
Fund’s prospectus. The fact that a risk is not listed as a principal
risk in a Fund’s prospectus does not necessarily mean that
shareholder
s
of that Fund are not subject to that
risk.
Life Sciences, Technology and Growth are
each
subject to the following principal
risks:
|
—
|
Growth stocks are typically priced
higher than other stocks, in relation to earnings and other measures,
because investors believe they have more growth potential. This potential
may or may not be realized and growth stock prices tend to fluctuate more
dramatically than the overall stock market.
|
|
—
|
The portfolio managers may buy a
large amount of a company’s stock quickly, and often will dispose of it
quickly if the company’s earnings or revenues decline. While the portfolio
managers believe this strategy provides substantial appreciation potential
over the long term, in the short term it can create a significant amount
of share price volatility. This volatility can be greater than that of the
average stock fund.
|
|
—
|
Each Fund may invest in securities
of foreign companies. Foreign investment involves additional risks,
including fluctuations in
currency exchange rates, less
stable political and economic structures, reduced availability of public
information, and lack of uniform financial reporting and regulatory
practices similar to those that apply in the
United States
. These factors make investing in
foreign securities generally riskier than investing in
U.S.
stocks. To the extent the
F
unds invest in
foreign securi
ties,
the overall risk of that F
und could be
affected.
|
|
—
|
Market performance tends to be
cyclical, and, in the various cycles, certain investment styles may fall
in and out of favor. If
the market is not favoring the
F
und’s style, the
fund’s gains may not be as big as, or its losses may be bigger than, other
equity funds using different investment styles
|
|
|
—
|
The value of
each F
und’s shares depends on the value
of the stocks and other securities it owns. The value of the individual
securities the fund owns will go up and down depending on the performance
of the companies that issued them, general market and economic conditions,
and investor confidence.
|
|
|
—
|
At any given time your shares may
be worth less than the price you paid for them. In other words, it is
possible to lose money by investing in the
F
und.
|
|
Life Sciences and Technology also are
subject to the following principal risks. Although Growth may be subject to
these risks as well, they are not considered to be principal risks of
Growth.
|
—
|
Life Sciences focuses its
investments among companies in the life sciences sector and Technology
focuses its investments among companies in the technology and
telecommunications-related sector. Because those investments are
concentrated in a comparatively narrow segment of the total market, the
funds’ investments are not as diversified as those of many other mutual
funds. Because of this, companies in each
F
und’s portfolio may react
similarly to market developments, such as government regulation, subsidies
or technological advancements. This means that
each F
und’s net asset value may be more
volatile than that of less concentrated funds. As a result, the value of
an investment in the
F
und
s
may rise or fall
rapidly.
|
|
—
|
Life Sciences and Technology are
nondiversified. This means that the portfolio managers may choose to
invest in a relatively small number of securities. If so, a price change
in any one of these securities may have a greater impact on
each
F
und’s share price than would be
the case if the
F
und
s
were diversified. Although the
portfolio managers expect
each Fund
will ordinarily invest in enough
securities to qualify as a diversified fund,
its
nondiversified status gives
it
more flexibility to invest heavily
in the most attractive companies identified by
the F
und’s
methodology.
|
|
—
|
Life Sciences
’
and Technology’s portfolio
turnover may be high. This could result in relatively high commission
costs, which could hurt the funds’ performance and increase capital gains
tax liabilities for the
F
unds’
shareholders.
|
|
—
|
Many faster-growing life sciences,
technology and telecommunications-related companies have limited operating
histories. For Life Sciences companies in particular, their
potential profitability may be dependent on regulatory approval of their
products and many of these companies’ activities are funded or subsidized
by government grants or other funding, which may be reduced or withdrawn.
Changes in government regulation also can have an impact on a company’s
profitability and/or stock price. Continuing technological advances may
mean rapid obsolescence of key products and services. These business
uncertainties may increase the volatility of the prices for these
companies’ securities.
|
|
—
|
I
nvesting in securities of
companies located in emerging market countries generally is also riskier
than investing in securities of companies located in foreign developed
countries. Emerging market countries may have unstable governments and/or
economies that are subject to sudden change. These changes may be
magnified by the countries’ emergent financial markets, resulting in
significant volatility to investments in these countries. These countries
also may lack the legal, business and social framework to support
securities markets.
|
|
—
|
Life Sciences
’
and Technology may invest in
companies regardless of size, which means they may invest in smaller
U.S.
and foreign companies. Investing
in securities of smaller companies generally presents unique risks.
Smaller companies may have more limited resources, trade less frequently
and have less publicly available information. They also may be more
sensitive to changing political and economic conditions. These factors may
cause investments in smaller companies to experience more price
volatility.
|
|
—
|
In addition to publicly traded
securities, Life Sciences and Technology each may invest up to 15% of its
assets in privately placed securities. These securities may be considered
illiquid if they cannot be sold in seven days at approximately the price
at which the fund is valuing them. Privately placed securities are valued
by the manager pursuant to
procedures established by the
F
und’s Board of
Directors.
|
|
—
|
Life Sciences and Technology’s
performance also may be affected by investments in initial public
offerings (IPOs). The impact of IPOs on a fund’s performance depends on
the strength of the IPO market and the size of the fund. IPOs may have
less impact on a fund’s performance as its assets
grow.
|
|
—
|
Option prices can be volatile, and
trading in options will expose
a
F
und to certain risks. For
instance, if the price of the option’s underlying security does not change
in the anticipated direction to an extent sufficient to cover the cost of
the option before the option expires, the
F
und may lose all or a significant
part of its investment in the option.
|
For more information on the risks of
investing in the Funds please see the prospectuses for the Funds, which are
incorporated by reference into this Proxy Statement/Prospectus. The prospectus
for Growth is included with this Proxy Statement/Prospectus.
Purchase, Redemption and Exchange of
Shares
The following table highlights certain
purchase, redemption and exchange features of Life Sciences and
Technology
as
compared to such features of shares of Growth.
|
Purchase,
Redemption
and Exchange
Features
|
Life Sciences and
Technology
|
Growth
|
|
Sales
Charges
|
There is no initial sales charge
or contingent deferred sales
charge (CDSC) on Investor or
Institutional Class shares.
|
Same as Life
Sciences
and
Technology
|
|
Minimum
Initial
Investments
|
Investor Class
Financial Intermediaries:
$250
Broker-dealer sponsored wrap
program and/or fee based
accounts: no
minimum
Coverdell Education Savings
Account: $2,000.
Employer-sponsored retirement
plan: no minimum
All other accounts:
$2,500.
Institutional Class: $5
million
($3 million for endowments and
foundations)
|
Same as Life
Sciences
and
Technology
|
|
Subsequent
Purchases
|
There is a $50 minimum for
subsequent purchases; however,
there is no subsequent purchase
minimum for financial
intermediaries or
employer-sponsored retirement plans.
|
Same as Life
Sciences
and
Technology
|
|
Redemption
Fees
|
None. However, there is a $10
charge to redeem your
shares by
wire.
|
Same as Life
Sciences
and
Technology
|
|
Account
Maintenance
Fee
|
Investor Class Shares: $12.50
semiannual fee for investors
whose total eligible investments
with American Century are
less than $10,000. (See the Funds’
prospectus for further
information.) This fee is not
applicable to shares held in a
financial intermediary or
retirement plan account.
Institutional Class Shares:
None.
|
Same as Life
Sciences
and
Technology
|
|
Purchases/
Redemptions
|
By telephone, mail or fax, online,
in person,
or
automatically
|
Same as Life
Sciences
and
Technology
|
|
Redemption
Policies
|
American Century reserves the
right to delay delivery of
redemption proceeds up to seven
days. Any redemption
request made within 15 days of an
address change may be
required to be submitted in
writing with guaranteed signatures
of all authorized signers. If bank
information is changed a 15-
day holding period may be imposed
before the proceeds are
wired to the
bank.
If, during any 90-day period, a
shareholder redeems Fund
shares worth more than $250,000
(or 1% of the value of the
Fund’s assets, if that percentage
is less than $250,000) then
the Fund reserves the right to pay
part or all of the redemption
proceeds in excess of this amount
in readily marketable
securities instead of cash.
Shareholders can avoid being paid
in securities if they provide an
unconditional instruction to
redeem at least 15 days prior to
the date on which the
redemption transaction is to
occur.
|
Same as Life
Sciences
and
Technology
|
|
Exchanges
|
Because there is no sales charge
or CDSC on Investor Class
and Institutional Class shares,
shareholders may redeem and
purchase shares into any other
Investor or Institutional share
class without incurring a sales
charge. However, investors will
have to meet the applicable
minimum initial investment when
purchasing new investments in
these share classes.
|
Same as Life
Sciences
and
Technology
|
|
Dividends and
Distributions
|
Distributions by the Fund
generally consist of dividends and
interest received by the Fund, as
well as capital gains
realized by the Fund on the sale
of investment securities.
Each Fund pays distributions from
net income once a year,
usually in December. Each Fund
generally pays capital gains
distributions, if any, twice a
year, usually in March and December.
A Fund may make more frequent
distributions, if necessary,
to comply with Internal
Revenue Code provisions.
You will participate in Fund
distributions, when they are declared,
starting the next business day
after your purchase is effective.
If you redeem shares, you will
receive any distribution declared
on the day you redeem. If you
redeem all shares, we will include
any
distributions received with your
redemption proceeds.
For investors investing through
taxable accounts, we will reinvest
distributions unless you elect to
have dividends and/or capital gains
sent to another American Century
account, to your bank electronically,
or to your home address or to
another person or address by check.
|
Same as Life Sciences
and
Technology, except that
t
he
Fund pays distributions
from
net income and capital gains once
a year, usually in
December.
|
In addition to the Investor and
Institutional Classes described above, Growth also offers Advisor and R Class
shares. For more information about these other classes, refer to the
Growth prospectus accompanying this Proxy
Statement/Prospectus.
Comparative Fee
Tables
The Funds, like all mutual funds, incur
certain expenses in their operations. These expenses include management fees, as
well as the costs of maintaining accounts, administration, providing shareholder
liaison and distribution services and other activities. Set forth in the tables
below is information regarding applicable sales charges, fees and expenses of
the Funds, and pro forma fees for Growth after giving effect to the
Reorganizations.
|
Life Sciences and
Technology
|
Growth
|
|||
|
Investor
Class
|
Institutional
Class
|
Investor
Class
|
Institutional
Class
|
|
|
Maximum Account Maintenance
Fee
|
$25
(1)
|
None
|
$25
(1)
|
None
|
|
1
|
Applies only
to investors whose total eligible investments with American Century
Investments are less than $10,000. See
Account Maintenance
Fee
under
Investing Directly
with American Century Investments
in the Funds’
prospectuses
for more
details.
|
|
2
|
Each fund pays
the
A
dvisor a
single, unified management fee for arranging all services necessary for
the
F
und to
operate. The fee shown
is based on
assets during each F
und’s most
recent fiscal year. Each
F
und has a
stepped f
ee schedule.
As a result, each F
und’s unified
management fee rate generally decreases as strategy assets increase and
increases as strategy assets decrease. For more information about the
unified management fee, including an explanation of strategy assets, see
The Investment
Advisor
under
Management
in the Funds’
prospectuses
.
|
|
3
|
Other expenses, which include the
fees and expenses of the
F
und’s independent directors and
their legal counsel, as well as interest, were less than 0.005% for the
most recent fiscal year.
|
|
4
|
The Fund indirectly bears its pro
rata share of fees and expenses of the acquired funds in which it invests.
Such indirect expenses are not paid from the
F
und's assets but are reflected in
the return realized by the
F
und on its investment in the
acquired funds. The Total Annual Fund Operating Expenses shown differ from
the Ratio of Expenses to Average Net Assets in the Financial Highlights,
which do not include acquired fund fees and
expenses.
|
|
5
|
Other expenses, which include the
fees and expenses of the
F
und’s independent directors and
their legal counsel, interest, and, if applicable, acquired fund fees and
expenses, were less than 0.005% for the most recent fiscal
year.
|
Example
The examples in the table below are
intended to help you compare the costs of investing in the Funds with the costs
of investing in other mutual funds. Of course, your actual costs may be higher
or lower. Assuming you . . .
|
•
|
invest $10,000 in the
Fund
|
|
•
|
redeem all of your shares at the
end of the periods shown below
|
|
•
|
earn a 5% return each
year
|
|
•
|
incur the same operating expenses
as shown above
|
. . . your cost of investing in the Fund
would be:
Fund Performance
History
Life Sciences and Technology Annual
Total Returns
The following bar charts show the
performance of the
Acquired
Funds’ Investor Class
shares for each full calendar year in the life of the class. They indicate the
volatility of the Funds’ historical returns from year to year. Account fees are
not reflected in the charts below. If they had been included, returns would be
lower than those shown. The returns of the Funds’ other classes of shares will
differ from those shown in the charts, depending on the expenses of those
classes.
Life Sciences — Inv
estor Class
The
highest and lowest quarterly returns for the periods reflected in the bar chart
are:
|
Highest
|
Lowest
|
|
|
Life
Sciences
|
14.32% (2Q
2001)
|
-16.51% (4Q
2008)
|
Technology — Investor
Class
The
highest and lowest quarterly returns for the periods reflected in the bar chart
are:
|
Highest
|
Lowest
|
|
|
Technology
|
26.15% (2Q
2003)
|
-33.53% (1Q
2001)
|
Life Sciences and Technology Average
Annual Total Returns
The following table shows the average
annual total returns of the
Acquired
Funds’ Investor Class shares calculated
three different ways. An additional table shows the average annual total returns
of the Funds’ Institutional
C
lass
shares
calculated before the impact of taxes.
Returns assume the deduction of all charges and other fees associated with a
particular class. Your actual returns may vary depending on the circumstances of
your investment.
Return Before Taxes shows the actual
change in the value of Fund shares over the time periods shown, but does not
reflect the impact of taxes on Fund distributions or the sale of Fund shares.
The two after-tax returns take into account taxes that may be associated with
owning Fund shares. Return After Taxes on Distributions is a Fund’s actual
performance, adjusted by the effect of taxes on distributions made by the Fund
during the periods shown. Return After Taxes on Distributions and Sale of Fund
Shares is further adjusted to reflect the tax impact on any change in the value
of Fund shares as if they had been sold on the last day of the
period.
After-tax returns are calculated using
the historical highest federal marginal income tax rates and do not reflect the
impact of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. After-tax returns
shown are not relevant to investors who hold Fund shares through tax-deferred
arrangements such as 401(k) plans or IRAs.
The benchmarks are unmanaged indices
that have no operating costs and are included in the table for performance
comparison.
The S&P
500
®
Index is a market value-weighted index
of the stocks of 500 publicly traded U.S. companies chosen for market size,
liquidity, and industry group representation that are considered to be leading
firms in dominant industries. The S&P Composite 1500 Hea
lth Care Index represents companies in
the
S&P Composite 1500
(which combines
the S&P 500, MidCap 400
and Smallcap 600 indices
)
in two main industry groups: Health
care equipment and supplies companies or companies that provide health care
related services, and companies that provide research, development, production
and marketing of pharmaceuticals and biotechnology products.
The S&P 1500 Technology Index
represents those S&P Composite1500 companies in two main industries groups:
technology software and services companies, and technology hardware and
equipment companies.
|
Investor
Class
|
|||
|
For the calendar year ended
December 31, 2008
|
1 year
|
5 years
|
Life of Class
(1)
|
|
Life
Sciences
|
|||
|
Return Before
Taxes
|
-23.99%
|
-0.13%
|
-0.93%
|
|
Return After Taxes on
Distributions
|
-23.99%
|
-0.13%
|
-1.05%
|
|
Return After Taxes on
Distributions
and
Sale
of Fund
Shares
|
-15.59%
|
-0.11%
|
-0.85%
|
|
S&P 500
®
Index
(reflects no
deduction for fees, expenses or taxes)
|
-37.00%
|
-2.19%
|
-3.76%
|
|
S&P Composite 1500 Health Care
Index
(reflects no
deduction for fees, expenses or taxes)
|
-23.76%
|
-0.43%
|
-1.06%
|
|
Technology
|
|||
|
Return Before
Taxes
|
-50.90%
|
-7.97%
|
-14.95%
|
|
Return After Taxes on
Distributions
|
-50.90%
|
-7.97%
|
-14.95%
|
|
Return After Taxes on
Distributions
and
Sale
of Fund
Shares
|
-33.08%
|
-6.59%
|
-11.19%
|
|
S&P 500
®
Index
(reflects no
deduction for fees, expenses or taxes)
|
-37.00%
|
-2.19%
|
-3.76%
|
|
S&P Composite 1500 Technology
Index
(reflects no
deduction for fees, expenses or taxes)
|
-42.90%
|
-5.68%
|
-12.51%
|
|
1
|
The inception date for the
Investor Class is June 30,
2000.
|
|
1
|
The inception date for the
Institutional Class of Life Sciences is July 17, 2000. The inception date
for the Institutional Class of Technology is July 14,
2000.
|
|
2
|
Since July 31, 2000, the date
closest to the class’s inception for which data is
available.
|
|
3
|
Since June 30, 2000, the date
closest to the class’s inception for which data is
available.
|
Growth Annual Total
Returns
The following bar chart shows the
performance of Growth’s Investor Class shares for each of the last 10 calendar
years. It indicates the volatility of the Fund’s historical returns from year to
year. Account fees are not reflected in the charts below. If they had been
included, returns would be lower than those shown. The returns of the shares of
other classes of Growth will differ from those shown in the chart, depending on
the expenses of that class.
Growth — Investor
Class
The highest and lowest quarterly returns
for the periods reflected in the bar chart are:
|
Highest
|
Lowest
|
|
|
Growth
|
23.62% (4Q
1999)
|
-22.91% (4Q
2008)
|
The following table shows the average
annual total returns of Growth’s Investor Class shares calculated three
different ways. An additional table shows the average annual total returns of
the Fund’s Institutional
C
lass
shares
calculated before the impact of taxes.
Returns assume the deduction of all charges and other fees associated with a
particular class. Your actual returns may vary depending on the circumstances of
your investment.
Return Before Taxes shows the actual
change in the value of Fund shares over the time periods shown, but does not
reflect the impact of taxes on Fund distributions or the sale of Fund shares.
The two after-tax returns take into account taxes that may be associated with
owning Fund shares. Return After Taxes on Distributions is a Fund’s actual
performance, adjusted by the effect of taxes on distributions made by the Fund
during the periods shown. Return After Taxes on Distributions and Sale of Fund
Shares is further adjusted to reflect the tax impact on any change in the value
of Fund shares as if they had been sold on the last day of the
period.
After-tax returns are calculated using
the historical highest federal marginal income tax rates and do not reflect the
impact of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. After-tax returns
shown are not relevant to investors who hold Fund shares through tax-deferred
arrangements such as 401(k) plans or IRAs. After-tax returns are shown only for
Investor Class shares. After-tax returns for other share classes will
vary.
The benchmark is an unmanaged index that
has no operating costs and is included in each table for performance
comparison.
The Russell 1000
®
Growth Index measures the performance
of th
e 1
,000 largest publicly traded U.S.
companies, based on total market capitalization
,
with higher price-to-book ratios and
higher forecasted growth rates.
|
Investor
Class
|
|||
|
For the calendar year ended
December 31, 2008
|
1 year
|
5 years
|
10 years
|
|
Return Before
Taxes
|
-37.84%
|
-1.66%
|
-2.33%
|
|
Return After Taxes on
Distributions
|
-37.89%
|
-1.69%
|
-2.90%
|
|
Return
After Taxes on
Distributions
and
Sale
of Fund
Shares
|
-24.53%
|
-1.40%
|
-1.98%
|
|
Russell 1000
®
Growth Index
(reflects no
deduction for fees, expenses or taxes)
|
-38.44%
|
-3.42%
|
-4.27%
|
|
Institutional
Class
|
|||
|
For the calendar year ended
December 31, 2008
|
1 year
|
5 years
|
10 years
|
|
Return Before
Taxes
|
-37.74%
|
-1.47%
|
-2.13%
|
|
Russell 1000
®
Growth Index
(reflects no
deduction for fees, expenses or taxes)
|
-38.44%
|
-3.42%
|
-4.27%
|
The Investment
Advisors
American Centur
y Investment Management, Inc.
(“
ACIM
”)
serves as investment advisor to
Technology and Growth
,
and American Century Global
Inve
stment Management, Inc.
