-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KgYVPaJ6pqUY7rYFGnnbhMHZQmu/Z82Qk4oXNIa4LYUR9n7YeHSu8J3FLsOpccVx jqn0ijogN3pxzrSx7igePA== 0000872825-96-000004.txt : 19960401 0000872825-96-000004.hdr.sgml : 19960401 ACCESSION NUMBER: 0000872825-96-000004 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 17 FILED AS OF DATE: 19960329 EFFECTIVENESS DATE: 19960329 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TWENTIETH CENTURY WORLD INVESTORS INC CENTRAL INDEX KEY: 0000872825 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MD FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 033-39242 FILM NUMBER: 96541116 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-06247 FILM NUMBER: 96541117 BUSINESS ADDRESS: STREET 1: 4500 MAIN ST STREET 2: TWENTIETH CENTURY TOWER CITY: KANSAS CITY STATE: MO ZIP: 64111 BUSINESS PHONE: 8165315575 485BPOS 1 POST-EFFECTIVE AMENDMENT As filed with the Securities and Exchange Commission on March 29, 1996 1933 Act File No. 33-39242; 1940 Act File No. 811-6247 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 _X__ Pre-Effective Amendment No.____ ____ Post-Effective Amendment No._6__ _X__ and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 _X__ Amendment No._6__ (Check appropriate box or boxes) Twentieth Century World Investors, Inc. -------------------------------------------- (Exact Name of Registrant as Specified in Charter) Twentieth Century Tower, 4500 Main Street, Kansas City, MO 64111 ---------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, including Area Code: 816-531-5575 James E. Stowers, Jr. Twentieth Century Tower, 4500 Main Street, Kansas City, MO 64111 ---------------------------------------------------------------- (Name and address of Agent for service) Approximate Date of Proposed Public Offering: April 1, 1996 It is proposed that this filing become effective: ____ immediately upon filing pursuant to paragraph (b) of Rule 485 _x__ on April 1, 1996 pursuant to paragraph (b) of Rule 485 ____ 60 days after filing pursuant to paragraph (a) of Rule 485 ____ on [date] pursuant to paragraph (a)(1) of Rule 485 ____ 75 days afer filing pursuant to paragraph (a)(2) of Rule 485 ____ on [date] pursuant to paragraph (a)(2) of Rule 485 The Registrant has registered an indefinite number or amount of securities under the Securities Act of 1933 pursuant to Rule 24f-2. The Rule 24f-2 notice for the fiscal year ended November 30, 1995, was filed on January 24, 1996. ================================================================================
====================================================================================================================== Cross Reference Sheet Rule 481(a) - ---------------------------------------------------------------------------------------------------------------------- Item No. Page No. ====================================================================================================================== Retail Institutional Part A. Prospectus Prospectus - ---------------------------------------------------------------------------------------------------------------------- 1. Cover Page Cover Page Cover Page - ---------------------------------------------------------------------------------------------------------------------- 2. Synopsis N/A N/A - ---------------------------------------------------------------------------------------------------------------------- 3. Condensed Financial Information 5 5 - ---------------------------------------------------------------------------------------------------------------------- 4. General Description of Registrant Cover Page, 1-15, Cover Page, 1-15 - ---------------------------------------------------------------------------------------------------------------------- 5. Management of the Fund 30-32 20-22 - ---------------------------------------------------------------------------------------------------------------------- 6. Capital Stock and Other Securities 32-33 22-23 - ---------------------------------------------------------------------------------------------------------------------- 7. Purchase of Securities Being Offered Cover Page, 16-18 Cover Page, 16 - ---------------------------------------------------------------------------------------------------------------------- 8. Redemption or Repurchase 18-24 16-18 - ---------------------------------------------------------------------------------------------------------------------- 9. Pending Legal Proceedings N/A N/A - ---------------------------------------------------------------------------------------------------------------------- Part B. - Statement of Additional Information - ---------------------------------------------------------------------------------------------------------------------- 10. Cover Page Cover Page - ---------------------------------------------------------------------------------------------------------------------- 11. Table of Contents Cover Page - ---------------------------------------------------------------------------------------------------------------------- 12. General Information and History N/A - ---------------------------------------------------------------------------------------------------------------------- 13. Investment Objectives and Policies 1-7 - ---------------------------------------------------------------------------------------------------------------------- 14. Management of the Fund 7-10 - ---------------------------------------------------------------------------------------------------------------------- 15. Control Persons and Principal Holders of Securities N/A - ---------------------------------------------------------------------------------------------------------------------- 16. Investment Advisory and Other Services 9-10 - ---------------------------------------------------------------------------------------------------------------------- 17. Brokerage Allocation 12 - ---------------------------------------------------------------------------------------------------------------------- 18. Capital Stock and Other Securities 10 - ---------------------------------------------------------------------------------------------------------------------- 19. Purchase, Redemption and Pricing of Securities Being Offered 13 - ---------------------------------------------------------------------------------------------------------------------- 20. Tax Status 10-11 - ---------------------------------------------------------------------------------------------------------------------- 21. Underwriters N/A - ---------------------------------------------------------------------------------------------------------------------- 22. Calculation of Performance Data N/A - ---------------------------------------------------------------------------------------------------------------------- 23. Financial Statements 13 - ----------------------------------------------------------------------------------------------------------------------
TWENTIETH CENTURY World Investors Prospectus APRIL 1, 1996 - -------------------------------------------------------------------------------- TWENTIETH CENTURY Twentieth Century World Investors, Inc., a member of the Twentieth Century family of funds, is a diversified, open-end management investment company whose shares are offered without a sales charge. Two series of shares offered by Twentieth Century, Twentieth Century International Equity and Twentieth Century International Emerging Growth (the "funds") are described in this prospectus. The investment objectives of the funds are listed on the inside cover of this prospectus. RISK OF FOREIGN INVESTMENTS Investment in securities of foreign issuers typically involves a greater degree of risk than investment in domestic securities. (See "Risk Factors," page 9.) NO-LOAD MUTUAL FUNDS Twentieth Century's funds are "no-load" investments, which means there are no sales charges or commissions. Twentieth Century has no 12b-1 plan or other deferred sales charges. This prospectus gives you information about Twentieth Century that you should know before investing. You should read this prospectus carefully and retain it for future reference. Additional information is included in the Statement of Additional Information dated April 1, 1996, and filed with the Securities and Exchange Commission. It is incorporated in this prospectus by reference. To obtain a copy without charge, call or write: Twentieth Century World Investors, Inc. 4500 Main Street o P.O. Box 419200 Kansas City, MO 64141-6200 1-800-345-2021 Local and international calls: 816-531-5575 Telecommunications device for the deaf: 1-800-634-4113 In Missouri: 816-753-1865 - -------------------------------------------------------------------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. INVESTMENT OBJECTIVES OF THE FUNDS - -------------------------------------------------------------------------------- TWENTIETH CENTURY INTERNATIONAL EQUITY The investment objective of Twentieth Century International Equity is capital growth. The fund will seek to achieve its investment objective by investing primarily in an internationally diversified portfolio of common stocks, primarily from developed markets, that are considered by the investment manager to have prospects for appreciation. This fund has no minimum investment requirements. However, if the value of the shares held in any one fund account is less than $2,500 ($1,000 for UGMA/UTMA accounts), you must establish an automatic investment program of $50 or more per month in each such account. (See "Automatic Investments," page 17, and "Automatic Redemption of Shares," page 23.) TWENTIETH CENTURY INTERNATIONAL EMERGING GROWTH The investment objective of Twentieth Century International Emerging Growth is capital growth. The fund will seek to achieve its investment objective by investing primarily in an internationally diversified portfolio of equity securities of (i) companies in developed markets having comparatively smaller market capitalizations (less than U.S. $800 million in market capitalization or less than U.S. $300 million in public float), and (ii) companies in emerging market countries without regard to market capitalization. All such investments must be considered by the investment manager to have prospects for appreciation. Due to the risks associated with such investments, an investment in this fund may be considered speculative. The minimum investment amount for this fund is $10,000. SHARES OF THE FUND CONVERTED OR REDEEMED WITHIN 180 DAYS OF THEIR PURCHASE ARE SUBJECT TO A REDEMPTION FEE OF 2.0% OF THE VALUE OF THE SHARES CONVERTED OR REDEEMED. THIS REDEMPTION FEE IS RETAINED BY THE FUND. There is no assurance that the funds will achieve their respective investment objectives. - -------------------------------------------------------------------------------- NO PERSON IS AUTHORIZED BY TWENTIETH CENTURY TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN OTHER PRINTED OR WRITTEN MATERIAL ISSUED BY THE COMPANY, AND YOU SHOULD NOT RELY ON ANY OTHER INFORMATION OR REPRESENTATION. 2 TABLE OF CONTENTS - -------------------------------------------------------------------------------- TRANSACTION AND OPERATING EXPENSE TABLE ..................... 4 FINANCIAL HIGHLIGHTS ........................................ 5 INFORMATION REGARDING THE FUNDS INVESTMENT POLICIES OF THE FUNDS ............................ 6 International Equity ................................... 6 International Emerging Growth .......................... 6 Policies Applicable to Both Funds ...................... 8 RISK FACTORS ................................................ 9 Investing in Foreign Securities Generally .............. 9 Speculative Nature of International Emerging Growth .....................................10 Investing in Emerging Market Countries .................10 Investing in Smaller Companies .........................10 Investing in Lower Quality Debt Instruments ............11 INVESTMENT RESTRICTIONS .....................................11 OTHER INVESTMENT PRACTICES ..................................11 Forward Currency Exchange Contracts ....................11 Indirect Foreign Investment ............................12 Sovereign Debt Obligations .............................12 Portfolio Turnover .....................................13 Repurchase Agreements ..................................13 When-Issued Securities .................................13 Short Sales ............................................14 Rule 144A Securities ...................................14 PERFORMANCE ADVERTISING .....................................14 HOW TO INVEST WITH TWENTIETH CENTURY Twentieth Century Family of Funds ...........................16 Investing in Twentieth Century ..............................16 International Equity ...................................16 International Emerging Growth ..........................16 Investing By Mail ......................................16 Investing By Telephone .................................16 Investing By Wire ......................................17 Automatic Investments ..................................17 Additional Information About Investments ...................................17 Tax Identification Number ..............................17 Certificates ...........................................18 SPECIAL SHAREHOLDER SERVICES ................................18 HOW TO EXCHANGE YOUR INVESTMENT FROM ONE TWENTIETH CENTURY FUND TO ANOTHER ........................................18 By Telephone ...........................................19 By Mail ................................................19 Additional Information About Exchanges .................19 HOW TO REDEEM SHARES ........................................20 By Telephone ...........................................20 By Mail ................................................20 By Check-A-Month .......................................21 Signature Guarantee ....................................21 REDEMPTION PROCEEDS .........................................21 By Mail ................................................21 By Wire and Electronic Funds Transfer ..................22 Special Requirements for Large Redemptions .............22 Automatic Redemption of Shares .........................23 ADDITIONAL INFORMATION ABOUT REDEMPTIONS ......................................23 TELEPHONE SERVICES ..........................................24 Investors Line .........................................24 Automated Information Line .............................24 HOW TO CHANGE YOUR ADDRESS OF RECORD ........................24 TAX-QUALIFIED RETIREMENT PLANS ..............................25 HOW TO TRANSFER AN INVESTMENT TO A TWENTIETH CENTURY RETIREMENT PLAN ......................25 HOW TO TRANSFER YOUR SHARES TO ANOTHER PERSON ......................................25 REPORTS TO SHAREHOLDERS .....................................25 ADDITIONAL INFORMATION YOU SHOULD KNOW SHARE PRICE .................................................27 When Share Price Is Determined .........................27 How Share Price Is Determined ..........................27 Where to Find Information About Share Price ............28 DISTRIBUTIONS ...............................................28 General Information About Distributions ................28 TAXES .......................................................29 MANAGEMENT ..................................................30 Investment Management ..................................30 Code of Ethics .........................................31 Transfer and Administrative Services ...................32 FURTHER INFORMATION ABOUT TWENTIETH CENTURY ................................32 3 TRANSACTION AND OPERATING EXPENSE TABLE - -------------------------------------------------------------------------------- International International Equity Emerging Growth SHAREHOLDER TRANSACTION EXPENSES Maximum Sales Load Imposed on Purchases none none Maximum Sales Load Imposed on Reinvested Dividends none none Deferred Sales Load none none Redemption Fee(1) none none(2) Exchange Fee none none ANNUAL FUND OPERATING EXPENSES (as a percentage of net assets) Management Fees(3) 1.90%(4) 2.00% 12b-1 Fees none none Other Expenses(5) 0.00% 0.00% Total Fund Operating Expenses 1.90% 2.00% Example You would pay the following expenses 1 year $ 18 $ 20 on a $1,000 investment, assuming 3 years 56 62 (1) a 5% annual return and (2) redemption 5 years 96 107 at the end of each time period(6): 10 years 208 231 - -------------------------------------------------------------------------------- The purpose of the table is to help you understand the various costs and expenses that you, as a shareholder, will bear directly or indirectly in connection with an investment in shares of Twentieth Century. The example set forth above assumes reinvestment of all dividends and distributions and uses a 5% annual rate of return as required by Securities and Exchange Commission regulations. NEITHER THE 5% RATE OF RETURN NOR THE EXPENSES SHOWN ABOVE SHOULD BE CONSIDERED INDICATIONS OF PAST OR FUTURE RETURNS AND EXPENSES. ACTUAL RETURNS AND EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. (1) Redemption proceeds sent by wire are subject to a $10 processing fee. (2) Shares of International Emerging Growth exchanged or redeemed within 180 days of their purchase are subject to a redemption fee of 2.0% of the value of the shares exchanged or redeemed. This redemption fee, which is retained by the fund, is intended to discourage shareholders from exchanging or redeeming their shares shortly after their purchase, as well as minimize the impact such exchanges and redemptions have on fund performance and, hence, on the other shareholders of the fund. (See "How to Exchange Your Investment from One Twentieth Century Fund to Another," page 18 and "How to Redeem Shares," page 20.) (3) The management fees paid by the funds are higher than the fees paid by many mutual funds. However, it should be noted that the fees the funds pay are "all-inclusive" covering not only advisory services, but virtually all other expenses. (See "Management," page 30). (4) Based upon fees paid by the fund for the 1995 fiscal year. The fund pays an annual management fee equal to 1.90% of its first $1 billion of average net assets, 1.25% of the next $1 billion, and 1.00% of average net assets over $2 billion. (5) Other expenses, the fees and expenses of those directors who are not "interested persons" as defined in the Investment Company Act, were .001 of 1% of average net assets for the most recent fiscal year. (6) Assumes, in accordance with Securities and Exchange Commission guidelines, that the assets of International Equity remain constant at $1,210,441,553, the assets of the fund as of November 30, 1995. 4
FINANCIAL HIGHLIGHTS (For a share outstanding throughout the period) - ------------------------------------------------------------------------------------------------------------------------------------ The Financial Highlights for each of the periods presented (except as noted) have been audited by Baird, Kurtz & Dobson, independent certified public accountants, whose report thereon appears in the corporation's annual report, which is incorporated by reference into the statement of additional information. The annual report contains additional performance information and will be made available upon request and without charge. INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS --------------------------------------------- ------------------------------------------------------------ Net Realized Distributions Distributions [table cont. and Unrealized in Excess from below] Net Asset Gains on Total Distributions of Net Realized Net Asset Value, Net Investment and from from Net Net Gains on Value, Beginning Investment Foreign Currency Investment Investment Investment Security Total End of Total of Period Income(Loss)1 Transactions Operations Income Income Transactions Distributions Period Return INTERNATIONAL EQUITY FUND May 9, 1991 (inception) through Nov. 30, 1991 $5.10 $.01 $.22 $.23 -- -- -- -- $5.33 4.51% Year Ended Nov. 30, 1992 5.33 .06 .41 .47 $(.005) $(.002) -- $(.007) 5.79 8.77% 1993 5.79 (.04) 1.78 1.74 (.036) (.155) -- (.191) 7.34 31.04% 1994 7.34 (.04) .57 .53 -- -- $(.402) (.402) 7.47 7.28% 1995 7.47 .01 .40 .41 -- -- (.372) (.372) 7.51 5.93% INTERNATIONAL EMERGING GROWTH April 1, 1994 (inception) through Nov. 30, 1994 $5.00 $(.02) $.41 $.39 -- -- -- -- $5.39 7.80% Year Ended Nov. 30, 1995 5.39 .03 .28 .31 -- -- -- -- 5.70 5.75% [table continued] RATIOS/SUPPLEMENTAL DATA ------------------------------------------------------------------- Ratio of Net Ratio of Investment Average Operating Income Commission Net Expenses (Loss) to Portfolio Paid Assets, to Average Average Turnover Per Share End of Net Assets Net Assets Rate Traded Period INTERNATIONAL EQUITY FUND May 9, 1991 (inception) through Nov. 30, 1991 1.93%(2) .26%(2) 84% -- $43,076,411 Year Ended Nov. 30, 1992 1.91% .95% 180% -- 215,346,400 1993 1.90% (.34%) 255% -- 759,237,590 1994 1.84% (.53%) 242% -- 1,316,641,977 1995 1.77% .25% 169% $.002 1,210,441,553 INTERNATIONAL EMERGING GROWTH April 1, 1994 (inception) through Nov. 30, 1994 2.00%(2) (.48%)(2) 56% -- $111,201,467 Year Ended Nov. 30, 1995 2.00% .27% 168% $.004 114,579,142 (1) Computed using average shares outstanding throughout the period. (2) Annualized.
5 INFORMATION REGARDING THE FUNDS - -------------------------------------------------------------------------------- INVESTMENT POLICIES OF THE FUNDS Twentieth Century has adopted certain investment restrictions applicable to the funds that are set forth on page 11 and in the statement of additional information. Those restrictions, as well as the investment objectives of the funds as identified on the inside front cover page, and any other investment policies designated as "fundamental" in this prospectus or in the statement of additional information, cannot be changed without shareholder approval. The funds have implemented additional investment policies and practices to guide their activities in the pursuit of their respective investment objectives. These policies and practices, which are described throughout this prospectus, are not designated as fundamental policies and may be changed without shareholder approval. YOU SHOULD READ AND CAREFULLY CONSIDER THE INFORMATION UNDER "RISK FACTORS," PAGE 9, BEFORE MAKING AN INVESTMENT IN EITHER FUND. TWENTIETH CENTURY INTERNATIONAL EQUITY The investment objective of the International Equity fund is capital growth. The fund will seek to achieve its investment objective by investing primarily in securities of foreign companies primarily located in developed markets that meet certain fundamental and technical standards of selection and have, in the opinion of the investment manager, potential for appreciation. The fund will invest primarily in common stocks (defined to include depositary receipts for common stocks) and other equity securities and equity equivalents of such companies. Twentieth Century tries to stay fully invested in such securities, regardless of the movement of stock prices generally. Although the primary investment of the fund will be common stocks, the fund may also invest in other types of securities consistent with the accomplishment of the fund's objectives. When the manager believes that the total return potential of other securities equals or exceeds the potential return of common stocks, the fund may invest up to 35% in such other securities. The other securities the fund may invest in are bonds, notes and debt securities of companies and obligations of domestic or foreign governments and their agencies. The fund will limit its purchases of debt securities to investment grade obligations. For long-term debt obligations this includes securities that are rated Baa or better by Moody's Investors Service, Inc. ("Moody's") or BBB or better by Standard & Poor's Corporation (S&P), or that are not rated but considered by the manager to be of equivalent quality. According to Moody's, bonds rated Baa are medium-grade and possess some speculative characteristics. A BBB rating by S&P indicates S&P's belief that a security exhibits a satisfactory degree of safety and capacity for repayment, but is more vulnerable to adverse economic conditions or changing circumstances than is the case with higher quality debt securities. (See "An Explanation of Fixed Income Securities Ratings" in the Statement of Additional Information.) TWENTIETH CENTURY INTERNATIONAL EMERGING GROWTH The investment objective of the International Emerging Growth fund is capital growth. The fund will seek to achieve its investment objective by investing primarily in an internationally diversified portfolio of equity securities of companies that meet certain fundamental and technical standards of selection. The fund will invest its assets primarily in equity securities of (i) smaller foreign companies in developed markets (those issuers having, at the time of investment, a market capitalization of less than U.S. $800 million or a public float of less than U.S. $300 6 million), and (ii) companies in emerging market countries without regard to market capitalization. The "public float" of an issuer is defined as the aggregate market value of the issuer's outstanding securities held by non-affiliates of the issuer. In developed and in emerging market countries, the investment manager will purchase securities of companies that have, in the opinion of the investment manager, significant growth potential. The fund will seek to invest in securities of companies with one or more identifiable catalysts that, in the opinion of the investment manager, are likely to cause the issuer to experience accelerating growth. Such catalysts may include a change in the issuer's operating environment, the development of a significant or potentially significant new product, service or technology, an improvement in business outlook for the issuer, or other similar factors. As noted, the fund will invest both in companies whose principal place of business is in (i) countries characterized as having developed markets and in (ii) countries characterized as having "emerging markets." A company's principal place of business is considered by management to be the country in which the company is domiciled. The fund may invest up to 50% of its assets in "emerging market countries." DUE TO THE SIGNIFICANT RISKS ASSOCIATED WITH THE FUND'S INVESTMENT STRATEGY, AN INVESTMENT IN THE FUND MAY BE CONSIDERED TO BE SPECULATIVE. (See "Speculative Nature of International Emerging Growth," page 10.) "Emerging market countries" include (i) countries considered to be "underdeveloped," "developing," or "emerging" countries according to the International Bank for Reconstruction and Development (commonly referred to as the World Bank), (ii) countries considered by the International Finance Corporation (the "IFC") as having "an emerging stock market," and (iii) countries in which companies included in the IFC Global Composite Index (the "IFC Index") are domiciled, such as Argentina, Brazil, Chile, China, Colombia, Greece, Hungary, India, Indonesia, Jordan, Korea, Malaysia, Mexico, Nigeria, Pakistan, Peru, the Philippines, Poland, Portugal, Sri Lanka, Taiwan, Thailand, Turkey, Venezuela and Zimbabwe. The fund may invest in securities of any type of issuer, including closed-end investment companies, governments and governmental entities, as well as corporations, partnerships and other business organizations. Twentieth Century believes that common stocks and other equity and equity equivalent securities ordinarily offer the greatest potential for capital appreciation and will constitute the majority of the fund's investments. The fund may invest, however, in any security the investment manager believes has the potential for capital appreciation. The other securities the fund may invest in include bonds, notes and debt securities of companies and obligations of domestic or foreign governments and their agencies. Twentieth Century attempts to stay fully invested in appreciating securities, regardless of the movement of stock and bond prices generally. There are no credit quality or maturity restrictions with regard to the bonds, corporate debt securities, and government obligations in which the fund may invest, although less than 35% of the fund's assets will be invested in below investment grade fixed income securities. (See "An Explanation of Fixed Income Securities Ratings" in the Statement of Additional Information.) Debt securities, especially those in emerging market countries, may be of poor quality and speculative in nature. While these securities will primarily be chosen for their appreciation potential, the fund may also take the potential for income into account when selecting investments. To enhance the fund's liquidity, at least 50% of the fund's assets will be invested in developed market countries at all times. However, the percentage of the assets of the fund invested in developed and emerging markets will vary as, in the opinion of the investment manager, market conditions warrant. No more than 15% of the fund's assets may be invested in illiquid investments at any time. 7 POLICIES APPLICABLE TO BOTH FUNDS The funds may make foreign investments either directly in foreign securities, or indirectly by purchasing depositary receipts or depositary shares or similar instruments ("DRs") for foreign securities. DRs are securities that are listed on exchanges or quoted in over-the-counter markets in one country but represent shares of issuers domiciled in another country. The funds may also purchase securities of such issuers in foreign markets, either on foreign securities exchanges or in the over-the-counter markets. The funds may also invest in other equity securities and equity equivalents. Other equity securities and equity equivalents include securities that permit the funds to receive an equity interest in an issuer, the opportunity to acquire an equity interest in an issuer, or the opportunity to receive a return on its investment that permits the fund to benefit from the growth over time in the equity of an issuer. Examples of other equity securities and equity equivalents are preferred stock, convertible preferred stock and convertible debt securities. Equity equivalents may also include securities whose value or return is derived from the value or return of a different security. An example of one type of derivative security in which the funds might invest is a depositary receipt. Notwithstanding the funds' respective investment objectives of capital growth, under exceptional market or economic conditions, each fund may temporarily invest all or a substantial portion of its assets in cash or investment-grade short-term securities (denominated in U.S. dollars or foreign currencies). To the extent a fund assumes a defensive position, it will not be pursuing its investment objective of capital growth. In addition to other factors that will affect their value, the value of a fund's investments in fixed income securities will change as prevailing interest rates change. In general, the prices of such securities vary inversely with interest rates. As prevailing interest rates fall, the prices of bonds and other securities that trade on a yield basis rise. When prevailing interest rates rise, bond prices fall. These changes in value may, depending upon the particular amount and type of fixed income securities holdings of a fund, impact the net asset value of that fund's shares. (See "How Share Price is Determined," page 27.) Under normal conditions, each fund will invest at least 65% of its assets in common stocks and other equity and equity equivalent securities of issuers from at least three countries outside of the United States. While securities of U.S. issuers may be included in the portfolio from time to time, it is the primary intent of the manager to diversify investments in a fund across a broad range of foreign issuers. Management defines "foreign issuer" as an issuer of securities that is domiciled outside the United States and/or whose shares trade principally on an exchange or other market outside the United States. In order to achieve maximum investment flexibility, neither fund has established geographic limits on asset distribution, on either a country-by-country or region-by-region basis (and, as previously noted, International Emerging Growth may invest up to 50% of its assets in emerging market countries). The investment manager expects to invest both in issuers whose principal place of business is in developed markets (such as Germany, the United Kingdom and Japan) and in issuers whose principal place of business is in emerging market countries. The principal criteria for inclusion of a security in a fund's portfolio is its ability to meet the fundamental and technical standards of selection and, in the opinion of the fund's investment manager, to achieve better-than-average appreciation. If, in the opinion of the fund's investment manager, a particular security satisfies these principal criteria, the security may be included in the fund's portfolio, regardless of the location of the issuer or the percentage of the fund's investments in the issuer's country (subject, with regard to International Emerging Growth, its 50% limitation on investments in emerging market countries) or region. 8 At the same time, however, the investment manager recognizes that both the selection of a fund's individual securities and the allocation of the portfolio's assets across different countries and regions are important factors in managing an international equity portfolio. For this reason, the manager will also consider a number of other factors in making investment selections including: the prospects for relative economic growth among countries or regions, economic and political conditions, expected inflation rates, currency exchange fluctuations and tax considerations. RISK FACTORS INVESTING IN FOREIGN SECURITIES GENERALLY Investing in securities of foreign issuers generally involves greater risks than investing in the securities of domestic companies. Investments in the funds should not be considered a complete investment program and may not be appropriate for an individual with limited investment resources or who is unable to tolerate fluctuations in the value of the investment. Potential investors should also carefully consider the following factors: Currency Risk. The value of the foreign investments held by the funds may be significantly affected by changes in currency exchange rates. The dollar value of a foreign security generally decreases when the value of the dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the dollar falls against such currency. In addition, the value of fund assets may be affected by losses and other expenses incurred in converting between various currencies in order to purchase and sell foreign securities and by currency restrictions, exchange control regulation, currency devaluations and political developments. Political and Economic Risk. The economies of many of the countries in which the funds invest are not as developed as the economy of the United States and may be subject to significantly different forces. Political or social instability, expropriation or confiscatory taxation, and limitations on the removal of funds or other assets, could also adversely affect the value of investments. Invest-ments in emerging market countries involve exposure to a greater degree of risk due to increased political and economic instability. (See "Investing in Emerging Market Countries," page 10). Regulatory Risk. Foreign companies are generally not subject to the regulatory controls imposed on U.S. issuers and, in general, there is less publicly available information about foreign securities than is available about domestic securities. Many foreign companies are not subject to uniform accounting, auditing and financial reporting standards, practices and requirements comparable to those applicable to domestic companies. Income from foreign securities owned by the funds may be reduced by a withholding tax at the source which would reduce dividend income payable to shareholders. (See "Taxes," page 29). Market and Trading Risk. Brokerage commission rates in foreign countries, which are generally fixed rather than subject to negotiation as in the U.S., are likely to be higher. The securities markets in many of the countries in which the funds invest will have substantially less trading volume than the principal U.S. markets. As a result, the securities of some companies in these countries may be less liquid and more volatile than comparable U.S. securities. Furthermore, one securities broker may represent all or a significant part of the trading volume in a particular country, resulting in higher trading costs and decreased liquidity due to a lack of alternative trading partners. There is generally less government regulation and supervision of foreign stock exchanges, brokers and issuers which may make it difficult to enforce contractual obligations. In addition, extended clearance and settlement periods in some foreign markets could result in losses to the funds or cause the funds to miss attractive investment possibilities. 9 SPECULATIVE NATURE OF INTERNATIONAL EMERGING GROWTH In addition to the risks posed by foreign investing generally, International Emerging Growth will be investing up to 50% of its assets in emerging market countries, and may invest the remainder of its assets in the securities of companies having comparatively small market capitalizations. (See "Investing in Emerging Market Countries" and "Investing in Smaller Companies," on this page.) As a result, an investment in the fund should be considered to be speculative. The fund is intended for aggressive investors seeking significant gains through investments in foreign securities. Those investors must be willing and able to accept the significantly greater risks associated with the investment strategy that International Emerging Growth will pursue. An investment in the fund is not a complete investment program and is not appropriate for individuals with limited investment resources or who are unable to tolerate fluctuations in the value of their investment. INVESTING IN EMERGING MARKET COUNTRIES International Equity may sometimes invest in emerging market countries, while International Emerging Growth can invest up to 50% of its assets in securities of issuers in emerging market countries. Investing in securities of issuers in emerging market countries involves exposure to significantly higher risk than investing in countries with developed markets. Emerging market countries may have economic structures that are generally less diverse and mature and political systems that can be expected to be less stable than those of developed countries. Securities prices in emerging market countries can be significantly more volatile than in developed countries, reflecting the greater uncertainties of investing in lesser developed markets and economies. In particular, emerging market countries may have relatively unstable governments, and may present the risk of nationalization of businesses, expropriation, confiscatory taxation or, in certain instances, reversion to closed market, centrally planned economies. Such countries may also have restrictions on foreign ownership or prohibitions on the repatriation of assets, and may have less protection of property rights than developed countries. The economies of emerging market countries may be predominantly based on only a few industries or dependent on revenues from particular commodities or on international aid or development assistance, may be highly vulnerable to changes in local or global trade conditions, and may suffer from extreme and volatile debt burdens or inflation rates. In addition, securities markets in emerging market countries may trade a small number of securities and may be unable to respond effectively to increases in trading volume, potentially resulting in a lack of liquidity and in volatility in the price of securities traded on those markets. Also, securities markets in emerging market countries typically offer less regulatory protection for investors. INVESTING IN SMALLER COMPANIES In developed markets, International Emerging Growth will only invest in securities of companies having, at the time of investment, a market capitalization of less than U.S. $800 million or a public float of less than U.S. $300 million. In emerging market countries the companies whose securities are purchased, while likely being large compared to other companies in their own countries, will tend to be comparatively smaller than large companies in developed markets. These smaller companies may present greater opportunities for capital appreciation, but may also involve greater risks than large, 10 mature issuers. Such companies may have limited product lines, markets or financial resources, and their securities may trade less frequently and in more limited volume than the securities of larger companies. In addition, available information regarding these smaller companies may be less available and, when available, may be incomplete or inaccurate. The securities of such companies may also be more likely to be delisted from trading on their primary domestic exchange. As a result, the securities of smaller companies may experience significantly more price volatility and less liquidity than securities of larger companies, and this volatility and limited liquidity may be reflected in the net asset value of the fund. INVESTING IN LOWER QUALITY DEBT INSTRUMENTS There are no credit, maturity or investment amount restrictions on the bonds, corporate debt securities, and government obligations in which International Emerging Growth may invest. Debt securities, especially those in emerging market countries, may be of poor quality, unrated and speculative in nature. Debt securities rated lower than Baa by Moody's or BBB by S&P or their equivalent, sometimes referred to as junk bonds, are considered by many to be predominately speculative. (See "An Explanation of Fixed Income Securities Ratings" in the Statement of Additional Information.) Changes in economic conditions or other circumstances are more likely to lead to a weakened capacity to make principal and interest payments on such securities than is the case with higher quality debt securities. Regardless of rating levels, all debt securities considered for purchase by the fund are analyzed by the investment manager to determine, to the extent reasonably possible, that the planned investment is sound given the investment objective of the fund. INVESTMENT RESTRICTIONS Twentieth Century has adopted certain fundamental limitations on its investment practices. The principal investment limitations are that each fund will not: 1) invest more than 5% of its assets in securities of any one issuer, except U.S. government securities; 2) own more than 10% of the outstanding voting securities of any one issuer; 3) invest in the securities of companies that, including predecessors, have a record of less than three years of continuous operations; and 4) invest more than 25% of the assets of the fund, exclusive of cash and U.S. government securities, in securities of any one industry. A complete listing of investment restrictions is contained in the statement of additional information. The limitations described here and in the statement of additional information are considered at the time securities are purchased. OTHER INVESTMENT PRACTICES FORWARD CURRENCY EXCHANGE CONTRACTS Some of the securities held by the funds will be denominated in foreign currencies. Other securities, such as DRs, may be denominated in U.S. dollars, but have a value that is dependent upon the performance of a foreign security, as valued in the currency of its home country. As a result, the value of their portfolios will be affected by changes in the exchange rates between foreign currencies and the dollar, as well as by changes in the market values of the securities themselves. The performance of foreign currencies relative to the dollar may be an important factor in the overall performance of the funds. 11 To protect against adverse movements in exchange rates between currencies, a fund may, for hedging purposes only, enter into forward currency exchange contracts. A forward currency exchange contract obligates the fund to purchase or sell a specific currency at a future date at a specific price. A fund may elect to enter into a forward currency exchange contract with respect to a specific purchase or sale of a security, or with respect to the fund's portfolio positions generally. By entering into a forward currency exchange contract with respect to the specific purchase or sale of a security denominated in a foreign currency, a fund can "lock in" an exchange rate between the trade and settlement dates for that purchase or sale. This practice is sometimes referred to as "transaction hedging." Each fund may enter into transaction hedging contracts with respect to all or a substantial portion of its trades. When the manager believes that a particular currency may decline in value compared to the dollar, a fund may enter into a foreign currency exchange contract to sell an amount of foreign currency equal to the value of some or all of the fund's portfolio securities either denominated in, or whose value is tied to, that currency. This practice is sometimes referred to as "portfolio hedging." A fund may not enter into a portfolio hedging transaction where the fund would be obligated to deliver an amount of foreign currency in excess of the aggregate value of its portfolio securities or other assets denominated in, or whose value is tied to, that currency. Each fund will make use of portfolio hedging to the extent deemed appropriate by the investment manager. However, it is anticipated that a fund will enter into portfolio hedges much less frequently than transaction hedges. If a fund enters into a forward contract, the fund, when required, will instruct its custodian bank to segregate cash or liquid high-grade securities in a separate account in an amount sufficient to cover its obligation under the contract. Those assets will be valued at market daily, and if the value of the segregated securities declines, additional cash or securities will be added so that the value of the account is not less than the amount of the fund's commitment. At any given time, no more than 10% of a fund's assets will be committed to a segregated account in connection with portfolio hedging transactions. Predicting the relative future values of currencies is very difficult, and there is no assurance that any attempt to reduce the risk of adverse currency movements through the use of forward currency exchange contracts will be successful. In addition, the use of forward currency exchange contracts tends to limit the potential gains that might result from a positive change in the relationship between the foreign currency and the U.S. dollar. INDIRECT FOREIGN INVESTMENT Subject to certain restrictions contained in the Investment Company Act, each fund may invest up to 10% of its assets in certain foreign countries indirectly through investment funds and registered investment companies authorized to invest in those countries. If the funds invest in investment companies, the funds will bear their proportionate shares of the costs incurred by such companies, including investment advisory fees, if any. SOVEREIGN DEBT OBLIGATIONS The funds may purchase sovereign debt instruments issued or guaranteed by foreign governments or their agencies, including debt of emerging market countries. Sovereign debt may be in the form of conventional securities or other types of debt instruments such as loans or loan participations. Sovereign debt of emerging market countries may involve a high degree of risk and may present a risk of default or renegotiation or rescheduling of debt payments. 