Registration No. 2-75812
File No. 811-3391
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
PRE-EFFECTIVE AMENDMENT NO. ___ / /
POST-EFFECTIVE AMENDMENT NO. 23
/ X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X
/
AMENDMENT NO. 18
/ X /
CENTENNIAL GOVERNMENT TRUST
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(Exact Name of Registrant as Specified in Charter)
3410 South Galena Street
Denver, Colorado, 80231
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(Address of Principal Executive Offices)
(303) 671-3200
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(Registrant's Telephone Number)
ANDREW J. DONOHUE, ESQ.
Oppenheimer Management Corporation
Two World Trade Center, New York, New York 10048-0203
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box):
/ / Immediately upon filing pursuant to paragraph (b)
/ X / On November 1, 1994 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a) (i)
/ / On _________ pursuant to paragraph (a) (i)
/ / 75 Days after filing, pursuant to paragraph (a) (ii)
/ / On ________, pursuant to paragraph (a) (ii) of Rule 485
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The Registrant has registered an indefinite number of its shares under
the Securities Act of 1933 pursuant to Rule 24f-2 promulgated under the
Investment Company Act of 1940. A Rule 24f-2 Notice for the Registrant's
fiscal year ended June 30, 1993 was filed on August 31, 1994.
FORM N-1A
CENTENNIAL GOVERNMENT TRUST
Cross Reference Sheet
Part A of
Form N-1A
Item No. Prospectus Heading
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1 Front Cover Page
2 Trust Expenses
3 Financial Highlights; Yield Information
4 Cover Page; The Trust and Its Investment Policies;
Investment Restrictions
5 Management of the Trusts; Trust Expenses; Additional
Information - The Custodian and the Transfer Agent; Back
Cover
6 Dividends, Distributions and Taxes; Additional Information;
Management of the Trust
7 How to Buy Shares; Exchanges of Shares and Retirement Plans;
Service Plan; Back Cover; How to Redeem Shares
8 How to Redeem Shares; Exchanges of Shares and Retirement
Plans
9 *
Part B of
Form N-1A
Item No. Statement of Additional Information Heading
- --------- -------------------------------------------
10 Cover Page
11 Cover Page
12 Additional Information
13 Investment Objective and Policies; Investment Restrictions;
Exhibit A - Description of Securities Ratings
14 Trustees and Officers; Investment Management Services
15 Trustees and Officers - Major Shareholders; Investment
Management Services
16 Investment Management Services; Service Plan; Additional
Information; Back Cover
17 Investment Management Services - Portfolio Transactions
18 Additional Information - Description of the Trusts
19 Purchase, Redemption and Pricing of Shares; Automatic
Withdrawal Plan Provisions; Yield Information
20 Additional Information - Tax Status of the Trust's Dividends
and Distributions
21 Investment Management Services; Additional Information -
General Distributor's Agreement; Service Plan
22 Yield Information
23 Financial Statements
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* Not applicable or negative answer.
<PAGE>
Centennial
Government Trust
3410 South Galena Street, Denver, Colorado 80231
Telephone 1-800-525-9310
Centennial Government Trust (the "Trust") is a no-load "money
market" mutual fund with the investment objective of seeking a high
current level of income consistent with preservation of capital and the
maintenance of liquidity, through investment in a diversified portfolio
of short-term debt instruments issued or guaranteed by the U.S.
Government or its agencies or instrumentalities and maturing in, or
having been called for redemption in, one year or less. See "The Trust
and its Investment Policies."
An investment in the Trust is neither insured nor guaranteed
by the U.S. Government. Shares of the Trust are not deposits or
obligations of any bank, are not guaranteed by any bank, and are not
insured by the FDIC or any other agency.While the Trust seeks to
maintain a stable net asset value of $1.00 per share, there can be no
assurance that the Trust will be able to do so. See "The Trust and Its
Investment Policies."
Shares of the Trust may be purchased directly from dealers having
sales agreements with the Trust's Distributor and also are offered to
participants in Automatic Purchase and Redemption Programs (the
"Programs") established by certain brokerage firms with which the
Trust's Distributor has entered into agreements for that purpose. (See
"How to Buy Shares" in the Appendix.) The information in this
Prospectus should be read together with the information in the Appendix
which is part of this Prospectus. Program participants should also
read the description of the Program provided by their broker.
This Prospectus sets forth concisely information about the
Trust that a prospective investor should know before investing. A
Statement of Additional Information about the Trust (the "Additional
Statement"), dated November 1, 1994, has been filed with the Securities
and Exchange Commission and is available without charge upon written
request to Shareholder Services, Inc. (the "Transfer Agent"), P.O. Box
5143, Denver, Colorado 80217-5143 or by calling the Transfer Agent at
the toll-free number shown above. The Additional Statement (which is
incorporated by reference in its entirety in this Prospectus) contains
more detailed information about the Trust and its management.
Investors are advised to read and retain this Prospectus for
future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus is effective November 1, 1994
<PAGE>
Table of Contents
Page
Trust Expenses
Financial Highlights
Yield Information
The Trust and its Investment Policies
Investment Restrictions
Appendix
Management of the Trusts
How to Buy Shares
Purchases Through Automatic Purchase and
Redemption Programs
Direct Purchases
Guaranteed Payment
Automatic Investment Plans
General
Service Plan
How to Redeem Shares
Program Participants
Shares of the Trusts Owned Directly
Regular Redemption Procedure
Expedited Redemption Procedure
Check Writing
Telephone Redemptions
Retirement Plans Holding Shares of
Government Trust and Money Market Trust
Automatic Withdrawal Plans
General Information on Redemptions
Exchanges of Shares and Retirement Plans
Dividends, Distributions and Taxes
Additional Information
Trust Expenses
The following table sets forth the fees that an investor in the
Trust might pay and the expenses paid by the Trust during its fiscal
year ended June 30, 1994.
Shareholder Transaction Expenses
Maximum Sales Charge on Purchases
(as a percentage of offering price) None
Sales Charge on Reinvested Dividends None
Redemption Fees None
Exchange Fee $5.00
Annual Trust Operating Expenses
(as a percentage of average net assets)
Management Fees 0.48%
12b-1 (Service Plan) Fees 0.20%
Other Expenses 0.11%
Total Trust Operating Expenses 0.79%
The purpose of this table is to assist an investor in understanding the
various costs and expenses that an investor in the Trust will bear
directly (shareholder transaction expenses) or indirectly (annual trust
operating expenses). "Other Expenses" includes such expenses as
custodial and transfer agent fees, audit and legal and other business
operating expenses, but excludes extraordinary expenses. For further
details, see the Trust's financial statements included in the
Additional Statement.
The following example applies the above-stated expenses to a
hypothetical $1,000 investment in shares of the Trust over the time
periods shown below, assuming a 5% annual rate of return on the
investment and also assuming that the shares were redeemed at the end
of each stated period. The amounts shown below are the cumulative
costs of such hypothetical $1,000 investment for the periods shown.
1 year 3 years 5 years 10 years
$8 $25 $44 $98
This example should not be considered a representation of past or
future expenses or performance. Expenses are subject to change and
actual performance and expenses may be less or greater than those shown
above.
<PAGE>
Financial Highlights
Selected data for a share of beneficial interest outstanding throughout each
period
The information in the table below has been audited by Deloitte & Touche
LLP, independent auditors, whose report on the financial statements of the
Trust for the fiscal year ended June 30, 1994, is included in the Additional
Statement.
FINANCIAL HIGHLIGHTS
Centennial Government Trust
<TABLE>
<CAPTION>
Year Ended June 30,
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1994 1993 1992 1991 1990 1989 1988 1987
1986 1985
--------- --------- --------- --------- --------- --------- --------- --------- ---------
- ---------
<S> <C> <C> <C> <C> <C> <C>
<C> <C>
<C> <C>
PER SHARE OPERATING
DATA:
Net asset value,
beginning of year.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00 $ 1.00 $
1.00
Income from investment
operations -- net
investment income and
net realized gain on
investments.......... .03 .04 .04 .07 .08 .08 .06 .05
.07 .08
Dividends and
distributions to
shareholders......... (.03) (.04) (.04) (.07) (.08) (.08) (.06) (.05)
(.07) (.08)
--------- --------- --------- --------- --------- --------- --------- --------- ---------
- ---------
Net asset value, end of
year................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- --------- --------- --------- --------- ---------
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--------- --------- --------- --------- --------- --------- --------- --------- ---------
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RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of year
(in thousands)....... $ 613,443 $ 637,102 $ 574,717 $ 533,154 $ 219,003 $ 151,898 $ 90,035
$ 67,042 $ 78,550
$ 53,690
Average net assets (in
thousands)........... $ 665,494 $ 633,017 $ 581,563 $ 418,268 $ 200,570 $ 121,909 $ 82,815
$ 74,084 $ 68,515
$ 65,241
Number of shares
outstanding at end of
year (in
thousands)........... 613,282 637,018 574,722 533,125 218,986 151,901 90,036
67,042 78,550
53,690
Ratios to average net
assets:
Net investment
income............. 2.79% 2.81% 4.38% 6.44% 7.75% 8.11% 5.94%
5.17% 6.59%
8.53%
Expenses............. .79% .79% .78% .79% .84% .85% .90%
.96% .93%
.86%
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Yield Information
From time to time the "yield" and "compounded effective yield" of
an investment in the Trust may be advertised. Both yield figures are
based on historical earnings and are not intended to indicate future
performance. The "yield" of the Trust is the income generated by an
investment in the Trust over a seven-day period, which is then
"annualized." In annualizing, the amount of income generated by the
investment during that seven days is assumed to be generated each week
over a 52-week period, and is shown as a percentage of the investment.
The "compounded effective yield" is calculated similarly, but the
annualized income earned by an investment in the Trust is assumed to be
reinvested. The "compounded effective yield" will therefore be
slightly higher than the yield because of the effect of the assumed
reinvestment. See "Yield Information" in the Additional Statement for
additional information about the methods of calculating these yields.
The Trust and Its Investment Policies
The Trust is a no-load "money-market" fund. It is an open-end,
diversified management investment company organized as a Massachusetts
business trust on January 18, 1982. The Trust's investment objective
is to seek high current income consistent with the preservation of
capital and the maintenance of liquidity. The value of Trust shares is
not insured or guaranteed by any government agency. However, shares
held in brokerage accounts would be eligible for coverage by the
Securities Investor Protection Corporation for losses arising from the
insolvency of the brokerage firm. The Trust's shares may be purchased
at their net asset value, which will remain fixed at $1.00 per share
except under extraordinary circumstances (see "Determination of Net
Asset Value Per Share" in the Additional Statement for further
information). There can be no assurance, however, that the Trust's net
asset value will not vary or that the Trust will achieve its investment
objective. The Trust's investment policies and practices are not
"fundamental" policies (as defined below) unless a particular policy is
identified as fundamental. The Board may change non-fundamental
investment policies without shareholder approval.
In seeking its objective, the Trust invests principally in
obligations issued or guaranteed by the U.S. Government or its agencies
or instrumentalities and maturing in twelve months or less from the
date of purchase, or in repurchase agreements (described below) under
which such obligations are purchased. The securities in which the
Trust may invest may not yield as high a level of current income as
longer-term or lower-rated securities, which generally have less
liquidity and experience greater price fluctuation.
Securities issued or guaranteed by the U.S. Government include a
variety of U.S. Treasury securities that differ only in their interest
rates, maturities and dates of issuance. Treasury Bills have
maturities of one year or less. Treasury Notes have maturities of from
one to ten years and Treasury Bonds generally have maturities of
greater than ten years at the date of issuance. U.S. Government
agencies or instrumentalities which issue or guarantee securities, also
include, but are not limited to, the Federal Housing Administration,
Farmers Home Administration, Export-Import Bank of the United States,
Small Business Administration, Government National Mortgage
Association, General Services Administration, Central Bank for
Cooperatives, Federal Home Loan Bank, Federal Home Loan Mortgage
Corporation, Federal Intermediate Credit Bank, Federal Land Bank,
Maritime Administration, Tennessee Valley Authority, District of
Columbia Armory Board, Federal National Mortgage Association and the
Student Loan Marketing Association. The Trust will not invest in
securities issued by the Inter-American Development Bank, the Asian-
American Development Bank and the International Bank for Reconstruction
and Development or in pooled mortgages offered by the Federal Housing
Administration or Veterans Administration.
Obligations of some U.S. Government agencies and instrumentalities
may not be supported by the full faith and credit of the United States.
Some are backed by the right of the issuer to borrow from the U.S.
Treasury; others, such as the Federal National Mortgage Association, by
discretionary authority of the U.S. Government to purchase the
agencies' obligations; while still others, such as the Student Loan
Marketing Association, are supported only by the credit of the
instrumentality. In the case of securities not backed by the full
faith and credit of the United States, the Trust must look principally
to the agency issuing or guaranteeing the obligation for ultimate
repayment, and may not be able to assert a claim against the United
States itself in the event the agency or instrumentality does not meet
its commitments.
Certain Debt Obligations
The Trust may invest in variable rate notes, variable rate master
demand notes or in master demand notes (described in "Investment
Objective and Policies" in the Additional Statement) that meet the
requirements of Rule 2a-7 (discussed below). The Trust may also
purchase debt obligations which are Eligible Securities, as defined
below, and that either mature within twelve months from the date of
purchase or have been called for redemption by the issuer, with such
redemption to be effective within one year.
- -Floating Rate/Variable Rate Notes. Some of the notes 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 91-day U.S. Treasury bill rate. The Trust may purchase
these obligations if they have a remaining maturity of one year or
less; if their maturity is greater than one year, they may be purchased
if they have a demand feature that permits the Trust to recover the
principal amount of the underlying security at specified intervals not
exceeding one year and upon not more than 30 days' notice. Such
obligations may be secured by bank letters of credit or other credit
support arrangements. See "Floating Rate/Variable Rate Obligations" in
the Additional Statement for more details.
Ratings of Securities
Under Rule 2a-7 of the Investment Company Act of 1940, as amended
(the "Investment Company Act") the Trust uses the amortized cost method
to value its portfolio securities to determine the Trust's net asset
value per share. Rule 2a-7 places restrictions on a money market
fund's investments. Under the Rule, the Trust may purchase only those
securities that the Trust's Board of Trustees has determined have
minimal credit risks and are "Eligible Securities."
With respect to ratings, an "Eligible Security" is (a) one that
has received a rating in one of the two highest short-term rating
categories by any two "nationally-recognized statistical rating
organizations" (as defined in the Rule) ("Rating Organizations"), or,
if only one Rating Organization has rated that security, by that Rating
Organization, or (b) an unrated security that is judged by Centennial
Asset Management Corporation, the Trust's investment manager (the
"Manager"), to be of comparable quality to investments that are
"Eligible Securities" rated by Rating Organizations. The Rule permits
the Trust to purchase "First Tier Securities," which are Eligible
Securities rated in the highest rating category for short-term debt
obligations by at least two Rating Organizations, or, if only one
Rating Organization has rated a particular security, by that Rating
Organization, or comparable unrated securities. Under the Rule, the
Trust may invest only up to 5% of its assets in "Second Tier
Securities," which are Eligible Securities that are not "First Tier
Securities." In addition to the overall 5% limit on Second Tier
Securities, the Trust may not invest more than (i) 5% of its total
assets in the securities of any one issuer (other than the U.S.
Government, its agencies or instrumentalities) or (ii) 1% of its total
assets or $1 million (whichever is greater) in Second Tier Securities
of any one issuer. Additionally, under Rule 2a-7, the Trust must
maintain a dollar-weighted average portfolio maturity of no more than
90 days. Some of the Trust's existing investment restrictions (which
are fundamental policies that may be changed only by shareholder vote)
are more restrictive than the provisions of Rule 2a-7. The Trust's
Board has adopted procedures under Rule 2a-7 pursuant to which the
Board has delegated to the Manager certain responsibilities, in
accordance with that Rule, of conforming the Trust's investments with
the requirements of the Rule and those procedures.
Exhibit A of the Additional Statement contains additional
information on the rating categories of Rating Organizations. Ratings
at the time of purchase will determine whether securities may be
acquired under the above restrictions. Subsequent downgrades in
ratings may require reassessments of the credit risk presented by a
security and may require its sale. The rating restrictions described
in this Prospectus do not apply to banks in which the Trust's cash is
kept. See "Ratings of Securities" in "Investment Objective and
Policies" in the Additional Statement for further details.
Repurchase Agreements
The Trust may acquire securities subject to repurchase agreements.
The Trust's repurchase agreements must comply with the collateral
requirements of Rule 2a-7. If the vendor fails to pay the agreed-upon
repurchase price on the delivery date, the Trust's risks may include
any costs of disposing of such collateral, and any loss resulting from
any delay in foreclosing on the collateral. There is no limit on the
amount of the Trust's net assets that may be subject to repurchase
agreements having a maturity of seven days or less. The Trust
ordinarily will not purchase or otherwise acquire any security or
invest in a repurchase agreement if, as a result, more than 10% of its
net assets (taken at current value) would be invested in repurchase
agreements not entitling the holder to payment of principal within
seven days. See "Repurchase Agreements" in the Additional Statement
for further details.
Loans of Portfolio Securities
To attempt to increase its income, the Trust may lend its
portfolio securities to qualified borrowers (other than in repurchase
transactions) if the loan is collateralized in accordance with
applicable regulatory requirements, and if, after any loan, the value
of the securities loaned does not exceed 25% of the value of the
Trust's total assets. The Trust will not enter into any securities
lending agreements having a duration of greater than one year. Any
securities received as collateral for a loan must mature in twelve
months or less. The Trust presently does not intend to engage in
securities loan transactions in the coming year. See "Loans of
Portfolio Securities" in the Additional Statement for further
information.
Investment Restrictions
The Trust has certain investment restrictions which, together with
its investment objective, are fundamental policies changeable only by
the vote of a "majority" (as defined in the Investment Company Act) of
the Trust's outstanding voting securities. Under some of those
restrictions, the Trust cannot: (1) invest in any security other than
those discussed under "The Trust and Its Investment Policies," above;
(2) enter into repurchase agreements maturing in more than seven days
or purchase securities which are restricted as to resale or for which
market quotations are not readily available, if any such investment
would cause more than 10% of the Trust's assets to be invested in such
securities; (3) borrow money in excess of 10% of the value of its total
assets, and then only as a temporary measure for extraordinary or
emergency purposes; provided that the Trust will not make any
investment at a time during which such borrowing exceeds 5% of the
value of its assets; no assets of the Trust may be pledged, mortgaged
or assigned to secure a debt; (4) make loans, except through (i) the
purchase of debt securities listed under "The Trust and Its Investment
Policies," (ii) the purchase of such debt securities subject to
repurchase agreements, or (iii) loans of securities as described under
"Loans of Portfolio Securities," above; or (5) invest in any debt
instrument having a maturity in excess of one year from the date of the
investment, or, in the case of a debt instrument subject to a
repurchase agreement or called for redemption, having a repurchase or
redemption date more than one year from the date of the investment.
The percentage restrictions above apply only at the time of investment
and require no action by the Trust as a result of subsequent changes in
value of the investments or the size of the Trust. A supplementary
list of investment restrictions is contained in the Additional
Statement.
<PAGE>
APPENDIX
This Appendix is part of the Prospectuses of Centennial Money Market
Trust ("Money Market Trust"), Centennial Tax Exempt Trust ("Tax Exempt
Trust") and Centennial Government Trust ("Government Trust"), each of
which is referred to in this Appendix individually as a "Trust" and
collectively are referred to as the "Trusts." Unless otherwise
indicated, the information in this Appendix applies to each Trust.
Management of the Trusts
The Board of Trustees of each Trust has overall responsibility for
the management of that Trust under the laws of Massachusetts governing
the responsibilities of trustees of business trusts. "Trustees and
Officers" in the Additional Statement identifies the Trustees and
officers and provides information about them. Subject to the authority
of the Board, the Trusts' investment manager, Centennial Asset
Management Corporation (the "Manager"), supervises the investment
operations of each Trust and the composition of its portfolio and
furnishes the Trusts advice and recommendations with respect to
investments, investment policies and the purchase and sale of
securities, pursuant to a management agreement (collectively, the
"Agreements") with each Trust. The management fee is payable monthly
to the Manager under the terms of each Trust's Agreement and is
computed on the aggregate net assets of the respective Trust as of the
close of business each day. The annual rates applicable to Money
Market Trust and Government Trust are as follows: 0.50% of the first
$250 million of net assets; 0.475% of the next $250 million of net
assets; 0.45% of the next $250 million of net assets; 0.425% of the
next $250 million of net assets; and 0.40% of net assets in excess of
$1 billion. See the Additional Statement for an explanation of the
Manager's reimbursement arrangement for the Trusts set forth in their
Agreements and the Manager's voluntary expense assumption for Money
Market Trust. The annual rates applicable to Tax Exempt Trust are as
follows: 0.50% of the first $250 million of net assets; 0.475% of the
next $250 million of net assets; 0.45% of the next $250 million of net
assets; 0.425% of the next $250 million of net assets; 0.40% of the
next $250 million of net assets; 0.375% of the next $250 million of net
assets; 0.35% of the next $500 million of net assets; and 0.325% of net
assets in excess of $2 billion. Furthermore, under Tax Exempt Trust's
Agreement, when the value of Tax Exempt Trust's net assets is less than
$1.5 billion, the annual fee payable to the Manager shall be reduced by
$100,000 based on average net assets computed daily and paid monthly at
the annual rates, but in no event shall the annual fee be less than $0.
"Investment Management Services" in the Additional Statement contains
more information about the Agreements, including a description of the
exculpation provisions, expense assumption arrangements and portfolio
transactions.
The Manager, a wholly-owned subsidiary of Oppenheimer Management
Corporation ("OMC"), has operated as an investment adviser since 1978.
The Manager and its affiliates currently advise U.S. investment
companies with assets aggregating over $28 billion as of June 30, 1994,
and having more than 1.8 million shareholder accounts. OMC is wholly
owned by Oppenheimer Acquisition Corp., a holding company owned in part
by senior management of OMC and the Manager, and ultimately controlled
by Massachusetts Mutual Life Insurance Company, a mutual life insurance
company which also advises pension plans and investment companies.
How to Buy Shares
Shares of each Trust may be purchased at their offering price,
which is net asset value per share, without sales charge. The net
asset value will remain fixed at $1.00 per share, except under
extraordinary circumstances (see "Determination of Net Asset Value Per
Share" in the Additional Statement for further details). There can be
no guarantee that any Trust will maintain a stable net asset value of
$1.00 per share. Centennial Asset Management Corporation, which also
acts as the distributor for each Trust (and in that capacity is
referred to as the "Distributor"), may in its sole discretion accept or
reject any order for purchase of a Trust's shares. Oppenheimer Funds
Distributor, Inc. ("OFDI"), an affiliate of the Distributor, acts as
the sub-distributor for each Trust (the "Sub-Distributor").
The minimum initial investment is $500 ($2,500 if by Federal Funds
wire), except as otherwise described in this Prospectus. Subsequent
purchases must be in amounts of $25 or more, and may be made through
authorized dealers or brokers or by forwarding payment to the
Distributor at P.O. Box 5143, Denver, Colorado 80217, with the name(s)
of all account owners, the account number and the name of the Trust.
The minimum initial and subsequent purchase requirements are waived on
purchases made by reinvesting dividends from any of the "Eligible
Funds" listed in "Exchange Privilege" below or by reinvesting
distributions from unit investment trusts for which reinvestment
arrangements have been made with the Distributor. Under an Automatic
Investment Plan or military allotment plan, initial and subsequent
investments must be at least $25. No share certificates will be issued
unless specifically requested in writing by an investor or the dealer
or broker.
Each Trust intends to be as fully invested as practicable to
maximize its yield. Therefore, dividends will accrue on newly-
purchased shares only after the Distributor accepts the purchase order
at its address in Denver, Colorado, on a day the New York Stock
Exchange is open (a "regular business day"), under one of the methods
of purchasing shares described below. The purchase will be made at the
net asset value next determined after the Distributor accepts the
purchase order.
Each Trust's net asset value per share is determined twice each
regular business day, at 12:00 Noon and 4:00 P.M. (all references to
times in this Prospectus are to New York time) by dividing the net
assets of the Trust by the total number of its shares outstanding.
Each Trust's Board of Trustees has established procedures for valuing
the Trust's assets, using the amortized cost method as described in
"Determination of Net Asset Value Per Share" in the Additional
Statement.
Purchases Through Automatic Purchase and Redemption Programs
Shares of each Trust are available under Automatic Purchase and
Redemption Programs ("Programs") of broker-dealers that have entered
into agreements with the Distributor for that purpose. Broker-dealers
whose clients participate in such Programs will invest the "free cash
balances" of such client's Program account in shares of the Trust
selected as the primary Trust by the client for the Program account.
Such purchases will be made by the broker-dealer under the procedures
described in "Guaranteed Payment," below. The Program may have minimum
investment requirements established by the broker-dealer. The
description of the Program provided by the broker-dealer should be
consulted for details, and all questions about investing in, exchanging
or redeeming shares of a Trust through a Program should be directed to
the broker-dealer.
Direct Purchases
An investor may directly purchase shares of the Trusts through any
dealer which has a sales agreement with the Distributor or the Sub-
Distributor. There are two ways to make a direct initial investment:
either (1) complete a Centennial Funds New Account Application and mail
it with payment to the Distributor at P.O. Box 5143, Denver, Colorado
80217 (if no dealer is named in the Application, the Sub-Distributor
will act as the dealer), or (2) order the shares through your dealer or
broker. Purchases made by Application should have a check enclosed, or
payment may be made by one of the alternative means described below.
-- Payment by check. Orders for shares purchased by check in U.S.
dollars drawn on a U.S. bank will be effected on the regular business
day on which the check (and the purchase application, if the account is
new) is accepted by the Distributor. Dividends will begin to accrue on
such shares the next regular business day after the purchase order is
accepted. For other checks, the shares will not be purchased until the
Distributor is able to convert the purchase payment to Federal Funds,
and dividends will begin to accrue on such shares on the next regular
business day.
-- Payment by Federal Funds Wire. Shares of each Trust may be
purchased by direct shareholders by Federal Funds wire. The minimum
investment by wire is $2,500. The investor must first call the
Distributor's Wire Department at 1-800-852-8457 to notify the
Distributor of the transmittal of the wire and to order the shares.
The investor's bank must wire the Federal Funds to Citibank, N.A., ABA
No. 0210-0008-9, for credit to Concentration Account No. 3737-5674
(Centennial Money Market Trust or Centennial Tax Exempt Trust) or
Concentration Account No. 3741-9796 (Centennial Government Trust), for
further credit to the following account numbers for the respective
Trust: (i) Centennial Money Market Trust Custodian Account No. 099920,
(ii) Centennial Government Trust Custodian Account No. 099975, or (iii)
Centennial Tax Exempt Trust Custodian Account No. 099862.
The wire must state the investor's name. Shares will be purchased
on the regular business day on which, prior to 4:00 P.M., the Federal
Funds are received by Citibank, N.A. (the "Custodian") and the
Distributor has received and accepted the investor's notification of
the wire order, at the net asset value next determined after receipt of
the Federal Funds and the order. Dividends on newly purchased shares
will begin to accrue on the purchase date if the Federal Funds and
order for the purchase are received and accepted by 12:00 Noon.
Dividends will begin to accrue on the next regular business day if the
Federal Funds and purchase order are received and accepted between
12:00 Noon and 4:00 P.M. The investor must also send the Distributor a
completed Application when the purchase order is placed to establish a
new account.
Guaranteed Payment
Broker-dealers with sales agreements with the Distributor
(including broker-dealers who have made special arrangements with the
Distributor for purchases for Program accounts) may place purchase
orders with the Distributor for purchases of a Trust's shares prior to
12:00 Noon on a regular business day, and the order will be effected at
the net asset value determined at 12:00 Noon that day if the broker-
dealer guarantees that payment for such shares in Federal Funds will be
received by the Trust's Custodian prior to 2:00 P.M. on the same day.
Dividends on such shares will begin to accrue on the purchase date. If
an order is received between 12:00 Noon and 4:00 P.M. on a regular
business day with the broker-dealer's guarantee that payment for such
shares in Federal Funds will be received by the Custodian prior to 4:00
P.M. the next regular business day, the order will be effected at 4:00
P.M. on the day the order is received, and dividends on such shares
will begin to accrue on the next regular business day the Federal Funds
are received by the required time. If the broker-dealer guarantees
that the Federal Funds payment will be received by the Trust's
Custodian by 2:00 P.M. on a regular business day on which an order is
placed for shares after 12:00 Noon, the order will be effected at 4:00
P.M. that day and dividends will begin to accrue on such shares on the
purchase date.
Automatic Investment Plans
Direct investors may purchase shares of a Trust automatically.
Automatic Investment Plans may be used to make regular monthly
investments ($25 minimum) from the investor's account at a bank or
other financial institution. To establish an Automatic Investment Plan
from a bank account, a check (minimum $25) for the initial purchase
must accompany the application. Shares purchased by Automatic
Investment Plan payments are subject to the redemption restrictions for
recent purchases described in "How to Redeem Shares." The amount of
the Automatic Investment Plan payment may be changed or the automatic
investments terminated at any time by writing to Shareholder Services,
Inc. (the "Transfer Agent"). A reasonable period (approximately 15
days) is required after receipt of such instructions to implement them.
The Trusts reserve the right to amend, suspend, or discontinue offering
Automatic Investment Plans at any time without prior notice.
General
Dealers and brokers who process orders for a Trust's shares on
behalf of their customers may charge a fee for this service. That fee
can be avoided by purchasing shares directly from a Trust. The sale of
shares will be suspended during any period when the determination of
net asset value is suspended, and may be suspended by the Board of
Trustees whenever the Board judges it in the best interest of a Trust
to do so.
Service Plan
Each Trust has adopted a Service Plan (the "Plan") under Rule 12b-
1 of the Investment Company Act pursuant to which the Trust will
reimburse the Distributor for all or a portion of its costs incurred in
connection with the personal service and maintenance of accounts that
hold Trust shares. The Distributor will use all the fees received from
the Trust to compensate dealers, brokers, banks, or other institutions
("Recipients") each quarter for providing personal service and
maintenance of accounts that hold Trust shares. The services to be
provided by Recipients under the Plan include, but shall not be limited
to, the following: answering routine inquiries from the Recipient's
customers concerning the Trust, providing such customers with
information on their investment in Trust shares, assisting in the
establishment and maintenance of accounts or sub-accounts in the Trust,
making the Trust's investment plans and dividend payment options
available, and providing such other information and customer liaison
services and the maintenance of accounts as the Distributor or the
Trust may reasonably request. Plan payments by the Trust to the
Distributor will be made quarterly in the amount of the lesser of: (i)
0.05% (0.20% annually) of the net asset value of the Trust, computed as
of the close of each business day or (ii) the Distributor's actual
distribution expenses for that quarter of the type approved by the
Board. Each Trust may make monthly payments to the Distributor (and
the Distributor to Recipients) in any month where Trust assets held by
a Recipient for itself or on behalf of its customers in that month
exceed $200 million. Any unreimbursed expenses incurred for any
quarter by the Distributor may not be recovered in later periods. The
Plan has the effect of increasing annual expenses of the Trust by up to
0.20% of average annual net assets from what its expenses would
otherwise be. In addition, the Manager may, under the Plan, from time
to time from its own resources (which may include the profits derived
from the advisory fee it receives from the Trust), make payments to
Recipients for distribution, administrative and accounting services
performed by Recipients. For further details, see "Service Plan" in
the Additional Statement.
