Registration No. 2-69653
File No. 811-3104
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933 [X]
Pre-Effective Amendment No. _____ [ ]
Post-Effective Amendment No. 33 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [X]
Amendment No. 30 [X]
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CENTENNIAL TAX EXEMPT TRUST
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(Exact Name of Registrant as Specified in Charter)
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6803 South Tucson Way, Englewood, Colorado 80112
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(Address of Principal Executive Offices) (Zip Code)
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1-800-525-9310
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(Registrant's Telephone Number, including Area Code)
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Andrew J. Donohue, Esq.
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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)
[ ] On _______________ pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[X] On October 28, 1999 pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] On _______________ pursuant to paragraph (a)(2)of Rule 485
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
Centennial Tax Exempt Trust
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Prospectus dated November 1, 1999
Centennial Tax Exempt Trust is a money
market mutual fund. It seeks the
maximum short-term interest income
exempt from federal income taxes that
is consistent with low capital risk and
the maintenance of liquidity. The Trust
invests in "money market" securities
meeting specified quality, maturity and
diversification standards. This
Prospectus contains important
information about the Trust's
objective, its investment policies,
strategies and risks. It also the
As with all mutual funds, contains important information about
Securities and Exchange Commission has how to buy and sell shares of the
not approved or disapproved the Trust's Trust and other account features.
securities nor has it determined that Please read this Prospectus carefully
this Prospectus is accurate or before you invest and keep it for
complete. It is a criminal offense to future reference about your account.
represent otherwise.
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<PAGE>
2
CONTENTS
A B O U T T H E T R U S T
The Trust's Objective and Investment Strategies
Main Risks of Investing in the Trust
The Trust's Past Performance
Fees and Expenses of the Trust
About the Trust's Investments
A P P E N D I X
(to prospectuses of Centennial Money Market Trust, Centennial
Tax Exempt Trust and Centennial Government Trust)
How the Trusts are Managed
How to Buy Shares
How to Sell Shares
By Mail
By Telephone
How to Exchange Shares
Shareholder Account Rules and Policies
Dividends and Tax Information
Financial Highlights
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A B O U T T H E T R U S T
The Trust's Objective and Investment Strategies
WHAT IS THE TRUST'S INVESTMENT OBJECTIVE? The Trust seeks the maximum short-term
interest income exempt from federal income taxes that is consistent with low
capital risk and the maintenance of liquidity.
WHAT DOES THE TRUST INVEST IN? The Trust is a money market fund. It invests in a
variety of high-quality money market securities to seek income that is exempt
from federal income taxes. Money market securities are short-term debt
instruments issued by the U.S. government, domestic and foreign corporations and
financial institutions and other entities. They include, for example, bank
obligations, commercial paper, other corporate debt obligations and government
debt obligations.
WHO IS THE TRUST DESIGNED FOR? The Trust may be appropriate for investors who
are seeking income exempt from federal income taxes at current money market
rates while preserving the value of their investment. The Trust is managed to
keep its share price stable at $1.00. The Trust does not invest for the purpose
of seeking capital appreciation or gains.
Main Risks of Investing in the Trust
All investments carry risks to some degree. Funds that invest in debt
obligations for income may be subject to credit risks and interest rate risks.
However, the Trust is a money market fund that seeks income by investing in
short-term debt securities that must meet strict standards set by its Board of
Trustees following rules for money market funds under federal law. These include
requirements for maintaining high credit quality in the Trust's portfolio, a
short average portfolio maturity to reduce the effects of changes in interest
rates on the value of the Trust's securities and diversifying the Trust's
investments among issuers to reduce the effects of a default by any one issuer
on the value of the Trust's shares.
Even so, there are risks that any of the Trust's holdings could have its
credit rating downgraded, or the issuer could default, or that interest rates
could rise sharply, causing the value of the Trust's securities (and its share
price) to fall. If there is a high redemption demand for the Trust's shares that
was not anticipated, portfolio securities might have to be sold prior to their
maturity at a loss. As a result, there is a risk that the Trust's shares could
fall below $1.00 per share.
The Trust's investment manager, Centennial Asset Management Corporation,
tries to reduce risks by diversifying investments and by carefully researching
securities before they are purchased. However, an investment in the Trust is not
a complete investment program. The rate of the Trust's income will vary from day
to day, generally reflecting changes in overall short-term interest rates. There
is no assurance that the Trust will achieve its investment objective.
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An investment in the Trust is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Trust seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the Trust.
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The Trust's Past Performance
The bar chart and table below show how the Trust's returns may vary over time,
by showing changes in the Trust's performance from year to year for the last ten
calendar years and average annual total returns for the 1-, 5- and 10- year
periods. Variability of returns is one measure of the risks of investing in a
money market fund. The Trust's past investment performance is not necessarily an
indication of how the Trust will perform in the future.
Annual Total Returns (as of 12/31 each year)
[See appendix to prospectus for annual total return data for bar chart.]
For the period from 1/1/99 through 9/30/99 the cumulative total return was __%.
During the period shown in the bar chart, the highest return for a calendar
quarter was __% ( Q ' ) and the lowest return for a calendar quarter was __% ( Q
' ).
5 Years 10 Years
Average Annual Total Returns (or life of (or life of
for the periods ending December 31, 1 Year class, class,
1998 if less) if less)
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Centennial Tax Exempt Trust % % %
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The returns in the table measure the performance of a hypothetical account and
assume that all dividends have been reinvested in additional shares. The total
returns are not the Trust's current yield. The Trust's yield more closely
reflects the Trust's current earnings.
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To obtain the Trust's current 7-day yield, please call the Transfer Agent
toll-free at 1-800-525-9310.
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Fees and Expenses of the Trust
The Trust pays a variety of expenses directly for management of its assets,
administration and other services. Those expenses are subtracted from the
Trust's assets to calculate the Trust's net asset value per share. All
shareholders therefore pay those expenses indirectly. Shareholders pay other
expenses directly, such as account transaction charges. The following tables are
provided to help you understand the fees and expenses you may pay if you buy and
hold shares of the Trust. The numbers below are based upon the Trust's expenses
during the fiscal year ended June 30, 1999.
SHAREHOLDER FEES. The Trust does not charge any shareholder fees in connection
with the offer of its shares.
Annual Trust Operating Expenses (deducted from Trust assets):
(% of average daily net assets)
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Management Fees %
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Service (12b-1) Fees %
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Other Expenses %
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Total Annual Operating Expenses %
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"Other expenses" in the table include transfer agent fees, custodial fees, and
accounting and legal expenses the Trust pays.
EXAMPLE. This example is intended to help you compare the cost of investing in
the Trust with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in shares of the Trust for the time periods indicated
and reinvest your dividends and distributions. The example also assumes that
your investment has a 5% return each year and that the Trust's expenses remain
the same. Your actual costs may be higher or lower, because expenses will vary
over time. Based on these assumptions your expenses would be as follows:
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1 year 3 years 5 years 10 years
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$ $ $ $
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About the Trust's Investments
THE TRUST'S PRINCIPAL INVESTMENT POLICIES. In seeking the maximum short-term
interest income exempt from federal income taxes that is consistent with low
capital risk and the maintenance of liquidity, the Trust invests in short-term
money market securities meeting quality, maturity and diversification standards
established for money market funds under the Investment Company Act. The
Statement of Additional Information contains more detailed information about the
Trust's investment policies and risks.
What Types of Money Market Securities Does the Trust Invest In? The following is
a brief description of the types of money market securities the Trust may
invest in. Money market instruments are high-quality, short-term debt
instruments that may be issued by the U.S. government, domestic and foreign
corporations, banks or other entities. They may have fixed, variable or
floating interest rates. The Trust normally invests 100% of its assets in
municipal securities. It will not make any investment that will reduce the
portion of its total assets that are invested in municipal securities to less
than 80%. The balance of the Trust's assets may be invested in investments
the income from which may be taxable. The Trust's taxable investments include
repurchase agreements, municipal securities issued to benefit a private user,
and certain temporary investments. These investments are described below
under "Other Investment Strategies" or in the Statement of Additional
Information.
o Municipal Securities. The Trust buys municipal bonds and notes, tax-exempt
commercial paper, certificates of participation in municipal leases and
other debt obligations. These are debt obligations issued by the
governments of states, their political subdivisions (such as cities, towns
and counties), or the District of Columbia, or by their agencies,
instrumentalities and authorities, if the interest paid on the security is
not subject to federal individual income tax in the opinion of bond counsel
to the issuer. All of these types of debt obligations are referred to as
"municipal securities" in this Prospectus. 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.
Additionally, the Trust may buy other money market instruments that its
Board of Trustees approves from time to time. They must be U.S.
dollar-denominated short-term investments that the Board must determine to have
minimal credit risks. They also must be of "high quality" as determined by a
national rating organization. The Trust may buy an unrated security that
otherwise meets those qualifications.
What Credit Quality, Maturity and Diversification Standards Apply to the Trust's
Investments? The Trust may buy only those securities that meet credit
quality, maturity and diversification standards set in the Investment Company
Act for money market funds. For example, the Trust must maintain an average
portfolio maturity of not more than 90 days and the remaining maturity of any
portfolio investment may not exceed 397 days. The Board of Trustees has
adopted procedures to evaluate securities for the Trust's portfolio under
those standards and the Manager has the responsibility to implement those
procedures when selecting investments for the Trust.
In general, those procedures require that the Trust hold only money market
instruments that are rated in one of the two highest short-term rating
categories of two national rating organizations or unrated securities of
comparable quality. The procedures also limit the amount of the Trust's assets
that can be invested in the securities of any one issuer (other than the U.S.
government, its agencies and instrumentalities), to spread the Trust's
investment risks.
Canthe Trust's Investment Objective and Policies Change? The Trust's Trustees
can change non-fundamental policies without shareholder approval, although
significant changes will be described in amendments to this Prospectus.
Fundamental policies are those that cannot be changed without the approval of
a majority of the Trust's outstanding voting shares. The Trust's investment
objective is a fundamental policy. An investment policy is not fundamental
unless this Prospectus or the Statement of Additional Information says that a
particular policy is fundamental.
OTHER INVESTMENT STRATEGIES. To seek its objective, the Trust can also use the
investment techniques and strategies described below. The Trust may not always
use all of the techniques and strategies described below. These techniques
involve certain risks. The Statement of Additional Information contains more
information about some of these practices, including limitations on their use
that are designed to reduce some of the risks.
Temporary Investments. The Trust may hold the following types of temporary
investments: (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. The income from these investments may be taxable.
Floating Rate/Variable Rate Notes. 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, such as the prime rate of a bank, or the 90 day U.S.
Treasury bill rate. 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 the Trust is able to recover the principal
amount of the underlying security at specified intervals not exceeding 397
days and upon no more than 30 days' notice. Such obligations may be secured
by bank letters of credit or other credit support arrangements which
guarantee payment.
"When-Issued" and "Delayed-Delivery" Transactions. The Trust can purchase
municipal securities on a "when-issued" basis and may purchase or sell such
securities on a "delayed- delivery" basis. These terms refer to securities
that have been created and for which a market exists, but which are not
available for immediate delivery. The Trust does not intend to make such
purchases for speculative purposes. During the period between the purchase
and settlement, no payment is made for the security and no interest accrues
to the buyer from the investment. There is a risk of loss to the Trust if the
value of the security declines prior to the settlement date.
Municipal Lease Obligations. Municipal leases are used by state and local
government authorities to obtain funds to acquire land, equipment or
facilities. The Trust may invest in certificates of participation that
represent a proportionate interest in payments made under municipal lease
obligations. If the government stops making payments or transfers its payment
obligations to a private entity, the obligation could lose value or become
taxable. Some of these obligations might not have an active trading market
and would be subject to the Trust's limits on "illiquid" securities described
below. From time to time the Trust may invest more 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.
Repurchase Agreements. The Trust may enter into repurchase agreements. In a
repurchase transaction, the Trust buys a security and simultaneously sells it
to the vendor for delivery at a future date. Repurchase agreements must be
fully collateralized. However, if the vendor fails to pay the resale price on
the delivery date, the Trust may incur costs in disposing of the collateral
and may experience losses if there is any delay in its ability to do so. The
Trust ordinarily will not enter into repurchase transactions that will cause
more than 10% of the Trusts net assets to be subject to repurchase agreements
having a maturity beyond seven days. However, when the Trust assumes a
temporary defensive position, there is no limit on the amount of the Trust's
assets that may be subject to repurchase agreements having a maturity of
seven days or less. Income earned on repurchase transactions is not
tax-exempt. The Trust normally will limit its investments in repurchase
transactions to 20% of its total assets.
Illiquid and Restricted Securities. Investments may be illiquid because of the
absence of an active trading market, making it difficult to value them or
dispose of them promptly at an acceptable price. Restricted securities may
have a contractual limit on resale or may require registration under federal
securities laws before they can be sold publicly. The Trust will not invest
more than 10% of its net assets in illiquid securities and other securities
that are not readily marketable. That limit generally does not apply to
certain restricted securities that are eligible for resale to qualified
institutional purchasers or purchases of commercial paper that may be sold
without registration under the federal securities laws. However, if there is
a lack of trading interest in such securities, those securities may be
illiquid. The Manager monitors holdings of illiquid securities on an ongoing
basis to determine whether to sell any holdings to maintain adequate
liquidity. Difficulty in selling a security may result in a loss to the Trust
or additional costs.
Demand Features and Guarantees. The Trust may invest a significant percentage of
its assets in municipal securities that have demand features, guarantees or
similar credit and liquidity enhancements. A demand feature permits the
holder of the security to sell the security within a specified period of time
at a stated price and entitles the holder of the security to receive an
amount equal to the approximate amortized cost of the security plus accrued
interest. These securities are described in the Statement of Additional
Information.
YEAR 2000 RISKS. Because many computer software systems in use today cannot
distinguish the year 2000 from the year 1900, the markets for securities in
which the Trust invests could be detrimentally affected by computer failures
beginning January 1, 2000. Failure of computer systems used for securities
trading could result in settlement and liquidity problems for the Trust and
other investors. That failure could have a negative impact on handling
securities trades, pricing and accounting services. Data processing errors by
government issuers of securities could result in economic uncertainties, and
those issuers might substantial costs in attempting to prevent or fix such
errors, all of which could have a negative effect on the Trust's investments and
returns.
