-----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, AFTR2J2YWwf0yTELJLjsRIBILJ79vVowh+7qP40Jyhy8yzXGHkIZj/MllYqpHMFp DhqXC+ais3c3OFOXvstssA== 0000717316-03-000004.txt : 20030429 0000717316-03-000004.hdr.sgml : 20030429 20030429113305 ACCESSION NUMBER: 0000717316-03-000004 CONFORMED SUBMISSION TYPE: NSAR-A PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 20030228 FILED AS OF DATE: 20030429 EFFECTIVENESS DATE: 20030429 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN CENTURY CALIFORNIA TAX FREE & MUNICIPAL FUNDS CENTRAL INDEX KEY: 0000717316 IRS NUMBER: 946562826 STATE OF INCORPORATION: MA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: NSAR-A SEC ACT: 1940 Act SEC FILE NUMBER: 811-03706 FILM NUMBER: 03668314 BUSINESS ADDRESS: STREET 1: 1665 CHARLESTON RD CITY: MOUNTAIN VIEW STATE: CA ZIP: 94043 BUSINESS PHONE: 8003218321 MAIL ADDRESS: STREET 1: 1665 CHARLESTON RD CITY: MOUNTAIN VIEW STATE: CA ZIP: 94043 FORMER COMPANY: FORMER CONFORMED NAME: BENHAM CALIFORNIA TAX FREE TRUST DATE OF NAME CHANGE: 19910218 FORMER COMPANY: FORMER CONFORMED NAME: BENHAM CALIFORNIA TAX FREE & MUNICIPAL FUNDS DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: BENHAM CALIFORNIA TAX FREE TRUST / DATE OF NAME CHANGE: 19960815 NSAR-A 1 answer.fil ACCTF&MF PAGE 1 000 A000000 02/28/2003 000 C000000 0000717316 000 D000000 N 000 E000000 NF 000 F000000 Y 000 G000000 N 000 H000000 N 000 I000000 6.1 000 J000000 A 001 A000000 AMERICAN CENTURY CA TAX-FREE & MUNICIPAL FDS 001 B000000 811-3706 001 C000000 8163407396 002 A000000 4500 MAIN 002 B000000 KANSAS CITY 002 C000000 MO 002 D010000 64111 002 D020000 7709 003 000000 N 004 000000 N 005 000000 N 006 000000 N 007 A000000 Y 007 B000000 5 007 C010100 1 007 C020100 CALIFORNIA TAX-FREE MONEY MARKET FUND 007 C030100 N 007 C010200 2 007 C010300 3 007 C020300 CALIFORNIA INTERMEDIATE-TERM TAX-FREE 007 C030300 N 007 C010400 4 007 C020400 CALIFORNIA LONG-TERM TAX-FREE FUND 007 C030400 N 007 C010500 5 007 C020500 CALIFORNIA HIGH-YIELD MUNICIPAL FUND 007 C030500 N 007 C010600 6 007 C010700 7 007 C020700 CALIFORNIA LIMITED-TERM TAX-FREE FUND 007 C030700 N 007 C010800 8 007 C010900 9 007 C011000 10 008 A00AA01 AMERICAN CENTURY INVESTMENT MANAGEMENT, INC. 008 B00AA01 A 008 C00AA01 801-08174 008 D01AA01 KANSAS CITY 008 D02AA01 MO 008 D03AA01 64111 008 D04AA01 7709 008 A00AA02 DELETE PAGE 2 010 A00AA01 AMERICAN CENTURY SERVICES CORPORATION 010 B00AA01 84-1406 010 C01AA01 KANSAS CITY 010 C02AA01 MO 010 C03AA01 64111 010 C04AA01 7709 010 A00AA02 DELETE 011 A00AA01 AMERICAN CENTURY INVESTMENT SERVICES, INC. 011 B00AA01 8-35220 011 C01AA01 KANSAS CITY 011 C02AA01 MO 011 C03AA01 64111 011 C04AA01 7709 011 A00AA02 DELETE 012 A00AA01 AMERICAN CENTURY SERVICES CORPORATION 012 B00AA01 84-1406 012 C01AA01 KANSAS CITY 012 C02AA01 MO 012 C03AA01 64111 012 C04AA01 7709 013 A00AA01 PRICEWATERHOUSECOOPERS LLP 013 B01AA01 KANSAS CITY 013 B02AA01 MO 013 B03AA01 64105 013 B04AA01 2140 014 A00AA01 AMERICAN CENTURY INVESTMENT SERVICES, INC. 014 B00AA01 8-35220 014 A00AA02 AMERICAN CENTURY BROKERAGE, INC. 014 B00AA02 8-50034 014 A00AA03 DELETE 015 A00AA01 J.P. 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0.0 062 Q000500 0.0 062 R000500 0.0 063 A000500 0 063 B000500 21.5 064 A000500 Y 064 B000500 N 070 A010500 Y 070 A020500 N 070 B010500 N 070 B020500 N 070 C010500 Y 070 C020500 N 070 D010500 N 070 D020500 N 070 E010500 Y 070 E020500 N 070 F010500 N 070 F020500 N 070 G010500 Y 070 G020500 N 070 H010500 N 070 H020500 N 070 I010500 N 070 I020500 N 070 J010500 Y 070 J020500 Y 070 K010500 Y 070 K020500 N 070 L010500 N 070 L020500 N 070 M010500 N 070 M020500 N 070 N010500 Y 070 N020500 N 070 O010500 Y 070 O020500 N 070 P010500 Y 070 P020500 Y PAGE 20 070 Q010500 Y 070 Q020500 N 070 R010500 Y 070 R020500 N 071 A000500 78494 071 B000500 79526 071 C000500 361142 071 D000500 22 072 A000500 6 072 B000500 10451 072 C000500 0 072 D000500 0 072 E000500 0 072 F000500 962 072 G000500 0 072 H000500 0 072 I000500 0 072 J000500 0 072 K000500 0 072 L000500 0 072 M000500 9 072 N000500 0 072 O000500 0 072 P000500 0 072 Q000500 0 072 R000500 0 072 S000500 0 072 T000500 0 072 U000500 0 072 V000500 0 072 W000500 1 072 X000500 972 072 Y000500 0 072 Z000500 9479 072AA000500 1165 072BB000500 0 072CC010500 873 072CC020500 0 072DD010500 9520 072DD020500 0 072EE000500 0 073 A010500 0.0000 073 A020500 0.0000 073 B000500 0.0000 073 C000500 0.0000 074 A000500 0 074 B000500 0 074 C000500 14105 074 D000500 360668 074 E000500 0 074 F000500 0 PAGE 21 074 G000500 0 074 H000500 0 074 I000500 0 074 J000500 0 074 K000500 0 074 L000500 6378 074 M000500 0 074 N000500 381151 074 O000500 11379 074 P000500 148 074 Q000500 0 074 R010500 0 074 R020500 0 074 R030500 0 074 R040500 1320 074 S000500 0 074 T000500 368304 074 U010500 0 074 U020500 0 074 V010500 0.00 074 V020500 0.00 074 W000500 0.0000 074 X000500 2775 074 Y000500 0 075 A000500 0 075 B000500 365444 076 000500 0.00 028 A010700 16757 028 A020700 348 028 A030700 0 028 A040700 3513 028 B010700 8852 028 B020700 396 028 B030700 0 028 B040700 9031 028 C010700 5404 028 C020700 394 028 C030700 0 028 C040700 6701 028 D010700 12292 028 D020700 714 028 D030700 0 028 D040700 4150 028 E010700 11209 028 E020700 422 028 E030700 0 028 E040700 9398 028 F010700 8222 028 F020700 371 028 F030700 0 028 F040700 3238 PAGE 22 028 G010700 62736 028 G020700 2645 028 G030700 0 028 G040700 36031 028 H000700 0 029 000700 N 030 A000700 0 030 B000700 0.00 030 C000700 0.00 031 A000700 0 031 B000700 0 032 000700 0 033 000700 0 034 000700 N 035 000700 0 036 B000700 0 037 000700 N 038 000700 0 039 000700 Y 040 000700 N 041 000700 N 042 A000700 0 042 B000700 0 042 C000700 0 042 D000700 0 042 E000700 0 042 F000700 0 042 G000700 0 042 H000700 0 043 000700 0 044 000700 0 049 000700 N 050 000700 N 051 000700 N 052 000700 Y 053 A000700 N 058 A000700 N 059 000700 Y 060 A000700 Y 060 B000700 Y 061 000700 5000 062 A000700 Y 062 B000700 0.0 062 C000700 0.0 062 D000700 0.0 062 E000700 21.7 062 F000700 0.0 062 G000700 0.0 062 H000700 0.0 062 I000700 0.0 062 J000700 0.0 PAGE 23 062 K000700 0.0 062 L000700 0.0 062 M000700 0.0 062 N000700 0.0 062 O000700 78.3 062 P000700 0.0 062 Q000700 0.0 062 R000700 0.0 063 A000700 0 063 B000700 3.9 064 A000700 Y 064 B000700 N 070 A010700 Y 070 A020700 N 070 B010700 N 070 B020700 N 070 C010700 Y 070 C020700 N 070 D010700 N 070 D020700 N 070 E010700 Y 070 E020700 N 070 F010700 N 070 F020700 N 070 G010700 Y 070 G020700 N 070 H010700 N 070 H020700 N 070 I010700 N 070 I020700 N 070 J010700 Y 070 J020700 Y 070 K010700 Y 070 K020700 N 070 L010700 N 070 L020700 N 070 M010700 N 070 M020700 N 070 N010700 Y 070 N020700 N 070 O010700 Y 070 O020700 N 070 P010700 Y 070 P020700 Y 070 Q010700 Y 070 Q020700 N 070 R010700 Y 070 R020700 N 071 A000700 50764 071 B000700 16773 071 C000700 195722 PAGE 24 071 D000700 9 072 A000700 6 072 B000700 3671 072 C000700 0 072 D000700 0 072 E000700 0 072 F000700 551 072 G000700 0 072 H000700 0 072 I000700 0 072 J000700 0 072 K000700 0 072 L000700 0 072 M000700 5 072 N000700 0 072 O000700 0 072 P000700 0 072 Q000700 0 072 R000700 0 072 S000700 0 072 T000700 0 072 U000700 0 072 V000700 0 072 W000700 0 072 X000700 556 072 Y000700 0 072 Z000700 3114 072AA000700 242 072BB000700 0 072CC010700 696 072CC020700 0 072DD010700 3114 072DD020700 0 072EE000700 406 073 A010700 0.1521 073 A020700 0.0000 073 B000700 0.0201 073 C000700 0.0000 074 A000700 0 074 B000700 0 074 C000700 53129 074 D000700 192108 074 E000700 0 074 F000700 0 074 G000700 0 074 H000700 0 074 I000700 0 074 J000700 4000 074 K000700 0 074 L000700 2511 074 M000700 0 PAGE 25 074 N000700 251749 074 O000700 15321 074 P000700 89 074 Q000700 0 074 R010700 0 074 R020700 0 074 R030700 0 074 R040700 1391 074 S000700 0 074 T000700 234948 074 U010700 21656 074 U020700 0 074 V010700 10.85 074 V020700 0.00 074 W000700 0.0000 074 X000700 1077 074 Y000700 0 075 A000700 0 075 B000700 221112 076 000700 0.00 SIGNATURE MARYANNE ROEPKE TITLE TREASURER EX-99.77Q3 3 ex9977q3cert.txt ACCTF&MF CERTIFICATION Exhibit 99.77Q3 CERT Registrant Name: American Century California Tax-Free and Municipal Funds File Number: 811-3706 Registrant CIK Number: 0000717316 (a)(i) As of October 22, 2002, an evaluation was performed under the supervision and with the participation of the Registrant's management, including the President (Principal Executive Officer) and Treasurer (Chief Financial Officer), of the effectiveness of the design and operation of the Registrant's disclosure controls and procedures. Based on that evaluation, the Registrant's management, including the President and Treasurer, concluded that the Registrant's disclosure controls and procedures were effective as of October 22, 2002 (a)(ii)There have been no significant changes in the Registrant's internal controls or in other factors that could significantly affect internal controls subsequent to October 22, 2002." (a) (iii) I, William M. Lyons, certify that:" 1. I have reviewed this report on Form N-SAR of American Century California Tax-Free & Municipal Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;" 3. Based on my knowledge, the financial information included in this report, and the financial statements on which the financial information is based, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;" 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-2(c) under the Investment Company Act) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the ""Evaluation Date""); and" c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. 29-Oct-02 /s/ William M. Lyons William M. Lyons President & Principal Executive Officer I, Maryanne Roepke, certify that:" 1. I have reviewed this report on Form N-SAR of American Century California Tax-Free & Municipal Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;" 3. Based on my knowledge, the financial information included in this report, and the financial statements on which the financial information is based, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;" 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-2(c) under the Investment Company Act) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the ""Evaluation Date""); and" c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. 29-Oct-02 /s/ Maryanne Roepke Maryanne Roepke Treasurer & Principal Financial Officer EX-99.77Q3 4 ex77q32addcert.txt EXHIBIT 99.77Q3.2 ADDITIONAL ITEMS Exhibit 99.77Q3-2 Registrant Name: American Century California Tax-Free and Municipal Funds File Number 811-3706 Registrant CIK Number: 0000717316 The electronic format for filing FORM N-SAR does not provide adequate space for responding fully to Items 15, 72DD, 73A, 74U and 74V. The complete answers are as follows: Item 15 Custodian: Sub-Custodian: J.P. Morgan Chase & Company See Attachment A Attachment A a.Foreign Subcustodians: Country Foreign Subcustodian ARGENTINA JPMorgan Chase Bank Buenos Aires AUSTRALIA Australia and New Zealand Banking Group Ltd. Melbourne AUSTRIA J.P. Morgan AG Frankfurt BAHRAIN National Bank of Bahrain Manama BANGLADESH Standard Chartered Bank Dhaka BELGIUM J.P. Morgan AG Frankfurt BERMUDA The Bank of Bermuda Limited Hamilton BOTSWANA Barclays Bank of Botswana Limited Gaborone BRAZIL "Citibank, N.A.." Sao Paulo BULGARIA ING Bank N.V. Sofia CANADA Royal Bank of Canada Toronto Royal Bank of Canada Toronto CHILE "Citibank, N.A" Santiago CHINA - SHANGHAI "Citibank, N.A." New York CHINA - SHENZHEN JPMorgan Chase Bank Hong Kong COLOMBIA Cititrust Colombia S.A. Sociedad Fiduciaria Santa Fe de Bogota CROATIA Privredna banka Zagreb d.d. Zagreb CYPRUS The Cyprus Popular Bank Ltd. Nicosia CZECH REPUBLIC "Ceskoslovenska obchodni banka, a.s." Prague DENMARK Nordea Bank Danmark A/S Copenhagen ECUADOR "Citibank, N.A." Quito EGYPT "Citibank, N.A." Cairo ESTONIA Esti Uhispank Tallinn FINLAND J.P. Morgan AG Frankfurt FRANCE J.P. Morgan AG Frankfurt J.P. Morgan AG Frankfurt GERMANY J.P. Morgan AG Frankfurt GHANA Barclays Bank of Ghana Limited Accra GREECE J.P. Morgan AG Frankfurt HONG KONG JPMorgan Chase Bank Hong Kong HUNGARY ING Bank Rt. Budapest ICELAND Islandsbanki-FBA Reykjavik INDIA The Hongkong and Shanghai Banking Corporation Limited Mumbai Standard Chartered Bank Mumbai INDONESIA The Hongkong and Shanghai Banking Corporation Limited Jakarta IRELAND J.P. Morgan AG Frankfurt ISRAEL Bank Leumi le-Israel B.M. Tel Aviv ITALY J.P. Morgan AG Frankfurt IVORY COAST Societe Generale Paris JAMAICA FirstCaribbean International Trust and Merchant Bank (Jamaica) Limited Kingston JAPAN JPMorgan Chase Bank Tokyo JPMorgan Chase Bank Tokyo JORDAN Arab Bank Plc Amman KAZAKHSTAN ABN AMRO Bank Kazakhstan Almaty KENYA Barclays Bank of Kenya Limited Nairobi LATVIA Hansabanka Riga LEBANON JPMorgan Chase Bank New York LITHUANIA Vilniaus Bankas AB Vilnius LUXEMBOURG J.P. Morgan AG Frankfurt MALAYSIA HSBC Bank Malaysia Berhad Kuala Lumpur MALTA HSBC Bank Malta p.l.c. Valletta MAURITIUS The Hongkong and Shanghai Banking Corporation Limited Port Louis MEXICO "Banco J.P. Morgan, S.A." "Mexico, D.F" "Banco Nacional de Mexico, S.A." "Mexico, D.F" MOROCCO Banque Commerciale du Maroc S.A. Casablanca NAMIBIA Standard Bank of Namibia Limited Windhoek NETHERLANDS J.P. Morgan AG Frankfurt J.P. Morgan AG Frankfurt NEW ZEALAND National Bank of New Zealand Wellington *NIGERIA* The Standard Bank of South Africa Limited Johannesburg NORWAY Den norske Bank ASA Oslo OMAN Oman Arab Bank Muscat PAKISTAN "Citibank, N.A." Karachi Deutsche Bank AG Karachi Standard Chartered Bank Karachi PERU Banco de Credito del Peru Lima PHILIPPINES The Hongkong and Shanghai Banking Corporation Limited Manila POLAND Bank Rozwoju Eksportu S.A. Warsaw PORTUGAL J.P. Morgan AG Frankfurt ROMANIA ING Bank N.V. Bucharest *RUSSIA* JPMorgan Chase Bank New York A/C JPMorgan Chase Bank London (USD NOSTRO Account) JPMorgan Chase Bank New York A/C JPMorgan Chase Bank London (USD NOSTRO Account) SINGAPORE Oversea-Chinese Banking Corporation Singapore SLOVAK REPUBLIC Vseobecno Uverova Banka S.A. Bratislava SLOVENIA Bank Austria Creditanstalt d.d. Ljubljana Ljubljana SOUTH AFRICA The Standard Bank of South Africa Limited Johannesburg SOUTH KOREA The Hongkong and Shanghai Banking Corporation Limited Seoul Standard Chartered Bank Seoul SPAIN J.P. Morgan AG Frankfurt SRI LANKA The Hongkong and Shanghai Banking Corporation Limited Colombo SWEDEN Svenska Handelsbanken Stockholm SWITZERLAND UBS AG Zurich TAIWAN JPMorgan Chase Bank Taipei The Hongkong and Shanghai Banking Corporation Limited Taipei THAILAND Standard Chartered Bank Bangkok TUNISIA "Banque Internationale Arabe de Tunisie, S.A." Tunis TURKEY JPMorgan Chase Bank Istanbul *UKRAINE* ING Bank Ukraine Kiev U.A.E. The National Bank of Abu Dhabi Abu Dhabi U.K. National Westminster Bank London URUGUAY "BankBoston, N.A" Montevideo. U.S.A. JPMorgan Chase Bank New York VENEZUELA "Citibank, N.A." Caracas VIETNAM The Hongkong and Shanghai Banking Corporation Limited Ho Chi Minh City ZAMBIA Barclays Bank of Zambia Limited Lusaka ZIMBABWE Barclays Bank of Zimbabwe Limited Harare Series Number: 5 72DD). 1. Total income dividends for which record date passed during the period Investor Class 9520 2. Dividends for a second class of oepn-end company shares A Class - B Class - C Class - 73A) 1. Dividends from net investment income Investor Class $0.256 2. Dividends for a second class of open-end company shares A Class $0.0394 B Class $0.0365 C Class $0.0394 74U). 1. Number of shares outstanding (000's omitted) "Investor Class 37,223" 2. Number of shares outstanding of a second class of open-end company shares (000's omitted) A Class - B Class 4 C Class - 74V). 