EX-99.d
AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS
MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT ("Agreement") is made as of the 1st day of
August, 2006 by and between AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL
FUNDS, a Massachusetts business trust and registered investment company (the
"Company"), and AMERICAN CENTURY INVESTMENT MANAGEMENT, INC., a Delaware
corporation (the "Investment Manager").
WHEREAS, a majority of those members of the Board of Trustees of the
Company (collectively, the "Board of Directors", and each Trustee individually a
"Director") who are not "interested persons" as defined in Investment Company
Act (hereinafter referred to as the "Independent Directors"), during its most
recent annual evaluation of the terms of the Agreement pursuant to Section 15(c)
of the Investment Company Act, has approved the continuance of the Agreement as
it relates to each series of shares of the Company set forth on Schedule B
attached hereto (the "Funds").
NOW, THEREFORE, 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 Fund. In such capacity, the Investment Manager shall
maintain a continuous investment program for each such Fund, determine what
securities shall be purchased or sold by each Fund, 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:
(a) the Investment Company Act and any rules and regulations promulgated
thereunder;
(b) any other applicable provisions of law;
(c) the Declaration of Trust of the Company as amended from time to time;
(d) the By-Laws of the Company as amended from time to time;
(e) the Multiple Class Plan; and
(f) the registration statement(s) of the Company, 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, its executive committee, or any committee or officers
of the Company acting under the authority of the Board of Directors.
4. PAYMENT OF EXPENSES. The Investment Manager will pay all the expenses of
each class of each Fund that it shall manage, other than interest, taxes,
brokerage commissions, portfolio insurance, extraordinary expenses, the
fees and expenses of the Independent Directors (including counsel fees),
and expenses incurred in connection with the provision of shareholder
services and distribution services under a plan adopted pursuant to Rule
12b-1 under the Investment Company Act. The Investment Manager will provide
the Company with all physical facilities and personnel
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AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS
required to carry on the business of each class of each Fund that it 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 of Directors. 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 class of a Fund shall pay to the Investment Manager a management
fee that is calculated as described in this Section 6 using the fee
schedules described herein.
(b) Definitions
(1) An "INVESTMENT TEAM" is the Portfolio Managers that the
Investment Manager has designated to manage a given portfolio.
(2) An "INVESTMENT STRATEGY" is the processes and policies
implemented by the Investment Manager for pursuing a particular
investment objective managed by an Investment Team.
(3) A "PRIMARY STRATEGY PORTFOLIO" is each Fund, as well as any other
series of any other registered investment company for which the
Investment Manager serves as the investment manager and for which
American Century Investment Services, Inc. serves as the
distributor; provided, however, that a registered investment
company that invests its assets exclusively in the shares of
other registered investment companies shall not be a Primary
Strategy Portfolio. Any exceptions to the above requirements
shall be approved by the Board of Directors.
(4) A "SECONDARY STRATEGY PORTFOLIO" is another account managed by
the Investment Manager that is managed by the same Investment
Team as that assigned to manage any Primary Strategy Portfolio
that shares the same board of directors or board of trustees as
the Company. Any exceptions to this requirement shall be approved
by the Board of Directors.
(5) An "INVESTMENT CATEGORY" for a Fund is the group to which the
Fund is assigned for determining the first component of its
management fee. Each Primary Strategy Portfolio is assigned to
one of the three Investment Categories indicated below. The
Investment Category assignments for the Funds appear in Schedule
B to this Agreement. The amount of assets in each of the
Investment Categories ("INVESTMENT CATEGORY ASSETS") is
determined as follows:
a) MONEY MARKET FUND CATEGORY ASSETS. The assets which are used
to determine the fee for this Investment Category is the sum
of the assets of all of the Primary Strategy Portfolios and
Secondary Strategy Portfolios
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AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS
that invest primarily in debt securities and are subject to
Rule 2a-7 under the Investment Company Act.
b) BOND FUND CATEGORY ASSETS. The assets which are used to
determine the fee for this Investment Category is the sum
the assets of all of the Primary Strategy Portfolios and
Secondary Strategy Portfolios that invest primarily in debt
securities and are not subject to Rule 2a-7 under the
Investment Company Act.
c) EQUITY FUND CATEGORY ASSETS. The assets which are used to
determine the fee for this Investment Category is the sum
the assets of all of the Primary Strategy Portfolios and
Secondary Strategy Portfolios that invest primarily in
equity securities.
(6) The "PER ANNUM INVESTMENT CATEGORY FEE DOLLAR AMOUNT" for a Fund
is the dollar amount resulting from applying the applicable
Investment Category Fee Schedule for the Fund (as shown on
Schedule A) using the applicable Investment Category Assets.
