Centennial Money Market Trust
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Prospectus dated November 1, 2000
Centennial Money Market Trust is a money
market mutual fund. It seeks the maximum
current income that is consistent with low
capital risk and maintaining liquidity. The
Trust invests in short-term, high-quality
"money market" instruments.
This Prospectus contains
important information about the
Trust's objective, its
investment policies, strategies
and risks. It also contains
As with all mutual funds, the important information about how Securities and
Exchange Commission to buy and sell shares of the has not approved or
disapproved Trust and other account the Trust's securities nor has it features.
Please read this determined that this Prospectus is Prospectus carefully before
you accurate or complete. It is a invest and keep it for future criminal offense
to represent reference about your account.
otherwise.
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<PAGE>
CONTENTS
A B O U T T H E T R U S T
The Trust's Investment Objective and Strategies
Main Risks of Investing in the Trust
The Trust's Past Performance
Fees and Expenses of the Trust
About the Trust's Investments
I N V E S T I N G I N T H E T R U S T
This section applies to the prospectuses of Centennial Money
Market Trust, Centennial Tax Exempt Trust and Centennial
Government Trust
How the Trusts are Managed
How to Buy Shares
Automatic Purchase and Redemption Programs
Direct Shareholders
How to Sell Shares
Automatic Purchase and Redemption Programs
Direct Shareholders
How to Exchange Shares
Shareholder Account Rules and Policies
Dividends and Tax Information
Financial Highlights
<PAGE>
A B O U T T H E T R U S T
The Trust's Investment Objective and Strategies
WHAT IS THE TRUST'S INVESTMENT OBJECTIVE? The Trust seeks the maximum current
income that is consistent with low capital risk and the maintenance of
liquidity.
WHAT DOES THE TRUST INVEST IN? The Trust is a money market fund. It invests in a
variety of high-quality money market instruments to seek income. Money market
instruments are short-term, U.S. dollar-denominated debt instruments issued by
the U.S. government, domestic and foreign corporations and financial
institutions and other entities. They include, for example, bank obligations,
repurchase agreements, commercial paper, other corporate debt obligations and
government debt obligations. To be considered "high-quality," generally they
must be rated in one of the two highest credit-quality categories for short-term
securities by nationally recognized rating services. If unrated, a security must
be determined by the Trust's investment manager to be of comparable quality to
rated securities.
WHO IS THE TRUST DESIGNED FOR? The Trust is designed for investors who are
seeking to earn income at current money market rates while preserving the value
of their investment, because the Trust tries to keep its share price stable at
$1.00. Income on short-term money market instruments tends to be lower than
income on longer term debt securities, so the Trust's yield will likely be lower
than the yield on longer-term fixed income funds. The Trust does not invest for
the purpose of seeking capital appreciation or gains and is not a complete
investment program.
Main Risks of Investing in the Trust
All investments carry risks to some degree. Funds that invest in debt
obligations for income may be subject to credit risks and interest rate risks.
However, the Trust's investments must meet strict standards set by its Board of
Trustees following special rules for money market funds under federal law. Those
standards include requirements for maintaining high credit quality in the
Trust's portfolio, a short average portfolio maturity to reduce the effects of
changes in interest rates on the value of the Trust's securities and investing
in a wide variety of issuers to reduce the effects of a default by any one
issuer on the Trust's overall portfolio and the value of the Trust's shares.
Even so, there are risks that any of the Trust's holdings could have its
credit rating downgraded, or the issuer could default, or that interest rates
could rise sharply, causing the value of the Trust's securities (and its share
price) to fall. As a result, there is a risk that the Trust's shares could fall
below $1.00 per share. If there is a high redemption demand for the Trust's
shares that was not anticipated, portfolio securities might have to be sold
prior to their maturity at a loss. Also, there is the risk that the value of
your investment could be eroded over time by the effects of inflation, and that
poor security selection could cause the Trust to underperform other funds with
similar objectives.
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An investment in the Trust is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Trust seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the Trust.
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The Trust's Past Performance
The bar chart and table below show how the Trust's returns may vary over time,
by showing changes in the Trust's performance from year to year for the last ten
calendar years and its average annual total returns for the 1-, 5- and 10- year
periods. Variability of returns is one measure of the risks of investing in a
money market fund. The Trust's past investment performance does not predict how
the Trust will perform in the future.
Annual Total Returns (% as of 12/31 each year)
[See appendix to prospectus for annual total return data for bar chart.]
For the period from 1/1/00 through 9/30/00 the cumulative total return (not
annualized) was 4.34%. During the period shown in the bar chart, the highest
return (not annualized) for a calendar quarter was 1.0% (1stand 4th Q '90) and
the lowest return (not annualized) for a calendar quarter was 0.65% (1st and 2nd
Q '93).
Average Annual Total Returns
for the periods ended December 1 Year 5 Years 10 Years
31, 1999
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Centennial Money Market Trust 4.72% 5.06% 4.88%
(inception 9/8/81)
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The returns measure the performance of a hypothetical account and assume that
all dividends have been reinvested in additional shares.
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The total returns are not the Trust's current yield. The Trust's yield more
closely reflects the Trust's current earnings. To obtain the Trust's current
7-day yield, please call the Transfer Agent toll-free at 1.800.525.9310.
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Fees and Expenses of the Trust
The Trust pays a variety of expenses directly for management, administration and
other services. Those expenses are subtracted from the Trust's assets to
calculate the Trust's net asset value per share. All shareholders therefore pay
those expenses indirectly. The following tables are meant to help you understand
the fees and expenses you may pay if you buy and hold shares of the Trust. The
numbers below are based upon the Trust's expenses during the fiscal year ended
June 30, 2000.
SHAREHOLDER FEES. The Trust does not charge any initial sales charge to buy
shares or to reinvest dividends. There are no exchange fees or redemption fees
and no contingent deferred sales charges (unless you buy Trust shares by
exchanging Class A shares of other eligible funds that were purchased subject to
a contingent deferred sales charge, as described in "How to Sell Shares").
Annual Trust Operating Expenses (deducted from Trust assets):
(% of average daily net assets)
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Management Fees 0.34%
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Distribution and/or Service (12b-1) 0.20%
Fees
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Other Expenses 0.13%
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Total Annual Operating Expenses 0.67%
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"Other expenses" in the table include transfer agent fees, custodial fees, and
accounting and legal expenses the Trust pays.
EXAMPLE. The following example is intended to help you compare the cost of
investing in the Trust with the cost of investing in other mutual funds. The
example assumes that you invest $10,000 in shares of the Trust for the time
periods indicated and reinvest your dividends and distributions. The example
also assumes that your investment has a 5% return each year and that the Trust's
operating expenses remain the same. Your actual costs may be higher or lower,
because expenses will vary over time. Based on these assumptions your expenses
would be as follows, whether or not you redeem your investment at the end of
each period:
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1 year 3 years 5 years 10 years
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$68 $214 $373 $835
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About the Trust's Investments
THE TRUST'S PRINCIPAL INVESTMENT POLICIES. The Trust invests in short-term money
market securities meeting quality, maturity and diversification standards
established by its Board of Trustees as well as rules that apply to money market
funds under the Investment Company Act. The Statement of Additional Information
contains more detailed information about the Trust's investment policies and
risks.
The Trust's investment manager, Centennial Asset Management Corporation
(referred to in this Prospectus as the Manager) tries to reduce risks by
diversifying investments and by carefully researching investments before the
Trust buys them. The rate of the Trust's income will vary from day to day,
generally reflecting changes in overall short-term interest rates. There is no
assurance that the Trust will achieve its investment objective.
What Does the Trust Invest In? Money market instruments are high-quality,
short-term debt instruments. They may have fixed, variable or floating
interest rates. All of the Trust's money market investments must meet the
special quality and maturity requirements set under the Investment Company
Act and the special standards set by the Board described briefly below.
The following is a brief description of the types of money market
instruments the Trust may invest in.
o U.S. Government Securities. The Trust invests in obligations issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities. Some are direct obligations of the U.S. Treasury,
such as Treasury bills, notes and bonds, and are supported by the full
faith and credit of the United States. Other U.S. government
securities, such as pass-through certificates issued by the Government
National Mortgage Association (Ginnie Mae), are also supported by the
full faith and credit of the U.S. government. Some government
securities, agencies or instrumentalities of the U.S. government are
supported by the right of the issuer to borrow from the U.S. Treasury,
such as securities of the Federal National Mortgage Corporation (Fannie
Mae). Others may be supported only by the credit of the
instrumentality, such as obligations of the Federal Home Loan Mortgage
Corporation (Freddie Mac).
o Bank Obligations. The Trust can buy time deposits, certificates of
deposit and bankers' acceptances. These obligations must be denominated
in U.S. dollars, even if issued by a foreign bank.
o Commercial Paper. Commercial paper is a short-term, unsecured promissory
note of a domestic or foreign company or other financial firm. The Trust
may buy commercial paper only if it matures in nine months or less from
the date of purchase.
o Corporate Debt Obligations. The Trust can invest in other short-term
corporate debt obligations, besides commercial paper including debt
obligations that either mature within twelve months of the date of
purchase or that are subject to repurchase agreements that call for
delivery in twelve months or less. The Board of Trustees has proposed a
change to this policy to increase the length of permitted maturity to up
to the maximum time permitted under Rule 2a-7, which is currently 397
days. Please see "What Standards Apply to the Trust's Investment?"
below for more details.
o Other Money Market Obligations. The Trust may invest in money market
obligations other than those listed above if they are subject to
repurchase agreements or guaranteed as to their principal and interest by
a corporation whose commercial paper may be purchased by the Trust or by a
domestic bank. The bank must meet credit criteria set by the Board.
Additionally, the Trust may buy other money market instruments that the
Manager approves under procedures adopted by the Board. They must be U.S.
dollar-denominated short-term investments that the Manager must determine to
have minimal credit risks.
Currently, the Board has approved the purchase of dollar-denominated
obligations of foreign banks payable in the U.S. or in London, England, floating
or variable rate demand notes, asset-backed securities, and bank loan
participation agreements. Their purchase may be subject to restrictions adopted
by the Board from time to time.
What Standards Apply to the Trust's Investments? Money market instruments are
subject to credit risk, the risk that the issuer might not make timely
payments of interest on the security or repay principal when it is due.
The Trust may buy only those investments that meet standards set by the
Investment Company Act for money market funds and procedures adopted by
the Board. The Board has adopted evaluation procedures for the Trust's
portfolio, and the Manager has the responsibility to implement those
procedures when selecting investments for the Trust.
In general, the Trust buys only high-quality investments that the Manager
believes present minimal credit risk at the time of purchase. "High-quality"
investments are:
o rated in one of the two highest short-term rating categories of two
national rating organizations, or
o rated by one rating organization in one of its two highest rating
categories (if only one rating organization has rated the investment), or
o unrated investments that the Manager determines are comparable in quality
to the two highest rating categories.
The procedures also limit the amount of the Trust's assets that can be
invested in the securities of any one issuer (other than the U.S.
government, its agencies and instrumentalities), to spread the Trust's
investment risks. The Trust's fundamental policy restricting investments
in any debt instrument having a maturity in excess of one year from the
date of the investment is more restrictive than the standards that apply
to all money market funds. That restriction could limit the Trust's
investments, however, shareholders have been requested to approve an
amendment to this policy whereby no security's maturity will exceed the
maximum time permitted under Rule 2a-7. If the change is not approved by
shareholders, the Manager will supplement this Prospectus to reflect that
the change was not approved. Finally, the Trust must maintain a
dollar-weighted average portfolio maturity of not more than 90 days, to
reduce interest rate risks.
Can the Trust's Investment Objective and Policies Change? The Board can change
non-fundamental policies without shareholder approval, although
significant changes will be described in amendments to this Prospectus.
Fundamental policies cannot be changed without the approval of a majority
of the Trust's outstanding voting shares. The Trust's investment objective
is a fundamental policy. Some investment restrictions that are fundamental
polices are listed in the Statement of Additional Information. An
investment policy is not fundamental unless this Prospectus or the
Statement of Additional Information says that it is. Please see the
Statement of Additional Information for more information on the proposals
to change the fundamental policies that the Board of Trustees has
requested shareholders to approve. If shareholders do not approve the
changes, then this Prospectus and Statement of Additional Information will
be supplemented to advise you that the amendments were not approved.
OTHER INVESTMENT STRATEGIES. To seek its objective, the Trust can use the
investment techniques and strategies described below. The Trust might not always
use all of them. These techniques involve risks. The Statement of Additional
Information contains more information about some of these practices, including
limitations on their use that are designed to reduce some of the risks.
Floating Rate/Variable Rate Notes. The Trust can purchase investments with
floating or variable interest rates. Variable rates are adjustable at
stated periodic intervals. Floating rates are adjusted automatically
according to a specified market rate or benchmark, such as the prime rate
of a bank. If the maturity of an investment is greater than one year (or
if the proposed change is approved by shareholders, the maximum time
permitted under Rule 2a-7), it may be purchased only if it has a demand
feature. That feature must permit the Trust to recover the principal
amount of the investment on not more than thirty days' notice at any time,
or at specified times not exceeding one year from purchase (or if the
proposed change is approved by shareholders, the maximum time permitted
under Rule 2a-7).
Asset-Backed Securities. The Trust can invest in asset-backed securities. These
are fractional interests in pools of consumer loans and other trade
receivables, which are the obligations of a number of different parties.
The income from the underlying pool is passed through to investors, such
as the Trust.
These investments might be supported by a credit enhancement, such as a
letter of credit, a guarantee or a preference right. However, the credit
enhancement generally applies only to a fraction of the security's value. If the
issuer of the security has no security interest in the related collateral, there
is the risk that the Trust could lose money if the issuer defaults.
Repurchase Agreements. The Trust may enter into repurchase agreements. In a
repurchase transaction, the Trust buys a security and simultaneously sells
it to the vendor for delivery at a future date. Repurchase agreements must
be fully collateralized. However, if the vendor fails to pay the resale
price on the delivery date, the Trust may incur costs in disposing of the
collateral and may experience losses if there is any delay in its ability
to do so. The Trust will not enter into repurchase transactions that will
cause more than 10% of the Trust's net assets to be subject to repurchase
agreements having a maturity beyond seven days. There is no limit on the
amount of the Trust's net assets that may be subject to repurchase
agreements of 7 days or less.
Illiquid and Restricted Securities. Investments may be illiquid because they
have no active trading market, making it difficult to value them or
dispose of them promptly at an acceptable price. A restricted security is
one that has a contractual limit on resale or which cannot be sold
publicly until it is registered under federal securities laws. The Trust
will not invest more than 10% of its net assets in illiquid or restricted
securities. That limit does not apply to certain restricted securities
that are eligible for resale to qualified institutional purchasers. The
Trust may invest up to 25% of its net assets in restricted securities,
subject to the 10% limit on illiquid securities and restricted securities
other than those sold to qualified institutional purchasers. The Manager
monitors holdings of illiquid securities on an ongoing basis to determine
whether to sell any holdings to maintain adequate liquidity. Difficulty in
selling a security may result in a loss to the Trust or additional costs.
I N V E S T I N G I N T H E T R U S T S
The information below applies to Centennial Money Market Trust, Centennial Tax
Exempt Trust and Centennial Government Trust. Each is referred to as a "Trust"
and they are collectively referred to as the "Trusts". Unless otherwise
indicated, this information applies to each Trust.
How the Trusts are Managed
THE MANAGER. The Manager, Centennial Asset Management Corporation, a
wholly-owned subsidiary of OppenheimerFunds, Inc., is the investment advisor for
the Trusts. The Manager chooses each of the Trust's investments and handles its
day-to-day business. The Manager carries out its duties subject to the policies
established by the Trust's Board of Trustees, under an investment advisory
agreement with each Trust that states the Manager's responsibilities. The
agreement sets the fees the Trust pays to the Manager and describes the expenses
that the Trust is responsible to pay to conduct its business.
The Manager has been an investment advisor since 1978. The Manager and its
affiliates managed investment companies and other assets of more than $130
billion as of September 30, 2000, and more than 5 million shareholder accounts.
The Manager is located at 6803 South Tucson Way, Englewood, Colorado 80112.
Portfolio Managers. The portfolio managers of the Trusts are the persons
principally responsible for the day-to-day management of the Trust's
portfolios. The portfolio manager of Centennial Money Market Trust and
Centennial Government Trust is Carol E. Wolf. Ms. Wolf was co-portfolio
manager of the Trusts from June 1990 until April 2000, when she became
the sole portfolio manager. She is a Senior Vice President of
OppenheimerFunds, Inc. and of the Trusts and an officer and portfolio
manager of other funds for which the Manager or an affiliate serves as
investment advisor. The portfolio manager of Centennial Tax Exempt
Trust is Michael Carbuto (since October 1987). Mr. Carbuto is a Vice
President of OppenheimerFunds, Inc. and is an officer and portfolio
manager of other funds for which the Manager serves as investment
advisor.
Advisory Fees. Under each investment advisory agreement, a Trust pays the
Manager an advisory fee at an annual rate that declines on additional
assets as the Trust grows. That fee is computed on the average annual net
assets of the respective Trust as of the close of each business day.
o Centennial Money Market Trust. The annual management fee rates are:
0.500% of the first $250 million of the Trust's net assets; 0.475% of
the next $250 million; 0.450% of the next $250 million; 0.425% of the
next $250 million; 0.400% of the next $250 million; 0.375% of the next
$250 million; 0.350% of the next $500 million; and 0.325% of net assets
in excess of $2 billion. In the agreement, the Manager guarantees that
the Trust's total expenses in any fiscal year, exclusive of taxes,
interest and brokerage commissions, and extraordinary expenses such as
litigation costs, shall not exceed the lesser of (1) 1.5% of the average
annual net assets of the Trust up to $30 million and 1% of its average
annual net assets in excess of $30 million; or (2) 25% of the total
annual investment income of the Trust. Centennial Money Market Trust's
management fee for its fiscal year ended June 30, 2000 was 0.34% of the
Trust's average annual net assets.
o Centennial Government Trust. The annual management fee rates are:
0.500% of the first $250 million of the Trust's net assets; 0.475% of
the next $250 million; 0.450% of the next $250 million; 0.425% of the
next $250 million; 0.400% of the next $250 million; 0.375% of the next
$250 million and 0.350% of net assets in excess of $1.5 billion. The
Manager has made the same guarantee to Centennial Government Trust
regarding expenses as described above for Centennial Money Market Trust.
The Trust's management fee for its fiscal year ended June 30, 2000 was
0.45% of the Trust's average annual net assets.
o Centennial Tax Exempt Trust. The annual management fee rates applicable
to the Trust are as follows: 0.500% of the first $250 million of the
Trust's net assets; 0.475% of the next $250 million; 0.450% of the next
$250 million; 0.425% of the next $250 million; 0.400% of the next $250
million; 0.375% of the next $250 million; 0.350% of the next $500
million; and 0.325% of net assets in excess of $2 billion. Under the
agreement, when the value of the Trust's net assets is less than $1.5
billion, the annual fee payable to the Manager shall be reduced by
$100,000 based on average net assets computed daily and paid monthly at
the annual rates. However, the annual fee cannot be less than $0. The
Trust's management fee for its fiscal year ended June 30, 2000 was 0.43%
of the Trust's average annual net assets.
How to Buy Shares
HOW ARE SHARE PRICES DETERMINED? Shares of each Trust are sold at their offering
price, which is the net asset value per share without any sales charge. The net
asset value per share will normally remain fixed at $1.00 per share. However,
there is no guarantee that a Trust will be able to maintain a stable net asset
value of $1.00 per share.
The offering price that applies to a purchase order is based on the next
calculation of the net asset value per share that is made after the
Sub-Distributor (OppenheimerFunds Distributor, Inc.) receives the purchase order
at its offices in Colorado, or after any agent appointed by the Sub-Distributor
receives the order and sends it to the Sub-Distributor as described below.
How is a Trust's Net Asset Value Determined? The net asset value of shares of
each Trust is determined twice each day, at 12:00 Noon and at 4:00 P.M.,
on each day The New York Stock Exchange is open for trading (referred to
in this Prospectus as a "regular business day"). All references to time in
this Prospectus mean "New York time."
The net asset value per share is determined by dividing the value of a
Trust's net assets by the number of shares that are outstanding. Under a policy
adopted by the Board of Trustees of the Trusts, each Trust uses the amortized
cost method to value its securities to determine net asset value.
The shares of each Trust offered by this Prospectus are considered to be
Class A shares for the purposes of exchanging them or reinvesting distributions
among other eligible funds that offer more than one class of shares.
IS THERE A MINIMUM INVESTMENT? Minimum initial investments described below and
depend on how you buy and pay for your shares. You can make additional
investments at any time with as little as $25. The minimum investment
requirements do not apply to reinvesting distributions from the Trust or other
eligible funds (a list of them appears in the Statement of Additional
Information, or you can ask your dealer or call the Transfer Agent) or
reinvesting distributions from unit investment trusts that have made
arrangements with the Distributor.
HOW ARE SHARES PURCHASED? You can buy shares in one of several ways:
BuyingShares Through a Dealer's Automatic Purchase and Redemption Program. You
can buy shares of a Trust through a broker-dealer that has a sales
agreement with the Trust's Distributor or Sub-Distributor that allows
shares to be purchased through the dealer's Automatic Purchase and
Redemption Program. Shares of each Trust are sold mainly to customers of
participating dealers that offer the Trusts' shares under these special
purchase programs. If you participate in an Automatic Purchase and
Redemption Program established by your dealer, your dealer buys shares of
the Trust for your account with the dealer. Program participants should
also read the description of the program provided by their dealer.
BuyingShares Through Your Dealer. If you do not participate in an Automatic
Purchase and Redemption Program, you can buy shares of a Trust through any
broker/dealer that has a sales agreement with the Sub-Distributor. Your
dealer will place your order with the Sub-Distributor on your behalf.
BuyingShares Directly Through the Sub-Distributor. You can also purchase shares
directly through the Sub-Distributor. Shareholders who make purchases
directly and hold shares in their own names are referred to as "direct
shareholders" in this Prospectus.
The Sub-Distributor may appoint servicing agents to accept purchase (and
redemption) orders, including broker/dealers that have established Automatic
Purchase and Redemption Programs. The Sub-Distributor, in its sole discretion,
may reject any purchase order for shares of a Trust.
AUTOMATIC PURCHASE AND REDEMPTION PROGRAM. If you buy shares of a Trust through
your broker/dealer's Automatic Purchase and Redemption Program, your
broker/dealer will buy your shares for your Program Account and will hold your
shares in your broker/dealer's name. These purchases will be made under the
procedures described in "Guaranteed Payment Procedures" below. Your Automatic
Purchase and Redemption Program Account may have minimum investment requirements
established by your broker/dealer. You should direct all questions about your
Automatic Purchase and Redemption Program to your broker/dealer, because the
Trusts' transfer agent does not have access to information about your account
under that Program.
Guaranteed Payment Procedures. Some broker/dealers may have arrangements with
the Sub-Distributor to enable them to place purchase orders for shares of
a Trust and to guarantee that the Trust's custodian bank will receive
Federal Funds to pay for the shares prior to specified times.
Broker/dealers whose clients participate in Automatic Purchase and
Redemption Programs may use these guaranteed payment procedures to pay for
purchases of shares of a Trust.
o If the Distributor receives a purchase order before 12:00 Noon on a
regular business day with the broker/dealer's guarantee that the Trust's
custodian bank will receive payment for those shares in Federal Funds by
2:00 P.M. on that same day, the order will be effected at the net asset
value determined at 12:00 Noon that day. Distributions will begin to
accrue on the shares on that day if the Federal Funds are received by the
required time.
o If the Distributor receives a purchase order after 12:00 Noon on a regular
business day with the broker/dealer's guarantee that the Trust's custodian
bank will receive payment for those shares in Federal Funds by 2:00 P.M.
on that same day, the order will be effected at the net asset value
determined at 4:00 P.M. that day. Distributions will begin to accrue on
the shares on that day if the Federal Funds are received by the required
time.
o If the Distributor receives a purchase order between 12:00 Noon and 4:00
P.M. on a regular business day with the broker/dealer's guarantee that
the Trust's custodian bank will receive payment for those shares in
Federal Funds by 4:00 P.M. the next regular business day, the order will
be effected at the net asset value determined at 4:00 P.M. on the day
the order is received and distributions will begin to accrue on the
shares purchased on the next regular business day if the Federal Funds
are received by the required time.
HOW CAN DIRECT SHAREHOLDERS BUY SHARES? Direct shareholders can buy shares of a
Trust by completing a Centennial Funds New Account Application (enclosed with
this Prospectus) and sending it to the Sub-Distributor, OppenheimerFunds
Distributor, Inc., P.O. Box 5143, Denver, Colorado 80217. Payment must be made
by check or by Federal Funds wire as described below. If you don't list a dealer
on the application, OppenheimerFunds Distributor, Inc., the Sub-Distributor,
will act as your agent in buying the shares. However, we recommend that you
discuss your investment with a financial advisor before you make a purchase to
be sure that the Trust is appropriate for you.
Each Trust intends to be as fully invested as possible to maximize its
yield. Therefore, newly-purchased shares normally will begin to accrue
distributions after the Sub-Distributor or its agent accepts your purchase
order, starting on the business day after the Trust receives Federal Funds from
the purchase payment.
Payment by Check. Direct shareholders may pay for purchases of shares of a Trust
by check. Send your check, payable to "OppenheimerFunds Distributor,
Inc.," along with your Application to the address listed above. For
initial purchases, your check should be payable in U.S. dollars and drawn
on a U.S. bank so that distributions will begin to accrue on the next
regular business day after the Distributor accepts your purchase order. If
your check is not drawn on a U.S. bank and is not payable in U.S. dollars,
the shares will not be purchased until the Distributor is able to convert
the purchase payment to Federal Funds. In that case distributions will
begin to accrue on the purchased shares on the next regular business day
after the purchase is made. The minimum initial investment for direct
shareholders by check is $500.
Payment by Federal Funds Wire. Direct shareholders may pay for purchases of
shares of a Trust by Federal Funds wire. You must also forward your
Application to the Sub-Distributor's address listed above. Before sending
a wire, call the Sub-Distributor's Wire Department at 1.800.525.9310
(toll-free from within the U.S.) or 303.768.3200 (from outside the U.S.)
to notify the Sub-Distributor of the wire, and to receive further
instructions.
Distributions will begin to accrue on the purchased shares on the purchase
date that is a regular business day if the Federal Funds from your wire and the
Application are received by the Sub-Distributor and accepted by 12:00 Noon. If
the Distributor receives the Federal Funds from your wire and accepts the
purchase order between 12:00 Noon and 4:00 P.M. on the purchase date,
distributions will begin to accrue on the shares on the next regular business
day. The minimum investment by Federal Funds Wire is $2,500.
Buying Shares Through Automatic Investment Plans. Direct shareholders can
purchase shares of a Trust automatically each month by authorizing the
Trust's Transfer Agent to debit your account at a U.S. domestic bank or
other financial institution. Details are in the Automatic Investment
Plan Application and the Statement of Additional Information. The
minimum monthly purchase is $25.
Service (12b-1) Plans. Each Trust has adopted a service plan. It reimburses the
Distributor for a portion of its costs incurred for services provided to
accounts that hold shares of the Trust. Reimbursement is made quarterly at
an annual rate of up to 0.20% of the average annual net assets of the
Trust. The Distributor currently uses all of those fees (together with
significant amounts from the Manager's own resources) to pay dealers,
brokers, banks and other financial institutions quarterly for providing
personal services and maintenance of accounts of their customers that hold
shares of the Trust.
Retirement Plans. Direct shareholders may buy shares of a Trust for a retirement
plan account. If you participate in a plan sponsored by your employer, the
plan trustee or administrator must buy the shares for your plan account.
The Sub-Distributor also offers a number of different retirement plans
that individuals and employers can use:
o Individual Retirement Accounts (IRAs). These include regular IRAs, Roth
IRAs, rollover IRAs and Education IRAs.
o SEP-IRAs. These are Simplified Employee Pensions Plan IRAs for small
business owners or self-employed individuals.
o 403(b)(7) Custodial Plans. These are tax deferred plans for employees of
eligible tax-exempt organizations, such as schools, hospitals and
charitable organizations.
o 401(k) Plans. These are special retirement plans for businesses.
o Pension and Profit-Sharing Plans. These plans are designed for
businesses and self-employed individuals.
Please call the Sub-Distributor for retirement plan documents, which
include applications and important plan information.
How to Sell Shares
You can sell (redeem) some or all of your shares on any regular business day.
Your shares will be sold at the next net asset value calculated after your order
is received in proper form (which means that it must comply with the procedures
described below) and is accepted by the Transfer Agent.
HOW CAN PROGRAM PARTICIPANTS SELL SHARES? If you participate in an Automatic
Purchase and Redemption Program sponsored by your broker/dealer, you must redeem
shares held in your Program Account by contacting your broker/dealer firm, or
you can redeem shares by writing checks as described below. You should not
contact the Trust or its Transfer Agent directly to redeem shares held in your
Program Account. You may also arrange (but only through your broker/dealer) to
have the proceeds of redeemed Trust shares sent by Federal Funds wire, as
described below in "Sending Redemption Proceeds by Wire."
HOW CAN DIRECT SHAREHOLDERS REDEEM SHARES? Direct shareholders can redeem their
shares by writing a letter to the Transfer Agent, Shareholder Services, Inc., by
using checkwriting privileges, or by telephone. You can also set up Automatic
Withdrawal Plans to redeem shares on a regular basis. If you have questions
about any of these procedures, and especially if you are redeeming shares in a
special situation, such as due to the death of the owner or from a retirement
plan account, please call the Transfer Agent for assistance first, at
1.800.525.9310.
Certain Requests Require a Signature Guarantee. To protect you and the Trust
from fraud, the following redemption requests for accounts of direct
shareholders must be in writing and must include a signature guarantee
(although there may be other situations that also require a signature
guarantee):
o You wish to redeem $100,000 or more and receive a check o The redemption
check is not payable to all shareholders listed on the
account statement
o The redemption check is not sent to the address of record on your
account statement
o Shares are being transferred to an account with a different owner or name o
Shares are being redeemed by someone (such as an Executor) other than
the owners listed in the account registration.
Where Can Direct Shareholders Have Their Signatures Guaranteed? The Transfer
Agent will accept a guarantee of your signature by a number of financial
institutions, including:
o a U.S. bank, trust company, credit union or savings association,
o a foreign bank that has a U.S. correspondent bank,
o a U.S. registered dealer or broker in securities, municipal securities
or government securities, or
o a U.S. national securities exchange, a registered securities association
or a clearing agency.
If you are signing on behalf of a corporation, partnership or other
business or as a fiduciary, you must also include your title in the signature.
How Can Direct Shareholders Sell Shares by Mail? Write a letter to the
Transfer Agent that includes:
o Your name
o The Trust's name
o Your account number (from your account statement) o The dollar amount or
number of shares to be redeemed o Any special payment instructions o Any
share certificates for the shares you are selling o The signatures of all
registered owners exactly as listed in the account
statement, and
o Any special documents requested by the Transfer Agent to assure proper
authorization of the person asking to sell the shares (such as Letters
Testamentary of an Executor).
----------------------------------------------------------------------
----------------------------------- ---------------------------------
Use the following address for Send courier or express mail
----------------------------------- requests to:
requests by mail: Shareholder Services, Inc.
Shareholder Services, Inc. 10200 E. Girard Avenue, Building
P.O. Box 5143 D
Denver, Colorado 80217-5270 Denver, Colorado 80231
----------------------------------
How Can Direct Shareholders Sell Shares by Telephone? Direct shareholders and
their dealer representative of record may sell shares by telephone. To
receive the redemption price calculated on a particular regular business
day, the Transfer Agent or its designated agent must receive the request
by 4:00 P.M. on that day. You may not redeem shares held under a share
certificate or in a retirement account by telephone. To redeem shares
through a service representative, call 1.800.525.9310. The check for
proceeds of telephone redemptions will be payable to the shareholder(s) of
record and will be sent to the address of record for the account. Up to
$100,000 may be redeemed by telephone in any 7-day period. Telephone
redemptions are not available within 30 days of changing the address on an
account.
Retirement Plan Accounts. There are special procedures to sell shares held in a
retirement plan account. Call the Transfer Agent for a distribution
request form. Special income tax withholding requirements apply to
distributions from retirement plans. You must submit a withholding form
with your redemption request to avoid delay in getting your money and if
you do not want tax withheld. If your employer holds your retirement plan
account for you in the name of the plan, you must ask the plan trustee or
administrator to request the sale of the Trust shares in your plan
account.
Sending Redemption Proceeds By Wire. While the Transfer Agent normally sends
direct shareholders their money by check, you can arrange to have the
proceeds of the shares you sell sent by Federal Funds wire to a bank
account you designate. It must be a commercial bank that is a member of
the Federal Reserve wire system. The minimum redemption you can have sent
by wire is $2,500. There is a $10 fee for each wire. To find out how to
set up this feature on an account or to arrange a wire, direct
shareholders should call the Transfer Agent at 1.800.525.9310. If you hold
your shares through your dealer's Automatic Purchase and Redemption
Program, you must contact your dealer to arrange a Federal Funds wire.
Can Direct Shareholders Submit Requests by Fax? Direct shareholders may send
requests for certain types of account transactions to the Transfer Agent
by fax (telecopier). Please call 1.800.525.9310 for information about
which transactions may be handled this way. Transaction requests submitted
by fax are subject to the same rules and restrictions as written and
telephone requests described in this Prospectus.
HOW DO I WRITE CHECKS AGAINST MY ACCOUNT? Automatic Purchase and Redemption
Program participants may write checks against an account held under their
Program, but must arrange for checkwriting privileges through their dealers.
Direct shareholders may write checks against their account by requesting that
privilege on the account Application or by contacting the Transfer Agent for
signature cards. They must be signed (with a signature guarantee) by all owners
of the account and returned to the Transfer Agent so that checks can be sent to
you to use. Shareholders with joint accounts can elect in writing to have checks
paid over the signature of one owner. If checkwriting is established after
November 1, 2000, only one signature is required for shareholders with joint
accounts, unless you elect otherwise.
o Checks can be written to the order of whomever you wish, but may not be
cashed at the bank the checks are payable through or the Trust's custodian
bank.
o Checkwriting privileges are not available for accounts holding shares that
are subject to a contingent deferred sales charge.
o Checks must be written for at least $250.
o Checks cannot be paid if they are written for more than your account
value.
o You may not write a check that would require the redemption of shares that
were purchased by check or Automatic Investment Plan payments within the
prior 10 days.
o Don't use your checks if you changed your account number, until you
receive new checks.
WILL I PAY A SALES CHARGE WHEN I SELL MY SHARES? The Trust does not charge a
fee to redeem shares of a Trust that were bought directly or by reinvesting
distributions from that Trust or another Centennial Trust or eligible fund.
