AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
AMERICAN CENTURY PREMIUM RESERVES, INC.
and
AMERICAN CENTURY INVESTMENT TRUST
TABLE OF CONTENTS
1. Transfer of Assets of Premium Capital Reserve.........................1
2. Liquidating Distribution and Termination of Limited-Term Bond.........2
3. Valuation Time........................................................3
4. Certain Representations, Warranties and Agreements of ACMF............3
5. Certain Representations, Warranties and Agreements of ACGIT...........6
6. Shareholder Action on Behalf of Limited-Term Bond.....................7
7. Registration Statement and Proxy Solicitation Materials...............8
8. Effective Time of the Reorganization..................................8
9. ACGIT's Conditions....................................................9
10. ACMF's Conditions....................................................10
11. Tax Documents........................................................11
12. Further Assurances...................................................11
13. Termination of Representations and Warranties........................12
14. Termination of Agreement.............................................12
15. Amendment and Waiver.................................................12
16. Governing Law........................................................13
17. Successors and Assigns...............................................13
18. Beneficiaries........................................................13
19. ACGIT Liability......................................................13
20. ACMF Liability.......................................................13
21. Notices..............................................................14
22. Expenses.............................................................14
23. Entire Agreement.....................................................14
24. Counterparts.........................................................14
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION made as of __________, 2001 by and
between American Century Premium Reserves, Inc., a Maryland corporation
("ACPR"), and American Century Investment Trust, a Massachusetts business trust
("ACIT").
WHEREAS, the parties desire that substantially all of the assets and
liabilities of the Premium Capital Reserve portfolio of ACPR ("Capital Reserve")
and substantially all of the assets and liabilities of the Premium Government
Reserve portfolio of ACPR ("Government Reserve") be transferred to, and be
acquired and assumed by, the Premium Money Market portfolio of ACIT ("Premium
Money Market") in exchange for shares of Premium Money Market which shall
thereafter be distributed by ACIT to the holders of shares of Capital Reserve
and Government Reserve, all as described in this Agreement (the
"Reorganization");
WHEREAS, the parties intend that the transfer of assets, assumption of
liabilities and distribution of shares in Capital Reserve and Government Reserve
be treated as a tax-free reorganization under Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the parties intend that in connection with the Reorganization,
Capital Reserve and Government Reserve shall be terminated and de-registered as
described in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and subject to the terms and conditions hereof, and
intending to be legally bound hereby, ACPR and ACIT agree as follows:
1. TRANSFER OF ASSETS OF CAPITAL RESERVE.
1.1. At the Effective Time (as defined in Section 9), ACPR shall
transfer and convey to ACIT, on behalf of Premium Money
Market, all property of every description, and all interests,
rights, privileges and powers of Capital Reserve (such assets,
the "Capital Reserve Assets"). Simultaneously, ACIT shall, on
behalf of Premium Money Market, accept the Capital Reserve
Assets and assume all liabilities, whether accrued, absolute,
contingent or otherwise, of Capital Reserve reflected in the
calculation of Capital Reserve's net asset value (the "Capital
Reserve Liabilities"). As a result, at and after the Effective
Time: (i) all assets of Capital Reserve shall become and be
the assets of Premium Money Market; and (ii) all known
liabilities of Capital Reserve reflected as such in the
calculation of Capital Reserve's net asset value shall attach
to Premium Money Market as aforesaid and may thenceforth be
enforced against Premium Money Market to the extent as if the
same had been incurred by it. Without limiting the generality
of the foregoing, the Capital Reserve Assets shall include all
property and assets of any nature whatsoever, including
without limitation, all cash, cash equivalents, securities,
other investments, claims and receivables (including dividend
and interest receivables) owned by Capital Reserve, and any
deferred or prepaid expenses shown as an asset on Capital
Reserve's books at the Effective Time, and all good will,
other intangible property and books and records belonging to
Capital Reserve. Recourse by any person for the Capital
Reserve Liabilities assumed by Premium Money Market shall, at
and after the Effective Time, be limited to Premium Money
Market.
1.2 In exchange for the transfer of the Capital Reserve Assets and
the assumption of the Capital Reserve Liabilities, ACIT shall
simultaneously issue at the Effective Time to Capital Reserve
a number of full and fractional shares (to the third decimal
place) of Premium Money Market, all determined and adjusted as
provided in this Agreement. The number of shares of Premium
Money Market so issued will have an aggregate net asset value
equal to the value of the Capital Reserve Assets, less the
Capital Reserve Liabilities, that are represented by shares of
Capital Reserve, the holders of which shall receive shares of
Premium Money Market, all determined and adjusted as provided
in this Agreement.
1.3. The net asset values of shares of Premium Money Market and of
Capital Reserve shall be determined as of the Valuation Time,
as defined in Section 5.
