Registration No. 2-69653
File No. 811-3104
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
PRE-EFFECTIVE AMENDMENT NO. ___ / /
POST-EFFECTIVE AMENDMENT NO. 31 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
/ X /
AMENDMENT NO. 28 / X /
CENTENNIAL TAX EXEMPT TRUST
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(Exact Name of Registrant as Specified in Charter)
6803 South Tucson Way
Englewood, Colorado, 80112
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(Address of Principal Executive Offices)
(303) 768-3200
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(Registrant's Telephone Number)
ANDREW J. DONOHUE, ESQ.
OppenheimerFunds, Inc.
Two World Trade Center, New York, New York 10048-0203
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box):
/ / Immediately upon filing pursuant to paragraph (b)
/ X / On October 1, 1997 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a) (i)
/ / On ____________, pursuant to paragraph (a) (i)
/ / 75 days after filing, pursuant to paragraph (a) (ii)
/ / On ____________, pursuant to paragraph (a) (ii) of Rule 485
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The Registrant has registered an indefinite number of its shares under the
Securities Act of 1933 pursuant to Rule 24f-2 promulgated under the Investment
Company Act of 1940. A Rule 24f-2 Notice for the Registrant's fiscal year ended
June 30, 1997 was filed on August 27, 1997.
<PAGE>
FORM N-1A
CENTENNIAL TAX EXEMPT TRUST
Cross Reference Sheet
Part A of
Form N-1A
Item No. Prospectus Heading
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1 Front Cover Page
2 Expenses
3 Financial Highlights; Performance of the Trust
4 Cover Page; Investment Objectives and Policies;
Investment Restrictions
5 How the Trusts Are Managed; Expenses; Back Cover
6 Dividends, Distributions and Taxes; How the Trusts Are Managed
7 How to Buy Shares; Purchases Through Automatic Purchases and
Redemption Programs; Direct Purchases;
Service Plan; Back Cover; How To Sell Shares
8 How to Sell Shares; Exchanges of Shares; Retirement Plans;
General Information on Redemptions
9 *
Part B of
Form N-1A
Item No. Statement of Additional Information Heading
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10 Cover Page
11 Cover Page
12 *
13 Investment Objective and Policies; Other Investment Restrictions;
Exhibit A - Description of Securities
Ratings
14 Trustees and Officers; Investment Management Services
15 Trustees and Officers - Major Shareholders; Investment
Management Services
16 Investment Management Services; Service Plan; Additional
Information; Back Cover
17 Investment Management Services - Portfolio Transactions
18 Additional Information - Description of the Trusts
19 Purchase, Redemption and Pricing of Shares; Exchange of Shares;
Automatic Withdrawal Plan Provisions;
Yield Information
20 Additional Information - Tax Status of the Trust's Dividends and
Distributions
21 Investment Management Services; Additional Information - General
Distributor's Agreement;
Service Plan
22 Yield Information
23 Financial Statements
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* Not applicable or negative answer.
<PAGE>
Centennial
Tax Exempt Trust
Prospectus dated October 1, 1997
Centennial Tax Exempt Trust is a no-load "money market" mutual fund that 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
seeks to achieve this objective by investing in obligations issued by states,
territories and possessions of the United States or by the District of Columbia,
or their political subdivisions, authorities and corporations, the income from
which is exempt from Federal income taxes. Shares of the Trust are sold at net
asset value without a sales charge.
An investment in the Trust is neither insured nor guaranteed by the U.S.
Government. While the Trust seeks to maintain a stable net asset value of $1.00
per share, there can be no assurance that the Trust will be able to do so.
Shares of the Trust may be purchased directly from brokers or dealers
having sales agreements with the Trust's Distributor and also are offered to
participants in Automatic Purchase and Redemption Programs (the "Programs")
established by certain brokerage firms with which the Trust's Distributor has
entered into agreements for that purpose. (See "How to Buy Shares" in the
Appendix.) The information in this Prospectus should be read together with the
information in the Appendix which is part of this Prospectus. Program
participants should also read the description of the Program provided by their
broker.
This Prospectus explains concisely what you should know before investing
in the Trust. Please read this Prospectus carefully and keep it for future
reference. You can find more detailed information about the Trust in the October
1, 1997 Statement of Additional Information. For a free copy, call Shareholder
Services, Inc., the Trust's Transfer Agent, at 1-800-525-9310 or write to the
Transfer Agent at the address on the back cover. The Statement of Additional
Information has been filed with the Securities and Exchange Commission and is
incorporated into this Prospectus by reference (which means that it is legally
part of this Prospectus).
Shares of the Trust are not deposits or obligations of any bank, are not
guaranteed by any bank, are not insured by the F.D.I.C. or any other agency, and
involve investment risks, including the possible loss of the principal amount
invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
Contents
ABOUT THE TRUST
Expenses
Financial Highlights
Investment Objective and Policies
Other Investment Restrictions
Performance of the Trust
APPENDIX
How the Trusts are Managed
How to Buy Shares
Purchases Through Automatic Purchase and Redemption
Programs
Direct Purchases
Payment by Check
Payment by Federal Funds Wire
Guaranteed Payment
Automatic Investment Plans
Service Plan
How to Sell Shares
Program Participants
Direct Shareholders
Regular Redemption Procedure
Expedited Redemption Procedure
Checkwriting
Telephone Redemptions
Automatic Withdrawal Plans
Distributions from Retirement Plans Holding Shares of
Government Trust and Money Market Trust
General Information on Redemptions
Exchanges of Shares
Retirement Plans
Dividends, Distributions and Taxes
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<PAGE>
ABOUT THE TRUST
Expenses
The following table sets forth the fees that an investor in the Trust might pay
and the expenses paid by the Trust during its fiscal year ended June 30, 1997.
o Shareholder Transaction Expenses
Maximum Sales Charge on Purchases
(as a percentage of offering price) None
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Maximum Sales Charge on Reinvested Dividends None
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Redemption Fee None(1)
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Exchange Fee None
(1) There is a $10 transaction fee for redemptions paid by Federal Funds wire,
but not for redemptions paid by check.
o Annual Trust Operating Expenses
(as a percentage of average net assets)
Management Fees 0.43%
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12b-1 Plan Fees 0.20%
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Other Expenses 0.09%
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Total Trust Operating Expenses 0.72%
The purpose of this table is to assist an investor in understanding the
various costs and expenses that an investor in the Trust will bear directly
(Shareholder Transaction Expenses) or indirectly (Annual Trust Operating
Expenses). "Other Expenses" includes such expenses as custodial and transfer
agent fees, audit and legal and other business operating expenses, but excludes
extraordinary expenses.
o Example. To try to show the effect of these expenses on an investment
over time, we have created the hypothetical example shown below. Assume that you
make a $1,000 investment in shares of the Trust, and the Trust's annual return
is 5%, and that its operating expenses are the ones shown in the Annual Trust
Operating Expenses chart above. If you were to redeem your shares at the end of
each period shown below, your investment would incur the following expenses by
the end of each period shown.
1 year 3 years 5 years 10 years
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$7 $23 $40 $89
This example shows the effect of expenses on an investment in the Trust,
but is not meant to predict actual or expected costs or investment returns of
the Trust, all of which may be more or less than those shown.
Financial Highlights
The table on the following page presents selected information about the Trust,
including per share data and expense ratios and other data based on the Trust's
average net assets. This information has been audited by Deloitte & Touche LLP,
independent auditors, whose report on the financial statements of the Trust for
the fiscal year ended June 30, 1997 is included in the Statement of Additional
Information.
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<PAGE>
Financial Highlights
Centennial Tax Exempt Trust
<TABLE>
<CAPTION>
Year Ended June 30,
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
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Per Share Operating Data:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
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Income from investment operations - net
investment income and net realized gain .03 .03 .03 .02 .02 .03 .04 .05 .05 .04
Dividends and distributions to shareholders (.03) (.03) (.03) (.02) (.02) (.03) (.04) (.05) (.05) (.04)
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Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
=====================================================================================
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Total Return, at Net Asset Value(1) 3.01% 3.16% 3.17% 1.90% 2.19% 3.55% 5.09% 5.70% 5.55% 4.35%
=================================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (in millions) $1,649 $1,426 $1,315 $1,039 $981 $917 $787 $575 $486 $518
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Average net assets (in millions) $1,591 $1,473 $1,127 $1,057 $977 $900 $711 $561 $504 $485
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Ratios to average net assets:
Net investment income 2.95% 3.12% 3.13% 1.87% 2.08% 3.40% 4.84% 5.44% 5.45% 4.30%
Expenses(2) 0.72% 0.72% 0.73% 0.76% 0.76% 0.75% 0.77% 0.79% 0.78% 0.79%
</TABLE>
(1) Assumes a 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.
(2) Beginning in fiscal 1995, the expense ratio reflects the effect of gross
expenses paid indirectly by the Trust. Prior year expense ratios have not been
adjusted.
<PAGE>
Investment Objective and Policies
Objective. The Trust is a no-load tax-exempt "money market" fund. It is an
open-end, diversified management investment company organized as a Massachusetts
business trust in 1985. The Trust was initially organized in 1980 as a Maryland
corporation. The Trust's investment objective is to seek maximum short-term
interest income exempt from Federal income taxes that is consistent with low
capital risk and the maintenance of liquidity. The value of Trust shares is not
insured or guaranteed by any government agency. However, shares held in
brokerage accounts would be eligible for coverage by the Securities Investor
Protection Corporation for losses arising from the insolvency of the brokerage
firm. The Trust's shares may be purchased at their net asset value, which will
remain fixed at $1.00 per share except under extraordinary circumstances (see
"Determination of Net Asset Value Per Share" in the Statement of Additional
Information for further information). There can be no assurance, however, that
the Trust's net asset value will not vary or that the Trust will achieve its
investment objective.
Ratings of Securities. Under Rule 2a-7 of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), 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
the Rule, the Trust may purchase only those securities that the Manager, under
procedures approved by the Trust's Board of Trustees, has determined have
minimal credit risks and are "Eligible Securities."
An "Eligible Security" is (a) one that has received a rating in one of the
two highest short-term rating categories by any two "nationally-recognized
statistical rating organizations" (as defined in the Rule) ("Rating
Organizations") or, if only one Rating Organization has rated that security, by
that Rating Organization, or (b) an unrated security that is judged by the
Manager to be of comparable quality to investments that are "Eligible
Securities" rated by Rating Organizations. The Rule permits the Trust to
purchase "First Tier Securities," which are Eligible Securities rated in the
highest rating category for short-term debt obligations by at least two Rating
Organizations or, if only one Rating Organization has rated a particular
security, by that Rating Organization, or comparable unrated securities.
Additionally, under Rule 2a-7, the Trust must maintain a dollar-weighted average
portfolio maturity of no more than 90 days, and the remaining maturity of any
single portfolio investment may not exceed 397 days. The Trust's Board has
adopted procedures under Rule 2a-7 pursuant to which the Board has delegated to
the Manager certain responsibilities, in accordance with that Rule, of
conforming the Trust's investments with the requirements of the Rule and those
procedures.
Exhibit A of the Statement of Additional Information contains information
on the rating categories of Rating Organizations. Ratings at the time of
purchase will determine whether securities may be acquired under the above
restrictions. Subsequent downgrades in ratings may require reassessments of the
credit risks presented by a security and may require its sale. See "Ratings of
Securities" in "Investment Objective and Policies" in the Statement of
Additional Information for further details.
Investment Policies and Strategies. The Trust's investment policies and
practices are not "fundamental" policies as defined in "Other Investment
Restrictions" unless a particular policy is identified as fundamental. The
Trust's investment objective is a fundamental policy. The Board may change
non-fundamental investment policies without shareholder approval. In seeking its
objective, the Trust may invest in the types of securities listed below and use
the following strategies:
o Municipal Securities. The Trust seeks to achieve its objective by
investing in municipal bonds, municipal notes (including tax anticipation notes,
bond anticipation notes, revenue anticipation notes, construction loan notes and
other short-term loans), tax-exempt commercial paper, certificates of
participation, participation interests and other debt obligations issued by or
on behalf of the states and the District of Columbia, any commonwealth or
territory of the United States, or their respective political subdivisions,
agencies, instrumentalities or authorities, the interest from which is not
subject to Federal individual income tax, in the opinion of bond counsel to the
respective issuer at the time of issue (collectively, "Municipal Securities").
Such obligations having maturities of (a) one year or more when issued are
referred to as "Municipal Bonds," and (b) less than one year are referred to as
"Municipal Notes." The Trust may invest in Municipal Bonds and Notes offered on
a "when-issued" basis, as discussed below and in the Statement of Additional
Information. The Trust will not invest in foreign securities. The Trust may also
purchase Municipal Securities with demand features that meet the requirements of
Rule 2a-7 (discussed above) and are approved under standards adopted by the
Trust's Board of Trustees. All Municipal Securities in which the Trust invests
must have, or, pursuant to regulations adopted by the Securities and Exchange
Commission, be deemed to have, remaining maturities of 397 days or less at the
date the Trust purchases them. The two principal classifications of Municipal
Securities are "general obligations" (secured by the issuer's pledge of its full
faith, credit and taxing power for the payment of principal and interest) and
"revenue obligations" (payable only from the revenues derived from a particular
facility or class of facilities, or specific excise tax or other revenue
source).
Under normal market conditions, the Trust attempts to invest 100% of its
assets in Municipal Securities, and the Trust will make no 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, including: (i) repurchase
agreements (explained below); (ii) Municipal Securities issued to benefit a
private user ("Private Activity Municipal Securities"), the interest from which
may be subject to Federal alternative minimum tax (see "Dividends, Distributions
and Taxes" below and "Private Activity Municipal Securities" in the Statement of
Additional Information); and (iii) certain "Temporary Investments" defined below
in "Temporary Investments." However, in times of unstable economic or market
conditions, when the Manager determines it appropriate to do so, the Trust may
assume a temporary defensive position and invest an unlimited amount of its
assets in Temporary Investments. The Trust may also hold Temporary Investments
pending the investment of proceeds from the sale of Trust shares or portfolio
securities, pending settlement of Municipal Securities purchases or to meet
anticipated redemptions. Normally, the Trust will not invest more than 20% of
its total assets in Private Activity Municipal Securities and other taxable
investments described above. The Trust will generally use its best efforts to
dispose of such securities within sixty days of acquisition. To the extent the
Trust receives income from taxable investments, it may not achieve its
investment objective. No independent investigation is made by Centennial Asset
Management Corporation, the Trust's investment manager (the "Manager") as to the
users of proceeds of such offerings or the application of such proceeds.
o Board Approved Instruments. The Trust may invest in obligations, other
than those discussed above, approved by the Trust's Board of Trustees and which
are in accordance with the Trust's investment objective, policies and
restrictions.
o Illiquid and Restricted Securities. The Trust will not purchase or
otherwise acquire any security if, as a result, more than 10% of its net assets
would be invested in securities that are illiquid by virtue of the absence of a
readily available market, or because of legal or contractual restrictions on
resale. This policy does not limit the acquisition of: (i) restricted securities
eligible for resale to qualified institutional purchasers pursuant to Rule 144A
under the Securities Act of 1933 that are determined to be liquid by the Board
of Trustees or by the Manager under Board-approved guidelines, or (ii)
commercial paper that may be sold without registration under Section 3(a)(3) or
Section 4(2) of the Securities Act of 1933. Such guidelines take into account
trading activity for such securities and the availability of reliable pricing
information, among other factors. If there is a lack of trading interest in
particular Rule 144A securities, the Trust's holdings of those securities may be
illiquid. If, due to changes in relative value, more than 10% of the value of
the Trust's net assets consist of illiquid securities, the Manager would
consider appropriate steps to protect the Trust's maximum flexibility. There may
be undesirable delays in selling illiquid securities at prices representing
their fair value. The Manager monitors holding of illiquid securities on an
ongoing basis and at times the Trust may be required to sell some holdings to
maintain adequate liquidity. Illiquid securities include repurchase agreements
maturing in more than seven days, or certain participation interests other than
those with puts exercisable within seven days.
o Floating Rate/Variable Rate Obligations. Some of the Municipal
Securities the Trust may purchase may have variable or floating interest rates.
Variable rates are adjustable at stated periodic intervals of no more than one
year. Floating rates are automatically adjusted according to a specified market
rate for such investments. The Trust may purchase these obligations if they have
a remaining maturity of 397 days or less; if their maturity is greater than 397
days, they may be purchased if they have a demand feature that permits the Trust
to recover the principal amount of the underlying security at specified
intervals not exceeding 397 days and upon no more than 30 days' notice. The
Manager may determine that an unrated floating rate or variable rate demand
obligation meets the Trust's quality standards by reason of being backed by a
letter of credit or guarantee issued by a bank that meets the Trust's quality
standards. However, the letter of credit or bank guarantee must be rated or meet
the other requirements of Rule 2a-7. See "Floating Rate/Variable Rate
Obligations" in the Statement of Additional Information for more details.
o Puts and Demand Features. The Trust may invest a significant percentage
of its assets in Municipal Securities subject to put or demand features. Because
the Trust invests in securities backed by banks and other financial
institutions, changes in the credit quality of these institutions could cause
losses to the Trust. Therefore, an investment in the Trust may be riskier than
an investment in other types of money market funds. A "put" is the right to sell
a particular security within a specified period of time at a stated exercise
price. The put may be sold, transferred, or assigned only with the underlying
security. A demand feature is a put that may be exercised at specified intervals
not exceeding 397 calendar days and upon no more than thirty days' notice.
Demand features can: (1) shorten the maturity of a variable or floating rate
security, (2) enhance the security's credit quality, and (3) enhance the ability
to sell the security. The aggregate price for a security subject to a put or
demand feature may be higher than the price that would be paid for the security
without the put or demand feature. The effect of the put or demand feature is to
increase the cost of the security and reduce its yield.
o When-Issued and Delayed Delivery Securities. The Trust may invest in
Municipal Securities on a "when-issued" or "delayed delivery" basis. In those
transactions, the Trust obligates itself to purchase or sell securities, with
delivery and payment to occur at a later date, to secure what is considered to
be an advantageous price and yield at the time the obligation is entered into.
The price, which is generally expressed in yield terms, is fixed at the time the
commitment to purchase is made, but delivery and payment for when-issued
securities take place at a later date (normally within 120 days of purchase).
During the period between purchase and settlement, no payment is made by the
Trust to the issuer and no interest accrues to the Trust from the investment.
Although the Trust is subject to the risk of adverse market fluctuation during
that period, the Manager does not believe that the Trust's net asset value or
income will be materially adversely affected by the Trust's purchase of
Municipal Securities on a "when-issued" or "delayed delivery" basis. See
"When-Issued and Delayed Delivery Transactions" in the Statement of Additional
Information for more details.
o Municipal Lease Obligations. The Trust may invest in certificates of
participation, which are tax-exempt obligations that evidence the holder's right
to share in lease, installment loan or other financing payments by a public
entity. Projects financed with certificates of participation generally are not
subject to state constitutional debt limitations or other statutory requirements
that may be applicable to Municipal Securities. Payments by the public entity on
the obligation underlying the certificates are derived from available revenue
sources; such revenue may be diverted to the funding of other municipal service
projects. Payments of interest and/or principal with respect to the certificates
are not guaranteed and do not constitute an obligation of the state or any of
its political subdivisions. While some municipal lease securities may be deemed
to be "illiquid" securities (the purchase of which would be limited as described
above in "Illiquid and Restricted Securities"), from time to time the Trust may
invest more than 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.
o Temporary Investments. The Trust may hold the following "Temporary
Investments" that are Eligible Securities: (i) obligations issued or guaranteed
by the U.S. Government or its agencies or instrumentalities; (ii) bankers
acceptances; (iii) taxable commercial paper rated in the highest category by a
Rating Organization; (iv) short-term taxable debt obligations rated in one of
the two highest rating categories of a Rating Organization; or (v) certificates
of deposit of domestic banks with assets of $1 billion or more, and (vi)
repurchase agreements
o Repurchase Agreements. The Trust may acquire securities that are subject
to repurchase agreements. The Trust's repurchase agreements must be fully
collateralized under the requirements of Rule 2a-7. If the vendor fails to pay
the agreed-upon resale price on the delivery date, the Trust's risks may include
any costs of disposing of the collateral, and any loss resulting from any delay
in foreclosing on the collateral. The Trust ordinarily will not purchase or
otherwise acquire any security or invest in a repurchase agreement, if as a
result, more than 10% of its net assets (taken at current value) at the time of
purchase would be invested in repurchase agreements not entitling the holder to
payment of principal within 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 and
accordingly, under normal market conditions, the Trust will limit its
investments in repurchase transactions to 20% of its total assets. See
"Repurchase Agreements" in the Statement of Additional Information for further
details.
Other Investment Restrictions
The Trust has certain investment restrictions which, together with its
investment objective, are fundamental policies which can be changed only by the
vote of a "majority" (as defined in the Investment Company Act) of the Trust's
outstanding voting securities. Under some of those restrictions, the Trust
cannot:
o make loans, except by purchasing debt obligations in accordance with its
investment policies as approved by the Board, or by entering into repurchase
agreements, or by lending portfolio securities in accordance with applicable
regulations;
o borrow money except as a temporary measure for extraordinary or
emergency purposes, and then only up to 10% of the value of its assets; no more
than 10% of the Trust's net assets may be pledged, mortgaged or assigned to
secure a debt; no investments may be made while outstanding borrowings, other
than by means of reverse repurchase agreements (which are not considered
borrowings under this restriction), exceed 5% of its assets;
o invest more than 5% of the value of its total assets taken at market
value in the securities of any one issuer (not including the U.S. Government or
its agencies or instrumentalities, whose securities may be purchased without
limitation for defensive purposes);
o purchase more than 10% of the outstanding voting securities of any one
issuer or invest in companies for the purpose of exercising control; or
o concentrate investments to the extent of 25% of its assets in any
industry; however, there is no limitation as to investment, for liquidity
purposes, in obligations issued by banks or savings and loan associations or in
obligations issued by the U.S. Government or its agencies or instrumentalities.
Unless the Prospectus states that a percentage restriction
applies continuously, it applies only at the time the Trust makes an investment
and 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.
Additional investment restrictions are contained in "Other Investment
Restrictions" in the Statement of Additional Information.
Performance of the Trust
Explanation of Yield. From time to time, the "yield," "compounded effective
yield" and "tax-equivalent yield" of an investment in the Trust may be
advertised. These yield figures are based on historical earnings per share and
are not intended to indicate future performance. The "yield" of the Trust is the
income generated by an investment in the Trust over a seven day period, which is
then "annualized." In annualizing, the amount of income generated by the
investment during that seven days is assumed to be generated each week over a 52
week period, and is shown as a percentage of the investment. The "compounded
effective yield" is calculated similarly, but the annualized income earned by an
investment in the Trust is assumed to be reinvested. The "compounded effective
yield" will therefore be slightly higher than the yield because of the effect of
the assumed reinvestment. The Trust's "tax-equivalent yield" is calculated by
dividing that portion of the Trust's "yield" (calculated as described above)
which is tax-exempt by one minus a stated income tax rate and adding the result
to the portion (if any) of the Trust's yield that is not tax-exempt. See "Yield
Information" in the Statement of Additional Information for additional
information about the methods of calculating these yields.
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<PAGE>
APPENDIX
This Appendix is part of the Prospectuses of Centennial Money Market Trust
("Money Market Trust"), Centennial Tax Exempt Trust ("Tax Exempt Trust") and
Centennial Government Trust ("Government Trust"), each of which is referred to
in this Appendix individually as a "Trust" and collectively are referred to as
the "Trusts." Unless otherwise indicated, the information in this Appendix
applies to each Trust.
How the Trusts are Managed
Organization and History. The Board of Trustees of each Trust has overall
responsibility for the management of that Trust under the laws of Massachusetts
governing the responsibilities of trustees of business trusts. "Trustees and
Officers" in the Statement of Additional Information identifies the trustees and
officers and provides information about them. Subject to the authority of the
Board, the Trusts' investment manager, Centennial Asset Management Corporation
(the "Manager"), is responsible for the day-to-day management of each Trust's
business, supervises the investment operations of each Trust and the composition
of its portfolio and furnishes the Trusts advice and recommendations with
respect to investments, investment policies and the purchase and sale of
securities, pursuant to an Investment Advisory Agreement (collectively, the
"Agreements") with each Trust. Each of the Agreements sets forth the fees paid
by the Trust to the Manager and the expenses that the Trust is responsible to
pay.
The Trusts' shares are of one class, are transferrable without restriction
and have equal rights and privileges. Each share of each Trust represents an
interest in that Trust equal to the interest of each other share of the Trust
and entitles the holder to one vote per share (and a fractional vote for a
fractional share) on matters submitted to a shareholder vote. The Trustees may
divide or combine the shares into a greater or lesser number of shares without
thereby changing the proportionate beneficial interest in the Trust. Shares do
not have cumulative voting rights or conversion, preemptive or subscription
rights. Shares of each Trust have equal liquidation rights as to the assets of
that Trust. (Each Trust's Board of Trustees is empowered to issue additional
classes or series of shares of that Trust, which may have separate assets and
liabilities.)
The Trusts will not normally hold annual meetings of the shareholders. The
Trusts may hold shareholder meetings from time to time on important matters and
shareholders have the right to call a meeting to remove a Trustee or take other
action described in the Declaration of Trust. Under certain principles governing
business trusts, shareholders may be held personally liable as "partners" for
the Trust's obligations. However, the risk of a shareholder incurring any
financial loss is limited to the relatively remote circumstances in which the
Trust is unable to meet its obligations. See "Additional Information" in the
Statement of Additional Information for details.