Generally, there is no fee to redeem shares of a Trust bought by exchange of
shares of another Centennial Trust or eligible fund. However,
o if you acquired shares of a Trust by exchanging Class A shares of another
eligible fund that you bought subject to the Class A contingent deferred
sales charge, and
o those shares are still subject to the Class A contingent deferred sales
charge when you exchange them into the Trust, then
o you will pay the contingent deferred sales charge if you redeem those
shares from the Trust within 18 months of the purchase date of the shares
of the fund you exchanged.
How to Exchange Shares
Shares of a Trust can be exchanged for shares of certain other Centennial Trusts
or other eligible funds, depending on whether you own your shares through your
dealer's Automatic Purchase and Redemption Program or as a direct shareholder.
HOW CAN PROGRAM PARTICIPANTS EXCHANGE SHARES? If you participate in an Automatic
Purchase and Redemption Program sponsored by your broker/dealer, you may
exchange shares held in your Program Account for shares of Centennial Money
Market Trust, Centennial Government Trust, Centennial Tax Exempt Trust,
Centennial California Tax Exempt Trust and Centennial New York Tax Exempt Trust
(referred to in this Prospectus as the "Centennial Trusts"), if available for
sale in your state of residence, by contacting your broker/dealer and obtaining
a Prospectus of the selected Centennial Trust.
HOW CAN DIRECT SHAREHOLDERS EXCHANGE SHARES? Direct shareholders can exchange
shares of a Trust for Class A shares of certain eligible funds listed in the
Statement of Additional Information. To exchange shares, you must meet several
conditions:
o Shares of the fund selected for exchange must be available for sale in
your state of residence.
o The prospectuses of the Trust and the fund whose shares you want to buy
must offer the exchange privilege.
o You must hold the shares you buy when you establish your account for at
least 7 days before you can exchange them. After the account is open 7
days, you can exchange shares every regular business day.
o You must meet the minimum purchase requirements for the fund whose shares
you purchase by exchange.
o Before exchanging into a fund, you must obtain and read its prospectus.
Shares of a particular class of an eligible fund may be exchanged only for
shares of the same class in other eligible funds. For example, you can exchange
shares of a Trust only for Class A shares of another fund, and you can exchange
only Class A shares of another eligible fund for shares of a Trust.
You may pay a sales charge when you exchange shares of a Trust. Because
shares of the Trusts are sold without sales charge, in some cases you may pay a
sales charge when you exchange shares of a Trust for shares of other eligible
funds that are sold subject to a sales charge. You will not pay a sales charge
when you exchange shares of a Trust purchased by reinvesting distributions from
that Trust or other eligible funds (except Oppenheimer Cash Reserves), or when
you exchange shares of a Trust purchased by exchange of shares of an eligible
fund on which you paid a sales charge.
For tax purposes, exchanges of shares involve a sale of the shares of the
fund you own and a purchase of the shares of the other fund, which may result in
a capital gain or loss. Since shares of a Trust normally maintain a $1.00 net
asset value, in most cases you should not realize a capital gain or loss when
you sell or exchange your shares.
Direct shareholders can find a list of eligible funds currently available
for exchanges in the Statement of Additional Information or you can obtain one
by calling a service representative at 1.800.525.9310. The list of eligible
funds can change from time to time.
How Do Direct Shareholders Submit Exchange Requests? Direct shareholders may
request exchanges in writing or by telephone:
o Written Exchange Requests. Complete an Exchange Authorization Form, signed
by all owners of the account. Send it to the Transfer Agent at the address
on the back cover.
o Telephone Exchange Requests. Telephone exchange requests may be made by
calling a service representative at 1.800.525.9310. Telephone exchanges
may be made only between accounts that are registered with the same
name(s) and address. Shares held under certificates may not be exchanged
by telephone.
ARE THERE LIMITATIONS ON EXCHANGES? There are certain exchange policies you
should be aware of:
o Shares are normally redeemed from one fund and purchased from the other
fund in the exchange transaction on the same regular business day on which
the Transfer Agent receives an exchange request that conforms to the
policies described above. Requests for exchanges to any of the Centennial
Trusts must be received by the Transfer Agent by 4:00 P.M. on a regular
business day to be effected that day. The Transfer Agent must receive
requests to exchange shares of a Trust to funds other than the Centennial
Trusts on a regular business day by the close of The New York Stock
Exchange that day. The close is normally 4:00 P.M. but may be earlier on
some days.
o Either fund may delay the purchase of shares of the fund you are
exchanging into up to seven days if it determines it would be
disadvantaged by a same-day exchange. For example, the receipt of the
multiple exchange requests from a "market timer" might require a fund to
sell securities at a disadvantageous time and/or price.
o Because excessive trading can hurt fund performance and harm shareholders,
the Trusts reserve the right to refuse any exchange request that may, in
the opinion of the Trusts, be disadvantageous, or to refuse multiple
exchange requests submitted by a shareholder or dealer.
o The Trusts may amend, suspend or terminate the exchange privilege at any
time. The Trusts will provide you notice whenever they are required to do
so by applicable law, but they may impose these changes at any time for
emergency purposes.
o If the Transfer Agent cannot exchange all the shares you request because
of a restriction cited above, only the shares eligible for exchange will
be exchanged.
Shareholder Account Rules and Policies
More information about the Trusts' policies and procedures for buying, selling
and exchanging shares is contained in the Statement of Additional Information.
The offering of shares of a Trust may be suspended during any period in which
the Trust's determination of net asset value is suspended, and the
offering may be suspended by the Board of Trustees at any time it believes
it is in a Trust's best interest to do so.
Telephone transaction privileges for purchases, redemptions or exchanges may be
modified, suspended or terminated by a Trust at any time. If an account
has more than one owner, a Trust and the Transfer Agent may rely on the
instructions of any one owner. Telephone privileges apply to each owner of
the account and the dealer representative of record for the account unless
the Transfer Agent receives cancellation instructions from an owner of the
account.
The Transfer Agent will record any telephone calls to verify data concerning
transactions. It has adopted other procedures to confirm that telephone
instructions are genuine, by requiring callers to provide tax
identification numbers and other account data and by confirming such
transactions in writing. The Transfer Agent and the Trusts will not be
liable for losses or expenses arising out of telephone instructions
reasonably believed to be genuine.
Redemption or transfer requests will not be honored until the Transfer Agent
receives all required documents in proper form. From time to time, the
Transfer Agent in its discretion may waive certain of the requirements for
redemptions stated in this Prospectus.
Payment for redeemed shares ordinarily is made in cash. It is forwarded by check
or by Federal Funds wire (as elected by the shareholder) within seven days
after the Transfer Agent receives redemption instructions in proper form.
However, under unusual circumstances determined by the Securities and
Exchange Commission, payment may be delayed or suspended. For accounts
registered in the name of a broker/dealer, payment will normally be
forwarded within three business days after redemption.
The Transfer Agent may delay forwarding a check or making a payment via
Federal Funds wire for the redemption of recently purchased shares, but
only until the purchase payment has cleared. That delay may be as much as
10 days from the date the shares were purchased. That delay may be avoided
if you purchase shares by Federal Funds wire or certified check, or
arrange with your bank to provide telephone or written assurance to the
Transfer Agent that your purchase payment has cleared.
Involuntary redemptions of small accounts may be made by Centennial Tax Exempt
Trust if the account value has fallen below $500 for reasons other than
the fact that the market value of shares has dropped. In some cases
involuntary redemptions may be made to repay the Distributor or
Sub-Distributor for losses from the cancellation of share purchase orders.
"Backup Withholding" of federal income tax may be applied against taxable
dividends, distributions and redemption proceeds (including exchanges) if
you fail to furnish the Trust your correct, certified Social Security or
Employer Identification Number when you sign your application, or if you
under-report your income to the Internal Revenue Service.
To avoid sending duplicate copies of materials to households, the Trust will
mail only one copy of each prospectus, annual and semi-annual report to
shareholders having the same last name and address on the Trust's records.
The consolidation of these mailings, called householding, benefits the
Trust through reduced mailing expense.
If you want to receive multiple copies of these materials, you may call
the Transfer Agent at 1.800.525.9310. You may also notify the Transfer
Agent in writing. Individual copies of prospectuses and reports will be
sent to you within 30 days after the Transfer Agent receives your request
to stop householding.
Dividends and Tax Information
DIVIDENDS. Each Trust intends to declare dividends from net investment income
each regular business day and to pay those dividends to shareholders monthly on
a date selected by the Board of Trustees. To maintain a net asset value of $1.00
per share, a Trust might withhold dividends or make distributions from capital
or capital gains. Daily dividends will not be declared or paid on newly
purchased shares until Federal Funds are available to a Trust from the purchase
payment for such shares.
CAPITAL GAINS. Each Trust normally holds its securities to maturity and
therefore will not usually pay capital gains. Although the Trusts do not seek
capital gains, a Trust could realize capital gains on the sale of its portfolio
securities. If it does, it may make distributions out of any net short-term or
long-term capital gains in December of each year. A Trust may make supplemental
distributions of dividends and capital gains following the end of its fiscal
year.
What Choices Do I Have for Receiving Distributions? For Automatic Purchase and
Redemption Programs, dividends and distributions are automatically
reinvested in additional shares of the selected Trust. For direct
shareholders, when you open your account, you should specify on your
application how you want to receive your dividends and distributions. You
have four options:
o Reinvest All Distributions in the Trust. You can elect to reinvest some
distributions (dividends, short-term capital gains or long-term capital
gains distributions) in the selected Trust.
o Reinvest Capital Gains Only. You can elect to reinvest some capital gains
distributions (dividends, short-term capital gains or long-term capital
gains distributions) in the selected Trust while receiving dividends by
check or having them sent to your bank account.
o Receive All Distributions in Cash. You can elect to receive a (dividends,
short-term capital gains or long-term capital gains distributions) check
for all distributions or have them sent to your bank.
o Reinvest Your Distributions in Another Account. You can reinvest all
distributions (dividends, short-term capital gains or long-term capital
gains distributions) in the same class of shares of another eligible fund
account you have established.
Under the terms of Automatic Purchase and Redemption Programs, your
broker/dealer can redeem shares to satisfy debit balances arising in your
Program Account. If that occurs, you will be entitled to dividends on those
shares as described in your Program Agreements.
TAXES.
Centennial Money Market Trust and Centennial Government Trust. If your shares
are not held in a tax-deferred retirement account, you should be aware of
the following tax implications of investing in Centennial Money Market
Trust and Centennial Government Trust. Dividends paid from net investment
income and short-term capital gains are taxable as ordinary income.
Long-term capital gains are taxable as long-term capital gains when
distributed to shareholders. It does not matter how long you have held
your shares. Whether you reinvest your distributions in additional shares
or take them in cash, the tax treatment is the same.
Every year the Trust will send you and the IRS a statement showing the
amount of each taxable distribution you received in the previous year. Any
long-term capital gains distributions will be separately identified in the tax
information the Trust sends you after the end of the calendar year.
Centennial Tax Exempt Trust. Exempt interest dividends paid from net investment
income earned by the Trust on municipal securities will be excludable from
gross income for federal income tax purposes. A portion of a dividend that
is derived from interest paid on certain "private activity bonds" may be
an item of tax preference if you are subject to the alternative minimum
tax. If the Trust earns interest on taxable investments, any dividends
derived from those earnings will be taxable as ordinary income to
shareholders.
Dividends and capital gains distributions may be subject to state or local
taxes. Long-term capital gains are taxable as long-term capital gains when
distributed to shareholders. It does not matter how long you have held your
shares. Dividends paid from short-term capital gains and non-tax exempt net
investment income are taxable as ordinary income. Whether you reinvest your
distributions in additional shares or take them in cash, the tax treatment is
the same. Every year the Trust will send you and the IRS a statement showing the
amount of any taxable distribution you received in the previous year as well as
the amount of your tax-exempt income.
Remember, There May be Taxes on Transactions. Because each Trust seeks to
maintain a stable $1.00 per share net asset value, it is unlikely that you
will have a capital gain or loss when you sell or exchange your shares. A
capital gain or loss is the difference between the price you paid for the
shares and the price you received when you sold them. Any capital gain is
subject to capital gains tax.
Returns of Capital Can Occur. In certain cases, distributions made by a Trust
may be considered a non-taxable return of capital to shareholders. If that
occurs, it will be identified in notices to shareholders.
This information is only a summary of certain federal income tax
information about your investment. You should consult with your tax adviser
about the effect of an investment in a Trust on your particular tax situation.
<PAGE>
Financial Highlights
The Financial Highlights Tables are presented to help you understand each
Trust's financial performance for the past five fiscal years. Certain
information reflects financial results for a single Trust share. The total
returns in the tables represent the rate that an investor would have earned (or
lost) on an investment in the Trusts (assuming reinvestment of all dividends and
distributions). This information for the past five fiscal years ended June 30,
2000, has been audited by Deloitte & Touche LLP, the Trusts' independent
auditors, whose report, along with the Trusts' financial statements, are
included in the Statements of Additional Information, which are available on
request.
<TABLE>
<CAPTION>
Year Ended June 30,
---------------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value,
beginning of period.... $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment
operations--net
investment income and
net realized gain...... .05 .05 .05 .05 .05
Dividends and/or
distributions to
shareholders........... (.05) (.05) (.05) (.05) (.05)
------- ------- ------- ------ ------
Net asset value, end of
period................. $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ====== ======
TOTAL RETURN(/1/)....... 5.36% 4.75% 5.16% 4.97% 5.11%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in millions)... $18,734 $17,821 $15,114 $9,063 $6,753
Average net assets (in
millions).............. $18,537 $17,128 $12,617 $8,033 $6,077
Ratios to average net
assets:(/2/)
Net investment income... 5.20% 4.63% 5.04% 4.86% 4.99%
Expenses................ 0.67% 0.66% 0.68%(/3/) 0.73%(/3/) 0.74%(/3/)
Expenses, net of
voluntary assumption of
expenses............... N/A N/A 0.66% 0.67% 0.69%
</TABLE>
1. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns reflect
changes in net investment income only. Total returns are not annualized for
periods less than one year. 2. Annualized for periods of less than one full
year. 3. Expense ratio has not been grossed up to reflect the effect of expenses
paid indirectly.
<PAGE>
INFORMATION AND SERVICES
For More Information on Centennial Money Market Trust:
The following additional information about the Trust is available without charge
upon request:
STATEMENT OF ADDITIONAL INFORMATION This document includes additional
information about the Trust's investment policies, risks, and operations. It is
incorporated by reference into this Prospectus (which means it is legally part
of this Prospectus).
ANNUAL AND SEMI-ANNUAL REPORTS Additional information about the Trust's
investments and performance is available in the Trust's Annual and Semi-Annual
Reports to shareholders. The Annual Report includes a discussion of market
conditions and investment strategies that significantly affected the Trust's
performance during its last fiscal year.
How to Get More Information:
You can request the Statement of Additional Information, the Annual and
Semi-Annual Reports, and other information about the Trusts or your account:
----------------------------------------------------------------------
By Telephone: Call Shareholder Services, Inc.
toll-free:
1.800.525.9310
----------------------------------------------------------------------
----------------------------------------------------------------------
By Mail: Write to:
Shareholder Services, Inc.
P.O. Box 5143
Denver, Colorado 80217
----------------------------------------------------------------------
You can also obtain copies of the Statement of Additional Information and other
Trust documents and reports by visiting the SEC's Public Reference Room in
Washington, D.C. (Phone 1.202.942.8090) or the EDGAR database on the SEC's
Internet web site at http://www.sec.gov. Copies may be obtained after payment of
a duplicating fee by electronic request at the SEC's e-mail address :
[email protected] or by writing to the SEC's Public Reference Section,
Washington, D.C. 20549-0102.
No one has been authorized to provide any information about the Trust or to make
any representations about the Trust other than what is contained in this
Prospectus. This Prospectus is not an offer to sell shares of the Trust, nor a
solicitation of an offer to buy shares of the Trust, to any person in any state
or other jurisdiction where it is unlawful to make such an offer.
The Trust's shares are distributed by:
SEC File No. 811-3391 Centennial Asset Management
Corporation
PR0170.001.1100
Printed on recycled paper
<PAGE>
APPENDIX TO THE PROSPECTUS OF
CENTENNIAL MONEY MARKET TRUST
Graphic material included in Prospectus of Centennial Money Market Trust
(the "Trust") under the heading: "Annual Total Returns (as of 12/31 each year)."
Bar chart will be included in the Prospectus of the Trust depicting the
annual total returns of a hypothetical investment in shares of the Trust for the
full calendar year since the Trust's inception as a money market fund. Set forth
below are the relevant data points that will appear on the bar chart.
----------------------------------------------------------
Calendar Year Ended: Annual Total Returns
----------------------------------------------------------
----------------------------------------------------------
12/31/90 7.70%
----------------------------------------------------------
----------------------------------------------------------
12/31/91 5.85%
----------------------------------------------------------
----------------------------------------------------------
12/31/92 3.46%
----------------------------------------------------------
----------------------------------------------------------
12/31/93 2.67%
----------------------------------------------------------
----------------------------------------------------------
12/31/94 3.71%
----------------------------------------------------------
----------------------------------------------------------
12/31/95 5.26%
----------------------------------------------------------
----------------------------------------------------------
12/31/96 4.72%
----------------------------------------------------------
----------------------------------------------------------
12/31/97 4.86%
----------------------------------------------------------
----------------------------------------------------------
12/31/98 4.84%
----------------------------------------------------------
----------------------------------------------------------
12/31/99 4.43%
----------------------------------------------------------
<PAGE>
-------------------------------------------------------------------------------
Centennial Money Market Trust
-------------------------------------------------------------------------------
6803 South Tucson Way, Englewood, Colorado 80112
1.800.525.9310
Statement of Additional Information dated November 1, 2000
This Statement of Additional Information is not a Prospectus. This
document contains additional information about the Trust and supplements
information in the Prospectus dated November 1, 2000. It should be read together
with the Prospectus, which may be obtained by writing to the Trust's Transfer
Agent, Shareholder Services, Inc., at P.O. Box 5143, Denver, Colorado 80217, or
by calling the Transfer Agent at the toll-free number shown above.
Contents
Page
About the Trust
Additional Information about the Trust's Investment Policies and Risks 2
The Trust's Investment Policies..............................2
Other Investment Strategies..................................5
Investment Restrictions......................................7
How the Trust is Managed.........................................10
Organization and History....................................10
Trustees and Officers of the Trust..........................12
The Manager.................................................17
Service Plan.....................................................19
Performance of the Trust.........................................20
About Your Account
How To Buy Shares................................................22
How To Sell Shares...............................................23
How To Exchange Shares...........................................25
Dividends and Taxes..............................................27
Additional Information About the Trust...........................28
Financial Information About the Trust
Independent Auditors' Report.....................................29
Financial Statements.............................................30
Appendix A: Securities Ratings..................................A-1
Appendix B: Industry Classifications............................B-1
<PAGE>
A B O U T T H E T R U S T
Additional Information About the Trust's Investment Policies and Risks
The investment objective and the principal investment policies of the Trust are
described in the Prospectus. This Statement of Additional Information contains
supplemental information about those policies and the types of securities that
the Trust's investment manager, Centennial Asset Management Corporation,
(referred to as, the "Manager") will select for the Trust. Additional
explanations are also provided about the strategies the Trust may use to try to
achieve its objective.
The Trust's Investment Policies. The composition of the Trust's portfolio and
the techniques and strategies that the Trust's Manager uses in selecting
portfolio securities will vary over time. The Trust is not required to use all
of the investment techniques and strategies described below at all times in
seeking its goal. It may use some of the special investment techniques and
strategies at some times or not at all.
The Trust's objective is to seek the maximum current income that is
consistent with low capital risk and the maintenance of liquidity. The Trust
will not make investments with the objective of seeking capital growth. However,
the value of the securities held by the Trust may be affected by changes in
general interest rates. Because the current value of debt securities varies
inversely with changes in prevailing interest rates, if interest rates increase
after a security is purchased, that security would normally decline in value.
Conversely, if interest rates decrease after a security is purchased, its value
would rise. However, those fluctuations in value will not generally result in
realized gains or losses to the Trust since the Trust does not usually intend to
dispose of securities prior to their maturity. A debt security held to maturity
is redeemable by its issuer at full principal value plus accrued interest.
The Trust may sell securities prior to their maturity, to attempt to take
advantage of short-term market variations, or because of a revised credit
evaluation of the issuer or other considerations. The Trust may also do so to
generate cash to satisfy redemptions of Trust shares. In such cases, the Trust
may realize a capital gain or loss on the security.
|X| Ratings of Securities -- Portfolio Quality, Maturity and
Diversification. Under Rule 2a-7 of the Investment Company Act 1940, the Trust
uses the amortized cost method to value its portfolio securities to determine
the Trust's net asset value per share. Rule 2a-7 places restrictions on a money
market fund's investments. Under that Rule, the Trust may purchase only those
securities that the Manager, under Board-approved procedures, has determined
have minimal credit risks and are "Eligible Securities." The rating restrictions
described in the Prospectus and this Statement of Additional Information do not
apply to banks in which the Trust's cash is kept.
An "Eligible Security" is one that has been rated in one of the two
highest short-term rating categories by any two "nationally-recognized
statistical rating organizations." That term is defined in Rule 2a-7 and they
are referred to as "Rating Organizations" in this Statement of Additional
Information. If only one Rating Organization has rated that security, it must
have been rated in one of the two highest rating categories by that Rating
Organization. An unrated security that is judged by the Manager to be of
comparable quality to Eligible Securities rated by Rating Organizations may also
be an "Eligible Security."
Rule 2a-7 permits the Trust to purchase any number of "First Tier
Securities." These are Eligible Securities that have been rated in the highest
rating category for short-term debt obligations by at least two Rating
Organizations. If only one Rating Organization has rated a particular security,
it must have been rated in the highest rating category by that Rating
Organization. Comparable unrated securities may also be First Tier Securities.
Under Rule 2a-7, the Trust may invest only up to 5% of its total assets in
"Second Tier Securities." Those are Eligible Securities that are not "First Tier
Securities." In addition, the Trust may not invest more than:
|_| 5% of its total assets in the securities of any one issuer (other than
the U.S. government, its agencies or instrumentalities) or |_| 1% of its
total assets or $1 million (whichever is greater) in Second Tier
Securities of any one issuer.
Under Rule 2a-7, the Trust must maintain a dollar-weighted average
portfolio maturity of not more than 90 days, and the maturity of any single
portfolio investment may not exceed one year from the date of purchase. The
Board of Trustees has recommended that shareholders approve increasing the
maximum permitted maturity to the maximum permitted under Rule 2a-7 (or any
other applicable rule) which is currently 397 days. If that change is not
approved by shareholders, the prospectus and this Statement of Additional
Information will be supplemented to reflect that the change was not approved.
The Board regularly reviews reports from the Manager to show the Manager's
compliance with the Trust's procedures and with the Rule.
If a security's rating is downgraded, the Manager and/or the Board of
Trustees may have to reassess the security's credit risk. If a security has
ceased to be a First Tier Security, the Manager will promptly reassess whether
the security continues to present minimal credit risk. If the Manager becomes
aware that any Rating Organization has downgraded its rating of a Second Tier
Security or rated an unrated security below its second highest rating category,
the Trust's Board of Trustees shall promptly reassess whether the security
presents minimal credit risk and whether it is in the best interests of the
Trust to dispose of it. If the Trust disposes of the security within five days
of the Manager learning of the downgrade, the Manager will provide the Board of
Trustees with subsequent notice of such downgrade. If a security is in default,
or ceases to be an Eligible Security, or is determined no longer to present
minimal credit risks, the Board of Trustees must determine whether it would be
in the best interests of the Trust to dispose of the security.
The Rating Organizations currently designated as nationally-recognized
statistical rating organizations by the Securities and Exchange Commission are
Standard & Poor's Corporation, Moody's Investors Service, Inc., Fitch, Inc. and
Thomson BankWatch, Inc. Appendix A to this Statement of Additional Information
contains descriptions of the rating categories of those Rating Organizations.
Ratings at the time of purchase will determine whether securities may be
acquired under the restrictions described above.
|X| Bank Obligations. The Trust can invest in the bank obligations
described in the Prospectus. The Trust will buy bank obligations only from a
domestic bank with total assets of at least $2.0 billion or from a foreign bank
with total assets of at least $30.0 billion. These asset requirements apply only
at the time the obligations are acquired. In addition, the Trust may invest in
certificates of deposit of $100,000 or less of a domestic bank, regardless of
asset size, if such certificate of deposit is fully insured as to principal by
the Federal Deposit Insurance Corporation. At no time will the Trust hold more
than one certificate of deposit from any such bank
Investments in securities issued by foreign banks or foreign branches of
U.S. banks subject the Trust to certain additional investment risks, including
future political and economic developments of the country in which the branch is
located, possible imposition of withholding taxes on income payable on the
securities, possible seizure of foreign deposits, establishment of exchange
control restrictions, or other government regulation. While domestic banks are
subject to federal and/or state laws and regulations which, among other things,
require specific levels of reserves to be maintained, not all of those laws
apply to foreign branches of domestic banks or domestic branches or subsidiaries
of foreign banks. For purposes of this section, the term "bank" includes
commercial banks, savings banks and savings and loan associations.
|X| U.S. Government Securities. U.S. government securities are
obligations issued or guaranteed by the U.S. government or its agencies or
instrumentalities. They include Treasury Bills (which mature within one year
of the date they are issued) and Treasury Notes and Bonds (which are issued
with longer maturities). All Treasury securities are backed by the full
faith and credit of the United States.
U.S. government agencies and instrumentalities that issue or guarantee
securities include, but are not limited to, the Federal Housing Administration,
Farmers Home Administration, Export-Import Bank of the United States, Small
Business Administration, Government National Mortgage Association, General
Services Administration, Bank for Cooperatives, Federal Home Loan Banks, Federal
Home Loan Mortgage Corporation, Federal Intermediate Credit Banks, Federal Land
Banks, Maritime Administration, the Tennessee Valley Authority and the District
of Columbia Armory Board.
Securities issued or guaranteed by U.S. government agencies and
instrumentalities are not always backed by the full faith and credit of the
United States. Some, such as securities issued by the Federal National Mortgage
Association ("Fannie Mae"), are backed by the right of the agency or
instrumentality to borrow from the Treasury. Others, such as securities issued
by the Federal Home Loan Mortgage Corporation ("Freddie Mac"), are supported
only by the credit of the instrumentality and not by the Treasury. If the
securities are not backed by the full faith and credit of the United States, the
purchaser must look principally to the agency issuing the obligation for
repayment and may not be able to assert a claim against the United States if the
issuing agency or instrumentality does not meet its commitment. The Trust will
invest in U.S. government securities of such agencies and instrumentalities only
when the Manager is satisfied that the credit risk with respect to such
instrumentality is minimal and that the security is an Eligible Security.
<PAGE>
Other Investment Strategies
O Floating Rate/Variable Rate Obligations. The Trust may invest in
instruments with floating or variable interest rates. The interest rate on a
floating rate obligation is based on a stated prevailing market rate, such as a
bank's prime rate, the 90-day U.S. Treasury Bill rate, the rate of return on
commercial paper or bank certificates of deposit, or some other standard. The
rate on the investment is adjusted automatically each time the market rate is
adjusted. The interest rate on a variable rate obligation is also based on a
stated prevailing market rate but is adjusted automatically at a specified
interval of not less than one year. Some variable rate or floating rate
obligations in which the Trust may invest have a demand feature entitling the
holder to demand payment of an amount approximately equal to the amortized cost
of the instrument or the principal amount of the instrument plus accrued
interest at any time, or at specified intervals not exceeding one year. These
notes may or may not be backed by bank letters of credit.
Variable rate demand notes may include master demand notes, which are
obligations that permit the Trust to invest fluctuating amounts in a note. The
amount may change daily without penalty, pursuant to direct arrangements between
the Trust, as the note purchaser, and the issuer of the note. The interest rates
on these notes fluctuate from time to time. The issuer of this type of
obligation normally has a corresponding right in its discretion, after a given
period, to prepay the outstanding principal amount of the obligation plus
accrued interest. The issuer must give a specified number of days' notice to the
holders of those obligations. Generally, the changes in the interest rate on
those securities reduce the fluctuation in their market value. As interest rates
decrease or increase, the potential for capital appreciation or depreciation is
less than that for fixed-rate obligations having the same maturity.
Because these types of obligations are direct lending arrangements between
the note purchaser and issuer of the note, these instruments generally will not
be traded. Generally, there is no established secondary market for these types
of obligations, although they are redeemable from the issuer at face value.
Accordingly, where these obligations are not secured by letters of credit or
other credit support arrangements, the Trust's right to redeem them is dependent
on the ability of the note issuer to pay principal and interest on demand. These
types of obligations usually are not rated by credit rating agencies. The Trust
may invest in obligations that are not rated only if the Manager determines at
the time of investment that they are Eligible Securities. The Manager, on behalf
of the Trust, will monitor the creditworthiness of the issuers of the floating
and variable rate obligations in the Trust's portfolio on an ongoing basis.
There is no limit on the amount of the Trust's assets that may be invested in
floating rate and variable rate obligations that meet the requirements of Rule
2a-7.
|X| Asset-Backed Securities. These securities, issued by trusts and
special purpose corporations, are backed by pools of assets. They pass through
the payments on the underlying obligations to the security holders (less
servicing fees paid to the originator or fees for any credit enhancement). The
value of an asset-backed security is affected by changes in the market's
perception of the asset backing the security, the creditworthiness of the
servicing agent for the loan pool, the originator of the loans, or the financial
institution providing any credit enhancement.
Payments of principal and interest passed through to holders of
asset-backed securities are typically supported by some form of credit
enhancement, such as a letter of credit, surety bond, limited guarantee by
another entity or having a priority to certain of the borrower's other
securities. The degree of credit enhancement varies, and generally applies to
only a fraction of the asset-backed security's par value until exhausted. If the
credit enhancement of an asset-backed security held by the Trust has been
exhausted, and if any required payments of principal and interest are not made
with respect to the underlying loans, the Trust may experience losses or delays
in receiving payment.
The risks of investing in asset-backed securities are ultimately dependent
upon payment of underlying assets. As a purchaser of an asset-backed security,
the Trust would generally have no recourse to the entity that originated the
loans in the event of default by a borrower. The underlying loans are subject to
prepayments, which shorten the weighted average life of asset-backed securities
and may lower their return, in the same manner as for prepayments of a pool of
mortgage loans underlying mortgage-backed securities. However, asset-backed
securities do not have the benefit of the same security interest in the
underlying collateral as do mortgage-backed securities.
|X| Repurchase Agreements. In a repurchase transaction, the Trust acquires
a security from, and simultaneously resells it to, an approved vendor for
delivery on an agreed-upon future date. The resale price exceeds the purchase
price by an amount that reflects an agreed-upon interest rate effective for the
period during which the repurchase agreement is in effect. An "approved vendor"
may be a U.S. commercial bank or the U.S. branch of a foreign bank having total
domestic assets of at least $1 billion, or a broker-dealer with a net capital of
$50 million which has been designated a primary dealer in government securities.
The majority of these transactions run from day to day, and delivery
pursuant to the resale typically will occur within one to five days of the
purchase. The Trust will not enter into a repurchase agreement that will cause
more than 10% of its net assets to be subject to repurchase agreements maturing
in more than seven days.
Repurchase agreements are considered "loans" under the Investment Company
Act, collateralized by the underlying security. The Trust's repurchase
agreements require that at all times while the repurchase agreement is in
effect, the collateral's value must equal or exceed the repurchase price to
fully collateralize the repayment obligation. Additionally, the Manager will
monitor the vendor's creditworthiness to confirm that the vendor is financially
sound and will continuously monitor the collateral's value. However, if the
vendor fails to pay the resale price on the delivery date, the Trust may incur
costs in disposing of the collateral and may experience losses if there is any
delay in its ability to do so.
|X| Illiquid and Restricted Securities. Under the policies and procedures
established by the Trust's Board of Trustees, the Manager determines the
liquidity of certain of the Trust's investments. Investments may be illiquid
because of the absence of an active trading market, making it difficult to value
them or dispose of them promptly at an acceptable price. A restricted security
is one that has a contractual restriction on its resale or which cannot be sold
publicly until it is registered under the Securities Act of 1933.
Illiquid securities the Trust can buy include issues that may be redeemed
only by the issuer upon more than seven days notice or at maturity, repurchase
agreements maturing in more than seven days, fixed time deposits subject to
withdrawal penalties which mature in more than seven days, and other securities
that cannot be sold freely due to legal or contractual restrictions on resale.
Contractual restrictions on the resale of illiquid securities might prevent or
delay their sale by the Trust at a time when such sale would be desirable.
There are restricted securities that are not illiquid that the Trust can
buy. They include certain master demand notes redeemable on demand, and
short-term corporate debt instruments that are related to current transactions
of the issuer and therefore are exempt from registration as commercial paper.
Illiquid securities include repurchase agreements maturing in more than 7 days,
or certain participation interests other than those with puts exercisable within
7 days.
O Loans of Portfolio Securities. To attempt to increase its income, the Trust
may lend its portfolio securities to brokers, dealers and other financial
institutions. These loans are limited to not more than 10% of the value of the
Trust's total assets and are subject to other conditions described below. The
Trust will not enter into any securities lending agreements having a maturity of
greater than one year (or if the proposed change is approved by shareholders,
the maximum time permitted under Rule 2a-7). The Trust presently does not intend
to lend its securities, but if it does, the value of securities loaned is not
expected to exceed 5% of the value of the Trust's total assets. There are some
risks in lending securities. The Trust could experience a delay in receiving
additional collateral to secure a loan, or a delay in recovering the loaned
securities.
The Trust may receive collateral for a loan. Any securities received as
collateral for a loan must mature in twelve months or less. Under current
applicable regulatory requirements (which are subject to change), on each
business day the loan collateral must be at least equal to the market value of
the loaned securities. The collateral must consist of cash, bank letters of
credit, U.S. government securities or other cash equivalents in which the Trust
is permitted to invest. To be acceptable as collateral, letters of credit must
obligate a bank to pay amounts demanded by the Trust if the demand meets the
terms of the letter. Such terms and the issuing bank must be satisfactory to the
Trust.
When it lends securities, the Trust receives from the borrower an amount
equal to the interest paid or the dividends declared on the loaned securities
during the term of the loan. It may also receive negotiated loan fees and the
interest on the collateral securities, less any finders', custodian,
administrative or other fees the Trust pays in connection with the loan. The
Trust may share the interest it receives on the collateral securities with the
borrower as long as it realizes at least a minimum amount of interest required
by the lending guidelines established by its Board of Trustees.