The Manager, the Distributor and the Transfer Agent have been working on
necessary changes to their computer systems to deal with the year 2000 and
expect that their systems will be adapted in time for that event, although there
cannot be assurance of success. Additionally, the services they provide depend
on the interaction of their computer systems with those of brokers, information
services, the Trust's Custodian and other parties. Therefore, any failure of the
computer systems of those parties to deal with the year 2000 might have a
negative effect on the services they provide to the Trust. The extent of that
risk cannot be ascertained at this time.
A P P E N D I X
This Appendix is part of the Prospectuses of Centennial Money Market Trust,
Centennial Tax Exempt Trust and Centennial Government Trust. Each is referred to
in this Appendix as a "Trust" and they are collectively referred to as the
"Trusts". Unless otherwise indicated, the information in this Appendix applies
to each Trust.
How the Trusts are Managed
THE MANAGER. The investment adviser for of the Trusts is Centennial Asset
Management Corporation. The Manager is responsible for selecting each Trust's
investments and handling its day-to-day business. The Manager carries out its
duties with respect to each Trust, subject to the policies established by the
Board of Trustees, under an Investment Advisory Agreement which states the
Manager's responsibilities. Each Agreement sets forth the fees paid by the Trust
to the Manager and describes the expenses that the Trust is responsible to pay
to conduct its business.
The Manager, a wholly-owned subsidiary of OppenheimerFunds, Inc., has
operated as an investment advisor since 1978. As of June 30, 1999, the Manager
and its affiliates managed assets of more than $110 billion, including private
accounts and investment companies having more than 5 million shareholder
accounts. The Manager is located at 6803 South Tucson Way, Englewood, CO 80112.
Portfolio Managers. Carol E. Wolf and Arthur J. Zimmer are the portfolio
managers of Centennial Money Market Trust and Centennial Government Trust.
They are the persons principally responsible for the day-to-day management
of the Trust's portfolio. Ms. Wolf has had this responsibility since
October 1990 and Mr. Zimmer since January 1991. Ms. Wolf is a Vice
President and Mr. Zimmer a Senior Vice President of OppenheimerFunds, Inc.,
and each is an officer and portfolio manager of other funds for which
OppenheimerFunds, Inc. or the Manager serves as investment advisor. Michael
Carbuto has been the portfolio manager of Centennial Tax Exempt Trust since
October 1987. Mr. Carbuto is a Vice President of OppenheimerFunds, Inc. and
is an officer and portfolio manager of other funds for which the Manager
serves as investment adviser.
Advisory Fees. The management fee is payable monthly to the Manager under the
terms of each Trust's Investment Advisory Agreement. That fee is computed on
the average annual net assets of the respective Trust as of the close of each
business day. See the Statement of Additional Information for an explanation
of the Manager's reimbursement arrangement for the Trusts set forth in their
Agreements.
The annual rates applicable to Centennial Money Market Trust are as
follows: 0.500% of the first $250 million of net assets; 0.475% of the next $250
million of net assets; 0.450% of the next $250 million of net assets; 0.425% of
the next $250 million of net assets; 0.400% of the next $250 million of net
assets; 0.375% of the next $250 million of net assets; 0.350% of the next $500
million of net assets; and 0.325% of net assets in excess of $2 billion.
Furthermore, the Manager guarantees that the total expenses of the Trust in any
fiscal year, exclusive of taxes, interest and brokerage commissions, and
extraordinary expenses such as litigation costs, shall not exceed, and the
Manager undertakes to pay or refund to the Trust any amount by which such
expenses shall exceed, the lesser of (i) 1.5% of the average annual net assets
of the Trust up to $30 million and 1% of its average annual net assets in excess
of $30 million; or (ii) 25% of total annual investment income of the Trust. The
Trust's management fee for the fiscal year ended June 30, 1999 was ___% of the
Trust's average annual net assets.
The annual rates applicable to Centennial Government Trust are as follows:
0.500% of the first $250 million of net assets; 0.475% of the next $250 million
of net assets; 0.450% of the next $250 million of net assets; 0.425% of the next
$250 million of net assets; and 0.400% of the next $250 million of net assets;
0.375% of the next $250 million of net assets and 0.350% of net assets in excess
of $1.5 billion.
The annual rates applicable to Centennial Tax Exempt Trust are as follows:
0.500% 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; 0.400% of the next $250 million of net assets;
0.375% of the next $250 million of net assets; 0.350% of the next $500 million
of net assets and 0.325% of net assets in excess of $2 billion. Furthermore,
under Centennial 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.
How to Buy Shares
AT WHAT PRICE ARE SHARES SOLD? Shares of each Trust are sold at their offering
price, which is the net asset value per share without any sales charge. The net
asset value per share will normally remain fixed at $1.00 per share. However,
there is no guarantee that a Trust will maintain a stable net asset value of
$1.00 per share.
The offering price that applies to a purchase order is based on the next
calculation of the net asset value per share that is made after the Distributor
receives the purchase order at its offices in Denver, Colorado, or after any
agent appointed by the Distributor receives the order and sends it to the
Distributor as described below.
HOW MUCH MUST YOU INVEST? You can open an account with a minimum initial
investment described below depending on how you buy and pay for your shares, and
you can make additional investments at any time with as little as $25. The
minimum investment requirements do not apply to reinvesting distributions from
the Trust or other Oppenheimer funds (a list of them appears in the Statement of
Additional Information, or you can ask your dealer or call the Transfer Agent)
or reinvesting distributions from unit investment trusts that have made
arrangements with the Distributor.
HOW ARE SHARES PURCHASED? Investors can buy shares in one of several ways:
1. Buying Shares Through a Dealer's Automatic Purchase and Redemption
Program: Investors can buy shares of a Trust through a broker-dealer
that has a sales agreement with that Trust's Distributor or
Sub-Distributor that allows shares to be purchased through the dealer's
Automatic Purchase and Redemption Program. Shares of each Trust are
sold mainly to customers of participating dealers that offer the
Trusts' shares under these special purchase programs. If you
participate in an Automatic Purchase and Redemption Program established
by your dealer, your dealer buys shares of the Trust for your account
with the dealer. Program participants should also read the description
of the program provided by their dealer.
2. Buying Shares Through Your Dealer: Investors who do not participate in
an Automatic Purchase and Redemption Program may buy shares of a Trust
through any broker-dealer that has a sales agreement with the
Distributor or the Sub-Distributor. Your dealer will place your order
with the Distributor on your behalf.
3. Buying Shares Directly Through the Distributor: Investors can also
purchase shares directly through the Trusts' Distributor. Investors who
make purchases directly and hold shares in their own names are referred
to as "Direct Investors" in this Prospectus.
The Distributor may appoint certain servicing agents to accept purchase
(and redemption) orders, including broker-dealers that have established
Automatic Purchase and Redemption Programs. The Distributor, in its sole
discretion, may reject any purchase order for shares of a Trust.
HOW ARE SHARES PURCHASED THROUGH AUTOMATIC PURCHASE AND REDEMPTION PROGRAMS? If
you buy shares through your broker-dealer's Automatic Purchase and Redemption
Program, your broker-dealer will buy your shares of a Trust for your Program
Account and will hold your shares in your broker-dealer's name. These purchases
will be made under the procedures described in "Guaranteed Payment" below. Your
Automatic Purchase and Redemption Program Account may have minimum investment
requirements established by your broker-dealer. You should direct all questions
about your Automatic Purchase and Redemption Program to your broker-dealer,
because the Trusts' transfer agent does not have access to information about
your account under that Program.
Guaranteed Payment Procedures. Some broker-dealers may have arrangements with
the Distributor to enable them to place purchase orders for shares of a Trust
and to guarantee that the Trust's custodian bank will receive Federal Funds
to pay for the shares prior to specified times. Broker-dealers whose clients
participate in Automatic Purchase and Redemption Programs may use these
guaranteed payment procedures to pay for purchases of shares of a Trust.
1. If the Distributor receives a purchase order before 12:00 Noon on a
regular business day with the dealer's guarantee that the Trust's
custodian bank will receive payment for those shares in Federal Funds
by 2:00 P.M. on that same day, the order will be effected at the net
asset value determined at 12:00 Noon that day. (All references to time
in this Prospectus mean "New York time.") Distributions will begin to
accrue on the shares on that day if the Federal Funds are received by
the required time.
2. If the Distributor receives a purchase order after 12:00 Noon on a
regular business day with the dealer's guarantee that the Trust's
custodian bank will receive payment for those shares in Federal Funds
by 2:00 P.M. on that same day, the order will be effected at the net
asset value determined at 4:00 P.M. that day. Distributions will begin
to accrue on the shares on that day if the Federal Funds are received
by the required time.
3. If the Distributor receives a purchase order between 12:00 Noon and
4:00 P.M. on a regular business day with the broker-dealer's guarantee
that the Trust's custodian bank will receive payment for those shares
in Federal Funds by 4:00 P.M. the next regular business day, the order
will be effected at the net asset value determined at 4:00 P.M. on the
day the order is received and distributions will begin to accrue on the
shares purchased on the next regular business day if the Federal Funds
are received by the required time.
HOW CAN DIRECT INVESTORS BUY SHARES THROUGH THE DISTRIBUTOR? Direct Investors
may buy shares of a Trust by completing a Centennial Funds New Account
Application (enclosed with this Prospectus), along with the three other
documents listed above, and sending them to Centennial Asset Management
Corporation, P.O. Box 5143, Denver, Colorado 80217. Payment must be made by
check or by Federal Funds wire as described below. If you don't list a dealer on
the application, OppenheimerFunds Distributor, Inc., the Sub-Distributor, will
act as your agent in buying the shares. However, we recommend that you discuss
your investment with a financial advisor before you make a purchase to be sure
that the Trust is appropriate for you.
Each Trust intends to be as fully invested as possible to maximize its
yield. Therefore, newly-purchased shares normally will begin to accrue
distributions after the Distributor or its agent accepts your purchase order,
starting on the business day after the Trust receives Federal Funds from the
purchase payment.
Payment by Check. Direct Investors may pay for purchases of shares of a Trust by
check. Send your check, payable to "Centennial Asset Management Corporation,"
along with your Application and other documents to the address listed above.
For initial purchases, your check should be payable in U.S. dollars and drawn
on a U.S. bank so that distributions will begin to accrue on the next regular
business day after the Distributor accepts your purchase order. If your check
is not drawn on a U.S. bank and is not payable in U.S. dollars, the shares
will not be purchased until the Distributor is able to convert the purchase
payment to Federal Funds. In that case distributions will begin to accrue on
the purchased shares on the next regular business day after the purchase is
made. The minimum initial investment for Direct Investors by check is $500.
Payment by Federal Funds Wire. Direct Investors may pay for purchases of Shares
of a Trust by Federal Funds wire. You must also forward your Application and
other documents to the address listed above. Before sending a wire, call the
Distributor's Wire Department at 1-800-525-9310 (toll-free from within the
U.S.) or 303-768-3200 (from outside the U.S.) to notify the Distributor of
the wire, and to receive further instructions.
Distributions will begin to accrue on the purchased shares on the purchase
date that is a regular business day if the Federal Funds from your wire and the
Application are received by the Distributor and accepted by 12:00 Noon. If the
Distributor receives the Federal Funds from your wire and accepts the purchase
order between 12:00 Noon and 4:00 P.M on the purchase date, distributions will
begin to accrue on the shares on the next regular business day. The minimum
investment by Federal Funds Wire is $2,500.
Buying Shares Through Automatic Investment Plans. Direct Investors can purchase
shares of a Trust automatically each month by authorizing the Trust's
Transfer Agent to debit your account at a U.S. domestic bank or other
financial institution. Details are in the Automatic Investment Plan
Application and the Statement of Additional Information. The minimum
monthly purchase is $25.
Howis a Trust's Net Asset Value Determined? The net asset value of shares of a
Trust is determined twice each day, at 12:00 Noon and at 4:00 P.M., on each
day The New York Stock Exchange is open for trading (referred to in this
Prospectus as a "regular business day"). All references to time in this
Prospectus mean "New York time."
The net asset value per share is determined by dividing the value of a
Trust's net assets by the number of shares that are outstanding. Under a policy
adopted by each Trust's Board of Trustees, each Trust uses the amortized cost
method to value its securities to determine net asset value.
The shares of each Trust offered by this Prospectus are considered to be
Class A shares for the purposes of exchanging them or reinvesting distributions
among other Oppenheimer funds that offer more than one class of shares.
Service (12b-1) Plan. Each trust has adopted a service plan. It reimburses the
Distributor for a portion of its costs incurred for services provided to
accounts that hold shares of the Trust. Reimbursement is made quarterly at an
annual rate of up to 0.20% of the average annual net assets of the Trust. The
Distributor currently uses all of those fees to pay dealers, brokers, banks
and other financial institutions quarterly for providing personal services
and maintenance of accounts of their customers that hold shares of the Trust.
How to Sell Shares
Shares can be sold (redeemed) on any regular business day. Orders to sell shares
will receive the next net asset value per share calculated after the order is
received in proper form (which means that it must comply with the procedures
described below) and is accepted by the Trust's Transfer Agent.
HOW CAN PROGRAM PARTICIPANTS SELL SHARES? If you participate in an Automatic
Purchase and Redemption Program sponsored by your broker-dealer, you must redeem
shares held in your Program Account by contacting your broker-dealer firm, or
you can redeem shares by writing checks as described below. You should not
contact the Trust or its Transfer Agent directly to redeem shares held in your
Program Account. You may also arrange (but only through your broker-dealer) to
have the proceeds of redeemed Trust shares sent by Federal Funds wire, as
described below in "Sending Redemption Proceeds by Wire."
HOW CAN DIRECT INVESTORS REDEEM SHARES? Direct Investors can redeem their shares
by writing a letter to the Transfer Agent, by using the Trust's checkwriting
privilege, or by telephone. You can also set up Automatic Withdrawal Plans to
redeem shares on a regular basis. If you have questions about any of these
procedures, and especially if you are redeeming shares in a special situation,
such as due to the death of the owner or from a retirement plan account, please
call the Transfer Agent for assistance first, at 1-800-525-9310.