The Manager and Its Affiliates. The Manager, a wholly-owned subsidiary of
OppenheimerFunds, Inc. ("OFI"), has operated as an investment advisor since
1978. The Manager and its affiliates currently advise U.S. investment companies
with assets aggregating over $70 billion as of June 30, 1997, and having more
than 3 million shareholder accounts. OFI is wholly owned by Oppenheimer
Acquisition Corp., a holding company owned in part by senior management of OFI
and the Manager, and ultimately controlled by Massachusetts Mutual Life
Insurance Company, a mutual life insurance company which also advises pension
plans and investment companies.
o Fees and Expenses. The management fee is payable monthly to the Manager
under the terms of each Trust's Agreement and is computed on the average annual
net assets of the respective Trust as of the close of business each day. The
annual rates applicable to Money Market Trust and Government Trust are as
follows: 0.50% of the first $250 million of net assets; 0.475% of the next $250
million of net assets; 0.45% of the next $250 million of net assets; 0.425% of
the next $250 million of net assets; and 0.40% of net assets in excess of $1
billion. Independently of Money Market Trust's Agreement, the Manager has
voluntarily agreed to waive a portion of the management fee otherwise payable to
it to the extent necessary to: (a) permit Money Market Trust to have a seven day
yield at least equal to that of Daily Cash Accumulation Fund, Inc., and (b) to
reduce, on an annual basis, the management fee paid on the average net assets of
the Trust in excess of $1 billion from 0.40% to: 0.40% of average net assets in
excess of $1 billion but less than $1.25 billion; 0.375% of average net assets
in excess of $1.25 billion but less than $1.50 billion; 0.35% of average net
assets in excess of $1.50 billion but less than $2 billion; and 0.325% of
average net assets in excess of $2 billion. This undertaking became effective as
of December 1, 1991, and may be modified or terminated by the Manager any time.
The Board of Directors of Daily Cash Accumulation Fund, Inc., a money
market fund for which the Manager also serves as investment adviser, has
proposed that shareholders of that fund consider and vote upon a reorganization
of that fund with and into Money Market Trust. A meeting of shareholders of
Daily Cash Accumulation Fund, Inc. is scheduled for November 18, 1997 to vote
upon the proposed reorganization. In connection with the proposed
reorganization, the Manager has agreed that if the reorganization is approved by
shareholders of Daily Cash Accumulation Fund, Inc. and implemented, it will
amend its Investment Advisory Agreement with Money Market Trust to include as
additional breakpoints in the fee schedule those breakpoints which are now
included in the Manager's voluntary undertaking described above. There is no
assurance that shareholders of Daily Cash Accumulation Fund, Inc. will approve
the proposed reorganization or that the reorganization will be implemented. If
the reorganization is not implemented, the Manager will not amend its Investment
Advisory Agreement with Money Market Trust and this prospectus will not be
supplemented to reflect that fact.
The annual rates applicable to Tax Exempt Trust are as follows: 0.50% of
the first $250 million of net assets; 0.475% of the next $250 million of net
assets; 0.45% of the next $250 million of net assets; 0.425% of the next $250
million of net assets; 0.40% of the next $250 million of net assets; 0.375% of
the next $250 million of net assets; 0.35% of the next $500 million of net
assets
and 0.325% of net assets in excess of $2 billion. Furthermore, under Tax Exempt
Trust's Agreement, when the value of Tax Exempt 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,
but in no event shall the annual fee be less than $0. See the Statement of
Additional Information for an explanation of the Manager's reimbursement
arrangement for the Trusts set forth in their Agreements. "Investment Management
Services" in the Statement of Additional Information contains more complete
information about the Agreements, including a discussion of expense
arrangements, and a description of the exculpation provisions and portfolio
transactions.
o The Custodian. The Custodian of the assets of the Trusts is Citibank,
N.A. The Manager and its affiliates presently have banking relationships with
the Custodian. See "Additional Information" in the Statement of Additional
Information for further information. Each Trust's cash balances in excess of
$100,000 held by the Custodian are not protected by Federal deposit insurance.
Such uninsured balances may at times be substantial. The foregoing rating
restrictions under Rule 2a-7 described under "Investment Objective and Policies"
do not apply to banks in which a Trust's cash is kept.
o The Transfer Agent. Shareholder Services, Inc., a subsidiary of OFI,
acts as Transfer Agent and shareholder servicing agent for the Trusts and the
other mutual funds advised by the Manager, on an at-cost basis. The fees to the
Transfer Agent do not include payments for any services of the type paid, or to
be paid, by the Trusts to the Distributor and to Recipients under the Service
Plan (see "Service Plan"). Direct shareholders should direct any inquiries
regarding the Trusts to the Transfer Agent at the address and toll-free phone
number on the back cover. Program participants should direct any inquiries
regarding the Trust to their broker.
How to Buy Shares
Shares of each Trust may be purchased at their offering price, which is net
asset value per share, without sales charge. The net asset value will remain
fixed at $1.00 per share, except under extraordinary circumstances (see
"Determination of Net Asset Value Per Share" in the Statement of Additional
Information for further details). There can be no guarantee that any Trust will
maintain a stable net asset value of $1.00 per share. Centennial Asset
Management Corporation, which also acts as the distributor for each Trust (and
in that capacity is referred to as the "Distributor"), may in its sole
discretion accept or reject any order for purchase of a Trust's shares.
OppenheimerFunds Distributor, Inc. ("OFDI"), an affiliate of the Distributor,
acts as the sub-distributor for each Trust (the "Sub-Distributor").
The minimum initial investment is $500 ($2,500 if by Federal Funds wire),
except as otherwise described in this Prospectus. Subsequent purchases must be
in amounts of $25 or more, and may be made through authorized dealers or brokers
or by forwarding payment to the Distributor at P.O. Box 5143, Denver, Colorado
80217, with the name(s) of all account owners, the account number and the name
of the Trust. The minimum initial and subsequent purchase requirements are
waived on purchases made by reinvesting dividends from any of the "Eligible
Funds" listed in "Exchange of Shares" in the Statement of Additional Information
or by reinvesting distributions from unit investment trusts for which
reinvestment arrangements have been made with the Distributor. Under an
Automatic Investment Plan or military allotment plan, initial and subsequent
investments must be at least $25. No share certificates will be issued unless
specifically requested in writing by an investor or the dealer or broker.
Each Trust intends to be as fully invested as practicable to maximize its
yield. Therefore, dividends will accrue on newly- purchased shares only after
the Distributor accepts the purchase order at its address in Colorado, on a day
the New York Stock Exchange is open (a "regular business day"), under one of the
methods of purchasing shares described below. The purchase will be made at the
net asset value next determined after the Distributor accepts the purchase
order.
Each Trust's net asset value per share is determined twice each regular
business day, at 12:00 Noon and the close of The New York Stock Exchange that
day, which is normally 4:00 P.M., but may be earlier on some days (all
references to time in this Prospectus mean New York time), by dividing the net
assets of the Trust by the total number of its shares outstanding. Each Trust's
Board of Trustees has established procedures for valuing the Trust's assets,
using the amortized cost method as described in "Determination of Net Asset
Value Per Share" in the Statement of Additional Information.
Dealers and brokers who process orders for a Trust's shares on behalf of
their customers may charge a fee for this service. That fee can be avoided by
purchasing shares directly from a Trust. The Distributor, in its sole
discretion, may accept or reject any order for purchases of the Trust's shares.
The sale of shares will be suspended during any period when the determination of
net asset value is suspended, and may be suspended by the Board of Trustees
whenever the Board judges it in the best interest of a Trust to do so.
Purchases Through Automatic Purchase and Redemption Programs. Shares of each
Trust are available under Automatic Purchase and Redemption Programs
("Programs") of broker-dealers that have entered into agreements with the
Distributor for that purpose. Broker-dealers whose clients participate in such
Programs will invest the "free cash balances" of such client's Program account
in shares of the Trust selected as the primary Trust by the client for the
Program account. Such purchases will be made by the broker-dealer under the
procedures described in "Guaranteed Payment," below. The Program may have
minimum investment requirements established by the broker-dealer. The
description of the Program provided by the broker-dealer should be consulted for
details, and all questions about investing in, exchanging or redeeming shares of
a Trust through a Program should be directed to the broker-dealer.
Direct Purchases. An investor (who is not a Program participant, but instead a
"Direct Shareholder") may directly purchase shares of the Trusts through any
broker or dealer which has a sales agreement with the Distributor or the
Sub-Distributor. There are two ways to make a direct initial investment: either
(1) complete a Centennial Funds New Account Application and mail it with payment
to the Distributor at P.O. Box 5143, Denver, Colorado 80217 (if no dealer is
named in the Application, the Sub-Distributor will act as the dealer), or (2)
order the shares through your dealer or broker. Purchases made by Application
should have a check enclosed, or payment may be made by one of the alternative
means described below.
o Payment by Check. Orders for shares purchased by check in U.S. dollars
drawn on a U.S. bank will be effected on the regular business day on which the
check (and the purchase application, if the account is new) is accepted by the
Distributor. Dividends will begin to accrue on such shares the next regular
business day after the purchase order is accepted. For other checks, the shares
will not be purchased until the Distributor is able to convert the purchase
payment to Federal Funds, and dividends will begin to accrue on such shares on
the next regular business day.
o Payment by Federal Funds Wire. Shares of each Trust may be purchased by
Direct Shareholders by Federal Funds wire. The minimum investment by wire is
$2,500. You must first call the Distributor's Wire Department at 1-800-852-8457
to notify the Distributor of the wire and to receive further instructions.
The investor's bank must wire the Federal Funds to Citibank, N.A., ABA No.
0210-0008-9, for credit to Concentration Account No. 3737-5674 (Centennial Money
Market Trust or Centennial Tax Exempt Trust) or Concentration Account No.
3741-9796 (Centennial Government Trust), for further credit to the following
account numbers for the respective Trust: (i) Centennial Money Market Trust
Custodian Account No. 099920, (ii) Centennial Government Trust Custodian Account
No. 099975, or (iii) Centennial Tax Exempt Trust Custodian Account No. 099862.
The wire must state the investor's name. Shares will be purchased on the
regular business day on which the Federal Funds are received by Citibank, N.A.
(the "Custodian") prior to the close of The New York Stock Exchange (which is
normally 4:00 P.M. but may be earlier on some days) and the Distributor has
received and accepted the investor's notification of the wire order prior to the
close of The New York Stock Exchange. Those shares will be purchased at the net
asset value next determined after receipt of the Federal Funds and the order.
Dividends on newly purchased shares will begin to accrue on the purchase date if
the Federal Funds and order for the purchase are received and accepted by 12:00
Noon. Dividends will begin to accrue on the next regular business day if the
Federal Funds and purchase order are received and accepted between 12:00 Noon
and the close of The New York Stock Exchange. The investor must also send the
Distributor a completed Application when the purchase order is placed to
establish a new account.
o Guaranteed Payment. Broker-dealers with sales agreements with the
Distributor (including broker-dealers who have made special arrangements with
the Distributor for purchases for Program accounts) may place purchase orders
with the Distributor for purchases of a Trust's shares prior to 12:00 Noon on a
regular business day, and the order will be effected at the net asset value
determined at 12:00 Noon that day if the broker-dealer guarantees that payment
for such shares in Federal Funds will be received by the Trust's Custodian prior
to 2:00 P.M. on the same day. Dividends on such shares will begin to accrue on
the purchase date. If an order is received between 12:00 Noon and the close of
The New York Stock Exchange (which is normally 4:00 P.M., but may be earlier on
some days) with the broker-dealer's guarantee that payment for such shares in
Federal Funds will be received by the Trust's Custodian by the close of the
Exchange on the next regular business day, the order will be effected at the
close of the Exchange on the day the order is received, and dividends on such
shares will begin to accrue on the next regular business day the Federal Funds
are received by the required time. If the broker-dealer guarantees that the
Federal Funds payment will be received by the Trust's Custodian by 2:00 P.M. on
a regular business day on which an order is placed for shares after 12:00 Noon,
the order will be effected at the close of the Exchange that day and dividends
will begin to accrue on such shares on the purchase date.
o Automatic Investment Plans. Direct investors may purchase shares of a
Trust automatically. Automatic Investment Plans may be used to make regular
monthly investments ($25 minimum) from the investor's account at a bank or other
financial institution. To establish an Automatic Investment Plan from a bank
account, a check (minimum $25) for the initial purchase must accompany the
application. Shares purchased by Automatic Investment Plan payments are subject
to the redemption restrictions for recent purchases described in "How to Sell
Shares." The amount of the Automatic Investment Plan payment may be changed or
the automatic investments terminated at any time by writing to the Transfer
Agent. A reasonable period (approximately 15 days) is required after receipt of
such instructions to implement them. The Trusts reserve the right to amend,
suspend, or discontinue offering Automatic Investment Plans at any time without
prior notice.
Service Plan. Each Trust has adopted a Service Plan (the "Plan") under Rule
12b-1 of the Investment Company Act pursuant to which the Trust will reimburse
the Distributor for all or a portion of its costs incurred in connection with
the personal service and maintenance of accounts that hold Trust shares. The
Distributor will use all the fees received from the Trust to compensate dealers,
brokers, banks, or other financial institutions ("Recipients") each quarter for
providing personal service and maintenance of accounts that hold Trust shares.
The services to be provided by Recipients under each Plan include, but shall not
be limited to, the following: answering routine inquiries from the Recipient's
customers concerning the Trust, providing such customers with information on
their investment in Trust shares, assisting in the establishment and maintenance
of accounts or sub- accounts in the Trust, making the Trust's investment plans
and dividend payment options available, and providing such other information and
customer liaison services and the maintenance of accounts as the Distributor or
the Trust may reasonably request. Plan payments by the Trust to the Distributor
will be made quarterly in the amount of the lesser of: (i) 0.05% (0.20%
annually) of the net asset value of the Trust, computed as of the close of each
business day or (ii) the Distributor's actual distribution expenses for that
quarter of the type approved by the Board. Each Trust may make monthly payments
to the Distributor (and the Distributor to Recipients) in any month where Trust
assets held by a Recipient for itself or on behalf of its customers in that
month exceed $200 million. Any unreimbursed expenses incurred for any quarter by
the Distributor may not be recovered in later periods. The Plan has the effect
of increasing annual expenses of each Trust by up to 0.20% of average annual net
assets from what its expenses would otherwise be. In addition, the Manager may,
under the Plan, from time to time from its own resources (which may include the
profits derived from the advisory fee it receives from the Trusts), make
payments to Recipients for distribution, administrative and accounting services
performed by Recipients. For further details, see "Service Plan" in the
Statement of Additional Information.
How to Sell Shares
Program Participants. A Program participant may redeem shares in the Program by
writing checks as described below, or by contacting the dealer or broker. A
Program participant may also arrange for "Expedited Redemptions," as described
below, only through his or her dealer or broker.
Direct Shareholders. Those shareholders whose ownership of shares of the Trusts
is direct rather than through a Program, may redeem shares by either regular
redemption procedures or by expedited redemption procedures.
o Regular Redemption Procedure. To redeem some or all shares in an account
(whether or not represented by certificates) under the Trust's regular
redemption procedures, a Direct Shareholder must send the following to the
Transfer Agent for the Trust, Shareholder Services, Inc., P.O. Box 5143, Denver,
Colorado 80217 [send courier or express mail deliveries to 10200 E. Girard
Avenue, Building D, Denver, Colorado 80231]: (1) a written request for
redemption signed by all registered owners exactly as the shares are registered,
including fiduciary titles, if any, and specifying the account number and the
dollar amount or number of shares to be redeemed; (2) a guarantee of the
signatures of all registered owners on the redemption request or on the
endorsement on the share certificate or accompanying stock power, by a U.S.
bank, trust company, credit union or savings association, or a foreign bank
having a U.S. correspondent bank, or by a U.S. registered dealer or broker in
securities, municipal securities or government securities, or by a U.S. national
securities exchange, registered securities association or clearing agency; (3)
any share certificates issued for any of the shares to be redeemed; and (4) any
additional documents which may be required by the Transfer Agent for redemption
by corporations, partnerships or other organizations, executors, administrators,
trustees, custodians, guardians, or from Individual Retirement Accounts ("IRAs")
or other retirement plans, or if the redemption is requested by anyone other
than the shareholder(s) of record. A signature guarantee is not required for
redemptions of $50,000 or less, requested by and payable to all shareholders of
record, to be sent to the address of record for that account. Transfers of
shares are subject to similar requirements.
To avoid delay in redemptions or transfers, shareholders having questions
about these requirements should contact the Transfer Agent in writing or by
calling 1-800-525-9310 before submitting a request. From time to time the
Transfer Agent in its discretion may waive any or certain of the foregoing
requirements
in particular cases. Redemption or transfer requests will not be honored until
the Transfer Agent receives all required documents in proper form.
o Expedited Redemption Procedure. In addition to the regular redemption
procedure set forth above, Direct Shareholders whose shares are not represented
by certificates may arrange to have redemption proceeds of $2,500 or more wired
in Federal Funds to a designated commercial bank if the bank is a member of the
Federal Reserve wire system. To place a wire redemption request, call the
Transfer Agent at 1-800-852-8457. The account number of the designated financial
institution and the bank ABA number must be supplied to the Transfer Agent on
the Application or dealer settlement instructions establishing the account or
may be added to existing accounts or changed only by signature-guaranteed
instructions to the Transfer Agent from all shareholders of record. Such
redemption requests may be made by telephone, wire or written instructions to
the Transfer Agent. The wire for the redemption proceeds of shares redeemed
prior to 12:00 Noon normally will be transmitted by the Transfer Agent to the
shareholder's designated bank account on the day the shares are redeemed (or, if
that day is not a bank business day, on the next bank business day). Shares
redeemed prior to 12:00 Noon do not earn dividends on the redemption date. The
wire for the redemption proceeds of shares redeemed between 12:00 Noon and the
close of The New York Stock Exchange (which is normally 4:00 P.M., but may be
earlier on some days) normally will be transmitted by the Transfer Agent to the
shareholder's designated bank account on the next bank business day after the
redemption. Shares redeemed between 12:00 Noon and the close of the Exchange
earn dividends on the redemption date. See "Purchase, Redemption and Pricing of
Shares" in the Statement of Additional Information for further details.
o Checkwriting. Upon request, the Transfer Agent will provide any Direct
Shareholder of the Trusts or any Program participant whose shares are not
represented by certificates, with forms of drafts ("checks") payable through a
bank selected by the Trust (the "Bank"). Checks may be made payable to the order
of anyone in any amount not less than $250, and will be subject to the Bank's
rules and regulations governing checks. Program participants' checks will be
payable from the primary account designated by the Program participant. The
Transfer Agent will arrange for checks written by Direct Shareholders to be
honored by the Bank after obtaining a specimen signature card from the
shareholder(s). Program participants must arrange for Checkwriting through their
brokers or dealers. If a check is presented for an amount greater than the
account value, it will not be honored. Shareholders of joint accounts may elect
to have checks honored with a single signature. Checks issued for one Trust
account must not be used if the shareholder's account has been transferred to a
new account or if the account number or registration has changed. Shares
purchased by check or Automatic Investment Plan payments within the prior 10
days may not be redeemed by Checkwriting. A check that would require redemption
of some or all of the shares so purchased is subject to non-payment. When a
check is presented to the Bank for clearance, the Bank will request the Trust to
redeem a sufficient number of full and fractional shares in the shareholders'
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 cash 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 Checkwriting privileges at any time
without prior notice.
By choosing the Checkwriting privilege, whether you do so by signing the
Account Application or by completing a Checkwriting card, the individuals
signing (1) represent that they are either the registered owner(s) of the shares
of the Trust, or are an officer, general partner, trustee or other fiduciary or
agent, as applicable, duly authorized to act on behalf of such registered
owner(s); (2) authorize the Trust, its Transfer Agent and any bank through which
the Trust's drafts ("checks") are payable (the "Bank"), to pay all checks drawn
on the Trust account of such person(s) and to effect a redemption of sufficient
shares in that account to cover payment of such checks; (3) specifically
acknowledge(s) that if you choose to permit 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 an account even if that
account is registered in the names of more than one person or even if more than
one authorized signature appears on the Checkwriting card or the Application, as
applicable; and (4) understand(s) that the Checkwriting privilege may be
terminated or amended at any time by the Trust and/or the Bank and neither shall
incur any liability for such amendment or termination or for effecting
redemptions to pay checks reasonably believed to be genuine, or for returning or
not paying checks which have not been accepted for any reason.
o Telephone Redemptions. Direct Shareholders of the Trusts may redeem
their shares by telephone by calling the Transfer Agent at 1-800-852-8457. This
procedure for telephone redemptions is not available to Program participants.
Proceeds of telephone redemptions will be paid by check payable to the
shareholder(s) of record and sent to the address of record for the account.
Telephone redemptions are not available within 30 days of a change of the
address of record. Up to $50,000 may be redeemed by telephone, in any seven day
period. The Transfer Agent may record any calls. Telephone redemptions may not
be available if all lines are busy, and shareholders would have to use the
Trusts' regular redemption procedures described above. Telephone redemption
privileges are not available for newly-purchased (within the prior 10 days)
shares or for shares represented by certificates. Telephone redemption
privileges apply automatically to each Direct Shareholder and the dealer
representative of record unless the Transfer Agent receives cancellation
instructions from a shareholder of record. If an account has multiple owners,
the Transfer Agent may rely on the instructions of any one owner.
o Automatic Withdrawal Plan. Direct Shareholders of the Trusts can
authorize the Transfer Agent to redeem shares (minimum $50) automatically on a
monthly, quarterly, semi-annual or annual basis under an Automatic Withdrawal
Plan. Shares will be redeemed as of the close of The New York Stock Exchange
(which is normally 4:00 P.M., but may be earlier on some days) three days prior
to the date requested by the shareholder for receipt of the payment. The Trusts
cannot guarantee receipt of payment on the date requested and reserve the right
to amend, suspend or discontinue offering such Plan at any time without prior
notice. Required minimum distributions from OppenheimerFunds-sponsored
retirement plans may not be arranged on this basis. For further details, see the
"Automatic Withdrawal Plan Provisions" included as Exhibit C in the Statement of
Additional Information.
Distributions from Retirement Plans Holding Shares of Government Trust and Money
Market Trust. Requests for distributions from OppenheimerFunds-sponsored
Individual Retirement Accounts ("IRAs"), 403(b)(7) custodial plans, or pension
or profit-sharing plans of Direct Shareholders for which the Manager or its
affiliates act as sponsors should be addressed to "Bank of Boston c/o
Shareholder Services, Inc." at the address listed on the cover, and must: (i)
state the reason for distribution; (ii) state the owner's awareness of tax
penalties if the distribution is premature; and (iii) conform to the
requirements of the plan and the Trust's requirements for regular redemptions
discussed above. Participants (other than self-employed persons) in
OppenheimerFunds-sponsored pension or profit-sharing plans may not directly
request redemption of their accounts. The employer or plan administrator must
sign the request. Distributions from such plans are subject to additional
requirements under the Internal Revenue Code and certain documents (available
from the Transfer Agent) must be completed before the distribution may be made.
Distributions from retirement plans are subject to withholding requirements
under the Internal Revenue Code of 1986, as amended, 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
Trustee, the Trusts, the Manager, the 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 penalties assessed.
General Information on Redemptions. The redemption price will be the net asset
value per share of the applicable Trust next determined after the receipt by the
Transfer Agent of a request in proper form. Under certain unusual circumstances,
the Board of Trustees of a Trust may involuntarily redeem small accounts (valued
at less than $500). Should the Board elect to exercise this right, it may also
fix, in accordance with the Investment Company Act, the requirements for any
notice to be given to the shareholders in question (not less than 30 days), or
may set requirements for permission to allow the shareholder to increase the
investment so that the shares would not be involuntarily redeemed. The Board of
Trustees of a Trust may also involuntarily redeem shares in amounts sufficient
to reimburse the Trust or the Distributor for any loss due to cancellation of a
share purchase order. Under the Internal Revenue Code, the Trusts may be
required to impose "backup" withholding of Federal income tax at the rate of 31%
from any taxable dividends and distributions (including exchanges) the Trust may
make if the shareholder has not furnished the Trust with a certified taxpayer
identification number or has not complied with provisions of the Internal
Revenue Code relating to reporting dividends.
Payment for redeemed shares is made ordinarily in cash and forwarded within
seven days of the Transfer Agent's receipt of redemption instructions in proper
form, except under unusual circumstances as determined by the Securities and
Exchange Commission. For accounts registered in the name of a broker- dealer,
payment will be forwarded within three business days. The Transfer Agent may
delay forwarding a redemption check for recently purchased shares only until the
purchase check has cleared, which may take up to 10 or more days from the
purchase date. Such delay may be avoided if the shareholder arranges telephone
or written assurance satisfactory to the Transfer Agent from the bank on which
the purchase payment was drawn, or by purchasing shares by Federal Funds wire,
as described above. The Trust makes no charge for redemption. Dealers or brokers
may charge a fee for handling redemption transactions, but such fee can be
avoided by Direct Shareholders by requesting the redemption directly through the
Transfer Agent. Under certain circumstances, the proceeds of redemption of
shares of a Trust acquired by exchange of shares of Eligible Funds that were
purchased subject to a contingent deferred sales charge ("CDSC") may be subject
to the CDSC (see "Exchange Privilege" below).
Exchanges of Shares
Exchange Privilege. Shares of each of the Trusts held under Programs may be
exchanged 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 if available for sale in the shareholder's
state of residence only by instructions of the broker.
Shares of the Trusts may, under certain conditions, be exchanged by Direct
Shareholders for Class A shares of certain Oppenheimer funds. A list of the
Oppenheimer funds currently available for exchange is included in the Statement
of Additional Information. That list can change from time to time. (The funds
included on the list are collectively referred to as "Eligible
Funds"). There is an initial sales charge on the purchase of Class A shares of
each Eligible Fund except the Money Market Funds (as defined in the Statement of
Additional Information). Under certain circumstances described below, redemption
proceeds of Money Market Fund shares may be subject to a CDSC.
Shares of the Trusts and of the other Eligible Funds may be exchanged at
net asset value, if all of the following conditions are met: (1) shares of the
fund selected for exchange are available for sale in the shareholder's state of
residence; (2) the respective prospectuses of the funds whose shares are to be
exchanged and acquired offer the Exchange Privilege to the investor; (3)
newly-purchased shares (by initial or subsequent investment) are held in an
account for at least seven days prior to the exchange; and (4) the aggregate net
asset value of the shares surrendered for exchange into a new account is at
least equal to the minimum investment requirements of the fund whose shares are
to be acquired.
In addition to the conditions stated above, shares of Eligible Funds may
be exchanged for shares of any Money Market Fund; shares of any Money Market
Fund held by Direct Shareholders (including the Trusts) purchased without a
sales charge may be exchanged for shares of Eligible Funds offered with a sales
charge upon payment of the sales charge (or, if applicable, may be used to
purchase shares of Eligible Funds subject to a CDSC); and shares of a Trust
acquired by reinvestment of dividends and distributions from any Eligible Fund,
except Oppenheimer Cash Reserves, or from any unit investment trust for which
reinvestment arrangements have been made with the Distributor or Sub-Distributor
may be exchanged at net asset value for shares of any Eligible Fund. The
redemption proceeds of shares of a Trust acquired by exchange of Class A shares
of an Eligible Fund purchased subject to a CDSC, that are redeemed within 12
months of the end of the calendar month of the initial purchase of the exchanged
shares, (18 months for shares purchased prior to May 1, 1997), will be subject
to the CDSC as described in the prospectus of that other Eligible Fund. In
determining whether the CDSC is payable, shares of the Trust not subject to the
CDSC are redeemed first, including shares purchased by reinvestment of dividends
and capital gains distributions from any Eligible Fund or shares of the Trust
acquired by exchange of shares of Eligible Funds on which a front-end sales
charge was paid or credited, and then other shares are redeemed in the order of
purchase.
