N-14/A
Pre-Effective Amendment
As filed with the Securities and Exchange Commission on August 8, 2001
Registration Nos. 333-64152 and 811-4363
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-14
REGISTRATION UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. __1__ [X]
Post-Effective Amendment No. _____ [ ]
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AMERICAN CENTURY GOVERNMENT INCOME TRUST
(Exact Name of Registrant as Specified in Charter)
4500 Main Street
P.O. Box 419200
Kansas City, MO 64141-6200
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: 816-531-5575
Charles A. Etherington
Vice President and Associate General Counsel
4500 Main Street, P.O. Box 419200, Kansas City, MO 64141-6200
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: August 22, 2001
Calculation of Registration Fee under the Securities Act of 1933: No filing fee
is required because an indefinite number of shares have previously been
registered on Form N-1A (Registration Nos. 2-99222 and 811-4363) pursuant to
Rule 24f-2 under the Investment Company Act of 1940. The Registrant is filing as
an exhibit to this Registration Statement an opinion related to the legality of
shares being issued in connection with this Registration Statement. Pursuant to
Rule 429, this Registration Statement relates to the aforesaid Registration
Statement on Form N-1A.
Prospectus and Proxy Statement
August 22, 2001
SHORT-TERM TREASURY FUND
IMPORTANT VOTING INFORMATION INSIDE!
[american century logo and text logo (reg. sm)]
TABLE OF CONTENTS
Important Information You Should Consider ................................... 2
Notice of Special Meeting of Shareholders ................................... 5
Combined Prospectus/Proxy Statement ......................................... 6
Comparison of Certain Information Regarding the Funds ....................... 7
Primary Federal Income Tax Consequences ..................................... 8
Risk Factors ................................................................ 8
Transaction and Operating Expense Information ............................... 8
Additional Information About the Proposed Transaction ....................... 9
Summary of Plan of Reorganization ...................................... 9
Description of the Securities of Treasury ..............................10
Reasons Supporting the Reorganization ..................................11
Federal Income Tax Consequences ........................................12
Capitalization .........................................................12
Information About the Funds .................................................12
Fundamental Investment Policies ........................................13
Information Relating to Voting Matters ......................................13
General Information ....................................................13
Voting and Revocation of Proxies .......................................13
Record Date ............................................................14
Quorum .................................................................14
Shareholder Vote Required ..............................................14
Cost of Proxy Solicitation .............................................15
Certain Shareholders ...................................................15
Appraisal Rights .......................................................15
Annual Meetings ........................................................16
Additional Information ......................................................16
Litigation .............................................................16
Other Business .........................................................16
Shareholder Inquiries ..................................................16
Management's Discussion of Fund Performance .................................17
Report Highlights ......................................................17
Our Message to You .....................................................18
Performance & Portfolio Information ....................................19
Management Q&A .........................................................20
American Century Investments
American Century Investments
P.O. Box 419200
Kansas City, Missouri 64141-6200
August 22, 2001
Dear American Century Short-Term Treasury Fund Shareholder:
I am writing to ask for your support of an important proposal affecting your
fund. The proposal will be voted on at an upcoming Special Meeting of
shareholders to be held on Friday, November 16, 2001. Please take a few minutes
to read the enclosed materials, complete and sign the proxy voting card and mail
it back to us.
As a shareholder of the American Century Short-Term Treasury Fund, you are being
asked to approve the combination of your fund with the American Century Treasury
Fund.
The reason for the combination is twofold. First, the reorganization will
combine funds with substantially similar investment objectives and strategies.
Investors can select one, general-purpose Treasury fund rather than decide
between substantially similar funds.
Second, management believes it will be more efficient to have the funds'
portfolio management team focus on a single, larger portfolio of assets than to
continue managing very similar, smaller portfolios.
The Board of Trustees of your fund has unanimously voted in favor of this
reorganization and believes the combination is in your fund's and your best
interests. We encourage you to vote "FOR" the reorganization. The enclosed
materials give more detailed information about the proposed reorganization and
the reasons why we recommend you vote for it.
Please don't put these materials aside thinking that you will return to them at
another time. If shareholders don't return their proxies, additional expenses
must be incurred to pay for follow-up mailings and phone calls. PLEASE TAKE A
FEW MINUTES TO REVIEW THE ENCLOSED MATERIALS AND VOTE YOUR SHARES TODAY. If you
have any questions or need any help in voting your shares, please call us at
1-800-331-8331. For business, not-for-profit, and employer-sponsored retirement
accounts, please call 1-800-345-3533, ext. 5004.
To more efficiently handle this proxy solicitation, we have hired Alamo Direct
to act as our proxy solicitor. They might be calling you during the solicitation
process to ask if you have questions or concerns about the voting process and to
assist you with your vote.
Thank you for your time in considering this important proposal. We believe the
reorganization will enable us to better serve your needs. Thank you for
investing with American Century and for your continued support.
Sincerely,
/s/Bill Lyons
William M. Lyons
President
Proxy/Prospectus Statement 1
IMPORTANT INFORMATION YOU SHOULD CONSIDER
The following Q&A is a brief summary of some of the issues that may be important
to you. It may not contain all of the information or topics that you think are
important and, as a result, is qualified in its entirety by the more detailed
information contained elsewhere in this document, or incorporated into this
document. Please read all the enclosed proxy materials before voting. PLEASE
REMEMBER TO VOTE YOUR SHARES AS SOON AS POSSIBLE. If enough shareholders return
their proxy cards soon, additional costs for follow-up mailings and phone calls
may be avoided.
WHAT IS THE PURPOSE OF THE UPCOMING MEETING?
Your Board of Trustees has recommended combining Short-Term Treasury with
Treasury. This combination requires approval of the Short-Term Treasury
shareholders. The Special Meeting will be held on Friday, November 16, 2001, at
10:00 a.m. (Central time) at American Century Tower I, 4500 Main Street, Kansas
City, Missouri. Shareholders of record as of the close of business on August 10,
2001, are eligible to vote.
WHY IS THE REORGANIZATION BEING PROPOSED?
After reviewing many factors, your Board of Trustees unanimously determined that
the reorganization was in the best interests of Short-Term Treasury and its
shareholders. The reorganization seeks to improve operational and investment
management efficiencies by combining funds with substantially similar investment
objectives and investment policies, approaches, procedures and portfolio
securities. Combining these similar funds will permit the portfolio management
team to focus its resources on a single, larger fund, rather than divide its
time between smaller funds. Combining these funds also will help eliminate
customer confusion regarding which Treasury fund to choose.
HOW WILL THE REORGANIZATION BE ACCOMPLISHED?
Shareholders of Short-Term Treasury are being asked to approve the combination
of their fund with Treasury according to the Agreement and Plan of
Reorganization described on page 9. The reorganization will take the form of a
transfer of assets by Short-Term Treasury in exchange for shares of Treasury.
Short-Term Treasury will then make a liquidating distribution to its
shareholders of the Treasury shares received in the exchange.
WHAT WILL SHAREHOLDERS GET IF THE REORGANIZATION IS APPROVED?
As a result of the liquidating distribution, you will receive shares of Treasury
in an amount equal to the value of your Short-Term Treasury shares on the date
the combination takes place (probably December 3, 2001). The total dollar value
of your account after the reorganization will be the same as the total dollar
value of your account before the reorganization. However, because the net asset
value (price per share) of Treasury may be different from the net asset value of
Short-Term Treasury, you may receive a different number of shares than you have.
After the reorganization, you will own shares of Treasury rather than shares of
Short-Term Treasury.
2 American Century Investments
WHY DID THE BOARD OF TRUSTEES APPROVE THE REORGANIZATION?
After reviewing many factors, your Board of Trustees unanimously determined that
the reorganization was in the best interests of Short-Term Treasury and its
shareholders. Some of the factors considered include:
* Operational and investment management efficiencies
* Streamlining investment options to eliminate customer confusion
* Combining funds with substantially similar investment objectives, policies,
approaches, procedures and portfolio securities
WILL THE EXCHANGE OF SHORT-TERM TREASURY SHARES FOR SHARES OF TREASURY CAUSE
SHAREHOLDERS TO REALIZE INCOME OR CAPITAL GAINS FOR TAX PURPOSES?
No. The exchange of shares in the reorganization will be tax-free. We will
obtain a tax opinion confirming that the reorganization will not be a taxable
event for you for federal income tax purposes. Your tax basis and holding period
for your shares will be unchanged.
HOW DOES THE TOTAL EXPENSE RATIO OF TREASURY COMPARE TO THAT OF SHORT-TERM
TREASURY?
The total expense ratios of the funds are the same.
IS TREASURY RISKIER THAN SHORT-TERM TREASURY?
Slightly. Both funds seek the highest level of current income exempt from state
income tax, and seek to maintain safety of capital, by purchasing U.S. Treasury
securities guaranteed by the direct full faith and credit pledge of the U.S.
government. The funds differ only in the maturity of the debt securities they
purchase. Short-Term Treasury maintains a weighted average portfolio maturity
range of 397 days to three years, while Treasury is not limited to a particular
weighted average portfolio maturity range (although under normal market
conditions, the fund expects to maintain a weighted average maturity of three to
ten years). In general, when interest rates rise, the share values of funds with
longer weighted portfolio maturities decline further than funds with shorter
weighted average portfolio maturities. Treasury's longer weighted average
portfolio maturity generally makes the fund more sensitive to interest rate
changes and, as a result, Treasury's interest rate risk generally will be higher
than Short-Term Treasury's.
IF SHAREHOLDERS SEND THEIR PROXIES IN NOW AS REQUESTED, CAN THEY CHANGE THEIR
VOTE LATER?
Yes! A proxy can be revoked at any time using any of the voting procedures
described on your proxy vote card or by attending the meeting and voting in
person. EVEN IF YOU PLAN TO ATTEND THE MEETING TO VOTE IN PERSON, WE ASK THAT
YOU RETURN THE ENCLOSED PROXY VOTE CARD. DOING SO WILL HELP US ACHIEVE A QUORUM
FOR THE MEETING.
HOW DO SHAREHOLDERS VOTE THEIR SHARES?
We've made it easy for you. You can vote online, by phone, by mail or by fax. To
vote online, access the Web site listed on your proxy card (you will need the
control number that appears on the right-hand side of your proxy card). To vote
by telephone, call the toll-free number listed on your proxy card (you will need
the control number that appears on the right-hand side of your proxy card). To
vote by mail, complete,
Proxy/Prospectus Statement 3
sign and send us the enclosed proxy voting card in the enclosed postage-paid
envelope. To vote by fax, send your fax to the toll-free number listed on your
proxy card.
Your shares will be voted EXACTLY as you tell us. If you simply sign the
enclosed proxy card and return it, we will follow the recommendation of your
Board of Trustees and vote it "FOR" the reorganization. You also may vote in
person at the meeting on Friday, November 16, 2001.
WHEN AND HOW WILL THE COMBINATION TAKE PLACE?