12 PORTFOLIO TURNOVER The total portfolio turnover rate of the International Equity fund is shown in the Financial Highlights Table on page 5 of this prospectus. Investment decisions to purchase and sell securities are based on the anticipated contribution of the security in question to a fund's objectives. The rate of portfolio turnover is irrelevant when management believes a change is in order to achieve those objectives and accordingly, the annual portfolio turnover rate cannot be anticipated. The portfolio turnover of each fund may be higher than other mutual funds with similar investment objectives. Higher turnover would generate correspondingly greater brokerage commissions, which is a cost that each fund pays directly. It may also affect the character of capital gains, if any, realized and distributed by a fund since short-term capital gains are taxable as ordinary income. REPURCHASE AGREEMENTS Each fund may invest in repurchase agreements when such transactions present an attractive short-term return on cash that is not otherwise committed to the purchase of securities pursuant to the investment policies of that fund. A repurchase agreement occurs when, at the time the fund purchases an interest-bearing obligation, the seller (a bank or broker-dealer registered under the Securities Exchange Act of 1934) agrees to repurchase it on a specified date in the future at an agreed-upon price. The repurchase price reflects an agreed-upon interest rate during the time the fund's money is invested in the security. Since the security purchased constitutes security for the repurchase obligation, a repurchase agreement can be considered as a loan collateralized by the security purchased. The fund's risk is the ability of the seller to pay the agreed-upon repurchase price on the repurchase date. If the seller defaults, the fund may incur costs in disposing of the collateral, which would reduce the amount realized thereon. If the seller seeks relief under the bankruptcy laws, the disposition of the collateral may be delayed or limited. To the extent the value of the security decreases, the fund could experience a loss. The funds will limit repurchase agreement transactions to securities issued by the U.S. government, its agencies and instrumentalities, and will enter into such transactions with those commercial banks and broker-dealers who are deemed creditworthy pursuant to criteria adopted by the funds' board of directors. The funds will not invest more than 15% of their respective assets in repurchase agreements maturing in more than seven days. WHEN-ISSUED SECURITIES Each of the funds may sometimes purchase new issues of securities on a when-issued basis without limit when, in the opinion of the investment manager, such purchases will further the investment objectives of the fund. The price of when-issued securities is established at the time the commitment to purchase is made. Delivery of and payment for these securities typically occur 15 to 45 days after the commitment to purchase. Market rates of interest on debt securities at the time of delivery may be higher or lower than those contracted for on the when-issued security. Accordingly, the value of such security may decline prior to delivery, which could result in a loss to the fund. A separate account for each fund consisting of cash or high-quality liquid debt securities in an amount at least equal to the when-issued commitments will be established and maintained with the custodian. No income will accrue to the fund prior to delivery. 13 SHORT SALES Each of the funds may engage in short sales if, at the time of the short sale, the fund owns or has the right to acquire an equal amount of the security being sold short at no additional cost. These transactions allow a fund to hedge against price fluctuations by locking in a sale price for securities it does not wish to sell immediately. A fund may make a short sale when it wants to sell the security it owns at a current attractive price, but also wishes to defer recognition of gain or loss for federal income tax purposes and for purposes of satisfying certain tests applicable to regulated investment companies under the Internal Revenue Code. RULE 144A SECURITIES The funds may invest up to 15% of their respective assets in illiquid securities (securities that may not be sold within seven days at approximately the price used in determining the net asset value of fund shares), including restricted securities. Although securities which may be resold only to qualified institutional buyers in accordance with the provisions of Rule 144A under the Securities Act of 1933 are considered "restricted securities," each fund may purchase Rule 144A securities without regard to the percent- age limitations described above when Rule 144A securities present an attractive investment opportunity and otherwise meet Twentieth Century's criteria of selection, and also meet the liquidity guidelines established for Rule 144A securities. With respect to securities eligible for resale under Rule 144A, the staff of the Securities and Exchange Commission has taken the position that the liquidity of such securities in the portfolio of a fund offering redeemable securities is a question of fact for the board of directors to determine, such determination to be based upon a consideration of the readily available trading markets and the review of any contractual restrictions. Accordingly, the board of directors is responsible for developing and establishing the guidelines and procedures for determining the liquidity of Rule 144A securities. As allowed by Rule 144A, the board of directors of Twentieth Century has delegated the day-to-day function of determining the liquidity of 144A securities to the investment manager. The board retains the responsibility to monitor the implementation of the guidelines and procedures it has adopted. Since the secondary market for such securities will be limited to certain qualified institutional investors, their liquidity may be limited accordingly and a fund may from time to time hold a Rule 144A security that is illiquid. In such an event, Twentieth Century will consider appropriate remedies to minimize the effect on the fund's liquidity. PERFORMANCE ADVERTISING From time to time, Twentieth Century may advertise performance data. Fund performance may be shown by presenting one or more performance measurements, including cumulative total return or average annual total return. Cumulative total return data is computed by considering all elements of return, including reinvestment of dividends and capital gains distributions, over a stated period of time. Average annual total return is determined by computing the annual compound return over a stated period of time that would have produced the fund's cumulative total return over the same period if the fund's performance had remained constant throughout. Each fund may also include in advertisements data comparing performance with the performance of non-related investment media, published editorial comments and performance rankings compiled by independent organizations (such as Lipper Analytical Services) and publications that monitor the performance of mutual funds. Performance information may be quoted numerically or may be presented in a table, graph or other illustration. Fund performance 14 may also be compared to well-known indices of market performance, such as the Standard & Poor's 500 Index, the Dow Jones World Index, the IFC Global Composite Index and the Morgan Stanley Capital International Europe, Australia, Far East Index (EAFE Index). Fund performance may also be compared to the rankings prepared by Lipper Analytical Services, Inc. In addition, fund performance may be compared to other funds in the Twentieth Century family and may also be combined or blended with other funds in the Twentieth Century family. Such combined or blended performance may be compared to the same indices to which individual funds may be compared. All performance information advertised by the funds is historical in nature and is not intended to represent or guarantee future results. The value of fund shares when redeemed may be more or less than their original cost. 15 HOW TO INVEST WITH TWENTIETH CENTURY - -------------------------------------------------------------------------------- TWENTIETH CENTURY FAMILY OF FUNDS In addition to the two funds offered by this prospectus, the Twentieth Century family of funds also includes funds offered by Twentieth Century Investors, Inc., Twentieth Century Premium Reserves, Inc., Twentieth Century Capital Portfolios, Inc. and Twentieth Century Strategic Asset Allocations, Inc. Please call the Investors Line for a prospectus and additional information about the other funds in the Twentieth Century family of funds. The Twentieth Century family of funds now also includes the funds offered by The Benham Group as a result of the acquisition of Benham Management Corporation, investment manager of The Benham Group, by Twentieth Century Companies, Inc. The Benham Group offers several funds with investment objectives similar to the Twentieth Century funds, but with different fee structures. You may also wish to consider the funds of The Benham Group for your investment needs. For a prospectus and more information about those funds, please call 1-800-331-8331. INVESTING IN TWENTIETH CENTURY INTERNATIONAL EQUITY You may make an initial investment in International Equity in any amount you choose. SUBSEQUENT INVESTMENTS TO PURCHASE ADDITIONAL SHARES IN ANY ONE INTERNATIONAL EQUITY ACCOUNT MUST BE IN AN AMOUNT OF $50 OR MORE.* While there is no minimum investment requirement for the International Equity fund, if you have one or more accounts with a share value of less than $2,500 ($1,000 for Uniform Gifts/Transfers to Minors Acts ["UGMA/UTMA"] accounts), you must establish an automatic investment to purchase additional shares in each such fund account in an amount of $50 or more per month.** (See "Automatic Investments," page 17, and "Automatic Redemption of Shares," page 23.) *THIS REQUIREMENT DOES NOT APPLY TO 403(B) ACCOUNTS AND OTHER TYPES OF TAX-DEFERRED RETIREMENT PLAN ACCOUNTS. **THIS REQUIREMENT DOES NOT APPLY TO INDIVIDUAL RETIREMENT ACCOUNTS, 403(B) ACCOUNTS AND OTHER TYPES OF TAX-DEFERRED RETIREMENT PLAN ACCOUNTS. INTERNATIONAL EMERGING GROWTH The minimum initial investment amount to establish a new account in the International Emerging Growth fund is $10,000. SUBSEQUENT INVESTMENTS TO PURCHASE ADDITIONAL SHARES IN ANY ONE INTERNATIONAL EMERGING GROWTH ACCOUNT MUST BE IN THE AMOUNT OF $50 OR MORE. To keep an International Emerging Growth account open, a minimum share value of $10,000 in the account must be maintained. If the share value of your account falls below $10,000, the shares in your account will be subject to automatic redemption. (See, "Automatic Redemption of Shares," page 23.) INVESTING BY MAIL Send your application and check or money order to Twentieth Century. Checks must be made payable in U.S. dollars. ADDITIONAL INVESTMENTS. When making additional investments by mail, please enclose your check with the return remittance portion of the confirmation of your previous investment, if available. If the remittance slip is not available, indicate on your check or a separate piece of paper your name, address and account number. Orders to purchase shares are effective on the day Twentieth Century receives your check or money order. (See "When Share Price is Deter-mined," page 27.) INVESTING BY TELEPHONE Once your account is open, you may make investments by telephone if you have elected the service authorizing Twentieth Century to draw 16 on your bank account by check when you call with instructions. Investments made by phone are effective at the time of your call. (See "When Share Price Is Determined," page 27.) INVESTING BY WIRE You may make your initial or subsequent investments in Twentieth Century by wiring funds. To do so: (1) Instruct your bank to wire funds to the Boatmen's First National Bank of Kansas City, Missouri (ABA routing number 101000035). (2) BE SURE TO SPECIFY ON THE WIRE: (a) TWENTIETH CENTURY WORLD INVESTORS, INC. (b) THE FUND YOU ARE BUYING AND ACCOUNT NUMBER (IF YOU HAVE ONE). (c) YOUR NAME. (d) YOUR CITY AND STATE. (e) YOUR TAXPAYER IDENTIFICATION NUMBER. Wired funds are considered received on the day they are deposited in Twentieth Century's account if your telephone call is received before the close of business on the New York Stock Exchange, usually 3 p.m. Central time, and the funds are deposited that day. (See "When Share Price Is Determined," page 27.) AUTOMATIC INVESTMENTS Once your account is open, you may make investments automatically by electing the service authorizing Twentieth Century to draw on your bank account regularly by preauthorized electronic draft. SUCH INVESTMENTS MUST BE IN AMOUNTS OF NOT LESS THAN $50. You should inquire at your bank whether it will honor a preauthorized check or electronic debit. Contact Twentieth Century if your bank cannot accept electronic debits or requires additional documentation. You may change the date or amount of your automatic investment any time by letter or telephone call to Twentieth Century at least five business days before the change is to become effective. ADDITIONAL INFORMATION ABOUT INVESTMENTS TWENTIETH CENTURY CANNOT ACCEPT INVESTMENTS SPECIFYING A CERTAIN PRICE, DATE OR NUMBER OF SHARES AND WILL RETURN THESE INVESTMENTS. Once you have mailed or otherwise transmitted your investment instruction to Twentieth Century, it may not be modified or cancelled. Each fund reserves the right to suspend the offering of shares for a period of time, and it reserves the right to reject any specific purchase order including purchases by exchange or conversion. Additionally, purchases may be refused if, in the opinion of the manager, they are of a size that would disrupt the management of a fund. Twentieth Century intends, upon 60 days' prior notice, to involuntarily redeem shares in any account that does not meet any required minimum share value or automatic investment applicable to such account. Twentieth Century reserves the right to change the amount of these minimums from time to time or waive them in whole or in part for certain classes of investors. (See "Automatic Investments," on this page, and "Automatic Redemption of Shares," page 23.) Transactions in shares of the funds may be executed by brokers or investment advisers who charge a fee for their services. You should be aware of the fact that these transactions may be made directly with Twentieth Century without incurring such fees. TAX IDENTIFICATION NUMBER You must furnish Twentieth Century with your tax identification number and state whether or not you are subject to withholding for prior under-reporting, certified under penalties of perjury as prescribed by the Internal Revenue Code and Regulations. Unless previously furnished, an investment received without such certification will be returned. Instructions to exchange or transfer shares held in an established account will be refused unless the certification has been provided, and redemption of such shares will be 17 subject to federal tax withholding at the rate of 31%. In addition, redemption bproceeds will be reduced by $50 to reimburse Twentieth Century for the penalty that the IRS will impose on the company for failure to report your tax identification number on information reports. Please avoid these penalties by correctly furnishing your tax identification number. CERTIFICATES At your written request, Twentieth Century will issue negotiable stock certificates. Unless your shares are purchased with wired funds, a certificate will not be issued until 15 days have elapsed from the time of purchase, or Twentieth Century has satisfactory proof of payment, such as a copy of your cancelled check. SPECIAL SHAREHOLDER SERVICES You may establish one or more special services that are designed to provide an easy way to do business with Twentieth Century. By electing these services on your application or by completing the appropriate forms, you may authorize: o Investments by phone. o Automatic Investments. o Exchanges and redemptions by phone. o Exchanges and redemptions in writing signed by only one registered owner. o Redemptions without a signature guarantee. o Transmission of redemption proceeds by wire or electronic funds transfer. An election to establish any of the above services, except Automatic Investments, will also apply to all existing or future accounts in the Twentieth Century family of funds listed under the same social security number or employer identification number. With regard to the service that enables you to exchange and redeem by phone or in writing signed by only one registered owner and with respect to redemptions, without a signature guarantee, Twentieth Century, its transfer agent and investment adviser will not be responsible for any loss for instructions that they reasonably believe are genuine. Twentieth Century intends to employ reasonable procedures to confirm that instructions received by Twentieth Century for your account in fact are genuine. Such procedures will include requiring personal information to verify the identity of callers, providing written confirmations of telephone transactions, and recording telephone calls. If Twentieth Century does not employ reasonable procedures to confirm the genuineness of instructions, then Twentieth Century may be liable for losses due to unauthorized or fraudulent instructions. HOW TO EXCHANGE YOUR INVESTMENT FROM ONE TWENTIETH CENTURY FUND TO ANOTHER You may exchange your shares to shares of any of the other funds in the Twentieth Century family of funds subject to any applicable minimum initial investment requirements of the funds into which you wish to exchange. Please call the Investors Line for a prospectus and additional information about the other funds in the Twentieth Century family of funds. Except as noted below, exchanges from any one fund account are limited to six times in any one calendar year. In addition, the shares being exchanged and the shares of each fund being acquired must have a current value of at least $100 and otherwise meet the minimum investment requirement, if any, of the fund being acquired. If you would like to exchange your shares, please call the Investors Line for a prospectus and additional information about the other funds in the Twentieth Century family of funds. (See "Additional Information About Exchanges," page 19.) Shares of the funds may be received in ex-change for shares of any series issued by the other members of the Twentieth Century family of funds. THE EXCHANGE PRIVILEGE IS NOT DESIGNED TO AFFORD SHAREHOLDERS A WAY TO PLAY SHORT-TERM SWINGS IN THE MARKET. TWENTIETH CENTURY FUNDS ARE NOT SUITABLE FOR THAT PURPOSE. IN ORDER TO DISCOURAGE THE EXCHANGE OF 18 SHARES OF INTERNATIONAL EMERGING GROWTH SHORTLY AFTER THEIR PURCHASE, EXCHANGE OF THOSE SHARES WITHIN 180 DAYS OF THEIR PURCHASE WILL BE SUBJECT TO A REDEMPTION FEE OF 2.0% OF THE VALUE OF THE SHARES EXCHANGED. This fee will be retained by the fund to help minimize the impact such exchanges have on fund performance and, hence, on the other shareholders of the fund. For the purposes of determining the applicability of this fee, shares first purchased will be deemed to be the shares first exchanged. Twentieth Century reserves the right to modify its policy regarding this redemption fee or to waive such policy in whole or in part for certain classes of investors. BY TELEPHONE You may exchange your shares by phone if you have authorized Twentieth Century to accept telephone instructions. (Before calling, read "Additional Information About Exchanges," on this page.) BY MAIL You may direct Twentieth Century in writing to exchange your shares. If you have authorized Twentieth Century to accept written instructions from any one registered owner, and if the shares are owned by two or more persons, only one signature is required on your written exchange request. Otherwise, the request should be signed by each person in whose name the shares are registered. All signatures should be exactly as the name appears in the registration; for example, if an owner's name is registered as John Robert Jones, he should sign that way and not as John R. Jones. (Before writing, read "Additional Information About Exchanges," on this page.) ADDITIONAL INFORMATION ABOUT EXCHANGES (1) IN AN EXCHANGE OF SHARES FROM ONE FUND ACCOUNT TO SHARES OF ANOTHER FUND ACCOUNT, THE SHARES BEING SOLD AND THE NEW SHARES BEING PURCHASED MUST HAVE A CURRENT VALUE OF AT LEAST $100, AND YOU MUST MEET ANY INVESTMENT MINIMUM IMPOSED BY THE FUND BEING ACQUIRED. (2) EXCHANGES FROM ANY ONE FUND ACCOUNT ARE LIMITED TO SIX TIMES IN ANY ONE CALENDAR YEAR except for the exchange of shares pursuant to an automatic exchange program. [This limitation does not apply to shares held in 403(b) accounts and certain pooled accounts owned by institutional investors.] (3) The shares being acquired must be qualified for sale in your state of residence. (4) If the shares are represented by a negotiable stock certificate, the certificate must be returned before the exchange can be effected. (5) ONCE YOU HAVE TELEPHONED OR MAILED YOUR EXCHANGE REQUEST, IT IS IRREVOCABLE AND MAY NOT BE MODIFIED OR CANCELED. (6) If, in any 90-day period, the total of your exchanges and your redemptions from any one account exceeds the lesser of $250,000 or 1% of a fund's assets, further exchanges will be subject to special requirements to comply with Twentieth Century's policy on large redemptions. (See "Special Requirements for Large Redemptions," page 22.) (7) For the purpose of processing exchanges, the value of the shares surrendered and the value of the shares acquired are the net asset values of such shares next computed after receipt of your exchange order. (8) Shares MAY NOT be exchanged unless you have furnished Twentieth Century with your tax identification number, certified as prescribed by the Internal Revenue Code and Regulations. (See "Tax Identification Number," page 17.) (9) An exchange of shares is, for federal income tax purposes, a sale of the shares, on which you may realize a taxable gain or loss. (10)If the request is made by a corporation, partnership, trust, fiduciary, agent or 19 unincorporated association, Twentieth Century will require evidence satisfactory to it of the authority of the individual signing the request. HOW TO REDEEM SHARES Twentieth Century will redeem or "buy back" your shares at any time at the net asset value next determined after receipt of a redemption request in good order. (Before redeeming, please read "Special Requirements for Large Redemptions," page 22, "Additional Information About Redemptions," page 23, and "When Share Price Is Determined," page 27.) IN ORDER TO DISCOURAGE THE REDEMPTION OF SHARES OF INTERNATIONAL EMERGING GROWTH SHORTLY AFTER THEIR PURCHASE, REDEMPTION OF THOSE SHARES WITHIN 180 DAYS OF THEIR PURCHASE WILL BE SUBJECT TO A REDEMPTION FEE OF 2.0% OF THE VALUE OF THE SHARES REDEEMED. This fee will be retained by the fund to help minimize the impact such redemptions have on fund performance and, hence, on the other shareholders of the fund. For the purposes of determining the applicability of this fee, shares first purchased will be deemed to be the shares first redeemed. Twentieth Century reserves the right to modify its policy regarding this redemption fee or to waive such policy regarding this redemption fee or to waive such policy in whole or in part for certain classes of investors. Your redemption proceeds may be delayed if you have owned your shares less than 15 days. (See "Redemption Proceeds," page 21.) ALL REQUESTS TO REDEEM SHARES HAVING A VALUE OF $25,000 OR MORE, THE PROCEEDS OF WHICH ARE TO BE PAID BY CHECK, MADE WITHIN 30 DAYS OF OUR RECEIPT OF AN ADDRESS CHANGE (INCLUDING REQUESTS TO REDEEM THAT ACCOMPANY AN ADDRESS CHANGE) MUST BE IN WRITING. ADDITIONALLY, THE REQUEST MUST BE SIGNED BY EACH PERSON IN WHOSE NAME THE SHARES ARE OWNED, AND ALL SIGNATURES MUST BE GUARANTEED. (See "Signature Guarantee," page 21 and "How to Change Your Address of Record," page 24.) BY TELEPHONE If you have authorized Twentieth Century to accept telephone instructions, you may redeem your shares by telephone. ONCE MADE, YOUR TELEPHONE REQUEST MAY NOT BE MODIFIED OR CANCELLED. If you call before the close of the New York Stock Exchange, usually 3 p.m. Central time, you will receive that day's closing price. (Before calling, read "Additional Information About Redemptions," page 23.) BY MAIL Your written instructions to redeem shares may be in any one of the following forms: o A redemption form, available from Twentieth Century. o A letter to Twentieth Century. o An assignment form or stock power. o An endorsement on the back of your negotiable stock certificate, if you have one. ONCE MAILED TO TWENTIETH CENTURY, THE REDEMPTION REQUEST IS IRREVOCABLE AND MAY NOT BE MODIFIED OR CANCELLED. If you have authorized Twentieth Century to accept written instructions from any one registered owner without a signature guarantee, only one signature is required on your written redemption request and it need not be guaranteed. If you have not elected this special service, all signatures must be guaranteed. (See "Signature Guarantee," page 21.) The request must be signed by each person in whose name the shares are registered; for example, in the case of joint ownership, each owner must sign. All signatures should be exactly as the name appears in the registration. If the owner's name appears in the registration as Mary Elizabeth Jones, she should sign that way and not as Mary E. Jones. (Before writing, see "Additional Information About Redemptions," page 23.) 20 BY CHECK-A-MONTH Twentieth Century's Check-A-Month plan is available for International Equity, but not for International Emerging Growth. The plan automatically redeems enough shares each month to provide you with a check for a minimum of $25. To set up a Check-A-Month plan, call Twentieth Century for instructions. Shares will be redeemed on the 20th day of each month or the next business day, and your check will be mailed the next day. If your monthly checks exceed the dividends, interest and capital appreciation on your shares, the payments will deplete your investment. Amounts paid to you by Check-A-Month are not a return on your investment. They are derived from the redemption of shares in your account, and you must report on your income tax return gains or losses that you realize. You may specify a Check-A-Month when you make your first investment. If you order a Check-A-Month thereafter, then, as in any redemption, the request for a Check-A-Month or any increase in amount must be signed by all owners with their signatures guaranteed unless Twentieth Century has been authorized to accept instructions from any one owner, by telephone or in writing without a signature guarantee. You may request that the Check-A-Month be sent to an address other than the address of record at the time of your first investment. Thereafter, a request to send a Check-A-Month to an address other than the address of record must be signed by all owners, with their signatures guaranteed. Twentieth Century may terminate the Check-A-Month at any time, upon notice to you, and you likewise may terminate it or change the amount of the Check-A-Month, by notice to Twentieth Century in writing or by telephone. Termination or change will become effective within five business days following receipt of your instruction. Your Check-A-Month plan may begin anytime after you have owned your shares for 15 days. SIGNATURE GUARANTEE When a signature guarantee is required, each signature MUST be guaranteed by a domestic bank or trust company, credit union, broker, dealer, national securities exchange registered securities association, clearing agency or savings association as defined by federal law. The institution providing the guarantee must use a signature guarantee ink stamp or medallion which states "Signature(s) Guaranteed" and be signed in the name of the guarantor by an authorized person with that person's title and the date. Twentieth Century may reject a signature guarantee if the guarantor is not a member of or participant in a signature guarantee program. Shareholders living abroad may acknowledge their signatures before a U.S. consular officer. Military personnel in foreign countries may acknowledge their signatures before officers authorized to take acknowledgments; e.g., legal officers and adjutants. Twentieth Century may waive the signature guarantee on a redemption of $5,000 or less if it is able to verify the signatures of all registered owners from its account records. Twentieth Century reserves the right to amend or discontinue this waiver policy at any time and, with regard to a particular redemption transaction, to require a signature guarantee at its discretion. REDEMPTION PROCEEDS Redemption proceeds may be sent to you: BY MAIL If your redemption check is mailed, it is usually mailed on the second business day after receipt of your redemption request, but not later than seven days afterwards. When a redemption occurs shortly after a recent purchase made by check or electronic draft, Twentieth Century may hold the redemption proceeds beyond seven days but only until the funds have cleared, which may take up to 15 days or more. No interest is paid on the redemption 21 proceeds after the redemption is processed and before the redemption check is mailed. IF YOU ANTICIPATE REDEMPTIONS SOON AFTER YOU PURCHASE YOUR SHARES, YOU ARE ADVISED TO WIRE FUNDS TO AVOID DELAY. Except for a direct transfer of proceeds from an IRA or 403(b) to a custodian of another IRA or 403(b), and as noted below, all redemption checks will be made payable to the registered owner of the shares and will be mailed only to the ADDRESS OF RECORD. If you would like a redemption check made payable to someone other than the registered owner of the shares and/or mailed to an address other than the address of record, your request to redeem must (1) be made in writing; (2) include an instruction to make the check payable to someone other than the registered owner of the shares and/or mail it to an address other than the address of record; and (3) be signed by all registered owners with their signatures guaranteed. (See "Signature Guarantee," page 21.) Redemptions from UGMA/UTMA accounts and from certain types of retirement accounts, such as IRA, 403(b) and qualified retirement plan accounts, will not be eligible for this special service. If you would like to use this special service but are not certain that a redemption from your account is eligible, please call Twentieth Century prior to submitting your request. (See "Telephone Services," page 24.) BY WIRE AND ELECTRONIC FUNDS TRANSFER You may authorize Twentieth Century to transmit redemption proceeds by wire or electronic funds transfer. These services will be effective 30 days after Twentieth Century receives the authorization. Proceeds from the redemption of shares will normally be transmitted on the first business day, but not later than the seventh day, following the redemption. Your bank usually will receive wired funds the day they are transmitted or the next day. Electronically transferred funds will ordinarily be received within one to seven days after transmission. Once the funds are transmitted, the time of receipt and the availability of the funds are not within Twentieth Century's control. Wired funds are subject to a charge of $10 to cover bank wire charges, which is deducted from redemption proceeds. If your bank account changes, you must send a new "voided" check, preprinted with your bank registration, with written instructions, including tax identification number. The change will be effective 30 days after receipt by Twentieth Century. Redemption proceeds will be transmitted by wire or electronic funds transfer only after Twentieth Century is satisfied that checks or electronic drafts that paid for the shares have cleared, i.e., after 15 days have elapsed from the time of purchase, or you have furnished Twentieth Century with satisfactory proof that the purchase funds have cleared. If a purchase were made by check, for example, a copy of the cancelled check would be satisfactory proof. No interest is paid on the redemption proceeds after the redemption and before the funds are transmitted. IF YOU ANTICIPATE REDEMPTIONS WITHIN 15 DAYS AFTER YOU PURCHASE SHARES, YOU ARE ADVISED TO WIRE FUNDS TO PAY FOR YOUR PURCHASES TO AVOID DELAY. SPECIAL REQUIREMENTS FOR LARGE REDEMPTIONS Twentieth Century has elected to be governed by Rule 18f-1 under the Investment Company Act, which obligates a fund to redeem shares in cash, with respect to any one shareholder during any 90-day period, up to the lesser of $250,000 or 1% of the assets of the fund. Although redemptions in excess of this limitation will also normally be paid in cash, Twentieth Century reserves the right to honor these redemptions by making payment in whole or in part in readily marketable securities (a "redemption-in-kind"). If payment is made in securities, the securities will be selected by the fund, will be valued 22 in the same manner as they are in computing the fund's net asset value and will be provided to you in lieu of cash without prior notice. If you expect to make a large redemption and would like to avoid any possibility of being paid in securities, you may do so by providing Twentieth Century with an unconditional instruction to redeem at least 15 days prior to the date on which the redemption transaction is to occur. The instruction must specify the dollar amount or number of shares to be redeemed and the date of the transaction. Receipt of your instruction 15 days prior to the transaction provides a fund with sufficient time to raise the cash in an orderly manner to pay the redemption and thereby minimizes the effect of the redemption on the fund and its remaining shareholders. Despite its right to redeem fund shares through a redemption-in-kind, Twentieth Century does not expect to exercise this option unless a fund has an unusually low level of cash to meet redemptions and/or is experiencing unusually strong demands for its cash. Such a demand might be caused, for example, by extreme market conditions that result in an abnormally high level of redemption requests concentrated in a short period of time. Absent these or similar circumstances, Twentieth Century expects redemptions in excess of $250,000 to be paid in cash in any fund with assets of more than $50 million if total redemptions from any one account in any 90-day period do not exceed one-half of 1% of the total assets of the fund. AUTOMATIC REDEMPTION OF SHARES International Equity. If at any time you have an International Equity account that falls into either of the following categories: (i) you invested the required minimum initial investment amount for the fund, currently $2,500 ($1,000 for UGMA/UTMA accounts), but due to exchanges or redemptions you have made, the account now has a value of less than the minimum initial investment amount; or (ii) you have not invested the minimum initial investment amount, and an automatic investment program of $50 or more per month does not exist for the account; a notification will be sent advising you of the need to either make an investment to bring the value of the shares held in the account up to $2,500 ($1,000) or to establish an automatic investment program of $50 or more per month. If the investment is not made or the automatic investment is not established within 60 days from the date of notification, the shares held in the account will be redeemed and the proceeds from the redemption will be sent by check to your address of record. The automatic redemption of shares of International Equity will not apply to Individual Retirement Accounts, 403(b) accounts and other types of tax-deferred retirement plan accounts. International Emerging Growth. If at any time you have an International Emerging Growth account that falls into either of the following categories: (i) you invested the required minimum initial investment amount of $10,000, but due to exchanges or redemptions you have made, the account now has a value of less than $10,000; or (ii) you have not invested $10,000; a notification will be sent advising you of the need to make an investment to bring the value of the shares held in the account up to $10,000. If the investment is not made within 60 days from the date of notification, the shares held in the fund account will be redeemed and the proceeds from the redemption will be sent by check to your address of record. Twentieth Century reserves the right to modify its policies regarding the automatic redemption of shares of International Equity and International Emerging Growth, or to waive such policies in whole or in part for certain classes of investors. ADDITIONAL INFORMATION ABOUT REDEMPTIONS If you experience difficulty in making a telephone redemption during periods of drastic 23 economic or market changes, your redemption request may be made by regular or express mail. It will be implemented at the net asset value next determined after your request has been received by Twentieth Century in good order. Twentieth Century reserves the right to revise or terminate the telephone redemption privilege at any time. REDEMPTIONS SPECIFYING A CERTAIN DATE OR PRICE CANNOT BE ACCEPTED AND WILL BE RETURNED. If the shares are represented by a negotiable stock certificate, the certificate must be returned before the redemption can be effected. ALL REDEMPTIONS ARE MADE AND THE PRICE IS DETERMINED ON THE DAY WHEN ALL DOCUMENTATION, PROPERLY COMPLETED, IS RECEIVED BY TWENTIETH CENTURY. (See "When Share Price Is Determined," page 27.) If the request to redeem is made by a corporation, partnership, trust, fiduciary, agent, or unincorporated association, Twentieth Century will require evidence satisfactory to it of the authority of the individual signing the request. Please call or write Twentieth Century for further information. A request to redeem shares in an IRA or 403(b) plan must be accompanied by an IRS Form W4-P and a reason for withdrawal as specified by the IRS. TELEPHONE SERVICES INVESTORS LINE You may reach a Twentieth Century Investor Services Representative by calling our Investors Line at 1-800-345-2021. On our Investors Line, you may request information about our funds and a current prospectus, speak with an Investor Services Representative about your account, or get answers to any questions that you may have about the funds and the services we offer. In addition, if you have authorized telephone transactions in your account, you may have an Investor Services Representative help you with investment, exchange and redemption transactions. UNUSUAL STOCK MARKET CONDITIONS HAVE IN THE PAST RESULTED IN AN INCREASE IN THE NUMBER OF SHAREHOLDER TELEPHONE CALLS. IF YOU EXPERIENCE DIFFICULTY IN REACHING TWENTIETH CENTURY ON THE INVESTORS LINE DURING SUCH PERIODS, YOU SHOULD CONSIDER SENDING YOUR TRANSACTION INSTRUCTIONS BY MAIL, EXPRESS MAIL OR COURIER SERVICE OR USING OUR AUTOMATED INFORMATION LINE, IF YOU HAVE REQUESTED AND RECEIVED AN ACCESS CODE AND ARE NOT ATTEMPTING TO REDEEM SHARES. AUTOMATED INFORMATION LINE In addition to reaching us on our Investors Line, you may also reach us by telephone on our Automated Information Line, 24 hours a day, seven days a week, at 1-800-345-8765. By calling the Automated Information Line, you may listen to fund prices, yields and total return figures. You may also obtain an access code that will allow you to use the Automated Information Line to make investment and exchange transactions in your accounts and obtain your share balance, value and most recent transaction. REDEMPTION TRANSACTIONS CANNOT BE MADE ON THE AUTOMATED INFORMATION LINE. Please call our Investors Line at 1-800-345-2021 for more information on how to obtain an access code for our Automated Information Line. HOW TO CHANGE YOUR ADDRESS OF RECORD You may notify Twentieth Century of changes in your address of record either by writing us or calling our Investors Line. Because your address of record impacts every piece of information we send to you, you are urged to notify us promptly of any change of address. TO PROTECT YOU AND TWENTIETH CENTURY, ALL REQUESTS TO REDEEM SHARES HAVING A VALUE OF $25,000 OR MORE, THE PROCEEDS OF WHICH 24 ARE TO BE PAID BY CHECK, MADE WITHIN 30 DAYS OF OUR RECEIPT OF AN ADDRESS CHANGE (INCLUDING REQUESTS TO REDEEM THAT ACCOMPANY AN ADDRESS CHANGE) MUST BE MADE IN WRITING, SIGNED BY EACH PERSON IN WHOSE NAME THE SHARES ARE OWNED, AND ALL SIGNATURES MUST BE GUARANTEED. (See "Signature Guarantee," page 21.) TAX-QUALIFIED RETIREMENT PLANS The funds are available for your tax-deferred retirement plan. Call or write Twentieth Century and request the appropriate forms for: o Individual Retirement Accounts (IRAs). o 403(b) plans for employees of public school systems and non-profit organizations. o Profit sharing plans and pension plans for corporations and other employers. HOW TO TRANSFER AN INVESTMENT TO A TWENTIETH CENTURY RETIREMENT PLAN It's easy to transfer your tax-deferred plan to Twentieth Century from another company or custodian. Call or write Twentieth Century for a request to transfer form. If you direct Twentieth Century to transfer funds from an existing non-retirement Twentieth Century account into a retirement account, the shares in your non-retirement account will be redeemed. The redemption proceeds will be invested in your Twentieth Century IRA or other tax-qualified retirement plan. The redemption is a taxable event resulting in a taxable gain or loss. HOW TO TRANSFER YOUR SHARES TO ANOTHER PERSON You may transfer ownership of your shares to another person or organization by written instructions to Twentieth Century, SIGNED BY ALL OWNERS AND WITH SIGNATURES GUARANTEED AS DESCRIBED UNDER "SIGNATURE GUARANTEE," PAGE 21. IF THE SHARES ARE REPRESENTED BY A NEGOTIABLE STOCK CERTIFICATE, THE CERTIFICATE MUST BE RETURNED WITH YOUR TRANSFER INSTRUCTIONS. REPORTS TO SHAREHOLDERS At the end of each quarter, Twentieth Century will send you a consolidated statement that summarizes all of your Twentieth Century holdings. At the same time, you will also receive an individual statement for each Twentieth Century fund you own with complete year-to-date information on activity in your account. You may at any time also request a statement of your account activity be sent to you. With the exception of the automatic transactions noted below, each time you invest, redeem, transfer or exchange shares, Twentieth Century will send you a confirmation of the transaction. Automatic investment purchases and 403(b) purchases (other than transfers), exchanges made in an automatic exchange program, purchases made by direct deposit and transfers made in a Transfer-A-Month program will be confirmed on your next consolidated quarterly statement. Please carefully review all information in your confirmation or consolidated statement relating to transactions to ensure that your instructions have been acted on properly. Please notify Twentieth Century in writing if there is an error. If you fail to provide notification of an error with reasonable promptness, i.e., within 30 days of non-automatic transactions or within 30 days of the date of your consolidated quarterly statement, in the case of automatic transactions noted above, we will deem you to have ratified the transaction. No later than January 31 of each year, Twentieth Century will send you the following reports, which you may use in completing your U.S. income tax return: 25 Form 1099-DIV Reports taxable distributions during the preceding year. (If you did not receive taxable distributions in the previous year, you will not receive a 1099-DIV.) Form 1099-B Reports proceeds paid on redemptions during the preceding year. Form 1099-R Reports distributions from IRAs and 403(b) plans during the preceding year. At such time as prescribed by law, Twentieth Century will send you a Form 5498, which reports contributions to your IRA for the previous calendar year. In January of each year, Twentieth Century will send you an annual report that includes audited financial statements for the fiscal year ending the preceding November 30 and a list of securities in its portfolio on that date. In July of each year, Twentieth Century will send you a semiannual report that includes unaudited financial statements for the six months ending the preceding May 31, as well as a list of securities in its portfolio on that date. Twentieth Century does not publish interim lists of portfolio securities. Twentieth Century usually prepares a new prospectus dated April 1 of each year and mails it to each shareholder's address of record. Each year that an annual meeting is held you will receive a notice of the annual meeting of shareholders (and of special meetings, if any) and a proxy statement. BECAUSE TWENTIETH CENTURY NEEDS YOUR VOTE TO CONDUCT ITS ANNUAL MEETING OF SHAREHOLDERS, YOU ARE URGED TO RETURN PROXIES PROMPTLY. IT IS IMPORTANT THAT YOU NOTIFY TWENTIETH CENTURY PROMPTLY OF ANY CHANGE OF ADDRESS. (See "How to Change Your Address of Record," page 24.) 