(“ACGIM”
) serves as
investment advisor to Life Sciences. ACIM has been managing mutual funds since
1958 and is headquartered at
4500 Main Street
,
Kansas City
,
Missouri
64111
. ACGIM, a wholly owned subsidiary of
ACIM, has been managing mutual funds since 2006 and is headquartered at 666
3
rd
Avenue, 23
rd
Floor, New York, New York
10017.
ACIM and ACGIM (each an “Advisor and
collectively the “Advisors”) are responsible for managing the investment
portfolio
s
of the Funds and directing the purchase
and sale of their investment securities. The Advisors also arrange for transfer
agency, custody and all other services necessary for each Fund to
operate.
For the services it provides to each
F
und, the
A
dvisor receives a unified management fee
based on a percentage of the daily net assets of each class of shares of the
F
und. The amount of the fee is calculated
daily and paid monthly in arrears. Out of that fee, the
A
dvisor pays all expenses of managing and
operating the fund except brokerage expenses, taxes, interest, fees and expenses
of the independent directors (including legal counsel fees), and extraordinary
expenses. A portion of the fund’s man
agement fee may be paid by the
F
und’s
A
dvisor to unaffiliated third parties who
provide recordkeeping and administrative services that would otherwise be
performed by an affiliate of the
A
dvisor.
The rate of the fee is determined by
applying a formula that takes into account the assets of each
F
und as well as certain assets, if any,
of other clients of the
A
dvisor outside the American Century
Investments fund family (such as subadvised funds and separate accounts) that
use very similar in
vestment
teams and strategies (“
strategy assets
”
). Growth
’s
strategy assets also include the assets
of the NT Growth Fund. The use o
f strategy assets, rather than
F
und assets, in calculating
the
F
und’s fee rate could allow the
F
und to realize scheduled cost savings
more quickly. Ho
wever, it
is possible that the F
und’s
strategy assets will not include assets of other client accounts or that any
such assets may not be sufficient to result in a lower fee
rate.
|
Management Fees Paid by the Fund
to the Advisor
as a Percentage of Average Net
Assets for the
Fiscal Year Ended November 30,
2008
|
Investor
Class
|
Institutional
Class
|
|
Life
Sciences
|
1.35%
|
1.15%
|
|
Technology
|
1.50%
|
1.30%
|
|
Management Fees Paid by the Fund
to the Advisor
as a Percentage of Average Net
Assets for the
Fiscal Year Ended October 31,
2008
|
Investor
Class
|
Institutional
Class
|
|
Growth
|
1.00%
|
0.80%
|
A
discussion regarding the basis for the Board of Directors’ approval of the
Funds’ investment advisory agreement with the Advisor is available in Life
Sciences’ and Technology's report to shareholders dated November 30, 2008 and
Growth's report to shareholders dated October 31, 2008.
The Fund Management
Team
The advisor uses teams of portfolio
managers and analysts to manage funds. The teams meet regularly to review
portfolio holdings and discuss purchase and sale activity. Team members buy and
sell securities for a fund as they see fit, guided by the fund’s investment
objective and strategy.
The portfolio manager on the investment
team who is primarily responsible for the day-to-day management of Life Sciences
and Technology is:
Steve Lurito
Mr. Lurito, Senior Vice President and
Chief Investment Officer, U.S. Growth Equity, has been a member of the teams
that manage Life Sciences and Technology since 2008. He joined American Century
Investments in 2007. From 2006 to 2007, he was the chief investment officer at
MUUS Asset Management. From 2004 to 2006, he was the director of small cap
research, senior portfolio manager and managing director at Forstmann Leff
Associates. He has a bachelor’s degree from the
University
of
Virginia
in
Charlottesville
and an MBA from The Wharton School of
Business,
University
of
Pennsylvania
.
The portfolio managers on the investment
team who are primarily responsible for the day-to-day management of Growth
are:
Gregory J. Woodhams
Mr. Woodhams, Vice President and Senior
Portfolio Manager, has been a member of the team that manages
Growth
since he joined American Century
Investments in 1997. He has a bachelor’s degree in economics from
Rice
University
and an M.A. in economics from the
University
of
Wisconsin
. He is a CFA
charterholder.
E. A. Prescott
LeGard
Mr. LeGard, Vice President and Portfolio
Manager, has been a member of the team that manages
Growth
since 1999. He has a bachelor’s degree
in economics from
DePauw
University
. He is a CFA
charterholder.
The statement of additional information
provides additional information about the accounts managed by the portfolio
managers, the structure of their compen
sation, and their ownership of
F
und
securities.
For further information on the
performance of the Funds, please see “Management’s Discussion of Fund
Performance” attached hereto as Exhibit B. For further information regarding the
financial history of the Funds, please see “Financial Highlights” attached
hereto as Exhibit C and the Fund
s
’ prospectus
es
.
The Board of the
Acquired
Funds Recommend
s
That You Vote “FOR” the Reorganization
of Life Sciences and Technology into Growth.
INFORMATION ABOUT THE
REORGANIZATIONS
Terms of the Agreements and Plans of
Reorganization
Set forth below is a summary of certain
material terms of the Agreements and Plans of Reorganization (“Plans”). This
summary is qualified in its entirety by the terms and provisions of the form of
Plan which is attached to this Proxy Statement/Prospectus as Exhibit
A.
The Plans provide that all of the assets
of Life Sciences and Technology will be transferred to Growth at 4:00 p.m.,
Eastern Time, on the Closing Date of the Reorganizations (which is expected
to be on or about May 29,
2009
).
In exchange for the transfer of these
assets, Growth will simultaneously issue a number of full and fractional shares
to each of Life Sciences and Technology equal in value to the aggregate net
assets of the respective Funds calculated at the time of the Reorganizations.
The Plans contemplate that each of the Acquired Funds will discharge all of its
liabilities and obliga
tions
prior to the Closing Date.
Growth shall not assume or agree to pay, satisfy, discharge or perform any
liabilities
(contingent or
otherwise)
of the Acquired
Funds.
When calculating the value of the assets
of Life Sciences and Technology for purposes of each Reorganization, the net
asset values will be determined in accordance with Growth's valuation
procedures. However, since the valuation procedures used by Growth are identical
in most respects to those used by Life Sciences and Technology, there are not
anticipated to be differences in the valuation methods used to value the
securities held by Life Sciences and Technology at the time of the
Reorganizations.
Following the transfer of assets in
exchange for shares of Growth, Life Sciences and Technology will distribute all
of the shares of Growth pro rata to their shareholders of record in complete
liquidation of Life Sciences and Technology. Shareholders of Life Sciences and
Technology owning shares at the time of the Reorganization will receive the same
percentage of the aggregate number of corresponding Growth shares issued as such
shareholder owned in Life Sciences and Technology at the time of the
Reorganizations. Such distribution will be accomplished by the establishment of
accounts in the names of each Life Sciences and Technology shareholder on the
share records of Growth's transfer agent. Each account will receive the
respective pro rata number of full and fractional Growth shares due to the
shareholder of Life Sciences and Technology. Life Sciences and Technology will
then be terminated. Growth does not issue share certificates to shareholders.
Growth shares to be issued will have no preemptive or conversion rights. No
sales charge will be imposed in connection with the receipt of such shares by
the shareholders of Life Sciences and Technology.
In connection with the Reorganizations,
holders of Investor Class shares of Life Sciences and Technology will receive
Investor Class shares of Growth and holders of Institutional Class shares of
Life Sciences and Technology will receive Institutional Class shares of Growth.
Shares of Growth to be issued to shareholders of Life Sciences and Technology
under the Plans will be fully paid and non-assessable when issued, transferable
without restriction and will have no subscription rights. Reference is hereby
made to the prospectus of Growth provided herewith for additional information
about shares of Growth.
The Plans contain customary
representations, warranties and conditions. Each Plan provides that the
consummation of the Reorganizations with respect to Life Sciences and Technology
and Growth are conditioned upon, among other things: (i) approval of the
Reorganizations by the shareholders of Life Sciences and Technology,
respectively; and (ii) the receipt by Life Sciences, Technology and Growth of a
tax opinion to the effect that the Reorganizations will be tax-free to Life
Sciences and Technology (and their respective shareholders) and Growth. Any Plan
may be terminated if, before the Closing Date, any of the required conditions
have not been met, the representations and warranties are not true (and have not
been cured within 30 days), or the ACWMF Board
or the Board of Directors of American
Century Mutual Funds, Inc. (“ACMF Board”)
determine that a Reorganization is not
in the best interest of the shareholders of Life Sciences, Technology or Growth,
respectively. The Reorganizations are not anticipated to result in dilution of
the net asset value of Life Sciences, Technology or Growth immediately following
their consummation. Consummation of one of the Reorganizations is not a
condition to the closing of the other Reorganization.
Costs of the
Reorganizations
The expenses of each Reorganization will
be paid by American Century. Reorganization expenses include: (a) expenses
associated with the preparation and filing of this Proxy Statement/Prospectus;
(b) postage; (c) printing; (d) accounting fees; (e) legal fees incurred in the
preparation of the Proxy Statement/Prospectus; (f) solicitation costs; and (g)
other related administrative or operational costs. Any registration or licensing
fee will be borne by the Fund incurring such fee. Life Sciences and Technology
will pay for any brokerage charges associated with the disposition of their
respective portfolio securities prior to the Reorganizations. Growth will pay
for brokerage charges and other transaction costs associated with transactions
(whether purchase or sale)
involving assets received from
Technology and Life Sciences in the Reorganizations.
Reasons for the
Reorganizations
In determining to approve the
Reorganizations and to recommend approval of the Reorganizations to shareholders
of Life Sciences and Technology, the ACWMF Board made inquiries into all matters
deemed relevant and considered the following, among other
items:
|
•
|
The viability of
both
Life Sciences and Technology
absent approval of the proposed Reorganizations;
|
|
•
|
The relative compatibility of the
investment objectives and principal investment policies of Growth and Life
Sciences
,
and
Growth and
Technology;
|
|
•
|
The comparative investment
performance of Life Sciences
and Growth, and
Technology and
Growth;
|
|
•
|
The comparative management and
other fees paid by the Funds;
|
|
•
|
The federal income tax treatment
of the Reorganizations; and
|
|
•
|
The undertaking by American
Century to pay the above-referenced expenses associated with the
Reorganizations.
|
Some of
these factors are discussed in greater detail below.
The ACWMF Board considered that
neither
Life Sciences
nor
Technology
has
grown substantially since their launch
in 2000 despite efforts to increase sales of the
se
Funds. Life Sciences and Technology
also show limited potential for future growth, as the demand for sector funds
has decreased and the overall market for health care and technology-related
funds has shrunk with exchange traded funds taking market share from actively
managed funds. Accordingly, the
ACWMF
Board concluded that
neither
Life Sciences
nor
Technology w
as
likely to reach a viable asset
size.
As discussed in the section entitled
“SUMMARY-Comparison of Investment Objectives and Policies,” the investment
objectives of
each of
Life Sciences and
Technology are substantially similar to that of Growth. Growth
also
uses a growth investment methodology
that places it near Life Sciences and Technology in Morningstar
’s comparison of growth
stocks
.
The ACWMF Board also considered that the
Acquired Funds will receive a tax opinion of Reed Smith, LLP that each
Reorganization will be considered a tax-free reorganization under applicable
provisions of the Internal Revenue Code of 1986, as amended, so that no gain or
loss will be recognized by Life Sciences
or
Technology
(or their respective
shareholders)
,
or
Growth. Prior to the Reorganizations, if
a Life Sciences or Technology shareholder were to redeem its investment in Life
Sciences or Technology and invest the proceeds in another fund or other
investment product, such shareholder generally would recognize gain or loss for
federal income tax purposes upon the redemption of the shares. By contrast, it
is intended that, as a result of the Reorganizations: (i) shareholders of the
Acquired Funds will not recognize a taxable gain or loss on the exchange of
their Life Sciences or Technology shares for shares of Growth; (ii)
shareholders of the Acquired Funds will
have the same aggregate tax cost basis in Growth shares received in connection
with the Reorganizations as in their Life Sciences or Technology shares; and
(iii) assuming that Life Sciences and Technology shares are held as a capital
asset on the Closing Date, the holding period for Growth shares will include the
period for which such shareholder held its Life Sciences or Technology
shares.
American Century, or one or more of its
affiliates, will bear certain costs associated with the Reorganizations,
including proxy solicitation and tabulation costs. See “Costs of the
Reorganizations” under “Information About the Reorganizations” for further
information.
Recommendation in Favor of Approval of
the Reorganizations
Based on the foregoing, together with
other factors and information considered to be relevant, and recognizing that
there can be no assurance that any benefits will in fact be realized, the ACWMF
Board concluded that
each
Reorganization
is
in the best interests of all affected
shareholders.
Pursuant to Rule 17a-8 under the 1940
Act, the ACWMF Board, including all of the Directors who are not “interested
persons” within the meaning of Section 2(a)(19) of the 1940 Act (“Independent
Directors”), determined that each Reorganization is in the best interests of
Life Sciences and Technology, respectively, and their respective shareholders.
In addition, the ACWMF Board, including all of the Independent Directors, also
determined that the interests of the shareholders of Life Sciences and
Technology would not be diluted as a result of effecting each respective
Reorganization because each such shareholder will receive corresponding shares
of Growth having an aggregate net asset value equal to the aggregate net asset
value of his or her shares in Life Sciences and Technology, respectively,
outstanding as determined at the Closing
Date
. Consequently, the ACWMF Board approved
the Reorganizations and directed that they be submitted to the shareholders of
each of Life Sciences and Technology, respectively
,
for approval.
The
ACMF Board likewise approved the
Reorganizations on behalf of Growth. Pursuant to Rule 17a-8 under the 1940 Act,
the ACMF Board, including a majority of the
Independent
Directors, determined that participation
in the Reorganizations was in the best interests of Growth’s shareholders and
that the interests of existing Growth shareholders would not be diluted as a
result of effecting the Reorganizations. Approval of the shareholders of Growth
is not required to effect the Reorganizations.
THE AMERICAN CENTURY WORLD MUTUAL FUNDS,
INC. BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS OF LIFE SCIENCES AND
TECHNOLOGY APPROVE THE CORRESPONDING PLANS OF REORGANIZATION. CONSUMMATION OF
THE REORGANIZATIONS WITH RESPECT TO ONE FUND IS NOT CONTINGENT UPON THE APPROVAL
OF THE PLAN OF REORGANIZATION BY SHAREHOLDERS OF THE OTHER
FUND.
Federal Income Tax Consequences of the
Reorganizations
As a condition to each Reorganization,
Life Sciences, Technology and Growth will receive opinions of counsel to the
effect that, on the basis of the existing provisions of the Code, current
administrative rules and court decisions, for federal income tax
purposes:
|
•
|
the Reorganizations as set forth
in the Plans will each constitute a tax-free reorganization under section
368(a) of the Code, and the parties to the Plans each will be a “party to
a reorganization” within the meaning of section 368(b) of the
Code;
|
|
•
|
no gain or loss will be recognized
by Growth upon its receipt of the assets of Life Sciences or Technology in
exchange for Investor Class and Institutional Class shares of
Growth;
|
|
•
|
no gain or loss will be recognized
by Life Sciences upon transfer of its assets to Growth in exchange for
Investor Class and Institutional Class shares of Growth or upon the
distribution of Investor Class and Institutional Class shares of Growth to
Life Sciences’ shareholders in exchange for their shares of Life
Sciences;
|
|
•
|
no gain or loss will be recognized
by Technology upon transfer of its assets to Growth in exchange for
Investor Class and Institutional Class shares of Growth or upon the
distribution of Investor Class and Institutional Class shares of Growth to
Technology’s shareholders in exchange for their shares of
Technology;
|
|
•
|
no gain or loss will be recognized
by shareholders of Life Sciences or Technology upon exchange of their
shares for Investor Class and Institutional Class shares of
Growth;
|
|
•
|
the aggregate tax basis of
Investor Class and Institutional Class shares of Growth received by each
shareholder of Life Sciences and Technology, respectively, pursuant to the
Reorganizations will be the same as the aggregate tax basis of the shares
of Life Sciences and Technology, respectively, held by such shareholder
immediately prior to the Reorganizations;
|
|
•
|
the holding period of the Investor
Class and Institutional Class shares of Growth received by each
shareholder of Life Sciences and Technology pursuant to the Plans will
include the period during which shares of Life Sciences and Technology
exchanged therefore were held by such shareholder, provided the shares of
Life Sciences and Technology were held as capital assets on the date of
the Reorganizations;
|
|
•
|
the tax basis of the assets of
Life Sciences
’
and Technology acquired by Growth
will be the same as the tax basis of such assets to Life Sciences and
Technology immediately prior to the Reorganizations;
and
|
|
•
|
the holding period of Life
Sciences and Technology’s assets in the hands of the Growth will include
the period during which those assets were held by Life Sciences and
Technology.
|
The foregoing opinion may state that no
opinion is expressed as to the effect of the Reorganizations on Life
Sciences
’
, Technology
’s
or Growth’s shareholders with respect
to any asset as to which unrealized gain or loss is required to be recognized
for federal income tax purposes at the end of a taxable year (or on the
termination or transfer thereof) under a mark-to-market system of
accounting.
The parties have agreed to cooperate to
facilitate the orderly reorganization of Life Sciences and Technology into
Growth. It is anticipated that this transition will include the purchase and
sale of certain portfolio securities of Life Sciences and Technology prior to
the Reorganizations, which could increase the Acquired Funds' transition costs.
The sale of securities may result in the realization of capital gains to
Life Sciences and Technology that, to the extent not offset by capital losses,
would be distributed to shareholders prior to the Closing
Date.
Life Sciences and Technology had
unutilized
capital loss carryovers as of the end of
its fiscal year. The final amount of unutilized capital loss carryovers for Life
Sciences and Technology is subject to change and will not be determined until
the time of the Reorganizations.
|
Fund
|
Unutilized Capital Loss Carryovers
as of November 30, 2008
|
|
Life
Sciences
|
$5,367,479
|
|
Technology
|
$219,779,782
|
Growth
may be limited under Section 382 of the Code in its use of Life Sciences’ or
Technology’s capital loss carryovers. However, the amount of capital loss
carryovers of Life Sciences and Technology that will transfer to Growth and any
such limitations on Growth’s use of such capital loss carryovers cannot be
determined until the Closing Date of the Reorganizations.
Life Sciences, Technology and Growth had
the following tax basis appreciation or (depreciation) as of each Fund’s fiscal
year end.
|
Fund
|
Tax Basis Appreciation or
(Depreciation)
|
|
Life Sciences
(as of November 30,
2008)
|
$(10,965,247
)
|
|
Technology
(as of November 30,
2008)
|
$(17,976,805
)
|
|
Growth
(as of October 31,
2008)
|
$(536,327,974
)
|
Shareholders
are urged to consult their tax advisors regarding the effect of the
Reorganizations in light of their individual circumstances. As the foregoing
relates only to federal income tax consequences, shareholders also should
consult their tax advisors as to the non-United States, state, local and other
tax consequences of the Reorganizations.
Fund Capitalization
The following table sets forth the
capitalization of Life Sciences and Technology as of December 31, 2008, and the
capitalization of Growth on a pro forma basis, as if the Reorganizations had
occurred on that date.
|
Life
Sciences
|
Growth
|
Pro Forma
Combining
|
||||
|
Life
Sciences/Growth
|
Investor
Class
|
Institutional
Class
|
Investor
Class
|
Institutional
Class
|
Investor
Class
|
Institutional
Class
|
|
Total Net
Assets
|
$68,750,109
|
$1,694,562
|
$2,510,491,065
|
$307,053,487
|
$2,579,241,174
|
$308,748,04
9
|
|
Shares
Outstanding
|
15,284,483
|
370,167
|
153,938,340
|
18,685,100
|
158,153,552
|
18,788,238
|
|
Net Asset Value Per
Share
|
$4.50
|
$4.58
|
$16.31
|
$16.43
|
$16.31
|
$16.43
|
|
Life
Sciences
|
Technology
|
Growth
|
Pro Forma
Combining
|
|||||
|
Life Sciences/
Technology/
Growth
|
Investor
Class
|
Institutional
Class
|
Investor
Class
|
Institutional
Class
|
Investor
Class
|
Institutional
Class
|
Investor
Class
|
Institutional
Class
|
|
Total Net
Assets
|
$68,750,109
|
$1,694,562
|
$56,060,857
|
$2,565,945
|
$2,510,491,065
|
$307,053,487
|
$2,635,302,031
|
$311,313,994
|
|
Shares
Outstanding
|
15,284,483
|
370,167
|
4,448,896
|
199,949
|
153,938,340
|
18,685,100
|
161,590,760
|
18,944,413
|
|
Net Asset
Value
Per Share
|
$4.50
|
$4.58
|
$12.60
|
$12.83
|
$16.31
|
$16.43
|
$16.31
|
$16.43
|
Material Differences Between Rights of
Shareholders
Life Sciences and Technology are series
of
ACWMF, a
Mar
yland
corporation organized on
December 27, 1990. Growth is a series of
ACMF, a
Maryland
corporation organized on July 2, 1990.