Subject to receiving shareholder approval, the reorganization is scheduled to
take place on December 3, 2001. After the funds have calculated the value of
their assets and liabilities on November 30, 2001, Short-Term Treasury will
transfer its assets and liabilities to Treasury in exchange for the appropriate
number of Treasury shares. Short-Term Treasury will then make a liquidating
distribution of those Treasury shares pro rata to its shareholders according to
the value of their accounts immediately prior to the transfer of assets. THE
VALUE OF YOUR ACCOUNT WILL NOT CHANGE AS A RESULT OF THIS REORGANIZATION.
WILL THE REORGANIZATION AFFECT THE MANAGEMENT TEAM OFSHORT-TERM TREASURY?
No. American Century Investment Management, Inc., the investment manager for
Short-Term Treasury, also manages the assets of Treasury, and the portfolio
management team of Short-Term Treasury also serves as the portfolio management
team of Treasury.
HOW WILL THE DISTRIBUTION, PURCHASE AND REDEMPTION PROCEDURES AND EXCHANGE
RIGHTS CHANGE AS A RESULT OF THE REORGANIZATION?
They won't. Treasury has the same distribution, purchase and exchange policies
and procedures as Short-Term Treasury.
WHERE CAN SHAREHOLDERS GET MORE INFORMATION ABOUT THE FUNDS?
A copy of the Treasury Prospectus accompanies this proxy statement. In addition,
the Manager's Discussion and Analysis of Fund Performance portion of Treasury's
most recent Annual Report to Shareholders is included in this document beginning
on page 17. If you would like a copy of the funds' Statement of Additional
Information or most recent annual or semiannual report, please call us at
1-800-331-8331.
4 American Century Investments
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
AMERICAN CENTURY GOVERNMENT INCOME TRUST
American Century Investments
P. O. Box 419200
Kansas City, Missouri 64141-6200
1-800-331-8331
TO BE HELD ON FRIDAY, NOVEMBER 16, 2001
To American Century Short-Term Treasury Shareholders:
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the shareholders of the
American Century Short-Term Treasury Fund, a portfolio of American Century
Government Income Trust ("Short-Term Treasury"), will be held at American
Century Tower I, 4500 Main Street, Kansas City, Missouri on Friday, November 16,
2001, at 10:00 a.m. (Central time) for the following purposes:
ITEM 1. To consider and act upon a proposal to approve an Agreement and Plan of
Reorganization and the transactions contemplated thereby, including:
(a) the transfer of substantially all of the assets and liabilities of
Short-Term Treasury to the American Century Treasury Fund, another investment
portfolio of American Century Government Income Trust ("Treasury"), in
exchange for shares in Treasury; and
(b) the distribution of Treasury's shares to the shareholders of Short-Term
Treasury according to their respective interests.
ITEM 2. To transact such other business as may properly come before the Special
Meeting or any adjournment(s) thereof.
The proposed reorganization, the Agreement and Plan of Reorganization and
related matters are described in the attached Combined Prospectus/Proxy
Statement.
Shareholders of record as of the close of business on August 10, 2001, are
entitled to notice of, and to vote at, the Special Meeting or any adjournment(s)
thereof.
Please execute and return promptly in the enclosed envelope the accompanying
proxy card, which is being solicited by the Board of Trustees of American
Century Government Income Trust. Please return your proxy card even if you are
planning to attend the Special Meeting. This is important to ensure a quorum at
the Special Meeting. Proxies may be revoked at any time before they are
exercised using any of the voting procedures described on your proxy vote card
or by attending the meeting and voting in person.
/s/David Tucker
David C. Tucker
Senior Vice President
August 22, 2001
Proxy/Prospectus Statement 5
COMBINED PROSPECTUS/PROXY STATEMENT
AMERICAN CENTURY GOVERNMENT INCOME TRUST
August 22, 2001
This Combined Prospectus/Proxy Statement is furnished in connection with the
solicitation of votes by the Board of Trustees of American Century Government
Income Trust on behalf of its Short-Term Treasury Fund ("Short-Term Treasury"),
in connection with a Special Meeting of Shareholders to be held on Friday,
November 16, 2001, at 10:00 a.m. (Central time) at American Century Tower I,
4500 Main Street, Kansas City, Missouri.
At the Special Meeting, shareholders of Short-Term Treasury are being asked to
approve the combination of their fund into the American Century Treasury Fund,
another series of American Century Government Income Trust ("Treasury").
The funds are diversified, open-end mutual funds that invest in a substantially
similar mix of fixed-income securities. The purpose of the reorganization is to
streamline American Century's fixed-income lineup and to achieve management and
operational efficiencies. Combining these substantially similar funds as
described further in this Combined Prospectus/Proxy Statement will help achieve
this objective. Each fund has shares registered with the Securities and Exchange
Commission.
This Combined Prospectus/Proxy Statement constitutes the proxy statement of your
fund for the Special Meeting of Shareholders and a prospectus for the Treasury
shares that are to be issued to you in connection with the reorganization. It is
intended to give you the information you need to consider and vote on the
proposed reorganization. You should retain this document for future reference. A
Statement of Additional Information about Treasury, dated August 1, 2001, has
been filed with the Commission and is incorporated into this document by
reference. A copy of the Statement of Additional Information may be obtained
without charge upon request by calling us at 1-800-331-8331, or writing to us at
American Century Investments, 4500 Main Street, P. O. Box 419200, Kansas City,
Missouri 64141-6200.
The principal executive offices of Short-Term Treasury and Treasury are located
at American Century Investments, 4500 Main Street, P. O. Box 419200, Kansas
City, Missouri 64141-6200. The funds' telephone number is 1-800-345-2021.
The information contained in this Combined Prospectus/Proxy Statement is
required by rules of the Securities and Exchange Commission, and some of it is
highly technical. If you have any questions about these materials or how to vote
your shares, please call us at 1-800-331-8331. For business, not-for-profit, and
employer-sponsored retirement accounts, please call 1-800-345-3533, ext. 5004.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
Combined Prospectus/Proxy Statement is accurate or complete. Any representation
to the contrary is a criminal offense.
6 American Century Investments
No person has been authorized to give any information or to make any
representations other than those contained in this Combined Prospectus/Proxy
Statement and in the materials expressly incorporated herein by reference. If
given or made, such other information or representations must not be relied upon
as having been authorized by Short-Term Treasury, Treasury or anyone affiliated
with American Century Investments.
PLEASE NOTE THAT THE SPECIAL MEETING OF SHAREHOLDERS WILL BE A BUSINESS MEETING
ONLY AND IS NOT A SHAREHOLDER SEMINAR.
COMPARISON OF CERTAIN INFORMATION REGARDING THE FUNDS
The following chart is provided to show a comparison of certain key attributes
of Short-Term Treasury with Treasury. For additional information about the
funds, see the section titled "Information About the Funds" starting on page 12.
SHORT-TERM TREASURY TREASURY
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Type of Fund Short-Term U.S. Intermediate U.S. Treasury Fund
Treasury Fund
Investment Objective Same as Treasury Seeks the highest level of current income
exempt from state income tax, while
maintaining safety of capital
Investment Policies Same as Treasury Pursues its objective by investing in U.S.
Treasury securities guaranteed by the full faith
and credit pledge of the U.S. government.
Also may invest up to 35% of its total assets
in other securities issued by the U.S.
government and its agencies.
Weighted Average 397 days - 3 years No Limitation
Portfolio Maturity
Credit Quality Same as Treasury AAA
Total Expense Ratio Same as Treasury Investor Class 0.51%
Advisor Class 0.76%
Distribution Policy Same as Treasury Distributions from net income are declared
daily and paid monthly. Distributions of capital
gains are paid once a year, usually in December.
Purchases and Same as Treasury See pages 20-23 of Investor Class Prospectus,
Exchanges pages 19-21 of Advisor Class Prospectus
Redemption Policies Same as Treasury See pages 20-23 of Investor Class Prospectus,
pages 19-21 of Advisor Class Prospectus
Investment Advisor Same as Treasury American Century Investment Management,
Inc. ("ACIM")
Transfer Agent Same as Treasury American Century Services Corporation
("ACSC")
Distributor Same as Treasury American Century Investment Services, Inc.
("ACIS")
Custodians Same as Treasury J.P. Morgan Chase and Co. and Commerce
Bank, N.A.
Independent Auditors Same as Treasury PricewaterhouseCoopers LLP
Proxy/Prospectus Statement 7
PRIMARY FEDERAL INCOME TAX CONSEQUENCES
The exchange of Short-Term Treasury shares for Treasury shares in the
reorganization will be tax-free to shareholders. We will obtain a tax opinion
confirming that the reorganization will not be a taxable event for shareholders
of either fund for federal income tax purposes. A shareholder's aggregate tax
basis and holding period for Treasury shares received in the reorganization will
be identical to the aggregate tax basis and holding period for the Short-Term
Treasury shares exchanged in the transaction. The tax consequences of the
reorganization are described in more detail on page 12 of this Combined
Prospectus/Proxy Statement.
RISK FACTORS
Because each of the funds invests in U.S. Treasury securities guaranteed by the
direct full faith and credit pledge of the U.S. government, the primary risk of
an investment in the funds is interest rate risk. Funds with longer weighted
average maturities generally have a higher potential for income, but they also
are more sensitive to interest rate changes. The share values of each fund will
decline when interest rates rise, but the share value of the fund with the
longer weighted average maturity generally will decline further. Because the
weighted average maturity of Treasury may fluctuate, the interest rate risk
associated with that fund will be the same as or higher than an investment in
Short-Term Treasury.
TRANSACTION AND OPERATING EXPENSE INFORMATION
The information below compares various shareholder transaction and annual fund
operating expenses of Short-Term Treasury as of its most recent fiscal year end
(March 31, 2001) and Treasury as of its most recent fiscal year end (March 31,
2001). After the reorganization, the expense levels of the surviving fund will
be the same as those shown for Treasury (Pro Forma).
ANNUAL OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Distribution and Other Total Annual Fund
Fee(1) Service (12b-1) Fees(2) Expenses(3) Operating Expenses
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Short-Term Treasury (Investor ) 0.51% None 0.00% 0.51%
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Treasury (Investor) 0.51% None 0.00% 0.51%
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Treasury (Investor Pro Forma) 0.51% None 0.00% 0.51%
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Short-Term Treasury (Advisor) 0.26% 0.50% 0.00% 0.76%
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Treasury (Advisor) 0.26% 0.50% 0.00% 0.76%
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Treasury (Advisor Pro Forma) 0.26% 0.50% 0.00% 0.76%
(1) Based on expenses incurred by all classes of the funds during the funds'
most recent fiscal year. The funds have stepped-fee schedules. As a result,
the funds' management fee rates generally decrease as fund assets increase.
(2) The 12b-1 fee is designed to permit investors to purchase Advisor Class
shares through broker-dealers, banks, insurance companies and other
financial intermediaries. A portion of the fee is used to compensate them
for ongoing recordkeeping and administrative services that would otherwise
be performed by an affiliate of the advisor, and a portion is used to
compensate them for distribution and other shareholder services.
(3) Other expenses, which include the fees and expenses of the funds'
independent trustees and their legal counsel, as well as interest, were less
than 0.005% for the most recent fiscal year.