(7) The "PER ANNUM INVESTMENT CATEGORY FEE RATE" for Fund is the
percentage rate that results from dividing the Per Annum
Investment Category Fee Dollar Amount for the Fund by the
applicable Investment Category Assets for the Fund.
(8) The "COMPLEX ASSETS" is the sum of the assets in all of the
Primary Strategy Portfolios.
(9) The "PER ANNUM COMPLEX FEE DOLLAR AMOUNT" for a class of a Fund
shall be the dollar amount resulting from application of the
Complex Assets to the Complex Fee Schedule for the class as shown
in Schedule C.
(10) The "PER ANNUM COMPLEX FEE RATE" for a class of a Fund is the
percentage rate that results from dividing the Per Annum Complex
Fee Dollar Amount for the class of a Fund by the Complex Assets.
(11) The "PER ANNUM MANAGEMENT FEE RATE" for a class of a Fund is the
sum of the Per Annum Investment Category Fee Rate applicable to
the Fund and the Per Annum Complex Fee Rate applicable to the
class of the Fund.
(c) DAILY MANAGEMENT FEE CALCULATION. For each calendar day, each class of
each Fund shall accrue a fee calculated by multiplying the Per Annum
Management Fee Rate for that class times the net assets of the class
on that day, and further dividing that product by 365 (366 in leap
years).
(d) MONTHLY MANAGEMENT FEE PAYMENT. On the first business day of each
month, each class of each series Fund shall pay the management fee to
the Investment Manager for the previous month. The fee for the
previous month shall be the sum of the Daily Management Fee
Calculations for each calendar day in the previous month.
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AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS
(e) ADDITIONAL SERIES OR CLASSES. In the event that the Board of Directors
shall determine to issue 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 and/or classes, as
appropriate, the Applicable Fee and such other terms and conditions as
are applicable to the management of such series and/or classes, or, in
the alternative, enter into a separate management agreement that
relates specifically to such series or classes of shares.
7. CONTINUATION OF AGREEMENT. This Agreement shall become effective for each
Fund as of the date first set forth above and shall continue in effect for
each Fund until August 1, 2007, unless sooner terminated as hereinafter
provided, and shall continue in effect from year to year thereafter for
each Fund only as long as such continuance is specifically approved at
least annually (i) by either the Board of Directors or by the vote of a
majority of the outstanding voting securities of such Fund, and (ii) by the
vote of a majority of the Directors, 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. The annual approvals provided
for herein shall be effective to continue this Agreement from year to year
if given within a period beginning not more than 90 days prior to August
1st of each applicable year, notwithstanding the fact that more than 365
days may have elapsed since the date on which such approval was last given.
8. TERMINATION. This Agreement may be terminated, with respect to any Fund, by
the Investment Manager at any time without penalty upon giving the Company
60 days' written notice, and may be terminated, with respect to any Fund,
at any time without penalty by the Board of Directors or by vote of a
majority of the outstanding voting securities of such Fund on 60 days'
written notice to the Investment Manager.
9. EFFECT OF ASSIGNMENT. This Agreement shall automatically terminate with
respect to any Fund in the event of its 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 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 Company or to
any shareholder of the Company 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 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 Investment Company Act,
this
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AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS
Agreement shall be deemed to constitute a separate agreement between the
Investment Manager and each Fund.
13. USE OF THE NAME "AMERICAN CENTURY". The name "American Century" and all
rights to the use of the name "American Century" are the exclusive property
of American Century Proprietary Holdings, Inc. ("ACPH"). ACPH has consented
to, and granted a non-exclusive license for, the use by the Company of the
name "American Century" in the name of the Company and any Fund. Such
consent and non-exclusive license may be revoked by ACPH in its discretion
if ACPH, the Investment Manager, or a subsidiary or affiliate of either of
them is not employed as the investment adviser of each Fund. In the event
of such revocation, the Company and each Fund using the name "American
Century" shall cease using the name "American Century" unless otherwise
consented to by ACPH or any successor to its interest in such name.
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
written above.