How to Redeem Shares
Program Participants
A Program participant may redeem shares in the Program by writing
checks as described below, or by contacting the dealer or broker. A
Program participant may also arrange for "Expedited Redemptions," as
described below, only through the dealer or broker.
Shares of the Trusts Owned Directly
Shares of the Trusts owned by a shareholder directly (not through
a Program) (a "direct shareholder"), may be redeemed in the following
ways:
-- Regular Redemption Procedure. To redeem some or all shares in
an account (whether or not represented by certificates) under the
Trust's regular redemption procedures, a direct shareholder must send
the following to the transfer agent for the Trust, Shareholder
Services, Inc. (the "Transfer Agent"), P.O. Box 5143, Denver, Colorado
80217 [send courier or express mail deliveries to 10200 E. Girard
Avenue, Building D, Denver, Colorado 80231]: (1) a written request for
redemption signed by all registered owners exactly as the shares are
registered, including fiduciary titles, if any, and specifying the
account number and the dollar amount or number of shares to be
redeemed; (2) a guarantee of the signatures of all registered owners on
the redemption request or on the endorsement on the share certificate
or accompanying stock power, by a U.S. bank, trust company, credit
union or savings association, or a foreign bank having a U.S.
correspondent bank, or by a U.S. registered dealer and broker in
securities, municipal securities or government securities, or by a U.S.
national securities exchange, registered securities association or
clearing agency; (3) any share certificates issued for any of the
shares to be redeemed; and (4) any additional documents which may be
required by the Transfer Agent for redemption by corporations,
partnerships or other organizations, executors, administrators,
trustees, custodians, or guardians, or if the redemption is requested
by anyone other than the shareholder(s) of record. A signature
guarantee is not required for redemptions of $50,000 or less, requested
by and payable to all shareholders of record, to be sent to the address
of record for that account. Transfers of shares are subject to similar
requirements. To avoid delay in redemption or transfer, shareholders
having questions about these requirements should contact the Transfer
Agent in writing or by calling 1-800-525-9310 before submitting a
request. From time to time the Transfer Agent in its discretion may
waive any or certain of the foregoing requirements in particular cases.
Redemption or transfer requests will not be honored until the Transfer
Agent receives all required documents in proper form.
-- Expedited Redemption Procedure. In addition to the regular
redemption procedure set forth above, direct shareholders whose shares
are not represented by certificates may arrange to have redemption
proceeds of $2,500 or more wired in Federal Funds to a designated
commercial bank if the bank is a member of the Federal Reserve wire
system. To place a wire redemption request, call the Transfer Agent at
1-800-852-8457. The account number of the designated financial
institution and the bank ABA number must be supplied to the Transfer
Agent on the Application or dealer settlement instructions establishing
the account or may be added to existing accounts or changed only by
signature-guaranteed instructions to the Transfer Agent from all
shareholders of record. Such redemption requests may be made by
telephone, wire or written instructions to the Transfer Agent. The
wire for the redemption proceeds of shares redeemed prior to 12:00 noon
normally will be transmitted by the Transfer Agent to the shareholder's
designated bank account on the day the shares are redeemed (or, if that
day is not a bank business day, on the next bank business day). Shares
redeemed prior to 12:00 noon do not earn dividends on the redemption
date. The wire for the redemption proceeds of shares redeemed between
12:00 noon and 4:00 P.M. normally will be transmitted by the Transfer
Agent to the shareholder's designated bank account on the next bank
business day after the redemption. Shares redeemed between 12:00 noon
and 4:00 P.M. earn dividends on the redemption date. See "Purchase,
Redemption and Pricing of Shares" in the Additional Statement for
further details.
-- Check Writing. Upon request, the Transfer Agent will provide
any direct shareholder of the Trusts or Program participant whose
shares are not represented by certificates with forms of drafts
("checks") payable through a bank selected by the Trust (the "Bank").
Checks may be made payable to the order of anyone in any amount not
less than $250, and will be subject to the Bank's rules and regulations
governing checks. Program participants' checks will be payable from
the primary account designated by the Program participant. The
Transfer Agent will arrange for checks written by direct shareholders
to be honored by the Bank after obtaining a specimen signature card
from the shareholder(s). Program participants should arrange for
check-writing through their brokers or dealers. If a check is
presented for an amount greater than the account value, it will not be
honored. Shareholders of joint accounts may elect to have checks
honored with a single signature. Checks issued for one Trust account
must not be used if the shareholder's account has been transferred to a
new account or if the account number or registration has changed.
Shares purchased by check or Automatic Investment Plan payments within
the prior 15 days may not be redeemed by Check Writing. A check that
would require redemption of some or all of the shares so purchased is
subject to non-payment. The Bank will present checks to the Trust to
redeem shares to cover the amount of the check. Checks may not be
presented for cash payment at the offices of the Bank or the Trust's
Custodian. This limitation does not affect the use of checks for the
payment of bills or to obtain cash at other banks. The Trust reserves
the right to amend, suspend, or discontinue check writing privileges at
any time without prior notice.
-- Telephone Redemptions. Direct shareholders of the Trusts may
redeem their shares by telephone by calling the Transfer Agent at 1-
800-852-8457. This procedure for telephone redemptions is not
available to Program participants. Proceeds of telephone redemptions
will be paid by check payable to the shareholder(s) of record and sent
to the address of record for the account. Telephone redemptions are
not available within 30 days of a change of the address of record. Up
to $50,000 may be redeemed by telephone, once in every seven day
period. The Transfer Agent may record any calls. Telephone
redemptions may not be available if all lines are busy, and
shareholders would have to use the Trusts' regular redemption
procedures described above. Telephone redemption privileges are not
available for newly-purchased (within the prior 15 days) shares or for
shares represented by certificates. Telephone redemption privileges
apply automatically to each shareholder and the dealer representative
of record unless the Transfer Agent receives cancellation instructions
from a shareholder of record. If an account has multiple owners, the
Transfer Agent may rely on the instructions of any one owner.
Retirement Plans Holding Shares of Government Trust and Money Market
Trust
Requests for distributions from OppenheimerFunds-sponsored
Individual Retirement Accounts ("IRAs"), 403(b)(7) custodial plans, or
pension or profit-sharing plans of direct shareholders for which the
Manager or its affiliates act as sponsors should be addressed to "Bank
of Boston c/o Shareholder Services, Inc." at the above address, and
must: (i) state the reason for distribution; (ii) state the owner's
awareness of tax penalties if the distribution is premature; and (iii)
conform to the requirements of the plan and the Trust's requirements
for regular redemptions discussed above. Participants (other than
self-employed persons) in OppenheimerFunds-sponsored pension or profit-
sharing plans may not directly request redemption of their accounts.
The employer or plan administrator must sign the request.
Distributions from such plans are subject to additional requirements
under the Internal Revenue Code and certain documents (available from
the Transfer Agent) must be completed before the distribution may be
made. Distributions from retirement plans are subject to withholding
requirements under the Internal Revenue Code of 1986, as amended, and
IRS Form W-4P (available from the Transfer Agent) must be submitted to
the Transfer Agent with the distribution request, or the distribution
may be delayed. Unless the shareholder has provided the Transfer Agent
with a certified tax identification number, the Internal Revenue Code
requires that tax be withheld from any distribution even if the
shareholder elects not to have tax withheld. The Trustee, the Trusts,
the Manager, the Distributor and the Transfer Agent assume no
responsibility to determine whether a distribution satisfies the
conditions of applicable tax laws and will not be responsible for any
penalties assessed.
Automatic Withdrawal Plans
Direct shareholders of the Trusts can authorize the Transfer Agent
to redeem shares (minimum $50) automatically on a monthly, quarterly,
semi-annual or annual basis under an Automatic Withdrawal Plan. Shares
will be redeemed as of 4:00 P.M. three days prior to the date requested
by the shareholder for receipt of the payment. The Trusts cannot
guarantee receipt of payment on the date requested and reserve the
right to amend, suspend or cease offering such Plan at any time without
prior notice. Required minimum distributions from OppenheimerFunds-
sponsored retirement plans may not be arranged on this basis. For
further details, see the Automatic Withdrawal Plan provisions included
as Exhibit B to the Additional Statement.
General Information on Redemptions
The redemption price will be the net asset value per share of the
Trust next determined after the receipt by the Transfer Agent of a
request in proper form. Under certain unusual circumstances, the Board
of Trustees of Tax Exempt Trust may involuntarily redeem small accounts
(valued at less than $500). Should the Board elect to exercise this
right, it may also fix, in accordance with the Investment Company Act,
the requirements for any notice to be given to the shareholders in
question (not less than 30 days), or may set requirements for
permission to allow the shareholder to increase the investment so that
the shares would not be involuntarily redeemed. The Board of Trustees
of Tax Exempt Trust may also involuntarily redeem shares in amounts
sufficient to reimburse the Trust or the Distributor for any loss due
to cancellation of a share purchase order. Under the Internal Revenue
Code, the Trusts may be required to impose "backup" withholding of
Federal income tax at the rate of 31% from any taxable dividends and
distributions the Trust may make if the shareholder has not furnished
the Trust with a certified taxpayer identification number or has not
complied with provisions of the Internal Revenue Code relating to
reporting dividends.
Payment for redeemed shares is made ordinarily in cash and
forwarded within seven days of the Transfer Agent's receipt of
redemption instructions in proper form, except under unusual
circumstances as determined by the Securities and Exchange Commission.
The Transfer Agent may delay forwarding a redemption check for
recently-purchased shares only until the purchase check has cleared,
which may take up to 15 or more days from the purchase date. Such
delay may be avoided if the shareholder arranges telephone or written
assurance satisfactory to the Transfer Agent from the bank on which the
purchase payment was drawn, or by purchasing shares by Federal Funds
wire, as described above. The Trust makes no charge for redemption.
Dealers or brokers may charge a fee for handling redemption
transactions, but such fee can be avoided by requesting the redemption
directly through the Transfer Agent. Under certain circumstances, the
proceeds of redemption of shares of a Trust acquired by exchange of
shares of "Eligible Funds" (described below) purchased subject to a
contingent deferred sales charge ("CDSC") may be subject to the CDSC
(see "Exchange Privilege" below).
Exchanges of Shares and Retirement Plans
Exchange Privilege
Shares of each of the Trusts held under Programs may be exchanged
for shares of Centennial Money Market Trust, Centennial Government
Trust, Centennial Tax Exempt Trust, Centennial California Tax Exempt
Trust and Centennial New York Tax Exempt Trust if available for sale in
the shareholder's state of residence only by instructions of the
broker. Shares of the Trusts may, under certain conditions, be
exchanged by direct shareholders for Class A shares of the following
funds, all collectively referred to as "Eligible Funds": (i)
Oppenheimer Target Fund, Oppenheimer Champion High Yield Fund,
Oppenheimer Asset Allocation Fund, Oppenheimer Discovery Fund,
Oppenheimer U.S. Government Trust, Oppenheimer Global Environment Fund,
Oppenheimer Global Growth & Income Fund, Oppenheimer Global Emerging
Growth Fund, Oppenheimer Limited-Term Government Fund, Oppenheimer
Intermediate Tax-Exempt Bond Fund, Oppenheimer Insured Tax-Exempt Bond
Fund, Oppenheimer Fund, Oppenheimer Global Fund, Oppenheimer Time Fund,
Oppenheimer Growth Fund, Oppenheimer Equity Income Fund, Oppenheimer
Main Street California Tax-Exempt Fund, Oppenheimer Main Street Income
& Growth Fund, Oppenheimer Gold & Special Minerals Fund, Oppenheimer
Investment Grade Bond Fund, Oppenheimer Value Stock Fund, Oppenheimer
California Tax-Exempt Fund, Oppenheimer Pennsylvania Tax-Exempt Fund,
Oppenheimer Florida Tax-Exempt Fund, Oppenheimer New Jersey Tax-Exempt
Fund, Oppenheimer New York Tax-Exempt Fund, Oppenheimer High Yield
Fund, Oppenheimer Total Return Fund, Inc., Oppenheimer Mortgage Income
Fund, Oppenheimer Tax-Free Bond Fund, Oppenheimer Strategic Income
Fund, Oppenheimer Strategic Income & Growth Fund, Oppenheimer Strategic
Short-Term Income Fund and Oppenheimer Strategic Investment Grade Bond
Fund; and (ii) the following "Money Market Funds": Centennial Money
Market Trust, Centennial Government Trust, Centennial America Fund,
L.P., Centennial California Tax Exempt Trust, Centennial New York Tax
Exempt Trust and Centennial Tax Exempt Trust (collectively, the
"Centennial Trusts"), Oppenheimer Money Market Fund, Inc., Oppenheimer
Cash Reserves and Daily Cash Accumulation Fund, Inc. There is an
initial sales charge on the purchase of Class A shares of each Eligible
Fund except the Money Market Funds (under certain circumstances
described below, redemption proceeds of Money Market Fund shares may be
subject to a CDSC).
Shares of the Trusts and of the other Eligible Funds may be
exchanged at net asset value, if all of the following conditions are
met: (1) shares of the fund selected for exchange are available for
sale in the shareholder's state of residence; (2) the respective
prospectuses of the funds whose shares are to be exchanged and
acquired offer the Exchange Privilege to the investor; (3) newly-
purchased shares (by initial or subsequent investment) are held in an
account for at least 7 days prior to the exchange; and (4) the
aggregate net asset value of the shares surrendered for exchange into a
new account is at least equal to the minimum investment requirements of
the fund whose shares are to be acquired.
In addition to the conditions stated above, shares of Eligible
Funds may be exchanged for shares of any Money Market Fund; shares of
any Money Market Fund (including the Trusts) purchased without a sales
charge may be exchanged for shares of Eligible Funds offered with a
sales charge upon payment of the sales charge (or, if applicable, may
be used to purchase shares of Eligible Funds subject to a CDSC); and
shares of a Trust acquired by reinvestment of dividends and
distributions from any Eligible Fund, except Oppenheimer Cash Reserves,
or from any unit investment trust for which reinvestment arrangements
have been made with the Distributor may be exchanged at net asset value
for shares of any Eligible Fund. The redemption proceeds of shares of
a Trust acquired by exchange of Class A shares of an Eligible Fund
purchased subject to a CDSC, that are redeemed within 18 months of the
end of the calendar month of the initial purchase of the exchanged
shares, will be subject to the CDSC as described in the prospectus of
that other eligible fund; in determining whether the CDSC is payable,
shares of the Trust not subject to the CDSC are redeemed first,
including shares purchased by reinvestment of dividends and capital
gains distributions from any Eligible Fund or shares of the Trust
acquired by exchange of shares of Eligible Funds on which a front-end
sales charge was paid or credited, and then other shares are redeemed
in the order of purchase.
-- How to Exchange Shares. An exchange may be made by submitting
an Exchange Authorization Form to the Transfer Agent, signed by all
registered owners. In addition, direct shareholders of the Trusts may
exchange shares of a Trust for shares of any Eligible Fund by telephone
exchange instructions to the Transfer Agent by a shareholder or the
dealer representative of record for an account. The Trusts may modify,
suspend or discontinue this exchange privilege at any time, and will do
so on 60 days' notice if such notice is required by regulations adopted
under the Investment Company Act. The Trusts reserve the right to
reject requests submitted in bulk on behalf of 10 or more accounts.
Exchange requests must be received by the Transfer Agent by 4:00 P.M.
on a regular business day to be effected that day. The number of
shares exchanged may be less than the number requested if the number
requested would include shares subject to a restriction cited above or
shares covered by a certificate that is not tendered with such request.
Only the shares available for exchange without restriction will be
exchanged.
-- Telephone Exchanges. Direct shareholders may place a telephone
exchange request by calling the Transfer Agent at 1-800-852-8457.
Telephone exchange calls may be recorded by the Transfer Agent.
Telephone exchanges are subject to the rules described above. By
exchanging shares by telephone, the shareholder is acknowledging
receipt of a prospectus of the fund to which the exchange is made and
that for full or partial exchanges, any special account features such
as Automatic Investment Plans, Automatic Withdrawal Plans and
retirement plan contributions will be switched to the new account
unless the Transfer Agent is otherwise instructed. Telephone exchange
privileges automatically apply to each direct shareholder of record and
the dealer representative of record unless and until the Transfer Agent
receives written instructions from the shareholder(s) of record
cancelling such privileges. If an account has multiple owners, the
Transfer Agent may rely on the instructions of any one owner. The
Transfer Agent has adopted reasonable procedures to confirm that
telephone instructions are genuine, by requiring callers to provide tax
identification number(s) and other account data and by recording calls
and confirming such transactions in writing. If the Transfer Agent
does not use such procedures, it may be liable for losses due to
unauthorized transactions, but otherwise will not be liable for losses
or expenses arising out of telephone instructions reasonably believed
to be genuine. The Transfer Agent reserves the right to require
shareholders to confirm, in writing, telephone exchange privileges for
an account. Shares acquired by telephone exchange must be registered
exactly as the account from which the exchange was made. Certificated
shares are not eligible for telephone exchange. If all telephone
exchange lines are busy (which might occur, for example, during periods
of substantial market fluctuations), shareholders might not be able to
request telephone exchanges and would have to submit written exchange
requests.
-- General Information on Exchanges. Shares to be exchanged are
redeemed on the day the Transfer Agent receives an exchange request in
proper form (the "Redemption Date"), as of 4:00 P.M. Normally, shares
of the fund to be acquired are purchased on the Redemption Date, but
such purchases may be delayed by either fund up to five business days
if it determines that it would be disadvantaged by an immediate
transfer of the redemption proceeds. The Trust in its discretion
reserves the right to refuse any exchange request that will
disadvantage it.
The Eligible Funds have different investment objectives and
policies. Each of those funds imposes a sales charge on purchases of
Class A shares except the Money Market Funds. For complete
information, including sales charges and expenses, a prospectus of the
fund into which the exchange is being made should be read prior to an
exchange. If a sales charge is assessed on all shares acquired by
exchange, there is no service charge. Otherwise, a $5 service charge
will be deducted from the account into which the exchange is made to
defray administrative expenses. Dealers and brokers who process
exchange orders on behalf of their customers may charge for their
services. Those charges may be avoided by requesting the Trust
directly to exchange shares. For Federal tax purposes, an exchange is
treated as a redemption and purchase of shares.
Retirement Plans
The Distributor has available for direct shareholders who purchase
shares of Government Trust and Money Market Trust: (i) individual
retirement accounts (IRAs), including Simplified Employee Pension Plans
(SEP IRAs); (ii) prototype pension and profit-sharing plans for
corporations and self-employed individuals; and (iii) Section 403(b)(7)
custodial plans for employees of public educational institutions and
organizations of the type described in Section 501(c)(3) of the
Internal Revenue Code. The minimum initial IRA, SEP IRA, pension or
profit-sharing plan investment is normally $250. The minimum initial
403(b)(7) plan investment is $25. For further details, including the
administrative fees, the appropriate retirement plan should be
requested from the Distributor. Retirement plans are not available to
direct shareholders who purchase shares of Tax Exempt Trust.
Dividends, Distributions and Taxes
This discussion relates solely to Federal tax laws and is not
exhaustive; a qualified tax adviser should be consulted. Dividends and
distributions may be subject to Federal, state and local taxation.
Information about the possible applicability of the Alternative Minimum
Tax to Tax Exempt Trust's dividends and distributions is contained in
"Investment Objective and Policies - Private Activity Municipal
Securities" in the Additional Statement. The Additional Statement
contains further discussion of tax matters affecting the Trusts and
their distributions.
Dividends and Distributions
Each Trust intends to declare all of its net income, as defined
below, as dividends on each regular business day and to pay dividends
monthly. Dividends will be payable to shareholders as described in
"How to Buy Shares" above. All dividends and distributions for the
accounts of Program participants are automatically reinvested in
additional shares of the Trust selected. Dividends accumulated since
the prior payment will be reinvested in full and fractional shares of
the respective Trust at net asset value on the third Thursday of each
calendar month. If a shareholder redeems all shares at any time during
a month, the redemption proceeds include all dividends accrued up to
the redemption date for shares redeemed prior to 12:00 noon, and
include all dividends accrued through the redemption date for shares
redeemed between 12:00 noon and 4:00 P.M. Such investors may receive
cash payments by asking the broker to redeem shares.
Participants in an A.G. Edwards & Sons, Inc. Cash Convenience
Account Program (other than those whose Account is an Individual
Retirement Account) holding shares of Tax Exempt Trust or Government
Trust will receive account statements five times a year, at the end of
March, May, August, October and December, if the only activity in their
account during that period is the automatic reinvestment of dividends.
Dividends and distributions payable to direct shareholders of the
Trusts will also be automatically reinvested in shares of the
respective Trust at net asset value, on the third Thursday of each
calendar month, unless the shareholder asks the Transfer Agent in
writing to pay dividends and distributions in cash or to reinvest them
in another Eligible Fund, as described in "Dividend Reinvestment in
Another Fund" in the Additional Statement. That notice must be
received prior to the record date for a dividend to be effective as to
that dividend. Dividends, distributions and the proceeds of
redemptions of Trust shares represented by checks returned to the
Transfer Agent by the Postal Service as undeliverable will be
reinvested in shares of the respective Trust, as promptly as possible
after the return of such check to the Transfer Agent to enable the
investor to earn a return on otherwise idle funds.
Under the terms of a Program, a broker-dealer may pay out the
value of some or all of a Program participant's Trust shares prior to
redemption of such shares by the Trust. In such cases, the shareholder
will be entitled to dividends on such shares only up to and including
the date of such payment. Dividends on such shares accruing between
the date of payment and the date such shares are redeemed by the Trusts
will be paid to the broker-dealer. It is anticipated that such
payments will occur only to satisfy debit balances arising in a
shareholder's account under a Program.
A Trust's net investment income for dividend purposes consists of
all interest accrued on portfolio assets, less all expenses of the
Trust for such period. Distributions from net realized gains on
securities, if any, will be paid at least once each year, and may be
made more frequently in compliance with the Internal Revenue Code and
the Investment Company Act. Long-term capital gains, if any, will be
identified separately when tax information is distributed. No Trust
will make any distributions from net realized securities gains unless
capital loss carry forwards, if any, have been used or have expired.
Receipt of tax-exempt income must be reported on the taxpayer's Federal
income tax return. To effect its policy of maintaining a net asset
value of $1.00 per share, each Trust, under certain circumstances, may
withhold dividends or make distributions from capital or capital gains.
The Additional Statement describes how dividends and distributions
received by direct shareholders of the Trusts may be reinvested in
shares of any Eligible Fund at net asset value.
Tax Status of Money Market Trust's and Government Trust's Dividends
and Distributions
Dividends paid by these Trusts derived from net investment income
or net short-term capital gains are taxable to shareholders as ordinary
income, whether received in cash or reinvested. If either Trust has
net realized long-term capital gains in a fiscal year, it may pay an
annual "long-term capital gains distribution," which will be so
identified when paid and when tax information is distributed.
Long-term capital gains are taxable to shareholders as long-term
capital gains, whether received in cash or reinvested, regardless of
how long Fund shares have been held. Although income from securities
issued by the U.S. Government may be exempt from income taxation by
various states, such exemptions may not apply when the income is
received in the form of a dividend from either of these Trusts. The
Government Trust will advise shareholders of the percentage of its
income earned on federal obligations.
Tax Status of Tax Exempt Trust's Dividends and Distributions
This Trust intends to qualify under the Internal Revenue Code
during each fiscal year to pay "exempt-interest dividends" to its
shareholders and did so qualify during its last fiscal year. Exempt-
interest dividends which are derived from net investment income earned
by the Trust on Municipal Securities will be excludable from gross
income of shareholders for Federal income tax purposes. Net investment
income includes the allocation of amounts of income from the Municipal
Securities in the portfolio of the Trust which is excludable from gross
income for Federal individual income tax purposes, less expenses.
Expenses are accrued daily. This allocation will be made by the use of
one designated percentage applied uniformly to all income dividends
made during the calendar year. Such designation will normally be made
following the end of each fiscal year as to income dividends paid in
the prior year. The percentage of income designated as tax-exempt may
substantially differ from the percentage of the Trust's income that was
tax-exempt for a given period. Although from time to time a portion of
the exempt-interest dividends paid by the Trust may be an item of tax
preference for shareholders subject to the alternative minimum tax, all
of the dividends (excluding distributions) paid by the Trust during the
calendar year ended December 31, 1993 were exempt from Federal income
taxes. The net amount of any income on Municipal Securities subject to
the alternative minimum tax will be identified when tax information is
distributed by the Trust. The Trust will report annually to
shareholders the percentage of interest income it received during the
preceding year on Municipal Securities. Receipt of tax-exempt income
must be reported on the taxpayer's Federal income tax return.
Shareholders receiving Social Security benefits should be aware that
exempt-interest dividends are a factor in determining whether such
benefits are subject to Federal income tax.
A Trust shareholder treats a dividend as a receipt of ordinary
income (whether paid in cash or reinvested in additional shares) if
derived from net interest income earned by the Trust from one or more
of: (i) certain taxable temporary investments (such as certificates of
deposit, commercial paper, obligations of the U.S. government, its
agencies or instrumentalities, and repurchase agreements), (ii) income
from securities loans, or (iii) an excess of net short-term capital
gains over net long-term capital losses. Additionally, all or a
portion of the Trust's exempt-interest dividends may be a component of
the "adjusted current earnings" preference item under the Federal
corporate alternative minimum tax.
Under the Internal Revenue Code, interest on loans to purchase
shares of the Trust may not be deducted for Federal tax purposes. In
addition, under rules used by the Internal Revenue Service for
determining when borrowed funds are deemed used for the purpose of
purchasing or carrying particular assets, the purchase of shares of the
Trust may be considered to have been made with borrowed funds even
though the borrowed funds are not directly traceable to the purchase of
shares. Furthermore, under Section 147(a) of the Internal Revenue
Code, persons who are "substantial users" (or persons related thereto)
of facilities financed by industrial development bonds or Private
Activity Municipal Securities should refer to "Private Activity
Municipal Securities" in the Additional Statement of Tax Exempt Trust
and should consult their own tax advisers before purchasing shares. No
investigation as to the users of the facilities financed by such bonds
has been made by the Trust.
Tax Status of the Trusts
If a Trust qualifies as a "regulated investment company" under the
Internal Revenue Code, it will not be liable for Federal income taxes
on amounts paid by it as dividends and distributions. Each Trust
qualified during its last fiscal year and intends to qualify in the
current and future fiscal years, while reserving the right not to
qualify. However, the Internal Revenue Code contains a number of
complex tests relating to such qualification that a Trust might not
meet in any particular year. If a Trust does not qualify, it would be
treated for tax purposes as an ordinary corporation and receive no tax
deduction for payments made to shareholders. Tax Exempt Trust would
then be unable to pay "exempt-interest dividends" as discussed before.
Dividends paid by any Trust will not be eligible for the dividends-
received deduction for corporations. For information as to "backup"
withholding on taxable dividends, see "How to Redeem Shares," above.
Additional Information
Description of Shares and of the Trusts
Each share of each Trust represents an interest in that Trust
equal to the interest of each other share of the Trust and entitles the
holder to one vote per share (and a fractional vote for a fractional
share) on matters submitted to a shareholder vote. The Trustees may
divide or combine the shares into a greater or lesser number of shares
without thereby changing the proportionate beneficial interest in the
Trust. Shares do not have cumulative voting rights or conversion,
preemptive or subscription rights. Shares of each Trust have equal
liquidation rights as to the assets of that Trust. Each Trust's Board
of Trustees is empowered to issue additional "series" of shares of that
Trust, which may have separate assets and liabilities.
The Trusts do not anticipate holding annual meetings. Under
certain circumstances, shareholders of each Trust have the right to
remove a Trustee. Although the Declaration of Trust of each Trust
states that when issued, shares are fully-paid and nonassessable,
shareholders may be held personally liable as "partners" for the
Trust's obligations. However, the risk of a shareholder incurring any
financial loss is limited to the relatively remote circumstances in
which the Trust is unable to meet its obligations. See "Additional
Information" in the Additional Statement for details.
The Custodian and the Transfer Agent
The Custodian of the assets of the Trusts is Citibank, N.A. The
Manager and its affiliates presently have banking relationships with
the Custodian. See "Additional Information" in the Additional
Statement for further information. Each Trust's cash balances in
excess of $100,000 held by the Custodian are not protected by Federal
deposit insurance. Such uninsured balances may at times be
substantial. The foregoing rating restrictions under Rule 2a-7
described under "The Trust and Its Investment Policies" do not apply to
banks in which a Trust's cash is kept.
Shareholder Services, Inc., a subsidiary of OMC, acts as Transfer
Agent and shareholder servicing agent for the Trusts and the other
funds advised by the Manager, on an at-cost basis. The fees to the
Transfer Agent do not include payments for any services of the type
paid, or to be paid, by the Trusts to the Distributor and to Recipients
under the Service Plan. Shareholders should direct any inquiries
regarding the Trusts to the Transfer Agent at the address or toll-free
number on the back cover. Program participants should direct any
inquiries regarding the Trust to their broker.
No dealer, salesperson or any other person has been authorized to give
any information or to make any representations other than those
contained in this Prospectus, and if given or made such information and
representations must not be relied upon as having been authorized by
the respective Trust, the Manager, the Distributor or any affiliate
thereof. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities offered hereby in
any state to any person to whom it is unlawful to make such offer in
such state.
Investment Adviser and Distributor
Centennial Asset Management Corporation
3410 South Galena Street
Denver, Colorado 80231
Transfer Agent and Shareholder Servicing Agent
Shareholder Services, Inc.
P.O. Box 5143
Denver, Colorado 80217-5143
1-800-525-9310
Custodian of Portfolio Securities
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Independent Auditors
Deloitte & Touche LLP
1560 Broadway
Denver, Colorado 80202
Legal Counsel
Myer, Swanson & Adams, P.C.
1600 Broadway - Suite 1850
Denver, Colorado 80202
Centennial Government Trust
Prospectus
Effective November 1, 1994
Centennial Government Trust
Prospectus
Effective November 1, 1994
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
CENTENNIAL GOVERNMENT TRUST
3410 South Galena Street, Denver, Colorado 80231
1-800-525-9310
This Statement of Additional Information (the "Additional
Statement") is not a Prospectus. This Additional Statement should be
read together with the Prospectus dated November 1, 1994 (the
"Prospectus") of Centennial Government Trust (the "Trust"), which may
be obtained upon written request to Shareholder Services, Inc. (the
"Transfer Agent"), P.O. Box 5143, Denver, Colorado 80217 or by calling
the Transfer Agent at the toll-free number shown above.
TABLE OF CONTENTS
Page
Investment Objective and Policies 2
Investment Restrictions 4
Appendix
Trustees and Officers A-1
Investment Management Services A-4
Service Plan A-6
Purchase, Redemption and Pricing of Shares A-8
Yield Information A-10
Additional Information A-11
Exhibit A: Description of Securities Ratings A-13
Exhibit B: Automatic Withdrawal Plan Provisions A-17
Independent Auditors' Report A-18
Financial Statements A-19
This Additional Statement is effective November 1, 1994.
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The investment objectives and policies of the Trust are described
in the Prospectus. Set forth below is supplemental information about
those policies. Certain capitalized terms used in this Additional
Statement are defined in the Prospectus.