The Trust will not lend its portfolio securities to any officer, Trustee,
employee or affiliate of the Trust or its Manager. The terms of the Trust's
loans must meet certain tests under the Internal Revenue Code and permit the
Trust to reacquire loaned securities on five business days notice or in time to
vote on any important matter.
Investment Restrictions
|X| What Are "Fundamental Policies?" Fundamental policies are those
policies that the Trust has adopted to govern its investments that can be
changed only by the vote of a "majority" of the Trust's outstanding voting
securities. Under the Investment Company Act, a "majority" vote is defined as
the vote of the holders of the lesser of:
|_| 67% or more of the shares present or represented by proxy at a
shareholder meeting, if the holders of more than 50% of the outstanding
shares are present or represented by proxy, or |_| more than 50% of the
outstanding shares.
The Trust's investment objective is a fundamental policy. Other policies
described in the Prospectus or this Statement of Additional Information are
"fundamental" only if they are identified as such. The Trust's Board of Trustees
can change non-fundamental policies without shareholder approval. However,
significant changes to investment policies will be described in supplements or
updates to the Prospectus or this Statement of Additional Information, as
appropriate. The Trust's most significant investment policies are described in
the Prospectus.
|X| Does the Trust Have Additional Fundamental Policies? The following
investment restrictions are fundamental policies of the Trust.
|_| The Trust cannot invest more than 5% of the value of its total assets
in the securities of any one issuer (other than the U.S. government or its
agencies or instrumentalities).
|_| The Trust cannot borrow money except as a temporary measure for
extraordinary or emergency purposes, and then only up to 10% of the market value
of the Trust's assets; the Trust will not make any investment when such
borrowing exceeds 5% of the value of its assets; no assets of the Trust may be
pledged, mortgaged or assigned to secure a debt.
|_| The Trust cannot make loans, except the Trust may: (i) purchase debt
securities, (ii) purchase debt securities subject to repurchase agreements, or
(iii) lend its securities as described in this Statement of Additional
Information.
|_| The Trust cannot invest in commodities or commodity contracts or
invest in interests in oil, gas or other mineral exploration or mineral
development programs.
|_| The Trust cannot invest in real estate; however the Trust may purchase
debt securities issued by companies which invest in real estate or interests
therein.
|_| The Trust cannot purchase securities on margin or make short sales of
securities.
|_| The Trust cannot invest in or hold securities of any issuer if those
officers and Trustees of the Trust or the Manager who beneficially own
individually more than 0.5% of the securities of such issuer together own more
than 5% of the securities of such issuer.
|_| The Trust cannot underwrite securities of other companies.
|_| The Trust cannot invest in securities of other investment companies,
except in connection with a consolidation or merger.
|_| The Trust cannot issue "senior securities," but this does not prohibit
certain investment activities for which assets of the Trust are designated as
segregated, or margin, collateral or escrow arrangements are established, to
cover the related obligations.
The Board of Trustees has recommended that shareholders approve changing or
eliminating certain fundamental policies of the Trust. These changes are
expected to be approved by shareholders at a meeting which is scheduled to be
held on or about December 15, 2000 (or any adjournments of that meeting). If the
changes are not approved by shareholders, the Manager will supplement this
Statement of Additional Information to reflect that the changes were not
approved. The changes to fundamental policies that the Board of Trustees has
recommended that shareholders approve are as follows:
? Eliminating certain fundamental investment restrictions.
A. Eliminating the fundamental investment restriction that limits investments
in securities of unseasoned issuers. Specifically, the Board has
recommended that shareholders approve the elimination of the following
fundamental investment restriction:
---------------------------------------------------------------------
Current
---------------------------------------------------------------------
---------------------------------------------------------------------
The Trust cannot invest more that 5% of the value of its total assets in
securities of companies that have operated less than three years, including the
operations of predecessors.
---------------------------------------------------------------------
B. Eliminating the fundamental investment restriction concerning the Trust's
purchase of more than 10% of non-voting securities or more than 10% of the
total debt securities of any one issuer. Specifically, the Board has
recommended that shareholders approve the elimination of the following
fundamental investment restriction:
---------------------------------------------------------------------
Current
---------------------------------------------------------------------
---------------------------------------------------------------------
The Trust cannot purchase more than 10% of the outstanding non-voting securities
or more than 10% of the total debt securities of any one issuer.
---------------------------------------------------------------------
? Approving amendments to certain fundamental investment
restrictions.
A. Amending the fundamental investment restriction on investing in debt
securities having a maturity greater than one year. The Trust currently
has a fundamental investment restriction that limits the maturity on debt
securities it can purchase to one year or less. This restriction is more
restrictive than is required under Rule 2a-7. Accordingly, the Board has
recommended that shareholders approve the following change:
---------------------------------------------------------------------
Current Proposed
---------------------------------------------------------------------
---------------------------------------------------------------------
The Trust cannot invest in any The Trust cannot invest in any debt instrument
having a maturity debt instrument having a in excess of one year from the
maturity in excess of the time date of the investment or, in the period provided
for in Rule 2a-7 case of a debt instrument subject of the Investment Company Act
of to a repurchase agreement or 1940, or any other applicable called for
redemption, having a rule, or in the case of a debt repurchase or redemption
date instrument subject to a more than one year from the date repurchase
agreement or called of the investment. for redemption, unless purchased
subject to a demand feature
which may not exceed the time
period provided for in Rule 2a-7
---------------------------------------------------------------------
B. Amending the Trust's concentration policy. The Securities and Exchange
Commission
as requested that the Trust's concentration policy be amended to prohibit
the purchase of securities of companies in any one industry if "25% or
more of its total assets" would consist of securities of companies in that
industry, (rather than "more than 25% of its total assets"). Accordingly,
the Board has recommended that shareholders approve the following change:
---------------------------------------------------------------------
Current Proposed
---------------------------------------------------------------------
---------------------------------------------------------------------
The Trust cannot concentrate to The Trust cannot invest 25% or the extent of 25%
of its assets more of its total assets in any in any industry; however, there
one industry; however, for the is no limitation as to investment purposes of
this restriction, in obligations issued by banks, municipal securities and U.S.
savings and loan associations or government obligations are not the U.S.
Government and its considered to be part of any agencies or instrumentalities.
single industry.
---------------------------------------------------------------------
These proposed changes are described in more detail in the Proxy Statement
which was previously sent to shareholders. If you have any questions about these
changes, please contact the Transfer Agent at 1.800.525.9310.
Except for the fundamental investment restriction regarding the Trust's
borrowing policy, unless the Prospectus or this Statement of Additional
Information states that a percentage restriction applies on an ongoing basis, it
applies only at the time the Trust makes an investment. The Trust need not sell
securities to meet the percentage limits if the value of the investment
increases in proportion to the size of the Trust.
For purposes of the Trust's policy not to concentrate its investments in
securities of issuers, the Trust has adopted the industry classifications set
forth in Appendix B to this Statement of Additional Information. This is not a
fundamental policy.
How the Trust Is Managed
Organization and History. The Trust is an open-end, diversified management
investment company organized as a Massachusetts business trust in 1979, with an
unlimited number of authorized shares of beneficial interest.
The Trust is governed by a Board of Trustees, which is responsible for
protecting the interests of shareholders under Massachusetts law. The Trustees
meet periodically throughout the year to oversee the Trust's activities, review
its performance, and review the actions of the Manager. Although the Trust will
not normally hold annual meetings of its shareholders, it may hold shareholder
meetings from time to time on important matters. Shareholders of the Trust may
have the right to call a meeting to remove a Trustee or to take other action
described in the Declaration of Trust.
|X| Classes of Shares. The Board of Trustees has the power, without
shareholder approval, to divide unissued shares of the Trust into two or more
classes. The Board has done so, and the Trust currently has authorized the
issuance of two classes of shares. The class of shares currently offered by the
Prospectus and this Statement of Additional information has no special name
designation. The Trust's other class of shares, designated as "Class Y" shares,
is not currently available. At such time as Class Y shares are available, both
classes of shares will invest in the same investment portfolio. Shares are
freely transferable. Each share has one vote at shareholder meetings, with
fractional shares voting proportionally on matters submitted to the vote of
shareholders. Each class of shares:
|_| has its own dividends and distributions,
|_| pays certain expenses which may be different for the
different classes,
|_| may have a different net asset value,
|_| may have separate voting rights on matters in which the interests of one
class are different from the interests of another class, and
|_| votes as a class on matters that affect that class
alone.
|X| Meetings of Shareholders. As a Massachusetts business trust, the Trust
is not required to hold, and does not plan to hold, regular annual meetings of
shareholders. The Trust will hold meetings when required to do so by the
Investment Company Act or other applicable law. It will also do so when a
shareholder meeting is called by the Trustees or upon proper request of the
shareholders.
Shareholders have the right, upon the declaration in writing or vote of
two-thirds of the outstanding shares of the Trust, to remove a Trustee. The
Trustees will call a meeting of shareholders to vote on the removal of a Trustee
upon the written request of the record holders of 10% of the outstanding shares
of the Trust. If the Trustees receive a request from at least 10 shareholders
stating that they wish to communicate with other shareholders to request a
meeting to remove a Trustee, the Trustees will then either make the shareholder
lists of the Trust available to the applicants or mail their communication to
all other shareholders at the applicants' expense. The shareholders making the
request must have been shareholders for at least six months and must hold shares
of the Trust valued at $25,000 or more or constituting at least 1% of the
outstanding shares of the Trust, whichever is less. The Trustees may also take
other action as permitted by the Investment Company Act.
|_| Shareholder and Trustee Liability. The Declaration of Trust contains
an express disclaimer of shareholder or Trustee liability for the Trust's
obligations. It also provides for indemnification and reimbursement of expenses
out of the Trust's property for any shareholder held personally liable for its
obligations. The Declaration of Trust also states that upon request, the Trust
shall assume the defense of any claim made against a shareholder for any act or
obligation of the Trust and shall satisfy any judgment on that claim.
Massachusetts law permits a shareholder of a business trust (such as the Trust)
to be held personally liable as a "partner" under certain circumstances.
However, the risk that a Trust shareholder will incur financial loss from being
held liable as a "partner" of the Trust is limited to the relatively remote
circumstances in which the Trust would be unable to meet its obligations.
The Trust's contractual arrangements state that any person doing business
with the Trust (and each shareholder of the Trust) agrees under the Declaration
of Trust to look solely to the assets of the Trust for satisfaction of any claim
or demand that may arise out of any dealings with the Trust. Additionally, the
Trustees shall have no personal liability to any such person, to the extent
permitted by law.
Trustees and Officers of the Trust. The Trust's Trustees and officers and their
principal occupations and business affiliations during the past five years are
listed below. Trustees denoted with an asterisk (*) below are deemed to be
"interested persons" of the Trust under the Investment Company Act. All of the
Trustees are also trustees, directors or managing general partners of the
following Denver-based Oppenheimer funds1:
Oppenheimer Senior Floating Rate
Oppenheimer Cash Reserves Fund
Oppenheimer Champion Income Fund Oppenheimer Strategic Income Fund
Oppenheimer Total Return Fund,
Oppenheimer Capital Income Fund Inc.
Oppenheimer High Yield Fund Oppenheimer Variable Account Funds
Oppenheimer International Bond
Fund Panorama Series Fund, Inc.
Oppenheimer Integrity Funds Centennial America Fund, L. P.
Oppenheimer Limited-Term Centennial California Tax Exempt
Government Fund Trust
Oppenheimer Main Street Funds,
Inc. Centennial Government Trust
Oppenheimer Main Street
Opportunity Fund Centennial Money Market Trust
Oppenheimer Main Street Small Centennial New York Tax Exempt
Cap Fund Trust
Oppenheimer Municipal Fund Centennial Tax Exempt Trust
Oppenheimer Real Asset Fund
Robert G. Avis*, Trustee, Age: 69.
One North Jefferson Ave., St. Louis, Missouri 63103
Director and President of A.G. Edwards Capital, Inc. (General Partner of
private equity funds), formerly, until March 2000, Chairman, President and
Chief Executive Officer of A.G. Edwards Capital, Inc.; formerly, until March
1999, Vice Chairman and Director of A.G. Edwards and Vice Chairman of A.G.
Edwards & Sons, Inc. (its brokerage company subsidiary); until March 1999,
Chairman of A.G. Edwards Trust Company and A.G.E. Asset Management
(investment advisor); until March 2000, a Director of A.G. Edwards & Sons and
A.G. Edwards Trust Company.
George C. Bowen, Trustee, Age: 64.
9224 Bauer Court, Lone Tree, Colorado 80124
Formerly (until April 1999) Mr. Bowen held the following positions: Senior Vice
President (since September 1987) and Treasurer (since March 1985) of
OppenheimerFunds, Inc. of which the Manager is a wholly-owned subsidiary; Vice
President (since June 1983) and Treasurer (since March 1985) of
OppenheimerFunds, Distributor, Inc., a subsidiary of OppenheimerFunds, Inc. and
the Trust's Sub-Distributor; Senior Vice President (since February 1992),
Treasurer (since July 1991) Assistant Secretary and a director (since December
1991) of Centennial Asset Management Corp., the Trust's Manager; Vice President
(since October 1989) and Treasurer (since April 1986) of HarbourView Asset
Management Corporation, an investment advisor subsidiary of OppenheimerFunds,
Inc.; President, Treasurer and a director of Centennial Capital Corporation
(since June 1989), Vice President and Treasurer (since August 1978) and
Secretary (since April 1981) of Shareholder Services, Inc., the Trust's Transfer
Agent; Vice President, Treasurer and Secretary of Shareholder Financial
Services, Inc. (since November 1989) ), a transfer agent subsidiary of
OppenheimerFunds, Inc; Assistant Treasurer of Oppenheimer Acquisition Corp.,
OppenheimerFunds, Inc.'s parent holding company (since March 1998); Treasurer of
Oppenheimer Partnership Holdings, Inc. (since November 1989), a holding company
subsidiary of OppenheimerFunds, Inc.; Vice President and Treasurer of
Oppenheimer Real Asset Management, Inc. (since July 1996) an investment advisor
subsidiary of OppenheimerFunds, Inc.; Treasurer of OppenheimerFunds
International Ltd. and Oppenheimer Millennium Funds plc (since October 1997),
offshore fund management subsidiaries of OppenheimerFunds, Inc.
Jon S. Fossel, Trustee, Age: 58.
P.O. Box 44, Mead Street, Waccabuc, New York 10597
Formerly (until October 1990) Chairman and a director of OppenheimerFunds,
Inc.; President and a director of Oppenheimer Acquisition Corp., Shareholder
Services, Inc. and Shareholder Financial Services, Inc.
Sam Freedman, Trustee, Age: 60.
4975 Lakeshore Drive, Littleton, Colorado 80123
Formerly (until October 1994) Chairman and Chief Executive Officer of
OppenheimerFunds Services, Chairman, Chief Executive Officer and a director of
Shareholder Services, Inc., Chairman, Chief Executive Officer and director of
Shareholder Financial Services, Inc., Vice President and director of Oppenheimer
Acquisition Corp. and a director of OppenheimerFunds, Inc.
Raymond J. Kalinowski, Trustee, Age: 71.
44 Portland Drive, St. Louis, Missouri 63131
Formerly a director of Wave Technologies International, Inc. (a computer
products training company), self-employed consultant (securities matters).
C. Howard Kast, Trustee, Age: 78.
2552 East Alameda, Denver, Colorado 80209
Formerly Managing Partner of Deloitte, Haskins & Sells (an accounting firm).
Robert M. Kirchner, Trustee, Age: 79.
7500 E. Arapahoe Road, Englewood, Colorado 80112
President of The Kirchner Company (management consultants).
Bridget A. Macaskill*, President and Trustee, Age: 52
Two World Trade Center, New York, New York 10048-0203
Chairman (since August 2000), Chief Executive Officer (since September 1995) and
a director (since December 1994) of OppenheimerFunds, Inc.; President (since
September 1995) and a director (since October 1990) of Oppenheimer Acquisition
Corp.; President, Chief Executive Officer and a director (since March 2000) of
OFI Private Investments, Inc., an investment advisor subsidiary of
OppenheimerFunds, Inc.; Chairman and a director of Shareholder Services, Inc.
(since August 1994) and Shareholder Financial Services, Inc. (since September
1995); President (since September 1995) and a director (since November 1989) of
Oppenheimer Partnership Holdings, Inc; President and a director (since October
1997) of OppenheimerFunds International Ltd. and of Oppenheimer Millennium Funds
plc; a director of HarbourView Asset Management Corporation (since July 1991)
and of Oppenheimer Real Asset Management, Inc. (since July 1996); a director
(since April 2000) of OppenheimerFunds Legacy Program, a charitable trust
program established by OppenheimerFunds, Inc.; a director of Prudential
Corporation plc (a U.K. financial service company); President and a trustee of
other Oppenheimer funds; formerly President of OppenheimerFunds, Inc. (June 1991
- August 2000).
James C. Swain*, Chairman, Chief Executive Officer and Trustee, Age: 66 6803
South Tucson Way, Englewood, Colorado 80112 Vice Chairman (since September 1988)
of OppenheimerFunds, Inc.; formerly President and a director of the Manager and
Chairman of the Board of Shareholder Services, Inc.
Carol E. Wolf, Vice President and Portfolio Manager, Age: 48.
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President (since June 2000) of OppenheimerFunds, Inc.; an officer
and portfolio manager of other Oppenheimer funds; formerly Vice President of
the Manager and of OppenheimerFunds, Inc. (June 1990 - June 2000).
Andrew J. Donohue, Vice President and Secretary, Age: 50.
Two World Trade Center, New York, New York 10048-0203
Executive Vice President (since January 1993), General Counsel (since October
1991) and a director (since September 1995) of OppenheimerFunds, Inc.; Executive
Vice President (since September 1993) and a director (since January 1992) of
OppenheimerFunds Distributor, Inc.; Executive Vice President, General Counsel
and a director (since September 1995) of HarbourView Asset Management
Corporation, Shareholder Services, Inc., Shareholder Financial Services, Inc.
and Oppenheimer Partnership Holdings, Inc., of OFI Private Investments, Inc.
(since March 2000), and of PIMCO Trust Company (since May 2000); President and a
director of the Manager; (since September 1995) and of Oppenheimer Real Asset
Management, Inc. (since July 1996); Vice President and a director (since
September 1997) of OppenheimerFunds International Ltd. and Oppenheimer
Millennium Funds plc; a director (since April 2000) of OppenheimerFunds Legacy
Program; General Counsel (since May 1996) and Secretary (since April 1997) of
Oppenheimer Acquisition Corp.; an officer of other Oppenheimer funds.
Brian W. Wixted, Treasurer, Principal Financial and Accounting Officer, Age:
41.
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President and Treasurer (since March 1999) of OppenheimerFunds,
Inc.; Treasurer (since March 1999) of HarbourView Asset Management Corporation,
Shareholder Services, Inc., Oppenheimer Real Asset Management Corporation,
Shareholder Financial Services, Inc. and Oppenheimer Partnership Holdings, Inc.,
of OFI Private Investments, Inc. (since March 2000) and of OppenheimerFunds
International Ltd. and Oppenheimer Millennium Funds plc (since May 2000);
Treasurer and Chief Financial Officer (since May 2000) of PIMCO Trust Company;
Assistant Treasurer (since March 1999) of Oppenheimer Acquisition Corp. and of
the Manager; an officer of other Oppenheimer funds; formerly Principal and Chief
Operating Officer, Bankers Trust Company Mutual Fund Services Division (March
1995 - March 1999); Vice President and Chief Financial Officer of CS First
Boston Investment Management Corp.
(September 1991 - March 1995).
Robert G. Zack, Assistant Secretary, Age: 52.
Two World Trade Center, New York, New York 10048-0203
Senior Vice President (since May 1985) and Associate General Counsel (since
May 1981) of OppenheimerFunds, Inc.; Assistant Secretary of Shareholder
Services, Inc. (since May 1985), Shareholder Financial Services, Inc. (since
November 1989); OppenheimerFunds International Ltd. and Oppenheimer
Millennium Funds plc (since October 1997); an officer of other Oppenheimer
funds.
Robert J. Bishop, Assistant Treasurer, Age: 41.
Vice President of OppenheimerFunds, Inc. (since May 1996); an officer of other
Oppenheimer funds; formerly an Assistant Vice President (April 1994 May 1996)
and a Fund Controller of OppenheimerFunds, Inc.
O Remuneration of Trustees. The officers of the Trust and certain Trustees of
the Trust (Ms. Macaskill and Mr. Swain) who are affiliated with the Manager
receive no salary or fee from the Trust. The remaining Trustees of the Trust
received the compensation shown below. The compensation from the Trust was paid
during its fiscal year ended June 30, 2000. The compensation from all of the
Denver-based Oppenheimer funds includes the Trust and is compensation received
as a trustee, director, managing general partner or member of a committee of the
Board during the calendar year 1999.
<PAGE>
------------------------------------------------------------------
Aggregate Total Compensation
Trustee's Name Compensation from all Denver-Based
and Other Positions from Trust Oppenheimer Funds1
------------------------------------------------------------------
------------------------------------------------------------------
Robert G. Avis $7,230 $67,998
------------------------------------------------------------------
------------------------------------------------------------------
William A. Baker2 $7,230 $67,998
------------------------------------------------------------------
------------------------------------------------------------------
George C. Bowen $4,007 $23,879
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------------------------------------------------------------------
Jon S. Fossel $7,433 $66,586
Review Committee Member
-----------------------------------------
------------------------------------------------------------------
Sam Freedman $7,868 $73,998
Review Committee Member
-----------------------------------------
------------------------------------------------------------------
Raymond J. Kalinowski $7,672 $73,248
Audit Committee Member
-----------------------------------------
------------------------------------------------------------------
C. Howard Kast $8,521 $78,873
Audit and Review
Committee Chairman
-----------------------------------------
------------------------------------------------------------------
Robert M. Kirchner $7,453 $69,248
Audit Committee Member
------------------------------------------------------------------
-----------------------------------------
Ned M. Steel2 $7,230 $67,998
------------------------------------------------------------------
1. For the 1999 calendar year.
2. Effective July 1, 2000, Messrs. Baker and Steel resigned as Trustees of
the Trust.
Deferred Compensation Plan for Trustees. The Trustees have adopted a
Deferred Compensation Plan for disinterested Trustees that enables them to elect
to defer receipt of all or a portion of the annual fees they are entitled to
receive from the Trust. Under the plan, the compensation deferred by a Trustee
is periodically adjusted as though an equivalent amount had been invested in
shares of one or more Oppenheimer funds selected by the Trustee. The amount paid
to the Trustee under this plan will be determined based upon the performance of
the selected funds.
Deferral of fees of the Trustees under this plan will not materially
affect the Trust's assets, liabilities or net income per share. This plan will
not obligate the Trust to retain the services of any Trustee or to pay any
particular level of compensation to any Trustee. Pursuant to an Order issued by
the Securities and Exchange Commission, the Trust may invest in the funds
selected by any Trustee under this plan without shareholder approval for the
limited purpose of determining the value of the Trustees' deferred fee accounts.
|X| Major Shareholders. As of October 10, 2000 the only person who owned
of record or was known by the Trust to own beneficially 5% or more of the
Trust's outstanding retail shares was A.G. Edwards & Sons, Inc. 1 North
Jefferson Avenue, St. Louis, Missouri 63103, which owned 19,505,155,245.27
shares of the Trust which was 99.6% of the outstanding shares of the Trust on
that date, for accounts of its customers none of whom individually owned more
than 5% of the outstanding shares.
The Manager. The Manager, Centennial Asset Management Corporation, is
wholly-owned by OppenheimerFunds, Inc., which is a wholly-owned subsidiary of
Oppenheimer Acquisition Corp., a holding company controlled by Massachusetts
Mutual Life Insurance Company.
The portfolio managers of the Trust are principally responsible for the
day-to-day management of the Trust's investment portfolio. Other members of the
Manager's fixed-income portfolio department, particularly security analysts,
traders and other portfolio managers, have broad experience with fixed-income
securities. They provide the Trust's portfolio managers with research and
support in managing the Trust's investments.
|X| The Investment Advisory Agreement. The Manager provides investment
advisory and management services to the Trust under an investment advisory
agreement between the Manager and the Trust. The Manager selects securities for
the Trust's portfolio and handles its day-to-day business. The agreement
requires the Manager, at its expense, to provide the Trust with adequate office
space, facilities and equipment. It also requires the Manager to provide and
supervise the activities of all administrative and clerical personnel required
to provide effective administration for the Trust. Those responsibilities
include the compilation and maintenance of records with respect to its
operations, the preparation and filing of specified reports, and composition of
proxy materials and registration statements for continuous public sale of shares
of the Trust.
Expenses not expressly assumed by the Manager under the investment
advisory agreement are paid by the Trust. The investment advisory agreement
lists examples of expenses paid by the Trust. The major categories relate to
interest, taxes, fees to unaffiliated Trustees, legal and audit expenses,
custodian and transfer agent expenses, share issuance costs, certain printing
and registration costs and non-recurring expenses, including litigation costs.
The management fees paid by the Trust to the Manager are calculated at the rates
described in the Prospectus.
----------------------------------------------------------------------
Fiscal Year Management Fee Paid to Centennial Asset Management
ending 6/30 Corporation
----------------------------------------------------------------------
----------------------------------------------------------------------
1998 $45,145,160
----------------------------------------------------------------------
----------------------------------------------------------------------
1999 $57,461,310
----------------------------------------------------------------------
----------------------------------------------------------------------
2000 $62,139,589
----------------------------------------------------------------------
Under the investment advisory agreement, the Manager has agreed to
reimburse the Trust to the extent that the Trust's total expenses (including the
management fee but excluding interest, taxes, brokerage commissions, and
extraordinary expenses such as litigation costs) exceed in any fiscal year the
lesser of: (i) 1.5% of average annual net assets of the Trust up to $30 million
plus 1% of the average annual net assets in excess of $30 million or; (ii) 25%
of the total annual investment income of the Trust. For fiscal years ended June
30, 1998, June 30, 1999 and June 30, 2000, the reimbursements by the Manager to
the Trust were $2,382,437, $0, and $0, respectively.
The investment advisory agreement provides that the Manager shall not be
liable for any loss sustained by reason of the adoption of an investment policy
or the purchase, sale or retention of any security on its recommendation,
whether or not such recommendation shall have been based upon its own
investigation and research or upon investigation and research made by any other
individual, firm or corporation, if such recommendation shall have been made and
such other individual, firm or corporation shall have been selected with due
care and in good faith, provided that nothing in the agreement shall be
construed to protect the Manager against any liability to the Trust or its
shareholders by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties, or by reason of its reckless disregard of its
obligations and duties under the agreement.
|X| The Distributor. Under its General Distributor's Agreement with the
Trust, Centennial Asset Management Corporation acts as the Trust's principal
underwriter and Distributor in the continuous public offering of the Trust's
shares. The Distributor is not obligated to sell a specific number of shares.
The Distributor bears the expenses normally attributable to sales, including
advertising and the cost of printing and mailing prospectuses, other than those
furnished to existing shareholders. The Trust's Sub-Distributor is
OppenheimerFunds Distributors, Inc.
Portfolio Transactions. Portfolio decisions are based upon recommendations and
judgment of the Manager subject to the overall authority of the Board of
Trustees. Most purchases made by the Trust are principal transactions at net
prices, so the Trust incurs little or no brokerage costs. The Trust deals
directly with the selling or purchasing principal or market maker without
incurring charges for the services of a broker on its behalf unless the Manager
determines that a better price or execution may be obtained by using the
services of a broker. Purchases of portfolio securities from underwriters
include a commission or concession paid by the issuer to the underwriter, and
purchases from dealers include a spread between the bid and asked prices.
The Trust seeks to obtain prompt execution of orders at the most favorable
net price. If broker/dealers are used for portfolio transactions, transactions
may be directed to broker/dealers for their execution and research services. The
research services provided by a particular broker may be useful only to one or
more of the advisory accounts of the Manager and its affiliates. Investment
research received for the commissions of those other accounts may be useful both
to the Trust and one or more of such other accounts. Investment research
services may be supplied to the Manager by a third party at the instance of a
broker through which trades are placed. It may include information and analyses
on particular companies and industries as well as market or economic trends and
portfolio strategy, receipt of market quotations for portfolio evaluations,
information systems, computer hardware and similar products and services. If a
research service also assists the Manager in a non-research capacity (such as
bookkeeping or other administrative functions), then only the percentage or
component that provides assistance to the Manager in the investment
decision-making process may be paid in commission dollars.
The research services provided by brokers broaden the scope and supplement
the research activities of the Manager. That research provides additional views
and comparisons for consideration, and helps the Manager obtain market
information for the valuation of securities held in the Trust's portfolio or
being considered for purchase.
Subject to applicable rules covering the Manager's activities in this
area, sales of shares of the Trust and/or the other investment companies managed
by the Manager or distributed by the Distributor may also be considered as a
factor in the direction of transactions to dealers. That must be done in
conformity with the price, execution and other considerations and practices
discussed above. Those other investment companies may also give similar
consideration relating to the sale of the Trust's shares. No portfolio
transactions will be handled by any securities dealer affiliated with the
Manager.
The Trust may experience high portfolio turnover that may increase the
Trust's transaction costs. However, since brokerage commissions, if any, are
small, high turnover does not have an appreciable adverse effect upon the income
of the Trust.
Service Plan
The Trust has adopted a Service Plan for the shares. The plan has been approved
by a vote of the Board of Trustees, including a majority of the Independent
Trustees2, cast in person at a meeting called for the purpose of voting on that
plan.
Under the plan, the Manager and the Distributor may make payments to
affiliates and, in their sole discretion, from time to time, may use their own
resources (at no direct cost to the Trust) to make payments to brokers, dealers
or other financial institutions for distribution and administrative services
they perform. The Manager may use its profits from the advisory fee it receives
from the Trust. In their sole discretion, the Distributor and the Manager may
increase or decrease the amount of payments they make from their own resources
to plan recipients.
Unless a plan is terminated as described below, the plan continues in
effect from year to year but only if the Trust's Board of Trustees and its
Independent Trustees specifically vote annually to approve its continuance.
Approval must be by a vote cast in person at a meeting called for the purpose of
voting on continuing the plan. A plan may be terminated at any time by the vote
of a majority of the Independent Trustees or by the vote of the holders of a
"majority" (as defined in the Investment Company Act) of the outstanding shares
of the Trust.
The Board of Trustees and the Independent Trustees must approve all
material amendments to a plan. An amendment to increase materially the amount of
payments to be made under a plan must be approved by shareholders of the class
affected by the amendment. The approval must be by a "majority" (as defined in
the Investment Company Act) of the shares.
While the plan is in effect, the Treasurer of the Trust shall provide
separate written reports on the plan to the Board of Trustees at least quarterly
for its review. The Reports shall detail the amount of all payments made under
the plan and the purpose for which the payments were made. Those reports are
subject to the review and approval of the Independent Trustees.
The plan states that while it is in effect, the selection and nomination
of those Trustees of the Trust who are not "interested persons" of the Trust is
committed to the discretion of the Independent Trustees. This does not prevent
the involvement of others in the selection and nomination process as long as the
final decision as to selection or nomination is approved by a majority of the
Independent Trustees.
Under the plan, no payment will be made to any recipient in any quarter in
which the aggregate net asset value of all Trust shares held by the recipient
for itself and its customers does not exceed a minimum amount, if any, that may
be set from time to time by a majority of the Independent Trustees. The Board of
Trustees has set no minimum amount of assets to qualify for payments under the
plan.
|X| Service Plan Fees. Under the service plan, the Distributor currently
uses the fees it receives from the Trust to pay brokers, dealers and other
financial institutions (they are referred to as "recipients") for personal
services and account maintenance services they provide for their customers who
hold shares. The services include, among others, answering customer inquiries
about the Trust, assisting in establishing and maintaining accounts in the
Trust, making the Trust's investment plans available and providing other
services at the request of the Trust or the Distributor. The service plan
permits reimbursements to the Distributor at a rate of up to 0.20% of average
annual net assets of the shares. While the plan permits the Board to authorize
payments to the Distributor to reimburse itself for services under the plan, the
Board has not yet done so. The Distributor makes payments to plan recipients
quarterly at an annual rate not to exceed 0.20% of the average annual net assets
consisting of shares held in the accounts of the recipients or their customers.
For the fiscal year ended June 30, 2000 payments under the plan totaled
$36,929,811, all of which was paid by the Distributor to recipients. That
included $1,208 paid to an affiliate of the Distributor's parent company. For
the fiscal year ended June 30, 2000, the Manager paid, in the aggregate,
$54,937,351 in fees out of its own resources for distribution assistance. Any
unreimbursed expenses the Distributor incurs with respect to the shares in any
fiscal year cannot be recovered in subsequent years. The Distributor may not use
payments received under the plan to pay any of its interest expenses, carrying
charges, or other financial costs, or allocation of overhead.
Performance of the Trust
Explanation of Performance Terminology. The Trust uses a variety of terms to
illustrate its performance. These terms include "yield," "compounded effective
yield" and "average annual total return." An explanation of how yields and total
returns are calculated is set forth below. The charts below show the Trust's
performance as of the Trust's most recent fiscal year end. You can obtain
current performance information by calling the Trust's Transfer Agent at
1.800.525.9310.
The Trust's illustrations of its performance data in advertisements must
comply with rules of the Securities and Exchange Commission. Those rules
describe the types of performance data that may be used and how it is to be
calculated. If the Trust shows total returns in addition to its yields, the
returns must be for the 1-, 5- and 10-year periods ending as of the most recent
calendar quarter prior to the publication of the advertisement (or its
submission for publication).
Use of standardized performance calculations enables an investor to
compare the Trust's performance to the performance of other funds for the same
periods. However, a number of factors should be considered before using the
Trust's performance information as a basis for comparisons with other
investments:
|_| Yields and total returns measure the performance of a hypothetical
account in the Trust over various periods and do not show the performance
of each shareholder's account. Your account's performance will vary from
the model performance data if your dividends are received in cash, or you
buy or sell shares during the period, or you bought your shares at a
different time than the shares used in the model. |_| An investment in the
Trust is not insured by the FDIC or any other government agency. |_| The
Trust's yield is not fixed or guaranteed and will fluctuate. |_| Yields
and total returns for any given past period represent historical
performance information and are not, and should not be considered, a
prediction of future yields or returns.
|_| Yields. The Trust's current yield is calculated for a seven-day
period of time as follows. First, a base period return is calculated for the
seven-day period by determining the net change in the value of a hypothetical
pre-existing account having one share at the beginning of the seven-day period.
The change includes dividends declared on the original share and dividends
declared on any shares purchased with dividends on that share, but such
dividends are adjusted to exclude any realized or unrealized capital gains or
losses affecting the dividends declared. Next, the base period return is
multiplied by 365/7 to obtain the current yield to the nearest hundredth of one
percent.
