<PAGE>
A.G. Edwards
Investments Since 1887
___________________________
Cash
Convenience
Account
____________________________
Daily Cash Accumulation Fund, Inc.
1995 Prospectus
Managed and Distributed by
Centennial Asset
Management Corporation
<PAGE>
Cash Convenience Account
The Cash Convenience Account Program (CCA) of A.G. Edwards & Sons,
Inc. (AGE) offers a conventional AGE securities account (the Securities
Account) linked to a no-load money market fund (the Fund), and if desired,
check writing redemption procedures (Check Writing). (A client must
request Check Writing on a separate Check Writing Privilege Authorization
and Specimen Signature Form.)
An AGE client may subscribe to a CCA program by depositing a minimum
of $2,500 of free cash balance (that is, any cash that may be withdrawn
from the Securities Account without resulting in interest charges) in the
Securities Account. This free cash balance must be available with no
unsettled transactions reducing the available cash balance to less than
$2,500 at the time the CCA begins operation. After the client has met
this initial requirement, AGE will automatically invest subsequent free
cash balances of $250 or more resulting from securities sales, additional
cash deposits, and interest or dividends held in the account, or any other
free cash balance that may be withdrawn from the Securities Account
without resulting in a debit balance in Fund shares at their current net
asset value at least once a week (Automatic Purchase Order). AGE will
redeem Fund shares, if available, at net asset value, to satisfy debit
balances in the Securities Account (Automatic Redemption Order).
AGE will make no commission or other transaction charge in connection
with the purchase or redemption of Fund shares. The Fund pays investment
advisory fees and incurs certain administrative and operational expenses,
as do other mutual funds. The client will pay AGE's normal brokerage fees
for securities transactions in the Securities Account.
AGE may alter or waive conditions on which a CCA may be established,
either with respect to services generally or to certain individuals or
groups. AGE has the right to reject any request or application to open
a CCA and to terminate a CCA for any reason. The following pages describe
the principal attributes of each CCA component.
This description of the CCA program is not a prospectus and must be
accompanied by the current prospectus of the selected Fund. Please read
the attached prospectus carefully.
<PAGE>
Securities Account
The Securities Account is a conventional account maintained by AGE,
which the client may use to purchase and sell securities. AGE will
maintain the Securities Account pursuant to the rules and regulations of
the Securities and Exchange Commission, the Board of Governors of the
Federal Reserve System, the New York Stock Exchange and the National
Association of Securities Dealers, Inc., as well as the policies of AGE.
The client pays AGE's normal brokerage fees for securities transactions
in the Securities Account. If securities transactions are to occur on
margin, the client must sign an AGE Client's Agreement. Certain
additional account documents may be required to open a Securities Account
depending on the type of entity and/or type of transactions to occur.
Each month in which there is activity in the Securities Account, other
than money market fund dividends, AGE will send a statement detailing
cash, securities and Fund transactions in the Securities Account during
the preceding period. If no activity other than money market fund
dividends occur, AGE will send a statement at least quarterly. Neither
AGE nor the Fund must send confirmations on each transaction in which Fund
shares are purchased or redeemed for the CCA. The statement will describe
the transactions in the Fund during the preceding period. You should
carefully review the statement and bring any discrepancies immediately to
the attention of AGE.
Each client will have the same protection with respect to the
Securities Account as any other Securities Account client, including up
to $500,000 from the Securities Investor Protection Corporation. In
addition, each client has an extra $49.5 million worth of account
protection on all securities held by AGE in a CCA, including Fund shares.
The Fund
Upon meeting the requirement of $2,500 in free cash balance with no
unsettled transactions in the Securities Account, AGE will automatically
invest the initial free cash balance and subsequent free cash balances of
$250 or more on the first business day of the following week in which
shares of Centennial Money Market Trust, Centennial Tax Exempt Trust,
Centennial Government Trust, Centennial America Fund, L.P.* or Daily Cash
Accumulation Fund, Inc.+ depending on which Fund the investor selects as
the primary investment. In addition, residents of California and New York
are offered the option of investing in a state tax-exempt fund for their
particular state. AGE may offer additional funds through CCA in the
future. An investor may change the primary Fund by notifying his or her
AGE investment broker.
_________________
*Centennial America Fund, L.P. is available only to foreign investors.
+Daily Cash Accumulation Fund, Inc. is not available for accounts
established on or after December 6, 1991.
This brochure is not part of the Prospectus.
<PAGE>
Each Fund declares dividends daily, which post monthly to the
Securities Account in the form of additional shares. For further
information, see "How to Buy Shares" and "Dividends, Distributions and
Taxes" or "Tax Status of the Fund's Dividends and Distributions" in the
accompanying Fund prospectus.
The Fund's distributor partially reimburses AGE for costs incurred
in distributing Fund shares.
Automatic Purchase Orders
After the initial investment of $2,500 or more, AGE will
automatically invest at least once a week free cash balances of $250 or
more resulting from sales, additional cash deposits and interest or
dividends in the Securities Account in Fund shares designated as the
primary Fund at their current net asset value. The purchase price for
shares will be the net asset value per share determined after the Fund's
receipt of an Automatic Purchase Order. At any time, the client may
withdraw uninvested free cash balances from the Securities Account by
notifying the AGE investment broker. Dividends are earned on the day
following investment through the date of request for redemption.
Manual Purchase Orders
Free cash balances in excess of $10,000 may be invested by manual
purchase order request on the day after funds become available for
withdrawal. Manual purchase orders entered prior to 2 p.m.Central time
(10 a.m. Central time on Friday) will be completed at 3 p.m. Central time
on the day of request, provided the Federal Reserve wire system is in
operation.
New cash deposits in excess of $10,000 may be invested by manual
purchase order two business days after receipt providing the deposit is
received prior to the local AGE branch cashiering deadline. Dividends
are earned on the day following investment through the date of request for
redemption.
Automatic Redemption Orders
Fund shares will be redeemed at net asset value to satisfy debit
balances in the Securities Account. Redemption for payment of a
securities purchase will be effected at net asset value at 3 p.m. Central
time on the day preceding settlement date of the purchase. Redemption for
other activity resulting in a net debit balance in the Securities Account
will be effected at net asset value at 3 p.m. Central time on the day
after the entry is posted to the Securities Account. Dividends are earned
on the day following investment through the date of request for
redemption.
This brochure is not part of the Prospectus.
<PAGE>
To override an Automatic Redemption Order, a free cash balance
sufficient to cover the amount of the Automatic Redemption Order must be
entered to the Securities Account before the AGE cashiering deadline two
days preceding settlement date of securities purchases, or on the day of
posting other entries generating a debit balance.
AGE reserves the right to redeem all Fund shares if the net asset
value of the Shares in a CCA amounts to less than $250.
Manual Redemption
Fund shares can be redeemed at net asset value on the shareholder's
request on any business day. Proceeds from redemption orders entered
before 2 p.m. Central time will be available for withdrawal from the
Securities Account on the next business day on which the Federal Reserve
wire system is in operation.
Check Writing
A client may write checks in amounts of $250 or more if checks are
requested by a signed separate Check Writing Privilege Authorization and
Specimen Signature Form. The amount available for checks will be the
total net asset value of Fund shares in the CCA. AGE will automatically
redeem fund shares to pay the bank through which checks are paid on behalf
of the account.
Termination
A client may terminate the CCA at any time by notifying AGE in
writing. However, the principals of the account will remain responsible
for any charges to the CCA arising before or after termination. AGE
reserves the right to terminate the CCA at any time with or without
notice.
This brochure is not part of the Prospectus.
<PAGE>
Daily Cash Accumulation Fund, Inc.
3410 South Galena Street, Denver, Colorado 80231
Telephone: 1-800-525-9310
Daily Cash Accumulation Fund, Inc. (the "Fund") is a no-load "money
market" mutual fund with the investment objective of seeking the maximum
current income that is consistent with low capital risk and the
maintenance of liquidity. The Fund seeks to achieve this objective by
investing in "money market" securities meeting specified quality
standards. Shares of the Fund are sold at net asset value without a sales
charge.
An investment in the Fund is neither insured nor guaranteed by the U.S.
Government. Shares of the Fund are not deposits or obligations of any
bank, are not guaranteed by any bank, and are not insured by the F.D.I.C.
or any other agency. While the Fund seeks to maintain a stable net asset
value of $1.00 per share, there can be no assurance that the Fund will be
able to do so. See "The Fund and Its Investment Policies."
Shares of the Fund may be purchased directly from dealers having sales
agreements with the Fund's Distributor and also are offered to
participants in Automatic Purchase and Redemption Programs (the
"Programs") established by certain brokerage firms with which the Fund's
Distributor has entered into agreements for that purpose. See "How to Buy
Shares," below for more details. Program participants should also read the
description of the Program provided by their broker.
This Prospectus sets forth concisely information about the Fund that a
prospective investor should know before investing. A Statement of
Additional Information about the Fund dated April 17, 1995, 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
toll-free number shown above. The Statement of Additional Information
(which is incorporated by reference in its entirety in this Prospectus)
contains more detailed information about the Fund 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 April 17, 1995.