1.4. The net asset value of shares of Premium Money Market shall be
computed in the manner set forth in Premium Money Market's
then-current prospectus under the Securities Act of 1933, as
amended (the "1933 Act"). The net asset value of the Capital
Reserve Assets to be transferred by ACPR shall be computed by
ACPR and shall be subject to adjustment by the amount, if any,
agreed to by ACIT and ACPR. In determining the value of the
securities transferred by Capital Reserve to Premium Money
Market, each security shall be priced in accordance with the
policies and procedures of ACIT as described in its
then-current prospectus and statement of additional
information and adopted by ACIT's Board of Trustees, which are
and shall be consistent with the policies now in effect for
ACPR. Price quotations and the security characteristics
relating to establishing such quotations shall be determined
by ACIT, provided that such determination shall be subject to
the approval of ACPR.
2. TRANSFER OF ASSETS OF GOVERNMENT RESERVE.
2.1. At the Effective Time (as defined in Section 9), ACPR shall
transfer and convey to ACIT, on behalf of Premium Money
Market, all property of every description, and all interests,
rights, privileges and powers of Government Reserve (such
assets, the "Government Reserve Assets"). Simultaneously, ACIT
shall, on behalf of Premium Money Market, accept the
Government Reserve Assets and assume all liabilities, whether
accrued, absolute, contingent or otherwise, of Government
Reserve reflected in the calculation of Government Reserve's
net asset value (the "Government Reserve Liabilities"). As a
result, at and after the Effective Time: (i) all assets of
Government Reserve shall become and be the assets of Premium
Money Market; and (ii) all known liabilities of Government
Reserve reflected as such in the calculation of Government
Reserve's net asset value shall attach to Premium Money Market
as aforesaid and may thenceforth be enforced against Premium
Money Market to the extent as if the same had been incurred by
it. Without limiting the generality of the foregoing, the
Government Reserve Assets shall include all property and
assets of any nature whatsoever, including without limitation,
all cash, cash equivalents, securities, other investments,
claims and receivables (including dividend and interest
receivables) owned by Government Reserve, and any deferred or
prepaid expenses shown as an asset on Government Reserve's
books at the Effective Time, and all good will, other
intangible property and books and records belonging to
Government Reserve. Recourse by any person for the Government
Reserve Liabilities assumed by Premium Money Market shall, at
and after the Effective Time, be limited to Premium Money
Market.
2.2 In exchange for the transfer of the Government Reserve Assets
and the assumption of the Government Reserve Liabilities, ACIT
shall simultaneously issue at the Effective Time to Government
Reserve a number of full and fractional shares (to the third
decimal place) of Premium Money Market, all determined and
adjusted as provided in this Agreement. The number of shares
of Premium Money Market so issued will have an aggregate net
asset value equal to the value of the Government Reserve
Assets, less the Government Reserve Liabilities, that are
represented by shares of Government Reserve, the holders of
which shall receive shares of Premium Money Market, all
determined and adjusted as provided in this Agreement.
2.3. The net asset values of shares of Premium Money Market and of
Government Reserve shall be determined as of the Valuation
Time, as defined in Section 5.
2.4. The net asset value of shares of Premium Money Market shall be
computed in the manner set forth in Premium Money Market's
then-current prospectus under the Securities Act of 1933, as
amended (the "1933 Act"). The net asset value of the
Government Reserve Assets to be transferred by ACPR shall be
computed by ACPR and shall be subject to adjustment by the
amount, if any, agreed to by ACIT and ACPR. In determining the
value of the securities transferred by Government Reserve to
Premium Money Market, each security shall be priced in
accordance with the policies and procedures of ACIT as
described in its then-current prospectus and statement of
additional information and adopted by ACIT's Board of
Trustees, which are and shall be consistent with the policies
now in effect for ACPR. Price quotations and the security
characteristics relating to establishing such quotations shall
be determined by ACIT, provided that such determination shall
be subject to the approval of ACPR.
3. LIQUIDATING DISTRIBUTION AND TERMINATION OF CAPITAL RESERVE.
Immediately after the Effective Time, Capital Reserve shall distribute
in the complete liquidation pro rata to the record holders of its
shares at the Effective Time the shares of Premium Money Market to be
received by the record holders of Capital Reserve. In accordance with
instructions it receives from ACPR, ACIT shall record on its books the
ownership of shares of Premium Money Market by the record holders of
shares of Capital Reserve. All of the issued and outstanding shares of
Capital Reserve shall be redeemed and canceled on the books of ACPR at
the Effective Time and shall thereafter represent only the right to
receive the shares of Premium Money Market, and Capital Reserve's
transfer books shall be closed permanently. As soon as practicable
after the Effective Time, ACPR shall take all steps as shall be
necessary and proper to effect the dissolution of Capital Reserve under
federal and state law. After the Effective Time, ACPR shall not conduct
any business with respect to Capital Reserve except in connection with
Capital Reserve's liquidation and dissolution.
4. LIQUIDATING DISTRIBUTION AND TERMINATION OF GOVERNMENT RESERVE.
Immediately after the Effective Time, Government Reserve shall
distribute in the complete liquidation pro rata to the record holders
of its shares at the Effective Time the shares of Premium Money Market
to be received by the record holders of Government Reserve. In
accordance with instructions it receives from ACPR, ACIT shall record
on its books the ownership of shares of Premium Money Market by the
record holders of shares of Government Reserve. All of the issued and
outstanding shares of Government Reserve shall be redeemed and canceled
on the books of ACPR at the Effective Time and shall thereafter
represent only the right to receive the shares of Premium Money Market,
and Government Reserve's transfer books shall be closed permanently. As
soon as practicable after the Effective Time, ACPR shall take all steps
as shall be necessary and proper to effect the dissolution of
Government Reserve under federal and state law. After the Effective
Time, ACPR shall not conduct any business with respect to Government
Reserve except in connection with Government Reserve's liquidation and
dissolution.
