N-14/A
Pre-Effective Amendment
As filed with the Securities and Exchange Commission on August 13, 2001
Registration Nos. 333-64150 and 811-7822
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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 INVESTMENT 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. 33-65170 and 811-7822) 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
PREMIUM CAPITAL RESERVE FUND
PREMIUM GOVERNMENT RESERVE 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 ................................... 6
Combined Prospectus/Proxy Statement ......................................... 7
Comparison of Certain Information Regarding the Funds ....................... 8
Primary Federal Income Tax Consequences ..................................... 9
Risk Factors ................................................................ 9
Transaction and Operating Expense Information ...............................10
Additional Information About the Proposed Transaction .......................11
Summary of Plan of Reorganization ......................................11
Description of the Securities of Premium Money Market ..................12
Reasons Supporting the Reorganization ..................................13
Federal Income Tax Consequences ........................................14
Capitalization .........................................................14
Information About the Funds .................................................14
Fundamental Investment Policies ........................................15
Information Relating to Voting Matters ......................................15
General Information ....................................................15
Voting and Revocation of Proxies .......................................15
Record Date ............................................................16
Quorum .................................................................16
Shareholder Vote Required ..............................................16
Cost of Proxy Solicitation .............................................17
Certain Shareholders ...................................................17
Appraisal Rights .......................................................17
Annual Meetings ........................................................18
Additional Information ......................................................18
Litigation .............................................................18
Other Business .........................................................18
Shareholder Inquiries ..................................................19
Management's Discussion of Fund Performance .................................19
Report Highlights ......................................................19
Our Message to You .....................................................20
Performance & Portfolio Information ....................................21
Management Q&A .........................................................22
American Century Investments
American Century Investments
P.O. Box 419200
Kansas City, Missouri 64141-6200
August 22, 2001
Dear American Century Premium Capital Reserve or Premium Government Reserve
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 either American Century Premium Capital Reserve Fund
("Capital Reserve") or American Century Premium Government Reserve Fund
("Government Reserve"), you are being asked to approve the combination of your
fund with the American Century Premium Money Market Fund, ("Premium Money
Market).
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 money market 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 Directors 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 Directors has recommended combining Capital Reserve and Government
Reserve with a new fund called Premium Money Market. This combination requires
approval of the shareholders of Capital Reserve and the shareholders of
Government Reserve. 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?
The reorganization seeks to improve operational and investment management
efficiencies by combining funds with similar investment objectives and portfolio
securities, and substantially similar investment policies, approaches and
procedures. 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 will also help eliminate
customer confusion regarding which money market fund to choose.
HOW WILL THE REORGANIZATION BE ACCOMPLISHED?
Shareholders of Capital Reserve and shareholders of Government Reserve are being
asked to approve the combination of their respective fund with Premium Money
Market according to the Agreement and Plan of Reorganization described on page
10. The reorganization will take the form of a transfer of assets by Capital
Reserve and Government Reserve in exchange for shares of Premium Money Market.
Capital Reserve and Government Reserve will then make a liquidating distribution
to their respective shareholders of the Premium Money Market 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 Premium
Money Market in an amount equal to the value of your Capital Reserve or
Government Reserve 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
Premium Money Market may be different from the net asset value of Capital
Reserve or Government Reserve, you may receive a different number of shares in
Premium Money Market than you have in Capital Reserve or Government Reserve.
After the reorganization, you will own shares of Premium Money Market rather
than shares of Capital Reserve or Government Reserve.
2 American Century Investments
WHY DID THE BOARD OF DIRECTORS APPROVE THE REORGANIZATION?
After reviewing many factors, your Board of Directors unanimously determined
that the reorganization was in the best interests of both Capital Reserve and
Government Reserve and their respective 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 and procedures and similar portfolio securities
WILL THE EXCHANGE OF CAPITAL RESERVE AND GOVERNMENT RESERVE SHARES FOR SHARES OF
PREMIUM MONEY MARKET 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 PREMIUM MONEY MARKET COMPARE TO THAT OF
CAPITAL RESERVE AND GOVERNMENT RESERVE?
The total expense ratios of the funds are substantially the same.
IS PREMIUM MONEY MARKET RISKIER THAN CAPITAL RESERVE?
No. Both funds are money market funds that seek to earn the highest level of
current income while preserving the value of your investment. Both funds invest
in very short-term U.S. government securities and high-quality, cash-equivalent
securities issued by banks, governments and corporations. Both funds operate
pursuant to Rule 2a-7 under the Investment Company Act, which provides
regulatory guidelines on quality and maturity for the funds' investments. Under
the rule, the funds (a) are permitted to buy only U.S. dollar-denominated
obligations with remaining maturities of 397 days or less; (b) maintain a
dollar-weighted average portfolio maturity of 90 days or less; and (c) restrict
their investments to high-quality obligations that present minimal credit risks.
Because of these fundamental similarities, Premium Money Market is no riskier
than Capital Reserve.
IS PREMIUM MONEY MARKET RISKIER THAN GOVERNMENT RESERVE?
Slightly. Both funds are money market funds that seek to earn the highest level
of current income while preserving the value of your investment. Both funds
invest in very short-term U.S. government securities, but Premium Money Market
is also permitted to invest in high-quality, cash-equivalent securities issued
by banks, governments and corporations. Although Premium Money Market is
permitted to invest in a broader spectrum of securities, both funds operate
pursuant to Rule 2a-7 under the Investment Company Act, which provides
regulatory guidelines on quality and maturity for the funds' investments. Under
the rule, the funds (a) are permitted to buy only U.S. dollar-denominated
obligations with remaining maturities of 397 days or less; (b) maintain a
dollar-weighted average portfolio maturity of 90 days or less; and (c) restrict
their investments to high-quality obligations that present minimal credit risks.
Because of these fundamental similarities, Premium Money Market is only slightly
riskier than Government Reserve.
Proxy/Prospectus Statement 3
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, 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 Directors 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, Capital Reserve and
Government Reserve will transfer their assets and liabilities to Premium Money
Market in exchange for the appropriate number of Premium Money Market shares.
Capital Reserve and Government Reserve will then make liquidating distributions
of the Premium Money Market shares pro rata to their respective shareholders
according to the value of each shareholder's account 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 OF CAPITAL RESERVE?
American Century Investment Management, Inc., the investment manager for Capital
Reserve, will manage the assets of Premium Money Market after the
reorganization. Beth Bunnell Hunter, Portfolio Manager, will lead the investment
management team that will manage Premium Money Market after the reorganization.
Ms. Hunter also leads the team that manages Government Reserve.
WILL THE REORGANIZATION AFFECT THE MANAGEMENT TEAM OF GOVERNMENT RESERVE?
American Century Investment Management, Inc., the investment manager for
Government Reserve, will manage the assets of Premium Money Market after the
reorganization. Beth Bunnell Hunter, Portfolio Manager, will lead the investment
management team that will manage Premium Money Market after the reorganization.
Ms. Hunter also leads the team that manages Government Reserve.
4 American Century Investments
HOW WILL THE DISTRIBUTION, PURCHASE AND REDEMPTION PROCEDURES AND EXCHANGE
RIGHTS CHANGE AS A RESULT OF THE REORGANIZATION?
They won't. Premium Money Market has the same distribution, purchase and
exchange policies and procedures as Capital Reserve and Government Reserve.
WHERE CAN SHAREHOLDERS GET MORE INFORMATION ABOUT THE FUNDS?
A copy of the Premium Money Market Prospectus accompanies this proxy statement.
In addition, the Manager's Discussion and Analysis of Fund Performance portion
of Capital Reserve's most recent Annual Report to Shareholders is included in
this document on page 19. We have included this discussion from the Capital
Reserve Annual Report because Premium Money Market will inherit the performance
information of Capital Reserve in the reorganization. If you would like a copy
of the Capital Reserve or Government Reserve Prospectus or the funds' Statements
of Additional Information or most recent annual or semiannual reports, please
call us at 1-800-331-8331.