8 American Century Investments
EXAMPLE
The examples in the table below are intended to help you compare the costs of
investing in a fund with the costs of investing in other mutual funds. Assuming
you . . .
* invest $10,000 in the fund
* redeem all of your shares at the end of the periods shown below
* earn a 5% return each year
* incur the same operating expenses as shown above
. . . your cost of investing in the fund would be:
1 year 3 years 5 years 10 years
- -------------------------------------------------------------------------------
Short-Term Treasury (Investor) $52 $163 $285 $640
- -------------------------------------------------------------------------------
Treasury (Investor) $52 $163 $285 $640
- -------------------------------------------------------------------------------
Treasury (Investor Pro Forma) $52 $163 $285 $640
- -------------------------------------------------------------------------------
Short-Term Treasury (Advisor) $78 $242 $422 $939
- -------------------------------------------------------------------------------
Treasury (Advisor) $78 $242 $422 $939
- -------------------------------------------------------------------------------
Treasury (Advisor Pro Forma) $78 $242 $422 $939
ADDITIONAL INFORMATION ABOUT THE PROPOSED TRANSACTION
SUMMARY OF PLAN OF REORGANIZATION
Subject to receipt of shareholder approval, the reorganization will be carried
out according to the terms of the Agreement and Plan of Reorganization between
the funds. The following is a brief summary of some of the important terms of
that Agreement.
EFFECTIVE TIME OF THE REORGANIZATION. The Agreement requires that the exchange
of assets for stock take place after the close of business on one business day
but before (or as of) the opening of business on the next business day (the
"Effective Time"). It is currently anticipated that the reorganization will take
place after the close of business on November 30, 2001, but before (or as of)
the opening of business on December 3, 2001. However, the Agreement gives the
officers of the funds the flexibility to choose another date.
EXCHANGE OF ASSETS. After the close of business on November 30, 2001, the funds
will determine the value of their assets and liabilities in the same manner as
described on page 24 of the Treasury Investor Class Prospectus or page 22 of the
Treasury Advisor Class Prospectus. The assets and liabilities of Short-Term
Treasury will then be transferred to Treasury in exchange for that number of
full and fractional shares (rounded to the third decimal place) that have the
same aggregate net asset value as the value of the net assets received in the
exchange.
LIQUIDATING DISTRIBUTIONS AND TERMINATION OF SHORT-TERM TREASURY. Immediately
after the exchange of its assets for the Treasury shares, Short-Term Treasury
will distribute pro rata all of the shares received in the exchange to its
shareholders of record at the Effective Time. All of the outstanding shares of
Short-Term Treasury will be redeemed and canceled and its stock books closed. As
a result, Short-Term Treasury shareholders will become shareholders of Treasury.
[LEFT MARGIN]
[GRAPHIC OF POINTING FINGER]
Use this example to compare the costs of investing in other funds. Of course,
your actual costs may be higher or lower.
Proxy/Prospectus Statement 9
SHAREHOLDER APPROVAL. Consummation of the reorganization requires approval of
Short-Term Treasury shareholders.
REPRESENTATIONS AND WARRANTIES. The Agreement contains representations and
warranties made by Short-Term Treasury to Treasury concerning Short-Term
Treasury's formation and existence under applicable state law, its power to
consummate the reorganization, its qualification as a "regulated investment
company" under applicable tax law, the registration of its shares under federal
law and other matters that are customary in a reorganization of this type. The
representations and warranties terminate at the Effective Time.
CONDITIONS TO CLOSING. The Agreement contains conditions to closing the proposed
reorganization that benefit each fund. The conditions include (i) that
Short-Term Treasury shareholders approve the proposed reorganization, (ii) that
all representations of the funds be true in all material respects, (iii) receipt
of the tax opinion described on page 12 below under the caption "Federal Income
Tax Consequences," and (iv) such other matters as are customary in a
reorganization of this type.
TERMINATION OF AGREEMENT. The Agreement may be terminated by a fund as a result
of the failure by the other fund to meet one of its conditions to closing, or by
mutual consent.
GOVERNING LAW. The Agreement states that it is to be interpreted under
Massachusetts law, the state of organization of Treasury and Short-Term
Treasury.
DESCRIPTION OF THE SECURITIES OF TREASURY
Treasury is a series of shares offered by American Century Government Income
Trust. Each series is commonly referred to as a mutual fund. The assets
belonging to each series of shares are held separately by the custodian.
American Century Government Income Trust is a Massachusetts business trust,
which means its activities are overseen by a Board of Trustees rather than a
Board of Directors. The function of a Board of Trustees is the same as the
function of a Board of Directors.
Like Short-Term Treasury, Treasury currently offers two classes of shares, the
Investor Class and the Advisor Class, although it may offer additional classes
in the future. The Investor Class of shares of Treasury has no up-front charges,
commissions or 12b-1 fees. The Advisor Class of shares has no up-front fees,
charges or commissions, but carries a 0.50% 12b-1 fee to pay for shareholder
services and distribution costs.
Your Board of Trustees believes there are no material differences between the
rights of a Short-Term Treasury shareholder and the rights of a Treasury
shareholder. Each share, irrespective of series or class of a series, is
entitled to one vote for each dollar of net asset value applicable to such share
on all questions, except for those matters that must be voted on separately by
the series or class of a series affected. Matters affecting only one class of a
series are voted upon only by that series or class.
Shares have non-cumulative voting rights, which means that the holders of more
than 50% of the votes cast in an election of trustees can elect all of the
trustees if they choose to do so, and in such event the holders of the remaining
votes will not be able to elect any person or persons to the Board of Trustees.
10 American Century Investments
Unless required by the Investment Company Act of 1940, it is not necessary for
Treasury to hold annual meetings of shareholders. As a result, shareholders may
not vote each year on the election of trustees or the appointment of auditors.
However, pursuant to each fund's bylaws, the holders of at least 10% of the
votes entitled to be cast may request the fund to hold a special meeting of
shareholders.
REASONS SUPPORTING THE REORGANIZATION
The Reorganization is part of a broader restructuring program proposed by
American Century Investment Management, Inc. ("ACIM") to respond to changing
industry conditions and investor needs and desires in the fixed-income area. The
mutual fund industry has grown dramatically over the last ten years. During
this period of rapid growth, investment managers have expanded the range of
fixed-income fund offerings that they make available to investors in an effort
to meet and anticipate the growing and changing needs and desires of an
increasingly large and dynamic group of investors. The family of funds advised
by ACIM has followed this pattern. With this expansion, however, has come
increased complexity and competition among fixed-income mutual funds, as well as
increased confusion among investors.
As a result, ACIM has sought ways to restructure and streamline the management
and operations of the funds it advises. ACIM believes and has advised the Board
of Trustees that the consolidation of certain ACIM-advised funds would benefit
fund shareholders. ACIM has, therefore, proposed the consolidation of a number
of ACIM-advised funds that ACIM believes have similar or compatible investment
objectives and policies. In many cases, the proposed consolidations are designed
to eliminate the substantial overlap in current offerings by the American
Century family of funds. Consolidation plans are proposed for other American
Century funds that have not gathered enough assets to operate efficiently and,
therefore, face the risk of closure and resulting tax liability for many
shareholders. ACIM believes that these consolidations may help to enhance
investment performance and increase efficiency of operations.
ACIM recommended to the Board of Trustees that, among other reasons, because the
current market demand for Treasury funds is generally weak and Short-Term
Treasury and Treasury are managed very similarly, the funds should be combined
to establish a larger fund that has substantially similar investment policies.
As part of its analysis, the Board of Trustees recognized that a large fund may
be able to realize certain potential cost savings that could benefit the
shareholders of the funds if the Reorganization is completed. The Reorganization
was also recommended to combine similar funds in an effort to eliminate
duplication of expenses and internal competition. The Board of Trustees reviewed
the expense ratios of both funds and the projected expenses of the combined
fund; the comparative investment performance of the funds; the compatibility of
the investment objectives, policies, restrictions and investments of the funds;
the benefits that may result to ACIM and its affiliates if the Reorganization is
consummated; and the tax consequences of the Reorganization. The Board of
Trustees also noted that the same portfolio management team manages both funds.
During the course of its deliberations, the Board of Trustees noted that the
expenses of the Reorganization will be borne by ACIM.
The Board of Trustees concluded that the Reorganization is in the best interests
of the shareholders of Short-Term Treasury, and that no dilution of value would
result to the shareholders of the funds from the Reorganization. The Board of
Trustees, including those who are not "interested persons" (as defined in the
1940 Act), approved the Plan and recommended that shareholders of Short-Term
Treasury vote to approve the Reorganization.
Proxy/Prospectus Statement 11
FOR THE REASONS DISCUSSED ABOVE, THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE
FOR THE PLAN.
FEDERAL INCOME TAX CONSEQUENCES
Consummation of the reorganization is subject to the condition that we receive a
tax opinion to the effect that for federal income tax purposes (i) no gain or
loss will be recognized by you, Short-Term Treasury or Treasury, (ii) your basis
in the Treasury shares that you receive will be the same in the aggregate as
your basis in the Short-Term Treasury shares held by you immediately prior to
the reorganization, and (iii) your holding period for the Treasury shares will
include your holding period for your Short-Term Treasury shares.
We have not sought a tax ruling from the Internal Revenue Service, but are
relying upon the tax opinion referred to above. That opinion is not binding on
the IRS and does not preclude it from taking a contrary position. The opinion
does not cover state or local taxes and you should consult your own advisers
concerning potential tax consequences.
The Agreement and Plan of Reorganization provides that Short-Term Treasury will
declare and pay dividends prior to the reorganization which, together with all
previous dividends, are intended to have the effect of distributing to the
Short-Term Treasury shareholders all undistributed ordinary income and net
realized capital gains earned up to and including the Effective Time of the
reorganization. The distributions are necessary to ensure that the
reorganization will not create adverse tax consequences to Short-Term Treasury.
The distributions generally will be taxable to shareholders to the extent
ordinary income and capital gains distributions are taxable to such
shareholders.
CAPITALIZATION (unaudited)
Short-Term Treasury
As of March 31, 2001 Treasury Treasury Pro Forma Combined
- ----------------------------------------------------------------------------------
Investor Class
Net Assets $391,305,724 $64,988,835 $456,294,559
Shares Outstanding 36,372,557 6,546,921 42,414,465
Net Asset Value Per Share $10.76 $9.93 $10.76
- ----------------------------------------------------------------------------------
Advisor Class
Net Assets $9,897,967 $13,882,861 $23,780,828
Shares Outstanding 920,033 1,398,547 2,210,700
Net Asset Value Per Share $10.76 $9.93 $10.76
INFORMATION ABOUT THE FUNDS
Complete information about Treasury and Short-Term Treasury is contained in
their Prospectus. The Prospectus for both Treasury and Short-Term Treasury dated
August 1, 2001, is included with this Prospectus/Proxy Statement. The content
of the Prospectus is incorporated into this document by reference. Below is a
list of types of information about Treasury and Short-Term Treasury and the
pages in the Prospectus where the information can be found.