The compounded effective yield for a seven-day period is calculated by (1)
adding 1 to the base period return (obtained as described above), (2)
raising the sum to a power equal to 365 divided by 7, and (3) subtracting
1 from the result.
The yield as calculated above may vary for accounts less than
approximately $100 in value due to the effect of rounding off each daily
dividend to the nearest full cent. The calculation of yield under either
procedure described above does not take into consideration any realized or
unrealized gains or losses on the Trust's portfolio securities which may affect
dividends. Therefore, the return on dividends declared during a period may not
be the same on an annualized basis as the yield for that period.
Total Return Information. There are different types of "total returns"
to measure the Trust's performance. Total return is the change in value of a
hypothetical investment in the Trust over a given period, assuming that all
dividends and capital gains distributions are reinvested in additional shares
and that the investment is redeemed at the end of the period. The cumulative
total return measures the change in value over the entire period (for example,
ten years). An average annual total return shows the average rate of return for
each year in a period that would produce the cumulative total return over the
entire period. However, average annual total returns do not show actual
year-by-year performance. The Trust uses standardized calculations for its total
returns as prescribed by the SEC.
The methodology is discussed below.
|_| Average Annual Total Return. The "average annual total return" of
each class is an average annual compounded rate of return for each year in a
specified number of years. It is the rate of return based on the change in value
of a hypothetical initial investment of $1,000 ("P" in the formula below) held
for a number of years ("n") to achieve an Ending Redeemable Value ("ERV" in the
formula) of that investment, according to the following formula:
1/n
ERV
--- - 1 = Average Annual Total Return
P
|_| Cumulative Total Return. The "cumulative total return" calculation
measures the change in value of a hypothetical investment of $1,000 over an
entire period of years. Its calculation uses some of the same factors as average
annual total return, but it does not average the rate of return on an annual
basis. Cumulative total return is determined as follows:
ERV-P
----- = Total Return
P
----------------------------------------------------------------------
Yield Compounded Average Annual Total Returns (at
(7 days ended Effective 6/30/00)
6/30/00) Yield
(7 days
ended
6/30/00)
----------------------------------------------------------------------
----------------------------------------------------------------------
1-Year 5 Years 10 Years
----------------------------------------------------------------------
----------------------------------------------------------------------
6.03% 6.22% 5.36% 5.07% 4.77%
----------------------------------------------------------------------
|X| Other Performance Comparisons. Yield information may be useful to
investors in reviewing the Trust's performance. The Trust may make comparisons
between its yield and that of other investments, by citing various indices such
as The Bank Rate Monitor National Index (provided by Bank Rate MonitorJ) which
measures the average rate paid on bank money market accounts, NOW accounts and
certificates of deposits by the 100 largest banks and thrifts in the top ten
metro areas. When comparing the Trust's yield with that of other investments,
investors should understand that certain other investment alternatives such as
certificates of deposit, U.S. government securities, money market instruments or
bank accounts may provide fixed yields and may be insured or guaranteed.
From time to time, the Trust may include in its advertisements and sales
literature performance information about the Trust cited in other newspapers and
periodicals, such as The New York Times, which may include performance
quotations from other sources.
From time to time, the Trust's Manager may publish rankings or ratings of
the Manager (or the Transfer Agent) or the investor services provided by them.
Those ratings or rankings of investor/shareholder services by third parties may
compare the services provided to those of other mutual fund families selected by
the rating or ranking services. They may be based on the opinions of the rating
or ranking service itself, based on its research or judgment, or based on
surveys of investors, brokers, shareholders or others.
A B O U T Y O U R A C C O U N T
How to Buy Shares
Determination of Net Asset Value Per Share. The net asset value per share of the
Trust is determined twice each day that the New York Stock Exchange ("Exchange")
is open, at 12:00 Noon and at 4:00 P.M, on each day that the Exchange is open,
by dividing the value of the Trust's net assets by the total number of shares
outstanding. All references to time in this Statement of Additional Information
mean New York time. The Exchange's most recent annual announcement (which is
subject to change) states that it will close on New Year's Day, Martin Luther
King Jr. Day, Washington's Birthday, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day. It may also close on other
days.
The Trust's Board of Trustees has adopted the amortized cost method to
value the Trust's portfolio securities. Under the amortized cost method, a
security is valued initially at its cost and its valuation assumes a constant
amortization of any premium or accretion of any discount, regardless of the
impact of fluctuating interest rates on the market value of the security. This
method does not take into consideration any unrealized capital gains or losses
on securities. While this method provides certainty in valuing securities, in
certain periods the value of a security determined by amortized cost may be
higher or lower than the price the Trust would receive if it sold the security.
The Trust's Board of Trustees has established procedures reasonably
designed to stabilize the Trust's net asset value at $1.00 per share. Those
procedures include a review of the valuations of the Trust's portfolio holdings
by the Board of Trustees, at intervals it deems appropriate, to determine
whether the Trust's net asset value calculated by using available market
quotations deviates from $1.00 per share based on amortized cost.
The Board of Trustees will examine the extent of any deviation between the
Trust's net asset value based upon available market quotations and amortized
cost. If the Trust's net asset value were to deviate from $1.00 by more than
0.5%, Rule 2a-7 requires the Board of Trustees to consider what action, if any,
should be taken. If they find that the extent of the deviation may cause a
material dilution or other unfair effects on shareholders, the Board of Trustees
will take whatever steps it considers appropriate to eliminate or reduce the
dilution, including, among others, withholding or reducing dividends, paying
dividends from capital or capital gains, selling portfolio instruments prior to
maturity to realize capital gains or losses or to shorten the average maturity
of the portfolio, or calculating net asset value per share by using available
market quotations.
During periods of declining interest rates, the daily yield on shares of
the Trust may tend to be lower (and net investment income and dividends higher)
than those of a fund holding the identical investments as the Trust but which
used a method of portfolio valuation based on market prices or estimates of
market prices. During periods of rising interest rates, the daily yield of the
Trust would tend to be higher and its aggregate value lower than that of an
identical portfolio using market price valuation.
How to Sell Shares
The information below supplements the terms and conditions for redeeming shares
set forth in the Prospectus.
Checkwriting. When a check is presented to the Bank for clearance, the Bank will
ask the Trust to redeem a sufficient number of full and fractional shares in the
shareholder's account to cover the amount of the check. This enables the
shareholder to continue receiving dividends on those shares until the check is
presented to the Trust. Checks may not be presented for payment at the offices
of the Bank or the Trust's Custodian. This limitation does not affect the use of
checks for the payment of bills or to obtain cash at other banks. The Trust
reserves the right to amend, suspend or discontinue offering checkwriting
privileges at any time without prior notice.
In choosing to take advantage of the Checkwriting privilege, by signing
the Account Application or by completing a Checkwriting card, each individual
who signs: (1) for individual accounts, represents that they are the registered
owner(s) of the shares of the Trust in that account;
(2) for accounts for corporations, partnerships, trusts and other entities,
represents that they are an officer, general partner, trustee or other
fiduciary or agent, as applicable, duly authorized to act on behalf of
the registered owner(s);
(3) authorizes the Trust, its Transfer Agent and any bank through which the
Trust's drafts (checks) are payable to pay all checks drawn on the Trust
account of such person(s) and to redeem a sufficient amount of shares
from that account to cover payment of each check;
(4) specifically acknowledges that if they choose to permit checks to be
honored if there is a single signature on checks drawn against joint
accounts, or accounts for corporations, partnerships, trusts or other
entities, the signature of any one signatory on a check will be
sufficient to authorize payment of that check and redemption from the
account, even if that account is registered in the names of more than
one person or more than one authorized signature appears on the
Checkwriting card or the Application, as applicable;
(5) understands that the Checkwriting privilege may be terminated or amended
at any time by the Trust and/or the Trust's bank; and
(6) acknowledges and agrees that neither the Trust nor its bank shall incur
any liability for that amendment or termination of checkwriting
privileges or for redeeming shares to pay checks reasonably believed by
them to be genuine, or for returning or not paying checks that have not
been accepted for any reason.
Sending Redemption Proceeds by Federal Funds Wire. The Federal Funds wire of
redemptions proceeds may be delayed if the Trust's custodian bank is not open
for business on a day when the Trust would normally authorize the wire to be
made, which is usually the Trust's next regular business day following the
redemption. In those circumstances, the wire will not be transmitted until the
next bank business day on which the Trust is open for business. No distributions
will be paid on the proceeds of redeemed shares awaiting transfer by Federal
Funds wire
Distributions From Retirement Plans. Requests for distributions from
OppenheimerFunds-sponsored IRAs, 403(b)(7) custodial plans, 401(k) plans or
pension or profit-sharing plans should be addressed to "Trustee,
OppenheimerFunds Retirement Plans," c/o the Transfer Agent at its address listed
in "How To Sell Shares" in the Prospectus or on the back cover of this Statement
of Additional Information. The request must
(1) state the reason for the distribution;
(2) state the owner's awareness of tax penalties if the distribution is
premature; and
(3) conform to the requirements of the plan and the Trust's other redemption
requirements.
Participants (other than self-employed persons) in
OppenheimerFunds-sponsored pension or profit-sharing plans with shares of the
Trust held in the name of the plan or its fiduciary may not directly request
redemption of their accounts. The plan administrator or fiduciary must sign the
request.
Distributions from pension and profit sharing plans are subject to special
requirements under the Internal Revenue Code and certain documents (available
from the Transfer Agent) must be completed and submitted to the Transfer Agent
before the distribution may be made. Distributions from retirement plans are
subject to withholding requirements under the Internal Revenue Code, and IRS
Form W-4P (available from the Transfer Agent) must be submitted to the Transfer
Agent with the distribution request, or the distribution may be delayed. Unless
the shareholder has provided the Transfer Agent with a certified tax
identification number, the Internal Revenue Code requires that tax be withheld
from any distribution even if the shareholder elects not to have tax withheld.
The Trust, the Manager, the Distributor the Sub-Distributor, and the Transfer
Agent assume no responsibility to determine whether a distribution satisfies the
conditions of applicable tax laws and will not be responsible for any tax
penalties assessed in connection with a distribution.
How to Exchange Shares
As stated in the Prospectus, direct shareholders can exchange shares of the
Trust for Class A shares of any of the following eligible funds:
Oppenheimer Limited-Term
Oppenheimer Bond Fund Government Fund
Oppenheimer California Municipal Oppenheimer Main Street California
Fund Municipal Fund
Oppenheimer Capital Appreciation Oppenheimer Main Street Growth &
Fund Income Fund
Oppenheimer Capital Preservation Oppenheimer Main Street
Fund Opportunity Fund
Oppenheimer Main Street Small Cap
Oppenheimer Capital Income Fund Fund
Oppenheimer Champion Income Fund Oppenheimer MidCap Fund
Oppenheimer Convertible Securities Oppenheimer Multiple Strategies
Fund Fund
Oppenheimer Developing Markets Fund Oppenheimer Municipal Bond Fund
Oppenheimer Disciplined Allocation
Fund Oppenheimer New York Municipal Fund
Oppenheimer New Jersey Municipal
Oppenheimer Disciplined Value Fund Fund
Oppenheimer Pennsylvania Municipal
Oppenheimer Discovery Fund Fund
Oppenheimer Emerging Technologies Oppenheimer Quest Balanced Value
Fund Fund
Oppenheimer Quest Capital Value
Oppenheimer Enterprise Fund Fund, Inc.
Oppenheimer Quest Global Value
Oppenheimer Europe Fund Fund, Inc.
Oppenheimer Quest Opportunity
Oppenheimer Florida Municipal Fund Value Fund
Oppenheimer Global Fund Oppenheimer Quest Small Cap Fund
Oppenheimer Global Growth & Income
Fund Oppenheimer Quest Value Fund, Inc.
Oppenheimer Gold & Special
Minerals Fund Oppenheimer Real Asset Fund
Oppenheimer Senior Floating Rate
Oppenheimer Growth Fund Fund
Oppenheimer High Yield Fund Oppenheimer Strategic Income Fund
Oppenheimer Total Return Fund,
Oppenheimer Insured Municipal Fund Inc.
Oppenheimer Intermediate Municipal
Fund Oppenheimer Trinity Core Fund
Oppenheimer International Bond Fund Oppenheimer Trinity Growth Fund
Oppenheimer International Growth
Fund Oppenheimer Trinity Value Fund
Oppenheimer International Small
Company Fund Oppenheimer U.S. Government Trust
Oppenheimer Large Cap Growth Fund Oppenheimer World Bond Fund
Limited-Term New York Municipal
Fund
and the following money market
funds: Rochester Fund Municipals
Centennial New York Tax Exempt
Centennial America Fund, L. P. Trust
Centennial California Tax Exempt
Trust Centennial Tax Exempt Trust
Centennial Government Trust Oppenheimer Cash Reserves
Oppenheimer Money Market Fund,
Inc.
Shares of the Trust purchased without a sales charge may be exchanged for
shares of an eligible fund offered with a sales charge upon payment of the sales
charge. Shares of the Trust acquired by reinvestment of dividends or
distributions from the Trust or any of the other eligible funds (other than
Oppenheimer Cash Reserves) or from any unit investment trust for which
reinvestment arrangements have been made with the Distributor may be exchanged
at net asset value for shares of any of the eligible funds.
|_| Limits on Multiple Exchange Orders. The Trust reserves the right to
reject telephone or written exchange requests submitted in bulk by anyone on
behalf of more than one account. The Trust may accept requests for exchanges of
up to 50 accounts per day from representatives of authorized dealers that
qualify for this privilege.
|_| Telephone Exchange Requests. When exchanging shares by telephone, a
direct shareholder must have an existing account in the fund to which the
exchange is to be made. Otherwise, the investor must obtain a prospectus of that
fund before the exchange request may be submitted. If all telephone lines are
busy (which might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request exchanges by telephone
and would have to submit written exchange requests.
|_| Processing Exchange Requests. Shares to be exchanged are redeemed on
the regular business day the Transfer Agent receives an exchange request in
proper form (the "Redemption Date"). Normally, shares of the fund to be acquired
are purchased on the Redemption Date, but such purchases may be delayed by
either fund up to five business days if it determines that it would be
disadvantaged by an immediate transfer of the redemption proceeds. The Trust
reserves the right, in its discretion, to refuse any exchange request that may
disadvantage it (for example, if the receipt of multiple exchange requests from
a dealer might require the disposition of portfolio securities at a time or at a
price that might be disadvantageous to the Trust).
In connection with any exchange request, the number of shares exchanged
may be less than the number requested if the exchange or the number requested
would include shares subject to a restriction cited in the Prospectus or this
Statement of Additional Information or would include shares covered by a share
certificate that is not tendered with the request. In those cases, only the
shares available for exchange without restriction will be exchanged.
The different eligible funds available for exchange have different
investment objectives, policies and risks. A shareholder should assure that the
fund selected is appropriate for his or her investment and should be aware of
the tax consequences of an exchange. For Federal income tax purposes, an
exchange transaction is treated as a redemption of shares of one fund and a
purchase of shares of another. The Trust, the Distributor, the Sub-Distributor,
and the Transfer Agent are unable to provide investment, tax or legal advice to
a shareholder in connection with an exchange request or any other investment
transaction.
The Trust may amend, suspend or terminate the exchange privilege at any
time. Although, the Trust may impose these changes at any time, it will provide
you with notice of those changes whenever it is required to do so by applicable
law. It may be required to provide 60 days notice prior to materially amending
or terminating the exchange privilege. That 60-day notice is not required in
extraordinary circumstances.
Dividends and Taxes
Tax Status of the Trust's Dividends and Distributions. The federal tax treatment
of the Trust's dividends and capital gains distributions is explained in the
Prospectus under the caption "Distributions and Taxes." Under the Internal
Revenue Code, by December 31 each year, the Trust must distribute 98% of its
taxable investment income earned from January 1 through December 31 of that year
and 98% of its capital gains realized in the period from November 1 of the prior
year through October 31 of the current year. It if does not, the Trust must pay
an excise tax on the amounts not distributed. It is presently anticipated that
the Trust will meet those requirements. However, the Board of Trustees and the
Manager might determine in a particular year that it would be in the best
interest of shareholders for the Trust not to make distributions at the required
levels and to pay the excise tax on the undistributed amounts. That would reduce
the amount of income or capital gains available for distribution to
shareholders. The Trust's dividends will not be eligible for the
dividends-received deduction for corporations.
If the Trust qualifies as a "regulated investment company" under the
Internal Revenue Code, it will not be liable for federal income taxes on amounts
paid by it as distributions. That qualification enables the Trust to "pass
through" its income and realized capital gains to shareholders without having to
pay tax on them. The Trust qualified as a regulated investment company in its
last fiscal year and intends to qualify in future years, but reserves the right
not to qualify. The Internal Revenue Code contains a number of complex tests to
determine whether the Trust qualifies. The Trust might not meet those tests in a
particular year. If it does not qualify, the Trust will be treated for tax
purposes as an ordinary corporation and will receive no tax deduction for
payments of distributions made to shareholders.
Dividends, distributions and the proceeds of the redemption of Trust
shares represented by checks returned to the Transfer Agent by the Postal
Service as undeliverable will be invested in shares of the Trust as promptly as
possible after the return of such checks to the Transfer Agent, in order to
enable the investor to earn a return on otherwise idle funds.
Dividend Reinvestment in Another Trust. Direct shareholders of the Trust may
elect to reinvest all dividends and/or capital gains distributions in Class A
shares of any eligible fund listed above. To elect this option, the shareholder
must notify the Transfer Agent in writing and must have an existing account in
the fund selected for reinvestment. Otherwise, the shareholder first must obtain
a prospectus for that fund and an application from the Distributor to establish
an account. The investment will be made at the close of business on the payable
date of the dividend or distribution.
Additional Information About the Trust
The Distributor. The Trust's shares are sold through dealers, brokers and other
financial institutions that have a sales agreement with the Sub-Distributor. The
Distributor and the Sub-Distributor also distribute shares of the other funds
managed by the Manager or an affiliate.
The Transfer Agent. Shareholder Services, Inc. the Trust's Transfer Agent,
is responsible for maintaining the Trust's shareholder registry and
shareholder accounting records, and for paying dividends and distributions to
shareholders of the Trust. It also handles shareholder servicing and
administrative functions. It is paid on a "at-cost" basis.
The Custodian. Citibank, N.A. is the Custodian of the Trust's assets. The
Custodian's responsibilities include safeguarding and controlling the Trust's
portfolio securities and handling the delivery of such securities to and from
the Trust. It will be the practice of the Trust to deal with the Custodian in a
manner uninfluenced by any banking relationship the Custodian may have with the
Manager and its affiliates. The Trust's cash balances with the Custodian in
excess of $100,000 are not protected by federal deposit insurance. Those
uninsured balances at times may be substantial.
Independent Auditors. Deloitte & Touche LLP are the independent auditors of
the Trust. They audit the Trust's financial statements and perform other
related audit services. They also act as auditors for the Manager and
OppenheimerFunds, Inc. and for certain other funds advised by the Manager and
its affiliates.
<PAGE>
Independent Auditors' Report
Centennial Money Market Trust
To the Board of Trustees and Shareholders of Centennial Money Market Trust:
We have audited the accompanying statement of assets and liabilities of
Centennial Money Market Trust, including the statement of investments, as of
June 30, 2000, and the related statement of operations for the year then ended,
the statements of changes in net assets for each of the two years in the period
then ended, and the financial highlights for each of the five years in the
period then ended. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of June 30, 2000, by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Centennial Money Market Trust as of June 30, 2000, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for each of the five
years in the period then ended, in conformity with accounting principles
generally accepted in the United States of America.
/s/ Deloitte & Touche LLP
-------------------------
Deloitte & Touche LLP
Denver, Colorado
July 24, 2000
<PAGE>
Statement of Investments June 30, 2000
Centennial Money Market Trust
<TABLE>
<CAPTION>
Principal Value
Amount See Note 1
------------ ------------
<S> <C> <C>
Direct Bank Obligations--1.2%
Canadian Imperial Bank of Commerce:
6.26%, 7/14/00..................................... $115,000,000 $115,000,000
6.71%, 9/12/00..................................... 26,000,000 25,999,157
6.74%, 9/11/00..................................... 32,000,000 32,001,021
Dresdner Bank AG:
6.25%, 7/19/00..................................... 50,000,000 50,000,246
------------
Total Direct Bank Obligations....................... 223,000,424
------------
Letters of Credit--8.6%
Abbey National plc, guaranteeing commercial paper of Abbey National North
America:
6.18%, 7/25/00..................................... 150,000,000 149,382,000
6.58%, 9/12/00..................................... 50,000,000 49,332,861
ABN Amro Bank NV, guaranteeing commercial paper of LaSalle Bank NA:
6.78%, 8/30/00..................................... 50,000,000 50,000,000
Bank of America NA, guaranteeing commercial paper of
Formosa Plastics Corp. USA, Series II:
6.45%, 8/2/00...................................... 20,000,000 19,885,333
Barclays Bank plc, guaranteeing commercial paper of
Banco Bradesco SA-Grand Cayman Branch, Series B:
6.61%, 9/19/00..................................... 31,000,000 30,544,645
Barclays Bank plc, guaranteeing commercial paper of
Banco Bradesco SA-Grand Cayman Branch, Series A:
6.61%, 9/18/00..................................... 70,000,000 68,984,631
Barclays Bank plc, guaranteeing commercial paper of
Petrobras International Finance Co.:
6.59%, 7/19/00..................................... 20,000,000 19,934,100
6.80%, 7/17/00..................................... 25,000,000 24,924,445
Credit Local de France, guaranteeing commercial paper of Dexia CLF Finance Co.:
6.59%, 9/13/00-9/14/00(/1/)........................ 118,000,000 116,387,830
6.60%, 9/15/00-9/18/00(/1/)........................ 120,000,000 118,306,000
Credit Suisse First Boston, guaranteeing commercial paper of Credit Suisse First
Boston International (Guernsey) Ltd.:
6.65%, 8/16/00(/1/)................................ 30,000,000 29,745,083
</TABLE>
3
<PAGE>
Statement of Investments June 30, 2000 (Continued)
Centennial Money Market Trust
<TABLE>
<CAPTION>
Principal Value
Amount See Note 1
------------ --------------
<S> <C> <C>
Letters of Credit (Continued)
Deutsche Bank AG, guaranteeing commercial paper of
Deutsche Bank Financial, Inc.:
6.19%, 7/26/00................................... $ 50,000,000 $ 49,785,069
6.55%, 7/11/00................................... 100,000,000 99,818,056
6.58%, 9/21/00................................... 100,000,000 98,501,222
6.59%, 9/15/00................................... 82,000,000 80,859,198
6.61%, 7/31/00................................... 50,000,000 49,724,583
Dresdner Bank AG, guaranteeing commercial paper of Dresdner US Finance, Inc.:
6.68%, 8/31/00................................... 100,000,000 98,868,111
First Union Corp., guaranteeing commercial paper
of First Union National Bank:
6.66%, 5/22/01(/2/).............................. 100,000,000 99,991,096
6.94%, 5/17/01(/2/).............................. 100,000,000 100,000,000
Keycorp, guaranteeing commercial paper of Key Bank NA:
6.603%, 6/5/01(/2/).............................. 100,000,000 99,934,986
Societe Generale, guaranteeing commercial paper of
Societe Generale North America:
6.60%, 9/8/00.................................... 68,000,000 67,139,800
6.61%, 11/27/00.................................. 50,000,000 48,632,097
US Bancorp, guaranteeing commercial paper of US Bank NA, Minneapolis:
6.56%, 7/7/00.................................... 35,000,000 34,961,733
--------------
Total Letters of Credit........................... 1,605,642,879
--------------
Short-Term Notes--87.4%
Aerospace/Defense--1.6%
BAE Systems Holdings, Inc.:
6.18%, 7/24/00(/1/).............................. 50,000,000 49,802,583
6.59%, 9/14/00(/1/).............................. 30,000,000 29,588,125
6.60%, 9/18/00-9/20/00(/1/)...................... 126,942,000 125,067,498
6.61%, 9/13/00(/1/).............................. 15,000,000 14,796,192
Honeywell International, Inc.:
6.63%, 11/17/00-12/4/00.......................... 83,000,000 80,718,727
--------------
299,973,125
--------------
</TABLE>
4
<PAGE>
Statement of Investments June 30, 2000 (Continued)
Centennial Money Market Trust
<TABLE>
<CAPTION>
Principal Value
Amount See Note 1
------------ ------------
<S> <C> <C>
Asset-Backed--23.1% AriesOne Metafolio Corp.:
6.58%, 7/5/00(/1/).................................. $ 60,200,000 $ 60,155,987
Asset Backed Capital Finance, Inc.:
6.20%, 7/26/00(/1/)................................. 84,000,000 83,638,333
6.44%, 7/10/00(/1/)................................. 38,000,000 37,938,820
6.63%, 7/31/00-9/11/00(/1/)......................... 27,000,000 26,796,680
6.64%, 10/2/00(/1/)................................. 25,000,000 24,571,167
6.66%, 8/2/00(/1/).................................. 40,000,000 39,763,200
Asset Portfolio Funding Corp.:
6.59%, 7/17/00(/1/)................................. 44,362,000 44,232,069
6.62%, 9/18/00(/1/)................................. 200,000,000 197,094,556
6.65%, 7/26/00(/1/)................................. 25,650,000 25,531,547
Asset Securitization Cooperative:
6.53%, 8/4/00(/1/).................................. 100,000,000 99,383,278
6.58%, 7/7/00-8/25/00(/1/).......................... 75,000,000 74,649,067
6.60%, 7/6/00-9/13/00(/1/).......................... 135,000,000 134,054,000
6.68%, 8/23/00(/1/)................................. 29,000,000 28,714,801
Barton Capital Corp.:
6.55%, 7/18/00(/1/)................................. 23,200,000 23,128,241
6.58%, 7/7/00-8/3/00(/1/)........................... 115,440,000 115,022,759
6.59%, 7/10/00(/1/)................................. 50,000,000 49,917,625
6.60%, 7/13/00(/1/)................................. 45,000,000 44,901,000
6.62%, 9/28/00(/1/)................................. 27,954,000 27,496,502
6.63%, 7/19/00(/1/)................................. 22,189,000 22,115,443
Breeds Hill Capital Co. LLC, Series A:
6.57%, 7/19/00(/1/)................................. 37,000,000 36,878,455
6.58%, 7/21/00(/1/)................................. 80,000,000 79,707,222
CIESCO LP:
6.41%, 7/7/00....................................... 100,000,000 99,893,167
6.52%, 8/14/00(/2/)(/3/)............................ 50,000,000 49,998,202
6.53%, 7/5/00-7/24/00............................... 48,400,000 48,247,706
6.62%, 7/28/00...................................... 75,000,000 74,627,625
6.66%, 8/21/00...................................... 50,000,000 49,528,250
</TABLE>
5
<PAGE>
Statement of Investments June 30, 2000 (Continued)
Centennial Money Market Trust
<TABLE>
<CAPTION>
Principal Value
Amount See Note 1
------------ ------------
<S> <C> <C>
Asset-Backed (Continued)
Corporate Receivables Corp.:
6.40%, 7/7/00(/1/).................................. $ 30,000,000 $ 29,968,000
6.57%, 8/11/00(/1/)................................. 97,000,000 96,274,197
6.58%, 7/6/00-8/10/00(/1/).......................... 210,000,000 209,410,541
6.60%, 9/7/00(/1/).................................. 30,000,000 29,626,000
6.63%, 8/7/00(/1/).................................. 40,000,000 39,727,433
Eureka Securitization, Inc.:
6.54%, 7/19/00-7/21/00(/1/)......................... 59,809,000 59,602,525
6.59%, 7/12/00(/1/)................................. 50,000,000 49,899,319
6.60%, 7/13/00(/1/)................................. 127,000,000 126,720,600
6.66%, 8/10/00(/1/)................................. 81,000,000 80,400,600
Lexington Parker Capital Co. LLC:
6.20%, 7/11/00-7/17/00(/1/)......................... 44,805,000 44,703,036
6.58%, 7/6/00(/1/).................................. 50,000,000 49,954,306
6.61%, 9/12/00(/1/)................................. 30,000,000 29,597,892
6.62%, 7/20/00(/1/)................................. 150,000,000 149,475,917
6.68%, 8/25/00(/1/)................................. 130,000,000 128,684,278
Moriarty Ltd.:
6.40%, 7/5/00(/1/).................................. 80,000,000 79,943,111
6.44%, 7/10/00(/1/)................................. 50,000,000 49,919,500
6.60%, 9/7/00(/1/).................................. 75,000,000 74,065,000
6.67%, 8/22/00(/1/)................................. 50,000,000 49,518,278
New Center Asset Trust:
6.24%, 7/17/00...................................... 25,000,000 24,930,667
6.52%, 7/19/00...................................... 40,000,000 39,869,600
6.60%, 7/5/00....................................... 50,000,000 49,963,333
Park Avenue Receivables Corp.:
6.55%, 7/6/00(/1/).................................. 70,440,000 70,375,919
6.56%, 7/14/00(/1/)................................. 51,750,000 51,627,410
6.58%, 7/20/00-7/26/00(/1/)......................... 180,886,000 180,113,937
Scaldis Capital LLC:
6.57%, 7/20/00(/1/)................................. 37,618,000 37,487,375
6.61%, 9/15/00(/1/)................................. 45,711,000 45,070,986
6.65%, 7/26/00(/1/)................................. 31,723,000 31,576,501
</TABLE>
6
<PAGE>
Statement of Investments June 30, 2000 (Continued)
Centennial Money Market Trust
<TABLE>
<CAPTION>
Principal Value
Amount See Note 1
------------ --------------
<S> <C> <C>
Asset-Backed (Continued)
Sigma Finance, Inc.:
6.39%, 7/3/00(/1/)................................ $ 44,000,000 $ 43,984,380
6.60%, 8/30/00(/1/)............................... 47,000,000 46,483,000
6.61%, 7/27/00-9/7/00(/1/)........................ 68,000,000 67,343,774
6.62%, 7/31/00-9/5/00(/1/)........................ 120,000,000 119,205,600
6.65%, 10/2/00(/1/)............................... 22,001,000 21,623,041
6.68%, 9/1/00(/1/)................................ 40,000,000 39,539,822
6.70%, 8/24/00(/1/)............................... 61,000,000 60,386,950
Variable Funding Capital Corp.:
6.44%, 7/7/00(/1/)................................ 37,500,000 37,459,750
6.58%, 7/6/00-7/20/00(/1/)........................ 75,000,000 74,867,487
6.61%, 7/18/00-9/7/00(/1/)........................ 145,123,000 143,637,463
6.63%, 10/19/00(/1/).............................. 50,000,000 48,987,083
6.65%, 8/3/00(/1/)................................ 50,000,000 49,695,208
VVR Funding LLC:
6.60%, 7/19/00(/1/)............................... 50,000,000 49,835,000
6.63%, 8/4/00(/1/)................................ 15,000,000 14,906,075
--------------
4,324,446,596
--------------
Automotive--3.1% BMW US Capital Corp.:
6.54%, 7/17/00.................................... 30,600,000 30,511,056
6.55%, 8/7/00..................................... 20,608,000 20,469,268
6.56%, 8/11/00.................................... 60,747,000 60,293,152
6.58%, 9/8/00-9/11/00............................. 109,015,000 107,592,975
DaimlerChrysler NA Holdings:
6.60%, 10/18/00................................... 100,000,000 98,001,667
6.61%, 11/20/00-11/30/00.......................... 168,000,000 163,472,885
6.62%, 11/27/00................................... 100,000,000 97,260,056
--------------
577,601,059
--------------
Banks--2.6%
Bank of America Corp.:
6.13%, 7/19/00.................................... 40,000,000 39,877,400
6.62%, 11/7/00.................................... 30,000,000 29,288,350
</TABLE>
7
<PAGE>
Statement of Investments June 30, 2000 (Continued)
Centennial Money Market Trust
<TABLE>
<CAPTION>
Principal Value
Amount See Note 1
----------- ------------
<S> <C> <C>
Banks (Continued)
Credit Suisse First Boston, Inc.:
6.50%, 8/4/00(/1/)................................... $50,000,000 $ 49,693,056
6.60%, 9/15/00(/1/).................................. 35,000,000 34,512,333
Wells Fargo Co.:
6.59%, 7/17/00....................................... 100,000,000 99,707,111
6.60%, 9/18/00....................................... 50,000,000 49,275,833
6.62%, 9/28/00-9/29/00............................... 150,000,000 147,526,694
6.67%, 8/28/00....................................... 38,000,000 37,591,648
------------
487,472,425
------------
Beverages--1.0%
Coca-Cola Enterprises, Inc.:
6.07%, 7/12/00(/1/).................................. 25,000,000 24,953,632
6.55%, 8/9/00(/1/)................................... 50,000,000 49,645,208
6.58%, 9/20/00(/1/).................................. 50,000,000 49,259,750
6.60%, 9/14/00(/1/).................................. 30,500,000 30,080,625
6.62%, 8/3/00(/1/)................................... 25,000,000 24,848,292
------------
178,787,507
------------
Broker/Dealers--9.4% Banc of America Securities LLC:
7.325%, 8/5/28(/2/).................................. 20,000,000 20,000,000
Bear Stearns Cos., Inc., Series B:
6.381%, 10/13/00(/2/)................................ 50,000,000 50,000,000
6.691%, 4/12/01(/2/)................................. 30,000,000 30,000,000
6.698%, 6/21/01(/2/)................................. 50,000,000 50,000,000
6.70%, 3/6/01(/2/)................................... 50,000,000 50,000,000
6.706%, 3/8/01(/2/).................................. 40,000,000 40,000,000
6.712%, 3/2/01(/2/).................................. 50,000,000 50,000,000
6.72%, 6/27/01(/2/).................................. 50,000,000 50,000,000
6.734%, 3/30/01-5/31/01(/2/)......................... 90,000,000 90,000,000
Goldman Sachs Group LP:
6.78%, 9/13/00(/3/).................................. 75,000,000 75,000,000
6.90%, 12/4/00....................................... 100,000,000 100,000,000
6.90%, 12/8/00(/3/).................................. 40,000,000 40,000,000
6.92%, 12/6/00(/3/).................................. 140,000,000 140,000,000
</TABLE>
8
<PAGE>
Statement of Investments June 30, 2000 (Continued)
Centennial Money Market Trust
<TABLE>
<CAPTION>
Principal Value
Amount See Note 1
------------ --------------
<S> <C> <C>
Broker/Dealers (Continued)
Merrill Lynch & Co., Inc.:
6.58%, 9/15/00.................................... $100,000,000 $ 98,610,889
Merrill Lynch & Co., Inc., Series B:
6.615%, 4/11/01(/2/).............................. 100,000,000 99,984,750
6.631%, 4/24/01(/2/).............................. 55,000,000 54,991,227
6.774%, 5/30/01(/2/).............................. 30,000,000 30,024,140
6.811%, 3/1/01(/2/)............................... 50,000,000 50,055,274
Morgan Stanley, Dean Witter Co.:
6.59%, 9/11/00.................................... 97,000,000 95,721,540
7.125%, 6/8/01(/2/)............................... 200,000,000 200,000,000
7.295%, 12/1/00(/2/).............................. 80,000,000 80,000,000
Salomon Smith Barney Holdings, Inc.:
6.17%, 7/12/00.................................... 34,000,000 33,935,901