There are no material differences regarding the rights of shareholders of the
Funds under applicable state law. In addition, the Articles of
Incorporation and Bylaws of the corporations are substantially similar except
that a majority of outstanding shares is required for quorum purposes under
ACMF’s organization documents while ACWMF’s requires one-third of the
outstanding shares to achieve quorum.
INFORMATION ABOUT THE
FUNDS
General Information
This Proxy Statement/Prospectus is being
furnished in connection with the solicitation of proxies by the Boards. Proxies
may be solicited by officers or employees of
the
Funds, American Century, their
affiliates, as well as any proxy solicitation firm hired by American Century.
Additionally, financial intermediaries may solicit the votes of the beneficial
owners of the Funds. It is anticipated that the solicitation of proxies will be
primarily by mail, internet, telephone, facsimile or personal interview.
Shareholders who communicate proxies by telephone or by other electronic means
have the same power and authority to issue, revoke or otherwise change their
voting instructions as shareholders submitting proxies in written form.
Telephonic solicitations will follow procedures designed to ensure accuracy and
prevent fraud. American Century or an affiliate thereof may reimburse banks,
brokers and others for their reasonable expenses in forwarding proxy
solicitation materials to beneficial owners of American Century shares, and may
reimburse certain officers or employees that it may employ for their reasonable
expenses in assisting in the solicitation of proxies from such beneficial
owners. American Century Services, LLC, the transfer agent and administrator of
the Funds, has entered into a contract with Broadridge pursuant to which
Broadridge will provide certain project management, telephone solicitation, and
internet and telephone voting services in addition to providing for the printing
and mailing of the proxy statement/prospectus. The estimated fee to
b
e paid to
Broadridge
by American
Century Services, LLC is $42,650 in the aggregate.
Date, Time and Place of
Meeting
The Meeting will be held on
May 5, 2009
at the principal executive offices of
American Century, 4500 Main Street, Kansas City, Missouri 64111 at
10:00 a.m.
Central Time.
Use and Revocation of
Proxies
A shareholder executing and returning a
proxy has the power to revoke it at any time prior to its exercise by executing
a superseding proxy (i.e., a later-dated and signed proxy), by submitting a
notice of revocation to the Corporate Secretary of the Funds or by subsequently
registering his or her vote by telephone or over the Internet. In addition,
although mere attendance at the Meeting will not revoke a proxy, a shareholder
of record present at the Meeting may withdraw his or her proxy and vote in
person. All shares represented by properly executed proxies received at or prior
to the Meeting, unless such proxies previously have been revoked, will be voted
at the Meeting in accordance with the directions on the proxies; if no direction
is indicated on a properly executed proxy, such shares will be voted “FOR” the
Reorganizations. It is not anticipated that any matters other than the approval
of the Reorganizations will be brought before the Meeting. If, however, any
other business properly is brought before the Meeting, proxies will be voted in
accordance with the judgment of the persons designated on such
proxies.
Voting Rights and Required
Votes
A quorum of shareholders is necessary to
hold a valid meeting. Shareholders entitled to vote one-third of the issued and
outstanding shares of each of Life Sciences and Technology must be present in
person or by proxy, to constitute a quorum for purposes of voting on proposals
relating to each Fund. Each shareholder is entitled to one vote per dollar of
NAV represented by their shares, with fractional dollars voting proportionally.
Shareholders of each affected Fund vote separately on whether to approve the
Reorganization
s
, and the consummation of any one
Reorganization is not a condition for approving the other Reorganization.
Approval of the Reorganizations requires the approval of the lesser of (i) more
than 50% of the outstanding shares of the applicable Fund or (ii) 67% or more of
the shares of that Fund present or represented by proxy at the Meeting if more
than 50% of such shares are present or represented by proxy. Broker-dealer firms
or other financial intermediaries holding shares of any of the Funds in “street
name” for the benefit of their customers and clients will request the
instructions of such customers and clients on how to vote their shares before
the Meeting. Each Fund will include shares held of record by broker-dealers as
to which such authority has been granted in its tabulation of the total number
of shares present for purposes of determining whether the necessary quorum of
shareholder exists. Properly executed proxies that are returned but that are
marked “abstain” or with respect to which a broker
-
dealer has declined to vote on any
proposal (“broker non-votes”) will be counted as present for the purposes of
determining a quorum. Abstention
s
and broker non-votes (if applicable)
will have the same effect as a vote against a proposal. If, by the time
scheduled for the Meeting, sufficient votes in favor of approval of a proposal
have not been received from the shareholders of the applicable Fund, the persons
named as proxies may propose one or more adjournments of such Meeting, without
further notice, to permit further solicitation of proxies from shareholders.
According to the Bylaws of Life Sciences and Technology, any meeting at which a
quorum is not present can be adjourned by a majority of the voting stock
represented in person or by proxy until a quorum shall be present or
represented. A meeting may be adjourned without additional notice, other than
announcement at the meeting, for up to 90 days.
Record Date and Outstanding
Shares
Only holders of record of shares of the
Funds at the close of business on February 20, 2009 (the “Record Date”) are
entitled to vote at the Meeting or any adjournment thereof. The following chart
sets forth the number of shares of each class of the Funds issued and
outstanding and the number of votes entitled to vote at the close of business on
the Record Date.
|
Fund Name
|
Share Class
|
Outstanding
Shares
|
Number of Votes Entitled to Vote
($1 equals 1 vote)
|
|
Life
Sciences
|
Investor
Class
|
||
|
Institutional
Class
|
|||
|
Technology
|
Investor
Class
|
||
|
Institutional
Class
|
Security Ownership of Certain Beneficial
Owners and Management of the Funds
At the close of business on [date],
2009, the following persons owned, to the knowledge of management, 5% or more of
the outstanding shares of the Funds.
|
Fund/
Class
|
Shareholder
|
Percentage of
Outstanding
Shares
Owned of
Record
|
Percentage of
Outstanding
Shares Owned
Post-Reorganization
on a Pro Forma Basis
(1)
|
Percentage of
Outstanding
Shares Owned
Post-Reorganization
on a Pro Forma Basis
(2)
|
|
|
Life
Sciences
|
|||||
|
Investor
Class
|
|||||
|
Charles Schwab & Co.,
Inc.
San Francisco
,
CA
|
__%
|
__%
|
__%
|
||
|
Institutional
Class
|
|||||
|
Trustees of American
Century
P/S & 401K Savings Plan &
Trust
Kansas City
,
MO
|
__%
|
__%
|
__%
|
||
|
JPMorgan Chase TR American
Century
Executive Def Comp Plan
Trust
Kansas City
, MO
|
__%
|
__%
|
__%
|
||
|
Technology
|
|||||
|
Investor
Class
|
|||||
|
Charles Schwab & Co.,
Inc.
San Francisco
,
CA
|
__%
|
__%
|
__%
|
||
|
Institutional
Class
|
|||||
|
Trustees of American Century
P/S
& 401K Savings Plan &
Trust
Kansas City
,
MO
|
__%
|
__%
|
__%
|
||
|
JPMorgan Chase TR American
Century
Executive Def Comp Plan
Trust
Kansas City
, MO
|
__%
|
__%
|
__%
|
||
|
Growth
|
|||||
|
Investor
Class
|
|||||
|
None
|
|||||
|
1
|
Percentage based on Reorganization
into the applicable class of
Growth.
|
|
2
|
Percentage based on Reorganization
of Life Sciences and Technology into the applicable class of
Growth.
|
|
Fund/
Class
|
Shareholder
|
Percentage of
Outstanding
Shares
Owned of
Record
|
Percentage of
Outstanding
Shares Owned
Post-Reorganization
on a Pro Forma Basis
(1)
|
Percentage of
Outstanding
Shares Owned
Post-Reorganization
on a Pro Forma Basis
(2)
|
|
Growth
|
||||
|
Institutional
Class
|
||||
|
JP Morgan Chase
Bank
TR Aurora Healthcare
Inc.
Kansas City
,
Missouri
|
__%
|
__%
|
__%
|
|
|
JP Morgan Chase Bank
TR
Avon Personal Savings Account Plan
Trust
New York
,
New York
|
__%
|
__%
|
__%
|
|
|
JP Morgan Chase Bank TR
Employees
Ret Plan of Bose
Corp
New York
,
New York
|
__%
|
__%
|
__%
|
|
|
Trustees of American Century
P/S
& 401K Savings Plan &
Trust
Kansas City
,
Missouri
|
__%
|
__%
|
__%
|
|
The Funds
are unaware of any other shareholders, beneficial or of record, who own more
than 5% of any class of a Fund’s outstanding shares. A shareholder owning of
record or beneficially more than 25% of the Corporation’s outstanding shares may
be considered a controlling person. The vote of any such person could have a
more significant effect on matters presented at a shareholder’s meeting than
votes of other shareholders. The Funds are unaware of any shareholders,
beneficial or of record, who own more than 25% of the voting securities of a
Corporation. As of [date], 2009, the officers and directors of the Funds, as a
group, owned less than 1% of any Fund’s outstanding shares.
Other Service
Providers
American Century Services, LLC,
4500 Main
Street
,
Kansas City
,
Missouri
64111
, an affiliate of American Century,
serves as transfer agent and administrator of the Funds. J.P. Morgan Investor
Services Co. provides sub-administrative services to the
F
unds. American Century Investment
Services, Inc.,
4500 Main
Street
,
Kansas City
,
Missouri
64111
, an affiliate of American Century,
serves as distributor to the Funds.
WHERE TO FIND ADDITIONAL
INFORMATION
Additional information about the Funds
is included in the documents listed in the beginning of this Proxy
Statement/Prospectus.
The Corporations are subject to the
informational requirements of the Securities Act, the Securities Exchange Act of
1934, and the 1940 Act, and in accordance therewith file reports and other
information with the SEC. Reports, proxy and information statements, and other
information filed by the Corporations, on behalf of the Funds, can be obtained
by calling or writing the Funds and can also be inspected and copied by the
public at the public reference facilities maintained by the SEC in Washington,
DC located at Room 1580, 100 F Street, N.E., Washington DC 20549 and located at
room 1204, Everett McKinley Dirksen Bldg., 219 South Dearborn Street, Chicago,
IL 60604 and 233 Broadway, NY, NY 10007. Copies of such material can be obtained
at prescribed rates from the Public Reference Branch, Office of Consumer Affairs
and Information Services, SEC,
Washington
DC
20549
, or obtained electronically from the
EDGAR database on the SEC’s website (www.sec.gov).
OTHER MATTERS AND DISCRETION OF
ATTORNEYS NAMED IN THE PROXY
The Funds are not required, and do not
intend, to hold regular annual meetings of shareholders. Shareholders wishing to
submit proposals for consideration for inclusion in a Proxy Statement/Prospectus
for the next meeting of shareholders should send their written proposals to
Corporate Secretary, American Century,
P.O. Box 410141
,
Kansas City
,
Missouri
,
64141
, or by e-mail to
corporatesecretary@americancentury.com so that they are received within a
reasonable time before any such meeting. No business other than the matters
described above is expected to come before the Meeting, but should any other
matter requiring a vote of shareholders arise, including any question as to an
adjournment or postponement of the Meeting, the persons named on the enclosed
proxy card(s) will vote on such matters according to their best judgment in the
interests of the Funds.
|
SHAREHOLDERS ARE REQUESTED TO
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD(S) AND RETURN IT IN THE
ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED
STATES.
|
EXHIBIT A
AGREEMENT AND PLAN OF
REORGANIZATION
BETWEEN
AMERICAN CENTURY MUTUAL FUNDS,
INC.
WITH RESPECT TO ITS
GROWTH FUND
AND
AMERICAN CENTURY WORLD MUTUAL FUNDS,
INC.
WITH RESPECT TO ITS
_______________________
FUND
THIS AGREEMENT AND PLAN OF
REORGANIZATION (the “Agreement”) is made as of this [__] day of [_____________],
by and between
AMERICAN CENTURY
MUTUAL FUNDS, INC
., a
Maryland c
orporation, with
its principal place of business at 4500 Main Street, Kansas City, Missouri
64111-0141 (the “Acquirer”), with respect to its Growth Fund (the “Acquiring
Fund”) and
AMERICAN CENTURY
WORLD MUTUAL FUNDS, INC.
, a
Maryland c
orporation, with
its principal place of business at 4500 Main Street, Kansas City, Missouri
64111-0141 (the “Acquiree”), with respect to its ____________________ Fund, a
series of the Acquiree (the “Acquired Fund” and, collectively with the Acquiring
Fund, the “Funds”).
RECITALS
This Agreement is intended to be, and is
adopted as, a plan of reorganization within the meaning of Section 368 of
the United States Internal Revenue Code of 1986, as amended (the “Code”) and the
Treasury Regulations promulgated thereunder. The reorganization will
consist of: (i) the transfer of all of the assets of the
Acquired Fund in exchange for Investor Shares and Institutional Shares, par
value $0.01 per share, of the Acquiring Fund (“Acquiring Fund Shares”); and
(ii) the distribution of Investor Shares of the Acquiring Fund to the
holders of Investor Shares of the Acquired Fund, the distribution of
Institutional Shares of the Acquiring Fund to the holders of Institutional
Shares of the Acquired Fund, and the liquidation of the Acquired Fund as
provided herein, all upon the terms and conditions set forth in this Agreement
(the “Reorganization”).
WHEREAS, the Acquired Fund is a separate
series of the Acquiree, the Acquiring Fund is a separate series of the Acquirer,
and the Acquirer and the Acquiree are open-end, registered management investment
companies and the Acquired Fund owns securities that generally are assets of the
character in which the Acquiring Fund is permitted to
invest;
WHEREAS, each of the Acquiring Fund and
the Acquired Fund is authorized to issue its respective
shares;
WHEREAS, the Directors of the Acquirer
have determined that the Reorganization, with respect to the Acquiring Fund, is
in the best interests of the Acquiring Fund and that the interests of the
existing shareholders of the Acquiring Fund will not be diluted as a result of
the Reorganization; and
WHEREAS, the Directors of the Acquiree
have determined that the Reorganization, with respect to the Acquired Fund, is
in the best interests of the Acquired Fund and that the interests of the
existing shareholders of the Acquired Fund will not be diluted as a result of
the Reorganization.
AGREEMENT
NOW, THEREFORE, in consideration of the
premises and of the covenants and agreements hereinafter set forth, the parties
hereto covenant and agree as follows:
ARTICLE I
TRANSFER OF ASSETS OF THE ACQUIRED FUND
IN EXCHANGE FOR ACQUIRING FUND SHARES AND LIQUIDATION OF THE ACQUIRED
FUND
1.1
THE EXCHANGE. Subject to the
terms and conditions contained herein and on the basis of the representations
and warranties contained herein, the Acquired Fund agrees to transfer all of its
assets, as set forth in paragraph 1.2, to the Acquiring Fund. In
exchange, the Acquiring Fund agrees to deliver to the Acquired Fund the number
of full and fractional Acquiring Fund Shares, determined by dividing the assets
of the Acquired Fund, computed in the manner and as of the time and date set
forth in paragraph 2.1 by the net asset value per share of the Acquiring Fund
Shares computed in the manner and as of the time and date set forth in paragraph
2.2. Holders of Investor Shares of the Acquired Fund will receive Investor
Shares of the Acquiring Fund and holders of Institutional Shares of the Acquired
Fund will receive Institutional Shares of the Acquiring Fund. Such
transactions shall take place at the closing on the Closing Date provided for in
paragraph 3.1.
1.2
A
SSETS TO BE ACQUIRED. The
assets of the Acquired Fund to be acquired by the Acquiring Fund shall consist
of property having a value equal to the total net assets of the Acquired Fund,
including, without limitation, cash, securities, commodities, interests in
futures and dividends or interest receivable, owned by the Acquired Fund and any
deferred or prepaid expenses shown as an asset on the books of the Acquired Fund
on the Closing Date.
The Acquired Fund has provided the
Acquiring Fund with its most recent audited financial statements, which contain
a list of all of the Acquired Fund’s assets as of the date of such statements.
The Acquired Fund hereby represents that as of the date of the execution of this
Agreement, there have been no changes in its financial position as reflected in
such financial statements other than as the result of changes in the market
values of securities or otherwise occurring in the ordinary course of business
in connection with the purchase and sale of securities, the issuance and
redemption of Acquired Fund shares and the payment of normal operating expenses,
dividends and capital gains distributions.
1.3
LIABILITIES TO BE
DISCHARGED. The Acquired Fund will discharge all of its liabilities
and obligations prior to the Closing Date
.
1.4
LIQUIDATION AND
DISTRIBUTION. On or as soon after the Closing Date as is conveniently
practicable: (a) the Acquired Fund will distribute in complete
liquidation of the Acquired Fund, pro rata to its shareholders of record,
determined as of the close of business on the Closing Date (the “Acquired Fund
Shareholders”), all of the Acquiring Fund Shares received by the Acquired Fund
pursuant to paragraph 1.1; and (b) the Acquired Fund will thereupon proceed
to dissolve and terminate as set forth in paragraph 1.8
below. Such distribution will be accomplished by the transfer of
Acquiring Fund Shares credited to the account of the Acquired Fund on the books
of the Acquiring Fund to open accounts on the share records of the Acquiring
Fund in the name of the Acquired Fund Shareholders, and representing the
respective pro rata number of Acquiring Fund Shares due such
shareholders. All issued and outstanding shares of the Acquired Fund
(the “Acquired Fund Shares”) will simultaneously be canceled on t
he books of the Acquired Fund.
The Acquiring Fund shall
not issue certificates representing Acquiring Fund Shares in connection with
such transfer. After the Closing Date, the Acquired Fund shall not
conduct any business except in connection with its
termination.
1.5
O
WNERSHIP OF SHARES. Ownership
of Acquiring Fund Shares will be shown on the books of the Acquiring Fund’s
transfer agent. Acquiring Fund Shares will be issued simultaneously to the
Acquired Fund, in an amount equal in value to the aggregate net asset value of
the Acquired Fund Shares, to be distributed to Acquired Fund
Shareholders.
1.6
T
RANSFER TAXES. Any transfer
taxes payable upon the issuance of Acquiring Fund Shares in a name other than
the registered holder of the Acquired Fund Shares on the books of the Acquired
Fund as of that time shall, as a condition of such issuance and transfer, be
paid by the person to whom such Acquiring Fund Shares are to be issued and
transferred.
1.7
REPORTING RESPONSIBILITY. Any
reporting responsibility of the Acquired Fund is and shall remain the
responsibility of the Acquired Fund.
1.8
TERMINATION. The Acquired
Fund shall be terminated promptly following the Closing Date and the making of
all distributions pursuant to paragraph 1.4.
1.9
B
OOKS AND RECORDS. All books
and records of the Acquired Fund, including all books and records required to be
maintained under the Investment Company Act of 1940, as amended (the “1940
Act”), and the rules and regulations thereunder, shall be available to the
Acquiring Fund from and after the Closing Date and shall be turned over to the
Acquiring Fund as soon as practicable following the Closing
Date.
ARTICLE II
VALUATION
2.1
VALUATION OF ASSETS. The
value of the Acquired Fund’s assets to be acquired by the Acquiring Fund
hereunder shall be the value of such assets at the closing on the Closing Date,
using the valuation procedures set forth in the Acquiring Fund’s Articles of
Incorporation, Bylaws and the Acquiring Fund’s then current prospectus and
statement of additional information.
2.2
VALUATION OF SHARES. The net
asset value per share of Acquiring Fund Shares shall be the net asset value per
share computed at the closing on the Closing Date, using the valuation
procedures set forth in the Acquiring Fund’s Articles of Incorporation, Bylaws
and the Acquiring Fund’s then current prospectus and statement of additional
information.
2.3
SHARES TO BE ISSUED. The
number of the Acquiring Fund’s shares to be issued (including fractional shares,
if any) in exchange for the Acquired Fund’s assets, shall be determined as set
forth in paragraph 1.1.