<PAGE>
Table of Contents
Page
Fund Expenses. . . . . . . . . . . . . . . . . . . . . . . 2
Financial Highlights . . . . . . . . . . . . . . . . . . . 3
Yield Information. . . . . . . . . . . . . . . . . . . . . 4
The Fund and Its Investment Policies . . . . . . . . . . . 4
Investment Restrictions. . . . . . . . . . . . . . . . . . 7
Management of the Fund . . . . . . . . . . . . . . . . . . 7
How to Buy Shares. . . . . . . . . . . . . . . . . . . . . 8
Purchases Through Automatic Purchase and
Redemption Programs . . . . . . . . . . . . . . . . . . 8
Direct Purchases . . . . . . . . . . . . . . . . . . . . . 9
Payment by Check. . . . . . . . . . . . . . . . . . . 9
Payment by Federal Funds Wire . . . . . . . . . . . . 9
Automatic Investment Plan . . . . . . . . . . . . . . 9
Guaranteed Payment. . . . . . . . . . . . . . . . . . 9
General. . . . . . . . . . . . . . . . . . . . . . . . . . 10
Service Plan . . . . . . . . . . . . . . . . . . . . . . . 10
How to Redeem Shares . . . . . . . . . . . . . . . . . . . 10
Program Participants . . . . . . . . . . . . . . . . . . . 10
Shares of the Fund Owned Directly. . . . . . . . . . . . . 11
Regular Redemption Procedure. . . . . . . . . . . . . 11
Expedited Redemption Procedure. . . . . . . . . . . . 11
Check Writing . . . . . . . . . . . . . . . . . . . . 12
Telephone Redemptions . . . . . . . . . . . . . . . . 12
Automatic Withdrawal Plan . . . . . . . . . . . . . . 12
General Information on Redemptions. . . . . . . . . . 12
Distributions from Retirement Plans . . . . . . . . . 13
Exchanges of Shares and Retirement Plans . . . . . . . . . 13
Dividends, Distributions and Taxes . . . . . . . . . . . . 16
Additional Information . . . . . . . . . . . . . . . . . . 17
<PAGE>
Fund Expenses
The following table sets forth the fees that an investor in the Fund
might pay and the expenses paid by the Fund during the Fund's fiscal year
ended December 31, 1994.
Shareholder Transaction Expenses
Maximum Sales Charge on Purchases None
Sales Charge on Reinvested Dividends None
Redemption Fees None
Exchange Fee $5.00
Annual Fund Operating Expenses
(as a percentage of average annual net assets)
Management Fees 0.35%
12b-1 (Service Plan) Fees 0.20%
Other Expenses (after expense assumption) 0.18%
Total Fund Operating Expenses -----
(after expense assumption) 0.73%
The purpose of this table is to assist an investor in understanding
the various costs and expenses that an investor in the Fund will bear
directly (shareholder transaction expenses) or indirectly (annual fund
operating expenses). "Other Expenses" includes such expenses as custodial
and transfer agent fees and audit, legal and other business operating
expenses, but excludes extraordinary expenses. The Annual Fund Operating
Expenses shown are net of a voluntary expense assumption undertaking by
the Fund's investment manager, Centennial Asset Management Corporation
(the "Manager"). Without such assumption "Other Expenses" would have been
0.19% of average annual net assets, and Total Fund Operating Expenses"
would have been 0.74%. The expense assumption undertaking is described
in "Investment Management Services" in the Statement of Additional
Information, and may be amended or withdrawn at any time. For further
details, see the Fund's financial statements included in the Statement of
Additional Information.
The following example applies the above-stated expenses to a
hypothetical $1,000 investment in shares of the Fund over the time periods
shown below, assuming a 5% annual rate of return on the investment and
also assuming that the shares are 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
------- ------- ------- --------
$7 $23 $41 $91
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 illustrated
above.
<PAGE>
Financial Highlights
The table on the following pages presents selected financial
information about the Fund including per share data and expense ratios and
other data based on the Fund's average net assets. This information has
been audited by Deloitte & Touche LLP independent auditors, whose report
on the financial statements of the Fund for the fiscal year ended December
31, 1994 is included in the Statement of Additional Information.
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- ----- ----- -----
Income from investment
operations -- net investment income
and net realized gain on
investments.......................... .04(1) .03 .03 .06 .08 .08 .07 .06
Dividends and distributions to
shareholders......................... (.04) (.03) (.03) (.06) (.08) (.08) (.07) (.06)
----- ----- ----- ----- ----- ----- ----- -----
Net asset value, end of period......... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- ----- ----- -----
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
millions)............................ $2,958 $3,589 $4,061 $5,208 $5,025 $4,920 $3,128 $2,555
Average net assets (in millions)....... $3,378 $3,940 $4,760 $5,434 $4,849 $4,112 $2,809 $2,541
Number of shares outstanding at end of
period (in millions)................. 2,958 3,589 4,061 5,208 5,024 4,920 3,128 2,555
Ratios to average net assets:
Net investment income................ 3.64% 2.67% 3.50% 5.64% 7.61% 8.58% 7.01% 6.10%
Expenses............................. .73%(1) .74% .70% .67% .68% .71% .77% .78%
<CAPTION>
1986 1985
------ ------
<S> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period... $1.00 $1.00
----- -----
Income from investment
operations -- net investment income
and net realized gain on
investments.......................... .06 .07
Dividends and distributions to
shareholders......................... (.06) (.07)
----- -----
Net asset value, end of period......... $1.00 $1.00
----- -----
----- -----
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
millions)............................ $2,635 $2,311
Average net assets (in millions)....... $2,530 $2,071
Number of shares outstanding at end of
period (in millions)................. 2,635 2,311
Ratios to average net assets:
Net investment income................ 6.11% 7.46%
Expenses............................. .78% .80%
</TABLE>
1. Net investment income would have been $.04 per share absent the voluntary
expense limitation, resulting in an expense ratio of .74%.
<PAGE>
Yield Information
From time to time the "yield" and "compounded effective yield" of an
investment in the Fund may be advertised. Both yield figures are based
on historical earnings per share and are not intended to indicate future
performance. The "yield" of the Fund is the income generated by an
investment in the Fund 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 Fund 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.
From time to time the Manager may voluntarily assume a portion of the
Fund's expenses (which may include the management fee), thereby lowering
the overall expense ratio per share and increasing the Fund's yield and
total return during the time such expenses are assumed. See "Yield
Information" in the Statement of Additional Information for more
information about the methods of calculating these yields.
The Fund and Its Investment Policies
The Fund is a no-load "money market" fund. It is an open-end,
diversified management investment company incorporated in Maryland in
1981. It was originally organized as a Delaware corporation in 1972. The
Fund's objective is to seek the maximum current income that is consistent
with low capital risk and maintenance of liquidity. The value of the
Fund's 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 Fund's shares may be purchased
at their net asset value, which will remain fixed at $1.00 per share
except under extraordinary circumstances (see "Determination of Net Asset
Value Per Share" in the Statement of Additional Information for further
information). There can be no assurance, however, that the Fund's net
asset value will not vary or that the Fund will achieve its investment
objective. In seeking its objective, the Fund may invest in the types of
instruments discussed below. The Fund'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
policies without shareholder approval. The Fund's investment objective
is a fundamental policy.
-- U.S. Government Securities. The Fund may invest in obligations
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities, maturing in twelve months or less from the date of
purchase.
-- Bank Obligations and Instruments Secured Thereby. The Fund may
invest in time deposits, certificates of deposit, bankers' acceptances and
other bank obligations if they are obligations of: (1) any U.S. bank
having total assets at least equal to $1 billion, or (2) any foreign bank,
if such bank has total assets at least equal to U.S. $1 billion. The Fund
may also invest in instruments secured by such obligations. Such foreign
obligations or instruments must be payable in U.S. dollars and mature in
twelve months or less from the date of purchase. For purposes of this
section, the term "bank" includes commercial banks, savings banks, and
savings and loan associations. The term "foreign bank" includes foreign
branches of U.S. banks (issuers of "Eurodollar" instruments), U.S.
branches and agencies of foreign banks (issuers of "Yankee dollar"
instruments) and foreign branches of foreign banks. The ratings
restrictions described below do not apply to banks in which the Fund's
cash is kept.
-- Commercial Paper and Certain Debt Obligations. The Fund may invest
in any "Eligible Security" permissible under Rule 2a-7 (discussed below).
The securities must mature in 12 months from the date of purchase, have
been called for redemption by the issuer if the redemption is effective
within one year, or mature within one year in accordance with the
provisions of that Rule. These securities include commercial paper
maturing in nine months or less from the date of purchase, variable and
floating rate notes or master demand notes (described in "Investment
Objective and Policies" in the Statement of Additional Information), and
other securities discussed below.
-- Other Obligations. The Fund may invest in obligations, other than
those listed above, if accompanied by a guarantee of principal and
interest or letter of credit, provided that the guarantee or letter of
credit is that of a bank or corporation whose certificates of deposit or
commercial paper may otherwise be purchased by the Fund. Such obligations
and guarantees must be due within twelve months or less from the date of
purchase. Also, the Fund may invest in obligations of the types listed
above that mature in more than twelve months, if they are purchased
subject to repurchase agreements calling for delivery in twelve months or
less.
-- Board-Approved Instruments. The Fund may invest in obligations,
other than those discussed above, approved by the Fund's Board of
Directors and which are in accordance with the Fund's investment
objective, policies and restrictions. One such type of obligation which
the Board has approved is bank loan participation agreements, described
under "Investment Objective and Policies" in the Statement of Additional
Information.
Ratings of Securities
Under Rule 2a-7 of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), the Fund uses the amortized cost method to
value its portfolio securities to determine the Fund's net asset value per
share. Rule 2a-7 places restrictions on a money market fund's
investments. Under the Rule, the Fund may purchase only those securities
that the Fund's Board of Directors has determined have minimal credit risk
and are "Eligible Securities," as defined below.