How to Exchange Shares. An exchange may be made by Direct Shareholders by
submitting an Exchange Authorization Form to the Transfer Agent, signed by all
registered owners. In addition, Direct Shareholders of the Trusts may exchange
shares of a Trust for shares of any Eligible Fund by telephone exchange
instructions to the Transfer Agent by a shareholder or the dealer representative
of record for an account. The Trusts may modify, suspend or discontinue this
exchange privilege at any time. Although the Trust will attempt to provide you
notice whenever reasonably able to do so, it may impose these changes at any
time. The Trusts reserve the right to reject written requests submitted in bulk
on behalf of more than one account. Exchange requests must be received by the
Transfer Agent by the close of The New York Stock Exchange on a regular business
day to be effected that day. The number of shares exchanged may be less than the
number requested if the number requested would include shares subject to a
restriction cited above or shares covered by a certificate that is not tendered
with such request. Only the shares available for exchange without restriction
will be exchanged.
Telephone Exchanges. Direct Shareholders may place a telephone exchange request
by calling the Transfer Agent at 1-800-852-8457. Telephone exchange calls may be
recorded by the Transfer Agent. Telephone exchanges are subject to the rules
described above. By exchanging shares by telephone, the shareholder is
acknowledging receipt of a prospectus of the fund to which the exchange is made
and that for full or partial exchanges, any special account features such as
Automatic Investment Plans, Automatic Withdrawal Plans and retirement plan
contributions will be switched to the new account unless the Transfer Agent is
otherwise instructed. Telephone exchange privileges automatically apply to each
Direct Shareholder of record and the dealer representative of record unless and
until the Transfer Agent receives written instructions from a shareholder of
record canceling such privileges. If an account has multiple owners, the
Transfer Agent may rely on the instructions of any one owner.
Telephone Instructions. Shares acquired by telephone exchange must be registered
exactly as the account from which the exchange was made. Certificated shares are
not eligible for telephone exchange. If all telephone exchange lines are busy
(which might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request telephone exchanges and
would have to submit written exchange requests. The Transfer Agent has adopted
procedures concerning telephone transactions including confirming that telephone
instructions are genuine by requiring callers to provide tax identification
number(s) and other account data or by using PINs, and by recording calls and
confirming such transactions in writing. If the Transfer Agent does not use
reasonable procedures, it may be liable for losses due to unauthorized
transactions, but otherwise neither it nor any Trust will be liable for losses
or expenses arising out of telephone instructions reasonably believed to be
genuine. The Transfer Agent reserves the right to require shareholders to
confirm, in writing, telephone transaction privileges for an account.
General Information on Exchanges. Shares to be exchanged are redeemed on the day
the Transfer Agent receives an exchange request in proper form (the "Redemption
Date"), as of the close of The New York Stock Exchange (which is normally 4:00
P.M., but may be earlier some days). 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 seven business days if it determines that it would be
disadvantaged by an immediate transfer of the redemption proceeds. Each Trust in
its discretion reserves the right to refuse any exchange request that will
disadvantage it.
The Eligible Funds have different investment objectives and policies. Each
of those funds imposes a sales charge on purchases of Class A shares except the
Money Market Funds. For complete information, including sales charges and
expenses, a prospectus of the fund into which the exchange is being made should
be read prior to an exchange. Dealers and brokers who process exchange orders on
behalf of their customers may charge for their services. Direct Shareholders may
avoid those charges by requesting the Trust directly to exchange shares. For
Federal tax purposes, an exchange is treated as a redemption and purchase of
shares.
Shareholder Transactions by Fax. Requests for certain account transactions may
be sent to the Transfer Agent by fax (telecopier). Please call 1-800-525-7048
for information about which transactions are included. Transaction requests
submitted by fax are subject to the same rules and restrictions as written and
telephone requests described in this Prospectus.
Retirement Plans
The Distributor has available for Direct Shareholders who purchase shares of
Government Trust and Money Market Trust: (i) individual retirement accounts
(IRAs), including Simplified Employee Pension Plans (SEP IRAs); (ii) prototype
pension and profit-sharing plans for corporations and self-employed individuals;
and (iii) Section 403(b)(7) custodial plans for employees of public educational
institutions and organizations of the type described in Section 501(c)(3) of the
Internal Revenue Code. The minimum initial IRA, SEP IRA, pension or
profit-sharing plan investment is normally $250. The minimum initial 403(b)(7)
plan investment is $25. For further details, including the administrative fees,
the appropriate retirement plan should be requested from the Distributor.
Retirement plans are not available to Direct Shareholders who purchase shares of
Tax Exempt Trust. The Trusts reserve the right to discontinue offering their
shares to such plans at any time without prior notice.
Dividends, Distributions and Taxes
This discussion relates solely to Federal tax laws and is not exhaustive. A
qualified tax advisor should be consulted. Dividends and distributions may be
subject to Federal, state and local taxation. Information about the possible
applicability of the Alternative Minimum Tax to Tax Exempt Trust's dividends and
distributions is contained in "Investment Objective and Policies -Private
Activity Municipal Securities" in the Statement of Additional Information of Tax
Exempt Trust. The Appendix to the Statement of Additional Information contains a
further discussion of tax matters affecting the Trusts and their distributions.
Dividends and Distributions. Each Trust intends to declare all of its net
income, as defined below, as dividends on each regular business day and to pay
dividends monthly. Dividends will be payable to shareholders as described above
in "How To Buy Shares." Dividends accumulated since the prior payment will be
reinvested in full and fractional shares of the respective Trust at net asset
value on the third Thursday of each calendar month. If a shareholder redeems all
shares at any time during a month, the redemption proceeds include all dividends
accrued up to the redemption date for shares redeemed prior to 12:00 Noon, and
include all dividends accrued through the redemption date for shares redeemed
between 12:00 Noon and the close of The New York Stock Exchange. Program
participants may receive cash payments by asking the broker to redeem shares.
All dividends and capital gains distributions for the accounts of Program
participants are automatically reinvested in additional shares of the Trust
selected. Dividends and distributions payable to Direct Shareholders of the
Trusts will also be automatically reinvested in shares of the respective Trust
at net asset value, on the third Thursday of each calendar month, unless the
shareholder asks the Transfer Agent in writing to pay dividends and
distributions in cash or to reinvest them in another Eligible Fund, as described
in "Dividend Reinvestment in Another Fund" in the Statement of Additional
Information. That notice must be received prior to the record date for a
dividend to be effective as to that dividend. Dividends, distributions and the
proceeds of redemptions of Trust shares represented by checks returned to the
Transfer Agent by the Postal Service as undeliverable will be reinvested in
shares of the respective Trust, as promptly as possible after the return of such
check to the Transfer Agent to enable the investor to earn a return on otherwise
idle funds.
Participants in an A.G. Edwards & Sons, Inc. Cash Convenience Account
Program (other than those whose account is an Individual Retirement Account)
holding shares of Tax Exempt Trust or Government Trust will receive account
statements five times a year, at the end of March, May, August, October and
December, if the only activity in their account during that period is the
automatic reinvestment of dividends.
Under the terms of a Program, a broker-dealer may pay out the value of
some or all of a Program participant's Trust shares prior to redemption of such
shares by the Trust. In such cases, the shareholder will be entitled to
dividends on such shares only up to and including the date of such payment.
Dividends on such shares accruing between the date of payment and the date such
shares are redeemed by the Trusts will be paid to the broker-dealer. Program
participants should discuss these arrangements with their broker-dealer.
A Trust's net investment income for dividend purposes consists of all
interest accrued on portfolio assets, less all expenses of the Trust for such
period. Distributions from net realized gains on securities, if any, will be
paid at least once each year, and may be made more frequently in compliance with
the Internal Revenue Code and the Investment Company Act. Long-term capital
gains, if any, will be identified separately when tax information is
distributed. No Trust will make any distributions from net realized securities
gains unless capital loss carry forwards, if any, have been used or have
expired. Receipt of tax-exempt income must be reported on the taxpayer's Federal
income tax return. To effect its policy of maintaining a net asset value of
$1.00 per
share, each Trust, under certain circumstances, may withhold dividends or make
distributions from capital or capital gains. The Statement of Additional
Information describes how dividends and distributions received by Direct
Shareholders of the Trusts may be reinvested in shares of any Eligible Fund at
net asset value.
Tax Status of Money Market Trust's and Government Trust's Dividends and
Distributions. Dividends paid by these Trusts derived from net investment income
or net short-term capital gains are taxable to shareholders as ordinary income,
whether received in cash or reinvested. If either Trust has net realized
long-term capital gains in a fiscal year, it may pay an annual "long-term
capital gains distribution," which will be so identified when paid and when tax
information is distributed. Long-term capital gains are taxable to shareholders
as long-term capital gains, whether received in cash or reinvested, regardless
of how long Trust shares have been held. Income from securities issued by the
U.S. Government may be exempt from income taxation by various states. The
Government Trust will advise shareholders of the percentage of its income earned
on federal obligations. Rules vary by state regarding the state taxability of
dividends paid by either Trust. You should consult your tax advisor to determine
proper tax treatment of dividends paid by the Trusts.
Tax Status of Tax Exempt Trust's Dividends and Distributions. This Trust intends
to qualify under the Internal Revenue Code during each fiscal year to pay
"exempt-interest dividends" to its shareholders and did so qualify during its
last fiscal year. Exempt-interest dividends which are derived from net
investment income earned by the Trust on Municipal Securities will be excludable
from gross income of shareholders for Federal income tax purposes. Net
investment income includes the allocation of amounts of income from the
Municipal Securities in the portfolio of the Trust which is excludable from
gross income for Federal individual income tax purposes, less expenses. Expenses
are accrued daily. This allocation will be made by the use of one designated
percentage applied uniformly to all income dividends made during the calendar
year. Such designation will normally be made following the end of each fiscal
year as to income dividends paid in the prior year. The percentage of income
designated as tax-exempt may substantially differ from the percentage of the
Trust's income that was tax-exempt for a given period. Although from time to
time a portion of the exempt-interest dividends paid by the Trust may be an item
of tax preference for shareholders subject to the alternative minimum tax, all
of the dividends (excluding distributions) paid by the Trust during the calendar
year ended December 31, 1996 were exempt from Federal income taxes. The net
amount of any income on Municipal Securities subject to the alternative minimum
tax will be identified when tax information is distributed by the Trust. The
Trust will report annually to shareholders the percentage of interest income it
received during the preceding year on Municipal Securities. Receipt of
tax-exempt income must be reported on the taxpayer's Federal income tax return.
Shareholders receiving Social Security benefits should be aware that
exempt-interest dividends are a factor in determining whether such benefits are
subject to Federal income tax.
A Trust shareholder treats a dividend as a receipt of ordinary income
(whether paid in cash or reinvested in additional shares) if derived from net
interest income earned by the Trust from one or more of: (i) certain taxable
temporary investments (such as certificates of deposit, commercial paper,
obligations of the U.S. government, its agencies or instrumentalities, and
repurchase agreements), (ii) income from securities loans, or (iii) an excess of
net short-term capital gains over net long-term capital losses. Additionally,
all or a portion of the Trust's exempt-interest dividends may be a component of
the "adjusted current earnings" preference item under the Federal corporate
alternative minimum tax.
Under the Internal Revenue Code, interest on loans to purchase shares of
the Trust may not be deducted for Federal tax purposes. In addition, under rules
used by the Internal Revenue Service for determining when borrowed funds are
deemed used for the purpose of purchasing or carrying particular assets, the
purchase of shares of the Trust may be considered to have been made with
borrowed funds even though the borrowed funds are not directly traceable to the
purchase of shares. Furthermore, under Section 147(a) of the Internal Revenue
Code, persons who are "substantial users" (or persons related thereto) of
facilities financed by industrial development bonds or Private Activity
Municipal Securities should refer to "Private Activity Municipal Securities" in
the Statement of Additional Information of Tax Exempt Trust and should consult
their own tax advisors before purchasing shares. No investigation as to the
users of the facilities financed by such bonds is made by the Tax Exempt Trust.
Tax Status of the Trusts. If a 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 dividends and distributions. Each Trust
qualified during its last fiscal year and intends to qualify in the current and
future fiscal years, while reserving the right not to qualify. However, the
Internal Revenue Code contains a number of complex tests relating to such
qualification that a Trust might not meet in any particular year. If a Trust
does not qualify, it would be treated for Federal tax purposes as an ordinary
corporation and receive no tax deduction for payments made to shareholders. Tax
Exempt Trust would then be unable to pay "exempt-interest dividends" as
discussed before. Dividends paid by any Trust will not be eligible for the
dividends-received deduction for corporations. For information as to "backup"
withholding on taxable dividends, see "How to Sell Shares," above.
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No dealer, broker, salesperson or any other person has been authorized to give
any information or to make any representations other than those contained in
this Prospectus or Statement of Additional Information, and if given or made
such information and representations must not be relied upon as having been
authorized by the respective Trust, the Manager, the Distributor or any
affiliate thereof. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities offered hereby in any
state to any person to whom it is unlawful to make such offer in such state.
Investment Advisor and Distributor
Centennial Asset Management Corporation
6803 South Tucson Way
Englewood, Colorado 80112
Sub-Distributor
OppenheimerFunds Distributor, Inc.
PO Box 5254
Denver, Colorado 80217
Transfer Agent and Shareholder Servicing Agent
Shareholder Services, Inc.
P.O. Box 5143
Denver, Colorado 80217
1-800-525-9310 Centennial
Tax Exempt Trust
Custodian of Portfolio Securities
Citibank, N.A.
399 Park Avenue Prospectus
New York, New York 10043
Dated October 1, 1997
Independent Auditors
Deloitte & Touche LLP
555 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Myer, Swanson, Adams & Wolf, P.C.
1600 Broadway
Denver, Colorado 80202
<PAGE>
Centennial Tax Exempt Trust
6803 South Tucson Way, Englewood, Colorado 80112
1-800-525-9310
Statement of Additional Information dated October 1, 1997
This Statement of Additional Information is not a Prospectus. This
document contains additional information about the Trust and supplements
information in the Prospectus dated October 1, 1997. 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 80217-5143
or by calling the Transfer Agent at the toll-free number shown above.
Contents Page
Investment Objective and Policies.............................................
Other Investment Restrictions.................................................
Appendix
Trustees and Officers.........................................................
Investment Management Services................................................
Service Plan..................................................................
Purchase, Redemption and Pricing of Shares....................................
Exchange of Shares ...........................................................
Yield Information.............................................................
Additional Information........................................................
Financial Information About the Trust
Independent Auditors' Report..................................................
Financial Statements..........................................................
Exhibits
Exhibit A: Description of Securities Ratings................................
Exhibit B: Industry Classifications.........................................
Exhibit C: Automatic Withdrawal Plan Provisions.............................
Exhibit D: Tax Equivalent Yield Table.......................................
<PAGE>
Investment Objective and Policies
Investment Policies and Strategies. The investment objective and policies of the
Trust are described in the Prospectus. Set forth below is supplemental
information about those policies. Certain capitalized terms used in this
Statement of Additional Information are defined in the Prospectus.
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, should 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. To a limited degree, the Trust may engage
in short-term trading to attempt to take advantage of short-term market
variations, or may dispose of a portfolio security prior to its maturity if, on
the basis of a revised credit evaluation of the issuer or other considerations,
the Trust believes such disposition advisable or needs to generate cash to
satisfy redemptions. In such cases, the Trust may realize a capital gain or
loss.
There are, or course, variations in Municipal Securities, both within a
particular classification and between classifications, depending on numerous
factors. The yields of Municipal Securities depend on, among other things,
general money market conditions, general conditions of the Municipal Securities
market, the size of a particular offering, the maturity of the obligation and
rating of the issue. The market value of Municipal Securities will vary as a
result of changing evaluations of the ability of their issuers to meet interest
and principal payments, as well as changes in the interest rates payable on new
issues of Municipal Securities.
Municipal Bonds. The principal classifications of long-term Municipal Bonds are
"general obligation," "revenue" and "industrial development" bonds.
o General Obligation Bonds. Issuers of general obligation bonds include
states, counties, cities, towns, and regional districts. The proceeds of these
obligations are used to fund a wide range of public projects, including
construction or improvement of schools, highways and roads, and water and sewer
systems. The basic security behind general obligation bonds is the issuer's
pledge of its full faith and credit and taxing power for the payment of
principal and interest. The taxes that can be levied for the payment of debt
service may be limited or unlimited as to the rate or amount of special
assessments.
o Revenue Bonds. The principal security for a revenue bond is generally
the net revenues derived from a particular facility, group of facilities, or, in
some cases, the proceeds of a special excise or other specific revenue source.
Revenue bonds are issued to finance a wide variety of capital projects
including: electric, gas, water and sewer systems; highways, bridges, and
tunnels; port and airport facilities; colleges and universities; and hospitals.
Although the principal security
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behind these bonds may vary, many provide additional security in the form of a
debt service reserve fund whose money may be used to make principal and interest
payments on the issuer's obligations. Housing finance authorities have a wide
range of security, including partially or fully insured mortgages,
rent-subsidized and/or collateralized mortgages, and/or the net revenues from
housing or other public projects. Some authorities provide further security in
the form of a state's ability (without obligation) to make up deficiencies in
the debt service reserve fund.
o Industrial Development Bonds. Industrial development bonds, which are
considered municipal bonds if the interest paid is exempt from federal income
tax, are issued by or on behalf of public authorities to raise money to finance
various privately operated facilities for business and manufacturing, housing,
sports, and pollution control. These bonds are also used to finance public
facilities such as airports, mass transit systems, ports, and parking. The
payment of the principal and interest on such bonds is dependent solely on the
ability of the facility's user to meet its financial obligations and the pledge,
if any, of real and personal property so financed as security for such payment.
Municipal Notes. Municipal Securities having a maturity when issued of less than
one year are generally known as municipal notes. Municipal notes generally are
used to provide for short-term working capital needs and include:
o Tax Anticipation Notes. Tax anticipation notes are issued to finance
working capital needs of municipalities. Generally, they are issued in
anticipation of various seasonal tax revenue, such as income, sales, use or
business taxes, and are payable from these specific future taxes.
o Revenue Anticipation Notes. Revenue anticipation notes are issued in
expectation of receipt of other types of revenue, such as federal revenues
available under Federal revenue sharing programs.
o Bond Anticipation Notes. Bond anticipation notes are issued to provide
interim financing until long-term financing can be arranged. In most cases, the
long-term bonds then provide the money for the repayment of the notes.
o Construction Loan Notes. Construction loan notes are sold to provide
construction financing. After successful completion and acceptance, many
projects receive permanent financing through the Federal Housing Administration.
o Tax-Exempt Commercial Paper. Tax-exempt commercial paper is a short-term
obligation issued by state and local governments or their agencies to finance
seasonal working capital needs or as short-term financing in anticipation of
longer-term financing.
Participation Interests. The Trust may purchase participation interests in all
or part of loans to municipal borrowers from financial institutions such as
banks, insurance companies and savings and loan associations. Such institutions
frequently provide, or secure from another financial institution, letters of
credit or guarantees to secure the interests, and give the buyer the right to
demand payment of the principal amount of the participation interests plus
accrued interest on short notice (normally
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within seven days). In the event of a failure by the issuer to pay scheduled
interest or principal payments on the underlying municipal security, the Trust
could experience a decline in its net asset value. In the event of a failure by
the financial institution to perform its obligations in connection with the
participation interest, the Trust might incur certain costs and delays in
realizing payment or may suffer a loss of principal and/or interest. The Trust
may buy participation interests in Municipal Securities having maturities of
more than one year if the participation interests include the right to demand
payment from the financial institution (which may charge fees in connection with
their repurchase commitments) consistent with the Trust's other investment
policies and restrictions.
Municipal Lease Obligations. From time to time the Trust may invest more than 5%
of its net assets in municipal lease obligations, generally through the
acquisition of certificates of participation, that the Manager has determined to
be liquid under guidelines set by the Board of Directors. Those guidelines
require the Manager to evaluate: (1) the frequency of trades and price
quotations for such securities; (2) the number of dealers or other potential
buyers willing to purchase or sell such securities; (3) the availability of
market-makers; and (4) the nature of the trades for such securities. The Manager
will also evaluate the likelihood of a continuing market for such securities
throughout the time they are held by the Trust and the credit quality of the
instrument. Municipal leases may take the form of a lease or an installment
purchase contract issued by a state or local government authority to obtain
funds to acquire a wide variety of equipment and facilities. Although lease
obligations do not constitute general obligations of the municipality for which
the municipality's taxing power is pledged, a lease obligation is ordinarily
backed by the municipality's covenant to budget for, appropriate and make the
payments due under the lease obligation. However, certain lease obligations
contain "non-appropriation" clauses which provide that the municipality has no
obligation to make lease or installment purchase payments in future years unless
money is appropriated for such purpose on a yearly basis. Projects financed with
certificates of participation generally are not subject to state constitutional
debt limitations or other statutory requirements that may be applicable to
Municipal Securities. Payments by the public entity on the obligation underlying
the certificates are derived from available revenue sources; such revenue may be
diverted to the funding of other municipal service projects. Payments of
interest and/or principal with respect to the certificates are not guaranteed
and do not constitute an obligation of the municipality.
Floating Rate/Variable Rate Obligations. Floating rate put bonds and variable
rate demand notes are tax-exempt obligations which may have a stated maturity in
excess of one year, but may include features that permit the holder to recover
the principal amount of the underlying security at specified intervals not
exceeding one year on not more than thirty days' notice at any time. The issuer
of such notes normally has a corresponding right, after a given period, to
prepay in its discretion the outstanding principal amount of the note plus
accrued interest upon a specified number of days notice to the holder. The
interest rate on a floating rate demand note is based on a stated prevailing
market rate and is adjusted automatically each time such rate is adjusted. The
interest rate on a variable rate demand note is also based on a stated
prevailing market rate but is adjusted automatically at specified intervals of
no more than one year. Generally, the changes in the interest rate on such
securities reduce the fluctuation in their market value. 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
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requirements of rule 2a-7. Floating rate or variable rate obligations which do
not provide for recovery of principal and interest within seven days may be
subject to the limitations applicable to illiquid securities described in
"Investment Objective and Policies - Illiquid and Restricted Securities" in the
Prospectus.
Puts and Standby Commitments. When the Trust buys Municipal Securities, it may
obtain a standby commitment from the seller to repurchase the securities that
entitles the Trust to achieve same day settlement from the repurchaser and to
receive an exercise price equal to the amortized cost of the underlying security
plus accrued interest, if any, at the time of exercise. A put purchased in
conjunction with a Municipal Security enables the Trust to sell the underlying
security within a specified period of time at a fixed exercise price. The Trust
may pay for a standby commitment or put either separately in cash or by paying a
higher price for the securities acquired subject to the standby commitment or
put. The Trust will enter into these transactions only with banks and dealers
which, in the Manager's opinion, present minimal credit risks. The Trust's
purchases of puts are subject to the provisions of Rule 2a-7 under the
Investment Company Act because the Trust uses the amortized cost method to value
its portfolio securities. An unconditional put or guarantee with respect to a
security will not be deemed to be issued by the institution providing the
guarantee or put, provided that the value of all securities held by the Trust
and issued or guaranteed by the issuer providing the guarantee or put shall not
exceed 10% of the Trust's total assets.
The Trust's ability to exercise a put or standby commitment will depend on
the ability of the bank or dealer to pay for the securities if the put or
standby commitment is exercised. If the bank or dealer should default on its
obligation, the Trust might not be able to recover all or a portion of any loss
sustained from having to sell the security elsewhere. Puts and standby
commitments are not transferrable by the Trust, and therefore terminate if the
Trust sells the underlying security to a third party. The Trust intends to enter
into these arrangements to facilitate portfolio liquidity, although such
arrangements may enable the Trust to sell a security at a pre-arranged price
which may be higher than the prevailing market price at the time the put or
standby commitment is exercised. Any consideration paid by the Trust for the put
or standby commitment (which increases the cost of the security and reduces the
yield otherwise available from the security) will be reflected on the Trust's
books as unrealized depreciation while the put or standby commitment is held,
and a realized gain or loss when the put or commitment is exercised or expires.
When-Issued and Delayed Delivery Transactions. As stated in the Prospectus, the
Trust may invest in Municipal Securities on a "when-issued" or "delayed
delivery" basis. Payment for and delivery of the securities shall not exceed 120
days from the date the offer is accepted. The purchase price and yield are fixed
at the time the buyer enters into the commitment. During the period between the
time of commitment and settlement, no payment is made by the Trust to the issuer
and no interest accrues to the Trust from this investment. However, the Trust
intends to be as fully invested as possible and will not invest in when-issued
securities if its income or net asset value will be materially adversely
affected. At the time the Trust makes the commitment to purchase a Municipal
Security on a when-issued basis, it will record the transaction on its books and
reflect the value of the security in determining its net asset value. It will
also segregate cash or other liquid high quality Municipal Securities equal in
value to the commitment for the when-issued securities. While when-issued
securities may be sold prior to settlement date, the Trust intends to acquire
the
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securities upon settlement unless a prior sale appears desirable for investment
reasons. There is a risk that the yield available in the market when delivery
occurs may be higher than the yield on the security acquired.
Private Activity Municipal Securities. The Tax Reform Act of 1986 (the "Tax
Reform Act") reorganized, as well as amended, the rules governing tax exemption
for interest on Municipal Securities. The Tax Reform Act generally did not
change the tax treatment of bonds issued in order to finance governmental
operations. Thus, interest on obligations issued by or on behalf of a state or
local government, the proceeds of which are used to finance the operations of
such governments (e.g., general obligation bonds) continues to be tax-exempt.
However, the Tax Reform Act further limited the use of tax-exempt bonds for
non-governmental (private) purposes. More stringent restrictions were placed on
the use of proceeds of such bonds. Interest on certain private activity bonds
(other than those specified as "qualified" tax-exempt private activity bonds,
e.g., exempt facility bonds including certain industrial development bonds,
qualified mortgage bonds, qualified Section 501(c)(3) bonds, qualified student
loan bonds, etc.) is taxable under the revised rules.