1. Net asset value per share (to nearest cent) Investor Class $ 9.89 2.Net asset value per share of a second class of open-end company shares (to nearest cent) A Class $ 9.89 B Class $ 9.89 C Class $ 9.89 EX-99.77I 5 ex77i.txt ACCTF&MF EXHIBIT 77I SUB-ITEM 77I Terms of new or amended securities (a) N/A (b) California High-Yield Municipal Fund, a series of the Registrant, began offering A Class and B Class shares of the fund during the period. The following describes all classes of the funds, including the A Class and the B Class, as called for by the applicable registration statement: Each fund votes separately on matters affecting that fund exclusively. Voting rights are not cumulative, so that investors holding more than 50% of the Trust's (i.e., all funds') outstanding shares may be able to elect a Board of Trustees. The Trust undertakes dollar-based voting, meaning that the number of votes a shareholder is entitled to is based upon the dollar amount of the shareholder's investment. The election of trustees is determined by the votes received from all Trust shareholders without regard to whether a majority of shares of any one fund voted in favor of a particular nominee or all nominees as a group. The Trust shall continue unless terminated by (1) approval of at least two-thirds of the shares of each fund entitled to vote or (2) by the Trustees by written notice to shareholders of each fund. Any fund may be terminated by (1) approval of at least two-thirds of the shares of that fund or (2) by the Trustees by written notice to shareholders of that fund. Upon termination of the Trust or a fund, as the case may be, the Trust shall pay or otherwise provide for all charges, taxes, expenses and liabilities belonging to the Trust or fund. Thereafter, the Trust shall reduce the remaining assets belonging to each fund (or the particular fund) to cash, shares of other securities or any combination thereof, and distribute the proceeds belonging to each fund (or the particular fund) to the shareholders of that fund ratably according to the number of shares of that fund held by each shareholder on the termination date. Shareholders of a Massachusetts business trust could, under certain circumstances, be held personally liable for its obligations. However, the Declaration of Trust contains an express disclaimer of shareholder liability for acts or obligations of the Trust. The Declaration of Trust also provides for indemnification and reimbursement of expenses of any shareholder held personally liable for obligations of the Trust. The Declaration of Trust provides that the Trust will, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the Trust and satisfy any judgment thereon. The Declaration of Trust further provides that the Trust may maintain appropriate insurance (for example, fidelity, bonding, and errors and omissions insurance) for the protection of the Trust, its shareholders, trustees, officers, employees and agents to cover possible tort and other liabilities. Thus, the risk of a shareholder incurring financial loss as a result of shareholder liability is limited to circumstances in which both inadequate insurance exists and the Trust is unable to meet its obligations. The assets belonging to each fund or class of shares are held separately by the custodian and the shares of each fund or class represent a beneficial interest in the principal, earnings and profit (or losses) of investments and other assets held for each fund or class. Within their respective fund or class, all shares have equal redemption rights. Each share, when issued, is fully paid and non-assessable. In the event of a complete liquidation or dissolution of the fund or class, shareholders of the fund or class of shares shall be entitled to receive, pro rata, all of the assets less the liabilities of that fund or class. Each shareholder has rights to dividends and distributions declared by the fund he or she owns and to the net assets of such fund upon its liquidation or dissolution proportionate to his or her share ownership interest in the fund. Shares of each fund have equal voting rights, although each fund votes separately on matters affecting that fund exclusively. A Class shares are sold at their offering price, which is net asset value plus an initial sales charge. This sales charge varies depending on the amount of a shareholder's investment, and is deducted from a shareholder's purchase before it is invested. A shareholder may qualify for a reduction or waiver of certain sales charges, but must provide information to American Century at the time shares are purchased in order to take advantage of a reduction or waiver. A shareholder and his immediate family (spouse and children under the age of 21) may combine investments to reduce A Class sales charges in the following ways: Account Aggregation. Investments made by a shareholder and his immediate family may be aggregated if made for his own account(s) and/or certain other accounts, such as: o Certain trust accounts o Solely controlled business accounts o Single-participant retirement plans o Endowments or foundations established and controlled by the shareholder or an immediate family member Concurrent Purchases. A shareholder may combine simultaneous purchases in A, B or C Class shares of any two or more American Century Advisor Funds to qualify for a reduced A Class sales charge. Rights of Accumulation. A shareholder may take into account the current value of his existing holdings in A, B or C Class shares of any American Century Advisor Fund to determine his A Class sales charge. Letter of Intent. A Letter of Intent allows a shareholder to combine all non-money market fund purchases of all A, B and C Class shares he intends to purchase over a 13-month period to determine the applicable sales charge. At a shareholder's request, purchases made during the previous 90 days may be included; however, capital appreciation, capital gains and reinvested dividends do not apply toward these combined purchases. A portion of a shareholder's account will be held in escrow to cover additional A Class sales charges that will be due if his total investments over the 13-month period do not qualify for the applicable sales charge reduction. Waiver for Certain Investors. The sales charge on A Class shares may be waived for: o Certain financial intermediaries who have selling agreements for American Century funds, and those intermediaries' employees and sales representatives o Present or former officers, directors and employees (and their families) of American Century o Qualified retirement plan purchases o IRA Rollovers from any American Century Advisor Fund held in a qualified retirement plan o Certain other investors as deemed appropriate by American Century B Class shares are sold at their net asset value without an initial sales charge. However, if a shareholder redeems shares within six years of their purchase, he will pay a contingent deferred sales charge (CDSC) the amount of which is contingent upon the length of time the shares have been held. There is no CDSC on shares acquired through reinvestment of dividends or capital gains. B Class shares automatically convert to A Class shares in the month of the eight-year anniversary of the purchase date. C Class shares are sold at their net asset value without an initial sales charge. However, if a shareholder sells his C Class shares within 12 months of their purchase, he will pay a sales charge the amount of which is contingent upon the length of time the shares have been held. Any applicable CDSC may be waived in the following cases: o Redemptions through systematic withdrawal plans not exceeding annually: o 12% of the lesser of the original purchase cost or current market value for A Class shares o 12% of the original purchase cost for B Class shares o 12% of the lesser of the original purchase cost or current market value for C Class shares o Distributions from IRAs due to attainment of age 59 1/2 for A Class and C Class shares o Required minimum distributions from retirement accounts upon reaching age 70 1/2 o Tax-free returns of excess contributions to IRAs o Redemptions due to death or post-purchase disability o Exchanges, unless the shares acquired by exchange are redeemed within the original CDSC period o IRA rollovers from any American Century Advisor Fund held in a qualified retirement plan, for A Class shares only o If no broker was compensated for the sale Redemption proceeds are calculated using the net asset value (NAV) next determined after a transaction request is received in good order. However, American Century reserves the right to delay delivery of redemption proceeds up to seven days. For example, each time an investment is made with American Century, there is a seven-day holding period before redemption proceeds from those shares will be released, unless satisfactory proof is provided that the purchase funds have cleared. For funds with CheckWriting privileges, American Century will not honor checks written against shares subject to this seven-day holding period. Investments by wire generally require only a one-day holding period. If a shareholder changes his address, American Century may require that any redemption request made within 15 days be submitted in writing and be signed by all authorized signers with their signatures guaranteed. If a shareholder changes his bank information, American Century may impose a 15-day holding period before proceeds are transferred or wired to the shareholder's bank. In addition, American Century reserves the right to honor certain redemptions with securities rather than cash. If, during any 90-day period, fund shares worth more than $250,000 (or 1% of the value of the fund's assets if that amount is less than $250,000) are redeemed, American Century reserves the right to pay part or all of the redemption proceeds in excess of this amount in readily marketable securities instead of in cash. The fund managers would select these securities from the fund's portfolio. A payment in securities can help the fund's remaining shareholders avoid tax liabilities that they might otherwise have incurred had the fund sold securities prematurely to pay the entire redemption amount in cash. American Century will value these securities in the same manner as used in computing the fund's net asset value. American Century may provide these securities in lieu of cash without prior notice. Also, if payment is made in securities, brokerage or other transaction costs may be incurred to convert the securities to cash. If a shareholder's redemption would exceed this limit and he would like to avoid being paid in securities, he must provide American Century with an unconditional instruction to redeem at least 15 days prior to the date on which the redemptions transaction is to occur. The instruction must specify the dollar amount or number of shares to be redeemed and the date of the transaction. This minimizes the effect of the redemption on the fund and its remaining investors. If an account balance falls below the minimum initial investment amount for any reason other than as a result of market fluctuation, American Century will notify the account holder and allow 90 days to meet the minimum. If the deadline is not met, American Century reserves the right to redeem the shares in the account and send the proceeds to the account holder's address of record. A, B or C Class shares may be subject to a sales charge as a result of the redemption. A shareholder may also incur tax liability if shares are redeemed in this manner. American Century may require a signature guarantee for the following transactions: o A shareholder's redemption or distribution check, Check-A-Month or automatic redemption is made payable to someone other than the account owners o A shareholder's redemption proceeds or distribution amount is sent by wire or EFT to a destination other than his personal bank account o A shareholder is transferring ownership of an account over $100,000 American Century reserves the right to require a signature guarantee for other transactions. A shareholder may exchange shares of a fund for shares of the same class of another American Century Advisor Fund without a sales charge if he meets the following criteria: o The exchange is for a minimum of $100 o For an exchange that opens a new account, the amount of the exchange meets or exceeds the minimum account size requirement for the fund receiving the exchange. For purposes of computing any applicable CDSC on shares that have been exchanged, the holding period will begin as of the date of purchase of the original fund owned. Exchanges from a money market fund are subject to a sales charge on the fund being purchased, unless the money market fund shares were acquired by exchange from a fund with a sales charge or by reinvestment of dividends or capital gains distributions. Within 90 days of a redemption of any A or B Class shares, a shareholder may reinvest all of the redemption proceeds in A Class shares of any American Century Advisor Fund at the then-current net asset value without paying an initial sales charge. Any CDSC the shareholder paid on an A Class redemption that he is reinvesting will be credited to his account. The shareholder or his financial advisor must notify the fund's transfer agent in writing at the time of the reinvestment to take advantage of this privilege, and it may be used only once. EX-99.77M 6 ex77m.txt ACCTF&MF NSAR EXHIBIT 77 M ITEM 77M Mergers (a) California Long-Term Tax-Free Fund, a series of American Century California Tax-Free and Municipal Funds. California Tax-Free Money Market Fund, a series of American Century California Tax-Free and Municipal Funds. (b) At a special meeting held on August 2, 2002, shareholders of the California Insured Tax-Free Fund, a series of American Century California Tax-Free and Municipal Funds, approved a proposed Agreement and Plan of Reorganization to combine the California Insured Tax-Free Fund with and into the California Long-Term Tax-Free Fund, another series of American Century California Tax-Free and Municipal Funds, effective September 3, 2002. The proposal was recommended by the Board of Trustees of American Century California Tax-Free and Municipal Funds. The reorganization took the form of a transfer of assets by the California Insured Tax-Free Fund in exchange for shares of the California Long-Term Tax-Free Fund. The California Insured Tax-Free Fund then made a liquidating distribution to its shareholders of the California Long-Term Tax-Free Fund shares received in the exchange. The total dollar value of California Insured Tax-Free shareholders' accounts after the reorganization was the same as the total dollar value of those accounts before the reorganization. As a result of the reorganization, the California Insured Tax-Free Fund has ceased to exist. At a special meeting held on August 2, 2002, shareholders of the California Municipal Money Market Fund, a series of American Century California Tax-Free and Municipal Funds, approved a proposed Agreement and Plan of Reorganization to combine the California Municipal Money Market Fund with and into the California Tax-Free Money Market Fund, another series of American Century California Tax-Free and Municipal Funds, effective September 3, 2002. The proposal was recommended by the Board of Trustees of American Century California Tax-Free and Municipal Funds. The reorganization took the form of a transfer of assets by the California Municipal Money Market Fund in exchange for shares of the California Tax-Free Money Market Fund. The California Tax-Free Money Market Fund then made a liquidating distribution to its shareholders of the California Municipal Money Market Fund shares received in the exchange. The total dollar value of California Municipal Money Market shareholders' accounts after the reorganization was the same as the total dollar value of those accounts before the reorganization. As a result of the reorganization, the California Municipal Money Market Fund has ceased to exist. EX-99.77Q1 7 ex77q1e1.txt ACCTF&MF EXHIBIT 77Q1E1 AMENDMENT NO. 5 TO MANAGEMENT AGREEMENT (INVESTOR CLASS) THIS AMENDMENT NO. 5 TO MANAGEMENT AGREEMENT (INVESTOR CLASS) is made as of the 31st day of December, 2002, by and between each of the registered investment companies that have executed this Amendment below (the "Companies") and American Century Investment Management, Inc., a Delaware corporation (the "Investment Manager"). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Management Agreement (defined below). WHEREAS, the Companies are parties to a certain Management Agreement (Investor Class) dated August 1, 1997, amended March 1, 1998, June 1, 1998, September 16, 2000, August 1, 2001, December 3, 2001 and July 1, 2002 (the "Agreement"); and WHEREAS, the Board of Directors of American Century Variable Portfolios II, Inc. ("ACVP II") have determined that it is in the best interests of ACVP II to add a new Series titled VP Inflation Protection Fund; and WHEREAS, the parties desire to amend the Agreement to add the new series. NOW, THEREFORE, IN CONSIDERATION of the mutual promises and agreements herein contained, the parties agree as follows: 1. Exhibits A, B, C and D to the Agreement are hereby amended by deleting the text thereof in their entirety and inserting in lieu therefor the Exhibits A, B, C and D attached hereto. 2. After the date hereof, all references to the Agreement shall be deemed to mean the Agreement as amended by this Amendment No. 5. 3. In the event of a conflict between the terms of this Amendment and the Agreement, it is the intention of the parties that the terms of this Amendment shall control and the Agreement shall be interpreted on that basis. To the extent the provisions of the Agreement have not been amended by this Amendment, the parties hereby confirm and ratify the Agreement. 4. Except as expressly supplemented, amended or consented to hereby, all of the representations, warranties, terms, covenants and conditions of the Agreement shall remain unamended and shall continue to be in full force and effect. IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective duly authorized officers as of the day and year first above written. AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS AMERICAN CENTURY GOVERNMENT INCOME TRUST AMERICAN CENTURY INTERNATIONAL BOND FUNDS AMERICAN CENTURY INVESTMENT TRUST AMERICAN CENTURY MUNICIPAL TRUST AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS AMERICAN CENTURY TARGET MATURITIES TRUST AMERICAN CENTURY VARIABLE PORTFOLIOS II, INC. By: ______________________________ Name: Charles A. Etherington Title: Vice President of each Attest: ______________________________ Name: Janet A. Nash Title: Assistant Secretary of each AMERICAN CENTURY INVESTMENT MANAGEMENT, INC. By: ______________________________ Name: David C. Tucker Title: Senior Vice President Attest: ______________________________ Name: Janet A. Nash Title: Assistant Secretary 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 August 1, 1997 California Intermediate-Term Tax-Free Fund August 1, 1997 California Limited-Term Tax-Free Fund August 1, 1997 California Long-Term Tax-Free Fund August 1, 1997 California Tax-Free Money Market Fund August 1, 1997 American Century Government Income Trust Capital Preservation Fund August 1, 1997 Ginnie Mae Fund (formerly GNMA Fund) August 1, 1997 Government Agency Money Market Fund August 1, 1997 Inflation-Adjusted Bond Fund (formerly Inflation-Adjusted Treasury Fund) August 1, 1997 Government Bond Fund (formerly Long-Term Treasury Fund) August 1, 1997 Short-Term Government Fund August 1, 1997 American Century International Bond Funds International Bond Fund August 1, 1997 American Century Investment Trust Prime Money Market Fund August 1, 1997 Diversified Bond Fund August 1, 2001 Premium Money Market Fund August 1, 2001 High-Yield Fund July 1, 2002 American Century Municipal Trust Arizona Municipal Bond Fund (formerly Arizona August 1, 1997 Intermediate-Term Municipal Fund) Florida Municipal Bond Fund (formerly Florida August 1, 1997 Intermediate-Term Municipal Fund) Florida Municipal Money Market Fund August 1, 1997 Tax-Free Bond Fund (formerly Intermediate-Term Tax-Free Fund) August 1, 1997 High-Yield Municipal Fund March 31, 1998 Tax-Free Money Market Fund August 1, 1997 Registered Investment Company and Funds Date American Century Quantitative Equity Funds Equity Growth Fund August 1, 1997 Global Gold Fund August 1, 1997 Global Natural Resources Fund August 1, 1997 Income & Growth Fund August 1, 1997 Small Cap Quantitative Fund July 1, 1998 Utilities Fund August 1, 1997 American Century Target Maturities Trust Target 2005 Fund August 1, 1997 Target 2010 Fund August 1, 1997 Target 2015 Fund August 1, 1997 Target 2020 Fund August 1, 1997 Target 2025 Fund August 1, 1997 Target 2030 Fund September 16, 2000 American Century Variable Portfolios II, Inc. VP Prime Money Market Fund September 16, 2000 VP Inflation Protection Fund December 31, 2002 Dated: December 31, 2002 Exhibit B Series Investment Categories Investment Category Series Money Market Funds California Tax-Free Money Market Fund Capital Preservation Fund Florida Municipal Money Market Fund Government Agency Money Market Fund Prime Money Market Fund Tax-Free Money Market Fund VP Prime Money Market Fund Premium Money Market Fund Bond Funds Arizona Municipal Bond Fund (formerly Arizona Intermediate-Term Municipal Fund) California High-Yield Municipal Fund California Intermediate-Term Tax-Free Fund California Limited-Term Tax-Free Fund California Long-Term Tax-Free Fund Diversified Bond Fund Florida Municipal Bond Fund (formerly Florida Intermediate-Term Municipal Fund) Ginnie Mae Fund (formerly GNMA Fund) Government Bond Fund (formerly Long-Term Treasury Fund) High-Yield Municipal Fund High-Yield Fund Inflation-Adjusted Bond Fund (formerly Inflation-Adjusted Treasury Fund) International Bond Fund Short-Term Government Fund Target 2005 Fund Target 2010 Fund Target 2015 Fund Target 2020 Fund Target 2025 Fund Target 2030 Fund Tax-Free Bond Fund (formerly Intermediate- Term Tax-Free Fund) VP Inflation Protection Fund Investment Category Series Equity Funds Equity Growth Fund Global Gold Fund Global Natural Resources Fund Income & Growth Fund Small Cap Quantitative Fund Utilities Fund Dated: December 31, 2002 Exhibit C Investment Category Fee Schedules: Money Market Funds Schedule 1 Funds: Capital Preservation Fund Government Agency Money Market Fund 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: California Tax-Free Money Market Fund Florida Municipal Money Market Fund Tax-Free Money Market Fund 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 VP 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% Schedule 4 Funds: Premium Money Market Fund Category Assets Fee Rate First $1 billion 0.2300% Next $1 billion 0.1870% Next $3 billion 0.1460% Next $5 billion 0.1290% Next $15 billion 0.1180% Next $25 billion 0.1175% Thereafter 0.1170% Investment Category Fee Schedules: Bond Funds Schedule 1 Funds: Government Bond Fund (formerly Long-Term Treasury Fund) California Limited-Term Tax-Free Fund California Intermediate-Term Tax-Free Fund California Long-Term Tax-Free Fund Arizona Municipal Bond Fund (formerly Arizona Intermediate- Term Municipal Fund) Florida Municipal Bond Fund (formerly Florida Intermediate- Term Municipal Fund) Tax-Free Bond Fund (formerly Intermediate-Term Tax-Free Fund) Inflation-Adjusted Bond Fund (formerly Inflation-Adjusted Treasury Fund) VP Inflation Protection Fund 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% Investment Category Fee Schedules: Bond Funds (continued) 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: Ginnie Mae Fund (formerly GNMA Fund) Short-Term Government Fund Target 2005 Fund Target 2010 Fund Target 2015 Fund Target 2020 Fund Target 2025 Fund Target 2030 Fund 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: International Bond Fund 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% Investment Category Fee Schedules: Equity Funds Schedule 1 Funds: Equity Growth Fund Global Gold Fund Global Natural Resources Fund Income & Growth Fund Utilities Fund 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: Small Cap Quantitative Fund 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: December 31, 2002 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: December 31, 2002 EX-99.77Q1 8 ex771e2.txt EXHIBIT 77QE2 AMENDMENT NO. 4 TO MANAGEMENT AGREEMENT (C CLASS) THIS AMENDMENT NO. 4 TO MANAGEMENT AGREEMENT (C CLASS) is made as of the 3rd day of September, 2002, by and between each of the registered investment companies that have executed this Amendment below (the "Companies") and American Century Investment Management, Inc., a Delaware corporation (the "Investment Manager"). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Management Agreement (defined below). WHEREAS, the Companies are parties to a certain Management Agreement (C Class) dated September 16, 2000, to be effective May 1, 2001, amended August 1, 2001, December 3, 2001 and July 1, 2002 (the "Agreement"); and WHEREAS, the Board of Trustees of American Century Investment Trust have determined that it is in the best interests of the Trust to add a C Class of shares for Diversified Bond Fund; and WHEREAS, the parties desire to amend the Agreement to add the C Class of shares for Diversified Bond Fund; NOW, THEREFORE, IN CONSIDERATION of the mutual promises and agreements herein contained, the parties agree as follows: 1. Exhibits A, B, C and D to the Agreement are hereby amended by deleting the text thereof in their entirety and inserting in lieu therefor the Exhibits A, B, C and D attached hereto. 2. After the date hereof, all references to the Agreement shall be deemed to mean the Agreement as amended by this Amendment No. 4. 3. In the event of a conflict between the terms of this Amendment and the Agreement, it is the intention of the parties that the terms of this Amendment shall control and the Agreement shall be interpreted on that basis. To the extent the provisions of the Agreement have not been amended by this Amendment, the parties hereby confirm and ratify the Agreement. 4. Except as expressly supplemented, amended or consented to hereby, all of the representations, warranties, terms, covenants and conditions of the Agreement shall remain unamended and shall continue to be in full force and effect. IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective duly authorized officers as of the day and year first above written. AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS AMERICAN CENTURY GOVERNMENT INCOME TRUST AMERICAN CENTURY INVESTMENT TRUST AMERICAN CENTURY MUNICIPAL TRUST AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS AMERICAN CENTURY TARGET MATURITIES TRUST By: ______________________________ Name: Charles A. Etherington Title: Vice President of each Attest: ______________________________ Name: Anastasia H. Enneking Title: Assistant Secretary of each AMERICAN CENTURY INVESTMENT MANAGEMENT, INC. By: ______________________________ Name: David C. Tucker Title: Senior Vice President Attest: ______________________________ Name: Anastasia H. Enneking Title: Assistant Secretary 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 May 1, 2001 California Intermediate-Term Tax-Free Fund May 1, 2001 California Long-Term Tax-Free Fund May 1, 2001 American Century Government Income Trust Ginnie Mae Fund (formerly GNMA Fund) May 1, 2001 American Century Investment Trust Prime Money Market Fund May 1, 2001 High-Yield Fund July 1, 2002 Diversified Bond Fund September 3, 2002 American Century Municipal Trust Arizona Municipal Bond Fund (formerly Arizona May 1, 2001 Intermediate-Term Municipal Fund) Florida Municipal Bond Fund (formerly Florida May 1, 2001 Intermediate-Term Municipal Fund) Tax-Free Bond Fund (formerly Intermediate-Term Tax-Free Fund) May 1, 2001 High-Yield Municipal Fund May 1, 2001 American Century Quantitative Equity Funds Equity Growth Fund May 1, 2001 Income & Growth Fund May 1, 2001 American Century Target Maturities Trust Target 2030 Fund May 1, 2001 Dated September 3, 2002 Exhibit B Series Investment Categories Investment Category Series Bond Funds Arizona Muncipal Bond Fund (formerly Arizona Intermediate-Term Municipal Fund) California High-Yield Municipal Fund California Intermediate-Term Tax-Free Fund California Long-Term Tax-Free Fund Florida Municipal Bond Fund (formerly Florida Intermediate-Term Municipal Fund) Ginnie Mae Fund (formerly GNMA Fund) High-Yield Municipal Fund Tax-Free Bond Fund (formerly Intermediate- Term Tax-Free Fund) Target 2030 Fund High-Yield Fund Diversified Bond Fund Investment Category Series Equity Funds Equity Growth Fund Income & Growth Fund 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% Schedule 4 Funds: none Category Assets Fee Rate First $1 billion 0.2300% Next $1 billion 0.1870% Next $3 billion 0.1460% Next $5 billion 0.1290% Next $15 billion 0.1180% Next $25 billion 0.1175% Thereafter 0.1170% Category Fee Schedules: Bond Funds Schedule 1 Funds: California Intermediate-Term Tax-Free Fund California Long-Term Tax-Free Fund Arizona Municipal Bond Fund (formerly Arizona Intermediate- Term Municipal Fund) Florida Municipal Bond Fund (formerly Florida Intermediate- Term Municipal Fund) Tax-Free Bond Fund (formerly Intermediate-Term Tax-Free Fund) 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% Category Fee Schedules: Bond Funds (continued) Schedule 3 Funds: Ginnie Mae Fund (formerly GNMA Fund) Target 2030 Fund 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% 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% Category Fee Schedules: Bond Funds (continued) 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: Equity Growth Fund Income & Growth Fund 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 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 EX-99.77Q1 9 ex77q1e3.txt EXHIBIT 77 Q1E3 AMENDMENT NO. 3 TO MANAGEMENT AGREEMENT (INSTITUTIONAL CLASS) THIS AMENDMENT NO. 3 TO MANAGEMENT AGREEMENT (INSTITUTIONAL CLASS) is made as of the 31st day of December, 2002, by and between each of the registered investment companies that have executed this Amendment below (the "Companies") and American Century Investment Management, Inc., a Delaware corporation (the "Investment Manager"). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Management Agreement (defined below). WHEREAS, the Companies and the Investment Manager are parties to a certain Management Agreement (Institutional Class) dated August 1, 1997, amended by Amendment No. 1 dated August 1, 2001 and Amendment No. 2 dated March 1, 2002 ("Agreement"); and WHEREAS, American Century Municipal Trust has added an Institutional Class of share for Tax-Free Bond Fund; and WHEREAS, American Century Municipal Trust desires to become a party to the Agreement; and WHEREAS, the parties desire to amend the Agreement to add American Century Municipal Trust and Tax-Free Bond Fund. NOW, THEREFORE, IN CONSIDERATION of the mutual promises and agreements herein contained, the parties agree as follows: 1. Exhibits A, B, C and D to the Agreement are hereby amended by deleting the text thereof in their entirety and inserting in lieu therefor the Exhibits A, B, C and D attached hereto. 2. After the date hereof, all references to the Agreement shall be deemed to mean the Agreement as amended by this Amendment No. 3. 3. In the event of a conflict between the terms of this Amendment and the Agreement, it is the intention of the parties that the terms of this Amendment shall control and the Agreement shall be interpreted on that basis. To the extent the provisions of the Agreement have not been amended by this Amendment, the parties hereby confirm and ratify the Agreement. 