12 American Century Investments
INFORMATION ABOUT THE
FOLLOWING ITEMS CAN BE FOUND ON THE FOLLOWING PAGES
- ---------------------------------------------------------------------------------------
Short-Term Short-Term
Treasury Treasury Treasury Treasury
Investor Advisor Investor Advisor
Class Class Class Class
- ---------------------------------------------------------------------------------------
An Overview of the Funds 2 2 2 2
Fees and Expenses 9 8 9 8
Objectives, Strategies and Risks 11 10 11 10
Management 17-19 16-18 17-19 16-18
Investing with American Century 20-23 19-21 20-23 19-21
Share Price and Distributions 24-25 22 24-25 22
Taxes 26-27 23-24 26-27 23-24
Multiple Class Information 28 25 28 25
Financial Highlights 29, 32 26, 28 29, 34 26, 30
FUNDAMENTAL INVESTMENT POLICIES
Fundamental investment policies contained in the Statement of Additional
Information dated August 1, 2001, and the investment objectives of Treasury may
not be changed without shareholder approval. The Board of Trustees may change
any other policies and investment strategies.
INFORMATION RELATING TO VOTING MATTERS
GENERAL INFORMATION
This Combined Prospectus/Proxy Statement is being furnished in connection with
the solicitation of proxies by the Board of Trustees of Short-Term Treasury.
Proxies may be solicited by officers and employees of the investment advisor of
the funds, their affiliates and employees. American Century Investment
Management, Inc. has hired Alamo Direct to act as proxy solicitor for the
reorganization. It is anticipated that the solicitation of proxies will be
primarily by mail, telephone, facsimile or other electronic means, or personal
interview. Authorizations to execute proxies may be obtained by telephonic or
electronically transmitted instructions in accordance with procedures designed
to authenticate the shareholder's identity and to confirm that the shareholder
has received the Combined Prospectus/Proxy Statement and proxy card. If you have
any questions regarding voting your shares or the proxy, please call us at
1-800-331-8331. For business, not-for-profit, and employer-sponsored retirement
accounts, please call 1-800-345-3533, ext. 5004.
VOTING AND REVOCATION OF PROXIES
The fastest and most convenient way to vote your shares is to complete, sign and
mail the enclosed proxy voting card to us in the enclosed envelope. If you have
access to the Internet, you can vote online by accessing the website listed on
the proxy card (you will need the control number that appears on the right-hand
side of your proxy card). You also may vote by telephone by calling the
toll-free number listed on your proxy card. In addition, you may vote by faxing
both sides of the completed proxy card to the toll-free number listed on the
proxy card. Your prompt response will help us obtain a quorum for the meeting
and avoid the cost of additional proxy solicitation
Proxy/Prospectus Statement 13
efforts. If you return your proxy to us, we will vote it EXACTLY as you tell us.
If you simply sign the card and return it, we will follow the recommendation of
the Board of Trustees and vote "FOR" the reorganization.
Any shareholder giving a proxy may revoke it at any time before it is exercised
using any of the voting procedures described on the proxy vote card or by
attending the meeting and voting in person.
RECORD DATE
Only Short-Term Treasury shareholders of record at the close of business on
August 10, 2001, will be entitled to vote at the meeting. The number of
outstanding votes entitled to vote at the meeting or any adjournment of the
meeting as of the close of business on July 13, 2001 is:
Short-Term Treasury 109,758,490
Because the record date is August 10, 2001, the total number of votes at the
meeting may be different.
QUORUM
A quorum is the number of shareholders legally required to be at a meeting in
order to conduct business. The quorum for the Special Shareholders Meeting is
40% of the outstanding shares of Short-Term Treasury entitled to vote at the
meeting. Shares may be represented in person or by proxy. Proxies properly
executed and marked with a negative vote or an abstention will be considered to
be present at the meeting for the purposes of determining the existence of a
quorum for the transaction of business. If a quorum is not present at the
meeting, or if a quorum is present at the meeting but sufficient votes are not
received to approve the Agreement and Plan of Reorganization, the persons named
as proxies may propose one or more adjournments of the meeting to permit further
solicitation of proxies. Any such adjournment will require the affirmative vote
of a majority of those shares affected by the adjournment that are represented
at the meeting in person or by proxy. If a quorum is not present, the persons
named as proxies will vote those proxies for which they are required to vote FOR
the Agreement and Plan of Reorganization in favor of such adjournments, and will
vote those proxies for which they are required to vote AGAINST such proposals
against any such adjournments.
SHAREHOLDER VOTE REQUIRED
The Agreement and Plan of Reorganization must be approved by the holders of a
majority of the outstanding votes of Short-Term Treasury present at the Special
Meeting in person or by proxy in accordance with the provisions of its Agreement
and Declaration of Trust and the requirements of the Investment Company Act of
1940. The term "majority of the outstanding shares" means more than 50% of its
outstanding shares present at the meeting in person or by proxy.
In tallying shareholder votes, abstentions and broker non-votes (i.e., proxies
sent in by brokers and other nominees that cannot be voted on a proposal because
instructions have not been received from the beneficial owners) will be counted
for purposes of determining whether or not a quorum is present for purposes of
convening the meeting. Abstentions and broker non-votes will, however, be
considered to be a vote against the Agreement and Plan of Reorganization.
14 American Century Investments
Approval of the reorganization by shareholders of Treasury is not being
solicited because their approval is not legally required.
COST OF PROXY SOLICITATION
The cost of the proxy solicitation and Special Meeting will be borne by American
Century Investment Management, Inc. and NOT by the shareholders of the funds.
CERTAIN SHAREHOLDERS
The following tables list, as of July 13, 2001, the names, addresses and
percentage of ownership of each person who owned of record or is known by either
fund to own beneficially 5% or more of any class of Short-Term Treasury or
Treasury. The percentage of shares to be owned after consummation of the
reorganization is based upon their holdings and the outstanding shares of both
funds as of July 13, 2001. Beneficial ownership information is not required to
be disclosed to the funds, so to the extent that information is provided below,
it is done so using the best information that the funds have been provided.
Number of Percent of Percent Owned After
Shareholder Name and Address Shares Owned Ownership Reorganization
- ---------------------------------------------------------------------------------------
SHORT-TERM TREASURY
INVESTOR
National Financial Services Corp. 2,434,463 28% 5%
New York, New York
Charles Schwab & Co. 1,185,903 14% 3%
San Francisco, California
ADVISOR
National Financial Services LLC 2,081,064 92% 67%
New York, New York
Charles Schwab & Co. 135,960 6% 4%
San Francisco, California
- --------------------------------------------------------------------------------
TREASURY
INVESTOR
Charles Schwab & Co. 5,124,098 14% 11%
San Francisco, California
National Financial Services Corp. 3,655,990 10% 8%
New York, New York
ADVISOR
Charles Schwab & Co. 663,376 67% 21%
San Francisco, California
Blush & Co. 142,990 14% 5%
New York, New York
As of July 13, 2001, the trustees and officers of the issuer of Short-Term
Treasury and Treasury, as a group, owned less than 1% of the outstanding shares
of Short-Term Treasury and Treasury.
APPRAISAL RIGHTS
Shareholders of Short-Term Treasury are not entitled to any rights of share
appraisal under its Agreement and Declaration of Trust, or under the laws of the
State of Massachusetts.
Proxy/Prospectus Statement 15
Shareholders have, however, the right to redeem their Short-Term Treasury shares
until the reorganization. Thereafter, shareholders may redeem the Treasury
shares they received in the reorganization at Treasury's net asset value as
determined in accordance with its then-current prospectus.
ANNUAL MEETINGS
Treasury does not intend to hold annual meetings of shareholders. Shareholders
of Treasury have the right to call a special meeting of shareholders and such
meeting will be called when requested in writing by the shareholders of record
of 10% or more of the fund's votes. To the extent required by law, American
Century Government Income Trust will assist in shareholder communications on
such matters.
Short-Term Treasury does not intend to hold an annual meeting of shareholders
this year for the election of trustees or the ratification of the appointment of
auditors.
ADDITIONAL INFORMATION
Information about Short-Term Treasury and Treasury is incorporated into this
document by reference from their Prospectus and Statement of Additional
Information, each dated August 1, 2001. A copy of the Prospectus accompanies
this document, and a copy of the Statement of Additional Information or the
funds' most recent annual and semiannual reports may be obtained without charge
by calling us at 1-800-331-8331.
Reports and other information filed by Short-Term Treasury and Treasury may be
inspected and copied at the Public Reference Facilities maintained by the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549, and copies of such materials may
be obtained by mail from the Public Reference Branch, Office of Consumer Affairs
and Information Services, Securities and Exchange Commission, Washington, D.C.
20549, at prescribed rates. This information may also be obtained from the EDGAR
database at www.sec.gov, or by email request at publicinfo@sec.gov.
LITIGATION
Neither Short-Term Treasury nor Treasury is involved in any litigation or
proceeding.
OTHER BUSINESS
The Board of Trustees is not aware of any other business to be brought before
the meeting. However, if any other matters come before the meeting, it is the
trustees' intention that proxies that do not contain specific restrictions to
the contrary will be voted on such matters in accordance with the judgment of
the persons named in the enclosed form of proxy.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to us at the address or telephone number
set forth on the cover page of this Combined Prospectus/Proxy Statement.
16 American Century Investments
SHAREHOLDERS ARE REQUESTED TO DATE AND SIGN EACH ENCLOSED PROXY AND RETURN IT IN
THE ENCLOSED ENVELOPE. PLEASE RETURN YOUR PROXY CARD EVEN IF YOU ARE PLANNING TO
ATTEND THE MEETING. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE - TREASURY
The following are excerpts of management's discussion of fund performance from
the Annual Report of Intermediate-Term Treasury dated March 31, 2001. Effective
August 1, 2001, the name of the Intermediate-Term Treasury fund was changed to
Treasury. All references to the Intermediate-Term Treasury fund in the following
excerpts have been changed to the Treasury fund. For a complete copy of the
report, please call us at 1-800-331-8331.
REPORT HIGHLIGHTS
* Treasury performed very well, rewarding investors with a strong return that
also outpaced the fund's Lipper category average.
* While the bond rally was in full swing, we began selling our shortest-term
Treasurys and used the proceeds to pick up three- to five-year Treasurys,
which looked more attractive.
* Strategically adjusting the portfolio's exposure to government agency bonds
also helped boost the fund's yield and return.
* Treasury appears well positioned for the current environment, so we don't
anticipate making any major changes for now.
TREASURY(1)
Total Returns: AS OF 3/31/01
6 Months 8.13%(2)
1 Year 13.17%
30-Day SEC Yield: 4.34%
Net Assets: $401.2 Million(3)
Inception Date: 5/16/80
Ticker Symbol: CPTNX
(1) Investor Class.
(2) Not annualized.
(3) Includes Investor and Advisor classes.
Proxy/Prospectus Statement 17
OUR MESSAGE TO YOU
Economic and financial market conditions have changed dramatically since our
last annual report to you. A year ago, a booming economy, inflation fears, and
rising interest rates had created a difficult environment for U.S. bonds.