Proxy/Prospectus Statement 5
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
AMERICAN CENTURY PREMIUM RESERVES, INC.
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 Premium Capital Reserve and Premium Government Reserve
Shareholders:
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the shareholders of the
American Century Premium Capital Reserve Fund ("Capital Reserve") and the
American Century Premium Government Reserve Fund ("Government Reserve"), both
portfolios of American Century Premium Reserves, Inc., 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 Capital
Reserve and Government Reserve to the American Century Premium Money Market
Fund, an investment portfolio of American Century Investment Trust ("Premium
Money Market"), in exchange for shares in Premium Money Market; and
(b) the distribution of Premium Money Market shares to the shareholders of
Capital Reserve and Government Reserve according to their 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 Directors of American
Century Premium Reserves, Inc. 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
6 American Century Investments
COMBINED PROSPECTUS/PROXY STATEMENT
AMERICAN CENTURY PREMIUM RESERVES, INC.
August 22, 2001
This Combined Prospectus/Proxy Statement is furnished in connection with the
solicitation of votes by the Board of Directors of American Century Premium
Reserves, Inc. on behalf of its Premium Capital Reserve Fund ("Capital Reserve")
and Premium Government Reserve Fund ("Government Reserve"), 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 Capital Reserve and Government Reserve
are being asked to approve the combination of their respective fund into the
American Century Premium Money Market Fund, a series of American Century
Investment Trust ("Premium Money Market").
The funds are similarly managed, diversified, open-end mutual funds that invest
in a 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 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 Premium
Money Market 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 Premium Money
Market, dated August 8, 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 Capital Reserve, Government Reserve, and
Premium Money Market 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.
Proxy/Prospectus Statement 7
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 Capital Reserve, Government Reserve, Premium Money
Market, 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 Capital Reserve and Government Reserve with Premium Money Market. For
additional information about the funds, see the section titled "Information
About the Funds" starting on page 14.
PREMIUM GOVERNMENT CAPITAL
MONEY MARKET RESERVE RESERVE
- ----------------------------------------------------------------------------------------------------------------
Type of Fund Money Market Fund Same as Premium Same as Premium
Money Market Money Market
Investment Objective Seeks to earn the highest Same as Premium Same as Premium
level of current income Money Market Money Market
while preserving the value
of your investment
Investment Policies Invests in high-quality, Invests in very Same as Premium
cash-equivalent securities short-term U.S. Money Market
including direct obligations government securities
of the U.S. government and including direct
its agencies and obligations of the
instrumentalities, as well U.S. government and
as short-term bank and its agencies and
corporate obligations that instrumentalities.
are payable in U.S. dollars.
Weighted Average 397 days or less Same as Premium Same as Premium
Portfolio Maturity Money Market Money Market
Credit Quality High-quality Same as Premium Same as Premium
Money Market Money Market
Investor Class Total 0.46% 0.45% 0.46%
Expense Ratio
Distribution Policy Distributions from net Same as Premium Same as Premium
income and capital gains Money Market Money Market
are declared daily and paid
on the last business day
of each month.
Purchases and See pages 9-12 of Same as Premium Same as Premium
Exchanges accompanying Prospectus Money Market Money Market
Redemption Policies See page 9-12 of Same as Premium Same as Premium
accompanying Prospectus Money Market Money Market
8 American Century Investments
PREMIUM GOVERNMENT CAPITAL
MONEY MARKET RESERVE RESERVE
- -------------------------------------------------------------------------------------------------------------
Investment Advisor American Century Same as Premium Same as Premium
Investment Management, Money Market Money Market
Inc. ("ACIM")
Transfer Agent American Century Services Same as Premium Same as Premium
Corporation ("ACSC") Money Market Money Market
Distributor American Century Same as Premium Same as Premium
Investment Services, Inc. Money Market Money Market
("ACIS")
Custodians J.P. Morgan Chase and Co. Same as Premium Same as Premium
and Commerce Bank, N.A. Money Market Money Market
Independent Auditors PricewaterhouseCoopers LLP Deloitte & Touche LLP Deloitte & Touche LLP
PRIMARY FEDERAL INCOME TAX CONSEQUENCES
The exchange of Capital Reserve and Government Reserve shares for Premium Money
Market shares in the reorganization will be tax-free to shareholders of Capital
Reserve, Government Reserve and Premium Money Market. We will obtain a tax
opinion confirming that the reorganization will not be a taxable event for
shareholders of the funds for federal income tax purposes. A shareholder's
aggregate tax basis and holding period for Premium Money Market shares received
in the reorganization will be identical to the aggregate tax basis and holding
period for the Capital Reserve or Government Reserve shares exchanged in the
transaction. The tax consequences of the reorganization are described in more
detail on page 14 of this Combined Prospectus/Proxy Statement.
RISK FACTORS
Each of the funds is a money market fund that seeks to earn the highest level of
current income while preserving the value of your investment. Each fund invests
in very short-term U.S. government securities, and Capital Reserve and Premium
Money Market also invest in high-quality, cash-equivalent securities issued by
banks, governments and corporations. Each of the funds operates pursuant to Rule
2a-7 under the Investment Company Act, which provides regulatory guidelines on
quality and maturity for the funds' investments. Under the rule, the funds (a)
are permitted to buy only U.S. dollar-denominated obligations with remaining
maturities of 397 days or less; (b) maintain a dollar-weighted average portfolio
maturity of 90 days or less; and (c) restrict their investments to high-quality
obligations that present minimal credit risks. Because of these similarities,
the funds have similar risks. Because very short-term U.S. government securities
and other cash-equivalent securities are among the safest securities available,
the interest they pay is among the lowest for income-paying securities.
Accordingly, the yield on these funds will likely be lower than funds that
invest in longer-term or lower-quality securities.
Proxy/Prospectus Statement 9
TRANSACTION AND OPERATING
EXPENSE INFORMATION
The information below compares various shareholder transaction and annual fund
operating expenses of Capital Reserve and Government Reserve as of their most
recent fiscal year end (March 31, 2001) with Premium Money Market Fund. After
the reorganization, the expense levels of the surviving fund will be the same as
those shown for Premium Money Market (Pro Forma).
ANNUAL OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Distribution Total Annual
Management and Service Other Fund Operating
Fee (12b-1) Fees Expenses(1) Expenses
- ------------------------------------------------------------------------------------------------------
Premium Government Reserve 0.45% None 0.00% 0.45%
- ------------------------------------------------------------------------------------------------------
Premium Capital Reserve 0.45% None 0.01% 0.46%
- ------------------------------------------------------------------------------------------------------
Premium Money Market (Pro Forma) 0.45%(2) None 0.01% 0.46%
(1) Other expenses include the fees and expenses of the funds' independent
directors and their legal counsel, as well as interest. Other expenses have
been restated to include anticipated portfolio insurance expenses for the
current fiscal year.
(2) The fund has a stepped-fee schedule. As a result, the fund's management
fee rate generally decreases as fund assets increase.
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
- -------------------------------------------------------------------------------
Premium Government Reserve $46 $144 $252 $566
- -------------------------------------------------------------------------------
Premium Capital Reserve $47 $148 $257 $579
- -------------------------------------------------------------------------------
Premium Money Market (Pro Forma) $47 $148 $257 $579
[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.
10 American Century Investments
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. Consummation of the reorganization is contingent upon approval by the
shareholders of both Capital Reserve and Government Reserve. 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 13 in the enclosed Premium Money Market Prospectus. The assets
and liabilities of Capital Reserve will then be transferred to Premium Money
Market 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. The assets and liabilities of
Government Reserve will also be transferred to Premium Money Market 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 CAPITAL RESERVE AND GOVERNMENT
RESERVE. Immediately after the exchange of their assets for the Premium Money
Market shares, Capital Reserve and Government Reserve will distribute pro rata
all of the shares received in the exchange to their respective shareholders of
record at the Effective Time. All of the outstanding shares of Capital Reserve
and Government Reserve will be redeemed and canceled and their stock books
closed. As a result, Capital Reserve and Government Reserve shareholders will
become shareholders of Premium Money Market.