The Trust will not make investments with the objective of seeking
capital growth. However, the value of the securities held by the Trust
may be affected by changes in general interest rates. Because the
current value of debt securities varies inversely with changes in
prevailing interest rates, if interest rates increase after a security
is purchased, that security would normally decline in value.
Conversely, should interest rates decrease after a security is
purchased, its value would rise. However, those fluctuations in value
will not generally result in realized gains or losses to the Trust
since the Trust does not usually intend to dispose of securities prior
to their maturity. A debt security held to maturity is redeemable by
its issuer at full principal value plus accrued interest. To a limited
degree, the Trust may engage in short-term trading to attempt to take
advantage of short-term market variations, or may dispose of a
portfolio security prior to its maturity if, on the basis of a revised
credit evaluation of the issuer or other considerations, the Trust
believes such disposition advisable or needs to generate cash to
satisfy redemptions. In such cases, the Trust may realize a capital
gain or loss.
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 resale typically will occur within
one to five days of the purchase. Repurchase agreements are considered
"loans" under the Investment Company Act, collateralized by the
underlying security. The Trust's repurchase agreements require that at
all times while the repurchase agreement is in effect, the value of the
collateral must equal or exceed the repurchase price to fully
collateralize the repayment obligation. Additionally, the Manager will
impose creditworthiness requirements to confirm that the vendor is
financially sound, and will continuously monitor the collateral's
value.
Loans of Portfolio Securities. The Trust may lend its portfolio
securities, subject to the restrictions stated in the Prospectus, to
attempt to increase the Trust's income to distribute to shareholders.
Under applicable regulatory requirements (which are subject to change),
the loan collateral must, on each business day, at least equal the
value of the loaned securities and must consist of cash, bank letters
of credit or U.S. Government Securities. To be acceptable as
collateral, letters of credit must obligate a bank to pay amounts
demanded by the Trust if the demand meets the terms of the letter. The
Trust receives an amount equal to the dividends or interest on loaned
securities and also receives one or more of (a) negotiated loan fees,
(b) interest on securities used as collateral, or (c) interest on
short-term debt securities purchased with such loan collateral; either
type of interest may be shared with the borrower. The Trust may also
pay reasonable finder's, custodian and administrative fees and will not
lend its portfolio securities to any officer, trustee, employee or
affiliate of the Trust or the Manager. The terms of the Trust's loans
must meet applicable tests under the Internal Revenue Code and permit
the Trust to reacquire loaned securities on five days' notice or in
time to vote on any important matter.
Floating Rate/Variable Rate Obligations. The Trust may invest in
instruments with floating or variable interest rates. The interest
rate on a floating rate obligation is based on a stated prevailing
market rate, such as a bank's prime rate, the 91-day U.S. Treasury Bill
rate, the rate of return on commercial paper or bank certificates of
deposit, or some other standard, and is adjusted automatically each
time such market rate is adjusted. The interest rate on a variable
rate obligation is also based on a stated prevailing market rate but is
adjusted automatically at a specified interval of no more than one
year. Generally, the changes in the interest rate on such securities
reduce the fluctuation in their market value. As interest rates
decrease or increase, the potential for capital appreciation or
depreciation is less than that for fixed-rate obligations of the same
maturity. Some variable rate or floating rate obligations in which the
Trust may invest have a demand feature entitling the holder to demand
payment at an amount approximately equal to amortized cost or the
principal amount thereof plus accrued interest at any time, or at
specified intervals not exceeding one year. These notes may or may not
be backed by bank letters of credit.
Variable rate demand notes may include master demand notes, which
are obligations that permit the Trust to invest fluctuating amounts,
which may change daily without penalty, pursuant to direct arrangements
between the Trust, as lender, and the borrower. The Manager, on behalf
of the Trust, will consider on an ongoing basis the creditworthiness of
the issuers of the floating and variable rate obligations in the
Trust's portfolio.
Master Demand Notes. A master demand note is a corporate obligation
that permits the investment of fluctuating amounts by the Trust at
varying rates of interest pursuant to direct arrangements between the
Trust, as lender, and the corporate borrower that issues the note.
These notes permit daily changes in the amounts borrowed. The Trust
has the right to increase the amount under the note at any time up to
the full amount provided by the note agreement, or to decrease the
amount, and the borrower may repay up to the full amount of the note at
any time without penalty. Because variable amount master demand notes
are direct lending arrangements between the lender and the borrower, it
is not generally contemplated that such instruments will be traded.
There is no secondary market for these notes, although they are
redeemable and thus immediately repayable by the borrower at face
value, plus accrued interest, at any time. Accordingly, the Trust's
right to redeem is dependent on the ability of the borrower to pay
principal and interest on demand. In evaluating the master demand
arrangements, the Manager considers the earning power, cash flow, and
other liquidity ratios of the issuer. Master demand notes are not
typically rated by credit rating agencies. If they are not rated, the
Trust may invest in them only if, at the time of an investment, they
are Eligible Securities. The Manager will continuously monitor the
borrower's financial ability to meet all of its obligations because the
Trust's liquidity might be impaired if the borrower were unable to pay
principal and interest on demand.
Ratings of Securities. The Prospectus describes "Eligible
Securities" in which the Trust may invest and indicates that if a
security's rating is downgraded, the Manager and/or the Board may have
to reassess the security's credit risks. If a security has ceased to
be a First Tier Security, Centennial Asset Management Corporation (the
"Manager") will promptly reassess whether the security continues to
present "minimal credit risks." If the Manager becomes aware that any
Rating Organization has downgraded its rating of a Second Tier Security
or rated an unrated security below its second highest rating category,
the Trust's Board of Trustees shall promptly reassess whether the
security presents minimal credit risks and whether it is in the best
interests of the Trust to dispose of it; but if the Trust disposes of
the security within five days of the Manager learning of the downgrade,
the Manager will provide the Board 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 must determine whether it would be in the best interests of
the Trust to dispose of the security. The Rating Organizations
currently designated as such by the Securities and Exchange Commission
("SEC") are Standard & Poor's Corporation, Moody's Investors Service,
Inc., Fitch Investors Services, Inc., Duff and Phelps, Inc., IBCA
Limited and its affiliate, IBCA, Inc., and Thomson Bankwatch, Inc. A
description of the ratings categories of those Rating Organizations is
contained in Exhibit A.
INVESTMENT RESTRICTIONS
The Trust's significant investment restrictions are set forth in
the Prospectus. The following investment restrictions are also
fundamental policies of the Trust, and together with the fundamental
policies and restrictions described in the Prospectus, cannot be
changed without the vote of a "majority" of the Trust's outstanding
shares. Under the Investment Company Act, such a "majority" vote is
defined as the vote of the holders of the lesser of: (i) 67% or more of
the shares present or represented by proxy at a shareholders meeting,
if the holders of more than 50% of the outstanding shares are present
or represented by proxy, or (ii) more than 50% of the outstanding
shares. Under these additional restrictions, the Trust cannot: (1)
invest in commodities or commodity contracts or invest in interests in
oil, gas or other mineral exploration or development programs; (2)
invest in real estate; (3) purchase securities on margin or make short
sales of securities; (4) invest in or hold securities of any issuer if
those officers and Trustees of the Trust or its adviser 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; (5)
underwrite securities of other companies; or (6) invest in securities
of other investment companies, except as they may be acquired as part
of a merger, consolidation or acquisition of assets.
<PAGE>
APPENDIX
This Appendix is part of the Additional Statement of Centennial Money
Market Trust ("Money Market Trust"), Centennial Tax Exempt Trust ("Tax
Exempt Trust") and Centennial Government Trust ("Government Trust"),
each of which is referred to in this Appendix individually as a "Trust"
and collectively are referred to as the "Trusts." Unless otherwise
indicated, the information in this Appendix applies to each Trust.
TRUSTEES AND OFFICERS
The Trustees and officers of the Trusts and their principal
business affiliations and occupations during the past five years are
listed below. All Trustees are Trustees of each of the Trusts. The
Trustees are also trustees, directors, or managing general partners of
Centennial California Tax Exempt Trust, Centennial New York Tax Exempt
Trust, Daily Cash Accumulation Fund, Inc., Oppenheimer Champion High
Yield Fund, Centennial America Fund, L.P., Oppenheimer Limited-Term
Government Fund, Oppenheimer Tax-Exempt Bond Fund, Oppenheimer Main
Street Funds, Inc., Oppenheimer Cash Reserves, Oppenheimer Equity
Income Fund, Oppenheimer High Yield Fund, Oppenheimer Integrity Funds,
Oppenheimer Strategic Funds Trust, Oppenheimer Strategic Income &
Growth Fund, Oppenheimer Strategic Short-Term Income Fund, Oppenheimer
Strategic Investment Grade Bond Fund, Oppenheimer Total Return Fund,
Inc., Oppenheimer Variable Account Funds and The New York Tax-Exempt
Income Fund, Inc. (all of the foregoing funds are collectively referred
to as the "Denver OppenheimerFunds"). Mr. Fossel is President and Mr.
Swain is Chairman of the Denver OppenheimerFunds. All of the officers
except Mr. Carbuto, Ms. Wolf, Mr. Zimmer and Ms. Warmack hold similar
positions with each of the Denver OppenheimerFunds. As of September
30, 1994, the Trustees and officers of each Trust in the aggregate
owned less than 1% of the outstanding shares of that Trust.
ROBERT G. AVIS, Trustee *
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
197 Desert Lakes Drive, Palm Springs, California 92264
Management Consultant.
CHARLES CONRAD, JR., Trustee
1447 Vista del Cerro, Las Cruces, New Mexico 88005
Vice President of McDonnell Douglas Space Systems Co.; formerly
associated with National Aeronautics and Space Administration.
JON S. FOSSEL, President and Trustee *
Two World Trade Center, New York, New York 10048-0203
Chairman, Chief Executive Officer and a director of Oppenheimer
Management Corporation ("OMC"), the immediate parent of Centennial
Asset Management Corporation (the "Manager"); President and
director of Oppenheimer Acquisition Corp. ("OAC"), OMC's parent
holding company; President and a director of HarbourView Asset
Management Corporation, a subsidiary of OMC ("HarbourView"); a
director of Shareholder Services, Inc. ("SSI"), the Trust's
Transfer Agent, and Shareholder Financial Services, Inc. ("SFSI"),
transfer agent subsidiaries of OMC; formerly President of OMC.
RAYMOND J. KALINOWSKI, Trustee
44 Portland Drive, St. Louis, Missouri 63131
Formerly Vice Chairman and a director of A.G. Edwards, Inc.,
parent holding company of A.G. Edwards & Sons, Inc. (a broker-
dealer), of which he was a Senior Vice President.
C. HOWARD KAST, Trustee
2552 E. Alameda, Denver, Colorado 80209
Formerly Managing Partner of Deloitte Haskins & Sells (an
accounting firm).
ROBERT M. KIRCHNER, Trustee
7500 E. Arapahoe Road, Englewood, Colorado 80112
President of The Kirchner Company (management consultants).
NED M. STEEL, Trustee
3416 South Race Street, Englewood, Colorado 80110
Chartered Property and Casualty Underwriter; formerly Senior Vice
President and a director of the Van Gilder Insurance Corp.
(insurance brokers).
JAMES C. SWAIN, Chairman and Trustee *
3410 South Galena Street, Denver, Colorado 80231
President and a Director of the Manager; Vice Chairman of OMC;
formerly Chairman of the Board of SSI.
MICHAEL A. CARBUTO, Vice President and Portfolio Manager of Tax Exempt
Trust
Two World Trade Center, New York, New York 10048-0203
Vice President of the Manager; an officer of other
OppenheimerFunds.
DOROTHY WARMACK, Vice President and Portfolio Manager of Money Market
Trust and Government Trust
3410 South Galena Street, Denver, Colorado 80231
Vice President of the Manager and OMC; an officer of other
OppenheimerFunds.
CAROL E. WOLF, Vice President and Portfolio Manager of Money Market
Trust and Government Trust
3410 South Galena Street, Denver, Colorado 80231
Vice President of the Manager and OMC; an officer of other
OppenheimerFunds.
ARTHUR J. ZIMMER, Vice President and Portfolio Manager of Money Market
Trust and Government Trust
3410 South Galena Street, Denver, Colorado 80231
Vice President of the Manager and OMC; an officer of other
OppenheimerFunds; formerly Vice President of Hanifen Imhoff
Management Company (mutual fund investment advisor).
ANDREW J. DONOHUE, Vice President
Two World Trade Center, New York, New York 10048-0203
Executive Vice President and General Counsel of OMC and
Oppenheimer Funds Distributor, Inc. ("OFDI"); an officer of other
OppenheimerFunds; formerly Senior Vice President and Associate
General Counsel of OMC and OFDI; Partner in Kraft & McManimon (a
law firm); an officer of First Investors Corporation (a broker-
dealer) and First Investors Management Company, Inc. (broker-
dealer and investment adviser); director and an officer of First
Investors Family of Funds and First Investors Life Insurance
Company.
GEORGE C. BOWEN, Vice President, Secretary and Treasurer
3410 South Galena Street Denver, Colorado 80231
Senior Vice President, Treasurer, Assistant Secretary and a
director of the Manager; Vice President and Treasurer of OFDI and
HarbourView; Senior Vice President and Treasurer of OMC; Vice
President, Treasurer and Secretary of SSI and SFSI; an officer of
other OppenheimerFunds.
ROBERT BISHOP, Assistant Treasurer
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of OMC/Mutual Fund Accounting; an officer
of other OppenheimerFunds; formerly a Fund Controller for OMC,
prior to which he was an Accountant for Yale & Seffinger, P.C., an
accounting firm, and previously an Accountant and Commissions
Supervisor for Stuart James Company, Inc., a broker-dealer.
SCOTT FARRAR, Assistant Treasurer
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of OMC/Mutual Fund Accounting; an officer
of other OppenheimerFunds; formerly a Fund Controller for OMC,
prior to which he was an International Mutual Fund Supervisor for
Brown Brothers, Harriman Co., a bank, and previously a Senior Fund
Accountant for State Street Bank & Trust Company, before which he
was a sales representative for Central Colorado Planning.
ROBERT G. ZACK, Assistant Secretary
Two World Trade Center, New York, New York 10048-0203
Senior Vice President and Associate General Counsel of OMC;
Assistant Secretary of SSI and SFSI; an officer of other
OppenheimerFunds.
[FN]
____________________________
* A Trustee who is an "interested person" of the Trusts as defined in
the Investment Company Act.
Remuneration of Trustees and Officers. The officers of the Trusts
(including Messrs. Swain and Fossel) are affiliated with the Manager
and receive no salary or fee from the Trusts. The Trusts have an Audit
and Review Committee, composed of William A. Baker (Chairman), Charles
Conrad, Jr. and Robert M. Kirchner. This Committee meets regularly to
review audit procedures, financial statements and other financial and
operational matters of the Trusts. During the fiscal year ended
June 30, 1994, the remuneration (including expense reimbursements) paid
by the Trusts to the Trustees as a group for services as trustees and
as members of one or more committees totaled: Money Market Trust:
$21,277; Tax Exempt Trust: $15,726; and Government Trust: $10,387.
Major Shareholders. As of September 30, 1994, A.G. Edwards & Sons,
Inc. ("A.G. Edwards"), 1 North Jefferson Avenue, St. Louis, MO 63103
was the record owner of 2,822,454,504.740 shares of Money Market Trust,
981,569,185.100 shares of Tax Exempt Trust and 633,638,298.290 shares
of Government Trust (approximately 99.6%, 96.1% and 97.8% of
outstanding shares, respectively, of these Trusts). A.G. Edwards has
advised the Trusts that all such shares are held for the benefit of
brokerage clients and that no such client owned beneficially 5% or more
of the outstanding shares of any of the Trusts.
INVESTMENT MANAGEMENT SERVICES
The Manager is wholly-owned by OMC, which is a wholly-owned
subsidiary of OAC, a holding company controlled by Massachusetts Mutual
Life Insurance Company. The remaining stock of OAC is owned by: (i)
certain of OMC's directors and officers, some of whom may serve as
officers of the Trusts, and two of whom (Messrs. James C. Swain and Jon
S. Fossel) serve as a Trustee of the Trusts and (ii) A.G. Edwards,
which owns less than 5% of its equity.
The management fee is payable monthly to the Manager under the
terms of the investment advisory agreements between the Manager and
each Trust (collectively, the "Agreements"), and is computed on the
aggregate net assets of the respective Trust as of the close of
business each day. The management fees paid to the Manager by the
Trusts during their last three fiscal periods were as follows: (a)
$3,824,936, $7,254,206 and $9,435,959 paid for the fiscal years ended
June 30, 1992, 1993 and 1994, respectively, of Money Market Trust; (b)
$4,164,955, $4,426,198 and $4,761,673 paid for the fiscal years ended
June 30, 1992, 1993 and 1994, respectively, of Tax Exempt Trust; and
(c) $2,804,557, $3,035,760 and $3,182,956 paid for the fiscal years
ended June 30, 1992, 1993 and 1994, respectively, of Government Trust.
The Agreements require the Manager, at its expense, to provide the
Trusts with adequate office space, facilities and equipment, and to
provide and supervise the activities of all administrative and clerical
personnel required to provide effective administration for the Trusts,
including the compilation and maintenance of records with respect to
operations, the preparation and filing of specified reports, and the
composition of proxy materials and registration statements for
continuous public sale of shares of the Trusts. Expenses not expressly
assumed by the Manager under the Agreements or as Distributor of the
shares of the Trusts, are paid by the Trusts. The Agreements list
examples of expenses paid by the Trusts, the major categories of which
relate to interest, taxes, certain insurance premiums, fees to
unaffiliated Trustees, legal, bookkeeping and audit expenses, custodian
and transfer agent expenses, share issuance costs, certain printing
costs (excluding the cost of printing prospectuses for sales
materials) and registration fees, and non-recurring expenses, including
litigation.
Under its Agreement with the Money Market Trust and the Government
Trust, the Manager has agreed to reimburse each Trust to the extent
that the Trust's total expenses (including the management fee but
excluding interest, taxes, brokerage commissions, and extraordinary
expenses such as litigation costs) exceed in any fiscal year the lesser
of: (i) 1.5% of average annual net assets of the Trust up to $30
million plus 1% of the average annual net assets in excess of $30
million or; (ii) 25% of the total annual investment income of the
Trust.
Independently of the Money Market Trust's Agreement, the Manager
has voluntarily agreed to waive a portion of the management fee
otherwise payable to it by the Money Market Trust to the extent
necessary to: (a) permit the Money Market Trust to have a seven-day
yield equal to that of Daily Cash Accumulation Fund, Inc., and (b) to
reduce, on an annual basis, the management fee paid on the average net
assets of the Trust in excess of $1 billion from 0.40% to: 0.40% of
average net assets in excess of $1 billion but less than $1.25 billion;
0.375% of average net assets in excess of $1.25 billion but less than
$1.50 billion; 0.35% of average net assets in excess of $1.50 billion
but less than $2 billion; and 0.325% of average net assets in excess of
$2 billion. This undertaking became effective as of December 1, 1991,
and may be modified or terminated by the Manager at any time. For the
fiscal years ended June 30, 1993 and 1994, the Manager reimbursed Money
Market Trust its expenses in the amounts of $900,512 and $1,201,403,
respectively.
Under its Agreement with Tax Exempt Trust, the Manager has agreed
to assume that Trust's expenses to the extent that the total expenses
(as described above) of the Trust exceed the most stringent limits
prescribed by any state in which the Trust's shares are offered for
sale. The payment of the management fee at the end of any month will
be reduced so that at no time will there be any accrued but unpaid
liabilities under any of these expense assumptions. No reimbursement
or assumption was necessary by the Manager to Government Trust or Tax
Exempt Trust during their respective three most recent fiscal years.
The Agreements permit the Manager to act as investment adviser for any
other person, firm or corporation.
The Tax Exempt Trust Agreement provides that the Manager assumes
no responsibility under the Agreement other than that which is imposed
by law, and shall not be responsible for any action of the Board of
Trustees of the Trust in following or declining to follow any advice or
recommendations of the Manager. The Agreement provides that the
Manager shall not be liable for any error of judgment or mistake of
law, or for any loss suffered by the Trust in connection with matters
to which the Agreement relates, except a loss resulting by reason of
the Manager's willful misfeasance, bad faith or gross negligence in the
performance of its duties, or its reckless disregard of its obligations
and duties under the Agreement.
The Agreements of Money Market Trust and Government Trust provide
that the Manager shall not be liable for any loss sustained by reason
of the adoption of an investment policy or the purchase, sale or
retention of any security on its recommendation, whether or not such
recommendation shall have been based upon its own investigation and
research or upon investigation and research made by any other
individual, firm or corporation, if such recommendation shall have been
made and such other individual, firm or corporation shall have been
selected with due care and in good faith, provided that nothing in the
Agreements shall be construed to protect the Manager against any
liability to such Trusts or their shareholders by reason of willful
misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of its reckless disregard of its obligations and
duties under such Agreements.
Portfolio Transactions. Portfolio decisions are based upon the
recommendations and judgment of the Manager subject to the overall
authority of the Board of Trustees. As most purchases made by the
Trust are principal transactions at net prices, the Trust incurs little
or no brokerage costs. The Trust's policy of investing in short-term
debt securities with maturities of less than one year results in high
portfolio turnover. However, since brokerage commissions, if any, are
small and securities are usually held to maturity, high turnover does
not have an appreciable adverse effect upon the net asset value or
income of the Trust in periods of stable or declining rates, and may
have a positive effect in periods of rising interest rates.
The Trust seeks to obtain prompt and reliable execution of orders
at the most favorable net price. If brokers are used for portfolio
transactions, transactions may be directed to brokers furnishing
execution and research services. The research services provided by a
particular broker may be useful only to one or more of the advisory
accounts of the Manager and its affiliates, and investment research
received for the commissions of those other accounts may be useful both
to the Trust and one or more of such other accounts. Such research,
which may be supplied by a third party at the instance of a broker,
includes information and analyses on particular companies and
industries as well as market or economic trends and portfolio strategy,
receipt of market quotations for portfolio evaluations, information
systems, computer hardware and similar products and services. If a
research service also assists the Manager in a non-research capacity
(such as bookkeeping or other administrative functions), then only the
percentage or component that provides assistance to the Manager in the
investment decision-making process may be paid for in commission
dollars.
The research services provided by brokers broaden the scope and
supplement the research activities of the Manager by making available
additional views for consideration and comparisons, and enabling the
Manager to obtain market information for the valuation of securities
held in the Trust's portfolio or being considered for purchase. In the
rare instances where the Trust pays commissions for research, the Board
of Trustees, including the independent Trustees of the Trust, will
review information furnished by the Manager as to the commissions paid
to brokers furnishing such services in an effort to ascertain that the
amount of such commissions was reasonably related to the value or the
benefit of such services. The Trust does not direct the handling of
purchases or sales of portfolio securities, whether on a principal or
agency basis, to brokers for selling shares of the Trust. No portfolio
transactions are handled by brokers which are affiliated with the Trust
or the Manager if that broker is acting as principal. The Board of
Trustees has permitted the Manager to use concessions on fixed price
offerings to obtain research, in the same manner as is permitted for
agency transactions.
SERVICE PLAN
Each Trust has adopted a Service Plan (the "Plan") under Rule 12b-
1 of the Investment Company Act, pursuant to which the Trust will
reimburse the Distributor for a portion of its costs incurred in
connection with the services rendered to the Trust, as described in the
Prospectus. Each Plan has been approved: (i) by a votie of the Board
of Trustees of the Trust, including a majority of the "Independent
Trustees" (those Trustees of the Trust who are not "interested
persons," as defined in the Investment Company Act, and who have no
direct or indirect financial interest in the operation of the Plan or
in any agreements relating to the Plan) cast in person at a meeting
called for the purpose of voting on the Plan; and (ii) by the vote of
the holders of a "majority" (as defined under the Investment Company
Act) of that Trust's outstanding voting securities. In approving each
Plan, the Board determined that it is likely each Plan will benefit the
shareholders of that Trust.
The Distributor has entered into Supplemental Distribution
Assistance Agreements ("Supplemental Agreements") under the Plan with
selected dealers distributing shares of Centennial Government Trust,
Centennial America Fund, L.P., Oppenheimer Cash Reserves, Centennial
New York Tax Exempt Trust and Centennial California Tax Exempt Trust.
Quarterly payments by the Distributor, which are not a Trust expense,
for distribution-related services will range from 0.10% to 0.30%,
annually, of the average net asset value of shares of these funds owned
during the quarter beneficially or of record by the dealer or its
customers. However, no payment shall be made to any dealer for any
quarter during which the average net asset value of shares of such
funds owned during that quarter by the dealer or its customers is less
than $5 million. Payments made pursuant to Supplemental Agreements are
not a fund expense, but are made by the Distributor out of its own
resources or out of the resources of the Manager which may include
profits derived from the advisory fee it receives from each such fund.
No such supplemental payments will be paid to any dealer which is an
"affiliate" (as defined in the Investment Company Act) of the
Distributor.
Each Plan, unless terminated as described below, shall continue in
effect from year to year but only so long as such continuance is
specifically approved at least annually by each Trust's Board of
Trustees, including its Independent Trustees, by a vote cast in person
at a meeting called for that purpose. The Supplemental Agreements are
subject to the same renewal requirement. A Plan and the Supplemental
Agreements may be terminated at any time by the vote of a majority of
the Trust's Independent Trustees or by the vote of the holders of a
"majority" (as defined in the Investment Company Act) of the Trust's
outstanding voting securities. The Supplemental Agreements will
automatically terminate in the event of their "assignment" (as defined
in the Investment Company Act), and each may be terminated by the
Distributor: (i) in the event Government Trust amends its Plan, or (ii)
if the net asset value of shares of the funds covered by the
Supplemental Agreements held by the dealer or its customers is less
than $5 million for two or more consecutive quarters. A dealer may
terminate a Supplemental Agreement at any time upon giving 30 days'
notice. Each Plan may not be amended to increase materially the amount
of payments to be made unless such amendment is approved by the
shareholders of that Trust. All material amendments must be approved
by the Independent Trustees.
Under each Plan, no payment will be made to any Recipient in any
quarter if the aggregate net asset value of all Trust shares held by
the Recipient for itself and its customers did not exceed a minimum
amount, if any, that may be determined from time to time by a majority
of the Trust's Independent Trustees. The Board of Trustees has set the
fee at the maximum rate and set no minimum amount. The Plans permit
the Distributor and the Manager to make additional distribution
payments to Recipients from their own resources (including profits from
advisory fees) at no cost to a Trust. The Distributor and the Manager
may, in their sole discretion, increase or decrease the amount of
distribution assistance payments they make to Recipients from their own
assets.
Each Recipient who is to receive distribution payments for any
month or quarter shall certify in writing that the aggregate payments
to be received from the applicable Trust during that month or quarter
do not exceed the Recipient's administrative and sales related costs in
rendering distribution assistance during the month or quarter, and will
reimburse the Trust for any excess.
For each Trust's fiscal year ended June 30, 1994, payments under
its Plan totalled $4,647,715, $2,104,473 and $1,328,950 for Money
Market Trust, Tax Exempt Trust and Government Trust, respectively, all
of which was paid by the Distributor to A.G. Edwards & Sons, Inc. (and,
with respect to Money Market Trust, $8,887 paid to A.G. Edwards Trust)
as a Recipient under the Plans, with the exception of (i) $92, $9,953
and $22,331 paid by Money Market Trust, Tax Exempt Trust and Government
Trust, respectively, to other Recipients, and (ii) $7,282 paid by Tax
Exempt Trust to an affiliate of the Distributor, as a Recipient.
Payments received by the Distributor under the Plans will not be used
to pay any interest expense, carrying charge, or other financial costs,
or allocation of overhead by the Distributor. Any unreimbursed
expenses incurred for any fiscal quarter by the Distributor may not be
recovered under that Plan in subsequent fiscal quarters.
While the Plan is in effect, the Treasurer of each Trust shall
provide a report to the Board of Trustees in writing at least quarterly
on the amount of all payments made pursuant to the Plan, the identity
of each Recipient that received any such payment, and the purposes for
which the payments were made. The Plan further provides that while it
is in effect, the election and nomination of those Trustees of a Trust
who are not "interested persons" of the Trust is committed to the
discretion of the Independent Trustees. This does not prevent the
involvement of others in such selection and nomination if the final
decision on any such selection or nomination is approved by a majority
of the Independent Trustees.
The Glass-Steagall Act and other applicable laws and regulations,
among other things, generally prohibit Federally-chartered or
supervised banks from engaging in the business of underwriting, selling
or distributing securities as principals. Accordingly, the Distributor
may pay banks only for sales made on an agency basis or for the
performance of administrative and shareholder servicing functions.
While the matter is not free from doubt, the Manager believes that such
laws do not preclude a bank from performing the services required of a
Recipient. However, judicial or administrative decisions or
interpretations of such laws, as well as changes in either Federal or
state statutes or regulations relating to the permissible activities of
banks or their subsidiaries or affiliates, could prevent certain
banks from continuing to perform all or a part of these services. If a
bank were so prohibited, shareholders of a Trust who were clients of
such bank would be permitted to remain as shareholders, and if a bank
could no longer provide those service functions, alternate means for
continuing the servicing of such shareholders would be sought. In such
event, shareholders serviced by such bank might no longer be able to
avail themselves of any automatic investment or other services then
being provided by such bank. It is not expected that shareholders
would suffer any adverse financial consequences as a result of any of
those occurrences. The Board of Trustees will consider appropriate
modifications to each Trust's operations, including discontinuance of
payments under the Plan to such institutions, in the event of any
future change in such laws or regulations which may adversely affect
the ability of such institutions to provide these services. In
addition, certain banks and financial institutions may be required to
register as dealers under state law.
PURCHASE, REDEMPTION AND PRICING OF SHARES
Determination of Net Asset Value Per Share. The net asset value of
each Trust's shares is determined twice each day as of 12:00 noon and
4:00 P.M., New York time, on each day the New York Stock Exchange (the
"Exchange") is open (a "regular business day"), by dividing that
Trust's net assets (the total value of the Trust's portfolio
securities, cash and other assets less all liabilities) by the total
number of shares outstanding. The Exchange's most recent annual
holiday schedule states that it will close New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. The Exchange may also close on
other days. Dealers other than Exchange members may conduct trading in
Municipal Securities on certain days on which the Exchange is closed
(e.g., Good Friday), so that securities of the same type held by Tax
Exempt Trust may be traded, and its net asset value per share may be
affected significantly, on such days when shareholders may not purchase
or redeem shares.
The Trusts will seek to maintain a net asset value of $1.00 per
share for purchases and redemptions. There can be no assurance that
each Trust will do so. Each Trust operates under Rule 2a-7 under which
a Trust may use the amortized cost method of valuing their shares. The
amortized cost method values a security initially at its cost and
thereafter assumes a constant amortization of any premium or accretion
of any discount, regardless of the impact of fluctuating interest rates
on the market value of the security. This method does not take into
account unrealized capital gains or losses.