26 ADDITIONAL INFORMATION YOU SHOULD KNOW - -------------------------------------------------------------------------------- SHARE PRICE WHEN SHARE PRICE IS DETERMINED The price of your shares is their net asset value next determined after receipt of your instruction to purchase, exchange or redeem. Net asset value is determined by calculating the total value of the fund's assets, deducting total liabilities and dividing the result by the number of shares outstanding. Net asset value is determined on each day that the New York Stock Exchange is open. Investments and requests to redeem shares will receive the share price next determined after receipt by Twentieth Century of the investment or redemption request. For example, investments and requests to redeem shares received by Twentieth Century before the close of business on the New York Stock Exchange are effective on, and will receive the price determined, that day as of the close of the Exchange. Redemption requests received thereafter are effective on, and receive the price determined, as of the close of the Exchange on the next day the Exchange is open. Investments are considered received only when your check or wired funds are received by Twentieth Century. Wired funds are considered received on the day they are deposited in Twentieth Century's bank account if your phone call is received before the close of business on the Exchange, usually 3 p.m. Central time, and the money is deposited that day. Investments by telephone pursuant to your prior authorization to Twentieth Century to draw on your bank account are considered received at the time of your telephone call. Investment and transaction instructions received by Twentieth Century on any business day by mail at its office prior to the close of business on the Exchange, usually 3 p.m. Central time, will receive that day's price. Investments and instructions received after that time will receive the price determined on the next business day. HOW SHARE PRICE IS DETERMINED The valuation of assets for determining net asset value may be summarized as follows: Portfolio securities of each fund, except as otherwise noted, listed or traded on a domestic securities exchange are valued at the last sale price on that exchange. If no sale is reported, the mean of the latest bid and asked price is used. Portfolio securities primarily traded on foreign securities exchanges are generally valued at the preceding closing values of such securities on the exchange where primarily traded. If no sale is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices is used. Depending on local convention or regulation, securities traded over-the-counter are priced at the mean of the latest bid and asked prices, or at the last sale price. When market quotations are not readily available, securities and other assets are valued at fair value as determined in good faith by the board of directors. Debt securities not traded on a principal securities exchange are valued through valuations obtained from a commercial pricing service or at the most recent mean of the bid and asked prices provided by investment dealers in accordance with procedures established by the board of directors. Pursuant to a determination by Twentieth Century's board of directors that such value represents fair value, debt securities with maturities of 60 days or less are valued at amortized cost. When a security is valued at amortized cost, it is valued at its cost when purchased, and thereafter by assuming a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuating interest rates on the market value of the instrument. The value of an exchange-traded foreign security is determined in its national currency as of the close of trading on the foreign exchange on which it is traded or as of the close of business on the New York Stock Exchange, usually 3 p.m. 27 Central time, if that is earlier. That value is then converted to dollars at the prevailing foreign exchange rate. Trading in securities on European and Far Eastern securities exchanges and over-the-counter markets is normally completed at various times before the close of business on each day that the New York Stock Exchange is open. If an event were to occur after the value of a security was established but before the net asset value per share was determined which was likely to materially change the net asset value, then that security would be valued at fair value as determined by the board of directors. Trading of these securities in foreign markets may not take place on every New York Stock Exchange business day. In addition, trading may take place in various foreign markets on Saturdays or on other days when the New York Stock Exchange is not open and on which a fund's net asset value is not calculated. Therefore, such calculation does not take place contemporaneously with the determination of the prices of many of the portfolio securities used in such calculation and the value of a fund's portfolio may be significantly affected on days when shares of the fund may not be purchased or redeemed. WHERE TO FIND INFORMATION ABOUT SHARE PRICE The net asset value of each fund is published in leading newspapers daily. In addition, the net asset value of each fund may also be obtained by calling Twentieth Century. (See "Telephone Services," page 24.) DISTRIBUTIONS Distributions from net investment income and net realized securities gains, if any, generally are declared and paid once a year, but the funds may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with the provisions of the Investment Company Act. THE OBJECTIVE OF EACH FUND IS CAPITAL APPRECIATION AND NOT THE PRODUCTION OF DISTRIBUTIONS. YOU MAY MEASURE THE SUCCESS OF YOUR INVESTMENT BY THE VALUE OF YOUR INVESTMENT AT ANY GIVEN TIME AND NOT BY THE DISTRIBUTIONS YOU RECEIVE. GENERAL INFORMATION ABOUT DISTRIBUTIONS Distributions will be reinvested unless you elect to receive them in cash. Distributions of less than $10 and distributions on shares purchased within the last 15 days, however, will not be paid in cash and will be reinvested. You may elect to have distributions on shares of Individual Retirement Accounts and 403(b) plans paid in cash only if you are 59 1 / 2 years old or permanently and totally disabled. Distribution checks normally are mailed within seven days after the record date. The board of directors may elect not to distribute capital gains in whole or in part to take advantage of loss carryovers. A distribution on shares of a fund does not increase the value of your shares or your total return. At any given time the value of your shares includes the undistributed net gains, if any, realized by the fund on the sale of portfolio securities, and undistributed dividends and interest received, less fund expenses. Because such gains and dividends are included in the price of your shares, when they are distributed the price of your shares is reduced by the amount of the distribution. If you buy your shares just before the distribution, you will pay the full price for your shares, and then receive a portion of the purchase price back as a taxable distribution. (See "Taxes," page 29.) If your distribution is reinvested in additional shares, the distribution has no effect on the value of your investment; while you own more shares, the 0price of each share has been 28 reduced by the amount of the distribution. Likewise, if you take your distribution in cash, the value of your shares after the record date plus the cash received is equal to the value of the shares before the record date. For example, if your shares immediately before the distribution have a value of $10, including $2 in dividends and capital gains realized by the fund during the year, and if the $2 is distributed, the value will decline to $8. If the $2 is reinvested at $8 per share, you will receive .250 shares, so that, after the distribution, you will have 1.250 shares at $8 per share, or $10, the same as before. TAXES Twentieth Century has elected to be taxed as a regulated investment company under Subchapter M of the Internal Revenue Code, which means that to the extent its income is distributed to shareholders, it pays no income taxes. Distributions of net investment income and net short-term capital gains are taxable to you as ordinary income. Distributions from net long-term capital gains are taxable as long-term capital gains regardless of the length of time you have held the shares on which such distributions are paid. However, you should note that any loss realized upon the sale or redemption of shares held for six months or less will be treated as a long-term capital loss to the extent of any distribution of long-term capital gain to you with respect to such shares. Dividends and interest received by a fund on foreign securities, as well as capital gains realized upon the sale of such securities, may give rise to withholding and other taxes imposed by foreign countries. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. The foreign taxes paid by a fund will reduce its dividends. If more than 50% of the value of a fund's total assets at the end of each quarter of any fiscal year consists of securities of foreign corporations, the fund may qualify for and make an election with the Internal Revenue Service with respect to such fiscal year so that fund shareholders may be able to claim a foreign tax credit in lieu of a deduction for foreign income taxes paid by the fund. If such an election is made, the foreign taxes paid by the fund will be treated as income received by you. If a fund purchases the securities of certain foreign investment funds or trusts called passive foreign investment companies, capital gains on the sale of such holdings will be deemed to be ordinary income regardless of how long the fund holds its investment. The fund may also be subject to corporate income tax and an interest charge on certain dividends and capital gains earned from these investments, regardless of whether such income and gains are distributed to shareholders. In the alternative, the fund may elect to recognize cumulative gains on such investments as of the last day of its fiscal year and distribute it to shareholders. Distributions on fund shares are taxable to you regardless of whether they are taken in cash or reinvested, even if the value of your shares is below your cost. If you purchase shares shortly before a distribution, you must pay income taxes on the distribution, even though the value of your investment (plus cash received, if any) remains the same. In addition, the share price at the time you purchase shares may include unrealized gains in the securities held in the investment portfolio of a fund. If these portfolio securities are subsequently sold and the gains are realized, they will, to the extent not offset by capital losses, be paid to you as a distribution of capital gains and will be taxable to you as short-term or long-term capital gains. (See "General Information About Distributions," page 28.) In January of the year following the distribution, Twentieth Century will send you a Form 1099-DIV notifying you of the status of your distributions for federal income tax purposes. Distributions may also be subject to state and local taxes, even if all or a substantial part of such distributions are derived from interest 29 on U.S. government obligations which, if you received them directly, would be exempt from state income tax. However, most but not all states allow this tax exemption to pass through to fund shareholders when a fund pays distributions to its shareholders. You should consult your tax adviser about the tax status of such distributions in your own state. If you have not complied with certain provisions of the Internal Revenue Code and Regulations, Twentieth Century is required by federal law to withhold and remit to the IRS 31% of reportable payments (which may include dividends, capital gains distributions and redemptions). Those regulations require you to certify that the social security number or tax identification number you provide is correct and that you are not subject to 31% withholding for previous under-reporting to the IRS. You will be asked to make the appropriate certification on your application. PAYMENTS REPORTED BY TWENTIETH CENTURY THAT OMIT YOUR SOCIAL SECURITY NUMBER OR TAX IDENTIFICATION NUMBER WILL SUBJECT TWENTIETH CENTURY TO A PENALTY OF $50, WHICH WILL BE CHARGED AGAINST YOUR ACCOUNT IF YOU FAIL TO PROVIDE THE CERTIFICATION BY THE TIME THE REPORT IS FILED. THIS CHARGE IS NOT REFUNDABLE. (See "Tax Identification Number," page 17.) Redemption of shares of a fund will be a taxable transaction for federal income tax purposes and shareholders will generally recognize gain or loss in an amount equal to the difference between the basis of the shares and the amount received. Assuming that shareholders hold such shares as a capital asset, the gain or loss will be a capital gain or loss and will generally be long term if shareholders have held such shares for a period of more than one year. If a loss is realized on the redemption of fund shares, the reinvestment in additional fund shares within 30 days before or after the redemption may be subject to the "wash sale" rules of the Code, resulting in a postponement of the recognition of such loss for federal income tax purposes. MANAGEMENT INVESTMENT MANAGEMENT Under the laws of the State of Maryland, the board of directors is responsible for managing the business and affairs of Twentieth Century. Acting pursuant to an investment advisory agreement entered into with Twentieth Century, Investors Research Corporation ("Investors Research") serves as the investment manager of Twentieth Century. Its principal place of business is Twentieth Century Tower, 4500 Main Street, Kansas City, Missouri 64111. Investors Research has been providing investment advisory services to investment companies and institutional clients since 1958. In June 1995, Twentieth Century Companies, Inc. ("TCC"), the parent of Investors Research, acquired Benham Management International, Inc. In the acquisition, Benham Management Corporation ("BMC"), the investment adviser to The Benham Group of mutual funds, became a wholly owned subsidiary of TCC. Certain employees of BMC will be providing investment management services to Twentieth Century funds, while certain Twentieth Century employees will be providing investment management services to Benham funds. Investors Research supervises and manages the investment portfolio of the funds and directs the purchase and sale of its investment securities. Investors Research utilizes a team of portfolio managers, assistant portfolio managers and analysts acting together to manage the assets of the funds. The team meets regularly to review portfolio holdings and to discuss purchase and sale activity. The team adjusts holdings in the funds' portfolios as they deem appropriate in pursuit of the funds' investment objectives. Individual portfolio managers may also adjust portfolio holdings of the funds as necessary between meetings. The portfolio manager members of the International Equity and International Emerging 30 Growth team and their principal business experience during the past five years are as follows: ROBERT C. PUFF, Executive Vice President and Chief Investment Officer, has been a Portfolio Manager since joining Investors Research in 1983. In his position as Chief Investment Officer, Mr. Puff oversees the investment activities of all of the teams that manage Twentieth Century funds. THEODORE J. TYSON joined Investors Research in 1988 and has been a member of the International Equity and International Emerging Growth team since its inception in 1991. HENRIK STRABO joined Investors Research in 1993 as an investment analyst member of the International Equity and International Emerging Growth team and has been a portfolio manager member of the team since 1994. Prior to joining Investors Research, Mr. Strabo was Vice President, International Equity Sales with Barclays de Zoete Wedd (1991 to 1993) and obtained international equity sales experience at Cresvale International (1990 to 1991). The activities of Investors Research are subject only to directions of Twentieth Century's board of directors. Investors Research pays all the expenses of Twentieth Century except brokerage, taxes, interest, fees and expenses of the non-interested person directors (including counsel fees) and extraordinary expenses. For the services provided to Twentieth Century, Investors Research receives an annual fee of 1.9% of the average net assets of International Equity up to $1 billion, 1.25% of the average net assets of International Equity between $1 billion and $2 billion, and 1.00% of the average net assets of International Equity in excess of $2 billion, and 2.0% of the average net assets of International Emerging Growth. On the first business day of each month, each series of shares pays a management fee to the manager for the previous month at the rate specified. The fee for the previous month is calculated by multiplying the applicable fee for such series by the aggregate average daily closing value of the series' net assets during the previous month, and further multiplying that product by a fraction, the numerator of which is the number of days in the previous month and the denominator of which is 365 (366 in leap years). The management fees paid by the funds to Investors Research are higher than the fees paid by the various other funds in the Twentieth Century family of funds because of the higher costs and additional expenses associated with managing and operating a fund owning a portfolio consisting primarily of foreign securities. The fee may also be higher than the fee paid by many other international or foreign investment companies. Many other investment companies may refer to or publicize an "investment management fee" or "management fee" paid by the company to its manager. However, most such companies also use fund assets to pay for certain expenses of the fund in addition to the stated management fee. In contrast, the management fee paid to Investors Research includes payment for almost all fund expenses, with the exceptions noted. Therefore, potential investors who attempt to compare the expenses of these funds to the expenses of other funds should be careful to compare only the ratio of total expenses to average net assets contained in the Financial Highlights Table found on page 5 of this prospectus to the same ratio of the other funds. The management agreement also provides that the Corporation's board of directors, upon 60 days' prior written notice to all affected shareholders, may impose a servicing or administrative fee as a charge against shareholder accounts. CODE OF ETHICS Twentieth Century and Investors Research have adopted a Code of Ethics that restricts personal investing practices by employees of Investors Research and its affiliates. Among other provisions, the Code of Ethics requires that employees with access to information about the purchase or sale of securities in the funds' portfolios obtain preclearance before executing personal trades. With respect to portfolio manager and other investment personnel, the Code of Ethics prohibits acquisition of securities in an initial pub- 31 lic offering, as well as profits derived from the purchase and sale of the same security within 60 calendar days. These provisions are designed to ensure that the interests of fund shareholders come before the interests of the people who manage those funds. TRANSFER AND ADMINISTRATIVE SERVICES Twentieth Century Services, Inc., 4500 Main Street, Kansas City, Missouri 64111 acts as transfer agent and dividend paying agent for Twentieth Century. It provides facilities, equipment and personnel to Twentieth Century, and is paid for such services by Investors Research. Certain recordkeeping services that would otherwise be performed by Twentieth Century Services, Inc., may be performed by an insurance company or other entity providing similar services for various retirement plans using shares of Twentieth Century as a funding medium, by broker dealers for their customers investing in shares of Twentieth Century or by sponsors of multi-mutual fund no- or low-transaction fee programs. Investors Research may elect to enter into contracts to pay them for such recordkeeping and administrative services out of its unified management fee. From time to time, special services may be offered to shareholders who maintain higher share balances in the funds. These services may include the waiver of minimum investment requirements, expedited confirmation of shareholder transactions, newsletters, and a team of personal representatives. Any expenses associated with these special services will be paid by Investors Research. Investors Research and Twentieth Century Services, Inc. are both wholly owned by Twentieth Century Companies, Inc. James E. Stowers, chairman of the board of Twentieth Century World Investors, controls Twentieth Century Companies by virtue of his ownership of a majority of its common stock. FURTHER INFORMATION ABOUT TWENTIETH CENTURY Twentieth Century World Investors, Inc. was organized as a Maryland corporation on December 28, 1990. Twentieth Century is a diversified, open-end management investment company whose shares were first offered in May 1991. Its business and affairs are managed by its officers under the direction of its board of directors. The principal office of Twentieth Century is Twentieth Century Tower, 4500 Main Street, P.O. Box 419200, Kansas City, Missouri 64141-6200. All inquiries may be made by mail to that address, or by phone to 1-800-345-2021. (For local Kansas City area or international callers: 816-531-5575.) Twentieth Century issues two series of $0.01 par value shares. Each share when issued, is fully paid and non-assessable. The assets belonging to each series of shares are held separately by the custodian, and in effect each series is a separate fund. Each share, irrespective of series, is entitled to one vote for each dollar of net asset value applicable to such share on all questions, except for those matters which must be voted on separately by the series of the shares affected. Matters affecting only one series are voted upon only by that series. Shares have non-cumulative voting rights, which means that the holders of more than 50% of the votes cast in an election of directors can elect all of the directors if they choose to do so, and in such event the holders of the remaining less-than-50% of the votes will not be able to elect any person or persons to the board of directors. Unless required by the Investment Company Act, it will not be necessary for Twentieth Century to hold annual meetings of shareholders. As a result, shareholders may not vote each year on the election of directors or the appointment of auditors. However, pursuant to Twentieth 32 Century's bylaws, the holders of shares representing at least 10% of the votes entitled to be cast may request Twentieth Century to hold a special meeting of shareholders. Twentieth Century will assist in the communication with other shareholders. TWENTIETH CENTURY RESERVES THE RIGHT TO CHANGE ANY OF ITS POLICIES, PRACTICES AND PROCEDURES DESCRIBED IN THIS PROSPECTUS, INCLUDING THE STATEMENT OF ADDITIONAL INFORMATION, WITHOUT SHAREHOLDER APPROVAL EXCEPT IN THOSE INSTANCES WHERE SHAREHOLDER APPROVAL IS EXPRESSLY REQUIRED. 33 (This page left blank intentionally.) 34 (This page left blank intentionally.) 35 TWENTIETH CENTURY World Investors Prospectus April 1, 1996 [company logo] Investments That Work(TM) - ---------------------------------------- P.O. Box 419200 Kansas City, Missouri 64141-6200 - ---------------------------------------- Person-to-person assistance: 1-800-345-2021 or 816-531-5575 - ---------------------------------------- Automated information line: 1-800-345-8765 - ---------------------------------------- Telecommunications Device for the Deaf: 1-800-634-4113 or 816-753-1865 - ---------------------------------------- Fax: 816-340-7962 - ---------------------------------------- [company logo] ================================================================================ - -------------------------------------------------------------------------------- SH-BKT-4573 9603 Recycled (C) 1996 Twentieth Century Services, Inc. TWENTIETH CENTURY World Investors Institutional Prospectus April 1, 1996 - -------------------------------------------------------------------------------- TWENTIETH CENTURY Twentieth Century World Investors, Inc., a member of the Twentieth Century family of funds, is a diversified, open-end management investment company whose shares are offered without a sales charge. Two series of shares offered by Twentieth Century, Twentieth Century International Equity and Twentieth Century International Emerging Growth (the "funds") are described in this prospectus. The investment objectives of the funds are listed on the inside cover of this prospectus. RISK OF FOREIGN INVESTMENTS Investment in securities of foreign issuers typically involves a greater degree of risk than investment in domestic securities. (See "Risk Factors," page 9.) NO-LOAD MUTUAL FUNDS Twentieth Century's funds are "no-load" investments, which means there are no sales charges or commissions. Twentieth Century has no 12b-1 plan or other deferred sales charges. This prospectus is intended for participants in employer-sponsored retirement or savings plans. One or more of the funds described herein is available as an investment option in your employer's plan. Another version of this prospectus containing information on how to open personal and other types of investment accounts is available by calling Twentieth Century at the number shown below. This prospectus gives you information about Twentieth Century that you should know before investing. You should read this prospectus carefully and retain it for future reference. Additional information is included in the Statement of Additional Information dated April 1, 1996, and filed with the Securities and Exchange Commission. It is incorporated in this prospectus by reference. To obtain a copy without charge, call or write: Twentieth Century World Investors, Inc. 4500 Main Street * P.O. Box 419385 Kansas City, MO 64141-6385 1-800-345-3533 Local and international calls: 816-531-5575 Telecommunications device for the deaf: 1-800-345-1833 * In Missouri: 816-753-0700 - -------------------------------------------------------------------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. INVESTMENT OBJECTIVES OF THE FUNDS - -------------------------------------------------------------------------------- TWENTIETH CENTURY INTERNATIONAL EQUITY The investment objective of Twentieth Century International Equity is capital growth. The fund will seek to achieve its investment objective by investing primarily in an internationally diversified portfolio of common stocks, primarily from developed markets, that are considered by the investment manager to have prospects for appreciation. This fund has no minimum investment requirements. However, if the value of the shares held in any one fund account is less than $2,500 ($1,000 for UGMA/UTMA accounts), you must establish an automatic investment program of $50 or more per month in each such account. (See "Automatic Investments," page 17, and "Automatic Redemption of Shares," page 23.) TWENTIETH CENTURY INTERNATIONAL EMERGING GROWTH The investment objective of Twentieth Century International Emerging Growth is capital growth. The fund will seek to achieve its investment objective by investing primarily in an internationally diversified portfolio of equity securities of (i) companies in developed markets having comparatively smaller market capitalizations (less than U.S. $800 million in market capitalization or less than U.S. $300 million in public float), and (ii) companies in emerging market countries without regard to market capitalization. All such investments must be considered by the investment manager to have prospects for appreciation. Due to the risks associated with such investments, an investment in this fund may be considered speculative. The minimum investment amount for this fund is $10,000. SHARES OF THE FUND CONVERTED OR REDEEMED WITHIN 180 DAYS OF THEIR PURCHASE ARE SUBJECT TO A REDEMPTION FEE OF 2.0% OF THE VALUE OF THE SHARES CONVERTED OR REDEEMED. THIS REDEMPTION FEE IS RETAINED BY THE FUND. There is no assurance that the funds will achieve their respective investment objectives. - -------------------------------------------------------------------------------- NO PERSON IS AUTHORIZED BY TWENTIETH CENTURY TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN OTHER PRINTED OR WRITTEN MATERIAL ISSUED BY THE COMPANY, AND YOU SHOULD NOT RELY ON ANY OTHER INFORMATION OR REPRESENTATION. 2 TABLE OF CONTENTS - -------------------------------------------------------------------------------- TRANSACTION AND OPERATING EXPENSE TABLE ........................................... 4 FINANCIAL HIGHLIGHTS ....................................... 5 INFORMATION REGARDING THE FUNDS INVESTMENT POLICIES OF THE FUNDS ........................... 6 International Equity ................................... 6 International Emerging Growth .......................... 6 Policies Applicable to Both Funds ...................... 8 RISK FACTORS ............................................... 9 Investing in Foreign Securities Generally .............. 9 Speculative Nature of International Emerging Growth .....................................10 Investing in Emerging Market Countries .................10 Investing in Smaller Companies .........................10 Investing in Lower-Quality Debt Instruments ............11 INVESTMENT RESTRICTIONS ....................................11 OTHER INVESTMENT PRACTICES .................................11 Forward Currency Exchange Contracts ....................11 Indirect Foreign Investment ............................12 Sovereign Debt Obligations .............................12 Portfolio Turnover .....................................13 Repurchase Agreements ..................................13 When-Issued Securities .................................13 Short Sales ............................................14 Rule 144A Securities ...................................14 PERFORMANCE ADVERTISING ....................................14 HOW TO INVEST WITH TWENTIETH CENTURY TWENTIETH CENTURY FAMILY OF FUNDS ..........................16 INVESTING IN TWENTIETH CENTURY .............................16 HOW TO EXCHANGE YOUR INVESTMENT FROM ONE TWENTIETH CENTURY FUND TO ANOTHER .........................................16 HOW TO REDEEM SHARES .......................................17 Special Requirements for Large Redemptions .............17 Automatic Redemption of Shares .........................18 TELEPHONE SERVICES .........................................18 Investors Line .........................................18 Automated Information Line .............................18 ADDITIONAL INFORMATION YOU SHOULD KNOW SHARE PRICE ................................................19 When Share Price Is Determined .........................19 How Share Price Is Determined ..........................19 Where to Find Information About Share Price ...................................20 DISTRIBUTIONS ..............................................20 TAXES ......................................................20 MANAGEMENT .................................................20 Investment Management ..................................20 Code of Ethics .........................................22 Transfer and Administrative Services ...................22 FURTHER INFORMATION ABOUT TWENTIETH CENTURY .................................22 3
TRANSACTION AND OPERATING EXPENSE TABLE - -------------------------------------------------------------------------------------------------- International International Equity Emerging Growth SHAREHOLDER TRANSACTION EXPENSES Maximum Sales Load Imposed on Purchases none none Maximum Sales Load Imposed on Reinvested Dividends none none Deferred Sales Load none none Redemption Fee none none(1) Exchange Fee none none ANNUAL FUND OPERATING EXPENSES (as a percentage of net assets) Management Fees(2) 1.90%(3) 2.00% 12b-1 Fees none none Other Expenses(4) 0.00% 0.00% Total Fund Operating Expenses 1.90% 2.00% Example You would pay the following expenses on a $1,000 1 year $18 $ 20 investment, assuming (1) a 5% annual return and 3 years 56 62 (2) redemption at the end of each time period(5): 5 years 96 107 10 years 208 231
The purpose of the table is to help you understand the various costs and expenses that you, as a shareholder, will bear directly or indirectly in connection with an investment in shares of Twentieth Century. The example set forth above assumes reinvestment of all dividends and distributions and uses a 5% annual rate of return as required by Securities and Exchange Commission regulations. NEITHER THE 5% RATE OF RETURN NOR THE EXPENSES SHOWN ABOVE SHOULD BE CONSIDERED INDICATIONS OF PAST OR FUTURE RETURNS AND EXPENSES. ACTUAL RETURNS AND EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. (1) Shares of International Emerging Growth exchanged or redeemed within 180 days of their purchase are subject to a redemption fee of 2.0% of the value of the shares exchanged or redeemed. This redemption fee, which is retained by the fund, is intended to discourage shareholders from exchanging or redeeming their shares shortly after their purchase, as well as minimize the impact such exchanges and redemptions have on fund performance and, hence, on the other shareholders of the fund. (See "How to Exchange Your Investment from One Twentieth Century Fund to Another," page 18 and "How to Redeem Shares," page 20.) (2) The management fees paid by the funds are higher than the fees paid by many mutual funds. However, it should be noted that the fees the funds pay are "all-inclusive" covering not only advisory services, but virtually all other expenses. (See "Management," page 30). (3) Based upon fees paid by the fund for the 1995 fiscal year. The fund pays an annual management fee equal to 1.90% of its first $1 billion of average net assets, 1.25% of the next $1 billion, and 1.00% of average net assets over $2 billion. (4) Other expenses, the fees and expenses of those directors who are not "interested persons" as defined in the Investment Company Act, were .001 of 1% of average net assets for the most recent fiscal year. (5) Assumes, in accordance with Securities and Exchange Commission guidelines, that the assets of International Equity remain constant at $1,210,441,553, the assets of the fund as of November 30, 1995. 4
FINANCIAL HIGHLIGHTS (For a share outstanding throughout the period) - ------------------------------------------------------------------------------------------------------------------------------------ The Financial Highlights for each of the periods presented (except as noted) have been audited by Baird, Kurtz & Dobson, independent certified public accountants, whose report thereon appears in the corporation's annual report, which is incorporated by reference into the statement of additional information. The annual report contains additional performance information and will be made available upon request and without charge. INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS --------------------------------------------- ------------------------------------------------------------ Net Realized Distributions Distributions [table cont. and Unrealized in Excess from below] Net Asset Gains on Total Distributions of Net Realized Net Asset Value, Net Investment and from from Net Net Gains on Value, Beginning Investment Foreign Currency Investment Investment Investment Security Total End of Total of Period Income(Loss)1 Transactions Operations Income Income Transactions Distributions Period Return INTERNATIONAL EQUITY FUND May 9, 1991 (inception) through Nov. 30, 1991 $5.10 $.01 $.22 $.23 -- -- -- -- $5.33 4.51% Year Ended Nov. 30, 1992 5.33 .06 .41 .47 $(.005) $(.002) -- $(.007) 5.79 8.77% 1993 5.79 (.04) 1.78 1.74 (.036) (.155) -- (.191) 7.34 31.04% 1994 7.34 (.04) .57 .53 -- -- $(.402) (.402) 7.47 7.28% 1995 7.47 .01 .40 .41 -- -- (.372) (.372) 7.51 5.93% INTERNATIONAL EMERGING GROWTH April 1, 1994 (inception) through Nov. 30, 1994 $5.00 $(.02) $.41 $.39 -- -- -- -- $5.39 7.80% Year Ended Nov. 30, 1995 5.39 .03 .28 .31 -- -- -- -- 5.70 5.75% [table continued] RATIOS/SUPPLEMENTAL DATA --------------------------------------------------------------------- Ratio of Net Ratio of Investment Average Operating Income Commission Net Expenses (Loss) to Portfolio Paid Assets, to Average Average Turnover Per Share End of Net Assets Net Assets Rate Traded Period INTERNATIONAL EQUITY FUND May 9, 1991 (inception) through Nov. 30, 1991 1.93%(2) .26%(2) 84% -- $43,076,411 Year Ended Nov. 30, 1992 1.91% .95% 180% -- 215,346,400 1993 1.90% (.34%) 255% -- 759,237,590 1994 1.84% (.53%) 242% -- 1,316,641,977 1995 1.77% .25% 169% $.002 1,210,441,553 INTERNATIONAL EMERGING GROWTH April 1, 1994 (inception) through Nov. 30, 1994 2.00%(2) (.48%)(2) 56% -- $111,201,467 Year Ended Nov. 30, 1995 2.00% .27% 168% $.004 114,579,142 (1) Computed using average shares outstanding throughout the period. (2) Annualized.
5 INFORMATION REGARDING THE FUNDS - -------------------------------------------------------------------------------- INVESTMENT POLICIES OF THE FUNDS Twentieth Century has adopted certain investment restrictions applicable to the funds that are set forth on page 11 and in the Statement of Additional Information. Those restrictions, as well as the investment objectives of the funds as identified on the inside front cover page, and any other investment policies designated as "fundamental" in this prospectus or in the Statement of Additional Information, cannot be changed without shareholder approval. The funds have implemented additional investment policies and practices to guide their activities in the pursuit of their respective investment objectives. These policies and practices, which are described throughout this prospectus, are not designated as fundamental policies and may be changed without shareholder approval. YOU SHOULD READ AND CAREFULLY CONSIDER THE INFORMATION UNDER "RISK FACTORS," PAGE 9, BEFORE MAKING AN INVESTMENT IN EITHER FUND. TWENTIETH CENTURY INTERNATIONAL EQUITY The investment objective of the International Equity fund is capital growth. The fund will seek to achieve its investment objective by investing primarily in securities of foreign companies primarily located in developed markets that meet certain fundamental and technical standards of selection and have, in the opinion of the investment manager, potential for appreciation. The fund will invest primarily in common stocks (defined to include depositary receipts for common stocks) and other equity securities and equity equivalents of such companies. Twentieth Century tries to stay fully invested in such securities, regardless of the movement of stock prices generally. Although the primary investment of the fund will be common stocks, the fund may also invest in other types of securities consistent with the accomplishment of the fund's objectives. When the manager believes that the total return potential of other securities equals or exceeds the potential return of common stocks, the fund may invest up to 35% in such other securities. The other securities the fund may invest in are bonds, notes and debt securities of companies and obligations of domestic or foreign governments and their agencies. The fund will limit its purchases of debt securities to investment grade obligations. For long-term debt obligations this includes securities that are rated Baa or better by Moody's Investors Service, Inc. ("Moody's") or BBB or better by Standard & Poor's Corporation (S&P), or that are not rated but considered by the manager to be of equivalent quality. According to Moody's, bonds rated Baa are medium-grade and possess some speculative characteristics. A BBB rating by S&P indicates S&P's belief that a security exhibits a satisfactory degree of safety and capacity for repayment, but is more vulnerable to adverse economic conditions or changing circumstances than is the case with higher quality debt securities. (See "An Explanation of Fixed Income Securities Ratings" in the Statement of Additional Information.) TWENTIETH CENTURY INTERNATIONAL EMERGING GROWTH The investment objective of the International Emerging Growth fund is capital growth. The fund will seek to achieve its investment objective by investing primarily in an internationally diversified portfolio of equity securities of companies that meet certain fundamental and technical standards of selection. The fund will invest its assets primarily in equity securities of (i) smaller foreign companies in developed markets (those issuers having, at the time of invest- 6 ment, a market capitalization of less than U.S. $800 million or a public float of less than U.S. $300 million), and (ii) companies in emerging market countries without regard to market capitalization. The "public float" of an issuer is defined as the aggregate market value of the issuer's outstanding securities held by non-affiliates of the issuer. In developed and in emerging market countries, the investment manager will purchase securities of companies that have, in the opinion of the investment manager, significant growth potential. The fund will seek to invest in securities of companies with one or more identifiable catalysts that, in the opinion of the investment manager, are likely to cause the issuer to experience accelerating growth. Such catalysts may include a change in the issuer's operating environment, the development of a significant or potentially significant new product, service or technology, an improvement in business outlook for the issuer, or other similar factors. As noted, the fund will invest both in companies whose principal place of business is in (i) countries characterized as having developed markets and in (ii) countries characterized as having "emerging markets." A company's principal place of business is considered by management to be the country in which the company is domiciled. The fund may invest up to 50% of its assets in "emerging market countries." DUE TO THE SIGNIFICANT RISKS ASSOCIATED WITH THE FUND'S INVESTMENT STRATEGY, AN INVESTMENT IN THE FUND MAY BE CONSIDERED TO BE SPECULATIVE. (See "Speculative Nature of International Emerging Growth," page 10.) "Emerging Market Countries" include (i) countries considered to be "underdeveloped," "developing," or "emerging" countries according to the International Bank for Reconstruction and Development (commonly referred to as the World Bank), (ii) countries considered by the International Finance Corporation (the "IFC") as having "an emerging stock market," and (iii) countries in which companies included in the IFC Global Composite Index (the "IFC Index") are domiciled, such as Argentina, Brazil, Chile, China, Colombia, Greece, Hungary, India, Indonesia, Jordan, Korea, Malaysia, Mexico, Nigeria, Pakistan, Peru, Philippines, Poland, Portugal, Sri Lanka, Taiwan, Thailand, Turkey, Venezuela and Zimbabwe. The fund may invest in securities of any type of issuer, including closed-end investment companies, governments and governmental entities, as well as corporations, partnerships and other business organizations. Twentieth Century believes that common stocks and other equity and equity equivalent securities ordinarily offer the greatest potential for capital appreciation and will constitute the majority of the fund's investments. The fund may invest, however, in any security the investment manager believes has the potential for capital appreciation. The other securities the fund may invest in include bonds, notes and debt securities of companies and obligations of domestic or foreign governments and their agencies. Twentieth Century attempts to stay fully invested in appreciating securities, regardless of the movement of stock and bond prices generally. There are no credit quality or maturity restrictions with regard to the bonds, corporate debt securities, and government obligations in which the fund may invest, although less than 35% of the fund's assets will be invested in below investment grade fixed income securities. (See "An Explanation of Fixed Income Securities Ratings" in the Statement of Additional Information.) Debt securities, especially those in emerging market countries, may be of poor quality and speculative in nature. While these securities will primarily be chosen for their appreciation potential, the fund may also take the potential for income into account when selecting investments. To enhance the fund's liquidity, at least 50% of the fund's assets will be invested in developed market countries at all times. However, the percentage of the assets of the 7 fund invested in developed and emerging markets will vary as, in the opinion of the investment manager, market conditions warrant. No more than 15% of the fund's assets may be invested in illiquid investments at any time. POLICIES APPLICABLE TO BOTH FUNDS The funds may make foreign investments either directly in foreign securities, or indirectly by purchasing depositary receipts or depositary shares or similar instruments ("DRs") for foreign securities. DRs are securities that are listed on exchanges or quoted in over-the-counter markets in one country but represent shares of issuers domiciled in another country. The funds may also purchase securities of such issuers in foreign markets, either on foreign securities exchanges or in the over-the-counter markets. The funds may also invest in other equity securities and equity equivalents. Other equity securities and equity equivalents include securities that permit the funds to receive an equity interest in an issuer, the opportunity to acquire an equity interest in an issuer, or the opportunity to receive a return on its investment that permits the fund to benefit from the growth over time in the equity of an issuer. Examples of other equity securities and equity equivalents are preferred stock, convertible preferred stock and convertible debt securities. Equity equivalents may also include securities whose value or return is derived from the value or return of a different security. An example of one type of derivative security in which the funds might invest is a depositary receipt. Notwithstanding the funds' respective investment objectives of capital growth, under exceptional market or economic conditions, each fund may temporarily invest all or a substantial portion of its assets in cash or investment-grade short-term securities (denominated in U.S. dollars or foreign currencies). To the extent a fund assumes a defensive position, it will not be pursuing its investment objective of capital growth. In addition to other factors that will affect their value, the value of a fund's investments in fixed income securities will change as prevailing interest rates change. In general, the prices of such securities vary inversely with interest rates. As prevailing interest rates fall, the prices of bonds and other securities that trade on a yield basis rise. When prevailing interest rates rise, bond prices fall. These changes in value may, depending upon the particular amount and type of fixed income securities holdings of a fund, impact the net asset value of that fund's shares. (See "How Share Price is Determined," page 19.) Under normal conditions, each fund will invest at least 65% of its assets in common stocks and other equity and equity-equivalent securities of issuers from at least three countries outside of the United States. While securities of U.S. issuers may be included in the portfolio from time to time, it is the primary intent of the manager to diversify investments in a fund across a broad range of foreign issuers. Management defines "foreign issuer" as an issuer of securities that is domiciled outside the United States and/or whose shares trade principally on an exchange or other market outside the United States. In order to achieve maximum investment flexibility, neither fund has established geographic limits on asset distribution, on either a country-by-country or region-by-region basis (and, as previously noted, International Emerging Growth may invest up to 50% of its assets in emerging market countries). The investment manager expects to invest both in issuers whose principal place of business is in developed markets (such as Germany, the United Kingdom and Japan) and in issuers whose principal place of business is in emerging market countries. The principal criteria for inclusion of a security in a fund's portfolio is its ability to meet the fundamental and technical standards of selection and, in the opinion of the fund's 8 investment manager, to achieve better-than-average appreciation. If, in the opinion of the fund's investment manager, a particular security satisfies these principal criteria, the security may be included in the fund's portfolio, regardless of the location of the issuer or the percentage of the fund's investments in the issuer's country (subject, with regard to International Emerging Growth, its 50% limitation on investments in emerging market countries) or region. At the same time, however, the investment manager recognizes that both the selection of a fund's individual securities and the allocation of the portfolio's assets across different countries and regions are important factors in managing an international equity portfolio. For this reason, the manager will also consider a number of other factors in making investment selections including: the prospects for relative economic growth among countries or regions, economic and political conditions, expected inflation rates, currency exchange fluctuations and tax considerations. RISK FACTORS INVESTING IN FOREIGN SECURITIES GENERALLY Investing in securities of foreign issuers generally involves greater risks than investing in the securities of domestic companies. Investments in the funds should not be considered a complete investment program and may not be appropriate for an individual with limited investment resources or who is unable to tolerate fluctuations in the value of the investment. Potential investors should also carefully consider the following factors: Currency Risk. The value of the foreign investments held by the funds may be significantly affected by changes in currency exchange rates. The dollar value of a foreign security generally decreases when the value of the dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the dollar falls against such currency. In addition, the value of fund assets may be affected by losses and other expenses incurred in converting between various currencies in order to purchase and sell foreign securities and by currency restrictions, exchange control regulation, currency