SHAREHOLDER APPROVAL. Consummation of the reorganization requires and is
contingent upon approval of Capital Reserve shareholders and Government Reserve
shareholders.
Proxy/Prospectus Statement 11
REPRESENTATIONS AND WARRANTIES. The Agreement contains representations and
warranties made by Capital Reserve and Government Reserve to Premium Money
Market concerning Capital Reserve's and Government Reserve's respective
formation and existence under applicable state law, each fund's power to
consummate the reorganization, each fund's qualification as a "regulated
investment company" under applicable tax law, the registration of each fund's
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 Capital
Reserve and Government Reserve 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 14 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 another 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 Premium Money Market.
DESCRIPTION OF THE SECURITIES OF PREMIUM MONEY MARKET
Premium Money Market is a series of shares offered by American Century
Investment 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 Investment 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 Capital Reserve and Government Reserve, Premium Money Market currently
offers one class of shares, the Investor Class, although it may offer additional
classes in the future. The Investor Class of shares of Premium Money Market has
no up-front charges, commissions or 12b-1 fees.
Your Board of Directors believes there are no material differences between the
rights of a Capital Reserve or Government Reserve shareholder and the rights of
a Premium Money Market 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.
12 American Century Investments
Unless required by the Investment Company Act of 1940, it is not necessary for
Premium Money Market 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 Directors that, among other reasons, because
the current market demand for money market funds is generally weak and Capital
Reserve and Government Reserve 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 Directors 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
Directors reviewed the expense ratios of the 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 Directors also noted that the same portfolio
management team manages both funds. During the course of its deliberations, the
Board of Directors noted that the expenses of the Reorganization will be borne
by ACIM.
The Board of Directors concluded that the Reorganization is in the best
interests of the shareholders of Capital Reserve and Government Reserve, and
that no dilution of value would result to the shareholders of the funds from the
Reorganization. The Board of Directors, including those who are not "interested
Proxy/Prospectus Statement 13
persons" (as defined in the 1940 Act), approved the Plan and recommended that
the shareholders of Capital Reserve and the shareholders of Government Reserve
vote to approve the Reorganization.
FOR THE REASONS DISCUSSED ABOVE, THE BOARD OF DIRECTORS 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, Capital Reserve, Government Reserve, or Premium
Money Market, (ii) your basis in the Premium Money Market shares that you
receive will be the same in the aggregate as your basis in the Capital Reserve
or Government Reserve shares held by you immediately prior to the
reorganization, and (iii) your holding period for the Premium Money Market
shares will include your holding period for your Capital Reserve or Government
Reserve 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 them 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 Capital Reserve and
Government Reserve 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 Capital Reserve and Government Reserve shareholders,
respectively, 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 for Capital Reserve or Government Reserve. The
distributions generally will be taxable to shareholders to the extent ordinary
income and capital gains distributions are taxable to such shareholders.
CAPITALIZATION (unaudited)
Premium Premium Premium Money Market
As of March 31, 2001 Capital Reserve Government Reserve Pro Forma Combined
- --------------------------------------------------------------------------------------------
Investor Class
Net Assets $526,794,021 $98,222,429 $625,016,450
Shares Outstanding 526,790,454 98,209,443 624,999,897
Net Asset Value Per Share $1.00 $1.00 $1.00
INFORMATION ABOUT THE FUNDS
Complete information about Premium Money Market, Capital Reserve, and Government
Reserve is contained in their Prospectuses. The Premium Money Market Prospectus
is included with this Prospectus/Proxy Statement. A copy of the Capital Reserve
and Government Reserve Prospectus dated August 1, 2001, may be obtained at no
charge by calling us at 1-800-331-8331. The content of the Prospectuses is
incorporated into this document by reference. Below is a list of types of
information about the funds and the pages in the Prospectuses where the
information can be found.
14 American Century Investments
INFORMATION ABOUT THE
FOLLOWING ITEMS CAN BE FOUND ON THE FOLLOWING PAGES
- -----------------------------------------------------------------------------------------------
Capital Reserve Government Reserve Premium Money Market
Investor Class Investor Class Investor Class
- -----------------------------------------------------------------------------------------------
An Overview of the Funds 2 2 2
Fees and Expenses 4 4 3
Objectives, Strategies and Risks 5-6 5-6 4
Management 9-10 9-10 7-8
Investing with American Century 11-14 11-14 9-12
Share Price and Distributions 15 15 13
Taxes 17-18 17-18 14-15
Multiple Class Information N/A N/A N/A
Financial Highlights 19, 21 19, 20 N/A
FUNDAMENTAL INVESTMENT POLICIES
Fundamental investment policies contained in the Premium Money Market Statement
of Additional Information dated August 8, 2001, and the investment objectives
of the fund 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 Directors of Capital Reserve and
Government Reserve. 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
Proxy/Prospectus Statement 15
us obtain a quorum for the meeting and avoid the cost of additional proxy
solicitation 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 Directors 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 Capital Reserve and Government Reserve 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:
Capital Reserve 498,020,360
Government Reserve 99,768,158
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
33-1/3% of the outstanding shares of Capital Reserve and 33-1/3% of the
outstanding shares of Government Reserve 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 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 both Capital Reserve and Government Reserve
present at the Special Meeting in person or by proxy in accordance with the
provisions of their Articles of Incorporation and the requirements of the
Investment Company Act of 1940. The term "majority of the outstanding shares"
means more than 50% of each fund's outstanding shares present at the Special
Meeting in person or by proxy.
16 American Century Investments
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.
Approval of the reorganization by shareholders of Premium Money Market 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 Capital Reserve, Government
Reserve, or Premium Money Market. The percentage of shares to be owned after
consummation of the reorganization is based upon their holdings and the
outstanding shares of the 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
- -------------------------------------------------------------------------------------------------
Premium Capital Reserve
Chase Manhattan Bank NA 53,821,559 11% 9%
Trustee Olin Corp Employee Ownership Plan
New York, New York
Premium Government Reserve
Chase Manhattan Bank NA TR 24,681,754 25% 4%
Lorillard Inc. Hourly Paid Employees PSP & Trust
New York, New York
Rancho San Antonio Retirement Services Inc. 10,847,469 11% 2%
Cupertino, California
Cornelia M. Small 8,817,834 9% 1%
New York, New York
As of July 13, 2001, the directors and officers of the issuer of Capital Reserve
and Government Reserve, as a group, owned less than 1% of the outstanding shares
of Capital Reserve and Government Reserve. As of July 13, 2001, the trustees and
officers of the issuer of Premium Money Market, as a group, owned less than 1%
of the outstanding shares of Premium Money Market.
APPRAISAL RIGHTS
Shareholders of Capital Reserve and Government Reserve are not entitled to any
rights of share appraisal under the funds' Articles of Incorporation, or under
the laws of the State of Maryland.
Proxy/Prospectus Statement 17
Shareholders have, however, the right to redeem their Capital Reserve and
Government Reserve fund shares until the reorganization. Thereafter,
shareholders may redeem the Premium Money Market shares they received in the
reorganization at Premium Money Market's net asset value as determined in
accordance with its then-current prospectus.
ANNUAL MEETINGS
Premium Money Market does not intend to hold annual meetings of shareholders.
Shareholders of Premium Money Market 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 Investment Trust will assist in shareholder
communications on such matters.
Capital Reserve and Government Reserve do not intend to hold an annual meeting
of shareholders this year for the election of directors or the ratification of
the appointment of auditors.
