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 August 8, 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.:

                                            Charles A. Etherington
                                            4500 Main Street
                                            Kansas City, MO  64111

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/Charles A. Etherington
   Charles A. Etherington
   Vice President


ATTEST:/s/Anastasia H. Enneking
       Anastasia H. Enneking



AMERICAN CENTURY PREMIUM RESERVES,
    INC.


By:/s/Charles A. Etherington
   Charles A. Etherington
   Vice President


ATTEST:/s/Anastasia H. Enneking
       Anastasia H. Enneking