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:

/s/Anastasia H. Enneking                        /s/Charles A. Etherington
Anastasia H. Enneking                           Charles A. Etherington
Assistant Secretary                             Vice President


Attest:                                         American Century Investment
                                                Management, Inc.

/s/Anastasia H. Enneking                        /s/David C. Tucker
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