5. VALUATION TIME.
Subject to Section 1.4 and 2.4 hereof, the Valuation Time for the
Reorganization shall be on such date as may be agreed by the duly
authorized officers of both parties hereto.
4. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF ACPR.
ACPR, on behalf of itself, Capital Reserve and Government Reserve,
represents and warrants to, and agrees with, ACIT as follows:
4.1. ACPR is a Maryland corporation duly created pursuant to its
Articles of Incorporation for the purpose of acting as a
management investment company under the 1940 Act and is
validly existing under the laws of, and duly authorized to
transact business in, the State of Maryland. Capital Reserve
and Government Reserve each is registered with the Securities
and Exchange Commission (the "SEC") as an open-end management
investment company under the Investment Company Act of 1940,
as amended (the "1940 Act"), and such registration is in full
force and effect.
4.2. ACPR has power to own all of its properties and assets and,
subject to the approval of shareholders referred to herein, to
carry out and consummate the transactions contemplated hereby,
and has all necessary federal, state and local authorizations
to carry on its business as now being conducted and to
consummate the transactions contemplated by this Agreement.
4.3. This Agreement has been duly authorized, executed and
delivered by ACPR, and represents ACPR's valid and binding
contract, enforceable in accordance with its terms, subject as
to enforcement to bankruptcy, insolvency, reorganization,
arrangement, moratorium, and other similar laws of general
applicability relating to or affecting creditors' rights and
to general principles of equity. The execution and delivery of
this Agreement does not and will not, and the consummation of
the transactions contemplated by this Agreement will not,
violate ACPR's Articles of Incorporation, By-laws, or any
agreement or arrangement to which it is a party or by which it
is bound.
4.4. Capital Reserve has elected to qualify and has qualified as a
"regulated investment company" under Subtitle A, Chapter 1,
Subchapter M, Part I of the Code, as of and since its first
taxable year; has been a regulated investment company at all
times since the end of its first taxable year when it so
qualified; and qualifies and shall continue to qualify as a
regulated investment company until the Effective Time.
4.5. Government Reserve has elected to qualify and has qualified as
a "regulated investment company" under Subtitle A, Chapter 1,
Subchapter M, Part I of the Code, as of and since its first
taxable year; has been a regulated investment company at all
times since the end of its first taxable year when it so
qualified; and qualifies and shall continue to qualify as a
regulated investment company until the Effective Time.
4.6. All federal, state, local and foreign income, profits,
franchise, sales, withholding, customs, transfer and other
taxes, including interest, additions to tax and penalties
(collectively, "Taxes") relating to the Capital Reserve Assets
or properly shown to be due on any return filed by Capital
Reserve with respect to taxable periods ending on or prior to,
and the portion of any interim period up to, the date hereof
have been fully and timely paid or provided for; and there are
no levies, liens, or other encumbrances relating to Taxes
existing, threatened or pending with respect to the Capital
Reserve Assets.
4.7. All federal, state, local and foreign income, profits,
franchise, sales, withholding, customs, transfer and other
taxes, including interest, additions to tax and penalties
(collectively, "Taxes") relating to the Government Reserve
Assets or properly shown to be due on any return filed by
Government Reserve with respect to taxable periods ending on
or prior to, and the portion of any interim period up to, the
date hereof have been fully and timely paid or provided for;
and there are no levies, liens, or other encumbrances relating
to Taxes existing, threatened or pending with respect to the
Government Reserve Assets.
4.8. The financial statements of Capital Reserve for the fiscal
year ended March 31, 2001, audited by Deloitte & Touche
LLP, independent auditors, copies of which have been
previously furnished to ACIT, present fairly the financial
position of Capital Reserve as of March 31, 2001 and the
results of its operations for the year then ending, in
conformity with generally accepted accounting principles.
4.9. The financial statements of Government Reserve for the fiscal
year ended March 31, 2001, audited by Deloitte & Touche
LLP, independent auditors, copies of which have been
previously furnished to ACIT, present fairly the financial
position of Government Reserve as of March 31, 2001 and the
results of its operations for the year then ending, in
conformity with generally accepted accounting principles.
4.10. Prior to the Valuation Time, Capital Reserve shall have
declared a dividend or dividends, with a record date and
ex-dividend date prior to such Valuation Time, which, together
with all previous dividends, shall have the effect of
distributing to its shareholders all of its investment company
taxable income, if any, for the taxable periods or years ended
on or before Capital Reserve's most recent fiscal year end,
and for the period from said date to and including the
Effective Time (computed without regard to any deduction for
dividends paid), and all of its net capital gain, if any,
realized in taxable periods or years ended on or Capital
Reserve's fiscal year end and for the period from said date to
and including the Effective Time. Such dividends will be paid
to shareholders of Capital Reserve prior to the Effective
Date.