By contrast, conditions became almost ideal for investment-grade bonds during
the year ended March 31, 2001. Higher interest rates a year ago slowed the
economy dramatically, particularly the technology and manufacturing sectors.
Bonds rallied strongly as stock prices and interest rates fell.
The rally boosted American Century's Short- and Long-Term Treasury and Treasury
funds to fiscal year total returns that were significantly above their
historical averages. The funds' investment team reviews economic and market
conditions as well as strategy and performance below.
The sudden change in the financial climate also reminded investors about the
value of diversification. Risk reduction was easy to ignore during the extended
stock rally from 1995 to 2000 but last year reminded everyone that downturns
still occur. Investors who are sensitive to overall portfolio volatility should
keep some fixed-income securities in their portfolios to absorb the shocks that
changing economic conditions can bring.
Turning to corporate matters, we're proud to announce that for the second
consecutive year, American Century's fund performance reports, like this one,
earned the Communications Seal from DALBAR, Inc., an independent financial
services research firm. The Seal recognizes communications excellence in the
industry.
What's more, American Century made Fortune Magazine's list of the "100 Best
Companies to Work for in America" for the second year in a row. This is
important for us because we think it demonstrates our commitment to attract and
retain the best people to serve our shareholders. We believe that ultimately our
success, and that of our investors, is based on the quality of our "intellectual
capital" - the collective wisdom of our investment and service professionals.
As always, we appreciate your continued confidence in American Century.
Sincerely,
/s/James E. Stowers, Jr /s/James E. Stowers III
James E. Stowers, Jr. James E. Stowers III
Chairman of the Board and Founder Co-Chairman of the Board
18 American Century Investments
PERFORMANCE & PORTFOLIO INFORMATION
Effective August 8, 2001, the name of Intermediate-Term Treasury was changed to
Treasury.
TOTAL RETURNS AS OF MARCH 31, 2001
INVESTOR CLASS (INCEPTION 5/16/80) ADVISOR CLASS (INCEPTION 10/9/97)
SALOMON SALOMON
INTERMEDIATE-TERM 3- TO 10-YEAR INTERMEDIATE U.S. TREASURY FUNDS(2) INTERMEDIATE-TERM 3- TO 10- YEAR
TREASURY TREASURY INDEX AVERAGE RETURN FUND'S RANKING TREASURY TREASURY INDEX
========================================================================================================================
6 MONTHS(1) 8.13% 8.34% 7.85% -- 8.00% 8.34%
1 YEAR 13.17% 13.58% 12.52% 3 OUT OF 10 12.89% 13.58%
========================================================================================================================
AVERAGE ANNUAL RETURNS
3 YEARS 6.82% 7.43% 6.48% 3 OUT OF 9 6.55% 7.43%
5 YEARS 7.08% 7.62% 6.93% 3 OUT OF 6 -- --
10 YEARS 7.11% 7.62% 7.09% 3 OUT OF 4 -- --
LIFE OF FUND 8.52% 9.47%(3) 8.55%(3) 1 OUT OF 1(3) 6.80% 7.69%(4)
(1) Returns for periods less than one year are not annualized.
(2) According to Lipper Inc., an independent mutual fund ranking service.
(3) Since 5/31/80, the date nearest the class's inception for which data are
available.
(4) Index data since 9/30/97, the date nearest the class's inception for which
data are available.
[mountain graph - data below]
GROWTH OF $10,000 OVER 10 YEARS
Value on 3/31/01
Salomon 3- to 10-Year
Treasury Index $20,848
Intermediate-Term Treasury $19,878
Intermediate-Term Salomon 3- to 10-Year
Treasury Treasury Index
DATE VALUE VALUE
3/31/1991 $10,000 $10,000
3/31/1992 $10,992 $11,049
3/31/1993 $12,350 $12,391
3/31/1994 $12,577 $12,682
3/31/1995 $13,022 $13,229
3/31/1996 $14,118 $14,443
3/31/1997 $14,690 $15,074
3/31/1998 $16,312 $16,815
3/31/1999 $17,305 $18,009
3/31/2000 $17,567 $18,356
3/31/2001 $19,878 $20,848
$10,000 investment made 3/31/91
The graph at left shows the growth of a $10,000 investment in the fund over 10
years, while the graph below shows the fund's year-by-year performance. The
Salomon 3- to 10-Year Treasury Index is provided for comparison in each graph.
Intermediate-Term Treasury's total returns include operating expenses (such as
transaction costs and management fees) that reduce returns, while the total
returns of the index do not. The graphs are based on Investor Class shares only;
performance for other classes will vary due to differences in fee structures
(see the Total Returns table above). Past performance does not guarantee future
results. Investment return and principal value will fluctuate, and redemption
value may be more or less than original cost.
[bar graph - data below]
ONE-YEAR RETURNS OVER 10 YEARS (PERIODS ENDED MARCH 31)
Intermediate-Term Salomon 3- to 10-Year
Treasury Treasury Index
DATE RETURN RETURN
3/31/1992 9.92% 10.49%
3/31/1993 12.35% 12.15%
3/31/1994 1.84% 2.32%
3/31/1995 3.54% 4.30%
3/31/1996 8.42% 9.18%
3/31/1997 4.05% 4.37%
3/31/1998 11.04% 11.55%
3/31/1999 6.09% 7.10%
3/31/2000 1.51% 1.93%
3/31/2001 13.17% 13.58%
Proxy/Prospectus Statement 19
YIELDS AS OF MARCH 31, 2001 PORTFOLIO AT A GLANCE
INVESTOR ADVISOR 3/31/01 3/31/00
CLASS CLASS Number of Securities 20 18
30-Day Weighted Average
SEC Yield 4.34% 4.09% Maturity 6.2 yrs 6.3 yrs
Average Duration 5.0 yrs 4.7 yrs
Expense Ratio 0.51% 0.51%
(for Investor Class)
The funds are neither insured nor guaranteed by the U.S. government.
MANAGEMENT Q&A
An interview with Bob Gahagan, a portfolio manager on the Treasury fund
investment team.
HOW DID THE FUND PERFORM DURING THE YEAR ENDED MARCH 31, 2001?
Treasury performed very well, rewarding investors with a strong return that also
outpaced the fund's Lipper category average. The fund returned 13.17%, compared
with the 12.52% average return of the 10 "Intermediate U.S. Treasury Funds"
tracked by Lipper Inc.* The portfolio's benchmark, the Salomon Brothers 3- to
10-Year Treasury Index, returned 13.58%.
WHY DID TREASURY PERFORM SO WELL?
There were a few key reasons: our bond maturity choices, our sector shifts, and
how we managed the fund's interest rate sensitivity.
LET'S ADDRESS THOSE POINTS ONE AT A TIME. WHAT MADE YOUR BOND MATURITY PICKS
WORK?
We were basically in the right places at the right times. During the fourth
quarter of last year, Treasurys with maturities less than three years were a
mainstay of the portfolio. They appeared poised to outperform intermediate- and
longer-term maturities if economic growth slowed further and interest rates
fell.
That scenario began to play out toward the end of last year. So while the bond
rally was in full swing and short-term yields were falling the fastest, we began
selling into that strength. We used the proceeds to pick up three- to five-year
Treasurys because they seemed like relatively better values.
In contrast, we generally kept our government agency bond exposure in the three-
to five-year maturity area throughout the last six months. We thought those
securities offered more value than shorter- or longer-term agencys.
WHAT ABOUT YOUR SECTOR SHIFTS - WHAT STRATEGIES DID YOU EMPLOY?
We adjusted the portfolio's mix of Treasurys and agencys as opportunities arose,
boosting the fund's yield and return. For example, government agency bonds
represented roughly 25% of the portfolio in early December. With Treasurys
rallying so sharply, we felt that agencys were undervalued and had definite
yield advantages compared with Treasurys with similar maturities.
* All fund returns and yields referred to in this interview are for Investor
Class shares.
20 American Century Investments
During the first quarter of 2001, other investors saw that value and snapped up
agency bonds, just as we'd hoped they would. In fact, we thought that some of
the bonds became overbought and overvalued during the rally.
As a result, we sold into that strength, reducing the portfolio's agency
holdings to just 5% by the end of January. We've kept fairly close to that level
since.
AND WHAT ABOUT YOUR MANAGEMENT OF THE PORTFOLIO'S INTEREST RATE SENSITIVITY
(DURATION)?
Treasury benefited from a slightly longer duration during the first quarter. The
longer a fund's duration, the more its price will move when rates change. As
interest rates fell and bond prices generally rose, the rally boosted the fund's
returns.
SHIFTING GEARS, WHAT'S YOUR OUTLOOK FOR INTEREST RATES AND BONDS?
As we entered the second quarter of 2001, the Federal Reserve appeared to have
faith in the resiliency of consumers and the U.S. economy, but doubts about
corporate health and the well-being of the global economy. So we think the Fed
will cut short-term interest rates again before the end of June.
But even if the Fed cuts rates, we think it will be difficult for all but the
shortest-term Treasury yields to fall much further. Bond yields have fallen far
and fast in the past year, and additional Fed rate cuts have already been priced
into the market.
SO, WHAT ARE YOUR PLANS FOR THE PORTFOLIO?
We don't anticipate making any further adjustments for market conditions for
now.
BUT YOU'RE PLANNING OTHER CHANGES - PLEASE EXPLAIN THE PROSPECTUS SUPPLEMENT
INCLUDED WITH THIS REPORT.
The supplement updates the fund's prospectus to reflect two changes:
First, effective August 1, 2001, we will remove all restrictions on the fund's
weighted average maturity - the fund can invest in the full spectrum of U.S.
Treasury securities, across all maturities.
Second, reflecting the average maturity change, the fund will be renamed
"American Century Treasury," effective August 1, 2001.
HOW WILL THIS AFFECT YOUR INVESTMENT STRATEGY?
It will give us more flexibility, but investors aren't likely to notice big
differences in fund strategy or performance. Optimal Treasury yields and returns
relative to risk (price volatility) still tend to be found in the
intermediate-term maturity area (3-10 years). The changes just free us to look
for the best relative values, yields, and appreciation potential throughout the
Treasury market. We'll still use the same disciplined investment approach, but
now we can apply it more broadly.
Proxy/Prospectus Statement 21
WHAT ARE THE REASONS FOR MAKING THESE CHANGES?
The most important is to help make choosing a Treasury fund easier for
investors. People who know they want the high quality and portfolio
diversification potential of Treasury securities but aren't sure what maturity
to choose will be able to invest in a "core" Treasury fund where we make the
maturity decisions for them, based on where we see the best investment
opportunities.