ADDITIONAL INFORMATION
Information about Capital Reserve and Government Reserve is incorporated into
this document by reference from their Prospectus and Statement of Additional
Information, each dated August 1, 2001, and information about Premium Money
Market is incorporated into this document by reference from its Prospectus and
Statement of Additional Information, each dated August 8, 2001. A copy of the
Premium Money Market Prospectus accompanies this document, and a copy of the
Capital Reserve or Government Reserve Prospectus, the funds' Statements of
Additional Information or the funds' most recent annual or semiannual reports
may be obtained without charge by calling us at 1-800-331-8331.
Reports and other information filed by Capital Reserve, Government Reserve and
Premium Money Market 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
Capital Reserve, Government Reserve and Premium Money Market are not involved in
any litigation or proceeding.
OTHER BUSINESS
The Board of Directors 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
directors' intention that proxies that do not contain specific restrictions to
the contrary will be
18 American Century Investments
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.
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 --
PREMIUM MONEY MARKET
Provided that the reorganization is approved by shareholders, Premium Money
Market will inherit the performance history of Premium Capital Reserve.
Accordingly, the following are excerpts of management's discussion of fund
performance from the Annual Report of Premium Capital Reserve dated March 31,
2001. For a complete copy of the Premium Capital Reserve report, please call us
at 1-800-331-8331.
REPORT HIGHLIGHTS
* Premium Capital Reserve provided better-than-average yields and returns
during a volatile year in stocks and the economy.
* Money market yields fell sharply during the last several months of the fiscal
year along with stock, economic growth, and interest rates.
* Yields on corporate money market securities fell even further, as companies
issued fewer money market instruments, preferring instead to lock in lower
long-term borrowing costs.
* With the economy slowing, we concentrated on improving the fund's credit
quality.
* Our credit research team deserves recognition for steering us clear of
troubled corporate money market issuers, including California's distressed
utilities.
* Looking ahead, we think the Federal Reserve is about done cutting interest
rates. If we're right, money market yields should stabilize in the coming
months.
PREMIUM CAPITAL RESERVE
Total Returns: AS OF 3/31/01
6 Months 2.99%(1)
1 Year 6.18%
7-Day Current Yield: 4.94%
Net Assets: $526.8 Million
Inception Date: 4/1/93
Ticker Symbol: TCRXX
(1) Not annualized.
Proxy/Prospectus Statement 19
OUR MESSAGE TO YOU
The fiscal year ended March 31, 2001, saw the economy and financial markets do a
remarkable about-face. For much of 2000, the U.S. economy was strong, while
interest rates and money market yields rose. But the Federal Reserve cut
interest rates dramatically after stocks and economic growth dropped off sharply
late last year.
This sharp volatility provides an excellent reminder of the value of portfolio
diversification over time. For the last several years, diversification hasn't
seemed to pay. And with nearly minute-by-minute analysis available to investors,
it's easy to lose sight of the fact that investing is an exercise measured in
years, even decades. But historically, investors who take this diversified,
long-term approach have been well rewarded for their patience through all types
of markets.
And just as we hope our shareholders follow their investing blueprint even in
trying times, we continue to stick to our disciplines in all our funds here at
American Century. This consistent management approach helped the Premium Capital
Reserve money market fund provide shareholders stability of principal with
better-than-average yields and returns last year.
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,
/*/James E. Stowers, Jr. /*/James E. Stowers III
James E. Stowers, Jr. James E. Stowers III
Chairman of the Board and Founder Co-Chairman of the Board
20 American Century Investments
PERFORMANCE & PORTFOLIO INFORMATION
TOTAL RETURNS AS OF MARCH 31, 2001
PREMIUM 90-DAY TREASURY MONEY MARKET INSTRUMENT FUNDS(2)
CAPITAL RESERVE BILL INDEX AVERAGE RETURN FUND'S RANKING
================================================================================
6 MONTHS(1) 2.99% 2.74% 2.74% --
1 YEAR 6.18% 5.80% 5.68% 28 OUT OF 368
================================================================================
AVERAGE ANNUAL RETURNS
3 YEARS 5.50% 5.18% 5.04% 28 OUT OF 300
5 YEARS 5.40% 5.17% 5.01% 28 OUT OF 257
LIFE OF FUND 5.00% 4.92% 4.76%(3) 25 OUT OF 173(3)
The fund's inception date was 4/1/93.
(1) Returns for periods less than one year are not annualized.
(2) According to Lipper Inc., an independent mutual fund ranking service.
(3) Since 4/30/93, the date nearest the fund's inception for which return data
are available.
PORTFOLIO AT A GLANCE
3/31/01 3/31/00
NUMBER OF SECURITIES 64 54
WEIGHTED AVERAGE
MATURITY 70 DAYS 59 DAYS
EXPENSE RATIO 0.45% 0.45%
YIELDS AS OF MARCH 31, 2001
7-DAY CURRENT YIELD 4.94%
7-DAY EFFECTIVE YIELD 5.07%
Past performance does not guarantee future results.
Money market funds are neither insured nor guaranteed by the FDIC or any other
government agency.
Yields will fluctuate, and although the fund seeks to preserve the value of your
investment at $1 per share, it is possible to lose money by investing in the
fund. The 7-day current yield more closely reflects the current earnings of the
fund than the total return.
Proxy/Prospectus Statement 21
MANAGEMENT Q&A
An interview with Beth Bunnell Hunter, a portfolio manager on the Premium
Capital Reserve fund investment team.
HOW DID PREMIUM CAPITAL RESERVE PERFORM DURING THE FISCAL YEAR ENDED MARCH 31,
2001?
The fund provided shareholders with solid performance and stability of principal
during a volatile year in U.S. financial markets. What's more, the fund's
average annual returns rank in the top 10% of the money market funds tracked by
Lipper Inc. for the one- and three-year periods ended March 31. In addition,
Premium Capital Reserve's 7-day effective yield of 5.07% at the end of March was
higher than the 4.54% average effective yield of the Lipper group.
WHAT WERE THE BIGGEST MARKET FACTORS AFFECTING PERFORMANCE?
The fiscal year was a tale of two halves, with economic growth and interest
rates rising sharply for much of 2000. But the investing environment changed
dramatically later in the year, as stocks and the economy went into a free fall,
while the Federal Reserve (the Fed) did an about-face on interest rates
beginning in 2001.
WHAT DID THAT MEAN FOR THE FUND'S YIELD?
Unfortunately, those changes caused a big decline in money market yields late
last year. With the economy slowing, investors started to push bond and money
market yields down, figuring it was only a matter of time before the Fed cut
short-term lending rates to kick-start growth.
In addition, many corporations decided to lock in lower borrowing costs by
issuing more long-term debt and fewer money market securities. This came at a
time when investors were fleeing stocks for the stability of money market funds.
Less supply and more demand for corporate money market securities pushed yields
down even further.
HOW DID YOU MANAGE THE FUND IN THAT ENVIRONMENT?
With the economy slowing, we worked on increasing the fund's credit quality. One
way we did that was by focusing on some of the highest-rated corporate money
market securities. In addition, we should mention that our team of credit
analysts did a good job steering the fund away from money market securities
issued by California's distressed utilities.
Another way we enhanced the fund's credit quality was by adding government
agency debt. This trade helped performance because yields on government agency
securities were relatively attractive as a result of a big increase in agency
supply.
WHAT'S YOUR OUTLOOK FOR THE FUND AND MONEY MARKET YIELDS?
We think most of the Fed's rate-cutting cycle is already behind us. As a result,
we think money market yields could stabilize in the coming months. Because of
that outlook we'll look to add high-quality one-year securities if their
relative values and yields improve later this year.