devaluation and political developments. Political and Economic Risk. The economies of many of the countries in which the funds invest are not as developed as the economy of the United States and may be subject to significantly different forces. Political or social instability, expropriation or confiscatory taxation, and limitations on the removal of funds or other assets, could also adversely affect the value of investments. Investments in emerging market countries involve exposure to a greater degree of risk due to increased political and economic instability. (See "Investing in Emerging Market Countries," page 10.) Regulatory Risk. Foreign companies are generally not subject to the regulatory controls imposed on U.S. issuers and, in general, there is less publicly available information about foreign securities than is available about domestic securities. Many foreign companies are not subject to uniform accounting, auditing and financial reporting standards, practices and requirements comparable to those applicable to domestic companies. Income from foreign securities owned by the funds may be reduced by a withholding tax at the source which would reduce dividend income payable to shareholders. (See "Taxes," page 20.) Market and Trading Risk. Brokerage commission rates in foreign countries, which are generally fixed rather than subject to negotiation as in the United States, are likely to be higher. The securities markets in many of the countries in which the funds invest will have substantially less trading volume than the principal U.S. markets. As a result, the securities of some companies in these countries may be less liquid and more volatile than comparable U.S. securities. Furthermore, one securities broker may represent all or a significant part of the trading volume in a particular country, result- 9 ing in higher trading costs and decreased liquidity due to a lack of alternative trading partners. There is generally less government regulation and supervision of foreign stock exchanges, brokers and issuers which may make it difficult to enforce contractual obligations. In addition, extended clearance and settlement periods in some foreign markets could result in losses to the funds or cause the funds to miss attractive investment possibilities. SPECULATIVE NATURE OF INTERNATIONAL EMERGING GROWTH In addition to the risks posed by foreign investing generally, International Emerging Growth will be investing up to 50% of its assets in emerging market countries, and may invest the remainder of its assets in the securities of companies having comparatively small market capitalizations. (See "Investing in Emerging Market Countries" and "Investing in Smaller Companies," on this page.) As a result, an investment in the fund should be considered to be speculative. The fund is intended for aggressive investors seeking significant gains through investments in foreign securities. Those investors must be willing and able to accept the significantly greater risks associated with the investment strategy that International Emerging Growth will pursue. An investment in the fund is not a complete investment program and is not appropriate for individuals with limited investment resources or who are unable to tolerate fluctuations in the value of their investment. INVESTING IN EMERGING MARKET COUNTRIES International Equity may sometimes invest in emerging market countries, while International Emerging Growth can invest up to 50% of its assets in securities of issuers in emerging market countries. Investing in securities of issuers in emerging market countries involves exposure to significantly higher risk than investing in countries with developed markets. Emerging market countries may have economic structures that are generally less diverse and mature, and political systems that can be expected to be less stable than those of developed countries. Securities prices in emerging market countries can be significantly more volatile than in developed countries, reflecting the greater uncertainties of investing in lesser developed markets and economies. In particular, emerging market countries may have relatively unstable governments, and may present the risk of nationalization of businesses, expropriation confiscatory taxation or in certain instances, reversion to closed-market, centrally planned economics. Such countries may also have restrictions on foreign ownership or prohibitions on the repatriation of assets, and may have less protection of property rights than developed countries. The economies of emerging market countries may be predominantly based on only a few industries or may be dependent on revenues from particular commodities or on international aid or development assistance, may be highly vulnerable to changes in local or global trade conditions, and may suffer from extreme and volatile debt burdens or inflation rates. In addition, securities markets in emerging market countries may trade a small number of securities and may be unable to respond effectively to increases in trading volume, potentially resulting in a lack of liquidity and in volatility in the price of securities traded on those markets. Also, securities markets in emerging market countries typically offer less regulatory protection for investors. INVESTING IN SMALLER COMPANIES In developed markets, International Emerging Growth will only invest in securities of companies having, at the time of investment, a market capitalization of less than U.S. $800 million or a public float of less than U.S. $300 million. In emerging market countries the companies whose securities are purchased, while 10 likely being large compared to other companies in their own countries, will tend to be comparatively smaller than large companies in developed markets. These smaller companies may present greater opportunities for capital appreciation, but may also involve greater risks than large, mature issuers. Such companies may have limited product lines, markets or financial resources, and their securities may trade less frequently and in more limited volume than the securities of larger companies. In addition, available information regarding these smaller companies may be less available and, when available, may be incomplete or inaccurate. The securities of such companies also may be more likely to be delisted from trading on their primary domestic exchange. As a result, the securities of smaller companies may experience significantly more price volatility and less liquidity than securities of larger companies, and this volatility and limited liquidity may be reflected in the net asset value of the fund. INVESTING IN LOWER-QUALITY DEBT INSTRUMENTS There are no credit, maturity or investment amount restrictions on the bonds, corporate debt securities, and government obligations in which International Emerging Growth may invest. Debt securities, especially those in emerging market countries, may be of poor quality, unrated and speculative in nature. Debt securities rated lower than Baa by Moody's or BBB by S&P or their equivalent, sometimes referred to as junk bonds, are considered by many to be predominantly speculative. (See "An Explanation of Fixed Income Securities Ratings" in the Statement of Additional Information.) Changes in economic conditions or other circumstances are more likely to lead to a weakened capacity to make principal and interest payments on such securities than is the case with higher quality debt securities. Regardless of rating levels, all debt securities considered for purchase by the fund are analyzed by the investment manager to determine, to the extent reasonably possible, that the planned investment is sound, given the investment objective of the fund. INVESTMENT RESTRICTIONS Twentieth Century has adopted certain fundamental limitations on its investment practices. The principal investment limitations are that each fund will not: 1) invest more than 5% of its assets in securities of any one issuer, except U.S. government securities; 2) own more than 10% of the outstanding voting securities of any one issuer; 3) invest in the securities of companies that, including predecessors, have a record of less than three years of continuous operations; and 4) invest more than 25% of the assets of the fund, exclusive of cash and U.S. government securities, in securities of any one industry. A complete listing of investment restrictions is contained in the Statement of Additional Information. The limitations described here and in the Statement of Additional Information are considered at the time securities are purchased. OTHER INVESTMENT PRACTICES FORWARD CURRENCY EXCHANGE CONTRACTS Some of the securities held by the funds will be denominated in foreign currencies. Other securities, such as DRs, may be denominated in U.S. dollars, but have a value that is dependent upon the performance of a foreign security, as valued in the currency of its home country. As a result, the value of their portfolios will be affected by changes in the exchange rates between foreign currencies and the dollar, as well as by changes in the market values of the securities themselves. The performance of foreign currencies relative to the dollar may be an important factor in the overall performance of the funds. 11 To protect against adverse movements in exchange rates between currencies, a fund may, for hedging purposes only, enter into forward currency exchange contracts. A forward currency exchange contract obligates the fund to purchase or sell a specific currency at a future date at a specific price. A fund may elect to enter into a forward currency exchange contract with respect to a specific purchase or sale of a security, or with respect to the fund's portfolio positions generally. By entering into a forward currency exchange contract with respect to the specific purchase or sale of a security denominated in a foreign currency, a fund can "lock in" an exchange rate between the trade and settlement dates for that purchase or sale. This practice is sometimes referred to as "transaction hedging." Each fund may enter into transaction hedging contracts with respect to all or a substantial portion of its trades. When the manager believes that a particular currency may decline in value compared to the dollar, a fund may enter into a foreign currency exchange contract to sell an amount of foreign currency equal to the value of some or all of the fund's portfolio securities either denominated in, or whose value is tied to, that currency. This practice is sometimes referred to as "portfolio hedging." A fund may not enter into a portfolio hedging transaction where the fund would be obligated to deliver an amount of foreign currency in excess of the aggregate value of its portfolio securities or other assets denominated in, or whose value is tied to, that currency. Each fund will make use of portfolio hedging to the extent deemed appropriate by the investment manager. However, it is anticipated that a fund will enter into portfolio hedges much less frequently than transaction hedges. If a fund enters into a forward contract, the fund, when required, will instruct its custodian bank to segregate cash or liquid high-grade securities in a separate account in an amount sufficient to cover its obligation under the contract. Those assets will be valued at market daily, and if the value of the segregated securities declines, additional cash or securities will be added so that the value of the account is not less than the amount of the fund's commitment. At any given time, no more than 10% of a fund's assets will be committed to a segregated account in connection with portfolio hedging transactions. Predicting the relative future values of currencies is very difficult, and there is no assurance that any attempt to reduce the risk of adverse currency movements through the use of forward currency exchange contracts will be successful. In addition, the use of forward currency exchange contracts tends to limit the potential gains that might result from a positive change in the relationship between the foreign currency and the U.S. dollar. INDIRECT FOREIGN INVESTMENT Subject to certain restrictions contained in the Investment Company Act, each fund may invest up to 10% of its assets in certain foreign countries indirectly through investment funds and registered investment companies authorized to invest in those countries. If the funds invest in investment companies, the funds will bear their proportionate shares of the costs incurred by such companies, including investment advisory fees, if any. SOVEREIGN DEBT OBLIGATIONS The funds may purchase sovereign debt instruments issued or guaranteed by foreign governments or their agencies, including debt of emerging market countries. Sovereign debt may be in the form of conventional securities or other types of debt instruments such as loans or loan participations. Sovereign debt of emerging market countries may involve a high degree of risk and may present a risk of default or renegotiation or rescheduling of debt payments. 12 PORTFOLIO TURNOVER The total portfolio turnover rate of the International Equity fund is shown in the Financial Highlights Table on page 5 of this prospectus. Investment decisions to purchase and sell securities are based on the anticipated contribution of the security in question to a fund's objectives. The rate of portfolio turnover is irrelevant when management believes a change is in order to achieve those objectives and accordingly, the annual portfolio turnover rate cannot be anticipated. The portfolio turnover of each fund may be higher than other mutual funds with similar investment objectives. Higher turnover would generate correspondingly greater brokerage commissions, which is a cost that each fund pays directly. It may also affect the character of capital gains, if any, realized and distributed by a fund since short-term capital gains are taxable as ordinary income. REPURCHASE AGREEMENTS Each fund may invest in repurchase agreements when such transactions present an attractive short-term return on cash that is not otherwise committed to the purchase of securities pursuant to the investment policies of that fund. A repurchase agreement occurs when, at the time the fund purchases an interest-bearing obligation, the seller (a bank or broker-dealer registered under the Securities Exchange Act of 1934) agrees to repurchase it on a specified date in the future at an agreed-upon price. The repurchase price reflects an agreed-upon interest rate during the time the fund's money is invested in the security. Since the security purchased constitutes security for the repurchase obligation, a repurchase agreement can be considered as a loan collateralized by the security purchased. The fund's risk is the ability of the seller to pay the agreed-upon repurchase price on the repurchase date. If the seller defaults, the fund may incur costs in disposing of the collateral, which would reduce the amount realized thereon. If the seller seeks relief under the bankruptcy laws, the disposition of the collateral may be delayed or limited. To the extent the value of the security decreases, the fund could experience a loss. The funds will limit repurchase agreement transactions to securities issued by the United States government, its agencies and instrumentalities, and will enter into such transactions with those commercial banks and broker-dealers who are deemed creditworthy pursuant to criteria adopted by the funds' board of directors. The funds will not invest more than 15% of their respective assets in repurchase agreements maturing in more than seven days. WHEN-ISSUED SECURITIES Each of the funds may sometimes purchase new issues of securities on a when-issued basis without limit when, in the opinion of the investment manager, such purchases will further the investment objectives of the fund. The price of when-issued securities is established at the time the commitment to purchase is made. Delivery of and payment for these securities typically occur 15 to 45 days after the commitment to purchase. Market rates of interest on debt securities at the time of delivery may be higher or lower than those contracted for on the when-issued security. Accordingly, the value of such security may decline prior to delivery, which could result in a loss to the fund. A separate account for each fund consisting of cash or high-quality liquid debt securities in an amount at least equal to the when-issued commitments will be established and maintained with the custodian. No income will accrue to the fund prior to delivery. 13 SHORT SALES Each of the funds may engage in short sales if, at the time of the short sale, the fund owns or has the right to acquire an equal amount of the security being sold short at no additional cost. These transactions allow a fund to hedge against price fluctuations by locking in a sale price for securities it does not wish to sell immediately. A fund may make a short sale when it wants to sell the security it owns at a current attractive price, but also wishes to defer recognition of gain or loss for federal income tax purposes and for purposes of satisfying certain tests applicable to regulated investment companies under the Internal Revenue Code. RULE 144A SECURITIES The funds may invest up to 15% of their respective assets in illiquid securities (securities that may not be sold within seven days at approximately the price used in determining the net asset value of fund shares), including restricted securities. Although securities which may be resold only to qualified institutional buyers in accordance with the provisions of Rule 144A under the Securities Act of 1933 are considered "restricted securities," each fund may purchase Rule 144A securities without regard to the percentage limitations described above when Rule 144A securities present an attractive investment opportunity and otherwise meet Twentieth Century's criteria of selection, and also meet the liquidity guidelines established for Rule 144A securities. With respect to securities eligible for resale under Rule 144A, the staff of the Securities and Exchange Commission has taken the position that the liquidity of such securities in the portfolio of a fund offering redeemable securities is a question of fact for the board of directors to determine, such determination to be based upon a consideration of the readily available trading markets and the review of any contractual restrictions. Accordingly, the board of directors is responsible for developing and establishing the guidelines and procedures for determining the liquidity of Rule 144A securities. As allowed by Rule 144A, the board of directors of Twentieth Century has delegated the day-to-day function of determining the liquidity of 144A securities to the investment manager. The board retains the responsibility to monitor the implementation of the guidelines and procedures it has adopted. Since the secondary market for such securities will be limited to certain qualified institutional investors, their liquidity may be limited accordingly and a fund may from time to time hold a Rule 144A security which is illiquid. In such an event, Twentieth Century will consider appropriate remedies to minimize the effect on the fund's liquidity. PERFORMANCE ADVERTISING From time to time, Twentieth Century may advertise performance data. Fund performance may be shown by presenting one or more performance measurements, including cumulative total return or average annual total return. Cumulative total return data is computed by considering all elements of return, including reinvestment of dividends and capital gains distributions, over a stated period of time. Average annual total return is determined by computing the annual compound return over a stated period of time that would have produced the fund's cumulative total return over the same period if the fund's performance had remained constant throughout. Each fund may also include in advertisements data comparing performance with the performance of non-related investment media, published editorial comments and performance rankings compiled by independent organizations (such as Lipper Analytical Services) and publications that monitor the performance of mutual 14 funds. Performance information may be quoted numerically or may be presented in a table, graph or other illustration. Fund performance may also be compared to well-known indices of market performance, such as the Standard & Poor's 500 Index, the Dow Jones World Index, the IFC Global Composite Index and the Morgan Stanley Capital International Europe, Australia, Far East Index (EAFE Index). Fund performance may also be compared to the rankings prepared by Lipper Analytical Services, Inc. In addition, fund performance may be compared to other funds in the Twentieth Century family and may also be combined or blended with other funds in the Twentieth Century family. Such combined or blended performance may be compared to the same indices to which individual funds may be compared. All performance information advertised by the funds is historical in nature and is not intended to represent or guarantee future results. The value of fund shares when redeemed may be more or less than their original cost. 15 HOW TO INVEST WITH TWENTIETH CENTURY - -------------------------------------------------------------------------------- TWENTIETH CENTURY FAMILY OF FUNDS In addition to the funds offered by this prospectus, the Twentieth Century family of funds also includes funds offered by Twentieth Century Investors, Inc., Twentieth Century Premium Reserves, Inc., Twentieth Century Capital Portfolios, Inc. and Twentieth Century Strategic Asset Allocations, Inc. Please call the Investors Line for a prospectus and additional information about the other funds in the Twentieth Century family of funds. The Twentieth Century family of funds now also includes the funds offered by The Benham Group as a result of the acquisition of Benham Management Corporation, investment manager of The Benham Group, by Twentieth Century Companies, Inc. The Benham Group offers several funds with investment objectives similar to the Twentieth Century funds, but with different fee structures. You may also wish to consider the funds of The Benham Group for your investment needs. For a prospectus and more information about those funds, please call 1-800-331-8331. INVESTING IN TWENTIETH CENTURY One or more of the funds offered by this prospectus is available as an investment option in your employer-sponsored retirement or savings plan. All orders to purchase shares must be made through your employer. The administrator of your plan or your employee benefits office can provide you with information on how to participate in your plan and how to select a Twentieth Century fund as an investment option. There is no minimum initial investment requirement for the International Equity fund. The minimum initial investment amount to establish a new account in the International Emerging Growth fund, which each retirement or savings plan measured as a whole must meet, is $10,000. There is no minimum investment requirement imposed by the fund on plan participants investing in International Emerging Growth. To keep an International Emerging Growth account open, a plan, measured as a whole, must maintain a minimum share value of $10,000 in the plan account. If the share value of the plan account falls below $10,000, the shares held by participants in that plan will be subject to automatic redemption. (See, "Automatic Redemption of Shares," page 18.) If you have questions about a fund, see, "Investment Policies of the Funds," page 6, or call Twentieth Century's Investors Line at 1-800-345-3533. Orders to purchase shares are effective on the day Twentieth Century receives payment. (See "When Share Price is Determined," page 19.) Twentieth Century may discontinue offering shares generally in the funds or in any particular state without notice to shareholders. HOW TO EXCHANGE YOUR INVESTMENT FROM ONE TWENTIETH CENTURY FUND TO ANOTHER Your plan may permit you to exchange your investment from the shares of the funds to shares of another fund in the Twentieth Century family of mutual funds. See your plan administrator or employee benefits office for details on the rules in your plan governing exchanges, or call Twentieth Century's Investors Line at 1-800-345-3533. Exchanges will be accepted by Twentieth Century only as permitted by your plan. Exchanges are made at the respective net asset values, next computed after receipt of the exchange instruction by Twentieth Century. If in any 90-day period, the total of the exchanges and redemptions from any one plan participant's 16 account exceeds the lesser of $250,000 or 1% of a fund's assets, further exchanges will be subject to special requirements to comply with Twentieth Century's policy on large redemptions. (See "Special Requirements for Large Redemptions," page 17.) IN ORDER TO DISCOURAGE THE EXCHANGE OF SHARES OF INTERNATIONAL EMERGING GROWTH SHORTLY AFTER THEIR PURCHASE, EXCHANGE OF THOSE SHARES WITHIN 180 DAYS OF THEIR PURCHASE BY A RETIREMENT OR SAVINGS PLAN WILL BE SUBJECT TO A REDEMPTION FEE OF 2.0% OF THE VALUE OF THE SHARES EXCHANGED. This fee will be retained by the fund to help minimize the impact such exchanges have on fund performance and, hence, on the other shareholders of the fund. For the purposes of determining the applicability of this fee, shares first purchased by a plan on behalf of any plan participant will be deemed to be the shares first exchanged. Twentieth Century reserves the right to modify its policy regarding this redemption fee or to waive such policy in whole or in part for certain classes of investors. HOW TO REDEEM SHARES Subject to any restrictions imposed by your employer's plan, you can sell ("redeem") your shares through the plan at their net asset value. Your plan administrator, trustee, or other designated person must provide Twentieth Century with redemption instructions. The shares will be redeemed at the net asset value next computed after receipt of the instructions in good order. (See, "When Share Price Is Determined," page 19.) If you have any questions about how to redeem, contact your plan administrator or your employee benefits office. IN ORDER TO DISCOURAGE THE REDEMPTION OF SHARES OF INTERNATIONAL EMERGING GROWTH SHORTLY AFTER THEIR PURCHASE, REDEMPTION OF THOSE SHARES WITHIN 180 DAYS OF THEIR PURCHASE BY A RETIREMENT OR SAVINGS PLAN WILL BE SUBJECT TO A REDEMPTION FEE OF 2.0% OF THE VALUE OF THE SHARES REDEEMED. This fee will be retained by the fund to help minimize the impact such redemptions have on fund performance and, hence, on the other shareholders of the fund. For the purposes of determining the applicability of this fee, shares first purchased by a plan on behalf of any plan participant will be deemed to be the shares first redeemed. Twentieth Century reserves the right to modify its policy regarding this redemption fee or to waive such policy regarding this redemption fee or to waive such policy in whole or in part for certain classes of investors. SPECIAL REQUIREMENTS FOR LARGE REDEMPTIONS Twentieth Century has elected to be governed by Rule 18f-1 under the Investment Company Act, which obligates a fund to redeem shares in cash, with respect to any one participant account during any 90-day period, up to the lesser of $250,000 or 1% of the assets of the fund. Although redemptions in excess of this limitation will also normally be paid in cash, Twentieth Century reserves the right to honor these redemptions by making payment in whole or in part in readily marketable securities (a "redemption-in-kind"). If payment is made in securities, the securities will be selected by the fund, will be valued in the same manner as they are in computing the fund's net asset value and will be provided to the redeeming plan participant in lieu of cash without prior notice. If you expect to make a large redemption and would like to avoid any possibility of being paid in securities, you may do so by providing Twentieth Century with an unconditional instruction to redeem at least 15 days prior to the date on which the redemption transaction is to occur. The instruction must specify the dollar amount or number of shares to be redeemed and the date of the transaction. Receipt of your instruction 15 days prior to the transaction provides the fund with sufficient time to raise the cash in an orderly manner to pay the redemption and 17 thereby minimizes the effect of the redemption on the fund and its remaining shareholders. Despite its right to redeem fund shares through a redemption-in-kind, Twentieth Century does not expect to exercise this option unless a fund has an unusually low level of cash to meet redemptions and/or is experiencing unusually strong demands for its cash. Such a demand might be caused, for example, by extreme market conditions that result in an abnormally high level of redemption requests concentrated in a short period of time. Absent these or similar circumstances, Twentieth Century expects redemptions in excess of $250,000 to be paid in cash in any fund with assets of more than $50 million if total redemptions from any one account in any 90-day period do not exceed one-half of 1% of the total assets of the fund. AUTOMATIC REDEMPTION OF SHARES Whenever the shares of International Emerging Growth held in an account on behalf of the participants in a plan have a value of less than $10,000 due to an exchange or redemption, a notification will be sent to the plan advising that if investments are not made within 60 days to bring the value of the shares held in the account up to $10,000, the shares held in the fund account will be redeemed and the proceeds from the redemption will be sent to the plan. Twentieth Century reserves the right to modify its policies regarding the automatic redemption of shares or to waive such policies in whole or in part for certain classes of investors. TELEPHONE SERVICES INVESTORS LINE You may reach a Twentieth Century Investor Services Representative by calling our Investors Line at 1-800-345-3533. On our Investors Line you may request information about our funds and a current prospectus, or get answers to any questions that you may have about the funds and the services we offer. AUTOMATED INFORMATION LINE In addition to reaching us on our Investors Line, you may also reach us by telephone on our Automated Information Line, 24 hours a day, seven days a week, at 1-800-345-8765. By calling the Automated Information Line you may listen to fund prices, yields and total return figures. 18 ADDITIONAL INFORMATION YOU SHOULD KNOW - -------------------------------------------------------------------------------- SHARE PRICE WHEN SHARE PRICE IS DETERMINED The price of your shares is their net asset value next determined after receipt of your instruction to purchase, exchange or redeem. Net asset value is determined by calculating the total value of the fund's assets, deducting total liabilities and dividing the result by the number of shares outstanding. Net asset value is determined on each day that the New York Stock Exchange is open. Investments and requests to redeem shares will receive the share price next determined after receipt by Twentieth Century or its authorized agent of the investment or redemption request. For example, investments and requests to redeem shares received by Twentieth Century or its authorized agent before the close of business on the New York Stock Exchange, usually 3 p.m. Central time, are effective on, and will receive the price determined, that day as of the close of the Exchange. Redemption requests received thereafter are effective on, and receive the price determined, as of the close of the Exchange on the next day the Exchange is open. HOW SHARE PRICE IS DETERMINED The valuation of assets for determining net asset value may be summarized as follows: Portfolio securities of each fund, except as otherwise noted, listed or traded on a domestic securities exchange are valued at the last sale price on that exchange. If no sale is reported, the mean of the latest bid and asked price is used. Portfolio securities primarily traded on foreign securities exchanges are generally valued at the preceding closing values of such securities on the exchange where primarily traded. If no sale is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices is used. Depending on local convention or regulation, securities traded over-the-counter are priced at the mean of the latest bid and asked prices, or at the last sale price. When market quotations are not readily available, securities and other assets are valued at fair value as determined in good faith by the board of directors. Debt securities not traded on a principal securities exchange are valued through valuations obtained from a commercial pricing service or at the most recent mean of the bid and asked prices provided by investment dealers in accordance with procedures established by the board of directors. Pursuant to a determination by Twentieth Century's board of directors that such value represents fair value, debt securities with maturities of 60 days or less are valued at amortized cost. When a security is valued at amortized cost, it is valued at its cost when purchased, and thereafter by assuming a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuating interest rates on the market value of the instrument. The value of an exchange-traded foreign security is determined in its national currency as of the close of trading on the foreign exchange on which it is traded or as of the close of business on the New York Stock Exchange, usually 3 p.m. Central time, if that is earlier. That value is then converted to dollars at the prevailing foreign exchange rate. Trading in securities on European and Far Eastern securities exchanges and over-the-counter markets is normally completed at various times before the close of business on each day that the New York Stock Exchange is open. If an event were to occur after the value of a security was established but before the net asset value per share was determined which was likely to materially change the net asset value, then that security would be valued at fair value as determined by the board of directors. Trading of these securities in foreign markets may not take place on every New York Stock Exchange business day. In addition, trading may take place in various foreign 19 markets on Saturdays or on other days when the New York Stock Exchange is not open and on which a fund's net asset value is not calculated. Therefore, such calculation does not take place contemporaneously with the determination of the prices of many of the portfolio securities used in such calculation and the value of the fund's portfolio may be significantly affected on days when shares of the fund may not be purchased or redeemed. WHERE TO FIND INFORMATION ABOUT SHARE PRICE The net asset value of each fund is published in leading newspapers daily. In addition, the net asset value of each fund may also be obtained by calling Twentieth Century. (See "Telephone Services," page 18.) DISTRIBUTIONS Distributions from net investment income and net realized securities gains, if any, generally are declared and paid once a year, but the funds may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with the provisions of the Investment Company Act. THE OBJECTIVE OF EACH FUND IS CAPITAL APPRECIATION AND NOT THE PRODUCTION OF DISTRIBUTIONS. YOU MAY MEASURE THE SUCCESS OF YOUR INVESTMENT BY THE VALUE OF YOUR INVESTMENT AT ANY GIVEN TIME AND NOT BY THE DISTRIBUTIONS YOU RECEIVE. TAXES Twentieth Century has elected to be taxed as a regulated investment company under Sub-chapter M of the Internal Revenue Code, which means that to the extent its income is distributed to shareholders, it pays no income taxes. If you choose to use one or more of Twentieth Century's funds as an investment option in your employer-sponsored retirement or savings plan, income and capital gains distributions paid by the funds will generally not be subject to current taxation, but will accumulate in your account under the plan on a tax-deferred basis. Employer-sponsored retirement and savings plans are governed by complex tax rules. If you elect to participate in your employer's plan, consult your plan description, or a professional tax adviser regarding the tax consequences of participation in the plan, contributions to, and withdrawals or distributions from the plan. MANAGEMENT INVESTMENT MANAGEMENT Under the laws of the State of Maryland, the board of directors is responsible for managing the business and affairs of Twentieth Century. Acting pursuant to an investment advisory agreement entered into with Twentieth Century, Investors Research Corporation ("Investors Research") serves as the investment manager of Twentieth Century. Its principal place of business is Twentieth Century Tower, 4500 Main Street, Kansas City, Missouri 64111. Investors Research has been providing investment advisory services to investment companies and institutional clients since 1958. In June 1995, Twentieth Century Companies, Inc. ("TCC"), the parent of Investors Research, acquired Benham Management International, Inc. In the acquisition, Benham Management Corporation ("BMC"), the investment adviser to The Benham Group of mutual funds, became a wholly owned subsidiary of TCC. Certain employees of BMC will be providing investment management services to Twentieth Century funds, while certain Twentieth Century employees will be providing investment management services to Benham funds. 20 Investors Research supervises and manages the investment portfolio of the funds and directs the purchase and sale of its investment securities. Investors Research utilizes a team of portfolio managers, assistant portfolio managers and analysts acting together to manage the assets of the funds. The team meets regularly to review portfolio holdings and to discuss purchase and sale activity. The team adjusts holdings in the funds' portfolios as it deems appropriate in pursuit of the funds' investment objectives. Individual portfolio managers may also adjust portfolio holdings of the funds as necessary between meetings. The portfolio manager members of the International Equity and International Emerging Growth team and their principal business experience during the past five years are as follows: ROBERT C. PUFF, Executive Vice President and Chief Investment Officer, has been a Portfolio Manager since joining Investors Research in 1983. In his position as Chief Investment Officer, Mr. Puff oversees the investment activities of all of the teams that manage Twentieth Century funds. THEODORE J. TYSON, Vice President and Portfolio Manager, joined Investors Research in 1988 and has been a member of the International Equity and International Emerging Growth team since its inception in 1991. HENRIK STRABO, Vice President and Portfolio Manager, joined Investors Research in 1993 as an investment analyst member of the International Equity and International Emerging Growth team and has been a portfolio manager member of the team since 1994. Prior to joining Investors Research, Mr. Strabo was Vice President, International Equity Sales with Barclays de Zoete Wedd (1991 to 1993) and obtained international equity sales experience at Cresvale International (1990 to 1991). The activities of Investors Research are subject only to directions of Twentieth Century's board of directors. Investors Research pays all the expenses of Twentieth Century except brokerage, taxes, interest, fees and expenses of the non-interested person directors (including counsel fees) and extraordinary expenses. For the services provided to Twentieth Century, Investors Research receives an annual fee of 1.9% of the average net assets of International Equity up to $1 billion, 1.25% of the average net assets of International Equity between $1 billion and $2 billion, and 1.00% of the average net assets of International Equity in excess of $2 billion, and 2.0% of the average net assets of International Emerging Growth. On the first business day of each month, each series of shares pays a management fee to the manager for the previous month at the rate specified. The fee for the previous month is calculated by multiplying the applicable fee for such series by the aggregate average daily closing value of the series' net assets during the previous month, and further multiplying that product by a fraction, the numerator of which is the number of days in the previous month and the denominator of which is 365 (366 in leap years). The management fees paid by the funds to Investors Research are higher than the fees paid by the various other funds in the Twentieth Century family of funds because of the higher costs and additional expenses associated with managing and operating a fund owning a portfolio consisting primarily of foreign securities. The fee may also be higher than the fee paid by many other international or foreign investment companies. Many other investment companies may refer to or publicize an "investment management fee" or "management fee" paid by the company to its manager. However, most such companies also use fund assets to pay for certain expenses of the fund in addition to the stated management fee. In contrast, the management fee paid to Investors Research includes payment for almost all fund expenses, with the exceptions noted. Therefore, potential investors who attempt to compare the expenses of these funds to the expenses of other funds should be careful to compare only the ratio of total expenses to average net assets contained in the Financial Highlights Table found on page 5 of this prospectus to the same ratio of the other funds. The management agreement also provides 21 that the Corporation's board of directors, upon 60 days' prior written notice to all affected shareholders, may impose a servicing or administrative fee as a direct charge against shareholder accounts. CODE OF ETHICS Twentieth Century and Investors Research have adopted a Code of Ethics that restricts personal investing practices by employees of Investors Research and its affiliates. Among other provisions, the Code of Ethics requires that employees with access to information about the purchase or sale of securities in the funds' portfolios obtain preclearance before executing personal trades. With respect to portfolio manager and other investment personnel, the Code of Ethics prohibits acquisition of securities in an initial public offering, as well as profits derived from the purchase and sale of the same security within 60 calendar days. These provisions are designed to ensure that the interests of fund shareholders come before the interests of the people who manage those funds. TRANSFER AND ADMINISTRATIVE SERVICES Twentieth Century Services, Inc., 4500 Main Street, Kansas City, Missouri 64111 acts as transfer agent and dividend-paying agent for Twentieth Century. It provides facilities, equipment and personnel to Twentieth Century, and is paid for such services by Investors Research. Certain recordkeeping services that would otherwise be performed by Twentieth Century Services, Inc., may be performed by an insurance company or other entity providing similar services for various retirement plans using shares of Twentieth Century as a funding medium, by broker-dealers for their customers investing in shares of Twentieth Century or by sponsors of multi-mutual fund no- or low-transaction fee program. Investors Research may elect to enter into contracts to pay them for such recordkeeping and administrative services out of its unified management fee. From time to time, special services may be offered to shareholders who maintain higher share balances in the funds. These services may include the waiver of minimum investment requirements, expedited confirmation of shareholder transactions, newsletters, and a team of personal representatives. Any expenses associated with these special services will be paid by Investors Research. Investors Research and Twentieth Century Services, Inc. are both wholly owned by Twentieth Century Companies, Inc. James E. Stowers, chairman of the board of Twentieth Century World Investors, controls Twentieth Century Companies by virtue of his ownership of a majority of its common stock. FURTHER INFORMATION ABOUT TWENTIETH CENTURY Twentieth Century World Investors, Inc. was organized as a Maryland corporation on December 28, 1990. Twentieth Century is a diversified, open-end management investment company whose shares were first offered in May 1991. Its business and affairs are managed by its officers under the direction of its board of directors. The principal office of Twentieth Century is Twentieth Century Tower, 4500 Main Street, P.O. Box 419200, Kansas City, Missouri 64141-6200. All inquiries may be made by mail to that address, or by phone to 1-800-345-3533. (For local Kansas City area or international callers: 816-531-5575.) Twentieth Century issues two series of $0.01 par value shares. Each share when issued, is fully paid and non-assessable. The assets belonging to each series of shares are held separately by the custodian, and in effect each series is a separate fund. Each share, irrespective of series, is entitled to one vote for each dollar of net asset value applicable to such share on all questions, except for those matters which must be voted on separately by the series of shares affected. Matters affecting only one series are voted upon only by that series. 22 Shares have non-cumulative voting rights, which means that the holders of more than 50% of the votes cast in an election of directors can elect all of the directors if they choose to do so, and in such event the holders of the remaining less-than-50% of the votes will not be able to elect any person or persons to the board of directors. Unless required by the Investment Company Act, it will not be necessary for Twentieth Century to hold annual meetings of shareholders. As a result, shareholders may not vote each year on the election of directors or the appointment of auditors. However, pursuant to Twentieth Century's by-laws, the holders of shares representing at least 10% of the votes entitled to be cast may request Twentieth Century to hold a special meeting of shareholders. Twentieth Century will assist in the communication with other shareholders. TWENTIETH CENTURY RESERVES THE RIGHT TO CHANGE ANY OF ITS POLICIES, PRACTICES AND PROCEDURES DESCRIBED IN THIS PROSPECTUS, INCLUDING THE STATEMENT OF ADDITIONAL INFORMATION, WITHOUT SHAREHOLDER APPROVAL EXCEPT IN THOSE INSTANCES WHERE SHAREHOLDER APPROVAL IS EXPRESSLY REQUIRED. 23 TWENTIETH CENTURY World Investors Institutional Prospectus April 1, 1996 [company logo] Investments That Work(TM) - ---------------------------------------- P.O. Box 419385 Kansas City, Missouri 64141-6385 - ---------------------------------------- Person-to-person assistance: 1-800-345-2021 or 816-531-5575 - ---------------------------------------- Automated information line: 1-800-345-8765 - ---------------------------------------- Telecommunications Device for the Deaf: 1-800-345-1833 or 816-753-0700 - ---------------------------------------- Fax: 816-340-4360 - ---------------------------------------- [company logo] ================================================================================ - -------------------------------------------------------------------------------- IN-BKT-4574 9603 Recycled (C) 1996 Twentieth Century Services, Inc. TWENTIETH CENTURY World Investors Statement of Additional Information April 1, 1996 - -------------------------------------------------------------------------------- This statement is not a prospectus but should be read in conjunction with the current prospectus of Twentieth Century World Investors, Inc., dated April 1, 1996. Please retain this document for future reference. To obtain the prospectus, call Twentieth Century toll-free at 1-800-345-2021 (816-531-5575 for local and international calls), or write to P.O. Box 419200, Kansas City,Missouri 64141-6200.