4.11. Prior to the Valuation Time, Government Reserve shall have
declared a dividend or dividends, with a record date and
ex-dividend date prior to such Valuation Time, which, together
with all previous dividends, shall have the effect of
distributing to its shareholders all of its investment company
taxable income, if any, for the taxable periods or years ended
on or before Government Reserve's most recent fiscal year end,
and for the period from said date to and including the
Effective Time (computed without regard to any deduction for
dividends paid), and all of its net capital gain, if any,
realized in taxable periods or years ended on or Government
Reserve's fiscal year end and for the period from said date to
and including the Effective Time. Such dividends will be paid
to shareholders of Government Reserve prior to the Effective
Date.
4.12. At both the Valuation Time and the Effective Time, there shall
be no known liabilities of Capital Reserve, whether accrued,
absolute, contingent or otherwise, not reflected in the net
asset value per share of its outstanding shares.
4.13. At both the Valuation Time and the Effective Time, there shall
be no known liabilities of Government Reserve, whether
accrued, absolute, contingent or otherwise, not reflected in
the net asset value per share of its outstanding shares.
4.14. There are no legal, administrative or other proceedings
pending or, to ACPR's knowledge threatened, against ACPR or
Capital Reserve which could result in liability on the part of
Capital Reserve.
4.15. There are no legal, administrative or other proceedings
pending or, to ACPR's knowledge threatened, against ACPR or
Government Reserve which could result in liability on the part
of Government Reserve.
4.16. Subject to the approval of shareholders, at both the Valuation
Time and the Effective Time, ACPR shall have full right, power
and authority to assign, transfer and deliver the Capital
Reserve Assets and, upon delivery and payment for the Capital
Reserve Assets as contemplated herein, Premium Money Market
shall acquire good and marketable title thereto, free and
clear of all liens and encumbrances, and subject to no
restrictions on the ownership or transfer thereof (except as
imposed by federal or state securities laws).
4.17. Subject to the approval of shareholders, at both the Valuation
Time and the Effective Time, ACPR shall have full right, power
and authority to assign, transfer and deliver the Government
Reserve Assets and, upon delivery and payment for the
Government Reserve Assets as contemplated herein, Premium
Money Market shall acquire good and marketable title thereto,
free and clear of all liens and encumbrances, and subject to
no restrictions on the ownership or transfer thereof (except
as imposed by federal or state securities laws).
4.18. No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by
ACPR of the transactions contemplated by this Agreement,
except such as may be required under the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"),
the 1940 Act, the rules and regulations under those Acts, and
state securities laws.
4.19. Insofar as the following relate to ACPR, the registration
statement filed by ACIT on Form N-14 relating to the shares of
Premium Money Market that will be registered with the SEC
pursuant to this Agreement, which, without limitation, shall
include a proxy statement of ACPR and the prospectus of ACIT
with respect to the transactions contemplated by this
Agreement, and any supplement or amendment thereto or to the
documents contained or incorporated therein by reference (the
"N-14 Registration Statement"), on the effective date of the
N-14 Registration Statement, at the time of any shareholders'
meeting referred to herein and at the Effective Time: (i)
shall comply in all material respects with the provisions of
the 1933 Act, the 1934 Act and the 1940 Act, the rules and
regulations thereunder, and state securities laws, and (ii)
shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
provided, however, that the representations and warranties in
this subsection shall apply only to statements in or omissions
from the N-14 Registration Statement made in reliance upon and
in conformity with information furnished by ACPR for use in
the N-14 Registration Statement.
4.20. All of the issued and outstanding shares of Capital Reserve
have been duly and validly issued, are fully paid and
non-assessable, and were offered for sale and sold in
conformity with all applicable federal and state securities
laws, and no shareholder of Capital Reserve has any preemptive
right of subscription or purchase in respect of such shares.
4.21. All of the issued and outstanding shares of Government Reserve
have been duly and validly issued, are fully paid and
non-assessable, and were offered for sale and sold in
conformity with all applicable federal and state securities
laws, and no shareholder of Government Reserve has any
preemptive right of subscription or purchase in respect of
such shares.
5. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF ACIT.
ACIT, on behalf of itself and Premium Money Market, represents and
warrants to, and agrees with, ACPR as follows:
5.1. ACIT is a Massachusetts business trust duly created pursuant
to a Declaration of Trust for the purpose of acting as a
management investment company under the 1940 Act and is
validly existing under the laws of, and duly authorized to
transact business in, the Commonwealth of Massachusetts,
Premium Money Market is registered with the SEC as an open-end
management investment company under the 1940 Act and such
registration is in full force and effect.
5.2. ACIT has the power to own all of its properties and assets and
to carry out and consummate the transactions contemplated
herein, and has all necessary federal, state and local
authorizations to carry on its business as now being conducted
and to consummate the transactions contemplated by this
Agreement.
5.3. This Agreement has been duly authorized, executed and
delivered by ACIT, and represents ACIT's valid and binding
contract, enforceable in accordance with its terms, subject as
to enforcement to bankruptcy, insolvency, reorganization,
arrangement, moratorium, and other similar laws of general
applicability relating to or affecting creditors' rights and
to general principles of equity. The execution and delivery of
this Agreement did not, and the consummation of the
transactions contemplated by this Agreement will not, violate
ACIT's Declaration of Trust or By-laws or any agreement or
arrangement to which it is a party or by which it is bound.