22 American Century Investments
PORTFOLIO COMPOSITION BY MATURITY
(as of March 31, 2001)
1-30 days 39%
31-90 days 40%
91-180 days 11%
More than 180 days 10%
PORTFOLIO COMPOSITION BY MATURITY
(as of September 30, 2000)
1-30 days 40%
31-90 days 30%
91-180 days 17%
More than 180 days 13%
Proxy/Prospectus Statement 23
Notes
24 American Century Investments
Notes
Proxy/Prospectus Statement 25
SH-BKT-26477 0108
AMERICAN CENTURY PREMIUM RESERVES, INC.
American Century Investments
4500 Main Street
P.O. Box 419200
Kansas City, Missouri 64141-6200
1-800-331-8331
AMERICAN CENTURY INVESTMENT 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 Premium Reserves, Inc.
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 Premium Money Market is contained in and incorporated
herein by reference to its Statement of Additional Information dated August 8,
2001. As a new fund, Premium Money Market did not have any financial
information as of the fiscal year end.
Further information about Premium Capital Reserve and Premium Government
Reserve 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 Premium Capital Reserve and
Premium Government Reserve 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 Premium Capital Reserve and Premium Government Reserve are
being asked to approve or disapprove an Agreement and Plan of Reorganization
(the "Reorganization Agreement") dated as of August 8, 2001 between American
Century Premium Reserves, Inc. and American Century Investment Trust and the
transactions contemplated thereby. The Reorganization Agreement contemplates the
transfer of substantially all of the assets and liabilities of Premium Capital
Reserve and Premium Government Reserve to Premium Money Market in exchange for
full and fractional shares representing interests in Premium Money Market. The
shares issued by Premium Money Market will have an aggregate net asset value
equal to the aggregate net asset value of the shares of Premium Capital Reserve
or Premium Government Reserve that are outstanding immediately before the
effective time of the Reorganization.
Following the exchange, Premium Capital Reserve and Premium Government Reserve
will each make a liquidating distribution to their respective shareholders of
the Premium Money Market shares received in the exchange. Each shareholder
owning shares of Premium Capital Reserve or Premium Government Reserve at the
effective time of the reorganization will receive shares of Premium Money Market
of equal value, plus the right to receive any unpaid dividends that were
declared before the Effective Time of the Reorganization on the Premium Capital
Reserve or Premium Government Reserve 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
Premium Capital Reserve (Fund 1) / Premium Government Reserve (Fund 2)
Proforma Combined Schedule of Portfolio Investments March 31, 2001
(Unaudited)
Proforma Proforma
Fund 1 Fund 2 Combined Fund 1 Fund 2 Combined
Principal Principal Principal Amortized Amortized Amortized
Amount Amount Amount Security Description Cost Cost Cost
- ------------ ------------- ----------- ---------------------------- -------------- ------------ ------------
COMMERCIAL PAPER(1) - 57.9%
$4,000,000 $4,000,000 Abbey National North $3,998,133 $3,998,133
America, 5.60%, 4/04/01
5,000,000 5,000,000 AEGON Funding Corp., 4,991,720 4,991,720
5.42%, 4/12/01 (Acquired
1/9/01, Cost $4,929,992)(2)
12,000,000 12,000,000 Allianz of America Inc., 11,945,891 11,945,891
4.82%-5.34%, 4/19/01-5/18/01
(Acquired 2/14/01-3/16/01, Cost
$11,892,331)(2)
13,500,000 13,500,000 American Family Financial 13,287,549 13,287,549
Services, 4.84%-5.34%,
6/1/01-8/17/01
5,000,000 5,000,000 Banco Brasesco SA, Grand 4,959,875 4,959,875
Cayman Branch, 6.42%,
5/16/01
24,726,000 24,726,000 Black Forest Funding, 24,705,701 24,705,701
5.24%-5.32%, 4/2/01-4/16/01
(Acquired 3/2/01-3/14/01, Cost
$24,615,781)(2)
10,000,000 10,000,000 Citicorp, 5.06%, 5/14/01 9,939,561 9,939,561
15,000,000 15,000,000 Corporate Receivables 14,956,782 14,956,782
Corp., 4.97%-6.17%, 4/5/01-5/23/01
(Acquired 1/2/01-3/5/01, Cost
$14,807,176)(2)
20,000,000 20,000,000 Credit Suisse First Boston 19,749,348 19,749,348
Inc., 4.91%-5.09%, 6/13/01-
7/16/01 (Acquired 2/1/01-3/12/01,
Cost $19,654,712)(2)
11,000,000 11,000,000 Dakota Certificates 10,928,154 10,928,154
(Citibank), 5.02%-5.25%, 4/6/01-
5/22/01 (Acquired 2/28/01-3/2/01,
Cost $10,881,654)(2)
3,000,000 3,000,000 Demir Funding Corp., 2,995,154 2,995,154
6.46%, 4/10/01
4,500,000 4,500,000 Diageo plc, 4.97%-5.20%, 4,470,299 4,470,299
5/8/01-6/6/01 (Acquired 2/13/01-
3/1/01, Cost 4,443,513)(2)
20,000,000 20,000,000 Emerald Certificates, 19,869,804 19,869,804
5.00%-5.38%, 5/1/01-6/4/01
(Acquired 2/1/01-3/2/01, Cost
$19,743,638)(2)
16,500,000 16,500,000 Falcon Asset Securities 16,413,154 16,413,154
Corp., 4.85%-5.30%, 4/3/01-
6/15/01 (Acquired 3/5/01-
3/29/01, Cost $16,381,198)(2)
13,000,000 13,000,000 Fortis Funding LLC, 6.44%, 12,979,071 12,979,071
4/10/01 (Acquired 10/10/00,
Cost $12,579,074)(2)
6,900,000 6,900,000 General Electric Capital 6,889,842 6,889,842
Corp., 5.05%-5.15%, 4/3/01-
4/18/01
4,500,000 4,500,000 GMAC Mortgage Corp., 4,499,339 4,499,339
5.29%, 4/02/01
3,000,000 3,000,000 Halogen Capital Co., 2,994,848 2,994,848
5.62%, 4/12/01 (Acquired
1/17/01, Cost $2,960,192)(2)
25,000,000 25,000,000 Morgan Stanley Dean 24,884,681 24,884,681
Witter & Co., 4.70%-6.05%,
4/9/01-6/28/01
16,000,000 16,000,000 Newcastle Certificates, 15,915,277 15,915,277
5.06%-5.30%, 5/02/01-5/15/01
(Acquired 2/12/01-3/30/01, Cost
$15,855,877)(2)
17,000,000 17,000,000 Old Line Funding Corp., 16,957,214 16,957,214
4.96%-5.05%, 4/4/01-5/11/01
(Acquired 3/26/01-3/27/01, Cost
$16,943,975)(2)
14,500,000 14,500,000 Receivables Capital Corp., 14,394,424 14,394,424
4.98%-5.22%, 4/5/01-7/27/01
(Acquired 1/5/01-3/28/01, Cost
$14,322,009)(2)
10,000,000 10,000,000 Rio Tinto America Inc., 9,899,911 9,899,911
4.70%-4.93%, 6/08/01-6/22/01
(Acquired 3/5/01-3/21/01, Cost
$9,874,243)(2)
4,000,000 4,000,000 Royal Bank of Canada, 3,941,150 3,941,150
5.35%, 7/09/01
10,000,000 10,000,000 Spintab-Swedmortgage AB, 9,906,331 9,906,331
4.90%-5.17%, 6/6/01-6/8/01
20,500,000 20,500,000 Tannehill Capital Company 20,414,788 20,414,788
LLC, 4.77%-5.53%, 4/9/01-
6/15/01 (Acquired 1/11/01-3/19/01
Cost $20,245,974)(2)
10,000,000 10,000,000 UBS Finance Holdings, 9,921,383 9,921,383
5.34%, 5/24/01
5,000,000 5,000,000 Verizon Network Funding, 4,991,872 4,991,872
5.32%, 4/12/01
15,000,000 15,000,000 WCP Funding Inc., 4.69%- 14,922,562 14,922,562
5.40%, 4/6/01-6/22/01 (Acquired
1/30/01-3/21/01, Cost
$14,850,164)(2)
23,943,000 23,943,000 Windmill Funding Corp., 23,840,317 23,840,317