6.39%, 7/13/00.................................... 45,000,000 44,904,150
6.50%, 8/2/00-8/3/00.............................. 100,000,000 99,412,736
6.61%, 9/13/00-10/4/00............................ 100,000,000 98,409,928
--------------
1,771,050,535
--------------
Chemicals--1.2%
BASF AG:
6.60%, 7/21/00(/1/)............................... 50,000,000 49,816,667
6.64%, 11/27/00(/1/).............................. 85,000,000 82,664,011
6.66%, 11/29/00(/1/).............................. 100,000,000 97,204,403
--------------
229,685,081
--------------
Commercial Finance--6.3%
Caterpillar Financial Services Corp.:
6.59%, 9/7/00..................................... 35,800,000 35,354,370
CIT Group, Inc.:
6.38%, 7/10/00.................................... 100,000,000 99,840,500
6.58%, 9/21/00.................................... 50,000,000 49,250,611
6.59%, 9/20/00.................................... 50,000,000 49,258,625
6.60%, 9/8/00-9/18/00............................. 145,000,000 143,024,583
6.67%, 8/28/00.................................... 75,000,000 74,194,042
Countrywide Home Loans:
6.59%, 8/22/00.................................... 80,000,000 79,238,489
6.60%, 8/18/00.................................... 37,980,000 37,645,776
</TABLE>
9
<PAGE>
Statement of Investments June 30, 2000 (Continued)
Centennial Money Market Trust
<TABLE>
<CAPTION>
Principal Value
Amount See Note 1
------------ --------------
<S> <C> <C>
Commercial Finance (Continued)
Countrywide Home Loans, Series H:
6.696%, 6/8/01(/2/)............................... $100,000,000 $ 99,986,039
6.717%, 5/21/01(/2/).............................. 150,000,000 149,995,664
6.754%, 5/30/01(/2/).............................. 50,000,000 49,995,530
Heller Financial, Inc., Series I:
5.846%, 9/25/00(/2/).............................. 50,000,000 50,013,571
6.90%, 8/7/00(/2/)................................ 50,000,000 49,999,496
Homeside Lending, Inc.:
6.25%, 7/24/00.................................... 50,000,000 49,800,347
6.58%, 9/20/00.................................... 50,000,000 49,259,750
6.59%, 8/16/00.................................... 50,000,000 49,578,972
6.62%, 9/27/00.................................... 50,000,000 49,190,889
Private Export Fund Corp.:
6.50%, 8/2/00(/1/)................................ 24,000,000 23,861,333
--------------
1,189,488,587
--------------
Consumer Finance--2.1%
American Express Credit Corp.:
6.54%, 7/10/00.................................... 150,000,000 149,754,750
6.55%, 7/12/00-7/13/00............................ 150,000,000 149,681,598
American General Finance Corp.:
6.39%, 7/12/00.................................... 50,000,000 49,902,375
6.59%, 7/17/00.................................... 50,000,000 49,853,556
--------------
399,192,279
--------------
Consumer Services--1.6%
Block Financial Corp.:
6.59%, 7/14/00(/1/)............................... 50,000,000 49,880,906
6.63%, 7/27/00(/1/)............................... 30,000,000 29,855,700
6.66%, 7/28/00(/1/)............................... 20,000,000 19,900,100
6.70%, 8/4/00(/1/)................................ 50,000,000 49,683,611
Prudential Funding Corp.:
6.18%, 7/28/00.................................... 50,000,000 49,768,250
6.57%, 9/7/00..................................... 60,000,000 59,255,400
6.66%, 8/30/00.................................... 39,000,000 38,567,100
--------------
296,911,067
--------------
</TABLE>
10
<PAGE>
Statement of Investments June 30, 2000 (Continued)
Centennial Money Market Trust
<TABLE>
<CAPTION>
Principal Value
Amount See Note 1
------------ ------------
<S> <C> <C>
Department Stores--0.3%
Wal-Mart Stores, Inc.:
6.52%, 7/11/00(/1/)................................. $ 16,000,000 $ 15,971,022
6.56%, 9/6/00(/1/).................................. 49,000,000 48,401,764
------------
64,372,786
------------
Diversified Financial--11.7%
Associates Corp. of North America:
6.37%, 7/6/00-7/7/00................................ 100,000,000 99,902,681
6.38%, 7/10/00...................................... 50,000,000 49,920,250
6.60%, 7/14/00...................................... 100,000,000 99,761,667
6.65%, 8/24/00...................................... 50,000,000 49,501,250
6.67%, 9/1/00....................................... 100,000,000 98,851,278
6.94%, 7/3/00....................................... 69,670,000 69,643,293
Ford Motor Credit Co.:
6.52%, 7/20/00...................................... 50,000,000 49,827,944
6.53%, 7/12/00-7/21/00.............................. 150,000,000 149,537,458
GE Capital International Funding, Inc.:
6.40%, 7/12/00(/1/)................................. 100,000,000 99,804,444
6.56%, 8/7/00(/1/).................................. 50,000,000 49,662,889
6.59%, 9/20/00(/1/)................................. 50,000,000 49,258,625
General Electric Capital Corp.:
6.68%, 8/30/00-8/31/00.............................. 120,000,000 118,651,011
General Motors Acceptance Corp.:
6.57%, 9/15/00...................................... 75,000,000 73,959,750
6.58%, 8/1/00....................................... 40,000,000 39,773,356
6.60%, 7/24/00...................................... 50,000,000 49,789,167
Household Finance Corp.:
6.18%, 7/24/00...................................... 90,000,000 89,644,650
6.56%, 7/7/00....................................... 75,000,000 74,918,000
6.62%, 11/3/00-12/8/00.............................. 100,000,000 97,379,583
6.68%, 8/28/00...................................... 45,000,000 44,515,700
7.10%, 9/14/00(/2/)................................. 100,000,000 99,987,705
</TABLE>
11
<PAGE>
Statement of Investments June 30, 2000 (Continued)
Centennial Money Market Trust
<TABLE>
<CAPTION>
Principal Value
Amount See Note 1
------------ --------------
<S> <C> <C>
Diversified Financial (Continued)
National Rural Utilities Cooperative Finance
Corp.:
6.07%, 7/13/00................................... $100,000,000 $ 99,797,667
6.12%, 7/7/00.................................... 41,065,000 41,023,082
6.14%, 7/19/00................................... 25,000,000 24,923,250
6.18%, 7/17/00-7/18/00........................... 70,000,000 69,800,008
6.61%, 9/14/00................................... 65,000,000 64,107,708
6.62%, 12/7/00-12/8/00........................... 80,000,000 77,651,739
6.66%, 8/17/00................................... 18,000,000 17,843,490
Textron Financial Corp.:
6.57%, 7/20/00................................... 50,000,000 49,826,625
6.58%, 8/9/00.................................... 50,000,000 49,643,583
6.61%, 8/23/00-8/24/00........................... 120,500,000 119,323,513
6.62%, 7/27/00................................... 16,500,000 16,421,112
--------------
2,184,652,478
--------------
Diversified Media--0.4%
Omnicom Finance, Inc.:
6.63%, 7/17/00-7/19/00(/1/)...................... 40,000,000 39,874,767
6.70%, 8/9/00(/1/)............................... 39,000,000 38,716,925
--------------
78,591,692
--------------
Electric Utilities--0.5%
Edison International:
6.55%, 8/17/00(/1/).............................. 50,000,000 49,572,431
6.58%, 8/16/00(/1/).............................. 24,000,000 23,798,213
6.63%, 9/5/00(/1/)............................... 20,000,000 19,756,900
--------------
93,127,544
--------------
Healthcare/Drugs--0.2%
American Home Products Corp.:
6.53%, 7/14/00(/1/).............................. 39,000,000 38,908,036
--------------
Insurance--8.5%
Aegon Funding Corp.:
6.58%, 9/5/00(/1/)............................... 50,000,000 49,396,833
6.59%, 9/8/00(/1/)............................... 56,500,000 55,785,821
6.60%, 9/13/00(/1/).............................. 50,000,000 49,321,667
6.62%, 12/7/00(/1/).............................. 35,000,000 33,976,658
6.65%, 8/22/00(/1/).............................. 50,000,000 49,519,722
6.66%, 8/28/00(/1/).............................. 19,000,000 18,796,130
</TABLE>
12
<PAGE>
Statement of Investments June 30, 2000 (Continued)
Centennial Money Market Trust
<TABLE>
<CAPTION>
Principal Value
Amount See Note 1
------------ --------------
<S> <C> <C>
Insurance (Continued)
AIG Life Insurance Co.:
6.13%, 5/31/01(/2/)(/3/)......................... $ 20,000,000 $ 20,000,000
Allstate Life Insurance Co.:
6.696%, 8/1/00(/2/).............................. 50,000,000 50,000,000
American General Annuity Insurance:
6.641%, 4/1/03(/2/).............................. 50,000,000 50,000,000
American General Corp.:
6.50%, 7/14/00................................... 40,000,000 39,906,111
Cooperative Assn. of Tractor Dealers, Inc., Series
A:
7.00%, 7/3/00.................................... 50,000,000 49,980,556
Cooperative Assn. of Tractor Dealers, Inc., Series
B:
7.05%, 7/3/00.................................... 34,000,000 33,986,683
Jackson National Life Insurance Co.:
6.64%, 3/1/01(/2/)............................... 70,000,000 70,000,000
6.65%, 8/1/00(/2/)............................... 48,000,000 48,000,000
Marsh U.S.A., Inc.:
6.50%, 8/2/00(/1/)............................... 50,000,000 49,711,111
Metropolitan Life Insurance Co.:
6.86%, 12/31/22(/2/)............................. 220,500,000 220,500,000
Pacific Life Insurance Co.:
6.661%, 2/14/03(/2/)(/3/)........................ 71,000,000 71,000,000
Protective Life Insurance Co.:
6.791%, 3/14/24(/2/)............................. 30,000,000 30,000,000
Prudential Life Insurance Co.:
6.29%, 1/31/03(/2/).............................. 165,000,000 165,000,000
Teachers Insurance & Annuity Assn. of America:
6.62%, 8/1/00(/1/)............................... 109,000,000 108,380,362
TransAmerica Life Insurance & Annuity Co.:
6.641%, 8/31/00(/2/)............................. 100,000,000 100,000,000
Travelers Insurance Co.:
6.615%, 9/16/00-2/2/01(/2/)(/3/)................. 73,000,000 73,000,000
6.635%, 10/5/00(/2/)(/3/)........................ 40,000,000 40,000,000
6.685%, 9/16/00(/2/)(/3/)........................ 25,000,000 25,000,000
Western Southern Life Insurance Co.:
6.641%, 12/1/02(/2/)............................. 100,000,000 100,000,000
--------------
1,601,261,654
--------------
</TABLE>
13
<PAGE>
Statement of Investments June 30, 2000 (Continued)
Centennial Money Market Trust
<TABLE>
<CAPTION>
Principal Value
Amount See Note 1
------------ ------------
<S> <C> <C>
Leasing & Factoring--2.4%
American Honda Finance Corp.:
6.17%, 7/13/00-7/17/00.............................. $ 50,000,000 $ 49,880,027
6.19%, 7/28/00...................................... 40,000,000 39,814,300
6.60%, 9/5/00-9/13/00............................... 173,950,000 171,710,576
6.62%, 2/8/01(/2/)(/4/)............................. 50,000,000 49,992,974
6.66%, 1/16/01(/2/)(/4/)............................ 45,000,000 44,997,296
Hertz Corp.:
6.56%, 7/7/00....................................... 50,000,000 49,945,333
6.57%, 9/13/00...................................... 50,000,000 49,324,750
------------
455,665,256
------------
Manufacturing--1.9%
Eaton Corp.:
6.50%, 8/3/00(/1/).................................. 45,000,000 44,731,875
6.63%, 8/30/00(/1/)................................. 55,000,000 54,391,417
6.64%, 9/11/00(/1/)................................. 50,000,000 49,336,000
6.65%, 9/21/00(/1/)................................. 25,000,000 24,621,319
6.68%, 10/16/00(/1/)................................ 75,000,000 73,507,944
6.70%, 11/8/00-12/7/00(/1/)......................... 53,000,000 51,582,764
6.72%, 8/21/00(/1/)................................. 50,000,000 49,524,000
------------
347,695,319
------------
Metals/Mining--0.8%
Alcoa, Inc.:
6.63%, 10/26/00..................................... 65,000,000 63,599,412
6.65%, 8/14/00-8/24/00.............................. 80,100,000 79,393,363
------------
142,992,775
------------
Nondurable Household Goods--0.6%
Newell Rubbermaid, Inc.:
6.58%, 9/20/00(/1/)................................. 40,000,000 39,407,800
6.60%, 8/22/00(/1/)................................. 40,000,000 39,618,667
6.62%, 7/26/00(/1/)................................. 25,000,000 24,885,069
------------
103,911,536
------------
</TABLE>
14
<PAGE>
Statement of Investments June 30, 2000 (Continued)
Centennial Money Market Trust
<TABLE>
<CAPTION>
Principal Value
Amount See Note 1
------------ -------------
<S> <C> <C>
Oil: Domestic--0.4%
Motiva Enterprises LLC:
6.17%, 7/17/00..................................... $ 40,000,000 $ 39,890,311
6.41%, 7/7/00...................................... 30,000,000 29,967,950
-------------
69,858,261
-------------
Photography--0.1%
Eastman Kodak Co.:
6.54%, 8/1/00...................................... 20,000,000 19,887,367
-------------
Publishing--1.5%
Tribune Co.:
6.17%, 7/6/00(/1/)................................. 89,000,000 88,923,732
6.59%, 8/23/00(/1/)................................ 35,000,000 34,660,432
6.60%, 9/11/00(/1/)................................ 25,000,000 24,670,000
6.62%, 9/27/00-10/2/00(/1/)........................ 136,500,000 134,245,155
-------------
282,499,319
-------------
Special Purpose Financial--0.9%
Forrestal Funding Master Trust, Series 2000-A:
6.60%, 8/11/00(/4/)................................ 35,000,000 34,736,917
6.63%, 7/28/00(/4/)................................ 41,219,000 41,014,039
KZH-KMS Corp.:
6.55%, 7/21/00(/1/)................................ 30,159,000 30,049,255
6.56%, 7/14/00(/1/)................................ 25,000,000 24,940,778
RACERS, Series 2000-7-MM:
6.707%, 5/30/01(/2/)(/3/).......................... 36,000,000 35,983,862
-------------
166,724,851
-------------
Telecommunications--Technology--3.6%
Alcatel SA:
6.60%, 9/7/00(/1/)................................. 8,000,000 7,900,267
GTE Corp.:
6.48%, 7/25/00(/1/)................................ 30,000,000 29,868,000
6.60%, 7/5/00-7/21/00(/1/)......................... 130,000,000 129,679,166
6.63%, 7/6/00(/1/)................................. 39,000,000 38,964,087
6.64%, 7/11/00-7/28/00(/1/)........................ 82,000,000 81,733,115
6.65%, 8/2/00(/1/)................................. 58,800,000 58,452,427
</TABLE>
15
<PAGE>
Statement of Investments June 30, 2000 (Continued)
Centennial Money Market Trust
<TABLE>
<CAPTION>
Principal Value
Amount See Note 1
------------ ---------------
<S> <C> <C>
Telecommunications--Technology (Continued)
SBC Communications, Inc.:
6.17%, 7/17/00(/1/)............................. $ 50,000,000 $ 49,862,889
6.52%, 8/4/00(/1/).............................. 50,000,000 49,692,111
6.55%, 8/3/00(/1/).............................. 25,000,000 24,849,896
6.56%, 8/21/00(/1/)............................. 50,000,000 49,535,333
6.61%, 7/24/00(/1/)............................. 49,000,000 48,793,070
Vodafone Air Touch plc-MTC:
6.862%, 6/5/01(/2/)(/3/)........................ 110,000,000 109,990,929
---------------
679,321,290
---------------
Telephone Utilities--1.6% AT&T Corp.:
6.58%, 9/11/00-9/14/00.......................... 300,000,000 295,978,889
---------------
Total Short-Term Notes........................... 16,380,057,314
---------------
Total Investments, at Value...................... 97.2% 18,208,700,617
---------------
Other Assets Net of Liabilities.................. 2.8 525,097,954
------------ ---------------
Net Assets....................................... 100.0% $18,733,798,571
============ ===============
</TABLE>
Short-term notes, direct bank obligations and letters of credit are generally
traded on a discount basis; the interest rate is the discount rate received by
the Trust at the time of purchase. Other securities normally bear interest at
the rates shown.
1. Security issued in an exempt transaction without registration under the
Securities Act of 1933. Such securities amount to $7,283,981,872, or 38.88% of
the Trust's net assets, and have been determined to be liquid pursuant to
guidelines adopted by the Board of Trustees.
2. Represents the current interest rate for a variable or increasing rate
security.
3. Represents a restricted security which is considered illiquid, by virtue of
the absence of a readily available market or because of legal or contractual
restrictions on resale. Such securities amount to $679,972,993, or 3.63% of the
Trust's net assets. The Trust may not invest more than 10% of its net assets
(determined at the time of purchase) in illiquid securities.
4. Represents a security sold under Rule 144A, which is exempt from registration
under the Securities Act of 1933, as amended. These securities have been
determined to be liquid under guidelines established by the Board of Trustees.
These securities amount to $170,741,226 or 0.91% of the Trust's net assets as of
June 30, 2000.
See accompanying Notes to Financial Statements.
16
<PAGE>
Statement of Assets and Liabilities June 30, 2000
Centennial Money Market Trust
<TABLE>
<S> <C>
ASSETS
Investments, at value--see accompanying statement............. $18,208,700,617
Cash.......................................................... 80,692,757
Receivables and other assets:
Shares of beneficial interest sold........................... 650,847,996
Interest..................................................... 18,674,480
Other........................................................ 3,207,170
---------------
Total assets................................................ 18,962,123,020
---------------
LIABILITIES Payables and other liabilities:
Shares of beneficial interest redeemed....................... 175,424,521
Dividends.................................................... 45,180,041
Transfer and shareholder servicing agent fees................ 4,311,671
Service plan fees............................................ 1,474,979
Trustees' compensation....................................... 14,535
Other........................................................ 1,918,702
---------------
Total liabilities........................................... 228,324,449
---------------
NET ASSETS.................................................... $18,733,798,571
===============
COMPOSITION OF NET ASSETS
Paid-in capital............................................... $18,733,718,429
Accumulated net realized gain on investment transactions...... 80,142
---------------
NET ASSETS--applicable to 18,734,251,144 shares of beneficial
interest outstanding......................................... $18,733,798,571
===============
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER
SHARE........................................................ $1.00
</TABLE>
See accompanying Notes to Financial Statements.
17
<PAGE>
Statement of Operations For the Year Ended June 30, 2000
Centennial Money Market Trust
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest........................................................ $1,088,473,436
--------------
EXPENSES
Management fees................................................. 62,139,589
Service plan fees............................................... 36,929,811
Transfer and shareholder servicing agent fees................... 20,051,451
Custodian fees and expenses..................................... 884,954
Trustees' compensation.......................................... 64,644
Other........................................................... 4,570,179
--------------
Total expenses................................................ 124,640,628
Less expenses paid indirectly................................... (113,968)
--------------
Net expenses.................................................... 124,526,660
--------------
NET INVESTMENT INCOME........................................... 963,946,776
--------------
NET REALIZED GAIN ON INVESTMENTS................................ 1,668
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............ $ 963,948,444
==============
</TABLE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended June 30,
--------------------------------
2000 1999
--------------- ---------------
<S> <C> <C>
OPERATIONS
Net investment income....................... $ 963,946,776 $ 792,499,233
Net realized gain........................... 1,668 14,857
--------------- ---------------
Net increase in net assets resulting from
operations................................. 963,948,444 792,514,090
--------------- ---------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLD-
ERS........................................ (963,946,776) (792,539,959)
--------------- ---------------
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from
beneficial interest transactions........... 913,155,440 2,706,509,046
--------------- ---------------
NET ASSETS
Total increase.............................. 913,157,108 2,706,483,177
Beginning of period......................... 17,820,641,463 15,114,158,286
--------------- ---------------
End of period............................... $18,733,798,571 $17,820,641,463
=============== ===============
</TABLE>
See accompanying Notes to Financial Statements.
18
<PAGE>
Financial Highlights
Centennial Money Market Trust
<TABLE>
<CAPTION>
Year Ended June 30,
---------------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value,
beginning of period.... $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment
operations--net
investment income and
net realized gain...... .05 .05 .05 .05 .05
Dividends and/or
distributions to
shareholders........... (.05) (.05) (.05) (.05) (.05)
------- ------- ------- ------ ------
Net asset value, end of
period................. $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ====== ======
TOTAL RETURN(/1/)....... 5.36% 4.75% 5.16% 4.97% 5.11%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in millions)... $18,734 $17,821 $15,114 $9,063 $6,753
Average net assets (in
millions).............. $18,537 $17,128 $12,617 $8,033 $6,077
Ratios to average net
assets:(/2/)
Net investment income... 5.20% 4.63% 5.04% 4.86% 4.99%
Expenses................ 0.67% 0.66% 0.68%(/3/) 0.73%(/3/) 0.74%(/3/)
Expenses, net of
voluntary assumption of
expenses............... N/A N/A 0.66% 0.67% 0.69%
</TABLE>
1. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns reflect
changes in net investment income only. Total returns are not annualized for
periods less than one year. 2. Annualized for periods of less than one full
year. 3. Expense ratio has not been grossed up to reflect the effect of expenses
paid indirectly.
See accompanying Notes to Financial Statements.
19
<PAGE>
Notes to Financial Statements
Centennial Money Market Trust
1. Significant Accounting Policies
Centennial Money Market Trust (the Trust) is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. The Trust's investment objective is to seek the maximum
current income that is consistent with low capital risk and the maintenance of
liquidity. The Trust's investment advisor is Centennial Asset Management
Corporation (the Manager), a subsidiary of OppenheimerFunds, Inc. (OFI). The
following is a summary of significant accounting policies consistently followed
by the Trust.
Securities Valuation. Portfolio securities are valued on the basis of amortized
cost, which approximates market value.
Repurchase Agreements. The Trust requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Trust may be delayed or limited.
Federal Taxes. The Trust intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders. Therefore, no federal
income or excise tax provision is required.
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Trust.
Other. Investment transactions are accounted for as of trade date. Realized
gains and losses on investments are determined on an identified cost basis,
which is the same basis used for federal income tax purposes.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
20
<PAGE>
Notes to Financial Statements (Continued)
Centennial Money Market Trust
2. Shares of Beneficial Interest
The Trust has authorized an unlimited number of no par value shares of
beneficial interest. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
Year Ended June 30, 2000 Year Ended June 30, 1999
--------------------------------- ---------------------------------
Shares Amount Shares Amount
--------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Sold.................... 59,623,565,708 $ 59,623,565,708 50,615,000,093 $ 50,615,000,093
Dividends and/or
distributions
reinvested............. 928,419,736 928,419,736 776,439,225 776,439,225
Redeemed................ (59,638,830,004) (59,638,830,004) (48,684,930,272) (48,684,930,272)
--------------- ---------------- --------------- ----------------
Net increase............ 913,155,440 $ 913,155,440 2,706,509,046 $ 2,706,509,046
=============== ================ =============== ================
</TABLE>
3. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Trust which provides for a fee of 0.50%
of the first $250 million of the Trust's net assets, 0.475% of the next $250
million, 0.45% of the next $250 million, 0.425% of the next $250 million, 0.40%
of the next $250 million, 0.375% of the next $250 million, 0.35% of the next
$500 million and 0.325% of net assets in excess of $2 billion. The Manager has
agreed to reimburse the Trust if aggregate expenses (with specified exceptions)
exceed the lesser of 1.50% of average annual net assets of the Trust up to $30
million, and 1% of its average annual net assets in excess of $30 million; or
25% of the total annual investment income of the Trust. The Trust's management
fee for the year ended June 30, 2000 was an annualized rate of 0.34%, before any
waiver by the Manager if applicable.
Transfer Agent Fees. Shareholder Services, Inc. (SSI) acts as the transfer and
shareholder servicing agent for the Trust and for other registered investment
companies on an "at-cost" basis.
Service Plan Fees. Under an approved service plan, the Trust may expend up to
0.20% of its average annual net assets annually to reimburse the Manager, as
distributor, for costs incurred in connection with the personal service and
maintenance of accounts that hold shares of the Trust, including amounts paid to
brokers, dealers, banks and other financial institutions. During the year ended
June 30, 2000, the Trust paid $1,208 to a broker/dealer affiliated with the
Manager as reimbursement for distribution-related expenses.
21
<PAGE>
Appendix A
RATINGS DEFINITIONS
Below are summaries of the rating definitions used by the nationally-recognized
rating agencies listed below. Those ratings represent the opinion of the agency
as to the credit quality of issues that they rate. The summaries below are based
upon publicly-available information provided by the rating organizations.
Moody's Investors Service, Inc.
-------------------------------------------------------------------------------
Long-Term (Taxable) Bond Ratings
Aaa: Bonds rated "Aaa" are judged to be the best quality. They carry the
smallest degree of investment risk. Interest payments are protected by a large
or by an exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, the changes that can be expected are
most unlikely to impair the fundamentally strong position of such issues.
Aa: Bonds rated "Aa" are judged to be of high quality by all standards. Together
with the "Aaa" group, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as with "Aaa" securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risk appear somewhat larger than that of "Aaa"
securities.
A: Bonds rated "A" possess many favorable investment attributes and are to be
considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment some time in the future.
Baa: Bonds rated "Baa" are considered medium-grade obligations; that is, they
are neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and have speculative
characteristics as well.
Ba: Bonds rated "Ba" are judged to have speculative elements. Their future
cannot be considered well-assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.
B: Bonds rated "B" generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.
Caa: Bonds rated "Caa" are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or
interest.
Ca: Bonds rated "Ca" represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.
C: Bonds rated "C" are the lowest class of rated bonds and can be regarded as
having extremely poor prospects of ever attaining any real investment standing.
Con. (...): Bonds for which the security depends on the completion of some act
or the fulfillment of some condition are rated conditionally. These bonds are
secured by (a) earnings of projects under construction, (b) earnings of projects
unseasoned in operating experience, (c) rentals that begin when facilities are
completed, or (d) payments to which some other limiting condition attaches. The
parenthetical rating denotes probable credit stature upon completion of
construction or elimination of the basis of the condition.
Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from "Aa" through "Caa." The modifier "1" indicates that the
obligation ranks in the higher end of its generic rating category; the modifier
"2" indicates a mid-range ranking; and the modifier "3" indicates a ranking in
the lower end of that generic rating category. Advanced refunded issues that are
secured by certain assets are identified with a # symbol.
Short-Term Ratings - Taxable Debt
These ratings apply to the ability of issuers to honor senior debt obligations
having an original maturity not exceeding one year:
Prime-1: Issuer has a superior ability for repayment of senior short-term debt
obligations.
Prime-2: Issuer has a strong ability for repayment of senior short-term debt
obligations. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while appropriate, may be
more affected by external conditions. Ample alternate liquidity is maintained.
Prime-3: Issuer has an acceptable ability for repayment of senior short-term
obligations. The effect of industry characteristics and market compositions may
be more pronounced. Variability in earnings and profitability may result in
changes in the level of debt protection measurements and may require relatively
high financial leverage. Adequate alternate liquidity is maintained.
Not Prime: Issuer does not fall within any Prime rating category.
Standard & Poor's Rating Services
-------------------------------------------------------------------------------
Long-Term Credit Ratings
AAA: Bonds rated "AAA" have the highest rating assigned by Standard & Poor's.
The obligor's capacity to meet its financial commitment on the obligation is
extremely strong.
AA: Bonds rated "AA" differ from the highest rated obligations only in small
degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.
A: Bonds rated "A" are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
BBB: Bonds rated "BBB" exhibit adequate protection parameters. However, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitment on the
obligation.
BB, B, CCC, CC, and C
Bonds rated "BB", "B", "CCC", "CC" and "C" are regarded as having significant
speculative characteristics. "BB" indicates the least degree of speculation, and
"C" the highest. While such obligations will likely have some quality and
protective characteristics, these may be outweighed by large uncertainties or
major exposures to adverse conditions. BB: Bonds rated "BB" are less vulnerable
to nonpayment than other speculative issues. However, these face major ongoing
uncertainties or exposure to adverse business, financial, or economic conditions
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.
B: Bonds rated "B" are more vulnerable to nonpayment than obligations rated
"BB", but the obligor currently has the capacity to meet its financial
commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's capacity or willingness to meet its
financial commitment on the obligation.
CCC: Bonds rated "CCC" are currently vulnerable to nonpayment, and are dependent
upon favorable business, financial, and economic conditions for the obligor to
meet its financial commitment on the obligation. In the event of adverse
business, financial or economic conditions, the obligor is not likely to have
the capacity to meet its financial commitment on the obligation.
CC: Bonds rated "CC" are currently highly vulnerable to nonpayment.
C: A subordinated debt or preferred stock obligation rated "C" is currently
highly vulnerable to nonpayment. The "C" rating may be used to cover a situation
where a bankruptcy petition has been filed or similar action has been taken, but
payments on this obligation are being continued. A "C" also will be assigned to
a preferred stock issue in arrears on dividends or sinking fund payments, but
that is currently paying.
D: Bonds rated "D" are in default. Payments on the obligation are not being made
on the date due even if the applicable grace period has not expired, unless
Standard and Poor's believes that such payments will be made during such grace
period. The "D" rating will also be used upon the filing of a bankruptcy
petition or the taking of a similar action if payments on an obligation are
jeopardized.
The ratings from "AA" to "CCC" may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within the major rating categories. The
"r" symbol is attached to the ratings of instruments with significant noncredit
risks.
-------------------------------------------------------------------------------
Short-Term Issue Credit Ratings
-------------------------------------------------------------------------------
A-1: Obligation is rated in the highest category. The obligor's capacity to meet
its financial commitment on the obligation is strong. Within this category, a
plus (+) sign designation indicates the obligor's capacity to meet its financial
obligation is extremely strong.
A-2: Obligation is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than obligations in higher rating
categories. However, the obligor's capacity to meet its financial commitment on
the obligation is satisfactory.
A-3: Obligation exhibits adequate protection parameters. However, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitment on the
obligation.
B: Obligation is regarded as having significant speculative characteristics. The
obligor currently has the capacity to meet its financial commitment on the
obligation. However, it faces major ongoing uncertainties which could lead to
the obligor's inadequate capacity to meet its financial commitment on the
obligation.
C: Obligation is currently vulnerable to nonpayment and is dependent upon
favorable business, financial, and economic conditions for the obligor to
meet its financial commitment on the obligation.
D: Obligation is in payment default. Payments on the obligation have not been
made on the due date even if the applicable grace period has not expired, unless
Standard and Poor's believes that such payments will be made during such grace
period. The "D" rating will also be used upon the filing of a bankruptcy
petition or the taking of a similar action if payments on an obligation are
jeopardized.
Fitch, Inc.
-------------------------------------------------------------------------------
International Long-Term Credit Ratings
Investment Grade:
AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of
credit risk. They are assigned only in the case of exceptionally strong
capacity for timely payment of financial commitments. This capacity is highly
unlikely to be adversely affected by foreseeable events.
AA: Very High Credit Quality. "AA" ratings denote a very low expectation of
credit risk. They indicate a very strong capacity for timely payment of
financial commitments. This capacity is not significantly vulnerable to
foreseeable events.
A: High Credit Quality. "A" ratings denote a low expectation of credit risk.
The capacity for timely payment of financial commitments is considered
strong. This capacity may, nevertheless, be more vulnerable to changes in
circumstances or in economic conditions than is the case for higher ratings.
BBB: Good Credit Quality. "BBB" ratings indicate that there is currently a
low expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and
in economic conditions are more likely to impair this capacity. This is the
lowest investment-grade category.
Speculative Grade:
BB: Speculative. "BB" ratings indicate that there is a possibility of credit
risk developing, particularly as the result of adverse economic change over
time. However, business or financial alternatives may be available to allow
financial commitments to be met. Securities rated in this category are not
investment grade.
B: Highly Speculative. "B" ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met. However, capacity for continued payment is contingent
upon a sustained, favorable business and economic environment.
CCC, CC C: High Default Risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained, favorable
business or economic developments. A "CC" rating indicates that default of
some kind appears probable. "C" ratings signal imminent default.
DDD, DD, and D: Default. The ratings of obligations in this category are based
on their prospects for achieving partial or full recovery in a reorganization or
liquidation of the obligor. While expected recovery values are highly
speculative and cannot be estimated with any precision, the following serve as
general guidelines. "DDD" obligations have the highest potential for recovery,
around 90%-100% of outstanding amounts and accrued interest. "DD" indicates
potential recoveries in the range of 50%-90%, and "D" the lowest recovery
potential, i.e., below 50%.
Entities rated in this category have defaulted on some or all of their
obligations. Entities rated "DDD" have the highest prospect for resumption of
performance or continued operation with or without a formal reorganization
process. Entities rated "DD" and "D" are generally undergoing a formal
reorganization or liquidation process; those rated "DD" are likely to satisfy a
higher portion of their outstanding obligations, while entities rated "D" have a
poor prospect for repaying all obligations. Plus (+) and minus (-) signs may be
appended to a rating symbol to denote relative status within the major rating
categories. Plus and minus signs are not added to the "AAA" category or to
categories below "CCC," nor to short-term ratings other than "F1" (see below).
International Short-Term Credit Ratings
F1: Highest credit quality. Strongest capacity for timely payment of financial
commitments. May have an added "+" to denote any exceptionally strong credit
feature.
F2: Good credit quality. A satisfactory capacity for timely payment of financial
commitments, but the margin of safety is not as great as in the case of higher
ratings.
F3: Fair credit quality. Capacity for timely payment of financial commitments is
adequate. However, near-term adverse changes could result in a reduction to
non-investment grade.
B: Speculative. Minimal capacity for timely payment of financial
commitments, plus vulnerability to near-term adverse changes in financial and
economic conditions.
C: High default risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon a sustained, favorable
business and economic environment.