2.4
DETERMINATION OF VALUE. All
computations of value shall be made by American Century Investment Management,
Inc. or its affiliates, on behalf of the Acquiring Fund and the Acquired
Fund.
ARTICLE III
CLOSING AND CLOSING
DATE
3.1
CLOSING DATE. The closing
shall occur on or about
May
29,
2009, or such other
date(s) as the parties may agree to in writing (the “Closing
Date”). All acts taking place at the closing shall be deemed to take
place at 4:00 p.m., Eastern Time, on the Closing Date unless otherwise provided
herein. The closing shall be held at the offices of American Century
Investments,
4500 Main
Street
,
Kansas City
,
Missouri
64111-0141, or at such other
time and/or place as the parties may agree.
3.2
CUSTODIAN’S CERTIFICATE. The Acquired
Fund shall cause the custodian for the Acquired Fund (the “Custodian”), to
deliver within one business day of the Closing a certificate of an authorized
officer stating that: (a)
the Acquired Fund’s portfolio
securities, cash, and any other assets have been delivered in proper form to the
Acquiring Fund as of the Closing Date; and (b)
all necessary taxes including all
applicable federal and state stock transfer stamps, if any, shall have been
paid, or provision for payment shall have been made, in conjunction with the
delivery of portfolio securities by the Acquired Fund.
3.3
EFFECT OF SUSPENSION IN
TRADING. In the event that on the scheduled Closing Date,
either: (a)
t
he New York Stock Exchange
(“NYSE”) or another primary exchange on which the portfolio securities of the
Acquiring Fund or the Acquired Fund are purchased or sold, shall be closed to
trading or trading on such exchange shall be restricted; or (b)
trading or the reporting of trading on
the NYSE or elsewhere shall be disrupted so that accurate appraisal of the value
of the net assets of the Acquiring Fund or the Acquired Fund is impracticable,
the Closing Date shall be postponed until the first business day after the day
when trading is fully resumed and reporting is restored.
3.4
TRANSFER AGENT’S CERTIFICATE. The
Acquired Fund shall cause the transfer agent for the Acquired Fund as of the
Closing Date, to deliver at the Closing a certificate of an authorized officer
stating that its records contain the names and addresses of Acquired Fund
Shareholders, and the number and percentage ownership of outstanding shares
owned by each such shareholder immediately prior to the Closing. The
Acquiring Fund shall issue and deliver or cause American Century Services, LLC,
its transfer agent, to issue and deliver a confirmation evidencing Acquiring
Fund Shares to be credited on the Closing Date to the Secretary of the Acquiree
or provide evidence satisfactory to the Acquired Fund that the Acquiring Fund
Shares have been credited to the Acquired Fund’s account on the books of the
Acquiring Fund. At the Closing, each party shall deliver to the other
such bills of sale, checks, assignments, share certificates, receipts, officer’s
certificates, transfer agent certificates, custodian certificates, opinions, and
other certificates and documents, if any, as such other party or its counsel may
reasonably request.
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES
4.1
REPRESENTATIONS OF THE ACQUIRED
FUND. The Acquiree, on behalf of the Acquired Fund, represents and
warrants to the Acquirer as follows:
|
a)
|
The Acquired Fund is a legally
designated, separate series of a corporation duly organized, validly
existing and in good standing under the laws of
Maryland
.
|
|
b)
|
The Acquiree is registered as an
open-end management investment company under the 1940 Act, and the
Acquiree’s registration with the Securities and Exchange Commission (the
“Commission”) as an investment company under the 1940 Act is in full force
and effect.
|
|
c)
|
The current prospectus and
statement of additional information of the Acquired Fund conform in all
material respects to the applicable requirements of the Securities Act of
1933, as amended (the “1933 Act”), and the 1940 Act, and the rules and
regulations thereunder, and do not include any untrue statement of a
material fact or omit to state any material fact required to be stated or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
|
|
d)
|
The Acquired Fund is not, and the
execution, delivery, and performance of this Agreement (subject to
shareholder approval) will not, result in the violation of any provision
of the Acquiree’s Articles of Incorporation or By-Laws or of any material
agreement, indenture, instrument, contract, lease, or other undertaking to
which the Acquired Fund is a party or by which it is
bound.
|
|
e)
|
The Acquired Fund has no material
contracts or other commitments (other than this Agreement) that will be
terminated with liability to it before the Closing Date, except for
liabilities, if any, to be discharged as provided in paragraph 1.3
hereof.
|
|
f)
|
No litigation, administrative
proceeding, or investigation of or before any court or governmental body
is presently pending or to its knowledge threatened against the Acquired
Fund or any of its properties or assets, which, if adversely determined,
would materially and adversely affect its financial condition, the conduct
of its business, or the ability of the Acquired Fund to carry out the
transactions contemplated by this Agreement. The Acquired Fund
knows of no facts that might form the basis for the institution of such
proceedings and is not a party to or subject to the provisions of any
order, decree, or judgment of any court or governmental body that
materially and adversely affects its business or its ability to consummate
the transactions contemplated herein.
|
|
g)
|
The financial statements of the
Acquired Fund as of
November 30, 2008
, and for the fiscal year then
ended, have been prepared in accordance with generally accepted accounting
principles, and audited by Deloitte & Touche LLP, independent
registered public
accounting firm
, and
such statements (copies of which have been furnished to the Acquiring
Fund) fairly and accurately reflect the financial condition of the
Acquired Fund as of such date, and there are no known contingent
liabilities of the Acquired Fund as of such date that are not disclosed in
such statements.
|
|
h
)
|
Since the date of the financial
statements referred to in subparagraph (
g
) above, there have been no
material adverse changes in the Acquired Fund’s financial condition,
assets, liabilities or business (other than changes occurring in the
ordinary course of business), or any incurrence by the Acquired Fund of
indebtedness maturing more than one year from the date such indebtedness
was incurred, except as identified and disclosed by the Acquired Fund on a
schedule to this Agreement. For the
purposes of this
subparagraph (h
), a decline in the net asset
value of the Acquired Fund in and of itself shall not constitute a
material adverse change.
|
|
i
)
|
All federal and other tax returns
and reports of the Acquired Fund required by law to be filed, have been
timely and accurately filed, and all federal and other taxes shown due on
such returns and reports have been paid, or provision shall have been made
for the payment thereof. To the best of the Acquired Fund’s
knowledge, no such return is currently under audit, and no assessment has
been asserted with respect to such returns.
|
|
j
)
|
All issued and outstanding
Acquired Fund Shares are duly and validly issued and outstanding, fully
paid and non-assessable by the Acquired Fund. All of the issued
and outstanding Acquired Fund Shares will, at the time of the Closing
Date, be held by the persons and in the amounts set forth in the records
of the Acquired Fund’s transfer agent as provided in
paragraph 3.4. The Acquired Fund has no outstanding
options, warrants, or other rights to subscribe for or purchase any of the
Acquired Fund Shares, and has no outstanding securities convertible into
any of the Acquired Fund Shares.
|
|
k)
|
At the Closing Date, the Acquired
Fund will have good and marketable title to the Acquired Fund’s assets to
be transferred to the Acquiring Fund pursuant to paragraph 1.2, and
full right, power, and authority to sell, assign, transfer, and deliver
such assets hereunder, free of any lien or other encumbrance, except those
liens or encumbrances to which the Acquiring Fund has received notice,
and, upon delivery and payment for such assets, and the filing of any
articles, certificates or other documents under the laws of Maryland, the
Acquiring Fund will acquire good and marketable title, subject to no
restrictions on the full transfer of such assets, other than such
restrictions as might arise under the 1933 Act, and other than as
disclosed to and accepted by the Acquiring
Fund.
|
|
l)
|
The
execution, delivery and
performance of this Agreement have been duly authorized by all necessary
action on the part of the Acquired Fund and its Board of
Directors. Subject to approval by the Acquired Fund
Shareholders, this
Agreement constitutes a valid
and
binding
obligation of the Acquired Fund, enforceable in accordance with its terms,
subject as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors’ rights and
to general equity principles.
|
|
m
)
|
The information to be furnished by
the Acquired Fund for use in no-action letters, applications for orders,
registration statements, proxy materials, and other documents that may be
necessary in connection with the transactions contemplated herein shall
comply in all material respects with federal securities and other laws and
regulations and will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated or necessary to
make the statements, in light of the circumstances under which such
statements were made, not misleading.
|
|
n
)
|
The Acquired Fund has elected to
qualify and has qualified as a “regulated investment company” under the
Code (a “RIC”), as of and since its first taxable year; has been a RIC
under the Code at all times since the end of its first taxable year when
it so qualified; and qualifies and will continue to qualify as a RIC under
the Code for its taxable year ending upon its
liquidation.
|
|
o
)
|
No governmental consents,
approvals, authorizations or filings are required under the 1933 Act, the
Securities Exchange Act of 1934, as amended (the “1934 Act”), the 1940 Act
or Maryland law for the execution of this Agreement by the Acquiree, for
itself and on behalf of the Acquired Fund, except for the effectiveness of
the Registration Statement (as defined in paragraph 5.7), and the filing
of any articles, certificates or other documents that may be required
under Maryland law, and except for such other consents, approvals,
authorizations and filings as have been made or received, and except for
such consents, approvals, authorizations and filings as may be required
subsequent to the Closing Date, it being understood, however, that this
Agreement and the transactions contemplated herein must be approved by the
shareholders of the Acquired Fund as described in
paragraph 5.2.
|
4.2
REPRESENTATIONS OF THE ACQUIRING
FUND. The Acquirer on behalf of the Acquiring Fund represents and
warrants to the Acquiree as follows:
|
a)
|
The Acquiring Fund is a legally
designated, separate series of a corporation duly organized, validly
existing and in good standing under the laws of
Maryland
.
|
|
b)
|
The Acquirer is registered as an
open-end management investment company under the 1940 Act, and the
Acquirer’s registration with the Commission as an investment company under
the 1940 Act is in full force and effect.
|
|
c)
|
The current prospectus and
statement of additional information of the Acquiring Fund conform in all
material respects to the applicable requirements of the 1933 Act and the
1940 Act, and the rules and regulations thereunder, and do not include any
untrue statement of a material fact or omit to state any material fact
required to be stated or necessary to make such statements therein, in
light of the circumstances under which they were made, not
misleading.
|
|
d)
|
The Acquiring Fund is not, and the
execution, delivery and performance of this Agreement will not, result in
a violation of any provision of the Acquirer’s Articles of Incorporation
or By-Laws or of any material agreement, indenture, instrument, contract,
lease, or other undertaking to which the Acquiring Fund is a party or by
which it is bound.
|
|
e)
|
No litigation, administrative
proceeding, or investigation of or before any court or governmental body
is presently pending or to its knowledge threatened against the Acquiring
Fund or any of its properties or assets, which, if adversely determined,
would materially and adversely affect its financial condition, the conduct
of its business, or the ability of the Acquiring Fund to carry out the
transactions contemplated by this Agreement. The Acquiring Fund
knows of no facts that might form the basis for the institution of such
proceedings and it is not a party to or subject to the provisions of any
order, decree, or judgment of any court or governmental body that
materially and adversely affects its business or its ability to consummate
the transaction contemplated herein.
|
|
f)
|
The financial statements of the
Acquiring Fund as of
October 31, 2008
, and
for the fiscal year then ended, have been prepared in accordance with
generally accepted accounting principles, and audited by Deloitte &
Touche LLP, independent registered public
accounting firm
, and such statements (copies of
which have been furnished to the Acquired Fund) fairly and accurately
reflect the financial condition of the Acquiring Fund as of such date, and
there are no known contingent liabilities of the Acquiring Fund as of such
date that are not disclosed in such statements.
|
|
g
)
|
Since the date of the financial
statements referred to in subparagraph (
f
) above, there have been no
material adverse changes in the Acquiring Fund’s financial condition,
assets, liabilities or business (other than changes occurring in the
ordinary course of business), or any incurrence by the Acquiring Fund of
indebtedness maturing more than one year from the date such indebtedness
was incurred, except as identified and disclosed by the Acquiring Fund on
a schedule to this Agreement. For the
purposes of this
subparagraph (g
), a decline in the net asset
value of the Acquiring Fund in and of itself shall not constitute a
material adverse change.
|
|
h
)
|
All federal and other tax returns
and reports of the Acquiring Fund required by law to be filed, have been
timely and accurately filed and all federal and other taxes shown due on
such returns and reports have been paid, or provision shall have been made
for their payment. To the best of the Acquiring Fund’s
knowledge, no such return is currently under audit, and no assessment has
been asserted with respect to such returns.
|
|
i
)
|
All issued and outstanding
Acquiring Fund Shares are duly and validly issued and outstanding, fully
paid and non-assessable by the Acquiring Fund. The Acquiring
Fund has no outstanding options, warrants, or other rights to subscribe
for or purchase any Acquiring Fund Shares, and has no outstanding
securities convertible into any Acquiring Fund Shares.
|
|
j
)
|
The execution, delivery and
performance of this Agreement have been duly authorized by all necessary
action on the part of the Acquiring Fund and its Board of Directors, and
this Agreement constitutes a valid and binding obligation of the Acquiring
Fund, enforceable in accordance with its terms, subject as to enforcement,
to bankruptcy, insolvency, reorganization, moratorium, and other laws
relating to or affecting creditors’ rights and to general equity
principles.
|
|
k
)
|
Acquiring Fund Shares to be issued
and delivered to the Acquired Fund for the account of the Acquired Fund
Shareholders pursuant to the terms of this Agreement will, at the Closing
Date, have been duly authorized. When so issued and delivered,
such shares will be duly and validly issued Acquiring Fund Shares, and
will be fully paid and non-assessable.
|
|
l
)
|
The information to be furnished by
the Acquiring Fund for use in no-action letters, applications for orders,
registration statements, proxy materials, and other documents that may be
necessary in connection with the transactions contemplated herein shall
comply in all material respects with federal securities and other laws and
regulations and will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated or necessary to
make the statements, in light of the circumstances under which such
statements were made, not misleading.
|
|
m
)
|
The Acquiring Fund has elected to
qualify and has qualified as a RIC under the Code, as of and since its
first taxable year; has been a RIC under the Code at all times since the
end of its first taxable year when it so qualified; and qualifies and
shall continue to qualify as a RIC under the Code for its current taxable
year.
|
|
n
)
|
No governmental consents,
approvals, authorizations or filings are required under the 1933 Act, the
1934 Act, the 1940 Act or Maryland law for the execution of this Agreement
by the Acquirer, for itself, and on behalf of the Acquiring Fund, except
for the effectiveness of the Registration Statement (as defined in
paragraph 5.7), and the filing of any articles, certificates or other
documents that may be required under Maryland law, and except for such
other consents, approvals, authorizations and filings as have been made or
received, and except for such consents, approvals, authorizations and
filings as may be required subsequent to the Closing
Date.
|
|
o
)
|
The Acquiring Fund agrees to use
all reasonable efforts to obtain the approvals and authorizations required
by the 1933 Act, the 1940 Act, and any state blue sky or securities laws
as it may deem appropriate in order to continue its operations after the
Closing Date.
|
ARTICLE V
COVENANTS OF THE ACQUIRING FUND AND THE
ACQUIRED FUND
5.1
OPERATION IN ORDINARY
COURSE. The Acquiring Fund and the Acquired Fund will each operate
its respective business in the ordinary course between the date of this
Agreement and the Closing Date, it being understood that such ordinary course of
business will include customary dividends and shareholder purchases and
redemptions, provided, however, that the Acquired Fund may be closed to new
investments in anticipation of the Reorganization.
5.2
APPROVAL OF SHAREHOLDERS. The
Acquiree will call a special meeting of the Acquired Fund Shareholders to
consider and act upon this Agreement and to take all other appropriate action
necessary to obtain approval of the transactions contemplated
herein.
5.3
INVESTMENT
REPRESENTATION. The Acquired Fund covenants that the Acquiring Fund
Shares to be issued pursuant to this Agreement are not being acquired for the
purpose of making any distribution, other than in connection with the
Reorganization and in accordance with the terms of this
Agreement.
5.4
ADDITIONAL INFORMATION. The
Acquired Fund will assist the Acquiring Fund in obtaining such information as
the Acquiring Fund reasonably requests concerning the beneficial ownership of
the Acquired Fund’s shares.
5.5
FURTHER ACTION. Subject to
the provisions of this Agreement, the Acquiring Fund and the Acquired Fund will
each take or cause to be taken, all action, and do or cause to be done, all
things reasonably necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement, including any actions
required to be taken after the Closing Date.
5.6
STATEMENT OF EARNINGS AND
PROFITS. As promptly as practicable, but in any case within sixty
days after the Closing Date, the Acquired Fund shall furnish the Acquiring Fund,
in such form as is reasonably satisfactory to the Acquiring Fund, a statement of
the earnings and profits of the Acquired Fund for federal income tax purposes
that will be carried over by the Acquiring Fund as a result of Section 381
of the Code, and which will be certified by the Acquiree’s
Treasurer.
5.7
PREPARATION OF REGISTRATION STATEMENT
AND PROXY. The Acquirer will review and file with the Commission a
registration statement on Form N-14 relating to the Acquiring Fund Shares
to be issued to shareholders of the Acquired Fund (the “Registration
Statement”). The Registration Statement shall include a proxy
statement and a prospectus of the Acquiring Fund relating to the transaction
contemplated by this Agreement. The Registration Statement shall be
in compliance with the 1933 Act, the 1934 Act and the 1940 Act, as
applicable. Each party will provide the other party with the
materials and information necessary to prepare the Registration Statement (the
“Proxy Materials”), for inclusion therein, in connection with the meeting of the
Acquired Fund Shareholders to consider the approval of this Agreement and the
transactions contemplated herein.
5.8
DISTRIBUTIONS. On or before
the Closing Date, the Acquired Fund shall have declared and paid a dividend or
dividends which, together with all previous such dividends, shall have the
effect of distributing to the Acquired Fund Shareholders all of the
Acquired Fund’s investment company taxable income (computed without regard to
any deduction for dividends paid), if any, plus the excess, if any, of its
interest income excludible from gross income under Section 103(a) of the Code
over its deductions disallowed under Sections 265 and 171(a)(2) of the Code
for all taxable periods or years ending on or before the Closing Date, and all
of its net capital gains realized (after reduction for any capital loss carry
forward), if any, in all taxable periods or years ending on or before the
Closing Date.
5.9
TAX RETURNS. The Acquiring
Fund and the Acquired Fund agree to cooperate with each other after the Closing
in filing any tax return, amended return or claim for refund, determining a
liability for taxes or a right to a refund of taxes or participating in or
conducting any audit or other proceeding in respect of
taxes.
5.10
CONFIRMATION OF TAX
BASIS. The Acquired Fund shall deliver to the Acquiring Fund on the
Closing Date confirmations or other adequate evidence as to the tax basis and
holding period of each of the Assets delivered to the Acquiring Fund
hereunder.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF
THE ACQUIRED FUND
The obligations of the Acquired Fund to
consummate the transactions provided for herein shall be subject, at its
election, to the performance by the Acquiring Fund of all the obligations to be
performed by the Acquiring Fund pursuant to this Agreement, on or before the
Closing Date and, in addition, subject to the following
conditions:
6
.1
All representations, covenants, and
warranties of the Acquiring Fund contained in this Agreement shall be true and
correct in all material respects as of the date hereof and as of the Closing
Date, with the same force and effect as if made on and as of the Closing Date.
The Acquiring Fund shall have delivered to the Acquired Fund on such Closing
Date a certificate executed in the Acquiring Fund’s name by the Acquirer’s
President or Vice President and its Treasurer or Assistant Treasurer, in form
and substance satisfactory to the Acquired Fund and dated as of the Closing
Date, to such effect and as to such other matters as the Acquired Fund shall
reasonably request.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF
THE ACQUIRING FUND
The obligations of the Acquiring Fund to
consummate the transactions provided for herein shall be subject, at its
election, to the performance by the Acquired Fund of all the obligations to be
performed by the Acquired Fund pursuant to this Agreement, on or before the
Closing Date and, in addition, shall be subject to the following
conditions:
7.1
All representations, covenants, and
warranties of the Acquired Fund contained in this Agreement shall be true and
correct in all material respects as of the date hereof and as of the Closing
Date, with the same force and effect as if made on and as of such Closing
Date. The Acquired Fund shall have delivered to the Acquiring Fund on
such Closing Date a certificate executed in the Acquired Fund’s name by the
Acquiree’s President or Vice President and its Treasurer or Assistant Treasurer,
in form and substance satisfactory to the Acquiring Fund and dated as of such
Closing Date, to such effect and as to such other matters as the Acquiring Fund
shall reasonably request.
