MANAGEMENT AGREEMENT
A Class
This MANAGEMENT AGREEMENT is made and entered into by and between the
registered investment companies listed on Exhibit A to this Agreement (the
"Companies"), as of the dates noted on such Exhibit A, and American Century
Investment Management, Inc., a Delaware corporation (the "Investment Manager").
WHEREAS, the Companies have adopted an Amended and Restated Multiple Class
Plan dated as of September 3, 2002, (as the same may be amended from time to
time, the "Multiple Class Plan"), pursuant to Rule 18f-3 of the Investment
Company Act of 1940, as amended (the "Investment Company Act"); and
WHEREAS, the Multiple Class Plan establishes seven classes of shares of
certain series of shares of the Companies: the Investor Class, the Institutional
Class, the Advisor Class , the C Class, the A Class, the B Class and the C Class
II; and
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 the A Class of each series of shares of the Companies
contemplated as of the date hereof, and the A Class of such subsequent series of
shares as the Companies shall select the Investment Manager to manage. In such
capacity, the Investment Manager shall maintain a continuous investment program
for the A Class of 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. In performing its
duties hereunder, the Investment Manager will manage the portfolio of all
classes of a particular series as a single portfolio.
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:
(a) the Investment Company Act of 1940, as amended (the "1940 Act"), and
any rules and regulations promulgated thereunder;
(b) any other applicable provisions of law;
(c) the Declaration of Trust or Articles of Incorporation applicable to
each of the Companies as amended from time to time;
(d) the By-Laws of the Companies as amended from time to time;
(e) The Amended and Restated Multiple Class Plan; and
(f) the registration statement of the Companies, as amended from time to
time, filed under the Securities Act of 1933 and the 1940 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
Trustees or Board of Directors (collectively, the "Board of Directors") of the
Companies, its executive committee, or any committee or officers of the
Companies acting under the authority of the Board of Directors.
4. Payment Of Expenses. The Investment Manager will pay all of the expenses
of the A Class of each series of the Companies' shares that it shall manage,
other than interest, taxes, brokerage commissions, portfolio insurance,
extraordinary expenses and the fees and expenses of those Directors who are not
"interested persons" as defined in 1940 Act (hereinafter referred to as the
"Independent Directors") (including counsel fees) and expenses incurred in
connection with the provision of shareholder services and distribution services
under the Master Distribution and Individual Shareholder Services Plan dated
September 3, 2002. The Investment Manager will provide the Companies with all
physical facilities and personnel required to carry on the business of the A
Class 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 Board of Directors may impose fees for various account
services, proceeds of which may be remitted to the appropriate Fund or the
Investment Manager at the discretion of the Board. 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,
the A Class of each series of shares of the Companies managed by the Investment
Manager shall pay to the Investment Manager a per annum management fee
(hereinafter, the "Applicable Fee"). The calculation of the Applicable Fee for
the A Class of a series is performed as follows:
(i) Each series is assigned to one of three categories based on its overall
investment objective ("Investment Category"). The Investment Category
assignments appear in Exhibit B to this Agreement.
(ii) Each series is assigned a fee schedule within its Investment Category
in Exhibit C to this Agreement. The Investment Category assets managed by the
Investment Manager determines the first component of a series' fee. This fee is
referred to as the "Investment Category Fee". The determination of the
Investment Category assets is as follows:
a) Money Market Fund Category. The assets which are used to determine the
fee for this Investment Category is the sum of the assets of all of the open-end
investment company series which invest primarily in debt securities, are subject
to Rule 2a-7 under the 1940 Act, managed by the Investment Manager and
distributed to the public by American Century Investment Services, Inc.
b) Bond Fund Category. The assets which are used to determine the fee for
this Investment Category is the sum the assets of all of the open-end investment
company series which invest primarily in debt securities, are not subject to
Rule 2a-7 under the 1940 Act, are managed by the Investment Manager and are
distributed to the public by American Century Investment Services, Inc.
c) Equity Fund Category. The assets which are used to determine the fee for
this Investment Category is the sum the assets of all of the open-end investment
company series which invest primarily in equity securities, are managed by the
Investment Manager and are distributed to the public by American Century
Investment Services, Inc.
(iii) A fee which is based on the total assets in all of the Investment
Categories is determined by the schedule which appears in Exhibit D. This fee is
referred to as the series' "Complex Fee".
(iv) The Applicable Fee for a series is the sum of the Investment Category
Fee and the Complex Fee.
(v) The assets which are used to compute the Applicable Fee shall be the
assets of all of the open-end investment companies managed by the Investment
Manager. Any exceptions to this requirement shall be approved by the Board of
Directors of the Companies.
(b) On the first business day of each month, the A Class of 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 a Company shall determine
to issue a A Class of any additional series of shares for which it is proposed
that the Investment Manager serve as investment manager, the Company 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, as to each series of the Companies, at least annually (i)
by the Board of Directors of the Companies or by the vote of a majority of the
outstanding A Class voting securities of the Companies, and (ii) by the vote of
a majority of the Directors of the Companies, 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, with respect to any
series, by the Investment Manager at any time without penalty upon giving the
appropriate Company 60 days' written notice, and may be terminated, with respect
to any series, at any time without penalty by the Board of Directors of a
Company or by vote of a majority of the outstanding A Class voting securities of
such series 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 1940 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 trustee, officer or employee of a
Company), 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 Companies or to any
shareholder of the Companies 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 1940
Act, in effect, treat each series of shares of a registered 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 1940 Act, this Agreement shall be deemed to constitute a separate agreement
between the Investment Manager and each series of shares of the Companies
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 indicated on
Exhibit A.