TABLE OF CONTENTS Institutional Page Prospectus Prospectus Herein Page Page Investment Objectives of the Funds 2 2 2 Investment Restrictions 2 11 11 Forward Currency Exchange Contracts 3 11 11 An Explanation of Fixed Income Securities Ratings 4 -- -- Short Sales 6 14 14 Portfolio Turnover 7 13 13 Officers and Directors 7 -- -- Management 10 30 20 Custodians 11 -- -- Independent Accountants 11 -- -- Capital Stock 11 -- -- Taxes 12 29 20 Brokerage 13 -- -- Performance Advertising 14 14 14 Redemptions in Kind 15 -- -- Holidays 15 -- -- Financial Statements 15 -- --
INVESTMENT OBJECTIVES OF THE FUNDS The investment objective of each series of shares of Twentieth Century World Investors, Inc. is described on the inside front cover page of the prospectus. In achieving its objective, a fund must conform to certain policies, some of which are designated in the prospectus or in this Statement of Additional Information as "fundamental" and cannot be changed except with the approval of the shareholders entitled to cast a majority of the outstanding votes of the fund as defined in the Investment Company Act. The following paragraph is also a statement of fundamental policy with respect to selection of investments: In general, within the restrictions outlined herein, each series has broad powers with respect to investing funds or holding them uninvested. Investments are varied according to what is judged advantageous under changing economic conditions. It will be the policy of Twentieth Century to retain maximum flexibility in management without restrictive provisions as to the proportion of one or another class of securities that may be held, subject to the investment restrictions described below. It is management's intention that each fund will generally consist of common stocks. However, the investment manager may invest the assets of a fund in varying amounts in other instruments and in senior securities, such as bonds, debentures, preferred stocks and convertible issues, when such a course is deemed appropriate in order to attempt to attain its financial objective. INVESTMENT RESTRICTIONS Additional fundamental policies that may be changed only with shareholder approval provide that each series of shares: (1) Shall not invest more than 15% of its assets in illiquid investments. (2) Shall not invest in the securities of companies that, including predecessors, have a record of less than three years of continuous operation. (3) Shall not lend its portfolio securities except to unaffiliated persons and subject to the rules and regulations adopted under the Investment Company Act. No such rules and regulations have been issued, but it is Twentieth Century's policy that such loans must be secured continuously by cash collateral maintained on a current basis in an amount at least equal to the market value of the securities loaned, or by irrevocable letters of credit. During the existence of the loan, the fund must continue to receive the equivalent of the interest and dividends paid by the issuer on the securities loaned and interest on the investment of the collateral; the fund must have the right to call the loan and obtain the securities loaned at any time on five days' notice, including the right to call the loan to enable the fund to vote the securities. To comply with the regulations of certain state securities administrators, such loans may not exceed one-third of the fund's net assets taken at market. (4) Shall not purchase the security of any one issuer if such purchase would cause more than 5% of the fund's assets at market to be invested in the securities of such issuer, except U.S. government securities, or if the purchase would cause more than 10% of the outstanding voting securities of any one issuer to be held in the fund's portfolio. (5) Shall not invest for control or for management, or concentrate its investment in a particular company or a particular industry. No more than 25% of the assets of the fund, exclusive of cash and U.S. government securities, will be invested insecurities of any one industry. (6) Shall not buy securities on margin nor sell short (unless it owns or by virtue of its ownership of other securities has the right to obtain securities equivalent in kind and amount to the securities sold); however, the fund may make margin deposits in connection with the use of any financial instrument 2 or any transaction in securities permitted by its fundamental policies. (7) Shall not invest in the securities of other investment companies except by purchases in the open market involving only customary brokers' commissions and no sales charges. (8) Shall not issue any senior security. (9) Shall not underwrite any securities. (10) Shall not purchase or sell real estate. (In the opinion of management, this restriction will not preclude the corporation from investing in securities of corporations that deal in real estate.) (11) Shall not purchase or sell commodities or commodity contracts. (12) Shall not borrow any money, except from banks or trust companies in an amount not in excess of 5% of the total assets of the fund, and then only for emergency and extraordinary purposes. The Investment Company Act imposes certain additional restrictions upon acquisition by the funds of securities issued by insurance companies, brokers, dealers, underwriters or investment advisers, and upon transactions with affiliated persons as therein defined. It also defines and forbids the creation of cross and circular ownership. The Investment Company Act also provides that the funds may not invest more than 25% of their assets in the securities of issuers engaged in a single industry. In determining industry groups for purposes of this standard, the Securities and Exchange Commission ordinarily uses the Standard Industry Classification codes developed by the United States Office of Management and Budget. In the interest of ensuring adequate diversification, the funds monitor industry concentration using a more restrictive list of industry groups than that recommended by the Securities and Exchange Commission. The funds believes that these classifications are reasonable and are not so broad that the primary economic characteristics of the companies in a single class are materially different. The use of these more restrictive industry classifications may, however, cause the funds to forego investment possibilities which may otherwise be available to them under the Investment Company Act. No fund will invest in oil, gas or other mineral leases, or in warrants, except that a fund may purchase securities with warrants attached. Neither the Securities and Exchange Commission nor any other agency of the federal or state government participates in or supervises the corporation's management or its investment practices or policies. FORWARD CURRENCY EXCHANGE CONTRACTS Each fund conducts its foreign currency exchange transactions either on a spot (i.e., cash) basis at the spot rate prevailing in the foreign currency exchange market, or through entering into forward currency exchange contracts to purchase or sell foreign currencies. Each fund expects to use forward contracts under two circumstances: (1) When the manager wishes to "lock in" the U.S. dollar price of a security when the fund is purchasing or selling a security denominated in a foreign currency, the fund would be able to enter into a forward contract to do so; (2) When the manager believes that the currency of a particular foreign country may suffer a substantial decline against the U.S. dollar, the fund would be able to enter into a forward contract to sell foreign currency for a fixed U.S. dollar amount approximating the value of some or all of the fund's portfolio securities either denominated in, or whose value is tied to, such foreign currency. As to the first circumstance, when a fund enters into a trade for the purchase or sale of a security denominated in a foreign currency, it may be desirable to establish (lock in) the U.S. dollar cost or 3 proceeds. By entering into forward contracts in U.S. dollars for the purchase or sale of a foreign currency involved in an underlying security transaction, the fund will be able to protect itself against a possible loss between trade and settlement dates resulting from the adverse change in the relationship between the U.S. dollar and the subject foreign currency. Under the second circumstance, when the manager believes that the currency of a particular country may suffer a substantial decline relative to the U.S. dollar, a fund could enter into a forward contract to sell for a fixed dollar amount the amount in foreign currencies approximating the value of some or all of its portfolio securities either denominated in, or whose value is tied to, such foreign currency. The fund will place cash or high-grade liquid securities in a separate account with its custodian in an amount sufficient to cover its obligation under the contract entered into under the second circumstance. If the value of the securities placed in the separate account declines, additional cash or securities will be placed in the account on a daily basis so that the value of the account equals the amount of the fund's commitments with respect to such contracts. The precise matching of forward contracts in the amounts and values of securities involved would not generally be possible since the future values of such foreign currencies will change as a consequence of market movements in the values of those securities between the date the forward contract is entered into and the date it matures. Predicting short-term currency market movements is extremely difficult, and the successful execution of short-term hedging strategy is highly uncertain. Normally, consideration of the prospect for currency parities will be incorporated into the long-term investment decisions made with respect to overall diversification strategies. However, the manager believes that it is important to have flexibility to enter into such forward contracts when it determines that a fund's best interests may be served. Generally, a fund will not enter into a forward contract with a term of greater than one year. At the maturity of the forward contract, the fund may either sell the portfolio security and make delivery of the foreign currency, or it may retain the security and terminate the obligation to deliver the foreign currency by purchasing an "offsetting" forward contract with the same currency trader obligating the fund to purchase, on the same maturity date, the same amount of the foreign currency. It is impossible to forecast with absolute precision the market value of portfolio securities at the expiration of the forward contract. Accordingly, it may be necessary for a fund to purchase additional foreign currency on the spot market (and bear the expense of such purchase) if the market value of the security is less than the amount of foreign currency the fund is obligated to deliver and if a decision is made to sell the security and make delivery of the foreign currency the fund is obligated to deliver. AN EXPLANATION OF FIXED INCOME SECURITIES RATINGS As described in the prospectus, the funds may invest in fixed income securities. International Equity may invest only in investment grade obligations, while International Emerging Growth may invest in bonds, corporate debt securities and governmental obligations without regard to credit quality restrictions if such obligations are determined by the investment manager to be sound investments. Fixed income securities ratings provide the investment manager with a current assessment of the credit rating of an issuer with respect to a specific fixed income security. The following is a description of the rating categories utilized by the rating services referenced in the prospectus disclosure: The following summarizes the ratings used by Standard & Poor's Corporation ("S&P") for bonds: AAA -- This is the highest rating assigned by S&P to a debt obligation and indicates an extremely strong capacity to pay interest and repay principal. AA -- Debt rated AA is considered to have a very strong capacity to pay interest and repay 4 principal and differs from AAA issues only to a small degree. A -- Debt rated A has a strong capacity to pay interest and repay principal although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories. BBB -- Debt rated BBB is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than in higher-rated categories. BB -- Debt rated BB has less near-term vulnerability to default than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions that could lead to inadequate capacity to meet timely interest and principal payments. The BB rating category is also used for debt subordinated to senior debt that is assigned an actual or implied BBB- rating. B -- Debt rated B has a greater vulnerability to default but currently has the capacity to meet interest payments and principal repayments. Adverse business, financial, or economic conditions will likely impair capacity or willingness to pay interest and repay principal. The B rating category is also used for debt subordinated to senior debt that is assigned an actual or implied BB or BB- rating. CCC -- Debt rated CCC has a currently identifiable vulnerability to default and is dependent upon favorable business, financial, and economic conditions to meet timely payment of interest and repayment of principal. In the event of adverse business, financial, or economic conditions, it is not likely to have the capacity to pay interest and repay principal. The CCC rating category is also used for debt subordinated to senior debt that is assigned an actual or implied B or B- rating. CC -- The rating CC typically is applied to debt subordinated to senior debt that is assigned an actual or implied CCC rating. C -- The rating C typically is applied to debt subordinated to senior debt, which is assigned an actual or implied CCC- debt rating. The C rating may be used to cover a situation where a bankruptcy petition has been filed, but debt service payments are continued. CI -- The rating CI is reserved for income bonds on which no interest is being paid. D -- Debt rated D is in payment default. The D rating category is used when interest payments or principal payments are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period. The D rating also will be used upon the filing of a bankruptcy petition if debt service payments are jeopardized. To provide more detailed indications of credit quality, the ratings from AA to CCC may be modified by the addition of a plus or minus sign to show relative standing within these major rating categories. The following summarizes the ratings used by Moody's Investors Service, Inc. ("Moody's") for bonds: Aaa -- Bonds that are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edge." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa -- Bonds that are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high-grade bonds. They are rated lower than the best bonds because 5 margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present that make the long-term risk appear somewhat larger than the Aaa securities. A -- Bonds that are rated A possess many favorable investment attributes and are to be considered as upper-medium-grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present that suggest a susceptibility to impairment some time in the future. Baa -- Bonds that are rated Baa are considered as medium-grade obligations (i.e., they are neither highly protected nor poorly secured). Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics, as well. Ba -- Bonds that are rated Ba are judged to have speculative elements; their future cannot be considered as well-assured. Often the protection of interest and principal payments may be very moderate, and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. B -- Bonds that are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. Caa -- Bonds that are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest. Ca -- Bonds that are rated Ca represent obligations that are speculative in a high degree. Such issues are often in default or have other marked shortcomings. C -- Bonds that are rated C are the lowest rated class of bonds, and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing. Moody's applies numerical modifiers 1, 2 and 3 in each generic rating category from Aa through B. The modifier 1 indicates that the bond being rated ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category. SHORT SALES A fund may engage in short sales if, at the time of the short sale, the fund owns or has the right to acquire an equal amount of the security being sold short at no additional cost. In a short sale, the seller does not immediately deliver the securities sold and is said to have a short position in those securities until delivery occurs. To make delivery to the purchaser, the executing broker borrows the securities being sold short on behalf of the seller. While the short position is maintained, the seller collateralizes its obligation to deliver the securities sold short in an amount equal to the proceeds of the short sale plus an additional margin amount established by the Board of Governors of the Federal Reserve. If a fund engages in a short sale the collateral account will be maintained by the fund's custodian. While the short sale is open the fund will maintain in a segregated custodial account an amount of securities convertible into or exchangeable for such equivalent securities at no additional cost. These securities would constitute the fund's long position. A fund may make a short sale, as described above, when it wants to sell the security it owns at a current attractive price, but also wishes to defer recognition of gain or loss for federal income tax purposes and for purposes of satisfying certain tests applicable to regulated investment companies under the Internal Revenue Code. In such a case, any future losses in the fund's long position should be reduced by a gain in the short position. The 6 extent to which such gains or losses are reduced would depend upon the amount of the security sold short relative to the amount the fund owns. There will be certain additional transaction costs associated with short sales, but the fund will endeavor to offset these costs with income from the investment of the cash proceeds of short sales. PORTFOLIO TURNOVER In order to achieve its investment objective, the management will purchase and sell securities without regard to the length of time the security has been held and, accordingly, it can be expected that the rate of portfolio turnover may be substantial. The corporation intends to purchase a given security whenever management believes it will contribute to the stated objective of a fund, even if the same security has only recently been sold. In selling a given security, management keeps in mind that (1) profits from sales of securities held less than three months must be limited in order to meet the requirements of Subchapter M of the Internal Revenue Code, and (2) profits from sales of securities are taxed to shareholders as ordinary income. Subject to those considerations, the corporation will sell a given security, no matter for how long or for how short a period it has been held in the portfolio, and no matter whether the sale is at a gain or at a loss, if the management believes that it is not fulfilling its purpose, either because, among other things, it did not live up to management's expectations, or because it may be replaced with another security holding greater promise, or because it has reached its optimum potential, or because of a change in the circumstances of a particular company or industry or in general economic conditions, or because of some combination of such reasons. When a general decline in security prices is anticipated, a fund may decrease or eliminate entirely its equity position and increase its cash position, and when a rise in price levels is anticipated, a fund may increase its equity position and decrease its cash position. However, it should be expected that each fund will, under most circumstances, be essentially fully invested in equity securities. Since investment decisions are based on the anticipated contribution of the security in question to a fund's objectives, the rate of portfolio turnover is irrelevant when management believes a change is in order to achieve those objectives, and a fund's annual portfolio turnover rate cannot be anticipated and may be comparatively high. This disclosure regarding portfolio turnover is a statement of fundamental policy and may be changed only by a vote of the shareholders. Since the management does not take portfolio turnover rate into account in making investment decisions, (1) the management has no intention of accomplishing any particular rate of portfolio turnover, whether high or low, and (2) the portfolio turnover rates should not be considered as a representation of the rates that will be attained in the future. OFFICERS AND DIRECTORS The principal officers and directors of the corporation, their principal business experience during the past five years, and their affiliations with Investors Research Corporation and its affiliated companies are listed below. Unless otherwise noted, the business address of each director and officer is 4500 Main Street, Kansas City, Missouri 64111. Those directors that are "interested persons" as defined in the Investment Company Act of 1940 are indicated by an asterisk (*). JAMES E. STOWERS JR.,* chairman, principal executive officer and director; chairman, director and controlling shareholder of Twentieth Century Companies, Inc., parent corporation of Investors Research Corporation and Twentieth Century Services, Inc.; chairman and director of Investors Research Corporation, Twentieth Century Services, Inc., Twentieth Century Investors, Inc., Twentieth Century Premium Reserves, Inc., Twentieth Century Capital Portfolios, Inc., Twentieth Century Strategic Asset Allocations, Inc. and TCI Portfolios, Inc.; father of James E. Stowers III. 7 JAMES E. STOWERS III,* president and director; president and director, Twentieth Century Companies, Inc., Twentieth Century Services, Inc., Investors Research Corporation, Twentieth Century Investors, Inc., Twentieth Century Premium Reserves, Inc., Twentieth Century Capital Portfolios, Inc., Twentieth Century Strategic Asset Allocations, Inc. and TCI Portfolios, Inc. THOMAS A. BROWN, director; 2029 Wyandotte, Kansas City, Missouri; chief executive officer, Associated Bearing Company, a corporation officer engaged in the sale of bearings and power transmission products; director, Twentieth Century Investors, Inc., Twentieth Century Premium Reserves, Inc., Twentieth Century Capital Portfolios, Inc., Twentieth Century Strategic Asset Allocations, Inc. and TCI Portfolios, Inc. ROBERT W. DOERING, M.D., director; 6420 Prospect, Kansas City, Missouri; general surgeon; director, Twentieth Century Investors, Inc., Twentieth Century Premium Reserves, Inc., Twentieth Century Capital Portfolios, Inc., Twentieth Century Strategic Asset Allocations, Inc. and TCI Portfolios, Inc. LINSLEY L. LUNDGAARD, director; 18648 White Wing Drive, Rio Verde, Arizona; retired; formerly vice president and national sales manager, Flour Milling Division, Cargill, Inc.; director, Twentieth Century Investors, Inc., Twentieth Century Premium Reserves, Inc., Twentieth Century Capital Portfolios, Inc., Twentieth Century Strategic Asset Allocations, Inc. and TCI Portfolios, Inc. DONALD H. PRATT, director; P.O.Box 419917, Kansas City, Missouri; president, Butler Manufacturing Company; director, Twentieth Century Investors, Inc., Twentieth Century Premium Reserves, Inc., Twentieth Century Capital Portfolios, Inc., Twentieth Century Strategic Asset Allocations, Inc. and TCI Portfolios, Inc. LLOYD T. SILVER JR., director; 2300 West 70th Terrace, Mission Hills, Kansas; president, LSC, Inc., manufacturer's representative; director, Twentieth Century Investors, Inc., Twentieth Century Premium Reserves, Inc., Twentieth Century Capital Portfolios, Inc., Twentieth Century Strategic Asset Allocations, Inc. and TCI Portfolios, Inc. M. JEANNINE STRANDJORD, director; 908 West 121st Street, Kansas City, Missouri; Senior Vice President and Treasurer, Sprint Corporation; director, Twentieth Century Investors, Inc., Twentieth Century Premium Reserves, Inc., Twentieth Century Capital Portfolios, Inc., Twentieth Century Strategic Asset Allocations, Inc. and TCI Portfolios, Inc. JOHN M. URIE, director; 5511 NW Flint Ridge Road, Kansas City, Missouri; consultant; form-erly, director of finance, City of Kansas City, Missouri; director, Twentieth Century Investors, Inc., Twentieth Century Premium Reserves, Inc., Twentieth Century Capital Portfolios, Inc., Twentieth Century Strategic Asset Allocations, Inc. and TCI Portfolios, Inc. WILLIAM M. LYONS, executive vice president, secretary and general counsel; executive vice president and general counsel, Twentieth Century Investors, Inc., Twentieth Century Premium Reserves, Inc., Twentieth Century Capital Portfolios, Inc., Twentieth Century Strategic Asset Allocations, Inc. and TCI Portfolios, Inc.; executive-vice president and general counsel, Twentieth Century Companies, Inc., Investors Research Corporation and Twentieth Century Services, Inc. ROBERT T. JACKSON, executive vice president and principal financial officer; treasurer, Twentieth Century Companies, Inc. and Investors Research Corporation; executive vice president and treasurer, Twentieth Century Services, Inc.; executive vice president-finance, Twentieth Century Investors, Inc., Twentieth Century Premium Reserves, Inc., Twentieth Century Capital Portfolios, Inc., Twentieth Century Strategic Asset Allocations, Inc. and TCI Portfolios, Inc.; formerly executive vice president, Kemper Corporation. MARYANNE ROEPKE, CPA, vice president, treasurer and principal accounting officer; vice president and treasurer, Twentieth Century Investors, Inc., Twentieth Century Premium Reserves, Inc., Twentieth Century Capital Portfolios, Inc., Twentieth Century Strategic Asset 8 Allocations, Inc. and TCI Portfolios, Inc.; vice president, Twentieth Century Services, Inc. PATRICK A. LOOBY, vice president; vice president and secretary, Twentieth Century Premium Reserves, Inc., Twentieth Century Capital Portfolios, Inc., Twentieth Century Strategic Asset Allocations, Inc. and TCI Portfolios, Inc.; vice president, Twentieth Century Investors, Inc. and Twentieth Century Services, Inc. ROBERT J. LEACH, CPA, controller; formerly accountant, Ernst & Young, Kansas City, Missouri. The board of directors has established three standing committees: the executive committee, the audit committee and the nominating committee. Messrs. Stowers Jr., Stowers III, and Urie constitute the executive committee of the board of directors. The committee performs the functions of the board of directors between meetings of the board, subject to the limitations on its power set out in the Maryland Corporation Law, and except for matters required by the Investment Company Act to be acted upon by the whole board. Those directors who are not "interested persons" constitute the audit committee. The functions of the audit committee include recommending the engagement of the corporation's independent accountants, reviewing the arrangements for and scope of the annual audit, reviewing comments made by the independent accountants with respect to internal controls and the considerations given or the corrective action taken by management, and reviewing nonaudit services provided by the independent accountants. The nominating committee has as its principal role the consideration and recommendation of individuals for nomination as directors. The names of potential director candidates are drawn from a number of sources, including recommendations from members of the board, management and shareholders. This committee also reviews and makes recommendations to the board with respect to the composition of board committees and other board-related matters, including its organization, size, composition, responsibilities, functions and compensation. The members of the nominating committee are Messrs. Urie (Chairman), Lundgaard and Stowers III. The directors of the corporation also serve as directors of Twentieth Century Investors, Inc., Twentieth Century Premium Reserves, Inc., Twentieth Century Capital Portfolios, Inc., Twentieth Century Strategic Asset Allocations, Inc. and TCI Portfolios, Inc., each a registered investment company. Each director who is not an "interested person" as defined in the Investment Company Act receives for service as a member of the board of all five of such companies an annual director's fee of $36,000, and an additional fee of $1,000 per regular board meeting attended and $500 per special board meeting and audit committee meeting attended. In addition, those directors who are not "interested persons" and serve as chairman of a committee of the board of directors receive an additional $2,000 for such services. These fees and expenses are divided among the five investment companies based upon their relative net assets. Under the terms of the management agreement with Investors Research Corporation, the corporation is responsible for paying such fees and expenses. For the most recent fiscal year, International Equity's share of such fees and expenses was $12,623 and International Emerging Growth's share was $584. Set forth below is the aggregate compensation paid for the periods indicated by the corporation and by the Twentieth Century family of mutual funds as a whole to each director of the corporation who is not an "interested person" as defined in the Investment Company Act. 9 Total Compensation from Aggregate Compensation the Twentieth Century Director from the Corporation1 Family of Funds2 - ----------------------------------------------------------------------------- Thomas A. Brown $1,800 $44,000 Robert W. Doering, M.D. 1,800 44,000 Linsley L. Lundgaard 1,725 44,000 Donald H. Pratt 1,070 32,000 Lloyd T. Silver Jr. 1,725 44,000 M. Jeannine Strandjord 1,725 44,000 John M. Urie 1,725 46,000 - ----------------------------------------------------------------------------- 1 Includes compensation paid by the corporation for the fiscal year ended November 30, 1995. 2 Includes compensation paid by the six investment company members of the Twentieth Century family of funds for the calendar year ended December 31, 1995. Those directors who are "interested persons," as defined in the Investment Company Act, receive no fee as such for serving as a director. The salaries of such individuals, who are also officers of the corporation, are paid by Investors Research Corporation. MANAGEMENT A description of the responsibilities and method of compensation of Twentieth Century's investment manager, Investors Research Corporation ("Investors Research"), appears in the prospectus under the caption, "Management." During the fiscal years ended November 30, 1995, 1994 and 1993, the management fees paid by International Equity to Investors Research were $21,967,586, $22,155,449 and $8,125,737 on average net assets of $1,240,949,900, $1,205,407,244, and $432,127,344. During the fiscal year ended November 30, 1995, and the period from April 1, 1994 (inception) through November 30, 1994, the management fees paid by International Emerging Growth to Investors Research were $2,260,979 and $957,116 on average net assets of $113,067,308 and $71,587,570. The management agreement shall continue in effect until the earlier of the expiration of two years from the date of its execution or until the first meeting of shareholders following such execution and for as long thereafter as its continuance is specifically approved at least annually by (i) the board of directors of Twentieth Century, or by the vote of a majority of the outstanding votes (as defined in the Investment Company Act), and (ii) by the vote of a majority of the directors of Twentieth Century who are not parties to the agreement or interested persons of Investors Research, cast in person at a meeting called for the purpose of voting on such approval. The management agreement provides that it may be terminated at any time without payment of any penalty by the board of directors of Twentieth Century, or by a vote of a majority of Twentieth Century's shareholders, on 60 days' written notice to Investors Research, and that it shall be automatically terminated if it is assigned. The management agreement provides that Investors Research shall not be liable to Twentieth Century or its shareholders for anything other than willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations or duties. The management agreement also provides that Investors Research and its officers, directors and employees may engage in other business, devote time and attention to any other business whether of a similar or dissimilar nature, and render services to others. Certain investments may be appropriate for the funds and also for other clients advised by Investors Research. Investment decisions for the funds and other clients are made with a view to achieving their respective investment objectives after consideration of such factors as their current holdings, availability of cash for investment, and the size of their investment generally. A particular security may be bought or sold for only one client, or in different amounts and at different times for more than one but less than all clients. In addition, purchases or sales of the same security may be made for two or more clients on the same date. Such transactions will be allocated among clients in a manner believed by Investors Research to be equitable to each. In some cases this procedure could have an adverse effect on the price or amount of the securities purchased or sold by a fund. 10 Investors Research may aggregate purchase and sale orders of the funds with purchase and sale orders of its other clients when Investors Research believes that such aggregation provides the best execution for the funds. The board of directors of the corporation has approved the policy of Investors Research with respect to the aggregation of portfolio transactions. Where portfolio transactions have been aggregated, the funds participate at the average share price for all transactions in that security on a given day and share transaction costs on a pro rata basis. Investors Research will not aggregate portfolio transactions of the funds unless it believes such aggregation is consistent with its duty to seek best execution on behalf of the funds and the terms of the management agreement. Investors Research receives no additional compensation or remuneration as a result of such aggregation. In addition to managing the funds, on November 30, 1995, Investors Research was acting as an investment adviser to 13 institutional accounts and to five registered investment companies, Twentieth Century Investors, Inc., Twentieth Century Premium Reserves, Inc., Twentieth Century Capital Portfolios, Inc., Twentieth Century Strategic Asset Allocations, Inc. and TCI Portfolios, Inc. Twentieth Century Services, Inc. provides physical facilities, including computer hardware and software and personnel, for the day-to-day administration of the corporation and of Investors Research. Investors Research pays Twentieth Century Services, Inc. for such services. As stated in the prospectus, all of the stock of Twentieth Century Services, Inc. and Investors Research is owned by Twentieth Century Companies, Inc. CUSTODIANS UMB Bank, N.A., 10th and Grand, Kansas City, Missouri 64105, and Boatmen's First National Bank of Kansas City, 10th and Baltimore, Kansas City, Missouri 64105, each serves as custodian of the assets of the funds. The custodians take no part in determining the investment policies of the funds or in deciding which securities are purchased or sold by the funds. The funds, however, may invest in certain obligations of the custodians and may purchase or sell certain securities from or to the custodians. INDEPENDENT ACCOUNTANTS At a meeting held on December 12, 1995, the board of directors of the corporation appointed Ernst & Young LLP, One Kansas City Place, 1200 Main Street, Kansas City, Missouri 64105, as the independent accountants of the funds to examine the financial statements of the funds for the fiscal year ending November 30, 1996. The appointment of Ernst & Young was recommended by the audit committee of the board of directors. As the independent accountants of the funds, Ernst & Young will provide services including (1) audit of the annual financial statements, (2) assistance and consultation in connection with SEC filings and (3) review of the annual federal income tax return filed for each fund by Twentieth Century. Baird, Kurtz & Dobson, City Center Square, Suite 2700, 1100 Main Street, Kansas City, Missouri 64105, served as independent accountants for the funds and examined the financial statements of the funds for all fiscal years ending prior to December 1, 1995. CAPITAL STOCK Twentieth Century's capital stock is described in the prospectus under the caption, "Further Information About Twentieth Century." The corporation currently has two series of shares outstanding. Twentieth Century may in the future issue additional series of shares without a vote of the shareholders. The assets belonging to each series of shares are held separately by the custodian and the shares of each series represent a beneficial interest in the principal, earnings and profits (or losses) of investment and other assets 11 held for that series. Your rights as a shareholder are the same for all series of securities unless other- wise stated. Within their respective series, all shares have equal redemption rights. Each share, when issued, is fully-paid and non-assessable. Each share, irrespective of series, is entitled to one vote for each dollar of net asset value represented by such share on all questions. In the event of complete liquidation or dissolution of Twentieth Century, shareholders of each series of shares shall be entitled to receive, pro rata, all of the assets less the liabilities of that series. TAXES The corporation elected to be taxed under subchapter M of the Internal Revenue Code (the "Code") as a regulated investment company. If it qualifies, it will not be subject to U.S. federal income tax (other than any tax resulting from investing in passive foreign investment companies, as discussed below) on net ordinary income and net capital gains, which are distributed to its shareholders within certain time periods specified in the Code. Amounts not distributed on a timely basis would be subject to federal corporate income tax and possibly to a nondeductible 4% excise tax. Each fund intends to distribute annually all of its net ordinary income and net capital gains. Distributions from net investment income and net short-term capital gains are taxable to shareholders as ordinary income. The dividend-received deduction available to corporate shareholders for dividends received from a fund will apply to ordinary income distributions only to the extent that they are attributable to the fund's dividend income from U.S. corporations. In addition, the dividends-received deduction will be limited if the shares with respect to which the dividends are received are treated as debt-financed or are deemed to have been held less than 46 days by a fund. Distributions from net long-term capital gains are taxable to a shareholder as long-term capital gains regardless of the length of time the shares on which such distributions are paid have been held by the shareholder. However, shareholders should note that any loss realized upon the sale or redemption of shares held for six months or less will be treated as a long-term capital loss to the extent of any distribution of long-term capital gain to the shareholder with respect to such shares. Income from foreign securities purchased by a fund may be reduced by a withholding tax at the source. If as of the end of any fiscal year more than 50% of the assets of a fund are invested in securities of foreign corporations, the fund may make an election that will result in the shareholder having the option to elect either to deduct their pro rata share of the foreign taxes paid by the fund or to use their pro rata share of the foreign taxes paid by the fund in calculating the foreign tax credit to which they are entitled. Distributions by a fund will be treated as U.S. source income for purposes other than computing the foreign tax credit limitation. If a fund invests in the securities of certain foreign investment funds or trusts called passive foreign investment companies, the fund may be subject to federal corporate income taxation on a portion of any "excess distribution" with respect to, or gain from the disposition of, such securities. The tax would be determined by allocating such distribution or gain ratability to each day of the fund's holding period for the stock. The distribution or gain so allocated to any taxable year of the fund, other than the taxable year of the excess distribution for disposition, would be taxed to the fund at the highest marginal rate in effect for such year, and the tax would be further increased by an interest charge. Any amount of distribution or gain allocated to the taxable year of the distribution or disposition would be included in the fund's taxable income. In the alternative, the fund may elect to recognize cumulative gains on such investments as of the last day of its fiscal year and distribute to shareholders. Redemption of shares of a fund will be a taxable transaction for federal income tax purposes and shareholders will generally recognize gain or loss in an amount equal to the difference between 12 the basis of the shares and the amount received. Assuming that shareholders hold such shares as a capital asset, the gain or loss will be a capital gain or loss and will generally be long term if shareholders have held such shares for a period of more than one year. If a loss is realized on the redemption of fund shares, the reinvestment in additional fund shares within 30 days before or after the redemption may be subject to the "wash sale" rules of the Code, resulting in a postponement of the recognition of such loss for federal income tax purposes. In addition to the federal income tax consequences described above relating to an investment in a fund, there may be other federal, state or local tax considerations that depend upon the circumstances of each particular investor. Prospective shareholders are therefore urged to consult their tax advisers with respect to the effect of this investment on their own specific situations. BROKERAGE Under the management agreement between Twentieth Century and Investors Research, Investors Research has the responsibility of selecting brokers to execute portfolio transactions. Twentieth Century's policy is to secure the most favorable prices and execution of orders on its portfolio transactions. So long as that policy is met, Investors Research may take into consideration the factors discussed under this caption when selecting brokers. Investors Research receives statistical and other information and services without cost from brokers and dealers. Investors Research evaluates such information and services, together with all other information that it may have, in supervising and managing the investments of Twentieth Century. Because such information and services may vary in amount, quality and reliability, their influence in selecting brokers varies from none to very substantial. Investors Research proposes to continue to place some of Twentieth Century's brokerage business with one or more brokers who provide information and services. Such information and services provided to Investors Research will be in addition to and not in lieu of services required to be performed for Twentieth Century by Investors Research. Investors Research does not utilize brokers that provide such information and services for the purpose of reducing the expense of providing required services to Twentieth Century. In the fiscal years ended November 30, 1995, 1994, and 1993, International Equity paid brokerage commissions in the amount of $12,351,904, $18,168,517, and $7,545,898. In the fiscal year ended November 30, 1995, and the period from April 1, 1994 (inception) through November 30, 1994, International Emerging Growth paid brokerage commissions in the amount of $1,434,299 and $901,470. The brokerage commissions paid by Twentieth Century may exceed those which another broker might have charged for effecting the same transactions, because of the value of the brokerage and research services provided by the broker. Research services furnished by brokers through whom Twentieth Century effects securities transactions may be used by Investors Research in servicing all of its accounts, and not all such services may be used by Investors Research in managing the portfolio of the corporation. The staff of the Securities and Exchange Commission has expressed the view that the best price and execution of over-the-counter transactions in portfolio securities may be secured by dealing directly with principal market makers, thereby avoiding the payment of compensation to another broker. In certain situations, the officers of Twentieth Century and the manager believe that the facilities, expert personnel and technological systems of a broker enable the corporation to secure as good a net price by dealing with a broker instead of a principal market maker, even after payment of the compensation to the broker. Twentieth Century normally places its over-the-counter transactions with principal market makers, but may also deal on a bro- 13 kerage basis when utilizing electronic trading networks or as circumstances warrant. PERFORMANCE ADVERTISING FUND PERFORMANCE Individual fund performance may be compared to various indices including the Standard & Poor's 500 Index, the Dow Jones World Index, the IFC Global Composite Index, and the Morgan Stanley Capital International Europe, Australia, Far East Index (EAFE Index). The following tables set forth the average annual total return of the funds for the periods indicated. Average annual total return is calculated by determining cumulative total return for the stated period and then computing the annual compound return that would produce the cumulative total return if the funds' performance had been constant over that period. Cumulative total return includes all elements of return, including reinvestment of dividends and capital gains distributions. Annualization of the funds' return assumes that the partial year performance will be constant throughout the period. Actual returns through the period may be greater or less than the annualized data. INTERNATIONAL EQUITY - ------------------------------------------ Year ended November 30, 1995 5.93% May 9, 1991 (Inception) through November 30, 1995 12.23% - ------------------------------------------ INTERNATIONAL EMERGING GROWTH - ------------------------------------------ Year ended November 30, 1995 5.75% April 1, 1994 (Inception) through November 30, 1995 8.23% - ------------------------------------------ The funds may also elect to advertise cumulative total return over various time periods. The International Equity fund's cumulative total return for the period from its inception through November 30, 1995, was 69.28%. The International Emerging Growth fund's cumulative total return for the period from its inception through November 30, 1995, was 14.00%. ADDITIONAL PERFORMANCE COMPARISONS Investors may judge the performance of the funds by comparing their performance to the performance of other mutual funds or mutual fund portfolios with comparable investment objectives and policies through various mutual fund or market indices such as the EAFE(R) Index and those prepared by Dow Jones & Co., Inc., Standard & Poor's Corporation, Shearson Lehman Brothers, Inc. and The Russell 2000 Index, and to data prepared by Lipper Analytical Services, Inc., Morningstar, Inc. and the Consumer Price Index. Comparisons may also be made to indices or data published in Money, Forbes, Barron's, The Wall Street Journal, The New York Times, Business Week, Pensions and Investments, USA Today and other similar publications or services. In addition to performance information, general information about the funds that appears in a publication such as those mentioned above or in the prospectus under the heading "Performance Advertising" may be included in advertisements and in reports to shareholders. PERMISSIBLE ADVERTISING INFORMATION From time to time, the funds may, in addition to any other permissible information, include the following types of information in advertisements, supplemental sales literature and reports to shareholders: (1) discussions of general economic or financial principles (such as the effects of compounding and the benefits of dollar-cost averaging); (2) discussions of general economic trends; (3) presentations of statistical data to supplement such discussions; (4) descriptions of past or anticipated portfolio holdings for one or more of the funds; (5) descriptions of investment strategies for one or more of the funds; (6) descriptions or com- 14 parisons of various savings and investment products (including, but not limited to, qualified retirement plans and individual stocks and bonds), which may or may not include the funds; (7) comparisons of investment products (including the funds) with relevant market or industry indices or other appropriate benchmarks; (8) discussions of fund rankings or ratings by recognized rating organizations; and (9) testimonials describing the experience of persons that have invested in one or more of the funds. The funds may also include calculations, such as hypothetical compounding examples, which describe hypothetical investment results in such communications. Such performance examples will be based on an express set of assumptions and are not indicative of the performance of any of the funds. REDEMPTIONS IN KIND Twentieth Century's policy with regard to large redemptions is described in the prospectus under the heading "Special Requirements for Large Redemptions." The corporation has elected to be governed by Rule 18f-1 under the Investment Company Act, pursuant to which the corporation is obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of the net asset value of a fund during any 90-day period for any one shareholder. If shares are redeemed in kind, the redeeming shareholder might incur brokerage costs in converting the assets to cash. The method of valuing portfolio securities used to make redemptions in kind will be the same as the method of valuing portfolio securities described in the prospectus under the caption "How Share Price is Determined," and such valuation will be made as of the same time the redemption price is determined. HOLIDAYS Twentieth Century does not determine the net asset value of its shares on days when the New York Stock Exchange is closed. Currently, the Exchange is closed on Saturdays and Sundays, and on holidays, namely New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas. FINANCIAL STATEMENTS Twentieth Century's financial statements for the fiscal year ended November 30, 1995 are included in the annual report to shareholders which is incorporated herein by reference. You may receive copies without charge upon request to Twentieth Century at the address and phone number shown on the cover of this statement. 15 TWENTIETH CENTURY World Investors Statement of Additional Information April 1, 1996 [company logo] Investments That Work(TM) - ---------------------------------------- P.O. Box 419200 Kansas City, Missouri 64141-6200 - ---------------------------------------- Person-to-person assistance: 1-800-345-2021 or 816-531-5575 - ---------------------------------------- Automated information line: 1-800-345-8765 - ---------------------------------------- Telecommunications Device for the Deaf: 1-800-634-4113 or 816-753-1865 - ---------------------------------------- Fax: 816-340-7962 - ---------------------------------------- [company logo] ================================================================================ - -------------------------------------------------------------------------------- SH-BKT-4575 9603 (C) 1996 Twentieth Century Services, Inc. PART C OTHER INFORMATION ITEM 24. Financial Statements and Exhibits (a) Financial Statements: (i) Financial Statements filed in Part A of Registration Statement: 1. Financial Highlights (ii) Financial Statements filed in Part B of the Registration Statement (each of the following financial statements is contained in the Registrant's Annual Report dated November 30, 1995, which appears as Exhibit 12 to this Registration Statement, and which is incorporated by reference in Part B of this Registration Statements): 1. Statement of Assets and Liabilities at November 30, 1995. 