An "Eligible Security" is (a) one that has received a rating in one of
the two highest short-term rating categories by any two "nationally-
recognized statistical rating organizations" (as defined in the Rule)
("Rating Organizations"), or, if only one Rating Organization has rated
that security, by that Rating Organization, or (b) an unrated security
that is judged by the Manager to be of comparable quality to investments
that are "Eligible Securities" rated by Rating Organizations. The Rule
permits the Fund 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 Fund 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 Fund 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. The Fund's Board must approve or
ratify the purchase of Eligible Securities that are unrated or are rated
by only one Rating Organization. Additionally, under Rule 2a-7, the Fund
must maintain a dollar-weighted average portfolio maturity of no more than
90 days, and the maturity of any single portfolio investment may not
exceed 397 days. Some of the Fund'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. For example,
as a matter of fundamental policy, the Fund may not invest in any debt
instrument having a maturity in excess of one year from the date of the
investment. The Fund's Board has adopted procedures under Rule 2a-7
pursuant to which the Board has delegated to the Manager certain
responsibilities, in accordance with the Rule, of conforming the Fund's
investments with the requirements of the Rule and those procedures.
Appendix A to the Statement of Additional Information contains
descriptions of 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 Fund's cash is kept. See "Ratings of
Securities" in "Investment Objective and Policies" in the Statement of
Additional Information for further details.
Obligations of Foreign Banks
The Fund's investment in obligations of foreign banks (which
obligations, as described above, must be payable in U.S. dollars), may
involve the following considerations not typically associated with the
obligations of domestic banks: (i) exchange control regulations; (ii)
availability of information about the issuer; (iii) differences in
accounting, auditing and financial reporting standards and government
regulation; (iv) the possibility of expropriation or confiscatory
taxation, political or social instability or diplomatic developments; (v)
the differences between the economies of the United States and the
applicable foreign country; and (vi) greater difficulties in commencing
a lawsuit against the issuer of a foreign security than against a U.S.
issuer. The Fund will not invest in obligations of foreign banks which
will cause more than 25% of the Fund's net assets to be so invested, and
will not speculate in foreign currencies.
Repurchase Agreements
The Fund may acquire securities that are subject to repurchase
agreements in order to generate income while providing liquidity. The
Fund's repurchase agreements will 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 Fund's risks may include any costs of disposing
of the collateral, and any loss resulting from any delay in foreclosing
on the collateral. The Fund will not enter into a repurchase agreement
that will cause more than 10% of the Fund's net assets at the time of
purchase to be subject to repurchase agreements maturing in more than
seven days. There is no limit on the amount of the Fund's net assets that
may be subject to repurchase agreements maturing in seven days or less.
See "Repurchase Agreements" in "Investment Objective and Policies" in the
Statement of Additional Information for more details.
Illiquid and Restricted Securities
The Fund will not purchase or otherwise acquire any security if, as
a result, more than 10% of its net assets would be invested in securities
that are illiquid by virtue of the absence of a readily available market
or because of legal or contractual restrictions on resale. This policy
includes repurchase agreements maturing in more than seven days and
certificates of deposit of $100,000 or less of a domestic bank (including
commercial banks, savings banks and savings and loan associations) having
total assets of less than $1 billion, if such certificate of deposit is
fully insured as to principal by the Federal Deposit Insurance
Corporation. This policy does not limit purchases of (1) restricted
securities eligible for resale to qualified institutional purchasers
pursuant to Rule 144A under the Securities Act of 1933 that are determined
to be liquid by the Board or the Manager under Board-approved guidelines,
or (2) commercial paper that may be sold without registration under
Section 4(2) of the Securities Act of 1933. Such guidelines take into
account trading activity for such securities and the availability of
reliable pricing information, among other factors. If there is a lack of
trading interest in particular Rule 144A securities, the Fund's holdings
of those securities may be illiquid. If due to changes in relative
values, more than 10% of the value of the Fund's net assets consist of
illiquid securities, the Manager would consider appropriate steps to
protect the Fund's maximum flexibility. There may be undesirable delays
in selling illiquid securities at prices representing their fair value.
The Fund may invest up to 25% of its net assets in restricted securities,
subject to the above 10% limitation on illiquid securities. For further
information, see "Illiquid and Restricted Securities" in "Investment
Objective and Policies" in the Statement of Additional Information.
Loans of Portfolio Securities
To attempt to increase its income for liquidity purposes, the Fund 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 Fund's total
assets. The Fund 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 12 months or less. The Fund
presently does not intend that the value of securities loaned will exceed
5% of the value of the Fund's net assets in the coming year. See "Loans
of Portfolio Securities" in the Statement of Additional Information for
further information on securities loans.
Investment Restrictions
The Fund 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 Fund's
outstanding voting securities. Under some of those restrictions, the Fund
cannot: (1) make loans, except through the purchase of the kinds of debt
securities described in "The Fund and Its Investment Policies"; repurchase
agreements are not considered loans for purposes of this restriction; the
Fund may also lend its portfolio securities as described above; (2) borrow
money in excess of 10% of the value of its assets; it may borrow only as
a temporary measure for extraordinary or emergency purposes; no assets of
the Fund may be pledged, mortgaged or assigned to secure a debt; (3)
invest more than 5% of the value of its total assets in securities of any
one issuer, not including government or government agency securities; (4)
purchase more than 10% of the outstanding non-voting securities or more
than 10% of the total debt securities of any one issuer; (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; (6)
concentrate investments to the extent of 25% of its assets in any
industry; however, there is no limitation as to investment in obligations
issued by domestic banks or savings and loan associations (for this
purpose, foreign branches of domestic banks are not considered to be
"domestic banks") or in obligations issued by the U.S. Government or its
agencies or instrumentalities.
The percentage restrictions described above and in the Statement of
Additional Information are applicable only at the time of investment and
require no action by the Fund as a result of subsequent changes in value
of the investment or the size of the Fund. A supplementary list of
investment restrictions is contained in the Statement of Additional
Information.
Management of the Fund
The Fund's Board of Directors has overall responsibility for the
management of the Fund under the laws of Maryland governing the
responsibilities of directors. "Directors and Officers" in the Statement
of Additional Information identifies the Fund's Directors and officers and
provides information about them. Subject to the authority of the Board
of Directors, the Manager is responsible for the day-to-day management of
the Fund's business, supervises the investment operations of the Fund and
the composition of its portfolio and furnishes the Fund advice and
recommendations with respect to investments, investment policies and the
purchase and sale of securities, pursuant to an investment advisory
agreement with the Fund (the "Agreement"). The management fee is payable
monthly to the Manager, under the terms of the Agreement and is computed
on the net assets of the Fund as of the close of business each day at the
following annual rates: 0.450% of the first $500 million of net assets;
0.425% of the next $500 million; 0.400% of the next $500 million; 0.375%
of the next $500 million; 0.350% of the next $500 million; 0.325% of the
next $500 million; 0.300% of the next $500 million; 0.275% of the next
$500 million; and 0.250% of net assets in excess of $4 billion.
"Investment Management Services" in the Statement of Additional
Information contains more complete information about the Agreement,
including a discussion of expense arrangements, exculpation provisions and
portfolio transactions.
The Manager, a wholly-owned subsidiary of Oppenheimer Management
Corporation ("OMC"), has operated as an investment adviser since 1978.
OMC is owned by Oppenheimer Acquisition Corp., a holding company owned in
part by senior management of OMC, and ultimately controlled by
Massachusetts Mutual Life Insurance Company, a mutual life insurance
company that also advises pension plans and investment companies. The
Manager and its affiliates currently advise U.S. investment companies
with assets aggregating over $29 billion as of December 31, 1994, and
having more than 2.4 million shareholder accounts.
How to Buy Shares
The Fund's shares may be purchased at their offering price, which is
net asset value per share without sales charge. The net asset value will
remain fixed at $1.00 per share, except under extraordinary circumstances
(see "Determination of Net Asset Value Per Share" in the Statement of
Additional Information for further details). There can be no guarantee
that the Fund will maintain a stable net asset value of $1.00 per share.
Centennial Asset Management Corporation (the "Distributor"), may in its
sole discretion accept or reject any order for purchase of the Fund's
shares. Oppenheimer Funds Distributor, Inc., acts as the sub-distributor
for the Fund (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 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 Fund. 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, military allotment plan,
403(b)(7) custodial plan or payroll deduction 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.
The Fund 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.
The Fund's net asset value per share is determined twice each regular
business day, at 12:00 Noon and the close of The New York Stock Exchange
that day, which is normally 4:00 P.M., but may be earlier on some days
(all references to time in this Prospectus mean New York time), by
dividing the net assets of the Fund by the total number of its shares
outstanding. The Fund's Board of Directors has established procedures for
valuing the Fund's assets, using the amortized cost method as described
in "Determination of Net Asset Value Per Share" in the Statement of
Additional Information.
Purchases Through Automatic Purchase and Redemption Programs
Shares of the Fund 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"
in such client's Program account in shares of the Fund. 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 Fund shares
through a Program should be directed to the broker-dealer.
Direct Purchases
An investor may directly purchase shares of the Fund 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 begin to be effected on the regular
business day on which the check (and a 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 may be purchased 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. 3723-2796, for
further credit to Daily Cash Accumulation Fund, Inc. (Custodian Account
No. 349-294).
The wire must state the investor's name. Shares will be purchased on
the regular business day on which the Federal Funds are received by
Citibank N.A. prior to the close of The New York Stock Exchange (which is
normally 4:00 P.M.) 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 the close of The New York Stock Exchange, which is
normally 4:00 P.M. but may be earlier on some days. The investor must
also send the Distributor a completed Application when the purchase order
is placed to establish a new account.
-- Automatic Investment Plan. Direct investors may purchase shares of
the Fund 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 may be 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 Fund reserves the right to amend, suspend or discontinue offering
Automatic Investment Plans at any time without prior notice.