Interest on certain private activity bonds issued after August 7, 1986,
which continues to be tax-exempt will be treated as a tax preference item
subject to the alternative minimum tax (discussed below) to which certain
taxpayers are subject. Further, a private activity bond which would otherwise be
a qualified tax-exempt private activity bond will not, under Internal Revenue
Code Section 147(a), be a qualified bond for any period during which it is held
by a person who is a "substantial user" of the facilities or by a "related
person" of such a substantial user. This "substantial user" provision is
applicable primarily to exempt facility bonds, including industrial development
bonds. The Trust may not be an appropriate investment for entities which are
"substantial users" (or persons related thereto) of such exempt facilities, and
such persons should consult their own tax advisors before purchasing shares. A
"substantial user" of such facilities is defined generally as a "non-exempt
person who regularly uses part of a facility" financed from the proceeds of
exempt facility bonds. Generally, an individual will not be a "related person"
under the Internal Revenue Code unless such investor or the investor's immediate
family (spouse, brothers, sisters and immediate descendants) own directly or
indirectly in the aggregate more than 50% in value of the equity of a
corporation or partnership which is a "substantial user" of a facility financed
from the proceeds of exempt facility bonds. In addition, limitations as to the
amount of private activity bonds which each state may issue were revised
downward by the Tax Reform Act, which will reduce the supply of such bonds. The
value of the Trust's portfolio could be affected if there is a reduction in the
availability of such bonds. That value may also be affected by a 1988 U.S.
Supreme Court decision upholding the constitutionality of the imposition of a
Federal tax on the interest earned on Municipal Securities issued in bearer
form.
A Municipal Security is treated as a taxable private activity bond under a
test for: (a) a trade or business use and security interest, or (b) a private
loan restriction. Under the trade or business use and security interest test, an
obligation is a private activity bond if: (i) more than 10% of bond proceeds are
used for private business purposes and (ii) 10% or more of the payment of
principal or interest on the issue is directly or indirectly derived from such
private use or is secured by the privately used property or the payments related
to the use of the property. For certain types of uses, a 5% threshold is
substituted for this 10% threshold. (The term "private business use" means any
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<PAGE>
direct or indirect use in a trade or business carried on by an individual or
entity other than a governmental unit.) Under the private loan restriction, the
amount of bond proceeds which may be used to make private loans is limited to
the lesser of 5% or $5.0 million of the proceeds. Thus, certain issues of
Municipal Securities could lose their tax-exempt status retroactively if the
issuer fails to meet certain requirements as to the expenditure of the proceeds
of that issue or use of the bond-financed facility. The Trust makes no
independent investigation of the users of such bonds or their use of proceeds.
Should the Trust hold a bond that loses its tax-exempt status retroactively,
there might be an adjustment to the tax-exempt income previously paid to
shareholders.
The Federal alternative minimum tax is designed to ensure that all
taxpayers pay some tax, even if their regular tax is zero. This is accomplished
in part by including in taxable income certain tax preference items in arriving
at alternative minimum taxable income. The Tax Reform Act made tax-exempt
interest from certain private activity bonds a tax preference item for purposes
of the alternative minimum tax on individuals and corporations. Any
exempt-interest dividend paid by a regulated investment company will be treated
as interest on a specific private activity bond to the extent of its
proportionate share of the interest on such bonds received by the regulated
investment company. In addition, corporate taxpayers subject to the alternative
minimum tax may, under some circumstances, have to include exempt-interest
dividends in calculating their alternative minimum taxable income in situations
where the "adjusted current earnings" of the corporation exceeds its alternative
minimum taxable income. The Trust may hold Municipal Securities the interest on
which (and thus a proportionate share of the exempt-interest dividends paid by
the Trust) will be subject to the Federal alternative minimum tax on individuals
and corporations. The Trust anticipates that under normal circumstances it will
not purchase any such securities in an amount greater than 20% of its total
assets.
Ratings of Securities. The Prospectus describes "Eligible Securities" in which
the Trust may invest and indicates that if a security's rating is downgraded,
the Manager and/or the Board may have to reassess the security's credit risks.
If a security has ceased to be a First Tier Security, the Manager will promptly
reassess whether the security continues to present "minimal credit risks." 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 risks and whether it is in the best
interests of the Trust to dispose of it. 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 must determine whether it would be in the best interests of the
Trust to dispose of the security. In each of the foregoing instances, Board
action is not required if the Trust disposes of the security within five days of
the Manager learning of the downgrade, in which event the Manager will provide
the Board with subsequent notice of such downgrade. The Rating Organizations
currently designated as such by the Securities and Exchange Commission ("SEC")
are Standard & Poor's Corporation, Moody's Investors Service, Inc., Fitch
Investors Services, Inc., Duff and Phelps, Inc., IBCA Limited and its affiliate,
IBCA, Inc., and Thomson BankWatch, Inc. A description of the ratings categories
of those Rating Organizations is contained in Exhibit A.
Repurchase Agreements. In a repurchase transaction, the Trust acquires a
security from, and simultaneously resells it to, an approved vendor (a U.S.
commercial bank or the U.S. branch of a
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foreign bank having total domestic assets of at least $1 billion or a
broker-dealer with a net capital of at least $50 million and which has been
designated a primary dealer in government securities). 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. 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. Repurchase
agreements are considered "loans" under the Investment Company Act of 1940, as
amended (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 value of the collateral must equal or
exceed the repurchase price to fully collateralize the repayment obligation.
Additionally, the Manager will impose creditworthiness requirements to confirm
that the vendor is financially sound and will continuously monitor the
collateral's value.
Diversification. For purposes of diversification under the Investment Company
Act, and the Trust's investment restrictions, the identification of the issuer
of a Municipal Bond or Note depends on the terms and conditions of the security.
When the assets and revenues of an agency, authority, instrumentality or other
political subdivision are separate from those of the government creating the
subdivision and the security is backed only by the assets and revenues of the
subdivision, such subdivision would be deemed to be the sole issuer. Similarly,
in the case of an industrial development bond, if that bond is backed only by
the assets and revenues of the nongovernmental user, then such nongovernmental
user would be deemed to be the sole issuer. If, however, in either case, the
creating government or some other entity guarantees a security, such a guarantee
would be considered a separate security and is to be treated as an issue of such
government or other entity.
Other Investment Restrictions
The Trust's significant investment restrictions are set forth in the Prospectus.
The following investment restrictions are also fundamental investment policies
of the Trust and, together with the fundamental policies and restrictions
described in the Prospectus, cannot be changed without the vote of a majority of
the Trust's outstanding shares. Under the Investment Company Act, such a
majority vote is defined as the vote of the holders of the lesser of: (i) 67% or
more of the shares present or represented by proxy at a shareholder's meeting,
if the holders of more than 50% of the outstanding shares are present or
represented by proxy, or (ii) more than 50% of the outstanding shares. Under
these additional restrictions, the Trust cannot:
o invest in commodities or commodity contracts or invest in interests in
oil, gas or other mineral exploration or development programs;
o invest in real estate; however the Trust may purchase Municipal Bonds
or Notes secured by interests in real estate;
o make short sales of securities or purchase securities on margin,
except for short-term credits necessary for the clearance of purchases and sales
of portfolio securities;
o invest in or hold securities of any issuer if those officers and
trustees or directors of the Trust or its advisor who beneficially own
individually more than 0.5% of the securities of such issuer
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together own more than 5% of the securities of such issuer;
o underwrite securities issued by other persons except to the extent
that, in connection with the disposition of its portfolio investments, it may be
deemed to be an underwriter for purposes of the Securities Act of 1933; or
o invest in securities of other investment companies except as they may
be acquired as part of a merger, consolidation or acquisition of assets.
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, and the Trust need not sell securities
to meet the percentage limits if the value of the investment increased in
proportion to the size of the Trust. For purposes of the Trust's policy not to
concentrate in securities of issuers as described in the investment restrictions
listed in the Prospectus, the Trust has adopted the industry classifications set
forth in Exhibit B to this Statement of Additional Information. This is not a
fundamental policy.
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APPENDIX
This Appendix is part of the Statement of Additional Information of Centennial
Money Market Trust ("Money Market Trust"), Centennial Tax Exempt Trust ("Tax
Exempt Trust") and Centennial Government Trust ("Government Trust"), each of
which is referred to in this Appendix individually as a "Trust" and collectively
are referred to as the "Trusts." Unless otherwise indicated, the information in
this Appendix applies to each Trust.
Trustees and Officers
The Trustees and officers of the Trusts and their principal business
affiliations and occupations during the past five years are listed below. Sam
Freedman became a Trustee on June 27, 1996. All Trustees are trustees of each of
the Trusts. The Trustees are also trustees, directors, or managing general
partners of Centennial America Fund, L.P., Centennial California Tax Exempt
Trust, Centennial New York Tax Exempt Trust, Daily Cash Accumulation Fund, Inc.,
Oppenheimer Cash Reserves, Oppenheimer Champion Income Fund, Oppenheimer Equity
Income Fund, Oppenheimer High Yield Fund, Oppenheimer Integrity Funds,
Oppenheimer International Bond Fund, Oppenheimer Limited-Term Government Fund,
Oppenheimer Main Street Funds, Inc., Oppenheimer Municipal Fund, Oppenheimer
Real Asset Fund, Oppenheimer Strategic Income Fund, Oppenheimer Total Return
Fund, Inc., Oppenheimer Variable Account Funds, Panorama Series Fund, Inc. and
The New York Tax Exempt Income Fund, Inc. (all of the foregoing funds are
collectively referred to as the "Denver Oppenheimer funds") except for Ms.
Macaskill, who is a Trustee, Director or Managing Partner of all the
Denver-based Oppenheimer funds except Oppenheimer Integrity Funds, Oppenheimer
Strategic Income Fund, Oppenheimer Variable Account Funds and Panorama Series
Fund Inc. Mr. Fossel is not a trustee of Centennial New York Tax Exempt Trust
and he is not a Managing General Partner of Centennial America Fund, L.P. Ms.
Macaskill is President and Mr. Swain is Chairman and Chief Executive Officer of
the Denver Oppenheimer funds. All of the officers except Mr. Carbuto, Ms. Wolf,
Mr. Zimmer and Ms. Warmack hold similar positions with each of the Denver
Oppenheimer funds. As of September 8, 1997, the Trustees and officers of the
Trust in the aggregate owned less than 1% of the outstanding shares of any
Trust. This does not reflect ownership of shares held of record by an employee
benefit plan for employees of OppenheimerFunds, Inc., the parent of the Manager
(for which two of the officers listed below, Ms. Macaskill and Mr. Donohue, are
trustees) other than the shares beneficially owned under that plan by the
officers of the funds listed above.
ROBERT G. AVIS, Trustee*; Age 66
One North Jefferson Avenue, St. Louis, Missouri 63103
Vice Chairman of A.G. Edwards & Sons, Inc. (a broker-dealer) and A.G. Edwards,
Inc. (its parent holding company); Chairman of A.G.E. Asset Management and A.G.
Edwards Trust Company (its affiliated investment advisor and trust company,
respectively).
WILLIAM A. BAKER, Trustee; Age 82
197 Desert Lakes Drive, Palm Springs, California 92264
Management Consultant.
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CHARLES CONRAD, JR., Trustee; Age 67
1501 Quail Street, Newport Beach, California 92660
Chairman and Chief Executive Officer of Universal Space Lines, Inc. (A space
services management company); formerly, Vice President of McDonnell Douglas
Space Systems Co. and associated with National Aeronautics and Space
Administration.
JON S. FOSSEL, Trustee; Age 55
Box 44 Mead Street, Waccabuc, New York 10597
Member of the Board of Governors of the Investment Company Institute (a national
trade association of investment companies), Chairman of the Investment Company
Institute Education Foundation; Formerly Chairman and a director of
OppenheimerFunds, Inc. ("OFI"), the immediate parent of Centennial Asset
Management Corporation ("Manager"); formerly President and a director of
Oppenheimer Acquisition Corp.("OAC"), OFI's parent holding company; formerly a
director of Shareholder Services, Inc. ("SSI") and Shareholder Financial
Services, Inc. ("SFSI"), transfer agent subsidiaries of OFI.
SAM FREEDMAN, Trustee; Age 56
4975 Lakeshore Drive, Littleton, Colorado 80123
Formerly Chairman and Chief Executive Officer of OppenheimerFunds Services (a
transfer agent); Formerly Chairman, Chief Executive Officer and a director of
SSI; Formerly Chairman, Chief Executive Officer and director of SFSI; Vice
President and a director of OAC and a director of OFI.
RAYMOND J. KALINOWSKI, Trustee; Age 68
44 Portland Drive, St. Louis, Missouri 63131
Director of Wave Technologies International, Inc.(a computer products training
company), formerly Vice Chairman and a director of A.G. Edwards, Inc., parent
holding company of A.G. Edwards & Sons, Inc. (a broker-dealer), of which he was
a Senior Vice President.
C. HOWARD KAST, Trustee; Age 75
2552 E. Alameda, Denver, Colorado 80209
Formerly Managing Partner of Deloitte, Haskins & Sells (an accounting firm).
ROBERT M. KIRCHNER, Trustee; Age 75
7500 East Arapahoe Road, Englewood, Colorado 80112
President of The Kirchner Company (management consultants).
BRIDGET A. MACASKILL, President and Trustee*; Age 49
Two World Trade Center, New York, New York 10048-0203
President, Chief Executive Officer and a director of OFI and HarbourView Asset
Management Corporation ("HarbourView"), a subsidiary of OFI; Chairman and a
director of SSI and SFSI; President and a director of OAC and Oppenheimer
Partnership Holdings Inc., a holding company subsidiary of OFI; a director of
Oppenheimer Real Asset Management, Inc. ("Real Asset"); formerly an Executive
Vice President of OFI.
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NED M. STEEL, Trustee; Age 82
3416 South Race Street, Englewood, Colorado 80110
Chartered Property and Casualty Underwriter; a director of Visiting Nurse
Corporation of Colorado; formerly Senior Vice President and a director of the
Van Gilder Insurance Corp. (insurance brokers).
JAMES C. SWAIN, Chairman, Chief Executive Officer and Trustee*; Age 63
6803 South Tucson Way, Englewood, Colorado 80112
Vice Chairman of OFI; formerly President and a director of the Manager, and
formerly Chairman of the Board of SSI.
MICHAEL A. CARBUTO, Vice President and Portfolio Manager of Tax Exempt Trust;
Age 42
Two World Trade Center, New York, New York 10048-0203
Vice President of the Manager and OFI; an officer of other Oppenheimer funds.
DOROTHY WARMACK, Vice President and Portfolio Manager of Money Market Trust and
Government Trust; Age 61
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager and OFI; an officer of other Oppenheimer funds.
CAROL E. WOLF, Vice President and Portfolio Manager of Money Market Trust and
Government Trust; Age 46
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager and OFI; an officer of other Oppenheimer funds.
ARTHUR J. ZIMMER, Vice President and Portfolio Manager of Money Market Trust and
Government Trust; Age 51
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager and OFI; an officer of other Oppenheimer funds.
ANDREW J. DONOHUE, Vice President and Secretary; Age 47
Two World Trade Center, New York, New York 10048-0203
Executive Vice President, General Counsel and a director of OFI and
OppenheimerFunds Distributor, Inc. ("OFDI") Harbour View, SSI, SFSI, Oppenheimer
Partnership Holdings Inc. and MultiSource Services, Inc. (a broker-dealer);
President and a director of the Manager; President and a director of Real Asset;
Secretary and General Counsel of OAC; an officer of other Oppenheimer funds.
GEORGE C. BOWEN, Vice President, Treasurer and Assistant Secretary; Age 61
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President and Treasurer of OFI; Vice President and Treasurer of OFDI
and HarbourView; Senior Vice President, Treasurer Assistant Secretary and a
director of the Manager; President, Treasurer and a director of Centennial
Capital Corporation; Senior Vice President, Treasurer and Secretary of SSI; Vice
President, Treasurer and Secretary of SFSI; Treasurer of OAC; Treasurer of
Oppenheimer Partnership Holdings, Inc.; Vice President and Treasurer of Real
Asset;
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Chief Executive Officer, Treasurer and a director of MultiSource Services, Inc.;
an officer of other Oppenheimer funds.
ROBERT G. ZACK, Assistant Secretary; Age 49
Two World Trade Center, New York, New York 10048-0203
Senior Vice President and Associate General Counsel of OFI; Assistant Secretary
of SSI and SFSI; an officer of other Oppenheimer funds.
ROBERT J. BISHOP, Assistant Treasurer; Age 38
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the OFI/Mutual Fund Accounting; an officer of other
Oppenheimer funds; formerly a Fund Controller for OFI.
SCOTT T. FARRAR, Assistant Treasurer; Age 32
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of OFI/Mutual Fund Accounting; an officer of other Oppenheimer
funds; formerly a Fund Controller for OFI.
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* A Trustee who is an "interested person" of the Trusts as defined in the
Investment Company Act.
Remuneration of Trustees. The officers of the Trusts and certain Trustees of the
Trusts (Ms. Macaskill and Mr. Swain) who are affiliated with the Manager receive
no salary or fee from the Trusts. Mr. Fossel did not receive any salary or fees
from the Trusts prior to January 1, 1997. The remaining Trustees of the Trusts
received the compensation shown below. Mr. Freedman became a Trustee on June 27,
1996 and received no compensation from the Trusts before that date. The
compensation from the Trusts was paid during its fiscal year ended June 30,
1997. The compensation from all of the Denver-based Oppenheimer funds include
the Trusts and is compensation received as a director, trustee, managing general
partner or member of a committee of the Board during the calendar year 1996.
<TABLE>
<CAPTION>
Aggregate Aggregate Aggregate Total
Compensation Compensation Compensation Compensation
from the from the from the from all
Money Market Tax Exempt Government Denver-based
Name and Position Trust Trust Trust Oppenheimer funds(1)
<S> <C> <C> <C> <C>
Robert G. Avis $4,578 $2,516 $1,888 $58,003
Trustee
William A. Baker $6,290 $3,226 $2,594 $79,715
Audit and Review
Committee Ex-Officio
Member (2) and Trustee
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Charles Conrad, Jr. $5,890 $3,024 $2,432 $74,717
Trustee(3)
Jon S. Fossel $2,125 $1,090 $ 876 None
Trustee
Sam Freedman $3,373 $1,729 $1,391 $29,502
Audit and Review
Committee Member(2)
and Trustee
Raymond J. Kalinowski $5,626 $2,885 $2,320 $74,173
Audit and Review
Committee Member(2)
and Trustee
C. Howard Kast $5,874 $3,012 $2,422 $74,173
Audit and Review
Committee Chairman(2)
and Trustee
Robert M. Kirchner $5,897 $3,024 $2,432 $74,717
Trustee(3)
Ned M. Steel $4,578 $2,348 $1,888 $58,003
Trustee
</TABLE>
(1) For the 1996 calendar year.
(2) Committee positions effective July 1, 1997
(3) Prior to July 1, 1997, Messrs. Conrad and Kirchner were also members of the
Audit And Review Committee.
Deferred Compensation Plan. The Board of Trustees has 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 receive from the Fund. 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
the Plan will be vary based upon the performance of the selected funds. Deferral
of Trustees' fees under the Plan does not affect the amounts paid to the Trustee
by the Fund and will not materially affect the Fund's assets, liabilities and
net income per share. The Plan will not obligate the Fund to retain the services
of any Trustee or to pay any particular level of compensation to the Trustee.
Pursuant to an Order issued by the Securities and Exchange Commission, the Fund
may invest in the funds selected by the Trustee under the Plan without
shareholder approval.
Major Shareholders. As of September 8, 1997, A.G. Edwards & Sons, Inc. ("A.G.
Edwards"), 1 North Jefferson Avenue, St. Louis, MO 63103 was the record owner of
9,596,900,481.40 shares of
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Money Market Trust, 1,817,332,367.93 shares of Tax Exempt Trust and
1,081,190,679 shares of Government Trust (approximately 98.83%, 98.35% and
96.92% of outstanding shares, respectively, of these Trusts). A.G. Edwards has
advised the Trusts that all such shares are held for the benefit of brokerage
clients and that no such client owned beneficially 5% or more of the outstanding
shares of any of the Trusts.
Investment Management Services
The Manager is wholly-owned by OFI, which is a wholly-owned subsidiary of
Oppenheimer Acquisition Corp. ("OAC"), a holding company controlled by
Massachusetts Mutual Life Insurance Company. OAC is owned by certain of OFI's
directors and officers, some of whom may serve as officers of the Trust, and two
of whom (Mr. Swain and Ms. Macaskill) serve as Trustees of the Trust.
The management fee is payable monthly to the Manager under the terms of
the investment advisory agreements between the Manager and each Trust
(collectively, the "Agreements"), and is computed on the aggregate net assets of
the respective Trust as of the close of business each day. The management fees
paid to the Manager by the Trusts during their last three fiscal periods were as
follows: (a) $12,657,193, $21,572,513 and $32,755,568 paid for the fiscal years
ended June 30, 1995, 1996 and 1997, respectively, of Money Market Trust; (b)
$5,050,991, $6,380,737 and $6,858,451 paid for the fiscal years ended June 30,
1995, 1996 and 1997, respectively, of Tax Exempt Trust; and (c) $3,414,212,
$4,468,617 and $4,743,430 paid for the fiscal years ended June 30, 1995, 1996
and 1997, respectively, of Government Trust.
The Agreements require the Manager, at its expense, to provide the Trusts
with adequate office space, facilities and equipment, and to provide and
supervise the activities of all administrative and clerical personnel required
to provide effective administration for the Trusts, including the compilation
and maintenance of records with respect to operations, the preparation and
filing of specified reports, and the composition of proxy materials and
registration statements for continuous public sale of shares of the Trusts.
Expenses not expressly assumed by the Manager under the Agreements or as
Distributor of the shares of the Trusts, are paid by the Trusts. The Agreements
list examples of expenses paid by the Trusts, the major categories of which
relate to interest, taxes, certain insurance premiums, fees to unaffiliated
Trustees, legal, bookkeeping and audit expenses, brokerage, custodian and
transfer agent expenses, share issuance costs, certain printing costs (excluding
the cost of printing prospectuses for sales materials) and registration fees,
and non-recurring expenses, including litigation. The Agreements permit the
Manager to act as investment advisor for any other person, firm or corporation.
Under its Agreements with the Money Market Trust and the Government Trust,
respectively, the Manager has agreed to reimburse each 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.
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Independently of the Money Market Trust's Agreement, the Manager has
voluntarily agreed to waive a portion of the management fee otherwise payable to
it by the Money Market Trust as described in the Prospectus under "The Manager
and Its Affiliates - Fees and Expenses". For fiscal year ended June 30, 1995,
June 30, 1996 and June 30, 1997, the reimbursements by the Manager to Money
Market Trust were $0, $0 and $4,890,123, respectively.
Under its Agreement with Tax Exempt Trust, when the value of the Fund's
net assets is less than $1.5 billion, the annual fee payable to the Manager is
reduced by $100,000 based on the average net assets computed daily and paid
monthly at the annual rates, but in no event shall the annual fee be less than
$0. This contractual provision resulted in a reduction of the fee which would
otherwise have been payable to the Manager during the fiscal years ended June
30, 1995, 1996 and 1997, respectively, in the following amounts: $100,000,
$19,945 and $100,000.
In addition, under its Agreement with Tax Exempt Trust, the Manager has
agreed to assume that Trust's expenses to the extent that the total expenses (as
described above) of the Trust exceed the most stringent limits prescribed by any
state in which the Trust's shares are offered for sale. The payment of the
management fee at the end of any month will be reduced so that at no time will
there be any accrued but unpaid liabilities under any of these expense
assumptions. No reimbursement or assumption was necessary by the Manager to
Government Trust during its three most recent fiscal years. As a result of
changes in federal securities laws which have effectively pre-empted state
expense limitations, the contractual commitment relating to such reimbursements
is no longer relevant.
The Tax Exempt Trust Agreement provides that the Manager assumes no
responsibility under the Agreement other than that which is imposed by law, and
shall not be responsible for any action of the Board of Trustees of the Trust in
following or declining to follow any advice or recommendations of the Manager.
The Agreement provides that the Manager shall not be liable for any error of
judgment or mistake of law, or for any loss suffered by the Trust in connection
with matters to which the Agreement relates, except a loss resulting by reason
of the Manager's willful misfeasance, bad faith or gross negligence in the
performance of its duties, or its reckless disregard of its obligations and
duties under the Agreement.
The Agreements of Money Market Trust and Government Trust provide 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
Agreements shall be construed to protect the Manager against any liability to
such Trusts or their 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 such Agreements.
Portfolio Transactions. Portfolio decisions are based upon the recommendations
and judgment of the Manager subject to the overall authority of the Board of
Trustees. As most purchases made by
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the Trust are principal transactions at net prices, the Trust incurs little or
no brokerage costs. 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's
policy of investing in short-term debt securities with maturities of less than
one year results in high portfolio turnover. However, since brokerage
commissions, if any, are small and securities are usually held to maturity, high
turnover does not have an appreciable adverse effect upon the net asset value or
income of the Trust in periods of stable or declining rates, and may have a
positive effect in periods of rising interest rates.
The Trust seeks to obtain prompt and reliable execution of orders at the
most favorable net price. If brokers are used for portfolio transactions,
transactions are directed to brokers furnishing 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, and
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. Such research,
which may be supplied by a third party at the instance of a broker, includes
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 for in commission dollars.
The research services provided by brokers broaden the scope and supplement
the research activities of the Manager to make available additional views for
consideration and comparisons, and to enable the Manager to obtain market
information for the valuation of securities held in the Trust's portfolio or
being considered for purchase. In the rare instances where the Trust pays
commissions for research, the Board of Trustees, including the independent
Trustees of the Trust, will review information furnished by the Manager as to
the commissions paid to brokers furnishing such services in an effort to
ascertain that the amount of such commissions was reasonably related to the
value or the benefit of such services. The Trust does not direct the handling of
purchases or sales of portfolio securities, whether on a principal or agency
basis, to brokers for selling shares of the Trust. No portfolio transactions are
handled by brokers which are affiliated with the Trust or the Manager if that
broker is acting as principal.