5.4. Premium Money Market intends to qualify as a "regulated
investment company" under Subtitle A, Chapter 1, Subchapter M,
Part I of the Code.
5.5. As a new fund, Premium Money Market has no audited financial
statements for its most recent fiscal year.
5.6. At both the Valuation Time and the Effective Time, there shall
be no known liabilities of Premium Money Market whether
accrued, absolute, contingent or otherwise, not reflected in
the net asset value per share of its shares to be issued
pursuant to this Agreement.
5.7. There are no legal, administrative or other proceedings
pending or, to its knowledge, threatened against ACIT or
Premium Money Market that could result in liability on the
part of ACIT or Premium Money Market.
5.8. No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by
ACIT of the transactions contemplated by this Agreement,
except such as may be required under the 1933 Act, the 1934
Act, the 1940 Act, the rules and regulations under those Acts,
and state securities laws.
5.9. Insofar as the following relate to ACIT, the N-14 Registration
Statement on its effective date, at the time of any
shareholders' meetings referred to herein and at the Effective
Time: (i) shall comply in all material respects with the
provisions of the 1933 Act, the 1934 Act and the 1940 Act, the
rules and regulations thereunder, and state securities laws,
and (ii) shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading; provided, however, that the representations and
warranties in this subsection shall apply only to statements
in or omissions from the N-14 Registration Statement made in
reliance upon and in conformity with information furnished by
ACIT for use in the N-14 Registration Statement.
5.10. The shares of Premium Money Market to be issued and delivered
to Capital Reserve for the account of record holders of shares
of Capital Reserve pursuant to the terms hereof shall have
been duly authorized as of the Effective Time and, when so
issued and delivered, shall be registered under the 1933 Act,
duly and validly issued, fully paid and non-assessable, and no
shareholder of ACIT shall have any preemptive right of
subscription or purchase in respect thereto.
5.11. The shares of Premium Money Market to be issued and delivered
to Government Reserve for the account of record holders of
shares of Government Reserve pursuant to the terms hereof
shall have been duly authorized as of the Effective Time and,
when so issued and delivered, shall be registered under the
1933 Act, duly and validly issued, fully paid and
non-assessable, and no shareholder of ACIT shall have any
preemptive right of subscription or purchase in respect
thereto.
6. SHAREHOLDER ACTION ON BEHALF OF CAPITAL RESERVE.
6.1. As soon as practicable after the effective date of the N-14
Registration Statement, but in any event prior to the
Effective Time and as a condition to the Reorganization, the
Board of Directors of ACPR shall call, and ACPR shall hold, a
meeting of the shareholders of Capital Reserve for the purpose
of considering and voting upon:
6.1.1. Approval of this Agreement and the transactions
contemplated hereby, including, without limitation:
6.1.1.1. The transfer of the Capital Reserve Assets
to Premium Money Market and the assumption
by Premium Money Market of the Capital
Reserve Liabilities, in exchange for shares
of Capital Reserve, as described in this
Agreement; and
6.1.1.2. The liquidation of Capital Reserve through
the distribution to its record holders of
shares of the shares of Premium Money Market
as described in this Agreement; and
6.1.2. Such other matters as may be determined by the Board
of Directors or authorized officers of the parties.
6.2. Approval of this Reorganization Agreement by the shareholders
of Capital Reserve shall constitute the waiver of the
application of any fundamental policy of Capital Reserve that
might be deemed to prevent them from taking the actions
necessary to effectuate the Reorganization as described, and
such policies, if any, shall be deemed to have been amended
accordingly.
7. SHAREHOLDER ACTION ON BEHALF OF GOVERNMENT RESERVE.
7.1. As soon as practicable after the effective date of the N-14
Registration Statement, but in any event prior to the
Effective Time and as a condition to the Reorganization, the
Board of Directors of ACPR shall call, and ACPR shall hold, a
meeting of the shareholders of Government Reserve for the
purpose of considering and voting upon:
7.1.1. Approval of this Agreement and the transactions
contemplated hereby, including, without limitation:
7.1.1.1. The transfer of the Government Reserve
Assets to Premium Money Market and the
assumption by Premium Money Market of the
Government Reserve Liabilities, in exchange
for shares of Government Reserve, as
described in this Agreement; and
7.1.1.2. The liquidation of Government Reserve
through the distribution to its record
holders of shares of the shares of Premium
Money Market as described in this Agreement;
and
7.1.2. Such other matters as may be determined by the Board
of Directors or authorized officers of the parties.
7.2. Approval of this Reorganization Agreement by the shareholders
of Capital Reserve shall constitute the waiver of the
application of any fundamental policy of Capital Reserve that
might be deemed to prevent them from taking the actions
necessary to effectuate the Reorganization as described, and
such policies, if any, shall be deemed to have been amended
accordingly.