Certain Requests Require a Signature Guarantee. To protect Investors and the
Trust from fraud, the following redemption requests for accounts of Direct
Investors must be in writing and must include a signature guarantee (although
there may be other situations that also require a signature guarantee):
o You wish to redeem $50,000 or more and receive a check
o The redemption check is not payable to all Investors listed on the
account statement
o The redemption check is not sent to the address of record on your account
statement
o Shares are being transferred to an account with a different owner or name
o Shares are being redeemed by someone (such as an Executor) other than the
owners
WhereCan Direct Investors Have Their Signatures Guaranteed? The Transfer Agent
will accept a guarantee of your signature by a number of financial
institutions, including: a U.S. bank, trust company, credit union or
savings association, or by a foreign bank that has 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, a registered securities association or a clearing agency. If you
are signing on behalf of a corporation, partnership or other business or as
a fiduciary, you must also include your title in the signature.
How Can Direct Investors Sell Shares by Mail? Write a "letter of instructions"
that includes:
o Your name
o The Trust's name
o Your account number (from your account statement)
o The dollar amount or number of shares to be redeemed o Any special
payment instructions
o Any share certificates for the shares you are selling
o The signatures of all registered owners exactly as the account is
registered, and
o Any special documents requested by the Transfer Agent to assure proper
authorization of the person asking to sell the shares.
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Use the following address for Send courier or express mail
requests by mail: requests to:
Shareholder Services, Inc. Shareholder Services, Inc.
P.O. Box 5143 10200 E. Girard Avenue, Building D
Denver, Colorado 80217-5270 Denver, Colorado 80231
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HowCan Direct Investors Sell Shares by Telephone? Direct Investors and their
dealer representative of record may also sell shares by telephone. To receive
the redemption price on a regular business day, the Transfer Agent must
receive the request by 4:00 P.M. on that day. You may not redeem shares held
under a share certificate by telephone. To redeem shares through a service
representative, call 1-800-525-9310. Proceeds of telephone redemptions will
be paid by check payable to the shareholder(s) of record and will be sent to
the address of record for the account. Up to $50,000 may be redeemed by
telephone in any 7-day period. The check must be payable to all owners of
record of the shares and must be sent to the address on the account
statement. This service is not available within 30 days of changing the
address on an account.
SENDING REDEMPTION PROCEEDS BY WIRE. While the Trust normally sends Direct
Investors their money by check, you can arrange to have the proceeds of the
shares you sell sent by Federal Funds wire to a bank account you designate. It
must be a commercial bank that is a member of the Federal Reserve wire system.
The minimum redemption you can have sent by wire is $2,500. There is a $10 fee
for each wire. To find out how to set up this feature on an account or to
arrange a wire, Direct Investors should call the Transfer Agent at
1-800-525-9310. If you hold your shares through your dealer's Automatic Purchase
and Redemption Program, you must contact your dealer to arrange a Federal Funds
wire.
HOW DO I WRITE CHECKS AGAINST MY ACCOUNT? Program participants may write checks
against the account held under their Program, but must arrange for checkwriting
privileges through their dealers. Direct Investors may write checks against
their account by requesting that privilege on the account Application or by
contacting the Transfer Agent for signature cards. They must be signed (with a
signature guarantee) by all owners of the account and returned to the Transfer
Agent so that checks can be sent to you to use. Investors with joint accounts
can elect in writing to have checks paid over the signature of one owner.
o Checks can be written to the order of whomever you wish, but may not be
cashed at the bank the checks are payable through or the Trust's custodian
bank
o Checkwriting privileges are not available for accounts holding shares that
are subject to a contingent deferred sales charge.
o Checks must be written for at least $250.
o Checks cannot be paid if they are written for more than your account value.
o You may not write a check that would require the Trust to redeem shares
that were purchased by check or Automatic Investment Plan payments within
the prior 10 days.
o Don't use your checks if you changed your account number, until you
receive new checks.
WILL I PAY A SALES CHARGE WHEN I SELL MY SHARES? The Trust does not charge a fee
to redeem shares of a Trust that were bought directly or by reinvesting
distributions from that Trust or another Centennial Trust or Oppenheimer fund.
Generally, there is no fee to redeem shares of a Trust bought by exchange of
shares of another Centennial Trust or Oppenheimer fund. However,
1. if you acquired shares of a Trust by exchanging Class A shares of
another Oppenheimer fund that you bought subject to the Class A
contingent deferred sales charge, and
2. those shares are still subject to the Class A contingent deferred sales
charge when you exchange them into the Trust, then
3. you will pay the contingent deferred sales charge if you redeem those
shares from the Trust within 18 months of the purchase date of the
shares of the Trust you exchanged.
How to Exchange Shares
Shares of a Trust can be exchanged for shares of certain other Centennial or
Oppenheimer funds, depending on whether you own your shares through your
dealer's Automatic Purchase and Redemption Program or as a Direct Investor.
HOW CAN PROGRAM PARTICIPANTS EXCHANGE SHARES? If you participate in an Automatic
Purchase and Redemption Program sponsored by your broker-dealer, you may
exchange shares held in your Program Account for shares of Centennial Money
Market Trust, Centennial Government Trust and Centennial Tax Exempt Trust,
Centennial California Tax Exempt Trust and Centennial New York Tax Exempt Trust
(referred to in this Prospectus as the "Centennial Trusts") if available for
sale in your state of residence by contacting your broker or dealer and
obtaining a Prospectus of the Centennial Trusts.
HOW CAN DIRECT INVESTORS EXCHANGE SHARES? Direct Investors can exchange shares
of a Trust for Class A shares of certain Oppenheimer funds. To exchange shares,
you must meet several conditions:
o Shares of the fund selected for exchange must be available for sale in
your place of residence.
o The prospectuses of the Trust and the fund whose shares you want to buy
must offer the exchange privilege.
o You must hold the shares you buy when you establish your account for at
least 7 days before you can exchange them. After the account is open 7
days, you can exchange shares every regular business day.
o You must meet the minimum purchase requirements for the fund you purchase
by exchange.
o Before exchanging into a fund, you should obtain and read its prospectus.
Shares of a particular class of an Oppenheimer fund may be exchanged only
for shares of the same class in other Oppenheimer funds. For example, you can
exchange shares of a Trust only for Class A shares of another fund, and you can
exchange only Class A shares of another Oppenheimer fund for shares of a Trust.
You may pay a sales charge when you exchange shares of a Trust. Because
shares of a Trust are sold without sales charge, in some cases you may pay a
sales charge when you exchange shares of a Trust for shares of other Oppenheimer
funds that are sold subject to a sales charge. You will not pay a sales charge
when you exchange shares of a Trust purchased by reinvesting distributions from
a Trust or other Oppenheimer funds (except Oppenheimer Cash Reserves), or shares
of a Trust purchased by exchange of shares on which you paid a sales charge.
For tax purposes, exchanges of shares involve a sale of the shares of the
fund you own and a purchase of the shares of the other fund, which may result in
a capital gain or loss. Since shares of a Trust normally maintain a $1.00 net
asset value, in most cases you should not realize a capital gain or loss when
you sell or exchange your shares.
Direct Investors can find a list of Oppenheimer funds currently available
for exchanges in the Statement of Additional Information or you can obtain one
by calling a service representative at 1-800-525-9310. The list of eligible
funds can change from time to time.
How Do Direct Investors Submit Exchange Requests? Direct shareholders may
request exchanges in writing or by telephone:
o Written Exchange Requests. Submit an Exchange Authorization Form, signed
by all owners of the account. Send it to the Transfer Agent at the address
on the Back Cover.
o Telephone Exchange Requests. Telephone exchange requests may be made by
calling a service representative at 1-800-525-9310. Telephone exchanges
may be made only between accounts that are registered with the same
name(s) and address. Shares held under certificates may not be exchanged
by telephone.
ARE THERE LIMITATIONS ON EXCHANGES? There are certain exchange policies you
should be aware of:
o Shares are normally redeemed from one fund and purchased from the other
fund in the exchange transaction on the same regular business day on which
the Transfer Agent receives an exchange request that conforms to the
policies described above. Requests for exchanges to any of the Centennial
Trusts must be received by the Transfer Agent by 4:00 P.M. on a regular
business day to be effected that day. The Transfer Agent must receive
requests to exchange shares of a Trust to funds other than the Centennial
Trusts on a regular business day by the close of The New York Stock
Exchange that day. The close is normally 4:00 P.M. but may be earlier on
some days.
o Either fund may delay the purchase of shares of the fund you are
exchanging into up to seven days if it determines it would be
disadvantaged by a same-day exchange. For example, the receipt of the
multiple exchange requests from a "market timer" might require a fund to
sell securities at a disadvantageous time and/or price.
o Because excessive trading can hurt fund performance and harm shareholders,
the Trusts reserve the right to refuse any exchange request that may, in
the opinion of the Trusts, be disadvantageous, or to refuse multiple
exchange requests submitted by a shareholder or dealer.
o The Trusts may amend, suspend or terminate the exchange privilege at any
time. Although the Trusts will attempt to provide you notice whenever it
is reasonably able to do so, they may impose these changes at any time.
o If the Transfer Agent cannot exchange all the shares you request because
of a restriction cited above, only the shares eligible for exchange will
be exchanged.
Shareholder Account Rules and Policies
More information about the Trusts' policies and procedures for buying, selling
and exchanging shares is contained in the Statement of Additional Information.
Theoffering of shares may be suspended during any period in which the
determination of net asset value is suspended, and the offering may be
suspended by the Board of Trustees at any time it believes it is in a Trust's
best interest to do so.
Telephone Transaction Privileges for purchases, redemptions or exchanges may be
modified, suspended or terminated by a Trust at any time. If an account has
more than one owner, a Trust and the Transfer Agent may rely on the
instructions of any one owner. Telephone privileges apply to each owner of
the account and the dealer representative of record for the account unless
the Transfer Agent receives cancellation instructions from an owner of the
account.
TheTransfer Agent will record any telephone calls to verify data concerning
transactions and has adopted other procedures to confirm that telephone
instructions are genuine, by requiring callers to provide tax identification
numbers and other account data or by using PINs, and by confirming such
transactions in writing. The Transfer Agent and a Trust will not be liable
for losses or expenses arising out of telephone instructions reasonably
believed to be genuine.
Redemption or transfer requests will not be honored until the Transfer Agent
receives all required documents in proper form. From time to time, the
Transfer Agent in its discretion may waive certain of the requirements for
redemptions stated in this Prospectus.
Payment for redeemed shares ordinarily is made in cash. It is forwarded by check
or by Federal Funds wire (as elected by the shareholder) within seven days
after the Transfer Agent receives redemption instructions in proper form.
However, under unusual circumstances determined by the Securities and
Exchange Commission, payment may be delayed or suspended. For accounts
registered in the name of a broker-dealer, payment will normally be forwarded
within three business days after redemption.
TheTransfer Agent may delay forwarding a check or making a payment via Federal
Funds wire for recently purchased shares, but only until the purchase payment
has cleared. That delay may be as much as 10 days from the date the shares
were purchased. That delay may be avoided if you purchase shares by Federal
Funds wire or certified check, or arrange with your bank to provide telephone
or written assurance to the Transfer Agent that your purchase payment has
cleared.
To avoid sending duplicate copies of materials to households, a Trust will mail
only one copy of each annual and semi-annual report to shareholders having
the same last name and address on a Trust's records. However, each
shareholder may call the Transfer Agent at 1-800-525-9310 to ask that copies
of those materials be sent personally to that shareholder.
Dividends and Tax Information
DIVIDENDS. Each Trust intends to declare dividends from net investment income
each regular business day and to pay those dividends to shareholders monthly on
a date selected by the Board of Trustees. To maintain a net asset value of $1.00
per share, a Trust might withhold dividends or make distributions from capital
or capital gains. Daily dividends will not be declared or paid on newly
purchased shares until Federal Funds are available to a Trust from the purchase
payment for such shares.
CAPITAL GAINS. Each Trust normally holds its securities to maturity and
therefore will not usually pay capital gains. Although the Trusts do not seek
capital gains, a Trust could realize capital gains on the sale of its portfolio
securities. If it does, it may make distributions out of any net short-term or
long-term capital gains in December of each year. A Trust may make supplemental
distributions of dividends and capital gains following the end of its fiscal
year.
If you participate in an Automatic Purchase and Redemption Program sponsored by
your broker-dealer, all dividends will be automatically reinvested in additional
shares of the Trust. Under the terms of the Automatic Purchase and Redemption
Program, your broker-dealer can pay redeem shares to satisfy debit balances
arising in your Program Account. If that occurs, you will be entitled to
dividends on those shares only up to and including the date of such redemption.
TAXES.
Centennial Money Market Trust and Centennial Government Trust.
If your shares are not held in a tax-deferred retirement account, you
should be aware of the following tax implications of investing in Centennial
Money Market Trust and Centennial Government Trust. Dividends paid from net
investment income and short-term capital gains are taxable as ordinary income.
Long-term capital gains are taxable as long-term capital gains when distributed
to shareholders. It does not matter how long you have held your shares. Whether
you reinvest your distributions in additional shares or take them in cash, the
tax treatment is the same.
Every year the Trust will send you and the IRS a statement showing the
amount of each taxable distribution you received in the previous year. Any
long-term capital gains distributions will be separately identified in the tax
information the Trust sends you after the end of the calendar year.
Centennial Tax Exempt Trust
Dividends paid from net investment income earned by the Trust on municipal
securities will be excludable from gross income for federal income tax purposes.
A portion of a dividend that is derived from interest paid on certain "private
activity bonds" may be an item of tax preference if you are subject to the
alternative minimum tax. If the Trust earns interest on taxable investments, any
dividends derived from those earnings will be taxable as ordinary income to
shareholders.
Dividends and capital gains distributions may be subject to state or local
taxes. Long-term capital gains are taxable as long-term capital gains when
distributed to shareholders. It does not matter how long you have held your
shares. Dividends paid from short-term capital gains and non-tax exempt net
investment income are taxable as ordinary income. Whether you reinvest your
distributions in additional shares or take them in cash, the tax treatment is
the same. Every year the Trust will send you and the IRS a statement showing the
amount of any taxable distribution you received in the previous year as well as
the amount of your tax-exempt income.
Remember There May be Taxes on Transactions. Because each Trust seeks to
maintain a stable $1.00 per share net asset value, it is unlikely that you
will have a capital gain or loss when you sell or exchange your shares. A
capital gain or loss is the difference between the price you paid for the
shares and the price you received when you sold them. Any capital gain is
subject to capital gains tax.
Returns of Capital Can Occur. In certain cases, distributions made by a Trust
may be considered a non-taxable return of capital to shareholders. If that
occurs, it will be identified in notices to shareholders.