D: Default. Denotes actual or imminent payment default.
<PAGE>
B-1
Appendix B
-------------------------------------------------------------------------------
Industry Classifications
-------------------------------------------------------------------------------
Aerospace/Defense Food and Drug Retailers
Air Transportation Gas Utilities
Asset-Backed Health Care/Drugs
Auto Parts and Equipment Health Care/Supplies & Services
Automotive Homebuilders/Real Estate
Bank Holding Companies Hotel/Gaming
Banks Industrial Services
Beverages Information Technology
Broadcasting Insurance
Broker-Dealers Leasing & Factoring
Building Materials Leisure
Cable Television Manufacturing
Chemicals Metals/Mining
Commercial Finance Nondurable Household Goods
Communication Equipment Office Equipment
Computer Hardware Oil - Domestic
Computer Software Oil - International
Conglomerates Paper
Consumer Finance Photography
Consumer Services Publishing
Containers Railroads & Truckers
Convenience Stores Restaurants
Department Stores Savings & Loans
Diversified Financial Shipping
Diversified Media Special Purpose Financial
Drug Wholesalers Specialty Printing
Durable Household Goods Specialty Retailing
Education Steel
Electric Utilities Telecommunications - Long Distance
Electrical Equipment Telephone - Utility
Electronics Textile, Apparel & Home
Furnishings
Energy Services Tobacco
Entertainment/Film Trucks and Parts
Environmental Wireless Services
Food
<PAGE>
-------------------------------------------------------------------------------
Centennial Money Market Trust
-------------------------------------------------------------------------------
Investment Advisor and Distributor
Centennial Asset Management Corporation
6803 South Tucson Way
Englewood, Colorado 80112
Sub-Distributor OppenheimerFunds Distributor, Inc.
P.O. Box 5254
Denver, Colorado 80217
Transfer Agent
Shareholder Services, Inc.
P.O. Box 5143
Denver, Colorado 80217
1-800-525-9130
Custodian of Portfolio Securities
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Independent Auditors
Deloitte & Touche LLP
555 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Myer, Swanson, Adams & Wolf, P.C.
1600 Broadway
Denver, Colorado 80202
PX0150.001.1100
CENTENNIAL GOVERNMENT TRUST
--------------------------------------------------------------------------------
Prospectus dated November 1, 2000 Centennial Government Trust is a money
market mutual fund. It seeks a high
level of current income consistent
with preserving capital and
maintaining liquidity. The Trust
invests in short-term, high quality
"money market" investments.
This Prospectus contains important
information about the Trust's
objective, its investment policies,
strategies and risks. It also contains
important information about how to buy
and sell shares of the Trust and other
account features.
As with all mutual funds, the Please read this Prospectus carefully Securities
and Exchange Commission has before you invest and keep it for not approved or
disapproved the Trust's future reference about your account. securities nor has
it determined that this Prospectus is accurate or complete. It is a criminal
offense to represent otherwise.
--------------------------------------------------------------------------------
<PAGE>
CONTENTS
A B O U T T H E T R U S T
The Trust's Investment Objective and Strategies
Main Risks of Investing in the Trust
The Trust's Past Performance
Fees and Expenses of the Trust
About the Trust's Investments
I N V E S T I N G I N T H E T R U S T
This section applies to the prospectuses of Centennial Money
Market Trust, Centennial Tax Exempt Trust and Centennial
Government Trust
How the Trusts are Managed
How to Buy Shares
Automatic Purchase and Redemption Programs
Direct Shareholders
How to Sell Shares
Automatic Purchase and Redemption Programs
Direct Shareholders
How to Exchange Shares
Shareholder Account Rules and Policies
Dividends and Tax Information
Financial Highlights
<PAGE>
A B O U T T H E T R U S T
The Trust's Investment Objective and Strategies
WHAT IS THE TRUST'S INVESTMENT OBJECTIVE? The Trust seeks a high level of
current income that is consistent with the preservation of capital and the
maintenance of liquidity.
WHAT DOES THE TRUST MAINLY INVEST IN? The Trust is a money market fund. It
invests in a variety of high-quality money market instruments to seek income.
The Trust invests principally in short-term, U.S. dollar-denominated debt
instruments issued by the U.S. government, its agencies and instrumentalities.
To be considered "high-quality," generally investments must be rated in one of
the two highest credit-quality categories for short-term securities by
nationally recognized rating services. If unrated, a security must be determined
by the Trust's investment manager to be of comparable quality to rated
securities.
WHO IS THE TRUST DESIGNED FOR? The Trust is designed for investors who are
seeking income at current money market rates while preserving the value of their
investment, because the Trust tries to keep its share price stable at $1.00.
Income on short-term money market instruments tends to be lower than income on
longer term debt securities, so the Trust's yield will likely be lower than the
yield on longer-term fixed income funds. The Trust does not invest for the
purpose of seeking capital appreciation or gains and is not a complete
investment program.
Main Risks of Investing in the Trust
All investments carry risks to some degree. Funds that invest in debt
obligations for income may be subject to credit risks and interest rate risks.
However, the Trust's investments must meet strict standards set by its Board of
Trustees following special rules for money market funds under federal law. Those
standards include requirements for maintaining high credit quality in the
Trust's portfolio, a short average portfolio maturity to reduce the effects of
changes in interest rates on the value of the Trust's securities and
diversifying the Trust's investments among issuers to reduce the effects of a
default by any one issuer on the Trust's overall portfolio and the value of the
Trust's shares.
Even so, there are risks that any of the Trust's holdings could have its
credit rating downgraded, or the issuer could default, or that interest rates
could rise sharply, causing the value of the Trust's investments (and its share
price) to fall. As a result, there is a risk that the Trust's shares could fall
below $1.00 per share. If there is a high redemption demand for the Trust's
shares that was not anticipated, portfolio securities might have to be sold
prior to their maturity at a loss. Also, there is the risk that the value of
your investment could be eroded over time by the effects of inflation, and that
poor security selection could cause the Trust to underperform other funds with
similar objectives.
--------------------------------------------------------------------------------
An investment in the Trust is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Trust seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the Trust.
--------------------------------------------------------------------------------
The Trust's Past Performance
The bar chart and table below show how the Trust's returns may vary over time,
by showing changes in the Trust's performance from year to year for the last ten
calendar years and average annual total returns for the 1-, 5- and 10- year
periods. Variability of returns is one measure of the risks of investing in a
money market fund. The Trust's past investment performance does not predict how
the Trust will perform in the future.
Annual Total Returns (% as of 12/31 each year)
[See appendix to prospectus for annual total return data for bar chart.]
For the period from 1/1/00 through 9/30/00 the cumulative total return (not
annualized) was 4.17%. During the period shown in the bar chart, the highest
return (not annualized) for a calendar quarter was 1.90% (1st Q '90) and the
lowest return (not annualized) for a calendar quarter was 0.63% (1st Q '93)
Average Annual Total Returns
for the periods ended December 31, 1 Year 5 Years 10 Years
1999
--------------------------------------------------------------------------------
Centennial Government Trust 4.43% 4.82% 4.74%
(inception 10/5/81)
--------------------------------------------------------------------------------
The returns measure the performance of a hypothetical account and assume that
all dividends have been reinvested in additional shares. The total returns are
not the Trust's current yield. The Trust's yield more closely reflects the
Trust's current earnings.
--------------------------------------------------------------------------------
To obtain the Trust's current 7-day yield, please call the Transfer Agent
toll-free at 1.800.525.9310.
--------------------------------------------------------------------------------
Fees and Expenses of the Trust
The Trust pays a variety of expenses directly for investment management,
administration and other services. Those expenses are subtracted from the
Trust's assets to calculate the Trust's net asset value per share. All
shareholders therefore pay those expenses indirectly. The following tables are
meant to help you understand the fees and expenses you may pay if you buy and
hold shares of the Trust. The numbers below are based upon the Trust's expenses
during its fiscal year ended June 30, 2000.
SHAREHOLDER FEES. The Trust does not charge any initial sales charge to buy
shares or to reinvest dividends. There are no exchange fees or redemption fees
and no contingent deferred sales charges (unless you buy Trust shares by
exchanging Class A shares of other eligible funds that were purchased subject to
a contingent deferred sales charge, as described in "How to Sell Shares").
Annual Trust Operating Expenses (deducted from Trust assets):
(% of average daily net assets)
------------------------------------------------------------------------------
Management Fees 0.45%
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees 0.20%
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Other Expenses 0.09%
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Total Annual Operating Expenses 0.74%
------------------------------------------------------------------------------
"Other expenses" in the table include transfer agent fees, custodial fees, and
accounting and legal expenses the Trust pays.
EXAMPLE. The following example is intended to help you compare the cost of
investing in the Trust with the cost of investing in other mutual funds. The
example assumes that you invest $10,000 in shares of the Trust for the time
periods indicated and reinvest your dividends and distributions. The example
also assumes that your investment has a 5% return each year and that the Trust's
operating expenses remain the same. Your actual costs may be higher or lower,
because expenses will vary over time. Based on these assumptions your expenses
would be as follows whether or not you redeem your investment at the end of each
period:
-----------------------------------------------------------------------------
1 year 3 years 5 years 10 years
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
$76 $237 $411 $918
-----------------------------------------------------------------------------
About the Trust's Investments
THE TRUST'S PRINCIPAL INVESTMENT POLICIES. The Trust invests in short-term money
market securities meeting quality, maturity and diversification standards
established by its Board of Trustees as well as rules that apply to money market
funds under the Investment Company Act. The Statement of Additional Information
contains more detailed information about the Trust's investment policies and
risks.
The Trust's investment manager, Centennial Asset Management
Corporation (referred to in this Prospectus as the Manager) tries to reduce
risks by diversifying investments and by carefully researching investments
before the Trust buys them. The rate of the Trust's income will vary from
day to day, generally reflecting changes in overall short-term interest
rates. There is no assurance that the Trust will achieve its investment
objective.
What Does the Trust Invest In? Money market instruments are high-quality,
short-term debt instruments. They may have fixed, variable or floating
interest rates. All of the Trust's money market investments must meet the
special quality and maturity and requirements set under the Investment
Company Act and the special standards set by the Board described briefly
below. The following is a brief description of the types of money market
instruments the Trust may invest in.
o U.S. Government Securities. The Trust invests mainly in obligations issued or
guaranteed by the U.S. government or any of its agencies or instrumentalities.
Some are direct obligations of the U.S. Treasury, such as Treasury bills, notes
and bonds, and are supported by the full faith and credit of the United States.
Other U.S. government securities, such as pass-through certificates issued by
the Government National Mortgage Association (Ginnie Mae), are also supported by
the full faith and credit of the U.S. government. Some government securities,
agencies or instrumentalities of the U.S. government are supported by the right
of the issuer to borrow from the U.S. Treasury, such as securities of the
Federal National Mortgage Corporation (Fannie Mae). Others may be supported only
by the credit of the instrumentality, such as obligations of the Federal Home
Loan Mortgage Corporation (Freddie Mac).
o Other Money Market Obligations. The Trust may invest in variable rate notes,
variable rate master demand notes or in master demand notes. The Trust o may
also purchase other debt obligations that mature within twelve months from the
date of purchase. It may purchase debt obligations that have been called for
redemption by the issuer if the redemption will occur within one year. The
Trustees have proposed a charge to this policy to increase the length of
permitted maturity to up to the maximum time permitted under Rule 2a-7, which is
currently 397 days. Please refer to "What Standards Apply to the Trust's
Investments?" below for more details.
Additionally, the Trust may buy other money market instruments that
the Manager approves under procedures adopted by the Board of Trustees..
They must be U.S. dollar-denominated short-term investments that the
Manager must determine to have minimal credit risks.
What Standards Apply to the Trust's Investments? Money market instruments
are subject to credit risk, the risk that the issuer might not make timely
payments of interest on the security or repay principal when it is due. The
Trust may buy only those investments that meet standards set by the
Investment Company Act for money market funds and procedures adopted by the
Board. The Trust's Board has adopted evaluation procedures for the Trust's
portfolio and the Manager has the responsibility to implement those
procedures when selecting investments for the Trust.
In general, the Trust buys only high-quality investments that the Manager
believespresent minimal credit risk at the time of purchase. "High-quality"
investments are:
o rated in one of the two highest short-term rating categories of two national
rating organizations, or
o rated by one rating organization in one of its two highest rating categories
(if only one rating organization has rated the investment), or
o unrated investments that the Manager determines are comparable in quality to
the two highest rating categories.
The standards also limit the amount of the Trust's assets that can be
invested in the securities of any one issuer (other than the U.S.
government, its agencies and instrumentalities), to spread the Trust's
investment risks. According to the standards, the Trust can invest without
limit in U.S. government securities because of their limited investment
risks. The Trust's fundamental policy restricting investments in any debt
instrument having a maturity in excess of one year from the date of the
investment is more restrictive than the standards that apply to all. That
restriction could limit the Trust's investments, however, shareholders have
been requested to approve an amendment to this policy whereby no security's
maturity will exceed the maximum time permitted under Rule 2a-7. If the
change is not approved by shareholders, the Manager will supplement this
Prospectus to reflect that the change was not approved. Finally, the Trust
must maintain a dollar-weighted average portfolio maturity of not more than
90 days, to reduce interest rate risks.
Can the Trust's Investment Objective and Policies Change? The Trust's Board
can change non-fundamental policies without shareholder approval, although
significant changes will be described in amendments to this Prospectus.
Fundamental policies cannot be changed without the approval of a majority
of the Trust's outstanding voting shares. The Trust's investment objective
is a fundamental policy. Some investment restrictions that are fundamental
polices are listed in the Statement of Additional Information. An
investment policy is not fundamental unless this Prospectus or the
Statement of Additional Information says that it is. Please see the
Statement of Additional Information for more information on the proposals
to change the fundamental policies that the Board of Trustees has requested
shareholders to approve. If shareholders do not approve the changes, then
this Prospectus and the Statement of Additional Information will be
supplemented to advise you that the amendments were not approved.
OTHER INVESTMENT STRATEGIES. To seek its objective, the Trust can also use
the investment techniques and strategies described below. The Trust might
not always use all of them. These techniques involve risks. The Statement
of Additional Information contains more information about some of these
practices, including limitations on their use that are designed to reduce
some of the risks.
Floating Rate/Variable Rate Notes. The Trust can purchase notes with
floating or variable interest rates. Variable rates are adjustable at
stated periodic intervals. Floating rates are adjusted automatically
according to a specified market rate or benchmark, such as the prime rate
of a bank. If the maturity of a note is greater than one year from the
purchase date (or if the proposed change is approved by shareholders, the
maximum time permitted under Rule 2a-7), it may be purchased only if it has
a demand feature. That feature must permit the Trust to recover the
principal amount of the investment on not more than thirty days' notice at
any time, or at specified times not exceeding one year from purchase (or if
the proposed change is approved by shareholders, the maximum time permitted
under Rule 2a-7).
Repurchase Agreements. The Trust may enter into repurchase agreements. In a
repurchase transaction, the Trust buys a security and simultaneously sells
it to the vendor for delivery at a future date. Repurchase agreements must
be fully collateralized. However, if the vendor fails to pay the resale
price on the delivery date, the Trust may incur costs in disposing of the
collateral and may experience losses if there is any delay in its ability
to do so. The Trust will not enter into repurchase transactions that will
cause more than 10% of the Trust's net assets to be subject to repurchase
agreements having a maturity beyond seven days. There is no limit on the
amount of the Trust's net assets that may be subject to repurchase
agreements maturing in seven days or less.
Illiquid and Restricted Securities. Investments may be illiquid because
they do not have an active trading market, making it difficult to value
them or dispose of them promptly at an acceptable price. A restricted
security is one that has a contractual limit on resale or which cannot be
sold publicly until it is registered under federal securities laws. The
Trust will not invest more than 10% of its net assets in illiquid or
restricted securities. That limit does not apply to certain restricted
securities that are eligible for resale to qualified institutional
purchasers. The Manager monitors holdings of illiquid securities on an
ongoing basis to determine whether to sell any holdings to maintain
adequate liquidity. Difficulty in selling a security may result in a loss
to the Trust or additional costs.
I N V E S T I N G I N T H E T R U S T S
The information below applies to Centennial Money Market Trust, Centennial
Tax Exempt Trust and Centennial Government Trust. Each is referred to as a
"Trust" and they are collectively referred to as the "Trusts". Unless
otherwise indicated, this information applies to each Trust.
How the Trusts are Managed
THE MANAGER. The Manager, Centennial Asset Management Corporation, a
wholly-owned subsidiary of OppenheimerFunds, Inc., is the investment
advisor for the Trusts. The Manager chooses each of the Trust's investments
and handles its day-to-day business. The Manager carries out its duties
subject to the policies established by the Trust's Board of Trustees, under
an investment advisory agreement with each Trust that states the Manager's
responsibilities. The agreement sets the fees the Trust pays to the Manager
and describes the expenses that the Trust is responsible to pay to conduct
its business.
The Manager has been an investment advisor since 1978. The Manager and its
affiliates managed investment companies and other assets of more than $130
billion as of September 30, 2000, and more than 5 million shareholder
accounts. The Manager is located at 6803 South Tucson Way, Englewood,
Colorado 80112.
Portfolio Managers. The portfolio managers of the Trusts are the persons
principally responsible for the day-to-day management of the Trust's
portfolios. The portfolio manager of Centennial Money Market Trust and
Centennial Government Trust is Carol E. Wolf. Ms. Wolf was co-portfolio
manager of the Trusts from June 1990 until April 2000, when she became the
sole portfolio manager. She is a Senior Vice President of OppenheimerFunds,
Inc. and of the Trusts and an officer and portfolio manager of other funds
for which the Manager or an affiliate serves as investment advisor. The
portfolio manager of Centennial Tax Exempt Trust is Michael Carbuto (since
October 1987). Mr. Carbuto is a Vice President of OppenheimerFunds, Inc.
and is an officer and portfolio manager of other funds for which the
Manager serves as investment advisor.
Advisory Fees. Under each investment advisory agreement, a Trust pays the
Manager an advisory fee at an annual rate that declines on additional
assets as the Trust grows. That fee is computed on the average annual net
assets of the respective Trust as of the close of each business day.
o Centennial Money Market Trust. The annual management fee rates are:
0.500% of the first $250 million of the Trust's net assets; 0.475% of the
next $250 million; 0.450% of the next $250 million; 0.425% of the next $250
million; 0.400% of the next $250 million; 0.375% of the next $250 million;
0.350% of the next $500 million; and 0.325% of net assets in excess of $2
billion. In the agreement, the Manager guarantees that the Trust's total
expenses in any fiscal year, exclusive of taxes, interest and brokerage
commissions, and extraordinary expenses such as litigation costs, shall not
exceed the lesser of (1) 1.5% of the average annual net assets of the Trust
up to $30 million and 1% of its average annual net assets in excess of $30
million; or (2) 25% of the total annual investment income of the Trust.
Centennial Money Market Trust's management fee for its fiscal year ended
June 30, 2000 was 0.34% of the Trust's average annual net assets.
o Centennial Government Trust. The annual management fee rates are: 0.500%
of the first $250 million of the Trust's net assets; 0.475% of the next
$250 million; 0.450% of the next $250 million; 0.425% of the next $250
million; 0.400% of the next $250 million; 0.375% of the next $250 million
and 0.350% of net assets in excess of $1.5 billion. The Manager has made
the same guarantee to Centennial Government Trust regarding expenses as
described above for Centennial Money Market Trust. The Trust's management
fee for its fiscal year ended June 30, 2000 was 0.45% of the Trust's
average annual net assets.
o Centennial Tax Exempt Trust. The annual management fee rates applicable
to the Trust are as follows: 0.500% of the first $250 million of the
Trust's net assets; 0.475% of the next $250 million; 0.450% of the next
$250 million; 0.425% of the next $250 million; 0.400% of the next $250
million; 0.375% of the next $250 million; 0.350% of the next $500 million;
and 0.325% of net assets in excess of $2 billion. Under the agreement, when
the value of the Trust's net assets is less than $1.5 billion, the annual
fee payable to the Manager shall be reduced by $100,000 based on average
net assets computed daily and paid monthly at the annual rates. However,
the annual fee cannot be less than $0. The Trust's management fee for its
fiscal year ended June 30, 2000 was 0.43% of the Trust's average annual net
assets.
How to Buy Shares
HOW ARE SHARE PRICES DETERMINED? Shares of each Trust are sold at their
offering price, which is the net asset value per share without any sales
charge. The net asset value per share will normally remain fixed at $1.00
per share. However, there is no guarantee that a Trust will be able to
maintain a stable net asset value of $1.00 per share.
The offering price that applies to a purchase order is based on the next
calculation of the net asset value per share that is made after the
Sub-Distributor (OppenheimerFunds Distributor, Inc.) receives the purchase
order at its offices in Colorado, or after any agent appointed by the
Sub-Distributor receives the order and sends it to the Sub-Distributor as
described below.
How is a Trust's Net Asset Value Determined? The net asset value of shares
of each Trust is determined twice each day, at 12:00 Noon and at 4:00 P.M.,
on each day The New York Stock Exchange is open for trading (referred to in
this Prospectus as a "regular business day"). All references to time in
this Prospectus mean "New York time."
The net asset value per share is determined by dividing the value of a
Trust's net assets by the number of shares that are outstanding. Under a
policy adopted by the Board of Trustees of the Trusts, each Trust uses the
amortized cost method to value its securities to determine net asset value.
The shares of each Trust offered by this Prospectus are considered to be
Class A shares for the purposes of exchanging them or reinvesting
distributions among other eligible funds that offer more than one class of
shares.
IS THERE A MINIMUM INVESTMENT? Minimum initial investments described below
and depend on how you buy and pay for your shares. You can make additional
investments at any time with as little as $25. The minimum investment
requirements do not apply to reinvesting distributions from the Trust or
other eligible funds (a list of them appears in the Statement of Additional
Information, or you can ask your dealer or call the Transfer Agent) or
reinvesting distributions from unit investment trusts that have made
arrangements with the Distributor.
HOW ARE SHARES PURCHASED? You can buy shares in one of several ways:
Buying Shares Through a Dealer's Automatic Purchase and Redemption Program.
You can buy shares of a Trust through a broker-dealer that has a sales
agreement with the Trust's Distributor or Sub-Distributor that allows
shares to be purchased through the dealer's Automatic Purchase and
Redemption Program. Shares of each Trust are sold mainly to customers of
participating dealers that offer the Trusts' shares under these special
purchase programs. If you participate in an Automatic Purchase and
Redemption Program established by your dealer, your dealer buys shares of
the Trust for your account with the dealer. Program participants should
also read the description of the program provided by their dealer.
BuyingShares Through Your Dealer. If you do not participate in an Automatic
Purchase and Redemption Program, you can buy shares of a Trust through any
broker/dealer that has a sales agreement with the Sub-Distributor. Your
dealer will place your order with the Sub-Distributor on your behalf.
Buying Shares Directly Through the Sub-Distributor. You can also purchase
shares directly through the Sub-Distributor. Shareholders who make
purchases directly and hold shares in their own names are referred to as
"direct shareholders" in this Prospectus.
The Sub-Distributor may appoint servicing agents to accept purchase (and
redemption) orders, including broker/dealers that have established
Automatic Purchase and Redemption Programs. The Sub-Distributor, in its
sole discretion, may reject any purchase order for shares of a Trust.
AUTOMATIC PURCHASE AND REDEMPTION PROGRAM. If you buy shares of a Trust
through your broker/dealer's Automatic Purchase and Redemption Program,
your broker/dealer will buy your shares for your Program Account and will
hold your shares in your broker/dealer's name. These purchases will be made
under the procedures described in "Guaranteed Payment Procedures" below.
Your Automatic Purchase and Redemption Program Account may have minimum
investment requirements established by your broker/dealer. You should
direct all questions about your Automatic Purchase and Redemption Program
to your broker/dealer, because the Trusts' transfer agent does not have
access to information about your account under that Program.
Guaranteed Payment Procedures. Some broker/dealers may have arrangements
with the Sub-Distributor to enable them to place purchase orders for shares
of a Trust and to guarantee that the Trust's custodian bank will receive
Federal Funds to pay for the shares prior to specified times.
Broker/dealers whose clients participate in Automatic Purchase and
Redemption Programs may use these guaranteed payment procedures to pay for
purchases of shares of a Trust.
o If the Distributor receives a purchase order before 12:00 Noon on a
regular business day with the broker/dealer's guarantee that the Trust's
custodian bank will receive payment for those shares in Federal Funds by
2:00 P.M. on that same day, the order will be effected at the net asset
value determined at 12:00 Noon that day. Distributions will begin to accrue
on the shares on that day if the Federal Funds are received by the required
time.
o If the Distributor receives a purchase order after 12:00 Noon on a
regular business day with the broker/dealer's guarantee that the Trust's
custodian bank will receive payment for those shares in Federal Funds by
2:00 P.M. on that same day, the order will be effected at the net asset
value determined at 4:00 P.M. that day. Distributions will begin to accrue
on the shares on that day if the Federal Funds are received by the required
time.
o If the Distributor receives a purchase order between 12:00 Noon and 4:00
P.M. on a regular business day with the broker/dealer's guarantee that the
Trust's custodian bank will receive payment for those shares in Federal
Funds by 4:00 P.M. the next regular business day, the order will be
effected at the net asset value determined at 4:00 P.M. on the day the
order is received and distributions will begin to accrue on the shares
purchased on the next regular business day if the Federal Funds are
received by the required time.
HOW CAN DIRECT SHAREHOLDERS BUY SHARES? Direct shareholders can buy shares
of a Trust by completing a Centennial Funds New Account Application
(enclosed with this Prospectus) and sending it to the Sub-Distributor,
OppenheimerFunds Distributor, Inc., P.O. Box 5143, Denver, Colorado 80217.
Payment must be made by check or by Federal Funds wire as described below.
If you don't list a dealer on the application, OppenheimerFunds
Distributor, Inc., the Sub-Distributor, will act as your agent in buying
the shares. However, we recommend that you discuss your investment with a
financial advisor before you make a purchase to be sure that the Trust is
appropriate for you.
Each Trust intends to be as fully invested as possible to maximize its
yield. Therefore, newly-purchased shares normally will begin to accrue
distributions after the Sub-Distributor or its agent accepts your purchase
order, starting on the business day after the Trust receives Federal Funds
from the purchase payment.
Payment by Check. Direct shareholders may pay for purchases of shares of a
Trust by check. Send your check, payable to "OppenheimerFunds Distributor,
Inc.," along with your Application to the address listed above. For initial
purchases, your check should be payable in U.S. dollars and drawn on a U.S.
bank so that distributions will begin to accrue on the next regular
business day after the Distributor accepts your purchase order. If your
check is not drawn on a U.S. bank and is not payable in U.S. dollars, the
shares will not be purchased until the Distributor is able to convert the
purchase payment to Federal Funds. In that case distributions will begin to
accrue on the purchased shares on the next regular business day after the
purchase is made. The minimum initial investment for direct shareholders by
check is $500.
Payment by Federal Funds Wire. Direct shareholders may pay for purchases of
shares of a Trust by Federal Funds wire. You must also forward your
Application to the Sub-Distributor's address listed above. Before sending a
wire, call the Sub-Distributor's Wire Department at 1.800.525.9310
(toll-free from within the U.S.) or 303.768.3200 (from outside the U.S.) to
notify the Sub-Distributor of the wire, and to receive further
instructions.
Distributions will begin to accrue on the purchased shares on the
purchase date that is a regular business day if the Federal Funds from your
wire and the Application are received by the Sub-Distributor and accepted
by 12:00 Noon. If the Distributor receives the Federal Funds from your wire
and accepts the purchase order between 12:00 Noon and 4:00 P.M. on the
purchase date, distributions will begin to accrue on the shares on the next
regular business day. The minimum investment by Federal Funds Wire is
$2,500.
Buying Shares Through Automatic Investment Plans. Direct shareholders can
purchase shares of a Trust automatically each month by authorizing the
Trust's Transfer Agent to debit your account at a U.S. domestic bank or
other financial institution. Details are in the Automatic Investment Plan
Application and the Statement of Additional Information. The minimum
monthly purchase is $25.
Service (12b-1) Plans. Each Trust has adopted a service plan. It reimburses
the Distributor for a portion of its costs incurred for services provided
to accounts that hold shares of the Trust. Reimbursement is made quarterly
at an annual rate of up to 0.20% of the average annual net assets of the
Trust. The Distributor currently uses all of those fees (together with
significant amounts from the Manager's own resources) to pay dealers,
brokers, banks and other financial institutions quarterly for providing
personal services and maintenance of accounts of their customers that hold
shares of the Trust.
Retirement Plans. Direct shareholders may buy shares of a Trust for a retirement
plan account. If you participate in a plan sponsored by your employer, the
plan trustee or administrator must buy the shares for your plan account. The
Sub-Distributor also offers a number of different retirement plans that
individuals and employers can use:
o Individual Retirement Accounts (IRAs). These include regular IRAs, Roth IRAs,
rollover IRAs and Education IRAs.
o SEP-IRAs. These are Simplified Employee Pensions Plan IRAs for small business
owners or self-employed individuals.
o 403(b)(7) Custodial Plans. These are tax deferred plans for employees of
eligible tax-exempt organizations, such as schools, hospitals and charitable
organizations.
o 401(k) Plans. These are special retirement plans for businesses.
o Pension and Profit-Sharing Plans. These plans are designed for businesses
and self-employed individuals.
Please call the Sub-Distributor for retirement plan documents, which
include applications and important plan information.
How to Sell Shares
You can sell (redeem) some or all of your shares on any regular business
day. Your shares will be sold at the next net asset value calculated after
your order is received in proper form (which means that it must comply with
the procedures described below) and is accepted by the Transfer Agent.
HOW CAN PROGRAM PARTICIPANTS SELL SHARES? If you participate in an
Automatic Purchase and Redemption Program sponsored by your broker/dealer,
you must redeem shares held in your Program Account by contacting your
broker/dealer firm, or you can redeem shares by writing checks as described
below. You should not contact the Trust or its Transfer Agent directly to
redeem shares held in your Program Account. You may also arrange (but only
through your broker/dealer) to have the proceeds of redeemed Trust shares
sent by Federal Funds wire, as described below in "Sending Redemption
Proceeds by Wire."
HOW CAN DIRECT SHAREHOLDERS REDEEM SHARES? Direct shareholders can redeem
their shares by writing a letter to the Transfer Agent, Shareholder
Services, Inc., by using checkwriting privileges, or by telephone. You can
also set up Automatic Withdrawal Plans to redeem shares on a regular basis.
If you have questions about any of these procedures, and especially if you
are redeeming shares in a special situation, such as due to the death of
the owner or from a retirement plan account, please call the Transfer Agent
for assistance first, at 1.800.525.9310.
Certain Requests Require a Signature Guarantee. To protect you
and the Trust from fraud, the following redemption requests for
accounts of direct shareholders must be in writing and must
include a signature guarantee (although there may be other
situations that also require a signature guarantee):
o You wish to redeem $100,000 or more and receive a check
o The redemption check is not payable to all shareholders listed on the account
statement
o The redemption check is not sent to the address of record on your account
statement
o Shares are being transferred to an account with a different owner or name o
Shares are being redeemed by someone (such as an Executor) other than the
owners listed in the account registration.
Where Can Direct Shareholders Have Their Signatures Guaranteed?
The Transfer Agent will accept a guarantee of your signature by a
number of financial institutions, including:
o a U.S. bank, trust company, credit union or savings association,
o a foreign bank that has a U.S. correspondent bank,
o a U.S. registered dealer or broker in securities, municipal securities or
government securities, or
o a U.S. national securities exchange, a registered securities association or a
clearing agency.
If you are signing on behalf of a corporation, partnership or other
business or as a fiduciary, you must also include your title in the
signature.
How Can Direct Shareholders Sell Shares by Mail? Write a letter to the Transfer
Agent that includes:
o Your name
o The Trust's name
o Your account number (from your account statement) o The dollar amount or
number of shares to be redeemed o Any special payment instructions o Any
share certificates for the shares you are selling o The signatures of all
registered owners exactly as listed in the account
statement, and
o Any special documents requested by the Transfer Agent to assure proper
authorization of the person asking to sell the shares (such as Letters
Testamentary of an Executor).
---------------------------------------- ---------------------------------------
Use the following address for Send courier or express mail
---------------------------------------- requests to:
requests by mail: Shareholder Services, Inc.
Shareholder Services, Inc. 10200 E. Girard Avenue, Building D
P.O. Box 5143 Denver, Colorado 80231
Denver, Colorado 80217-5270
--------------------------------------------------------------------------------
How Can Direct Shareholders Sell Shares by Telephone? Direct
shareholders and their dealer representative of record may sell
shares by telephone. To receive the redemption price calculated
on a particular regular business day, the Transfer Agent or its
designated agent must receive the request by 4:00 P.M. on that
day. You may not redeem shares held under a share certificate or
in a retirement account by telephone. To redeem shares through a
service representative, call 1.800.525.9310. The check for
proceeds of telephone redemptions will be payable to the
shareholder(s) of record and will be sent to the address of
record for the account. Up to $100,000 may be redeemed by
telephone in any 7-day period. Telephone redemptions are not
available within 30 days of changing the address on an account.
Retirement Plan Accounts. There are special procedures to sell shares
held in a retirement plan account. Call the Transfer Agent for a
distribution request form. Special income tax withholding requirements
apply to distributions from retirement plans. You must submit a withholding
form with your redemption request to avoid delay in getting your money and
if you do not want tax withheld. If your employer holds your retirement
plan account for you in the name of the plan, you must ask the plan trustee
or administrator to request the sale of the Trust shares in your plan
account.
Sending Redemption Proceeds By Wire. While the Transfer Agent normally
sends direct shareholders their money by check, you can arrange to have the
proceeds of the shares you sell sent by Federal Funds wire to a bank
account you designate. It must be a commercial bank that is a member of the
Federal Reserve wire system. The minimum redemption you can have sent by
wire is $2,500. There is a $10 fee for each wire. To find out how to set up
this feature on an account or to arrange a wire, direct shareholders should
call the Transfer Agent at 1.800.525.9310. If you hold your shares through
your dealer's Automatic Purchase and Redemption Program, you must contact
your dealer to arrange a Federal Funds wire.
Can Direct Shareholders Submit Requests by Fax? Direct shareholders
may send requests for certain types of account transactions to the Transfer
Agent by fax (telecopier). Please call 1.800.525.9310 for information about
which transactions may be handled this way. Transaction requests submitted
by fax are subject to the same rules and restrictions as written and
telephone requests described in this Prospectus.
HOW DO I WRITE CHECKS AGAINST MY ACCOUNT? Automatic Purchase and
Redemption Program participants may write checks against an
account held under their Program, but must arrange for
checkwriting privileges through their dealers. Direct
shareholders may write checks against their account by requesting
that privilege on the account Application or by contacting the
Transfer Agent for signature cards. They must be signed (with a
signature guarantee) by all owners of the account and returned to
the Transfer Agent so that checks can be sent to you to use.