4. Except as expressly supplemented, amended or consented to hereby, all of the representations, warranties, terms, covenants and conditions of the Agreement shall remain unamended and shall continue to be in full force and effect. IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective duly authorized officers as of the day and year first above written. AMERICAN CENTURY INVESTMENT TRUST AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS AMERICAN CENTURY GOVERNMENT INCOME TRUST AMERICAN CENTURY MUNICIPAL TRUST By: ______________________________ Name: Charles A. Etherington Title: Vice President of each Attest: ______________________________ Name: Janet A. Nash Title: Assistant Secretary of each AMERICAN CENTURY INVESTMENT MANAGEMENT, INC. By: ______________________________ Name: David C. Tucker Title: Senior Vice President Attest: ______________________________ Name: Janet A. Nash Title: Assistant Secretary Exhibit A Registered Investment Companies Subject to Management Agreement Registered Investment Company and Funds Date American Century Quantitative Equity Funds Equity Growth Fund August 1, 1997 Income & Growth Fund August 1, 1997 Small Cap Quantitative Fund July 1, 1998 American Century Investment Trust Diversified Bond Fund August 1, 2001 American Century Government Income Trust Inflation-Adjusted Bond Fund March 1, 2002 American Century Municipal Trust Tax-Free Bond Fund December 31, 2002 Dated: December 31, 2002 Exhibit B Series Investment Categories Investment Category Series Bond Funds Diversified Bond Fund Inflation-Adjusted Bond Fund Tax-Free Bond Fund Investment Category Series Equity Funds Equity Growth Fund Income & Growth Fund Small Cap Quantitative Fund Investment Category Series Money Market Funds none Dated: December 31, 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: none 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% Schedule 4 Funds: none Category Assets Fee Rate First $1 billion 0.2300% Next $1 billion 0.1870% Next $3 billion 0.1460% Next $5 billion 0.1290% Next $15 billion 0.1180% Next $25 billion 0.1175% Thereafter 0.1170% Category Fee Schedules: Bond Funds Schedule 1 Funds: Inflation-Adjusted Bond Fund Tax-Free Bond Fund 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: none 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% Category Fee Schedules: Bond Funds (continued) 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% 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% Category Fee Schedules: Bond Funds (continued) Schedule 5 Funds: 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: none 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: Equity Growth Fund Income & Growth Fund 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: Small Cap Quantitative Fund 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: December 31, 2002 Exhibit D Complex Fee Schedule Complex Assets Fee Rate First $2.5 billion 0.1100% Next $7.5 billion 0.1000% Next $15.0 billion 0.0985% Next $25.0 billion 0.0970% Next $50.0 billion 0.0960% Next $100.0 billion 0.0950% Next $100.0 billion 0.0940% Next $200.0 billion 0.0930% Next $250.0 billion 0.0920% Next $500.0 billion 0.0910% Thereafter 0.0900% Dated: December 31, 2002 EX-99.77Q1 10 ex77q1e4.txt EXHIBIT 77Q1E4 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: Anastasia H. Enneking Charles A. Etherington Assistant Secretary Vice President Attest: American Century Investment Management, Inc. Anastasia H. Enneking David C. Tucker 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 EX-99.77Q1 11 ex771e5.txt EXHIBIT 771E5 MANAGEMENT AGREEMENT B 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 B Class of each series of shares of the Companies contemplated as of the date hereof, and the B 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 B 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 B 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 B 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 B 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 B 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 B 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 B 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 B 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 B 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: Anastasia H. Enneking Charles A. Etherington Assistant Secretary Vice President Attest: American Century Investment Management, Inc. Anastasia H. Enneking David C. Tucker 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 EX-99.77Q1 12 ex771e6.txt EXHIBIT 771E6 MANAGEMENT AGREEMENT C Class II 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 C Class II of each series of shares of the Companies contemplated as of the date hereof, and the C Class II 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 C Class IIof 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 C Class II 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 C Class IIof 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 C Class II 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 C Class II 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 C Class II 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 C Class II 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 C Class II 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 C Class II 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: Anastasia H. Enneking Charles A. Etherington Assistant Secretary Vice President Attest: American Century Investment Management, Inc. Anastasia H. Enneking David C. Tucker 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 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 EX-99.77Q1 13 x77q1g1.txt EXHIBIT 77Q1G1 AGREEMENT AND PLAN OF REORGANIZATION BY AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS TABLE OF CONTENTS Preamble........................................................................................1 1. Transfer of Assets of California Insured Tax-Free...............................................1 2. Liquidating Distribution and Termination of California Insured Tax-Free.........................2 3. Valuation Time..................................................................................3 4. Certain Representations, Warranties and Agreements of ACCTFMF...................................3 5. Certain Representations, Warranties and Agreements of ACCTFMF...................................6 6. Shareholder Action on Behalf of California Insured Tax-Free.....................................7 7. Registration Statement and Proxy Solicitation Materials.........................................8 8. Effective Time of the Reorganization............................................................8 9. ACCTFMF Conditions.............................................................................10 10. ACCTFMF Conditions.............................................................................10 11. Tax Documents..................................................................................11 12. Further Assurances.............................................................................11 13. Termination of Representations and Warranties..................................................12 14. Termination of Agreement.......................................................................12 15. Amendment and Waiver...........................................................................12 16. Governing Law..................................................................................13 17. Successors and Assigns.........................................................................13 18. Beneficiaries..................................................................................13 19. ACCTFMF Liability..............................................................................13 20. Notices........................................................................................13 21. Expenses.......................................................................................14 22. Entire Agreement...............................................................................14 23. Counterparts...................................................................................14
AGREEMENT AND PLAN OF REORGANIZATION AGREEMENT AND PLAN OF REORGANIZATION made as of April 1, 2002 by American Century California Tax-Free and Municipal Funds, a Massachusetts business trust ("ACCTFMF"). WHEREAS, the parties desire that substantially all of the assets and liabilities of the California Insured Tax-Free portfolio of ACCTFMF ("California Insured Tax-Free") be transferred to, and be acquired and assumed by, the California Long-Term Tax-Free portfolio of ACCTFMF ("California Long-Term Tax-Free") in exchange for shares of California Long-Term Tax-Free which shall thereafter be distributed by ACCTFMF to the holders of shares of California Insured Tax-Free, all as described in this Agreement (the "Reorganization"); WHEREAS, the parties intend that the transfer of assets, assumption of liabilities and distribution of shares in California Insured Tax-Free be treated as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"); and WHEREAS, the parties intend that in connection with the Reorganization, California Insured Tax-Free shall be terminated and de-registered as described in this Agreement. NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and subject to the terms and conditions hereof, and intending to be legally bound hereby, ACCTFMF agrees as follows: 1. TRANSFER OF ASSETS OF CALIFORNIA INSURED TAX-FREE. 1.1. At the Effective Time (as defined in Section 8), ACCTFMF shall transfer and convey, on behalf of California Insured Tax-Free, all property of every description, and all interests, rights, privileges and powers of California Insured Tax-Free (such assets, the "California Insured Tax-Free Assets"). Simultaneously, ACCTFMF shall, on behalf of California Long-Term Tax-Free, accept the California Insured Tax-Free Assets and assume all liabilities, whether accrued, absolute, contingent or otherwise, of California Insured Tax-Free reflected in the calculation of California Insured Tax-Free's net asset value (the "California Insured Tax-Free Liabilities"). As a result, at and after the Effective Time: (i) all assets of California Insured Tax-Free shall become and be the assets of California Long-Term Tax-Free; and (ii) all known liabilities of California Insured Tax-Free reflected as such in the calculation of California Insured Tax-Free's net asset value shall attach to California Long-Term Tax-Free as aforesaid and may thenceforth be enforced against California Long-Term Tax-Free to the extent as if the same had been incurred by it. Without limiting the generality of the foregoing, the California Insured Tax-Free Assets shall include all property and assets of any nature whatsoever, including without limitation, all cash, cash equivalents, securities, other investments, claims and receivables (including dividend and interest receivables) owned by California Insured Tax-Free, and any deferred or prepaid expenses shown as an asset on California Insured Tax-Free's books at the Effective Time, and all good will, other intangible property and books and records belonging to California Insured Tax-Free. Recourse by any person for the California Insured Tax-Free Liabilities assumed by California Long-Term Tax-Free shall, at and after the Effective Time, be limited to California Long-Term Tax-Free. 1.2. In exchange for the transfer of the California Insured Tax-Free Assets and the assumption of the California Insured Tax-Free Liabilities, ACCTFMF shall simultaneously issue at the Effective Time to California Insured Tax-Free a number of full and fractional shares (to the third decimal place) of California Long-Term Tax-Free, all determined and adjusted as provided in this Agreement. The number of shares of California Long-Term Tax-Free so issued will have an aggregate net asset value equal to the value of the California Insured Tax-Free Assets, less the California Insured Tax-Free Liabilities, that are represented by shares of California Insured Tax-Free, the holders of which shall receive shares of California Long-Term Tax-Free, all determined and adjusted as provided in this Agreement. 1.3. The net asset values of shares of California Long-Term Tax-Free and of California Insured Tax-Free shall be determined as of the Valuation Time, as defined in Section 3. 1.4. The net asset value of shares of California Long-Term Tax-Free shall be computed in the manner set forth in California Long-Term Tax-Free's then-current prospectus under the Securities Act of 1933, as amended (the "1933 Act"). The net asset value of the California Insured Tax-Free Assets to be transferred by ACCTFMF shall be computed by ACCTFMF. In determining the value of the securities transferred by California Insured Tax-Free to California Long-Term Tax-Free, each security shall be priced in accordance with the policies and procedures of ACCTFMF as described in its then-current prospectus and statement of additional information and adopted by ACCTFMF's Board of Trustees. Price quotations and the security characteristics relating to establishing such quotations shall be determined by ACCTFMF. 2. LIQUIDATING DISTRIBUTION AND TERMINATION OF CALIFORNIA INSURED TAX-FREE. Immediately after the Effective Time, California Insured Tax-Free shall distribute in the complete liquidation pro rata to the record holders of its shares at the Effective Time the shares of California Long-Term Tax-Free to be received by the record holders of California Insured Tax-Free. ACCTFMF shall record on its books the ownership of shares of California Long-Term Tax-Free by the record holders of shares of California Insured Tax-Free. All of the issued and outstanding shares of California Insured Tax-Free shall be redeemed and canceled on the books of ACCTFMF at the Effective Time and shall thereafter represent only the right to receive the shares of California Long-Term Tax-Free, and California Insured Tax-Free's transfer books shall be closed permanently. As soon as practicable after the Effective Time, ACCTFMF shall take all steps as shall be necessary and proper to effect the dissolution of California Insured Tax-Free under federal and state law. After the Effective Time, ACCTFMF shall not conduct any business with respect to California Insured Tax-Free except in connection with California Insured Tax-Free's liquidation and dissolution. 3. VALUATION TIME. Subject to Section 1.4 hereof, the Valuation Time for the Reorganization shall be on such date as may be agreed by the duly authorized officers of ACCTFMF. 4. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF ACCTFMF. ACCTFMF, on behalf of itself and California Insured Tax-Free, represents and warrants to, and agrees with the following: 4.1. ACCTFMF is a Massachusetts business trust duly created pursuant to a Declaration of Trust for the purpose of acting as a management investment company under the 1940 Act and is validly existing under the laws of, and duly authorized to transact business in, the Commonwealth of Massachusetts, California Insured Tax-Free is registered with the SEC as an open-end management investment company under the 1940 Act and such registration is in full force and effect. 4.2. ACCTFMF has power to own all of its properties and assets and, subject to the approval of shareholders referred to herein, to carry out and consummate the transactions contemplated hereby, and has all necessary federal, state and local authorizations to carry on its business as now being conducted and to consummate the transactions contemplated by this Agreement. 4.3. This Agreement has been duly authorized, executed and delivered by ACCTFMF, and represents ACCTFMF's valid and binding contract, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization, arrangement, moratorium, and other similar laws of general applicability relating to or affecting creditors' rights and to general principles of equity. The execution and delivery of this Agreement does not and will not, and the consummation of the transactions contemplated by this Agreement will not, violate ACCTFMF's Declaration of Trust, By-laws, or any agreement or arrangement to which it is a party or by which it is bound. 4.4. California Insured Tax-Free has elected to qualify and has qualified as a "regulated investment company" under Subtitle A, Chapter 1, Subchapter M, Part I of the Code, as of and since its first taxable year; has been a regulated investment company at all times since the end of its first taxable year when it so qualified; and qualifies and shall continue to qualify as a regulated investment company until the Effective Time. 4.5. All federal, state, local and foreign income, profits, franchise, sales, withholding, customs, transfer and other taxes, including interest, additions to tax and penalties (collectively, "Taxes") relating to the California Insured Tax-Free Assets or properly shown to be due on any return filed by California Insured Tax-Free with respect to taxable periods ending on or prior to, and the portion of any interim period up to, the date hereof have been fully and timely paid or provided for; and there are no levies, liens, or other encumbrances relating to Taxes existing, threatened or pending with respect to the California Insured Tax-Free Assets. 