This information is only a summary of certain federal tax information
about your investment. You should consult with your tax adviser about the effect
of an investment in a Trust on your particular tax situation.
<PAGE>
Financial Highlights
The Financial Highlights Table is presented to help you understand the Trust's
financial performance for the past 5 fiscal years. Certain information reflects
financial results for a single Trust share. The total returns in the table
represent the rate that an investor would have earned [or lost] on an investment
in the Trust (assuming reinvestment of all dividends and distributions). This
information for the past 5 fiscal years ended June 30, 1999 has been audited by
Deloitte & Touche LLP, the Trust's independent auditors, whose report, along
with the Trust's financial statements, is included in the Statement of
Additional Information, which is available on request.
<PAGE>
INFORMATION AND SERVICES
For More Information On Centennial Tax Exempt Trust:
The following additional information about the Trust is available without charge
upon request:
STATEMENT OF ADDITIONAL INFORMATION This document includes additional
information about the Trust's investment policies, risks, and operations. It is
incorporated by reference into this Prospectus (which means it is legally part
of this Prospectus).
ANNUAL AND SEMI-ANNUAL REPORTS Additional information about the Trust's
investments and performance is available in the Trust's Annual and Semi-Annual
Reports to shareholders. The Annual Report includes a discussion of market
conditions and investment strategies that significantly affected the Trust's
performance during its last fiscal year.
How to Get More Information:
You can request the Statement of Additional Information, the Annual and
Semi-Annual Reports, and other information about the Trust or your account:
- --------------------------------------------------------------------------------
By Telephone: Call Shareholder Services, Inc.
toll-free:
1-800-525-9310
- --------------------------------------------------------------------------------
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By Mail: Write to:
Shareholder Services, Inc.
P.O. Box 5143
Denver, Colorado 80217
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You can also obtain copies of the Statement of Additional Information and other
Fund documents and reports by visiting the SEC's Public Reference Room in
Washington, D.C. (Phone 1-800-SEC-0330) or the SEC's Internet web site at
http://www.sec.gov. Copies may be obtained upon payment of a duplicating fee by
writing to the SEC's Public Reference Section, Washington, D.C. 20549-6009.
No one has been authorized to provide any information about the Trust or to make
any representations about the Trust other than what is contained in this
Prospectus. This Prospectus is not an offer to sell shares of the Trust, nor a
solicitation of an offer to buy shares of the Trust, to any person in any state
or other jurisdiction where it is unlawful to make such an offer.
The Trust's shares are distributed by:
SEC File No. 811-3104 Centennial Asset Management Corporation
PR0160.001.1199
Printed on recycled paper
<PAGE>
APPENDIX TO THE PROSPECTUS OF
CENTENNIAL TAX EXEMPT TRUST
Graphic material included in Prospectus of Centennial Tax Exempt Trust
(the "Trust") under the heading: "Annual Total Returns (as of 12/31 each year)."
Bar chart will be included in the Prospectus of the Trust depicting the
annual total returns of a hypothetical investment in shares of the Trust for the
full calendar year since the Trust's inception as a money market fund. Set forth
below are the relevant data points that will appear on the bar chart.
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Calendar Year Ended: Annual Total Returns
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12/31/89
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12/31/90
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12/31/91
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12/31/92
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12/31/93
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12/31/94
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12/31/95
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12/31/96
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12/31/97
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12/31/98
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<PAGE>
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Centennial Tax Exempt Trust
- --------------------------------------------------------------------------------
6803 South Tucson Way, Englewood, Colorado 80112
1-800-525-9310
Statement of Additional Information dated November 1, 1999
This Statement of Additional Information is not a Prospectus. This
document contains additional information about the Trust and supplements
information in the Prospectus dated November 1, 1999. It should be read together
with the Prospectus, which may be obtained by writing to the Trust's Transfer
Agent, Shareholder Services, Inc., at P.O. Box 5143, Denver, Colorado 80217, or
by calling the Transfer Agent at the toll-free number shown above.
Contents
Page
About the Trust
Additional Information about the Trust's Investment Policies and Risks........
The Trust's Investment Policies..........................................
Other Investment Strategies..............................................
Investment Restrictions..................................................
How the Trust is Managed......................................................
Organization and History.................................................
Trustees and Officers of the Trust............................................
The Manager..............................................................
Performance of the Trust......................................................
About Your Account
How To Buy Shares.............................................................
How To Sell Shares............................................................
Dividends and Taxes...........................................................
Additional Information About the Trust........................................
Financial Information About the Trust
Independent Auditors' Report..................................................
Financial Statements..........................................................
Appendix A: Securities Ratings.............................................A-1
Appendix B: Industry Classifications.......................................B-1
Appendix C: Automatic Withdrawal Plan Provision............................C-1
Appendix D: Tax Equivalent Yield Tables....................................D-1
<PAGE>
A B O U T T H E T R U S T
Additional Information About the Trust's Investment Policies and Risks
The investment objective and the principal investment policies of the Trust are
described in the Prospectus. This Statement of Additional Information contains
supplemental information about those policies and the types of securities that
the Trust's investment manager, Centennial Asset Management Corporation, will
select for the Trust. Additional explanations are also provided about the
strategies the Trust may use to try to achieve its objective.
The Trust's Investment Policies. The composition of the Trust's portfolio and
the techniques and strategies that the Trust's Manager uses in selecting
portfolio securities will vary over time. The Trust is not required to use all
of the investment techniques and strategies described below at all times in
seeking its goal. It may use some of the special investment techniques and
strategies at some times or not at all.
The Trust does not make investments with the objective of seeking capital
growth. However, the values of the securities held by the Trust may be affected
by changes in general interest rates and other factors, prior to their maturity.
Because the current values of debt securities vary inversely with changes in
prevailing interest rates, if interest rates increase after a security is
purchased, that security will normally fall in value. Conversely, should
interest rates decrease after a security is purchased, normally its value will
rise.
However, those fluctuations in value will not generally result in realized
gains or losses to the Trust unless the Trust sells the security prior to the
security's maturity. A debt security held to maturity is redeemable by its
issuer at full principal value plus accrued interest. The Trust does not usually
intend to dispose of securities prior to their maturity, but may do so for
liquidity purposes, or because of other factors affecting the issuer that cause
the Manager to sell the particular security. In that case, the Trust could
realize a capital gain or loss on the sale.
There are variations in the credit quality of municipal securities, both
within a particular rating classification and between classifications. These
variations depend on numerous factors. The yields of municipal securities depend
on a number of factors, including general conditions in the municipal securities
market, the size of a particular offering, the maturity of the obligation and
rating (if any) of the issue. These factors are discussed in greater detail
below.
|X| Portfolio Turnover. A change in the securities held by the Trust from
buying and selling investments is known as "portfolio turnover." Short-term
trading increases the rate of portfolio turnover and could increase the Trust's
transaction costs. However, the Trust ordinarily incurs little or no brokerage
expense because most of the Trust's portfolio transactions are principal trades
that do not require payment of brokerage commissions.
The Trust ordinarily does not trade securities to achieve capital gains,
because they would not be tax-exempt income. To a limited degree, the Trust may
engage in short-term trading to attempt to take advantage of short-term market
variations. It may also do so to dispose of a portfolio security prior to its
maturity. That might be done if, on the basis of a revised credit evaluation of
the issuer or other considerations, the Manager believes such disposition is
advisable or the Trust needs to generate cash to satisfy requests to redeem
Trust shares. In those cases, the Trust may realize a capital gain or loss on
its investments. The Trust's annual portfolio turnover rate normally is not
expected to exceed ____%.
Municipal Securities. The types of municipal securities in which the Trust may
invest are described in the Prospectus under "About the Trust's Investments."
Municipal securities are generally classified as general obligation bonds,
revenue bonds and notes. A discussion of the general characteristics of these
principal types of municipal securities follows below.
|X| Municipal Bonds. We have classified municipal securities having a
maturity (when the security is issued) of more than one year as "municipal
bonds." The principal classifications of long-term municipal bonds are "general
obligation" and "revenue" (including "industrial development") bonds. They may
have fixed, variable or floating rates of interest, as described below.
Some bonds may be "callable," allowing the issuer to redeem them before
their maturity date. To protect bondholders, callable bonds may be issued with
provisions that prevent them from being called for a period of time. Typically,
that is 5 to 10 years from the issuance date. When interest rates decline, if
the call protection on a bond has expired, it is more likely that the issuer may
call the bond. If that occurs, the Trust might have to reinvest the proceeds of
the called bond in bonds that pay a lower rate of return.
|_| General Obligation Bonds. The basic security behind general
obligation bonds is the issuer's pledge of its full faith and credit and taxing
power, if any, for the repayment of principal and the payment of interest.
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 rate of taxes that can be
levied for the payment of debt service on these bonds may be limited or
unlimited. Additionally, there may be limits as to the rate or amount of special
assessments that can be levied to meet these obligations.
|_| 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 tax or other
specific revenue source. Revenue bonds are issued to finance a wide variety of
capital projects. Examples include electric, gas, water and sewer systems;
highways, bridges, and tunnels; port and airport facilities; colleges and
universities; and hospitals.
Although the principal security for these types of bonds may vary from
bond to bond, many provide additional security in the form of a debt service
reserve fund that 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.
|_| Industrial Development Bonds. Industrial development bonds are
considered municipal bonds if the interest paid is exempt from federal income
tax. They 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 may also be 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 financed by the bond as security
for those payments.
|_| 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 certain types of 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 general obligation bonds
issued by or on behalf of state or local governments, the proceeds of which are
used to finance the operations of such governments, continues to be tax-exempt.
However, the Tax Reform Act 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 is
taxable under the revised rules. There is an exception for "qualified"
tax-exempt private activity bonds, for example, exempt facility bonds including
certain industrial development bonds, qualified mortgage bonds, qualified
Section 501(c)(3) bonds, and qualified student loan bonds. Normally, the Trust
will not invest more than 20% of its total assets in private activity municipal
securities or other taxable investments.
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.
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. 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 federal alternative minimum tax is designed to ensure that all persons
who receive income pay some tax, even if their regular tax is zero. This is
accomplished in part by including in taxable income certain tax preference items
that are used to calculate 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 the proportionate relationship the interest the investment company
receives on such bonds bears to all its exempt interest dividends.
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. That could occur in
situations where the "adjusted current earnings" of the corporation exceeds its
alternative minimum taxable income.
To determine whether a municipal security is treated as a taxable private
activity bond, it is subject to 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 the 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 direct or indirect use in a
trade or business carried on by an individual or entity other than a state or
municipal governmental unit. Under the private loan restriction, the amount of
bond proceeds that 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 the
use of the bond-financed facility. The Trust makes no independent investigation
of the users of such bonds or their use of proceeds of the bonds. If the Trust
should hold a bond that loses its tax-exempt status retroactively, there might
be an adjustment to the tax-exempt income previously distributed to
shareholders.
Additionally, a private activity bond that 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 applies primarily to exempt
facility bonds, including industrial development bonds. The Trust may invest in
industrial development bonds and other private activity bonds. Therefore, the
Trust may not be an appropriate investment for entities which are "substantial
users" (or persons related to "substantial users") of such exempt facilities.
Those entities and persons should consult their tax advisers before purchasing
shares of the Trust.
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 individual or the
individual'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.
|X| Municipal Notes. Municipal securities having a maturity (when the
security is 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. Some of the types of municipal notes the Trust can invest in are
described below.
|_| Tax Anticipation Notes. These 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 other business taxes, and
are payable from these specific future taxes.
|_| Revenue Anticipation Notes. These are notes issued in expectation of
receipt of other types of revenue, such as federal revenues available under
federal revenue-sharing programs.
|_| Bond Anticipation Notes. Bond anticipation notes are issued to
provide interim financing until long-term financing can be arranged. The
long-term bonds that are issued typically also provide the money for the
repayment of the notes.
|_| Construction Loan Notes. These are sold to provide project
construction financing until permanent financing can be secured. After
successful completion and acceptance of the project, it may receive permanent
financing through public agencies, such as the Federal Housing Administration.
|X| Tax Exempt Commercial Paper. This type of short-term obligation
(usually having a maturity of 270 days or less) is issued by a municipality to
meet current working capital needs.
|X| Municipal Lease Obligations. The Trust's investments in municipal
lease obligations may be through certificates of participation that are offered
to investors by public entities. 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.
Some municipal lease securities may be deemed to be "illiquid" securities.
Their purchase by the Trust would be limited as described below in "Illiquid
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 Board of Trustees. Those guidelines require
the Manager to evaluate:
|_| the frequency of trades and price quotations for such securities;
|_| the number of dealers or other potential buyers willing to purchase or
sell such securities;
|_| the availability of market-makers; and
|_| the nature of the trades for such securities.
Municipal leases have special risk considerations. 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 that purpose on a yearly basis. While the obligation
might be secured by the lease, it might be difficult to dispose of that property
in case of a default.
Projects financed with certificates of participation generally are not
subject to state constitutional debt limitations or other statutory requirements
that may apply to other municipal securities. Payments by the public entity on
the obligation underlying the certificates are derived from available revenue
sources. That revenue might 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 a state
or any of its political subdivisions.
In addition to the risk of "non-appropriation," municipal lease securities
do not have as highly liquid a market as conventional municipal bonds. Municipal
leases, like other municipal debt obligations, are subject to the risk of
non-payment of interest or repayment of principal by the issuer. The ability of
issuers of municipal leases to make timely lease payments may be adversely
affected in general economic downturns and as relative governmental cost burdens
are reallocated among federal, state and local governmental units. A default in
payment of income would result in a reduction of income to the Trust. It could
also result in a reduction in the value of the municipal lease and that, as well
as a default in repayment of principal, could result in a decrease in the net
asset value of the Trust. While the Trust holds such securities, the Manager
will also evaluate the likelihood of a continuing market for these securities
and their credit quality.
Floating Rate/Variable Rate Obligations. Floating rate 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 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.
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 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 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.
|X| Ratings of Securities -- Portfolio Quality, Maturity and
Diversification. Under Rule 2a-7 of 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 that Rule, the Trust may purchase only those
securities that the Manager, under Board-approved procedures, has determined
have minimal credit risks and are "Eligible Securities." The rating restrictions
described in the Prospectus and this Statement of Additional Information do not
apply to banks in which the Trust's cash is kept.