Shareholders with joint accounts can elect in writing to have
checks paid over the signature of one owner. If checkwriting is
established after November 1, 2000, only one signature is
required for shareholders with joint accounts, unless you elect
otherwise.
o Checks can be written to the order of whomever you wish, but may not be
cashed at the bank the checks are payable through or the Trust's custodian
bank.
o Checkwriting privileges are not available for accounts holding shares that
are subject to a contingent deferred sales charge.
o Checks must be written for at least $250.
o Checks cannot be paid if they are written for more than your account value. o
You may not write a check that would require the redemption of shares that
were purchased by check or Automatic Investment Plan payments within the
prior 10 days.
o Don't use your checks if you changed your account number, until you receive
new checks.
WILL I PAY A SALES CHARGE WHEN I SELL MY SHARES? The Trust does
not charge a fee to redeem shares of a Trust that were bought
directly or by reinvesting distributions from that Trust or
another Centennial Trust or eligible fund. Generally, there is no
fee to redeem shares of a Trust bought by exchange of shares of
another Centennial Trust or eligible fund. However,
o if you acquired shares of a Trust by exchanging Class A shares of another
eligible fund that you bought subject to the Class A contingent deferred sales
charge, and
o those shares are still subject to the Class A contingent deferred sales charge
when you exchange them into the Trust, then
o you will pay the contingent deferred sales charge if you redeem those shares
from the Trust within 18 months of the purchase date of the shares of the
fund you exchanged.
How to Exchange Shares
Shares of a Trust can be exchanged for shares of certain other Centennial Trusts
or other eligible funds, depending on whether you own your shares through your
dealer's Automatic Purchase and Redemption Program or as a direct shareholder.
HOW CAN PROGRAM PARTICIPANTS EXCHANGE SHARES? If you participate in an
Automatic Purchase and Redemption Program sponsored by your broker/dealer,
you may exchange shares held in your Program Account for shares of
Centennial Money Market Trust, Centennial Government Trust, Centennial Tax
Exempt Trust, Centennial California Tax Exempt Trust and Centennial New
York Tax Exempt Trust (referred to in this Prospectus as the "Centennial
Trusts"), if available for sale in your state of residence, by contacting
your broker/dealer and obtaining a Prospectus of the selected Centennial
Trust.
HOW CAN DIRECT SHAREHOLDERS EXCHANGE SHARES? Direct shareholders can exchange
shares of a Trust for Class A shares of certain eligible funds listed in the
Statement of Additional Information. To exchange shares, you must meet several
conditions:
o Shares of the fund selected for exchange must be available for sale in your
state of residence.
o The prospectuses of the Trust and the fund whose shares you want to buy must
offer the exchange privilege.
o You must hold the shares you buy when you establish your account for at least
7 days before you can exchange them. After the account is open 7 days, you
can exchange shares every regular business day.
o You must meet the minimum purchase requirements for the fund whose shares you
purchase by exchange.
o Before exchanging into a fund, you must obtain and read its prospectus.
Shares of a particular class of an eligible fund may be exchanged only for
shares of the same class in other eligible funds. For example, you can exchange
shares of a Trust only for Class A shares of another fund, and you can exchange
only Class A shares of another eligible fund for shares of a Trust.
You may pay a sales charge when you exchange shares of a Trust.
Because shares of the Trusts are sold without sales charge, in some cases
you may pay a sales charge when you exchange shares of a Trust for shares
of other eligible funds that are sold subject to a sales charge. You will
not pay a sales charge when you exchange shares of a Trust purchased by
reinvesting distributions from that Trust or other eligible funds (except
Oppenheimer Cash Reserves), or when you exchange shares of a Trust
purchased by exchange of shares of an eligible fund on which you paid a
sales charge.
For tax purposes, exchanges of shares involve a sale of the shares of
the fund you own and a purchase of the shares of the other fund, which may
result in a capital gain or loss. Since shares of a Trust normally maintain
a $1.00 net asset value, in most cases you should not realize a capital
gain or loss when you sell or exchange your shares.
Direct shareholders can find a list of eligible funds currently
available for exchanges in the Statement of Additional Information or you
can obtain one by calling a service representative at 1.800.525.9310. The
list of eligible funds can change from time to time.
How Do Direct Shareholders Submit Exchange Requests? Direct shareholders may
request exchanges in writing or by telephone:
o Written Exchange Requests. Complete an Exchange Authorization Form, signed
by all owners of the account. Send it to the Transfer Agent at the address
on the back cover.
o Telephone Exchange Requests. Telephone exchange requests may be made by
calling a service representative at 1.800.525.9310. Telephone exchanges may
be made only between accounts that are registered with the same name(s) and
address. Shares held under certificates may not be exchanged by telephone.
ARE THERE LIMITATIONS ON EXCHANGES? There are certain exchange policies
you should be aware of:
o Shares are normally redeemed from one fund and purchased from the other fund
in the exchange transaction on the same regular business day on which the
Transfer Agent receives an exchange request that conforms to the policies
described above. Requests for exchanges to any of the Centennial Trusts must
be received by the Transfer Agent by 4:00 P.M. on a regular business day to
be effected that day. The Transfer Agent must receive requests to exchange
shares of a Trust to funds other than the Centennial Trusts on a regular
business day by the close of The New York Stock Exchange that day. The close
is normally 4:00 P.M. but may be earlier on some days.
o Either fund may delay the purchase of shares of the fund you are exchanging
into up to seven days if it determines it would be disadvantaged by a
same-day exchange. For example, the receipt of the multiple exchange requests
from a "market timer" might require a fund to sell securities at a
disadvantageous time and/or price.
o Because excessive trading can hurt fund performance and harm shareholders,
the Trusts reserve the right to refuse any exchange request that may, in the
opinion of the Trusts, be disadvantageous, or to refuse multiple exchange
requests submitted by a shareholder or dealer.
o The Trusts may amend, suspend or terminate the exchange privilege at any
time. The Trusts will provide you notice whenever they are required to do so
by applicable law, but they may impose these changes at any time for
emergency purposes.
o If the Transfer Agent cannot exchange all the shares you request because of a
restriction cited above, only the shares eligible for exchange will be
exchanged.
Shareholder Account Rules and Policies
More information about the Trusts' policies and procedures
for buying, selling and exchanging shares is contained in
the Statement of Additional Information.
The offering of shares of a Trust may be suspended during any period in
which the Trust's determination of net asset value is suspended, and
the offering may be suspended by the Board of Trustees at any time it
believes it is in a Trust's best interest to do so.
Telephone transaction privileges for purchases, redemptions or exchanges
may be modified, suspended or terminated by a Trust at any time. If an
account has more than one owner, a Trust and the Transfer Agent may
rely on the instructions of any one owner. Telephone privileges apply
to each owner of the account and the dealer representative of record
for the account unless the Transfer Agent receives cancellation
instructions from an owner of the account.
The Transfer Agent will record any telephone calls to verify data
concerning transactions. It has adopted other procedures to confirm
that telephone instructions are genuine, by requiring callers to
provide tax identification numbers and other account data and by
confirming such transactions in writing. The Transfer Agent and the
Trusts will not be liable for losses or expenses arising out of
telephone instructions reasonably believed to be genuine.
Redemption or transfer requests will not be honored until the Transfer
Agent receives all required documents in proper form. From time to time,
the Transfer Agent in its discretion may waive certain of the requirements
for redemptions stated in this Prospectus.
Payment for redeemed shares ordinarily is made in cash. It is
forwarded by check or by Federal Funds wire (as elected by the
shareholder) within seven days after the Transfer Agent receives
redemption instructions in proper form. However, under unusual
circumstances determined by the Securities and Exchange Commission,
payment may be delayed or suspended. For accounts registered in the
name of a broker/dealer, payment will normally be forwarded within
three business days after redemption.
The Transfer Agent may delay forwarding a check or making a
payment via Federal Funds wire for the redemption of recently
purchased shares, but only until the purchase payment has cleared.
That delay may be as much as 10 days from the date the shares were
purchased. That delay may be avoided if you purchase shares by Federal
Funds wire or certified check, or arrange with your bank to provide
telephone or written assurance to the Transfer Agent that your
purchase payment has cleared.
Involuntary redemptions of small accounts may be made by
Centennial Tax Exempt Trust if the account value has fallen below $500
for reasons other than the fact that the market value of shares has
dropped. In some cases involuntary redemptions may be made to repay
the Distributor or Sub-Distributor for losses from the cancellation of
share purchase orders.
"Backup Withholding" of federal income tax may be applied against
taxable dividends, distributions and redemption proceeds (including
exchanges) if you fail to furnish the Trust your correct, certified
Social Security or Employer Identification Number when you sign your
application, or if you under-report your income to the Internal
Revenue Service.
To avoid sending duplicate copies of materials to households, the
Trust will mail only one copy of each prospectus, annual and
semi-annual report to shareholders having the same last name and
address on the Trust's records. The consolidation of these mailings,
called householding, benefits the Trust through reduced mailing
expense.
If you want to receive multiple copies of these materials, you
may call the Transfer Agent at 1.800.525.9310. You may also notify the
Transfer Agent in writing. Individual copies of prospectuses and
reports will be sent to you within 30 days after the Transfer Agent
receives your request to stop householding.
Dividends and Tax Information
DIVIDENDS. Each Trust intends to declare dividends from net
investment income each regular business day and to pay those dividends
to shareholders monthly on a date selected by the Board of Trustees.
To maintain a net asset value of $1.00 per share, a Trust might
withhold dividends or make distributions from capital or capital
gains. Daily dividends will not be declared or paid on newly purchased
shares until Federal Funds are available to a Trust from the purchase
payment for such shares.
CAPITAL GAINS. Each Trust normally holds its securities to
maturity and therefore will not usually pay capital gains. Although
the Trusts do not seek capital gains, a Trust could realize capital
gains on the sale of its portfolio securities. If it does, it may make
distributions out of any net short-term or long-term capital gains in
December of each year. A Trust may make supplemental distributions of
dividends and capital gains following the end of its fiscal year.
What Choices Do I Have for Receiving Distributions? For Automatic
Purchase and Redemption Programs, dividends and distributions are
automatically reinvested in additional shares of the selected Trust.
For direct shareholders, when you open your account, you should
specify on your application how you want to receive your dividends and
distributions. You have four options:
o Reinvest All Distributions in the Trust. You can elect to reinvest some
distributions (dividends, short-term capital gains or long-term capital gains
distributions) in the selected Trust.
o Reinvest Capital Gains Only. You can elect to reinvest some capital gains
distributions (dividends, short-term capital gains or long-term capital gains
distributions) in the selected Trust while receiving dividends by check or
having them sent to your bank account.
o Receive All Distributions in Cash. You can elect to receive a (dividends,
short-term capital gains or long-term capital gains distributions) check for
all distributions or have them sent to your bank.
o Reinvest Your Distributions in Another Account. You can reinvest all
distributions (dividends, short-term capital gains or long-term capital gains
distributions) in the same class of shares of another eligible fund account
you have established.
Under the terms of Automatic Purchase and Redemption Programs,
your broker/dealer can redeem shares to satisfy debit balances arising
in your Program Account. If that occurs, you will be entitled to
dividends on those shares as described in your Program Agreements.
TAXES.
Centennial Money Market Trust and Centennial Government Trust. If your
shares are not held in a tax-deferred retirement account, you should be
aware of the following tax implications of investing in Centennial Money
Market Trust and Centennial Government Trust. Dividends paid from net
investment income and short-term capital gains are taxable as ordinary
income. Long-term capital gains are taxable as long-term capital gains when
distributed to shareholders. It does not matter how long you have held your
shares. Whether you reinvest your distributions in additional shares or
take them in cash, the tax treatment is the same.
Every year the Trust will send you and the IRS a statement showing the
amount of each taxable distribution you received in the previous year. Any
long-term capital gains distributions will be separately identified in the
tax information the Trust sends you after the end of the calendar year.
Centennial Tax Exempt Trust. Exempt interest dividends paid from net
investment income earned by the Trust on municipal securities will be
excludable from gross income for federal income tax purposes. A portion of
a dividend that is derived from interest paid on certain "private activity
bonds" may be an item of tax preference if you are subject to the
alternative minimum tax. If the Trust earns interest on taxable
investments, any dividends derived from those earnings will be taxable as
ordinary income to shareholders.
Dividends and capital gains distributions may be subject to state
or local taxes. Long-term capital gains are taxable as long-term
capital gains when distributed to shareholders. It does not matter how
long you have held your shares. Dividends paid from short-term capital
gains and non-tax exempt net investment income are taxable as ordinary
income. Whether you reinvest your distributions in additional shares
or take them in cash, the tax treatment is the same. Every year the
Trust will send you and the IRS a statement showing the amount of any
taxable distribution you received in the previous year as well as the
amount of your tax-exempt income.
Remember, There May be Taxes on Transactions. Because each Trust
seeks to maintain a stable $1.00 per share net asset value, it is
unlikely that you will have a capital gain or loss when you sell or
exchange your shares. A capital gain or loss is the difference between
the price you paid for the shares and the price you received when you
sold them. Any capital gain is subject to capital gains tax.
Returns of Capital Can Occur. In certain cases, distributions
made by a Trust may be considered a non-taxable return of capital to
shareholders. If that occurs, it will be identified in notices to
shareholders.
This information is only a summary of certain federal income tax
information about your investment. You should consult with your tax
adviser about the effect of an investment in a Trust on your
particular tax situation.
<PAGE>
Financial Highlights
The Financial Highlights Tables are presented to help you
understand each Trust's financial performance for the past five fiscal
years. Certain information reflects financial results for a single
Trust share. The total returns in the tables represent the rate that
an investor would have earned (or lost) on an investment in the Trusts
(assuming reinvestment of all dividends and distributions). This
information for the past five fiscal years ended June 30, 2000, has
been audited by Deloitte & Touche LLP, the Trusts' independent
auditors, whose report, along with the Trusts' financial statements,
are included in the Statements of Additional Information, which are
available on request.
<PAGE>
FINANCIAL HIGHLIGHTS
Centennial Government Trust
<TABLE>
<CAPTION>
Year Ended June 30,
-----------------------------------------------------
2000 1999 1998 1997 1996
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period....................... $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations--
net investment income and
net realized gain........................................ .05 .04 .05 .05 .05
Dividends and/or distributions to shareholders............. (.05) (.04) (.05) (.05) (.05)
----- ----- ----- ----- -----
Net asset value, end of period............................. $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
TOTAL RETURN(1)............................................ 5.07% 4.47% 4.93% 4.75% 4.91%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions).................... $1,192 $1,213 $1,132 $1,027 $ 942
Average net assets (in millions)........................... $1,244 $1,245 $1,117 $1,032 $ 962
Ratios to average net assets:(2)
Net investment income...................................... 4.92% 4.37% 4.82% 4.65% 4.83%
Expenses................................................... 0.74% 0.74% 0.75%(3) 0.76%(3) 0.77%(3)
</TABLE>
1. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns reflect
changes in net investment income only. Total returns are not annualized for
periods less than one full year.
2. Annualized for periods of less than one full year.
3. Expense ratio has not been grossed up to reflect the effect of expenses
paid indirectly.
<PAGE>
-30-
INFORMATION AND SERVICES
For More Information on Centennial Money Market Trust:
The following additional information about the Trust is available without charge
upon request:
STATEMENT OF ADDITIONAL INFORMATION This document includes
additional information about the Trust's investment policies,
risks, and operations. It is incorporated by reference into this
Prospectus (which means it is legally part of this Prospectus).
ANNUAL AND SEMI-ANNUAL REPORTS Additional information about the Trust's
investments and performance is available in the Trust's Annual and Semi-Annual
Reports to shareholders. The Annual Report includes a discussion of market
conditions and investment strategies that significantly affected the Trust's
performance during its last fiscal year.
How to Get More Information:
You can request the Statement of Additional Information, the
Annual and Semi-Annual Reports, and other information about
the Trusts or your account:
--------------------------------------------------------------------------------
By Telephone: Call Shareholder Services, Inc.
toll-free:
1.800.525.9310
-------------------------------------------------------------------------------
By Mail: Write to:
Shareholder Services, Inc.
P.O. Box 5143
Denver, Colorado 80217
--------------------------------------------------------------------------------
You can also obtain copies of the Statement of Additional
Information and other Trust documents and reports by visiting the
SEC's Public Reference Room in Washington, D.C. (Phone
1.202.942.8090) or the EDGAR database on the SEC's Internet web
site at http://www.sec.gov. Copies may be obtained after payment
of a duplicating fee by electronic request at the SEC's e-mail
address : [email protected] or by writing to the SEC's Public
Reference Section, Washington, D.C. 20549-0102.
No one has been authorized to provide any information about the Trust or to make
any representations about the Trust other than what is contained in this
Prospectus. This Prospectus is not an offer to sell shares of the Trust, nor a
solicitation of an offer to buy shares of the Trust, to any person in any state
or other jurisdiction where it is unlawful to make such an offer.
The Trust's shares are distributed by:
SEC File No. 811-3391 Centennial Asset Management Corporation
PR0170.001.1100
Printed on recycled paper
<PAGE>
APPENDIX TO THE PROSPECTUS OF
CENTENNIAL GOVERNMENT TRUST
Graphic material included in Prospectus of Centennial Government Trust (the
"Trust") under the heading: "Annual Total Returns (as of 12/31 each year)."
Bar chart will be included in the Prospectus of the Trust depicting the
annual total returns of a hypothetical investment in shares of the Trust for the
full calendar year since the Trust's inception as a money market fund. Set forth
below are the relevant data points that will appear on the bar chart.
--------------------------------------------------------------------
Calendar Year Ended: Annual Total Returns
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/90 7.70%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/91 5.85%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/92 3.46%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/93 2.67%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/94 3.71%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/95 5.26%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/96 4.72%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/97 4.86%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/98 4.84%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/99 4.43%
<PAGE>
Centennial Tax Exempt Trust
--------------------------------------------------------------------------------
Prospectus dated November 1, 2000 Centennial Tax Exempt Trust is a money
market mutual fund. It seeks the
maximum short-term interest income
exempt from federal income taxes that
is consistent with low capital risk
and the maintenance of liquidity. The
Trust invests in short-term, high
quality "money market" securities.
This Prospectus contains important
information about the Trust's
objective, its investment policies,
strategies and risks. It also contains
important information about how to buy
and sell shares of the
As with all mutual funds, the Trust and other account features. Securities and
Exchange Commission has Please read this Prospectus carefully not approved or
disapproved the Trust's before you invest and keep it for securities nor has it
determined that future reference about your account. this Prospectus is accurate
or complete. It is a criminal offense to represent otherwise.
--------------------------------------------------------------------------------
<PAGE>
CONTENTS
A B O U T T H E T R U S T
The Trust's Investment Objective and Strategies
Main Risks of Investing in the Trust
The Trust's Past Performance
Fees and Expenses of the Trust
About the Trust's Investments
I N V E S T I N G I N T H E T R U S T
This section applies to the prospectuses of Centennial Money
Market Trust, Centennial Tax Exempt Trust and Centennial
Government Trust
How the Trusts are Managed
How to Buy Shares
Automatic Purchase and Redemption Programs
Direct Shareholders
How to Sell Shares
Automatic Purchase and Redemption Programs
Direct Shareholders
How to Exchange Shares
Shareholder Account Rules and Policies
Dividends and Tax Information
Financial Highlights
<PAGE>
A B O U T T H E T R U S T
The Trust's Investment Objective and Strategies
WHAT IS THE TRUST'S INVESTMENT OBJECTIVE? The Trust seeks the maximum short-term
interest income exempt from federal income taxes that is consistent with low
capital risk and the maintenance of liquidity.
WHAT DOES THE TRUST MAINLY INVEST IN? The Trust is a money market fund. It
invests in a variety of high-quality money market instruments to seek income.
Money market instruments are short-term, U.S. dollar-denominated debt
instruments issued by the U.S. government, domestic and foreign corporations and
financial institutions and other entities. They include, for example, bank
obligations, repurchase agreements, commercial paper, other corporate debt
obligations and government debt obligations. To be considered "high-quality,"
generally they must be rated in one of the two highest credit-quality categories
for short-term securities by nationally recognized rating services. If unrated,
a security must be determined by the Trust's investment manager to be of
comparable quality to rated securities.
The Trust normally invests 100% of its assets in municipal securities. It
will not make any investment that will reduce the portion of its total assets
that are invested in municipal securities to less than 80%. The balance of the
Trust's assets may be invested in investments the income from which may be
taxable. The Trust will not invest more than 20% of its net assets in municipal
securities the income on which may be a tax preference item that would increase
an individual investor's alternative minimum tax.
WHO IS THE TRUST DESIGNED FOR? The Trust is designed for investors who are
seeking income at current money market rates while preserving the value of their
investment, because the Trust tries to keep its share price stable at $1.00.
Income on short-term securities tends to be lower than income on longer term
debt securities, so the Trust's yield will likely be lower than the yield on
longer-term fixed income funds. The Trust does not invest for the purpose of
seeking capital appreciation or gains and is not a complete investment program.
Main Risks of Investing in the Trust
All investments carry risks to some degree. Funds that invest in debt
obligations for income may be subject to credit risks and interest rate risks.
However, the Trust's investments must meet strict standards set by its Board of
Trustees following special rules for money market funds under federal law. Those
standards include requirements for maintaining high credit quality in the
Trust's portfolio, a short average portfolio maturity to reduce the effects of
changes in interest rates on the value of the Trust's securities and
diversifying the Trust's investments among issuers to reduce the effects of a
default by any one issuer on the Trust's overall portfolio and the value of the
Trust's shares.
Even so, there are risks that any of the Trust's holdings could have its
credit rating downgraded, or the issuer could default, or that interest rates
could rise sharply, causing the value of the Trust's securities (and its share
price) to fall. As a result, there is a risk that the Trust's shares could fall
below $1.00 per share. If there is a high redemption demand for the Trust's
shares that was not anticipated, portfolio securities might have to be sold
prior to their maturity at a loss. Also, there is the risk that the value of
your investment could be eroded over time by the effects of inflation, and that
poor security selection could cause the Trust to underperform other funds with
similar objectives.
-------------------------------------------------------------------------------
An investment in the Trust is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Trust seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the Trust.
--------------------------------------------------------------------------------
The Trust's Past Performance
The bar chart and table below show how the Trust's returns may vary over time,
by showing changes in the Trust's performance from year to year for the last ten
calendar years and average annual total returns for the 1-, 5- and 10- year
periods. Variability of returns is one measure of the risks of investing in a
money market fund. The Trust's past investment performance does not predict how
the Trust will perform in the future.
Annual Total Returns (% as of 12/31 each year)
[See appendix to prospectus for annual total return data for bar chart.]
For the period from 1/1/00 through 9/30/00 the cumulative total return (not
annualized) was 2.49%. During the period shown in the bar chart, the highest
return (not annualized) for a calendar quarter was 1.44% (4th Q '90) and the
lowest return for a calendar quarter (not annualized) was 0.44% (1st Q '94).
Average Annual Total Returns
for the periods ended December 31, 1 Year 5 Years 10 Years
1999
-------------------------------------------------------------------------------
---------- ---------------
Centennial Tax Exempt Trust 2.60% 3.02% 3.18%
(inception 9/8/81)
-------------------------------------------------------------------------------
The returns in the table measure the performance of a hypothetical account and
assume that all dividends have been reinvested in additional shares. The total
returns are not the Trust's current yield. The Trust's yield more closely
reflects the Trust's current earnings.
--------------------------------------------------------------------------------
To obtain the Trust's current 7-day yield, please call the Transfer Agent
toll-free at 1.800.525.9310.
--------------------------------------------------------------------------------
Fees and Expenses of the Trust
The Trust pays a variety of expenses directly for investment management,
administration and other services. Those expenses are subtracted from the
Trust's assets to calculate the Trust's net asset value per share. All
shareholders therefore pay those expenses indirectly. The following tables are
provided to help you understand the fees and expenses you may pay if you buy and
hold shares of the Trust. The numbers below are based upon the Trust's expenses
during its fiscal year ended June 30, 2000.
SHAREHOLDER FEES. The Trust does not charge any initial sales charge to buy
shares or to reinvest dividends. There are no exchange fees or redemption fees
and no contingent deferred sales charges (unless you buy Trust shares by
exchanging Class A shares of other eligible funds that were purchased subject to
a contingent deferred sales charge, as described in "How to Sell Shares").
Annual Trust Operating Expenses (deducted from Trust assets):
(% of average daily net assets)
------------------------------------------------------------------------------
Management Fees 0.43%
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees 0.20%
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Other Expenses 0.09%
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Total Annual Operating Expenses 0.72%
------------------------------------------------------------------------------
"Other expenses" in the table include transfer agent fees, custodial fees, and
accounting and legal expenses the Trust pays.
EXAMPLE. The following example is intended to help you compare the cost of
investing in the Trust with the cost of investing in other mutual funds. The
example assumes that you invest $10,000 in shares of the Trust for the time
periods indicated and reinvest your dividends and distributions. The example
also assumes that your investment has a 5% return each year and that the Trust's
operating expenses remain the same. Your actual costs may be higher or lower,
because expenses will vary over time. Based on these assumptions your expenses
would be as follows, whether or not you redeem your investment at the end of
each period:
-----------------------------------------------------------------------------
1 year 3 years 5 years 10 years
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
$74 $230 $401 $894
-----------------------------------------------------------------------------
About the Trust's Investments
THE TRUST'S PRINCIPAL INVESTMENT POLICIES. The Trust invests in short-term money
market securities meeting quality, maturity and diversification standards
established by its Board of Trustees as well as rules that apply to money market
funds under the Investment Company Act. The Statement of Additional Information
contains more detailed information about the Trust's investment policies and
risks.
The Trust's investment manager, Centennial Asset Management Corporation
(referred to in this Prospectus as the Manager) tries to reduce risks by
diversifying investments and by carefully researching investments before the
Trust buys them. The rate of the Trust's income will vary from day to day,
generally reflecting changes in overall short-term interest rates. There is no
assurance that the Trust will achieve its investment objective.
What Does the Trust Invest In? Money market instruments are high-quality,
short-term debt instruments. They may have fixed, variable or floating
interest rates. All of the Trust's money market investments must meet the
special quality and maturity requirements set under the Investment Company
Act and the special standards set by the Board described briefly below.
The following is a brief description of the types of money market
instruments the Trust may invest in.
o Municipal Securities. The Trust buys municipal bonds and notes, tax-exempt
commercial paper, certificates of participation in municipal leases and
other debt obligations. These are debt obligations issued by the
governments of states, their political subdivisions (such as cities, towns
and counties), or the District of Columbia, or by their agencies,
instrumentalities and authorities, if the interest paid on the security is
not subject to federal individual income tax in the opinion of bond
counsel to the issuer. All of these types of debt obligations are referred
to as "municipal securities" in this Prospectus.
o Other Money Market Obligations. Additionally, the Trust may buy other
money market instruments that the Manager approves under procedures
adopted by the Board of Trustees. They must be U.S. dollar-denominated
short-term investments that the Manager must determine to have minimal
credit risks.
What Standards Apply to the Trust's Investments? Money market instruments are
subject to credit risk, the risk that the issuer might not make timely
payments of interest on the security or repay principal when it is due.
The Trust may buy only those instruments that meet standards set by the
Investment Company Act for money market funds and procedures adopted by
the Board. The Trust's Board has adopted evaluation procedures for the
Trust's portfolio and the Manager has the responsibility to implement
those procedures when selecting investments for the Trust.
In general, the Trust buys only high-quality investments that the Manager
believes present minimal credit risk at the time of purchase. "High-quality"
investments are:
o rated in one of the two highest short-term rating categories of two national
rating organizations, or
o rated by one rating organization in one of its two highest rating categories
(if only one rating organization has rated the investment), or
o unrated investments that the Manager determines are comparable in quality to
the two highest rating categories.
The standards also limit the amount of the Trust's assets that can be
invested in the securities of any one issuer (other than the U.S. government,
its agencies and instrumentalities), to spread the Trust's investment risks. The
Trust must also maintain an average portfolio maturity of not more than 90 days,
to reduce interest rate risks. Additionally, the remaining maturity of any
single portfolio investment may not exceed 397 days.
Can the Trust's Investment Objective and Policies Change? The Trust's Board of
Trustees can change non-fundamental policies without shareholder approval,
although significant changes will be described in amendments to this
Prospectus. Fundamental policies cannot be changed without the approval of
a majority of the Trust's outstanding voting shares. The Trust's
investment objective is a fundamental policy. Some investment restrictions
that are fundamental policies are listed in the Statement of Additional
Information. An investment policy is not fundamental unless this
Prospectus or the Statement of Additional Information says that it is.
Please see the Statement of Additional Information for information on a
proposal to change one of the Trust's fundamental policies that the Board
of Trustees has requested shareholders to approve. If shareholders do not
approve the change, then the Statement of Additional Information will be
supplemented to advise you that the amendment was not approved.
OTHER INVESTMENT STRATEGIES. To seek its objective, the Trust can use the
investment techniques and strategies described below. The Trust might not always
use all of them. These techniques involve risks. The Statement of Additional
Information contains more information about some of these practices, including
limitations on their use that are designed to reduce some of the risks.
Floating Rate/Variable Rate Notes. The Trust can purchase investments with
floating or variable interest rates. Variable rates are adjustable at
stated periodic intervals. Floating rates are adjusted automatically
according to a specified market rate or benchmark, such as the prime rate
of a bank. If the maturity of an investment is greater than 397 days,, it
may be purchased only if it has a demand feature. That feature must permit
the Trust to recover the principal amount of the investment on not more
than thirty days' notice at any time, or at specified times not exceeding
397 days from the date of purchase.
Municipal Lease Obligations. Municipal leases are used by state and local
governments to obtain funds to acquire land, equipment or facilities. The
Trust can invest in certificates of participation that represent a
proportionate interest in payments made under municipal lease obligations.
If the government stops making payments or transfers its payment
obligations to a private entity, the obligation could lose value or become
taxable. Some of these obligations might not have an active trading market
and would be subject to the Trust's limits on "illiquid" securities
described below. From time to time the Trust may invest more that 5% of
its net assets in municipal lease obligations that the Manager has
determined to be liquid under guidelines set by the Trust's Board of
Trustees.
Repurchase Agreements. The Trust may enter into repurchase agreements. In a
repurchase transaction, the Trust buys a security and simultaneously sells
it to the vendor for delivery at a future date. Repurchase agreements must
be fully collateralized. However, if the vendor fails to pay the resale
price on the delivery date, the Trust may incur costs in disposing of the
collateral and may experience losses if there is any delay in its ability
to do so. The Trust ordinarily will not enter into repurchase,
transactions that will cause more than 10% of the Trusts net assets to be
subject to repurchase agreements having a maturity beyond seven days.
However, when the Trust assumes a temporary defensive position, there is
no limit on the amount of the Trust's assets that may be subject to
repurchase agreements having a maturity of seven days or less. Income
earned on repurchase transactions is not tax-exempt. The Trust normally
will limit its investments in repurchase transactions to 20% of its total
assets.
Illiquid and Restricted Securities. Investments may be illiquid because they do
not have an active trading market, making it difficult to value them or
dispose of them promptly at an acceptable price. A restricted security is
one that has a contractual limit on resale or which cannot be sold
publicly until it is registered under federal securities laws. The Trust
will not invest more than 10% of its net assets in illiquid or restricted
securities. That limit does not apply to certain restricted securities
that are eligible for resale to qualified institutional purchasers. The
Manager monitors holdings of illiquid securities on an ongoing basis to
determine whether to sell any holdings to maintain adequate liquidity.
Difficulty in selling a security may result in a loss to the Trust or
additional costs.
DemandFeatures and Guarantees. The Trust may invest a significant percentage of
its assets in municipal securities that have demand features, guarantees
or similar credit and liquidity enhancements. A demand feature permits the
holder of the security to sell the security within a specified period of
time at a stated price and entitles the holder of the security to receive
an amount equal to the approximate amortized cost of the security plus
accrued interest. These securities are described in the Statement of
Additional Information.
Temporary Investments. In times of adverse market, economic, political, or other
conditions, the Trust can invest up to 100% of its assets in temporary defensive
investments. These temporary investments can include: o obligations issued or
guaranteed by the U.S. government or its agencies or instrumentalities, o
bankers' acceptances; taxable commercial paper rated in the highest category by
a Rating Organization, o short-term taxable debt obligations rated in one of the
two highest rating categories of a Rating Organization. o certificates of
deposit of domestic banks, and o repurchase agreements.
To the extent the Trust assumes a temporary defensive position, a
significant portion of the Trust's distributions may be taxable.
I N V E S T I N G I N T H E T R U S T S
The information below applies to Centennial Money Market Trust, Centennial Tax
Exempt Trust and Centennial Government Trust. Each is referred to as a "Trust"
and they are collectively referred to as the "Trusts". Unless otherwise
indicated, this information applies to each Trust.
How the Trusts are Managed
THE MANAGER. The Manager, Centennial Asset Management Corporation, a
wholly-owned subsidiary of OppenheimerFunds, Inc., is the investment advisor for
the Trusts. The Manager chooses each of the Trust's investments and handles its
day-to-day business. The Manager carries out its duties subject to the policies
established by the Trust's Board of Trustees, under an investment advisory
agreement with each Trust that states the Manager's responsibilities. The
agreement sets the fees the Trust pays to the Manager and describes the expenses
that the Trust is responsible to pay to conduct its business.
The Manager has been an investment advisor since 1978. The Manager and its
affiliates managed investment companies and other assets of more than $130
billion as of September 30, 2000, and more than 5 million shareholder accounts.
The Manager is located at 6803 South Tucson Way, Englewood, Colorado 80112.
Portfolio Managers. The portfolio managers of the Trusts are the persons
principally responsible for the day-to-day management of the Trust's portfolios.
The portfolio manager of Centennial Money Market Trust and Centennial Government
Trust is Carol E. Wolf. Ms. Wolf was co-portfolio manager of the Trusts from
June 1990 until April 2000, when she became the sole portfolio manager. She is a
Senior Vice President of OppenheimerFunds, Inc. and of the Trusts and an officer
and portfolio manager of other funds for which the Manager or an affiliate
serves as investment advisor. The portfolio manager of Centennial Tax Exempt
Trust is Michael Carbuto (since October 1987). Mr. Carbuto is a Vice President
of OppenheimerFunds, Inc. and is an officer and portfolio manager of other funds
for which the Manager serves as investment advisor.