-- 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 the Fund's shares
prior to 12:00 Noon on a regular business day, and the order will be
effected at 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 Fund's Custodian prior to 2:00 P.M., on the same
day. Dividends will begin to accrue on the purchase date. If an order
is received between 12:00 Noon and the close of The New York Stock
Exchange, which is normally 4:00 P.M., on a regular business day, with the
broker-dealer's guarantee that payment for such shares in Federal Funds
will be received by the Fund's Custodian by the close of the Exchange on
the next regular business day, the order will be effected 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 Fund's Custodian by 2:00 P.M. on a regular
business day on which an order is placed for shares after 12:00 Noon, the
order will be effected at the close of the Exchange that day and dividends
will begin to accrue on such shares on the purchase date.
General
Dealers and brokers who process orders for the Fund's shares on behalf
of their customers may charge a fee for this service. That fee can be
avoided by purchasing shares directly from the Fund. The Distributor, in
its sole discretion, may accept or reject any order for purchases of the
Fund's shares. The sale of shares will be suspended during any period
when the determination of net asset value is suspended, and may be
suspended by the Board of Directors whenever the Board judges it in the
best interest of the Fund to do so.
Service Plan
The Fund has adopted a service plan (the "Plan") under Rule 12b-1 of
the Investment Company Act pursuant to which the Fund 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 Fund shares.
The Distributor will use all the fees received from the Fund to reimburse
dealers, brokers, banks, or other institutions ("Recipients") each month
or quarter for providing personal service and maintenance of accounts that
hold Fund 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 Fund,
providing such customers with information on their investment in Fund
shares, assisting in the establishment and maintenance of accounts or sub-
accounts in the Fund, making the Fund'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 Fund may reasonably request. Plan payments by the Fund
to the Distributor will be made monthly or quarterly in the amount of the
lesser of: (i) 0.05% (0.20% annually) of the net asset value of the Fund,
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. 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 Fund 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 Fund), make payments to Recipients for distribution,
administrative and accounting services performed by Recipients. For
further details, see "Service Plan" in the Statement of Additional
Information.
How to 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 Fund Owned Directly
Shares of the Fund 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 Fund's
regular redemption procedure, a direct shareholder must send the following
to the Transfer Agent, Shareholder Services, Inc., P.O. Box 5143, Denver,
Colorado 80217 [send courier or express mail deliveries to 10200 E. Girard
Avenue, Building D, Denver, Colorado 80231]: (1) a written request for
redemption signed by all registered owners exactly as the shares are
registered, including fiduciary titles, if any, and specifying the account
number and the dollar amount or number of shares to be redeemed; (2) a
guarantee of the signatures of all registered owners on the redemption
request or on the endorsement on the share certificate or accompanying
stock power, by a U.S. bank, trust company, credit union or savings
association, or a foreign bank having a U.S. correspondent bank, or by a
U.S. registered dealer or broker in securities, municipal securities or
government securities, or by a U.S. national securities exchange,
registered securities association or clearing agency; (3) any share
certificates issued for any of the shares to be redeemed; and (4) any
additional documents which may be required by the Transfer Agent for
redemption by corporations, partnerships or other organizations,
executors, administrators, trustees, custodians, guardians, or from
Individual Retirement Accounts ("IRAs") or other retirement plans, or if
the redemption is requested by one other than the shareholder(s) of
record. A signature guarantee is not required for redemptions of $50,000
or less, requested by and payable to all shareholders of record, to be
sent to the address of record for that account. Transfers of shares are
subject to similar requirements.
To avoid delay in redemptions or transfers, shareholders having
questions about these requirements should contact the Transfer Agent in
writing or by calling 1-800-525-9310 before submitting a request. From
time to time the Transfer Agent in its discretion may waive any or certain
of the foregoing requirements in particular cases. Redemption or transfer
requests will not be honored until the Transfer Agent receives all
required documents in proper form.
-- Expedited Redemption Procedure. In addition to the regular
redemption procedure set forth above, direct shareholders whose shares are
not represented by certificates may arrange to have redemption proceeds
of $2,500 or more wired in Federal Funds to a designated commercial bank
if the bank is a member of the Federal Reserve wire system. To place a
wire redemption request, call the Transfer Agent at 1-800-852-8457. The
account number of the designated financial institution and the bank ABA
number must be supplied to the Transfer Agent on the Application or dealer
settlement instructions establishing the account or may be added to
existing accounts or changed only by signature-guaranteed instructions to
the Transfer Agent from all shareholders of record. Such redemption
requests may be made by telephone, wire or written instructions to the
Transfer Agent. The wire for the redemption proceeds of shares redeemed
prior to 12:00 Noon normally will be transmitted by the Transfer Agent to
the shareholder's designated bank account on the day the shares are
redeemed (or, if that day is not a bank business day, on the next bank
business day). Shares redeemed prior to 12:00 Noon do not earn dividends
on the redemption date. The wire for the redemption proceeds of shares
redeemed between 12:00 Noon and the close of The New York Stock Exchange,
which is normally 4:00 P.M., but may be earlier on some days, normally
will be transmitted by the Transfer Agent to the shareholder's designated
bank account on the next bank business day after the redemption. Shares
redeemed between 12:00 Noon and the close of the Exchange earn dividends
on the redemption date. See "Purchase, Redemption and Pricing of Shares"
in the Statement of Additional Information for further details.
-- Check Writing. Upon request, the Transfer Agent will provide any
direct shareholder of the Fund or any Program participant whose shares are
not represented by certificates with forms of drafts ("checks") payable
through a bank selected by the Fund (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 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 Fund account must
not be used if the shareholder's account has been transferred to a new
account or if the account number or registration has changed. Shares
purchased by check or Automatic Investment Plan payments within the prior
10 days may not be redeemed by check writing. A check that would require
the redemption of some or all of the shares so purchased is subject to
non-payment. The Bank will present checks to the Fund 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 Fund's Custodian. This
limitation does not affect the use of checks for the payment of bills or
to obtain cash at other banks. The Fund reserves the right to amend,
suspend, or discontinue check writing privileges at any time without prior
notice.
-- Telephone Redemptions. Direct shareholders of the Fund may redeem
their shares by telephone by calling the Transfer Agent at 1-800-852-8457.
This procedure for telephone redemptions is not available to Program
participants. Proceeds of telephone redemptions will be paid by check
payable to the shareholder(s) of record and sent to the address of record
for the account. Telephone redemptions are not available within 30 days
of a change of the address of record. Up to $50,000 may be redeemed by
telephone in any seven day period. The Transfer Agent may record any
calls. Telephone redemptions may not be available if all lines are busy,
and shareholders would have to use the Fund's regular redemption procedure
described above. Telephone redemption privileges are not available for
newly-purchased (within the prior 10 days) shares or for shares
represented by certificates. Telephone redemption privileges apply
automatically to each 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.
-- Automatic Withdrawal Plan. Direct shareholders of the Fund can
authorize the Transfer Agent to redeem shares (minimum $50) automatically
on a monthly, quarterly semi-annual or annual basis under an Automatic
Withdrawal Plan. Shares will be redeemed as of the close of The New York
Stock Exchange, which is normally 4:00 P.M. (but may be earlier on some
days), three days prior to the date requested by the shareholder for
receipt of the payment. The Fund cannot guarantee receipt of payment on
the date requested and reserves the right to amend, suspend or discontinue
offering such Plans 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," Appendix B to the Statement of Additional
Information.
General Information on Redemptions
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 SEC. The Transfer Agent may delay forwarding a
redemption check for recently purchased shares only until the purchase
payment has cleared, which may take up to 10 days or more from the
purchase date. Such delay may be avoided by purchasing shares by Federal
Funds as described above. Under the Internal Revenue Code, the Fund may
be required to impose "back-up" withholding of Federal income tax at the
rate of 31% from dividends and distributions the Fund may make if the
shareholder has not furnished the Fund a certified taxpayer identification
number or has not complied with the provisions of the Internal Revenue
Code relating to reporting dividends. The Fund 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 by the Fund through the Transfer Agent. Under certain
circumstances, proceeds of redemptions of shares of the Fund acquired by
exchange of shares of Eligible Funds that were purchased subject to a
"contingent deferred sales charge" ("CDSC") may be subject to the CDSC
(see "Exchange Privilege" below).
Distributions from Retirement Plans
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 the 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 Fund'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 of
1986, as amended (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, 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 Fund, 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.
Exchanges of Shares and Retirement Plans
Exchange Privilege
Shares of the Fund held under a Program 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 Fund 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 Fund, Oppenheimer Target Fund, Oppenheimer
Champion High Yield Fund, Oppenheimer Asset Allocation Fund, Oppenheimer
Discovery Fund, Oppenheimer U.S. Government Trust, Oppenheimer Global
Growth & Income Fund, Oppenheimer Global Emerging Growth Fund, Oppenheimer
Limited-Term Government Fund, Oppenheimer Global Fund, Oppenheimer Time
Fund, Oppenheimer Growth Fund, Oppenheimer Equity Income Fund, Oppenheimer
Gold & Special Minerals Fund, Oppenheimer Intermediate Tax-Exempt Bond
Fund, Oppenheimer Insured Tax-Exempt Bond Fund, Oppenheimer Investment
Grade Bond Fund, Oppenheimer Value Stock Fund, Oppenheimer California Tax-
Exempt Fund, Oppenheimer Pennsylvania Tax-Exempt Fund, Oppenheimer New
Jersey Tax-Exempt Fund, Oppenheimer Florida Tax-Exempt Fund, Oppenheimer
High Yield Fund, Oppenheimer Total Return Fund, Inc., Oppenheimer Main
Street California Tax-Exempt Fund, Oppenheimer Main Street Income & Growth
Fund, Oppenheimer Mortgage Income Fund, Oppenheimer Tax-Free Bond Fund,
Oppenheimer New York Tax-Exempt Fund, Oppenheimer Strategic Income Fund,
Oppenheimer Strategic Income & Growth Fund, Oppenheimer Strategic Short-
Term Income Fund, Oppenheimer Strategic Diversified Income Fund, and
Oppenheimer Strategic Investment Grade Bond Fund; and (ii) the following
"Money Market Funds": Centennial Money Market Trust, Centennial Tax Exempt
Trust, Centennial Government Trust, Centennial California Tax Exempt
Trust, Centennial New York Tax Exempt Trust, Oppenheimer Money Market
Fund, Inc. and Oppenheimer Cash Reserves. 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 Fund and of the other Eligible Funds may be exchanged at
net asset value, if all of the following conditions are met: (1) shares
of the fund selected for exchange are available for sale in the
shareholder's state of residence; (2) the respective prospectuses of the
funds whose shares are to be exchanged and acquired offer the Exchange
Privilege to the investor; (3) newly-purchased shares (by initial or
subsequent investment) are held in an account for at least seven days
prior to the exchange; and (4) the aggregate net asset value of the shares
surrendered for exchange into a new account is at least equal to the
minimum investment requirements of the fund whose shares are to be
acquired.