An "Eligible Security" is one that has been rated in one of the two
highest short-term rating categories by any two "nationally-recognized
statistical rating organizations." That term is defined in Rule 2a-7 and they
are referred to as "Rating Organizations" in this Statement of Additional
Information. If only one Rating Organization has rated that security, it must
have been rated in one of the two highest rating categories by that Rating
Organization. An unrated security that is judged by the Manager to be of
comparable quality to Eligible Securities rated by Rating Organizations may also
be an "Eligible Security."
Rule 2a-7 permits the Trust to purchase any number of "First Tier
Securities." These are Eligible Securities that have been rated in the highest
rating category for short-term debt obligations by at least two Rating
Organizations. If only one Rating Organization has rated a particular security,
it must have been rated in the highest rating category by that Rating
Organization. Comparable unrated securities may also be First Tier Securities.
Under Rule 2a-7, the Trust may invest only up to 5% of its total assets in
"Second Tier Securities." Those are Eligible Securities that are not "First Tier
Securities." In addition, the Trust may not invest more than:
|_| 5% of its total assets in the securities of any one issuer (other than
the U.S. Government, its agencies or instrumentalities) or
|_| 1% of its total assets or $1 million (whichever is greater) in Second
Tier Securities of any one issuer.
Under Rule 2a-7, the Trust must maintain a dollar-weighted average
portfolio maturity of not more than 90 days, and the maturity of any single
portfolio investment may not exceed 397 days. Some of the Trust's existing
investment restrictions are more restrictive than the provisions of Rule 2a-7.
For example, as a matter of fundamental policy, the Trust may not invest in any
debt instrument having a maturity in excess of one year from the date of the
investment. The Board regularly reviews reports from the Manager to show the
Manager's compliance with the Trust's procedures and with the Rule.
If a security's rating is downgraded, the Manager and/or the Board of
Trustees may have to reassess the security's credit risk. If a security has
ceased to be a First Tier Security, the Manager will promptly reassess whether
the security continues to present minimal credit risk. If the Manager becomes
aware that any Rating Organization has downgraded its rating of a Second Tier
Security or rated an unrated security below its second highest rating category,
the Trust's Board of Trustees shall promptly reassess whether the security
presents minimal credit risk and whether it is in the best interests of the
Trust to dispose of it. If the Trust disposes of the security within five days
of the Manager learning of the downgrade, the Manager will provide the Board of
Trustees with subsequent notice of such downgrade. If a security is in default,
or ceases to be an Eligible Security, or is determined no longer to present
minimal credit risks, the Board of Trustees must determine whether it would be
in the best interests of the Trust to dispose of the security.
The Rating Organizations currently designated as nationally-recognized
statistical rating organizations by the Securities and Exchange Commission are
Standard & Poor's Corporation, Moody's Investors Service, Inc., Fitch IBCA,
Inc., Duff and Phelps, Inc., and Thomson BankWatch, Inc. Appendix A to this
Statement of Additional Information contains descriptions of the rating
categories of those Rating Organizations. Ratings at the time of purchase will
determine whether securities may be acquired under the restrictions described
above.
Other Investment Strategies
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 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 monitor
the vendor's creditworthiness to confirm that the vendor is financially sound
and will continuously monitor the collateral's value.
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.
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.
Investment Restrictions
|X| What Are "Fundamental Policies?" Fundamental policies are those
policies that the Trust has adopted to govern its investments that can be
changed only by the vote of a "majority" of the Trust's outstanding voting
securities. Under the Investment Company Act, a "majority" vote is defined as
the vote of the holders of the lesser of:
|_| 67% or more of the shares present or represented by proxy at a
shareholder meeting, if the holders of more than 50% of the outstanding
shares are present or represented by proxy, or
|_| more than 50% of the outstanding shares.
The Trust's investment objective is a fundamental policy. Other policies
described in the Prospectus or this Statement of Additional Information are
"fundamental" only if they are identified as such. The Trust's Board of Trustees
can change non-fundamental policies without shareholder approval. However,
significant changes to investment policies will be described in supplements or
updates to the Prospectus or this Statement of Additional Information, as
appropriate. The Trust's most significant investment policies are described in
the Prospectus.
n Does the Trust Have Additional Fundamental Policies? The following
investment restrictions are fundamental policies of the Trust:
|_| The Trust cannot 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;
|_| The Trust cannot 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;
|_| The Trust cannot 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);
|_| The Trust cannot purchase more than 10% of the outstanding voting
securities of any one issuer or invest in companies for the purpose of
exercising control;
|_| The Trust cannot 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;
|_| The Trust cannot invest in commodities or commodity contracts or
invest in interests in oil, gas or other mineral exploration or development
programs;
|_| The Trust cannot invest in real estate; however the Trust may
purchase municipal bonds or notes secured by interests in real estate;
|_| The Trust cannot 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;
|_| The Trust cannot 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 together own
more than 5% of the securities of such issuer;
|_| The Trust cannot 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;
|_| The Trust cannot invest in securities of other investment companies
except as they may be acquired as part of a merger, consolidation or acquisition
of assets; or
|_| The Trust cannot issue "senior securities," but this does not
prohibit certain investment activities for which assets of the Trust are
designated as segregated, or margin, collateral or escrow arrangements are
established, to cover the related obligations. Examples of those activities
include borrowing money, reverse repurchase agreements, delayed-delivery and
when-issued arrangements for portfolio securities transactions, and contracts to
buy or sell derivatives, hedging instruments, options or futures.
Unless the Prospectus or this Statement of Additional Information states
that a percentage restriction applies on an ongoing basis, it applies only at
the time the Trust makes an investment. The Trust need not sell securities to
meet the percentage limits if the value of the investment increases in
proportion to the size of the Trust.
For purposes of the Trust's policy not to concentrate its investments in
securities of issuers, the Trust has adopted the industry classifications set
forth in Appendix B to this Statement of Additional Information. This is not a
fundamental policy.
How the Trust Is Managed
Organization and History. The Trust is an open-end, diversified management
investment company organized as a Massachusetts business trust in ____, with an
unlimited number of authorized shares of beneficial interest.
The Trust is governed by a Board of Trustees, which is responsible for
protecting the interests of shareholders under Massachusetts law. The Trustees
meet periodically throughout the year to oversee the Trust's activities, review
its performance, and review the actions of the Manager. Although the Trust will
not normally hold annual meetings of its shareholders, it may hold shareholder
meetings from time to time on important matters. Shareholders of the Trust may
have the right to call a meeting to remove a Trustee or to take other action
described in the Declaration of Trust.
|X| Classes of Shares. The Trust has a single class of shares of stock.
While that class has no designation, it is deemed to be the equivalent of Class
A for purposes of the shareholder account policies that apply to Class A shares
of the Oppenheimer funds. Shares of the Trust are freely transferable. Each
share has one vote at shareholder meetings, with fractional shares voting
proportionally on matters submitted to a vote of shareholders. There are no
preemptive or conversion rights and shares participate equally in the assets of
the Trust upon liquidation.
|X| Meetings of Shareholders. As a Massachusetts business trust, the Trust
is not required to hold, and does not plan to hold, regular annual meetings of
shareholders. The Trust will hold meetings when required to do so by the
Investment Company Act or other applicable law. It will also do so when a
shareholder meeting is called by the Trustees or upon proper request of the
shareholders.
Shareholders have the right, upon the declaration in writing or vote of
two-thirds of the outstanding shares of the Trust, to remove a Trustee. The
Trustees will call a meeting of shareholders to vote on the removal of a Trustee
upon the written request of the record holders of 10% of the outstanding shares
of the Trust. If the Trustees receive a request from at least 10 shareholders
stating that they wish to communicate with other shareholders to request a
meeting to remove a Trustee, the Trustees will then either make the shareholder
lists of the Trust available to the applicants or mail their communication to
all other shareholders at the applicants' expense. The shareholders making the
request must have been shareholders for at least six months and must hold shares
of series of the Trust valued at $25,000 or more or constituting at least 1% of
the outstanding shares of the Trust, whichever is less. The Trustees may also
take other action as permitted by the Investment Company Act.
|_| Shareholder and Trustee Liability. The Declaration of Trust contains
an express disclaimer of shareholder or Trustee liability for the Trust's
obligations. It also provides for indemnification and reimbursement of expenses
out of the Trust's property for any shareholder held personally liable for its
obligations. The Declaration of Trust also states that upon request, the Trust
shall assume the defense of any claim made against a shareholder for any act or
obligation of the Trust and shall satisfy any judgment on that claim.
Massachusetts law permits a shareholder of a business trust (such as the Trust)
to be held personally liable as a "partner" under certain circumstances.
However, the risk that a Trust shareholder will incur financial loss from being
held liable as a "partner" of the Trust is limited to the relatively remote
circumstances in which the Trust would be unable to meet its obligations.
The Trust's contractual arrangements state that any person doing business
with the Trust (and each shareholder of the Trust) agrees under the Declaration
of Trust to look solely to the assets of the Trust for satisfaction of any claim
or demand that may arise out of any dealings with the Trust. The Declaration of
Trust further state that the Trustees shall have no personal liability to any
such person, to the extent permitted by law.
Trustees and Officers of the Trust. The Trust's Trustees and officers and their
principal occupations and business affiliations during the past five years are
listed below. Trustees denoted with an asterisk (*) below are deemed to be
"interested persons" of the Trust under the Investment Company Act. All of the
Trustees are also trustee, directors or Trustees of the following Denver-based
Oppenheimer funds1:
1Ms. Macaskill and Mr. Bowen are not Trustees or Directors of Oppenheimer
Integrity Funds, Oppenheimer Strategic Income Fund, Panorama Series Fund, Inc.
or Oppenheimer Variable Account Funds. Mr. Fossel and Mr. Bowen are not Trustees
of Centennial New York Tax Exempt Trust or Managing General Partners of
Centennial America Fund, L.P.
Oppenheimer Cash Reserves Oppenheimer Strategic Income Fund
Oppenheimer Champion Income Fund Oppenheimer Total Return Fund, Inc.
Oppenheimer Capital Income Fund Oppenheimer Variable Account Funds
Oppenheimer High Yield Fund Panorama Series Fund, Inc.
Oppenheimer International Bond Fund Centennial America Fund, L. P.
Oppenheimer Integrity Funds Centennial California Tax Exempt
Trust
Oppenheimer Limited-Term Government Centennial Government Trust
Fund
Oppenheimer Main Street Funds, Inc. Centennial Money Market Trust
Oppenheimer Main Street Small Cap Centennial New York Tax Exempt Trust
Fund
Oppenheimer Municipal Fund Centennial Tax Exempt Trust
Oppenheimer Real Asset Fund
Robert G. Avis*, Trustee, Age: 68
One North Jefferson Ave., 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 adviser and trust company,
respectively).
William A. Baker, Trustee, Age: 84
197 Desert Lakes Drive, Palm Springs, California 92264
Management Consultant.
George C. Bowen*, Trustee, Age: 63
6803 South Tucson Way, Englewood, Colorado 80112
Formerly (until April 1999) Mr. Bowen held the following positions: Senior Vice
President (since September 1987) and Treasurer (since March 1985) of the
Manager; Vice President (since June 1983) and Treasurer (since March 1985) of
the Distributor; Vice President (since October 1989) and Treasurer (since April
1986) of HarbourView Asset Management Corporation; Senior Vice President (since
February 1992), Treasurer (since July 1991) Assistant Secretary and a director
(since December 1991) of Centennial Asset Management Corporation; President,
Treasurer and a director of Centennial Capital Corporation (since June 1989);
Vice President and Treasurer (since August 1978) and Secretary (since April
1981) of Shareholder Services, Inc.; Vice President, Treasurer and Secretary of
Shareholder Financial Services, Inc. (since November 1989); Assistant Treasurer
of Oppenheimer Acquisition Corp. (since March 1998); Treasurer of Oppenheimer
Partnership Holdings, Inc. (since November 1989); Vice President and Treasurer
of Oppenheimer Real Asset Management, Inc. (since July 1996); Chief Executive
Officer, Treasurer; Treasurer of OppenheimerFunds International Ltd. and
Oppenheimer Millennium Funds plc (since October 1997).
Jon S. Fossel, Trustee, Age: 57
P.O. Box 44, Mead Street, Waccabuc, New York 10597
Formerly Chairman and a director of the Manager, President and a director of
Oppenheimer Acquisition Corp., the Manager's parent holding company, and
Shareholder Services, Inc. and Shareholder Financial Services, Inc., transfer
agent subsidiaries of the Manager.
Sam Freedman, Trustee, Age: 59
4975 Lakeshore Drive, Littleton, Colorado 80123
Formerly Chairman and Chief Executive Officer of OppenheimerFunds Services,
Chairman, Chief Executive Officer and a director of Shareholder Services, Inc.,
Chairman, Chief Executive Officer and director of Shareholder Financial
Services, Inc., Vice President and director of Oppenheimer Acquisition Corp. and
a director of OppenheimerFunds, Inc.
Raymond J. Kalinowski, Trustee, Age: 70
44 Portland Drive, St. Louis, Missouri 63131
Director of Wave Technologies International, Inc. (a computer products training
company), self-employed consultant (securities matters).
C. Howard Kast, Trustee, Age: 77
2552 East Alameda, Denver, Colorado 80209
Formerly Managing Partner of Deloitte, Haskins & Sells (an accounting firm).
Robert M. Kirchner, Trustee, Age: 78
7500 E. Arapahoe Road, Englewood, Colorado 80112
President of The Kirchner Company (management consultants).
Bridget A. Macaskill*, President and Trustee, Age: 51
Two World Trade Center, New York, New York 10048-0203
President (since June 1991), Chief Executive Officer (since September 1995) and
a Director (since December 1994) of the Manager; President and director (since
June 1991) of HarbourView Asset Management Corporation, an investment adviser
subsidiary of the Manager; Chairman and a director of Shareholder Services, Inc.
(since August 1994) and Shareholder Financial Services, Inc. (since September
1995), transfer agent subsidiaries of the Manager; President (since September
1995) and a director (since October 1990) of Oppenheimer Acquisition Corp., the
Manager's parent holding company; President (since September 1995) and a
director (since November 1989) of Oppenheimer Partnership Holdings, Inc., a
holding company subsidiary of the Manager; a director of Oppenheimer Real Asset
Management, Inc. (since July 1996); President and a director (since October
1997) of OppenheimerFunds International Ltd., an offshore fund management
subsidiary of the Manager and of Oppenheimer Millennium Funds plc; President and
a director of other Oppenheimer funds; a director of Prudential Corporation plc
(a U.K. financial service company).