4.6. The financial statements of California Insured Tax-Free for the fiscal year ended August 31, 2001, audited by PricewaterhouseCoopers, LLP, independent auditors, copies of which have been previously furnished to ACCTFMF, present fairly the financial position of California Insured Tax-Free as of August 31, 2001 and the results of its operations for the year then ending, in conformity with generally accepted accounting principles. 4.7. Prior to the Valuation Time, California Insured Tax-Free shall have declared a dividend or dividends, with a record date and ex-dividend date prior to such Valuation Time, which, together with all previous dividends, shall have the effect of distributing to its shareholders all of its investment company taxable income, if any, for the taxable periods or years ended on or before California Insured Tax-Free's most recent fiscal year end, and for the period from said date to and including the Effective Time (computed without regard to any deduction for dividends paid), and all of its tax-exempt income and net capital gain, if any, realized in taxable periods or years ended on or before California Insured Tax-Free's fiscal year end and for the period from said date to and including the Effective Time. Such dividends will be paid to shareholders of California Insured Tax-Free prior to the Effective Date. 4.8. At both the Valuation Time and the Effective Time, there shall be no known liabilities of California Insured Tax-Free, whether accrued, absolute, contingent or otherwise, not reflected in the net asset value per share of its outstanding shares. 4.9. There are no legal, administrative or other proceedings pending or, to ACCTFMF's knowledge threatened, against ACCTFMF or California Insured Tax-Free which could result in liability on the part of California Insured Tax-Free. 4.10. Subject to the approval of shareholders, at both the Valuation Time and the Effective Time, ACCTFMF shall have full right, power and authority to assign, transfer and deliver the California Insured Tax-Free Assets and, upon delivery and payment for the California Insured Tax-Free Assets as contemplated herein, California Long-Term Tax-Free shall acquire good and marketable title thereto, free and clear of all liens and encumbrances, and subject to no restrictions on the ownership or transfer thereof (except as imposed by federal or state securities laws). 4.11. No consent, approval, authorization or order of any court or governmental authority is required for the consummation by ACCTFMF of the transactions contemplated by this Agreement, except such as may be required under the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"), the 1940 Act, the rules and regulations under those Acts, and state securities laws. 4.12. Insofar as the following relate to ACCTFMF, the registration statement filed by ACCTFMF on Form N-14 relating to the shares of California Long-Term Tax-Free that will be registered with the SEC pursuant to this Agreement, which, without limitation, shall include a proxy statement and prospectus of ACCTFMF with respect to the transactions contemplated by this Agreement, and any supplement or amendment thereto or to the documents contained or incorporated therein by reference (the "N-14 Registration Statement"), on the effective date of the N-14 Registration Statement, at the time of any shareholders' meeting referred to herein and at the Effective Time: (i) shall comply in all material respects with the provisions of the 1933 Act, the 1934 Act and the 1940 Act, the rules and regulations thereunder, and state securities laws, and (ii) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the representations and warranties in this subsection shall apply only to statements in or omissions from the N-14 Registration Statement made in reliance upon and in conformity with information furnished by ACCTFMF for use in the N-14 Registration Statement. 4.13. All of the issued and outstanding shares of California Insured Tax-Free have been duly and validly issued, are fully paid and non-assessable, and were offered for sale and sold in conformity with all applicable federal and state securities laws, and no shareholder of California Insured Tax-Free has any preemptive right of subscription or purchase in respect of such shares. 5. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF ACCTFMF. ACCTFMF, on behalf of itself and California Long-Term Tax-Free, represents and warrants to, and agrees with the following: 5.1. ACCTFMF is a Massachusetts business trust duly created pursuant to a Declaration of Trust for the purpose of acting as a management investment company under the 1940 Act and is validly existing under the laws of, and duly authorized to transact business in, the Commonwealth of Massachusetts, California Long-Term Tax-Free is registered with the SEC as an open-end management investment company under the 1940 Act and such registration is in full force and effect. 5.2. ACCTFMF has the power to own all of its properties and assets and to carry out and consummate the transactions contemplated herein, and has all necessary federal, state and local authorizations to carry on its business as now being conducted and to consummate the transactions contemplated by this Agreement. 5.3. This Agreement has been duly authorized, executed and delivered by ACCTFMF, and represents ACCTFMF's valid and binding contract, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization, arrangement, moratorium, and other similar laws of general applicability relating to or affecting creditors' rights and to general principles of equity. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated by this Agreement will not, violate ACCTFMF's Declaration of Trust or By-laws or any agreement or arrangement to which it is a party or by which it is bound. 5.4. California Long-Term Tax-Free has elected to qualify, and has qualified, as a "regulated investment company" under Subtitle A, Chapter 1, Subchapter M, Part I of the Code, as of and since its first taxable year; and has been a regulated investment company at all times since the end of its first taxable year when it so qualified and intends to continue to qualify as a regulated investment company. 5.5. The financial statements of California Long-Term Tax-Free for its fiscal year ended August 31, 2001, audited by PricewaterhouseCoopers LLP, independent auditors, copies of which have been previously furnished to ACCTFMF, present fairly the financial position of California Long-Term Tax-Free as of August 31, 2001 and the results of its operations for the year then ending, in conformity with generally accepted accounting principles. 5.6. At both the Valuation Time and the Effective Time, there shall be no known liabilities of California Long-Term Tax-Free whether accrued, absolute, contingent or otherwise, not reflected in the net asset value per share of its shares to be issued pursuant to this Agreement. 5.7. There are no legal, administrative or other proceedings pending or, to its knowledge, threatened against ACCTFMF or California Long-Term Tax-Free that could result in liability on the part of ACCTFMF or California Long-Term Tax-Free. 5.8. No consent, approval, authorization or order of any court or governmental authority is required for the consummation by ACCTFMF of the transactions contemplated by this Agreement, except such as may be required under the 1933 Act, the 1934 Act, the 1940 Act, the rules and regulations under those Acts, and state securities laws. 5.9. Insofar as the following relate to ACCTFMF, the N-14 Registration Statement on its effective date, at the time of any shareholders' meetings referred to herein and at the Effective Time: (i) shall comply in all material respects with the provisions of the 1933 Act, the 1934 Act and the 1940 Act, the rules and regulations thereunder, and state securities laws, and (ii) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the representations and warranties in this subsection shall apply only to statements in or omissions from the N-14 Registration Statement made in reliance upon and in conformity with information furnished by ACCTFMF for use in the N-14 Registration Statement. 5.10. The shares of California Long-Term Tax-Free to be issued and delivered to California Insured Tax-Free for the account of record holders of shares of California Insured Tax-Free pursuant to the terms hereof shall have been duly authorized as of the Effective Time and, when so issued and delivered, shall be registered under the 1933 Act, duly and validly issued, fully paid and non-assessable, and no shareholder of ACCTFMF shall have any preemptive right of subscription or purchase in respect thereto. 6. SHAREHOLDER ACTION ON BEHALF OF CALIFORNIA INSURED TAX-FREE. 6.1. As soon as practicable after the effective date of the N-14 Registration Statement, but in any event prior to the Effective Time and as a condition to the Reorganization, the Board of Directors of ACCTFMF shall call, and ACCTFMF shall hold, a meeting of the shareholders of California Insured Tax-Free for the purpose of considering and voting upon: 6.1.1. Approval of this Agreement and the transactions contemplated hereby, including, without limitation: 6.1.1.1. The transfer of the California Insured Tax-Free Assets to California Long-Term Tax-Free and the assumption by California Long-Term Tax-Free of the California Insured Tax-Free Liabilities, in exchange for shares of California Long-Term Tax-Free, as described in this Agreement; and 6.1.1.2. The liquidation of California Insured Tax-Free through the distribution to its record holders of the shares of California Long-Term Tax-Free as described in this Agreement; and 6.1.2. Such other matters as may be determined by the Board of Directors or authorized officers of the parties. 6.2. Approval of this Reorganization Agreement by the shareholders of California Insured Tax-Free shall constitute the waiver of the application of any fundamental policy of California Insured Tax-Free that might be deemed to prevent them from taking the actions necessary to effectuate the Reorganization as described, and such policies, if any, shall be deemed to have been amended accordingly. 7. REGISTRATION STATEMENT AND PROXY SOLICITATION MATERIALS. The N-14 Registration Statement under the 1933 Act, including the combined prospectus/proxy statement contained therein under the 1934 Act and 1940 Act proxy rules, shall be filed with the SEC as promptly as practicable, ACCTFMF shall have furnished and shall continue to furnish the information relating to California Insured Tax-Free and California Long-Term Tax-Free that is required by the 1933 Act, the 1934 Act, the 1940 Act, the rules and regulations under each of those Acts and state securities laws, to be included in the N-14 Registration Statement. 8. EFFECTIVE TIME OF THE REORGANIZATION. Delivery of the California Insured Tax-Free Assets and the shares of California Long-Term Tax-Free to be issued pursuant to Section 1 and the liquidation of California Insured Tax-Free pursuant to Section 2 shall occur at the opening of business on the next business day following the Valuation Time, or on such other date, and at such place and time, as may be determined by the President or any Vice President of ACCTFMF. The date and time at which such actions are taken are referred to herein as the "Effective Time." To the extent any of the California Insured Tax-Free Assets are, for any reason, not transferred at the Effective Time, ACCTFMF shall cause such California Insured Tax-Free Assets to be transferred in accordance with this Agreement at the earliest practicable date thereafter. 9. ACCTFMF CONDITIONS. The obligations of ACCTFMF hereunder with respect to California Long-Term Tax-Free shall be subject to the following conditions precedent: 9.1. This Agreement and the transactions contemplated by this Agreement shall have been approved by the shareholders of California Insured Tax-Free, in the manner required by law. 9.2. ACCTFMF shall have duly executed and delivered such bills of sale, assignments, certificates and other instruments of transfer ("Transfer Documents") as may be necessary or desirable to transfer all right, title and interest of ACCTFMF and California Insured Tax-Free in and to the California Insured Tax-Free Assets. The California Insured Tax-Free Assets shall be accompanied by all necessary state stock transfer stamps or cash for the appropriate purchase price therefor. 9.3. All representations and warranties made in this Agreement shall be true and correct in all material respects as if made at and as of the Valuation Time and the Effective Time. As of the Valuation Time and the Effective Time, there shall have been no material adverse change in the financial position of California Insured Tax-Free since August 31, 2001, other than those changes incurred in the ordinary course of business as an investment company. No action, suit or other proceeding shall be threatened or pending before any court or governmental agency in which it is sought to restrain or prohibit, or obtain damages or other relief in connection with, this Agreement or the transactions contemplated herein. 9.4. ACCTFMF shall have received a tax opinion addressed to ACCTFMF in a form reasonably satisfactory to it and dated the Effective Time, substantially to the effect that for federal income tax purposes: (i) the transfer of the California Insured Tax-Free Assets hereunder, and the assumption by California Long-Term Tax-Free of the California Insured Tax-Free Liabilities, in exchange for shares of California Long-Term Tax-Free, and the distribution of said shares to the shareholders of California Insured Tax-Free, as provided in this Agreement, will constitute a reorganization within the meaning of Section 368 of the Code, and California Insured Tax-Free and California Long-Term Tax-Free will each be considered "a party to a reorganization" within the meaning of Section 368(b) of the Code; (ii) no gain or loss will be recognized by California Insured Tax-Free as a result of such transaction; (iii) no gain or loss will be recognized by California Long-Term Tax-Free as a result of such transaction; (iv) no gain or loss will be recognized by the shareholders of California Insured Tax-Free on the distribution to them by California Insured Tax-Free of shares of California Long-Term Tax-Free in exchange for their shares of California Insured Tax-Free; (v) the aggregate basis of California Long-Term Tax-Free shares received by each shareholder of California Insured Tax-Free will be the same as the aggregate basis of the shareholder's California Insured Tax-Free shares immediately prior to the transaction; (vi) the basis of the California Insured Tax-Free Assets to California Long-Term Tax-Free will be the same as the basis of the California Insured Tax-Free Assets in the hands of California Insured Tax-Free immediately prior to the exchange; (vii) a shareholder's holding period for California Long-Term Tax-Free shares will be determined by including the period for which the shareholder held the shares of California Insured Tax-Free exchanged therefor, provided that the shareholder held such shares of California Insured Tax-Free as a capital asset; and (viii) the holding period of California Long-Term Tax-Free with respect to the California Insured Tax-Free Assets will include the period for which the California Insured Tax-Free Assets were held by California Insured Tax-Free (except to the extent that an activity or investment of California Long-Term Tax-Free has the effect of diminishing a holding period with respect to an asset). 9.5. The SEC shall not have issued any unfavorable advisory report under Section 25(b) of the 1940 Act nor instituted any proceeding seeking to enjoin consummation of the transactions contemplated by this Agreement under Section 25(c) of the 1940 Act. 9.6. The N-14 Registration Statement shall have become effective under the 1933 Act and no stop order suspending such effectiveness shall have been instituted or, to the knowledge of ACCTFMF, contemplated by the SEC, and the parties shall have received all permits and other authorizations necessary under state securities laws to consummate the transactions contemplated by this Agreement. 