Each Trust's Board of Trustees has established procedures intended
to stabilize the Trust's net asset value at $1.00 per share. If a
Trust's net asset value per share were to deviate from $1.00 by more
than 0.5%, Rule 2a-7 requires the Board promptly to consider what
action, if any, should be taken. If the Trustees find that the extent
of any such deviation may result in material dilution or other unfair
effects on shareholders, the Board will take whatever steps it
considers appropriate to eliminate or reduce such dilution or unfair
effects, including, without limitation, selling portfolio securities
prior to maturity, shortening the average portfolio maturity,
withholding or reducing dividends, reducing the outstanding number of
Trust shares without monetary consideration, or calculating net asset
value per share by using available market quotations.
As long as the Trusts use Rule 2a-7, each Trust must abide by
certain conditions described in the Prospectus. Some of those
conditions which relate to portfolio management are that each Trust
must: (i) maintain a dollar-weighted average portfolio maturity not in
excess of 90 days; (ii) limit its investments, including repurchase
agreements, to those instruments which are denominated in U.S. dollars
and which are rated in one of the two highest short-term rating
categories by at least two "nationally-recognized statistical rating
organizations" ("Rating Organizations") as defined in Rule 2a-7, or by
one Rating Organization if only one Rating Organization has rated the
security; an instrument that is not rated must be of comparable quality
as determined by the Board; and (iii) not purchase any instruments with
a remaining maturity of more than 397 days. Under Rule 2a-7, the
maturity of an instrument is generally considered to be its stated
maturity (or in the case of an instrument called for redemption, the
date on which the redemption payment must be made), with special
exceptions for certain variable rate demand and floating rate
instruments. Repurchase agreements and securities loan agreements are,
in general, treated as having a maturity equal to the period scheduled
until repurchase or return, or if subject to demand, equal to the
notice period.
While the amortized cost method provides certainty in valuation,
there may be periods during which the value of an instrument, as
determined by amortized cost, is higher or lower than the price the
Trust would receive if it sold the instrument. During periods of
declining interest rates, the daily yield on shares of the Trust may
tend to be lower (and net investment income and daily dividends higher)
than a like computation made by a fund with identical investments
utilizing a method of valuation based upon market prices or estimates
of market prices for its portfolio. Thus, if the use of amortized cost
by the Trusts resulted in a lower aggregate portfolio value on a
particular day, a prospective investor in one of the Trusts would be
able to obtain a somewhat higher yield than would result from
investment in a fund utilizing solely market values, and existing
investors in the Trusts would receive less investment income than if
the Trust were priced at market value. Conversely, during periods of
rising interest rates, the daily yield on Trust shares will tend to be
higher and its aggregate value lower than that of a portfolio priced at
market value. A prospective investor would receive a lower yield than
from an investment in a portfolio priced at market value, while
existing investors in the Trust would receive more investment income
than if the Trust were priced at market value.
Expedited Redemption Procedures. Under the Expedited Redemption
Procedure available to direct shareholders of the Trusts, as discussed
in the Appendix to the Prospectus, the wiring of redemption proceeds
may be delayed if the Trust's Custodian bank is not open for business
on a day that the Trust would normally authorize the wire to be made,
which is usually same day for redemptions prior to 12:00 noon, and the
Trust's next regular business day for redemptions between 12:00 noon
and 4:00 P.M. In those circumstances, the wire will not be transmitted
until the next bank business day on which the Trust is open for
business, and no dividends will be paid on the proceeds of redeemed
shares waiting transfer by wire.
Dividend Reinvestment in Another Fund. Direct shareholders of the
Trusts may elect to reinvest all dividends and/or distributions in
shares of any of the other funds listed in the Prospectus as "Eligible
Funds" at net asset value without sales charge. To elect this option,
a shareholder must notify the Transfer Agent in writing, and either
must have an existing account in the fund selected for reinvestment or
must obtain a prospectus for that fund and an application from the
Transfer Agent to establish an account. The investment will be made at
the net asset value per share in effect at the close of business on the
payable date of the dividend or distribution.
YIELD INFORMATION
Each Trust's current yield is calculated for a seven-day period of
time, in accordance with regulations adopted under the Investment
Company Act. First, a base period return is calculated for the seven-
day period by determining the net change in the value of a hypothetical
pre-existing account having one share at the beginning of the seven-day
period. The change includes dividends declared on the original share
and dividends declared on any shares purchased with dividends on that
share, but such dividends are adjusted to exclude any realized or
unrealized capital gains or losses affecting the dividends declared.
Next, the base period return is multiplied by 365/7 to obtain the
current yield to the nearest hundredth of one percent. The compounded
effective yield for a seven day period is calculated by (a) adding 1 to
the base period return (obtained as described above), (b) raising the
sum to a power equal to 365 divided by 7 and (c) subtracting 1 from the
result. For the seven day period ended June 30, 1994, the "current
yield" for Money Market Trust, Tax Exempt Trust and Government Trust
was 3.68%, 2.07% and 3.59%, respectively. The seven-day compounded
effective yield for that period was 3.75%, 2.09% and 3.65%,
respectively.
The yield as calculated above may vary for accounts less than
approximately $100 in value due to the effect of rounding off each
daily dividend to the nearest full cent. Since the calculation of yield
under either procedure described above does not take into consideration
any realized or unrealized gains or losses on each Trust's portfolio
securities which may affect dividends, the return on dividends declared
during a period may not be the same on an annualized basis as the yield
for that period.
Tax Exempt Trust's "tax equivalent yield" adjusts Tax Exempt
Trust's current yield, as calculated above, by a stated Federal tax
rate. The tax equivalent yield is computed by dividing the tax-exempt
portion of the Trust's current yield by one minus a stated income tax
rate and adding the result to the portion (if any) of the Trust's
current yield that is not tax-exempt. The tax equivalent yield may be
compounded as described above to provide a compounded effective tax
equivalent yield. The tax equivalent yield may be used to compare the
tax effects of income derived from the Trust with income from taxable
investments at the tax rates stated. Exhibit C, which is applicable
only to Tax Exempt Trust, includes a tax equivalent yield table, based
on various effective tax brackets for individual taxpayers. Such tax
brackets are determined by a taxpayer's Federal taxable income (the net
amount subject to Federal income tax after deductions and exemptions).
The tax equivalent yield table assumes that the investor is taxed at
the highest bracket, regardless of whether a switch to non-taxable
investments would cause a lower bracket to apply and that state income
tax payments are fully deductible for income tax purposes. For
taxpayers with income above certain levels, otherwise allowable
itemized deductions are limited. The Tax Exempt Trust's tax equivalent
yield for the seven-day period ended June 30, 1994 was 3.43%. Its tax-
equivalent compounded effective yield for the same period was 3.46% for
an investor in the highest Federal tax bracket.
Yield information may be useful to investors in reviewing each
Trust's performance. A Trust may make comparisons between its yield and
that of other investments, by citing various indices such as The Bank
Rate Monitor National Index (provided by Bank Rate Monitor TM), which
measures the average rate paid on bank money market accounts, NOW
accounts and certificates of deposit by the 100 largest banks and
thrift institutions in the top ten metropolitan areas. However, a
number of factors should be considered before using yield information
as a basis for comparison with other investments. An investment in a
Trust is not insured. Its yield is not guaranteed and normally will
fluctuate on a daily basis. The yield for any given past period is not
an indication or representation by the Trust of future yields or rates
of return on its shares. Each Trust's yield is affected by portfolio
quality, portfolio maturity, type of instruments held and operating
expenses. When comparing a Trust's yield with that of other
investments, investors should understand that certain other investment
alternatives such as certificates of deposit, U.S. Government
Securities, money market instruments or bank accounts may provide fixed
yields or yields that may vary above a stated minimum, and also that
bank accounts may be insured. Certain types of bank accounts may not
pay interest when the balance falls below a specified level and may
limit the number of withdrawals by check per month. In order to
compare the Tax Exempt Trust's dividends to the rate of return on
taxable investments, Federal income taxes on such investments should be
considered.
ADDITIONAL INFORMATION
Description of the Trusts. Each Trust's Declaration of Trust contains
an express disclaimer of shareholder and Trustee liability for the
Trust's obligations, and provides for indemnification and reimbursement
of expenses out of its property for any shareholder held personally
liable for its obligations. Each Declaration of Trust also provides
that the Trust shall, upon request, assume a defense of any claim made
against any shareholder for any act or obligation of the Trust and
satisfy any judgment thereon. Thus, while Massachusetts law permits a
shareholder of a trust (such as the Trust) to be held personally liable
as a "partner" for the Trust's obligations under certain circumstances,
the risk of a Trust shareholder incurring any financial loss on account
of shareholder liability is highly unlikely and is limited to the
relatively remote circumstance in which the Trust would be unable to
meet its obligations described above. Any person doing business with
the Trust, and any shareholder of the Trust, agrees under the Trust's
Declaration of Trust to look solely to the assets of the Trust for
satisfaction of any claim or demand which may arise out of any dealings
with the Trust, and the Trustees shall have no personal liability to
any such person, to the extent permitted by law.
It is not contemplated that regular annual meetings of
shareholders will be held. The Trust will hold meetings when required
to do so by the Investment Company Act or other applicable law, or when
a shareholder meeting is called by the Trustees 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 shareholders of 10% of its outstanding shares. In
addition, if the Trustees receive a request from at least 10
shareholders (who have been shareholders for at least six months)
holding in the aggregate shares of the Trust valued at $25,000 or more
or holding 1% or more of the Trust's outstanding shares, whichever is
less, that they wish to communicate with other shareholders to request
a meeting to remove a Trustee, the Trustees will then either make the
Trust's shareholder list available to the applicants or mail their
communication to all other shareholders at the applicants' expense, or
the Trustees may take such other action as set forth in Section 16(c)
of the Investment Company Act.
Tax Status of the Trust's Dividends and Distributions. The Federal tax
treatment of the Trust's dividends and distributions to shareholders is
explained in the Prospectus under the caption "Dividends, Distributions
and Taxes." Under the Internal Revenue Code, the Trust must
distribute by December 31 each year 98% of its taxable investment
income earned from January 1 through December 31 of that year and 98%
of its capital gains realized from the prior November 1 through
October 31 of that year or else must pay an excise tax on the amounts
not distributed. While it is presently anticipated that the Trust's
distributions will meet those requirements, the Trust's Board and the
Manager might determine in a particular year that it might be in the
best interest of the Trust not to distribute income or capital gains at
the mandated levels and to pay the excise tax on the undistributed
amounts, which would reduce the amount available for distribution to
shareholders.
The Custodian and the Transfer Agent. The Custodian's responsibilities
include safeguarding and controlling the Trusts' portfolio securities
and handling the delivery of portfolio securities to and from the
Trusts. The Manager has represented to the Trusts that its banking
relationships with the Custodian have been and will continue to be
unrelated to and unaffected by the relationships between the Trusts and
the Custodian. It will be the practice of the Trusts to deal with the
Custodian in a manner uninfluenced by any banking relationship the
Custodian may have with the Manager or its affiliates. Shareholder
Services, Inc., the Transfer Agent, is responsible for maintaining each
Trust's shareholder registry and shareholder accounting records, and
for shareholder servicing and administrative functions.
General Distributor's Agreement. Under the General Distributor's
Agreement between each Trust and the Distributor, the Distributor acts
as each Trust's principal underwriter in the continuous public offering
of its shares but is not obligated to sell a specific number of shares.
Expenses normally attributable to sales (other than those paid under
the Distribution Plan), including advertising and the cost of printing
and mailing prospectuses other than those furnished to existing
shareholders, are borne by the Distributor.
Independent Auditors and Financial Statements. The independent
auditors of the Trusts examine the Trusts' financial statements and
perform other related audit services. They also act as auditors for
the Manager and for Oppenheimer Management Corporation, the Manager's
immediate parent, as well as for certain other funds advised by the
Manager and Oppenheimer Management Corporation.
<PAGE>
Exhibit A
DESCRIPTION OF SECURITIES RATINGS
Below is a description of the two highest rating categories for Short
Term Debt and Long Term Debt by the "Nationally-Recognized Statistical
Rating Organizations" which the Manager evaluates in purchasing
securities on behalf of the Trust. The ratings descriptions are based
on information supplied by the ratings organizations to subscribers.
Short Term Debt Ratings.
Moody's Investors Service, Inc. ("Moody's"): The following rating
designations for commercial paper (defined by Moody's as promissory
obligations not having original maturity in excess of nine months), are
judged by Moody's to be investment grade, and indicate the relative
repayment capacity of rated issuers:
Prime-1: Superior capacity for repayment. Capacity will normally
be evidenced by the following characteristics: (a) leveling market
positions in well-established industries; (b) high rates of return
on funds employed; (c) conservative capitalization structures with
moderate reliance on debt and ample asset protection; (d) broad
margins in earning coverage of fixed financial charges and high
internal cash generation; and (e) well established access to a
range of financial markets and assured sources of alternate
liquidity.
Prime-2: Strong capacity for repayment. This will normally be
evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound,
will be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.
Moody's ratings for state and municipal short-term obligations are
designated "Moody's Investment Grade" ("MIG"). Short-term notes which
have demand features may also be designated as "VMIG". These rating
categories are as follows:
MIG1/VMIG1: Best quality. There is present strong protection by
established cash flows, superior liquidity support or demonstrated
broadbased access to the market for refinancing.
MIG2/VMIG2: High quality. Margins of protection are ample
although not so large as in the preceding group.
Standard & Poor's Corporation ("S&P"): The following ratings by S&P
for commercial paper (defined by S&P as debt having an original
maturity of no more than 365 days) assess the likelihood of payment:
A-1: Strong capacity for timely payment. Those issues determined
to possess extremely strong safety characteristics are denoted
with a plus sign (+) designation.
A-2: Satisfactory capacity for timely payment. However, the
relative degree of safety is not as high as for issues designated
"A-1".
S&P's ratings for Municipal Notes due in three years or less are:
SP-1: Very strong or strong capacity to pay principal and
interest. Those issues determined to possess overwhelming safety
characteristics will be given a plus (+) designation.
SP-2: Satisfactory capacity to pay principal and interest.
S&P assigns "dual ratings" to all municipal debt issues that have
a demand or double feature as part of their provisions. The first
rating addresses the likelihood of repayment of principal and interest
as due, and the second rating addresses only the demand feature. With
short-term demand debt, S&P's note rating symbols are used with the
commercial paper symbols (for example, "SP-1+/A-1+").
Fitch Investors Service, Inc. ("Fitch"): Fitch assigns the following
short-term ratings to debt obligations that are payable on demand or
have original maturities of generally up to three years, including
commercial paper, certificates of deposit, medium-term notes, and
municipal and investment notes:
F-1+: Exceptionally strong credit quality; the strongest degree
of assurance for timely payment.
F-1: Very strong credit quality; assurance of timely payment is
only slightly less in degree than issues rated "F-1+".
F-2: Good credit quality; satisfactory degree of assurance for
timely payment, but the margin of safety is not as great as for
issues assigned "F-1+" or "F-1" ratings.
Duff & Phelps, Inc. ("Duff & Phelps"): The following ratings are for
commercial paper (defined by Duff & Phelps as obligations with
maturities, when issued, of under one year), asset-backed commercial
paper, and certificates of deposit (the ratings cover all obligations
of the institution with maturities, when issued, of under one year,
including bankers' acceptance and letters of credit):
Duff 1+: Highest certainty of timely payment. Short-term
liquidity, including internal operating factors and/or access to
alternative sources of funds, is outstanding, and safety is just
below risk-free U.S. Treasury short-term obligations.
Duff 1: Very high certainty of timely payment. Liquidity factors
are excellent and supported by good fundamental protection
factors. Risk factors are minor.
Duff 1-: High certainty of timely payment. Liquidity factors are
strong and supported by good fundamental protection factors. Risk
factors are very small.
Duff 2: Good certainty of timely payment. Liquidity factors and
company fundamentals are sound. Although ongoing funding needs
may enlarge total financing requirements, access to capital
markets is good. Risk factors are small.
IBCA Limited or its affiliate IBCA Inc. ("IBCA"): Short-term ratings,
including commercial paper (with maturities up to 12 months), are as
follows:
A1: Obligations supported by the highest capacity for timely
repayment.
A1: Obligations supported by a very strong capacity for timely
repayment.
A2: Obligations supported by a strong capacity for timely
repayment, although such capacity may be susceptible to adverse
changes in business, economic, or financial conditions.
Thomson BankWatch, Inc. ("TBW"): The following short-term ratings
apply to commercial paper, certificates of deposit, unsecured notes,
and other securities having a maturity of one year or less.
TBW-1: The highest category; indicates the degree of safety
regarding timely repayment of principal and interest is very
strong.
TBW-2: The second highest rating category; while the degree of
safety regarding timely repayment of principal and interest is
strong, the relative degree of safety is not as high as for issues
rated "TBW-1".
Long Term Debt Ratings. These ratings are relevant for securities
purchased by the Trust with a remaining maturity of 397 days or less,
or for rating issuers of short-term obligations.
Moody's: Bonds (including municipal bonds) are rated as follows:
Aaa: Judged to be the best quality. They carry the smallest
degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an
exceptionally stable margin, and principal is secure. While the
various protective elements are likely to change, such changes as
can be visualized are most unlikely to impair the fundamentally
strong positions of such issues.
Aa: Judged to be of high quality by all standards. Together with
the "Aaa" group they comprise what are generally known as high-
grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in "Aaa" securities
or fluctuations of protective elements may be of greater amplitude
or there may be other elements present which make the long-term
risks appear somewhat larger than in "Aaa" securities.
Moody's applies numerical modifiers "1", "2" and "3" in its "Aa" rating
classification. The modifier "1" indicates that the security ranks in
the higher end of its generic rating category; the modifier "2"
indicates a mid-range ranking; and the modifier "3" indicates that the
issue ranks in the lower end of its generic rating category.
Standard & Poor's: Bonds (including municipal bonds) are rated as
follows:
AAA: The highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA: A strong capacity to pay interest and repay principal and
differ from "AAA" rated issues only in small degree.
Fitch:
AAA: Considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA: Considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay
principal is very strong, although not quite as strong as bonds
rated "AAA". Plus (+) and minus (-) signs are used in the "AA"
category to indicate the relative position of a credit within that
category.
Because bonds rated in the "AAA" and "AA" categories are not
significantly vulnerable to foreseeable future developments, short-term
debt of these issuers is generally rated "F-1+".
Duff & Phelps:
AAA: The highest credit quality. The risk factors are negligible,
being only slightly more than for risk-free U.S. Treasury debt.
AA: High credit quality. Protection factors are strong. Risk is
modest but may vary slightly from time to time because of economic
conditions. Plus (+) and minus (-) signs are used in the "AA"
category to indicate the relative position of a credit within that
category.
IBCA: Long-term obligations (with maturities of more than 12 months)
are rated as follows:
AAA: The lowest expectation of investment risk. Capacity for
timely repayment of principal and interest is substantial such
that adverse changes in business, economic, or financial
conditions are unlikely to increase investment risk significantly.
AA: A very low expectation for investment risk. Capacity for
timely repayment of principal and interest is substantial.
Adverse changes in business, economic, or financial conditions may
increase investment risk albeit not very significantly.
A plus (+) or minus (-) sign may be appended to a long term rating
to denote relative status within a rating category.
TBW: TBW issues the following ratings for companies. These ratings
assess the likelihood of receiving payment of principal and interest on
a timely basis and incorporate TBW's opinion as to the vulnerability of
the company to adverse developments, which may impact the market's
perception of the company, thereby affecting the marketability of its
securities.
A: Possesses an exceptionally strong balance sheet and earnings
record, translating into an excellent reputation and unquestioned
access to its natural money markets. If weakness or vulnerability
exists in any aspect of the company's business, it is entirely
mitigated by the strengths of the organization.
A/B: The company is financially very solid with a favorable track
record and no readily apparent weakness. Its overall risk
profile, while low, is not quite as favorable as for companies in
the highest rating category.
Exhibit B
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>
INDEPENDENT AUDITORS' REPORT
Centennial Government Trust
The Board of Trustees and Shareholders of Centennial Government Trust:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Centennial Government Trust as of June 30,
1994, the related statement of operations for the year then ended, the
statements of changes in net assets for the years ended June 30, 1994 and 1993,
and the financial highlights for the period July 1, 1984 to June 30, 1994. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of securities owned
at June 30, 1994 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Centennial
Government Trust at June 30, 1994, the results of its operations, the changes in
its net assets, and the financial highlights for the respective stated periods,
in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE
/s/ DELOITTE & TOUCHE
- ---------------------
Denver, Colorado
July 22, 1994
<PAGE>
STATEMENT OF INVESTMENTS June 30, 1994
Centennial Government Trust
<TABLE>
<CAPTION>
Face Market
Value
REPURCHASE AGREEMENTS -- 19.4%
Amount See Note 1
------------- ------------
<S> <C>
<C>
Repurchase agreement with Morgan Guaranty Trust Co., 4.30%, dated 6/30/94, to be repurchased
at $105,212,566 on 7/1/94, collateralized by Federal National Mortgage Assn. Participation
Certificates, 6.50%, 12/1/23-4/1/24, with a value of $39,067,805 and Government National
Mortgage Assn., 6.50%-7%, 9/15/23-6/15/24, with a value of $69,683,743.................... $
105,200,000
$105,200,000
Repurchase agreement with First Chicago Capital Markets, 4.22%, dated 6/30/94, to be
repurchased at $14,001,641 on 7/1/94, collateralized by U.S. Treasury Notes., 5.125%,
11/30/98, with a value of $14,291,213..................................................... 14,000,000
14,000,000
------------
Total Repurchase Agreements (Cost $119,200,000).............................................
119,200,000
------------
U.S. GOVERNMENT OBLIGATIONS -- 80.1%
Federal Farm Credit Bank, 4.34%-4.67%, 7/18/94-11/28/94.....................................
38,000,000 37,906,055
Federal Home Loan Bank:
3.44%-4.58%, 7/5/94-11/18/94.............................................................. 72,500,000
71,961,222
3.322%-4.65%, 7/7/94-8/18/94(1)........................................................... 46,000,000
45,974,124
Federal Home Loan Mortgage Corp.:
4.37%, 8/19/94............................................................................ 14,500,000
14,413,753
4.50%, 9/3/94(1).......................................................................... 50,000,000
49,902,089
Federal National Mortgage Assn., 3.60%-4.64%, 7/7/94-11/18/94...............................
107,040,000 106,297,666
Small Business Administration, 4.25%-8.875%, 7/1/94(1)......................................
75,085,960 79,181,895
Student Loan Marketing Assn.:
4.61%-4.70%, 7/1/94-7/5/94(1)............................................................. 65,500,000
65,411,114
5.48%, 6/30/95............................................................................ 20,000,000
20,003,125
------------
Total U.S. Government Obligations (Cost $491,051,043).......................................
491,051,043
------------
</TABLE>
<TABLE>
<S> <C> <C>
Total Investments, at Value (Cost $610,251,043)................................................. 99.5%
610,251,043
Other Assets Net of Liabilities................................................................. .5
3,191,459
----- --------------
Net Assets...................................................................................... 100.0% $
613,442,502
----- --------------
----- --------------
</TABLE>
- ------------
1. Variable rate security. The interest rate, which is based on specific, or an
index of, market interest rates, is subject to change periodically and is the
effective rate on June 30, 1994.
See accompanying Notes to Financial Statements.
3
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES June 30, 1994
Centennial Government Trust
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments, at value (cost $610,251,043) -- see accompanying
statement.................................... $610,251,043
Cash.......................................................................................................
1,047,353
Receivables:
Shares of beneficial interest sold.......................................................................
6,107,522
Interest and principal paydowns..........................................................................
3,449,444
Other......................................................................................................
108,468
------------
Total assets..........................................................................................
620,963,830
------------
LIABILITIES:
Payables and other liabilities:
Shares of beneficial interest redeemed...................................................................
6,502,429
Dividends................................................................................................
877,960
Service plan fees -- Note 3..............................................................................
48,537
Other.................................................................................................... 92,402
------------
Total liabilities.....................................................................................
7,521,328
------------
NET ASSETS.................................................................................................
$613,442,502
------------
------------
COMPOSITION OF NET ASSETS:
Paid-in capital............................................................................................
$613,281,725
Accumulated net realized gain from investment transactions.................................................
160,777
------------
NET ASSETS -- Applicable to 613,281,725 shares of beneficial interest
outstanding.......................... $613,442,502
------------
------------
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER
SHARE.............................................
$1.00
</TABLE>
See accompanying Notes to Financial Statements.
4
<PAGE>
STATEMENT OF OPERATIONS For the Year Ended June 30, 1994
Centennial Government Trust
<TABLE>
<S> <C>
INVESTMENT INCOME -- Interest...............................................................................
$23,830,047
-----------
EXPENSES:
Management fees -- Note 3...................................................................................
3,182,956
Service plan fees -- Note 3.................................................................................
1,328,950
Transfer and shareholder servicing agent fees -- Note 3.....................................................
417,466
Custodian fees and expenses.................................................................................
82,795
Registration and filing fees................................................................................
79,295
Shareholder reports.........................................................................................
61,247
Legal and auditing fees.....................................................................................
23,841
Trustees' fees and expenses.................................................................................
10,387
Other....................................................................................................... 69,752
-----------
Total expenses.........................................................................................
5,256,689
-----------
NET INVESTMENT INCOME.......................................................................................
18,573,358
-----------
NET REALIZED GAIN ON
INVESTMENTS............................................................................ 166,504
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS........................................................
$18,739,862
-----------
-----------
</TABLE>
See accompanying Notes to Financial Statements.
5
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Centennial Government Trust
<TABLE>
<CAPTION>
Year Ended June 30,
----------------------------
1994 1993
------------ ------------
<S> <C>
<C>
OPERATIONS:
Net investment income...................................................................... $ 18,573,358 $
17,796,282
Net realized gain on investments........................................................... 166,504
89,483
------------ ------------
Net increase in net assets resulting from operations.................................. 18,739,862
17,885,765
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS................................................
(18,663,114)
(17,796,282)
BENEFICIAL INTEREST TRANSACTIONS:
Net increase (decrease) in net assets resulting from beneficial interest
transactions -- Note 2................................................................... (23,735,954)
62,295,251
------------ ------------
NET ASSETS:
Total increase (decrease).................................................................. (23,659,206)
62,384,734
Beginning of year.......................................................................... 637,101,708
574,716,974
------------ ------------
End of year................................................................................ $613,442,502
$637,101,708
------------ ------------
------------ ------------
</TABLE>
See accompanying Notes to Financial Statements.
6
<PAGE>
FINANCIAL HIGHLIGHTS
Centennial Government Trust
<TABLE>
<CAPTION>
Year Ended June 30,
- ------------------------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987
1986 1985
--------- --------- --------- --------- --------- --------- --------- --------- ---------
- ---------
<S> <C> <C> <C> <C> <C> <C>
<C> <C>
<C> <C>
PER SHARE OPERATING
DATA:
Net asset value,
beginning of year.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00 $ 1.00 $
1.00
Income from investment
operations -- net
investment income and
net realized gain on
investments.......... .03 .04 .04 .07 .08 .08 .06 .05
.07 .08
Dividends and
distributions to
shareholders......... (.03) (.04) (.04) (.07) (.08) (.08) (.06) (.05)
(.07) (.08)
--------- --------- --------- --------- --------- --------- --------- --------- ---------
- ---------
Net asset value, end of
year................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- --------- --------- --------- --------- ---------
- ---------
--------- --------- --------- --------- --------- --------- --------- --------- ---------
- ---------
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of year
(in thousands)....... $ 613,443 $ 637,102 $ 574,717 $ 533,154 $ 219,003 $ 151,898 $ 90,035
$ 67,042 $ 78,550
$ 53,690
Average net assets (in
thousands)........... $ 665,494 $ 633,017 $ 581,563 $ 418,268 $ 200,570 $ 121,909 $ 82,815
$ 74,084 $ 68,515
$ 65,241
Number of shares
outstanding at end of
year (in
thousands)........... 613,282 637,018 574,722 533,125 218,986 151,901 90,036
67,042 78,550
53,690
Ratios to average net
assets:
Net investment
income............. 2.79% 2.81% 4.38% 6.44% 7.75% 8.11% 5.94%
5.17% 6.59%
8.53%
Expenses............. .79% .79% .78% .79% .84% .85% .90%
.96% .93%
.86%
</TABLE>
See accompanying Notes to Financial Statements.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Centennial Government Trust
1. SIGNIFICANT ACCOUNTING POLICIES
Centennial Government Trust (the Trust) is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. The Trust's investment advisor is Centennial Asset
Management Corporation (the Manager), a subsidiary of Oppenheimer Management
Corporation (OMC). The following is a summary of significant accounting policies
consistently followed by the Trust.
Investment Valuation -- Portfolio securities are valued on the basis of
amortized cost, which approximates market value.
Repurchase Agreements -- The Trust requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. If the seller of the agreement defaults and the value of
the collateral declines, or if the seller enters an insolvency proceeding,
realization of the value of the collateral by the Trust may be delayed or
limited.
Federal Income Taxes -- The Trust intends to continue to comply with provisions
of the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders. Therefore, no federal
income tax provision is required.
Distributions to Shareholders -- The Trust intends to declare dividends from net
investment income each day the New York Stock Exchange is open for business and
pay such dividends monthly. To effect its policy of maintaining a net asset
value of $1.00 per share, the Trust may withhold dividends or make distributions
of net realized gains.
Other -- Investment transactions are accounted for on the date the investments
are purchased or sold (trade date). Realized gains and losses on investments are
determined on an identified cost basis, which is the same basis used for federal
income tax purposes.
2. SHARES OF BENEFICIAL INTEREST
The Trust has authorized an unlimited number of no par value shares of
beneficial interest. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
Year Ended June 30,
-------------------------------------------------------------------
1994 1993
-------------------------------- --------------------------------
Shares Amount Shares Amount
-------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Sold.............................. 2,133,375,320 $ 2,133,375,320 1,995,315,893 $ 1,995,315,893
Dividends and distributions
reinvested...................... 18,030,062 18,030,062 17,570,813 17,570,813
Redeemed.......................... (2,175,141,336) (2,175,141,336) (1,950,591,455)
(1,950,591,455)
-------------- --------------- -------------- ---------------
Net increase (decrease)......... (23,735,954) $ (23,735,954) 62,295,251 $ 62,295,251
-------------- --------------- -------------- ---------------
-------------- --------------- -------------- ---------------
</TABLE>
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
Centennial Government Trust
3. MANAGEMENT FEES AND OTHER
TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Trust which provides for an annual fee of .50% on
the first $250 million of net assets with a reduction of .025% on each $250
million thereafter, to .40% on net assets in excess of $1 billion. The Manager
has agreed to reimburse the Trust if aggregate expenses (with specified
exceptions) exceed the lesser of 1.50% of the first $30 million of average
annual net assets of the Trust, plus 1% of average annual net assets in excess
of $30 million; or 25% of the total annual investment income of the Trust.
Shareholder Services, Inc. (SSI), a subsidiary of OMC, is the transfer and
shareholder servicing agent for the Trust, and for other registered investment
companies. SSI's total costs of providing such services are allocated ratably to
these companies.
Under an approved service plan, the Trust may expend up to .20% of its net
assets annually to reimburse certain securities dealers and other financial
institutions and organizations for costs incurred in distributing Trust shares.
During the year ended June 30, 1994, the Trust paid $22,331 to a broker/dealer
affiliated with the Manager as reimbursement for distribution-related expenses.
Investment Adviser and Distributor
Centennial Asset Management Corporation
3410 South Galena Street
Denver, Colorado 80231
Transfer Agent
Shareholder Services, Inc.