Ned M. Steel, Trustee, Age: 84
3416 South Race Street, Englewood, Colorado 80110
Chartered Property and Casualty Underwriter; a director of Visiting Nurse
Corporation of Colorado.
James C. Swain*, Chairman, Chief Executive Officer and Trustee, Age: 65 6803
South Tucson Way, Englewood, Colorado 80112 Vice Chairman of the Manager (since
September 1988); formerly President and a director of Centennial Asset
Management Corporation, an investment adviser subsidiary of the Manager and
Chairman of the Board of Shareholder Services, Inc.
Michael A. Carbuto, Vice President and Portfolio Manager, Age: 44
Two World Trade Center, New York, New York 10048-0203
Vice President of the Manager and Centennial Asset Management Corporation (since
May 1988); an officer of other Oppenheimer funds.
Andrew J. Donohue, Vice President and Secretary, Age: 49
Two World Trade Center, New York, New York 10048-0203
Executive Vice President (since January 1993), General Counsel (since October
1991) and a Director (since September 1995) of the Manager; Executive Vice
President and General Counsel (since September 1993) and a director (since
January 1992) of the Distributor; Executive Vice President, General Counsel and
a director of HarbourView Asset Management Corporation, Shareholder Services,
Inc., Shareholder Financial Services, Inc. and (since September 1995)
Oppenheimer Partnership Holdings, Inc.; President and a director of Centennial
Asset Management Corporation (since September 1995); President, General Counsel
and a director of Oppenheimer Real Asset Management, Inc. (since July 1996);
General Counsel (since May 1996) and Secretary (since April 1997) of Oppenheimer
Acquisition Corp.; Vice President and a director of OppenheimerFunds
International Ltd. and Oppenheimer Millennium Funds plc (since October 1997); an
officer of other Oppenheimer funds.
Robert J. Bishop, Assistant Treasurer, Age: 40
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); an
officer of other Oppenheimer funds; formerly an Assistant Vice President of the
Manager/Mutual Fund Accounting (April 1994 - May 1996), and a Fund Controller
for the Manager.
Scott T. Farrar, Assistant Treasurer, Age: 34
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); Assistant
Treasurer of Oppenheimer Millennium Funds plc (since October 1997); an officer
of other Oppenheimer funds; formerly an Assistant Vice President of the
Manager/Mutual Fund Accounting (April 1994 - May 1996), and a Fund Controller
for the Manager.
Brian W. Wixted, Vice President, Treasurer and Assistant Secretary, Age: 40 6803
South Tucson Way, Englewood, Colorado 80112 Senior Vice President and Treasurer
(since April 1999) of the Manager; Treasurer of HarbourView Asset Management
Corporation, Shareholder Services, Inc., Shareholder Financial Services, Inc.
and Oppenheimer Partnership Holdings, Inc. (since April 1999); Assistant
Treasurer of Oppenheimer Acquisition Corp. (since April 1999); Assistant
Secretary of Centennial Asset Management Corporation (since April 1999);
formerly Principal and Chief Operating Officer, Bankers Trust Company - Mutual
Fund Services Division (March 1995 - March 1999); Vice President and Chief
Financial Officer of CS First Boston Investment Management Corp. (September 1991
- - March 1995); and Vice President and Accounting Manager, Merrill Lynch Asset
Management (November 1987 - September 1991).
Robert G. Zack, Assistant Secretary, Age: 51
Two World Trade Center, New York, New York 10048-0203
Senior Vice President (since May 1985) and Associate General Counsel (since May
1981) of the Manager, Assistant Secretary of Shareholder Services, Inc. (since
May 1985), and Shareholder Financial Services, Inc. (since November 1989);
Assistant Secretary of OppenheimerFunds International Ltd. and Oppenheimer
Millennium Funds plc (since October 1997); an officer of other Oppenheimer
funds.
O Remuneration of Trustees. The officers of the Trust and certain Trustees of
the Trust (Ms. Macaskill and Messrs. Bowen and Swain) who are affiliated with
the Manager receive no salary or fee from the Trust. The remaining Trustees of
the Trust received the compensation shown below. The compensation from the Trust
was paid during its fiscal year ended June 30, 1999. The compensation from all
of the Denver-based Oppenheimer funds includes the Trust and is compensation
received as a Trustee, director, Trustee or member of a committee of the Board
during the calendar year 1998.
<PAGE>
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Aggregate Total Compensation
Trustee's Name Compensation from all Denver-Based
and Other Positions from Trust Oppenheimer Funds1
-----------------------------------------------------------------------------
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Robert G. Avis $ $67,998.00
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William A. Baker $ $69,998.00
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Charles Conrad, Jr. $ $67,998.00
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Jon S. Fossel $ $67,496.04
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Sam Freedman $ $73,998.00
Audit and Review
Committee Member
------------------------------------------------
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Raymond J. Kalinowski $ $73,998.00
Audit and Review
Committee Member
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C. Howard Kast $ $76,998.00
Audit and Review
Committee Chairman
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Robert M. Kirchner $ $67,998.00
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Ned M. Steel $ $67,998.00
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1. For the 1998 calendar year.
o Deferred Compensation Plan for Trustees. The Trustees have adopted
a Deferred Compensation Plan for disinterested Trustees that enables them to
elect to defer receipt of all or a portion of the annual fees they are entitled
to receive from the Trust. Under the plan, the compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested in shares of one or more Oppenheimer funds selected by the Trustee. The
amount paid to the Trustee under this plan will be determined based upon the
performance of the selected funds.
Deferral of fees of the Trustees under this plan will not materially
affect the Trust's assets, liabilities or net income per share. This plan will
not obligate the Trust to retain the services of any Trustee or to pay any
particular level of compensation to any Trustee. Pursuant to an Order issued by
the Securities and Exchange Commission, the Trust may invest in the funds
selected by any Trustee under this plan without shareholder approval for the
limited purpose of determining the value of the Trustees' deferred fee accounts.
|X| Major Shareholders. As of __________, 1999 the only person who owned of
record or was known by the Trust to own beneficially 5% or more of the Trust's
outstanding retail shares was A.G. Edwards & Sons, Inc. ("Edwards"), 1 North
Jefferson Avenue, St. Louis, Missouri 63103, which owned ________shares of the
Trust which was ____% of the outstanding shares of the Trust on that date, for
its own account.
The Manager. The Manager is wholly-owned by OppenheimerFunds, Inc., which is a
wholly-owned subsidiary of Oppenheimer Acquisition Corp., a holding company
controlled by Massachusetts Mutual Life Insurance Company. The Manager and the
Trust have a Code of Ethics. It is designed to detect and prevent improper
personal trading by certain employees, including portfolio managers, that would
compete with or take advantage of the Trust's portfolio transactions. Compliance
with the Code of Ethics is carefully monitored and enforced by the Manager.
The portfolio managers of the Trust are principally responsible for the
day-to-day management of the Trust's investment portfolio. Other members of the
Manager's fixed-income portfolio department, particularly security analysts,
traders and other portfolio managers, have broad experience with fixed-income
securities. They provide the Trust's portfolio managers with research and
support in managing the Trust's investments.
|X| The Investment Advisory Agreement. The Manager provides investment
advisory and management services to the Trust under an investment advisory
agreement between the Manager and the Trust. The Manager selects securities for
the Trust's portfolio and handles its day-to-day business. The agreement
requires the Manager, at its expense, to provide the Trust with adequate office
space, facilities and equipment. It also requires the Manager to provide and
supervise the activities of all administrative and clerical personnel required
to provide effective administration for the Trust. Those responsibilities
include the compilation and maintenance of records with respect to its
operations, the preparation and filing of specified reports, and composition of
proxy materials and registration statements for continuous public sale of shares
of the Trust.
Expenses not expressly assumed by the Manager under the investment
advisory agreement are paid by the Trust. The investment advisory agreement
lists examples of expenses paid by the Trust. The major categories relate to
interest, taxes, fees to disinterested Trustees, legal and audit expenses,
custodian and transfer agent expenses, share issuance costs, certain printing
and registration costs and non-recurring expenses, including litigation costs.
The management fees paid by the Trust to the Manager are calculated at the rates
described in the Prospectus.
- --------------------------------------------------------------------------------
Fiscal Year Management Fee Paid to Centennial Asset Management Corporation
ending 6/30
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1999
- --------------------------------------------------------------------------------
Under its Agreement with The Trust, when the value of the Trust'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, 1997, 1998, and 1999, respectively, in the following amounts: $______,
$______ and $______.
In addition, under its Agreement with The 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. 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 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.
|X| The Distributor. Under its General Distributor's Agreement with the
Trust, Centennial Asset Management Corporation, a subsidiary of the Manager,
acts as the Trust's principal underwriter and Distributor in the continuous
public offering of the Trust's shares. The Distributor is not obligated to sell
a specific number of shares. The Distributor bears the expenses normally
attributable to sales, including advertising and the cost of printing and
mailing prospectuses, other than those furnished to existing shareholders.
Portfolio Transactions. Portfolio decisions are based upon recommendations and
judgment of the Manager subject to the overall authority of the Board of
Trustees. Most purchases made by the Trust are principal transactions at net
prices, so the Trust incurs little or no brokerage costs. The Trust deals
directly with the selling or purchasing principal or market maker without
incurring charges for the services of a broker on its behalf unless the Manager
determines that a better price or execution may be obtained by using the
services of a broker. Purchases of portfolio securities from underwriters
include a commission or concession paid by the issuer to the underwriter, and
purchases from dealers include a spread between the bid and asked prices.
The Trust seeks to obtain prompt execution of orders at the most favorable
net price. If dealers are used for portfolio transactions, transactions may be
directed to dealers for their execution and research services. The research
services provided by a particular broker may be useful only to one or more of
the advisory accounts of the Manager and its affiliates. Investment research
received for the commissions of those other accounts may be useful both to the
Trust and one or more of such other accounts. Investment research services may
be supplied to the Manager by a third party at the instance of a broker through
which trades are placed. It may include information and analyses on particular
companies and industries as well as market or economic trends and portfolio
strategy, receipt of market quotations for portfolio evaluations, information
systems, computer hardware and similar products and services. If a research
service also assists the Manager in a non-research capacity (such as bookkeeping
or other administrative functions), then only the percentage or component that
provides assistance to the Manager in the investment decision-making process may
be paid in commission dollars.
The research services provided by brokers broaden the scope and supplement
the research activities of the Manager. That research provides additional views
and comparisons for consideration, and helps the Manager obtain market
information for the valuation of securities held in the Trust's portfolio or
being considered for purchase.
Subject to applicable rules covering the Manager's activities in this
area, sales of shares of the Trust and/or the other investment companies managed
by the Manager or distributed by the Distributor may also be considered as a
factor in the direction of transactions to dealers. That must be done in
conformity with the price, execution and other considerations and practices
discussed above. Those other investment companies may also give similar
consideration relating to the sale of the Trust's shares. No portfolio
transactions will be handled by any securities dealer affiliated with the
Manager.
The Trust's policy of investing in short-term debt securities with
maturity of less than one year results in high portfolio turnover and may
increase the Trust's transaction costs. However, since brokerage commissions, if
any, are small, high turnover does not have an appreciable adverse effect upon
the income of the Trust.
Performance of the Trust
Explanation of Performance Terminology. The Trust uses a variety of terms to
illustrate its performance. These terms include "yield," "compounded effective
yield, " "tax-equivalent yield" and "average annual total return." An
explanation of how yields and total returns are calculated is set forth below.
The charts below show the Trust's performance as of the Trust's most recent
fiscal year end. You can obtain current performance information by calling the
Trust's Transfer Agent at 1-800-525-7948.
The Trust's illustrations of its performance data in advertisements must
comply with rules of the Securities and Exchange Commission. Those rules
describe the types of performance data that may be used and how it is to be
calculated. If the Trust shows total returns in addition to its yields, the
returns must be for the 1-, 5- and 10-year periods ending as of the most recent
calendar quarter prior to the publication of the advertisement (or its
submission for publication).
Use of standardized performance calculations enables an investor to
compare the Trust's performance to the performance of other funds for the same
periods. However, a number of factors should be considered before using the
Trust's performance information as a basis for comparisons with other
investments:
|_| Yields and total returns measure the performance of a hypothetical
account in the Trust over various periods and do not show the performance
of each shareholder's account. Your account's performance will vary from
the model performance data if your dividends are received in cash, or you
buy or sell shares during the period, or you bought your shares at a
different time than the shares used in the model.
|_| An investment in the Trust is not insured by the FDIC or any other
government agency.
|_| The Trust's yield is not fixed or guaranteed and will fluctuate.
|_| Yields and total returns for any given past period represent historical
performance information and are not, and should not be considered, a
prediction of future yields or returns.
|_| Yields. The Trust's current yield is calculated for a seven-day
period of time as follows. First, a base period return is calculated for the
seven-day period by determining the net change in the value of a hypothetical
pre-existing account having one share at the beginning of the seven-day period.
The change includes dividends declared on the original share and dividends
declared on any shares purchased with dividends on that share, but such
dividends are adjusted to exclude any realized or unrealized capital gains or
losses affecting the dividends declared. Next, the base period return is
multiplied by 365/7 to obtain the current yield to the nearest hundredth of one
percent.
The compounded effective yield for a seven-day period is calculated by (1)
adding 1 to the base period return (obtained as described above), (2)
raising the sum to a power equal to 365 divided by 7, and (3) subtracting
1 from the result.
The yield as calculated above may vary for accounts less than
approximately $100 in value due to the effect of rounding off each daily
dividend to the nearest full cent. The calculation of yield under either
procedure described above does not take into consideration any realized or
unrealized gains or losses on the Trust's portfolio securities which may affect
dividends. Therefore, the return on dividends declared during a period may not
be the same on an annualized basis as the yield for that period.