8. REGISTRATION STATEMENT AND PROXY SOLICITATION MATERIALS.
The N-14 Registration Statement under the 1933 Act, including the
combined prospectus/proxy statement contained therein under the 1934
Act and 1940 Act proxy rules, shall be filed with the SEC as promptly
as practicable, ACIT and ACPR have cooperated and shall continue to
cooperate with each other, and have furnished and shall continue to
furnish each other with the information relating to themselves that is
required by the 1933 Act, the 1934 Act, the 1940 Act, the rules and
regulations under each of those Acts and state securities laws, to be
included in the N-14 Registration Statement.
9. EFFECTIVE TIME OF THE REORGANIZATION.
Delivery of the Capital Reserve Assets and the shares of Premium Money
Market to be issued pursuant to Section 1 and the liquidation of
Capital Reserve pursuant to Section 3 and the delivery of the
Government Reserve Assets and the shares of Premium Money Market to be
issued pursuant to Section 2 and the liquidation of Government Reserve
pursuant to section 4 shall occur at the opening of business on the
next business day following the Valuation Time, or on such other date,
and at such place and time, as may be determined by the President or
any Vice President of each party hereto. The date and time at which
such actions are taken are referred to herein as the "Effective Time."
To the extent any of the Capital Reserve Assets or Government Reserve
Assets are, for any reason, not transferred at the Effective Time, ACPR
shall cause such Capital Reserve Assets or Government Reserve Assets to
be transferred in accordance with this Agreement at the earliest
practicable date thereafter.
9. ACIT CONDITIONS.
The obligations of ACIT hereunder with respect to Premium Money Market
shall be subject to the following conditions precedent:
9.1. This Agreement and the transactions contemplated by this
Agreement shall have been approved by the shareholders of
Capital Reserve and the shareholders of Government Reserve, in
the manner required by law.
9.2. ACPR shall have duly executed and delivered to ACIT such bills
of sale, assignments, certificates and other instruments of
transfer ("Transfer Documents") as may be necessary or
desirable to transfer all right, title and interest of ACPR
and Capital Reserve in and to the Capital Reserve Assets. The
Capital Reserve Assets shall be accompanied by all necessary
state stock transfer stamps or cash for the appropriate
purchase price therefor.
9.3. ACPR shall have duly executed and delivered to ACIT such bills
of sale, assignments, certificates and other instruments of
transfer ("Transfer Documents") as may be necessary or
desirable to transfer all right, title and interest of ACPR
and Government Reserve in and to the Government Reserve
Assets. The Government Reserve Assets shall be accompanied by
all necessary state stock transfer stamps or cash for the
appropriate purchase price therefor.
9.4. All representations and warranties made in this Agreement
shall be true and correct in all material respects as if made
at and as of the Valuation Time and the Effective Time. As of
the Valuation Time and the Effective Time, there shall have
been no material adverse change in the financial position of
Capital Reserve or Government Reserve since March 31, 2001,
other than those changes incurred in the ordinary course of
business as an investment company. No action, suit or other
proceeding shall be threatened or pending before any court or
governmental agency in which it is sought to restrain or
prohibit, or obtain damages or other relief in connection
with, this Agreement or the transactions contemplated herein.
9.4. ACIT shall have received a tax opinion acceptable to ACPR,
addressed to ACIT and ACPR in a form reasonably satisfactory
to them and dated the Effective Time, substantially to the
effect that for federal income tax purposes: (i) the transfer
of the Capital Reserve Assets hereunder, and the assumption by
Premium Money Market of the Capital Reserve Liabilities, in
exchange for shares of Premium Money Market, and the
distribution of said shares to the shareholders of Capital
Reserve, as provided in this Agreement, will constitute a
reorganization within the meaning of Section 368 of the Code,
and Capital Reserve and Premium Money Market will each be
considered "a party to a reorganization" within the meaning of
Section 368(b) of the Code; (ii) the transfer of the
Government Reserve Assets hereunder, and the assumption by
Premium Money Market of the Government Reserve Liabilities, in
exchange for shares of Premium Money Market, and the
distribution of said shares to the shareholders of Government
Reserve, as provided in this Agreement, will constitute a
reorganization within the meaning of Section 368 of the Code,
and Government Reserve and Premium Money Market will each be
considered "a party to a reorganization" within the meaning of
Section 368(b) of the Code; (iii) no gain or loss will be
recognized by Capital Reserve as a result of such transaction;
(iv) no gain or loss will be recognized by Government Reserve
as a result of such transaction; (v) no gain or loss will be
recognized by Premium Money Market as a result of such
transaction; (iv) no gain or loss will be recognized by the
shareholders of Capital Reserve on the distribution to them by
Capital Reserve of shares of Premium Money Market in exchange
for their shares of Capital Reserve; (v) no gain or loss will
be recognized by the shareholders of Government Reserve on the
distribution to them by Government Reserve of shares of
Premium Money Market in exchange for their shares of
Government Reserve (vi) the aggregate basis of Premium Money
Market shares received by each shareholder of Capital Reserve
will be the same as the aggregate basis of the shareholder's
Capital Reserve shares immediately prior to the transaction;
(vii) the aggregate basis of Premium Money Market shares
received by each shareholder of Government Reserve will be the
same as the aggregate basis of the shareholder's Government
Reserve shares immediately prior to the transaction; (viii)
the basis of the Capital Reserve Assets to Premium Money
Market will be the same as the basis of the Capital Reserve
Assets in the hands of Capital Reserve immediately prior to
the exchange; (ix) the basis of the Government Reserve Assets
to Premium Money Market will be the same as the basis of the
Government Reserve Assets in the hands of Government Reserve
immediately prior to the exchange; (x) a shareholder's holding
period for Premium Money Market shares will be determined by
including the period for which the shareholder held the shares
of Capital Reserve exchanged therefor, provided that the
shareholder held such shares of Capital Reserve as a capital
asset; (xi) a shareholder's holding period for Premium Money
Market shares will be determined by including the period for
which the shareholder held the shares of Government Reserve
exchanged therefor, provided that the shareholder held such
shares of Government Reserve as a capital asset; (xii) the
holding period of Premium Money Market with respect to the
Capital Reserve Assets will include the period for which the
Capital Reserve Assets were held by Capital Reserve; and
(xiii) the holding period of Premium Money Market with respect
to the Government Reserve Assets will include the period for
which the Government Reserve Assets were held by Government
Reserve (except to the extent that an activity or investment
of Premium Money Market has the effect of diminishing a
holding period with respect to an asset).