P.O. Box 5143
Denver, Colorado 80217
1-800-525-9310
Custodian
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Independent Auditors
Deloitte & Touche LLP
1560 Broadway
Denver, Colorado 80202
Legal Counsel
Myer, Swanson & Adams, P.C.
1600 Broadway - Suite 1850
Denver, Colorado 80202
<PAGE>
CENTENNIAL GOVERNMENT TRUST
FORM N-1A
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements
--------------------
(1) Condensed Financial Information (See Part A): Filed
herewith.
(2) Independent Auditors' Report (See Part B): Filed
herewith.
(3) Statement of Investments, June 30, 1994 (See Part
B): Filed herewith.
(4) Statement of Assets and Liabilities, June 30, 1994
(See Part B): Filed herewith.
(5) Statement of Operations for the year ended June 30,
1994 (See Part B): Filed herewith.
(6) Statements of Changes in Net Assets for the years
ended June 30, 1993 and 1994 (See Part B): Filed herewith.
(7) Notes to Financial Statements (See Part B): Filed
herewith.
(8) Independent Auditors' Consent: Filed herewith.
(b) Exhibits
--------
(1) Restated Declaration of Trust dated September 27,
1985: Filed with Registrant's Post-Effective Amendment No. 9, 9/27/85,
and refiled herewith pursuant to Item 102 of Regulation S-T.
(2) By-Laws, as amended through June 26, 1990: Filed
with Registrant's Post-Effective Amendment No. 19, 10/31/91, and
refiled herewith pursuant to Item 102 of Regulation S-T.
(3) Not applicable.
(4) Specimen Share Certificate: Filed with
Registrant's Post-Effective Amendment No. 9, 9/23/85, and refiled
herewith pursuant to Item 102 of Regulation S-T.
(5) Investment Advisory Agreement dated October 22,
1990: Filed with Registrant's Post-Effective Amendment No. 18,
10/31/90, and refiled herewith pursuant to Item 102 of Regulation S-
T.
(6) (i) General Distributor's Agreement dated October
13, 1992 between Registrant and Centennial Asset Management
Corporation: Filed with Registrant's Post-Effective Amendment No. 21,
10/29/93, and incorporated herein by reference.
(ii) Form of Centennial Asset Management
Corporation Dealer Agreement: Filed with Registrant's Post-Effective
Amendment No. 6, 10/26/84, and refiled herewith pursuant to Item 102 of
Regulation S-T.
(iii) Sub-Distributor's Agreement dated May 28,
1993 between Centennial Asset Management Corporation and Oppenheimer
Funds Distributor, Inc.: Filed with Registrant's Post-Effective
Amendment No. 21, 10/29/93, and incorporated herein by reference.
(7) Not applicable.
(8) (i) Custodian Agreement dated 5/7/82: Filed with
Registrant's Post-Effective Amendment No. 11, 10/31/86 and refiled
herewith pursuant to Item 102 of Regulation S-T.
(ii) Amendment dated September 27, 1985, to
Custodian Agreement: Filed with Registrant's Post-Effective Amendment
No. 9, 9/23/85, and refiled herewith pursuant to Item 102 of Regulation
S-T.
(9) Not applicable.
(10) Opinion and Consent of Counsel dated 4/7/82: Filed
with Registrant's Pre-Effective Amendment No. 1, 4/13/82, and refiled
herewith pursuant to Item 102 of Regulation S-T.
(11) Not applicable.
(12) Not applicable.
(13) Not applicable.
(14) (i) Form of Individual Retirement Account Plan
(IRA) Agreement: Previously filed with Post-Effective Amendment No. 21
of Oppenheimer U.S. Government Trust (File No. 2-76645), 8/25/93, and
incorporated herein by reference.
(ii) Form of prototype Standardized and Non-
Standardized Profit-Sharing Plan for self-employed persons and
corporations: Filed with Post-Effective Amendment No. 3 of Oppenheimer
Global Growth & Income Fund (File No. 33-33799), 1/31/92, and
incorporated herein by reference.
(iii) Form of Tax Sheltered Retirement Plan and
Custody Agreement for employees of public schools and tax-exempt
Organizations: Filed with Post-Effective Amendment No. 47 of
Oppenheimer Growth Fund (Reg. No. 2-45272), 10/21/94 and incorporated
herein by reference.
(iv) Form of Simplified Employee Pension IRA:
Previously filed with Post-Effective Amendment No. 36 of Oppenheimer
Equity Income Fund (File No. 2-33043), 10/23/91, and incorporated
herein by reference.
(v) Form of SAR-SEP Simplified Employee Pension
IRA: Previously filed with Post-Effective Amendment No. 19 to the
Registration Statement for Oppenheimer Integrity Funds (File No. 2-
76547), 3/1/94, and incorporated herein by reference.
(15) Service Plan and Agreement under Rule 12b-1 dated
August 24, 1993 between Registrant and Centennial Asset Management
Corporation: Filed with Registrant's Post-Effective Amendment No. 21,
10/29/93, and incorporated herein by reference.
(16) Performance Data Computation Schedule: Filed
herewith.
(17) Financial Data Schedule: Filed herewith.
-- Powers of Attorney: Filed with Registrant's Post
Effective Amendment No. 21, 10/29/93, and incorporated herein by
reference.
Item 26. Number of Holders of Securities
-------------------------------
Number of Record
Holders as of
Title of Class September 30, 1994
-------------- ----------------
Shares of Beneficial Interest 35,351
Item 27. Indemnification
---------------
Reference is made to Section 12 of Article SEVENTH of
Registrant's Restated Declaration of Trust, dated September 27, 1985,
filed as Exhibit 24(b)(1) to this registration statement.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of Registrant pursuant to the foregoing provisions
or otherwise, Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
Registrant of expenses incurred or paid by a trustee, officer or
controlling person of Registrant in the successful defense of any
action, suit or proceeding) is asserted by such trustee, officer or
controlling person, Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication
of such issue.
Item 28. (a) Business and Other Connections of Investment Adviser
----------------------------------------------------
Centennial Asset Management Corporation is the
investment adviser of Registrant; it and certain subsidiaries and
affiliates act in the same capacity for other registered investment
companies as described in Parts A and B.
(b) Business and Other Connections of Officers and
Directors of Centennial Capital Corporation
----------------------------------------------
For information as to the business, profession, vocation
or employment of a substantial nature of each of the officers and
directors of Centennial Asset Management Corporation, reference is made
to Form ADV of Centennial Asset Management Corporation, as filed under
the Investment Advisers Act of 1940, which is incorporated herein by
reference.
Item 29. Principal Underwriter
---------------------
(a) Centennial Asset Management Corporation is the principal
underwriter. It is also the principal underwriter of each of the other
registered investment companies of which it is the investment adviser,
as described in Parts A and B.
(b) The information contained in the registration on Form BD
of Centennial Asset Management Corporation, filed under the Securities
Exchange Act of 1934 is incorporated herein by reference.
(c) Not applicable.
Item 30. Location of Accounts and Records
--------------------------------
The accounts, books and other documents required to be
maintained by Registrant pursuant to Section 31(a) of the Investment
Company Act of 1940 and rules promulgated thereunder are in the
possession of Centennial Asset Management Corporation, 3410 South
Galena Street, Denver, Colorado 80231.
Item 31. Management Services
-------------------
Not applicable.
Item 32. Undertakings
------------
(a) Not applicable.
(b) Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant certifies that it meets
all of the requirements for effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and
has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Denver
and State of Colorado on the 28th day of October, 1994.
CENTENNIAL GOVERNMENT TRUST
By: /s/ James C. Swain*
-----------------------------
James C. Swain, Chairman
Attest:
/s/ George C. Bowen*
- --------------------------
George C. Bowen, Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities on the dates indicated:
Signatures Title Date
- ---------- ----- ----
/s/ James C. Swain* Chairman, Trustee October 28, 1994
- ------------------ and Principal
James C. Swain Executive Officer
/s/ Jon S. Fossel* President and October 28, 1994
- ----------------- Trustee
Jon S. Fossel
/s/ George C. Bowen* Treasurer and October 28, 1994
- ------------------- Principal Financial
George C. Bowen and Accounting
Officer
/s/ Robert G. Avis* Trustee October 28, 1994
- ------------------
Robert G. Avis
/s/ William A. Baker* Trustee October 28, 1994
- --------------------
William A. Baker
/s/ Charles Conrad, Jr.* Trustee October 28, 1994
- -----------------------
Charles Conrad, Jr.
/s/ Raymond J. Kalinowski* Trustee October 28, 1994
- -------------------------
Raymond J. Kalinowski
/s/ C. Howard Kast* Trustee October 28, 1994
- ------------------
C. Howard Kast
/s/ Robert M. Kirchner* Trustee October 28, 1994
- ----------------------
Robert M. Kirchner
/s/ Ned M. Steel* Trustee October 28, 1994
- ----------------
Ned M. Steel
*By: /s/ Robert G. Zack
- --------------------------------
Robert G. Zack, Attorney-in-Fact
<PAGE>
CENTENNIAL GOVERNMENT TRUST
EXHIBIT INDEX
Form N-1A
Item No. Description
24 (a) (8) Independent Auditor's Consent
24 (b) (1) Restated Declaration of Trust dated 9/27/85
24 (b) (2) By-Laws (as amended through 6/26/90)
24 (b) (4) Specimen Share Certificate
24 (b) (5) Investment Advisory Agreement dated 10/22/90
24 (b) (6) (ii) Form of Dealer Agreement
24 (b) (8) (i) Custodian Agreement dated 5/7/82
24 (b) (8) (ii) Amendment dated 9/27/85 to Custodian Agreement
24 (b) (10) Opinion and Consent of Counsel dated 4/7/82
24 (b) (16) Performance Data Computation Schedule
24 (b) (17) Financial Data Schedule
INDEPENDENT AUDITORS' CONSENT
Centennial Government Trust:
We consent to the use in this Post-Effective Amendment No. 23 to
Registration Statement No. 2-75812 of our report dated July 22, 1994 on
the financial statements of Centennial Government Trust appearing in the
Statement of Additional Information, which is a part of such Registration
Statement, and to the reference to us under the caption "Financial
Highlights" appearing in the Prospectus, which is also a part of such
Registration Statement.
/s/ Deloitte & Touche LLP
_ _ _ _ _ _ _ _ _ _ _ _ _
DELOITTE & TOUCHE LLP
Denver, Colorado
October 28, 1994
RESTATED DECLARATION OF TRUST
OF
CENTENNIAL GOVERNMENT TRUST
RESTATED DECLARATION OF TRUST, made September 27, 1985 by and among
the individuals executing this Declaration of Trust as the initial
Trustees.
WHEREAS, a majority of the Trustees established Daily Cash Government
Fund, a business trust under the laws of the Commonwealth of
Massachusetts, for the investment and reinvestment of funds contributed
thereto, under a Declaration of Trust dated January 18, 1982;
WHEREAS, the Trustees desire to make permitted changes to said
Declaration of Trust, one of which is to change the name of the Trust to
Centennial Government Trust;
WHEREAS, such changes have been approved by the shareholders of Daily
Cash Government Fund at a shareholders meeting held September 27, 1985;
NOW THEREFORE, the Trustees declare that all money and property
contributed to the business trust known as Daily Cash Government Fund
established January 18, 1982 shall henceforth be held and managed under
this Restated Declaration of Trust IN TRUST as herein set forth below.
FIRST: The Trust shall be known as CENTENNIAL GOVERNMENT TRUST.
SECOND: Whenever used herein, unless otherwise required by the
context or specifically provided:
1. All terms used in this Declaration of Trust that are defined in
the 1940 Act shall have the meanings given to them in the 1940 Act.
2. The "Trust" refers to Centennial Government Trust.
3. "Shareholder" means a record owner of Shares of the Trust.
4. The "Trustees" refers to the individual trustees in their
capacity as trustees hereunder of the Trust and their successor or
successors for the time being in office as such trustees.
5. "Shares" means the equal proportionate units of interest into
which the beneficial interest in the Trust shall be divided from time to
time and includes fractions of Shares as well as whole Shares.
6. The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time.
7. "Commission" means the Securities and Exchange Commission.
8. "Board" means the Board of Trustees of the Trust.
THIRD: The purpose or purposes for which the Trust is formed and the
business or objects to be transacted, carried on and promoted by it are
as follows:
1. To hold, invest or reinvest its funds, and in connection
therewith to hold part or all of its funds in cash, and to purchase or
otherwise acquire, hold for investment or otherwise, sell, sell short,
assign, negotiate, transfer, exchange or otherwise dispose of or turn to
account or realize upon, securities (which term "securities" shall for the
purposes of this Declaration of Trust, without limitation of the
generality thereof, be deemed to include any stocks, shares, bonds,
debentures, notes, mortgages or other obligations, and any certificates,
receipts, warrants or other instruments representing rights to receive,
purchase or subscribe for the same, or evidencing or representing any
other rights or interests therein, or in any property or assets) created
or issued by any issuer (which term "issuer" shall for the purposes of
this Declaration of Trust, without limitation of the generality thereof
be deemed to include any persons, firms, associations, corporations,
syndicates, combinations, organizations, governments, or subdivisions
thereof) and to exercise, as owner or holder of any securities, all
rights, powers and privileges in respect thereof; and to do any and all
acts and things for the preservation, protection, improvement and
enhancement in value of any or all such securities or financial
instruments.
2. To borrow money and pledge assets in connection with any of the
objects or purposes of the Trust, and to issue notes or other obligations
evidencing such borrowings, to the extent permitted by the 1940 Act and
by the Trust's fundamental investment policies under the 1940 Act.
3. To issue and sell its Shares in such amounts and on such terms and
conditions, for such purposes and for such amount or kind of consideration
(including without limitation thereto, securities) now or hereafter
permitted by the laws of the Commonwealth of Massachusetts and by this
Declaration of Trust, as the Trustees may determine.
4. To purchase or otherwise acquire, hold, dispose of, resell,
transfer, reissue or cancel (all without the vote or consent of the
Shareholders of the Trust) its Shares, in any manner and to the extent now
or hereafter permitted by this Declaration of Trust.
5. To conduct its business in all its branches at one or more
offices in Massachusetts and elsewhere in any part of the world, without
restriction or limit as to extent.
6. To carry out all or any of the foregoing objects and purposes as
principal or agent, and alone or with associates or, to the extent now or
hereafter permitted by the laws of Massachusetts, as a member of, or as
the owner or holder of any stock of, or share of interest in, any issuer,
and in connection therewith to make or enter into such deeds or contracts
with any issuers and to do such acts and things and to exercise such
powers, as a natural person could lawfully make, enter into, do or
exercise.
7. To do any and all such further acts and things and to exercise
any and all such further powers as may be necessary, incidental, relative,
conducive, appropriate or desirable for the accomplishment, carrying out
or attainment of all or any of the foregoing purposes or objects.
The foregoing objects and purposes shall, except as otherwise
expressly provided, be in no way limited or restricted by reference to,
or inference from, the terms of any other clause of this or any other
Article of this Declaration of Trust, and shall each be regarded as
independent and construed as powers as well as objects and purposes, and
the enumeration of specific purposes, objects and powers shall not be
construed to limit or restrict in any manner the meaning of general terms
or the general powers of the Trust now or hereafter conferred by the laws
of the Commonwealth of Massachusetts nor shall the expression of one thing
be deemed to exclude another, though it be of like nature, not expressed;
provided, however, that the Trust shall not carry on any business, or
exercise any powers, in any state, territory, district or country except
to the extent that the same may lawfully be carried on or exercised under
the laws thereof.
FOURTH: The beneficial interest in the Trust shall at all times be
divided into an unlimited number of transferrable Shares, without par
value, each of which shall represent an equal proportionate interest in
the Trust with each other Share outstanding, none having priority or
preference over another. The Trustees may from time to time divide or
combine the Shares into a greater or lesser number without thereby
changing the proportionate beneficial interests in the Trust.
Contributions to the Trust may be accepted for, and Shares shall be
redeemed as, whole Shares and/or 1/1,000ths of a Share or multiples
thereof. The Board of Trustees of the Trust may classify unissued shares
into one or more additional classes which shall, together with the issued
shares of stock of the Trust have such designations as the Board shall
determine, and which shall be treated for all purposes other than as to
dividends as if all shares were shares of one class. The dividend payable
to the holders of each such class shall, subject to any applicable rule,
regulation or order of the Securities and Exchange Commission or other
applicable law or regulation, be determined by the Board and need not be
individually declared but may be declared and paid in accordance with a
formula adopted by the Board. The Board of Trustees may in the
alternative classify unissued shares into one or more additional classes
which shall, together with the issued shares of stock of the Trust, have
such designations as the Board may determine and shall, subject to any
applicable rule, regulation or order of the Securities and Exchange
Commission or other applicable law or regulation, have the following
characteristics.
(a) All consideration received by the Trust for the issue or sale
of shares of stock of each such class, together with all income, earnings,
profits and proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation thereof, and any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be,
shall irrevocably belong to the class of shares of stock with respect to
which such assets, payments, or funds were received by the Trust for all
purposes, subject only to the rights of creditors, and shall be so handled
upon the books of account of the Trust. Such assets, income, earnings,
profits and proceeds thereof, including any proceeds derived from the
sale, exchange, or liquidation thereof, any asset derived from any
reinvestment of such proceeds, in whatever form the same may be, are
herein referred to as "assets belonging to" such class.
(b) Dividends or distributions on shares of any such class of stock,
whether payable in stock or cash, shall be paid only out of earnings,
surplus or other assets belonging to such class.
(c) In the event of the liquidation or dissolution of the Trust
shareholders of each such class shall be entitled to receive, as a class,
out of the assets of the Trust available for distribution to shareholders,
but other than general assets not belonging to any particular class of
stock, the assets belonging to such class; and the assets so distributable
to the shareholders of any such class shall be distributed among such
shareholders in proportion to the number of shares of such class held by
them and recorded on the books of the Trust. In the event that there are
any general assets not belonging to any particular class of stock and
available for distribution, such distribution shall be made to the holders
of stock of all classes in proportion to the asset value of the respective
classes.
(d) The assets belonging to any such class of stock shall be charged
with the liabilities in respect to such class and shall also be charged
with its share of the general liabilities of the Trust, in proportion to
the asset value of the respective classes. The determination of the Board
of Trustees shall be conclusive as to the amount of liabilities, including
accrued expenses and reserves, and as to the allocation of the same as to
a given class, and as to whether the same, or general assets of the Trust,
are allocable to one or more classes. The liabilities so allocated to a
class are herein referred to as "liabilities belonging to" such class.
(e) At all meetings of stockholders, each stockholder of each share
of stock of each class of the Trust shall be entitled to one vote for each
share of stock irrespective of the class standing in his name on the books
of the Trust, except that where a vote of the holders of the shares of
stock of any class, or of more than one class, voting by class, is
required by the Investment Company Act of 1940 and/or Massachusetts law
as to any proposal, only the holders of such class or classes, voting by
class, shall be entitled to vote upon such proposal and the holders of any
other class or classes shall not be entitled to vote thereon. Any
fractional share, if any such fractional shares are outstanding, shall
carry proportionately all the rights of a whole share, including the right
to vote and the right to receive dividends; there shall be no cumulative
voting rights with respect to any shares or class of shares of the Trust.
(f) The provision of Article FIFTH relating to voting shall apply
when the Trust has only one class of shares outstanding or when the Trust
has more than one class of shares outstanding but which differ only as to
their dividend rights.
(g) When the Trust has more than one class of shares outstanding
having separate assets and liabilities: (i) the redemption rights provided
to the holders of the Trust's shares shall be deemed to apply only to the
assets belonging to the class of stock in question; and (ii) the net asset
value per share as provided for in Article SEVENTH shall be applied as if
each class of shares were the Trust as referred to in such computation,
but with its assets limited to the assets belonging to such class and its
liabilities belonging to such class.
(h) The ownership of Shares shall be recorded in the books of the
Trust or a transfer agent. The Trustees may make such rules as they
consider appropriate for the transfer of shares and similar matters. The
record books of the Trust or any transfer agent, as the case may be, shall
be conclusive as to who are the holders of Shares and as to the number of
Shares held from time to time by each.
(i) The Trustees shall accept investments in the Trust from such
persons and on such terms as they may from time to time authorize. After
the date of the initial contribution of capital (which shall occur prior
to the initial public offering of Shares of the Trust), the number of
Shares to represent the initial contribution shall be considered as
outstanding and the amount received by the Trustees on account of the
contribution shall be treated as an asset of the Trust. Subsequent to
such initial contribution of capital, Shares (including Shares which may
have been redeemed or repurchased by the Trust) may be issued or sold at
a price which will net the Trust, before paying any taxes in connection
with such issue or sale, not less than the net asset value (as defined in
Article SEVENTH, Section 13) thereof; provided, however, that the Trustees
may in their discretion impose a sales charge upon investments in the
Trust.
(j) Shareholders shall know no pre-emptive or other right to
subscribe to any additional shares or other securities issued by the Trust
or the Trustees.
FIFTH: The following provisions are hereby adopted with respect to
voting Shares of the Trust and certain other rights:
1. The Shareholders shall have the power to vote (i) for the
election of Trustees when that issue is submitted to them, (ii) with
respect to the amendment of this Declaration of Trust, (iii) to the same
extent as the shareholders of a Massachusetts business corporation, as to
whether or not a court action, proceeding or claim should be brought or
maintained derivatively or as a class action on behalf of the Trust or the
Shareholders, and (iv) with respect to those matters relating to the Trust
as may be required by the 1940 Act or required by law, by this Declaration
of Trust, or the By-Laws of the Trust or any registration statement of the
Trust filed with the Commission or any State, or as the Trustees may
consider desirable.
2. At all meetings of Shareholders, each Shareholder shall be
entitled to one vote for each Share standing in his name on the books of
the Trust on the date, fixed in accordance with the By-Laws, for
determination of Shareholders entitled to vote at such meeting except for
Shares redeemed prior to the meeting. Any fractional Share shall carry
proportionately all the rights of a whole share, including the right to
vote and the right to receive dividends. The presence in person or by
proxy of the holders of one-third of the Shares outstanding and entitled
to vote thereat shall constitute a quorum at any meeting of the
Shareholders. If at any meeting of the Shareholders there shall be less
than a quorum present, the Shareholders present at such meeting may,
without further notice, adjourn the same from time to time until a quorum
shall attend, but no business shall be transacted at any such adjourned
meeting except such as might have been lawfully transacted had the meeting
not been adjourned.
3. Each Shareholder, upon request to the Trust in proper form
determined by the Trust, shall be entitled to require the Trust to redeem
all or any part of the Shares standing in the name of such Shareholder.
The method of computing such net asset value, the time at which such net
asset value shall be computed and the time within which the Trust shall
make payment therefor, shall be determined as hereinafter provided in
Article SEVENTH of this Declaration of Trust. Notwithstanding the
foregoing, the Trustees may suspend the right of the Shareholders to
require the Trust to redeem Shares when permitted or required to do so by
the 1940 Act.
4. No Shareholder shall, as such holder, have any right to purchase
or subscribe for any security of the Trust which it may issue or sell,
other than such right, if any, as the Trustees, in their discretion, may
determine.
5. All persons who shall acquire Shares shall acquire the same
subject to the provisions of the Declaration of Trust.
SIXTH: (A) Each Trustee shall hold office until the annual meeting
of Shareholders next succeeding his election or until his successor is
duly elected and qualifies. The initial number of Trustees shall be ten
and the persons who shall act as such until the first annual meeting or
until their successors are duly chosen and qualify are the initial
trustees executing this Declaration of Trust or any counterpart thereof.
The Trust shall not be required to hold annual meetings of shareholders
unless required by the 1940 Act, the provisions of this Declaration of
Trust, or any other applicable law.
However, the By-Laws of the Trust may fix the number of Trustees at
a number greater than that named in this Declaration of Trust and may
authorize the Trustees, by vote of a majority of the entire number of
Trustees, to increase or decrease the number of Trustees fixed by this
Declaration of Trust or the By-Laws within limits specified in the By-
Laws, provided that in no case shall the number of Trustees be less than
three, and to fill the vacancies created by any such increase in the
number of Trustees. Unless otherwise provided by the By-Laws of the
Trust, the Trustees need not be shareholders. The Trustees may fill
vacancies on the Board of Trustees which may occur for any reasons.
(B) A Trustee at any time may be removed either with or without
cause by resolution duly adopted by the affirmative vote of the holders
of two-thirds of the outstanding Shares, present in person or by proxy at
any meeting of Shareholders called for such purpose; such a meeting shall
be called by the Trustees when requested in writing to do so by the record
holders of not less than ten per centum of the outstanding Shares.
(C) The Trustees shall make available a list of names and addresses
of all Shareholders as recorded on the books of the Trust, upon receipt
of the request in writing signed by not less than ten Shareholders, who
have been such for at least six months, holding shares of the Trust valued
at not less than $25,000 at current offering price (as defined in the
Trust's Prospectus and/or Statement of Additional Information) or at least
1% in amount of the entire amount of Shares issued and outstanding; such
request must state that such Shareholders wish to communicate with other
shareholders with a view to obtaining signatures to a request for a
meeting to take action pursuant to part (B) of this Article SIXTH and
accompanied by a form of communication to the Shareholders. The Trustees
may, in their discretion, satisfy their obligation under this part (C) by
either making available the Shareholder list to such Shareholders at the
principal offices of the Trust, or at the offices of the Trust's transfer
agent, during regular business hours, or by mailing a copy of such
communication and form of request, at the expense of such requesting
Shareholders, to all other Shareholders.
SEVENTH: The following provisions are hereby adopted for the purpose
of defining, limiting and regulating the powers of the Trust and of the
Trustees and Shareholders.
1. As soon as any Trustee is duly elected by the Shareholders or the
Trustees and shall have accepted this trust, the Trust estate shall vest
in the new Trustee or Trustees, together with the continuing Trustees,
without any further act or conveyance, and he shall be deemed a Trustee
hereunder.
2. The death, declination, resignation, retirement, removal, or
incapacity of the Trustees, or any one of them shall not operate to annul
the Trust or to revoke any existing agency created pursuant to the terms
of this Declaration of Trust.
3. The assets of the Trust shall be held separate and apart from any
assets now or hereafter held in any capacity other than as Trustee
hereunder by the Trustees or any successor Trustees. All of the assets
of the Trust shall at all times be considered as vested in the Trustees.
Except as provided in this Declaration of Trust, no Shareholder shall
have, as a holder of beneficial interest in the Trust, (a) any authority,
power or right whatsoever to transact business for or on behalf of the
Trust, or on behalf of the Trustees, in connection with the property or
assets of the Trust, nor (b) any interest in the specific property or
assets of the Trust, or in any part thereof, except the right to receive
the waiver and distributable amounts arising therefrom as set forth
herein.
4. The Trustees in all instances shall act as principals, and are
and shall be free from the control of the Shareholders. The Trustees
shall have full power and authority to do any and all acts and to make and
execute any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust.
The Trustees shall not in any way be bound or limited by present or future
laws or customs in regard to trust investments, but shall have full
authority and power to make any and all investments which they, in their
uncontrolled discretion, shall deem proper to accomplish the purpose of
this Trust. Subject to any applicable limitation in this Declaration of
Trust or by the By-Laws of the Trust, the Trustees shall have power and
authority:
(a) to adopt By-Laws not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust and to amend and
repeal them to the extent that they do not reserve that right to the
Shareholders;
(b) to elect and remove such officers and appoint and terminate such
officers as they consider appropriate;
(c) to employ a bank or trust company as custodian of any assets of
the Trust subject to any conditions set forth in this Declaration of Trust
or in the By-Laws;
(d) To retain a transfer agent and shareholder servicing agent, or
both;
(e) To provide for the distribution of Shares either through a
principal underwriter or the Trust itself, or both;
(f) To set record dates in the manner provided for in the By-Laws
of the Trust;
(g) to delegate such authority as they consider desirable to any
officers of the Trust and to any agent, custodian or underwriter,
including the authority to sign any supplemental Declaration of Trust on
behalf of the Trustees;
(h) to vote or give assent, or exercise any rights of ownership,
with respect to stock or other securities or property; and to execute and
deliver powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion
with relation to securities or property as the Trustees shall deem proper;
(i) to exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;
(j) to hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form; or either
in its own name or in the name of a custodian or a nominee or nominees,
subject in either case to proper safeguards according to the usual
practice of Massachusetts business trusts or investment companies;
(k) to consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of
which is held in the Trust; to consent to any contract, lease, mortgage,
purchase, or sale of property by such corporation or concern, and to pay
calls or subscriptions with respect to any security held in the Trust;
(l) to compromise, arbitrate, or otherwise adjust claims in favor
of or against the Trust or any matter in controversy including, but not
limited to, claims for taxes;
(m) to make, in the manner provided in the By-Laws, distributions
of income and of capital gains to Shareholders;
(n) to borrow money to the extent and in the manner permitted by the
1940 Act and any fundamental policy thereunder as to borrowing;
(o) to enter into investment advisory or management contracts,
subject to the 1940 Act, with any one or more corporations, partnerships,
trusts, associations or other persons; if the other party or parties to
any such contract are authorized to enter into securities transactions on
behalf of the Trust, such transactions shall be deemed to have been
authorized by all of the Trustees; and
(p) to change the name of the Trust as they consider appropriate
without prior shareholder approval.
5. No one dealing with the Trustees shall be under any obligation
to make any inquiry concerning the authority of the Trustees, or to see
to the application of any payments made or property transferred to the
Trustees or upon their order.
6.(a) The Trustees shall have no power to bind any Shareholder
personally or to call upon any Shareholder for the payment of any sum of
money or assessment whatsoever other than such as the Shareholder may at
any time personally agree to pay by way of subscription to any Shares or
otherwise. Every note, bond, contract or other undertaking issued by or
on behalf of the Trust or the Trustees relating to the Trust shall include
a recitation limiting the obligation represented thereby to the Trust and
its assets (but the omission of such recitation shall not operate to bind
any Shareholder).
(b) Whenever this Declaration of Trust calls for or permits any
action to be taken by the Trustees hereunder, such action shall mean that
taken by the Board of Trustees by vote of the majority of Trustees as set
forth from time to time in the By-Laws of the Trust or as required
pursuant to the provisions of the 1940 Act and the rules and regulations
promulgated thereunder.
(c) The Trustees shall possess and exercise any and all such
additional powers as are reasonably implied from the powers herein
contained such as may be necessary or convenient in the conduct of any
business or enterprise of the Trust, to do and perform anything necessary,
suitable, or proper for the accomplishment of any of the purposes, or the
attainment of any one or more of the objects, herein enumerated, or which
shall at any time appear conducive to or expedient for the protection or
benefit of the Trust, and to do and perform all other acts and things
necessary or incidental to the purposes herein before set forth, or that
may be deemed necessary by the Trustees.
(d) The Trustees shall have the power to determine conclusively
whether any moneys, securities, or other properties of the Trust are, for
the purposes of this Trust, to be considered as capital or income and in
what manner any expenses or disbursements are to be borne as between
capital and income whether or not in the absence of this provision such
moneys, securities, or other properties would be regarded as capital or
income and whether or not in the absence of this provision such expenses
or disbursements would ordinarily be charged to capital or to income.