PORTFOLIO COMPOSITION BY SECURITY TYPE
(as of 3/31/01)
Treasury Notes and Bonds 95%
Agency Notes 4%
Temporary Cash Investments 1%
PORTFOLIO COMPOSITION BY SECURITY TYPE
(as of 9/30/00)
Treasury Notes and Bonds 77%
Agency Notes 17%
Treasury Inflation-Indexed Notes 5%
Temporary Cash Investments 1%
22 American Century Investments
Notes
Proxy/Prospectus Statement 23
SH-BKT-26482 0108
PART B
AMERICAN CENTURY GOVERNMENT INCOME TRUST
American Century Investments
4500 Main Street
P.O. Box 419200
Kansas City, Missouri 64141-6200
1-800-331-8331
Statement of Additional Information
2001 Special Meeting of Shareholders of American Century Government Income Trust
This Statement of Additional Information is not a prospectus but should be
read in conjunction with the Combined Proxy Statement/Prospectus dated August
22, 2001 for the Special Meeting of Shareholders to be held on November 16,
2001. Copies of the Combined Proxy Statement/Prospectus may be obtained at no
charge by calling 1-800-331-8331.
Unless otherwise indicated, capitalized terms used herein and not otherwise
defined have the same meanings as are given to them in the Combined Proxy
Statement/Prospectus.
Further information about Treasury and Short-Term Treasury is contained in and
incorporated herein by reference to their Statement of Additional Information
dated August 1, 2001. The audited financial statements and related independent
accountant's report for Treasury and Short-Term Treasury contained in their
Annual Report dated March 31, 2001 are incorporated herein by reference. No
other parts of the Annual Report are incorporated by reference herein.
The date of this Statement of Additional Information is August 22, 2001.
TABLE OF CONTENTS
General Information
Pro Forma Financial Statements
GENERAL INFORMATION
The shareholders of Short-Term Treasury are being asked to approve or
disapprove an Agreement and Plan of Reorganization (the "Reorganization
Agreement") dated as of August 8, 2001 FOR AMERICAN CENTURY GOVERNMENT INCOME
TRUST and the transactions contemplated thereby. The Reorganization Agreement
contemplates the transfer of substantially all of the assets and liabilities of
Short-Term Treasury to Treasury in exchange for full and fractional shares
representing interests in Treasury. The shares issued by Treasury will have an
aggregate net asset value equal to the aggregate net asset value of the shares
of Short-Term Treasury that are outstanding immediately before the effective
time of the Reorganization.
Following the exchange, Short-Term Treasury will make a liquidating
distribution to its shareholders of the Treasury shares received in the
exchange. Each shareholder owning shares of Short-Term Treasury at the Effective
Time of the reorganization will receive shares of Treasury of equal value, plus
the right to receive any unpaid dividends that were declared before the
Effective Time of the Reorganization on the Short-Term Treasury shares
exchanged.
The Special Meeting of Shareholders to consider the Reorganization Agreement
and the related transactions will be held at 10:00 a.m. Central time on November
16, 2001 at American Century Tower I, 4500 Main Street, Kansas City, Missouri.
For further information about the transaction, see the Combined Proxy
Statement/Prospectus.
Pro Forma Combining
American Century Short-Term Treasury Fund and
American Century Treasury Fund
Intermediate-Term Treasury (Fund 1) / Short-Term Treasury (Fund 2)
Proforma Combined Schedule of Portfolio Investments March 31, 2001
(Unaudited)
Proforma
Fund 1 Fund 2 Combined Proforma
Shares or Shares or Shares or Fund 1 Fund 2 Combined
Principal Principal Principal Market Market Market
Amount Amount Amount Security Description Value Value Value
- ------------ ------------- ----------- -------------------- -------------- ------------ ------------
U.S. TREASURY SECURITIES (93.4%)
$ 5,000,000 $ 5,000,000 U.S. Treasury Bonds, $ 5,645,900 $ 5,645,900
10.750%, 5/15/03
1,800,000 1,800,000 U.S. Treasury Bonds, 2,071,969 2,071,969
11.125%, 8/15/03
10,000,000 10,000,000 U.S. Treasury Bonds, 15,667,192 15,667,192
11.250%, 2/15/15
7,000,000 2,700,000 9,700,000 U.S. Treasury Notes, 6,984,418 2,693,990 9,678,408
4.250%, 11/15/03
17,300,000 17,300,000 U.S. Treasury Notes, 17,108,091 17,108,091
4.750%, 11/15/08
15,000,000 15,000,000 U.S. Treasury Notes, 15,086,730 15,086,730
5.000%, 2/15/11
4,800,000 4,800,000 U.S. Treasury Notes, 4,914,283 4,914,283
5.250%, 5/15/04
5,000,000 5,000,000 U.S. Treasury Notes, 5,109,345 5,109,345
5.500%, 1/31/03
23,000,000 23,000,000 U.S. Treasury Notes, 23,861,511 23,861,511
5.500%, 2/15/08
32,600,000 32,600,000 U.S. Treasury Notes, 33,768,221 33,768,221
5.500%, 5/15/09
20,000,000 20,000,000 U.S. Treasury Notes, 20,887,580 20,887,580
5.625%, 5/15/08
9,900,000 9,900,000 U.S. Treasury Notes, 10,225,323 10,225,323
5.750%, 8/15/03
4,500,000 4,500,000 U.S. Treasury Notes, 4,701,056 4,701,056
5.875%, 11/15/04
15,800,000 15,800,000 U.S. Treasury Notes, 16,629,152 16,629,152
5.875%, 11/15/05
3,300,000 3,300,000 U.S. Treasury Notes, 3,381,424 3,381,424
5.875%, 9/30/02
17,000,000 17,000,000 U.S. Treasury Notes, 17,802,077 17,802,077
6.000%, 8/15/04
24,000,000 24,000,000 U.S. Treasury Notes, 25,645,320 25,645,320
6.000%, 8/15/09
20,000,000 20,000,000 U.S. Treasury Notes, 21,420,320 21,420,320
6.125%, 8/15/07
5,000,000 5,000,000 U.S. Treasury Notes, 5,178,380 5,178,380
6.250%, 2/15/03
4,100,000 4,100,000 U.S. Treasury Notes, 4,215,891 4,215,891
6.250%, 8/31/02
24,000,000 24,000,000 U.S. Treasury Notes, 26,528,712 26,528,712
6.500%, 2/15/10
2,100,000 2,100,000 U.S. Treasury Notes, 2,143,657 2,143,657
6.500%, 2/28/02
39,800,000 39,800,000 U.S. Treasury Notes, 42,783,289 42,783,289
6.500%, 8/15/05
3,500,000 3,500,000 U.S. Treasury Notes, 3,530,961 3,530,961
6.500%, 8/31/01
5,500,000 5,500,000 U.S. Treasury Notes, 5,632,138 5,632,138
6.625%, 3/31/02
3,500,000 3,500,000 U.S. Treasury Notes, 3,597,801 3,597,801
6.625%, 5/31/02
2,000,000 2,000,000 U.S. Treasury Notes, 2,162,464 2,162,464
6.750%, 5/15/05
13,200,000 13,200,000 U.S. Treasury Notes, 14,527,273 14,527,273
6.875%, 5/15/06
17,000,000 17,000,000 U.S. Treasury Notes, 18,824,253 18,824,253
7.000%, 7/15/06
16,000,000 16,000,000 U.S. Treasury Notes, 17,291,936 17,291,936
7.250%, 5/15/04
36,400,000 36,400,000 U.S. Treasury Notes, 40,170,749 40,170,749
7.500%, 2/15/05
3,200,000 3,200,000 U.S. Treasury Notes, 3,213,376 3,213,376
8.000%, 5/15/01
------------- ------------ ------------
Total U.S. TREASURY SECURITIES (Combined Cost $425,108,154) 379,687,880 63,716,902 443,404,782
------------- ------------ ------------
U.S. GOVERNMENT AGENCY SECURITIES (5.5%)
2,000,000 2,000,000 FHLB, 5.125%, 1/13/03 2,018,300 2,018,300
1,500,000 1,500,000 FHLB, 6.000%, 11/15/01 1,513,946 1,513,946
2,800,000 2,800,000 FHLB, 6.250%, 11/15/02 2,872,929 2,872,929
13,600,000 13,600,000 FHLB, 6.875%, 8/15/05 14,486,298 14,486,298
5,000,000 5,000,000 FHLMC, 7.000%, 2/15/03 5,213,199 5,213,199
------------- ------------ ------------
Total U.S. GOVERNMENT AGENCY SECURITIES
(Combined Cost $25,156,642) 14,486,298 11,618,374 26,104,672
------------- ------------ ------------
TEMPORARY CASH INVESTMENTS (1.1%)
3,100,000 2,200,000 5,300,000 SLMA Discount Notes, 3,100,000 2,200,000 5,300,000
5.130%, 4/02/01 (1)
------------- ------------ ------------
Total TEMPORARY CASH INVESTMENTS (Combined Cost $5,299,247) 3,100,000 2,200,000 5,300,000
------------- ------------ ------------
Total Investment Securities
(Combined Cost $455,564,043) - 100.0% $397,274,178 $77,535,276 $474,809,454
============= ============ ============
Percentages indicated are based on combined investment securities of $474,809,454.
FHLB = Federal Home Loan Bank
FHLMC = Federal Home Loan Mortgage Corporation
SLMA = Student Loan Marketing Association
(1) Rate indicated is the yield to maturity at purchase.
Intermediate-Term Treasury
Short-Term Treasury
Pro Forma Combining Statement of Assets and Liabilities
MARCH 31, 2001 (UNAUDITED)
Pro Forma
Intermediate-Term Short-Term Combining
Treasury Treasury Adjustments (Note 1)
----------------- ------------- -------------- --------------
ASSETS
Investment securities, at value
(identified cost of $379,226,603,
$76,337,440 and $455,564,043
respectively) $397,274,178 $77,535,276 $474,809,454
Cash 64,914 43,764 108,678
Receivable for capital shares sold 407,166 104,989 512,155
Interest receivable 4,831,066 1,248,777 6,079,843
-------------- ------------- -------------- --------------
402,577,324 78,932,806 - 481,510,130
-------------- ------------- -------------- --------------
LIABILITIES
Payable for Capital shares redeemed 1,049,317 - 1,049,317
Accrued management fees 165,689 29,866 195,555
Distribution fees payable 1,908 1,717 3,625
Service fees payable 1,908 1,717 3,625
Dividends payable 154,087 27,670 181,757
Payable for trustees' fees and expenses 590 113 703
Accrued expenses and other liabilities 134 27 161
-------------- ------------- -------------- --------------
1,373,633 61,110 - 1,434,743
-------------- ------------- -------------- --------------
Net Assets $401,203,691 $78,871,696 - $480,075,387
============== ============= ============== ==============
NET ASSETS CONSIST OF:
Capital paid in $398,148,702 $78,305,394 476,454,096
Accumulated net realized loss
on investment transactions (14,992,586) (631,534) (15,624,120)
Net unrealized appreciation
on investments 18,047,575 1,197,836 19,245,411
-------------- ------------- -------------- --------------
$401,203,691 $78,871,696 - $480,075,387
============== ============= ============== ==============
Investor Class
Net assets $391,305,724 $64,988,835 $456,294,559
Shares outstanding 36,372,557 6,546,921 (505,013)(a) 42,414,465
Net asset value per share $10.76 $9.93 - $10.76
Advisor Class
Net assets $9,897,967 $13,882,861 $23,780,828
Shares outstanding 920,033 1,398,547 (107,880)(a) 2,210,700
Net asset value per share $10.76 $9.93 - $10.76
(a) Adjustment to reflect the issuance of Intermediate-Term Treasury Investor
and Advisor shares in exchange for shares of the Short-Term Treasury
Investor and Advisor Classes in connection with the proposed organization.