Service Plan
Each Trust has adopted a Service Plan (the "Plan") under Rule 12b-1 of the
Investment Company Act, pursuant to which the Trust will reimburse the
Distributor for a portion of its costs incurred in connection with the services
rendered to the Trust, as described in the Prospectus. Each Plan has been
approved: (i) by a vote of the Board of Trustees of the Trust, including a
majority of the "Independent Trustees" (those Trustees of the Trust who are not
"interested persons," as defined in the Investment Company Act, and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreements relating to the Plan) cast in person at a meeting called for the
purpose of voting on the Plan; and (ii) by the vote of the holders of a
"majority of the outstanding voting securities " (as defined under the
Investment Company Act) of that Trust's outstanding voting
A-8
<PAGE>
securities. In approving each Plan, the Board determined that it is likely each
Plan will benefit the shareholders of that Trust.
The Distributor has entered into Supplemental Distribution Assistance
Agreements ("Supplemental Agreements") under the Plan with selected dealers
distributing shares of Centennial America Fund, L.P., Centennial California Tax
Exempt Trust, Centennial Government Trust, Centennial New York Tax Exempt Trust
and Oppenheimer Cash Reserves. Quarterly payments by the Distributor, which are
not a Trust expense, for distribution-related services will range from 0.10% to
0.30%, annually, of the average net asset value of shares of these funds owned
during the quarter beneficially or of record by the dealer or its customers.
However, no payment shall be made to any dealer for any quarter during which the
average net asset value of shares of such funds owned during that quarter by the
dealer or its customers is less than $5 million. Payments made pursuant to
Supplemental Agreements are not a fund expense, but are made by the Distributor
out of its own resources or out of the resources of the Manager which may
include profits derived from the advisory fee it receives from each such fund.
No such supplemental payments will be paid to any dealer which is an "affiliate"
(as defined in the Investment Company Act) of the Distributor.
Each Plan, unless terminated as described below, shall continue in effect
from year to year but only so long as such continuance is specifically approved
at least annually by each Trust's Board of Trustees, including its Independent
Trustees, by a vote cast in person at a meeting called for that purpose. The
Supplemental Agreements are subject to the same renewal requirement. A Plan and
the Supplemental Agreements may be terminated at any time by the vote of a
majority of the Trust's Independent Trustees or by the vote of the holders of a
"majority of the outstanding voting securities" (as defined in the Investment
Company Act) of the Trust's outstanding voting securities. The Supplemental
Agreements will automatically terminate in the event of their "assignment" (as
defined in the Investment Company Act), and each may be terminated by the
Distributor: (i) in the event a Trust amends its Plan, or (ii) if the net asset
value of shares of the funds covered by the Supplemental Agreements held by the
dealer or its customers is less than $5 million for two or more consecutive
quarters. A dealer may terminate a Supplemental Agreement at any time upon
giving 30 days' notice. Each Plan may not be amended to increase materially the
amount of payments to be made unless such amendment is approved by the
shareholders of that Trust. All material amendments must be approved by the
Independent Trustees.
Under each Plan, no payment will be made to any Recipient in any quarter
if the aggregate net asset value of all Trust shares held by the Recipient for
itself and its customers did not exceed a minimum amount, if any, that may be
determined from time to time by a majority of the Trust's Independent Trustees.
The Board of Trustees has set the fee at the maximum rate and set no minimum
amount. The Plans permit the Distributor and the Manager to make additional
distribution payments to Recipients from their own resources (including profits
from advisory fees) at no cost to a Trust. The Distributor and the Manager may,
in their sole discretion, increase or decrease the amount of distribution
assistance payments they make to Recipients from their own assets.
Each Recipient who is to receive distribution payments for any month or
quarter is required to certify in writing that the aggregate payments to be
received from the applicable Trust during that month or quarter do not exceed
the Recipient's administrative and sales related costs in rendering
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distribution assistance during the month or quarter, and will reimburse the
Trust for any excess.
For each Trust's fiscal year ended June 30, 1997, payments to the
Distributor under its Plan totaled $16,003,021, $3,177,577 and $2,060,666 for
Money Market Trust, Tax Exempt Trust and Government Trust, respectively, of
which $-0-, $3,109,499 and $-0- was paid by Money Market Trust, Tax Exempt Trust
and Government Trust, respectively, to an affiliate of the Distributor, as a
Recipient. Payments received by the Distributor under the Plans will not be used
to pay any interest expense, carrying charge, or other financial costs, or
allocation of overhead by the Distributor. Any unreimbursed expenses incurred
for any fiscal quarter by the Distributor may not be recovered under that Plan
in subsequent fiscal quarters.
While the Plan is in effect, the Treasurer of each Trust shall provide a
report to the Board of Trustees in writing at least quarterly on the amount of
all payments made pursuant to the Plan, the identity of each Recipient that
received any such payment, and the purposes for which the payments were made.
The Plan further provides that while it is in effect, the election and
nomination of those Trustees of a 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 such selection and nomination if the final
decision on any such selection or nomination is approved by a majority of the
Independent Trustees.
Purchase, Redemption and Pricing of Shares
Determination of Net Asset Value Per Share. The net asset value of each Trust's
shares is determined twice each day as of 12:00 Noon and the close of The New
York Stock Exchange (the "Exchange") which is normally 4:00 P.M., but may be
earlier on some days, each day the Exchange is open (a "regular business day")
(all references to time mean New York time) by dividing that Trust's net assets
(the total value of the Trust's portfolio securities, cash and other assets less
all liabilities) by the total number of shares outstanding. The Exchange's most
recent annual holiday schedule states that it will close New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. The Exchange may also close on other days.
Dealers other than Exchange members may conduct trading in Municipal Securities
on certain days on which the Exchange is closed (e.g., Good Friday), so that
securities of the same type held by Tax Exempt Trust may be traded, and its net
asset value per share may be affected significantly, on such days when
shareholders may not purchase or redeem shares.
Each Trust's Board of Trustees has established procedures for the
valuation of the Trust's securities which provide that money market debt
securities that had a maturity of less than 397 days when issued that have a
remaining maturity of 60 days or less are valued at cost, adjusted for
amortization of premiums and accretion of discounts; and securities (including
restricted securities) not having readily-available market quotations are valued
at fair value determined under the Board's procedures.
The Trusts will seek to maintain a net asset value of $1.00 per share for
purchases and redemptions. There can be no assurance that each Trust will do so.
Each Trust operates under Rule 2a-7 under which a Trust may use the amortized
cost method of valuing their shares. The amortized
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<PAGE>
cost method values a security initially at its cost and thereafter 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 account unrealized capital gains or losses.
Each Trust's Board of Trustees has established procedures intended to
stabilize the Trust's net asset value at $1.00 per share. If a Trust's net asset
value per share were to deviate from $1.00 by more than 0.5%, Rule 2a-7 requires
the Board promptly to consider what action, if any, should be taken. If the
Trustees find that the extent of any such deviation may result in material
dilution or other unfair effects on shareholders, the Board will take whatever
steps it considers appropriate to eliminate or reduce such dilution or unfair
effects, including, without limitation, selling portfolio securities prior to
maturity, shortening the average portfolio maturity, withholding or reducing
dividends, reducing the outstanding number of Trust shares without monetary
consideration, or calculating net asset value per share by using available
market quotations.
As long as the Trust use Rule 2a-7, each Trust must abide by certain
conditions described in the Prospectus. Some of those conditions which relate to
portfolio management are that each Trust must: (i) maintain a dollar-weighted
average portfolio maturity not in excess of 90 days; (ii) limit its investments,
including repurchase agreements, to those instruments which are denominated in
U.S. dollars and which are rated in one of the two highest short-term rating
categories by at least two "nationally-recognized statistical rating
organizations" ("Rating Organizations") as defined in Rule 2a-7, or by one
Rating Organization if only one Rating Organization has rated the security; an
instrument that is not rated must be a comparable quality as determined by the
Manager under procedures approved by the Board; and (iii) not purchase any
instruments with a remaining maturity of more than 397 days. Under Rule 2a-7,
the maturity of an instrument is generally considered to be its stated maturity
(or in the case of an instrument called for redemption, the date on which the
redemption payment must be made), with special exceptions for certain variable
rate demand and floating rate instruments. Repurchase agreements and securities
loan agreements are, in general, treated as having a maturity equal to the
period scheduled until repurchase or return, or if subject to demand, equal to
the notice period.
While amortized cost method provides certainty in valuation, there may be
periods during which the value of an instrument, as determined by amortized
cost, is higher or lower than the price the Trust would receive if it sold the
instrument. During periods of declining interest rates, the daily yield on
shares of the Trust may tend to be lower (and net investment income and daily
dividends higher) than market prices or estimates of market prices for its
portfolio. Thus, if the use of amortized cost by the trusts resulted in a lower
aggregate portfolio value on a particular day, a prospective investor in one of
the Trust would be able to obtain a somewhat higher yield than would result from
investment in a fund utilizing solely market values, and existing investors in
the Trusts would receive less investment income than if the Trust were priced at
market value. Conversely, during periods of rising interest rates, the daily
yield on Trust shares will tend to be higher and its aggregate value lower than
that of a portfolio priced at market value. A prospective investor would receive
a lower yield than from an investment in a portfolio priced at market value,
while existing investors in the Rust would receive more investment income than
if the Trust were priced at market value.
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Redemptions. Each Trust's Board of Trustees has the right, in conformity with
the Trust's Declaration of Trust and applicable law, to cause the involuntary
redemption of the shares held in any account if the aggregate net asset value of
such shares is less than $500 or such lesser amount as the Board may decide.
Should the Board elect to exercise this right, it will establish the terms of
any notice of such redemption required to be provided to the shareholder under
the Investment Company Act, including any provision the Board may establish to
enable the shareholder to increase the amount of the investment to avoid
involuntary redemption.
Expedited Redemption Procedures. Under the Expedited Redemption Procedure
available to shareholders of the Trusts, as discussed in the Appendix to the
Prospectus, the wiring of redemption proceeds may be delayed if the Trust's
Custodian bank is not open for business on a day that the Trust would normally
authorize the wire to be made, which is usually the same day for redemptions
prior to 12:00 Noon, and the Trust's next regular business day for redemptions
between 12:00 Noon and the close of The New York Stock Exchange, which is
normally 4:00 P.M., but may be earlier on some days. In those circumstances, the
wire will not be transmitted until the next bank business day on which the Trust
is open for business, and no dividends will be paid on the proceeds of redeemed
shares waiting transfer by wire.
Dividend Reinvestment in Another Fund. Direct shareholders of the Trusts may
elect to reinvest all dividends and/or distributions in Class A shares of any of
the other funds listed below as "Eligible Funds" at net asset value without
sales charge. To elect this option, a shareholder must notify the Transfer Agent
in writing, and either must have an existing account in the fund selected for
reinvestment or must obtain a prospectus for that fund and an application from
the Transfer Agent to establish an account. The investment will be made at the
net asset value per share next determined on the payable date of the dividend or
distribution.
Exchange of Shares
Eligible Funds. As stated in the Prospectus, shares of the Trust may, under
certain circumstances, be exchanged by direct shareholders for Class A shares of
the following Oppenheimer funds ("Eligible Funds"):
Limited Term New York Municipal Fund
Oppenheimer Bond Fund
Oppenheimer Bond Fund for Growth
Oppenheimer California Municipal Fund
Oppenheimer Champion Income Fund
Oppenheimer Developing Markets Fund
Oppenheimer Disciplined Allocation Fund
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Oppenheimer Disciplined Value Fund
Oppenheimer Discovery Fund
Oppenheimer Enterprise Fund
Oppenheimer Equity Income Fund
Oppenheimer Florida Municipal Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer High Yield Fund
Oppenheimer Insured Municipal Fund
Oppenheimer Intermediate Municipal Fund
Oppenheimer International Bond Fund
Oppenheimer International Growth Fund
Oppenheimer LifeSpan Balanced Fund
Oppenheimer LifeSpan Growth Fund
Oppenheimer LifeSpan Income Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street California Municipal Fund
Oppenheimer Main Street Income & Growth Fund
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multiple Strategies Fund
Oppenheimer Municipal Bond Fund
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<PAGE>
Oppenheimer New Jersey Municipal Fund
Oppenheimer New York Municipal Fund
Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Growth & Income Value Fund
Oppenheimer Quest Officers Value Fund
Oppenheimer Quest Opportunity Value Fund
Oppenheimer Quest Small Cap Value Fund
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Real Asset Fund
Oppenheimer Strategic Income Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer U.S. Government Trust
Oppenheimer World Bond Fund
Rochester Fund Municipals
The New York Tax-Exempt Income Fund, Inc.
the following "Money Market Funds":
Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial New York Tax Exempt Trust
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Centennial Tax Exempt Trust
Daily Cash Accumulation Fund, Inc.
Oppenheimer Cash Reserves
Oppenheimer Money Market Fund, Inc.
Yield Information
Each Trust's current yield is calculated for a seven-day period of time, in
accordance with regulations adopted under the Investment Company Act, 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 (a) adding 1 to the base
period return (obtained as described above), (b) raising the sum to a power
equal to 365 divided by 7 and (c) subtracting 1 from the result. For the seven
day period ended June 30, 1997, the "current yield" for each Money Market Trust,
Tax Exempt Trust and Government Trust was 5.04% 3.34% and 4.81%, respectively.
The seven-day compounded effective yield for that period was 5.17%, 3.40% and
4.93%, respectively.
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. Since the calculation of yield under either
procedure described above does not take into consideration any realized or
unrealized gains or losses on each Trust's portfolio securities which may affect
dividends, the return on dividends declared during a period may not be the same
on an annualized basis as the yield for that period.
Tax Exempt Trust's "tax equivalent yield" adjusts Tax Exempt Trust's
current yield, as calculated above, by a stated Federal tax rate. The tax
equivalent yield is computed by dividing the tax-exempt portion of the Trust's
current yield by one minus a stated income tax rate and adding the result to the
portion (if any) of the Trust's current yield that is not tax-exempt. The tax
equivalent yield may be compounded as described above to provide a compounded
effective tax equivalent yield. The tax equivalent yield may be used to compare
the tax effects of income derived from the Trust with income from taxable
investments at the tax rates stated. Exhibit D, which is applicable only to Tax
Exempt Trust, includes a tax equivalent yield table, based on various effective
tax brackets for individual taxpayers. Such tax brackets are determined by a
taxpayer's Federal taxable income (the net amount subject to Federal income tax
after deductions and exemptions). The tax equivalent yield table assumes that
the investor is taxed at the highest bracket, regardless of whether a switch to
non-taxable investments would cause a lower bracket to apply and that state
income tax payments are fully deductible for income tax purposes. For taxpayers
with income above certain levels, otherwise allowable itemized deductions are
limited. The Tax Exempt Trust's tax equivalent
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<PAGE>
yield for the seven-day period ended June 30, 1997 was 3.24%. Its tax-equivalent
compounded effective yield for the same period was 3.40% for an investor in the
highest Federal tax bracket.
Yield information may be useful to investors in reviewing each Trust's
performance. A 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 Monitor TM), which measures the average rate paid
on bank money market accounts, NOW accounts and certificates of deposit by the
100 largest banks and thrift institutions in the top ten metropolitan areas.
However, a number of factors should be considered before using yield information
as a basis for comparison with other investments. An investment in a Trust is
not insured. Its yield is not guaranteed and normally will fluctuate on a daily
basis. The yield for any given past period is not an indication or
representation by the Trust of future yields or rates of return on its shares.
Each Trust's yield is affected by portfolio quality, portfolio maturity, type of
instruments held and operating expenses. When comparing a 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
or yields that may vary above a stated minimum, and also that bank accounts may
be insured. Certain types of bank accounts may not pay interest when the balance
falls below a specified level and may limit the number of withdrawals by check
per month. In order to compare the Tax Exempt Trust's dividends to the rate of
return on taxable investments, Federal income taxes on such investments should
be considered.
Additional Information
Description of the Trusts. Each Trust's Declaration of Trust contains an express
disclaimer of shareholder and Trustee liability for the Trust's obligations, and
provides for indemnification and reimbursement of expenses out of its property
for any shareholder held personally liable for its obligations. Each Declaration
of Trust also provides that the Trust shall, upon request, assume a defense of
any claim made against any shareholder for any act or obligation of the Trust
and satisfy any judgment thereon. Thus, while Massachusetts law permits a
shareholder of a trust (such as the Trust) to be held personally liable as a
"partner" for the Trust's obligations under certain circumstances, the risk of a
Trust shareholder incurring any financial loss on account of shareholder
liability is highly unlikely and is limited to the relatively remote
circumstance in which the Trust would be unable to meet its obligations
described above. Any person doing business with the Trust, and any shareholder
of the Trust, agrees under the Trust's Declaration of Trust to look solely to
the assets of the Trust for satisfaction of any claim or demand which may arise
out of any dealings with the Trust, and the Trustees shall have no personal
liability to any such person, to the extent permitted by law.
It is not contemplated that regular annual meetings of shareholders will
be held. The Trust will hold meetings when required to do so by the Investment
Company Act or other applicable law, or when a shareholder meeting is called by
the Trustees. 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 shareholders of 10% of its outstanding
shares. In addition, if the Trustees receive a request from at least 10
shareholders (who have been shareholders for at least six months)
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holding in the aggregate shares of the Trust valued at $25,000 or more or
holding 1% or more of the Trust's outstanding shares, whichever is less, that
they wish to communicate with other shareholders to request a meeting to remove
a Trustee, the Trustees will then either make the Trust's shareholder list
available to the applicants or mail their communication to all other
shareholders at the applicants' expense, or the Trustees may take such other
action as set forth in Section 16(c) of the Investment Company Act.
Tax Status of the Trust's Dividends and Distributions. The Federal tax treatment
of the Trust's dividends and distributions to shareholders is explained in the
Prospectus under the caption "Dividends, Distributions and Taxes." Under the
Internal Revenue Code, the Trust must distribute by December 31 each year 98% of
its taxable investment income earned from January 1 through December 31 of that
year and 98% of its capital gains realized from the prior November 1 through
October 31 of that year or else pay an excise tax on the amounts not
distributed. While it is presently anticipated that the Trust's distributions
will meet those requirements, the Trust's Board and the Manager might determine
in a particular year that it is in the best interest of the Trust's shareholders
not to distribute income or capital gains at the mandated levels and to pay the
excise tax on the undistributed amounts.
The Custodian and the Transfer Agent. The Custodian's responsibilities include
safeguarding and controlling the Trusts' portfolio securities and handling the
delivery of portfolio securities to and from the Trusts. The Manager has
represented to the Trusts that its banking relationships with the Custodian have
been and will continue to be unrelated to and unaffected by the relationships
between the Trusts and the Custodian. It will be the practice of the Trusts to
deal with the Custodian in a manner uninfluenced by any banking relationship the
Custodian may have with the Manager or its affiliates. Shareholder Services,
Inc., the Transfer Agent, is responsible for maintaining each Trust's
shareholder registry and shareholder accounting records, and for shareholder
servicing and administrative functions.
General Distributor's Agreement. Under the General Distributor's Agreement
between each Trust and the Distributor, the Distributor acts as each Trust's
principal underwriter in the continuous public offering of its shares but is not
obligated to sell a specific number of shares. Expenses normally attributable to
sales (other than those paid under the General Distributor's Agreement and the
Service Plan), including advertising and the cost of printing and mailing
prospectuses other than those furnished to existing shareholders, are borne by
the Distributor.
Independent Auditors and Financial Statements. The independent auditors of the
Trusts examine the Trusts' financial statements and perform other related audit
services. They also act as auditors for the Manager and for OFI, the Manager's
immediate parent, as well as for certain other funds advised by the Manager and
OFI.
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INDEPENDENT AUDITORS' REPORT
Centennial Tax Exempt Trust
The Board of Trustees and Shareholders of Centennial Tax Exempt Trust:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Centennial Tax Exempt Trust as of June 30,
1997, the related statement of operations for the year then ended, the
statements of changes in net assets for the years ended June 30, 1997 and 1996,
and the financial highlights for the period July 1, 1992 to June 30, 1997.