2. Statement of Operations for the year ended November 30, 1995. 3. Statements of Changes in Net Assets for the years ended November 30, 1995 and 1994. 4. Notes to Financial Statements as of November 30, 1995. 5. Schedule of Investments of November 30, 1995. 6. Independent Accountants' Report dated December 30, 1995. (b) Exhibits (all footnoted exhibits being incorporated herein by reference). 1. (a) Articles of Incorporation of Twentieth Century World Investors, Inc. (EX-99.B1a). (b) Articles Supplementary of Twentieth Century World Investors,Inc., dated November 8, 1993 (EX-99.B1b). (c) Articles Supplementary of Twentieth Century World Investors, Inc., dated April 24, 1995 (EX-99.B1c). 2. By-Laws of Twentieth Century World Investors, Inc. (EX-99.B2). 3. Voting Trust Agreements - None. 4. Specimen Securities (filed as Exhibit 4 to the Registration Statement, File No. 33-39242, and incorporated herein by reference). 5. Form of Investment Management Agreement between Twentieth Century World Investors, Inc. and Investors Research Corporation (EX-99.B5). 6. Underwriting Agreements - None. 7. Bonus and Profit Sharing Plan, Etc. - None. 8. (a) Custody Agreement by and between Twentieth Century World Investors, Inc. and UMB Bank, N.A. (EX-99.B8a). (b) Amendment No. 1 to Custody Agreement by and between Twentieth Century World Investors, Inc. and UMB Bank, N.A., dated January 25, 1996 (EX-99.B8b). (c) Custodian Agreement by and between Twentieth Century World Investors, Inc. and Boatmen's First National Bank of Kansas City (EX-99.B8c). 9. Transfer Agency Agreement dated as of March 1, 1992, by and between Twentieth Century World Investors, Inc. and Twentieth Century Services, Inc. (EX-99.B9). 10. Opinion and consent of David H. Reinmiller, Esq. (EX-99.B10). 11. Consent of Baird, Kurtz & Dobson (EX-99.B11). 12. Annual Report for the year ended November 30, 1995 (filed January 24, 1996, File No. 33-39242, accession #872825-96-000001, and incorporated herein by reference). 13. Agreements for Initial Capital, Etc. - None. 14. Model Retirement Plans (filed as Exhibits 14a-d to Pre-Effective Amendment No. 4, File No. 33-39242, and incorporated herein by reference). 15. 12b-1 Plans - None. 16. Schedule of Computation for Performance Advertising Quotations (EX-99.B16). 17. Power of Attorney (EX-99.B17). 27. (a) Financial Data Schedule for Twentieth Century International Equity (EX-27.1.1). (b) Financial Data Schedule for Twentieth Century International Emerging Growth (EX-27.1.2). ITEM 25 Persons Controlled by or Under Common Control with Registrant - None. ITEM 26 Number of Holders of Securities Number of Record Holders Title of Series As of December 31, 1995 --------------- ------------------------ Twentieth Century International Equity 115,608 Twentieth Century International Emerging Growth 6,623 ITEM 27 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 XIII of the Registrant's Articles of Incorporation, Exhibit 1, 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 28 Business and Other Connections of Investment Advisor. Investors Research Corporation, the investment advisor, is engaged in the business of managing investments for registered investment companies, deferred compensation plans and other institutional investors. ITEM 29 Principal Underwriters - None. ITEM 30 Location of Accounts and Records All accounts, books and other documents required to be maintained by Section 31(a) of the 1940 Act, and the rules promulgated thereunder, are in the possession of Registrant, Twentieth Century Services, Inc. and Investors Research Corporation, all located at 4500 Main Street, Kansas City, Missouri 64111. ITEM 31 Management Services - None. ITEM 32 Undertakings. (a) Not applicable. (b) Not applicable. (c) The Registrant hereby undertakes to furnish each person to whom a prospectus is delivered with a copy of the Registrant's latest annual report to shareholders, upon request and without charge. (d) The Registrant hereby undertakes that it will, if requested to do so by the holders of at least 10% of the Registrant's outstanding votes, call a meeting of shareholders for the purpose of voting upon the question of the removal of a director and to assist in communication with other shareholders as required by Section 16(c). SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, Twentieth Century World Investors, Inc., the Registrant, certifies that it meets all the requirements for effectiveness of the Post-Effective Amendment No. 6 to its Registration Statement on Form N-1A pursuant to Rule 485(b) promulgated under the Securities Act of 1933, as amended, and has duly caused this Post-Effective Amendment No. 6 to its Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Kansas City, State of Missouri on the 29th day of March, 1996. Twentieth Century World, Inc. (Registrant) By:/s/ James E. Stowers III James E. Stowers III, President Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 6 has been signed below by the following persons in the capacities and on the dates indicated. Signature Title Date *James E. Stowers, Jr. Chairman, Director and March 29, 1996 James E. Stowers, Jr. Principal Executive Officer /s/ James E. Stowers III President and Director March 29, 1996 James E. Stowers III *Robert T. Jackson Executive Vice President March 29, 1996 Robert T. Jackson and Principal Financial Officer *Maryanne Roepke Vice President, Treasurer and March 29, 1996 Maryanne Roepke Principal Accounting Officer *Thomas A. Brown Director March 29, 1996 Thomas A. Brown *Robert W. Doering, M.D. Director March 29, 1996 Robert W. Doering, M.D. *Linsley L. Lundgaard Director March 29, 1996 Linsley L. Lundgaard *Donald H. Pratt Director March 29, 1996 Donald H. Pratt *Lloyd T. Silver, Jr. Director March 29, 1996 Lloyd T. Silver, Jr. *M. Jeannine Strandjord Director March 29, 1996 M. Jeannine Strandjord *John M. Urie Director March 29, 1996 John M. Urie *By/s/ James E. Stowers III James E. Stowers III Attorney-in-Fact EX-99 2 EXHIBIT INDEX EXHIBIT INDEX Twentieth Century World Investors, Inc. Exhibit Description of Document Number EX-99.B1a Articles of Incorporation of Twentieth Century World Investors, Inc. EX-99.B1b Articles Supplementary of Twentieth Century World Investors,Inc., dated November 8, 1993. EX-99.B1c Articles Supplementary of Twentieth Century World Investors, Inc., dated April 24, 1995. EX-99.B2 By-Laws of Twentieth Century World Investors, Inc. EX-99.B4 Specimen Securities (filed as Exhibit 4 to the Registration Statement on Form N-1A of the Registrant, File No. 33-39242, and incorporated herein by reference). EX-99.B5 Form of Investment Management Agreement between Twentieth Century World Investors, Inc. and Investors Research Corporation. EX-99.B8a Custody Agreement by and between Twentieth Century World Investors, Inc. and UMB Bank, N.A. EX-99.B8b Amendment No. 1 to Custody Agreement by and between Twentieth Century World Investors, Inc. and UMB Bank, N.A., dated January 25, 1996. EX-99.B8c Custodian Agreement by and between Twentieth Century World Investors, Inc. and Boatmen's First National Bank of Kansas City. EX-99.B9 Transfer Agency Agreement dated as of March 1, 1992, by and between Twentieth Century World Investors, Inc. and Twentieth Century Services, Inc. EX-99.B10 Opinion and consent of David H. Reinmiller, Esq. EX-99.B11 Consent of Baird, Kurtz & Dobson. EX-99.B12 Annual Report for the year ended November 30, 1995 (filed January 24, 1996, File No. 33-39242, accession #872825-96-000001, and incorporated herein by reference). EX-99.B14 Model Retirement Plans (filed as Exhibits 14a-d to Pre-Effective Amendment No. 4 to the Registration Statement on Form N-1A, File No. 33-39242, and incorporated herein by reference). EX-99.B16 Schedule of Computation for Performance Advertising Quotations. EX-99.B17 Power of Attorney. EX-99.B27.1.1 Financial Data Schedule for Twentieth Century International Equity. EX-99.B27.1.2 Financial Data Schedule for Twentieth Century International Emerging Growth. EX-99.B1A 3 ARTICLES OF INCORPORATION ARTICLES OF INCORPORATION OF TWENTIETH CENTURY WORLD INVESTORS, INC. FIRST: I, the undersigned, Patrick A. Looby, whose post office address is 4500 Main Street, P.O. Box 418210, Kansas City, Missouri 64141-9210, being at least 18 years of age, do, under and by virtue of the general laws of the State of Maryland, execute and acknowledge these Articles of Incorporation as incorporator with the intention of forming a corporation. SECOND: The name of the Corporation is Twentieth Century World Investors, Inc. THIRD: The purposes for which the Corporation is formed are: 1. To carry on the business of an investment company. 2. To engage in any or all lawful business for which corporations may be organized under the Maryland General Corporation Law except insofar as such business may be limited by the Investment Company Act of 1940 as from time to time amended, or by any other law of the United States regulating investment companies, or by limitations imposed by the laws of the several states wherein the Corporation offers its shares. FOURTH: The name of the resident agent of the Corporation in this state is The Corporation Trust Company, a corporation of this state, and the post office address of the resident agent is 32 South Street, Baltimore, Maryland 21202. The current address of the principal office of the Corporation in the State of Maryland is c/o The Corporation Trust Company, 32 South Street, Baltimore, Maryland 21202. FIFTH: 1. The total number of shares of stock which the Corporation shall have authority to issue is 100,000,000 shares of a par value of $0.01 each, and an aggregate value of $1,000,000. All such shares are herein classified as "Common Stock" subject, however, to the authority herein granted to the Board of Directors to divide such shares into such classes and series as the Board of Directors may from time to time determine. The Board of Directors shall have the power to fix the number of shares in each such class or series and to fix such preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications and terms or conditions of redemption thereof as are not stated in these Articles of Incorporation. 2. The preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications and terms or conditions of redemption thereof shall be as follows: (a) The holder of each share of stock of the Corporation shall be entitled to one vote for each share of stock, and to a fractional vote for each fractional share, irrespective of the class or series, then standing on his name on the books of the Corporation; provided, however, that (1) matters affecting only one class or series shall be voted upon only by that class or series, and (2) where required by the Investment Company Act of 1940 or the regulations adopted thereunder or any other applicable law, certain matters shall be voted on separately by each class or series of shares affected. (b) All payments received by the Corporation for the sale of stock of each class or series and the investment and reinvestment thereof and the income, earnings and profits thereon shall belong to the class or series of shares with respect to which such payments were received, and are herein referred to as "assets belonging to" such class or series. Any assets which are not readily identifiable as belonging to any particular class or series shall be allocated to any one or more of any class or series in such manner as the Board of Directors in its sole discretion deems fair and equitable. (c) The assets belonging to each class or series shall be charged with the liabilities of the Corporation in respect of that class or series, and any liabilities of the Corporation that are not readily identifiable as belonging to any particular class or series in such manner as the Board of Directors in its sole discretion deems fair and equitable. (d) The holders of the outstanding shares of each class or series of capital stock of the Corporation shall be entitled to receive dividends from ordinary income and distributions from capital gains of the assets belonging to such class or series in such amounts, if any, and payable in such manner, as the Board of Directors may from time to time determine. Such dividends and distributions may be declared and paid by means of a formula or other method of determination at meetings held less frequently than the declaration of payment of such dividends and distributions. (e) In the event of the liquidation or dissolution of the Corporation or of any class or series thereof, stockholders of each class or series shall be entitled to receive the assets belonging to such class or series to be distributed among them in proportion to the number of shares of such class or series held by them. (f) Each holder of any class or series of stock of the Corporation, upon proper documentation and the payment of all taxes in connection therewith, may require the Corporation to redeem or repurchase such stock at the net asset value thereof, less a redemption charge or discount determined by the Board of Directors. Payment shall be made in cash or in kind as determined by the Corporation. (g) Each holder of any class or series of stock of the Corporation may, upon proper documentation and the payment of all taxes in connection therewith, convert the shares represented thereby into shares of stock of any other class or series of the Corporation on the basis of their relative net asset values less a conversion charge or discount determined by the Board of Directors, provided, however, that the Board of Directors may abolish, limit or suspend such right of conversion. (h) The Corporation may cause the shares of any stockholder to be redeemed whenever the number of shares owned by such stockholder or their dollar value is below the minimum fixed by the Board of Directors. SIXTH: The number of directors of the Corporation shall be seven, which number may be changed in accordance with the By-laws of the Corporation but shall never be less than three. The names of the directors who shall act until the first annual meeting of stockholders and until their successors are elected and qualify are: Thomas A. Brown Robert W. Doering, M.D. Linsley L. Lundgaard Lloyd T. Silver James E. Stowers Jr. James E. Stowers III John M. Urie SEVENTH: The following provisions are hereby adopted for the purpose of defining, limiting and regulating the powers of the Corporation, its directors and stockholders: 1. The Board of Directors has exclusive authority to make, amend, or repeal the By-laws of the Corporation. 2. The Board of Directors is authorized to increase or decrease the number of shares of any series or class, and to classify and reclassify any unissued stock into classes and series within classes that may be established and designated from time to time and to set or change the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, or terms or conditions of redemption of stock, of any class or series, which are not stated in these Articles of Incorporation. 3. No holder of shares of stock of any class or series shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class or series or of securities convertible into shares of stock of any class or series, whether now or hereafter authorized or whether issued for money, for a consideration other than money, or by way of dividend. 4. Notwithstanding any provisions of law requiring a greater proportion than a majority of the votes of all classes or series or of any class or series of stock entitled to be cast to take or authorize any action, the Corporation may take or authorize such action upon the concurrence of a majority of the aggregate number of the votes entitled to be cast thereon. 5. The Corporation reserves the right from time to time to make any amendments of its charter, now or hereafter authorized by law, including any amendment which alters the contract rights, as expressly set forth in its charter, or any outstanding stock. 6. The Corporation is not required to hold an annual meeting in any year in which the election of directors is not required to be acted upon under the Investment Company Act of 1940. 7. Unless a greater number therefor shall be specified in the By-laws of the Corporation, the presence at any stockholders meeting, in person or by proxy, of stockholders entitled to cast one-third of the votes thereat shall be necessary and sufficient to constitute a quorum for the transaction of business at such meeting. EIGHTH: The Corporation shall indemnify to the full extent permitted by law each person who has served at any time as director or officer of the Corporation, and his heirs, administrators, successors and assigns, against any and all reasonable expenses, including counsel fees, amounts paid upon judgments, and amounts paid in settlement (before or after suit is commenced) actually incurred by such person in connection with the defense or settlement of any claim, action, suit or proceeding in which he is made a party, or which may be asserted against him, by reason of being or having been a director or officer of the Corporation. Such indemnification shall be in addition to any other rights to which such person may be entitled under any law, by-law, agreement, vote of stockholders, or otherwise. Notwithstanding the foregoing, no officer or director of the Corporation shall be indemnified against any liability, whether or not there is an adjudication of liability, arising by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of duties within the meaning of Section 17 (and the interpretations thereunder) of the Investment Company Act of 1940. Any determination to indemnify under this Article Eight shall be made by "reasonable and fair means" within the meaning of Section 17 and shall otherwise comply with the Investment Company Act and interpretations thereunder. NINTH: All of the provisions of these Articles of Incorporation are subject to, and shall be effective only in compliance with, the Investment Company Act of 1940, all other applicable laws of the United States, the applicable laws of the several states and the applicable rules and regulations of administrative agencies having jurisdiction, as such laws, rules and regulations may from time to time be amended. IN WITNESS THEREOF, the undersigned, who executed the foregoing Articles of Incorporation, hereby acknowledges the same to be his act and states, that to the best of his knowledge, information and belief, the matters and facts therein are true in all material respects, and that this statement is made under penalties of perjury. Dated this 27th day of December, 1990 /s/Partick A. Looby Patrick A. Looby EX-99.B1B 4 ARTICLES SUPPLEMENTARY ARTICLES SUPPLEMENTARY TWENTIETH CENTURY WORLD INVESTORS, INC. Twentieth Century World Investors, Inc. ("Twentieth Century"), a Maryland corporation, hereby states: 1. Twentieth Century is registered as an open-end investment company under the Investment Company Act of 1940. 2. On November 8, 1993, the Executive Committee of the Board of Directors, acting pursuant to the authority of Section 2-105(c) of the Maryland General Corporation Law, increased the total number of shares of capital stock that Twentieth Century has authority to issue. 3. Immediately prior to the increase Twentieth Century had authority to issue one hundred million (100,000,000) shares of capital stock. Following the increase, Twentieth Century has the authority to issue one billion one hundred million (1,100,000,000) shares of capital stock. 4. Both immediately prior to and after the increase, all shares authorized were and are classified as capital stock. 5. The par value of shares of Twentieth Century's capital stock before the increase was and after the increase is $0.01 per share. 6. Immediately prior to the increase, the aggregate par value of all shares of stock that Twentieth Century was authorized to issue was $1,000,000. After giving effect to the increase, the aggregate par value of all shares of stock that Twentieth Century is authorized to issue is $11,000,000. IN WITNESS WHEREOF, the undersigned, William M. Lyons, Executive Vice President of Twentieth Century, acknowledges that these Articles Supplementary are the act of Twentieth Century, and states that, to the best of his knowledge, information and belief, the matters and facts stated herein are true in all material respects, and that this statement is made under penalties of perjury. Dated this 8th day of November, 1993. /s/ William M. Lyons William M. Lyons Executive Vice President Witness /s/ John H. Hartenbach John H. Hartenbach Secretary EX-99.B1C 5 ARTICLES SUPPLEMENTARY TWENTIETH CENTURY WORLD INVESTORS, INC. ARTICLES SUPPLEMENTARY TWENTIETH CENTURY WORLD INVESTORS, INC., a Maryland corporation whose principal Maryland office is located in Baltimore, Maryland (the "Corporation"), hereby certifies to the State Department of Assessments and Taxation of Maryland that: FIRST: Pursuant to authority expressly vested in the Board of Directors of the Corporation by Article SEVENTH of the Charter of the Corporation, the Board of Directors of the Corporation has duly established two (2) different series for the Corporation's stock (each hereinafter referred to as a "Series") and allocated Three Hundred Twenty Million (320,000,000) shares of the One Billion One Hundred Million (1,100,000,000) shares of authorized capital stock of the Corporation, par value One Cent ($.01) per share for an aggregate par value of Eleven Million Dollars ($11,000,000), among such Series as follows: Series Number of Shares Aggregate Par Value - ------ ---------------- ------------------- International Equity 300,000,000 $3,000,000 International Emerging Growth 20,000,000 200,000 The par value of each share of stock in each Series is One Cent ($0.01) per share. SECOND: Except as otherwise provided by the express provisions of these Articles Supplementary, nothing herein shall limit, by inference or otherwise, the discretionary right of the Board of Directors to serialize, classify or reclassify and issue any unissued shares of any Series or any unissued shares that have not been allocated to a Series, and to fix or alter all terms thereof, to the full extent provided by the Charter of the Corporation. THIRD: A description of the Series, including the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions for redemption is set forth in the Charter of the Corporation and is not changed by these Articles Supplementary, except with respect to the creation of the various Series. FOURTH: The Board of Directors of the Corporation duly adopted resolutions dividing into Series the authorized capital stock of the Corporation and allocating shares to each Series as set forth in these Articles Supplementary. IN WITNESS WHEREOF, TWENTIETH CENTURY WORLD INVESTORS, INC. has caused these Articles Supplementary to be signed and acknowledged in its name and on its behalf by its Vice President and its corporate seal to be hereunto affixed and attested to by its Secretary on this 24th day of April, 1995. TWENTIETH CENTURY WORLD INVESTORS, INC. ATTEST: /s/William M. Lyons By: /s/ Patrick A. Looby Name: William M. Lyons Name: Patrick A. Looby Title: Secretary Title: Vice President THE UNDERSIGNED Vice President of TWENTIETH CENTURY WORLD INVESTORS, INC., who executed on behalf of said Corporation the foregoing Articles Supplementary to the Charter, of which this certificate is made a part, hereby acknowledges, in the name of and on behalf of said Corporation, the foregoing Articles Supplementary to the Charter to be the corporate act of said Corporation, and further certifies that, to the best of his knowledge, information and belief, the matters and facts set forth therein with respect to the approval thereof are true in all material respects under the penalties of perjury. Dated: April 24, 1995 /s/ Patrick A. Looby Patrick A. Looby, Vice President EX-99.B2 6 BY-LAWS TWENTIETH CENTURY WORLD INVESTORS, INC. BY-LAWS OFFICES SECTION 1: The registered office shall be in the City of Baltimore, State of Maryland. SECTION 2: The Corporation may also have offices at such other places both within and without the State of Maryland as the Board of Directors may from time to time determine or the business of the Corporation may require. MEETINGS OF STOCKHOLDERS SECTION 3: Meetings of the stockholders shall be held at the office of the Corporation in Kansas City, Missouri or at any other place within the United States as shall be designated from time to time by the Board of Directors and stated in the notice of meeting. SECTION 4: The Corporation shall not be required to hold an annual meeting of its stockholders in any year in which the election of Directors is not required by the Investment Company Act of 1940, as amended (the "Investment Company Act"), to be acted upon by the holders of any class or series of stock of the Corporation. The use of the term "annual meeting," wherever found in these By-laws, shall not be construed to imply a requirement that a stockholder meeting be held annually. In the event that the Corporation shall be required by the Investment Company Act to hold an annual meeting of stockholders to elect Directors, such meeting shall be held at a date and time set by the Board of Directors in accordance with the Investment Company Act of (but in no event later than 120 days after the occurrence of the event requiring the election of Directors). Any annual meeting that is not required by the Investment Company Act shall be held on a date and time during the month of July set by the Board of Directors. At any annual meeting, the stockholders shall elect a Board of Directors and may transact any business within the powers of the Corporation. Any business of the Corporation may be transacted at an annual meeting without being specially designated in the notice, except such business as is specifically required by statute to be stated in the notice. SECTION 5: One third of the stock issued and outstanding and entitled to vote at any meeting of stockholders, the holders of which are present in person or represented by proxy, shall constitute a quorum for the transaction of business at such meeting, except as otherwise provided by law, by the Articles of Incorporation, or by these By-laws. Where the approval of any particular item of business to come before a meeting requires the approval of one or more than one class or series of stock, voting separately, the holders of one third of each of such classes or series of stock entitled to vote must be present to constitute a quorum for the transaction of such item of business. If, however, a quorum shall not be present or represented at any meeting of the stockholders, a majority of the voting stock represented in person or by proxy at such meeting may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than 90 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote thereat. SECTION 6: When a quorum is present at any meeting, a majority of all the votes cast is sufficient to approve any matter which properly comes before the meeting, unless a different vote for such matter is specified by law, by the Articles of Incorporation or by these By-laws, in which case such different specified vote shall be required to approve such matter. SECTION 7: Special meetings of the stockholders may be called at any time by the Board of Directors, or by the Chairman of the Board, the President, a Vice President, the Secretary or an Assistant Secretary. SECTION 8: Special meetings of the stockholders shall be called by the Secretary upon written request of stockholders entitled to cast at least 25 percent of all the votes entitled to be cast at such meeting. Such request shall state the purpose or purposes of such meeting and the matters proposed to be acted on thereat. After verification of the sufficiency of such request, the Secretary shall then inform the requesting stockholders of the reasonably estimated cost of preparing and mailing such notice of the meeting. Upon payment to the Corporation of such costs, the Secretary shall give notice stating the purpose or purposes of the meeting to all stockholders entitled to notice of such meeting; provided, however, unless requested by stockholders entitled to cast a majority of all the votes entitled to be cast at the meeting, no special meeting need be called to consider any matter which is substantially the same as a matter voted upon at any special meeting of the stockholders held during the preceding 12 months. SECTION 9: Not less than ten nor more than 90 days before the date of every stockholders' meeting, the Secretary shall give to each stockholder entitled to vote at such meeting, and to each stockholder not entitled to vote who is entitled by statute to notice, written or printed notice stating (i) the time and place of the meeting and, (ii) the purpose or purposes for which the meeting is called if the meeting is a special meeting, or if notice of the purpose of the meeting is required by statute to be given. Such notice shall be given either by mail or by presenting it to the stockholder personally or by leaving it at his residence or usual place of business. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the stockholder at his address as it appears on the records of the Corporation, with postage thereon paid. SECTION 10: Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice of the meeting. SECTION 11: At all meetings of stockholders, a stockholder may vote the shares owned of record by him on the record date (determined in accordance with Section 39 hereof) for each such stockholders' meeting either in person or by written proxy signed by the stockholder or by his duly authorized attorney-in-fact. No proxy shall be valid after 11 months from its date, unless otherwise provided in the proxy. At all meetings of stockholders, unless the voting is conducted by inspectors, all questions relating to the qualifications of voters and the validity of proxies and the acceptance or rejection of votes shall be decided by the chairman of the meeting. DIRECTORS SECTION 12: The number of Directors of the Corporation shall be seven. By vote of a majority of the entire Board of Directors, the number of Directors fixed by the Articles of Incorporation or by these By-laws may be increased or decreased from time to time to a number not exceeding 15 nor less than three, but the tenure of office of a Director shall not be affected by any decrease in the number of Directors so made by the Board. Until the first annual meeting of stockholders or until successors are duly elected and qualify, the Board shall consist of the persons named as such in the Articles of Incorporation. At the first annual meeting of stockholders and at each annual meeting thereafter, the stockholders shall elect Directors to hold office until the next annual meeting or until their successors are elected and qualify. A plurality of all the votes cast at an annual meeting at which a quorum is present shall be required to elect Directors of the Corporation. Each Director, upon his election, shall qualify by accepting the Office of Director, and his attendance at, or his written approval of the minutes of, any meeting of the newly-elected directors shall constitute his acceptance of such office, or he may execute such acceptance by a separate writing, which shall be placed in the minute book. Directors need not be stockholders of the Corporation. SECTION 13: The business and affairs of the Corporation shall be managed by its Board of Directors, which may exercise all the powers of the Corporation, except such as are by law and by the Articles of Incorporation or by these By-laws conferred upon or reserved to the stockholders. MEETINGS OF THE BOARD OF DIRECTORS SECTION 14: Meetings of the Board of Directors, regular or special, may be held at any place in or out of the State of Maryland as the Board may from time to time determine. SECTION 15: The first meeting of each newly-elected Board of Directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting, and no notice of such meeting shall be necessary to the newly-elected Directors in order to legally constitute the meeting, provided a quorum shall be present. In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly-elected Board of Directors, or if such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors, or as shall be specified in a written waiver signed by all of the Directors. SECTION 16: Regular meetings of the Board of Directors may be held at such time and place as shall from time to time be fixed by resolution adopted by the full Board of Directors. Adoption of such resolutions shall constitute notice of all meetings held pursuant thereto. SECTION 17: Special meetings of the Board of Directors may be called at any time by the Board of Directors or the Executive Committee, if one be constituted, by vote at a meeting, or by the Chairman of the Board, the President or by a majority of the Directors or a majority of the members of the Executive Committee in writing with or without a meeting. Special meetings may be held at such place or places within or without Maryland as may be designated from time to time by the Board of Directors; in the absence of such designation, such meetings shall be held at such places as may be designated in the call. SECTION 18: Notice of the place and time of every special meeting of the Board of Directors shall be served on each Director or sent to him by telegraph, or by leaving the same at his residence or usual place of business at least three days before the date of the meeting, or by mail at least seven days before the date of the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the Director at his address as it appears on the records of the Corporation, with postage thereon prepaid. SECTION 19: At all meetings of the Board, a majority of the entire Board of Directors shall constitute a quorum for the transaction of business and the action of a majority of the Directors present at any meeting at which a quorum is present shall be the action of the Board of Directors unless the concurrence of a greater proportion is required for such action by law, the Articles of Incorporation or these By-laws. If a quorum shall not be present at any meeting of Directors, the Directors present thereat may by a majority vote adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. SECTION 20: Unless otherwise restricted by the Articles of Incorporation or these By-laws, members of the Board of Directors of the Corporation, or any committee designated by the Board, may participate in a meeting of the Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by that means shall constitute presence in person at such meeting. SECTION 21: Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if a written consent to such action is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of the proceedings of the Board or committee. COMMITTEES OF DIRECTORS SECTION 22: The Board of Directors may appoint from among its members an Executive Committee and other committees composed of two or more Directors, and may delegate to such committees any of the powers of the Board of Directors except the power to declare dividends or distributions on stock, recommend to the stockholders any action which requires stockholder approval, amend the By-laws, approve any merger or share exchange which does not require stockholder approval or issue stock. However, if the Board of Directors, subject to the terms and provisions of the Articles of Incorporation, has given general authorization for the issuance of stock, a committee of the Board, in accordance with a general formula or method specified by the Board of Directors by resolution or by adoption of a stock option or other plan, may fix the terms of stock subject to classification or reclassification and the terms on which any stock may be issued. In the absence of an appropriate resolution of the Board of Directors, each committee may adopt such rules and regulations governing its duties, proceedings, quorum and manner of acting as it shall deem proper and desirable, provided that the quorum shall not be less than two directors. In the absence of any member of such committee, the members thereof present at any meeting, whether or not they constitute a quorum, may appoint a member of the Board of Directors to act in the place of such absent member. SECTION 23: All committees of the Board of Directors shall keep minutes of their proceedings and shall report the same to the Board of Directors at the next Board of Directors meeting. Any action by any of such committees shall be subject to the revision and alteration by the Board of Directors, provided that no rights of the third persons shall be affected by any such revision or alteration. WAIVER OF NOTICE SECTION 24: Whenever any notice of the time, place or purpose of any meeting of stockholders, Directors or committee is required to be given under the provisions of a statute or under the provisions of the Articles of Incorporation or these By-laws, each person who is entitled to the notice waives notices if (i) he, before or after the meeting, signs a waiver of notice which is filed with the records of the meeting, or (ii) such person present in person at the meeting if the meeting in question is of the Board of Directors or a committee or, if the meeting in question is of the stockholders, if such person is present either in person or by proxy. OFFICERS SECTION 25: The officers of the Corporation shall be chosen by the Board of Directors and shall include a President, a Vice President, a Secretary and a Treasurer. The President shall be selected from among the Directors. The Board of Directors may also choose a Chairman of the Board, additional Vice Presidents, one or more Assistant Secretaries and Assistant Treasurers. If chosen, the Chairman of the Board shall be selected from among the Directors. Officers of the Corporation shall be elected by the Board of Directors at its first meeting after each annual meeting of stockholders. If no annual meeting of stockholders shall be held in any year, such election of officers may be held at any regular or special meeting of the Board of Directors as shall be determined by the Board of Directors. SECTION 26: Two or more offices, except those of President and Vice President, may be held by the same person but no officer shall execute, acknowledge or verify any instrument in more than one capacity, if such instrument is required by law, the Articles of Incorporation or these By-laws to be executed, acknowledged or verified by two or more officers. SECTION 27: The Board of Directors, at any meeting thereof, may appoint such additional officers and agents as it shall deem necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board. SECTION 28: The salaries of all officers and agents of the Corporation shall be fixed by the Board of Directors. SECTION 29: The officers of the Corporation shall serve for one year and until their successors are chosen and qualify. Any officer or agent may be removed by the Board of Directors whenever, in its judgment, the best interests of the Corporation will be served thereby, but such removal shall be without prejudice to the contractual rights, if any, of the person so removed. If the office of any officer or officers becomes vacant for any reason, the vacancy may be filled by the Board of Directors at any meeting thereof. CHAIRMAN OF THE BOARD SECTION 30: If a Chairman of the Board be elected, he shall preside at all meetings of the stockholders and Directors at which he may be present and shall have such other duties, powers and authority as may be prescribed elsewhere in these By-laws. The Board of Directors may delegate such other authority and assign such additional duties to the Chairman of the Board, other than those conferred by law exclusively upon the President, as it may from time to time determine, and, to the extent permissible by law, the Board may designate the Chairman of the Board as the chief executive officer of the Corporation with all of the powers otherwise conferred upon the President of the Corporation under Section 31, or it may, from time to time, divide the responsibilities, duties and authority for the general control and management of the Corporation's business and affairs between the Chairman of the Board and the President. PRESIDENT SECTION 31: Unless the Board otherwise provides, the President shall be the chief executive officer of the Corporation with such general executive powers and duties of supervision and management as are usually vested in the office of the chief executive officer of a corporation, and he shall carry into effect all directions and resolutions of the Board. The President, in the absence of the Chairman of the Board or if there be no Chairman of the Board, shall preside at all meetings of the stockholders and Directors. He shall have such other or further duties and authority as may be prescribed elsewhere in these By-laws or from time to time by the Board of Directors. If a Chairman of the Board be elected or appointed and designated as the chief executive officer of the Corporation, as provided in Section 30, the President shall perform such duties as may be specifically delegated to him by the Board of Directors or are conferred by law exclusively upon him and in the absence, disability, or inability or refusal to act of the Chairman of the Board, the President shall perform the duties and exercise the powers of the Chairman of the Board. VICE PRESIDENTS SECTION 32: The Vice President, or if there shall be more than one, the Vice Presidents in the order determined by the Board of Directors, shall, in the absence or disability of the President, perform the duties and exercise the powers of the President, and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. SECRETARY AND ASSISTANT SECRETARIES SECTION 33: The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings of the meetings of the Corporation and of the Board of Directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision he shall be. He shall keep in safe custody the seal of the Corporation, and when authorized by the Board, affix the same to any instrument requiring it, and when so affixed it shall be attested by his signature or by the signature of an Assistant Secretary. SECTION 34: The Assistant Secretary, if any, or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors, shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. THE TREASURER AND ASSISTANT TREASURER SECTION 35: The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipt and disbursements in books belonging to the Corporation and shall deposit all monies, and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. SECTION 36: The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires an account of all his transactions as Treasurer and of the financial condition of the Corporation. He shall perform all of the acts incidental to the office of Treasurer, subject to the control of the Board of Directors. SECTION 37: If required by the Board of Directors, he shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board for the faithful performance of the duties of his office and for the restoration of the Corporation, in case of his death, resignation, retirement, or removal from office of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation. SECTION 38: The Assistant Treasurer, if any, or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors, or if there be no such determination, the Assistant Treasurer designated by the Board of Directors, shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. GENERAL PROVISIONS CLOSING OF TRANSFER BOOKS SECTION 39: The Board of Directors may fix, in advance, a date as the record date for the purpose of determining stockholders entitled to notice of, or to vote at, any meeting of stockholders, or stockholders entitled to receive payment of any dividend or the allotment of any rights, or in order to make a determination of the stockholders of record for any other proper purpose. Such date, in any case, shall be not more than 90 days, and in case of a meeting of stockholders not less than ten days prior to the date on which the particular action requiring such determination of stockholders is to be taken. In lieu of fixing a record date, prior to the date on which the particular action requiring such determination of stockholders is to be taken, the Board of Directors may provide that the stock transfer books shall be closed for a stated period not to exceed, in any case, 20 days. If the stock transfer books are closed for the purpose of determining stockholders entitled to notice of or to vote at a meeting of stockholders, such books shall be closed for at least ten days immediately preceding such meeting. SECTION 40: The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such shares or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Maryland. DIVIDENDS SECTION 41: Dividends upon the capital stock of the Corporation may be declared by the Board of Directors at any regular or special meeting. Dividends may be paid in cash, in property, or in its own shares. The authority of the Board of Directors regarding the declaration and payment of dividends is subject, however, to the provisions of the Investment Company Act, the law of Maryland and the Articles of Incorporation. EXECUTION OF INSTRUMENTS SECTION 42: All documents, transfers, contracts, agreements, requisitions or orders, promissory notes, assignments, endorsements, checks, drafts, and orders for payment of money, notes and other evidences of indebtedness, issued in the name of the Corporation, and other instruments requiring execution by the Corporation, shall be signed by such officer or officers as the Board of Directors may from time to time designate or, in the absence of such designation, by the President. FISCAL YEAR SECTION 43: The fiscal year of the Corporation shall end on November 30 of each year unless the Board of Directors shall determine otherwise. SEAL SECTION 44: The corporate seal of the Corporation shall have inscribed thereon the name and the state of incorporation of the Corporation. The form of the seal shall be subject to alteration by the Board of Directors and the seal may be used by causing it or a facsimile to be impressed or affixed or printed or otherwise reproduced. In lieu of affixing the corporate seal to any document it shall be sufficient to meet the requirements of any law, rule, or regulation relating to a corporate seal to affix the word "(Seal)" adjacent to the signature of the authorized officer of the Corporation. STOCK LEDGER SECTION 45: The Corporation shall maintain at its office in Kansas City, Missouri, an original stock ledger containing the names and addresses of all stockholders and the number of shares of each class held by each stockholder. Such stock ledger may be in written form or any other form capable of being converted into written form within a reasonable time for visual inspection. STOCK CERTIFICATES SECTION 46: Certificates of stock of the Corporation shall be in the form approved by the Board of Directors. Subject to Section 47 below, every holder of stock of the Corporation shall be entitled to have a certificate, signed in the name of the Corporation by the President, or any Vice President and countersigned by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, certifying the number and kind of shares owned by him in the Corporation. Such certificate may be sealed with the corporate seal of the Corporation. Such signatures may be either manual or facsimile signatures and the seal may be either facsimile or any other form of seal. In case any officer, transfer agent, or registrar who shall have signed any such certificate, or whose facsimile signature has been placed thereon, shall cease to be such an officer, transfer agent or registrar (because of death, resignation or otherwise) before such certificate is issued, such certificate may be issued and delivered by the Corporation with the same effect as if he were such officer, transfer agent, or registrar at the date of issue. SECTION 47: The Board of Directors, by resolution, may at any time authorize the issuance without certificates of some or all of the shares of one or more of the classes or series of the Corporation's stock. Such issuances without certificates shall be made in accordance with the requirements therefor set forth in Sections 2-210(c) and 2-211 of the Maryland General Corporation Law and Article 8 of the Maryland Commercial Law Article (or any successor provisions to such statutes). Such authorization will not affect shares already represented by certificates until such shares are surrendered to the Corporation for transfer, cancellation or other disposition. INDEMNIFICATION AND INSURANCE SECTION 48: (a) The Corporation shall indemnify any individual ("Indemnitee") who is a present or former director, officer, employee, or agent of the Corporation, or who, while a director, officer, employee, or agent of the Corporation, is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, other enterprise or employee benefit plan who, by reason of his position was, is, or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (hereinafter collectively referred to as a "Proceeding") against any judgments, penalties, fines, settlements, and reasonable expenses (including attorneys' fees) actually incurred by such Indemnitee in connection with any Proceeding, to the fullest extent that such indemnification may be lawful under Maryland law. The Corporation shall pay any reasonable expenses so incurred by such Indemnitee in defending a Proceeding in advance of the final disposition thereof to the fullest extent that such advance payment may be lawful under Maryland law. Subject to any applicable limitations and requirements set forth in the Corporation's Articles of Incorporation and in these By-laws, any payment of indemnification or advance of expenses shall be made in accordance with the procedures set forth in Maryland law. (b) Anything in this Section 48 to the contrary notwithstanding, nothing in this Section 48 shall protect or purport to protect any Indemnitee against any liability to the Corporation or its stockholders, whether or not there has been an adjudication of liability, to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office ("Disabling Conduct"). (c) Anything in this Section 48 to the contrary notwithstanding, no indemnification shall be made by the Corporation to any Indemnitee unless: (i) there is a final decision on the merits by a court or other body before whom the Proceeding was brought that the Indemnitee was not liable by reason of Disabling Conduct: or (ii) in the absence of such a decision, there is a reasonable determination, based upon a review of the facts, that the Indemnitee was not liable by reason of Disabling Conduct, which determination shall be made by: (a) the vote of a majority of a quorum of directors who are neither "interested persons" of the Corporation as defined in Section 2(a)(19) of the Investment Company Act, nor parties to the Proceedings; or (b) an independent legal counsel in a written opinion. (d) Anything in this Section 48 to the contrary notwithstanding, any advance of expenses by the Corporation to any Indemnitee shall be made only upon the undertaking by such Indemnitee to repay the advance unless it is ultimately determined that such Indemnitee is entitled to indemnification as above provided, and only if one of the following conditions is met: (i) the Indemnitee provides a security for his undertaking; or (ii) the Corporation shall be insured against losses arising by reason of any lawful advances; or (iii)there is a determination, based on a review of readily available facts (which review shall not require a full trial-type inquiry), that there is reason to believe that the Indemnitee will ultimately be found entitled to indemnification, which determination shall be made by: (a) a majority of a quorum of directors who are neither "interested persons" of the Corporation as defined in Section 2(a)(19) of the Investment Company Act, nor parties to the Proceeding; or (b) an independent legal counsel in a written opinion. SECTION 49: To the fullest extent permitted by applicable Maryland law and by Sections 17(h) and 17(i) of the Investment Company Act, or any successor provisions thereto or interpretations thereunder, the Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the Corporation, or who is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, other enterprise, or employee benefit plan, against any liability asserted against him and incurred by him in any such capacity or arising out of his position, whether or not the Corporation would have the power to indemnify him against such liability pursuant to Section 2-418 of the Maryland General Corporation Law. AMENDMENTS SECTION 50: The Board of Directors shall have the power, at any regular meeting or at any special meeting if notice thereof be included in the notice of such special meeting, to alter or repeal any or all By-laws of the Corporation and to adopt new By-laws. _____________________________ I, the undersigned, being the Secretary of Twentieth Century World Investors, Inc., do hereby certify the foregoing to be the By-laws of said Corporation, as adopted at a meeting of the Board of Directors held the 9th day of February, 1991. /s/John H. Hartenbach John H. Hartenbach, Secretary EX-99.B5 7 MANAGEMENT AGREEMENT MANAGEMENT AGREEMENT THIS AGREEMENT made as of the 1st day of August, 1994, is by and between Twentieth Century World Investors, Inc., a Maryland corporation (hereinafter called the "Corporation") and Investors Research Corporation, a Delaware corporation (hereinafter called the "Investment Manager"). IN CONSIDERATION of the mutual promises and agreements herein contained, the parties agree as follows: 1. INVESTMENT MANAGEMENT SERVICES. The Investment Manager shall supervise the investments of each series of shares of the Corporation contemplated as of the date hereof, and such subsequent series of shares as the Corporation shall select the Investment Manager to manage. In such capacity, the Investment Manager shall maintain a continuous investment program for each such series, determine what securities shall be purchased or sold by each series, secure and evaluate such information as it deems proper and take whatever action is necessary or convenient to perform its functions, including the placing of purchase and sale orders. 