4.81%-5.34%, 4/16/01-6/6/01
(Acquired 2/15/01-3/19/01, Cost
$23,731,442)(2) ------------- ------------
Total COMMERCIAL PAPER 360,564,135 360,564,135
------------- ------------
U.S. GOVERNMENT AGENCY SECURITIES - 15.5%
2,000,000 2,000,000 FFCB, 5.125%, 4/02/01 1,999,990 1,999,990
4,000,000 2,000,000 6,000,000 FHLB , 5.050%, 2/05/02 4,001,090 2,000,724 6,001,814
2,000,000 2,000,000 FHLB , 6.750%, 2/15/02 2,025,205 2,025,205
250,000 250,000 FHLB, 4.98%, 11/23/01 249,462 249,462
7,000,000 3,000,000 10,000,000 FHLB, 5.500%, 8/13/01 7,014,539 3,008,752 10,023,291
900,000 900,000 FHLB, 6.35%, 10/26/01 905,107 905,107
5,000,000 5,000,000 FHLB, VRN, 4.800%, 4,999,825 4,999,825
4/04/01, resets weekly off
the 3-month T-Bill rate plus
0.49% with no caps
2,000,000 2,000,000 4,000,000 FHLMC, 5.000%, 11/9/01 1,988,413 1,988,413 3,976,826
3,000,000 3,000,000 FHLMC, 5.400%, 4/12/01 2,999,691 2,999,691
5,000,000 5,000,000 FNMA, 5.25%, 2/21/02 5,000,000 5,000,000
1,065,000 1,065,000 FNMA, 5.300%, 5/17/01 1,063,359 1,063,359
5,000,000 6,000,000 11,000,000 FNMA, 5.400%, 1/18/02 5,000,000 6,005,279 11,005,279
2,000,000 2,000,000 FNMA, 6.375%, 12/21/01 2,006,976 2,006,976
2,000,000 2,000,000 FNMA, 7.250%, 5/25/01 2,000,000 2,000,000
5,000,000 5,000,000 SLMA MTN, VRN, 4.740%, 4,998,274 4,998,274
4/03/01, resets weekly off
the 3-month T-Bill rate plus
0.43% with no caps
5,000,000 5,000,000 SLMA MTN, VRN, 4.740%, 5,000,000 5,000,000
4/03/01, resets weekly off
the 3-month T-Bill rate plus
0.43% with no caps
4,000,000 4,000,000 SLMA MTN, VRN, 6.170%, 4,000,000 4,000,000
4/03/01, resets weekly off
the 3-month T-Bill rate plus
0.28% with a floor of 6.17%
and no caps
5,000,000 5,000,000 SLMA MTN, VRN, 4.800%, 5,001,525 5,001,525
4/03/01, resets weekly off
the 3-month T-Bill rate plus
0.49% with no caps
15,000,000 3,000,000 18,000,000 SLMA MTN, VRN, 5.890%, 15,000,000 3,000,000 18,000,000
4/03/01, resets weekly off
the 3-month T-Bill rate with a
floor of 5.89% and no caps
5,000,000 5,000,000 SLMA, VRN, 6.300%, 5,000,000 5,000,000
4/03/01, resets weekly off
the 3-month T-Bill rate plus
0.41% with a floor of 6.30%
and no caps ------------- ------------- ------------
Total U.S. GOVERNMENT AGENCY SECURITIES 39,158,611 57,098,013 96,256,624
------------- ------------- ------------
CORPORATE BONDS - 7.4%
10,000,000 10,000,000 Bayer Corp., 4.75%, 9,997,203 9,997,203
3/19/02
5,000,000 5,000,000 Eli Lilly & Co., 4.70%, 5,000,000 5,000,000
3/22/02
10,140,000 10,140,000 General Motors Acceptance 10,205,484 10,205,484
Corp., 6.375%, 9/28/01-12/1/01
1,900,000 1,900,000 General Motors Acceptance 1,899,773 1,899,773
Corp., VRN, 5.67%,
4/23/01, resets quarterly
off the 3-month LIBOR plus
0.02% with no caps
3,000,000 3,000,000 Jackson National Life 3,000,000 3,000,000
Insurance Co., VRN, 5.41%,
4/09/01, resets monthly
off the 1-month LIBOR plus
0.15% with no caps
(Acquired 6/9/00, Cost
$3,000,000)(2)
5,000,000 5,000,000 Transamerica Asset 5,000,000 5,000,000
Funding Corp., VRN, 5.64%,
5/01/01, resets quarterly
off the 3-month LIBOR plus
0.11% with no caps
(Acquired 11/9/99, Cost
$5,000,000)(2)
6,000,000 6,000,000 Travelers Insurance 6,000,000 6,000,000
Company (The), VRN,
5.09%, 4/23/01, resets
monthly off the 1-month
LIBOR plus 0.03% with no
caps (Acquired 5/22/00,
Cost $6,000,000)(2)
5,000,000 5,000,000 U.S. Bank NA Minnesota, 5,001,275 5,001,275
VRN, 5.05%, 4/18/01,
resets monthly off the
1-month LIBOR plus 0.07%
with no caps ------------- ------------- ------------
Total CORPORATE BONDS 46,103,735 46,103,735
------------- ------------- ------------
U.S. GOVERNMENT AGENCY DISCOUNT NOTES(1) - 7.4%
5,000,000 5,000,000 FFCB Discount Notes, 4,784,231 4,784,231
4.49%, 3/13/02
3,000,000 3,000,000 FHLMC Discount Notes, 2,909,545 2,909,545
4.740%, 11/16/01
1,500,000 1,500,000 FNMA Discount Notes, 1,448,284 1,448,284
4.580%, 12/28/01
36,700,000 36,700,000 SLMA Discount Notes, 36,694,770 36,694,770
5.130%, 4/02/01
------------- ------------- ------------
Total U.S. GOVERNMENT AGENCY DISCOUNT NOTES 4,784,231 41,052,599 45,836,830
------------- ------------- ------------
CERTIFICATES OF DEPOSIT - 6.9%
5,000,000 5,000,000 Abbey National Treasury 5,000,059 5,000,059
Services PLC, 7.33%,
5/16/01
5,000,000 5,000,000 Bayerische Landesbank 4,999,999 4,999,999
Girozentrale (New York),
6.33%, 6/11/01
5,000,000 5,000,000 Canadian Imperial Bank of 5,000,000 5,000,000
Commerce, 4.78%, 6/18/01
5,000,000 5,000,000 Commerzbank AG, 5.76%, 5,000,043 5,000,043
4/09/01
3,000,000 3,000,000 National Westminster Bank 2,999,997 2,999,997
PLC (New York), 6.87%,
4/03/01
5,000,000 5,000,000 Rabobank Nederland 4,999,215 4,999,215
NV/NY, 5.27%, 1/14/02
10,000,000 10,000,000 UBS AG, 6.89%-6.97%, 9,998,946 9,998,946
8/2/01-8/20/01
5,000,000 5,000,000 Westdeutsche 5,000,000 5,000,000
Landesbank, 7.10%, 5/03/01 ------------- ------------
Total CERTIFICATES OF DEPOSIT 42,998,259 42,998,259
------------- ------------
MUNICIPAL SECURITIES - 3.5%
2,600,000 2,600,000 California Infrastructure & 2,600,000 2,600,000
Economic Development
Bank Industrial Rev., Series
2000 B, (Bonny Doon),
VRDN, 5.20%, 4/05/01
3,000,000 3,000,000 Casa Grande Arizona Industrial 3,000,000 3,000,000
Development Auth. Rev.,
Series 2000 B, (Aztec Pulp),
VRDN, 5.18%, 4/05/01
5,105,000 5,105,000 Cook County Illinois Industrial 5,105,000 5,105,000
Development Rev., Series
1999 B, (Devorahco LLC),
VRDN, 5.16%, 4/05/01
(Acquired 3/23/01, Cost
$5,105,000)(2)
8,000,000 8,000,000 Riverside County California, VRDN, 8,000,000 8,000,000
5.20%, 4/04/01
3,120,000 3,120,000 Washington State Housing 3,120,000 3,120,000
Finance Commission, Series
1997 B, (Glenbrooke
Apartments), VRDN, 5.15%,
4/05/01 ------------- ------------
Total MUNICIPAL SECURITIES 21,825,000 21,825,000
------------- ------------
ASSET-BACKED SECURITIES(3) - 0.8%
142,455 142,455 Associates Automobile 142,455 142,455
Receivables Trust, Series
2000-1, Class A1 SEQ,
6.85%, 6/15/01
70,075 70,075 Household Automotive 70,075 70,075
Trust, Series 2000-2, Class
A1 SEQ, 6.81%, 7/16/01
5,000,000 5,000,000 Household Automotive 4,999,393 4,999,393
Trust, Series 2001-1, Class
A1 SEQ, 4.99%, 3/18/02 ------------- ------------
Total ASSET-BACKED SECURITIES 5,211,923 5,211,923
------------- ------------
BANK NOTES - 0.6%
4,000,000 4,000,000 Bank of America N.A., 4,000,000 4,000,000
7.20%, 5/04/01 ------------- ------------
Total BANK NOTES 4,000,000 4,000,000
------------- ------------
Total Investment Securities - 100.0% $524,645,894 $98,150,612 $622,796,506
============= ============= ============
Percentages indicated are based on combined investment securities
of $622,796,506.