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 generally accepted auditing
standards. 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 at June
30, 1997 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, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Centennial Tax
Exempt Trust at June 30, 1997, the results of its operations, the changes in
its net assets, and the financial highlights for the respective stated periods,
in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
- -------------------------
DELOITTE & TOUCHE LLP
Denver, Colorado
July 22, 1997
<PAGE>
2
<PAGE>
STATEMENT OF INVESTMENTS
Centennial Tax Exempt Trust
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
------------ --------------
<S> <C> <C>
SHORT-TERM TAX-EXEMPT OBLIGATIONS-102.7%
ALABAMA-0.6%
Bessemer, AL IDV RB, Big B, Inc. Project, Series A, 4.25%(1) . . . . . . . . . . $ 1,750,000 $ 1,750,000
Huntsville, AL FAU MH RRB, Series B, 4.10%(1) . . . . . . . . . . . . . . . . . . 7,000,000 7,000,000
Winfield, AL IDV RB, Union Underwear Co., 4%(1) . . . . . . . . . . . . . . . . . 1,900,000 1,900,000
--------------
10,650,000
--------------
ARIZONA-2.6%
AZ HFAU RB, Blood Systems, Inc., 4.20%(1) . . . . . . . . . . . . . . . . . . . . 8,000,000 8,000,000
Maricopa Cnty., AZ IDAU RB, Grand Canyon University Project, 4.20%(1) . . . . . . 5,200,000 5,200,000
Phoenix, AZ IDAU MH RRB, Lynwood Apts. Project, 4.15%(1) . . . . . . . . . . . . 6,475,000 6,475,000
Phoenix, AZ IDAU MH RRB, Paradise Lakes Apts. Project, 1995 Series, 4.35%(1) . . 22,500,000 22,500,000
Tucson, AZ IDAU RB, Geronimo Building Renovation Project, 4%, 12/15/97(2) . . . . 1,045,000 1,045,000
--------------
43,220,000
--------------
ARKANSAS-0.0%
Subiaco, AR IDV RB, Cloves Gear & Products, Inc., 5.40%(1) . . . . . . . . . . . 265,000 265,000
--------------
CALIFORNIA-14.1%
Anaheim, CA HAU MH RB, Bel Page Project, Series A, 4.10%(1) . . . . . . . . . . . 1,000,000 1,000,000
Anaheim, CA HAU MH RRB, Park Vista Apts., Series A, 4.05%(1) . . . . . . . . . . 1,000,000 1,000,000
CA GOB, 3.70%, 7/1/97(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000,000 20,000,000
CA HEAU Student Loan RB, Series C, 4.20%(1) . . . . . . . . . . . . . . . . . . . 4,000,000 4,000,000
CA HEAU Student Loan RRB, Series 1987A, 3.95%, 5/1/98(2) . . . . . . . . . . . . 27,175,000 27,175,000
CA HEAU Student Loan RRB, Series 1992A-2, 3.95%, 5/1/98(2) . . . . . . . . . . . 14,000,000 14,000,000
CA HEAU Student Loan RB, 3.95%, 5/1/98(2) . . . . . . . . . . . . . . . . . . . . 34,400,000 34,400,000
CA HFFAU RB, Adventist Health System, Series B, 3.95%(1) . . . . . . . . . . . . 1,000,000 1,000,000
CA HFFAU RB, Catholic Healthcare Project, Series B, 4.05%(1) . . . . . . . . . . 1,100,000 1,100,000
CA HFFAU RB, Pooled Loan Program, Series B, FGIC Insured, 4.05%(1) . . . . . . . 500,000 500,000
CA HFFAU RB, Santa Barbara Cottage Project, Series C, 3.95%(1) . . . . . . . . . 800,000 800,000
CA HFFAU RB, Scripps Memorial Hospital, Series A, MBIA Insured, 4.05%(1) . . . . 420,000 420,000
CA HFFAU RRB, Catholic West Project, Series C, MBIA Insured, 4.05%(1) . . . . . . 1,900,000 1,899,977
CA HFFAU RRB, Memorial Health Services Project, 3.95%(1) . . . . . . . . . . . . 1,300,000 1,300,000
CA M-S-R PPA RB, San Juan Project, Sub Lien, Series E, MBIA Insured, 3.90%(1) . . 4,000,000 4,000,000
CA Municipal RB, Series SG89, MBIA Insured, 3.90%, 8/7/97 . . . . . . . . . . . . 7,425,000 7,425,000
CA PCFAU SWD RB, Western Waste Industries, Series A, 3.90%(1) . . . . . . . . . . 500,000 500,000
CA School Cash Reserve Program Authority Nts., Series A,
AMBAC Insured, 4.75%, 7/2/98 . . . . . . . . . . . . . . . . . . . . . . . . . 45,000,000 45,389,250
Hemet, CA HAU MH RRB, West Acacia Project, 4%(1) . . . . . . . . . . . . . . . . 4,800,000 4,800,000
</TABLE>
3
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
Centennial Tax Exempt Trust
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
------------ --------------
<S> <C> <C>
CALIFORNIA (CONTINUED)
Huntington Park, CA RA MH RB, Casa Rita Apts., Series A, 4.05%(1) . . . . . . . . $ 1,500,000 $ 1,499,990
Irvine, CA Public Facilities & Infrastructure Authority Lease RB,
Capital Improvement Projects, 4%(1) . . . . . . . . . . . . . . . . . . . . . 1,800,000 1,800,000
Kings Cnty., CA HAU MH RRB, Edgewater Isle Apts., Series A, 3.95%(1) . . . . . . 3,005,000 3,005,000
Los Angeles Cnty., CA HAU MH RB, Park Sierra Project, 4.05%(1) . . . . . . . . . 1,700,000 1,700,000
Los Angeles, CA Airport RB, Series SG61, 4.35%(1) . . . . . . . . . . . . . . . . 2,555,000 2,555,000
Metropolitan Water District of Southern CA Waterworks RRB, Series A,
AMBAC Insured, 4%(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400,000 400,006
Modesto, CA Irrigation District FAU RB, Series SG66, 4.25%(1) . . . . . . . . . . 500,000 500,000
Northern CA PPA RRB, Geothermal Project 3-A, 3.90%(1) . . . . . . . . . . . . . . 3,000,000 3,000,040
Oceanside, CA MH RRB, Lakeridge Apts. Project, 4.40%(1) . . . . . . . . . . . . . 4,100,000 4,100,000
Ontario, CA Multifamily Residential Mtg. RB,
Park Centre Project, Series A, 3.75%(1) . . . . . . . . . . . . . . . . . . . 400,000 400,000
Rancho Mirage, CA RA COP, 4.05%(1) . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,000,011
Riverside Cnty., CA HAU MH RB, McKinley Project, 4%(1) . . . . . . . . . . . . . 2,000,000 2,000,000
Sacramento Cnty., CA MH RRB, Issue A, 4.10%(1) . . . . . . . . . . . . . . . . . 3,400,000 3,400,000
San Bernardino Cnty., CA HAU MH RRB, Arrowview Park Apts. Project,
Series A, 4%(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,050,000 3,050,037
San Bernardino Cnty., CA HAU MH RRB, Monterey Villas Apts. Project,
Series A, 4%(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,125,000 2,125,000
San Bernardino Cnty., CA Tax & RAN,
Series A, 4.50%, 6/30/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,000,000 23,143,060
San Francisco, CA City & Cnty. RA MH RRB,
Fillmore Center Housing Project, Series A-1, 4%(1) . . . . . . . . . . . . . . 500,000 500,000
San Francisco, CA City & Cnty. Redevelopment FAU RRB,
Yerba Buena Garden, 4.05%(1) . . . . . . . . . . . . . . . . . . . . . . . . . 760,000 760,000
Southern CA PAU RRB, Palo Verde Project,
Series B, AMBAC Insured, 3.90%(1) . . . . . . . . . . . . . . . . . . . . . . 2,400,000 2,400,000
--------------
232,047,371
--------------
COLORADO-2.1%
Arapahoe Cnty., CO MH RRB, Hunters Run Rental Housing, 4.30%(1) . . . . . . . . . 25,600,000 25,600,000
Aurora, CO IDV RRB, La Quinta Motor Inns, Inc., 4.25%(1) . . . . . . . . . . . . 2,600,000 2,600,000
Superior Metropolitan District No. 3, CO GOB, 4.20%(1) . . . . . . . . . . . . . 5,000,000 5,000,000
Wheat Ridge, CO IDV RRB, La Quinta Motor Inns, Inc., 4.25%(1) . . . . . . . . . . 1,775,000 1,775,000
--------------
34,975,000
--------------
DELAWARE-0.7%
DE EDAU RB, Hospital Billing Project, Series A, BIG Insured, 4.25%(1) . . . . . . 6,100,000 6,100,000
Sussex Cnty., DE EDAU RB, Route 113 LP Project, 3.70%(1) . . . . . . . . . . . . 6,000,000 6,000,000
--------------
12,100,000
--------------
</TABLE>
4
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
Centennial Tax Exempt Trust
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
------------ --------------
<S> <C> <C>
FLORIDA-7.6%
Dade Cnty., FL WSS RB, FGIC Insured, 3.40%, 7/1/97 . . . . . . . . . . . . . . . $ 9,500,000 $ 9,500,000
Escambia Cnty., FL HFAU RRB, Florida Convertible Centers Project,
Series A, 3.70%(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,250,000 1,250,000
FL BOE Capital Outlay Public Education Refunding Bonds, Series A, 4.28%(1) . . . 13,230,000 13,230,000
FL HFA MH RRB, Monterey Lake Project, 4.30%(1) . . . . . . . . . . . . . . . . . 19,965,000 19,965,000
FL Turnpike Authority RB, Series A, FGIC Insured, 3.40%, 7/1/97(2) . . . . . . . 14,200,000 14,200,000
Hillsborough Cnty., FL IDAU PC COP, Tampa Electric Co. Project,
MBIA Insured, 3.97%(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,000,000 17,000,000
Hillsborough Cnty., FL IDAU PC RB, Tampa Electric Co. Project, 4.30%(1) . . . . . 17,000,000 17,000,000
Jacksonville, FL IDV RRB, Airport Hotel Project, 4.15%(1) . . . . . . . . . . . . 3,000,000 3,000,000
Orange Cnty., FL HFAU RRB, Pooled Hospital Loan Program,
Series 1985, MBIA Insured, 3.60%, 8/25/97 . . . . . . . . . . . . . . . . . . 16,000,000 16,000,000
Orange Cnty., FL Housing FAU MH RRB, Monterey Project, Series B, 4.45%(1) . . . . 4,815,000 4,815,000
St. Lucie Cnty., FL PC RB, Florida Power & Light Project, 3.55%, 8/11/97 . . . . 9,200,000 9,200,000
--------------
125,160,000
--------------
GEORGIA-4.4%
Cobb Cnty., GA HAU MH RRB, Terrell Mill Project, 4.35%(1) . . . . . . . . . . . . 9,400,000 9,400,000
Floyd Cnty., GA DAU PC RRB, Inland-Rome, Inc. Project, 4.35%(1) . . . . . . . . . 4,735,000 4,735,000
Fulton Cnty., GA DAU RB, Georgia Tech Athletic Assn., Inc., 4.20%(1) . . . . . . 3,000,000 3,000,000
Fulton Cnty., GA DAU RB, Lovett School Project, 4.20%(1) . . . . . . . . . . . . 3,000,000 3,000,000
Fulton Cnty., GA DAU RB, Robert W. Woodruff Arts Project, 4.20%(1) . . . . . . . 2,000,000 2,000,000
Fulton Cnty., GA Residential Care Facilities RB,
Canterbury Court Project, Series A, 4.20%(1) . . . . . . . . . . . . . . . . . 2,255,000 2,255,000
GA GOB, Series 1995B, 4.30%(1) . . . . . . . . . . . . . . . . . . . . . . . . . 11,400,000 11,400,000
Gwinnett Cnty., GA HAU MH RB, Post Chase Project, 4.10%(1) . . . . . . . . . . . 7,500,000 7,500,000
Roswell, GA HAU MH RRB, Oxford Project, 4.35%(1) . . . . . . . . . . . . . . . . 23,610,000 23,610,000
Smyrna, GA HAU MH RRB, Hills of Post Village Project, 4.10%(1) . . . . . . . . . 5,000,000 5,000,000
--------------
71,900,000
--------------
ILLINOIS-11.4%
Centralia City, IL IDV RB, Consolidated Foods
Corp./Hollywood Brands, Inc., 4.20%(1) . . . . . . . . . . . . . . . . . . . . 5,500,000 5,500,000
Elk Grove Village, IL IDV RB, La Quinta Motor Inns, Inc., 3.70%(1) . . . . . . . 3,100,000 3,100,000
IL Development FAU RB, Residential Brookdale Project, 4.183%(1) . . . . . . . . . 14,800,000 14,800,000
IL Educational FA RB, National-Louis University, 4.20%(1) . . . . . . . . . . . . 6,200,000 6,200,000
IL HFAU RB, Lake Forest Hospital Project, 4.057%(1) . . . . . . . . . . . . . . . 12,190,000 12,190,000
IL HFAU RRB, Advocate Health Care, Series B, 4.20%(1) . . . . . . . . . . . . . . 74,500,000 74,500,000
</TABLE>
5
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
Centennial Tax Exempt Trust
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
------------ --------------
<S> <C> <C>
ILLINOIS (CONTINUED)
IL IDAU RRB, SuperValu, Inc. Project, 4.15%(1) . . . . . . . . . . . . . . . . . $ 5,000,000 $ 5,000,000
IL Student Assistance Commission Student Loan RB, Series A, 4.20%(1) . . . . . . 7,600,000 7,600,000
Lakemoor Village, IL MH Mtg. RB, Lakemoor Apts. Project, 4.75%, 9/4/97(2) . . . . 15,000,000 15,000,000
Lakemoor Village, IL MH Mtg. RB, Lakemoor Apts.
Project, Series A, 4.45%, 9/1/97(2) . . . . . . . . . . . . . . . . . . . . . 4,724,050 4,724,050
Oakbrook Terrace, IL MH Mtg. RB, Series C, 4.90%, 11/3/97(2) . . . . . . . . . . 35,000,000 35,000,000
West Chicago, IL IDV RRB, Liquid Container Project, 4.25%(1) . . . . . . . . . . 3,810,000 3,810,000
--------------
187,424,050
--------------
INDIANA-2.4%
Crawfordsville, IN ED RRB, Pedcor Investments-Shady Knoll Apts. Project, 4.25%(1) 3,425,000 3,425,000
Gary, IN Industrial Environmental Improvement RB, U.S. Steel Corp.
Project, 4.10%(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,000
Greenfield, IN Industrial ED RRB, 4.20%(1) . . . . . . . . . . . . . . . . . . . 1,200,000 1,200,000
Greenwood, IN Industrial ED RRB, 4.20%(1) . . . . . . . . . . . . . . . . . . . . 1,210,000 1,210,000
Hobart, IN ED RRB, MMM Invest, Inc. Project, 4.20%(1) . . . . . . . . . . . . . . 1,785,000 1,785,000
IN Development FAU RB, Brebeuf Prep School, 4.20%(1) . . . . . . . . . . . . . . 3,500,000 3,500,000
IN EDFAU RB, Saroyan Hardwoods, Inc., 4.30%(1) . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
Marion Cnty., IN HA Hospital Facility RB, Indianapolis Osteopathic, 4.25%(1) . . 3,645,000 3,645,000
Rockport, IN PC RRB, Indiana & Michigan Electric Co. Project, Series A, 4.20%(1) 13,000,000 13,000,000
St. Joseph Cnty., IN HA Special Obligation Bonds, Madison Center, Inc.
Project, 4.25%(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,875,000 6,875,000
St. Joseph Cnty., IN Industrial Educational Facilities RB,
Holy Cross College, 4.25%(1) . . . . . . . . . . . . . . . . . . . . . . . . . 1,305,000 1,305,000
--------------
38,945,000
--------------
IOWA-0.6%
Des Moines, IA CD RB, Series A, 4.15%(1) . . . . . . . . . . . . . . . . . . . . 5,000,000 5,000,000
Mason City, IA IDV RB, SuperValu Stores, Inc. Project, 4.15%(1) . . . . . . . . . 4,900,000 4,900,000
--------------
9,900,000
--------------
KANSAS-0.5%
Kansas City, KS Private Activity RRB, Inland Container Corp., 4.35%(1) . . . . . 5,200,000 5,200,000
Olathe, KS Industrial RRB, William F. Bieber Project, 4.35%(1) . . . . . . . . . 1,675,000 1,675,000
Ottawa, KS IDV RB, Laich Industries Project, 5.40%(1) . . . . . . . . . . . . . . 700,000 700,000
--------------
7,575,000
--------------
</TABLE>
6
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
Centennial Tax Exempt Trust
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
------------ --------------
<S> <C> <C>
KENTUCKY-1.0%
Jamestown, KY Industrial Building RB, Union Underwear Co., 4%(1) . . . . . . . . $ 1,000,000 $ 1,000,000
Mayfield, KY Multi-City Lease RB, Kentucky League of
Cities Funding Trust, 4.30%(1) . . . . . . . . . . . . . . . . . . . . . . . . 15,200,000 15,200,000
--------------
16,200,000
--------------
LOUISIANA-0.4%
East Baton Rouge Parish, LA IDV Board RRB, La Quinta Motor Inns, Inc., 4.25%(1) . 2,125,000 2,125,000
LA GORB, Series A, MBIA Insured, 6.60%, 8/1/97 . . . . . . . . . . . . . . . . . 1,000,000 1,002,214
Lake Charles, LA Harbor & Terminal District RB, Reynolds Metals Co.
Project, 3.75%, 12/1/97(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 4,085,000 4,085,000
--------------
7,212,214
--------------
MARYLAND-4.1%
Anne Arundel Cnty., MD ED RB, West Capitol, Series A, 4.20%(1) . . . . . . . . . 6,000,000 6,000,000
Hartford Cnty., MD RRB, 1001 Partnership Facility Project, 3.70%(1) . . . . . . . 2,550,000 2,550,000
MD Health & HEFAU RB, Carroll General Pooled Loan Program, Series A, 4.20%(1) . . 1,060,000 1,060,000
MD Health & HEFAU RB, University of Maryland Pooled Loan Program,
Series B, 3.70%(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,150,000 1,150,000
Montgomery Cnty., MD GOB, Series A, 5%, 5/1/98 . . . . . . . . . . . . . . . . . 4,750,000 4,792,148
Montgomery Cnty., MD MH Opportunities Commission RB, Grosvenor House Project,
Series A, 3.70%(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,700,000 19,700,000
Montgomery Cnty., MD MH Opportunities Commission RB, Issue A, 4.35%(1) . . . . . 23,800,000 23,800,000
Worcester Cnty., MD RRB, White Marlin Mall Project, 3.70%(1) . . . . . . . . . . 7,850,000 7,850,000
--------------
66,902,148
--------------
MASSACHUSETTS-1.2%
MA Commonwealth GOB, Series C, 4.25%(1) . . . . . . . . . . . . . . . . . . . . . 14,600,000 14,600,000
MA HFA RB, SFM, Series 50, 3.90%, 6/1/98 . . . . . . . . . . . . . . . . . . . . 5,535,000 5,535,000
North Andover Town, MA Industrial RB, Atlee-Oak Realty Trust of Delaware, Inc.,
4.75%(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350,000 350,000
--------------
20,485,000
--------------
MICHIGAN-0.8%
Madison Heights, MI ED RB, Red Roof Inns Project, 3.80%(1) . . . . . . . . . . . 1,000,000 1,000,000
MI Hospital FAU RRB, Mount Clemens General Hospital, 4.15%(1) . . . . . . . . . . 9,920,000 9,920,000
MI Job DAU RB, East Lansing Residence Associates Project, 4.10%(1) . . . . . . . 1,900,000 1,900,000
--------------
12,820,000
--------------
</TABLE>
7
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
Centennial Tax Exempt Trust
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
------------ --------------
<S> <C> <C>
MINNESOTA-4.5%
Anoka City, MN MH RB, Walker Plaza, Series B, 4.20%(1) . . . . . . . . . . . . . $ 1,750,000 $ 1,750,000
Austin, MN IDV RRB, SuperValu Stores, Inc. Project, 4.15%(1) . . . . . . . . . . 4,600,000 4,600,000
Blaine, MN IDV RRB, SuperValu Stores, Inc. Project, 4.15%(1) . . . . . . . . . . 5,500,000 5,500,000
Bloomington, MN Port Authority Tax RRB, Mall of America Project, Series C,
FSA Insured, 4.20%(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,300,000 8,300,000
Burnsville, MN CD RB, SuperValu Stores, Inc. Project, Series 83, 4.15%(1) . . . . 5,500,000 5,500,000
Dakota Cnty., MN Housing & Redevelopment Multifamily Mtg. RB, Westwood
Ridge Rental Housing Project, Series A, 4.20%(1) . . . . . . . . . . . . . . . 4,100,000 4,100,000
Eden Prairie, MN CD RRB, Lakeview Business Center, 4.20%(1) . . . . . . . . . . . 2,495,000 2,495,000
Eden Prairie, MN IDV RB, SuperValu Stores, Inc. Project, 4.15%(1) . . . . . . . . 1,000,000 1,000,000
Maplewood, MN CD RRB, 5.25%(1) . . . . . . . . . . . . . . . . . . . . . . . . . 625,000 625,000
Minneapolis, MN CD RRB, Minnehaha/Lake Partners Project, 4.20%(1) . . . . . . . . 2,750,000 2,750,000
Minneapolis, MN Community Development Agency RRB, Heart Institute
Foundation Project, 4.20%(1) . . . . . . . . . . . . . . . . . . . . . . . . . 2,900,000 2,900,000
Minneapolis, MN RB, Catholic Charities Project, 4.15%(1) . . . . . . . . . . . . 3,000,000 3,000,000
New Ulm, MN Hospital Facilities RB, Health Center Systems, 4%(1) . . . . . . . . 2,400,000 2,400,000
North Suburban Hospital District, MN RB, Anoka & Ramsey Counties Hospital
Health Center, 4%(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,300,000 3,300,000
St. Paul, MN Housing & Redevelopment Authority RB, Science Museum of Minnesota,
Series B, 3.30%(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,300,000 7,300,000
St. Paul, MN Port Authority Tax Increment RB, Westgate Office & Industrial Center
Project, 4.15%(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,500,000 10,500,000
Stillwater, MN IDV RRB, SuperValu Stores, Inc. Project, 4.15%(1) . . . . . . . . 5,500,000 5,500,000
Waite Park, MN Housing RRB, Park Meadows Apts. Project, 4.20%(1) . . . . . . . . 3,235,000 3,235,000
--------------
74,755,000
--------------
MISSOURI-3.1%
MO Environmental Improvement & Energy Research Authority PC RB, Union
Electric Co., Series B, 3.95%, 6/1/98 . . . . . . . . . . . . . . . . . . . . 37,975,000 37,976,124
St. Charles Cnty., MO IDV RRB, Remington Apts. Project, 4.50%(1) . . . . . . . . 12,700,000 12,700,000
--------------
50,676,124
--------------
MONTANA-1.1%
Great Falls, MT IDV RRB, SuperValu Stores, Inc. Project, 4.15%(1) . . . . . . . . 1,000,000 1,000,000
MT Board Investment RR RB, Colstrip Project, 4.25%(1) . . . . . . . . . . . . . . 3,000,000 3,000,000
MT HFAU RB, Health Care Pooled Loan Program, Series A, FGIC Insured, 4.15%(1) . . 14,300,000 14,300,000
--------------
18,300,000
--------------
</TABLE>
8
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
Centennial Tax Exempt Trust
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
------------ --------------
<S> <C> <C>
NEBRASKA-0.2%
Norfolk, NE IDV RRB, SuperValu Stores, Inc. Project, 4.15%(1) . . . . . . . . . . $ 2,800,000 $ 2,800,000
--------------
NEW JERSEY-0.2%
NJ EDAU Manufacturing Facilities RB, VPR Commerce Center Project, 4.40%(1) . . . 3,750,000 3,750,020
--------------
NEW YORK-6.3%
Buffalo, NY RAN, Series A, 4.25%, 7/15/97 . . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,262
Erie Cnty., NY RAN, 4.50%, 6/25/98 . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,006,628
Franklin Cnty., NY IDA RAN, McAdam Cheese Co. Project, 4.20%(1) . . . . . . . . . 600,000 600,000
Hempstead Town, NY GOB, AMBAC Insured, 5%, 2/15/98 . . . . . . . . . . . . . . . 2,572,000 2,588,756
Monroe Cnty., NY RAN, 4.25%, 12/12/97 . . . . . . . . . . . . . . . . . . . . . . 20,050,000 20,105,499
NY PAU RB, Series SG4, 4.35%(1) . . . . . . . . . . . . . . . . . . . . . . . . . 2,295,000 2,295,001
NYC HDC Multifamily Mtg. RB, Columbus Project, Series A, 4.10%(1) . . . . . . . . 2,800,000 2,800,000
NYC HDC Multifamily Mtg. RB, James Tower Development, Series A, 4.10%(1) . . . . 3,000,000 3,000,000
NYC Health & Hospital Corp. RB, Series D, 4.10%(1) . . . . . . . . . . . . . . . 1,500,000 1,500,000
NYC IDA RB, Brooklyn Navy Yard Cogeneration, Series B, 4.15%(1) . . . . . . . . . 15,000,000 15,000,000
NYC IDA RB, Brooklyn Navy Yard Cogeneration, Series A, 4.20%(1) . . . . . . . . . 800,000 799,988
NYC Trust Cultural Resources RRB, American Museum of Natural History, Series A,
MBIA Insured, 4.05%(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,200,000 2,200,042
NYC Trust Cultural Resources RRB, American Museum of Natural History, Series B,
MBIA Insured, 4.05%(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800,000 800,000
NYS DA COP, Rockefeller University, 3.52%(1) . . . . . . . . . . . . . . . . . . 500,000 500,013
NYS Environmental Quality GOB, 3.70%, 8/27/97 . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
NYS ERDAUEF RB, L.I. Lighting Co., Series A, 4.095%(1) . . . . . . . . . . . . . 400,000 400,002
NYS ERDAUEF RB, L.I. Lighting Co., Series B, 4.20%(1) . . . . . . . . . . . . . . 700,000 700,000
NYS ERDAUPC RRB, Orange/Rockland Utility Project,
Series A, AMBAC Insured, 4.05%(1) . . . . . . . . . . . . . . . . . . . . . . 800,000 799,998
NYS LGAC RB, Series SG100, MBIA Insured, 3.75%, 7/24/97 . . . . . . . . . . . . . 10,420,000 10,420,000
NYS LGAC RB, Series SG99, MBIA Insured, 3.75%, 7/24/97(2) . . . . . . . . . . . . 17,195,000 17,195,000
NYS MCFFA RB, Lenox Hill Hospital Project, Series A, 4.10%(1) . . . . . . . . . . 4,300,000 4,299,991
NYS MCFFA RRB, Mental Health Services, Series A, 8.875%, 8/15/97(2) . . . . . . . 1,550,000 1,590,362
NYS TBTAU Beneficial Interest COP, MBIA Insured, 3.80%, 7/15/97(2) . . . . . . . 3,300,000 3,300,000
NYS TBTAU COP, Series A, 4.25%(1) . . . . . . . . . . . . . . . . . . . . . . . . 9,700,000 9,700,000
--------------
104,601,542
--------------
NORTH CAROLINA-0.4%
NC National Bank Pooled Tax-Exempt Trust COP, Series 1990A, 4.283%(1) . . . . . . 3,830,000 3,830,000
NC National Bank Pooled Tax-Exempt Trust COP, Series 1990B, 4.20%(1) . . . . . . 2,015,000 2,015,000
--------------
5,845,000
--------------
</TABLE>
9
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
Centennial Tax Exempt Trust
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
------------ --------------
<S> <C> <C>
NORTH DAKOTA-0.1%
Bismarck, ND IDV RRB, SuperValu Stores, Inc. Project, 4.15%(1) . . . . . . . . . $ 800,000 $ 800,000
Bismarck, ND IDV RRB, SuperValu Stores, Inc. Project, 4.15%(1) . . . . . . . . . 1,500,000 1,500,000
--------------
2,300,000
--------------
OHIO-6.0%
Coshocton Cnty., OH Hospital FA RB, Coshocton Cnty. Memorial Hospital Project,
4.26%(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,500,000 3,500,000
Cuyahoga Cnty., OH IDV RB, Southwest LP, 3.75%, 12/1/97(2) . . . . . . . . . . . 2,015,000 2,015,000
Gallia Cnty., OH IDV Mtg. RRB, Jackson Pike Assn., 3.75%, 12/15/97(2) . . . . . . 4,040,000 4,040,000
Greene Cnty., OH IDV RRB, SuperValu Holdings, Inc. Project, 4.15%(1) . . . . . . 1,000,000 1,000,000
Lorain Cnty., OH Hospital Facilities RB, Catholic Health Care Partners, 3.80%,
7/3/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000 25,000,000
Lucas Cnty., OH IDV RRB, H.H. Motel, Inc. Project, 4.20%(1) . . . . . . . . . . . 3,275,000 3,275,000
Marion Cnty., OH Hospital RB, Pooled Lease Program, 4.20%(1) . . . . . . . . . . 6,560,000 6,560,000
Marion Cnty., OH Hospital RB, Pooled Lease Program, 4.20%(1) . . . . . . . . . . 3,460,000 3,460,000
Merchant & Mechanics Tax-Exempt Mtg. Bond Trust RB, 3.70%, 9/1/97(2) . . . . . . 925,000 925,000
Miami Valley, OH Tax-Exempt Mtg. Trust RB, Series 86, 4.88%, 10/15/97(2) . . . . 2,765,000 2,765,000
OH Air Quality DAU PC RRB, Series B, 3.85%, 10/9/97 . . . . . . . . . . . . . . . 4,655,000 4,655,000
OH Water DAU PC Facilities RB, Duquesne Commercial Paper, Series A, 3.85%,
10/9/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,955,000 33,955,000
Scioto Cnty., OH HCF RB, Hill View Retirement Center, 3.90%,
12/1/97(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,815,000 2,815,000
Toledo, OH City Services Special Assessment Nts., 4.15%(1) . . . . . . . . . . . 2,720,000 2,720,000
Warren Cnty., OH IDV RRB, Liquid Container Project, 4.25%(1) . . . . . . . . . . 1,670,000 1,670,000
--------------
98,355,000
--------------
OKLAHOMA-0.6%
Claremore, OK Industrial & Redevelopment Authority RRB, Worthington Cylinder
Project, 4.25%(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,220,000 2,220,000
Cleveland Cnty., OK Public Facilities RB, Hunt Development Project, Series A,
4.40%(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,000
Mid-West, OK Tax-Exempt Mtg. Board Trust RB, 3.85%(1) . . . . . . . . . . . . . . 820,000 820,000
Tulsa, OK Industrial Authority RB, 3.60%(1) . . . . . . . . . . . . . . . . . . . 6,500,000 6,500,000
--------------
10,540,000
--------------
OREGON-0.6%
Hillsboro, OR RB, Oregon Graduate Institute, 4.20%(1) . . . . . . . . . . . . . . 6,900,000 6,900,000
OR Economic & IDV Commission RB, Eagle-Picher Industries Project, 4%(1) . . . . . 3,600,000 3,600,000
--------------
10,500,000
--------------
</TABLE>
10
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
Centennial Tax Exempt Trust
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
------------ --------------
<S> <C> <C>
PENNSYLVANIA-1.9%
Delaware Cnty., PA IDA PC RRB, Philadelphia Electric Co., FGIC Insured, 3.65%,
7/23/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,000,000 $ 10,000,000
Montgomery Cnty., PA IDAU RB, Quaker Chemical Corp. Project, 3.954%(1) . . . . . 1,600,000 1,600,000
PA HEFAU RB, Council Independent Colleges, Series A3, 4.75%, 4/1/98(2) . . . . . 2,600,000 2,615,102
PA HEFAU RB, Council Independent Colleges, Series A4, 4.75%, 4/1/98 . . . . . . . 1,200,000 1,206,970
PA Higher Education University Funding Obligations RB, Temple University,
4.75%, 5/18/98(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,000,000 16,114,996
--------------
31,537,068
--------------
SOUTH CAROLINA-3.4%
Charleston Center Tax-Exempt Bonds, Grantor Trust No. 2, 3.90%, 11/1/97(2) . . . 4,407,500 4,407,500
Charleston Center Tax-Exempt Bonds, Grantor Trust No. 3, 3.50%, 7/1/97(2) . . . . 9,452,500 9,452,500
Charleston Center Tax-Exempt Bonds, Grantor Trust No. 6, 3.70%, 10/1/97(2) . . . 8,075,000 8,075,000
Dorchester Cnty., SC PC Facilities RRB, The BOC Group, Inc. Project, 4.20%(1) . . 3,500,000 3,500,000
Piedmont, SC MPA Electrical RRB, Series D, MBIA Insured, 4.15%(1) . . . . . . . . 15,000,000 15,000,000
SC Jobs & EDAU RB, Wellman Income Project, 4.30%(1) . . . . . . . . . . . . . . . 1,000,000 1,000,000
SC Public Service Authority RB, Series 182, MBIA Insured, 4.25%(1) . . . . . . . 14,200,000 14,200,000
--------------
55,635,000
--------------
SOUTH DAKOTA-2.1%
Grant Cnty., SD PC RRB, Otter Tail Power Co. Project, 4.20%(1) . . . . . . . . . 10,400,000 10,400,000
SD Health & Educational Facilities RB, Sioux Valley Hospital Issue, 4.20%(1) . . 19,700,000 19,700,000
Watertown, SD IDV RRB, SuperValu Stores, Inc. Project, 4.15%(1) . . . . . . . . . 3,900,000 3,900,000
--------------
34,000,000
--------------
TENNESSEE-2.1%
Clarksville, TN Public Building Authority RB, Pooled Financing-Tennessee
Municipal Bond Fund, 4.20%(1) . . . . . . . . . . . . . . . . . . . . . . . . 10,800,000 10,800,000
Dayton, TN IDV Board RRB, La-Z-Boy Chair Co. Project, 4.20%(1) . . . . . . . . . 4,350,000 4,350,000
Knox Cnty., TN IDV Board RB, Weisgarber Partners, FGIC Insured, 3.85%(1) . . . . 3,000,000 3,000,000
Metropolitan Government of Nashville & Davidson Cnty., TN Educational &
HF Board RB, Vanderbilt University Project, Series 1985B, 3.95%, 5/1/98(2) . . 2,500,000 2,500,000
Metropolitan Government of Nashville & Davidson Cnty., TN MH RB, Arbor Crest
Project, Series B, 4.20%(1) . . . . . . . . . . . . . . . . . . . . . . . . . 3,550,000 3,550,000
Rutherford Cnty., TN IDV Board Industrial Building RB, Derby Industries, Inc.