7. The By-Laws of the Trust may divide the Trustees into classes and
prescribe the tenure of office of the several classes, but no class shall
be elected for a period shorter than that from the time of the election
following the division into classes until the next meeting and thereafter
for a period shorter than the interval between meetings or for a period
longer than five years, and the term of office of at least one class shall
expire each year.
8. The Shareholders shall have the right to inspect the records,
documents, accounts and books of the Trust, subject to reasonable
regulations of the Trustees, not contrary to Massachusetts law, as to
whether and to what extent, and at what times and places, and under what
conditions and regulations, such right shall be exercised.
9. Any Trustee, or any officer elected or appointed by the Trustees
or by any committee of the Trustees or by the Shareholders or otherwise,
may be removed at any time, with or without cause, in such lawful manner
as may be provided in the By-Laws of the Trust.
10. If the By-Laws so provide, the Trustees shall have power to hold
their meetings, to have an office or offices and, subject to the
provisions of the laws of Massachusetts, to keep the books of the Trust
outside of said Commonwealth at such places as may from time to time be
designated by them.
11. Securities held by the Trust shall be voted in person or by
proxy by the President or a Vice-President, or such officer or officers
of the Trust as the Trustees shall designate for the purpose, or by a
proxy or proxies thereunto duly authorized by the Trustees, except as
otherwise ordered by vote of the holders of a majority of the Shares
outstanding and entitled to vote in respect thereto.
12.(a) Subject to the provisions of the 1940 Act, any Trustee,
officer or employee, individually, or any partnership of which any
Trustee, officer or employee may be a member, or any corporation or
association of which any Trustee, officer or employee may be an officer,
director, trustee, employee or stockholder, may be a party to, or may be
pecuniarily or otherwise interested in, any contract or transaction of the
Trust, and in the absence of fraud no contract or other transaction shall
be thereby affected or invalidated; provided that in case a Trustee, or
a partnership, corporation or association of which a Trustee is a member,
officer, director, trustee, employee or stockholder is so interested, such
fact shall be disclosed or shall have been known to the Trustees
or a majority thereof; and any Trustee who is so interested, or who is
also a director, officer, trustee, employee or stockholder of such other
corporation or a member of such partnership which is so interested, may
be counted in determining the existence of a quorum at any meeting of the
Trustees which shall authorize any such contract or transaction, and may
vote thereat to authorize any such contract or transaction, with like
force and effect as if he or she were not such director, officer, trustee,
employee or stockholder of such other trust or corporation or association
or a member of a partnership so interested.
(b) Specifically, but without limitation of the foregoing, the Trust
may enter into a management or investment advisory contract or
underwriting contract and other contracts with, and may otherwise do
business with any manager or investment adviser for the Trust and/or
principal underwriter of the Shares of the Trust or any subsidiary or
affiliate of any such manager or investment adviser and/or principal
underwriter and may permit any such firm or corporation to enter into any
contracts or other arrangements with any other firm or corporation
relating to the Trust notwithstanding that the Trustees of the Trust may
be composed in part of partners, directors, officers or employees of any
such firm or corporation, and officers of the Trust may have been or may
be or become partners, directors, officers or employees of any such firm
or corporation, and in the absence of fraud the Trust and any such firm
or corporation may deal freely with each other, and no such contract or
transaction between the Trust and any such firm or corporation shall be
invalidated or in any way affected thereby, nor shall any Trustee or
officer of the Trust be liable to the Trust or to any Shareholder or
creditor thereof or to any other person for any loss incurred by it or him
solely because of the existence of any such contract or transaction;
provided that nothing herein shall protect any director or officer of the
Trust against any liability to the trust or to its security holders to
which he would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in
the conduct of his or her office.
(c) As used in this paragraph the following terms shall have the
meanings set forth below:
(i) the term "indemnitee" shall mean any present or former
Trustee or officer of the Trust, any present or former Trustee or officer
of another trust whose securities are or were owned by the Trust or of
which the Trust is or was a creditor and who served or serves in such
capacity at the request of the Trust, and the heirs, executors and
administrators of any of the foregoing; however, whenever conduct by an
indemnitee is referred to, the conduct shall be that of the original
indemnitee rather than that of the heir, executor or administrator;
(ii) the term "covered proceeding" shall mean any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, to which an indemnitee is or was a party
or is threatened to be made a party by reason of the fact or facts under
which he is an indemnitee as defined above;
(iii) the term "disabling conduct" shall mean willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office in question;
(iv) the term "covered expenses" shall mean expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by an indemnitee in connection with a covered
proceeding; and
(v) the term "adjudication of liability" shall mean, as to any
covered proceeding and as to any indemnitee, an adverse determination as
to the indemnitee whether by judgment, order, settlement, conviction or
upon a plea of nolo contendere or its equivalent.
(d) The Trust shall not indemnify any indemnitee for any covered
expenses in any covered proceeding if there has been an adjudication of
liability against such indemnitee expressly based on a finding of
disabling conduct.
(e) Except as set forth in (d) above, the Trust shall indemnify any
indemnitee for covered expenses in any covered proceeding, whether or not
there is an adjudication of liability as to such indemnitee, if a
determination has been made that the indemnitee was not liable by reason
of disabling conduct by (i) a final decision of the court or other body
before which the covered proceeding was brought; or (ii) in the absence
of such decision, a reasonable determination, based on a review of the
facts, by either (a) the vote of a majority of a quorum of Trustees who
are neither "interested persons", as defined in the 1940 Act nor parties
to the covered proceedings, or (b) an independent legal counsel in a
written opinion; provided that such Trustees or counsel, in reaching such
determination, may but need not presume the absence of disabling conduct
on the part of the indemnitee by reason of the manner in which the covered
proceeding was terminated.
(f) Covered expenses incurred by an indemnitee in connection with
a covered proceeding shall be advanced by the Trust to an indemnitee prior
to the final disposition of a covered proceeding upon the request of the
indemnitee for such advance and the undertaking by or on behalf of the
indemnitee to repay the advance unless it is ultimately determined that
the indemnitee is entitled to indemnification hereunder, but only if one
or more of the following is the case: (i) the indemnitee shall provide a
security for such undertaking; (ii) the Trust shall be insured against
losses arising out of any lawful advances; or (iii) there shall have been
a determination, based on a review of the readily available facts (as
opposed to a full trial-type inquiry) that there is a reason to believe
that the indemnitee ultimately will be found entitled to indemnification
by either independent legal counsel in a written opinion or by the vote
of a majority of a quorum of trustees who are neither "interested persons"
as defined in the 1940 Act nor parties to the covered proceeding.
(g) Nothing herein shall be deemed to affect the right of the Trust
and/or any indemnitee to acquire and pay for any insurance covering any
or all indemnities to the extent permitted by the 1940 Act or to affect
any other indemnification rights to which any indemnitee may be entitled
to the extent permitted by the 1940 Act.
13. For purposes of the computation of net asset value, as in this
Declaration of Trust referred to, the following rules shall apply:
(a) The net asset value of each Share of the Trust tendered to the
Trust for redemption shall be determined as of the close of business on
the New York Stock Exchange succeeding the tender of such share;
(b) The net asset value of each Share of the Trust for the purpose
of the issue of such shares shall be determined as of the close of
business on the New York Stock Exchange next succeeding the receipt of an
order to purchase such shares;
(c) The net asset value of each Share at the time of valuation on
any day, shall be the quotient obtained by dividing the value, as at such
time, of the net assets of that Series (i.e., the value of the assets of
the Trust less its liabilities exclusive of its surplus) by the total
number of Shares outstanding at such time. The assets and liabilities of
any Series shall be determined in accordance with generally accepted
accounting principles, provided, however, that in determining the
liabilities of the Trust there shall be included such reserves for taxes
or contingent liabilities as may be authorized or approved by the
Trustees, and provided further that in determining the value of the assets
of the Trust for the purpose of obtaining the net asset value, each
security listed on the New York Stock Exchange shall be valued on the
basis of the closing sale at the time of valuation on the business day as
of which such value is being determined; if there be no sale on such day,
then the security shall be valued on the basis of the mean between the
closing bid and asked prices on such day; if no bid and asked prices are
quoted for such day, then the security shall be valued by such method as
the Trustees shall deem in good faith to reflect its fair market value;
securities not listed on the New York Stock Exchange shall be valued in
like manner on the basis of quotations on any other stock exchange which
the Trustees may from time to time approve for that purpose; readily
marketable securities traded in the over-the-counter market shall be
valued at the mean between their bid and asked prices, or, if the Trustees
shall so determine, at their bid prices; and all other assets of the Trust
and all securities as to which the Trust might be considered an
"underwriter" (as that term is defined in the Securities Act of 1933),
whether or not such securities are listed or traded in the over-the-
counter market, shall be valued by such method as they shall deem in good
faith to reflect their fair market value. In connection with the accrual
of any fee or refund payable to or by an investment adviser of the Trust,
the amount of which accrual is not definitely determinable as of any time
at which the net asset value of each Share of the Trust is being
determined due to the contingent nature of such fee or refund, the
Trustees are authorized to established from time to time formula for such
accrual, on the basis of the contingencies in question to the date of such
determination, or on such other basis as the Trustees may establish.
(1) Shares to be issued shall be deemed to be outstanding as of the
time of the determination of the net asset value per share applicable to
such issuance and the net price thereof shall be deemed to be an asset of
the Trust; and
(2) Shares to be redeemed by the Trust shall be deemed to be
outstanding until the time of the determination of the net asset value
applicable to such redemption and thereupon and until paid the redemption
price thereof shall be deemed to be a liability of the Trust; and
(3) Shares voluntarily purchased or contracted to be purchased by
the Trust pursuant to the provisions of paragraph 13(s) of this Article
SEVENTH shall be deemed to be outstanding until whichever is the later of
(i) the time of the making of such purchase or contract of purchase, and
(ii) the time at which the purchase price is determined, and thereupon and
until paid, the purchase price thereof shall be deemed to be a liability
of the Trust.
(d) The net asset value of each Share of the Trust, as of any time
other than the close of business on the New York Stock Exchange on any
day, may be determined by applying to the net asset value as of the close
of business on that Exchange on the preceding business day, computed as
provided in paragraph 8(c) of this Article SEVENTH, such adjustments as
are authorized by or pursuant to the direction of the Trustees and
designed reasonably to reflect any material changes in the market value
of securities and other assets held and any other material changes in the
assets or liabilities of the Trust and in the number of its outstanding
Shares which shall have taken place since the close of business on such
preceding business day.
(e) In addition to the foregoing, the Trustees are empowered, in
their absolute discretion, to establish other bases or times, or both, for
determining the net asset value of each Share of Trust in accordance with
the 1940 Act and to authorize the voluntary purchase by the Trust, either
directly or through an agent, of Shares of the Trust upon such terms and
conditions and for such consideration as the Trustees shall deem advisable
in accordance with any such provision, rule or regulation.
(f) Payment of the net asset of Shares of the Trust properly
surrendered to it for redemption shall be made by the Trust within seven
days after tender of such stock to the Trust for such purpose plus any
period of time during which the right of the holders of the shares of the
Trust to require the Trust to redeem such shares has been suspended. Any
such payment may be made in portfolio securities of the Trust and/or in
cash, as the Trustees shall deem advisable, and no Shareholder shall have
the right, other than as determined by the Trustees, to have Shares
redeemed in kind.
EIGHTH: The name "Centennial Government Trust" included in the name
of the Trust shall be used pursuant to a royalty-free, non-exclusive
license from Centennial Capital Corporation. The license may be
terminated by Centennial Capital Corporation with or without cause upon
60 days' notice, in which case the Trust shall have any further right to
use the name "Centennial Government Trust" in its name or otherwise and
the Trust, the Shareholders and its officers and Trustees shall promptly
take whatever action may be necessary to change its name accordingly.
NINTH:
1. In case any Shareholder or former Shareholder shall be held to
be personally liable solely by reason of his being or having been a
Shareholder and not because of his acts or omissions or for some other
reason, the Shareholder or former Shareholder (or his heirs, executors,
administrators or other legal representatives or in the case of a
corporation or other entity, its corporate or other general successor)
shall be entitled out of the Trust estate to be held harmless from and
indemnified against all loss and expense arising from such liability. The
Trust shall, upon request by the Shareholder, assume the defense of any
claim made against any Shareholder for any act or obligation of the Trust
and satisfy any judgment thereon.
2. It is hereby expressly declared that a trust and not a
partnership is created hereby. No individual Trustee hereunder shall have
any power to bind personally either the Trust's officers or any
Shareholder. All persons extending credit to, contracting with or having
any claim against the Trust or the Trustees shall look only to the assets
of the Trust for payment under any such credit, contract or claim; and
neither the Shareholders nor the Trustees, nor any of their agents,
whether past, present or future, shall be personally liable therefor.
Nothing in this Declaration of Trust shall protect a Trustee against any
liability to which such Trustee would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of the office of Trustee hereunder.
3. The exercise by the Trustees of their powers and discretion
hereunder in good faith and with reasonable care under the circumstances
then prevailing, shall be binding upon everyone. Subject to the
provisions of paragraph 2 of this Article NINTH, the Trustees shall not
be liable for errors of judgment or mistakes of fact or law. The Trustees
may take advice of counsel or other experts with respect to the meaning
and operations of this Declaration of Trust, and subject to the provisions
of paragraph 2 of this Article NINTH, shall be under no liability for any
act or omission in accordance with such advice or for failing to follow
such advice. The Trustees shall not be required to give any bond as such,
nor any surety if a bond is required.
4. This Trust shall continue without limitation of time but subject
to the provisions of sub-sections (a), (b) and (c) of this paragraph 4.
(a) The Trustees, with the favorable vote of the holders of more
than 50% of the outstanding Shares entitled to vote, may sell and convey
the assets of the Trust (which sale may be subject to the retention of
assets for the payment of liabilities and expenses) to another issuer for
a consideration which may be or include securities of such issuer. Upon
making provision for the payment of liabilities, by assumption by such
issuer or otherwise, the Trustees shall distribute the remaining proceeds
ratably among the holders of Shares of the Trust then outstanding.
(b) The Trustees, with the favorable vote of the holders of more
than 50% of the outstanding Shares entitled to vote, may at any time sell
and convert into money all the assets of the Trust. Upon making
provisions for the payment of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of the Trust shall distribute the
remaining assets of that Series ratably among the holders of the
outstanding Shares.
(c) Upon completion of the distribution of the remaining
proceeds or the remaining assets as provided in sub-sections (a) and (b),
the Trust shall terminate and the Trustees shall be discharged of any and
all further liabilities and duties hereunder and the right, title and
interest of all parties shall be cancelled and discharged.
5. The original or a copy of this instrument and of each declaration
of trust supplemental hereto shall be kept at the office of the Trust
where it may be inspected by any Shareholder. A copy of this instrument
and of each supplemental declaration of trust shall be filed with the
Massachusetts Secretary of State, as well as any other governmental office
where such filing may from time to time be required. Anyone dealing with
the Trust may rely on a certificate by an officer of the Trust as to
whether or not any such supplemental declarations of trust have been made
and as to any matters in connection with the Trust hereunder, and, with
the same effect as if it were the original, may rely on a copy certified
by an officer of the Trust to be a copy of this instrument or of any such
supplemental declaration of trust. In this instrument or in any such
supplemental declaration of trust, references to this instrument, and all
expressions like "herein", "hereof" and "hereunder" shall be deemed to
refer to this instrument as amended or affected by any such supplemental
declaration of trust. This instrument may be executed in any number of
counterparts, each of which shall be deemed an original.
6. The Trust set forth in this instrument is created under and is to
be governed by and construed and administered according to the laws of the
Commonwealth of Massachusetts. The Trust shall be of the type commonly
called a Massachusetts business trust, and without limiting the provisions
hereof, the Trust may exercise all powers which are ordinarily exercised
by such a trust.
7. If authorized by vote of the Trustees and the favorable vote of
more than 50% of the outstanding Shares entitled to vote, or by any larger
vote which may be required by applicable law in any particular case, the
Trustees shall amend or otherwise supplement this instrument, by making
a Declaration of Trust supplemental hereto, which thereafter shall form
a part hereof.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this instrument as
of the 27th day of September, 1994.
/s/ W. A. Baker /s/ Charles Conrad, Jr.
William A. Baker, Trustee Charles Conrad, Jr., Trustee
197 Desert Lakes Drive 19411 Merion Court
Palm Springs, California 92264 Huntington Beach, California
/s/ Fred E. Neef /s/ Robert M. Kirchner
Fred E. Neef, Trustee Robert M. Kirchner, Trustee
2800 S. University Boulevard 2800 S. University Boulevard
Denver, Colorado 80210 Denver, Colorado 80210
/s/ Ned M. Steel /s/ Henry D. Owen
Ned M. Steel, Trustee Henry D. Owen
3236 S. Steele Steet 2947 University Terrace,N.W.
Denver, Colorado Washington, D.C. 20015
/s/ Robert G. Galli /s/ Joseph A. Uhl
Joseph A. Uhl, Trustee Joseph A. Uhl
115 Edgewood Drive 20 Crestmoor Drive
Allendale, New Jersey 07401 Denver, Colorado 80220
/s/ James C. Swain
James C. Swain, Trustee
23554 Wayne's Way
Golden, California 80401
CENTENNIAL GOVERNMENT TRUST
BY-LAWS
(as amended through June 26, 1990)
ARTICLE I
SHAREHOLDERS
Section 1. Place of Meeting. All meetings of the Shareholders
(which terms as used herein shall, together with all other terms defined
in the Declaration of Trust, have the same meaning as in the Declaration
of Trust) shall be held at the principal office of the Fund or at such
other place as may from time to time be designated by the Board of
Trustees and stated in the notice of meeting.
Section 2. Shareholder Meetings. Meetings of the Shareholders for
any purpose or purposes may be called by the Chairman of the Board of
Trustees, if any, or by the President or by the Board of Trustees and
shall be called by the Secretary upon receipt of the request in writing
signed by Shareholders holding not less than one third in amount of the
entire number of Shares issued and outstanding and entitled to vote
thereat. Such request shall state the purpose or purposes of the proposed
meeting. In addition, meetings of the Shareholders shall be called by the
Board of Trustees upon receipt of the request in writing signed by
Shareholders that hold not less than ten percent in amount of the entire
number of Shares issued and outstanding and entitled to vote thereat,
stating that the purpose of the proposed meeting is the removal of a
Trustee.
Section 3. Notice of Meetings of Shareholders. Not less than ten
days' and not more than 120 days' written or printed notice of every
meeting of Shareholders, stating the time and place thereof (and the
general nature of the business proposed to be transacted at any special
or extraordinary meeting), shall be given to each Shareholder entitled to
vote thereat by leaving the same with him or at his residence or usual
place of business or by mailing it, postage prepaid and addressed to him
at his address as it appears upon the books of the Fund.
No notice of the time, place or purpose of any meeting of
Shareholders need be given to any Shareholder who attends in person or by
proxy or to any Shareholder who, in writing executed and filed with the
records of the meeting, either before or after the holding thereof, waives
such notice.
Section 4. Record Dates. The Board of Trustees may fix, in advance,
a date, not exceeding 120 days and not less than ten days preceding the
date of any meeting of Shareholders, and not exceeding 120 days preceding
any dividend payment date or any date and entitled to receive such
dividends or rights for the allotment of rights, as a record date for the
determination of the Shareholders entitled to receive such dividend or
rights, as the case may be; and only Shareholder of record on such date
and entitled to receive such dividends or rights shall be entitled to
notice of and to vote at such meeting or to receive such dividends or
rights, as the case may be.
Section 5. Access to Shareholder List. The Board of Trustees shall
make available a list of the names and addresses of all shareholders as
recorded on the books of the Fund, upon receipt of the request in writing
signed by not less than ten Shareholders (who have been such for at least
six months) holding Shares of the Fund valued at $25,000 or more at
current offering price (as defined in the Fund's Prospectus), or holding
not less than one percent in amount of the entire number of shares of the
Fund issued and outstanding; such request must state that such
Shareholders wish to communicate with other Shareholders with a view to
obtaining signatures to a request for a meeting pursuant to Section 2 of
Article II of these By-Laws and accompanied by a form of communication to
the Shareholders. The Board of Trustees may, in its discretion, satisfy
its obligation under this Section 5 by either making available the
Shareholder List to such Shareholders at the principal offices of the
Fund, or at the offices of the Fund's transfer agents, during regular
business hours, or by mailing a copy of such Shareholders' proposed
communication and form of request, at their expense, to all other
Shareholders.
Section 6. Quorum, Adjournment of Meetings. The presence in person
or by proxy of the holders of record of more than 50% of the Shares of the
stock of the Fund issued and outstanding and entitled to vote thereat,
shall constitute a quorum at all meetings of the Shareholders. If at any
meeting of the Shareholders there shall be less than a quorum present, the
Shareholders present at such meeting may, without further notice, adjourn
the same from time to time until a quorum shall attend, but no business
shall be transacted at any such adjourned meeting except as might have
been lawfully transacted had the meeting not been adjourned.
Section 7. Voting and Inspectors. At all meetings of Shareholders,
every Shareholder or record entitled to vote thereat shall be entitled to
vote at such meeting either in person or by proxy appointed by instrument
in writing subscribed by such Shareholder or his duly authorized attorney-
in-fact.
All elections of Trustees shall be had by a plurality of the votes
cast and all questions shall be decided by a majority of the votes cast,
in each case at a duly constituted meeting, except as otherwise provided
in the Declaration of Trust or in these By-Laws or by specific statutory
provision superseding the restrictions and limitations contained in the
Declaration of Trust or in these By-Laws.
At any election of Trustees, the Board of Trustees prior thereto may,
or, if they have not so acted, the Chairman of the meeting may, and upon
the request of the holders of ten percent (10%) of the Shares entitled to
vote at such election shall, appoint two inspectors of election who shall
first subscribe an oath or affirmation to execute faithfully the duties
of inspectors at such election with strict impartiality and according to
the best of their ability, and shall after the election make a certificate
of the result of the vote taken. No candidate for the office of Trustee
shall be appointed such Inspector.
The Chairman of the meeting may cause a vote by ballot to be taken
upon any election of the matter, and such vote shall be taken upon the
request of the holders of ten percent (10%) of the Shares entitled to vote
on such election or matter.
Section 8. Conduct of Shareholders' Meetings. The meetings of the
Shareholders shall be presided over by the Chairman of the Board of
Trustees, if any, or if he shall not be present, by the President, or if
he shall not be present, by a Vice-President, or if neither the Chairman
of the Board of Trustees, the President nor any Vice-President is present,
by a chairman to be elected at the meeting. The Secretary of the Fund,
if present, shall act as Secretary of such meetings, or if he is not
present, an Assistant Secretary shall so act, or if neither the Secretary
nor an Assistant Secretary is present, then the meeting shall elect its
secretary.
Section 9. Concerning Validity of Proxies, Ballots, Etc. At every
meeting of the Shareholders, all proxies shall be received and taken in
charge of and all ballots shall be received and canvassed by the secretary
of the meeting, who shall decide all questions touching the qualification
of voters, the validity of the proxies, and the acceptance or rejection
of votes, unless inspectors of election shall have been appointed as
provided in Section 7, in which event such inspectors of election shall
decide all such questions.
ARTICLE II
BOARD OF TRUSTEES
Section 1. Number and Tenure of Office. The business and property
of the Fund shall be conducted and managed by a Board of Trustees
consisting of the number of initial Trustees, which number may be
increased or decreased as provided in Section 2 of this Article. Each
Trustee shall, except as otherwise provided herein, hold office until the
meeting of Shareholders of the Fund next succeeding his election or until
his successor is duly elected and qualifies. Trustees need not be
Shareholders.
Section 2. Increase or Decrease in Number of Trustees; Removal. The
Board of Trustees, by the vote of a majority of the entire Board, may
increase the number of Trustees to a number not exceeding fifteen, and may
elect Trustees to fill the vacancies occurring for any reason, including
vacancies created by any such increase in the number of Trustees until the
next annual meeting or until their successors are duly elected and
qualify; the Board of Trustees, by the vote of a majority of the entire
Board, may likewise decrease the number of Trustees to a number not less
than three but the tenure of office of any Trustee shall not be affected
by any such decrease. In the event that after the proxy material has been
printed for a meeting of Shareholders at which Trustees are to be elected
and any one or more nominees named in such proxy material dies or becomes
incapacitated, the authorized number of Trustees shall be automatically
reduced by the number of such nominees, unless the Board of Trustees prior
to the meeting shall otherwise determine.
A Trustee at any time may be removed either with or without cause by
resolution duly adopted by the affirmative votes of the holders of two-
thirds of the outstanding Shares of the Fund, present in person or by
proxy at any meeting of Shareholders at which such vote may be taken,
provided that a quorum is present. Any Trustee at any time may be removed
for cause by resolution duly adopted at any meeting of the Board of
Trustees provided that notice thereof is contained in the notice of such
meeting and that such resolution is adopted by the vote of at least two-
thirds of the Trustees whose removal is not proposed. As used herein,
"for cause" shall mean any cause which under Massachusetts law would
permit the removal of a Trustee of a business trust.
Section 3. Place of Meeting. The Trustees may hold their meetings,
have one or more offices, and keep the books of the Fund outside
Massachusetts, at any office or offices of the Fund or at any other place
as they may from time to time by resolution determine, or, in the case of
meetings, as they may from time to time by resolution determine or as
shall be specified or fixed in the respective notices or waivers of notice
thereof.
Section 4. Regular Meetings. Regular meetings of the Board of
Trustees shall be held at such time and on such notice, if any, as the
Trustees may from time to time determine. One such regular meeting during
each fiscal year of the Fund shall be designated an annual meeting of the
Board of Trustees.
Section 5. Special Meetings. Special meetings of the Board of
Trustees may be held from time to time upon call of the Chairman of the
Board of Trustees, if any, the President or two or more of the Trustees,
by oral, telegraphic or written notice duly served on or sent or mailed
to each Trustee not less than one day before such meeting. No notice need
be given to any Trustee who attends in person or to any Trustee who in
writing executed and filed with the records of the meeting either before
or after the holding thereof, waives such notice. Such notice or waiver
of notice need not state the purpose or purposes of such meeting.
Section 6. Quorum. One-third of the Trustees then in office shall
constitute a quorum for the transaction of business, provided that a
quorum shall in no case be less than two Trustees. If at any meeting of
the Board there shall be less than a quorum present (in person or by open
telephone line, to the extent permitted by the Investment Company Act of
1940 (the "1940 Act")), a majority of those present may adjourn the
meeting from time to time until a quorum shall have been obtained. The
act of the majority of the Trustees present at any meeting at which there
is a quorum shall be the act of the Board, except as may be otherwise
specifically provided by statute, by the Declaration of Trust or by these
By-Laws.
Section 7. Executive Committee. The Board of Trustees may, by the
affirmative vote of a majority of the entire Board, elect from the
Trustees an Executive Committee to consist of such number of Trustees as
the Board may from time to time determine. The Board of Trustees by such
affirmative vote shall have power at any time to change the members of
such Committee and may fill vacancies in the Committee by election from
the Trustees. When the Board of Trustees is not in session, the Executive
Committee shall have and may exercise any or all of the powers of the
Board of Trustees in the management of the business and affairs of the
Fund (including the power to authorize the seal of the Fund to be affixed
to all papers which may require it) except as provided by law and except
the power to increase or decrease the size of, or fill vacancies on, the
Board. The Executive Committee may fix its own rules of procedure, and
may meet, when and as provided by such rules or by resolution of the Board
of Trustees, but in every case the presence of a majority shall be
necessary to constitute a quorum. In the absence of any member of the
Executive Committee, the members thereof present at any meeting, whether
or not they constitute a quorum, may appoint a member of the Board of
Trustees to act in the place of such absent member.
Section 8. Other Committees. The Board of Trustees, by the
affirmative vote of a majority of the entire Board, may appoint other
committees which shall in each case consist of such number of members (not
less than two) and shall have and may exercise such powers as the Board
may determine in the resolution appointing them. A majority of all
members of any such committee may determine its action, and fix the time
and place of its meetings, unless the Board of Trustees shall otherwise
provide. The Board of Trustees shall have power at any time to change the
members and powers of any such committee, to fill vacancies, and to
discharge any such committee.
Section 9. Informal Action by and Telephone Meetings of Trustees and
Committees. Any action required or permitted to be taken at any meeting
of the Board of Trustees or any committee thereof may be taken without a
meeting, if a written consent to such action is signed by all members of
the Board, or of such committee, as the case may be. Trustees or members
of a committee of the Board of Trustees may participate in a meeting by
means of a conference telephone or similar communications equipment; such
participation shall, except as otherwise required by the 1940 Act, have
the same effect as presence in person.
Section 10. Compensation of Trustees. Trustees shall be entitled
to receive such compensation from the Fund for their services as may from
time to time be voted by the Board of Trustees.
Section 11. Dividends. Dividends or distributions payable on the
Shares of any Series of the Fund may, but need not be, declared by
specific resolution of the Board as to each dividend or distribution; in
lieu of such specific resolutions, the Board may, by general resolution,
determine the method of computation thereof, the method of determining the
Shareholders of the Series to which they are payable and the methods of
determining whether and to which Shareholders they are to be paid in cash
or in additional Shares.
Section 12. Indemnification. The Declaration of Trust shall not be
deemed to affect any other indemnification rights to which an indemnitee
may be entitled to the extent permitted by applicable law. Such rights
to indemnification shall not be deemed exclusive of any other rights to
which such indemnitee may be entitled under any statue, By-Law, contract
or otherwise.
ARTICLE III
OFFICERS
Section 1. Executive Officers. The executive officers of the Fund
shall include a Chairman of the Board of Trustees, a President, one or
more Vice-Presidents (the number thereof to be determined by the Board of
Trustees), a Secretary and a Treasurer. The Chairman of the Board and the
President shall be selected from among the Trustees. The Board of
Trustees may also in its discretion appoint Assistant Secretaries,
Assistant Treasurers, and other officers, agents and employees, who shall
have authority and perform such duties as the Board or the Executive
Committee may determine. The Board of Trustees may fill any vacancy
which may occur in any office. Any two offices, except those of Chairman
of the Board and Secretary and President and Secretary, may be held by the
same person, but no officer shall execute, acknowledge or verify any
instrument in more than one capacity, if such instrument is required by
law or these By-Laws to be executed, acknowledged or verified by two or
more officers.
Section 2. Term of Office. The term of office of all officers shall
be until their respective successors are chosen and qualify; however, any
officer may be removed from office at any time with or without cause by
the vote of a majority of the entire Board of Trustees.
Section 3. Powers and Duties. The officers of the Fund shall have
such powers and duties as generally pertain to their respective offices,
as well as such powers and duties as may from time to time be conferred
by the Board of Trustees or the Executive Committee. Unless otherwise
ordered by the Board of Trustees, the Chairman of the Board shall be the
Chief Executive Officer.
ARTICLE IV
SHARES
Section 1. Share Certificates. Each Shareholder of any Series of
the Fund may be issued a certificate or certificates for his Shares of
that Series, in such form as the Board of Trustees may from time to time
prescribe, but only if and to the extent and on the conditions described
by the Board.
Section 2. Transfer of Shares. Shares of any Series shall be
transferable on the books of the Fund by the holder thereof in person or
by his duly authorized attorney or legal representative, upon surrender
and cancellation of certificates, if any, for the same number of Shares
of that Series, duly endorsed or accompanied by proper instruments of
assignment and transfer, with such proof of the authenticity of the
signature as the Fund or its agent may reasonably require; in the case of
shares not represented by certificates, the same or similar requirements
may be imposed by the Board of Trustees.