In addition to the conditions stated above, shares of Eligible Funds
may be exchanged for shares of any Money Market Fund; shares of any Money
Market Fund (including the Fund) 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 the Fund
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 the Fund 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 Fund 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 Fund acquired
by exchange of shares of Eligible Funds on which a front-end sales charge
was paid or credited, and then other shares are redeemed in the order of
purchase.
-- How to Exchange Shares. An exchange may be made by direct
shareholders by submitting an Exchange Authorization Form to the Transfer
Agent, signed by all registered owners. In addition, direct shareholders
of the Fund may exchange shares of the Fund 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
Fund 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 Fund reserves
the right to reject written requests submitted in bulk on behalf of 10 or
more accounts. Exchange requests must be received by the Transfer Agent
by the close of The New York Stock Exchange on a regular business day to
be effected that day. The number of shares exchanged may be less than the
number requested if the number requested would include shares subject to
a restriction cited above or shares covered by a certificate that is not
tendered with such request. Only the shares available for exchange
without restriction will be exchanged.
-- Telephone Exchanges. Direct shareholders may place a telephone
exchange request by calling the Transfer Agent at 1-800-852-8457.
Telephone exchange calls may be recorded by the Transfer Agent. Telephone
exchanges are subject to the rules described above. By exchanging shares
by telephone, the shareholder is acknowledging receipt of a prospectus of
the fund to which the exchange is made and that for full or partial
exchanges, any special account features such as Automatic Investment
Plans, Automatic Withdrawal Plans and retirement plan contributions will
be switched to the new account unless the Transfer Agent is otherwise
instructed. Telephone exchange privileges automatically apply to each
direct shareholder of record and the dealer representative of record
unless and until the Transfer Agent receives written instructions from 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 neither it nor the Fund will be liable for
losses or expenses arising out of telephone instructions reasonably
believed to be genuine. The Transfer Agent reserves the right to require
shareholders to confirm, in writing, telephone 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 the close of The New York Stock
Exchange, which is normally 4:00 P.M., but may be earlier on some days.
Normally, shares of the fund to be acquired are purchased on the
Redemption Date, but such purchases may be delayed by either fund up to
five business days if it determines that it would be disadvantaged by an
immediate transfer of the redemption proceeds. The Fund 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 assessed against the account into
which the exchange is made to help defray administrative costs. Dealers
and brokers who process exchange orders on behalf of their customers may
charge for their services. Direct shareholders may avoid those charges by
requesting the Fund 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 the Fund: (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) 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. The Fund reserves the right to discontinue offering
its shares to such plans at any time without prior notice.
Dividends, Distributions and Taxes
This discussion relates solely to Federal tax laws and is not
exhaustive; a qualified tax adviser should be consulted. Dividends and
distributions may be subject to Federal, state and local taxation. See
"Tax Status of the Fund's Dividends and Distributions" in the Statement
of Additional Information for a further discussion of tax matters
affecting the Fund and its distributions, as well as a procedure for
electing to reinvest dividends and distributions of any of the Eligible
Funds into shares of the Fund at net asset value.
Dividends and Distributions
The Fund intends to declare all of its net income, as defined below,
as dividends on each regular business day and to pay dividends monthly.
Dividends will be payable to shareholders as described above in "How To
Buy Shares." All dividends and capital gains distributions for accounts
of Program participants are automatically reinvested in Fund shares.
Dividends accumulated since the prior payment will be reinvested in full
and fractional shares at net asset value on the third Thursday of each
calendar month. If a shareholder redeems all shares at any time during
a month, the redemption proceeds include all dividends accrued up to the
redemption date for shares redeemed prior to 12:00 Noon, and include all
dividends accrued through the redemption date for shares redeemed between
12:00 Noon and the close of The New York Stock Exchange. Program
participants may receive cash payments by asking the broker to redeem
shares.
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 the Fund 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 Fund
will also be automatically reinvested in shares of the Fund at net asset
value, on the third Thursday of each calendar month, unless the
shareholder asks the Transfer Agent in writing to pay dividends and
distributions in cash or to reinvest them in another Eligible Fund, as
described in "Dividend Reinvestment in Another Fund" in the Statement of
Additional Information. That notice must be received prior to the record
date for a dividend to be effective as to that dividend. Dividends,
distributions and the proceeds of redemptions of Fund shares represented
by checks returned to the Transfer Agent by the Postal Service as
undeliverable will be reinvested in shares of the Fund, 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 Fund shares prior to redemption of
such shares by the Fund. In such cases, the shareholder will be entitled
to dividends on such shares only up to and including the date of such
payment. Dividends on such shares accruing between the date of payment
and the date such shares are redeemed by the Trusts will be paid to the
broker-dealer. Program participants should discuss these arrangements
with their broker-dealer.
The Fund's net investment income for dividend purposes consists of all
interest accrued on portfolio assets, less all expenses of the Fund 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. The Fund will not make any distributions from
net realized securities gains unless capital loss carry forwards, if any,
have been used or have expired. Any net realized capital loss is carried
forward to offset against gains in later years. To effect its policy of
maintaining a net asset value of $1.00 per share, the Fund, under certain
circumstances, may withhold dividends or make distributions from capital
or capital gains.
Tax Status of the Fund's Dividends and Distributions
Dividends paid by the Fund derived from net investment income or net
short-term capital gains are taxable to shareholders as ordinary income,
whether received in cash or reinvested, and will not be eligible for the
dividends-received deduction for corporations. If the Fund 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 gains are taxable
to shareholders as long-term capital gains whether received in cash or
reinvested, and regardless of how long the Fund shares have been held.
For information on "backup" withholding on dividends, see "General
Information on Redemptions," above.
Tax Status of the Fund
If the Fund 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. The Fund qualified
during its last fiscal year and intends to qualify in 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 which the Fund might not meet in any particular fiscal year.
If the Fund does not qualify, it would be treated for Federal tax purposes
as an ordinary corporation and receive no tax deduction for payments made
to shareholders.
Additional Information
Description of Capital Stock
The Fund's shares are of one class, are transferable without
restriction, and have equal rights and privileges. Each share of the Fund
entitles the holder to one vote per share (and a fractional vote for a
fractional share) on matters submitted to a shareholder vote, and to
participate pro rata in dividends and distributions and in the net
distributable assets of the Fund on liquidation. The Directors may divide
or combine the shares into a greater or lesser number of shares without
thereby changing the proportionate beneficial interest in the Fund.
Shares of the Fund have equal liquidation rights as to the assets of the
Fund. When issued, shares of the Fund are fully-paid and nonassessable,
and have no preemptive, conversion or exchange rights. The Fund's Board
of Directors is empowered to issue additional "series" of shares of the
Fund, which may have separate assets and liabilities. Under the
provisions of the Fund's By-Laws and as permitted by Maryland law, the
Fund does not anticipate holding annual meetings.
The Custodian and the Transfer Agent
The Custodian of the assets of the Fund is Citibank, N.A. The Manager
and its affiliates presently have banking relationships with the
Custodian. See "Additional Information" in the Statement of Additional
Information for further information. The Fund'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 Fund
and Its Investment Policies" do not apply to banks in which the Fund's
cash is kept.
Shareholder Services, Inc., a subsidiary of OMC, acts as Transfer Agent
and shareholder servicing agent for the Fund and other mutual funds
advised by the Manager on an at-cost basis. The fees to the Transfer
Agent do not include payments for any services of the type paid or to be
paid, by the Fund to the Distributor and to Recipients under the Service
Plan. Shareholders should direct any inquiries regarding the Fund to the
Transfer Agent at the address and toll-free phone number on the back
cover. Program participants should direct any inquiries regarding the Fund
to their broker.
<PAGE>
Investment Adviser and Distributor
Centennial Asset Management Corporation
3410 South Galena Street
Denver, Colorado 80231
Transfer 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 & Wolf, P.C.
Colorado State Bank Building
1600 Broadway - Suite 1850
Denver, Colorado 80202
No dealer, broker, salesperson or any other person has been authorized to
give any information or to make any representations other than those
contained in this Prospectus or the Statement of Additional Information,
and if given or made, such information and representations must not be
relied upon as having been authorized by the Fund, 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.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
DAILY CASH ACCUMULATION FUND, INC.