The Trust's "tax equivalent yield" adjusts the 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 Trust's 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 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 Trust's tax equivalent yield for the seven-day
period ended June 30, 1999 was ____%. Its tax-equivalent compounded effective
yield for the same period was ____% for an investor in the highest federal tax
bracket.
o Total Return Information. There are different types of "total
returns" to measure the Trust's performance. Total return is the change in value
of a hypothetical investment in the Trust over a given period, assuming that all
dividends and capital gains distributions are reinvested in additional shares
and that the investment is redeemed at the end of the period. The cumulative
total return measures the change in value over the entire period (for example,
ten years). An average annual total return shows the average rate of return for
each year in a period that would produce the cumulative total return over the
entire period. However, average annual total returns do not show actual
year-by-year performance. The Trust uses standardized calculations for its total
returns as prescribed by the SEC. The methodology is discussed below.
|_| Average Annual Total Return. The "average annual total return" of
each class is an average annual compounded rate of return for each year in a
specified number of years. It is the rate of return based on the change in value
of a hypothetical initial investment of $1,000 ("P" in the formula below) held
for a number of years ("n") to achieve an Ending Redeemable Value ("ERV" in the
formula) of that investment, according to the following formula:
( ERV ) 1/n
(-----) -1 = Average Annual Total Return
( P )
|_| Cumulative Total Return. The "cumulative total return" calculation
measures the change in value of a hypothetical investment of $1,000 over an
entire period of years. Its calculation uses some of the same factors as average
annual total return, but it does not average the rate of return on an annual
basis.
Cumulative total return is determined as follows:
ERV - P
------- = Total Return
P
- --------------------------------------------------------------------------------
Yield Compounded Average Annual Total Returns (at 6/30/99)
(7 days ended Effective Yield
6/30/99) (7 days ended
6/30/99)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1-Year 5 Years 10 Years
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- --------------------------------------------------------------------------------
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|X| Other Performance Comparisons. Yield information may be useful to
investors in reviewing the Trust's performance. The Trust may make comparisons
between its yield and that of other investments, by citing various indices such
as The Bank Rate Monitor National Index (provided by Bank Rate MonitorJ) which
measures the average rate paid on bank money market accounts, NOW accounts and
certificates of deposits by the 100 largest banks and thrifts in the top ten
metro areas. When comparing the Trust's yield with that of other investments,
investors should understand that certain other investment alternatives such as
certificates of deposit, U.S. government securities, money market instruments or
bank accounts may provide fixed yields and may be insured or guaranteed.
From time to time, the Trust may include in its advertisements and sales
literature performance information about the Trust cited in other newspapers and
periodicals, such as The New York Times, which may include performance
quotations from other sources.
From time to time, the Trust's Manager may publish rankings or ratings of
the Manager (or the Transfer Agent) or the investor services provided by them to
shareholders of the Oppenheimer funds, other than performance rankings of the
Oppenheimer funds themselves. Those ratings or rankings of investor/shareholder
services by third parties may compare the services of the Oppenheimer funds to
those of other mutual fund families selected by the rating or ranking services.
They may be based on the opinions of the rating or ranking service itself, based
on its research or judgment, or based on surveys of investors, brokers,
shareholders or others.
A B O U T Y O U R A C C O U N T
How to Buy Shares
|X| The Oppenheimer Funds. The Oppenheimer funds are those mutual funds for
which the OppenheimerFunds Distributor, Inc. acts as the distributor or the
sub-Distributor and include the following:
<TABLE>
<S> <C>
Oppenheimer Bond Fund Oppenheimer Large Cap Growth Fund
Oppenheimer Capital Appreciation Fund Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street California
Oppenheimer Capital Income Fund Municipal Fund
Oppenheimer Main Street Growth & Income
Oppenheimer California Municipal Fund Fund
Oppenheimer Champion Income Fund Oppenheimer Main Street Small Cap Fund
Oppenheimer Convertible Securities Fund Oppenheimer MidCap Fund
Oppenheimer Developing Markets Fund Oppenheimer Multiple Strategies Fund
Oppenheimer Disciplined Allocation Fund Oppenheimer Municipal Bond Fund
Oppenheimer Disciplined Value Fund Oppenheimer New York Municipal Fund
Oppenheimer Discovery Fund Oppenheimer New Jersey Municipal Fund
Oppenheimer Enterprise Fund Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Europe Fund Oppenheimer Quest Balanced Value Fund
Oppenheimer Quest Capital Value Fund,
Oppenheimer Florida Municipal Fund Inc.
Oppenheimer Quest Global Value Fund,
Oppenheimer Global Fund Inc.
Oppenheimer Global Growth & Income Fund Oppenheimer Quest Opportunity Value Fund
Oppenheimer Gold & Special Minerals Fund Oppenheimer Quest Small Cap Value Fund
Oppenheimer Growth Fund Oppenheimer Quest Value Fund, Inc.
Oppenheimer High Yield Fund Oppenheimer Real Asset Fund
Oppenheimer Insured Municipal Fund Oppenheimer Strategic Income Fund
Oppenheimer Intermediate Municipal Fund Oppenheimer Total Return Fund, Inc.
Oppenheimer International Bond Fund Oppenheimer U.S. Government Trust
Oppenheimer International Growth Fund Oppenheimer World Bond Fund
Oppenheimer International Small Company
Fund Limited-Term New York Municipal Fund
Rochester Fund Municipals
and the following money market funds:
Centennial America Fund, L. P. Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust Centennial Tax Exempt Trust
Centennial Government Trust Oppenheimer Cash Reserves
Centennial Money Market Trust Oppenheimer Money Market Fund, Inc.
</TABLE>
Determination of Net Asset Value Per Share. The net asset value per share of the
Trust is determined twice each day that the New York Stock Exchange ("Exchange")
is open, at 12:00 Noon and at 4:00 P.M., by dividing the value of the Trust's
net assets by the total number of shares outstanding. All references to time in
this Statement of Additional Information mean New York time. The Exchange's most
recent annual announcement (which is subject to change) states that it will
close on New Year's Day, Martin Luther King Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. It may also close on other days.
The Trust's Board of Trustees have adopted the amortized cost method to
value the Trust's portfolio securities. Under the amortized cost method, a
security is valued initially at its cost and its valuation assumes a constant
amortization of any premium or accretion of any discount, regardless of the
impact of fluctuating interest rates on the market value of the security. This
method does not take into consideration any unrealized capital gains or losses
on securities. While this method provides certainty in valuing securities, in
certain periods the value of a security determined by amortized cost may be
higher or lower than the price the Trust would receive if it sold the security.
The Trust's Board of Trustees have established procedures reasonably
designed to stabilize the Trust's net asset value at $1.00 per share. Those
procedures include a review of the Trust's portfolio holdings by the Board of
Trustees, at intervals it deems appropriate, to determine whether the Trust's
net asset value calculated by using available market quotations deviates from
$1.00 per share based on amortized cost.
The Board of Trustees will examine the extent of any deviation between the
Trust's net asset value based upon available market quotations and amortized
cost. If the Trust's net asset value were to deviate from $1.00 by more than
0.5%, Rule 2a-7 requires the Board of Trustees to consider what action, if any,
should be taken. If they find that the extent of the deviation may cause a
material dilution or other unfair effects on shareholders, the Board of Trustees
will take whatever steps they consider appropriate to eliminate or reduce the
dilution, including, among others, withholding or reducing dividends, paying
dividends from capital or capital gains, selling portfolio instruments prior to
maturity to realize capital gains or losses or to shorten the average maturity
of the portfolio, or calculating net asset value per share by using available
market quotations.
During periods of declining interest rates, the daily yield on shares of
the Trust may tend to be lower (and net investment income and dividends higher)
than those of a fund holding the identical investments as the Trust but which
used a method of portfolio valuation based on market prices or estimates of
market prices. During periods of rising interest rates, the daily yield of the
Trust would tend to be higher and its aggregate value lower than that of an
identical portfolio using market price valuation.
How to Sell Shares
The information below supplements the terms and conditions for redeeming shares
set forth in the Prospectus.
Sending Redemption Proceeds by Federal Funds Wire. The Federal Funds wire of
redemptions proceeds may be delayed if the Trust's custodian bank is not open
for business on a day when the Trust would normally authorize the wire to be
made, which is usually the Trust's next regular business day following the
redemption. In those circumstances, the wire will not be transmitted until the
next bank business day on which the Trust is open for business. No distributions
will be paid on the proceeds of redeemed shares awaiting transfer by Federal
Funds wire
Dividends and Taxes
Tax Status of the Trust's Dividends and Distributions. The Trust intends to
qualify under the Internal Revenue Code during each fiscal year to pay
"exempt-interest dividends" to its shareholders. Exempt-interest dividends that
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 Trust's portfolio that are free from federal
income taxes. This allocation will be made by the use of one designated
percentage applied uniformly to all income dividends paid during the Trust's tax
year. That 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.
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.
The amount of any dividends attributable to tax preference items for purposes of
the alternative minimum tax will be identified when tax information is
distributed by the Trust.
A shareholder receiving a dividend from income earned by the Trust from
one or more of the following sources treats the dividend as a receipt of either
ordinary income or long-term capital gain in the computation of gross income,
regardless of whether the dividend is reinvested:
(1) certain taxable temporary investments (such as certificates of
deposit, repurchase agreements, commercial paper and obligations of
the U.S.
government, its agencies and instrumentalities);
(2) income from securities loans; or
(3) an excess of net short-term capital gain over net long-term capital
loss from the Trust.
The Trust's dividends will not be eligible for the dividends-received
deduction for corporations. 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. Losses realized by
shareholders on the redemption of Trust shares within six months of purchase
(which period may be shortened by regulation) will be disallowed for federal
income tax purposes to the extent of exempt-interest dividends received on such
shares.
If the Trust qualifies as a "regulated investment company" under the
Internal Revenue Code, it will not be liable for federal income taxes on amounts
paid by it as dividends and distributions. That qualification enables the Trust
to "pass through" its income and realized capital gains to shareholders without
having to pay tax on them. The Trust qualified as a regulated investment company
in its last fiscal year and intends to qualify in future years, but reserves the
right not to qualify. The Internal Revenue Code contains a number of complex
tests to determine whether the Trust qualifies. The Trust might not meet those
tests in a particular year. If it does not qualify, the Trust will be treated
for tax purposes as an ordinary corporation and will receive no tax deduction
for payments of dividends and distributions made to shareholders.
Under the Internal Revenue Code, by December 31 each year the Trust must
distribute 98% of its taxable investment income earned from January 1 through
December 31 of that year and 98% of its capital gains realized in the period
from November 1 of the prior year through October 31 of the current year. If it
does not, the Trust must pay an excise tax on the amounts not distributed. It is
presently anticipated that the Trust will meet those requirements. However, the
Trust's Board of Trustees and the Manager might determine in a particular year
that it would be in the best interest of shareholders not to make distributions
at the required levels and to pay the excise tax on the undistributed amounts.
That would reduce the amount of income or capital gains available for
distribution to shareholders.
Additional Information About the Trust
The Distributor. The Trust's retail shares are sold through dealers, brokers and
other financial institutions that have a sales charge agreement with Centennial
Asset Management Corporation, the Trust's Distributor. The Distributor also
distributes shares of the other Oppenheimer funds and is sub-distributor for
funds managed by a subsidiary of the Manager.
The Transfer Agent. Shareholder Services, Inc. the Trust's Transfer Agent, is
responsible for maintaining the Trust's shareholder registry and shareholder
accounting records, and for paying dividends and distributions to shareholders
of the Trust. It also handles shareholder servicing and administrative
functions. It is paid on a "at-cost" basis.
The Custodian. Citibank, N.A. is the Custodian of the Trust's assets. The
Custodian's responsibilities include safeguarding and controlling the Trust's
portfolio securities and handling the delivery of such securities to and from
the Trust. It will be the practice of the Trust to deal with the Custodian in a
manner uninfluenced by any banking relationship the Custodian may have with the
Manager and its affiliates. The Trust's cash balances with the Custodian in
excess of $100,000 are not protected by federal deposit insurance. Those
uninsured balances at times may be substantial.
Independent Auditors. Deloitte & Touche LLP are the independent auditors of the
Trust. They audit the Trust's financial statements and perform other related
audit services. They also act as auditors for the Manager and OFI and for
certain other funds advised by the Manager and its affiliates.
<PAGE>
Appendix 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.
- --------------------------------------------------------------------------------
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 broad-based access to the
market for refinancing.
MIG2/VMIG2: High quality. Margins of protection are ample although not so large
as in the preceding group.
<PAGE>
Standard & Poor's Ratings Services
- --------------------------------------------------------------------------------
The following ratings by Standard & Poor's 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-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 IBCA, Inc.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
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.
Thomson BankWatch, Inc.
- --------------------------------------------------------------------------------
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 Investors Service, Inc.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
Standard & Poor's Ratings Services
- --------------------------------------------------------------------------------
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 IBCA, Inc.
- --------------------------------------------------------------------------------
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, Inc.
- --------------------------------------------------------------------------------
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.
Thomson BankWatch, Inc.
- --------------------------------------------------------------------------------
TBW issues the following ratings for companies. These ratings assess the
likelihood of 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
<PAGE>
Appendix 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 Pollution Control
Resource Recovery Sales Tax Sewer Single Family Housing Special Assessment
Telephone Water
<PAGE>
C-2
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.
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.
<PAGE>
Appendix D
- --------------------------------------------------------------------------------
TAX EQUIVALENT YEILD TABLE
- --------------------------------------------------------------------------------
The equivalent yield table below compares tax-free income with taxable income
under federal income tax rates effective in 1998. 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>
<S> <C> <C> <C> <C> <C>
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:
JOINT RETURN
- ---------------------
Over Not over
- -------- -----------
$ 0 $ 42,350 15.0% 1.76% 2.35% 2.94%
$ 42,350 $102,300 28.0% 2.08% 2.78% 3.47%
$102,300 $155,950 31.0% 2.17% 2.90% 3.62%
$155,950 $278,450 36.0% 2.34% 3.13% 3.91%
$278,450 and above 39.6% 2.48% 3.31%
4.14%
SINGLE RETURN
- ------------------------
Over Not over
- ------- -----------
$ 0 $ 25,350 15.0% 1.76% 2.35% 2.94%
$ 25,350 $ 61,400 28.0% 2.08% 2.78% 3.47%
$ 61,400 $128,100 31.0% 2.17% 2.90% 3.62%
$128,100 $278,450 36.0% 2.34% 3.13% 3.91%
$278,450 and above 39.6% 2.48% 3.31%
4.14%
<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 $ 42,350 15.0% 3.53% 4.12% 4.71% 5.29%
$ 42,350 $102,300 28.0% 4.17% 4.86% 5.56% 6.25%
$102,300 $155,950 31.0% 4.35% 5.07% 5.80% 6.52%
$155,950 $278,450 36.0% 4.69% 5.47% 6.25% 7.03%
$278,450 39.6% 4.97% 5.79% 6.62% 7.45%
SINGLE RETURN
- -------------------------
Over Not over
- -------- -----------
$ 0 $ 25,350 15.0% 3.53% 4.12% 4.71% 5.29%
$ 25,350 $ 61,400 28.0% 4.17% 4.86% 5.56% 6.25%
$ 61,400 $128,100 31.0% 4.35% 5.07% 5.80% 6.52%
$128,100 $278,450 36.0% 4.69% 5.47% 6.25% 7.03%
$278,450 39.6% 4.97% 5.79% 6.62% 7.45%
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
Centennial Tax Exempt Trust
- -------------------------------------------------------------------------------
Investment Advisor and Distributor
Centennial Asset Management Corporation
6803 South Tucson Way
Englewood, Colorado 80112
Sub-Distributor
OppenheimerFunds Distributor, Inc.