7.2
The Acquired Fund shall have delivered
to the Acquiring Fund a statement of the Acquired Fund’s assets and liabilities,
together with a list of the Acquired Fund’s portfolio securities showing the tax
costs of such securities by lot and the holding periods of such securities, as
of the Closing Date, certified by the Treasurer of the
Acquiree.
ARTICLE VI
I
I
FURTHER CONDITIONS PRECEDENT TO
OBLIGATIONS OF THE
ACQUIRING FUND AND ACQUIRED
FUND
If any of the conditions set forth below
do not exist on or before the Closing Date with respect to the Acquired Fund or
the Acquiring Fund, the other party to this Agreement shall, at its option, not
be required to consummate the transactions contemplated by this
Agreement:
8.1
This Agreement and the transactions
contemplated herein, with respect to the Acquired Fund, shall have been approved
by the requisite vote of the Board of Directors and the Acquired Fund
Shareholders in accordance with applicable law and the provisions of the
Acquiree’s Articles of Incorporation and By-Laws. Certified copies of
the resolutions evidencing such approval shall have been delivered to the
Acquiring Fund. Notwithstanding anything herein to the contrary,
neither the Acquiring Fund nor the Acquired Fund may waive the conditions set
forth in this paragraph 8.1.
8.2
On the Closing Date, the Commission
shall not have issued an unfavorable report under Section 25(b) of the 1940
Act, or instituted any proceeding seeking to enjoin the consummation of the
transactions contemplated by this Agreement under Section 25(c) of the 1940
Act. Furthermore, no action, suit or other proceeding shall be
threatened or pending before any court or governmental agency in which it is
sought to restrain or prohibit, or obtain damages or other relief in connection
with this Agreement or the transactions contemplated herein.
8.3
All required consents of other parties
and all other consents, orders, and permits of federal, state and local
regulatory authorities (including those of the Commission and of state
securities authorities, including any necessary “no-action” positions and
exemptive orders from such federal and state authorities) to permit consummation
of the transactions contemplated herein shall have been obtained, except where
failure to obtain any such consent, order, or permit would not involve a risk of
a material adverse effect on the assets or properties of the Acquiring Fund or
the Acquired Fund, provided that either party hereto may waive any such
conditions for itself.
8.4
The Registration Statement shall have
become effective under the 1933 Act, and no stop orders suspending the
effectiveness thereof shall have been issued. To the best knowledge
of the parties to this Agreement, no investigation or proceeding for that
purpose shall have been instituted or be pending, threatened or contemplated
under the 1933 Act.
8.5
The parties shall have received an
opinion of Reed Smith LLP substantially to the effect that for federal income
tax purposes:
|
a)
|
The transfer of all of the
Acquired Fund’s assets to the Acquiring Fund solely in exchange for
Acquiring Fund Shares (followed by the distribution of Acquiring Fund
Shares to the Acquired Fund Shareholders in dissolution and liquidation of
the Acquired Fund) will constitute a “reorganization” within the meaning
of Section 368(a) of the Code, and the Acquiring Fund and the
Acquired Fund will each be a “party to a reorganization” within the
meaning of Section 368(b) of the Code.
|
|
b)
|
No gain or loss will be recognized
by the Acquiring Fund upon the receipt of the assets of the Acquired Fund
solely in exchange for Acquiring Fund Shares.
|
|
c)
|
No gain or loss will be recognized
by the Acquired Fund upon the transfer of the Acquired Fund’s assets to
the Acquiring Fund solely in exchange for Acquiring Fund Shares or upon
the distribution (whether actual or constructive) of Acquiring Fund Shares
to Acquired Fund Shareholders in exchange for their Acquired Fund
Shares.
|
|
d)
|
No gain or loss will be recognized
by any Acquired Fund Shareholder upon the exchange of its Acquired Fund
Shares for Acquiring Fund Shares.
|
|
e
)
|
The aggregate tax basis of the
Acquiring Fund Shares received by each Acquired Fund Shareholder pursuant
to the Reorganization will be the same as the aggregate tax basis of the
Acquired Fund Shares held by it immediately prior to the
Reorganization. The holding period of the Acquiring Fund Shares
received by each Acquired Fund Shareholder will include the period during
which the Acquired Fund Shares exchanged
therefore
were held by such shareholder,
provided the Acquired Fund Shares are held as capital assets at the time
of the Reorganization.
|
|
f
)
|
The tax basis of the Acquired
Fund’s assets acquired by the Acquiring Fund will be the same as the tax
basis of such assets to the Acquired Fund immediately prior to the
Reorganization. The holding period of the assets of the
Acquired Fund in the hands of the Acquiring Fund will include the period
during which those assets were held by the Acquired
Fund.
Such opinion shall be based on
customary assumptions and such representations as Reed Smith LLP may
reasonably request, and the Acquired Fund and Acquiring Fund will
cooperate to make and certify the accuracy of such
representations. The foregoing opinion may state that no
opinion is expressed as to the effect of the Reorganization on the
Acquiring Fund, the Acquired Fund or any Acquired Fund Shareholder with
respect to any asset as to which unrealized gain or loss is required to be
recognized for federal income tax purposes at the end of a taxable year
(or on the termination or transfer thereof) under a mark-to-market system
of accounting. Notwithstanding anything herein to the contrary,
neither the Acquiring Fund nor the Acquired Fund may waive the conditions
set forth in this
paragraph 8.5.
|
ARTICLE IX
EXPENSES
As soon as practical after the Closing,
American Century Investment Management, Inc., or its affiliates, shall pay
expenses associated with the Acquiring Fund’s and Acquired Fund’s participation
in the Reorganization. Such Reorganization expenses
include: (a) expenses associated with the preparation and filing
of the Proxy Materials; (b) postage; (c) printing; (d) accounting
fees; (e) legal fees incurred by each Fund; (f) solicitation costs of
the transaction; and (g) other related administrative or operational costs.
Any registration or licensing fee will be borne by the Fund incurring such
fee. The Acquired Fund will pay for any brokerage charges associated
with the disposition of its respective portfolio securities prior to the
Reorganizations. The Acquiring Fund will pay for any brokerage
charges and other transaction costs associated with transactions (whether
purchase or sale) involving assets received by the Acquired Fund in the
Reorganization.
ARTICLE X
ENTIRE AGREEMENT; SURVIVAL OF
WARRANTIES
10.1
The Acquirer, on behalf of the Acquiring
Fund, and the Acquiree, on behalf of the Acquired Fund, agree that neither party
has made to the other party any representation, warranty and/or covenant not set
forth herein, and that this Agreement constitutes the entire agreement between
the parties.
10.2
Except as specified in the next sentence
set forth in this paragraph 10.2, the representations, warranties, and covenants
contained in this Agreement or in any document delivered pursuant to or in
connection with this Agreement, shall not survive the consummation of the
transactions contemplated hereunder. The covenants to be performed
after the Closing Date shall continue in effect beyond the consummation of the
transactions contemplated hereunder.
ARTICLE XI
TERMINATION
This Agreement may be terminated by the
mutual agreement of the Acquirer and the Acquiree. In addition,
either the Acquirer or the Acquiree may at its option terminate this Agreement
at or before the Closing Date due to:
|
a)
|
a breach by the other of any
representation, warranty, or agreement contained herein to be performed at
or before the Closing Date, if not cured within 30
days;
|
|
b)
|
a condition herein expressed to be
precedent to the obligations of the terminating party that has not been
met and it reasonably appears that it will not or cannot be met;
or
|
|
c)
|
a determination by a party’s Board
of Directors, as appropriate, that the consummation of the transactions
contemplated herein is not in the best interest of the Acquiree or the
Acquirer, respectively, and notice given to the other party
hereto.
|
In the event of any such termination, in
the absence of willful default, there shall be no liability for damages on the
part of the Acquiring Fund, the Acquirer, the Acquired Fund, the Acquiree, or
their respective directors or officers, to the other party or its directors or
officers.
ARTICLE XII
AMENDMENTS
This Agreement may be amended, modified,
or supplemented in such manner as may be mutually agreed upon in writing by the
officers of the Acquiree and the Acquirer as specifically authorized by their
respective Boards of Directors; provided, however, that following the meeting of
the Acquired Fund Shareholders called by the Acquired Fund pursuant to
paragraph 5.2 of this Agreement, no such amendment may have the effect of
changing the provisions for determining the number of Acquiring Fund Shares to
be issued to the Acquired Fund Shareholders under this Agreement to the
detriment of such shareholders without their further
approval.
ARTICLE XIII
HEADINGS; COUNTERPARTS; GOVERNING LAW;
ASSIGNMENT;
LIMITATION OF
LIABILITY
13.1
The Article and paragraph headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
13.2
This Agreement may be executed in any
number of counterparts, each of which shall be deemed an
original.
13.3
This Agreement shall be governed by and
construed in accordance with the laws of the State of
Missouri
, without regard to the conflict of laws
rules of that or any other jurisdiction.
13.4
This Agreement shall bind and inure to
the benefit of the parties hereto and their respective successors and assigns,
but, except as provided in this paragraph, no assignment or transfer hereof or
of any rights or obligations hereunder shall be made by any party without the
written consent of the other party. Nothing herein expressed or
implied is intended or shall be construed to confer upon or give any person,
firm, or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
IN WITNESS WHEREOF, the parties have
duly executed this Agreement, all as of the date first written
above.
|
AMERICAN CENTURY WORLD MUTUAL
FUNDS, INC.
on behalf of its
portfolio,
|
|
|
___________________________________________________
FUND
|
|
|
By:________________________________________________________
|
|
|
Title:_______________________________________________________
|
|
|
AMERICAN CENTURY MUTUAL FUNDS,
INC.
on behalf of its
portfolio,
|
|
|
GROWTH
FUND
|
|
|
By:_________________________________________________________
|
|
|
Title:________________________________________________________
|
EXHIBIT B
MANAGEMENT'S DISCUSSION OF FUND
PERFORMANCE
Growth
Market Perspective
By Steve Lurito, Chief Investment
Officer,
U.S.
Growth Equity
The Perfect Storm
The year ended October 31, 2008, was one
of the most turbulent periods for the
U.S.
equity market since the Great
Depression. As the accompanying table shows, stocks declined sharply across the
board as a “perfect storm” of negative influences undermined investor confidence
and produced a dramatic increase in market volatility.
The biggest impact came from the credit
crisis that grew out of the housing and mortgage meltdowns in 2007. Credit
conditions deteriorated throughout the one-year period, culminating in a
liquidity crisis that led to the downfall of a number of major financial
companies. Examples included the government conservatorship of mortgage lenders
Fannie Mae and Freddie Mac, the bankruptcy of brokerage firm Lehman Brothers,
and the government bailout of insurer American International Group. Despite
efforts by the
U.S.
government and Federal Reserve to
provide systemic stability, the credit markets remained
frozen.
Diminishing economic activity also
weighed on the stock market. After decelerating in 2007, the
U.S.
economy weakened further in 2008 as
consumer spending stalled, the housing downturn worsened, and the unemployment
rate reached its highest level since 1994. The
U.S.
economic slowdown spread to other parts
of the world, increasing the likelihood of a global
recession.
One other noteworthy factor was the
parabolic rise and fall of commodity prices. Robust growth in emerging economies
boosted the prices of energy and many other commodities to record highs by
mid-2008. However, the global economic slowdown led to a sharp reversal in
commodity prices during the last few months of the period.
The Groundwork for
Recovery
The events of the past year have been
about correcting global imbalances and domestic excesses—the first step on the
road to recovery. It’s important to remember that the stock market is a
discounting mechanism, trading on estimates of future earnings power. The market
decline over the past year discounted the current economic slowdown; similarly,
we would expect the market to rebound before we see improvement in the economic
data. We don’t know when this will happen, but the preconditions—significant
monetary stimulus and low valuations—are in place.
Growth - Performance
|
Total Returns as of October 31,
2008
|
|||||||
|
Average Annual
Returns
|
|||||||
|
1 year
|
5 years
|
10 years
|
Since
Inception
|
Inception
Date
|
|||
|
Investor
Class
|
-33.86%
|
0.62%
|
-0.02%
|
13.21%
|
6/30/71
(1)
|
||
|
Russell 1000 Growth
Index
(2)
|
-36.95%
|
-1.29%
|
-2.10%
|
N/A
(3)
|
—
|
||
|
Institutional
Class
|
-33.71%
|
0.83%
|
0.20%
|
2.41%
|
6/16/97
|
||
|
Advisor
Class
|
-34.03%
|
0.37%
|
-0.28%
|
2.42%
|
6/4/97
|
||
|
R Class
|
-34.21%
|
0.12%
|
—
|
0.90%
|
8/29/03
|
||
|
1
|
Although the fund’s actual
inception date was 10/31/58, this inception date corresponds with the
investment advisor’s implementation of its current investment philosophy
and practices.
|
|
2
|
Data provided by Lipper Inc. – A
Reuters Company. © 2008 Reuters. All rights reserved. Any copying,
republication or redistribution of Lipper content, including by caching,
framing or similar means, is expressly prohibited without the prior
written consent of Lipper. Lipper shall not be liable for any errors or
delays in the content, or for any actions taken in reliance
thereon.
|
|
|
Lipper Fund Performance —
Performance data is total return, and is preliminary and subject to
revision.
|
|
|
The data contained herein has been
obtained from company reports, financial reporting services, periodicals
and other resources believed to be reliable. Although carefully verified,
data on compilations is not guaranteed by Lipper and may be incomplete. No
offer or solicitations to buy or sell any of the securities herein is
being made by Lipper.
|
|
3
|
Benchmark began
12/29/78.
|
Data presented reflect past performance.
Past performance is no guarantee of future results. Current performance may be
higher or lower than the performance shown. Investment return and principal
value will fluctuate, and redemption value may be more or less than original
cost. To obtain performance data current to the most recent month end, please
call 1-800-345-2021 or visit americancentury.com.
Unless otherwise indicated, performance
reflects Investor Class shares; performance for other share classes will vary
due to differences in fee structure. For information about other share classes
available, please consult the prospectus. Data assumes reinvestment of dividends
and capital gains, and none of the charts reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
Returns for the index are provided for comparison. The fund’s total returns
include operating expenses (such as transaction costs and management fees) that
reduce returns, while the total returns of the index do not.
|
Growth of $10,000 Over 10
Years
|
|
$10,000 investment made October
31, 1998
|
|
One-Year Returns Over 10
Years
|
||||||||||
|
Periods ended October
31
|
||||||||||
|
1999
|
2000
|
2001
|
2002
|
2003
|
2004
|
2005
|
2006
|
2007
|
2008
|
|
|
Investor
Class
|
36.31%
|
11.49%
|
-34.14%
|
-17.09%
|
16.62%
|
6.78%
|
7.47%
|
11.51%
|
21.86%
|
-33.86%
|
|
Russell 1000
Growth
Index
|
34.25%
|
9.33%
|
-39.95%
|
-19.62%
|
21.81%
|
3.38%
|
8.81%
|
10.84%
|
19.23%
|
-36.95%
|
Data presented reflect past performance.
Past performance is no guarantee of future results. Current performance may be
higher or lower than the performance shown. Investment return and principal
value will fluctuate, and redemption value may be more or less than original
cost. To obtain performance data current to the most recent month end, please
call 1-800-345-2021 or visit americancentury.com.
Unless otherwise indicated, performance
reflects Investor Class shares; performance for other share classes will vary
due to differences in fee structure. For information about other share classes
available, please consult the prospectus. Data assumes reinvestment of dividends
and capital gains, and none of the charts reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
Returns for the index are provided for comparison. The fund’s total returns
include operating expenses (such as transaction costs and management fees) that
reduce returns, while the total returns of the index do not.
Growth - Portfolio
Commentary
Portfolio Managers: Greg Woodhams and
Prescott
LeGard
Performance Summary
Growth returned –33.86%* during the 12
months ended October 31, 2008. By comparison, Growth outperformed its
benchmark—the Russell 1000 Growth Index—and the Lipper Large-Cap Growth Funds
category average, which returned –36.95% and –38.55%,** respectively. See the
previous page for the portfolio’s long-term performance compared with its
benchmark.
The portfolio declined in a year of
unprecedented turmoil in financial markets. No sector contributed positively to
absolute returns; information technology shares detracted most. Growth held up
better than the Russell index thanks to contributions from a number of sectors,
led by consumer discretionary, financials, and materials shares. Information
technology and industrials were the only sectors to detract from relative
results.
Consumer Discretionary Contributed
Most
Outperformance in the consumer
discretionary sector was driven by stock picks in the multiline and specialty
retail industries. The sector was home to the number-one overall contributor to
relative results, an overweight position in Family Dollar Stores. In the
specialty retail segment, performance benefited from larger-than-benchmark
weightings in Urban Outfitters and The TJX Companies, which operates the T.J.
Maxx and
Marshalls
chains, among others. Having exposure
to these and other discount retailers during the period benefited portfolio
performance in this difficult economic environment.
For example, in the consumer staples
sector, Wal-Mart saw increased customer traffic while continuing to make
progress on its turnaround. Wal-Mart was a top-five contributor to portfolio
performance.
* All fund returns referenced
in this commentary are for Investor Class shares.
** The Lipper Large-Cap Growth Funds
category average returns for the five- and 10-year periods ended October 31,
2008, were -1.58% and -0.71%, respectively.
Other Key
Contributors
Financials shares also helped relative
performance, thanks to stock selection in the insurance space, as well as
underweight positions in consumer finance and thrifts. The key contribution to
relative results came from an overweight position in Chubb Corporation. Chubb
had an essentially flat return during an otherwise very difficult year for
financials stocks because it’s seen as a well-capitalized, higher-quality
name.
Materials shares also helped relative
performance, led by stock selection. Monsanto, the world’s largest seed
producer, was the leading contributor in this space. It also helped to be
underweight in the chemicals and metals and mining industries, which suffered
from falling commodity prices and the outlook for slower economic growth and
tighter credit. The portfolio had no exposure to the poorest-performing
fertilizer and steel companies, led by Mosaic and U.S. Steel,
respectively.
IT, Industrials
Detracted
The information technology sector was
the largest detractor from relative return. Stock selection in the software
industry hurt performance, behind an underweight position in Microsoft, which
was seen as a “safe haven” during the market turmoil. An underweight position
and stock selection in IT services also detracted. Here it hurt to be
underrepresented in IBM, another big safe-haven play, and overweight in
Western Union
and DST Systems during the
period.
The industrial sector underperformed due
to positioning in the electrical equipment, commercial services, road and rail,
and building products industries. Stock selection was mixed, but allocation
detracted—the portfolio was overweight the poor-performing
electrical equipment companies, and underrepresented in the other
industry segments, which held up better.
|
1
|
Includes depositary shares, dual
listed securities and foreign ordinary
shares.
|
|
2
|
Includes securities lending
collateral and other assets and
liabilities.
|
|
3
|
Category is less than 0.05% of
total net assets.
|
Outlook
The Growth team’s investment process
focuses on large companies exhibiting sustainable improvement in their
businesses. The managers have a thesis on each stock they own and devote their
entire research effort toward identifying the companies in each sector and
industry that they feel are likely to outperform. It is the managers’ belief
that owning such companies will generate outperformance over time versus the
Russell 1000 Growth Index and the other funds in the large-growth peer
group.
As a result, the portfolio’s sector and
industry selection as well as capitalization range allocations are primarily a
result of identifying what the managers believe to be superior individual
securities. As of October 31, 2008, they found opportunity in the health care
and consumer discretionary sectors, the portfolio’s largest overweight
positions. The most notable sector underweights were in information technology
and energy shares.
MANAGEMENT'S DISCUSSION OF FUND
PERFORMANCE
Life Sciences Fund
Technology Fund
Market Perspective
By Enrique Chang, Chief Investment
Officer, American Century Investments
Financial Storm Sank
Stocks
The year ended November 30, 2008,
represented one of the most tumultuous periods in the history of the
U.S.
equity market as an ongoing financial
storm and a recession battered the stock market.
Continued deterioration in the credit
environment and a deepening liquidity crisis—ignited by last year’s
mortgage-market meltdown—led to an increasingly urgent need for capital at many
major financial companies. By September, the crisis reached a tipping point as a
number of major financial institutions filed for bankruptcy, sold out to
competitors to avoid insolvency, or were taken over by the federal
government.