3410 South Galena Street, Denver, Colorado 80231
1-800-525-9310
This Statement of Additional Information is not a Prospectus. This
Statement of Additional Information should be read together with the
Prospectus, dated April 17, 1995 (the "Prospectus"), of Daily Cash
Accumulation Fund, Inc. (the "Fund"), which may be obtained by writing to
Shareholder Services, Inc. ( the "Transfer Agent"), P.O. Box 5143, Denver,
Colorado 80217, or by calling the toll-free number shown above.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Investment Objective and Policies. . . . . . . . . . . . . . . . . . . 2
Yield Information. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Investment Restrictions. . . . . . . . . . . . . . . . . . . . . . . . 5
Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . 6
Investment Management Services . . . . . . . . . . . . . . . . . . . . 9
Purchase, Redemption and Pricing of Shares . . . . . . . . . . . . . .11
Service Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Additional Information . . . . . . . . . . . . . . . . . . . . . . . .14
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . .15
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . .16
Appendix A: Description of Securities Ratings. . . . . . . . . . . . A-1
Appendix B: Automatic Withdrawal Plan Provisions . . . . . . . . . . B-1
Appendix C: Industry Classifications . . . . . . . . . . . . . . . . C-1
</TABLE>
This Statement of Additional Information is effective April 17, 1995.
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The investment objective and policies of the Fund are described in the
Prospectus. Supplemental information about those policies is set forth
below. Certain capitalized terms used in this Statement of Additional
Information are defined in the Prospectus.
The Fund will not make investments with the objective of seeking
capital growth. However, the value of the securities held by the Fund 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 Fund since the Fund 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 Fund 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
Fund believes such disposition advisable or it needs to generate cash to
satisfy redemptions. In such cases, the Fund may realize a capital gain
or loss.
Ratings of Securities. The Prospectus describes "Eligible Securities" in
which the Fund may invest and indicates that if a security's rating is
downgraded, the Manager and/or the Board may have to reassess the
security's credit risks. If a security has ceased to be a First Tier
Security, the Manager will promptly reassess whether the security
continues to present "minimal credit risks." If the Manager becomes aware
that any Rating Organization has downgraded its rating of a Second Tier
Security or rated an unrated security below its second highest rating
category, the Fund's Board of Directors shall promptly reassess whether
the security presents minimal credit risks and whether it is in the best
interests of the Fund to dispose of it; but if the Fund disposes of the
security within five days of the Manager's 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 Fund to dispose
of the security. The Rating Organizations currently designated as such
by the 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
Appendix A.
Floating Rate/Variable Rate Obligations. The Fund may invest in
instruments with floating or variable interest rates. The interest rate
on a floating rate obligation is based on a stated prevailing market rate,
such as a bank's prime rate, the 90-day U.S. Treasury Bill rate, the rate
of return on commercial paper or bank certificates of deposit, or some
other standard, 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. Some variable rate or
floating rate obligations in which the Fund 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, discussed
below. The Manager, on behalf of the Fund, will consider on an ongoing
basis the creditworthiness of the issuers of the floating and variable
rate obligations in the Fund's portfolio. There is no limit on the amount
of the Fund's assets that may be invested in floating rate and variable
rate obligations.
Repurchase Agreements. In a repurchase transaction, the Fund 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 Fund'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.
Master Demand Notes. A master demand note is a corporate obligation that
permits the investment of fluctuating amounts by the Fund at varying rates
of interest pursuant to direct arrangements between the Fund, as lender,
and the corporate borrower that issues the note. These notes permit daily
changes in the amounts borrowed. The Fund 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 Fund's right to redeem is dependent on the ability of the borrower to
pay principal and interest on demand. In evaluating the master demand
note 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
Fund 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 Fund's
liquidity might be impaired if the borrower were unable to pay principal
and interest on demand.
Loans of Portfolio Securities. The Fund may lend its portfolio securities
subject to the restrictions stated in the Prospectus. Under applicable
regulatory requirements (which are subject to change), the loan collateral
must, on each business day, at least equal the market value of the loaned
securities and must consist of cash, bank letters of credit or U.S.
Government securities, or other cash equivalents which the Fund is
permitted to purchase. To be acceptable as collateral, letters of credit
must obligate a bank to pay amounts demanded by the Fund if the demand
meets the terms of the letter. The Fund 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 Fund 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 Fund or the Manager. The
terms of the Fund's loans must meet applicable tests under the Internal
Revenue Code and permit the Fund to reacquire loaned securities on five
business days' notice or in time to vote on any important matter.
Illiquid and Restricted Securities. Illiquid securities in which the Fund
may invest include issues which only may be redeemed by the issuer upon
more than seven days notice or at maturity, repurchase agreements maturing
in more than seven days, fixed time deposits subject to withdrawal
penalties which mature in more than seven days, and other securities which
cannot be sold freely due to legal or contractual restrictions on resale.
Contractual restrictions on the resale of illiquid securities might
prevent or delay their sale by the Fund at a time when such sale would be
desirable. Restricted securities that are not illiquid, in which the Fund
may invest, include certain master demand notes redeemable on demand, and
short-term corporate debt instruments which are not related to current
transactions of the issuer and therefore are not exempt from registration
as commercial paper, as described in the Prospectus.
Bank Loan Participation Agreements. The Fund may invest in bank loan
participation agreements, subject to the investment limitation set forth
in "The Fund and Its Investment Policies - Illiquid and Restricted
Securities" in the Prospectus. These participation agreements give the
Fund an undivided interest in U.S. dollar-denominated loans made by the
bank selling the participation interests, in the proportion that the
Fund's participation interest bears to the total principal amount of the
loan. The selling bank may not have any obligation to the purchaser of
the interest other than to pay to it principal and interest on the loan
if and when received by the selling bank. The Manager has set certain
creditworthiness standards for issuers of loan participations, and
monitors their creditworthiness. Participation interests are considered
investments in illiquid securities (see "Illiquid and Restricted
Securities," above). Their value primarily depends upon the
creditworthiness of the borrower, and its ability to pay interest and
principal. Borrowers may have difficulty making payments. If a borrower
fails to make scheduled interest on principal payments, the Fund could
experience a reduction in its income and a decline in the net asset value
of its shares. Therefore, the loan must be an obligation of a corporation
whose commercial paper or corporate debt obligations the Fund may
purchase. The Fund will only purchase participation agreements from a
bank in whose obligations the Fund may invest, and subject to the
restriction described above on investments in illiquid securities. Only
loans which mature in one year or less may be the subject of participation
interests.
YIELD INFORMATION
The Fund's current yield is calculated for a seven-day period of time,
determined in accordance with regulations adopted under the Investment
Company Act as follows. First, a base period return is calculated for the
seven-day period by determining the net change in the value of a
hypothetical pre-existing account having one share at the beginning of the
seven day period. The change includes dividends declared on the original
share and dividends declared on any shares purchased with dividends on
that share, but such dividends are adjusted to exclude any realized or
unrealized capital gains or losses affecting the dividends declared.
Next, the base period return is multiplied by 365/7 to obtain the current
yield to the nearest hundredth of one percent. The compounded effective
yield for a seven-day period is calculated by (a) adding 1 to the base
period return (obtained as described above), (b) raising the sum to a
power equal to 365 divided by 7, and (c) subtracting 1 from the result.
For the seven days ended December 31, 1994, the Fund's yield was 5.32% and
its compounded effective yield was 5.46%.
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 the Fund'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.
Yield information may be useful to investors in reviewing the Fund's
performance. The Fund 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 MonitorTM), 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 the Fund 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 Fund of future yields or rates of return on its shares. The Fund's
yield is affected by portfolio quality, portfolio maturity, type of
instruments held and operating expenses. When comparing the Fund'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.
INVESTMENT RESTRICTIONS
The Fund's most significant investment restrictions are described in
the Prospectus. The following investment restrictions are also
fundamental policies and, together with the fundamental investment
policies and restrictions described in the Prospectus, cannot be changed
without the vote of a "majority" of the Fund's outstanding shares. Under
the Investment Company Act, such a "majority" vote is defined as the vote
of the lesser of:(i) 67% or more of the shares present or represented by
proxy at a shareholder's meeting, if the holders of more than 50% of the
outstanding shares are present or represented by proxy, or (ii) more than
50% of the outstanding shares. Under these additional restrictions, the
Fund 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; however, the Fund may purchase debt
securities issued by companies which invest in real estate or interests
therein; (3) purchase securities on margin or make short sales of
securities; (4) invest in or hold securities of any issuer if those
officers and directors of the Fund 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; (6) invest more than 5% of the value of its total
assets in securities of companies that have operated less than three
years, including the operations of predecessors; and (7) invest in
securities of other investment companies.
For purposes of the Fund's policy not to concentrate described under
investment restriction number 6 in the Prospectus, the Fund has adopted,
as a matter of non-fundamental policy, the industry classifications set
forth in Appendix C to this Statement of Additional Information.
DIRECTORS AND OFFICERS
The Directors and officers of the Fund and their principal business
affiliations and occupations during the past five years are listed below.
All of the Directors are also trustees, directors, or managing general
partners of Centennial Money Market Trust, Centennial Government Trust,
Centennial Tax Exempt Trust, Centennial New York Tax Exempt Trust,
Centennial California Tax Exempt Trust and Centennial America Fund, L.P.
(collectively, the "Centennial Trusts"), Oppenheimer Equity Income Fund,
Oppenheimer Total Return Fund, Inc., Oppenheimer High Yield Fund,
Oppenheimer Cash Reserves, The New York Tax-Exempt Income Fund, Inc.,
Oppenheimer Limited-Term Government Fund, Oppenheimer Tax-Exempt Bond
Fund, Oppenheimer Variable Account Funds, Oppenheimer Main Street Funds,
Inc., Oppenheimer Champion High Yield Fund, Oppenheimer Integrity Funds,
Oppenheimer Strategic Funds Trust, Oppenheimer Strategic Short-Term Income
Fund, Oppenheimer Strategic Income & Growth Fund and Oppenheimer Strategic
Investment Grade Bond Fund (all of the foregoing funds are collectively
referred to as the "Denver-based OppenheimerFunds"). All officers except
Ms. Wolf, Ms. Warmack and Mr. Zimmer hold similar positions with such
other funds. Mr. Fossel is President and Mr. Swain is Chairman of the
Denver-based OppenheimerFunds. As of April 3, 1995, the Directors and
officers of the Fund as a group owned less than 1% of the Fund's
outstanding shares. The foregoing statement does not reflect ownership
of shares held of record by an employee benefit plan for employees of the
Manager (for which two of the officers listed below, Messrs. Fossel and
Donohue, are trustees), other than the shares beneficially owned under the
plan by the officers of the Fund listed above.