9.5. The SEC shall not have issued any unfavorable advisory report
under Section 25(b) of the 1940 Act nor instituted any
proceeding seeking to enjoin consummation of the transactions
contemplated by this Agreement under Section 25(c) of the 1940
Act.
9.6. The N-14 Registration Statement shall have become effective
under the 1933 Act and no stop order suspending such
effectiveness shall have been instituted or, to the knowledge
of ACIT, contemplated by the SEC, and the parties shall have
received all permits and other authorizations necessary under
state securities laws to consummate the transactions
contemplated by this Agreement.
9.7. The President or a Vice President of ACPR shall have certified
that ACPR has performed and complied in all material respects
with each of its agreements and covenants required by this
Agreement to be performed or complied with by it prior to or
at the Valuation Time and the Effective Time.
10. ACPR'S CONDITIONS.
The obligations of ACPR hereunder with respect to Capital Reserve and
Government shall be subject to the following conditions precedent:
10.1. This Agreement and the transactions contemplated by this
Agreement shall have been approved by the shareholders of
Capital Reserve and Government Reserve in the manner required
by law.
10.2. All representations and warranties of ACIT made in this
Agreement shall be true and correct in all material respects
as if made at and as of the Valuation Time and the Effective
Time. As of the Valuation Time and the Effective Time, there
shall have been no material adverse change in the financial
condition of Premium Money Market since August 20, 2001, other
than those changes incurred in the ordinary course of business
as an investment company. No action, suit or other proceeding
shall be threatened or pending before any court or
governmental agency in which it is sought to restrain or
prohibit, or obtain damages or other relief in connection
with, this Agreement or the transactions contemplated herein.
10.3. ACPR shall have received a tax opinion acceptable to ACPR,
addressed to ACIT and ACPR in a form reasonably satisfactory
to them and dated the Effective Time, with respect to the
matters specified in Section 9.4.
10.4. The N-14 Registration Statement shall have become effective
under the 1933 Act and no stop order suspending such
effectiveness shall have been instituted, or to the knowledge
of ACIT, contemplated by the SEC, and the parties shall have
received all permits and other authorizations necessary under
state securities laws to consummate the transactions
contemplated by this Agreement.
10.5. ACPR shall not sell or otherwise dispose of any shares of
Premium Money Market to be received in the transactions
contemplated herein, except in distribution to its
shareholders as contemplated herein.
10.6. The SEC shall not have issued any unfavorable advisory report
under Section 25(b) of the 1940 Act nor instituted any
proceeding seeking to enjoin consummation of the transactions
contemplated by this Agreement under Section 25(c) of the 1940
Act.
10.7. The President or a Vice President of ACIT shall have certified
that ACIT has performed and complied in all material respects
with each of its agreements and covenants required by this
Agreement to be performed or complied with by it prior to or
at the Valuation Time and the Effective Time.
11. TAX DOCUMENTS.
ACPR shall deliver to ACIT at the Effective Time confirmations or other
adequate evidence as to the adjusted tax basis of the Capital Reserve
Assets and the Government Reserve Assets then delivered to Premium
Money Market in accordance with the terms of this Agreement.
12. FURTHER ASSURANCES.
Subject to the terms and conditions herein provided, each of the
parties hereto shall use its best efforts to take, or cause to be
taken, such action, to execute and deliver, or cause to be executed and
delivered, such additional documents and instruments, and to do, or
cause to be done, all things necessary, proper or advisable under the
provisions of this Agreement and under applicable law to consummate and
make effective the transactions contemplated by this Agreement.
13. TERMINATION OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the parties set forth in this
Agreement shall terminate at the Effective Time.