Project, 4.30%(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,345,000 1,345,000
TN GOB, 5%, 5/1/98(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,640,000 8,716,615
--------------
34,261,615
--------------
</TABLE>
11
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
Centennial Tax Exempt Trust
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
------------ --------------
<S> <C> <C>
TEXAS-12.7%
Angelina & Neches TX River Authority PC RRB,
Temple-Inland Forest Project, 4.35%(1) . . . . . . . . . . . . . . . . . . . . $ 7,350,000 $ 7,350,000
Greater East TX HEAU RRB, Student Loans, Series A, 4.10%, 5/1/98 . . . . . . . . 4,700,000 4,700,000
Gulf Coast, TX IDAU Marine Terminal RB, Amoco Oil Project, 3.75%, 12/1/97(2) . . 8,065,000 8,065,000
Harris Cnty., TX Criminal Justice Center RB, Series SG96, FGIC
Insured, 3.90%, 8/14/97 . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,475,000 7,475,000
Harris Cnty., TX Toll Road COP, 3.97%(1) . . . . . . . . . . . . . . . . . . . . 9,500,000 9,500,000
Hockley Cnty., TX IDV Corp. PC RB, Amoco Project-Standard
Oil Co., 3.60%, 9/1/97(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000,000 20,000,000
Houston, TX WSS RB, Series SG77, 4.35%(1) . . . . . . . . . . . . . . . . . . . . 35,000,000 35,000,000
San Antonio, TX Electric & Gas RRB, Series SG105, 3.85%, 8/7/97 . . . . . . . . . 20,000,000 20,000,000
Travis Cnty., TX Housing Finance Corp. MH RB, Bent Oaks Apts., 4.25%(1) . . . . . 4,400,000 4,400,000
TX Tax & RAN, 4.75%, 8/29/97 . . . . . . . . . . . . . . . . . . . . . . . . . . 78,150,000 78,253,678
TX Turnpike Authority RB, Dallas Northtollway, Series SG70, 4.35%(1) . . . . . . 15,325,000 15,325,000
--------------
210,068,678
--------------
UTAH-0.5%
UT HFA MH RRB, Candlestick Apts. Project, 4.15%(1) . . . . . . . . . . . . . . . 6,400,000 6,400,000
Weber Cnty., UT IDV RRB, Parker Properties, Inc. Project, 4.20%(1) . . . . . . . 2,600,000 2,600,000
--------------
9,000,000
--------------
VERMONT-0.3%
VT Educational & Health Buildings Financing Agency RB, Middlebury College
Project, Series 1988A, 3.95%, 5/1/98(2) . . . . . . . . . . . . . . . . . . . 4,700,000 4,700,000
VT IDAU RB, Sherbern Corp., Series 1998, 3.60%(1) . . . . . . . . . . . . . . . . 1,005,000 1,005,000
--------------
5,705,000
--------------
WASHINGTON-1.6%
Port Longview, WA IDV RB, Longview Fibre Co. Project, 4.35%(1) . . . . . . . . . 5,000,000 5,000,000
Redmond, WA Public Corp. Industrial RRB, Genie Industries, Lot 1, 4.10%(1) . . . 1,010,000 1,010,000
Redmond, WA Public Corp. Industrial RRB, Genie Industries, Lot 2, 4.10%(1) . . . 1,725,000 1,725,000
Seattle, WA IDV Corp. RB, RICS LP, 4.10%(1) . . . . . . . . . . . . . . . . . . . 4,950,000 4,950,000
WA GORB, Series 1995C, 4.25%(1) . . . . . . . . . . . . . . . . . . . . . . . . . 13,100,000 13,100,000
--------------
25,785,000
--------------
WEST VIRGINIA-0.3%
Beckley, WV RAN, Series A, 4.20%(1) . . . . . . . . . . . . . . . . . . . . . . . 1,500,000 1,500,000
Cabell Cnty., WV BOE GOB, MBIA Insured, 8%, 5/1/98 . . . . . . . . . . . . . . . 2,625,000 2,712,051
--------------
4,212,051
--------------
</TABLE>
12
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
Centennial Tax Exempt Trust
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
------------ --------------
<S> <C> <C>
WYOMING-0.2%
Uinta Cnty., WY PC RB, AMOCO Standard Oil Co. of Indiana Project, 3.90%,
12/1/97(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,000,000 $ 3,000,000
--------------
U.S. POSSESSIONS-0.0%
PR Industrial, Medical & Environmental PC Facilities FAU RB, Reynolds Metals Co.
Project, 3.80%, 9/1/97(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000 200,016
----------- --------------
Total Investments, at Value . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.7% 1,693,607,897
Liabilities in Excess of Other Assets . . . . . . . . . . . . . . . . . . . . . . (2.7) (44,861,768)
----------- --------------
Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $1,648,746,129
=========== ==============
</TABLE>
13
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
Centennial Tax Exempt Trust
To simplify the listings of securities abbreviations are used per the table
below:
<TABLE>
<S> <C>
BOE Board of Education HFAU Health Facilities Authority
CD Commercial Development HFFAU Health Facilities Finance Authority
COP Certificates of Participation IDV Industrial Development
DA Dormitory Authority IDA Industrial Development Agency
DAU Development Authority IDAU Industrial Development Authority
ED Economic Development LGAC Local Government Assistance Corp.
EDAU Economic Development Authority L.I. Long Island
EDFAU Economic Development Finance Authority MCFFA Medical Care Facilities Finance Agency
ERDAUEF Energy Research & Development Authority Electric Facilities MH Multifamily Housing
ERDAUPC Energy Research & Development Authority Pollution Control MPA Municipal Power Agency
FA Facilities Authority NYC New York City
FAU Finance Authority NYS New York State
GOB General Obligation Bonds PAU Power Authority
GORB General Obligation Refunding Bonds PC Pollution Control
HA Hospital Authority PCFAU Pollution Control Finance Authority
HAU Housing Authority PPA Public Power Agency
HCF Health Care Facilities RA Redevelopment Agency
HDC Housing Development Corp. RAN Revenue Anticipation Nts.
HEAU Higher Education Authority RB Revenue Bonds
HEFAU Higher Educational Facilities Authority RR Resource Recovery
HF Health Facilities RRB Revenue Refunding Bonds
HFA Housing Finance Agency SFM Single Family Mortgage
SWD Solid Waste Disposal
TBTAU Triborough Bridge & Tunnel Authority
WSS Water & Sewer System
</TABLE>
1. Floating or variable rate obligation maturing in more than one year. The
interest rate, which is based on specific, or an index of, market interest
rates, is subject to change periodically and is the effective rate on June
30, 1997. This instrument may also have a demand feature which allows the
recovery of principal at any time, or at specified intervals not exceeding
one year, on up to 30 days notice.
2. Put obligation redeemable at full face value on the date reported.
See accompanying Notes to Financial Statements.
14
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES June 30, 1997
Centennial Tax Exempt Trust
<TABLE>
<S> <C>
ASSETS:
Investments, at value-see accompanying statement . . . . . . . . . . . . . . . . . . . . . $1,693,607,897
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67,677
Receivables:
Shares of beneficial interest sold . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,202,566
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,950,146
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,069
--------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,746,839,355
--------------
LIABILITIES:
Payables and other liabilities:
Investments purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,537,733
Shares of beneficial interest redeemed . . . . . . . . . . . . . . . . . . . . . . . . . 18,476,819
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,668,348
Service plan fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134,349
Transfer and shareholder servicing agent fees . . . . . . . . . . . . . . . . . . . . . 56,005
Trustees' fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,158
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218,814
--------------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98,093,226
--------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,648,746,129
==============
COMPOSITION OF NET ASSETS:
Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,648,641,002
Accumulated net realized gain on investment transactions . . . . . . . . . . . . . . . . . 105,127
--------------
NET ASSETS-applicable to 1,648,656,970 shares of beneficial
interest outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,648,746,129
==============
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE . . . . . . . . . . . . . . $1.00
</TABLE>
See accompanying Notes to Financial Statements.
15
<PAGE>
STATEMENT OF OPERATIONS For the Year Ended June 30, 1997
Centennial Tax Exempt Trust
<TABLE>
<S> <C>
INVESTMENT INCOME-Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $58,330,447
-----------
EXPENSES:
Management fees-Note 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,858,451
Service plan fees-Note 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,177,577
Transfer and shareholder servicing agent fees-Note 3 . . . . . . . . . . . . . . . . . . . 720,214
Registration and filing fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364,067
Custodian fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251,398
Shareholder reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,016
Legal and auditing fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,178
Trustees' fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,685
Insurance expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,792
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,308
-----------
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,521,686
Less expenses paid indirectly-Note 3 . . . . . . . . . . . . . . . . . . . . . . . . . . (169,628)
-----------
Net expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,352,058
-----------
NET INVESTMENT INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,978,389
NET REALIZED GAIN ON INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116,199
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . . . $47,094,588
===========
</TABLE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended June 30,
---------------------------------------
1997 1996
--------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income . . . . . . . . . . . . . . . . . . . . . . $ 46,978,389 $ 46,013,851
Net realized gain . . . . . . . . . . . . . . . . . . . . . . . . 116,199 244,254
-------------- --------------
Net increase in net assets resulting from operations . . . . . . 47,094,588 46,258,105
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS . . . . . . . . . . . (47,224,231) (46,061,715)
BENEFICIAL INTEREST TRANSACTIONS:
Net increase in net assets resulting from beneficial interest
transactions-Note 2 . . . . . . . . . . . . . . . . . . . . . 222,881,798 110,876,607
-------------- --------------
NET ASSETS:
Total increase . . . . . . . . . . . . . . . . . . . . . . . . . 222,752,155 111,072,997
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . 1,425,993,974 1,314,920,977
-------------- --------------
End of period . . . . . . . . . . . . . . . . . . . . . . . . . $1,648,746,129 $1,425,993,974
============== ==============
</TABLE>
See accompanying Notes to Financial Statements.
16
<PAGE>
FINANCIAL HIGHLIGHTS
Centennial Tax Exempt Trust
<TABLE>
<CAPTION>
Year Ended June 30,
---------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<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 .02 .02
Dividends and distributions to shareholders . . . . . . . . (.03) (.03) (.03) (.02) (.02)
------- ------- ------- ------- -------
Net asset value, end of period . . . . . . . . . . . . . . $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= =======
TOTAL RETURN, AT
NET ASSET VALUE(1) . . . . . . . . . . . . . . . . . . . 3.01% 3.16% 3.17% 1.90% 2.19%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in millions) . . . . . . . . . . $1,649 $1,426 $1,315 $1,039 $981
Average net assets (in millions) . . . . . . . . . . . . . $1,591 $1,473 $1,127 $1,057 $977
Ratios to average net assets:
Net investment income . . . . . . . . . . . . . . . . . . 2.95% 3.12% 3.13% 1.87% 2.08%
Expenses(2) . . . . . . . . . . . . . . . . . . . . . . . . 0.72% 0.72% 0.73% 0.76% 0.76%
</TABLE>
1. Assumes a 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.
2. Beginning in fiscal 1995, the expense ratio reflects the effect of gross
expenses paid indirectly by the Trust. Prior year expense ratios have not
been adjusted.
See accompanying Notes to Financial Statements.
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Centennial Tax Exempt Trust
1. SIGNIFICANT ACCOUNTING POLICIES
Centennial Tax Exempt 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
short-term interest income exempt from Federal income taxes that is consistent
with low capital risk and the maintenance of liquidity by investing in
short-term municipal securities. The Trust's investment adviser 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.
Investment Valuation-Portfolio securities are valued on the basis of amortized
cost, which approximates market value.
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.
Distributions to Shareholders-The Trust intends to declare dividends from net
investment income each day the New York Stock Exchange is open for business and
pay such dividends monthly. To effect its policy of maintaining a net asset
value of $1.00 per share, the Trust may withhold dividends or make
distributions of net realized gains.
Other-Investment transactions are accounted for on the date the investments are
purchased or sold (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.
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
Centennial Tax Exempt 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, 1997 Year Ended June 30, 1996
---------------------------------- ---------------------------------
Shares Amount Shares Amount
--------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
Sold . . . . . . . . . . . 4,793,933,452 $ 4,793,933,452 4,357,729,565 $ 4,357,729,565
Dividends and distributions
reinvested . . . . . . . . 45,861,059 45,861,059 45,904,203 45,904,203
Redeemed . . . . . . . . . (4,616,912,713) (4,616,912,713) (4,292,757,161) (4,292,757,161)
-------------- --------------- --------------- ---------------
Net increase . . . . . . . 222,881,798 $ 222,881,798 110,876,607 $ 110,876,607
============== =============== =============== ===============
</TABLE>
3. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
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 net assets; 0.475% of the next $250 million of net
assets; 0.45% of the next $250 million of net assets; 0.425% of the next $250
million of net assets; 0.40% of the next $250 million of net assets; 0.375% of
the next $250 million of net assets; 0.35% of the next $500 million of net
assets and 0.325% of net assets in excess of $2 billion. Until Trust net assets
reach $1.5 billion, the annual fee payable to the Manager will be reduced by
$100,000.
Shareholder Services, Inc. (SSI), a subsidiary of OFI, is the transfer and
shareholder servicing agent for the Trust, and for other registered investment
companies. SSI's total costs of providing such services are allocated ratably
to these companies.
Expenses paid indirectly represent a reduction of custodian fees for earnings
on cash balances maintained by the Trust.
Under an approved service plan, the Trust may expend up to 0.20% of its 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 institutions. During the year ended June 30, 1997, the Trust paid $10,400
to a broker/dealer affiliated with the Manager as reimbursement for
distribution-related expenses.
<PAGE>
Exhibit A
DESCRIPTION OF SECURITIES RATINGS
Below is a description of the two highest rating categories for Short Term Debt
and Long Term Debt by the "Nationally-Recognized Statistical Rating
Organizations" which the Manager evaluates in purchasing securities on behalf of
the Trust. The ratings descriptions are based on information supplied by the
ratings organizations to subscribers.
Short Term Debt Ratings.
Moody's Investors Service, Inc. ("Moody's"): The following rating designations
for commercial paper (defined by Moody's as promissory obligations not having
original maturity in excess of nine months), are judged by Moody's to be
investment grade, and indicate the relative repayment capacity of rated issuers:
Prime-1: Superior capacity for repayment. Capacity will normally be evidenced by
the following characteristics: (a) leveling market positions in
well-established industries; (b) high rates of return on funds
employed; (c) conservative capitalization structures with moderate
reliance on debt and ample asset protection; (d) broad margins in
earning coverage of fixed financial charges and high internal cash
generation; and (e) well established access to a range of financial
markets and assured sources of alternate liquidity.
Prime-2: Strong capacity for repayment. This will normally be evidenced by many
of the characteristics cited above but to a lesser degree. Earnings
trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may
be more affected by external conditions. Ample alternate liquidity is
maintained.
Moody's ratings for state and municipal short-term obligations are designated
"Moody's Investment Grade" ("MIG"). Short-term notes which have demand features
may also be designated as "VMIG".
These rating categories are as follows:
MIG1/VMIG1: Best quality. There is present strong protection by established
cash flows, superior liquidity support or demonstrated broadbased
access to the market for refinancing.
MIG2/VMIG2: High quality. Margins of protection are ample although not so large
as in the preceding group.
Standard & Poor's Corporation ("S&P"): The following ratings by S&P for
commercial paper (defined by S&P as debt having an original maturity of no more
than 365 days) assess the likelihood of payment:
A-1: Strong capacity for timely payment. Those issues determined to possess
extremely strong safety characteristics are denoted with a plus sign (+)
designation.
A-5
<PAGE>
A-2: Satisfactory capacity for timely payment. However, the relative degree of
safety is not as high as for issues designated "A-1".
S&P's ratings for Municipal Notes due in three years or less are:
SP-1: Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will be
given a plus (+) designation.
SP-2: Satisfactory capacity to pay principal and interest.
S&P assigns "dual ratings" to all municipal debt issues that have a demand or
double feature as part of their provisions. The first rating addresses the
likelihood of repayment of principal and interest as due, and the second rating
addresses only the demand feature. With short-term demand debt, S&P's note
rating symbols are used with the commercial paper symbols (for example,
"SP-1+/A- 1+").
Fitch Investors Service, Inc. ("Fitch"): Fitch assigns the following short-term
ratings to debt obligations that are payable on demand or have original
maturities of generally up to three years, including commercial paper,
certificates of deposit, medium-term notes, and municipal and investment notes:
F-1+: Exceptionally strong credit quality; the strongest degree of assurance for
timely payment.
F-1: Very strong credit quality; assurance of timely payment is only slightly
less in degree than issues rated "F-1+".
F-2: Good credit quality; satisfactory degree of assurance for timely
payment, but the margin of safety is not as great as for issues assigned
"F-1+" or "F-1" ratings.
Duff & Phelps, Inc. ("Duff & Phelps"): The following ratings are for commercial
paper (defined by Duff & Phelps as obligations with maturities, when issued, of
under one year), asset-backed commercial paper, and certificates of deposit (the
ratings cover all obligations of the institution with maturities, when issued,
of under one year, including bankers' acceptance and letters of credit):
Duff 1+: Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or access to alternative
sources of funds, is outstanding, and safety is just below risk-free
U.S. Treasury short-term obligations.
Duff 1: Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection factors. Risk
factors are minor.
Duff 1-: High certainty of timely payment. Liquidity factors are strong and
supported by good fundamental protection factors. Risk factors are very
small.
Duff 2: Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge
total financing requirements, access to capital markets is good. Risk
factors are small.
IBCA Limited or its affiliate IBCA Inc. ("IBCA"): Short-term ratings, including
commercial paper (with maturities up to 12 months), are as follows:
A1: Obligations supported by the highest capacity for timely repayment.
A1: Obligations supported by a very strong capacity for timely repayment.
A2: Obligations supported by a strong capacity for timely repayment, although
such capacity may be susceptible to adverse changes in business, economic,
or financial conditions.
Thomson BankWatch, Inc. ("TBW"): The following short-term ratings apply to
commercial paper, certificates of deposit, unsecured notes, and other securities
having a maturity of one year or less.
TBW-1: The highest category; indicates the degree of safety regarding timely
repayment of principal and interest is very strong.
TBW-2: The second highest rating category; while the degree of safety regarding
timely repayment of principal and interest is strong, the relative
degree of safety is not as high
as for issues rated "TBW-1".
Long Term Debt Ratings. These ratings are relevant for securities purchased by
the Trust with a remaining maturity of 397 days or less, or for rating issuers
of short-term obligations.
Moody's: Bonds (including municipal bonds) are rated as follows:
Aaa: Judged to be the best quality. They carry the smallest degree of
investment risk and are generally referred to as "gilt edge." 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, such changes as can be visualized are most unlikely to impair
the fundamentally strong positions of such issues.
Aa: 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 in "Aaa" securities or fluctuations of protective elements
may be of greater amplitude or there may be other elements present which
make the long-term risks appear somewhat larger than in "Aaa" securities.
Moody's applies numerical modifiers "1", "2" and "3" in its "Aa" rating
classification. The modifier "1" indicates that the security ranks in the higher
end of its generic rating category; the modifier "2" indicates a mid-range
ranking; and the modifier "3" indicates that the issue ranks in the lower end of
its generic rating category.
A-6
<PAGE>
Standard & Poor's: Bonds (including municipal bonds) are rated as follows:
AAA: The highest rating assigned by S&P. Capacity to pay interest and repay
principal is extremely strong.
AA: A strong capacity to pay interest and repay principal and differ from "AAA"
rated issues only in small degree.
Fitch:
AAA: Considered to be investment grade and of the highest credit quality. The
obligor has an exceptionally strong ability to pay interest and repay principal,
which is unlikely to be affected by reasonably foreseeable events.
AA: Considered to be investment grade and of very high credit quality. The
obligor's ability to pay interest and repay principal is very strong, although
not quite as strong as bonds rated "AAA". Plus (+) and minus (-) signs are used
in the "AA" category to indicate the relative position of a credit within that
category.
Because bonds rated in the "AAA" and "AA" categories are not significantly
vulnerable to foreseeable future developments, short-term debt of these issuers
is generally rated "F-1+".
Duff & Phelps:
AAA: The highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.
AA: High credit quality. Protection factors are strong. Risk is modest but may
vary slightly from time to time because of economic conditions. Plus (+) and
minus (-) signs are used in the "AA" category to indicate the relative position
of a credit within that category.
IBCA: Long-term obligations (with maturities of more than 12 months) are rated
as follows:
AAA: The lowest expectation of investment risk. Capacity for timely repayment of
principal and interest is substantial such that adverse changes in business,
economic, or financial conditions are unlikely to increase investment risk
significantly.
AA: A very low expectation for investment risk. Capacity for timely repayment of
principal and interest is substantial. Adverse changes in business, economic, or
financial conditions may increase investment risk albeit not very significantly.
A plus (+) or minus (-) sign may be appended to a long term rating to denote
relative status within a rating category.
TBW: TBW issues the following ratings for companies. These ratings assess the
likelihood of
A-7
<PAGE>
receiving payment of principal and interest on a timely basis and incorporate
TBW's opinion as to the vulnerability of the company to adverse developments,
which may impact the market's perception of the company, thereby affecting the
marketability of its securities.
A: Possesses an exceptionally strong balance sheet and earnings record,
translating into an excellent reputation and unquestioned access to its
natural money markets. If weakness or vulnerability exists in any aspect
of the company's business, it is entirely mitigated by the strengths of
the organization.
A/B: The company is financially very solid with a favorable track record and no
readily apparent weakness. Its overall risk profile, while low, is not
quite as favorable as for companies in the highest rating category.
A-8
<PAGE>
Exhibit B
INDUSTRY CLASSIFICATIONS
Adult Living Facilities
Education
Electric
Gas
General Obligation
Higher Education
Highways
Hospital
Lease Rental
Manufacturing, Durables
Manufacturing, Non Durables
Marine/Aviation Facilities
Multi Family Housing
Non Profit Organization
Pollution Control Resource
Recovery
Sales Tax
Sewer
Single Family Housing
Special Assessment
Telephone
Water
A-9
<PAGE>
Exhibit C
AUTOMATIC WITHDRAWAL PLAN PROVISIONS
By requesting an Automatic Withdrawal Plan, the shareholder agrees to the terms
and conditions applicable to such plans, as stated below and elsewhere in the
Application for such Plans, and the Prospectus and this Statement of Additional
Information as they may be amended from time to time by the Trust and/or the
Distributor. When adopted, such amendments will automatically apply to existing
Plans.
Trust shares will be redeemed as necessary to meet withdrawal payments.
Shares acquired without a sales charge will be redeemed first and thereafter
shares acquired with reinvested dividends and distributions followed by shares
acquired with a sales charge will be redeemed to the extent necessary to make
withdrawal payments. Depending upon the amount withdrawn, the investor's
principal may be depleted. Payments made to shareholders under such plans should
not be considered as a yield or income on investment. Purchases of additional
shares concurrently with withdrawals are undesirable because of sales charges on
purchases when made. Accordingly, a shareholder may not maintain an Automatic
Withdrawal Plan while simultaneously making regular purchases.
1. Shareholder Services, Inc., the Transfer Agent of the Trust, will
administer the Automatic Withdrawal Plan (the "Plan") as agent for the person
(the "Planholder") who executed the Plan authorization and application submitted
to the Transfer Agent.
2. Certificates will not be issued for shares of the Trust purchased for and
held under the Plan, but the Transfer Agent will credit all such shares to the
account of the Planholder on the records of the Trust. Any share certificates
now held by the Planholder may be surrendered unendorsed to the Transfer Agent
with the Plan application so that the shares represented by the certificate may
be held under the Plan. Those shares will be carried on the Planholder's Plan
Statement.
3. Distributions of capital gains must be reinvested in shares of the Trust,
which will be done at net asset value without a sales charge. Dividends may be
paid in cash or reinvested.
4. Redemptions of shares in connection with disbursement payments will be
made at the net asset value per share determined on the redemption date.
5. Checks or ACH payments will be transmitted three business days prior to
the date selected for receipt of the monthly or quarterly payment (the date of
receipt is approximate), according to the choice specified in writing by the
Planholder.
6. The amount and the interval of disbursement payments and the address to
which checks are to be mailed may be changed at any time by the Planholder on
written notification to the Transfer Agent. The Planholder should allow at least
two weeks' time in mailing such notification before the requested change can be
put in effect.