The
U.S.
economy, which officially entered a
recession in December 2007, grew even more sluggish. Steady job losses pushed
the unemployment rate up to a 15-year high, consumer spending slowed
dramatically, and mortgage foreclosures and delinquencies rose markedly. In
addition, the financial crisis spread around the world, increasing the
likelihood of a global economic downturn. On the positive side, the slowing
economic environment brought the prices of energy and other commodities down
sharply from record highs reached during the summer.
The troubling financial and economic
news led to an unprecedented level of stock market turbulence. Day-to-day
volatility increased dramatically as investor confidence faltered, producing a
market storm that has not been seen since the 1930s. Stocks declined in five of
the last six months of the period, with October producing the worst monthly
performance in 21 years and one of the 10 worst months in the stock market’s
history.
|
Market
Returns
|
|
|
For the 12 months ended November
30, 2008
|
|
|
U.S.
Stocks
|
|
|
Russell 1000 Index
(Large-Cap)
|
–38.98%
|
|
Russell Midcap
Index
|
–44.04%
|
|
Russell 2000 Index
(Small-Cap)
|
–37.46%
|
|
Foreign
Stocks
|
|
|
MSCI EAFE
Index
|
–47.79%
|
|
MSCI EM
Index
|
–56.42%
|
Intervention and
Resiliency
As business and economic conditions
worsened, intervention increased. The
U.S.
government and the Federal Reserve have
provided extraordinary levels of fiscal and monetary assistance, and other
central banks and governments have contributed additional
stimulus.
Furthermore, downturns play the
sometimes necessary role of correcting past market misbehavior and eliminating
excesses and inefficiencies. The current downturn was years in the making, so it
may take some time before we are firmly on the road to recovery. However, we
remain confident in the stock market’s long-term resiliency.
Life Sciences
−
Performance
|
Total Returns as of November 30,
2008
|
||||||
|
Average Annual
Returns
|
||||||
|
1 year
|
5 years
|
Since
Inception
|
Inception
Date
|
|||
|
Investor
Class
|
-28.17%
|
-0.23%
|
-1.45%
|
6/30/00
|
||
|
S&P Composite 1500 Health Care
Index
|
-30.45%
|
-0.74%
|
-1.85%
|
—
|
||
|
S&P 500 Index
(1)
|
-38.09%
|
-1.39%
|
-3.92%
|
—
|
||
|
Institutional
Class
|
-28.08%
|
-0.09%
|
-1.86%
|
7/17/00
|
||
|
1
|
Data provided by Lipper Inc. – A
Reuters Company. © 2008 Reuters. All rights reserved. Any copying,
republication or redistribution of Lipper content, including by caching,
framing or similar means, is expressly prohibited without the prior
written consent of Lipper. Lipper shall not be liable for any errors or
delays in the content, or for any actions taken in reliance
thereon.
|
|
|
The data contained herein has been
obtained from company reports, financial reporting services, periodicals
and other resources believed to be reliable. Although carefully verified,
data on compilations is not guaranteed by Lipper and may be incomplete. No
offer or solicitations to buy or sell any of the securities herein is
being made by Lipper.
|
Data presented reflect past performance.
Past performance is no guarantee of future results. Current performance may be
higher or lower than the performance shown. Investment return and principal
value will fluctuate, and redemption value may be more or less than original
cost. To obtain performance data current to the most recent month end, please
call 1-800-345-2021 or visit americancentury.com. The fund concentrates its
investments in a narrow segment of the total market and is therefore subject to
greater risks and market fluctuations than a portfolio representing a broader
range of industries. International investing involves special risks,
such as political instability and currency fluctuations.
Unless otherwise indicated, performance
reflects Investor Class shares; performance for other share classes will vary
due to differences in fee structure. For information about other share classes
available, please consult the prospectus. Data assumes reinvestment of dividends
and capital gains, and none of the charts reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
Returns for the indices are provided for comparison. The fund’s total returns
include operating expenses (such as transaction costs and management fees) that
reduce returns, while the total returns of the indices do
not.
|
Growth of $10,000 Over Life of
Class
|
|
$10,000 investment made June 30,
2000
|
*From 6/30/00, the Investor’s Class’s
inception date. Not annualized
Data presented reflect past performance.
Past performance is no guarantee of future results. Current performance may be
higher or lower than the performance shown. Investment return and principal
value will fluctuate, and redemption value may be more or less than original
cost. To obtain performance data current to the most recent month end, please
call 1-800-345-2021 or visit americancentury.com. The fund concentrates its
investments in a narrow segment of the total market and is therefore subject to
greater risks and market fluctuations than a portfolio representing a broader
range of industries. International investing involves special risks,
such as political instability and currency fluctuations.
Unless otherwise indicated, performance
reflects Investor Class shares; performance for other share classes will vary
due to differences in fee structure. For information about other share classes
available, please consult the prospectus. Data assumes reinvestment of dividends
and capital gains, and none of the charts reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
Returns for the indices are provided for comparison. The fund’s total returns
include operating expenses (such as transaction costs and management fees) that
reduce returns, while the total returns of the indices do
not.
Life Sciences
─
Portfolio
Commentary
Portfolio Managers:
Arnold
Douville and Christy
Turner*
Performance Summary
Life Sciences returned –28.17%** for the
12 months ended November 30, 2008. The portfolio’s benchmark, the S&P
Composite 1500 Health Care Index, returned –30.45%. The broader equity market,
represented by the S&P 500 Index, returned –38.09%.
Anxieties surrounding the economic
slowdown and global financial market distress undermined the broader
U.S.
equity market during the period.
Although inflationary worries eased in the final months of the reporting period,
tighter credit conditions increasingly restricted access to operating capital
and fueled investor pessimism. Befitting its reputation as a “safe haven” in
volatile times, the health care sector outperformed the broader stock market.
Nevertheless, every health care industry represented in the benchmark and the
portfolio posted a negative total return for the 12-month period, with most
posting double digit losses.
Stock Selection Drove
Results
Stock selection in the health care
industry accounted for the majority of the portfolio’s outperformance compared
to the benchmark. Additionally, an underweight position in health care providers
and services and an overweight position in health care equipment contributed
positively to the portfolio’s relative performance.
Despite realizing positive effects from
stock selection, our pharmaceuticals component, the portfolio’s largest industry
weighting, detracted from relative performance due to our underweight position.
Our stock selection in the biotechnology industry, the portfolio’s
second-largest weighting, was a negative influence on
performance.
|
*
|
As of December 19, 2008, Steve
Lurito is the portfolio
manager.
|
|
**
|
All fund returns referenced in
this commentary are for Investor Class
shares.
|
Sleep Disorder Company Was Top
Stock
The health care equipment category was
home to Respironics, the portfolio’s top contributor to relative performance. We
maintained an overweight position in the company, a manufacturer of respiratory
products for sleep disorders, which reported record earnings and revenue growth
before being acquired by Royal Philips Electronics.
In the pharmaceuticals area, our
out-of-benchmark positions in
Israel
’s Teva Pharmaceutical Industries, a
generic drug manufacturer, and the
United Kingdom
’s Elan Corp., a biopharmaceuticals
company, boosted performance. Teva reported higher sales and continued success
with its multiple sclerosis drug and its inhalers. Elan rallied on encouraging
results for its investigational Alzheimer’s disease drug and on prescription
increases for its multiple sclerosis treatment.
Our small, out-of-benchmark position in
Sigma-Aldrich, a supplier of biochemicals and organic chemicals to the life
sciences industry, was a top contributor to relative performance during the
period. The company reported improved margins, cash flow, and sales combined
with a steady increase in its emerging-markets business.
|
1
|
Includes depositary shares, dual
listed securities and foreign ordinary
shares.
|
Underweights in Key Companies
Detracted
Our underweight positions in Johnson
& Johnson, the health care products and pharmaceuticals giant, and Amgen, a
biotechnology company, represented the largest detractors to relative
performance. Both companies were among the largest holdings in the portfolio,
but they were underweighted compared with the benchmark. From a relative
perspective, Johnson & Johnson benefited from its blue-chip status in a
fairly recession-proof industry. Amgen benefited, on a relative basis, from
solid earnings and positive phase 3 data for its pipeline product, denosumab,
which treats low bone mass.
Our portfolio-only position in
Switzerland
’s Alcon, a surgical equipment and
consumer eye-care products manufacturer, also detracted from results. Shares
fell sharply after the company cut its revenue outlook. Alcon attributed the
revised forecast to currency fluctuations tied to the strengthening U.S. dollar
and to slowing
U.S.
prescription sales.
Outlook
Regardless of the macroeconomic
environment, we will continue to emphasize companies from across the health care
spectrum exhibiting accelerating earnings and reasonable valuations. Our
investment decisions may result in shifts in industry weightings, but any such
developments stem from a fundamental, bottom-up assessment of each company’s
merits.
Technology
─
Performance
|
Total Returns as of November 30,
2008
|
||||||
|
Average Annual
Returns
|
||||||
|
1 year
|
5 years
|
Since
Inception
|
Inception
Date
|
|||
|
Investor
Class
|
-51.13%
|
-8.56%
|
-15.16%
|
6/30/00
|
||
|
S&P Composite
1500
Technology
Index
|
-43.26%
|
-5.65%
|
-12.83%
|
—
|
||
|
S&P 500 Index
(1)
|
-38.09%
|
-1.39%
|
-3.92%
|
—
|
||
|
Institutional
Class
|
-51.02%
|
-8.38%
|
-16.08%
|
7/14/00
|
||
|
1
|
Data provided by Lipper Inc. – A
Reuters Company. © 2008 Reuters. All rights reserved. Any copying,
republication or redistribution of Lipper content, including by caching,
framing or similar means, is expressly prohibited without the prior
written consent of Lipper. Lipper shall not be liable for any errors or
delays in the content, or for any actions taken in reliance
thereon.
|
|
|
The data contained herein has been
obtained from company reports, financial reporting services, periodicals
and other resources believed to be reliable. Although carefully verified,
data on compilations is not guaranteed by Lipper and may be incomplete. No
offer or solicitations to buy or sell any of the securities herein is
being made by Lipper.
|
Data presented reflect past performance.
Past performance is no guarantee of future results. Current performance may be
higher or lower than the performance shown. Investment return and principal
value will fluctuate, and redemption value may be more or less than original
cost. To obtain performance data current to the most recent month end, please
call 1-800-345-2021 or visit americancentury.com. The fund concentrates its
investments in a narrow segment of the total market and is therefore subject to
greater risks and market fluctuations than a portfolio representing a broader
range of industries. The fund’s investment process may involve high portfolio
turnover, high commission costs and high capital gains distributions. In
addition, its investment approach may involve higher volatility and risk.
International investing involves special risks, such as political instability
and currency fluctuations. Investing in emerging markets may accentuate these
risks.
Unless otherwise indicated, performance
reflects Investor Class shares; performance for other share classes will vary
due to differences in fee structure. For information about other share classes
available, please consult the prospectus. Data assumes reinvestment of dividends
and capital gains, and none of the charts reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
Returns for the indices are provided for comparison. The fund’s total returns
include operating expenses (such as transaction costs and management fees) that
reduce returns, while the total returns of the indices do
not.
|
Growth of $10,000 Over Life of
Class
|
|
$10,000 investment made June 30,
2000
|
|
One-Year Returns Over Life of
Class
|
|||||||||
|
Periods ended November
30
|
|||||||||
|
2000*
|
2001
|
2002
|
2003
|
2004
|
2005
|
2006
|
2007
|
2008
|
|
|
Investor
Class
|
-36.20%
|
-34.48%
|
-31.10%
|
35.97%
|
-7.05%
|
7.75%
|
7.60%
|
21.33%
|
-51.13%
|
|
S&P
Composite
1500
Technology
Index
|
-33.66%
|
-29.22%
|
-27.70%
|
24.02%
|
1.48%
|
7.21%
|
7.65%
|
12.50%
|
-43.26%
|
|
S&P 500
Index
|
-9.16%
|
-12.22%
|
-16.51%
|
15.09%
|
12.86%
|
8.44%
|
14.23%
|
7.72%
|
-38.09%
|
*From 6/30/00, the Investor’s Class’s
inception date. Not annualized.
Data presented reflect past performance.
Past performance is no guarantee of future results. Current performance may be
higher or lower than the performance shown. Investment return and principal
value will fluctuate, and redemption value may be more or less than original
cost. To obtain performance data current to the most recent month end, please
call 1-800-345-2021 or visit americancentury.com. The fund concentrates its
investments in a narrow segment of the total market and is therefore subject to
greater risks and market fluctuations than a portfolio representing a broader
range of industries. The fund’s investment process may involve high portfolio
turnover, high commission costs and high capital gains distributions. In
addition, its investment approach may involve higher volatility and risk.
International investing involves special risks, such as political instability
and currency fluctuations. Investing in emerging markets may accentuate these
risks.
Unless otherwise indicated, performance
reflects Investor Class shares; performance for other share classes will vary
due to differences in fee structure. For information about other share classes
available, please consult the prospectus. Data assumes reinvestment of dividends
and capital gains, and none of the charts reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
Returns for the indices are provided for comparison. The fund’s total returns
include operating expenses (such as transaction costs and management fees) that
reduce returns, while the total returns of the indices do
not.
Technology
─
Portfolio
Commentary
Portfolio Manager: Tom
Telford*
Performance Summary
Technology returned –51.13%** for the 12
months ended November 30, 2008. The portfolio’s benchmark, the S&P Composite
1500 Technology Index, returned –43.26%. The broader equity market, represented
by the S&P 500 Index, returned –38.09%.
The global credit crisis culminated late
in the period with a series of extraordinary corporate failures and takeovers
and government intervention. These events triggered a widespread stock market
downturn that significantly magnified the losses experienced earlier in the
period. Growth stocks underperformed value stocks across the capitalization
spectrum, as the sectors closely aligned with business and consumer spending
suffered the most.
Stock Selection Hampered
Results
Stock selection accounted for the
portfolio’s underperformance relative to the benchmark. Specifically, our stocks
in the IT services and software industries were among the largest detractors. In
the IT services sector, our underweight position in IBM landed the computer
manufacturer among the portfolio’s largest detractors to relative performance.
Similarly, in the software industry, which ended the period as the portfolio’s
largest sector, our underweighted position in Microsoft was the top detractor to
relative results. The company reported healthy earnings throughout the reporting
period, which helped its stock performance. But, as with most stocks, IBM and
Microsoft declined in the final months of the period, due to dismal economic
forecasts and the broad-based stock market sell-off.
After delivering strong performance in
2007 and early 2008, our position in Canada’s Research In Motion, the maker of
the BlackBerry handheld device and one of the largest holdings in the portfolio,
represented the greatest individual performance detractor for the 12-month
period. Shares nose-dived after the company warned that new-product-related
spending would erode profit margins. Concerns about the global economic slowdown
also weighed on the stock price.
|
*
|
As of December 19, 2008, Steve
Lurito is the portfolio
manager.
|
|
**
|
All fund returns referenced in
this commentary are for Investor Class
shares.
|
Portfolio-only Positions Helped
Performance
From a sector perspective, our small,
portfolio-only exposure to the industrials and consumer discretionary sectors
represented the greatest contributors to relative performance. For example, in
the industrials sector,
Japan
’s Nissha Printing was among the
portfolio’s top contributors to relative performance. The company, which engages
in printing and publishing for industrial materials and electronic products,
raised its dividend payment and revenue outlook, and announced a joint venture
with a Tokyo-based internet and printing-related business.
In the electronic equipment industry,
our small, out-of-benchmark position in Cogent, Inc., a provider of automated
fingerprint identification systems, was the portfolio’s leading contributor to
relative performance. The company advanced on strong earnings and sales growth,
soaring demand for its products, and management’s stock buyback
plan.
|
Types of Investments in
Portfolio
|
||
|
% of net
assets
as of
11/30/08
|
% of net
assets
as of
5/31/08
|
|
|
Domestic Common
Stocks
|
84.6%
|
72.7%
|
|
Foreign Common Stocks
(1)
|
14.0%
|
24.6%
|
|
Total Common
Stocks
|
98.6%
|
97.3%
|
|
Temporary Cash
Investments
|
1.1%
|
1.6%
|
|
Other Assets and
Liabilities
|
0.3%
|
1.1%
|
|
(1)
|
Includes depositary shares, dual
listed securities and foreign ordinary
shares.
|
Outlook
We will continue to focus on technology
firms with accelerating earnings and revenue growth rates and positive
share-price momentum, as we believe such stocks will generate superior returns
over time. As recent results demonstrate, sector funds can show strong
volatility to the up- and downsides. Therefore, it may be best to use such funds
in the context of a larger, long-term, growth-oriented
strategy.
EXHIBIT C
FINANCIAL HIGHLIGHTS
The Financial Highlights itemize what
contributed to the changes in share price during the most recently ended fiscal
year. They also show the changes in share price for this period in comparison to
changes over the last five fiscal years (or a shorter period if the
share class is not five years
old).
The Financial Highlights
of each fund
that follow have been audited by
Deloitte & Touche LLP. Their Report
s
of Independent Registered Public
Accounting Firm and the financial statements
and financial highlights
are included in the
respective
funds’ annual report, which
are
available upon
request.
Growth Fund
|
Investor
Class
|
|||||
|
For a Share Outstanding Throughout
the Years Ended October 31
|
|||||
|
2008
|
2007
|
2006
|
2005
|
2004
|
|
|
Per-Share
Data
|
|||||
|
Net Asset Value, Beginning of
Period
|
$26.78
|
$21.99
|
$19.80
|
$18.43
|
$17.26
|
|
Income From Investment
Operations
|
|||||
|
Net Investment
Income (Loss)
(1)
|
0.04
|
0.04
|
0.02
|
0.08
|
(0.01)
|
|
Net Realized
and
Unrealized Gain
(Loss)
|
(9.10)
|
4.76
|
2.26
|
1.30
|
1.18
|
|
Total From
Investment Operations
|
(9.06)
|
4.80
|
2.28
|
1.38
|
1.17
|
|
Distributions
|
|||||
|
From Net
Investment Income
|
(0.03)
|
(0.01)
|
(0.09)
|
(0.01)
|
—
|
|
Net Asset Value, End of
Period
|
$17.69
|
$26.78
|
$21.99
|
$19.80
|
$18.43
|
|
Total Return
(2)
|
(33.86)%
|
21.86%
|
11.51%
|
7.47%
|
6.78%
|
|
Ratios/Supplemental
Data
|
|||||
|
Ratio of Operating
Expenses
to Average Net
Assets
|
1.00%
|
1.00%
|
1.00%
|
1.00%
|
1.00%
|
|
Ratio of Net
Investment
Income (Loss)
to
Average Net
Assets
|
0.16%
|
0.15%
|
0.09%
|
0.38%
|
(0.07)%
|
|
Portfolio Turnover
Rate
|
129%
|
112%
|
127%
|
77%
|
131%
|
|
Net Assets, End of
Period
(in
millions)
|
$2,617
|
$4,133
|
$3,946
|
$4,008
|
$4,176
|
|
1
|
Computed using average shares
outstanding throughout the
period.
|
|
2
|
Total return assumes reinvestment
of net investment income and capital gains distributions, if any. The
total return of the classes may not precisely reflect the class expense
differences because of the impact of calculating the net asset values to
two decimal places. If net asset values were calculated to three decimal
places, the total return differences would more closely reflect the class
expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in
any gain or loss of value between one class and
another.
|
Growth Fund
|
Institutional
Class
|
|||||
|
For a Share Outstanding Throughout
the Years Ended October 31
|
|||||
|
2008
|
2007
|
2006
|
2005
|
2004
|
|
|
Per-Share
Data
|
|||||
|
Net Asset Value, Beginning of
Period
|
$27.03
|
$22.19
|
$19.98
|
$18.59
|
$17.38
|
|
Income From Investment
Operations
|
|||||
|
Net Investment
Income (Loss)
(1)
|
0.08
|
0.09
|
0.06
|
0.11
|
0.02
|
|
Net Realized
and
Unrealized Gain
(Loss)
|
(9.17)
|
4.81
|
2.27
|
1.33
|
1.19
|
|
Total From
Investment Operations
|
(9.09)
|
4.90
|
2.33
|
1.44
|
1.21
|
|
Distributions
|
|||||
|
From Net
Investment Income
|
(0.08)
|
(0.06)
|
(0.12)
|
(0.05)
|
—
|
|
Net Asset Value, End of
Period
|
$17.86
|
$27.03
|
$22.19
|
$19.98
|
$18.59
|
|
Total Return
(2)
|
(33.71)%
|
22.13%
|
11.70%
|
7.72%
|
6.96%
|
|
Ratios/Supplemental
Data
|
|||||
|
Ratio of Operating
Expenses
to Average Net
Assets
|
0.80%
|
0.80%
|
0.80%
|
0.80%
|
0.80%
|
|
Ratio of Net
Investment
Income (Loss)
to
Average Net
Assets
|
0.36%
|
0.35%
|
0.29%
|
0.58%
|
0.13%
|
|
Portfolio Turnover
Rate
|
129%
|
112%
|
127%
|
77%
|
131%
|
|
Net Assets, End of
Period
(in
thousands)
|
$286,262
|
$284,695
|
$759,816
|
$689,983
|
$685,090
|
|
1
|
Computed using average shares
outstanding throughout the
period.