Intermediate-Term Treasury
Short-Term Treasury
Pro Forma Combining Statement of Operations
YEAR ENDED MARCH 31, 2001 (UNAUDITED)
Pro Forma
Intermediate-Term Short-Term Combining
Treasury Treasury Adjustments (Note 1)
----------------- ------------- -------------- --------------
INVESTMENT INCOME
Income:
Interest $20,476,678 $3,787,758 $24,264,436
-------------- ------------- -------------- --------------
Expenses:
Management fees 1,741,527 303,461 2,044,988
Distribution fees - Advisor Class 25,295 5,645 30,940
Service fees - Advisor Class 25,295 5,645 30,940
Trustees' fees and expenses 10,712 1,871 12,583
-------------- ------------- -------------- --------------
1,802,829 316,622 - 2,119,451
-------------- ------------- -------------- --------------
Net investment income 18,673,849 3,471,136 - 22,144,985
-------------- ------------- -------------- --------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on
investment transactions (346,701) 414,923 68,222
Change in net unrealized
appreciation on investments 24,909,721 1,414,146 26,323,867
-------------- ------------- -------------- --------------
Net realized and unrealized
gain on investments 24,563,020 1,829,069 - 26,392,089
-------------- ------------- -------------- --------------
Net Increase in Net Assets
Resulting from Operations $43,236,869 $5,300,205 - $48,537,074
============== ============= ============== ==============
Notes to Pro Forma Financial Statements (unaudited)
1. Basis of Combination-The unaudited Pro Forma Combining Schedule of
Investments, Pro Forma Combining Statement of Assets and Liabilities and Pro
Forma Combining Statement of Operations reflect the accounts of the
Short-Term Treasury and Intermediate-Term Treasury at and for the year ended
March 31, 2001.
The pro forma statements give effect to the proposed transfer of the assets
and stated liabilities of the non-surviving fund, Short-Term Treasury, in
exchange for shares of the surviving fund, for purposes of maintaining the
financial statements and performance, Intermediate-Term Treasury. Effective
August 1, 2001, the Intermediate-Term Treasury Fund's name will be changed to
the Treasury Fund.
In accordance with generally accepted accounting principles, the historical
cost of investment securities will be carried forward to the surviving fund
and the results of operations for pre-combination periods for the surviving
fund will not be restated. The pro forma statements do not reflect the
expenses of either fund in carrying out its obligation under the Agreement
and Plan of Reorganization. Under the terms of the Plan of Reorganization,
the combination of the funds will be treated as a tax-free business
combination and accordingly will be accounted for by a method of accounting
for tax-free mergers of investment companies (sometimes referred to as the
pooling without restatement method).
The Pro Forma Combining Schedule of Investments, Statement of Assets and
Liabilities and Statement of Operations should be read in conjunction with
the historical financial statements of the funds included or incorporated by
reference in the Statement of Additional Information.
2. Portfolio Valuation- Securities are valued through valuations obtained from a
commercial pricing service or at the mean of the most recent bid and asked
prices. When valuations are not readily available, securities are valued at
fair value as determined in accordance with procedures adopted by the Board
of Trustees.
3. Capital Shares-The pro forma net asset value per share assumes the issuance
of shares of the surviving financial fund that would have been issued at
March 31, 2001, in connection with the proposed reorganization. The number
of shares assumed to be issued is equal to the net asset value of shares of
the non-surviving financial fund, as of March 31, 2001, divided by the net
asset value per share of the shares of the surviving financial fund as of
March 31, 2001. The pro forma total number of shares outstanding for the
combined fund consists of the following at March 31, 2001:
Additional Shares
Combined Total Outstanding Shares of Assumed Issued
Fund Shares Surviving Fund in Reorganization
---------------------------------------------------------------------------------------------------
Intermediate-Term Treasury Fund
Investor 42,414,465 36,372,557 6,041,908
Advisor 2,210,700 920,033 1,290,667
Total Fund 44,625,165 37,292,590 7,332,575
4. Investments-At March 31, 2001, the funds had the following net capital loss
carryforwards available to offset future capital gains. To the extent that
those carryforward losses are used to offset capital gains, it is probable
that any gains so offset will not be distributed.
Fund Net Capital Loss Carryforward
----------------------------------------------------------------------------------------
Intermediate-Term Treasury Fund $14,992,584
Short-Term Treasury Fund $ 606,361
For the five month period ended March 31, 2001, Short-Term Treasury incurred net
capital losses of $6,980. Short-Term Treasury has elected to treat such losses
as having been incurred in the following fiscal year.
PART C OTHER INFORMATION
Item 15 Indemnification.
As stated in Article VII, Section 3 of the Amended and Restated Agreement and
Declaration of Trust, incorporated herein by reference to Exhibit (a) to the
Registration Statement, "The Trustees shall be entitled and empowered to the
fullest extent permitted by law to purchase insurance for and to provide by
resolution or in the Bylaws for indemnification out of Trust assets for
liability and for all expenses reasonably incurred or paid or expected to be
paid by a Trustee or officer in connection with any claim, action, suit, or
proceeding in which he or she becomes involved by virtue of his or her capacity
or former capacity with the Trust. The provisions, including any exceptions and
limitations concerning indemnification, may be set forth in detail in the Bylaws
or in a resolution adopted by the Board of Trustees."
Registrant hereby incorporates by reference, as though set forth fully herein,
Article VI of the Registrant's Amended and Restated Bylaws, dated March 9, 1998,
appearing as Exhibit 2b to Post-Effective Amendment No. 23 to the Registration
Statement on Form N-1A of American Century Municipal Trust filed March 26, 1998.
The Registrant has purchased an insurance policy insuring its officers and
directors against certain liabilities which such officers and directors may
incur while acting in such capacities and providing reimbursement to the
Registrant for sums which it may be permitted or required to pay to its officers
and directors by way of indemnification against such liabilities, subject in
either case to clauses respecting deductibility and participation.
Item 16 Exhibits (all exhibits not filed herewith are being incorporated
herein by reference).
(1) (a) Amended and Restated Agreement and Declaration of Trust, dated
March 9, 1998 and amended March 1, 1999 (filed electronically as
Exhibit a to Post-Effective Amendment No. 37 to the Registration
Statement of the Registrant on May 7, 1999, File No. 2-99222).
(b) Amendment No. 1 to the Amended and Restated Agreement and
Declaration of Trust (filed electronically as Exhibit a2 to
Post-Effective Amendment No. 42 to the Registration Statement of the
Registrant on April 19, 2001, File No. 2-99222).
(c) Amendment No. 2 to the Amended and Restated Agreement dated August
1, 2001 (filed electronically as Exhibit a3 to Post-Effective
Amendment No. 44 to the Registration Statement of the Registrant, on
July 31, 2001, File No. 2-99222).
(2) Amended and Restated Bylaws, dated March 9, 1998 (filed electronically
as Exhibit 2b to Post-Effective Amendment No. 23 to the Registration
Statement of American Century Municipal Trust on March 26, 1998, File
No. 2-91229).
(3) Not applicable.
(4) Agreement and Plan of Reorganization is filed herein.
(5) Not applicable.
(6) (a) Management Agreement (Investor Class) between American Century
Government Income Trust and American Century Investment Management,
Inc., dated August 1, 1997 (filed electronically as Exhibit 5 to
Post-Effective Amendment No. 33 to the Registration Statement of the
Registrant on July 31, 1997, File No. 2-99222).
(b) Amendment to the Management Agreement (Investor Class) between
American Century Government Income Trust and American Century
Investment Management, Inc., dated March 31, 1998 (filed
electronically as Exhibit 5b to Post-Effective Amendment No. 23 to the
Registration Statement of American Century Municipal Trust on March
26, 1998, File No. 2-91229).
(c) Amendment to the Management Agreement (Investor Class) between
American Century Government Income Trust and American Century
Investment Management, Inc., dated July 1, 1998 (filed electronically
as Exhibit d3 to Post-Effective Amendment No 39 to the Registration
Statement of the Registrant on July 28, 1999, File No. 2-99222).
(d) Amendment No. 1 to the Management Agreement (Investor Class)
between American Century Government Income Trust and American Century
Investment Management, Inc., dated September 16, 2000 (filed
electronically as Exhibit d4 to Post-Effective Amendment No. 30 to the
Registration Statement of American Century California Tax-Free and
Municipal Funds on December 29, 2000, File No. 2-82734).
(e) Amendment No. 2 to the Management Agreement (Investor Class)
between American Century Government Income Trust and American Century
Investment Management, Inc., dated August 1, 2001 (filed
electronically as Exhibit d5 to Post-Effective Amendment No. 44 to the
Registration Statement of the Registrant, on July 31, 2001, File No.
2-99222).
(f) Management Agreement (Advisor Class) between American Century
Government Income Trust and American Century Investment Management,
Inc., dated August 1, 1997 and amended as of June 1, 1998 (filed
electronically as Exhibit 5b to Post-Effective Amendment No. 9 to the
Registration Statement of American Century Investment Trust on June
30, 1999, File No. 33-65170).
(g) Amendment No. 1 to the Management Agreement (Advisor Class)
between American Century Government Income Trust and American Century
Investment Management, Inc., dated September 16, 2000 (filed
electronically as Exhibit d6 to Post-Effective Amendment No. 36 to the
Registration Statement of American Century Target Maturities Trust on
April 18, 2001, File No. 2-94608).
(h) Amendment No. 2 to the Management Agreement (Advisor Class)
between American Century Government Income Trust and American Century
Investment Management, Inc. dated August 1, 2001 (filed electronically
as Exhibit d8 to Post-Effective Amendment No. 44 to the Registration
Statement of the Registrant, on July 31, 2001, File No. 2-99222).
(i) Management Agreement (C Class) between American Century Target
Maturities Trust, American Century California Tax-Free and Municipal
Funds, American Century Government Income Trust, American Century
Investment Trust, American Century Quantitative Equity Funds, American
Century Municipal Trust and American Century Investment Management
Inc., dated September 16, 2000 (filed electronically as Exhibit d6 to
Post-Effective Amendment No. 35 to the Registration Statement of
American Century Target Maturities Trust on April 17, 2001, File No.
2-94608).
(j) Amendment No. 1 to the Management Agreement (C Class) between
American Century Target Maturities Trust, American Century California
Tax-Free and Municipal Funds, American Century Government Income
Trust, American Century Investment Trust, American Century
Quantitative Equity Funds, American Century Municipal Trust and
American Century Investment Management Inc., dated August 1, 2001
(filed electronically as Exhibit d10 to Post-Effective Amendment No.
44 to the Registration Statement of the Registrant, on July 31, 2001,
File No. 2-99222).