A-11
<PAGE>
7. The Planholder may, at any time, instruct the Transfer Agent by written
notice (in proper form in accordance with the requirements of the then-current
Prospectus of the Trust) to redeem all, or any part of, the shares held under
the Plan. In such case, the Transfer Agent will redeem the number of shares
requested at the net asset value per share in effect in accordance with the
Trust's usual redemption procedures and will mail a check for the proceeds of
such redemption to the Planholder.
8. The Plan may, at any time, be terminated by the Planholder on written
notice to the Transfer Agent, or by the Transfer Agent upon receiving directions
to that effect from the Trust. The Transfer Agent will also terminate the Plan
upon receipt of evidence satisfactory to it of the death or legal incapacity of
the Planholder. Upon termination of the Plan by the Transfer Agent or the Trust,
shares remaining unredeemed will be held in an uncertificated account in the
name of the Planholder, and the account will continue as a
dividend-reinvestment, uncertificated account unless and until proper
instructions are received from the Planholder, his executor or guardian, or as
otherwise appropriate.
9. For purposes of using shares held under the Plan as collateral, the
Planholder may request issuance of a portion of his shares in certificated form.
Upon written request from the Planholder, the Transfer Agent will determine the
number of shares as to which a certificate may be issued, so as not to cause the
withdrawal checks to stop because of exhaustion of uncertificated shares needed
to continue payments. Should such uncertificated shares become exhausted, Plan
withdrawals will terminate.
10. The Transfer Agent shall incur no liability to the Planholder for any
action taken or omitted by the Transfer Agent in good faith.
11. In the event that the Transfer Agent shall cease to act as transfer agent
for the Trust, the Planholder will be deemed to have appointed any successor
transfer agent to act as his agent in administering the Plan.
A-12
<PAGE>
Exhibit D
TAX EXEMPT/TAX EQUIVALENT YIELDS
The equivalent yield table below compares tax-free income with taxable income
under Federal income tax rates effective in 1997. The tables assume that an
investor's highest tax bracket applies to the change in taxable income resulting
from a switch between taxable and non-taxable investments, that the investor is
not subject to the Alternative Minimum Tax, and that state income tax payments
are fully deductible for Federal income tax purposes. The income tax brackets
are subject to indexing in future years to reflect changes in the Consumer Price
Index.
Example: Assuming a 4.0% tax-free yield, the equivalent taxable yield would be
6.25% for a person in the 36% tax bracket.
<TABLE>
<CAPTION>
Centennial Tax Exempt Trust Yield of:
Federal Effective 1.5% 2.0% 2.5%
Taxable Tax Is Approximately Equivalent To a
Income Bracket Taxable Yield of:
<S> <C> <C> <C> <C> <C>
JOINT RETURN
- ---------------------
Over Not over
- -------- -----------
$ 0 $ 41,200 15.0% 1.76% 2.35% 2.94%
$ 41,200 $ 99,600 28.0% 2.08% 2.78% 3.47%
$ 99,600 $151,750 31.0% 2.17% 2.90% 3.62%
$151,750 $271,050 36.0% 2.34% 3.13% 3.91%
$271,050 and above 39.6% 2.48% 3.31% 4.14%
SINGLE RETURN
- ------------------------
Over Not over
- ------- -----------
$ 0 $ 24,650 15.0% 1.76% 2.35% 2.94%
$ 24,650 $ 59,750 28.0% 2.08% 2.78% 3.47%
$ 59,750 $124,650 31.0% 2.17% 2.90% 3.62%
$124,650 $271,050 36.0% 2.34% 3.13% 3.91%
$271,050 and above 39.6% 2.48% 3.31% 4.14%
A-13
<PAGE>
Centennial Tax Exempt Trust Yield of:
Federal Effective 3.0% 3.5% 4.0% 4.5%
Taxable Tax Is Approximately Equivalent To a
Income Bracket Taxable Yield of:
JOINT RETURN
- ---------------------
Over Not over
- -------- -----------
$ 0 $ 41,200 15.0% 3.53% 4.12% 4.71% 5.29%
$ 41,200 $ 99,600 28.0% 4.17% 4.86% 5.56% 6.25%
$ 99,600 $151,750 31.0% 4.35% 5.07% 5.80% 6.52%
$151,750 $271,050 36.0% 4.69% 5.47% 6.25% 7.03%
$271,050 39.6% 4.97% 5.79% 6.62% 7.45%
SINGLE RETURN
- -------------------------
Over Not over
- -------- -----------
$ 0 $ 24,650 15.0% 3.53% 4.12% 4.71% 5.29%
$ 24,650 $ 59,750 28.0% 4.17% 4.86% 5.56% 6.25%
$ 59,750 $124,650 31.0% 4.35% 5.07% 5.80% 6.52%
$124,650 $271,050 36.0% 4.69% 5.47% 6.25% 7.03%
$271,050 39.6% 4.97% 5.79% 6.62% 7.45%
</TABLE>
A-14
<PAGE>
Investment Advisor and Distributor
Centennial Asset Management Corporation
6803 South Tucson Way
Englewood, Colorado 80112
Sub-Distributor
OppenheimerFunds Distributor, Inc.
PO Box 5254
Denver, Colorado 80217
Transfer Agent and Shareholder Servicing Agent
Shareholder Services, Inc.
P.O. Box 5143
Denver, Colorado 80217
1-800-525-9310
Custodian
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
PXO160.001.1097
<PAGE>
CENTENNIAL TAX EXEMPT TRUST
FORM N-1A
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
- -------- --------------------------------
(a) Financial Statements:
---------------------
(1) Condensed Financial Information (See Part A): Filed herewith
(2) Independent Auditors' Report (See Part B): Filed
herewith
(3) Statement of Investments, June 30, 1997 (See Part B): Filed
herewith
(4) Statement of Assets and Liabilities, June 30, 1997 (See Part B):
Filed herewith
(5) Statement of Operations for the year ended June 30, 1997 (See Part
B): Filed herewith
(6) Statement of Changes in Net Assets for the years ended June 30,
1996 and 1997 (See Part B): Filed herewith
(7) Notes to Financial Statements (See Part B): Filed herewith
(b) Exhibits:
---------
(1) Restated Declaration of Trust dated September 27, 1985: Filed with
Registrant's Post-Effective Amendment No. 11, 9/27/85, and refiled
with Registrant's Post-Effective Amendment No. 28, 10/31/94,
pursuant to Item 102 of Regulation S-T and incorporated herein by
reference.
(2) By-Laws, as amended through June 26, 1990: Filed with Registrant's
Post-Effective Amendment No. 23, 10/31/91, and refiled with
Registrant's Post- Effective Amendment No. 28, 10/31/94, pursuant
to Item 102 of Regulation S-T and incorporated herein by
reference.
(3) Not applicable
(4) Specimen Share Certificate: Filed with Registrant's
Post-Effective Amendment No. 11, 9/27/85, and
refiled with Registrant's Post-Effective Amendment
No. 28, 10/31/94, pursuant to Item 102 of Regulation
S-T and incorporated herein by reference.
(5) Investment Advisory Agreement dated February 18, 1992: Filed with
Registrant's Post-Effective Amendment No. 25, 11/1/92, and refiled
with Registrant's Post-Effective Amendment No. 28, 10/31/94,
pursuant to Item 102 of Regulation S-T and incorporated herein by
reference.
(6) (i) General Distributor's Agreement between Registrant and
Centennial Asset Management Corporation dated 10/13/92: Filed with
Registrant's Post-Effective Amendment No. 26, 8/30/93, and
incorporated herein by reference.
(ii)Form of Centennial Asset Management Corporation
Dealer Agreement: Filed with Post-Effective
Amendment No. 23 to the Registration Statement of
Centennial Government Trust (File No. 2-75812),
11/1/94, and incorporated herein by reference.
(iii)Sub-Distributor's Agreement dated May 28, 1993
between Centennial Asset Management Corporation and
Oppenheimer Funds Distributor, Inc.: Filed with
Registrant's Post-Effective Amendment No. 26, August
30, 1993, and incorporated herein by reference.
(7) Not applicable
(8) (i) Custodian Agreement dated March 1, 1981 between
Registrant (formerly Daily Cash Tax Exempt Cash
Fund, Inc.) and Citibank, N.A.: Filed with
Registrant's Post-Effective Amendment No. 13,
1/31/86, and refiled with Registrant's Post-
Effective Amendment No. 28, 10/31/94, pursuant to
Item 102 of Regulation S-T and incorporated herein
by reference.
(ii)Assignment and Amendment dated September 27,
1985 to Custodian Agreement dated March 1, 1981,
between Registrant and Citibank, N.A.: Filed with
Registrant's Post-Effective Amendment No. 13,
1/31/86, and refiled with Registrant's Post-
Effective Amendment No. 28, 10/31/94, pursuant to
Item 102 of Regulation S-T and incorporated herein
by reference.
(9) Not applicable
(10) (i) Opinion and Consent of Counsel dated February 23, 1981: Filed
with Pre-Effective Amendment No. 1 to Registrant's Registration
Statement, 3/2/81, and refiled with Registrant's Post-Effective
Amendment No. 28, 10/31/94, pursuant to Item 102 of Regulation S-T
and incorporated herein by reference.
(ii)Opinion of Neef, Swanson, Myer & Clark dated
September 27, 1985, general counsel to Registrant,
to Centennial Tax Exempt Trust, issued in the
reorganization of Registrant (formerly Daily Cash
Tax Exempt Fund, Inc.) and Centennial Tax Exempt
Trust: Filed with Registrant's Post-Effective
Amendment No. 13, 1/31/86, and refiled herewith
pursuant to Item 102 of Regulation S-T.
(iii)Opinion of Moye, Giles, O'Keefe, Vermeire &
Gorrell dated September 27, 1985, special counsel to
Centennial Tax Exempt Trust, to Registrant (formerly
Daily Cash Tax Exempt Fund, Inc.), issued in the
reorganization of Registrant and Centennial Tax
Exempt Trust: Filed with Registrant's Post-
Effective Amendment No. 13, 1/31/86, and refiled
with Registrant's Post-Effective Amendment No. 28,
10/31/94, pursuant to Item 102 of Regulation S-T and incorporated
herein by reference.
(11)(i) Opinion of Deloitte Haskins & Sells dated September 27, 1985
issued to Centennial Tax Exempt Trust in the reorganization of
Registrant (formerly Daily Cash Tax Exempt Fund, Inc.) and
Centennial Tax Exempt Trust: Filed with Registrant's Post-
Effective Amendment No. 13, 1/31/86, and refiled with Registrant's
Post-Effective Amendment No. 28, 10/31/94, pursuant to Item 102 of
Regulation S-T and incorporated herein by reference.
(ii)Opinion of Deloitte Haskins & Sells dated
September 27, 1985 issued to Registrant (formerly
Daily Cash Tax Exempt Fund, Inc.) in the
Reorganization of Registrant and Centennial Tax
Exempt Trust: Filed with Registrant's Post-
Effective Amendment No. 13, 1/31/86, and refiled
with Registrant's Post-Effective Amendment No. 28,
10/31/94, pursuant to Item 102 of Regulation S-T and
incorporated herein by reference.
(iii)Independent Auditors' Consent: Filed herewith
(12) Not applicable
(13) Not applicable
(14) Not applicable.
(15) Service Plan and Agreement under Rule 12b-1 between Registrant and
Centennial Asset Management Corporation, dated as of 8/24/93:
Filed with Registrant's Post-Effective Amendment No. 27, 10/28/93,
and incorporated herein by reference.
(16) Performance Data Computation Schedule: Filed
herewith
(17) Financial Data Schedule: Filed herewith
(18) Not applicable
--- Powers of Attorney: Filed with Registrant's Post-
Effective Amendment No. 27, 10/28/93, and
incorporated herein by reference. Powers of Attorney
from S. Freedman and B. Macaskill filed with Registrant's
Post-Effective Amendment No. 30, 10/8/96, and
incorporated herein by reference.
Item 25. Persons Controlled by and Under Common Control with
- -------- ----------------------------------------------------
Registrant
- ----------
None
Item 26. Number of Holders of Securities
- -------- ------------------------------
Number of Record Holders
Title of Class as of September 8, 1997
-------------- -----------------------
Shares of Beneficial Interest 37,586
Item 27. Indemnification
- -------- ---------------
Reference is made to Section 12 of Article SEVENTH of Registrant's Restated
Declaration of Trust, dated September 27, 1985, filed as Exhibit 24(b)(1) to
this Registration Statement.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of
Registrant pursuant to the foregoing provisions or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Registrant
of expenses incurred or paid by a Trustee, officer or controlling person of
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such Trustee, officer or controlling person, Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
Item 28. Business and Other Connections of Investment Adviser
- -------- ----------------------------------------------------
(a) Centennial Asset Management Corporation is the investment adviser of
the Registrant; it and certain subsidiaries and affiliates act in the same
capacity to other registered investment companies as described in Parts A and B
hereof and listed in Item 28(b) below.
(b) There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which each officer
and director of Centennial Asset Management Corporation is, or at any time
during the past two fiscal years has been, engaged for his/her own account or in
the capacity of director, officer, employee, partner or trustee.
Name & Current Position
with Centennial Asset Other Business and Connections
Management Corporation During the Past Two Years
- ----------------------- ------------------------------
George C. Bowen, Director,
Senior Vice President,
Treasurer and Assistant
Secretary Treasurer of the Oppenheimer funds,
OppenheimerFunds Distributor, Inc. (the
"Distributor") and HarbourView Asset
Management Corporation ("HarbourView"),
an investment adviser subsidiary of
OppenheimerFunds, Inc. (the "Manager");
Vice President and Assistant Secretary of
the Denver-based Oppenheimer funds; Vice
President of the Distributor and
HarbourView; Senior Vice President &
Treasurer of OppenheimerFunds, Inc.
("OFI"), Vice President, Treasurer and
Secretary of Shareholder Services, Inc.
("SSI") and Shareholder Financial
Services, Inc. ("SFSI"), transfer agent
subsidiaries of the Manager; Director,
Treasurer and Chief Executive Officer of
MultiSource Services, Inc. (July, 1996
-present); Vice President and Treasurer of ORAMI
(July, 1996 - present); President Treasurer and
Director of Centennial Capital Corporation; Vice
President and Treasurer of Main Street Advisers.
Michael Carbuto,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; Vice President of
Centennial Asset Management Corp.
("Centennial").
Andrew J. Donohue,
President and Director Secretary of the Oppenheimer Funds; Vice
President of the Denver-based Oppenheimer
Funds; Executive Vice President, Director and
General Counsel of the Distributor; Executive
Vice President, General Counsel and Director of
("OFI"); Chief Legal Officer and a Director of
MultiSource; President and a Director of ORAMI;
Executive Vice President, General Counsel and
Director of SFSI and SSI; formerly Senior Vice
President and Associate General Counsel of the
Manager and the Distributor.
Katherine P. Feld,
Secretary Vice President and Secretary of the Distributor;
Secretary of HarbourView,
MultiSource and OFI; Secretary, Vice
President and Director of Centennial
Capital Corporation; Vice President and
Secretary of Oppenheimer Real Asset
Management, Inc.
Gary P. Tyc,
Assistant Treasurer
and Assistant Secretary Vice President, Assistant Secretary and
Assistant Treasurer of OFI; Assistant
Treasurer of the Distributor and SFSI.
Dorothy Warmack,
Vice President Vice President of OFI; an officer
and/or portfolio manager of certain Oppenheimer
funds.
Carol Wolf,
Vice President Vice President of OFI; an officer
and/or portfolio manager of certain Oppenheimer
funds.
Arthur Zimmer,
Vice President Vice President of OFI; an officer
and/or portfolio manager of certain Oppenheimer
funds.
The Oppenheimer Funds include the New York-based Oppenheimer
Funds, the Denver-based Oppenheimer Funds and the Oppenheimer/Quest
Rochester Funds, as set forth below:
New York-based Oppenheimer Funds
- --------------------------------
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Developing Markets Fund
Oppenheimer Discovery Fund
Oppenheimer Enterprise Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer International Growth Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Municipal Trust
Oppenheimer Multiple Strategies Fund
Oppenheimer Municipal Bond Fund
Oppenheimer New York Municipal Fund
Oppenheimer Series Fund, Inc.
Oppenheimer U.S. Government Trust
Oppenheimer World Bond Fund
Quest/Rochester Funds
- ---------------------
Limited Term New York Municipal Fund
Oppenheimer Bond Fund For Growth
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest For Value Funds
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Rochester Fund Municipals
Denver-based Oppenheimer Funds
- ------------------------------
Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Daily Cash Accumulation Fund, Inc.
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Equity Income Fund
Oppenheimer High Yield Fund
Oppenheimer Integrity Funds
Oppenheimer International Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Municipal Fund
Oppenheimer Real Asset Fund
Oppenheimer Strategic Income Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
Panorama Series Fund, Inc.
The New York Tax-Exempt Income Fund, Inc.
The address of OppenheimerFunds, Inc., the New York-based Oppenheimer
Funds, the Quest Funds, OppenheimerFunds Distributor, Inc., HarbourView Asset
Management Corp., Oppenheimer Partnership Holdings, Inc., and Oppenheimer
Acquisition Corp. is Two World Trade Center, New York, New York 10048-0203.
The address of the Denver-based Oppenheimer Funds, Shareholder Financial
Services, Inc., Shareholder Services, Inc., OppenheimerFunds Services,
Centennial Asset Management Corporation, Centennial Capital Corp., and
Oppenheimer Real Asset Management, Inc. is 6803 South Tucson Way, Englewood,
Colorado 80112.
The address of MultiSource Services, Inc. is 1700 Lincoln Street, Denver,
Colorado 80203.
The address of the Rochester-based funds is 350 Linden Oaks, Rochester, New
York 14625-2807.
Item 29. Principal Underwriter
- -------- ----------------------
(a) Centennial Asset Management Corporation is the Distributor of
Registrant's shares. It is also the Distributor of each of the other registered
open-end investment companies for which Centennial Asset Management Corporation
is the investment adviser, as described in Part A and B of this Registration
Statement and listed in Item 28(b) above.
(b) The directors and officers of the Registrant's principal underwriter
are:
Positions and
Name & Principal Positions & Offices Offices with
Business Address with Underwriter Registrant
- ---------------- ------------------- -----------
George C. Bowen+ Director, Senior Vice Vice
President, Treasurer and President,
Assistant Secretary Treasurer and
Assistant
Secretary
Michael Carbuto* Vice President Vice President of Centennial
California Tax
Exempt Fund,
Centennial New York
Tax Exempt Fund and
Centennial Tax
Exempt Trust
Andrew J. Donohue* President and Director Vice President and Secretary
Katherine P. Feld* Secretary None
Gary P. Tyc+ Assistant Treasurer and None
Assistant Secretary
Dorothy Warmack+ Vice President Vice President of Daily Cash
Accumulation Fund,
Inc., Centennial
Government Trust,
Centennial America
Fund, L.P., and
Centennial Money
Market Trust
Carol Wolf+ Vice President Vice President of Daily Cash
Accumulation Fund,
Inc., Centennial
Government Trust,
Centennial America
Fund, L.P., and
Centennial Money
Market Trust
Arthur Zimmer+ Vice President Vice President of Daily Cash
Accumulation Fund,
Inc., Centennial
Government Trust,
Centennial America
Fund, L.P., and
Centennial Money
Market Trust
(c) Not applicable.
- --------------------
* Two World Trade Center, New York, NY 10048-0203
+ 6803 South Tucson Way, Englewood, CO 80112
Item 30. Location of Accounts and Records
- -------- --------------------------------
The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
rules promulgated thereunder are in the possession of Centennial Asset
Management Corporation, 6803 South Tucson Way, Englewood, CO 80112.
Item 31. Management Services
- -------- -------------------
Not applicable
Item 32. Undertakings
- -------- ------------
(a) Not applicable
(b) Not applicable
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the County of Arapahoe, State of Colorado on the 18th day of
September, 1997.
CENTENNIAL TAX EXEMPT TRUST
By: /s/ James C. Swain*
-----------------------------
James C. Swain, Chairman
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities on
the dates indicated:
Signatures Title Date
- ---------- ----- ----
/s/ James C. Swain* Chairman, Trustee September 18, 1997
- ------------------ and Principal
James C. Swain Executive Officer
/s/ George C. Bowen* Vice President, September 18, 1997
- ------------------- Treasurer,
George C. Bowen Assistant
Secretary and
Principal Financial
and Accounting
Officer
/s/ Robert G. Avis* Trustee September 18, 1997
- ------------------
Robert G. Avis
/s/ William A. Baker* Trustee September 18, 1997
- --------------------
William A. Baker
/s/ Charles Conrad, Jr.* Trustee September 18, 1997
- -----------------------
Charles Conrad, Jr.
/s/ Jon S. Fossel* Trustee September 18, 1997
- -----------------
Jon S. Fossel
/s/ Sam Freedman* Trustee September 18, 1997
- -----------------------
Sam Freedman
/s/ Raymond J. Kalinowski* Trustee September 18, 1997
- -------------------------
Raymond J. Kalinowski
/s/ C. Howard Kast* Trustee September 18, 1997
- ------------------
C. Howard Kast
/s/ Robert M. Kirchner* Trustee September 18, 1997
- ----------------------
Robert M. Kirchner
/s/ Bridget A. Macaskill* President, September 18, 1997
- ------------------------- Trustee
Bridget A. Macaskill
/s/ Ned M. Steel* Trustee September 18, 1997
- ----------------
Ned M. Steel
*By: /s/ Robert G. Zack
--------------------------------
Robert G. Zack, Attorney-in-Fact
<PAGE>
CENTENNIAL TAX EXEMPT TRUST
INDEX TO EXHIBITS
Exhibit Description
-------- -----------
24(b)(11)(iii) Independent Auditor's Consent
24(b)(16) Performance Data Computation Schedule
24(b)(17) Financial Data Schedule
24(b)(11)
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Post-Effective Amendment No. 31 to Registration
Statement No. 2-69653 of Centennial Tax Exempt Trust of our report dated July
22, 1997 appearing in the Statement of Additional Information, which is a part
of such Registration Statement, and to the reference to our firm under the
heading "Financial Highlights" appearing in the Prospectus, which is also a part
of such Registration Statement.
/s/ Deloitte & Touch LLP
- -------------------------
DELOITTE & TOUCHE LLP
Denver, Colorado
September 8, 1997
Centennial Tax Exempt Trust
Exhibit 24(b)(16) to Form N-1A
Performance Data Computation Schedule
1. YIELD AND EFFECTIVE YIELD FOR 7-DAY PERIOD ENDED 06/30/97:
Calculations of the Fund's "Yield" and "Compounded Effective Yield" set
forth in the section entitled "Yield Information" in the Statement of
Additional Information were made as follows:
Date Daily Accrual Per Share (in $)
06/24/97 .0000928
06/25/97 .0000901
06/26/97 .0000875
06/27/97 .0000917
06/28/97 .0000917
06/29/97 .0000917
06/30/97 .0000954
Seven Day
Total: .0006409
Current Yield: $0.0006409/7 x 365 = 3.34%
365/7
Effective Yield: (.0006409 + 1) - 1 = 3.40%
<PAGE>
Centennial Tax Exempt Trust
Page 2
2. TAX EQUIVALENT CURRENT AND EFFECTIVE YIELDS FOR THE 7-DAY PERIOD ENDED
06/30/97:
The Fund's current tax equivalent yield is calculated using the following
formula:
a
----- + b = Tax Equivalent Yield
1 - c
The symbols above represent the following factors:
a = 7-day current yield of tax-exempt security positions in the
portfolio.
b = 7-day current yield of taxable security positions in the portfolio.
c = Federal stated tax rate for an individual in the 39.6% federal tax
bracket filing singly.
Example: .0334
---------- + 0 = 5.53%
1 - .3960
The Fund's effective tax equivalent yield is calculated using the
following formula:
a
----- + b = Tax Equivalent Yield
1 - c
The symbols above represent the following factors:
a = 7-day effective yield of tax-exempt security positions in the
portfolio.
b = 7-day effective yield of taxable security positions in the
portfolio.
c = Federal stated tax rate for an individual in the 39.6% federal tax
bracket filing singly.
Example: .0340
---------- + 0 = 5.63%
1 - .3960
<PAGE>
Centennial Tax Exempt Trust
Page 3
3. TAX EQUIVALENT CURRENT AND EFFECTIVE YIELDS FOR THE 30-DAY PERIOD
ENDED 06/30/97
The Fund's current tax equivalent yield is calculated using the following
formula:
a
----- + b = Tax Equivalent Yield
1 - c
The symbols above represent the following factors:
a = 30-day current yield of tax-exempt security positions in the
portfolio.
b = 30-day current yield of taxable security positions in the portfolio.
c = Federal stated tax rate for an individual in the 39.6% federal tax
bracket filing singly.
Example: .0321
---------- + 0 = 5.31%
1 - .3960
The Fund's effective tax equivalent yield is calculated using the
following formula:
a
----- + b = Tax Equivalent Yield
1 - c
The symbols above represent the following factors:
a = 30-day effective yield of tax-exempt security positions in the
portfolio.
b = 30-day effective yield of taxable security positions in the
portfolio.
c = Federal stated tax rate for an individual in the 39.6% federal tax
bracket filing singly.
Example: .0326
---------- + 0 = 5.40%
1 - .3960
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 319880
<NAME> CENTENNIAL TAX-EXEMPT TRUST
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 1,693,607,897
<INVESTMENTS-AT-VALUE> 1,693,607,897
<RECEIVABLES> 53,152,712
<ASSETS-OTHER> 11,069
<OTHER-ITEMS-ASSETS> 67,677
<TOTAL-ASSETS> 1,746,839,355
<PAYABLE-FOR-SECURITIES> 77,537,733
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 20,555,493
<TOTAL-LIABILITIES> 98,093,226
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,648,641,002
<SHARES-COMMON-STOCK> 1,648,656,970
<SHARES-COMMON-PRIOR> 1,425,775,172
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 105,127
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,648,746,129
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 58,330,447
<OTHER-INCOME> 0
<EXPENSES-NET> 11,352,058
<NET-INVESTMENT-INCOME> 46,978,389
<REALIZED-GAINS-CURRENT> 116,199
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 47,094,588
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 47,224,231
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,793,933,452
<NUMBER-OF-SHARES-REDEEMED> 4,616,912,713
<SHARES-REINVESTED> 45,861,059
<NET-CHANGE-IN-ASSETS> 222,752,155
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 234,770
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 6,858,451
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 11,521,686
<AVERAGE-NET-ASSETS> 1,591,000,000
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.03
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.72
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