|
|
2
|
Total return assumes reinvestment
of net investment income and capital gains distributions, if any. The
total return of the classes may not precisely reflect the class expense
differences because of the impact of calculating the net asset values to
two decimal places. If net asset values were calculated to three decimal
places, the total return differences would more closely reflect the class
expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in
any gain or loss of value between one class and
another.
|
Life Sciences Fund
|
Investor
Class
|
|||||
|
For a Share Outstanding Throughout
the Years Ended November 30
|
|||||
|
2008
|
2007
|
2006
|
2005
|
2004
|
|
|
Per-Share
Data
|
|||||
|
Net Asset Value, Beginning of
Period
|
$6.00
|
$5.22
|
$5.32
|
$4.69
|
$4.36
|
|
Income From Investment
Operations
|
|||||
|
Net Investment
Income (Loss)
(1)
|
(0.01)
|
(0.02)
|
(0.04)
|
(0.04)
|
(0.04)
|
|
Net Realized
and
Unrealized Gain
(Loss)
|
(1.68)
|
0.80
|
(0.06)
|
0.67
|
0.37
|
|
Total From
Investment Operations
|
(1.69)
|
0.78
|
(0.10)
|
0.63
|
0.33
|
|
Net Asset Value, End of
Period
|
$4.31
|
$6.00
|
$5.22
|
$5.32
|
$4.69
|
|
Total Return
(2)
|
(28.17)%
|
14.94%
|
(1.88)%
|
13.43%
|
7.57%
|
|
Ratios/Supplemental
Data
|
|||||
|
Ratio of Operating
Expenses
to Average Net
Assets
|
1.35%
|
1.35%
|
1.46%
|
1.50%
|
1.50%
|
|
Ratio of Net Investment
Income
(Loss) to Average Net
Assets
|
(0.16)%
|
(0.39)%
|
(0.67)%
|
(0.81)%
|
(0.85)%
|
|
Portfolio Turnover
Rate
|
78%
|
73%
|
151%
|
162%
|
215%
|
|
Net Assets, End of
Period
(in
thousands)
|
$66,285
|
$100,120
|
$112,648
|
$155,835
|
$155,530
|
|
1
|
Computed using average shares
outstanding throughout the
period.
|
|
2
|
Total return assumes reinvestment
of net investment income and capital gains distributions, if any. The
total return of the classes may not precisely reflect the class expense
differences because of the impact of calculating the net asset values to
two decimal places. If net asset values were calculated to three decimal
places, the total return differences would more closely reflect the class
expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in
any gain or loss of value between one class and
another.
|
Life Sciences Fund
|
Institutional
Class
|
|||||
|
For a Share Outstanding Throughout
the Years Ended November 30
|
|||||
|
2008
|
2007
|
2006
|
2005
|
2004
|
|
|
Per-Share
Data
|
|||||
|
Net Asset Value, Beginning of
Period
|
$6.09
|
$5.29
|
$5.38
|
$4.74
|
$4.40
|
|
Income From Investment
Operations
|
|||||
|
Net Investment
Income (Loss)
(1)
|
----
(2)
|
(0.01)
|
(0.02)
|
(0.03)
|
(0.03)
|
|
Net Realized
and
Unrealized Gain
(Loss)
|
(1.71)
|
0.81
|
(0.07)
|
0.67
|
0.37
|
|
Total From
Investment Operations
|
(1.71)
|
0.80
|
(0.09)
|
0.64
|
0.34
|
|
Net Asset Value, End of
Period
|
$4.38
|
$6.09
|
$5.29
|
$5.38
|
$4.74
|
|
Total Return
(3)
|
(28.08)%
|
15.12%
|
(1.67)%
|
13.50%
|
7.73%
|
|
Ratios/Supplemental
Data
|
|||||
|
Ratio of Operating
Expenses
to Average Net
Assets
|
1.15%
|
1.15%
|
1.26%
|
1.30%
|
1.30%
|
|
Ratio of Net Investment
Income
(Loss)
to Average Net
Assets
|
0.04%
|
(0.19)%
|
(0.47)%
|
(0.61)%
|
(0.65)%
|
|
Portfolio Turnover
Rate
|
78%
|
73%
|
151%
|
162%
|
215%
|
|
Net Assets, End of
Period
(in
thousands)
|
$1,697
|
$2,309
|
$2,744
|
$3,953
|
$3,510
|
|
1
|
Computed using average shares
outstanding throughout the
period.
|
|
2
|
Per-share amount was less than
$0.005.
|
|
3
|
Total return assumes reinvestment
of net investment income and capital gains distributions, if any. The
total return of the classes may not precisely reflect the class expense
differences because of the impact of calculating the net asset values to
two decimal places. If net asset values were calculated to three decimal
places, the total return differences would more closely reflect the class
expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in
any gain or loss of value between one class and
another.
|
Technology Fund
|
Investor
Class
|
|||||
|
For a Share Outstanding Throughout
the Years Ended November 30
|
|||||
|
2008
|
2007
|
2006
|
2005
|
2004
|
|
|
Per-Share
Data
|
|||||
|
Net Asset Value, Beginning of
Period
|
$25.60
|
$21.10
|
$19.61
|
$18.20
|
$19.58
|
|
Income From Investment
Operations
|
|||||
|
Net Investment
Income (Loss)
(1)
|
(0.18)
|
(0.21)
|
(0.24)
|
(0.19)
|
(0.24)
|
|
Net Realized
and
Unrealized Gain
(Loss)
|
(12.91)
|
4.71
|
1.73
|
1.60
|
(1.14)
|
|
Total From
Investment Operations
|
(13.09)
|
4.50
|
1.49
|
1.41
|
(1.38)
|
|
Net Asset Value, End of
Period
|
$12.51
|
$25.60
|
$21.10
|
$19.61
|
$18.20
|
|
Total Return
(2)
|
(51.13)%
|
21.33%
|
7.60%
|
7.75%
|
(7.05)%
|
|
Ratios/Supplemental
Data
|
|||||
|
Ratio of Operating
Expenses
to Average Net
Assets
|
1.50%
|
1.51%
|
1.51%
|
1.51%
|
1.50%
|
|
Ratio of Net Investment
Income
(Loss) to Average Net
Assets
|
(0.88)%
|
(0.91)%
|
(1.15)%
|
(1.06)%
|
(1.30)%
|
|
Portfolio Turnover
Rate
|
178%
|
260%
|
385%
|
388%
|
279%
|
|
Net Assets, End of
Period
(in
thousands)
|
$56,269
|
$130,854
|
$122,353
|
$137,710
|
$166,986
|
|
1
|
Computed using average shares
outstanding throughout the
period.
|
|
2
|
Total return assumes reinvestment
of net investment income and capital gains distributions, if any. The
total return of the classes may not precisely reflect the class expense
differences because of the impact of calculating the net asset values to
two decimal places. If net asset values were calculated to three decimal
places, the total return differences would more closely reflect the class
expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in
any gain or loss of value between one class and
another.
|
Technology Fund
|
Institutional
Class
|
|||||
|
For a Share Outstanding Throughout
the Years Ended November 30
|
|||||
|
2008
|
2007
|
2006
|
2005
|
2004
|
|
|
Per-Share
Data
|
|||||
|
Net Asset Value, Beginning of
Period
|
$26.01
|
$21.40
|
$19.84
|
$18.38
|
$19.74
|
|
Income From Investment
Operations
|
|||||
|
Net Investment
Income (Loss)
(1)
|
(0.14)
|
(0.17)
|
(0.20)
|
(0.15)
|
(0.20)
|
|
Net Realized
and
Unrealized Gain
(Loss)
|
(13.13)
|
4.78
|
1.76
|
1.61
|
(1.16)
|
|
Total From
Investment Operations
|
(13.27)
|
4.61
|
1.56
|
1.46
|
(1.36)
|
|
Net Asset Value, End of
Period
|
$12.74
|
$26.01
|
$21.40
|
$19.84
|
$18.38
|
|
Total Return
(2)
|
(51.02)%
|
21.54%
|
7.86%
|
7.94%
|
(6.89)%
|
|
Ratios/Supplemental
Data
|
|||||
|
Ratio of Operating
Expenses
to Average Net
Assets
|
1.30%
|
1.31%
|
1.31%
|
1.31%
|
1.30%
|
|
Ratio of Net Investment
Income
(Loss) to Average Net
Assets
|
(0.68)%
|
(0.71)%
|
(0.95)%
|
(0.86)%
|
(1.10)%
|
|
Portfolio Turnover
Rate
|
178%
|
260%
|
385%
|
388%
|
279%
|
|
Net Assets, End of
Period
(in
thousands)
|
$2,662
|
$5,481
|
$5,051
|
$6,099
|
$7,805
|
|
1
|
Computed using average shares
outstanding throughout the
period.
|
|
2
|
Total return assumes reinvestment
of net investment income and capital gains distributions, if any. The
total return of the classes may not precisely reflect the class expense
differences because of the impact of calculating the net asset values to
two decimal places. If net asset values were calculated to three decimal
places, the total return differences would more closely reflect the class
expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in
any gain or loss of value between one class and
another.
|
EXHIBIT D
FUN
DAMENTAL INVESTMENT
LIMITATIONS
The Funds’ fundamental investment
policies are set forth below. These investment policies, the Funds' investment
objectives and Growth’s status as diversified, may not be changed without
shareholder approval. With
the
exception
of the Funds
’
respective policies regarding
concentration and diversification, the fundamental
investment
limitations of the Funds are
identical.
|
Subject
|
Policy
|
|
Senior
Securities
|
Each Fund may not issue senior
securities, except as permitted under the Investment Company
Act.
|
|
Borrowing
|
Each Fund may not borrow money,
except that each Fund may borrow for temporary or emergency purposes (not
for leveraging or investment) in an amount not exceeding 33
1
/
3
% of the fund’s total assets
(including the amount borrowed) less liabilities (other than
borrowings).
|
|
Lending
|
Each Fund may not lend any
security or make any other loan if, as a result, more than 33
1
/
3
% of the Fund’s total assets would
be lent to other parties, except
(i) through the purchase of debt
securities in accordance with its investment objective, policies and
limitations or (ii) by engaging in repurchase agreements with respect to
portfolio securities.
|
|
Real Estate
|
Each Fund may not purchase or sell
real estate unless acquired as a result of ownership of securities or
other instruments. This policy shall not prevent a fund from investing in
securities or other instruments backed by real estate or securities of
companies that deal in real estate or are engaged in the real estate
business.
|
|
Concentration
|
Each Fund
may not concentrate its
investments in securities of issuers in a particular industry (other than
securities issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities)
except that the funds may
concentrate their investments in securities of issuers as follows: engaged
in the technology or telecommunications industries and related industry
groups (Technology only); or engaged in the medical and health care
industry and related industry groups (Life Sciences only)
.
|
|
Underwriting
|
Each Fund may not act as an
underwriter of securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted
securities.
|
|
Commodities
|
Each Fund may not purchase or sell
physical commodities unless acquired as a result of ownership of
securities or other instruments
;
provided that this limitation
shall not prohibit the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed by
physical commodities.
|
|
Control
|
Each Fund may not invest for
purposes of exercising control over
management.
|
For
purposes of the investment policy relating to concentration, a fund (except Life
Sciences and Technology) shall not purchase any securities that would cause 25%
or more of the value of the fund’s total assets at the time of purchase to be
invested in the securities of one or more issuers conducting their principal
business activities in the same industry, provided that:
|
(a)
|
there is no limitation with
respect to obligations issued or guaranteed by the U.S. government, any
state, territory or possession of the United States, the District of
Columbia or any of their authorities, agencies, instrumentalities or
political subdivisions and repurchase agreements secured by such
obligations,
|
|
(b)
|
wholly owned finance companies
will be considered to be in the industries of their parents if their
activities are primarily related to financing the activities of their
parents,
|
|
(c)
|
utilities will be divided
according to their services, for example, gas, gas transmission, electric
and gas, electric, and telephone will each be considered a separate
industry, and
|
|
(d)
|
personal credit and business
credit businesses will be considered separate
industries.
|
Growth is diversified as defined in the
Investment Company Act of 1940. Diversified means that, with respect to 75% of
its total assets, the Fund will not invest more than 5% of its total assets in
the securities of a single issuer or own more than 10% of the outstanding voting
securities of a single issuer (other than U.S. government securities and
securities of other investment companies). Life Sciences and Technology are
nondiversified. Nondiversified means that a fund may invest a greater portion of
its assets in a smaller number of securities than a diversified fund. Although
Life Sciences’ and Technology’s portfolio managers expect that the Funds will
ordinarily satisfy the requirements of a diversified fund, their nondiversified
status gives each Fund more flexibility to invest heavily in the most attractive
companies identified by its methodology.
In
addition, the Funds are subject to the following investment limitations that are
not fundamental and may be changed by the Board of Directors. The
non-fundamental investment limitations of the Funds are substantially
similar.
|
Subject
|
Policy
|
|
Leveraging
|
Each Fund may not purchase
additional investment securities at any time during which outstanding
borrowings exceed 5% of the total assets of the Fund.
|
|
Liquidity
|
Each Fund may not purchase any
security or enter into a repurchase agreement if, as a result, more than
15% of its net assets would be invested in illiquid securities. Illiquid
securities include repurchase agreements not
entitling the holder to payment of
principal and interest within seven days
and
in
securities that are illiquid by
virtue of legal or contractual restrictions on resale
or the absence of a readily
available market.
|
|
Short Sales
|
Each Fund may not sell securities
short, unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to constitute
selling securities short.
|
|
Margin
|
Each Fund may not purchase
securities on margin, except to obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on
margin.
|
|
Futures
and
Options
|
Each Fund may enter into futures
contracts and write and buy put and call options relating to futures
contracts. Each Fund may not, however, enter into leveraged futures
transactions if it would be possible for the Fund to lose more than the
notional value of the investment.
|
|
Issuers with
Limited
Operating
Histories
|
Each Fund may invest
in the equity securities of
issuers with limited operating histories. An issuer is considered to have
a limited operating history if that issuer has a record of less than three
years of continuous operation. Periods of capital formation, incubation,
consolidations, and research and development may be considered in
determining whether a particular issuer has a record of three years of
continuous operation.
|
STATEMENT OF ADDITIONAL
INFORMATION
March 2, 2009
REORGANIZATION OF
LIFE SCIENCES FUND
AND
TECHNOLOGY FUND
EACH, A SERIES OF AMERICAN CENTURY WORLD
MUTUAL FUNDS, INC.
IN EXCHANGE FOR SHARES
OF
GROWTH FUND
A SERIES OF AMERICAN CENTURY MUTUAL
FUNDS, INC.
Each fund has the following
address:
4500 Main Street
Kansas City
,
Missouri
64111
Telephone No.:
1-800-345-2021
This Statement of Additional Information
is not a prospectus. A Proxy Statement and Prospectus
,
dated
March 2, 2009
, related to the above-referenced
matters may be obtained from American Century, on behalf of the funds listed
above, by writing or calling American Century at the address and telephone
number shown above. This Statement of Additional Information should
be read in conjunction with such Proxy Statement and
Prospectus.
TABLE OF CONTENTS
|
1.
|
The statement of additional
information for Growth, a series of American Century Mutual Funds, Inc.,
dated March 1, 2009.
|
|
2.
|
The statement of additional
information for Life Sciences and Technology, each a series of American
Century World Mutual Funds, Inc., dated April 1, 2008, as supplemented on
May 30, 2008; July 1, 2008; August 7, 2008; and December 24,
2008.
|
|
3.
|
Audited Financial Statements
of Growth
, a series
of American Century M
utual Funds, Inc., dated October
31, 2008.
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|
4.
|
Audited Financial Statements of
Life Sciences and Technology, each a series of American Century World
Mutual Funds, Inc., dated November 30,
2008.
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INFORMATION INCORPORATED BY
REFERENCE
The statement of additional information
for Growth, a series of American Century Mutual Funds, Inc., dated March 1,
2009, is incorporated by reference to American Century Mutual Funds, Inc.
Post-Effective Amendment No. 124 to its Registration Statement on Form N-1A
(File No. 811-0816)
,
which was filed with the Securities and
Exchange Commission on or about
[
February
__
], 2009.
A combined statement of additional
information for Life Sciences and Technology, each a series of American Century
World Mutual Funds, Inc., dated April 1, 2008, is incorporated by reference to
American Century World Mutual Funds, Inc.'s Post-Effective Amendment No. 48 to
its Registration Statement on Form N-1A (File No. 811-6247)
,
which was filed with the Securities and
Exchange Commission on or about March 28, 2008.
Audited
f
inancial
s
tatements
and financial highlights
of Growth, a series of American Century
Mutual Funds, Inc., dated October 31, 2008,
including the Report of the Independent
Registered Public Accounting Firm,
are incorporated by reference to the
fund's Annual Report to shareholders, which was filed with the Securities and
Exchange Commission pursuant to Section 30(b) of the Investment Company Act of
1940, as amended, on or about December 31, 2008.
The respective a
udited
f
inancial
s
tatements
and financial highlights
of Life Sciences and
of
Technology, each a series of American
Century World Mutual Funds, Inc., dated November 30, 2008,
including the Report of the Independent
Registered Public Accounting Firm,
are incorporated by reference to the
funds' Annual Report to shareholders, which was filed with the Securities and
Exchange Commission pursuant to Section 30(b) of the Investment Company Act of
1940, as amended, on or about [February __], 2009.
References to the above-listed documents
include any supplements to such documents in effect as of the date of the
related Proxy Statement/Prospectus.
AMERICAN
CENTURY MUTUAL FUNDS, INC.
PART
C OTHER INFORMATION
Item
15. Indemnification
The Registrant is a Maryland
Corporation. Section 2-418 of the Maryland General Corporation Law allows a
Maryland corporation to indemnify its officers, directors, employees and agents
to the extent provided in such statute.
Article VIII of the Registrant's
Articles of Incorporation, requires the indemnification of the Registrant's
directors and officers to the extent permitted by Section 2-418 of the Maryland
General Corporation Law, the Investment Company Act of 1940 and all other
applicable laws.
The Registrant has purchased an
insurance policy insuring its officers and directors against certain liabilities
which such officers and directors may incur while acting in such capacities and
providing reimbursement to the Registrant for sums which it may be permitted or
required to pay to its officers and directors by way of indemnification against
such liabilities, subject in either case to clauses respecting deductibility and
participation.
Item
16. Exhibits
(1) (a) Articles
of Incorporation of Twentieth Century Investors, Inc., dated June 26, 1990
(filed electronically as Exhibit b1a to Post-Effective Amendment No. 73 to the
Registration Statement of the Registrant on February 29, 1996, File No. 2-14213,
and incorporated herein by reference).
(b) Articles
of Amendment of Twentieth Century Investors, Inc., dated November 19, 1990
(filed electronically as Exhibit b1b to Post-Effective Amendment No. 73 to the
Registration Statement of the Registrant on February 29, 1996, File No. 2-14213,
and incorporated herein by reference).
(c) Articles
of Merger of Twentieth Century Investors, Inc., a Maryland corporation and
Twentieth Century Investors, Inc., a Delaware corporation, dated February 22,
1991 (filed electronically as Exhibit b1c to Post-Effective Amendment No. 73 to
the Registration Statement of the Registrant on February 29, 1996, File No.
2-14213, and incorporated herein by reference).
(d) Articles
of Amendment of Twentieth Century Investors, Inc., dated August 10, 1993 (filed
electronically as Exhibit b1d to Post-Effective Amendment No. 73 to the
Registration Statement of the Registrant on February 29, 1996, File No. 2-14213,
and incorporated herein by reference).
(e) Articles
Supplementary of Twentieth Century Investors, Inc., dated September 2, 1993
(filed electronically as Exhibit b1e to Post-Effective Amendment No. 73 to the
Registration Statement of the Registrant on February 29, 1996, File No. 2-14213,
and incorporated herein by reference).