American Century California Tax-Free and Municipal Funds
American Century Investment Trust
American Century Municipal Trust
Attest:
Xxxxxxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxxxxxxxx
Assistant Secretary Vice President
Attest: American Century Investment Management, Inc.
Xxxxxxxxx X. Xxxxxxxx Xxxxx X. Xxxxxx
Assistant Secretary Senior Vice President
Exhibit A
Registered Investment Companies Subject to Management Agreement
Registered Investment Company and Funds Date
American Century California Tax-Free and Municipal Funds
California High-Yield Municipal Fund September 3, 2002
American Century Investment Trust
Prime Money Market Fund September 3, 2002
Diversified Bond Fund September 3, 2002
High-Yield Fund September 3, 2002
American Century Municipal Trust
High-Yield Municipal Fund September 3, 2002
Dated: September 3, 2002
Exhibit B
Series Investment Categories
Investment Category Series
Bond Funds California High-Yield Municipal Fund
High-Yield Municipal Fund
High-Yield Fund
Diversified Bond Fund
Investment Category Series
Equity Funds none
Investment Category Series
Money Market Funds Prime Money Market Fund
Dated: September 3, 2002
Exhibit C
Investment Category Fee Schedules: Money Market Funds
Schedule 1 Funds:
none
Category Assets Fee Rate
First $1 billion 0.2500%
Next $1 billion 0.2070%
Next $3 billion 0.1660%
Next $5 billion 0.1490%
Next $15 billion 0.1380%
Next $25 billion 0.1375%
Thereafter 0.1370%
Schedule 2 Funds:
none
Category Assets Fee Rate
First $1 billion 0.2700%
Next $1 billion 0.2270%
Next $3 billion 0.1860%
Next $5 billion 0.1690%
Next $15 billion 0.1580%
Next $25 billion 0.1575%
Thereafter 0.1570%
Schedule 3 Funds:
Prime Money Market Fund
Category Assets Fee Rate
First $1 billion 0.3700%
Next $1 billion 0.3270%
Next $3 billion 0.2860%
Next $5 billion 0.2690%
Next $15 billion 0.2580%
Next $25 billion 0.2575%
Thereafter 0.2570%
Category Fee Schedules: Bond Funds
Schedule 1 Funds:
none
Category Assets Fee Rate
First $1 billion 0.2800%
Next $1 billion 0.2280%
Next $3 billion 0.1980%
Next $5 billion 0.1780%
Next $15 billion 0.1650%
Next $25 billion 0.1630%
Thereafter 0.1625%
Schedule 2 Funds:
California High-Yield Municipal Fund
Category Assets Fee Rate
First $1 billion 0.3100%
Next $1 billion 0.2580%
Next $3 billion 0.2280%
Next $5 billion 0.2080%
Next $15 billion 0.1950%
Next $25 billion 0.1930%
Thereafter 0.1925%
Schedule 3 Funds:
none
Category Assets Fee Rate
First $1 billion 0.3600%
Next $1 billion 0.3080%
Next $3 billion 0.2780%
Next $5 billion 0.2580%
Next $15 billion 0.2450%
Next $25 billion 0.2430%
Thereafter 0.2425%
Category Fee Schedules: Bond Funds
(continued)
Schedule 4 Funds:
none
Category Assets Fee Rate
First $1 billion 0.6100%
Next $1 billion 0.5580%
Next $3 billion 0.5280%
Next $5 billion 0.5080%
Next $15 billion 0.4950%
Next $25 billion 0.4930%
Thereafter 0.4925%
Schedule 5 Funds:
High-Yield Municipal Fund
Diversified Bond Fund
Category Assets Fee Rate
First $1 billion 0.4100%
Next $1 billion 0.3580%
Next $3 billion 0.3280%
Next $5 billion 0.3080%
Next $15 billion 0.2950%
Next $25 billion 0.2930%
Thereafter 0.2925%
Schedule 6 Funds:
High-Yield Fund
Category Assets Fee Rate
First $1 billion 0.6600%
Next $1 billion 0.6080%
Next $3 billion 0.5780%
Next $5 billion 0.5580%
Next $15 billion 0.5450%
Next $25 billion 0.5430%
Thereafter 0.5425%
Category Fee Schedules: Equity Funds
Schedule 1 Funds:
none
Category Assets Fee Rate
First $1 billion 0.5200%
Next $5 billion 0.4600%
Next $15 billion 0.4160%
Next $25 billion 0.3690%
Next $50 billion 0.3420%
Next $150 billion 0.3390%
Thereafter 0.3380%
Schedule 2 Funds:
none
Category Assets Fee Rate
First $1 billion 0.7200%
Next $5 billion 0.6600%
Next $15 billion 0.6160%
Next $25 billion 0.5690%
Next $50 billion 0.5420%
Next $150 billion 0.5390%
Thereafter 0.5380%
Dated: September 3, 2002
D-1
Exhibit D
Complex Fee Schedule
Complex Assets Fee Rate
First $2.5 billion 0.3100%
Next $7.5 billion 0.3000%
Next $15.0 billion 0.2985%
Next $25.0 billion 0.2970%
Next $50.0 billion 0.2960%
Next $100.0 billion 0.2950%
Next $100.0 billion 0.2940%
Next $200.0 billion 0.2930%
Next $250.0 billion 0.2920%
Next $500.0 billion 0.2910%
Thereafter 0.2900%
Dated: September 3, 2002