2. COMPLIANCE WITH LAWS. All functions undertaken by the Investment Manager hereunder shall at all times conform to, and be in accordance with, any requirements imposed by: (1) the Investment Company Act of 1940, as amended (the "Investment Company Act"), and any rules and regulations promulgated thereunder; (2) any other applicable provisions of law; (3) the Articles of Incorporation of the Corporation as amended from time to time; (4) the By-laws of the Corporation as amended from time to time; and (5) the registration statements of the Corporation, as amended from time to time, filed under the Securities Act of 1933 and the Investment Company Act. 3. BOARD SUPERVISION. All of the functions undertaken by the Investment Manager hereunder shall at all times be subject to the direction of the Board of Directors of the Corporation, its executive committee, or any committee or officers of the Corporation acting under the authority of the Board of Directors. 4. PAYMENT OF EXPENSES. The Investment Manager will pay all of the expenses of each series of the Corporation's shares that it shall manage, other than interest, taxes, brokerage commissions, extraordinary expenses and the fees and expenses of those directors who are not "interested persons" as defined in Investment Company Act (hereinafter referred to as the "Independent Directors") (including counsel fees). The Investment Manager will provide the Corporation with all physical facilities and personnel required to carry on the business of each series that the Investment Manager shall manage, including but not limited to office space, office furniture, fixtures and equipment, office supplies, computer hardware and software and salaried and hourly paid personnel. The Investment Manager may at its expense employ others to provide all or any part of such facilities and personnel. 5. ACCOUNT FEES. The Corporation, by resolution of the Board of Directors, including a majority of the Independent Directors, may from time to time authorize the imposition of a fee as a direct charge against shareholder accounts of one or more of the series, such fee to be retained by the Corporation or to be paid to the Investment Manager to defray expenses which would otherwise be paid by the Investment Manager in accordance with the provisions of paragraph 4 of this Agreement. At least 60 days' prior written notice of the intent to impose such fee must be given to the shareholders of the affected series. 6. MANAGEMENT FEES. (a) In consideration of the services provided by the Investment Manager, each series of shares of the Corporation managed by the Investment Manager shall pay to the Investment Manager a per annum management fee (hereinafter, the "Applicable Fee"), as follows: NAME OF SERIES APPLICABLE FEE International Equity (i) 1.90% on assets up to $1 billion (ii) 1.25% on assets between $1 billion and $2 billion (iii) 1.00% on assets in excess of $2 billion International Emerging Growth 2.0% (b) On the first business day of each month, each series of shares shall pay the management fee at the rate specified by subparagraph (a) of this paragraph 6 to the Investment Manager for the previous month. The fee for the previous month shall be calculated by multiplying the Applicable Fee for such series by the aggregate average daily closing value of the series' net assets during the previous month, and further multiplying that product by a fraction, the numerator of which shall be the number of days in the previous month, and the denominator of which shall be 365 (366 in leap years). (c) In the event that the Board of Directors of the Corporation shall determine to issue any additional series of shares for which it is proposed that the Investment Manager serve as investment manager, the Corporation and the Investment Manager shall enter into an Addendum to this Agreement setting forth the name of the series, the Applicable Fee and such other terms and conditions as are applicable to the management of such series of shares. 7. CONTINUATION OF AGREEMENT. This Agreement shall continue in effect, unless sooner terminated as hereinafter provided, for a period of two years from the execution hereof, and for as long thereafter as its continuance is specifically approved at least annually (i) by the Board of Directors of the Corporation or by the vote of a majority of the outstanding voting securities of the Corporation, and (ii) by the vote of a majority of the directors of the Corporation, who are not parties to the agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. 8. TERMINATION. This Agreement may be terminated by the Investment Manager at any time without penalty upon giving the Corporation 60 days' written notice, and may be terminated at any time without penalty by the Board of Directors of the Corporation or by vote of a majority of the outstanding voting securities of the Corporation on 60 days' written notice to the Investment Manager. 9. EFFECT OF ASSIGNMENT. This Agreement shall automatically terminate in the event of assignment by the Investment Manager, the term "assignment" for this purpose having the meaning defined in Section 2(a)(4) of the Investment Company Act. 10. OTHER ACTIVITIES. Nothing herein shall be deemed to limit or restrict the right of the Investment Manager, or the right of any of its officers, directors or employees (who may also be a director, officer or employee of the Corporation), to engage in any other business or to devote time and attention to the management or other aspects of any other business, whether of a similar or dissimilar nature, or to render services of any kind to any other corporation, firm, individual or association. 11. STANDARD OF CARE. In the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of its obligations or duties hereunder on the part of the Investment Manager, it, as an inducement to it to enter into this Agreement, shall not be subject to liability to the Corporation or to any shareholder of the Corporation for any act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security. 12. SEPARATE AGREEMENT. The parties hereto acknowledge that certain provisions of the Investment Company Act, in effect, treat each series of shares of an investment company as a separate investment company. Accordingly, the parties hereto hereby acknowledge and agree that, to the extent deemed appropriate and consistent with the Investment Company Act, this Agreement shall be deemed to constitute a separate agreement between the Investment Manager and each series of shares of the Corporation managed by the Investment Manager. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective duly authorized officers as of the day and year first above written. Attest: TWENTIETH CENTURY WORLD INVESTORS, INC. /s/ William M. Lyons /s/ James E. Stowers III William M. Lyons James E. Stowers III Secretary President Attest: INVESTORS RESEARCH CORPORATION /s/ William M. Lyons /s/ James E. Stowers III William M. Lyons James E. Stowers III Secretary President EX-99.B8A 8 CUSTODY AGREEMENT CUSTODY AGREEMENT Dated September 12, 1995 Between UMB BANK, N.A. and INVESTORS RESEARCH CORPORATION and THE TWENTIETH CENTURY MUTUAL FUNDS Table of Contents SECTION PAGE 1. APPOINTMENT OF CUSTODIAN 1 2. DEFINITIONS 2 (a) Securities 2 (b) Assets 2 (c) Instructions and Special Instructions 2 3. DELIVERY OF CORPORATE DOCUMENTS 2 4. POWERS AND DUTIES OF CUSTODIAN AND DOMESTIC SUBCUSTODIAN 3 (a) Safekeeping 4 (b) Manner of Holding Securities 4 (c) Free Delivery of Assets 6 (d) Exchange of Securities 6 (e) Purchases of Assets 6 (f) Sales of Assets 7 (g) Options 7 (h) Futures Contracts 8 (i) Segregated Accounts 9 (j) Depositary Receipts 9 (k) Corporate Actions, Put Bonds, Called Bonds, Etc. 9 (l) Interest Bearing Deposits 10 (m) Foreign Exchange Transactions 10 (n) Pledges or Loans of Securities 11 (o) Stock Dividends, Rights, Etc. 12 (p) Routine Dealings 12 (q) Collections 12 (r) Bank Accounts 12 (s) Dividends, Distributions and Redemptions 13 (t) Proceeds from Shares Sold 13 (u) Proxies and Notices; Compliance with the Shareholders Communication Act of 1985 13 (v) Books and Records 14 (w) Opinion of Fund's Independent Certified Public Accountants 14 (x) Reports by Independent Certified Public Accountants 14 (y) Bills and Other Disbursements 14 5. SUBCUSTODIANS 14 (a) Domestic Subcustodians 15 (b) Foreign Subcustodians 15 (c) Interim Subcustodians 16 (d) Special Subcustodians 16 (e) Termination of a Subcustodian 17 (f) Certification Regarding Foreign Subcustodians 17 6. STANDARD OF CARE 17 (a) General Standard of Care 17 SECTION PAGE (b) Actions Prohibited by Applicable Law, Events Beyond Custodian's Control, Armed Conflict, Sovereign Risk, Etc. 17 (c) Liability for Past Records 18 (d) Advice of Counsel 18 (e) Advice of the Funds and Others 18 (f) Instructions Appearing to be Genuine 18 (g) Exceptions from Liability 19 7. LIABILITY OF THE CUSTODIAN FOR ACTIONS OF OTHERS 19 (a) Domestic Subcustodians 19 (b) Securities Systems, Interim Subcustodians, Special Subcustodians, Securities Depositories and Clearing Agencies 19 (c) Defaults or Insolvencies of Brokers, Banks Etc. 20 (d) Reimbursement of Expenses 20 8. INDEMNIFICATION 20 (a) Indemnification by Fund 20 (b) Indemnification by Custodian 20 9. ADVANCES 21 10. COMPENSATION 21 11. POWERS OF ATTORNEY 21 12. TERMINATION AND ASSIGNMENT 22 13. ADDITIONAL FUNDS 22 14. NOTICES 22 15. MISCELLANEOUS 23 CUSTODY AGREEMENT This agreement made as of this 12th day of September 1995, between UMB Bank, n.a., a national banking association with its principal place of business located at Kansas City, Missouri (hereinafter "Custodian"), and Investors Research Corporation (hereinafter "IRC"), and each of the registered investment companies that have executed the signature page hereof, together with such additional registered investment companies that shall be made parties to this Agreement by the execution of a separate signature page hereto (individually, a "Fund Company" and collectively, the "Fund Companies"). WITNESSETH: WHEREAS, each Fund Company is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, IRC is a registered investment adviser and provides, either directly or through one o more of its affiliates, investment management and administrative services to the Fund Companies; and WHEREAS, each Fund Company desires to appoint Custodian as its custodian for the custody of Assets (as hereinafter defined) owned by the various series of shares of each such Fund Company which Assets are to be held in such accounts as such Fund Company may establish from time to time; and WHEREAS, Custodian is willing to accept such appointment on the terms and conditions hereof. NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties hereto, intending to be legally bound, mutually covenant and agree as follows: 1. APPOINTMENT OF CUSTODIAN. Each Fund Company hereby constitutes and appoints the Custodian as custodian of Assets belonging to the various series of shares of each such Fund Company which have been or may be from time to time deposited with the Custodian or any Subcustodian (as defined in Section 5 below) duly appointed as set forth herein. Custodian accepts such appointment as a custodian and agrees to perform the duties and responsibilities of Custodian as set forth herein on the conditions set forth herein. It is understood and agreed to the parties hereto that wherever in this agreement it is stated or implied that an action is to be taken or performed by the Fund Companies, that such action shall be taken or performed by IRC or its affiliates. 2. DEFINITIONS. For purposes of this Agreement, the following terms shall have the meanings so indicated: (a) "Security" or "Securities" shall have the same meaning ascribed to such term under Section 2(36) of the 1940 Act. 1 (b) "Assets" shall mean Securities, monies and other property held by the Custodian for the benefit of a Fund Company. (c) (1) "Instructions," as used herein, shall mean: (i) a tested telex, a written (including, without limitation, facsimile transmission) request, direction, instruction or certification signed or initialed by or on behalf of a Fund Company by an Authorized Person (defined in Section 3 below); (ii) a telephonic or other oral communication from a person the Custodian reasonably believes to be an Authorized Person; or (iii) a communication effected directly between an electro-mechanical or electronic device or system (including, without limitation, computers) on behalf of a Fund Company. Instructions in the form of oral communications shall be confirmed by the appropriate Fund Company by tested telex or in writing in the manner set forth in clause (i) above, but the lack of such confirmation shall in no way affect any action taken by the Custodian in reliance upon such oral Instructions prior to the Custodian's receipt of such confirmation. Each Fund Company authorizes the Custodian to record any and all telephonic or other oral Instructions communicated to the Custodian. (2) "Special Instructions," as used herein, shall mean Instructions countersigned or confirmed in writing by the Treasurer or any Controller of a Fund Company or any other person designated by the Treasurer of such Fund Company in writing, which countersignature or confirmation shall be included on the same instrument containing the Instructions or on a separate instrument relating thereto. (3) Instructions and Special Instructions shall be delivered to the Custodian at the address and/or telephone, facsimile transmission or telex number agreed upon from time to time by the Custodian and each Fund Company. (4) Where appropriate, Instructions and Special Instructions shall be continuing instructions. (d) "Domestic Subcustodian" shall mean those entities specifically identified as such on Appendix A attached hereto and such other entities as may be appointed "Domestic Subcustodians" pursuant to Section 5(a) below. 3. DELIVERY OF CORPORATE DOCUMENTS. Each of the parties to this Agreement represents that its execution does not violate any of the provisions of its respective charter, articles of incorporation, articles of association or bylaws and all required corporate action to authorize the execution and delivery of this Agreement has been taken. Each Fund Company has furnished the Custodian with copies, properly certified or authenticated, with all amendments or supplements thereto, of the following documents: 2 (a) Resolutions of the Board of Directors of the Fund Companies appointing the Custodian and approving the form of this Agreement; and (b) Each Fund Company's current prospectus and statements of additional information. IRC will furnish the Custodian with copies of any updates, amendments or supplements to each Fund Company's prospectus and SAI upon request of the foregoing documents. In addition, each Fund Company has delivered or will promptly deliver to the Custodian, copies of the Resolution(s) of its Board of Directors or Trustees and all amendments or supplements thereto, properly certified or authenticated, designating certain officers or employees of IRC or its affiliates who will have continuing authority to certify to the Custodian: (a) the names, titles, signatures and scope of authority of all persons authorized to give Instructions or any other notice, request, direction, instruction, certificate or instrument on behalf of each Fund Company, and (b) the names, titles and signatures of those persons authorized to countersign or confirm Special Instructions on behalf of each Fund Company (in both cases collectively, the "Authorized Persons" and individually, an "Authorized Person"). Such Resolutions and certificates may be accepted and relied upon by the Custodian as conclusive evidence of the facts set forth therein and shall be considered to be in full force and effect until revoked by telephone by any such officer or employee or by any Authorized Person, or until delivery to the Custodian of a similar Resolution or certificate to the contrary, whichever first occurs. Upon delivery of a certificate which deletes or does not include the name(s) of a person previously authorized to give Instructions or to countersign or confirm Special Instructions, such persons shall no longer be considered an Authorized Person authorized to give Instructions or to countersign or confirm Special Instructions. Unless the certificate specifically requires that the approval of anyone else will first have been obtained, the Custodian will be under no obligation to inquire into the right of the person giving such Instructions or Special Instructions to do so. Notwithstanding any of the foregoing, no Instructions or Special Instructions received by the Custodian from a Fund Company will be deemed to authorize or permit any director, trustee, officer, employee, or agent of such Fund Company or of IRC to withdraw any of the Assets of such Fund Company for his or her own personal use or receipt or to be an account not registered in the name of the Fund Companies upon the mere receipt of such authorization, Special Instructions or Instructions from such director, trustee, officer, employee or agent. 4. POWERS AND DUTIES OF CUSTODIAN AND DOMESTIC SUBCUSTODIAN. The Custodian shall have and perform the powers and duties hereinafter set forth in this Section 4. For purposes of this Section 4 all references to powers and duties of the "Custodian" shall also refer to any Domestic Subcustodian, whichever first occurs. 3 (a) Safekeeping. The Custodian will keep safely the Assets of each Fund Company which are delivered to it from time to time. The Custodian shall not be responsible for any property of a Fund held or received by such Fund and not delivered to the Custodian or Subcustodian. (b) Manner of Holding Securities. (1) The Custodian shall at all times in accordance with Instructions received from IRC hold Securities of each Fund Company either: (i) by physical possession of the share certificates or other instruments representing such Securities in registered or bearer form; or (ii) in book-entry form by a Securities System (as hereinafter defined) in accordance with the provisions of sub-paragraph (3) below. (2) The Custodian may hold registrable portfolio Securities which have been delivered to it in physical form, by registering the same in the name of the Custodian or its nominee, for whose actions Custodian shall be fully responsible. Upon the receipt of Instructions, the Custodian shall hold such Securities in street certificate form, so called, with or without any indication of fiduciary capacity. However, unless it receives Instructions to the contrary, the Custodian will register all such portfolio Securities in the name of the Custodian's authorized nominee. All such Securities shall be held in an account of the Custodian containing only assets of the appropriate Fund Company or only assets held by the Custodian as a fiduciary, provided that the records of the Custodian shall accurately reflect at all times the Fund Company or other customer for which such Securities are held in such accounts and the respective interests therein. (3) Upon receipt of Instructions, the Custodian will deposit and/or maintain domestic Securities owned by a Fund Company in, and each Fund Company hereby approves use of: (a) The Depository Trust Company; (b) The Participants Trust Company; and (c) any book-entry system as provided in (i) Subpart O of Treasury Circular No. 300, 31 CFR 306.115, (ii) Subpart B of Treasury Circular Public Debt Series No. 27-76, 31 CFR 350.2, or (iii) the book-entry regulations of federal agencies substantially in the form of 31 CRT 306.115. Upon the receipt of Special Instructions, the Custodian will deposit and/or maintain domestic Securities owned by a Fund Company in any other domestic clearing agency registered with the Securities and Exchange Commission ("SEC") under Section 17A of the Securities Exchange Act of 1934 (or as may otherwise be authorized by the SEC to serve in the capacity of depository or clearing agent for the Securities or other assets of investment companies) which acts as a Securities depository. Each of the foregoing shall be referred to in this Agreement as a "Securities System," and all such Securities Systems shall be listed on the attached Appendix A. Use of a Securities System shall be in accordance with applicable Federal Reserve Board and SEC rules and regulations, if any, and subject to the following provisions: 4 (i) The Custodian may deposit the Securities directly or through one or more agents or Subcustodians which are also qualified to act as custodians for investment companies. (ii) The Custodian shall deposit and/or maintain the Securities in a Securities System, provided that such Securities are represented in an account ("Account") of the Custodian in the Securities System that includes only assets held by the Custodian as a fiduciary, custodian or otherwise for customers. (iii) The books and records of the Custodian shall at all times identify those Securities belonging to any one or more of the Fund Companies that are maintained in a Securities System. (iv) The Custodian shall pay for Securities purchased for the account of a Fund Company only upon (a) receipt of advice from the Securities System that such Securities have been transferred to the Account of the Custodian in accordance with the rules of the Securities System, and (b) the making of an entry on the records of the Custodian to reflect such payment and transfer for the account of such Fund Company. The Custodian shall transfer Securities sold for the account of a Fund Company only upon (a) receipt of advice from the Securities System that payment for such Securities has been transferred to the Account of the Custodian in accordance with the rules of the Securities System, and (b) the making of an entry on the records of the Custodian to reflect such transfer and payment for the account of such Fund Company. Copies of all advices from the Securities System relating to transfers of Securities for the account of a Fund Company shall be maintained for such Fund Company by the Custodian. The Custodian shall deliver to a Fund Company on the next succeeding business day daily transaction reports which shall include each day's transactions in the Securities System for the account of such Fund Company. Such transaction reports shall be delivered to such Fund Company or any agent designated by such Fund Company pursuant to Instructions, by computer or in such other manner as such Fund Company and Custodian may agree. (v) The Custodian shall provide such Fund Company with reports obtained by the Custodian or any Subcustodian with respect to a Securities System's accounting system, internal accounting control and procedures for safeguarding Securities deposited in the Securities System. (vi) Upon receipt of Special Instructions, the Custodian shall terminate the use of any Securities System on behalf of a Fund Company as promptly as practicable and shall take all actions reasonably practicable to safeguard the Securities of such Fund Company maintained with such Securities System. 5 (c) Free Delivery of Assets. Notwithstanding any other provision of this Agreement and except as provided in Section 3 hereof, the Custodian, upon receipt of Special Instructions, will undertake to make free delivery of Assets, provided such Assets are on hand and available, in connection with a Fund Company's transactions and to transfer such Assets to such broker, dealer, Subcustodian, bank agent, Securities System or otherwise as specified in such Special Instructions. (d) Exchange of Securities. Upon receipt of Instructions, the Custodian will exchange portfolio Securities held by it for a Fund for other Securities or cash paid in connection with any reorganization, recapitalization, merger, consolidation, or conversion of convertible Securities, and will tender any such portfolio Securities in accordance with the terms of any reorganization or protective plan. Without Instructions, the Custodian is authorized to exchange Securities held by it in temporary form for Securities in definitive form, to surrender Securities for transfer into a name or nominee name as permitted in Section 4(b)(2), to effect an exchange of shares in a stock split or when the par value of the stock is changed, to sell any fractional shares, and, upon receiving payment therefor, to surrender bonds or other Securities held by it at maturity or call. (e) Purchases of Assets. (1) Securities Purchases. In accordance with Instructions, the Custodian shall, with respect to a purchase of Securities, pay for such Securities out of monies held for a Fund Company's account for which the purchase was made, but only insofar as monies are available therein for such purpose, and receive the portfolio Securities so purchased. Unless the Custodian has received Special Instructions to the contrary, such payment will be made only upon receipt of Securities by the Custodian, a clearing corporation of a national Securities exchange of which the Custodian is a member, or a Securities System in accordance with the provisions of Section 4(b)(3) hereof. Notwithstanding the foregoing, upon receipt of Instructions: (i) in connection with a repurchase agreement, the Custodian may release funds to a Securities System prior to the receipt of advice from the Securities System that the Securities underlying such repurchase agreement have been transferred by book-entry into the Account maintained with such Securities System by the Custodian, provided that the Custodian's instructions to the Securities System require that the Securities System may make payment of such funds to the other party to the repurchase agreement only upon transfer by book-entry of the Securities underlying the repurchase agreement into such Account; (ii) in the case of Interest Bearing Deposits (defined in Section 4(e) below), currency deposits, and other deposits, foreign exchange transactions, futures contracts or options, pursuant to Sections 4(g), 4(h), 4(l), and 4(m) hereof, the Custodian may make payment therefor before receipt of an advice of transaction; and (iii) in the case of Securities as to which payment for the Security and receipt of the instrument evidencing the Security 6 are under generally accepted trade practice or the terms of the instrument representing the Security expected to take place in different locations or through separate parties, such as commercial paper which is indexed to foreign currency exchange rates, derivatives and similar Securities, the Custodian may make payment for such Securities prior to delivery thereof in accordance with such generally accepted trade practice or the terms of the instrument representing such Security. (2) Other Assets Purchased. Upon receipt of Instructions and except as otherwise provided herein, the Custodian shall pay for and receive other Assets for the account of a Fund Company as provided in Instructions. (f) Sales of Assets. (1) Securities Sold. In accordance with Instructions, the Custodian will, with respect to a sale, deliver or cause to be delivered the Securities thus designated as sold to the broker or other person specified in the Instructions relating to such sale. Unless the Custodian has received Special Instructions to the contrary, such delivery shall be made only upon receipt of payment therefor in the form of: (a) cash, certified check, bank cashier's check, bank credit, or bank wire transfer; (b) credit to the account of the Custodian with a clearing corporation of a national Securities exchange of which the Custodian is a member; or (c) credit to the Account of the Custodian with a Securities System, in accordance with the provisions of Section 4(b)(3) hereof. Notwithstanding the foregoing, Securities held in physical form may be delivered and paid for in accordance with "street delivery custom" to a broker or its clearing agent, against delivery to the Custodian of a receipt for such Securities, provided that the Custodian shall have taken reasonable steps to ensure prompt collection of the payment for, or return of, such Securities by the broker or its clearing agent, and provided further that the Custodian shall not be responsible for the selection of or the failure or inability to perform of such broker or its clearing agent or for any related loss arising from delivery or custody of such Securities prior to receiving payment therefor. (2) Other Assets Sold. Upon receipt of Instructions and except as otherwise provided herein, the Custodian shall receive payment for and deliver other Assets for the account of a Fund Company as provided in Instructions. (g) Options. (1) Upon receipt of Instructions relating to the purchase of an option or sale of a covered call option, the Custodian shall: (a) receive and retain confirmations or other documents, if any, evidencing the purchase or writing of the option by a Fund Company; (b) if the transaction involves the sale of a covered call option, deposit and maintain in a segregated account the Securities (either physically or by book-entry in a Securities System) subject to the covered call option written on behalf of such Fund; and (c) pay, release and/or transfer such Securities, cash or other Assets in accordance with any notices or other communications evidencing the expiration, 7 termination or exercise of such options which are furnished to the Custodian by the Options Clearing Corporation (the "OCC"), the securities or options exchanges on which such options were traded, or such other organization as may be responsible for handling such option transactions. (2) Upon receipt of Instructions relating to the sale of a naked option (including stock index and commodity options), the Custodian, the appropriate Fund Company and the broker-dealer shall enter into an agreement to comply with the rules of the OCC or of any registered national securities exchange or similar organization(s). Pursuant to that agreement and such Fund Company's Instructions, the Custodian shall: (a) receive and retain confirmations or other documents, if any, evidencing the writing of the option; (b) deposit and maintain in a segregated account, Securities (either physically or by book-entry in a Securities System), cash and/or other Assets in an amount specified in the Instructions; and (c) pay, release and/or transfer such Securities, cash or other Assets in accordance with any such agreement and with any notices or other communications evidencing the expiration, termination or exercise of such option which are furnished to the Custodian by the OCC, the securities or options exchanges on which such options were traded, or such other organization as may be responsible for handling such option transactions. The appropriate Fund Company and the broker-dealer shall be responsible for determining the quality and quantity of assets held in any segregated account established in compliance with applicable margin maintenance requirements and the performance of other terms of any option contract. (h) Futures Contracts. Upon receipt of Instructions, the Custodian shall enter into a futures margin procedural agreement among the appropriate Fund Company, the Custodian and the designated futures commission merchant (a "Procedural Agreement"). Under the Procedural Agreement the Custodian shall: (a) receive and retain confirmations, if any, evidencing the purchase or sale of a futures contract or an option on a futures contract by such Fund Company; (b) deposit and maintain in a segregated account cash, Securities and/or other Assets designated as initial, maintenance or variation "margin" deposits intended to secure such Fund Company's performance of its obligations under any futures contracts purchased or sold, or any options on futures contracts written by such Fund Company, in accordance with the provisions of any Procedural Agreement designed to comply with the provisions of the Commodity Futures Trading Commission and/or any commodity exchange or contract market (such as the Chicago Board of Trade), the Securities Exchange Commission ("SEC"), or any similar organization(s), regarding such margin deposits; and (c) release Assets from and/or transfer Assets into such margin accounts only in accordance with any such Procedural Agreements. The appropriate Fund Company and such futures commission merchant shall be responsible for determining the type and amount of Assets held in the segregated account or paid to the broker-dealer in compliance with applicable margin maintenance requirements and the performance of any futures contract or option on a futures contract in accordance with its terms. 8 (i) Segregated Accounts. Upon receipt of Instructions, the Custodian shall establish and maintain on its books a segregated account or accounts for and on behalf of a Fund Company, into which account or accounts may be transferred Assets of such Fund Company, including Securities maintained by the Custodian in a Securities System pursuant to Paragraph (b)(3) of this Section 4, said account or accounts to be maintained (i) for the purposes set forth in Sections 4(g), 4(h) and 4(n) and (ii) for the purpose of compliance by such Fund Company with the procedures required by the SEC Investment Company Act Release Number 10666 or any subsequent release or releases relating to the maintenance of segregated accounts by registered investment companies, or (iii) for such other purposes as may be set forth, from time to time, in Special Instructions. The Custodian shall not be responsible for the determination of the type or amount of Assets to be held in any segregated account referred to in this paragraph, or for compliance by the Fund Companies with required procedures noted in (ii) above. (j) Depositary Receipts. Upon receipt of Instructions, the Custodian shall exchange, or cause to be exchanged, Securities held on behalf of a Fund Company for American Depositary Receipts or International Depositary Receipts (hereinafter referred to, collectively, as "ADRs") representing such Securities. To effect such exchange, the Custodian or Subcustodian shall surrender the Securities to the depository of the issuer of the applicable ADR, against a written receipt therefor adequately describing such Securities and written evidence satisfactory to the Custodian or Subcustodian surrendering the same that the depositary has acknowledged receipt of instructions to issue ADRs with respect to such Securities in the name of the Custodian or a nominee of the Custodian, for delivery in accordance with such instructions. Upon receipt of Instructions, the Custodian shall surrender or cause to be surrendered ADRs to the issuer thereof, against a written receipt therefor adequately describing the ADRs surrendered and written evidence satisfactory to the organization surrendering the same that the issuer of the ADRs has acknowledged receipt of instructions to cause its depository to deliver the Securities underlying such ADRs in accordance with such instructions. (k) Corporate Actions, Put Bonds, Called Bonds, Etc. Upon receipt of Instructions, the Custodian shall: (a) deliver warrants, puts, calls, rights or similar Securities to the issuer or trustee thereof (or to the agent of such issuer or trustee) for the purpose of exercise or sale, provided that the new Securities, cash or other Assets, if any, acquired as a result of such actions are to be delivered to the Custodian; and (b) deposit Securities upon invitations for tenders thereof, provided that the consideration for such Securities is to be paid or delivered to the Custodian, or the tendered Securities are to be returned to the Custodian. 9 Notwithstanding any provision of this Agreement to the contrary, the Custodian shall take all necessary action, unless otherwise directed to the contrary in Instructions, to comply with the terms of all mandatory or compulsory exchanges, calls, tenders, redemptions, or similar rights of security ownership, and shall notify the appropriate Fund Company of such action in writing by facsimile transmission or in such other manner as such Fund Company and Custodian may agree in writing. IRC agrees that if it gives an Instruction for the performance of an act after the deadline prescribed by the Custodian for the performance of such act, the Custodian shall use reasonable efforts to perform such act, but the Fund Company shall hold the Custodian harmless from any adverse consequences in connection with any failure to effect such Instructions. The Custodian agrees to establish reasonable deadlines by which Instructions must be given. (l) Interest Bearing Deposits. Upon receipt of Instructions directing the Custodian to purchase interest bearing fixed term and call deposits (hereinafter referred to, collectively, as "Interest Bearing Deposits") for the account of a Fund Company, the Custodian shall purchase such Interest Bearing Deposits in the name of such Fund Company with such banks or trust companies, including the Custodian, any Subcustodian or any subsidiary or affiliate of the Custodian (hereinafter referred to as "Banking Institutions"), and in such amounts as such Fund Company may direct pursuant to Instructions. Such Interest Bearing Deposits may be denominated in U.S. dollars or other currencies, as such Fund Company may determine and direct pursuant to Instructions. The responsibilities of the Custodian to a Fund Company for Interest Bearing Deposits issued by the Custodian shall be that of a U.S. bank for a similar deposit. With respect to Interest Bearing Deposits other than those issued by the Custodian, (a) the Custodian shall be responsible for the collection of income and the transmission of cash to and from such accounts; and (b) the Custodian shall have no duty with respect to the selection of the Banking Institution or for the failure of such Banking Institution to pay upon demand. (m) Foreign Exchange Transactions. (1) Each Fund hereby appoints the Custodian as its agent in the execution of certain currency exchange transactions. The Custodian agrees to provide exchange rate and U.S. Dollar information, in writing, to the Funds. Such information shall be supplied by the Custodian at least by the business day prior to the value date of the foreign exchange transaction, provided that the Custodian receives the request for such information at least two business days prior to the value date of the transaction. (2) Upon receipt of Instructions, the Custodian shall settle foreign exchange contracts or options to purchase and sell foreign currencies for spot and future delivery on behalf of and for the account of a Fund with such currency brokers or Banking Institutions as such Fund may determine and direct pursuant to Instructions. 10 (3) Each Fund Company accepts full responsibility for its use of third party foreign exchange brokers and for execution of said foreign exchange contracts and understands that the Fund Company shall be responsible for any and all costs and interest charges which may be incurred as a result of the failure or delay of its third party broker to deliver foreign exchange. The Custodian shall have no responsibility or liability with respect to the selection of the currency brokers or Banking Institutions with which a Fund Company deals or the performance of such brokers or Banking Institutions. (4) Notwithstanding anything to the contrary contained herein, upon receipt of Instructions the Custodian may, in connection with a foreign exchange contract, make free outgoing payments of cash in the form of U.S. Dollars or foreign currency prior to receipt of confirmation of such foreign exchange contract or confirmation that the countervalue currency completing such contract has been delivered or received. (5) The Custodian shall not be obligated to enter into foreign exchange transactions as principal. However, if the Custodian has made available to a Fund Company its services as a principal in foreign exchange transactions and subject to any separate agreement between the parties relating to such transactions, the Custodian shall enter into foreign exchange contracts or options to purchase and sell foreign currencies for spot and future delivery on behalf of and for the account of the Fund Company, with the Custodian as principal. (n) Pledges or Loans of Securities. (1) Upon receipt of Instructions from a Fund Company, the Custodian will release or cause to be released Securities held in custody to the pledgees designated in such Instructions by way of pledge or hypothecation to secure loans incurred by such Fund Company with various lenders including but not limited to the Custodian; provided, however, that the Securities shall be released only upon payment to the Custodian of the monies borrowed, except that in cases where additional collateral is required to secure existing borrowings, further Securities may be released or delivered, or caused to be released or delivered for that purpose upon receipt of Instructions. Upon receipt of Instructions, the Custodian will pay, but only from funds available for such purpose, any such loan upon re-delivery to it of the Securities pledged or hypothecated therefor and upon surrender of the note or notes evidencing such loan. In lieu of delivering collateral to a pledgee, the Custodian, on the receipt of Instructions, shall transfer the pledged Securities to a segregated account for the benefit of the pledgee. (2) Upon receipt of Special Instructions, and execution of a separate Securities Lending Agreement, the Custodian will release Securities held in custody to the borrower designated in such Instructions and may, except as otherwise provided below, deliver such Securities prior to the receipt of collateral, if any, for such borrowing, provided that, in case of loans of Securities held by a Securities System that are secured by cash collateral, the Custodian's instructions to the Securities System shall require that the Securities System deliver the Securities of the appropriate 11 Fund to the borrower thereof only upon receipt of the collateral for such borrowing. The Custodian shall have no responsibility or liability for any loss arising from the delivery of Securities prior to the receipt of collateral. Upon receipt of Instructions and the loaned Securities, the Custodian will release the collateral to the borrower. (o) Stock Dividends, Rights, Etc. The Custodian shall receive and collect all stock dividends, rights, and other items of like nature and, upon receipt of Instructions, take action with respect to the same as directed in such Instructions. (p) Routine Dealings. The Custodian will, in general, attend to all routine and mechanical matters in accordance with industry standards in connection with the sale, exchange, substitution, purchase, transfer, or other dealings with Securities or other property of each Fund Company except as may be otherwise provided in this Agreement or directed from time to time by Instructions from any particular Fund Company. (q) Collections. The Custodian shall (a) collect amounts due and payable to each Fund Company with respect to portfolio Securities and other Assets; (b) promptly credit to the account of each Fund Company all income and other payments relating to portfolio Securities and other Assets held by the Custodian hereunder upon Custodian's receipt of such income or payments or as otherwise agreed in writing by the Custodian and any particular Fund Company; (c) promptly endorse and deliver any instruments required to effect such collection; and (d) promptly execute ownership and other certificates and affidavits for all federal, state, local and foreign tax purposes in connection with receipt of income or other payments with respect to portfolio Securities and other Assets, or in connection with the transfer of such Securities or other Assets; provided, however, that with respect to portfolio Securities registered in so-called street name, or physical Securities with variable interest rates, the Custodian shall use its best efforts to collect amounts due and payable to any such Fund Company. The Custodian shall notify a Fund Company in writing by facsimile transmission or in such other manner as such Fund Company and Custodian may agree in writing if any amount payable with respect to portfolio Securities or other Assets is not received by the Custodian when due. The Custodian shall not be responsible for the collection of amounts due and payable with respect to portfolio Securities or other Assets that are in default. (f) Bank Accounts. Upon Instructions, the Custodian shall open and operate a bank account or accounts on the books of the Custodian; provided that such bank account(s) shall be in the name of the Custodian or a nominee thereof, for the account of one or more of the Fund Companies, and shall be subject only to 12 draft or order of the Custodian; and provided further, that the records of the Custodian shall identify the amount of Assets of each Fund Company on deposit in such bank account(s) and the responsibility of the Custodian with respect to the portion of such bank account(s) attributable to each Fund Company shall be that of a U.S. bank for a similar amount deposited in a similar account. (s) Dividends, Distributions and Redemptions. To enable each Fund Company to pay dividends or other distributions to shareholders of each such Fund Company and to make payment to shareholders who have requested repurchase or redemption of their shares of each such Fund Company (collectively, the "Shares"), the Custodian shall release cash or Securities insofar as available. In the case of cash, the Custodian shall, upon the receipt of Instructions, transfer such funds by check or wire transfer to any account at any bank or trust company designated by each such Fund Company in such Instructions. In the case of Securities, the Custodian shall, upon the receipt of Special Instructions, make such transfer to any entity or account designated by each such Fund Company in such Special Instructions. (t) Proceeds from Shares Sold. The Custodian shall receive funds representing cash payments received for shares issued or sold from time to time by each Fund Company, and shall credit such funds to the account of the appropriate Fund Company. The Custodian shall notify the appropriate Fund Company of Custodian's receipt of cash in payment for shares issued by such Fund Company by facsimile transmission or in such other manner as such Fund Company and the Custodian shall agree. Upon receipt of Instructions, the Custodian shall: (a) deliver all federal funds received by the Custodian in payment for shares as may be set forth in such Instructions and at a time agreed upon between the Custodian and such Fund Company; and (b) make federal funds available to a Fund Company as of specified times agreed upon from time to time by such Fund Company and the Custodian, in the amount of checks received in payment for shares which are deposited to the accounts of such Fund Company. (u) Proxies and Notices; Compliance with the Shareholders Communication Act of 1985. The Custodian shall deliver or cause to be delivered to the appropriate Fund Company all forms of proxies, all notices of meetings, and any other notices or announcements affecting or relating to Securities owned by such Fund Company that are received by the Custodian, any Subcustodian, or any nominee of either of them, and, upon receipt of Instructions, the Custodian shall execute and deliver, or cause such Subcustodian or nominee to execute and deliver, such proxies or other authorizations as may be required. Except as directed pursuant to Instructions, neither the Custodian nor any Subcustodian or nominee shall vote upon any such Securities, or execute any proxy to vote thereon, or give any consent or take any other action with respect thereto. 13 The Custodian will not release the identity of any Fund Company to an issuer which requests such information pursuant to the Shareholder Communications Act of 1985 for the specific purpose of direct communications between such issuer and any such Fund Company unless IRC directs the Custodian otherwise in writing. (v) Books and Records. The Custodian shall maintain such records relating to its activities under this Agreement as are required to be maintained by Rule 31a-1 under the Investment Company Act of 1940 ("the 1940 Act") and to preserve them for the periods prescribed in Rule 31a-2 under the 1940 Act. These records shall be open for inspection by duly authorized officers, employees or agents (including independent public accountants) of the appropriate Fund during normal business hours of the Custodian. The Custodian shall provide accountings relating to its activities under this Agreement as shall be agreed upon by each Fund Company and the Custodian. (w) Opinion of Fund Companies' Independent Certified Public Accountants. The Custodian shall take all reasonable action as each Fund Company may request to obtain from year to year favorable opinions from each such Fund Companies' independent certified public accountants with respect to the Custodian's activities hereunder and in connection with the preparation of each such Fund Companies' periodic reports to the SEC and with respect to any other requirements of the SEC. (x) Reports by Independent Certified Public Accountants. At the request of a Fund Company, the Custodian shall deliver to such Fund Company a written report prepared by the Custodian's independent certified public accountants with respect to the services provided by the Custodian under this Agreement, including, without limitation, the Custodian's accounting system, internal accounting control and procedures for safeguarding cash, Securities and other Assets, including cash, Securities and other Assets deposited and/or maintained in a Securities System or with a Subcustodian. Such report shall be of sufficient scope and in sufficient detail as may reasonably be required by such Fund Company and as may reasonably be obtained by the Custodian. (y) Bills and Other Disbursements. Upon receipt of Instructions, the Custodian shall pay, or cause to be paid, all bills, statements, or other obligations of a Fund Company. 