(f) Articles
Supplementary of Twentieth Century Investors, Inc., dated April 24, 1995 (filed
electronically as Exhibit b1f to Post-Effective Amendment No. 73 to the
Registration Statement of the Registrant on February 29, 1996, File No. 2-14213,
and incorporated herein by reference).
(g) Articles
Supplementary of Twentieth Century Investors, Inc., dated October 11, 1995
(filed electronically as Exhibit b1g to Post-Effective Amendment No. 73 to the
Registration Statement of the Registrant on February 29, 1996, File No. 2-14213,
and incorporated herein by reference).
(h) Articles
Supplementary of Twentieth Century Investors, Inc., dated January 22, 1996
(filed electronically as Exhibit b1h to Post-Effective Amendment No. 73 to the
Registration Statement of the Registrant on February 29, 1996, File No. 2-14213,
and incorporated herein by reference).
(i) Articles
Supplementary of Twentieth Century Investors, Inc., dated March 11, 1996 (filed
electronically as Exhibit b1i to Post-Effective Amendment No. 75 to the
Registration Statement of the Registrant on June 14, 1996, File No. 2-14213, and
incorporated herein by reference).
(j) Articles
Supplementary of Twentieth Century Investors, Inc., dated September 9, 1996
(filed electronically as Exhibit a10 to Post-Effective Amendment No. 85 to the
Registration Statement of the Registrant on September 1, 1999, File No. 2-14213,
and incorporated herein by reference).
(k) Articles
of Amendment of Twentieth Century Investors, Inc., dated December 2, 1996 (filed
electronically as Exhibit b1j to Post-Effective Amendment No. 76 to the
Registration Statement of the Registrant on February 28, 1997, File No. 2-14213,
and incorporated herein by reference).
(l) Articles
Supplementary of American Century Mutual Funds, Inc., dated December 2, 1996
(filed electronically as Exhibit b1k to Post-Effective Amendment No. 76 to the
Registration Statement of the Registrant on February 28, 1997, File No. 2-14213,
and incorporated herein by reference).
(m) Articles
Supplementary of American Century Mutual Funds, Inc., dated July 28, 1997 (filed
electronically as Exhibit b1l to Post-Effective Amendment No. 78 to the
Registration Statement of the Registrant on February 26, 1998, File No. 2-14213,
and incorporated herein by reference).
(n) Articles
Supplementary of American Century Mutual Funds, Inc., dated November 28, 1997
(filed electronically as Exhibit a13 to Post-Effective Amendment No. 83 to the
Registration Statement of the Registrant on February 26, 1999, File No. 2-14213,
and incorporated herein by reference).
(o) Certificate
of Correction to Articles Supplementary of American Century Mutual Funds, Inc.,
dated December 18, 1997 (filed electronically as Exhibit a14 to Post-Effective
Amendment No. 83 to the Registration Statement of the Registrant on February 26,
1999, File No. 2-14213, and incorporated herein by reference).
(p) Articles
Supplementary of American Century Mutual Funds, Inc., dated December 18, 1997
(filed electronically as Exhibit b1m to Post-Effective Amendment No. 78 to the
Registration Statement of the Registrant on February 26, 1998, File No. 2-14213,
and incorporated herein by reference).
(q) Articles
Supplementary of American Century Mutual Funds, Inc., dated January 25, 1999
(filed electronically as Exhibit a16 to Post-Effective Amendment No. 83 to the
Registration Statement of the Registrant on February 26, 1999, File No. 2-14213,
and incorporated herein by reference).
(r) Articles
Supplementary of American Century Mutual Funds, Inc., dated February 16, 1999
(filed electronically as Exhibit a17 to Post-Effective Amendment No. 83 to the
Registration Statement of the Registrant on February 26, 1999, File No. 2-14213,
and incorporated herein by reference).
(s) Articles
Supplementary of American Century Mutual Funds, Inc., dated August 2, 1999
(filed electronically as Exhibit a19 to Post-Effective Amendment No. 89 to the
Registration Statement of the Registrant on December 1, 2000, File No. 2-14213,
and incorporated herein by reference).
(t) Articles
Supplementary of American Century Mutual Funds, Inc., dated November 19, 1999
(filed electronically as Exhibit a19 to Post-Effective Amendment No. 87 to the
Registration Statement of the Registrant on November 29, 1999, File No. 2-14213,
and incorporated herein by reference).
(u) Articles
Supplementary of American Century Mutual Funds, Inc., dated March 5, 2001 (filed
electronically as Exhibit a21 to Post-Effective Amendment No. 93 to the
Registration Statement of the Registrant on April 20, 2001, File No. 2-14213,
and incorporated herein by reference).
(v) Certificate
of Correction to Articles Supplementary, dated April 3, 2001 (filed
electronically as Exhibit a22 to Post-Effective Amendment No. 93 to the
Registration Statement of the Registrant on April 20, 2001, File No. 2-14213,
and incorporated herein by reference).
(w) Articles
Supplementary of American Century Mutual Funds, Inc., dated June 14, 2002 (filed
electronically as Exhibit a23 to Post-Effective Amendment No. 98 to the
Registration Statement of the Registrant on October 10, 2002, File No. 2-14213,
and incorporated herein by reference).
(x) Certificate
of Correction to Articles Supplementary of American Century Mutual Funds, Inc.,
dated June 25, 2002 (filed electronically as Exhibit a24 to Post-Effective
Amendment No. 98 to the Registration Statement of the Registrant on October 10,
2002, File No. 2-14213, and incorporated herein by reference).
(y) Articles
Supplementary of American Century Mutual Funds, Inc., dated February 12, 2003
(filed electronically as Exhibit a25 to Post-Effective Amendment No. 100 to the
Registration Statement of the Registrant on February 28, 2003, File No. 2-14213,
and incorporated herein by reference).
(z) Certificate
of Correction to Articles Supplementary of American Century Mutual Funds, Inc.,
dated February 28, 2003 (filed electronically as Exhibit a26 to Post-Effective
Amendment No. 101 to the Registration Statement of the Registrant on August 28,
2003, File No. 2-14213, and incorporated herein by reference).
(aa) Articles
Supplementary of American Century Mutual Funds, Inc., dated August 14, 2003
(filed electronically as Exhibit a27 to Post-Effective Amendment No. 102 to the
Registration Statement of the Registrant on August 28, 2003, File No. 2-14213,
and incorporated herein by reference).
(bb) Articles
Supplementary of American Century Mutual Funds, Inc., dated January 14, 2004
(filed electronically as Exhibit a28 to Post-Effective Amendment No. 104 to the
Registration Statement of the Registrant on February 26, 2004, File No. 2-14213,
and incorporated herein by reference).
(cc) Articles
Supplementary of American Century Mutual Funds, Inc., dated November 17, 2004
(filed electronically as Exhibit a29 to Post-Effective Amendment No. 106 to the
Registration Statement of the Registrant on November 29, 2004, File No. 2-14213,
and incorporated herein by reference).
(dd) Articles
Supplementary of American Century Mutual Funds, Inc., dated January 13, 2005
(filed electronically as Exhibit a30 to Post-Effective Amendment No. 109 to the
Registration Statement of the Registrant on February 25, 2005, File No. 2-14213,
and incorporated herein by reference).
(ee) Articles
Supplementary of American Century Mutual Funds, Inc., dated June 22, 2005 (filed
electronically as Exhibit a31 to Post-Effective Amendment No. 111 to the
Registration Statement of the Registrant on July 28, 2005, File No. 2-14213, and
incorporated herein by reference).
(ff) Articles
Supplementary of American Century Mutual Funds, Inc., dated December 13, 2005
(filed electronically as Exhibit 1(ff) to the Registration Statement on Form
N-14 of the Registrant on December 22, 2005, File No. 2-14213, and incorporated
herein by reference).
(gg) Articles
Supplementary of American Century Mutual Funds, Inc., dated March 15, 2006
(filed electronically as Exhibit a33 to Post-Effective Amendment No. 116 to the
Registration Statement of the Registrant on March 31, 2006, File No. 2-14213,
and incorporated herein by reference).
(hh) Articles
Supplementary of American Century Mutual Funds, Inc., dated November 14, 2006
(filed electronically as Exhibit 1(hh) to the Registration Statement on Form
N-14 of the Registrant on February 27, 2007, File No. 2-14213, and incorporated
herein by reference).
(ii) Articles
of Amendment of American Century Mutual Funds, Inc., dated August 29, 2007
(filed electronically as Exhibit a35 to Post-Effective Amendment No. 121 to the
Registration Statement of the Registrant on September 27, 2007, File No.
2-14213, and incorporated herein by reference).
(jj) Articles
Supplementary of American Century Mutual Funds, Inc., dated September 10, 2007
(filed electronically as Exhibit a36 to Post-Effective Amendment No. 121 to the
Registration Statement of the Registrant on September 27, 2007, File No.
2-14213, and incorporated herein by reference).
(kk) Articles
of Amendment of American Century Mutual Funds, Inc., dated November 27, 2007
(filed electronically as Exhibit a37 to Post-Effective Amendment No. 122 to the
Registration Statement of the Registrant on February 28, 2008, File No. 2-14213,
and incorporated herein by reference).
(ll) Articles
Supplementary of American Century Mutual Funds, Inc., dated November 27, 2007
(filed electronically as Exhibit a38 to Post-Effective Amendment No. 122 to the
Registration Statement of the Registrant on February 28, 2008, File No. 2-14213,
and incorporated herein by reference)
(mm) Articles
Supplementary of American Century Mutual Funds, Inc., dated June 5, 2008, are
included herein.
(2) Amended
and Restated By-laws, dated November 29, 2007 (filed electronically as Exhibit b
to Post-Effective Amendment No. 122 to the Registration Statement of the
Registrant on February 28, 2008, File No. 2-14213, and incorporated herein by
reference).
(3) Not
applicable.
(4) Form
of Agreement and Plan of Reorganization, is included herein as Exhibit A to the
Proxy Statement/Prospectus in Part A of this Registration
Statement.
(5) Registrant
hereby incorporates by reference, as though set forth fully herein, Article
Fifth, Article Seventh, and Article Eighth of Registrant’s Articles of
Incorporation, appearing as Exhibit (1)(a) herein and Article Fifth of
Registrant’s Articles of Amendment, appearing as Exhibit (1)(d) herein and
Sections 3-11 of Registrant’s Amended and Restated By-Laws, appearing as Exhibit
2 herein.
(6) (a) Management
Agreement with American Century Investment Management, Inc., dated August 1,
2008, is included herein.
(b) Investment
Subadvisory Agreement with Mason Street Advisors LLC, dated March 30, 2006
(filed electronically as Exhibit d3 to Post-Effective Amendment No. 116 to the
Registration Statement of the Registrant on March 31, 2006, File No. 2-14213,
and incorporated herein by reference).
(7) (a) Amended
and Restated Distribution Agreement with American Century Investment Services,
Inc., dated December 3, 2007 (filed electronically as Exhibit e to
Post-Effective Amendment No. 122 to the Registration Statement of the Registrant
on February 28, 2008, File No. 2-14213, and incorporated herein by
reference).
(b) Form
of Dealer/Agency Agreement (filed electronically as Exhibit e2 to Post-Effective
Amendment No. 25 to the Registration Statement of American Century International
Bond Funds on April 30, 2007, File No. 333-43321, and incorporated herein by
reference).
(8) Not
applicable.
(9) (a) Master
Agreement with Commerce Bank, N. A., dated January 22, 1997 (filed
electronically as Exhibit b8e to Post-Effective Amendment No. 76 to the
Registration Statement of American Century Mutual Funds, Inc. on February 28,
1997, File No. 2-14213, and incorporated herein by reference).
(b) Global
Custody Agreement with The Chase Manhattan Bank, dated August 9, 1996 (filed
electronically as Exhibit b8 to Post-Effective Amendment No. 31 to the
Registration Statement of American Century Government Income Trust on February
7, 1997, File No. 2-99222, and incorporated herein by reference).
(c) Amendment
to the Global Custody Agreement with The Chase Manhattan Bank, dated December 9,
2000 (filed electronically as Exhibit g2 to Pre-Effective Amendment No. 2 to the
Registration Statement of American Century Variable Portfolios II, Inc. on
January 9, 2001, File No. 333-46922, and incorporated herein by
reference).
(d) Amendment
No. 2 to the Global Custody Agreement between American Century Investments and
the JPMorgan Chase Bank, dated as of May 1, 2004 (filed electronically as
Exhibit g4 to Post-Effective Amendment No. 35 to the Registration Statement of
American Century Quantitative Equity Funds, Inc. on April 29, 2004, File No.
33-19589, and incorporated herein by reference).
(e) Amendment
No. 3 to the Global Custody Agreement between American Century Investments and
the JPMorgan Chase Bank, dated as of May 31, 2006 (filed electronically as
Exhibit g6 to Pre-Effective Amendment No. 1 to the Registration Statement of
American Century Growth Funds, Inc. on May 30, 2006, File No. 333-132114, and
incorporated herein by reference).
(f) Amendment
No. 4 to the Global Custody Agreement with JPMorgan Chase Bank, dated as of July
2, 2008 (filed electronically as Exhibit g6 to Post-Effective Amendment No. 56
to the Registration Statement of American Century Government Income Trust on
July 29, 2008, File No. 2-99222, and incorporated herein by
reference).
(g) Custodian
and Investment Accounting Agreement with State Street Bank and Trust Company,
dated May 27, 2005 (filed electronically as Exhibit g6 to Post-Effective
Amendment No. 27 to the Registration Statement of American Century Investment
Trust on May 27, 2005, File No. 33-65170, and incorporated herein by
reference).
(h) Amendment
No. 1 to Custodian and Investment Accounting Agreement with State Street Bank
and Trust Company, effective September 30, 2005 (filed electronically as Exhibit
g8 to Post-Effective Amendment No. 41 to the Registration Statement of American
Century Quantitative Equity Funds, Inc. on September 29, 2005, File No.
33-19589, and incorporated herein by reference).
(i) Amendment
No. 2 to Custodian and Investment Accounting Agreement with State Street Bank
and Trust Company, effective March 31, 2006 (filed electronically as Exhibit g9
to Post-Effective Amendment No. 32 to the Registration Statement of American
Century Investment Trust on March 31, 2006, File No. 33-65170, and incorporated
herein by reference).
(10) (a) Amended
and Restated Master Distribution and Individual Shareholder Services Plan
(Advisor Class), dated January 1, 2008 (filed electronically as Exhibit m1 to
Post-Effective Amendment No. 122 to the Registration Statement of the Registrant
on February 28, 2008, File No. 2-14213, and incorporated herein by
reference).
(b) Amended
and Restated Master Distribution and Individual Shareholder Services Plan (C
Class), dated January 1, 2008 (filed electronically as Exhibit m2 to
Post-Effective Amendment No. 122 to the Registration Statement of the Registrant
on February 28, 2008, File No. 2-14213, and incorporated herein by
reference).
(c) Amended
and Restated Master Distribution and Individual Shareholder Services Plan (A
Class), dated January 1, 2008 (filed electronically as Exhibit m3 to
Post-Effective Amendment No. 122 to the Registration Statement of the Registrant
on February 28, 2008, File No. 2-14213, and incorporated herein by
reference).
(d) Amended
and Restated Master Distribution and Individual Shareholder Services Plan (B
Class), dated January 1, 2008 (filed electronically as Exhibit m4 to
Post-Effective Amendment No. 122 to the Registration Statement of the Registrant
on February 28, 2008, File No. 2-14213, and incorporated herein by
reference).
(e) Amended
and Restated Master Distribution and Individual Shareholder Services Plan (R
Class), dated January 1, 2008 (filed electronically as Exhibit m5 to
Post-Effective Amendment No. 122 to the Registration Statement of the Registrant
on February 28, 2008, File No. 2-14213, and incorporated herein by
reference).
(f) Amended
and Restated Multiple Class Plan, dated January 1, 2008, is included
herein.
(g) Letter
Agreement with American Century Investment Management, Inc., dated March 30,
2006 (filed electronically as Exhibit n13 to Post-Effective Amendment No. 42 to
the Registration Statement of American Century World Mutual Funds, Inc. on March
30, 2006, File No. 33-39242, and incorporated herein by reference).
(11) Opinion
and Consent of Counsel, dated January 30, 2009, is included herein.
(12) Opinion
and Consent of Counsel as to the tax matters and consequences (to be filed by
amendment).
(13) (a) Amended
and Restated Transfer Agency Agreement between American Century Mutual Funds,
Inc. and American Century Services, LLC, dated August 1, 2007 (filed
electronically as Exhibit h1 to Post-Effective Amendment No. 121 to the
Registration Statement of the Registrant on September 27, 2007, File No.
2-14213, and incorporated herein by reference).
(b) Mutual
Fund Services Agreement between American Century Investment Management, Inc. and
J.P. Morgan Investor Services Co., dated July 2, 2008 (filed electronically as
Exhibit h3 to Post-Effective Amendment No. 53 to the Registration Statement of
American Century Municipal Trust on September 26, 2008, File No. 2-91229, and
incorporated herein by reference).
(c) Revised
Schedule A-2 to Mutual Fund Services Agreement between American Century
Investment Management, Inc. and J.P. Morgan Investor Services Co., effective
July 2, 2008 (filed electronically as Exhibit h3 to Post-Effective Amendment No.
10 to the Registration Statement of American Century Asset Allocation
Portfolios, Inc. on November 26, 2008, File No. 333-116351, and incorporated
herein by reference).
(14) Consent
of Deloitte & Touche LLP, independent registered public accounting firm,
dated January 26, 2009, is included herein.
(15) Not
applicable.
(16) (a) Power
of Attorney, dated June 4, 2008 (filed electronically as Exhibit q1 to
Post-Effective Amendment No. 42 to the Registration Statement of American
Century Capital Portfolios, Inc. on July 29, 2008, File No. 33-64872, and
incorporated herein by reference).
(b) Secretary's
Certificate, dated June 4, 2008 (filed electronically as Exhibit q2 to
Post-Effective Amendment No. 42 to the Registration Statement of American
Century Capital Portfolios, Inc. on July 29, 2008, File No. 33-64872, and
incorporated herein by reference).
(17) Form
of proxy is included herein.
Item
17. Undertakings
(1) The
undersigned Registrant agrees that prior to any public reoffering of the
securities registered through the use of a prospectus which is part of this
Registration Statement by any person or party who is deemed to be an underwriter
within the meaning of Rule 145(c) of the Securities Act of 1933, the reoffering
prospectus will contain the information called for by the applicable
registration form for the reofferings by persons who may be deemed underwriters,
in addition to the information called for by the other items of the applicable
form.
(2) The
undersigned Registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as a part of an amendment to the Registration
Statement and will not be used until the amendment is effective, and that, in
determining any liability under the Securities Act of 1933, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering of them.
(3) The
undersigned Registrant agrees to file, by post-effective amendment, an opinion
of counsel supporting the tax consequences of the proposed reorganization within
a reasonable time after receipt of such opinion.
SIGNATURES
As
required by the Securities Act of 1933, as amended, this Registration Statement
has been signed on behalf of the Registrant, in the City of Kansas City, State
of Missouri on the 30th day of January, 2009.
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AMERICAN
CENTURY MUTUAL FUNDS, INC.
|
|
|
(Registrant)
|
|
|
By:
*
Jonathan S. Thomas
President
|
|
As
required by the Securities Act of 1933, this Registration Statement amendment
has been signed by the following persons in the capacities and on the dates
indicated.
|
*By:
/s/ Kathleen Gunja
Nelson
Kathleen Gunja
Nelson
Attorney in Fact
(pursuant to Power of
Attorney
dated June 4,
2008)
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EXHIBIT DESCRIPTION
OF DOCUMENT
NUMBER
|
EXHIBIT
1(mm)
|
Articles
Supplementary of American Century Mutual Funds, Inc., dated June 5,
2008.
|
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EXHIBIT
6(a)
|
Management
Agreement with American Century Investment Management, Inc., dated August
1, 2008.
|
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EXHIBIT
10(f)
|
Amended
and Restated Multiple Class Plan, dated January 1,
2008.
|
|
EXHIBIT
11
|
Opinion
and Consent of Counsel, dated January 30,
2009.
|
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EXHIBIT
14
|
Consent
of Deloitte & Touche LLP, independent registered public accounting
firm, dated January 26, 2009.
|
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EXHIBIT
17
|
Form
of proxy.
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