Section 3. Share Ledgers. The share ledgers of the Fund, containing
the name and address of the Shareholders of each Series of the Fund and
the number of shares of that Series, held by them respectively, shall be
kept at the principal offices of the Fund or, if the Fund employs a
transfer agent, at the offices of the transfer agent of the Fund.
Section 4. Lost, Stolen or Destroyed Certificates. The Board of
Trustees may determine the conditions upon which a new certificate may be
issued in place of a certificate which is alleged to have been lost,
stolen or destroyed; and may, in their discretion, require the owner of
such certificate or his legal representative to give bond, with sufficient
surety to the Fund and the transfer agent, if any, to indemnify it and
such transfer agent against any and all loss or claims which may arise by
reason of the issue of a new certificate in the place of the one so lost,
stolen or destroyed.
ARTICLE V
SEAL
The Board of Trustees shall provide a suitable seal of the Fund, in
such form and bearing such inscriptions as it may determine.
ARTICLE VI
FISCAL YEAR
The fiscal year of the Fund shall be fixed by the Board of Trustees.
ARTICLE VII
AMENDMENT OF BY-LAWS
The By-Laws of the Fund may be altered, amended, added to or repealed
by the Shareholders or by majority vote of the entire Board of Trustees,
but any such alteration, amendment, addition or repeal of the By-Laws by
action of the Board of Trustees may be altered or repealed by the
Shareholders.
ORGZN/170
170.BYL
CENTENNIAL GOVERNMENT TRUST
Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-5/16" x 10-5/8" decorative border, 5/16" wide)
(upper left corner, box with heading: NUMBER [of shares]
(upper right corner) [share certificate no.]
(upper right box with heading: SHARES
below cert. no.)
(centered
below boxes) Centennial Government Trust
A MASSACHUSETTS BUSINESS TRUST
(at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
(box with number)
CUSIP 150910 107
(at left) is the owner of
(centered) FULLY PAID SHARES OF BENEFICIAL INTEREST OF
CENTENNIAL GOVERNMENT 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 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 Dated: (signature
at left of seal) at right of seal)
_______________________ ___________________
SECRETARY PRESIDENT
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
CENTENNIAL GOVERNMENT TRUST
SEAL
1986
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 Signature of Office/Title
by: _____________________________
Officer
(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 current
signature(s) prospectus of the Trust.
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
edgar\170cert
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 22nd day of October, 1990, by and between
CENTENNIAL GOVERNMENT TRUST (hereinafter called the "Fund"), and
CENTENNIAL ASSET MANAGEMENT CORPORATION (hereinafter called the
"Management Corporation").
WITNESSETH:
WHEREAS, the Fund is an open-end diversified management investment
company registered as such with the Securities and Exchange Commission
(the "Commission") pursuant to the Investment Company Act of 1940 (the
"Investment Company Act"), and the Management Corporation is a registered
investment adviser;
NOW, THEREFORE, in consideration of the mutual promises and
agreements herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, it is agreed by and between the
parties hereto as follows:
1. General
The Management Corporation agrees, all as more fully set forth
herein, to act as investment adviser to the Fund with respect to the
investment of its assets; to supervise and arrange the purchase of
securities for and the sale of securities held in the portfolio of the
Fund; and to furnish personnel and facilities as shall be required to
provide effective administration of the Fund.
2. Duties and Obligations of the Management Corporation with respect to
Investments of Assets of the Fund
(a) Subject to the succeeding provisions of this section and subject
to the direction and control of the Board of Trustees of the Fund, the
Management Corporation shall:
(i) Regularly provide investment advice and
recommendations to the Fund with respect to its
investments, investment policies and the purchase and
sale of securities;
(ii) Supervise continuously the investment program of the
Fund and the composition of its portfolio; and
(iii) Arrange, subject to the provisions of paragraph
"4" hereof, for the purchase of securities and
other investments for and the sale of securities
and other investments held in the portfolio of
the Fund.
(b) Any investment advice furnished by the Management Corporation
under this section shall at all times conform to, and be in accordance
with, any requirements imposed by: (1) the provisions of the Investment
Company Act of 1940, and of any rules or regulations in force thereunder;
(2) any other applicable provision of law; (3) the provisions of the
Declaration of Trust and By-Laws of the Fund as amended from time to time;
(4) any policies and determinations of the Board of Trustees of the Fund;
and (5) the terms of the registration statement of the Fund, as amended
from time to time, under the Securities Act of 1933 and the Investment
Company Act of 1940.
(c) The Management Corporation shall give the Fund the benefit of its
best judgment and effort in rendering services hereunder, but the
Management Corporation shall not be liable for any loss sustained by
reason of the adoption of any investment policy or the purchase, sale or
retention of any security on its recommendation, whether or not such
recommendation shall have been based upon its own investigation and
research or upon investigation and research made by any other individual,
firm or corporation, if such recommendation shall have been made and such
other individual firm or corporation shall have been selected with due
care and in good faith. Nothing herein contained shall, however, be
construed to protect the Management Corporation against any liability to
the Fund or its security holders by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason
of its reckless disregard of its obligations and duties under this
Agreement.
(d) Nothing in this Agreement shall prevent the Management
Corporation or any officer thereof from acting as investment adviser for
any other person, firm or corporation and shall not in any way limit or
restrict the Management Corporation or any of its directors, officers,
stockholders or employees from buying, selling or trading any securities
for its or their own accounts or for the accounts of others for whom it
or they may be acting, provided however that the Management Corporation
expressly represents that it will undertake no activities which, in its
judgment, will adversely affect the performance of its obligations to the
Fund under this Agreement.
3. Allocation of Expenses
The Management Corporation shall at its expense provide all
executive, administrative and clerical personnel as shall be required to
provide effective administration for the Fund, including the compilation
and maintenance of records with respect to its operations as may
reasonably be required; the preparation and filing of such reports with
respect thereto as shall be required by rules or regulations promulgated
by the Securities and Exchange Commission; the composition of registration
statements required by Federal securities laws for continuous public sale
of shares of the Fund; composition of periodic reports with respect to its
operations for the shareholders of the Fund; and composition of proxy
materials for meetings of the Fund's shareholders. The Management
Corporation shall, at its own cost and expense, also provide the Fund with
adequate office space, facilities and equipment. The Management
Corporation shall, at its own expense, provide such officers for the Fund
as the Fund's Board may request. All other costs
and expenses not expressly assumed by the Management Corporation under
this Agreement, or to be paid by the General Distributor of the shares of
the Fund, shall be paid by the Fund, including, but not limited to (i)
interest and taxes; (ii) brokerage commissions, if any; (iii) insurance
premiums for fidelity and other coverage requisite to its operations; (iv)
compensation and expenses of its Trustees other than those associated or
affiliated with the Management Corporation; (v) legal and audit expenses;
(vi) custodian and transfer agent fees and expenses; (vii) expenses
incident to the redemption of its shares; (viii) expenses incident to the
issuance of its shares against payment therefor by or on behalf of the
subscribers thereto; (ix) fees and expenses, other than as hereinabove
provided, incident to the registration under Federal and State securities
laws of shares of the Fund for public sale; (x) expenses of printing and
mailing reports, notices, and proxy material to shareholders of the Fund;
(xi) except as noted above, all other expenses incidental to holding
regular annual meetings of the Fund's shareholders; and (xii) such
extraordinary non-recurring expenses as may arise, including litigation
affecting the Fund and the legal obligation which the Fund may have to
indemnify its officers and Trustees with respect thereto.
4. Portfolio Transactions and Brokerage
(a) The Management Corporation is authorized, for the purchase and
sale of the Fund's portfolio securities, to employ such securities dealers
as may, in the best judgment of the Management Corporation, implement the
policy of the Fund to obtain prompt and reliable execution of orders at
the most favorable net price. Consistent with this policy, the Management
Corporation is authorized to direct the execution of the Fund's portfolio
transactions to dealers furnishing statistical information or research
deemed by the Management Corporation to be useful or valuable to the
performance of its investment advisory functions for the Fund.
5. Compensation of the Management Corporation
(a) The Fund agrees to pay the Management Corporation and the
Management Corporation agrees to accept as full compensation for all
services rendered by the Management Corporation as such, an annual fee
payable monthly and computed on the net asset value of the Fund as of the
close of business each day at the following annual rates:
.500% of the first $250 million of net assets;
.475% of the next $250 million of net assets;
.450% of the next $250 million of net assets;
.425% of the next $250 milion of net assets; and
.400% of net assets in excess of $1 billion.
(b) Regardless of any of the above provisions, the Management
Corporation guarantees that the total expenses of the Fund in any fiscal
year, exclusive of taxes, interest and brokerage commissions, and
extraordinary expenses such as litigation costs, shall not exceed, and the
Management Corporation undertakes to pay or refund to the Fund any amount
by which such expenses shall exceed the lesser of (i) 1.5% of the average
annual net assets of the Fund 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 Fund.
6. Use of Name
The Management Corporation hereby grants to the Fund a royalty-free,
non-exclusive license to use the name "Centennial" in the name of the
Fund, and any trademarks or servicemarks, whether or not registered, which
it may own. To the extent necessary to protect the Management
Corporation's rights to the name "Centennial" under applicable law, such
license shall allow the Management Corporation to inspect and, subject to
control by the Fund's Board, control the nature and quality of services
offered by the Fund under such name. The license may be terminated by the
Management Corporation upon termination of this Agreement in which case
the Fund shall have no further right to use the name "Centennial" in its
name or otherwise or any of such marks, and the Fund, the holders of its
shares, and its officers and Trustees shall promptly take whatever action
may be necessary to change its name accordingly. The name "Centennial"
or any of said marks may be used or licensed by the Management Corporation
in connection with any of its activities, or licensed by the Management
Corporation to any other party.
7. Duration and Termination
(a) This Agreement shall go into effect on the date first set forth
above and shall continue in effect until December 31, 1991, and thereafter
from year to year, but only so long as such continuance is specifically
approved at least annually by the Board of Trustees, including the vote
of a majority of the Trustees of the Fund who are not parties to this
Agreement or "interested persons" (as defined in the Investment Company
Act of 1940) of any such party cast in person at a meeting called for the
purpose of voting on such approval, or by the vote of the holders of a
"majority" (as so defined) of the outstanding voting securities of the
Fund and by such a vote of the Board of Trustees.
(a) This Agreement may be terminated by the Management Corporation
at any time without penalty upon giving the Fund sixty days' written
notice (which notice may be waived by the Fund) and may be terminated by
the Fund at any time without penalty upon giving the Management
Corporation sixty days' notice (which notice may be waived by the
Management Corporation), provided that such termination by the Fund shall
be directed or approved by the vote of a majority of all of the Trustees
of the Fund then in office or by the vote of the holders of a "majority"
(as defined in the Investment Company Act of 1940) of the voting
securities of the Fund at the time outstanding and entitled to vote. This
Agreement shall automatically terminate in the event of its "assignment"
(as that term is defined in the Investment Company Act of 1940).
8. Disclaimer of Shareholder Liability
The Management Corporation understands that the obligations of this
Agreement are not binding upon any Trustee or shareholder of the Fund
personally, but bind only the Fund's property. The Management Corporation
represents that it has notice of the provisions of the Declaration of
Trust disclaiming Trustee and shareholder liability for acts or
obligations of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers as of the day
and year first above written.
CENTENNIAL GOVERNMENT TRUST
Attest:
/s/ Sara L. Badler By:/s/ Robert G. Galli
CENTENNIAL ASSET MANAGEMENT
CORPORATION
Attest:
/s/ Sara L. Badler By:/s/ Katherine P. Feld
ADVAG/170
170.IAA
DEALER AGREEMENT
Between
Centennial Capital Corporation and
To: Centennial Capital Corporation
3410 South Galena Street
P.O. Box 5061
Denver, Colorado 80231
Gentlemen:
We desire to enter into an agreement with you for the sale and
distribution of the shares of each of the open-end investment companies
of which you are, or may become, Distributor or Sub-distributor
(hereinafter collectively referred to as the "Funds" and individually as
a "Fund") and whose shares are offered to the public at an offering price
which may or may not include a sales charge (hereinafter referred to as
"Shares"). Upon acceptance of this Agreement by you, we understand that
we may offer and sell Shares subject, however, to all of the terms and
conditions hereof and to your right, without notice, to suspend or
terminate the sale of the Shares of any one or more of the Funds.
1. We understand that the Shares will be offered and sold at the
current offering price in effect at the time the order for such Shares is
confirmed and accepted by you. All purchase requests and applications
submitted by us are subject to acceptance or rejection in your sole
discretion, and, if accepted, each purchase will be deemed to have been
consummated at your office.
2. We certify (a) that we are a member of the National Association
of Securities Dealers, Inc. ("NASD") and agree to maintain membership in
the NASD or (b) in the alternative that we are a foreign dealer not
eligible for membership in the NASD. In either case, we agree to abide
by all the rules and regulations of the Securities and Exchange Commission
and the NASD which are binding upon underwriters and dealers in the
distribution of the securities of open-end investment companies, including
without limitation, Section 26 of Article III of the NASD Rules of Fair
Practice, all of which are incorporated herein as if set forth in full.
We further agree to comply with all applicable State and Federal laws and
the rules and regulations of authorized regulatory agencies. We agree that
we will not sell or offer for sale Shares in any state or jurisdiction
where they have not been qualified for sale or if you have not advised us
in advance that such sale is exempt from such qualification requirements.
3. We will offer and sell Shares of any Fund only in accordance with
the terms and conditions of its then current Prospectus and we will make
no representations not included in said Prospectus or in any authorized
supplemental material supplied by you. We will use our best efforts in
the development and promotion of sales of Shares and agree to be
responsible for the proper instruction and training of all sales personnel
employed by us, in order that the Shares will be offered in accordance
with the terms and conditions of this Agreement and all applicable laws,
rules and regulations. We agree to hold you harmless and indemnify you,
in the event we, or any of our sales representatives, should violate any
law, rule or regulation, or any provisions of this Agreement, which
violation may result in liability to you, or any Fund; and in the event
you determine to refund any amounts paid by any investor by reason of any
such violation on our part, we shall return to you any commissions
previously paid or discounts allowed by you to us with respect to the
transaction for which the refund is made. All expenses which we incur in
connection with our activities under this Agreement shall be borne by us.
4. We understand and agree that, where applicable, the sales charge
and dealer commission relative to any sales of Fund Shares made by us will
be in an amount as set forth in the then current Prospectus of such Fund.
5. We understand that commissions, where applicable, are subject
to change by you from time to time, upon 30 days' written notice, and any
orders placed after the effective date of such change shall be subject to
the rates in effect at the time of receipt of the payment by you. Such
30 day period may be waived at your sole option in the event such change
increases the commission due us.
6. Payments for purchases of Shares made by wire order from us shall
be made to you and received by you together with all necessary
applications and other documents required to establish an account within
five business days after the acceptance of our order or such shorter time
as may be required by law. If such payment is not received by you, we
understand that you reserve the right, without notice, forthwith to cancel
the sale, or, at your option, to sell the Shares ordered by us back to the
Fund, in which latter case we may be held responsible for any loss,
including loss of profit, suffered by you resulting from our failure to
make the aforesaid payment. Where sales of any Fund's Shares are
contingent upon the Fund's receipt of funds in payment therefor, we will
forward promptly to you any purchase orders and/or payments received by
us from investors.
7. We agree to purchase Shares only from you or from our customers.
If we purchase Shares from you, we agree that all such purchases shall be
made only to cover orders received by us from our customers, or for our
own bona fide investment. If we purchase Shares from our customers, we
agree to pay such customers not less than the applicable repurchase price
as established by the then current applicable Fund Prospectus.
8. Unless at the time of transmitting an order we advise you to the
contrary, you may consider the order to be the total holding of the
investor and assume that the investor is not entitled to any reduction in
sales price beyond that accorded to the amount of the purchase as
determined by the schedule set forth in the then current Prospectus.
9. We understand and agree that if any Shares sold by us under the
terms of this Agreement are redeemed by any of the Funds (including
redemptions resulting from an exchange for shares of another Fund) or are
repurchased by you as agent for the Fund or are tendered to a Fund for
redemption within seven business days after your confirmation to us of our
original purchase order for such shares, we shall pay forthwith to you the
full amount of the commission allowed to us on the original sale, provided
you notify us of such repurchase or redemption within ten days of the date
upon which written redemption requests and, if applicable, Share
certificates are delivered to you or to the Fund.
10. Your obligations to us under this Agreement are subject to all
the provisions of any distributorship agreements entered into between you
and the Funds. We understand and agree that in performing our services
covered by this Agreement we are acting as principal, and you are in no
way responsible for the manner of our performance or for any of our acts
or omissions in connection therewith. Nothing in this Agreement shall be
construed to constitute us or any of our agents, employees or
representatives as your agent, partner or employee, or the agent or
employee of the Funds.
11. We may terminate this Agreement by notice in writing to you,
which termination shall become effective thirty (30) days after the date
of our mailing such notice to you. We agree that you have and reserve the
right, in your sole discretion without notice, to suspend sales of Shares
of any of the Funds, or to withdraw entirely the offering of Shares of any
of the Funds, or, in your sole discretion, to modify, amend or cancel this
Agreement upon written notice to us of such modification, amendment or
cancellation, which shall be effective on the date stated in such notice.
Without limiting the foregoing, you may terminate this Agreement for cause
on violation by us of any of the provisions of this Agreement, said
termination to become effective on the date of mailing notice to us of
such termination. Without limiting the foregoing, any provision hereof
to the contrary notwithstanding, our expulsion from the NASD will
automatically terminate this Agreement without notice; our suspension from
the NASD, the appointment of a trustee for all or substantially all of our
business assets, or violation of applicable State or Federal laws or rules
and regulations of authorized regulatory agencies will terminate this
Agreement effective upon the date of your mailing notice to us of such
termination. Your failure to terminate for any cause shall not constitute
a waiver of your right to terminate at a later date for any such cause.
All notices, hereunder shall be to the respective parties at the addresses
listed hereon, unless changed by notice given in accordance with this
Agreement.
12. This Agreement shall become effective as of the date when it is
executed and dated by you below and shall be in substitution of any prior
agreement between you and us covering any of the Funds. This Agreement
and all the rights and obligations of the parties hereunder shall be
governed by and construed under the laws of the State of Colorado. This
Agreement is not assignable or transferable, except that your firm may
assign or transfer this Agreement to any successor firm or corporation
which becomes the Distributor or Subdistributor of the Funds
DEALER FIRM (NAME) -------------------------------
(ADDRESS) -----------------------------------------
By: ------------------------------------------------
(AUTHORIZED SIGNATURE)
-----------------------------------------------------
(NAME) (TITLE)
Accepted:
CENTENNIAL CAPITAL CORPORATION
By: _ _ _ _ _ _ _ _ _ _ _ _ _ _
ofmi\1701
CUSTODIAN AGREEMENT
DAILY CASH GOVERNMENT FUND
AND
CITIBANK, N.A.
DATED: May 7, 1982
CUSTODIAN AGREEMENT
I. DESIGNATION OF CUSTODIAN
DAILY CASH GOVERNMENT FUND (the "Fund"), an unincorporated business
trust organized under the laws of the Commonwealth of Massachusetts,
having an office at 3600 South Yosemite Street, Denver, Colorado, and
engaged principally in the business of investing and reinvesting its
assets in securities, hereby designates Citibank, N.A. (the "Bank"), a
National Banking Corporation incorporated under the laws of the United
States of America and having an office at One Citicorp Center, New York,
NY 10043, custodian of the Property (as defined in Section III). By its
acceptance, the Bank agrees to serve as such custodian upon the terms and
conditions set forth in this agreement.
II. DELIVERY OF DOCUMENTS
(a) Documents Delivered. The Fund delivers to the Bank herewith the
following documents:
(1) Resolutions, as defined in subsection (d), authorizing the
appointment of the Bank as the custodian of the Fund and
the execution by the Fund of this Agreement;
(2) copies, certified by the appropriate officer or officers,
of the charter and the by-laws of the Fund; and
(3) incumbency and signature certificates identifying and
containing the signatures of the officers of the Fund
and/or other signatories authorized to sign instructions
on behalf of the Fund, specifying the number of signatures
required for Instructions and identifying the directors
and the other officers, if any, of the Fund.
(b) Changes. In case of any change or changes affecting any of the
documents described in this Section II, the Fund shall deliver new
documents to the Bank, to the extent necessary to reflect such change or
changes. Unless and until such new documents are delivered to the Bank
at the address set forth in Section XVI the Bank shall be under no
obligation to act (or omit to act) in accordance with any such change, nor
shall the Bank be liable for failure so to act (or omit to act), but the
Bank shall act in accordance with the documents which such new documents
are to replace.
(c) Additional Information. The Fund shall furnish to the Bank any
additional information and documentation relating to the Fund management
company which the Bank may reasonably request.
(d) "Resolutions" Defined. The term "Resolutions," as used in this
Agreement, means (1) if the directors of the Fund are authorized to
transact business of the Fund by signing an instrument setting forth such
business, resolutions signed by the number of directors of the Fund so
authorized and (2) in all other cases, copies of resolutions of the
directors of the Fund, certified by the appropriate officer or officers
of the Fund.
(e) "Depository" Defined. The term "Depository" as used in this
Agreement means any "system" or "person" contemplated by Section 12(f) of
the Investment Company Act of 1940 in which the Bank may, under that
Section and any rules, regulations or orders thereunder, deposit all or
part of the Fund's securities with the consent of the Fund and to which
the Fund has consented and continues to consent.
(f) "Receipt of payment" Defined. Whenever this Agreement
contemplates receipt of payment by the Bank such receipt shall mean
receipt by the Bank of:
(i) cash or checks certified or issued by a bank (which
term, as used in this Agreement, shall include a trust company and a
Federal Reserve Bank), trust company or member firm of the New York Stock
Exchange or a Depository; or
(ii) written or telegraphic advice from a bank, registered
clearing agency, a Federal Reserve Bank, Subcustodian or a Depository that
funds have been or will be credited to the account of the Fund or the Bank
at one or more of the foregoing; or
(iii) a bank wire from a correspondent bank of the Bank;
or
(iv) payment in property other than the foregoing, if
specified in instructions relating to the transaction in question.
III. THE PROPERTY
(a) "Property" Defined. The term "Property," as used in the
Agreement, means:
(i) any and all securities, including without limitation option
premiums, in respect of any of such securities or other property,
(ii) all income, including without limitation option premiums,
in respect of any of such securities or other property,
(iii) all proceeds of the sale of such securities or other
property, and
(iv) all proceeds of the sale of securities issued by the Fund,
which are received by the Bank from time to time from the Fund or its
transfer agent.
(b) Property Delivered. The Fund shall deliver the Property, or
cause the Property to be delivered, to the Bank or to a Subcustodian or
a Depository, subject to the provisions of this Agreement. Upon delivery,
the securities at the time included in the Property, unless held by a
depository or a subcustodian shall be in bearer form or shall be
registered in the name of the nominee of the Bank (with or without
indication of fiduciary status) or shall be properly endorsed and in form
for transfer satisfactory to the Bank.
(c) Options. The Property shall include documents representing
puts, calls or straddles or other options of a character similar thereto.
(d) Holding of Securities. The Bank shall hold in a separate
account, and physically segregated at all times from those of any other
persons, firms or corporations, pursuant to the provisions hereof, all
securities which are part of the Property, other than those held by a
Depository or a Subcustodian. All such securities are to be held or
disposed of by the Bank, or by a Subcustodian or a Depository subject at
all times to Instructions pursuant to the terms of this Agreement. The
Bank shall have no power or authority to (or to cause a Subcustodian or
Depository to) assign, hypothecate, pledge, or otherwise dispose of any
such securities except pursuant to Instructions and only for the account
of the Fund, as set forth in Section VI of this Agreement.
(e) Depositories. The terms of the use of a Depository under this
Agreement shall be governed by the terms and conditions of rule 17f-4
under the Investment Company Act of 1940 (or any successor rule,
regulation or any applicable order) to which terms and conditions the
parties hereto agree as if set forth in full in this Agreement. The
parties also agree that such terms and conditions shall supersede any
conflicting provisions of this Agreement. Nothing herein shall be deemed
to require that the Bank ascertain, as a condition to the use of a
Depository that any required action has been taken by the Board of
Directors of the Fund other than mutual consent to such use.
If and to the extent that a Depository permits the withdrawal of a
security from a Depository in certificate form and the Fund requires a
certificate for making a loan or otherwise, the Bank shall take all
necessary and appropriate action to obtain such certificate upon receipt
of an Instruction requesting the same.
The Bank shall be liable to the Fund for any loss or damage resulting
from the use of a Depository arising by reason of any negligence,
misfeasance, or misconduct on the part of the Bank or of any of its
employees or agents.
The Bank agrees that it will effectively enforce such rights as it
may have against a Depository and will use its best efforts, and will
enforce any such rights as it may have against a Depository, to require
that a Depository shall take all appropriate and necessary steps to obtain
replacement of any certificated security in a Depository which has been
lost, apparently destroyed or wrongfully taken.
(f) Appointment of Subcustodian. The Bank may at any time or times
and from time to time, in each case only upon the prior written consent
by the Fund, appoint (and may, upon the prior written consent of the Fund
remove) any other bank or banks or trust company or trust companies as the
Bank's agent or subcustodian to carry out such of the provisions of this
agreement as the bank may from time to time direct. Any such subcustodian
(referred to herein as a "Subcustodian") must be qualified to act in such
capacity under the provisions of the Investment Company Act of 1940 and
any rules, regulations or orders promulgated thereunder and as in effect
from time to time. Any such Subcustodian designated hereunder shall be
deemed to be the agent of the Bank, and receipt and possession of Property
of the Fund shall be deemed to be receipt and possession of such Property
by the bank. The Bank agrees that it will take necessary steps to assure
that the Subcustodian Agreement between the Bank and any Subcustodian
designated hereunder shall require such Subcustodian to hold and keep the
Property of the Fund physically segregated from the securities and
property of other persons. The Bank hereby agrees to indemnify the Fund
against any and all losses arising from the negligence of any Subcustodian
it has appointed with respect to the Property of the Fund held by it.
IV. REGISTRATION OF SECURITIES; COMMERCIAL ACCOUNTS;
OVERDRAFTS
(a) Registration of Securities. The securities included in the Property,
unless held by a Subcustodian or a Depository, shall be held in bearer
form or in the name of one or more nominees of the Bank, or shall be
properly endorsed and in form for transfer satisfactory to the Bank. The
Fund shall provide the Bank appropriate instruments to enable the Bank to
hold or deliver in proper form for transfer, or to register in the name
of a nominee of the Bank, securities held in the name of the Fund.
(b) Commercial Accounts. The Bank shall open and maintain a commercial
account or accounts in the name of the Fund, subject only to the Bank's
draft or order only if the Bank has received instructions or as otherwise
specifically provided in this Agreement, and the Bank shall deposit in
such account or accounts all monies constituting, or which are to become,
part of the Property. The Bank shall make payments to or for the account
of the Fund only pursuant to Section VI of the Agreement or as otherwise
specifically provided in this Agreement.
(c) Overdrafts. (1) At the sole discretion of the Bank, the Bank will
permit the incurrence of cash overdrafts in any account of the Fund with
the Bank (a) in aid of the timely and orderly clearance of securities
transactions in the course of the Fund's normal business, trading and
investment operations or (b) in connection with payments to shareholders
all or a portion of whose shares in the Fund have been or are being
redeemed (as defined below), but the Bank may exercise in its discretion
to permit overdrafts only upon the Bank's compliance with the notice
requirements hereunder stated and upon receipt by the Bank of instructions
to do so.
(2) The Bank shall provide notice to the Fund of overdrafts
within five (5) days of the occurrence of such overdrafts. Notice shall
be given by the Bank by telephone to the Fund's manager of fund accounting
or by making available to the Fund necessary information on the Fund's
account balances that may be requested by the Fund by teleprocessing for
the Fund to ascertain whether or not overdrafts have been incurred. If
notice of such overdrafts is timely given by the Bank to the Fund, it
shall be conclusively presumed that the Bank had instructions authorizing
such overdrafts from the time such overdrafts were incurred. If the Bank
does not give timely notice of such overdrafts, (A) those overdrafts
covered by instructions expressly requesting said overdrafts shall be
considered authorized by the Fund and compensable under subsection (d) of
this section, and (B) those overdrafts not covered by such express
instructions shall be compensable under subsection (d) of this section
only to the extent that the Fund did not incur a loss or change its
position to its detriment by relying on the absence of timely notice from
the Bank.
(3) The Bank shall not be obligated to incur or permit the
incurrence of any such overdraft and the Bank shall not be liable to the
Fund or any third party for any refusal, failure or neglect on the part
of the Bank to incur or permit the incurrence of any such overdraft.
(4) As used in this Agreement, the terms "Redeem" and
"Redemption" refer to redemptions, purchases and other acquisitions by the
Fund of shares in the Fund from Shareholders, and the term "Shareholder"
means a shareholders or former shareholder of the Fund.
(d) Payment of Overdrafts; Interest; Compensating Balances.
(1) The Fund shall pay to the Bank, and the Bank may deduct from the
Property, the amount of each compensable overdraft referred to in Section
IV (c), together with interest thereon at such rate as the Bank may from
time to time notify to the Fund (such rate not to exceed on a daily basis
the closing offered rate for Federal Funds), upon the Bank's demand
therefor.
(2) In lieu of paying part or all the interest due on overdrafts,
in accordance with the preceding subsection (such determination to be made
by the Fund in its sole discretion), the Fund may deposit with the Bank
in a non-interest bearing account cash for such a period and in such an
amount that the interest that would have been paid on such deposit at a
rate equal to the closing offered Adjusted Federal Funds Rate as defined
below on a daily basis equals the interest due on the overdrafts.
(3) The adjusted Federal Funds rate is the Federal Funds rate
multiplied by a fraction consisting of, in the numerator, one and, in the
denominator, one plus the prevailing reserve requirement, expressed as a
percentage, on such deposits.
(e) "Receipt" of Securities Defined. Whenever this Agreement
contemplates receipt of securities by the Bank, such receipt shall mean
receipt by the Bank of:
(i) securities in bearer form or in form for transfer
satisfactory to the Bank or:
(ii) written or telegraphic advice from a Depository that
securities have been credited to the account of the Fund or the Bank at
the Depository; or
(iii) written or telegraphic advice from any Subcustodian
designated by the Bank hereunder that such securities have been deposited
with such Subcustodian for the account of the Fund.
V. INSTRUCTIONS
(a) "Instructions" Defined. As used in this Agreement, the term
"instructions" means instructions, with respect to any specified
transaction (except as otherwise indicated in this Agreement), in writing
or by telecopier, tested telegram, cable or Telex or by facsimile sending
device, signed by the requisite number of officers or authorized
signatories of the Fund as specified in the incumbency and signature
certificate(s) provided to the Bank by the Fund pursuant to Section II(a)
or (b) hereof.
(b) Instructions Consistent With Charter, etc. Although the Bank
may take cognizance of the provisions of the charter and by-laws of the
Fund as from time to time amended, the Bank may assume that any
instructions received hereunder are not in any way inconsistent with any
provision of such charter or by-laws or any vote, resolution or proceeding
of the shareholders or the directors, or of any committee of either
thereof, of the Fund.