9.7. The President or a Vice President of ACCTFMF shall have certified that ACCTFMF has performed and complied in all material respects with each of its agreements and covenants required by this Agreement to be performed or complied with by it prior to or at the Valuation Time and the Effective Time. 10. ACCTFMF CONDITIONS. The obligations of ACCTFMF hereunder with respect to California Insured Tax-Free shall be subject to the following conditions precedent: 10.1. This Agreement and the transactions contemplated by this Agreement shall have been approved by the shareholders of California Insured Tax-Free in the manner required by law. 10.2. All representations and warranties of ACCTFMF made in this Agreement shall be true and correct in all material respects as if made at and as of the Valuation Time and the Effective Time. As of the Valuation Time and the Effective Time, there shall have been no material adverse change in the financial condition of California Long-Term Tax-Free since August 31, 2001, other than those changes incurred in the ordinary course of business as an investment company. No action, suit or other proceeding shall be threatened or pending before any court or governmental agency in which it is sought to restrain or prohibit, or obtain damages or other relief in connection with, this Agreement or the transactions contemplated herein. 10.3. ACCTFMF shall have received a tax opinion, addressed to ACCTFMF in a form reasonably satisfactory to it and dated the Effective Time, with respect to the matters specified in Section 9.4. 10.4. The N-14 Registration Statement shall have become effective under the 1933 Act and no stop order suspending such effectiveness shall have been instituted, or to the knowledge of ACCTFMF, contemplated by the SEC, and the parties shall have received all permits and other authorizations necessary under state securities laws to consummate the transactions contemplated by this Agreement. 10.5. ACCTFMF shall not sell or otherwise dispose of any shares of California Long-Term Tax-Free to be received in the transactions contemplated herein, except in distribution to its shareholders as contemplated herein. 10.6. The SEC shall not have issued any unfavorable advisory report under Section 25(b) of the 1940 Act nor instituted any proceeding seeking to enjoin consummation of the transactions contemplated by this Agreement under Section 25(c) of the 1940 Act. 10.7. The President or a Vice President of ACCTFMF shall have certified that ACCTFMF has performed and complied in all material respects with each of its agreements and covenants required by this Agreement to be performed or complied with by it prior to or at the Valuation Time and the Effective Time. 11. TAX DOCUMENTS. ACCTFMF shall have at the Effective Time confirmations or other adequate evidence as to the adjusted tax basis of the California Insured Tax-Free Assets then delivered to California Long-Term Tax-Free in accordance with the terms of this Agreement. 12. FURTHER ASSURANCES. Subject to the terms and conditions herein provided, each of the parties hereto shall use its best efforts to take, or cause to be taken, such action, to execute and deliver, or cause to be executed and delivered, such additional documents and instruments, and to do, or cause to be done, all things necessary, proper or advisable under the provisions of this Agreement and under applicable law to consummate and make effective the transactions contemplated by this Agreement. 13. TERMINATION OF REPRESENTATIONS AND WARRANTIES. The representations and warranties of the parties set forth in this Agreement shall terminate at the Effective Time. 14. TERMINATION OF AGREEMENT. 14.1. This Agreement may be terminated prior to the Effective Time by the Board of Trustees of ACCTFMF, as provided below: 14.1.1. With respect to California Long-Term Tax-Free, by ACCTFMF if the conditions set forth in Section 9 are not satisfied as specified in said Section; 14.1.2. With respect to California Insured Tax-Free, by ACCTFMF if the conditions set forth in Section 10 are not satisfied as specified in said Section; 14.1.3. By the mutual consent of the parties. 14.2. If a party terminates this Agreement because one or more of its conditions precedent have not been fulfilled, or if this Agreement is terminated by mutual consent, this Agreement will become null and void without any liability of either party or any of their investment portfolios to the other; provided, however, that if such termination is by ACCTFMF with respect to California Long-Term Tax-Free pursuant to Section 14.1.1 as a result of a breach by ACCTFMF with respect to California Insured Tax-Free of any of its representations, warranties or covenants in this Agreement, or such termination is by ACCTFMF with respect to California Insured Tax-Free pursuant to Section 14.1.2 as a result of a breach by ACCTFMF with respect to California Long-Term Tax-Free of any of its representations, warranties or covenants in this Agreement, nothing herein shall affect the non-breaching party's right to damages on account of such other party's breach. 15. AMENDMENT AND WAIVER. At any time prior to or (to the fullest extent permitted by law) after approval of this Agreement by the shareholders of ACCTFMF, (a) the parties hereto may, by written agreement authorized by their Board of Trustees, or their respective Presidents or any Vice Presidents, and with or without the approval of their shareholders, amend any of the provisions of this Agreement, and (b) either party may waive any breach by the other party or the failure to satisfy any of the conditions to its obligations (such waiver to be in writing and executed by the President or Vice President of the waiving party with or without the approval of such party's shareholders). 16. GOVERNING LAW. This Agreement and the transactions contemplated hereby shall be governed, construed and enforced in accordance with the laws of Massachusetts without giving effect to the conflicts of law principles otherwise applicable therein. 17. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the respective successors and permitted assigns of the parties hereto. This Agreement and the rights, obligations and liabilities hereunder may not be assigned by either party without the consent of the other party. 18. BENEFICIARIES. Nothing contained in this Agreement shall be deemed to create rights in persons not parties hereto, other than the successors and permitted assigns of the parties. 19. ACCTFMF LIABILITY. 19.1. The name "American Century California Tax-Free and Municipal Funds" and "Trustees of American Century California Tax-Free and Municipal Funds" refer respectively to the trust created and the trustees, as trustees but not individually or personally, acting from time to time under an Amended and Restated Agreement and Declaration of Trust dated as of March 1, 1999, as amended, which is hereby referred to and copies of which are on file at the office of the State Secretary of the Commonwealth of Massachusetts and at the principal office of ACCTFMF. The obligations of ACCTFMF entered into in the name or on behalf thereof by any of its trustees, representatives or agents are made not individually, but in such capacities, and are not binding upon any of the trustees, shareholders or representatives of ACCTFMF personally, but bind only the trust property, and all persons dealing with any portfolio of ACCTFMF must look solely to the trust property belonging to such portfolio for the enforcement of any claims against ACCTFMF. 19.2. Both parties specifically acknowledge and agree that any liability of ACCTFMF under this Agreement with respect to California Long-Term Tax-Free, or in connection with the transactions contemplated herein with respect to California Long-Term Tax-Free, shall be discharged only out of the assets of California Long-Term Tax-Free and that no other portfolio of ACCTFMF, if any, shall be liable with respect thereto. 19.3. Both parties specifically acknowledge and agree that any liability of ACCTFMF under this Agreement with respect to California Insured Tax-Free, or in connection with the transactions contemplated herein with respect to California Insured Tax-Free, shall be discharged only out of the assets of California Insured Tax-Free and that no other portfolio of ACCTFMF, if any, shall be liable with respect thereto. 20. NOTICES. All notices required or permitted herein shall be in writing and shall be deemed to be properly given when delivered personally or by telecopier to the party entitled to receive the notice or when sent by certified or registered mail, postage prepaid, or delivered to a nationally recognized overnight courier service, in each case properly addressed to the party entitled to receive such notice at the address or telecopier number stated below or to such other address or telecopier number as may hereafter be furnished in writing by notice similarly given by one party to the other party hereto: If to American Century California Tax-Free and Municipal Funds : Charles A. Etherington 4500 Main Street Kansas City, MO 64111 21. EXPENSES. Expenses incurred in connection with the Reorganization are the sole responsibility of and will be borne by American Century Investment Management, Inc. or one or more of its affiliates. 22. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and understanding of the parties hereto and supersedes any and all prior agreements, arrangements and understandings relating to matters provided for herein. 23. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which, when executed and delivered shall be deemed to be an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their duly authorized officers designated below as of the date first written. AMERICAN CENTURY CALIFORNIA MUNICIPAL AND TAX-FREE FUNDS By: Charles A. Etherington Vice President ATTEST: Anastasia H. Enneking EX-99.77Q1 14 ex77q1g2.txt EXHIBIT 77Q1G2 AGREEMENT AND PLAN OF REORGANIZATION BY AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS TABLE OF CONTENTS Preamble........................................................................................1 1. Transfer of Assets of California Municipal Money Market.........................................1 2. Liquidating Distribution and Termination of California Municipal Money Market...................2 3. Valuation Time..................................................................................3 4. Certain Representations, Warranties and Agreements of ACCTFMF...................................3 5. Certain Representations, Warranties and Agreements of ACCTFMF...................................6 6. Shareholder Action on Behalf of California Municipal Money Market...............................7 7. Registration Statement and Proxy Solicitation Materials.........................................8 8. Effective Time of the Reorganization............................................................8 9. ACCTFMF Conditions.............................................................................10 10. ACCTFMF Conditions.............................................................................10 11. Tax Documents..................................................................................11 12. Further Assurances.............................................................................11 13. Termination of Representations and Warranties..................................................12 14. Termination of Agreement.......................................................................12 15. Amendment and Waiver...........................................................................12 16. Governing Law..................................................................................13 17. Successors and Assigns.........................................................................13 18. Beneficiaries..................................................................................13 19. ACCTFMF Liability..............................................................................13 20. Notices........................................................................................13 21. Expenses.......................................................................................14 22. Entire Agreement...............................................................................14 23. Counterparts...................................................................................14
AGREEMENT AND PLAN OF REORGANIZATION AGREEMENT AND PLAN OF REORGANIZATION made as of April 1, 2002 by American Century California Tax-Free and Municipal Funds, a Massachusetts business trust ("ACCTFMF"). WHEREAS, the parties desire that substantially all of the assets and liabilities of the California Municipal Money Market portfolio of ACCTFMF ("California Municipal Money Market") be transferred to, and be acquired and assumed by, the California Tax-Free Money Market portfolio of ACCTFMF ("California Tax-Free Money Market") in exchange for shares of California Tax-Free Money Market which shall thereafter be distributed by ACCTFMF to the holders of shares of California Municipal Money Market, all as described in this Agreement (the "Reorganization"); WHEREAS, the parties intend that the transfer of assets, assumption of liabilities and distribution of shares in California Municipal Money Market be treated as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"); and WHEREAS, the parties intend that in connection with the Reorganization, California Municipal Money Market shall be terminated and de-registered as described in this Agreement. NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and subject to the terms and conditions hereof, and intending to be legally bound hereby, ACCTFMF agrees as follows: 1. TRANSFER OF ASSETS OF CALIFORNIA MUNICIPAL MONEY MARKET. 1.1. At the Effective Time (as defined in Section 8), ACCTFMF shall transfer and convey, on behalf of California Municipal Money Market, all property of every description, and all interests, rights, privileges and powers of California Municipal Money Market (such assets, the "California Municipal Money Market Assets"). Simultaneously, ACCTFMF shall, on behalf of California Tax-Free Money Market, accept the California Municipal Money Market Assets and assume all liabilities, whether accrued, absolute, contingent or otherwise, of California Municipal Money Market reflected in the calculation of California Municipal Money Market's net asset value (the "California Municipal Money Market Liabilities"). As a result, at and after the Effective Time: (i) all assets of California Municipal Money Market shall become and be the assets of California Tax-Free Money Market; and (ii) all known liabilities of California Municipal Money Market reflected as such in the calculation of California Municipal Money Market's net asset value shall attach to California Tax-Free Money Market as aforesaid and may thenceforth be enforced against California Tax-Free Money Market to the extent as if the same had been incurred by it. Without limiting the generality of the foregoing, the California Municipal Money Market Assets shall include all property and assets of any nature whatsoever, including without limitation, all cash, cash equivalents, securities, other investments, claims and receivables (including dividend and interest receivables) owned by California Municipal Money Market, and any deferred or prepaid expenses shown as an asset on California Municipal Money Market's books at the Effective Time, and all good will, other intangible property and books and records belonging to California Municipal Money Market. Recourse by any person for the California Municipal Money Market Liabilities assumed by California Tax-Free Money Market shall, at and after the Effective Time, be limited to California Tax-Free Money Market. 