AMERICAN CENTURY INVESTMENT MANAGEMENT, AMERICAN CENTURY CALIFORNIA TAX-FREE AND
INC. MUNICIPAL FUNDS
/s/ Xxxxxxx X. Xxxxxxxxxxx /s/ Xxxxx X. Xxxxxxxxxx
-------------------------------------- ---------------------------------------
XXXXXXX X. XXXXXXXXXXX XXXXX X. XXXXXXXXXX
Senior Vice President Vice President
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AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS Schedule A: Category Fee Schedules
--------------------------------------------------------------------------------------------
SCHEDULE A
INVESTMENT CATEGORY FEE SCHEDULES
MONEY MARKET FUNDS
================================================================================
RATE SCHEDULES
CATEGORY ASSETS SCHEDULE 1 SCHEDULE 2 SCHEDULE 3 SCHEDULE 4
--------------------- ------------ -------------- ------------ ----------------
--------------------- ------------ -------------- ------------ ----------------
First $1 billion 0.2500% 0.2700% 0.3500% 0.2300%
Next $1 billion 0.2070% 0.2270% 0.3070% 0.1870%
Next $3 billion 0.1660% 0.1860% 0.2660% 0.1460%
Next $5 billion 0.1490% 0.1690% 0.2490% 0.1290%
Next $15 billion 0.1380% 0.1580% 0.2380% 0.1180%
Next $25 billion 0.1375% 0.1575% 0.2375% 0.1175%
Thereafter 0.1370% 0.1570% 0.2370% 0.1170%
===================== ============ ============== ============ ================
BOND FUNDS
======================================================================================================
RATE SCHEDULES
CATEGORY ASSETS SCHEDULE 1 SCHEDULE 2 SCHEDULE 3 SCHEDULE 4 SCHEDULE 5 SCHEDULE 6
------------------ -------------- ------------- ------------- -------------- ------------ ------------
------------------ -------------- ------------- ------------- -------------- ------------ ------------
First $1 billion 0.2800% 0.3100% 0.3600% 0.6100% 0.4100% 0.6600%
Next $1 billion 0.2280% 0.2580% 0.3080% 0.5580% 0.3580% 0.6080%
Next $3 billion 0.1980% 0.2280% 0.2780% 0.5280% 0.3280% 0.5780%
Next $5 billion 0.1780% 0.2080% 0.2580% 0.5080% 0.3080% 0.5580%
Next $15 billion 0.1650% 0.1950% 0.2450% 0.4950% 0.2950% 0.5450%
Next $25 billion 0.1630% 0.1930% 0.2430% 0.4930% 0.2930% 0.5430%
Thereafter 0.1625% 0.1925% 0.2425% 0.4925% 0.2925% 0.5425%
================== ============== ============= ============= ============== ============ ============
EQUITY FUNDS
==========================================================================
RATE SCHEDULES
CATEGORY ASSETS SCHEDULE 1 SCHEDULE 2
-------------------------- ----------------------- -----------------------
-------------------------- ----------------------- -----------------------
First $1 billion 0.5200% 0.7200%
Next $5 billion 0.4600% 0.6600%
Next $15 billion 0.4160% 0.6160%
Next $25 billion 0.3690% 0.5690%
Next $50 billion 0.3420% 0.5420%
Next $150 billion 0.3390% 0.5390%
Thereafter 0.3380% 0.5380%
========================== ======================= =======================
Page A-1
AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS Schedule B: Investment Category Assignments
------------------------------------------------------------------------------------------------------
SCHEDULE B
INVESTMENT CATEGORY ASSIGNMENTS
AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS
================================================================================
Applicable
Fee Schedule
Series Category Number
--------------------------------------------------------------------------------
California Tax-Free Money Market Fund Money Market Funds 2
California Limited-Term Tax-Free Fund Bond Funds 1
California Tax-Free Bond Fund Bond Funds 1
California Long-Term Tax-Free Fund Bond Funds 1
California High-Yield Municipal Fund Bond Funds 2
================================================================================
Page B-1
AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS Schedule C: Complex Fee Schedules
--------------------------------------------------------------------------------------------
SCHEDULE C
COMPLEX FEE SCHEDULES
================================================================================
Rate Schedules
Complex Assets Advisor Class Institutional Class All Other Classes
------------------- ----------------- ----------------------- ------------------
First $2.5 billion 0.0600% 0.1100% 0.3100%
Next $7.5 billion 0.0500% 0.1000% 0.3000%
Next $15.0 billion 0.0485% 0.0985% 0.2985%
Next $25.0 billion 0.0470% 0.0970% 0.2970%
Next $25.0 billion 0.0370% 0.0870% 0.2870%
Next $25.0 billion 0.0300% 0.0800% 0.2800%
Next $25.0 billion 0.0200% 0.0700% 0.2700%
Next $25.0 billion 0.0150% 0.0650% 0.2650%
Next $25.0 billion 0.0100% 0.0600% 0.2600%
Next $25.0 billion 0.0050% 0.0550% 0.2550%
Thereafter 0.0000% 0.0500% 0.2500%
================================================================================
=========================================================================================================
Series Investor Institu- Advisor A B C R
Class tional Class Class Class Class Class
Class
---------------------------------------------------------------------------------------------------------
> California High-Yield Municipal Fund Yes No No Yes Yes Yes No
> California Tax Free Money Market Fund Yes No No No No No No
> California Tax-Free Bond Fund Yes No No No No No No
> California Long-Term Tax-Free Fund Yes No No No No No No
> California Limited-Term Tax-Free Fund Yes No No No No No No
=========================================================================================================
Page C-1