(c) Authority of Fund's Signatories. The incumbency and signature
certificates most recently delivered to the Bank pursuant to Section II
(a)(3) shall constitute conclusive evidence of the authority of the
signatories designated therein to act on behalf of the Fund.
VI. TRANSACTIONS REQUIRING INSTRUCTIONS
The bank shall not undertake any transactions of the nature set forth
in the subdivisions of this Section unless the Bank has received
instructions to do so as set forth below, and upon receipt of such
appropriate instructions the Bank shall undertake the actions set forth
below:
(a) Purchases. Upon receipt of instructions to do so, the Bank
shall make payment for and receive all securities purchased for the
account of the Fund (insofar as monies are available, or insofar as the
Bank is willing to permit an overdraft or overdrafts in the Fund's account
or accounts with the Bank, for such purpose), payment to be made only upon
receipt of the securities, in form for transfer satisfactory to the bank
(or with respect to securities eligible for transfer on the books of a
Depository, upon receipt of wire confirmation of such Depository;
provided, however, that, if any such securities (or any securities to be
received free for the Fund's account) are not received by the Bank on or
before the thirtieth day following the date of the Bank's receipt of the
instructions to receive such securities, the bank may, but need not,
consider such instructions cancelled unless and until the Bank receives
further instructions reinstating such original instructions;
(b) Sales. Upon receipt of instructions to do so, the Bank shall
deliver Property sold by the Fund against payment therefor (1) in cash or
by check certified or issued by a bank, trust company or member firm of
the New York Stock Exchange or (2) wholly or partially in property other
than cash, as specified in such instructions.
(c) Miscellaneous Transactions. Upon receipt of instructions to do so,
the Bank shall deliver (or cause a Subcustodian or Depository to deliver)
Property against such payment or other consideration or written receipt
therefor as shall be specified in such instructions, in the following
cases:
(1) for examination by a broker selling for the account of the Fund
in accordance with street delivery custom;
(2) for payment when such Property has been called, redeemed or
retired, or has otherwise become payable at the option of the holder
thereof;
(3) in exchange for, or for conversion into other securities and/or
cash pursuant to any plan of merger, consolidation or reorganization,
recapitalization, readjustment or other rearrangement of the issuer;
(4) for deposit with a reorganization committee or protective
committee pursuant to a deposit agreement;
(5) for conversion into or exchange for other securities, or into
or for other securities and cash, in accordance with any conversion or
exchange right or option relating thereto subject to the provisions of
Section VI(f) of this Agreement;
(6) in the case of warrants, rights or other similar securities, upon
the exercise thereof;
(7) in the case of interim receipts or temporary securities, upon
the surrender thereof for definitive securities;
(8) for delivery to designated brokers as collateral in connection
with any short sales effected or to be effected by the Fund so long as any
Property so delivered consists of either U.S. government obligations or
securities fungible with the securities which are the subject of such
short sales;
(9) in connection with any short sale effected or to be effected by
the Fund, for deposit in a segregated commercial account with the Bank,
pursuant to the provisions of Section IV(b) hereof, of an amount of United
States Government obligations which, when added to the amount of cash (if
any) deposited in said account will be (A) equal to the difference between
the market value of the securities sold short by the Fund at the time they
were sold and any cash or government securities deposited as collateral
with the broker in connection with the short sale (not including the
proceeds from the short sale), and (B) until the Fund replaces the
borrowed security, for the purpose of daily maintaining the segregated
account at a level so that (Y) the amount deposited in it plus the amount
deposited with the broker (not including the proceeds from the short sale)
will equal the current market value of the securities sold short, and (Z)
the amount deposited in it plus the amount deposited with the broker (not
including the proceeds from the short sale), will not be less than the
market value of the securities at the time they were sold short; provided;
however, that the Bank shall not be responsible for ensuring that the
amount deposited in such account complies with the foregoing;
(10) upon sales of securities for the account of the Fund and receipt
by the Bank of payment therefor, including upon sales by the Fund through
designated brokers of put and/or call options written by persons other
than the Fund, combinations thereof and similar options issued by the
Options Clearing Corporation or any similar clearing corporation.
(11) for delivery to (A) broker-custodians to fulfill put and similar
options written by persons other than the Fund held in the custody of such
broker-custodians and exercised by the Fund, or (B) to designated brokers
to fulfill put and similar options issued by the Options Clearing
Corporation, or any similar clearing corporation and exercised by the
Fund, in which event the Bank will deliver any non-negotiable certificates
(against receipt for such certificates) issued by the Options Clearing
Corporation, or any similar clearing corporation; and
(12) as collateral in connection with any loan to be made to the Fund
or any loans of portfolio securities made by the Fund.
(d) Payments. Without limiting the generality of the foregoing,
upon receipt of instructions to do so, the Bank shall make payment with
respect to any transaction described in Section VI(c)(3) to (11)
inclusive, in the amount specified in such Instructions.
(e) Cash Disbursements. Upon receipt of Instructions to do so
(subject to the provisions of Section VII(b)), the Bank shall make cash
disbursement for the account of the Fund, in the amount specified in such
instructions, in connection with the payment of (1) any dividend or other
distribution declared by the Fund, or (2) any tax, expense or liability
of the Fund. Any cash disbursements which are made otherwise than for (i)
purchases of securities by the Fund (as provided for in Section VI (a)),
(ii) Redemption of shares of the Fund (as provided for in Section
VIII(a)), (iii) payments of principal of or interest on loans made to the
Fund, (iv) payments to the banks under this Agreement or for the payment
of dividends, distributions, taxes, management or supervisory fees or
operating expenses (including, without limitation, fees for legal,
accounting and auditing services), (v) payments in connection with
securities loans, made by the Fund, (vi) payments in connection with the
conversion exchange or surrender of securities owned or subscribed to by
the Fund, or (vii) payments contemplated by Section IV(c) or Section
VII(b) of this Agreement, shall be made by the Bank only on receipt of
instructions specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring such purpose to
be a proper corporate purpose and naming the person or persons to whom
such payment is to be made.
(f) Exercise of rights, etc. The Bank shall deal with rights,
warrants and similar securities received by it hereunder only in the
manner and to the extent ordered by instructions received by the Bank and,
in the event instructions are not received a reasonable time before any
action is required to be taken with respect thereto, the Bank may take or
refrain from taking such action in its discretion.
(g) Voting. Neither the Bank nor its nominees shall vote any of the
securities included in the Property or authorize the voting of any such
securities or give any consent, approval or waiver with respect thereto,
except as directed by Instructions received from the Bank. The Bank shall
promptly deliver or cause to be executed and delivered to the Fund all
notices, proxies and proxy solicitation material with relation to such
securities, such proxies to be executed by the registered holder of such
securities (if registered otherwise than in the name of the Fund) but
without indicating the manner in which such proxies are to be voted.
(h) Release of Funds. Except as otherwise specifically provided in
this Agreement, the Bank shall release to the Fund, or otherwise apply for
the account of the Fund, the Property or any part thereof, as directed by
instructions received by the Bank.
(i) Limitation. Except as otherwise expressly provided in this
Agreement, the Bank shall not deliver or otherwise dispose of any of the
Property except to the Fund or against countervalue, including (without
limitation) payment or other consideration or receipt therefor pursuant
to Sections VI(b) and (c).
VII. TRANSACTIONS NOT REQUIRING INSTRUCTIONS
(a) Collection of Income and Other Payments. In the absence of
contrary instructions, the Bank shall without first seeking instruction
to do so:
(1) collect and receive, for the account of the Fund, all
income and other payments and distributions, including
(without limitation) stock dividends, rights, warrants and
similar items, included or to be included in the Property,
and promptly advise the Fund in writing of such receipt;
(2) take any action which may be necessary and proper in
connection with the collection and receipt of such income
and other payments and distributions, including (without
limitation) the execution of ownership and exemption
certificates, the presentation of coupons or other
interest items, the presentation for payment of securities
which have become payable as a result of their being
called, redeemed or retired, or otherwise becoming
payable, otherwise than at the option of the holder
thereof, and the endorsement for collection of checks,
drafts and other negotiable instruments; and
(3) receive and hold for the account of the Fund all
securities received as a distribution on securities held
by the Fund where such distributed securities are received
as a result of a stock dividend, share split-up or
reorganization, recapitalization, readjustment or other
rearrangement or distribution of rights or similar
securities issued with respect to any securities of the
Fund held by the Bank hereunder,
(4) exchange interim receipts or temporary securities for
definitive securities; and
(5) execute as agent on behalf of the Fund all necessary
ownership certificates required by the Internal Revenue
Code or the Income Tax Regulations of the United States
Treasury Department or under the laws of any State now or
hereafter in effect, inserting the Fund's name on such
certificates as the owner of the securities covered
thereby, to the extent the Bank may lawfully do so;
provided, however, that the Bank shall not be required to
transact any item of business referred to in this Section
VII(a) with respect to a security issued outside of the
United States or which is not covered by a published
securities manual reasonably available to the Asset
Services Department of the Bank (or the successor to such
Department in the event of any administrative
rearrangement of the Bank) unless and until such Asset
Services Department (or its successor) has received a
notice specifying (X) the item of business in question and
(Y) such additional information as will permit the Bank to
transact such item of business properly and without
unreasonable inconvenience to such Asset Services
Department (or its successor).
(b) Cash disbursements. In the absence of contrary Instructions,
the Bank may make cash disbursements for minor expenses in handling
securities and for similar items in connection with the Bank's duties
under this Agreement. The Bank shall promptly advise the Fund in writing
of disbursements so made.
(c) Delivery of Information and Documents. The Bank shall promptly
deliver to the Fund all information and documents received by the Bank and
relating to the Property including (without limitation) pendency of calls
and maturities of securities and expiration of rights in connection
therewith received by the Bank from issuers of securities being held for
the Fund. With respect to tender or exchange offers, the Bank shall
transmit promptly to the Fund all written information received from
issuers of the securities whose tender or exchange is being sought or from
the party (or his agents) making the tender or exchange offer; and the
Bank shall promptly deliver all other notices, proxies, reports and other
financial information.
VIII TRANSACTIONS REQUIRING SPECIAL INSTRUCTIONS
The Bank shall not undertake any transactions of the nature set forth
below in the subdivisions of this Section unless the Bank has received
instructions to do so which conform to the specific requirements set forth
below, and upon receipt of such appropriate instructions the Bank shall
undertake the actions set forth below;
(a) Redemptions. Upon receipt of instructions to do so, the Bank
shall deliver Property in connection with Redemptions (insofar as monies
or, in a case referred to in clause (3) below, other Property is
available, or insofar as the Bank is willing to permit an overdraft or
overdrafts in the Fund's account or accounts with the Bank, for such
purpose), provided, however, that the Instructions covering each
Redemption shall contain (1) the number of shares Redeemed, (2) the net
asset value (determined pursuant to the regulations of the Fund, as from
time to time amended, which govern determination of net asset value) of
such shares on the effective date of such Redemption and (3) specification
of any Property other than cash which the Bank is to deliver pursuant
thereto.
(b) Extraordinary Transactions. In the case of any of the following
transactions, not in the ordinary course of the business of the Fund:
(1) the merger or consolidation of the Fund and another
investment company,
(2) the sale by the Fund of all or substantially all of its
assets, or
(3) liquidation of the Fund or dissolution of the Fund and
distribution of its assets,
the Bank shall deliver Property only upon receipt of Instructions and
advice of counsel satisfactory to the Bank (who may be counsel for the
Fund, at the option of the Bank) to the effect that all necessary
corporate action therefor has been taken, or will be taken concurrently
with the Bank's action.
IX. RIGHT TO RECEIVE ADVICE
(a) Advice of Fund. If the Bank shall be in doubt as to any action
to be taken or omitted by it, it may request, and shall receive, from the
Fund directions or advice, including Instructions where appropriate.
(b) Advice of Counsel. If the Bank shall be in doubt as to any
questions of law involved in any action to be taken or omitted by the
Bank, it may request advice from counsel of its own choosing (who may be
counsel for the Fund, at the option of the Bank).
(c) Conflicting Advice. In case of conflict between directions,
advice or instructions received by the Bank pursuant to Section IX(a) and
advice received by the Bank pursuant to Section IX(b), the Bank shall be
entitled to rely on and follow the advice received pursuant to Section
IX(b) alone.
(d) Absolute Protection to Bank. The Bank shall be absolutely
protected in any action or inaction which it takes in reliance on any
directions, advice or instructions received pursuant to Section IX(a) or
(unless Section IX(b) is applicable) (b) or which the Bank, after receipt
of any such directions, advice or instructions, in good faith believes to
be consistent with such directions, advice or Instructions, as the case
may be. However, nothing in this Section IX shall be construed as
imposing upon the Bank any obligation (1) to seek such directions, advice
or Instructions, or (2) to act in accordance with such directions or
advice when received, unless, under the terms of another provision of this
Agreement, the same is a condition to the Bank's properly taking or
omitting to take such action.
X. STATEMENTS
(a) Statements. The Bank shall render to the Fund statements of the
transactions in the accounts of the Fund at the following times:
(1) Daily advices as to transactions;
(2) Monthly Cash Statements Recapitulation; and
(3) Such other statements and advice as the Fund may reasonably
request.
(b) Access. The Bank agrees to provide access from time to time to
the portfolio securities held by the Bank for the account of the Fund to
such of the Fund's authorized officers, auditors and counsel as the Fund
may request in writing upon reasonable notice, for any proper corporate
purpose, subject in each case to such physical security requirements as
the Bank may deem necessary or advisable.
XI. COMPENSATION
(a) Ordinary Services. The Fund shall pay to the Bank, and the Bank
may deduct from the Property, for its services under this Agreement (other
than the services referred to in Section XI(c)) compensation based on a
schedule of charges to be agreed upon in writing from time to time.
(b) Expenses. The Fund shall reimburse the Bank for all expenses,
taxes and other charges (including, without limitation, interest and other
items charged by brokers in respect of debit balances and delayed
deliveries) paid by the Bank with respect to the property of the Fund, or
incurred by the Bank on behalf of the Fund in the performance of the
Bank's duties hereunder, provided, however, that the Bank shall be
entitled to reimbursement with respect to the fees and disbursements of
counsel only (1) as set forth in Sections XI(c) and XIII or (2) when the
Fund breaches or threatens to breach, or the Fund's investment advisor (if
any) threatens to cause a breach, of this Agreement to the extent that the
fees and disbursements of such counsel relate to such actual or apparent
breach or threatened breach. If the Bank submits to the Fund a bill for
such reimbursement and the Fund does not, within 15 days after such
submission, notify the Bank that the bill is disapproved and make a
reasonable counter-offer in writing, the bill shall be deemed approved and
the Bank may deduct such reimbursement from the Property.
(c) Extraordinary services. The Fund shall pay to the Bank, and the
Bank may deduct from the Property, for its services as the Fund's agent
in paying to a Shareholder consideration, consisting wholly or partially
of property other than cash, in connection with the Redemption of all or
any part of such Shareholder's shares in the Fund compensation equal to
1/10 of 1% of the amount computed by subtracting from the aggregate
Redemption price of such shares the cash, if any, paid to such Shareholder
in respect of such Redemption. Without limiting the generality of the
provisions of Section XI(b), the Fund shall reimburse to the Bank, and the
Bank may deduct from the Property reimbursement for, the fees and
disbursements of the Bank's counsel attributable to such counsel's
services in respect of each such Redemption.
XII. INDEMNIFICATION
The Fund, as sole owner of the Property, will indemnify the Bank and
each of the Bank's nominees, and hold the Bank and such nominees harmless,
and the Bank may deduct from the Property indemnification, against all
costs, liabilities (including, without limitation, liabilities under the
Securities Act of 1933, the Securities Exchange Act of 1934, the
Investment Company Act of 1940 and any state and foreign securities and
blue sky laws, all as from time to time amended) any expenses, including
(without limitation) attorney's fees and disbursements, arising directly
or indirectly (1) from the fact that securities included in the Property
are registered in the name of any such nominee or (2) without limiting the
generality of the foregoing clause (1), from any action or thing which the
Bank takes or does or omits to take or do, (A) at the request or on the
directions or in reliance on the advice of the Fund, or of the Fund's
investment adviser (if any), or (B) upon Instructions, provided. however,
that neither the Bank nor any of its nominees shall be indemnified against
any liability to the Fund or to its Shareholders (or any expense incident
to such liability) arising out of the Bank's or such nominee's own willful
misfeasance, bad faith, gross negligence or reckless disregard of its
duties under this Agreement or (Y) the Bank's own negligent failure to
perform its duties under Section VII(a)(2).
XIII. RESPONSIBILITY: COLLECTIONS
(a) Responsibility of Bank. The Bank shall be under no duty to take
any action on behalf of the Fund except as specifically set forth herein
or as may be specifically agreed to by the Bank in writing. In the
performance of the Bank's duties hereunder, the Bank shall be obligated
to exercise care and diligence, but the Bank shall not be liable for any
act or omission which does not willful misfeasance, bad faith or
negligence on the part of the Bank or any Subcustodian it has appointed
or reckless disregard by the Bank or by any Subcustodian it has appointed,
pursuant to this Agreement, of its duties under this Agreement. Without
limiting the generality of the foregoing or of any other provision of this
Agreement, the Bank shall not be under any duty or obligation to inquire
into and shall not be liable for or in respect of (1) the validity or
invalidity or authority or lack thereof of any instruction, notice or
other instrument which conforms to the applicable requirements of this
Agreement, if any, and which the Bank reasonably believes to be genuine,
or (2) the validity or invalidity of the issuance of any securities
included or to be included in the Property, the legality or illegality of
the purchase of such securities, or the propriety or impropriety of the
amount paid therefor, or (3) the legality or illegality of the sale (or
exchange) of any Property or the propriety or impropriety of the amount
for which such Property is sold (or exchanged), nor shall the Bank be
under any duty or obligation to ascertain whether any property at any time
delivered to or held by the Bank may properly be held by or for the Fund
or (4) the compliance of any instruction, notice or other instrument with
any restrictions on the Fund's investment powers or policies, imposed by
law or contained in its charter, by-laws, registration statements or
amendments thereto, or in its Prospectus or elsewhere. The Bank agrees
that it will use its best efforts to assist the Fund to enforce any rights
the Fund may have in connection with the use of a Depository as defined
in Section II (e).
(b) Collections. All collections of monies or other property in
respect, or which are to become part, of the Property shall be at the sole
risk of the Fund.
(c) Enforcement against Subcustodian. In using the facilities of
a Subcustodian it has appointed, the Bank shall be responsible for the
prompt and effective enforcement of its rights against the Subcustodian
in respect of the Property including the proper replacement of any
certificated security which has been lost, destroyed, wrongfully taken,
mislaid or erroneously delivered while in the custody of the Subcustodian.
XIV. ADVERTISING
No printed or other matter in any language (including, without
limitation, prospectuses, notices to shareholders, annual reports and
promotional material) which mentions the Bank's name or the rights, powers
or duties of the custodian of the Fund shall be issued by the Fund or on
the Fund's behalf unless the Bank shall first have given its specific
written consent thereto, other than a new or revised version of such item
which contains the same information as to the Bank as in a previous
version previously consented to by the Bank.
XV. EFFECTIVE DATE; TERMINATION; SUCCESSOR; DISSOLUTION
(a) Effective Date. This Agreement shall become effective as of the
date entered in the final paragraph of this Agreement and shall continue
in effect until terminated in the manner set forth below. Upon execution
of this Agreement, any Custodian agreement previously entered into between
the Bank and the Fund shall terminate, however, all rights, liabilities
and causes of action arising under such prior agreement from the conduct
of the parties thereunder shall survive the execution hereof.
(b) Termination. Either party to this Agreement may terminate this
Agreement, without penalty, upon at least one month prior written notice
to the other. The effective date of such notice shall be specified in
such notice, except that, at the option of the party receiving the notice
of termination, the effective date of termination may be postponed, by
notice (given prior to the effective date specified in the termination
notice) to the other party, to a date not more than 120 days from the date
of the notice of termination; provided, however, that the Fund shall have
no right to so postpone the effective date of termination if the Fund is
at the time in default under the provisions of Section XIV.
(c) Successor Custodian. The Bank shall, in the event of such
termination, deliver the Property, or cause it to be delivered, to any new
custodian which may be designated in instructions received by the Bank.
(d) Successor Custodian Not Available. In the event that no new
custodian can be found by the Fund at the effective date of termination
of this Agreement, the Fund shall, before authorizing the delivery of the
Property to anyone other than a successor custodian, submit to its
directors, or if required by law to its shareholders, the question of
whether the Fund shall be liquidated or shall function without a
custodian. The Bank shall, pending the finding of such a new custodian,
the dissolution of the Fund or the decision of the directors or
shareholders that the Fund shall function without a custodian, continue
to hold the Property in safekeeping subject to the terms of this
Agreement, but the Bank will not carry out any transaction requiring
instructions, the instructions with respect to which are received by the
Bank subsequent to the effective date of the termination of this
Agreement, or issue any advice provided for by Section VII or any
statement provided for by Section X, provided, however, that, upon its
receipt of instructions to do so, the Bank will deliver the Property to
a new custodian (which shall be a person, firm or corporation meeting such
requirements as may be imposed by applicable law), distribute the Property
(after liquidating any part of the Property which does not consist of
cash, if such Instructions so order) upon dissolution of the Fund or
deliver the Property to any other person if the shareholders have decided
that the Fund shall function without a custodian. The Bank shall not be
liable to the Fund or any third party on account of any incidents or
omissions occurring during such period of safekeeping except those arising
through the Bank's own willful misconduct or gross negligence.
(e) Dissolution; No Successor Custodian. Upon its receipt of
instructions to do so, the Bank shall distribute the Property (after
liquidating any part of the Property which does not consist of cash, if
such instructions so order) upon dissolution of the Fund or deliver the
Property to any person who is to take the place of the Fund's custodian
if the directors or shareholders have decided that the Fund shall function
without a custodian, provided, however, in either case, that such
instructions shall be accompanied by a certified copy of the minutes of
the meeting of the directors or shareholders at which the same was
approved; and, provided, further, that the Bank shall not be required to
make such distribution or delivery until it shall have received payment
in full for its services to the Fund under this Agreement.
XVI. NOTICES
Except as provided to the contrary in Section V(d) all notices and
other communications, including instructions (collectively referred to as
"Notices" in this Section XVI), hereunder shall be in writing or by
telecopier, tested telegram, cable, Telex or facsimile sending device.
Notices shall be addressed (1) if the Bank, to:
A.S.D. Mutual Funds Department
Investment Management Group
Box 2806
New York, New York 10043
(or such department's successor referred to in Section VII(a)), (2) if to
the Fund, to the attention of its Treasurer, 3600 South Yosemite Street,
Denver, Colorado 80237 or (3) if to either of the foregoing, at such other
address as shall have been notified to the sender of any such Notice or
other communication. If the location of the sender of a Notice and the
address thereof are, at the time of sending, more than 100 miles apart,
the Notice shall be sent by airmail or its equivalent, in which case it
shall be deemed given three days after it is sent, or by tested telegram,
telecopier, cable, Telex or facsimile sending device, in which case it
shall be deemed given immediately, and, if the location of the sender of
a Notice and the address of the addressee thereof are, at the time of
sending, not more than 100 miles apart, the Notice may be sent by first-
class mail, in which case it shall be deemed given two days after it is
sent, or by messenger, in which case it deemed given on the day it is
delivered, or by tested telegram or Telex, in which case it shall be
deemed given immediately, provided, however, that the addressee shall in
no event be liable in respect of any delay other than on the part of the
addressee in its actual receipt of any Notice. All postage, cable,
telegraph, telecopier, facsimile sending device and Telex charges arising
from the sending of a Notice hereunder shall be paid by the sender.
XVII. MISCELLANEOUS
(a) Amendments, etc. This Agreement or any part hereof may be
changed or waived only by an instrument in writing signed by the party
against which enforcement of such change or waiver is sought. This
Agreement shall be construed and enforced in accordance with and governed
by the laws of the State of New York. The headings in this Agreement are
for convenience of reference only, are not a part of this Agreement and
shall be disregarded in connection with any interpretation of all or any
part of this Agreement.
(b) Entire Agreement. This Agreement embodies the entire agreement
and understanding between the parties hereto, and supersedes all prior
agreements and understandings, relating to the subject matter hereof,
provided that the parties hereto may embody in one or more separate
documents their agreement, if any, with respect to delegated and/or oral
instructions.
(c) Successors and Assigns; Assignment. All terms of this Agreement
shall be binding upon the respective successors and assigns of the parties
hereto, the Fund's investment adviser (if any) and the Shareholders and
shall inure to the benefit of and be enforceable by the parties hereto and
their respective successors and assigns, provided, however that this
Agreement shall not be assignable in whole or in part by either party
hereto without the written consent of the other party hereto.
(d) Shareholder Liability. The Bank understands that the
obligations of the Fund under this Agreement are not binding upon any
shareholder of the Fund personally, but bind only the Fund's property; the
Bank represents that it has notice of the provisions of the Declaration
of Trust disclaiming shareholder liability for acts or obligations of the
Fund.
(e) Counterparts. This Agreement may be executed simultaneously in
several counterparts, each of which shall be deemed an original but all
of which, taken together, shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by the hands of their signatories thereunto duly authorized
as of the 7th day of May, 1982.
CITIBANK, N.A.
By:---------------------------
DAILY CASH GOVERNMENT FUND
By:------------------------------
CUSTODY/1702
170.CA
CENTENNIAL GOVERNMENT TRUST
(a Massachusetts Business Trust)
AMENDMENT TO CUSTODIAN AGREEMENT
Amendment dated September 27, 1985 to Custodian Agreement dated May
7, 1982 between Daily Cash Government Fund and Citibank, N.A.
WHEREAS, Daily Cash Government Fund (an open-end, diversified
investment company organized as a Massachusetts business trust in 1982)
has acquired the assets of Centennial Government Trust (an open-end,
diversified investment company organized as a Massachusetts business trust
in 1981) in exchange for shares of Daily Cash Government Fund pursuant to
an Agreement and Plan of Reorganization approved by the shareholders of
Centennial Government Trust at a special meeting held September 26, 1985;
WHEREAS, the shareholders of Daily Cash Government Fund, at the
annual meeting of shareholders held September 27, 1985, approved a
proposal to amend the Fund's Declaration of Trust to, among other things,
change the name of Daily Cash Government Fund to Centennial Government
Trust and henceforth authorize the Trustees to change the name of the Fund
as they consider appropriate;
NOW THEREFORE, the Custodian Agreement dated May 7, 1982 between
Daily Cash Government Fund and Citibank, N.A. is amended as follows:
1. The first sentence of Article I is hereby amended to delete
"Daily Cash Government Fund" and insert in place thereof
"Centennial Government Trust".
2. Except as expressly modified by the foregoing, such Custodian
Agreement remains in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by the hands of their signatures thereunto duly authorized as
of the 27th day of September, 1985.
CITIBANK, N.A.
By: ----------------------
CENTENNIAL GOVERNMENT TRUST
By: -----------------------
George C. Bowen
Vice President,
custody/170 Secretary & Treasurer
170.ACA
.
April 7, 1982
Securities and Exchange Commission
500 North Capitol Street, N.W>
Washington, D.C. 20549
Re: Daily Cash Government Fund
Gentlemen:
In connection with the public offering of the no par value shares of Daily
Cash Government Fund, a business trust organized under the laws of the
Commonwealth of Massachusetts, (the "Trust"), as counsel for the Trust,
we have examined such records and documents and have made such further
investigation and examination as we deem necessary for the purpose of this
opinion.
The Trust is authorized to issue an unlimited number of full and
fractional shares of transferable beneficial interests, without par value,
each of which represents an equal proportionate interest in the Trust with
each other share outstanding, none having priority or preference over
another. Under Massachusetts law, shareholders of the Trust may, under
certain circumstances, be held personally liable as partners for the
obligations of the Trust. The Declaration of Trust does, however, contain
an express disclaimer of shareholder liability for acts or obligations of
the Trust and requires that notice of such disclaimer be given in each
agreement, obligation, or instrument entered into or executed by the Trust
or the Trustees. The Declaration of Trust provides for indemnification
out of the Trust property of any shareholder held personally liable for
the obligations of the Trust. The Declaration of Trust also provides that
the Trust shall, upon request, assume the defense of any claim made
against any shareholder for any act or obligation of the Trust and satisfy
any judgment thereon. An indefinite number of shares of the Trust are
being registered with the Securities and Exchange Commission by filing
Form N-1.
As of the date of this letter, it is our opinion that the shares of the
Trust when issued and paid for in accordance with the terms of the
offering, as set forth in the prospectus forming a part of said
Registration Statement, will be, when such registration shall become
effective, legally issued and, subject to the matters mentioned in the
preceding paragraph, full paid and nonassessable by the Trust.
We hereby consent to the use of our name in the Prospectus forming part
of the Registration Statement and the filing of this opinion as an exhibit
thereto.
Sincerely,
NEEF, SWANSON, MYER & CLARK
By /s/ Rendle Myer
Rendle Myer
opin/170
Centennial Government Trust
Exhibit 24(b)(16) to Form N-1A
Performance Data Computation Schedule
1. YIELD AND EFFECTIVE YIELD FOR 7-DAY PERIOD ENDED 06/30/94:
Calculations of the Fund's "Yield" and "Compounded Effective Yield"
set forth in the section entitled "Yield Information" in the
Statement of Additional Information were made as follows:
Date Daily Accrual Per Share (in $)
06/24/94 $0.0001014
06/25/94 0.0001014
06/26/94 0.0001014
06/27/94 0.0000953
06/28/94 0.0000971
06/29/94 0.0000928
06/30/94 0.0000983
Seven Day
Total $0.0006877
Current Yield: $0.0006877/ 7 * 365 = 3.59%
365/7
Effective Yield: ( $0.0006877 + 1) -1 = 3.65%
<TABLE> <S> <C>
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<CIK> 0000357247
<NAME> CENTENNIAL GOVERNMENT TRUST
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1994
<PERIOD-START> JUL-01-1993
<PERIOD-END> JUN-30-1994
<INVESTMENTS-AT-COST> 610251043
<INVESTMENTS-AT-VALUE> 610251043
<RECEIVABLES> 9556966
<ASSETS-OTHER> 108468
<OTHER-ITEMS-ASSETS> 1047353
<TOTAL-ASSETS> 620963830
<PAYABLE-FOR-SECURITIES> 0
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<OTHER-ITEMS-LIABILITIES> 7521328
<TOTAL-LIABILITIES> 7521328
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 613281725
<SHARES-COMMON-STOCK> 613281725
<SHARES-COMMON-PRIOR> 637017679
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<ACCUMULATED-NET-GAINS> 160777
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<NET-ASSETS> 613442502
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<INTEREST-INCOME> 23830047
<OTHER-INCOME> 0
<EXPENSES-NET> 5256689
<NET-INVESTMENT-INCOME> 18573358
<REALIZED-GAINS-CURRENT> 166504
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 18739862
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 18663114
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2133375320
<NUMBER-OF-SHARES-REDEEMED> 2175141336
<SHARES-REINVESTED> 18030062
<NET-CHANGE-IN-ASSETS> (23659206)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 84029
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3182956
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5256689
<AVERAGE-NET-ASSETS> 665494000
<PER-SHARE-NAV-BEGIN> 1.0
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .03
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 79
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