14. TERMINATION OF AGREEMENT.
14.1. This Agreement may be terminated prior to the Effective Time
by the Board of Trustees of ACT or the Board of Directors of
ACPR, as provided below:
14.1.1. By ACIT if the conditions set forth in Section 9 are
not satisfied in said Section;
14.1.2. By ACPR if the conditions set forth in Section 10 are
not satisfied as specified in said Section;
14.1.3. By the mutual consent of the parties.
14.2. If a party terminates this Agreement because one or more of
its conditions precedent have not been fulfilled, or if this
Agreement is terminated by mutual consent, this Agreement will
become null and void without any liability of either party or
any of their investment portfolios to the other; provided,
however, that if such termination is by ACIT pursuant to
Section 14.1.1 as a result of a breach by ACPR of any of its
representations, warranties or covenants in this Agreement, or
such termination is by ACPR pursuant to Section 14.1.2 as a
result of a breach by ACIT of any of its representations,
warranties or covenants in this Agreement, nothing herein
shall affect the non-breaching party's right to damages on
account of such other party's breach.
15. AMENDMENT AND WAIVER.
At any time prior to or (to the fullest extent permitted by law) after
approval of this Agreement by the shareholders of ACPR, (a) the parties
hereto may, by written agreement authorized by their respective Board
of Directors or Trustees, as the case may be, or their respective
Presidents or any Vice Presidents, and with or without the approval of
their shareholders, amend any of the provisions of this Agreement, and
(b) either party may waive any breach by the other party or the failure
to satisfy any of the conditions to its obligations (such waiver to be
in writing and executed by the President or Vice President of the
waiving party with or without the approval of such party's
shareholders).
16. GOVERNING LAW.
This Agreement and the transactions contemplated hereby shall be
governed, construed and enforced in accordance with the laws of
Massachusetts without giving effect to the conflicts of law principles
otherwise applicable therein.
17. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the respective successors and
permitted assigns of the parties hereto. This Agreement and the rights,
obligations and liabilities hereunder may not be assigned by either
party without the consent of the other party.
18. BENEFICIARIES.
Nothing contained in this Agreement shall be deemed to create rights in
persons not parties hereto, other than the successors and permitted
assigns of the parties.
19. ACIT LIABILITY.
19.1. The name "American Century Investment Trust" and "Trustees of
American Century Investment Trust" refer respectively to the
trust created and the trustees, as trustees but not
individually or personally, acting from time to time under an
Amended and Restated Agreement and Declaration of Trust dated
as of March 9, 1998, as amended, which is hereby referred to
and copies of which are on file at the office of the State
Secretary of the Commonwealth of Massachusetts and at the
principal office of ACIT. The obligations of ACIT entered into
in the name or on behalf thereof by any of its trustees,
representatives or agents are made not individually, but in
such capacities, and are not binding upon any of the trustees,
shareholders or representatives of ACIT personally, but bind
only the trust property, and all persons dealing with any
portfolio of ACIT must look solely to the trust property
belonging to such portfolio for the enforcement of any claims
against ACIT.
19.2. Both parties specifically acknowledge and agree that any
liability of ACIT under this Agreement with respect to Premium
Money Market, or in connection with the transactions
contemplated herein with respect to Premium Money Market,
shall be discharged only out of the assets of Premium Money
Market and that no other portfolio of ACIT, if any, shall be
liable with respect thereto.
20. ACPR LIABILITY.
20.1 Both parties specifically acknowledge and agree that any
liability of ACPR under this Agreement with respect to Capital
Reserve or in connection with the transactions contemplated
herein with respect to Capital Reserve, shall be discharged
only out of the Capital Reserve Assets and that no other
portfolio of ACPR shall be liable with respect thereto.
20.2 Both parties specifically acknowledge and agree that any
liability of ACPR under this Agreement with respect to
Government Reserve or in connection with the transactions
contemplated herein with respect to Government Reserve, shall
be discharged only out of the Government Reserve Assets and
that no other portfolio of ACPR shall be liable with respect
thereto.
21. NOTICES.
All notices required or permitted herein shall be in writing and shall
be deemed to be properly given when delivered personally or by
telecopier to the party entitled to receive the notice or when sent by
certified or registered mail, postage prepaid, or delivered to a
nationally recognized overnight courier service, in each case properly
addressed to the party entitled to receive such notice at the address
or telecopier number stated below or to such other address or
telecopier number as may hereafter be furnished in writing by notice
similarly given by one party to the other party hereto:
If to American Century Investment Trust or American Century Premium
Reserves, Inc.:
Xxxxxxx X. Xxxxxxxxxxx
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
22. EXPENSES.
Expenses incurred in connection with the Reorganization are the sole
responsibility of and will be borne by American Century Investment
Management, Inc. or one or more of its affiliates.
23. ENTIRE AGREEMENT.
This Agreement embodies the entire agreement and understanding of the
parties hereto and supersedes any and all prior agreements,
arrangements and understandings relating to matters provided for
herein.
24. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered shall be deemed to be an original,
but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized officers designated below as of the date
first written.
AMERICAN CENTURY INVESTMENT
TRUST
By:/s/Xxxxxxx X. Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxxx
Vice President
ATTEST:/s/Xxxxxxxxx X. Xxxxxxxx
Xxxxxxxxx X. Xxxxxxxx
AMERICAN CENTURY PREMIUM RESERVES,
INC.
By:/s/Xxxxxxx X. Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxxx
Vice President
ATTEST:/s/Xxxxxxxxx X. Xxxxxxxx
Xxxxxxxxx X. Xxxxxxxx