P.O. Box 5254
Denver, Colorado 80217
Transfer Agent
Shareholder Services, Inc.
P.O. Box 5143
Denver, Colorado 80217
1-800-525-9130
Custodian of Portfolio Securities
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Independent Auditors
Deloitte & Touche LLP
555 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Myer, Swanson, Adams & Wolf, P.C.
1600 Broadway
Denver, Colorado 80202
PX0160.001.1199
<PAGE>
CENTENNIAL TAX EXEMPT TRUST
FORM N-1A
PART C
OTHER INFORMATION
Item 23. Exhibits
(a) Restated Declaration of Trust dated September 27, 1985: Previously 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.
(b) By-Laws, as amended through June 26, 1990: Previously filed with
Registrant's Post-Effective Amendment No. 23 (10/31/91), and refiled with
Registrant's Post-Effective Amendment No. 28 (10/28/94), pursuant to Item 102 of
Regulation S-T, and incorporated herein by reference.
(c) Specimen Share Certificate: Filed herewith.
(d) Investment Advisory Agreement dated February 18, 1992: Previously filed with
Registrant's Post-Effective Amendment No. 25 (11/1/92), refiled with
Registrant's Post-Effective Amendment No. 28 (01/31/94), pursuant to Item 102 of
Regulation S-T and incorporated herein by reference.
(e) (i) General Distributor's Agreement Centennial Asset Management
Corporation dated October 13, 1992: Previously filed with Registrant's
Post Effective Amendment No. 26 (8/30/93), and incorporated herein by
reference.
(ii) Sub-Distributor's Agreement between Centennial Asset Management
Corporation and OppenheimerFunds Distributor, Inc. dated May 28, 1993:
Previously filed with Registrant's Post-Effective Amendment No. 26
(8/30/93), and incorporated herein by reference.
(iii) Form of Dealer Agreement of Centennial Asset Management Corporation:
Previously filed with Post-Effective Amendment No. 23 of Centennial
Government Trust (Reg. No. 2-75912), (11/1/94), and incorporated herein by
reference.
(f) Form of Deferred Compensation Agreement for Disinterested
Trustees/Directors: Filed with Post-Effective Amendment No. 40 to the
Registration Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076),
(10/27/98), and incorporated herein by reference.
(g) (i) Custodian Agreement between Registrant (formerly Daily Cash Tax Exempt
Cash Fund, Inc.) and Citibank, N.A. dated March 1, 1981: Previously filed
with Registrant's Post-Effective Amendment No. 13 (1/31/86), 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 to Custodian Agreement dated September 27,
1985: Previously filed with Registrant's Post-Effective Amendment No. 13
(1/31/86), 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.
(h) Not applicable.
(i) (i) Opinion and Consent of Counsel dated September 22, 1981: Previously
filed with Registrant's Post-Effective Amendment No. 3 (9/29/81), refiled
with Registrant's Post-Effective Amendment No. 21 (10/28/94), pursuant to
Item 102 of Regulation S-T and incorporated herein by reference.
(ii) Opinion of Neef, Swanson, Myer & Clark, general counsel to Registrant
issued in the reorganization of Registrant (formerly Daily Cash Tax Exempt
Fund, Inc.) dated September 27, 1985: Previously filed with Registrant' s
Post-Effective Amendment No. 13 (1/31/86), 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) Opinion of Moye, Giles, O'Keefe, Bermeire & Gorrell, special counsel
to Registrant issued in the reorganization of Registrant (formerly Daily
Cash Tax Exempt Fund, Inc.) dated September 27, 1985: Previously filed
with Registrant's Post-Effective Amendment No. 13 (1/31/86), 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.
(iv) Opinion of Deloitte Haskins & Sells issued to Registrant in the
reorganization of Registrant (formerly Daily Cash Tax Exempt Fund, Inc.)
dated September 27, 1985: Previously filed with Registrant's
Post-Effective Amendment No. 13 (1/31/86), 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.
(j) Independent Auditors' Consent: To be filed by Post-Effective Amendment.
(k) Not applicable.
(l) Not applicable.
(m) Service Plan and Agreement between Registrant and Centennial Asset
Management Corporation under Rule 12b-1 dated August 24, 1993: Previously filed
with Registrant's Post-Effective Amendment No. 27, (10/29/93), and incorporated
herein by reference.
(n) Financial Data Schedule: To be filed by Post-Effective Amendment.
(o) Not applicable.
- -- Powers of Attorney (including Certified Board resolutions): Previously filed
with Post-Effective Amendment No. 20 to the Registration Statement of
Oppenheimer Total Return Fund, Inc. (Reg. No. 2-11052), (4/30/99), Brian W.
Wixted and incorporated herein by reference. Filed with Registrant's
Post-Effective Amendment No. 32 (10/28/98) George Bowen; Filed with Registrant's
Post Effective Amendment No. 23 (10/8/96) Sam Freedman and Bridget Macaskill and
with Registrant's Post Effective Amendment No. 20 (10/29/93) (all others), and
incorporated herein by reference.
Item 24. Persons Controlled by or Under Common Control with the Fund
None.
Item 25. Indemnification
Reference is made to the provisions of Article Seven of Registrant's
Amended and Restated Declaration of Trust filed as Exhibit 23(a) to this
Registration Statement, and incorporated herein by reference.
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 26. 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 and Current Position
with Centennial Asset Other Business and Connections
Management Corporation During the Past Two Years
Michael Carbuto,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds; Vice
President of Centennial Asset Management
Corporation.
Andrew J. Donohue,
President and Director Executive Vice President (since September 1993),
and a director (since January 1992) of the
Distributor; Executive Vice President, General
Counsel and a director of HarbourView Asset
Management Corporation, Shareholder Services,
Inc., Shareholder Financial Services, Inc. and
Oppenheimer Partnership Holdings, Inc. since
(September 1995); President and a director of
Centennial Asset Management Corporation (since
September 1995); President and a director of
Oppenheimer Real Asset Management, Inc.(since
July 1996); General Counsel (since May 1996) and
Secretary (since April 1997) of Oppenheimer
Acquisition Corp.; Vice President and Director
of OppenheimerFunds International, Ltd. and
Oppenheimer Millennium Funds plc (since October
1997); an officer of other Oppenheimer funds.
Katherine P. Feld,
Secretary and Director Vice President and Secretary of the Distributor;
Secretary of HarbourView Asset Management
Corporation, and Centennial Asset Management
Corporation; Secretary, Vice President and
Director of Centennial Capital Corporation; Vice
President and Secretary of Oppenheimer Real
Asset Management, Inc.
Ray Olson, Assistant Vice President of OFI; Assistant Vice
Treasurer President and Treasurer, OFDI.
Brian W. Wixted Senior Vice President and Treasurer of OFI; (April
Assistant Treasurer 1999); Vice President and Treasurer of OFDI;
formerly Principal and Chief Operating
Officer, Bankers Trust Company Mutual Fund
Service Division (March 1995 - March 1999);
Vice President and Chief Financial Officer
of CS First Boston Investment Management
Corp. (September 1991 - March 1995); and
Vice President and Accounting Manager,
Merrill Lynch Asset Management (November
1987 - September 1991).
Carol Wolf,
Vice President An officer and/or portfolio manager of certain
Oppenheimer funds; Vice President of OFI; Vice
President Finance and Accounting; Point of
Contact: Finance Supporters of Children: Member
of the Oncology Advisory Board of the Children's
Hospital.
Arthur J. Zimmer,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds; Vice
President of OFI.
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 Europe Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer International Growth Fund
Oppenheimer International Small Company Fund
Oppenheimer Large Cap 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 Trinity Core Fund
Oppenheimer Trinity Growth Fund
Oppenheimer Trinity Value Fund
Oppenheimer U.S. Government Trust
Oppenheimer World Bond Fund
Quest/Rochester funds
Limited Term New York Municipal Fund
Oppenheimer Convertible Securities Fund
Oppenheimer MidCap Fund
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
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Capital Income Fund
Oppenheimer High Yield Fund
Oppenheimer Integrity Funds
Oppenheimer International Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Main Street Small Cap Fund
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 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 Corporation, and
Oppenheimer Real Asset Management, Inc. is 6803 South Tucson Way, Englewood,
Colorado 80112.
The address of the Rochester-based funds is 350 Linden Oaks, Rochester, New York
14625-2807.
Item 27. 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
Michael Carbuto(1) Vice President Vice President of Centennial
California Tax Exempt Trust,
Centennial New York Tax
Exempt Trust, and Centennial
Tax Exempt Trust
Andrew J. Donohue(1) President and Director Vice President and Secretary
Katherine P. Feld(1) Secretary and Director None
Ray Olson Treasurer None
Brian W. Wixted Assistant Treasurer None
Carol Wolf(2) Vice President Vice President of Centennial
Government Trust,
Centennial Money Market
Trust and Centennial
America Fund, L.P.
Arthur Zimmer(2) Vice President Vice President of Centennial
Government Trust,
Centennial Money Market
Trust and Centennial
America Fund, L.P.
- -----------------------
(1) Two World Trade Center, New York, NY 10048-0203
(2) 6803 South Tucson Way, Englewood, CO 80112
(c) Not applicable.
Item 28. 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 OppenheimerFunds, Inc. at its
offices at 6803 South Tucson Way, Englewood, Colorado 80112.
Item 29. Management Services
Not applicable
Item 30. Undertakings
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the Investment
Company Act of 1940, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
County of Arapahoe and State of Colorado on the 27th day of August, 1999.
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 of the August 27, 1999
- ------------------------------------ Board of Trustees
James C. Swain Principal Executive
Officer and Trustee
/s/ George C. Bowen* Trustee August 27, 1999
- -------------------------------------
George C. Bowen
/s/ Bridget A. Macaskill* President and August 27, 1999
- ------------------------------------ Trustee
Bridget A. Macaskill
/s/ Robert G. Avis* Trustee August 27, 1999
- -------------------------------------
Robert G. Avis
/s/ William A. Baker* Trustee August 27, 1999
- -------------------------------------
William A. Baker
/s/ Jon S. Fossel Trustee August 27, 1999
- -------------------------------------
Jon S. Fossel
/s/ Sam Freedman* Trustee August 27, 1999
- -------------------------------------
Sam Freedman
/s/ Raymond J. Kalinowski* Trustee August 27, 1999
- -------------------------------------
Raymond J. Kalinowski
/s/ C. Howard Kast* Trustee August 27, 1999
- -------------------------------------
C. Howard Kast
/s/ Robert M. Kirchner* Trustee August 27, 1999
- -------------------------------------
Robert M. Kirchner
/s/ Ned M. Steel* Trustee August 27, 1999
- -------------------------------------
Ned M. Steel
/s/ Brian W. Wixted* Treasurer August 27, 1999
- -------------------------------------
Brian W. Wixted
*By: /s/ Robert G. Zack
- -----------------------------------
Robert G. Zack, Attorney-in-Fact
<PAGE>
CENTENNIAL TAX EXEMPT TRUST
EXHIBIT INDEX
Exhibit No. Description
23(c) Speciman Share Certificate
Exhibit 23(c)
CENTENNIAL TAX EXEMPT TRUST
Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within decorative border)
(upper left corner, box with heading: NUMBER [of shares]
(upper right corner, box with heading: SHARES below cert. no.)
(centered below boxes)
Centennial Tax Exempt Trust
A MASSACHUSETTS BUSINESS TRUST
(at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR CERTAIN
DEFINITIONS
(box with number)
CUSIP 151390 101
(at left) is the owner of
(centered) FULLY PAID SHARES OF BENEFICIAL INTEREST OF
CENTENNIAL TAX EXEMPT TRUST
(hereinafter called the "Trust"), transferable only on the books of the
Trust by the holder hereof in person or by duly authorized attorney, upon
surrender of this certificate properly endorsed. This certificate and the
shares represented hereby are issued and shall be held subject to all of
the provisions of the Declaration of Trust of the Trust to all of which
the holder by acceptance hereof assents. This certificate is not valid
until countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Trust and the signatures of its duly
authorized officers.
(signature at left of seal) Dated: (signature at right of seal)
/s/ Brian W. Wixted /s/ Bridget Macaskill
------------------------- -------------------------
TREASURER PRESIDENT
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
CENTENNIAL TAX EXEMPT TRUST
SEAL
1985
COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed vertically) Countersigned
SHAREHOLDER SERVICES, INC.
Denver (CO) Transfer Agent
By
--------------------------------
Authorized Signature
II. BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common TEN ENT - as tenants by the entirety JT TEN WROS
NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
Additional abbreviations may also be used though not in the above list.
For Value Received ............ hereby sell(s), assign(s), and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)
- -----------------------------------------------------------------------
(Please print or type name and address of assignee)
- -----------------------------------------------------------------------
- -------------------------------------------------------- Shares of beneficial
interest represented by the within Certificate, and do hereby irrevocably
constitute and appoint ___________________ Attorney to transfer the said shares
on the books of the within named Trust with full power of substitution in the
premises.
Dated: ----------------------
Signed: --------------------------------
------------------------------------
(Both must sign if joint owners)
Signature(s) ---------------------------
guaranteed Name of Guarantor
by: ------------------------------------
Signature of Officer/Title
(text printed NOTICE: The signature(s) to this assignment must vertically to
right correspond with the name(s) as written upon the of above paragraph) face
of the certificate in every particular without alteration or enlargement or any
change whatever.
(text printed in Signatures must be guaranteed by a financial
box to left of institution of the type described in the
signature(s)) current prospectus of the Fund.
PLEASE NOTE: This document contains CENTENNIAL
a watermark when viewed at an angle. ASSET MANAGEMENT CORPORATION
It is invalid without this watermark:
-------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