FFCB = Federal Farm Credit Bank
FHLB = Federal Home Loan Bank
FHLMC = Federal Home Loan Mortgage Corporation
FNMA = Federal National Mortgage Association
LIBOR = London Interbank Offered Rate
MTN = Medium Term Note
resets = The frequency with which a security's coupon changes, based on
current market conditions or an underlying index. The more frequently a
security resets, the less risk the investor is taking that the coupon will
vary significantly from current market rates.
SEQ = Sequential Payer
SLMA = Student Loan Marketing Association
VRDN = Variable Rate Demand Note. Interest reset date is indicated and used
in calculating the weighted average portfolio maturity. Rate shown is
effective March 31, 2001.
VRN = Variable Rate Note. Interest reset date is indicated and used in
calculating the weighted average portfolio maturity. Rate shown is
effective March 31, 2001.
(1) The rates for commercial paper and discount notes are the yield to
maturity at purchase.
(2) Security was purchased under Rule 144A or Section 4(2) of the Securities
Act of 1933 or is a private placement and, unless registered under the Act
or exempted from registration, may only be sold to qualified institutional
investors. The aggregate value of restricted securities at March 31, 2001,
was $279,454,265, which represented 44.7% of combined net assets.
Restricted securities considered illiquid represent 2.2% of combined
net assets.
(3) Final maturity indicated. Expected remaining maturity used for purposes
of calculating the weighted average maturity.
See notes to financial statements.
Premium Capital Reserve
Premium Government Reserve
Pro Forma Combining Statement of Assets and Liabilities
MARCH 31, 2001 (UNAUDITED)
PREMIUM PREMIUM Pro Forma
CAPITAL GOVERNMENT Combined
RESERVE RESERVE Adjustments (Note 1)
ASSETS
Investment securities, at value (amortized cost
and cost for federal income tax purposes) $524,645,894 $98,150,612 $ - $622,796,506
Interest receivable 2,867,757 647,515 - 3,515,272
Prepaid portfolio insurance 39,856 - 9,051 (a) 48,907
--------------- --------------- --------------- ---------------
527,553,507 98,798,127 9,051 626,360,685
--------------- --------------- --------------- ---------------
LIABILITIES
Disbursements in excess of demand deposit cash 561,274 539,108 - 1,100,382
Accrued management fees 197,811 36,516 - 234,327
Payable for directors' fees and expenses 401 74 - 475
Accrued expenses and other liabilities - - 9,051 (a) 9,051
--------------- --------------- --------------- ---------------
759,486 575,698 9,051 1,344,235
--------------- --------------- --------------- ---------------
Net Assets $526,794,021 $98,222,429 $0 $625,016,450
=============== =============== =============== ===============
CAPITAL SHARES, $0.01 PAR VALUE
Authorized 1,000,000,000 1,000,000,000 - 2,000,000,000
=============== =============== =============== ===============
Outstanding 526,790,454 98,209,443 - 624,999,897
=============== =============== =============== ===============
Net Asset Value Per Share $1.00 $1.00 - $1.00
=============== =============== =============== ===============
NET ASSETS CONSIST OF:
Capital (par value and paid-in surplus) $526,790,454 $98,209,443 - $624,999,897
Accumulated undistributed net realized
gain on investment transactions 3,567 12,986 - 16,553
--------------- --------------- --------------- ---------------
$526,794,021 $98,222,429 $0 $625,016,450
=============== =============== =============== ===============
(a) Adjustment for portfolio insurance that will apply to the combined assets. This represents 10 months of prepaid portfolio insurance based on the effective date of the portfolio insurance of February 1, 2001 and statement date of March 31, 2001.
Premium Capital Reserve
Premium Government Reserve
Pro Forma Combining Statement of Operations
YEAR ENDED MARCH 31, 2001 (UNAUDITED)
PREMIUM PREMIUM Pro Forma
CAPITAL GOVERNMENT Combined
RESERVE RESERVE Adjustments (Note 1)
INVESTMENT INCOME
Income:
Interest $26,691,307 $5,959,187 $ - $32,650,494
------------ ------------ ------------ ------------
Expenses:
Management fees 1,860,437 424,151 - 2,284,588
Directors' fees and expenses 2,535 564 - 3,099
Portfolio insurance and other expenses 7,684 - 1,579 (a) 9,263
------------ ------------ ------------ ------------
1,870,656 424,715 1,579 2,287,687
------------ ------------ ------------ ------------
Net investment income 24,820,651 5,534,472 (1,579) 30,362,807
------------ ------------ ------------ ------------
Net realized gain (loss) on investments 3,579 15,680 - 19,259
------------ ------------ ------------ ------------
Net Increase in Net Assets
Resulting from Operations $24,824,230 $5,550,152 ($1,579) $30,382,066
============ ============ ============ ============
(a) Adjustment for portfolio insurance applied to the
combined assets. This represents amortization since
the effective date of the portfolio insurance on
Feburary 1, 2001.
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 Premium
Government Reserve and Premium Capital Reserve at and for the year ended
March 31, 2001. The Pro Forma Combining Schedule of Investments and Pro
Forma Combining Statement of Assets and Liabilities assumes the combination
was consummated after the close of business on March 31, 2001. The Pro
Forma Combining Statement of Operations assumes the combination was
consummated at the beginning of the fiscal 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, Premium
Government Reserve, in exchange for shares of the surviving fund, for
purposes of maintaining the financial statements and performance, Premium
Capital Reserve. The funds are being reorganized as funds issued by
American Century Investment Trust in the name of the Premium Money
Market Fund.
In accordance with accounting principles generally accepted in the United
States of America, 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 at amortized cost, which
approximates current value. When valuations are not readily available,
securities are valued at fair value as determined in accordance with
procedures adopted by the Board of Directors.
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
- ----------------- ----------------- -------------- -------------------
Premium
Money Market 624,999,897 526,790,454 98,209,443
AMERICAN CENTURY INVESTMENT TRUST
PART C OTHER INFORMATION
Item 15. Indemnification.