ROBERT G. AVIS, Director*; Age: 63
One North Jefferson Avenue, St. Louis, Missouri 63103
Vice Chairman of A.G. Edwards & Sons, Inc. (a broker-dealer) and A.G.
Edwards, Inc. (its parent holding company); Chairman of A.G.E. Asset
Management and A.G. Edwards Trust Company (its affiliated investment
adviser and trust company, respectively).
WILLIAM A. BAKER, Director; Age: 80
197 Desert Lakes Drive, Palm Springs, California 92264
Management Consultant.
CHARLES CONRAD, JR., Director; Age: 64
19411 Merion Circle, Huntington Beach, California 92648
Vice President of McDonnell Douglas Space Systems Co.; formerly
associated with the National Aeronautics and Space Administration.
JON S. FOSSEL, Director and President*; Age: 53
Two World Trade Center, New York, New York 10048
Chairman, Chief Executive Officer and a Director of OMC; President and
Director of Oppenheimer Acquisition Corp. ("OAC"), OMC's parent
holding company; President and a Director of HarbourView Asset
Management Corporation ("HarbourView"), an investment advisory
subsidiary of OMC; a Director of the Transfer Agent and Shareholder
Financial Services, Inc. ("SFSI"), transfer agent subsidiaries of OMC;
formerly President of OMC.
RAYMOND J. KALINOWSKI, Director; Age: 65
44 Portland Drive, St. Louis, Missouri 63131
Director of Wave Technologies International, Inc.; formerly Vice
Chairman and 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, Director; Age: 73
2552 East Alameda, Denver, Colorado 80209
Formerly Managing Partner of Deloitte Haskins & Sells (an accounting
firm).
ROBERT M. KIRCHNER, Director; Age: 73
7500 E. Arapahoe Road, Englewood, Colorado 80112
President of The Kirchner Company (management consultants).
NED M. STEEL, Director; Age: 80
3416 South Race Street, Englewood, Colorado 80110
Chartered Property and Casualty Underwriter; Director of Visiting
Nurse Corporation of Colorado; formerly Senior Vice President and a
Director of the Van Gilder Insurance Corp. (insurance brokers).
JAMES C. SWAIN, Director and Chairman*; Age: 61
3410 South Galena Street, Denver, Colorado 80231
Vice Chairman and a Director of OMC; President and a Director of the
Manager; and formerly Chairman of the Board of the Transfer Agent.
ANDREW J. DONOHUE, Vice President; Age: 44
Two World Trade Center, New York, New York 10048
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; Age: 58
3410 South Galena Street, Denver, Colorado 80231
Senior Vice President and Treasurer of the Manager; Senior Vice
President and Treasurer of OMC; Vice President and Treasurer of OFDI
and HarbourView; Vice President, Secretary and Treasurer of the
Transfer Agent and SFSI; an officer of other OppenheimerFunds.
DOROTHY G. WARMACK, Vice President and Portfolio Manager; Age: 58
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; Age: 43
3410 South Galena Street, Denver, Colorado 80231
Vice President of OMC and the Manager; an officer of other
OppenheimerFunds.
ARTHUR J. ZIMMER, Vice President and Portfolio Manager; Age: 48
3410 South Galena Street, Denver, Colorado 80231
Vice President of OMC and the Manager; an officer of other
OppenheimerFunds; formerly Vice President of Hanifen Imhoff Management
Company (mutual fund investment advisor).
ROBERT G. ZACK, Assistant Secretary; Age: 46
Two World Trade Center, New York, New York 10048
Senior Vice President and Associate General Counsel of OMC; Assistant
Secretary of the Transfer Agent and SFSI; an officer of other
OppenheimerFunds.
ROBERT J. BISHOP, Assistant Treasurer; Age: 36
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other OppenheimerFunds; previously a Fund Controller for
the Manager, prior to which he was an Accountant for Yale & Seffinger,
P.C. (an accounting firm) Resolution Trust Corporation and previously
an Accountant and Commissions Supervisor for Stuart James Company,
Inc., a broker-dealer.
SCOTT FARRAR, Assistant Treasurer; Age: 29
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other OppenheimerFunds; previously a Fund Controller for
the Manager, 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.
[FN]
- -----------------------
*A Director who is an "interested person" of the Fund as defined in the
Investment Company Act.
Remuneration of Directors. The officers of the Fund are affiliated with
the Manager; they and the Directors of the Fund who are affiliated with
the Manager (Messrs. Fossel and Swain, who are both officers and
Directors) receive no salary or fee from the Fund. The Directors of the
Fund (excluding Messrs. Fossel and Swain) received the total amounts shown
below (i) from the Fund, during its fiscal year ended December 31, 1994,
and (ii) from all 22 of the Denver-based OppenheimerFunds (including the
Fund) listed in the first paragraph of this section, for services in the
positions shown:
<TABLE>
<CAPTION>
Total Compensation
Aggregate From All
Compensation Denver-based
Name Position from Fund OppenheimerFunds1
<S> <C> <C> <C>
Robert G. Avis Director $5,452 $53,000.00
William A. Baker Audit and Review Committee$7,540 $73,257.01
Chairman and Director
Charles Conrad, Jr. Audit and Review Committee$7,028 $68,293.67
Member and Director
Raymond J. KalinowskiDirector $5,452 $53,000.00
C. Howard Kast Director $5,452 $53,000.00
Robert M. Kirchner Audit and Review Committee$7,028 $68,293.67
Member and Director
Ned M. Steel Director $5,452 $53,000.00
- ------------------------
1For the 1994 calendar year.
</TABLE>
Major Shareholders. As of April 3, 1995, the only person known by the
management of the Fund to be the record or beneficial owner of 5% or more
of the outstanding shares of the Fund was A.G. Edwards & Sons, Inc.
("Edwards"), One North Jefferson Street, St. Louis, MO 63103, which was
the record owner of 3,048,916,737.450 shares (approximately 98.82% of the
shares outstanding). The Fund has been informed that the shares held of
record by Edwards were beneficially owned for the benefit of its brokerage
clients.
INVESTMENT MANAGEMENT SERVICES
The Manager is a wholly-owned subsidiary of Oppenheimer Management
Corporation ("OMC"), which is wholly-owned by Oppenheimer Acquisition
Corporation ("OAC"), a holding company controlled by Massachusetts Mutual
Life Insurance Company. The remaining stock of OAC is also owned by: (i)
certain of OMC's directors and officers, some of whom may also serve as
officers of the Fund, and two of whom (Messrs. Fossel and Swain) serve as
Directors of the Fund, and (ii) A.G. Edwards, which owns less than 5% of
its equity.
The Manager supervises the investment operations of the Fund and the
composition of its portfolio and furnishes the Fund advice and
recommendations with respect to investments, investment policies, and the
purchase and sale of securities pursuant to an investment advisory
agreement (the "Agreement") with the Fund, described in "Management of the
Fund" in the Prospectus. During the Fund's fiscal years ended December
31, 1994, 1993 and 1992, the Fund paid the Manager management fees of
$11,918,801, $13,841,735 and $16,400,925 respectively, pursuant to the
Agreement. The Manager reimbursed the Fund $125,619 in 1994 pursuant to
the voluntary undertakings discussed below.
The Agreement requires the Manager, at its expense, to provide the
Fund 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 Fund, including the
compilation and maintenance of records with respect to its 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 Fund. Expenses not expressly assumed by the Manager under the
Agreement or as Distributor of the shares of the Fund are paid by the
Fund. The Agreement lists examples of expenses paid by the Fund, the
major categories of which relate to interest, taxes, fees to unaffiliated
directors, legal, bookkeeping and audit expenses, brokerage, custodian and
transfer agent expenses, stock issuance costs, certain printing costs
(excluding the cost of printing prospectuses for sales materials),
registration fees, and non-recurring expenses, including litigation.
The Agreement provides that the Manager will reimburse the Fund for
annual expenses of the Fund (excluding brokerage commissions, taxes,
interest and extraordinary expenses such as litigation) which exceed the
most stringent limits prescribed by any state in which the Fund's shares
are offered for sale. At present, that limitation is imposed by
California and limits expenses (with specified exclusions) to 2.5% of the
first $30 million of average annual net assets, 2.0% of the next $70
million, and 1.5% of average annual net assets in excess of $100 million.
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 liability under
this expense limitation. Independently of the Agreement with the Fund,
effective December 1, 1994, the Manager has voluntarily agreed to assume
the Fund's expenses to the level needed to enable the Fund's 7-day yield
(computed in accordance with procedures specified pursuant to regulations
adopted under the Investment Company Act of 1940) to at least equal the
7-day yield of Centennial Money Market Trust. The Manager reserves the
right to modify or terminate the latter of these voluntary undertakings
at any time without prior notice to investors or shareholders. Prior to
December 1, 1994, the Manager voluntarily agreed to waive a portion of the
management fee otherwise payable to it by the Fund to the extent necessary
to ensure that the annual management fee of the Fund did not exceed 0.35%
of the Fund's average net assets.
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 Directors of the Fund in following or declining to follow
any advice or recommendations of the Manager. The Manager shall not be
liable for any error of judgment or mistake of law, or for any loss
suffered by the Fund 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 Agreement permits the Manager to act as investment adviser
for any other person, firm or corporation.