1.2. In exchange for the transfer of the California Municipal Money Market Assets and the assumption of the California Municipal Money Market Liabilities, ACCTFMF shall simultaneously issue at the Effective Time to California Municipal Money Market a number of full and fractional shares (to the third decimal place) of California Tax-Free Money Market, all determined and adjusted as provided in this Agreement. The number of shares of California Tax-Free Money Market so issued will have an aggregate net asset value equal to the value of the California Municipal Money Market Assets, less the California Municipal Money Market Liabilities, that are represented by shares of California Municipal Money Market, the holders of which shall receive shares of California Tax-Free Money Market, all determined and adjusted as provided in this Agreement. 1.3. The net asset values of shares of California Tax-Free Money Market and of California Municipal Money Market shall be determined as of the Valuation Time, as defined in Section 3. 1.4. The net asset value of shares of California Tax-Free Money Market shall be computed in the manner set forth in California Tax-Free Money Market's then-current prospectus under the Securities Act of 1933, as amended (the "1933 Act"). The net asset value of the California Municipal Money Market Assets to be transferred by ACCTFMF shall be computed by ACCTFMF. In determining the value of the securities transferred by California Municipal Money Market to California Tax-Free Money Market, each security shall be priced in accordance with the policies and procedures of ACCTFMF as described in its then-current prospectus and statement of additional information and adopted by ACCTFMF's Board of Trustees. Price quotations and the security characteristics relating to establishing such quotations shall be determined by ACCTFMF. 2.LIQUIDATING DISTRIBUTION AND TERMINATION OF CALIFORNIA MUNICIPAL MONEY MARKET. Immediately after the Effective Time, California Municipal Money Market shall distribute in the complete liquidation pro rata to the record holders of its shares at the Effective Time the shares of California Tax-Free Money Market to be received by the record holders of California Municipal Money Market. ACCTFMF shall record on its books the ownership of shares of California Tax-Free Money Market by the record holders of shares of California Municipal Money Market. All of the issued and outstanding shares of California Municipal Money Market shall be redeemed and canceled on the books of ACCTFMF at the Effective Time and shall thereafter represent only the right to receive the shares of California Tax-Free Money Market, and California Municipal Money Market's transfer books shall be closed permanently. As soon as practicable after the Effective Time, ACCTFMF shall take all steps as shall be necessary and proper to effect the dissolution of California Municipal Money Market under federal and state law. After the Effective Time, ACCTFMF shall not conduct any business with respect to California Municipal Money Market except in connection with California Municipal Money Market's liquidation and dissolution. 3. VALUATION TIME. Subject to Section 1.4 hereof, the Valuation Time for the Reorganization shall be on such date as may be agreed by the duly authorized officers of ACCTFMF. 4. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF ACCTFMF. ACCTFMF, on behalf of itself and California Municipal Money Market, represents and warrants to, and agrees with the following: 4.1. ACCTFMF is a Massachusetts business trust duly created pursuant to a Declaration of Trust for the purpose of acting as a management investment company under the 1940 Act and is validly existing under the laws of, and duly authorized to transact business in, the Commonwealth of Massachusetts, California Municipal Money Market is registered with the SEC as an open-end management investment company under the 1940 Act and such registration is in full force and effect. 4.2. ACCTFMF has power to own all of its properties and assets and, subject to the approval of shareholders referred to herein, to carry out and consummate the transactions contemplated hereby, and has all necessary federal, state and local authorizations to carry on its business as now being conducted and to consummate the transactions contemplated by this Agreement. 4.3. This Agreement has been duly authorized, executed and delivered by ACCTFMF, and represents ACCTFMF's valid and binding contract, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization, arrangement, moratorium, and other similar laws of general applicability relating to or affecting creditors' rights and to general principles of equity. The execution and delivery of this Agreement does not and will not, and the consummation of the transactions contemplated by this Agreement will not, violate ACCTFMF's Declaration of Trust, By-laws, or any agreement or arrangement to which it is a party or by which it is bound. 4.4. California Municipal Money Market has elected to qualify and has qualified as a "regulated investment company" under Subtitle A, Chapter 1, Subchapter M, Part I of the Code, as of and since its first taxable year; has been a regulated investment company at all times since the end of its first taxable year when it so qualified; and qualifies and shall continue to qualify as a regulated investment company until the Effective Time. 4.5. All federal, state, local and foreign income, profits, franchise, sales, withholding, customs, transfer and other taxes, including interest, additions to tax and penalties (collectively, "Taxes") relating to the California Municipal Money Market Assets or properly shown to be due on any return filed by California Municipal Money Market with respect to taxable periods ending on or prior to, and the portion of any interim period up to, the date hereof have been fully and timely paid or provided for; and there are no levies, liens, or other encumbrances relating to Taxes existing, threatened or pending with respect to the California Municipal Money Market Assets. 4.6. The financial statements of California Municipal Money Market for the fiscal year ended August 31, 2001, audited by PricewaterhouseCoopers, LLP, independent auditors, copies of which have been previously furnished to ACCTFMF, present fairly the financial position of California Municipal Money Market as of August 31, 2001 and the results of its operations for the year then ending, in conformity with generally accepted accounting principles. 4.7. Prior to the Valuation Time, California Municipal Money Market shall have declared a dividend or dividends, with a record date and ex-dividend date prior to such Valuation Time, which, together with all previous dividends, shall have the effect of distributing to its shareholders all of its investment company taxable income, if any, for the taxable periods or years ended on or before California Municipal Money Market's most recent fiscal year end, and for the period from said date to and including the Effective Time (computed without regard to any deduction for dividends paid), and all of its tax-exempt income and net capital gain, if any, realized in taxable periods or years ended on or before California Municipal Money Market's fiscal year end and for the period from said date to and including the Effective Time. Such dividends will be paid to shareholders of California Municipal Money Market prior to the Effective Date. 4.8. At both the Valuation Time and the Effective Time, there shall be no known liabilities of California Municipal Money Market, whether accrued, absolute, contingent or otherwise, not reflected in the net asset value per share of its outstanding shares. 4.9. There are no legal, administrative or other proceedings pending or, to ACCTFMF's knowledge threatened, against ACCTFMF or California Municipal Money Market which could result in liability on the part of California Municipal Money Market. 4.10. Subject to the approval of shareholders, at both the Valuation Time and the Effective Time, ACCTFMF shall have full right, power and authority to assign, transfer and deliver the California Municipal Money Market Assets and, upon delivery and payment for the California Municipal Money Market Assets as contemplated herein, California Tax-Free Money Market shall acquire good and marketable title thereto, free and clear of all liens and encumbrances, and subject to no restrictions on the ownership or transfer thereof (except as imposed by federal or state securities laws). 4.11. No consent, approval, authorization or order of any court or governmental authority is required for the consummation by ACCTFMF of the transactions contemplated by this Agreement, except such as may be required under the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"), the 1940 Act, the rules and regulations under those Acts, and state securities laws. 4.12. Insofar as the following relate to ACCTFMF, the registration statement filed by ACCTFMF on Form N-14 relating to the shares of California Tax-Free Money Market that will be registered with the SEC pursuant to this Agreement, which, without limitation, shall include a proxy statement and prospectus of ACCTFMF with respect to the transactions contemplated by this Agreement, and any supplement or amendment thereto or to the documents contained or incorporated therein by reference (the "N-14 Registration Statement"), on the effective date of the N-14 Registration Statement, at the time of any shareholders' meeting referred to herein and at the Effective Time: (i) shall comply in all material respects with the provisions of the 1933 Act, the 1934 Act and the 1940 Act, the rules and regulations thereunder, and state securities laws, and (ii) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the representations and warranties in this subsection shall apply only to statements in or omissions from the N-14 Registration Statement made in reliance upon and in conformity with information furnished by ACCTFMF for use in the N-14 Registration Statement. 4.13. All of the issued and outstanding shares of California Municipal Money Market have been duly and validly issued, are fully paid and non-assessable, and were offered for sale and sold in conformity with all applicable federal and state securities laws, and no shareholder of California Municipal Money Market has any preemptive right of subscription or purchase in respect of such shares. 5. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF ACCTFMF. ACCTFMF, on behalf of itself and California Tax-Free Money Market, represents and warrants to, and agrees with the following: 5.1. ACCTFMF is a Massachusetts business trust duly created pursuant to a Declaration of Trust for the purpose of acting as a management investment company under the 1940 Act and is validly existing under the laws of, and duly authorized to transact business in, the Commonwealth of Massachusetts, California Tax-Free Money Market is registered with the SEC as an open-end management investment company under the 1940 Act and such registration is in full force and effect. 5.2. ACCTFMF has the power to own all of its properties and assets and to carry out and consummate the transactions contemplated herein, and has all necessary federal, state and local authorizations to carry on its business as now being conducted and to consummate the transactions contemplated by this Agreement. 5.3. This Agreement has been duly authorized, executed and delivered by ACCTFMF, and represents ACCTFMF's valid and binding contract, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization, arrangement, moratorium, and other similar laws of general applicability relating to or affecting creditors' rights and to general principles of equity. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated by this Agreement will not, violate ACCTFMF's Declaration of Trust or By-laws or any agreement or arrangement to which it is a party or by which it is bound. 5.4. California Tax-Free Money Market has elected to qualify, and has qualified, as a "regulated investment company" under Subtitle A, Chapter 1, Subchapter M, Part I of the Code, as of and since its first taxable year; and has been a regulated investment company at all times since the end of its first taxable year when it so qualified and intends to continue to qualify as a regulated investment company. 5.5. The financial statements of California Tax-Free Money Market for its fiscal year ended August 31, 2001, audited by PricewaterhouseCoopers LLP, independent auditors, copies of which have been previously furnished to ACCTFMF, present fairly the financial position of California Tax-Free Money Market as of August 31, 2001 and the results of its operations for the year then ending, in conformity with generally accepted accounting principles. 5.6. At both the Valuation Time and the Effective Time, there shall be no known liabilities of California Tax-Free Money Market whether accrued, absolute, contingent or otherwise, not reflected in the net asset value per share of its shares to be issued pursuant to this Agreement. 5.7. There are no legal, administrative or other proceedings pending or, to its knowledge, threatened against ACCTFMF or California Tax-Free Money Market that could result in liability on the part of ACCTFMF or California Tax-Free Money Market. 5.8. No consent, approval, authorization or order of any court or governmental authority is required for the consummation by ACCTFMF of the transactions contemplated by this Agreement, except such as may be required under the 1933 Act, the 1934 Act, the 1940 Act, the rules and regulations under those Acts, and state securities laws. 5.9. Insofar as the following relate to ACCTFMF, the N-14 Registration Statement on its effective date, at the time of any shareholders' meetings referred to herein and at the Effective Time: (i) shall comply in all material respects with the provisions of the 1933 Act, the 1934 Act and the 1940 Act, the rules and regulations thereunder, and state securities laws, and (ii) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the representations and warranties in this subsection shall apply only to statements in or omissions from the N-14 Registration Statement made in reliance upon and in conformity with information furnished by ACCTFMF for use in the N-14 Registration Statement. 5.10. The shares of California Tax-Free Money Market to be issued and delivered to California Municipal Money Market for the account of record holders of shares of California Municipal Money Market pursuant to the terms hereof shall have been duly authorized as of the Effective Time and, when so issued and delivered, shall be registered under the 1933 Act, duly and validly issued, fully paid and non-assessable, and no shareholder of ACCTFMF shall have any preemptive right of subscription or purchase in respect thereto. 6. SHAREHOLDER ACTION ON BEHALF OF CALIFORNIA MUNICIPAL MONEY MARKET. 6.1. As soon as practicable after the effective date of the N-14 Registration Statement, but in any event prior to the Effective Time and as a condition to the Reorganization, the Board of Directors of ACCTFMF shall call, and ACCTFMF shall hold, a meeting of the shareholders of California Municipal Money Market for the purpose of considering and voting upon: 6.1.1. Approval of this Agreement and the transactions contemplated hereby, including, without limitation: 6.1.1.1. The transfer of the California Municipal Money Market Assets to California Tax-Free Money Market and the assumption by California Tax-Free Money Market of the California Municipal Money Market Liabilities, in exchange for shares of California Tax-Free Money Market, as described in this Agreement; and 6.1.1.2. The liquidation of California Municipal Money Market through the distribution to its record holders of the shares of California Tax-Free Money Market as described in this Agreement; and 6.1.2. Such other matters as may be determined by the Board of Directors or authorized officers of the parties. 6.2. Approval of this Reorganization Agreement by the shareholders of California Municipal Money Market shall constitute the waiver of the application of any fundamental policy of California Municipal Money Market that might be deemed to prevent them from taking the actions necessary to effectuate the Reorganization as described, and such policies, if any, shall be deemed to have been amended accordingly. 