5. SUBCUSTODIANS. 14 From time to time, in accordance with the relevant provisions of this Agreement, the Custodian may appoint one or more Domestic Subcustodians, Foreign Subcustodians, Special Subcustodians, or Interim Subcustodians (as each are hereinafter defined) to act on behalf of any one or more of the Fund Companies. A Domestic Subcustodian, in accordance with the provisions of this Agreement, may also appoint a Foreign Subcustodian, Special Subcustodian, or Interim Subcustodian to act on behalf of any one or more of the Fund Companies. For purposes of this Agreement, all Domestic Subcustodians, Foreign Subcustodians, Special Subcustodians and Interim Subcustodians shall be referred to collectively as "Subcustodians." (a) Domestic Subcustodians. Subject to the prior written approval of IRC and the Funds, the Custodian may appoint any bank as defined in Section 2(a)(5) of the 1940 Act or any trust company or other entity, any of which meet the requirements of a custodian under Section 17(f) of the 1940 Act and the rules and regulations thereunder, to act for the Custodian on behalf of any one or more Funds as a subcustodian for purposes of holding Assets of such Fund(s) and performing other functions of the Custodian within the United States (a "Domestic Subcustodian"). The Custodian's appointment of any such Domestic Subcustodian shall not be effective without such prior written approval of IRC and the Fund Companies. In connection with the appointment of any Domestic Subcustodian, the Custodian shall enter into a subcustodian agreement with the proposed Domestic Subcustodian in form and substance approved by IRC and each Fund Company. The Custodian shall not consent to the amendment of any subcustodian agreement entered into with a Domestic Subcustodian that materially affects IRC and Fund Company's rights under such agreement, except upon prior written approval of IRC and each Fund Company pursuant to Special Instructions. Each such duly approved Domestic Subcustodian shall be listed on Appendix A attached hereto, as it may be amended, from time to time. (b) Foreign Subcustodians. The Custodian may at any time appoint, or cause a Domestic Subcustodian to appoint, any bank, trust company or other entity meeting the requirements of an "eligible foreign custodian" under Section 17(f) of the 1940 Act and the rules and regulations thereunder to act for the Custodian on behalf of any one or more Funds as a subcustodian or sub-subcustodian (if appointed by a Domestic Subcustodian) for purposes of holding Assets of the Fund(s) and performing other functions of the Custodian in countries other than the United States of America (hereinafter referred to as a "Foreign Subcustodian" in the context of either a subcustodian or a sub-subcustodian); provided that the Custodian shall have obtained written confirmation from each Fund Company of the approval of the Board of Directors or other governing body of each such Fund (which approval may be withheld in the sole discretion of such Board of Directors or other governing body or entity) with respect to (i) the identity of any proposed Foreign Subcustodian (including branch designation), (ii) the country or countries in which, and the securities depositories or clearing agencies (hereinafter "Securities Depositories and Clearing Agencies"), if any, through which, the Custodian or any proposed 15 Foreign Subcustodian is authorized to hold Securities and other Assets of each such Fund Company, and (iii) the form and terms of the subcustodian agreement to be entered into with such proposed Foreign Subcustodian. Each such duly approved Foreign Subcustodian and the countries where and the Securities Depositories and Clearing Agencies through which they may hold Securities and other Assets of the Fund Companies shall be listed on Appendix A attached hereto, as it may be amended, from time to time. Each Fund Company shall be responsible for informing the Custodian sufficiently in advance of a proposed investment which is to be held in a country in which no Foreign Subcustodian is authorized to act, in order that there shall be sufficient time for the Custodian, or any Domestic Subcustodian, to effect the appropriate arrangements with a proposed Foreign Subcustodian, including obtaining approval as provided in this Section 5(b). In connection with the appointment of any Foreign Subcustodian, the Custodian shall, or shall cause the Domestic Subcustodian to, enter into a subcustodian agreement with the Foreign Subcustodian in form and substance approved by IRC and each such Fund Company. The Custodian shall not consent to the amendment of, and shall cause any Domestic Subcustodian not to consent to the amendment of, any agreement entered into with a Foreign Subcustodian, which materially affects any Fund Company's rights under such agreement, except upon prior written approval of such Fund Company pursuant to Special Instructions. (c) Interim Subcustodians. Notwithstanding the foregoing, in the event that a Fund Company shall invest in an Asset to be held in a country in which no Foreign Subcustodian is authorized to act, the Custodian shall notify such Fund Company in writing by facsimile transmission or in such other manner as such Fund Company and the Custodian shall agree in writing of the unavailability of an approved Foreign Subcustodian in such country; and upon the receipt of Special Instructions from such Fund Company, the Custodian shall, or shall cause its Domestic Subcustodian to, appoint or approve an entity (referred to herein as an "Interim Subcustodian") designated in such Special Instructions to hold such Security or other Asset. (d) Special Subcustodians. Upon receipt of Special Instructions, the Custodian shall, on behalf of a Fund Company, appoint one or more banks, trust companies or other entities designated in such Special Instructions to act for the Custodian on behalf of such Fund Company as a subcustodian for purposes of: (i) effecting third-party repurchase transactions with banks, brokers, dealers or other entities through the use of a common custodian or subcustodian; (ii) providing depository and clearing agency services with respect to certain variable rate demand note Securities, (iii) providing depository and clearing agency services with respect to dollar denominated Securities, and (iv) effecting any other transactions designated by such Fund Company in such Special Instructions. Each such designated subcustodian (hereinafter referred to as a "Special Subcustodian") shall be listed on Appendix A attached hereto, as it may be amended from time to time. In connection with the appointment of any Special Subcustodian, the Custodian shall enter into a subcustodian agreement 16 with the Special Subcustodian in form and substance approved by the appropriate Fund Company in Special Instructions. The Custodian shall not amend any subcustodian agreement entered into with a Special Subcustodian, or waive any rights under such agreement, except upon prior approval pursuant to Special Instructions. (e) Termination of a Subcustodian. The Custodian may, at any time in its discretion upon notification to the appropriate Fund Companies, terminate any Subcustodian of such Fund(s) in accordance with the termination provisions under the applicable subcustodian agreement, and upon the receipt of Special Instructions, the Custodian will terminate any Subcustodian in accordance with the termination provisions under the applicable subcustodian agreement. Notwithstanding the above, the Custodian may not terminate Morgan Stanley Trust Company as a Domestic Subcustodian under this Agreement unless 60 days prior written notice is provided to IRC and the Fund Companies. (f) Certification Regarding Foreign Subcustodians. Upon request of a Fund Company, the Custodian shall deliver to such Fund Company a certificate stating: (i) the identity of each Foreign Subcustodian then acting on behalf of the Custodian; (ii) the countries in which and the Securities Depositories and Clearing Agencies through which each such Foreign Subcustodian is then holding cash, Securities and other Assets of such Fund Company; and (iii) such other information as may be requested by such Fund Company, and as the Custodian shall be reasonably able to obtain, to evidence compliance with rules and regulations under the 1940 Act. 6. STANDARD OF CARE. (a) General Standard of Care. The Custodian shall be liable to IRC and each Fund Company for all losses, damages and reasonable costs and expenses (including reasonable attorneys fees) suffered or incurred by IRC and each Fund Company in connection with this Agreement resulting from the negligence or willful misconduct of the Custodian. (b) Actions Prohibited by Applicable Law, Events Beyond Custodian's Control, Sovereign Risk, Etc. In no event shall the Custodian incur liability hereunder (i) if the Custodian or any Subcustodian or Securities System, or any subcustodian, Securities System, Securities Depository or Clearing Agency utilized by the Custodian or any such Subcustodian, or any nominee of the Custodian or any Subcustodian (individually, a "Person") is prevented, forbidden or delayed from performing, or omits to perform, any act or thing which this Agreement provides shall be performed or omitted to be performed, by reason of: (a) any provision of any present or future law or regulation or order of the United States of America, or any state thereof, or of any foreign country, or 17 political subdivision thereof or of any court of competent jurisdiction (other than a federal bankruptcy court) (and neither the Custodian nor any other Person shall be obligated to take any action contrary thereto); or (b) any event beyond the control of the Custodian or other Person such as armed conflict, riots, labor disputes of third-party vendors, Fund Company equipment or transmission failures, natural disasters, or failure of the mails, transportation, communications or power supply; or (ii) for any loss, damage, cost or expense resulting from "Sovereign Risk." A "Sovereign Risk" shall mean nationalization, expropriation, currency devaluation, revaluation or fluctuation, confiscation, seizure, cancellation, destruction or similar action by any governmental authority, de facto or de jure; or enactment, promulgation, imposition or enforcement by any such governmental authority of currency restrictions, exchange controls, taxes, levies or other charges affecting a Fund's Assets; or acts of armed conflict, terrorism, insurrection or revolution. (c) Liability for Past Records. Neither the Custodian nor any Domestic Subcustodian shall have any liability in respect of any loss, damage or expense suffered by a Fund Company, insofar as such loss, damage or expense arises from the performance of the Custodian or any Domestic Subcustodian as a result of reasonable reliance upon records that were maintained for such Fund Company by entities other than the Custodian or any Domestic Subcustodian prior to the Custodian's employment hereunder. (d) Advice of Counsel. The Custodian and all Domestic Subcustodians shall be entitled to receive and act upon the written advice of counsel of its own choosing on all matters (which may include counsel for the Fund Companies). The Custodian and all Domestic Subcustodians shall be without liability for any actions taken or omitted in good faith pursuant to the written advice of counsel. (e) Advice of the Fund and Others. The Custodian and any Domestic Subcustodian may rely upon the advice of any Fund and upon statements of such Fund's accountants and other persons affiliated with the Fund Companies reasonably believed by it in good faith to be expert in matters upon which they are consulted, and neither the Custodian nor any Domestic Subcustodian shall be liable for any actions taken or omitted, reasonably and in good faith, pursuant to such written advice or statements. (f) Instructions Appearing to be Genuine. The Custodian and all Domestic Subcustodians shall be fully protected and indemnified in acting as a custodian hereunder upon any Resolutions of the Board of Directors or Trustees, Instructions, Special Instructions, advice, notice, request, consent, certificate, instrument or paper appearing to it to be genuine and to have been properly executed and 18 shall, unless otherwise specifically provided herein, be entitled to receive as conclusive proof of any fact or matter required to be ascertained from any Fund Company hereunder a certificate signed by any officer of such Fund authorized to countersign or confirm Special Instructions. (g) Exceptions from Liability. Without limiting the generality of any other provisions hereof, neither the Custodian nor any Domestic Subcustodian shall be under any duty or obligation to inquire into, nor be liable for: (i) the validity of the issue of any Securities purchased by or for any Fund Company, the legality of the purchase thereof or evidence of ownership required to be received by any such Fund Company, or the propriety of the decision to purchase or amount paid therefor; (ii) the legality of the sale of any Securities by or for any Fund Company, or the propriety of the amount for which the same were sold; or (iii) any other expenditures, encumbrances of Securities, borrowings or similar actions with respect to any Fund Company's Assets; and may, until notified to the contrary, presume that all Instructions or Special Instructions received by it are not in conflict with or in any way contrary to any provisions of any such Fund Company's Declaration of Trust, Partnership Agreement, Articles of Incorporation or By-Laws or votes or proceedings of the shareholders, trustees, partners or directors of any such Fund Company, or any such Fund Company's currently effective Registration Statement on file with the SEC. 7. LIABILITY OF THE CUSTODIAN FOR ACTIONS OF OTHERS. (a) Domestic Subcustodians and Foreign Subcustodian The Custodian shall be liable for the acts or omissions of any Domestic Subcustodian and Foreign Subcustodian to the same extent as if such actions or omissions were performed by the Custodian itself. (b) Securities Systems, Interim Subcustodians, Special Subcustodians, Securities Depositories and Clearing Agencies. The Custodian shall not be liable to any Fund Company for any loss, damage or expense suffered or incurred by such Fund resulting from or occasioned by the actions or omissions of a Securities System, Interim Subcustodian, Special Subcustodian, or Securities Depository and Clearing Agency unless such loss, damage or expense is caused by, or results from, the negligence or willful misconduct of the Custodian. 19 (c) Defaults or Insolvencies of Brokers, Banks, Etc. The Custodian shall not be liable for any loss, damage or expense suffered or incurred by any Fund Company resulting from or occasioned by the actions, omissions, neglects, defaults or insolvency of any broker, bank, trust company or any other person with whom the Custodian may deal (other than any of such entities acting as a Subcustodian, Securities System or Securities Depository and Clearing Agency, for whose actions the liability of the Custodian is set out elsewhere in this Agreement) unless such loss, damage or expense is caused by, or results from, the gross negligence or willful misconduct of the Custodian. (d) Reimbursement of Expenses. IRC agrees to reimburse the Custodian for all reasonable out-of-pocket expenses incurred by the Custodian in connection with this Agreement, but excluding salaries and overhead expenses. 8. INDEMNIFICATION. (a) Indemnification by IRC. Subject to the limitations set forth in this Agreement, IRC agrees to indemnify and hold harmless the Custodian and its nominees from all losses, damages and expenses (including reasonable attorneys' fees) suffered or incurred by the Custodian or its nominee caused by or arising from actions taken by the Custodian, its employees or agents in the performance of its duties and obligations under this Agreement, including, but not limited to, any indemnification obligations undertaken by the Custodian under any relevant subcustodian agreement, the form of which has been approved by IRC; provided, however, that such indemnity shall not apply to the extent the Custodian is liable under Sections 6 or 7 hereof. If any Fund Company requires the Custodian to take any action with respect to Securities, which action involves the payment of money or which may, in the opinion of the Custodian, result in the Custodian or its nominee assigned to such Fund Company being liable for the payment of money or incurring liability of some other form, such Fund Company, as a prerequisite to requiring the Custodian to take such action, shall provide indemnity to the Custodian in an amount and form satisfactory to it. (b) Indemnification by Custodian. Subject to the limitations set forth in this Agreement and in addition to the obligations provided in Sections 6 and 7, the Custodian agrees to indemnify and hold harmless by IRC and each Fund Company from all losses, damages and expenses suffered or incurred that is caused by the negligence or willful misconduct of the Custodian or any Subcustodian. 20 9. ADVANCES. In the event that, pursuant to Instructions, the Custodian or any Subcustodian, Securities System, or Securities Depository or Clearing Agency acting either directly or indirectly under agreement with the Custodian (each of which for purposes of this Section 9 shall be referred to as "Custodian"), makes any payment or transfer of funds on behalf of any Fund Company as to which there would be, at the close of business on the date of such payment or transfer, insufficient funds held by the Custodian on behalf of any such Fund Company, the Custodian may, in its discretion without further Instructions, provide an advance ("Advance") to any such Fund Company in an amount sufficient to allow the completion of the transaction by reason of which such payment or transfer of funds is to be made. In addition, in the event the Custodian is directed by Instructions to make any payment or transfer of funds on behalf of any Fund Company as to which it is subsequently determined that such Fund Company has overdrawn its cash account with the Custodian as of the close of business on the date of such payment or transfer, said overdraft shall constitute an Advance. Any Advance shall be payable by the Fund Company on behalf of which the Advance was made on demand by Custodian, unless otherwise agreed by such Fund Company and the Custodian, and, as an overdraft charge, shall accrue interest from the date of the Advance to the date of payment by such Fund Company to the Custodian at a rate agreed upon in writing from time to time by the Custodian and such Fund Company. It is understood that any transaction in respect of which the Custodian shall have made an Advance, including but not limited to a foreign exchange contract or transaction in respect of which the Custodian is not acting as a principal, is for the account of and at the risk of the Fund Company on behalf of which the Advance was made, and not, by reason of such Advance, deemed to be a transaction undertaken by the Custodian for its own account and risk. The Custodian and each of the Fund Companies that are parties to this Agreement acknowledge that the purpose of Advances is to provide for the prompt delivery in accordance with the settlement terms of such transactions or to meet emergency expenses not reasonably foreseeable by a Fund Company. The Custodian shall promptly notify the appropriate Fund Company of any Advance. Such notification shall be sent by facsimile transmission or in such other manner as such Fund Company and the Custodian may agree. The Custodian shall have a lien on the property in the custody accounts, in an amount not greater than 110% of the amount of an advance to secure payment of any such advance. 10. COMPENSATION. IRC will pay to the Custodian such compensation as is agreed to in writing by the Custodian and IRC from time to time. Such compensation, together with all amounts for which the Custodian is to be reimbursed in accordance with Section 7(e), shall be billed to IRC and paid in cash to the Custodian. 11. POWERS OF ATTORNEY. Upon request, each Fund shall deliver to the Custodian such proxies, powers of attorney or other instruments as may be required in 21 connection with the performance by the Custodian or any Subcustodian of their respective obligations under this Agreement or any applicable subcustodian agreement. 12. TERMINATION AND ASSIGNMENT. Any Fund Company or the Custodian may terminate this Agreement by notice in writing, delivered or mailed, postage prepaid (certified mail, return receipt requested) to the other not less than 60 days prior to the date upon which such termination shall take effect. Upon termination of this Agreement, IRC shall pay to the Custodian such fees as may be due the Custodian hereunder as well as its reimbursable disbursements, costs and expenses paid or incurred. Upon termination of this Agreement, the Custodian shall deliver, at the terminating party's expense, all Assets held by it hereunder to the appropriate Fund Company or as otherwise designated by such Fund Company by Special Instructions. Upon such delivery, the Custodian shall have no further obligations or liabilities under this Agreement except as to the final resolution of matters relating to activity occurring prior to the effective date of termination. This Agreement may not be assigned by the Custodian or any Fund Company without the respective consent of the other, duly authorized by a resolution by its Board of Directors or Trustees. 13. ADDITIONAL FUNDS. Additional Fund Companies may become party to this Agreement after the date hereof by an instrument in writing to such effect signed by such Fund Company or Companies and the Custodian. If this Agreement is terminated as to one or more of the Fund Companies (but less than all of the Fund Companies) or if an additional Fund Company or Companies shall become a party to this Agreement, there shall be delivered to each party an Appendix B or an amended Appendix B, signed by each of the additional Fund Companies (if any) and each of the remaining Fund Companies as well as the Custodian, deleting or adding such Fund Company or Companies, as the case may be. The termination of this Agreement as to less than all of the Fund Companies shall not affect the obligations of the Custodian and the remaining Fund Companies hereunder as set forth on the signature page hereto and in Appendix B as revised from time to time. 14. NOTICES. As to IRC and each Fund Company, notices, requests, instructions and other writings delivered to Investors Research Corporation, 4500 Main Street, Kansas City, Missouri 64111, Attention: General Counsel, postage prepaid, or to such other address as any particular Fund Company may have designated to the Custodian in writing, shall be deemed to have been properly delivered or given to IRC and the Fund Companies. Notices, requests, instructions and other writings delivered to the Securities Administration Department of the Custodian at its office at 928 22 Grand Avenue, Kansas City, Missouri, or mailed postage prepaid, to the Custodian's Securities Administration Department, Post Office Box 226, Kansas City, Missouri 64141, or to such other addresses as the Custodian may have designated to each Fund Company in writing, shall be deemed to have been properly delivered or given to the Custodian hereunder; provided, however, that procedures for the delivery of Instructions and Special Instructions shall be governed by Section 2(c) hereof. 15. MISCELLANEOUS. (a) This Agreement is executed and delivered in the State of Missouri and shall be governed by the laws of such state. (b) All of the terms and provisions of this Agreement shall be binding upon, and inure to the benefit of, and be enforceable by the respective successors and assigns of the parties hereto. (c) No provisions of this Agreement may be amended, modified or waived, in any manner except in writing, properly executed by both parties hereto; provided, however, Appendix A may be amended from time to time as Domestic Subcustodians, Foreign Subcustodians, Special Subcustodians, and Securities Depositories and Clearing Agencies are approved or terminated according to the terms of this Agreement. (d) The captions in this Agreement are included for convenience of reference only, and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. (e) This Agreement shall be effective as of the date of execution hereof. (f) This Agreement may be executed simultaneously in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. (g) The following terms are defined terms within the meaning of this Agreement, and the definitions thereof are found in the following sections of the Agreement: 23 Term Section Account 4(b)(3)(ii) ADR's 4(j) Advance 9 Assets 2 Authorized Person 3 Banking Institution 4(1) Domestic Subcustodian 5(a) Foreign Subcustodian 5(b) Instruction 2 Interim Subcustodian 5(c) Interest Bearing Deposit 4(1) OCC 4(g)(2) Person 6(b) Procedural Agreement 4(h) SEC 4(b)(3) Securities 2 Securities Depositories and Clearing Agencies 5(b) Securities System 4(b)(3) Shares 4(s) Sovereign Risk 6(b) Special Instruction 2 Special Subcustodian 5(d) Subcustodian 5 1940 Act 4(v) (h) If any part, term or provision of this Agreement is held to be illegal, in conflict with any law or otherwise invalid by any court of competent jurisdiction, the remaining portion or portions shall be considered severable and shall not be affected, and the rights and obligations of the parties shall be construed and enforced as if this Agreement did not contain the particular part, term or provision held to be illegal or invalid. (i) This Agreement constitutes the entire understanding and agreement of the parties hereto with respect to the subject matter hereof, and accordingly supersedes, as of the effective date of this Agreement, any custodian agreement heretofore in effect between the Fund Companies and the Custodian. 24 IN WITNESS WHEREOF, the parties hereto have caused this Custody Agreement to be executed by their respective duly authorized officers. ATTEST: INVESTORS RESEARCH CORPORATION By: /s/ William M. Lyons Name: William M. Lyons Title: Executive V.P. & General Counsel Date: ATTEST: UMB BANK, N.A. By: /s/ David Swan Name: David Swan Title: SVP Date: 9-12-95 25 APPENDIX A CUSTODY AGREEMENT DOMESTIC SUBCUSTODIANS: United Missouri Trust Company of New York Morgan Stanley Trust Company (Foreign Securities Only) SECURITIES SYSTEMS: Federal Book Entry Depository Trust Company Participant's Trust Company SPECIAL SUBCUSTODIANS: SECURITIES DEPOSITORIES COUNTRY FOREIGN SUBCUSTODIANS CENTRAL DEPOSITORY Argentina Citibank Caja de Valores Australia Australia and New Zealand Bank CHESS Austria Creditanstalt Bankverein OKB Bangladesh Standard Chartered Bank N/A Belgium Banque Bruxelles Lambert CIK Botswana Barclays Bank of Botswana N/A Brazil Banco de Boston BOVESPA Rio De Janeiro Stock Exchange Canada Toronto Dominion Bank CDS Chile Citibank N.A. Depositorio Central de Valores China Hongkong & Shanghai Bank Corp. Shenzhen Exchange: Citibank, N.A. Standard Chartered Bank Hongkong & Shanghai Bank Corp. Shanghai Exchange: Shanghai Exchange Colombia Cititrust N/A Czech Republic ING Bank SCP Denmark Den Danske Bank VP Finland Union Bank of Finland N/A France Banque Indosuez SICOVAM Germany BHF Bank DKV Ghana Barclays Bank of Ghana N/A Greece Citibank N.A. N/A 26 Hong Kong Hongkong & Shanghai Bank Corp. CCASS Hungary Euroclear (see Austria) OKB Citibank Budapest KELER India Standard Chartered Bank N/A Indonesia Hongkong & Shanghai Bank Corp. N/A Ireland Allied Irish Bank N/A Israel Bank Leumi SECH Italy Barclays Bank Monte Titoli S.p.A. Japan Morgan Stanley International JASDEC Mutual Fund Clients: Mitsubishi Bank Ltd. Jordan Arab Bank ple N/A Kenya Barclays Bank of Kenya N/A Korea Standard Chartered Bank KCD Luxembourg Euroclear/Bankque Bruxelles Lambert N/A Malaysia Oversea Chinese Banking Corp. MCD Mauritius Hongkong & Shanghai Bank Corp. N/A Mexico Citibank N.A. S.D. Indeval Morocco Banque Commerciale du Maroc N/A Netherlands ABN Amro Bank NECIGEF New Zealand Australia and New Zealand Bank AUSTRACLEAR Norway Den Norske Bank VPS Pakistan Standard Chartered Bank SCD Papua New Guinea Australia and New Zealand Bank N/A (see Australia) Peru Citibank N.A. Caja de Valores Phillippines Hongkong & Shanghai Bank Corp. N/A Poland Citibank S.A. NDS Portugal Banco Comercial Portugues N/A Singapore Oversea Chinese Banking Corp. CDP South Africa First National Bank of Southern Africa N/A Spain Banco Santander SCLV Sri Lanka Hongkong & Shanghai Bank Corp. CDS Swaziland Barclays Bank of Swaziland N/A Sweden Svenska Handelsbanken VPS Switzerland Bank Leu SEGA Taiwan Hongkong & Shanghai Bank Corp. TSCD Thailand Standard Chartered Bank TSD Turkey Citibank N.A. N/A United Kingdom Barclays Bank PLC N/A USA DTC DTC Chemical Bank N/A Uruguay Citibank N.A. N/A Venezuela Citibank N.A. N/A Zambia Barclays Bank of Zambia N/A Zimbabwe Barclays Bank of Zimbabwe N/A 27 Investors Research Corporation UMB Bank, n.a. By: /s/ William M. Lyons By: /s/ David Swan Name: Name: David Swan Title: Title: SVP Date: Date: 9-12-95 28 APPENDIX B CUSTODY AGREEMENT The following open-end management investment companies ("Funds") are hereby made parties to the Custody Agreement dated September 12, 1995, with UMB Bank, n.a. ("Custodian") and Investors Research Corporation, and agree to be bound by all the terms and conditions contained in said Agreement: LIST OF FUNDS Twentieth Century Growth Investors Twentieth Century Select Investors Twentieth Century Ultra Investors Twentieth Century Vista Investors Twentieth Century Giftrust Investors Twentieth Century Heritage Investors Twentieth Century Balanced Investors Twentieth Century Equity Investors Twentieth Century Value Investors Twentieth Century International Equity Income Twentieth Century International Emerging Growth TCI Growth TCI Balanced TCI Advantage TCI International ATTEST: INVESTORS RESEARCH CORPORATION By: /s/ William M. Lyons Name: Title: Date: ATTEST: UMB BANK, N.A. By: /s/ David Swan Name: David Swan Title: SVP Date: 9-12-95 29 EX-99.B8B 9 AMENDMENT TO CUSTODY AGREEMENT AMENDMENT NO. 1 TO CUSTODY AGREEMENT THIS AMENDMENT NO. 1 TO CUSTODY AGREEMENT is made as of the 25th day of January, 1996, by and among UMB BANK, N.A., a national banking association ("Custodian"), INVESTORS RESEARCH CORPORATION ("IRC"), and each of the registered investment companies that have executed this Amendment below (each, individually referred to as a "Fund Company" and collectively referred to as the "Fund Companies"). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Custody Agreement (defined below). RECITALS WHEREAS, Custodian, Investors Research and the Fund Companies (other than Twentieth Century Strategic Asset Allocations, Inc. ("TCSAA")) are parties to a certain Custody Agreement dated September 12, 1995 (the "Custody Agreement"); and WHEREAS, Custodian, Investors Research and the Fund Companies now desire to amend the Custody Agreement to add TCSAA as a party thereto; NOW, THEREFORE, in consideration of the mutual promises set forth herein, the parties hereto agree as follows: 1. Appendix B to the Custody Agreement is hereby amended by deleting the text thereof in its entirety and inserting in lieu therefor the Appendix B attached hereto. 2. After the date hereof, all references to the "Custody Agreement" shall be deemed to mean the Custody Agreement, as amended by this Amendment No. 1. 3. In the event of a conflict between the terms of this Amendment No. 1 and the Custody Agreement, it is the intention of the parties that the terms of this Amendment No. 1 shall control and the Custody Agreement shall be interpreted on that basis. To the extent the provisions of the Custody Agreement have not been amended by this Amendment No. 1, the parties hereby confirm and ratify the Custody Agreement. 4. This Amendment No. 1 may be executed in two or more counterparts, each of which shall be an original and all of which together shall constitute one instrument. IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1 as of the date first above written. UMB BANK, N.A. INVESTORS RESEARCH CORPORATION By: /s/ David Swan By: /s/ William M. Lyons Name: David Swan William M. Lyons Title: Senior Vice President Executive Vice President TWENTIETH CENTURY INVESTORS, INC. TWENTIETH CENTURY WORLD INVESTORS, INC. TWENTIETH CENTURY PREMIUM RESERVES, INC. TWENTIETH CENTURY CAPITAL PORTFOLIOS, INC. TWENTIETH CENTURY STRATEGIC ASSET ALLOCATIONS, INC. By: /s/ William M. Lyons William M. Lyons Executive Vice President of each APPENDIX B CUSTODY AGREEMENT The following open-end management investment companies ("Fund Companies") are hereby made parties to the Custody Agreement dated September 12, 1995, with UMB BANK, n.a. ("Custodian") and INVESTORS RESEARCH CORPORATION, and agree to be bound by all the terms and conditions contained in said Agreement: FUND COMPANIES Twentieth Century Investors, Inc. Twentieth Century Capital Portfolios, Inc. Twentieth Century World Investors, Inc. TCI Portfolios, Inc. Twentieth Century Strategic Asset Allocations, Inc. ATTEST: TWENTIETH CENTURY INVESTORS, INC. TWENTIETH CENTURY CAPITAL PORTFOLIOS, INC. /s/ Charles A. Etherington TWENTIETH CENTURY WORLD INVESTORS, INC. TCI PORTFOLIOS, INC. TWENTIETH CENTURY STRATEGIC ASSET ALLOCATIONS, INC. By: /s/ William M. Lyons Name: William M. Lyons Title: Executive Vice President of each Date: January 25, 1996 EX-99.B8C 10 CUSTODIAN AGREEMENT W/ BOATMEN'S CUSTODIAN AGREEMENT Agreement made this as of 1st day of March, 1991, by and between Twentieth Century World Investors, Inc., a Maryland Corporation ("Corporation") and Boatmen's First National Bank of Kansas City, a nationally-chartered banking association ("Custodian"). 1. During the term of this Agreement, the Corporation shall maintain one or more custody accounts (the "Accounts") with the Custodian and shall deposit in the Accounts all currency, checks, drafts, wired funds and other funds delivered to the Corporation in Kansas City, Missouri in payment for its shares. All checks, drafts and similar items shall be endorsed in proper form for deposit to the Accounts. 2. The Custodian shall provide a courier for delivery of deposits from the Corporation's office to the Custodian, and the courier shall pick up the deposits at such times as the Corporation and Custodian may from time to time agree upon. 3. The Custodian promptly and in a business-like manner shall process the items so deposited in the Accounts and remit the funds deposited to United States Trust Company of New York, the Corporation's Custodian, for deposit in Corporation's accounts there. Any funds not remitted by the close of each day shall be invested for the Corporation's benefit in such manner as the Corporation and Custodian may from time to time agree upon. All income from such investments shall be deposited in the Accounts. No funds shall be invested or otherwise utilized for the benefit of the Custodian. 4. (a) The Custodian shall no later than 9 a.m. on every day (Saturdays, Sundays and Holidays excluded) report to the Corporation the balance in the Accounts and the amounts available for transfer to United States Trust Company of New York. (b) The Custodian shall furnish monthly bank statements of the Accounts in the usual form. (c) At least monthly the Custodian shall provide the Corporation with an account analysis showing average ledger and collected balance for the month, total items processed and other bank services used during the period, together with the Custodian's statement for its services. The Corporation shall compensate the Custodian for its services in accordance with the schedule of compensation attached to this Agreement and marked Schedule 1. 5. If the Corporation instructs the Custodian in any capacity to take any action with respect to any funds held by it hereunder, which action might subject the Custodian in the opinion of the Custodian to liability for any cost, loss, damage or expense, as prerequisite to taking such action the Custodian shall be and be kept indemnified in an amount and form satisfactory to it. 6. This Agreement may be terminated by the Corporation in whole or in part upon ten (10) days written notice delivered to the Custodian at 10th & Baltimore, Kansas City, Missouri 64105 (mailing address P.O. Box 38, Kansas City, Missouri 64183-0300) or by the Custodian upon sixty (60) days written notice delivered to the Corporation at 4500 Main Street, Kansas City, Missouri 64111 (mailing address P.O. Box 419200, Kansas City, Missouri 64141), and each party may from time to time designate another address to which such notice shall be delivered. Such notices shall be sent by registered mail and shall be deemed delivered when deposited in the United States Mail, postage prepaid. In the event of the inability of the Custodian to serve or other termination of this Agreement by either party, the Corporation shall forthwith appoint a custodian which qualifies as such under the Investment Company Act of 1940 or any other applicable law and the Custodian shall deliver all funds to such successor custodian (or to any other Custodian of the Corporation's assets) and such delivery shall constitute a full and complete discharge of the Custodian's obligations hereunder. If not such successor shall be found and there should be no other custodian, the Corporation shall submit to the holders of shares of its capital stock, before permitting delivery of such cash to anyone other than a qualified custodian, the question whether the Corporation shall be dissolved or shall function without a Custodian; and pending such decision the Custodian shall, (a) continue to hold the Accounts, or (b) deliver the funds in the Accounts, and all other assets, if any, to a Bank or Trust Company selected by it, such funds and assets to be held subject to the terms of custody hereunder and any such delivery shall be a full and complete discharge of its obligation hereunder. 7. If the Corporation shall be liquidated while this Agreement is in force, the Custodian shall distribute the property of the Corporation to creditors and shareholders in such manner as the Corporation may direct. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by its officer or officers duly authorized, on the day and year first above written. TWENTIETH CENTURY WORLD INVESTORS, INC. By: /s/James E. Stowers James E. Stowers, President BOATMEN'S FIRST NATIONAL BANK OF KANSAS CITY By: /s/Rebecca Collins Rebecca Collins, Vice President EX-99.B9 11 TRANSFER AGENCY AGREEMENT TRANSFER AGENCY AGREEMENT Agreement made as of March 1, 1991, by and between Twentieth Century World Investors, Inc., a Maryland Corporation ("World Investors"), and Twentieth Century Services, Inc., a Missouri Corporation ("Services"). 1. By action of its Board of Directors, World Investors on February 9, 1991, appointed Services as its transfer agent, and Services accepted such appointment. 2. As transfer agent for World Investors, Services shall perform all the functions usually performed by transfer agents of investment companies, in accordance with the policies and practices of World Investors as disclosed in its prospectus or otherwise communicated to Services from time to time, including but not limited to, the following: (a) Recording the ownership, transfer, conversion and cancellation of ownership of shares of World Investors on the books of World Investors; (b) Causing the issuance, transfer, conversion and cancellation of stock certificates of World Investors; (c) Establishing and maintaining records of accounts; (d) Computing and causing to be prepared and mailed or otherwise delivered to shareholders payment of redemption proceeds due from World Investors on redemption of shares and notices of reinvestment in additional shares of dividends, stock dividends or stock splits declared by World Investors on shares of World Investors; (e) Furnishing to shareholders such information as may be reasonably required by World Investors, including confirmation of shareholder's transactions and appropriate income tax information; (f) Addressing and mailing to shareholders prospectuses, annual and semiannual reports; addressing and mailing proxy materials for shareholder meetings prepared by or on behalf of World Investors, and tabulating the proxy votes; (g) Replacing allegedly lost, stolen or destroyed stock certificates in accordance with and subject to usual and customary procedures and conditions; (h) Maintaining such books and records relating to transactions effected by Services pursuant to this Agreement as are required by the Investment Company Act, or by rules or regulations thereunder, or by any other applicable provisions of law, to be maintained by World Investors or its transfer agent with respect to such transactions; preserving, or causing to be preserved, any such books and records for such periods as may be required by any such law, rule or regulation; furnishing World Investors such information as to such transactions and at such times as may be reasonably required by it to comply with applicable laws and regulations, including but not limited to the laws of the several states of the United States; (i) Dealing with and answering all correspondence from or on behalf of shareholders relating to its functions under this Agreement. 3. World Investors may perform on-site inspection of records and accounts and perform audits directly pertaining to World Investors shareholder accounts serviced by Services hereunder at Services' facilities in accordance with reasonable procedures at the frequency necessary to show proper administration of this agreement and the proper audit of World Investors' financial statements. Services will cooperate with World Investors' auditors and the representatives of appropriate regulatory agencies and furnish all reasonably requested records and data. 4. (a) Services will at all times exercise due diligence and good faith in performing its duties hereunder. Services will make every reasonable effort and take all reasonably available measures to assure the adequacy of its personnel and facilities as well as the accurate performance of all services to be performed by it hereunder within the time requirements of any applicable statutes, rules or regulations or as disclosed in World Investors' prospectus. (b) Services shall not be responsible for, and World Investors agrees to indemnify Services, for any losses, damages or expenses (including reasonable counsel fees and expenses) (a) resulting from any claim, demand, action or suit not resulting from Services' failure to exercise good faith or due diligence and arising out of or in connection with Services' duties on behalf of the fund hereunder; (b) for any delay, error, or omission by reason or circumstance beyond its control, including acts of civil or military authority, national emergencies, labor difficulties (except with response to Services' employees), fire, mechanical breakdowns beyond its control, flood or catastrophe, act of God, insurrection, war, riot or failure beyond its control of transportation, communication or power supply; or (c) for any action taken or omitted to be taken by Services in good faith in reliance on (i) the authenticity of any instrument or communication reasonably believed by it to be genuine and to have been properly made and signed or endorsed by an appropriate person, or (ii) the accuracy of any records or information provided to it by World Investors, (iii) any authorization or instruction contained in any officers' instruction, or (iv) any advice of counsel approved by World Investors who may be internally employed counsel or outside counsel, in either case for World Investors or Services. 5. Services shall not look to World Investors for compensation for its services described herein. It shall be compensated entirely by Investors Research Corporation, pursuant to the management agreement between Investors Research Corporation and World Investors which requires Investors Research Corporation to pay, with certain exceptions, all of the expenses of World Investors. 6. (a) This Agreement may be terminated by either party at any time without penalty upon giving the other party 60 days written notice (which notice may be waived by either party). (b) Upon termination, Services will deliver to World Investors all microfilm records pertaining to shareholder accounts of World Investors, and all records of shareholder accounts in machine readable form in the format in which they are maintained by Services. (c) All data processing programs used by Services in connection with the performance of its duties under this Agreement are the sole and exclusive property of Services, and after the termination of this Agreement, World Investors shall have no right to use the same. IN WITNESS WHEREOF, the parties have executed this instrument as of the day and year first above written. Twentieth Century World Investors, Inc. By: /s/James E. Stowers James E. Stowers Jr., President Twentieth Century Services, Inc. By: /s/William M. Lyons William M. Lyons, Vice President EX-99.B10 12 OPINION AND CONSENT OF COUNSEL DAVID H. REINMILLER ATTORNEY AT LAW 4500 MAIN STREET * P.O. BOX 418210 KANSAS CITY, MISSOURI 64141-9210 TELEPHONE (816)340-4046 TELECOPIER (816)340-4964 March 29, 1996 VIA EDGAR Twentieth Century World Investors, Inc. Twentieth Century Tower 4500 Main Street Kansas City, Missouri 64111 Ladies and Gentlemen: As counsel to Twentieth Century World Investors, Inc. (the "Corporation"), I am generally familiar with its affairs. Based upon this familiarity, and upon the examination of such documents as I deemed relevant, it is my opinion that the shares of the Corporation described in Post-Effective Amendment No. 6 to its Registration Statement on Form N-1A, to be filed with the Securities and Exchange Commission on March 29, 1996, will, when issued, be validly issued, fully paid and nonassessable. For the record, it should be stated that I am an officer of the Corporation and an officer of Twentieth Century Services, Inc. an affiliated corporation of Investors Research Corporation, the investment adviser of the Corporation. I hereby consent to the use of this opinion as an exhibit to Post-Effective Amendment No. 6. Very truly yours, /s/David H. Reinmiller David H. Reinmiller EX-99.B11 13 CONSENT OF INDEPENDENT ACCOUNTANT BAIRD, KURTZ & DOBSON Certified Public Accountants City Center Square * Suite 2700 1100 Main Street Kansas City, Missouri 64105 Telephone (816) 221-6300 Fax (816)221-6380 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT Twentieth Century World Investors, Inc. Twentieth Century Tower 4500 Main Street Kansas City, Missouri 64111 We hereby consent to the use in this Post-Effective Amendment No. 6 to the Registration Statement under the Securities Act of 1933 and this Amendment No. 6 to the Registration Statement under the Investment Company Act of 1940, both on Form N-1A, of our report dated December 29, 1995, accompanying and pertaining to the financial statements of Twentieth Century International Equity and Twentieth Century International Emerging Growth, each a series of Twentieth Century World Investors, Inc., as of November 30, 1995, which are included in such Post-Effective Amendments. /s/Baird, Kurtz & Dobson BAIRD, KURTZ & DOBSON Kansas City, Missouri March 27, 1996 EX-99.B16 14 SCHEDULE OF COMPUTATION SCHEDULE OF COMPUTATION OF PERFORMANCE ADVERTISING QUOTATIONS Set forth below are representative calculations of each type of total return performance quotation included in the Statement of Additional Information of Twentieth Century World Investors, Inc. 1. AVERAGE ANNUAL TOTAL RETURN. The average one-year annual total return of International Equity as quoted in the Statement of Additional Information, was 5.93%. This return was calculated as follows: n P(1+T) =ERV where, P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value of the hypothetical $1,000 payment at the end of the period. Applying the actual return figures of the fund for the one year period ended November 30, 1995: 1 1,000(1+T) = $1,059.30 1 (1,059.30) T = ---------- - 1 (1,000) T = 5.93 2. CUMULATIVE TOTAL RETURN. The cumulative total return of International Equity from May 9, 1991 (inception) to November 30, 1995 as quoted in the Statement of Additional Information, was 69.28% This return was calculated as follows: (ERV-P) C = ------- P where, C = cumulative total return P = a hypothetical initial payment of $1,000 ERV = ending redeemable value of the hypothetical $1,000 payment at the end of the period. Applying the actual return figures of the fund for the period May 9, 1991 through November 30, 1994. (1,692.80-1,000) C = ---------------- 1,000 C = 69.28 EX-99.B17 15 POWER OF ATTORNEY POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned, Twentieth Century World Investors, Inc., hereinafter called the "Corporation", and certain directors and officers of the Corporation, do hereby constitute and appoint James E. Stowers, Jr., James E. Stowers III, William M. Lyons, and Patrick A. Looby, and each of them individually, their true and lawful attorneys and agents to take any and all action and execute any and all instruments which said attorneys and agents may deem necessary or advisable to enable the Corporation to comply with the Securities Act of 1933 and/or the Investment Company Act of 1940, as amended, and any rules, regulations, orders, or other requirements of the United States Securities and Exchange Commission thereunder, in connection with the registration under the Securities Act of 1933 and/or the Investment Company Act of 1940, as amended, including specifically, but without limitation of the foregoing, power and authority to sign the name of the Corporation in its behalf and to affix its corporate seal, and to sign the names of each of such directors and officers in their capacities as indicated, to any amendment or supplement to the Registration Statement filed with the Securities and Exchange Commission under the Securities Act of 1933 and/or the Investment Company Act of 1940, as amended, and to any instruments or documents filed or to be filed as a part of or in connection with such Registration Statement; and each of the undersigned hereby ratifies and confirms all that said attorneys and agents shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the Corporation has caused this Power to be executed by its duly authorized officers on this the 29th day of July, 1995. TWENTIETH CENTURY WORLD INVESTORS, INC. By:/s/ James E. Stowers III JAMES E. STOWERS III, President SIGNATURE AND TITLE /s/ James E. Stowers, Jr. /s/ Robert W. Doering, M.D. JAMES E. STOWERS, JR. ROBERT W. DOERING, M.D. Chairman, Director Director Principal Executive Officer /s/ James E. Stowers III /s/ Linsley L. Lundgaard JAMES E. STOWERS III LINSLEY L. LUNDGAARD President and Director Director /s/ Robert T. Jackson /s/ Donald H. Pratt ROBERT T. JACKSON DONALD H. PRATT Executive Vice President, Director Principal Financial Officer /s/ Maryanne Roepke /s/ Lloyd T. Silver MARYANNE ROEPKE LLOYD T. SILVER Vice President and Treasurer, Director Principal Accounting Officer /s/ Thomas A. Brown /s/ M. Jeannine Strandjord THOMAS A. BROWN M. JEANNINE STRANDJORD Director Director Attest: /s/ John M. Urie JOHN M. URIE By: /s/ William M. Lyons Director William M. Lyons, Secretary EX-27.1.1 16 FDS FOR INTERNATIONAL EQUITY
6 1 INTERNATIONAL EQUITY - 1995 PORTFOLIO YEAR NOV-30-1995 NOV-30-1995 1117878236 1220410163 8785692 5416008 0 1234611863 19918971 0 4251339 24170310 1611076 1110500544 161107645 176227043 1143362 0 (8835079) 0 106021650 1210441553 21363527 3748709 0 21981773 3130463 (9429329) 75548366 69249500 0 0 64609265 0 55937551 80255938 9198989 (106200424) 0 69720504 0 0 21967586 0 21981773 1240949900 7.47 0.01 0.40 0.00 0.37 0.00 7.51 1.77 0 0.00
EX-27.1.2 17 FDS FOR INTERNATIONAL EMERGING GROWTH
6 2 INTERNATIONAL EMERGING - 1995 PORTFOLIO YEAR NOV-30-1995 NOV-30-1995 102963888 114122473 3970268 47454 0 118140195 2769103 0 791950 3561053 200876 110043229 20087565 20622853 537032 0 (7456885) 0 11254890 114579142 2143739 423255 0 2262274 304720 (6179550) 12189016 6314186 0 0 0 0 7866729 8402017 0 3377675 0 (1057889) 0 0 2260979 0 2262274 113067308 5.39 0.03 0.28 0.00 0.00 0.00 5.70 2.00 0 0.00
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