Advisory Fees. Under each investment advisory agreement, a Trust pays the
Manager an advisory fee at an annual rate that declines on additional
assets as the Trust grows. That fee is computed on the average annual net
assets of the respective Trust as of the close of each business day.
o Centennial Money Market Trust. The annual management fee rates are: 0.500% of
the first $250 million of the Trust's net assets; 0.475% of the next $250
million; 0.450% of the next $250 million; 0.425% of the next $250 million;
0.400% of the next $250 million; 0.375% of the next $250 million; 0.350% of the
next $500 million; and 0.325% of net assets in excess of $2 billion. In the
agreement, the Manager guarantees that the Trust's total expenses in any fiscal
year, exclusive of taxes, interest and brokerage commissions, and extraordinary
expenses such as litigation costs, shall not exceed the lesser of (1) 1.5% of
the average annual net assets of the Trust up to $30 million and 1% of its
average annual net assets in excess of $30 million; or (2) 25% of the total
annual investment income of the Trust. Centennial Money Market Trust's
management fee for its fiscal year ended June 30, 2000 was 0.34% of the Trust's
average annual net assets.
o Centennial Government Trust. The annual management fee rates are: 0.500% of
the first $250 million of the Trust's net assets; 0.475% of the next $250
million; 0.450% of the next $250 million; 0.425% of the next $250 million;
0.400% of the next $250 million; 0.375% of the next $250 million and 0.350% of
net assets in excess of $1.5 billion. The Manager has made the same guarantee to
Centennial Government Trust regarding expenses as described above for Centennial
Money Market Trust. The Trust's management fee for its fiscal year ended June
30, 2000 was 0.45% of the Trust's average annual net assets.
o Centennial Tax Exempt Trust. The annual management fee rates applicable to the
Trust are as follows: 0.500% of the first $250 million of the Trust's net
assets; 0.475% of the next $250 million; 0.450% of the next $250 million; 0.425%
of the next $250 million; 0.400% of the next $250 million; 0.375% of the next
$250 million; 0.350% of the next $500 million; and 0.325% of net assets in
excess of $2 billion. Under the agreement, when the value of the Trust's net
assets is less than $1.5 billion, the annual fee payable to the Manager shall be
reduced by $100,000 based on average net assets computed daily and paid monthly
at the annual rates. However, the annual fee cannot be less than $0. The Trust's
management fee for its fiscal year ended June 30, 2000 was 0.43% of the Trust's
average annual net assets.
How to Buy Shares
HOW ARE SHARE PRICES DETERMINED? Shares of each Trust are sold at their offering
price, which is the net asset value per share without any sales charge. The net
asset value per share will normally remain fixed at $1.00 per share. However,
there is no guarantee that a Trust will be able to maintain a stable net asset
value of $1.00 per share.
The offering price that applies to a purchase order is based on the next
calculation of the net asset value per share that is made after the
Sub-Distributor (OppenheimerFunds Distributor, Inc.) receives the purchase order
at its offices in Colorado, or after any agent appointed by the Sub-Distributor
receives the order and sends it to the Sub-Distributor as described below.
How is a Trust's Net Asset Value Determined? The net asset value of shares of
each Trust is determined twice each day, at 12:00 Noon and at 4:00 P.M.,
on each day The New York Stock Exchange is open for trading (referred to
in this Prospectus as a "regular business day"). All references to time in
this Prospectus mean "New York time."
The net asset value per share is determined by dividing the value of a
Trust's net assets by the number of shares that are outstanding. Under a policy
adopted by the Board of Trustees of the Trusts, each Trust uses the amortized
cost method to value its securities to determine net asset value.
The shares of each Trust offered by this Prospectus are considered to be
Class A shares for the purposes of exchanging them or reinvesting distributions
among other eligible funds that offer more than one class of shares.
IS THERE A MINIMUM INVESTMENT? Minimum initial investments described below and
depend on how you buy and pay for your shares. You can make additional
investments at any time with as little as $25. The minimum investment
requirements do not apply to reinvesting distributions from the Trust or other
eligible funds (a list of them appears in the Statement of Additional
Information, or you can ask your dealer or call the Transfer Agent) or
reinvesting distributions from unit investment trusts that have made
arrangements with the Distributor.
HOW ARE SHARES PURCHASED? You can buy shares in one of several ways:
BuyingShares Through a Dealer's Automatic Purchase and Redemption Program. You
can buy shares of a Trust through a broker-dealer that has a sales
agreement with the Trust's Distributor or Sub-Distributor that allows
shares to be purchased through the dealer's Automatic Purchase and
Redemption Program. Shares of each Trust are sold mainly to customers of
participating dealers that offer the Trusts' shares under these special
purchase programs. If you participate in an Automatic Purchase and
Redemption Program established by your dealer, your dealer buys shares of
the Trust for your account with the dealer. Program participants should
also read the description of the program provided by their dealer.
BuyingShares Through Your Dealer. If you do not participate in an Automatic
Purchase and Redemption Program, you can buy shares of a Trust through any
broker/dealer that has a sales agreement with the Sub-Distributor. Your
dealer will place your order with the Sub-Distributor on your behalf.
BuyingShares Directly Through the Sub-Distributor. You can also purchase shares
directly through the Sub-Distributor. Shareholders who make purchases
directly and hold shares in their own names are referred to as "direct
shareholders" in this Prospectus.
The Sub-Distributor may appoint servicing agents to accept purchase (and
redemption) orders, including broker/dealers that have established Automatic
Purchase and Redemption Programs. The Sub-Distributor, in its sole discretion,
may reject any purchase order for shares of a Trust.
AUTOMATIC PURCHASE AND REDEMPTION PROGRAM. If you buy shares of a Trust through
your broker/dealer's Automatic Purchase and Redemption Program, your
broker/dealer will buy your shares for your Program Account and will hold your
shares in your broker/dealer's name. These purchases will be made under the
procedures described in "Guaranteed Payment Procedures" below. Your Automatic
Purchase and Redemption Program Account may have minimum investment requirements
established by your broker/dealer. You should direct all questions about your
Automatic Purchase and Redemption Program to your broker/dealer, because the
Trusts' transfer agent does not have access to information about your account
under that Program.
Guaranteed Payment Procedures. Some broker/dealers may have arrangements with
the Sub-Distributor to enable them to place purchase orders for shares of
a Trust and to guarantee that the Trust's custodian bank will receive
Federal Funds to pay for the shares prior to specified times.
Broker/dealers whose clients participate in Automatic Purchase and
Redemption Programs may use these guaranteed payment procedures to pay for
purchases of shares of a Trust.
o If the Distributor receives a purchase order before 12:00 Noon on a
regular business day with the broker/dealer's guarantee that the Trust's
custodian bank will receive payment for those shares in Federal Funds by
2:00 P.M. on that same day, the order will be effected at the net asset
value determined at 12:00 Noon that day. Distributions will begin to
accrue on the shares on that day if the Federal Funds are received by the
required time.
o If the Distributor receives a purchase order after 12:00 Noon on a regular
business day with the broker/dealer's guarantee that the Trust's custodian
bank will receive payment for those shares in Federal Funds by 2:00 P.M.
on that same day, the order will be effected at the net asset value
determined at 4:00 P.M. that day. Distributions will begin to accrue on
the shares on that day if the Federal Funds are received by the required
time.
o If the Distributor receives a purchase order between 12:00 Noon and 4:00
P.M. on a regular business day with the broker/dealer's guarantee that the
Trust's custodian bank will receive payment for those shares in Federal
Funds by 4:00 P.M. the next regular business day, the order will be
effected at the net asset value determined at 4:00 P.M. on the day the
order is received and distributions will begin to accrue on the shares
purchased on the next regular business day if the Federal Funds are
received by the required time.
HOW CAN DIRECT SHAREHOLDERS BUY SHARES? Direct shareholders can buy shares of a
Trust by completing a Centennial Funds New Account Application (enclosed with
this Prospectus) and sending it to the Sub-Distributor, OppenheimerFunds
Distributor, Inc., P.O. Box 5143, Denver, Colorado 80217. Payment must be made
by check or by Federal Funds wire as described below. If you don't list a dealer
on the application, OppenheimerFunds Distributor, Inc., the Sub-Distributor,
will act as your agent in buying the shares. However, we recommend that you
discuss your investment with a financial advisor before you make a purchase to
be sure that the Trust is appropriate for you.
Each Trust intends to be as fully invested as possible to maximize its
yield. Therefore, newly-purchased shares normally will begin to accrue
distributions after the Sub-Distributor or its agent accepts your purchase
order, starting on the business day after the Trust receives Federal Funds from
the purchase payment.
Payment by Check. Direct shareholders may pay for purchases of shares of a Trust
by check. Send your check, payable to "OppenheimerFunds Distributor,
Inc.," along with your Application to the address listed above. For
initial purchases, your check should be payable in U.S. dollars and drawn
on a U.S. bank so that distributions will begin to accrue on the next
regular business day after the Distributor accepts your purchase order. If
your check is not drawn on a U.S. bank and is not payable in U.S. dollars,
the shares will not be purchased until the Distributor is able to convert
the purchase payment to Federal Funds. In that case distributions will
begin to accrue on the purchased shares on the next regular business day
after the purchase is made. The minimum initial investment for direct
shareholders by check is $500.
Payment by Federal Funds Wire. Direct shareholders may pay for purchases of
shares of a Trust by Federal Funds wire. You must also forward your
Application to the Sub-Distributor's address listed above. Before sending
a wire, call the Sub-Distributor's Wire Department at 1.800.525.9310
(toll-free from within the U.S.) or 303.768.3200 (from outside the U.S.)
to notify the Sub-Distributor of the wire, and to receive further
instructions.
Distributions will begin to accrue on the purchased shares on the purchase
date that is a regular business day if the Federal Funds from your wire and the
Application are received by the Sub-Distributor and accepted by 12:00 Noon. If
the Distributor receives the Federal Funds from your wire and accepts the
purchase order between 12:00 Noon and 4:00 P.M. on the purchase date,
distributions will begin to accrue on the shares on the next regular business
day. The minimum investment by Federal Funds Wire is $2,500.
Buying Shares Through Automatic Investment Plans. Direct shareholders can
purchase shares of a Trust automatically each month by authorizing the Trust's
Transfer Agent to debit your account at a U.S. domestic bank or other financial
institution. Details are in the Automatic Investment Plan Application and the
Statement of Additional Information. The minimum monthly purchase is $25.
Service (12b-1) Plans. Each Trust has adopted a service plan. It reimburses the
Distributor for a portion of its costs incurred for services provided to
accounts that hold shares of the Trust. Reimbursement is made quarterly at
an annual rate of up to 0.20% of the average annual net assets of the
Trust. The Distributor currently uses all of those fees (together with
significant amounts from the Manager's own resources) to pay dealers,
brokers, banks and other financial institutions quarterly for providing
personal services and maintenance of accounts of their customers that hold
shares of the Trust.
Retirement Plans. Direct shareholders may buy shares of a Trust for a retirement
plan account. If you participate in a plan sponsored by your employer, the
plan trustee or administrator must buy the shares for your plan account.
The Sub-Distributor also offers a number of different retirement plans
that individuals and employers can use:
o Individual Retirement Accounts (IRAs). These include regular IRAs, Roth
IRAs, rollover IRAs and Education IRAs.
o SEP-IRAs. These are Simplified Employee Pensions Plan IRAs for small
business owners or self-employed individuals.
o 403(b)(7) Custodial Plans. These are tax deferred plans for employees of
eligible tax-exempt organizations, such as schools, hospitals and charitable
organizations.
o 401(k) Plans. These are special retirement plans for businesses.
o Pension and Profit-Sharing Plans. These plans are designed for businesses
and self-employed individuals.
Please call the Sub-Distributor for retirement plan documents, which
include applications and important plan information.
How to Sell Shares
You can sell (redeem) some or all of your shares on any regular business day.
Your shares will be sold at the next net asset value calculated after your order
is received in proper form (which means that it must comply with the procedures
described below) and is accepted by the Transfer Agent.
HOW CAN PROGRAM PARTICIPANTS SELL SHARES? If you participate in an Automatic
Purchase and Redemption Program sponsored by your broker/dealer, you must redeem
shares held in your Program Account by contacting your broker/dealer firm, or
you can redeem shares by writing checks as described below. You should not
contact the Trust or its Transfer Agent directly to redeem shares held in your
Program Account. You may also arrange (but only through your broker/dealer) to
have the proceeds of redeemed Trust shares sent by Federal Funds wire, as
described below in "Sending Redemption Proceeds by Wire."
HOW CAN DIRECT SHAREHOLDERS REDEEM SHARES? Direct shareholders can redeem their
shares by writing a letter to the Transfer Agent, Shareholder Services, Inc., by
using checkwriting privileges, or by telephone. You can also set up Automatic
Withdrawal Plans to redeem shares on a regular basis. If you have questions
about any of these procedures, and especially if you are redeeming shares in a
special situation, such as due to the death of the owner or from a retirement
plan account, please call the Transfer Agent for assistance first, at
1.800.525.9310.
Certain Requests Require a Signature Guarantee. To protect you and the Trust
from fraud, the following redemption requests for accounts of direct
shareholders must be in writing and must include a signature guarantee
(although there may be other situations that also require a signature
guarantee):
o You wish to redeem $100,000 or more and receive a check
o The redemption check is not payable to all shareholders listed on the account
statement
o The redemption check is not sent to the address of record on your account
statement
o Shares are being transferred to an account with a different owner or name o
Shares are being redeemed by someone (such as an Executor) other than the
owners listed in the account registration.
Where Can Direct Shareholders Have Their Signatures Guaranteed? The Transfer
Agent will accept a guarantee of your signature by a number of financial
institutions, including:
o a U.S. bank, trust company, credit union or savings association,
o a foreign bank that has a U.S. correspondent bank,
o a U.S. registered dealer or broker in securities, municipal securities or
government securities, or
o a U.S. national securities exchange, a registered securities association or a
clearing agency.
If you are signing on behalf of a corporation, partnership or other
business or as a fiduciary, you must also include your title in the signature.
How Can Direct Shareholders Sell Shares by Mail? Write a letter to the Transfer
Agent that includes:
o Your name
o The Trust's name
o Your account number (from your account statement) o The dollar amount or
number of shares to be redeemed o Any special payment instructions o Any
share certificates for the shares you are selling
o The signatures of all registered owners exactly as listed in the account
statement, and
o Any special documents requested by the Transfer Agent to assure proper
authorization of the person asking to sell the shares (such as Letters
Testamentary of an Executor).
--------------------------------------------------------------------------------
---------------------------------------- ---------------------------------------
Use the following address for Send courier or express mail
---------------------------------------- requests to: requests by mail:
Shareholder Services, Inc. Shareholder Services, Inc. 10200 E. Girard Avenue,
Building D P.O. Box 5143 Denver, Colorado 80231 Denver, Colorado 80217-5270
--------------------------------------------------------------------------------
How Can Direct Shareholders Sell Shares by Telephone? Direct shareholders and
their dealer representative of record may sell shares by telephone. To
receive the redemption price calculated on a particular regular business
day, the Transfer Agent or its designated agent must receive the request
by 4:00 P.M. on that day. You may not redeem shares held under a share
certificate or in a retirement account by telephone. To redeem shares
through a service representative, call 1.800.525.9310. The check for
proceeds of telephone redemptions will be payable to the shareholder(s) of
record and will be sent to the address of record for the account. Up to
$100,000 may be redeemed by telephone in any 7-day period. Telephone
redemptions are not available within 30 days of changing the address on an
account.
Retirement Plan Accounts. There are special procedures to sell shares held in a
retirement plan account. Call the Transfer Agent for a distribution
request form. Special income tax withholding requirements apply to
distributions from retirement plans. You must submit a withholding form
with your redemption request to avoid delay in getting your money and if
you do not want tax withheld. If your employer holds your retirement plan
account for you in the name of the plan, you must ask the plan trustee or
administrator to request the sale of the Trust shares in your plan
account.
Sending Redemption Proceeds By Wire. While the Transfer Agent normally sends
direct shareholders their money by check, you can arrange to have the
proceeds of the shares you sell sent by Federal Funds wire to a bank
account you designate. It must be a commercial bank that is a member of
the Federal Reserve wire system. The minimum redemption you can have sent
by wire is $2,500. There is a $10 fee for each wire. To find out how to
set up this feature on an account or to arrange a wire, direct
shareholders should call the Transfer Agent at 1.800.525.9310. If you hold
your shares through your dealer's Automatic Purchase and Redemption
Program, you must contact your dealer to arrange a Federal Funds wire.
Can Direct Shareholders Submit Requests by Fax? Direct shareholders may send
requests for certain types of account transactions to the Transfer Agent
by fax (telecopier). Please call 1.800.525.9310 for information about
which transactions may be handled this way. Transaction requests submitted
by fax are subject to the same rules and restrictions as written and
telephone requests described in this Prospectus.
HOW DO I WRITE CHECKS AGAINST MY ACCOUNT? Automatic Purchase and Redemption
Program participants may write checks against an account held under their
Program, but must arrange for checkwriting privileges through their dealers.
Direct shareholders may write checks against their account by requesting that
privilege on the account Application or by contacting the Transfer Agent for
signature cards. They must be signed (with a signature guarantee) by all owners
of the account and returned to the Transfer Agent so that checks can be sent to
you to use. Shareholders with joint accounts can elect in writing to have checks
paid over the signature of one owner. If checkwriting is established after
November 1, 2000, only one signature is required for shareholders with joint
accounts, unless you elect otherwise.
o Checks can be written to the order of whomever you wish, but may not be
cashed at the bank the checks are payable through or the Trust's custodian
bank.
o Checkwriting privileges are not available for accounts holding shares that
are subject to a contingent deferred sales charge.
o Checks must be written for at least $250.
o Checks cannot be paid if they are written for more than your account value.
o You may not write a check that would require the redemption of shares that
were purchased by check or Automatic Investment Plan payments within the
prior 10 days.
o Don't use your checks if you changed your account number, until you
receive new checks.
WILL I PAY A SALES CHARGE WHEN I SELL MY SHARES? The Trust does not charge a fee
to redeem shares of a Trust that were bought directly or by reinvesting
distributions from that Trust or another Centennial Trust or eligible fund.
Generally, there is no fee to redeem shares of a Trust bought by exchange of
shares of another Centennial Trust or eligible fund. However,
o if you acquired shares of a Trust by exchanging Class A shares of another
eligible fund that you bought subject to the Class A contingent deferred
sales charge, and
o those shares are still subject to the Class A contingent deferred sales
charge when you exchange them into the Trust, then
o you will pay the contingent deferred sales charge if you redeem those
shares from the Trust within 18 months of the purchase date of the shares
of the fund you exchanged.
How to Exchange Shares
Shares of a Trust can be exchanged for shares of certain other Centennial Trusts
or other eligible funds, depending on whether you own your shares through your
dealer's Automatic Purchase and Redemption Program or as a direct shareholder.
HOW CAN PROGRAM PARTICIPANTS EXCHANGE SHARES? If you participate in an Automatic
Purchase and Redemption Program sponsored by your broker/dealer, you may
exchange shares held in your Program Account for shares of Centennial Money
Market Trust, Centennial Government Trust, Centennial Tax Exempt Trust,
Centennial California Tax Exempt Trust and Centennial New York Tax Exempt Trust
(referred to in this Prospectus as the "Centennial Trusts"), if available for
sale in your state of residence, by contacting your broker/dealer and obtaining
a Prospectus of the selected Centennial Trust.
HOW CAN DIRECT SHAREHOLDERS EXCHANGE SHARES? Direct shareholders can exchange
shares of a Trust for Class A shares of certain eligible funds listed in the
Statement of Additional Information. To exchange shares, you must meet several
conditions:
o Shares of the fund selected for exchange must be available for sale in
your state of residence.
o The prospectuses of the Trust and the fund whose shares you want to buy
must offer the exchange privilege.
o You must hold the shares you buy when you establish your account for at
least 7 days before you can exchange them. After the account is open 7
days, you can exchange shares every regular business day.
o You must meet the minimum purchase requirements for the fund whose shares
you purchase by exchange.
o Before exchanging into a fund, you must obtain and read its prospectus.
Shares of a particular class of an eligible fund may be exchanged only for
shares of the same class in other eligible funds. For example, you can exchange
shares of a Trust only for Class A shares of another fund, and you can exchange
only Class A shares of another eligible fund for shares of a Trust.
You may pay a sales charge when you exchange shares of a Trust. Because
shares of the Trusts are sold without sales charge, in some cases you may pay a
sales charge when you exchange shares of a Trust for shares of other eligible
funds that are sold subject to a sales charge. You will not pay a sales charge
when you exchange shares of a Trust purchased by reinvesting distributions from
that Trust or other eligible funds (except Oppenheimer Cash Reserves), or when
you exchange shares of a Trust purchased by exchange of shares of an eligible
fund on which you paid a sales charge.
For tax purposes, exchanges of shares involve a sale of the shares of the
fund you own and a purchase of the shares of the other fund, which may result in
a capital gain or loss. Since shares of a Trust normally maintain a $1.00 net
asset value, in most cases you should not realize a capital gain or loss when
you sell or exchange your shares.
Direct shareholders can find a list of eligible funds currently available
for exchanges in the Statement of Additional Information or you can obtain one
by calling a service representative at 1.800.525.9310. The list of eligible
funds can change from time to time.
How Do Direct Shareholders Submit Exchange Requests? Direct shareholders may
request exchanges in writing or by telephone:
o Written Exchange Requests. Complete an Exchange Authorization Form, signed
by all owners of the account. Send it to the Transfer Agent at the address
on the back cover.
o Telephone Exchange Requests. Telephone exchange requests may be made by
calling a service representative at 1.800.525.9310. Telephone exchanges
may be made only between accounts that are registered with the same
name(s) and address. Shares held under certificates may not be exchanged
by telephone.
ARE THERE LIMITATIONS ON EXCHANGES? There are certain exchange policies you
should be aware of:
o Shares are normally redeemed from one fund and purchased from the other
fund in the exchange transaction on the same regular business day on which
the Transfer Agent receives an exchange request that conforms to the
policies described above. Requests for exchanges to any of the Centennial
Trusts must be received by the Transfer Agent by 4:00 P.M. on a regular
business day to be effected that day. The Transfer Agent must receive
requests to exchange shares of a Trust to funds other than the Centennial
Trusts on a regular business day by the close of The New York Stock
Exchange that day. The close is normally 4:00 P.M. but may be earlier on
some days.
o Either fund may delay the purchase of shares of the fund you are
exchanging into up to seven days if it determines it would be
disadvantaged by a same-day exchange. For example, the receipt of the
multiple exchange requests from a "market timer" might require a fund to
sell securities at a disadvantageous time and/or price.
o Because excessive trading can hurt fund performance and harm shareholders,
the Trusts reserve the right to refuse any exchange request that may, in
the opinion of the Trusts, be disadvantageous, or to refuse multiple
exchange requests submitted by a shareholder or dealer.
o The Trusts may amend, suspend or terminate the exchange privilege at any
time. The Trusts will provide you notice whenever they are required to do
so by applicable law, but they may impose these changes at any time for
emergency purposes.
o If the Transfer Agent cannot exchange all the shares you request because
of a restriction cited above, only the shares eligible for exchange will
be exchanged.
Shareholder Account Rules and Policies
More information about the Trusts' policies and procedures for buying, selling
and exchanging shares is contained in the Statement of Additional Information.
The offering of shares of a Trust may be suspended during any period in which
the Trust's determination of net asset value is suspended, and the
offering may be suspended by the Board of Trustees at any time it believes
it is in a Trust's best interest to do so.
Telephone transaction privileges for purchases, redemptions or exchanges may be
modified, suspended or terminated by a Trust at any time. If an account
has more than one owner, a Trust and the Transfer Agent may rely on the
instructions of any one owner. Telephone privileges apply to each owner of
the account and the dealer representative of record for the account unless
the Transfer Agent receives cancellation instructions from an owner of the
account.
The Transfer Agent will record any telephone calls to verify data concerning
transactions. It has adopted other procedures to confirm that telephone
instructions are genuine, by requiring callers to provide tax
identification numbers and other account data and by confirming such
transactions in writing. The Transfer Agent and the Trusts will not be
liable for losses or expenses arising out of telephone instructions
reasonably believed to be genuine.
Redemption or transfer requests will not be honored until the Transfer Agent
receives all required documents in proper form. From time to time, the
Transfer Agent in its discretion may waive certain of the requirements for
redemptions stated in this Prospectus.
Payment for redeemed shares ordinarily is made in cash. It is forwarded by check
or by Federal Funds wire (as elected by the shareholder) within seven days
after the Transfer Agent receives redemption instructions in proper form.
However, under unusual circumstances determined by the Securities and
Exchange Commission, payment may be delayed or suspended. For accounts
registered in the name of a broker/dealer, payment will normally be
forwarded within three business days after redemption.
The Transfer Agent may delay forwarding a check or making a payment via
Federal Funds wire for the redemption of recently purchased shares, but
only until the purchase payment has cleared. That delay may be as much as
10 days from the date the shares were purchased. That delay may be avoided
if you purchase shares by Federal Funds wire or certified check, or
arrange with your bank to provide telephone or written assurance to the
Transfer Agent that your purchase payment has cleared.
Involuntary redemptions of small accounts may be made by Centennial Tax Exempt
Trust if the account value has fallen below $500 for reasons other than
the fact that the market value of shares has dropped. In some cases
involuntary redemptions may be made to repay the Distributor or
Sub-Distributor for losses from the cancellation of share purchase orders.
"Backup Withholding" of federal income tax may be applied against taxable
dividends, distributions and redemption proceeds (including exchanges) if
you fail to furnish the Trust your correct, certified Social Security or
Employer Identification Number when you sign your application, or if you
under-report your income to the Internal Revenue Service.
To avoid sending duplicate copies of materials to households, the Trust will
mail only one copy of each prospectus, annual and semi-annual report to
shareholders having the same last name and address on the Trust's records.
The consolidation of these mailings, called householding, benefits the
Trust through reduced mailing expense.
If you want to receive multiple copies of these materials, you may call
the Transfer Agent at 1.800.525.9310. You may also notify the Transfer
Agent in writing. Individual copies of prospectuses and reports will be
sent to you within 30 days after the Transfer Agent receives your request
to stop householding.
Dividends and Tax Information
DIVIDENDS. Each Trust intends to declare dividends from net investment income
each regular business day and to pay those dividends to shareholders monthly on
a date selected by the Board of Trustees. To maintain a net asset value of $1.00
per share, a Trust might withhold dividends or make distributions from capital
or capital gains. Daily dividends will not be declared or paid on newly
purchased shares until Federal Funds are available to a Trust from the purchase
payment for such shares.
CAPITAL GAINS. Each Trust normally holds its securities to maturity and
therefore will not usually pay capital gains. Although the Trusts do not seek
capital gains, a Trust could realize capital gains on the sale of its portfolio
securities. If it does, it may make distributions out of any net short-term or
long-term capital gains in December of each year. A Trust may make supplemental
distributions of dividends and capital gains following the end of its fiscal
year.
What Choices Do I Have for Receiving Distributions? For Automatic Purchase and
Redemption Programs, dividends and distributions are automatically
reinvested in additional shares of the selected Trust. For direct
shareholders, when you open your account, you should specify on your
application how you want to receive your dividends and distributions. You
have four options:
o Reinvest All Distributions in the Trust. You can elect to reinvest some
distributions (dividends, short-term capital gains or long-term capital
gains distributions) in the selected Trust.
o Reinvest Capital Gains Only. You can elect to reinvest some capital gains
distributions (dividends, short-term capital gains or long-term capital
gains distributions) in the selected Trust while receiving dividends by
check or having them sent to your bank account.
o Receive All Distributions in Cash. You can elect to receive a (dividends,
short-term capital gains or long-term capital gains distributions) check
for all distributions or have them sent to your bank.
o Reinvest Your Distributions in Another Account. You can reinvest all
distributions (dividends, short-term capital gains or long-term capital
gains distributions) in the same class of shares of another eligible fund
account you have established.
Under the terms of Automatic Purchase and Redemption Programs, your
broker/dealer can redeem shares to satisfy debit balances arising in your
Program Account. If that occurs, you will be entitled to dividends on those
shares as described in your Program Agreements.
TAXES.
Centennial Money Market Trust and Centennial Government Trust. If your shares
are not held in a tax-deferred retirement account, you should be aware of
the following tax implications of investing in Centennial Money Market
Trust and Centennial Government Trust. Dividends paid from net investment
income and short-term capital gains are taxable as ordinary income.
Long-term capital gains are taxable as long-term capital gains when
distributed to shareholders. It does not matter how long you have held
your shares. Whether you reinvest your distributions in additional shares
or take them in cash, the tax treatment is the same.
Every year the Trust will send you and the IRS a statement showing the
amount of each taxable distribution you received in the previous year. Any
long-term capital gains distributions will be separately identified in the tax
information the Trust sends you after the end of the calendar year.
Centennial Tax Exempt Trust. Exempt interest dividends paid from net investment
income earned by the Trust on municipal securities will be excludable from
gross income for federal income tax purposes. A portion of a dividend that
is derived from interest paid on certain "private activity bonds" may be
an item of tax preference if you are subject to the alternative minimum
tax. If the Trust earns interest on taxable investments, any dividends
derived from those earnings will be taxable as ordinary income to
shareholders.
Dividends and capital gains distributions may be subject to state or local
taxes. Long-term capital gains are taxable as long-term capital gains when
distributed to shareholders. It does not matter how long you have held your
shares. Dividends paid from short-term capital gains and non-tax exempt net
investment income are taxable as ordinary income. Whether you reinvest your
distributions in additional shares or take them in cash, the tax treatment is
the same. Every year the Trust will send you and the IRS a statement showing the
amount of any taxable distribution you received in the previous year as well as
the amount of your tax-exempt income.
Remember, There May be Taxes on Transactions. Because each Trust seeks to
maintain a stable $1.00 per share net asset value, it is unlikely that you
will have a capital gain or loss when you sell or exchange your shares. A
capital gain or loss is the difference between the price you paid for the
shares and the price you received when you sold them. Any capital gain is
subject to capital gains tax.
Returns of Capital Can Occur. In certain cases, distributions made by a Trust
may be considered a non-taxable return of capital to shareholders. If that
occurs, it will be identified in notices to shareholders.
This information is only a summary of certain federal income tax
information about your investment. You should consult with your tax adviser
about the effect of an investment in a Trust on your particular tax situation.
<PAGE>
Financial Highlights
The Financial Highlights Tables are presented to help you understand each
Trust's financial performance for the past five fiscal years. Certain
information reflects financial results for a single Trust share. The total
returns in the tables represent the rate that an investor would have earned (or
lost) on an investment in the Trusts (assuming reinvestment of all dividends and
distributions). This information for the past five fiscal years ended June 30,
2000, has been audited by Deloitte & Touche LLP, the Trusts' independent
auditors, whose report, along with the Trusts' financial statements, are
included in the Statements of Additional Information, which are available on 3
request.
<PAGE>
FINANCIAL HIGHLIGHTS
Centennial Tax Exempt Trust
<TABLE>
<CAPTION>
Year Ended June 30,
---------------------------------------------------------------------
2000 1999 1998 1997 1996
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations--
net investment income and
net realized gain .............................. .03 .03 .03 .03 .03
Dividends and/or distributions to shareholders .... (.03) (.03) (.03) (.03) (.03)
--------- --------- --------- --------- ---------
Net asset value, end of period .................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= =========
TOTAL RETURN(1) ................................... 3.01% 2.61% 3.12% 3.01% 3.16%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) ........... $ 1,692 $ 1,749 $ 1,829 $ 1,649 $ 1,426
Average net assets (in millions) .................. $ 1,737 $ 1,896 $ 1,832 $ 1,591 $ 1,473
Ratios to average net assets:(2)
Net investment income ............................. 2.94% 2.58% 3.07% 2.95% 3.12%
Expenses .......................................... 0.72% 0.69% 0.69%(3) 0.72%(3) 0.72%(3)
</TABLE>
1. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns reflect
changes in net investment income only. Total returns are not annualized for
periods of less than one full year.
2. Annualized for periods of less than one full year.
3. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
<PAGE>
INFORMATION AND SERVICES
For More Information on Centennial Money Market Trust:
The following additional information about the Trust is available without charge
upon request:
STATEMENT OF ADDITIONAL INFORMATION This document includes additional
information about the Trust's investment policies, risks, and operations. It is
incorporated by reference into this Prospectus (which means it is legally part
of this Prospectus).
ANNUAL AND SEMI-ANNUAL REPORTS Additional information about the Trust's
investments and performance is available in the Trust's Annual and Semi-Annual
Reports to shareholders. The Annual Report includes a discussion of market
conditions and investment strategies that significantly affected the Trust's
performance during its last fiscal year.
How to Get More Information:
You can request the Statement of Additional Information, the Annual and
Semi-Annual Reports, and other information about the Trusts or your account:
--------------------------------------------------------------------------------
By Telephone: Call Shareholder Services, Inc.
toll-free:
1.800.525.9310
--------------------------------------------------------------------------------
By Mail: Write to:
Shareholder Services, Inc.
P.O. Box 5143
Denver, Colorado 80217
--------------------------------------------------------------------------------
You can also obtain copies of the Statement of Additional Information and other
Trust documents and reports by visiting the SEC's Public Reference Room in
Washington, D.C. (Phone 1.202.942.8090) or the EDGAR database on the SEC's
Internet web site at http://www.sec.gov. Copies may be obtained after payment of
a duplicating fee by electronic request at the SEC's e-mail address :
[email protected] or by writing to the SEC's Public Reference Section,
Washington, D.C. 20549-0102.
No one has been authorized to provide any information about the Trust or to make
any representations about the Trust other than what is contained in this
Prospectus. This Prospectus is not an offer to sell shares of the Trust, nor a
solicitation of an offer to buy shares of the Trust, to any person in any state
or other jurisdiction where it is unlawful to make such an offer.
The Trust's shares are distributed
by:
SEC File No. 811-3391 Centennial Asset Management Corporation
PR0170.001.1100
Printed on recycled paper
<PAGE>
APPENDIX TO THE PROSPECTUS OF
CENTENNIAL GOVERNMENT TRUST
Graphic material included in Prospectus of Centennial Government Trust
(the "Trust") under the heading: "Annual Total Returns (as of 12/31 each year)."
Bar chart will be included in the Prospectus of the Trust depicting the
annual total returns of a hypothetical investment in shares of the Trust for the
full calendar year since the Trust's inception as a money market fund. Set forth
below are the relevant data points that will appear on the bar chart.
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Calendar Year Ended: Annual Total Returns
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12/31/90 7.70%
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12/31/91 5.85%
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12/31/92 3.46%
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12/31/93 2.67%
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12/31/94 3.71%
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12/31/95 5.26%
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12/31/96 4.72%
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12/31/97 4.86%
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12/31/98 4.84%
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12/31/99 4.43%
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