As stated in Article VII, Section 3 of the Declaration of Trust,
incorporated herein by reference to Exhibit 1 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 II, Section 16 of the Registrant's Amended and
Restated Bylaws, dated March 9, 1998, appearing as Exhibit b2 to
Post-Effective Amendment No. 23 to the Registration Statement of
American Century Municipal Trust on March 26, 1998, File No. 2-91229.
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 Declaration of Trust, restated March 1, 1998
and amended March 1, 1999 (filed electronically as Exhibit a to
Post-Effective Amendment No. 7 to the Registration Statement on April
1, 1999, File No. 33-65170).
(b) Amendment No. 1 to the Declaration of Trust dated March 6, 2001
(filed electronically as Exhibit a2 to Post-Effective Amendment No. 12
to the Registration Statement on April 19, 2001, File No. 33-65170).
(c) Amendment No. 2 to the Declaration of Trust (filed electronically
as Exhibit a3 to Post-Effective Amendment No. 15 to the Registration
Statement, on August 7, 2001, File No. 33-65170).
(2) Amended and Restated Bylaws dated March 9, 1998 (filed electronically
as Exhibit b2 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
Investment 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
American Century Government Income Trust on July 31, 1997, File No.
2-99222).
(b) Amendment to the Management Agreement (Investor Class) between
American Century Investment 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 Investment 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
American Century Government Income Trust on July 28, 1999, File No.
2-99222).
(d) Amendment No. 1 to the Management Agreement (Investor Class)
between American Century Investment 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 Investment Trust and American Century
Investment Management, Inc. (filed electronically as Exhibit d5 to
Post-Effective Amendment No. 44 to the Registration Statement of
American Century Government Income Trust, on July 31, 2001, File No.
2-99222).
(f) Management Agreement (Advisor Class) between American Century
Investment Trust and American Century Investment Management, Inc.,
dated August 1, 1997 and amended as of June 1, 1998 (filed
electronically as Exhibit d3 to Post-Effective Amendment No. 9 to the
Registration Statement of the Registrant on June 30, 1999, File No.
33-65170).
(g) Amendment No. 1 to the Management Agreement (Advisor Class)
between American Century Investment Trust and American Century
Investment Management, Inc. (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 Investment 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 American Century Government Income Trust, 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 American Century Government Income
Trust, on July 31, 2001, File No. 2-99222).
(k) Management Agreement (Institutional Class) between American
Century Quantitative Equity Funds and American Century Investment
Management, Inc., dated August 1, 1997 (filed electronically as an
exhibit to Post-Effective Amendment No. 20 to the Registration
Statement of American Century Quantitative Equity Funds on August 29,
1997, File No. 33-19589).
(l) Amendment to Management Agreement (Institutional Class) between
American Century Quantitative Equity Funds and American Century
Investment Management, Inc., dated July 1, 1998 (filed electronically
as Exhibit d6 to Post-Effective Amendment No. 27 to the Registration
Statement of American Century Quantitative Equity Funds on April 27,
2000, File No. 33-19589).
(m) Amendment No. 1 to the Management Agreement (Institutional Class)
between American Century Quantitative Equity Funds, American Century
Investment Trust and American Century Investment Management, Inc.
dated August 1, 2001 (filed electronically as Exhibit d13 to
Post-Effective Amendment No. 15 to the Registration Statement, on
August 7, 2001, file No. 33-65170).
(7) (a) Distribution Agreement between American Century Investment 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 Investment 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 Investment 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 Investment 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 Investment 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 Investment 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 B8e 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 B8 to Post-Effective Amendment No. 31 to the Registration
Statement of the American Century Government Income Trust on February
7, 1997, File No. 2-99222).
(c) Amendment to 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 to Post-Effective Amendment No. 32 to the Registration Statement of
American Century Target Maturities Trust, filed on January 31, 2000,
File No. 2-94608).
(b) Amendment 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 June 29, 1998 (filed electronically
as Exhibit m2 to Post-Effective Amendment No. 32 to the Registration
Statement of American Century Target Maturities Trust, filed on
January 31, 2000, File No. 2-94608).
(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) (filed electronically as Exhibit m3 to
Post-Effective Amendment No. 44 to the Registration Statement of
American Century Government Income Trust, 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
American Century Government Income Trust, 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 Funds, 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
Funds, 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 American Century Government Income Trust, on July 31,
2001, File No. 2-99222).
(11) Opinion and Consent as to the legality of the securities being
registered (filed electronically as Exhibit i to Post-Effective
Amendment No. 7 to the Registration Statement of the Registrant on May
7, 1999, File No. 33-65170).
(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. 33-65170.
(13) (a) Transfer Agency Agreement between American Century Investment
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 American Century Government Income
Trust on July 31, 1997, File No. 2-99222).
(b) Amendment to the Transfer Agency Agreement between American
Century Investment Trust and American Century Services Corporation,
dated March 9, 1998 (filed electronically as Exhibit B9b 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 Investment Trust and American Century Services Corporation,
dated June 29, 1998 (filed electronically as Exhibit B9b 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 Investment 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 Investment 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
American Century Government Income Trust, 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 (filed electronically as
Exhibit j1 to Post-Effective Amendment No. 15 to the Registration
Statement of the Registrant, on August 7, 2001, File No. 33-65170).
(b) Consent of Deloitte & Touche LLP is included herein.
(c) Consent of KPMG Peat Marwick, LLP, independent auditors (filed
electronically as Exhibit b11 to Post-Effective Amendment No. 5 to the
Registration Statement of the Registrant on June 27, 1997, File No.
33-65170).
(15) Not applicable.
(16) Power of Attorney, dated September 16, 2000 (filed electronically
as Exhibit j3 to Post-Effective Amendment No. 11 to the Registration
Statement of the Registrant on February 22, 2001, File No. 33-65170).
(17) (a) Form of proxy vote card is filed herein.
(b) Premium Money Market Prospectus dated August 8, 2001 (filed
electronically as part of Post-Effective Amendment No. 15 to the
Registration Statement of the Registrant on August 7, 2001, File No.
33-65170).
(c) Statement of Additional Information dated August 8, 2001 (filed
electronically as part of Post-Effective Amendment No. 15 to the
Registration Statement of the Registrant on August 7, 2001, File No.
33-65170).
(d) Premium Capital Reserve and Premium Government Reserve Prospectus
dated August 1, 2001 (filed electronically as part of Post-Effective
Amendment No. 12 to the Registration Statement of American Century
Premium Reserves, Inc. on July 31, 2001, File No. 33-57430).
(e) Statement of Additional Information dated August 1, 2001 (filed
electronically as part of Post-Effective Amendment No. 12 to the
Registration Statement of American Century Premium Reserves, Inc. on
July 31, 2001, File No. 33-57430).
(f) Premium Capital Reserve and Premium Government Reserve Annual
Report (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 its behalf by the undersigned,
thereunto duly authorized, in the City of Kansas City, State of Missouri on the
13th day of August, 2001.
AMERICAN CENTURY INVESTMENT TRUST (Registrant)
By: /*/William M. Lyons
William M. Lyons
President and Principal Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
has been signed below by the following persons in the capacities and on the
dates indicated.
*William M. Lyons President and August 13, 2001
- --------------------------------- Principal Executive
William M. Lyons Officer
*Maryanne Roepke Senior Vice President, August 13, 2001
- --------------------------------- Treasurer and Chief
Maryanne Roepke Accounting Officer
*James E. Stowers III Director and August 13, 2001
- --------------------------------- Chairman of the Board
James E. Stowers III
*Albert A. Eisenstat Director August 13, 2001
- ---------------------------------
Albert A. Eisenstat
*Ronald J. Gilson Director August 13, 2001
- ---------------------------------
Ronald J. Gilson
*Myron S. Scholes Director August 13, 2001
- ---------------------------------
Myron S. Scholes
*Kenneth E. Scott Director August 13, 2001
- ---------------------------------
Kenneth E. Scott
*Jeanne D. Wohlers Director August 13, 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).