(7) (a) Distribution Agreement between American Century Government Income
Trust and American Century Investment Services, Inc., dated March 13,
2000 (filed electronically as Exhibit e7 to Post-Effective Amendment
No. 17 to the Registration Statement of American Century World Mutual
Funds, Inc. on March 30, 2000, File No. 33-39242).
(b) Amendment No. 1 to the Distribution Agreement between American
Century Investment Trust and American Century Investment Services,
Inc., dated June 1, 2000 (filed electronically as Exhibit e9 to
Post-Effective Amendment No. 19 to the Registration Statement of
American Century World Mutual Funds, Inc. on May 24, 2000, File No.
33-39242).
(c) Amendment No. 2 to the Distribution Agreement between American
Century Government Income Trust and American Century Investment
Services, Inc., dated November 20, 2000 (filed electronically as
Exhibit e10 to Post-Effective Amendment No. 29 to the Registration
Statement of American Century Variable Portfolios, Inc. on December 1,
2000, File No. 33-14567).
(d) Amendment No. 3 to the Distribution Agreement between American
Century Government Income Trust and American Century Investment
Services, Inc., dated March 1, 2001 (filed electronically as Exhibit
e4 to Post-Effective Amendment No. 35 to the Registration Statement of
American Century Target Maturities Trust on April 17, 2001, File No.
2-94608).
(e) Amendment No. 4 to the Distribution Agreement between American
Century Government Income Trust and American Century Investment
Services, Inc., dated April 30, 2001 (filed electronically as Exhibit
e5 to Post-Effective Amendment No. 35 to the Registration Statement of
American Century Target Maturities Trust on April 17, 2001, File No.
2-94608).
(f) Amendment No. 5 to the Distribution Agreement between American
Century Government Income Trust and American Century Investment
Services, Inc. (filed as Exhibit e6 to Post-Effective Amendment No. 21
to the Registration Statement of American Century Capital Portfolios,
Inc., on July 30, 2001, File No. 33-64872).
(g) Amendment No. 6 to the Distribution Agreement between American
Century Government Income Trust and American Century Investment
Services, Inc. (filed as Exhibit e7 to Post-Effective Amendment No. 21
to the Registration Statement of American Century Capital Portfolios,
Inc., on July 30, 2001, File No. 33-64872).
(8) Not applicable.
(9) (a) Master Agreement by and between Commerce Bank N.A. and Twentieth
Century Services, Inc., dated January 22, 1997 (filed electronically
as Exhibit g2 to Post-Effective Amendment No. 76 to the Registration
Statement of American Century Mutual Funds, Inc. on February 28, 1997,
File No. 2-14213).
(b) Global Custody Agreement between American Century Investments and
The Chase Manhattan Bank, dated August 9, 1996 (filed electronically
as Exhibit 8 to Post-Effective Amendment No. 31 to the Registration
Statement of the Registrant on February 7, 1997, File No. 2-99222).
(c) Amendment to the Global Custody Agreement between American Century
Investments and The Chase Manhattan Bank dated December 9, 2000 (filed
electronically as Exhibit g2 to Pre-Effective Amendment No. 2 to the
Registration Statement of American Century Variable Portfolios II,
Inc. on January 9, 2001, File No. 333-46922).
(10) (a) Master Distribution and Shareholder Services Plan of American
Century Government Income Trust, American Century Investment Trust,
American Century International Bond Fund, American Century Target
Maturities Trust and American Century Quantitative Equity Funds
(Advisor Class), dated August 1, 1997 (filed electronically as Exhibit
m1 of Post-Effective Amendment No. 32 to the Registration Statement of
American Century Target Maturities Trust on January 31, 2000, File No.
2-94608).
(b) Amendment to the Master Distribution and Shareholder Services Plan
of American Century Government Income Trust, American Century
Investment Trust, American Century International Bond Fund, American
Century Target Maturities Trust and American Century Quantitative
Equity Funds (Advisor Class), dated June 29, 1998 (filed
electronically as Exhibit m2 to Post-Effective Amendment No. 23 to the
Registration Statement of American Century Target Maturities Trust on
January 31, 2000, File No. 33-19589).
(c) Amendment No. 1 to Master Distribution and Shareholder Services
Plan of American Century Government Income Trust, American Century
Investment Trust, American Century International Bond Fund, American
Century Target Maturities Trust and American Century Quantitative
Equity Funds (Advisor Class) dated August 1, 2001 (filed
electronically as Exhibit m3 to Post-Effective Amendment No. 44 to the
Registration Statement of the Registrant, on July 31, 2001, File No.
2-99222).
(d) Master Distribution and Individual Shareholder Services Plan of
American Century Government Income Trust, American Century Investment
Trust, American Century California Tax-Free and Municipal Funds,
American Century Municipal Trust, American Century Target Maturities
Trust and American Century Quantitative Equity Funds (C Class), dated
September 16, 2000 (filed electronically as Exhibit m3 to
Post-Effective Amendment No. 35 to the Registration Statement of
American Century Target Maturities Trust on April 17, 2001, File No.
2-94608).
(e) Amendment No. 1 to Master Distribution and Individual Shareholder
Services Plan of American Century Government Income Trust, American
Century Investment Trust, American Century California Tax-Free and
Municipal Funds, American Century Municipal Trust, American Century
Target Maturities Trust and American Century Quantitative Equity Funds
(C Class), dated August 1, 2001 (filed electronically as Exhibit m5 to
Post-Effective Amendment No. 44 to the Registration Statement of the
Registrant, on July 31, 2001, File No. 2-99222).
(f) Amended and Restated Multiple Class Plan of American Century
California Tax-Free and Municipal Funds, American Century Government
Income Trust, American Century International Bond Fund, American
Century Investment Trust, American Century Municipal Trust, American
Century Target Maturities Trust and American Century Quantitative
Equity Funds, dated November 20, 2000 (filed electronically as Exhibit
n to Post-Effective Amendment No. 35 to the Registration Statement of
American Century Target Maturities Trust on April 17, 2001, File No.
2-94608).
(g) Amendment No. 1 to the Amended and Restated Multiple Class Plan of
American Century California Tax-Free and Municipal Funds, American
Century Government Income Trust, American Century International Bond
Fund, American Century Investment Trust, American Century Municipal
Trust, American Century Target Maturities Trust and American Century
Quantitative Equity Funds, dated August 1, 2001 (filed electronically
as Exhibit n2 to Post-Effective Amendment No. 44 to the Registration
Statement of the Registrant, on July 31, 2001, File No. 2-99222).
(11) Opinion and Consent of Counsel as to the legality of the securities
being registered (filed electronically as Exhibit i to Post-Effective
Amendment No. 37 to the Registration Statement of the Registrant on
May 7, 1999, File No. 2-99222).
(12) Opinion and Consent as to the tax matters and consequences to
shareholders (filed electronically as Exhibit 12 on Form N-14 to the
Registration Statement, on June 29, 2001, File No. 2-99222).
(13) (a) Transfer Agency Agreement between American Century Government
Income Trust and American Century Services Corporation, dated August
1, 1997 (filed electronically as Exhibit 9 to Post-Effective Amendment
No. 33 to the Registration Statement of the Registrant on July 31,
1997, File No. 2-99222).
(b) Amendment to the Transfer Agency Agreement between American
Century Government Income Trust and American Century Services
Corporation, dated March 9, 1998 (filed electronically as Exhibit 9b
to Post-Effective Amendment No. 23 to the Registration Statement of
American Century Municipal Trust on March 26, 1998, File No. 2-91229).
(c) Amendment No. 1 to the Transfer Agency Agreement between American
Century Government Income Trust and American Century Services
Corporation, dated June 29, 1998 (filed electronically as Exhibit 9b
to Post-Effective Amendment No. 23 to the Registration Statement of
American Century Quantitative Equity Funds on June 29, 1998, File No.
33-19589).
(d) Amendment No. 2 to the Transfer Agency Agreement between American
Century Government Income Trust and American Century Services
Corporation, dated November 20, 2000 (filed electronically as Exhibit
h4 to Post-Effective Amendment No. 30 to the Registration Statement of
American Century California Tax-Free and Municipal Funds on December
29, 2000, File No. 2-82734).
(e) Amendment No. 3 to the Transfer Agency Agreement between American
Century Government Income Trust and American Century Services
Corporation dated August 1, 2001 (filed electronically as Exhibit h5
to Post-Effective Amendment No. 44 to the Registration Statement of
the Registrant, on July 31, 2001, File No. 2-99222).
(f) Credit Agreement between American Century Funds and The Chase
Manhattan Bank, as Administrative Agent, dated as of December 19, 2000
(filed electronically as Exhibit h5 to Post-Effective Amendment No. 33
to the Registration Statement of American Century Target Maturities
Trust on January 31, 2001, File No. 2-94608).
(14) (a) Consent of PricewaterhouseCoopers LLP, independent accountants is
included herein.
(b) Consent of KPMG Peat Marwick, LLP, independent auditors (filed
electronically as Exhibit 11 to Post-Effective Amendment No. 33 to the
Registration Statement of the Registrant on July 31, 1997, File No.
2-99222).
(15) Not applicable.
(16) (a) Power of Attorney, dated September 16, 2000 (filed electronically
as Exhibit j3 to Post-Effective Amendment No. 41 to the Registration
Statement of the Registrant on February 22, 2001, File No. 2-99222).
(17) (a) Form of proxy vote card is filed herein.
(b) Short-Term Treasury and Treasury (Investor and Advisor)
Prospectuses dated August 1, 2001 (filed electronically on July 31,
2001).
(c) Statement of Additional Information dated August 1, 2001 (filed
electronically on July 31, 2001).
(d) Short-Term Treasury and Treasury Annual Report dated March 31,
2001 (filed electronically on May 31, 2001).
Item 17. Undertakings.
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed on behalf of the Registrant, in the
City of Kansas City, and State of Missouri, on the 8th day of August, 2001.
AMERICAN CENTURY GOVERNMENT INCOME TRUST
By: /*/William M. Lyons
President and Principal Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
*William M. Lyons President and August 8, 2001
- --------------------------------- Principal Executive
William M. Lyons Officer
*Maryanne Roepke Senior Vice President, August 8, 2001
- --------------------------------- Treasurer and Chief
Maryanne Roepke Accounting Officer
*James E. Stowers III Director and August 8, 2001
- --------------------------------- Chairman of the Board
James E. Stowers III
*Albert A. Eisenstat Director August 8, 2001
- ---------------------------------
Albert A. Eisenstat
*Ronald J. Gilson Director August 8, 2001
- ---------------------------------
Ronald J. Gilson
*Myron S. Scholes Director August 8, 2001
- ---------------------------------
Myron S. Scholes
*Kenneth E. Scott Director August 8, 2001
- ---------------------------------
Kenneth E. Scott
*Jeanne D. Wohlers Director August 8, 2001
- ---------------------------------
Jeanne D. Wohlers
/s/Janet A. Nash
*by Janet A. Nash, Attorney in Fact (pursuant to a Power of Attorney dated
September 16, 2000).
American Century Government Income Trust
Filed: 8 Aug 01, 12:00am