7. REGISTRATION STATEMENT AND PROXY SOLICITATION MATERIALS. The N-14 Registration Statement under the 1933 Act, including the combined prospectus/proxy statement contained therein under the 1934 Act and 1940 Act proxy rules, shall be filed with the SEC as promptly as practicable, ACCTFMF shall have furnished and shall continue to furnish the information relating to California Municipal Money Market and California Tax-Free Money Market that is required by the 1933 Act, the 1934 Act, the 1940 Act, the rules and regulations under each of those Acts and state securities laws, to be included in the N-14 Registration Statement. 8. EFFECTIVE TIME OF THE REORGANIZATION. Delivery of the California Municipal Money Market Assets and the shares of California Tax-Free Money Market to be issued pursuant to Section 1 and the liquidation of California Municipal Money Market pursuant to Section 2 shall occur at the opening of business on the next business day following the Valuation Time, or on such other date, and at such place and time, as may be determined by the President or any Vice President of ACCTFMF. The date and time at which such actions are taken are referred to herein as the "Effective Time." To the extent any of the California Municipal Money Market Assets are, for any reason, not transferred at the Effective Time, ACCTFMF shall cause such California Municipal Money Market Assets to be transferred in accordance with this Agreement at the earliest practicable date thereafter. 9. ACCTFMF CONDITIONS. The obligations of ACCTFMF hereunder with respect to California Tax-Free Money Market shall be subject to the following conditions precedent: 9.1. This Agreement and the transactions contemplated by this Agreement shall have been approved by the shareholders of California Municipal Money Market, in the manner required by law. 9.2. ACCTFMF shall have duly executed and delivered such bills of sale, assignments, certificates and other instruments of transfer ("Transfer Documents") as may be necessary or desirable to transfer all right, title and interest of ACCTFMF and California Municipal Money Market in and to the California Municipal Money Market Assets. The California Municipal Money Market Assets shall be accompanied by all necessary state stock transfer stamps or cash for the appropriate purchase price therefor. 9.3. All representations and warranties made in this Agreement shall be true and correct in all material respects as if made at and as of the Valuation Time and the Effective Time. As of the Valuation Time and the Effective Time, there shall have been no material adverse change in the financial position of California Municipal Money Market since August 31, 2001, other than those changes incurred in the ordinary course of business as an investment company. No action, suit or other proceeding shall be threatened or pending before any court or governmental agency in which it is sought to restrain or prohibit, or obtain damages or other relief in connection with, this Agreement or the transactions contemplated herein. 9.4. ACCTFMF shall have received a tax opinion addressed to ACCTFMF in a form reasonably satisfactory to it and dated the Effective Time, substantially to the effect that for federal income tax purposes: (i) the transfer of the California Municipal Money Market Assets hereunder, and the assumption by California Tax-Free Money Market of the California Municipal Money Market Liabilities, in exchange for shares of California Tax-Free Money Market, and the distribution of said shares to the shareholders of California Municipal Money Market, as provided in this Agreement, will constitute a reorganization within the meaning of Section 368 of the Code, and California Municipal Money Market and California Tax-Free Money Market will each be considered "a party to a reorganization" within the meaning of Section 368(b) of the Code; (ii) no gain or loss will be recognized by California Municipal Money Market as a result of such transaction; (iii) no gain or loss will be recognized by California Tax-Free Money Market as a result of such transaction; (iv) no gain or loss will be recognized by the shareholders of California Municipal Money Market on the distribution to them by California Municipal Money Market of shares of California Tax-Free Money Market in exchange for their shares of California Municipal Money Market; (v) the aggregate basis of California Tax-Free Money Market shares received by each shareholder of California Municipal Money Market will be the same as the aggregate basis of the shareholder's California Municipal Money Market shares immediately prior to the transaction; (vi) the basis of the California Municipal Money Market Assets to California Tax-Free Money Market will be the same as the basis of the California Municipal Money Market Assets in the hands of California Municipal Money Market immediately prior to the exchange; (vii) a shareholder's holding period for California Tax-Free Money Market shares will be determined by including the period for which the shareholder held the shares of California Municipal Money Market exchanged therefor, provided that the shareholder held such shares of California Municipal Money Market as a capital asset; and (viii) the holding period of California Tax-Free Money Market with respect to the California Municipal Money Market Assets will include the period for which the California Municipal Money Market Assets were held by California Municipal Money Market (except to the extent that an activity or investment of California Tax-Free Money Market has the effect of diminishing a holding period with respect to an asset). 9.5. The SEC shall not have issued any unfavorable advisory report under Section 25(b) of the 1940 Act nor instituted any proceeding seeking to enjoin consummation of the transactions contemplated by this Agreement under Section 25(c) of the 1940 Act. 9.6. The N-14 Registration Statement shall have become effective under the 1933 Act and no stop order suspending such effectiveness shall have been instituted or, to the knowledge of ACCTFMF, contemplated by the SEC, and the parties shall have received all permits and other authorizations necessary under state securities laws to consummate the transactions contemplated by this Agreement. 9.7. The President or a Vice President of ACCTFMF shall have certified that ACCTFMF has performed and complied in all material respects with each of its agreements and covenants required by this Agreement to be performed or complied with by it prior to or at the Valuation Time and the Effective Time. 10. ACCTFMF CONDITIONS. The obligations of ACCTFMF hereunder with respect to California Municipal Money Market shall be subject to the following conditions precedent: 10.1. This Agreement and the transactions contemplated by this Agreement shall have been approved by the shareholders of California Municipal Money Market in the manner required by law. 10.2. All representations and warranties of ACCTFMF made in this Agreement shall be true and correct in all material respects as if made at and as of the Valuation Time and the Effective Time. As of the Valuation Time and the Effective Time, there shall have been no material adverse change in the financial condition of California Tax-Free Money Market since August 31, 2001, other than those changes incurred in the ordinary course of business as an investment company. No action, suit or other proceeding shall be threatened or pending before any court or governmental agency in which it is sought to restrain or prohibit, or obtain damages or other relief in connection with, this Agreement or the transactions contemplated herein. 10.3. ACCTFMF shall have received a tax opinion, addressed to ACCTFMF in a form reasonably satisfactory to it and dated the Effective Time, with respect to the matters specified in Section 9.4. 10.4. The N-14 Registration Statement shall have become effective under the 1933 Act and no stop order suspending such effectiveness shall have been instituted, or to the knowledge of ACCTFMF, contemplated by the SEC, and the parties shall have received all permits and other authorizations necessary under state securities laws to consummate the transactions contemplated by this Agreement. 10.5. ACCTFMF shall not sell or otherwise dispose of any shares of California Tax-Free Money Market to be received in the transactions contemplated herein, except in distribution to its shareholders as contemplated herein. 10.6. The SEC shall not have issued any unfavorable advisory report under Section 25(b) of the 1940 Act nor instituted any proceeding seeking to enjoin consummation of the transactions contemplated by this Agreement under Section 25(c) of the 1940 Act. 10.7. The President or a Vice President of ACCTFMF shall have certified that ACCTFMF has performed and complied in all material respects with each of its agreements and covenants required by this Agreement to be performed or complied with by it prior to or at the Valuation Time and the Effective Time. 11. TAX DOCUMENTS. ACCTFMF shall have at the Effective Time confirmations or other adequate evidence as to the adjusted tax basis of the California Municipal Money Market Assets then delivered to California Tax-Free Money Market in accordance with the terms of this Agreement. 12. FURTHER ASSURANCES. Subject to the terms and conditions herein provided, each of the parties hereto shall use its best efforts to take, or cause to be taken, such action, to execute and deliver, or cause to be executed and delivered, such additional documents and instruments, and to do, or cause to be done, all things necessary, proper or advisable under the provisions of this Agreement and under applicable law to consummate and make effective the transactions contemplated by this Agreement. 13. TERMINATION OF REPRESENTATIONS AND WARRANTIES. The representations and warranties of the parties set forth in this Agreement shall terminate at the Effective Time. 14. TERMINATION OF AGREEMENT. 14.1. This Agreement may be terminated prior to the Effective Time by the Board of Trustees of ACCTFMF, as provided below: 14.1.1. With respect to California Tax-Free Money Market, by ACCTFMF if the conditions set forth in Section 9 are not satisfied as specified in said Section; 14.1.2. With respect to California Municipal Money Market, by ACCTFMF if the conditions set forth in Section 10 are not satisfied as specified in said Section; 14.1.3. By the mutual consent of the parties. 14.2. If a party terminates this Agreement because one or more of its conditions precedent have not been fulfilled, or if this Agreement is terminated by mutual consent, this Agreement will become null and void without any liability of either party or any of their investment portfolios to the other; provided, however, that if such termination is by ACCTFMF with respect to California Tax-Free Money Market pursuant to Section 14.1.1 as a result of a breach by ACCTFMF with respect to California Municipal Money Market of any of its representations, warranties or covenants in this Agreement, or such termination is by ACCTFMF with respect to California Municipal Money Market pursuant to Section 14.1.2 as a result of a breach by ACCTFMF with respect to California Tax-Free Money Market of any of its representations, warranties or covenants in this Agreement, nothing herein shall affect the non-breaching party's right to damages on account of such other party's breach. 15. AMENDMENT AND WAIVER. At any time prior to or (to the fullest extent permitted by law) after approval of this Agreement by the shareholders of ACCTFMF, (a) the parties hereto may, by written agreement authorized by their Board of Trustees, or their respective Presidents or any Vice Presidents, and with or without the approval of their shareholders, amend any of the provisions of this Agreement, and (b) either party may waive any breach by the other party or the failure to satisfy any of the conditions to its obligations (such waiver to be in writing and executed by the President or Vice President of the waiving party with or without the approval of such party's shareholders). 16. GOVERNING LAW. This Agreement and the transactions contemplated hereby shall be governed, construed and enforced in accordance with the laws of Massachusetts without giving effect to the conflicts of law principles otherwise applicable therein. 17. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the respective successors and permitted assigns of the parties hereto. This Agreement and the rights, obligations and liabilities hereunder may not be assigned by either party without the consent of the other party. 18. BENEFICIARIES. Nothing contained in this Agreement shall be deemed to create rights in persons not parties hereto, other than the successors and permitted assigns of the parties. 19. ACCTFMF LIABILITY. 19.1. The name "American Century California Tax-Free and Municipal Funds" and "Trustees of American Century California Tax-Free and Municipal Funds" refer respectively to the trust created and the trustees, as trustees but not individually or personally, acting from time to time under an Amended and Restated Agreement and Declaration of Trust dated as of March 1, 1999, as amended, which is hereby referred to and copies of which are on file at the office of the State Secretary of the Commonwealth of Massachusetts and at the principal office of ACCTFMF. The obligations of ACCTFMF entered into in the name or on behalf thereof by any of its trustees, representatives or agents are made not individually, but in such capacities, and are not binding upon any of the trustees, shareholders or representatives of ACCTFMF personally, but bind only the trust property, and all persons dealing with any portfolio of ACCTFMF must look solely to the trust property belonging to such portfolio for the enforcement of any claims against ACCTFMF. 19.2. Both parties specifically acknowledge and agree that any liability of ACCTFMF under this Agreement with respect to California Tax-Free Money Market, or in connection with the transactions contemplated herein with respect to California Tax-Free Money Market, shall be discharged only out of the assets of California Tax-Free Money Market and that no other portfolio of ACCTFMF, if any, shall be liable with respect thereto. 19.3. Both parties specifically acknowledge and agree that any liability of ACCTFMF under this Agreement with respect to California Municipal Money Market, or in connection with the transactions contemplated herein with respect to California Municipal Money Market, shall be discharged only out of the assets of California Municipal Money Market and that no other portfolio of ACCTFMF, if any, shall be liable with respect thereto. 20. NOTICES. All notices required or permitted herein shall be in writing and shall be deemed to be properly given when delivered personally or by telecopier to the party entitled to receive the notice or when sent by certified or registered mail, postage prepaid, or delivered to a nationally recognized overnight courier service, in each case properly addressed to the party entitled to receive such notice at the address or telecopier number stated below or to such other address or telecopier number as may hereafter be furnished in writing by notice similarly given by one party to the other party hereto: If to American Century California Tax-Free and Municipal Funds: Charles A. Etherington 4500 Main Street Kansas City, MO 64111 21. EXPENSES. Expenses incurred in connection with the Reorganization are the sole responsibility of and will be borne by American Century Investment Management, Inc. or one or more of its affiliates. 22. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and understanding of the parties hereto and supersedes any and all prior agreements, arrangements and understandings relating to matters provided for herein. 23. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which, when executed and delivered shall be deemed to be an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their duly authorized officers designated below as of the date first written. AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS By: Charles A. Etherington Vice President ATTEST: Anastasia H. Enneking -----END PRIVACY-ENHANCED MESSAGE-----