Portfolio Transactions. Portfolio decisions are based upon
recommendations and judgment of the Manager subject to the overall
authority of the Board of Directors. As most purchases made by the Fund
are principal transactions at net prices, the Fund incurs little or no
brokerage costs. Purchases of portfolio securities from underwriters
include a commission or concession paid by the issuer to the underwriter,
and purchases from dealers include a spread between the bid and asked
price. The Fund'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 Fund.
The Fund seeks to obtain prompt and reliable execution of orders at
the most favorable net price. If brokers are used for portfolio
transactions, transactions are directed to brokers furnishing execution
and research services deemed by the Manager to be useful or valuable to
the performance of its investment advisory functions for the Fund.
Research information may be in written form or through direct contact with
individuals and includes information on particular companies and
industries as well as market, economic or institutional activity areas.
It serves to broaden the scope and supplement the research activities of
the Manager, to make available additional views for consideration and
comparisons, and to enable the Manager to obtain market information for
the valuation of securities held in the Fund's portfolio. The Fund 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 Fund. No portfolio transactions are handled by brokers which are
affiliated with the Fund or the Manager.
PURCHASE, REDEMPTION AND PRICING OF SHARES
Determination of Net Asset Value Per Share. The net asset value per share
of the Fund's shares is determined twice each day as of 12:00 Noon and as
of the close of The New York Stock Exchange (the "Exchange") which is
normally 4:00 P.M., but may be earlier on some days, each day the Exchange
is open (a "regular business day"), (all references to time mean New York
time) by dividing the Fund's net assets (the total value of the Fund'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.
The Fund will seek to maintain a net asset value of $1.00 per share
for purchases and redemptions. There can be no assurance that it will do
so. The Fund operates under Rule 2a-7 under which the Fund may use the
amortized cost method of valuing its shares. The amortized cost method
values a security initially at its cost and thereafter assumes a constant
amortization of any market discount or premium, regardless of the impact
of fluctuating interest rates on the market value of the security. The
method does not take into account unrealized capital gains or losses.
The Fund's Board of Directors has established procedures intended to
stabilize the Fund's net asset value at $1.00 per share. If the Fund'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 Directors 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 Fund shares without monetary consideration, or
calculating net asset value per share by using available market
quotations.
As long as it uses Rule 2a-7, the Fund must abide by certain
conditions described in the Prospectus. Some of those conditions which
relate to portfolio management are that the Fund 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 Manager
under guidelines approved by the Board; and (iii) not purchase any
instrument with a remaining maturity of more than 397 days. The Fund's
fundamental investment policy that the remaining maturity of an instrument
shall not exceed one year is more restrictive than the provisions of Rule
2a-7. 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 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 Fund
would receive if it sold the instrument. During periods of declining
interest rates, the daily yield on shares of the Fund 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 Fund resulted
in a lower aggregate portfolio value on a particular day, a prospective
investor in the Fund 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 Fund would receive less investment income than
if the Fund were priced at market value. Conversely, during periods of
rising interest rates, the daily yield on Fund 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 Fund would receive more investment income than if the
Fund were priced at market value.
Redemptions. The Fund's Board of Directors has the right, in conformity
with applicable law, to cause the involuntary redemption of the shares
held in any account if the aggregate net asset value of such shares is
less than $500 or such lesser amount as the Board may decide. Should the
Board elect to exercise this right, it will establish the terms of any
notice of such redemption required to be provided to the shareholder under
the Investment Company Act or Maryland law, including any provision the
Board may establish to enable the shareholder to increase the amount of
the investment to avoid involuntary redemption.
Expedited Redemption Procedures. Under the Expedited Redemption Procedure
available to direct shareholders of the Fund, as discussed in the
Prospectus, the wiring of redemption proceeds may be delayed if the Fund's
Custodian bank is not open for business on a day that the Fund would
normally authorize the wire to be made, which is usually the same day for
redemptions prior to 12:00 Noon, and the Fund's next regular business day
for redemptions between 12:00 Noon and the close of The New York Stock
Exchange, which is normally 4:00 P.M., but may be earlier on some days.
In those circumstances, the wire will not be transmitted until the next
bank business day on which the Fund is open for business and no dividends
will be paid on the proceeds of redeemed shares waiting transfer by wire.
SERVICE PLAN
The Fund has adopted a service plan (the "Plan") under Rule 12b-1 of
the Investment Company Act pursuant to which the Fund is permitted to
reimburse the Distributor for a portion of its costs incurred in
connection with the servicing of the Fund's shares, as described in the
Prospectus for costs incurred in rendering assistance in connection with
the distribution of Fund shares. Under the Plan, the Fund's Distributor
is authorized to reimburse certain securities dealers and other financial
institutions and organizations ("Recipients") in connection with the
personal service and the maintenance of shareholder accounts that hold
Fund shares. Payment is made monthly or quarterly (i) at the annual rate
of 0.20 of 1.0% (or such lesser amount as the disinterested Directors may
determine) of the average net asset value of the Fund's shares owned
beneficially or of record during the month or quarter by the Recipient or
its customers, or (ii) in an amount equal to the Recipient's total cost
during the month of rendering personal service (including reasonable
allocations of overhead), whichever is less. No payment will be made to
a Recipient for any month during which the average net asset value of Fund
shares held by the Recipient and its customers was less than $3 million.
Although no payments are retained by the Distributor or the Manager,
Recipients which are affiliates of the Manager may receive payments.
Payments by the Fund under the Plan for the fiscal year ended December 31,
1994 totalled $6,661,667.
Under the Plan, a Recipient must certify monthly or quarterly that
its expenses for providing such services do not exceed its administrative
and sales-related costs. A Recipient is required to reimburse the Fund
if the aggregate payments it receives during the year exceed its costs as
so certified.
The Agreement may continue in effect for a period of more than one
year from the date of its execution only so long as continuance is
approved at least annually by the Board of Directors of the Fund,
including a majority of the disinterested Directors, by a vote cast in
person at a meeting called for the purpose of voting on that Agreement.
The Agreement automatically terminates in the event of its assignment and
also terminates if (i) the Fund terminates the Plan, or (ii) a majority
of the disinterested Directors or the holders of a majority of the
outstanding voting securities of the Fund vote to terminate the Agreement.
The Plan provides that, as long as the Plan remains in effect, the
selection and nomination of Directors of the Fund who are not "interested
persons" of the Fund shall be committed to the discretion of the Directors
then in office who are not "interested persons" of the Fund. However,
others may participate in such selection and nomination provided that the
final decision is approved by a majority of the incumbent Independent
Directors. Finally, the Plan cannot be amended without shareholder
approval as set forth above to increase materially the amount of payments
to be made and all material amendments are required to be approved by the
vote of the Board of Directors of the Fund, including a majority of the
disinterested Directors, cast in person at a meeting called for that
purpose.
ADDITIONAL INFORMATION
Tax Status of the Fund's Dividends and Distributions. The Federal tax
treatment of the Fund's dividends and distributions to shareholders is
explained in the Prospectus under the caption "Dividends, Distributions
and Taxes." Under the Internal Revenue Code, the Fund 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 the Fund must pay an excise tax on the amounts not distributed.
While it is presently anticipated that the Fund's distributions will meet
those requirements, the Fund's Board and Manager might determine in a
particular year that it might be in the best interest of the Fund's
shareholders 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.
Dividend Reinvestment in Another Fund. Direct shareholders of the Fund
may elect to reinvest all dividends and/or distributions in Class A 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 next determined on the payable date of the dividend or
distribution.
The Custodian and the Transfer Agent. The Custodian's responsibilities
include safeguarding and controlling the Fund's portfolio securities and
handling the delivery of portfolio securities to and from the Fund. The
Manager has represented to the Fund that its banking relationships between
the Manager and the Custodian have been and will continue to be unrelated
to and unaffected by the relationship between the Fund and the Custodian.
It will be the practice of the Fund 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. as the Transfer Agent, is responsible for
maintaining the Fund'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 the Fund and the Distributor, the Distributor is the
Fund's principal underwriter in the continuous public offering of the
Fund's shares but is not obligated to sell a specific number of shares.
Expenses normally attributable to sales (other than those paid under the
Service Plan), include advertising and the cost of printing and mailing
prospectuses (other than those furnished to existing shareholders), are
borne by the Distributor.
Independent Auditors. The independent auditors of the Fund audit the
Fund's financial statements and perform other related audit services.
They also act as auditors for the Manager, Oppenheimer Management
Corporation, the Manager's immediate parent, as well as for and certain
other funds advised by the Manager and Oppenheimer Management Corporation.
<PAGE>
INDEPENDENT AUDITORS' REPORT
Daily Cash Accumulation Fund, Inc.
The Board of Directors and Shareholders of Daily Cash Accumulation
Fund, Inc.:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Daily Cash Accumulation Fund,
Inc., as of December 31, 1994, the related statement of operations for the
year then ended, the statements of changes in net assets for the years
ended December 31, 1994 and 1993, and the financial highlights for the
period January 1, 1985 to December 31, 1994. These financial statements
and financial highlights are the responsibility of the Fund'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 December 31, 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 Daily Cash
Accumulation Fund, Inc., at December 31, 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.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Denver, Colorado
January 23, 1995
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1994
Daily Cash Accumulation Fund, Inc.
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
------ ------------
<S> <C> <C>
BANKERS' ACCEPTANCES -- 0.3%
Chase Manhattan Bank, N.A., 6.15%, 2/17/95 (Cost $9,919,708)............................... $ 10,000,000 $ 9,919,708
CERTIFICATES OF DEPOSIT -- 2.6%
YANKEE CERTIFICATES OF DEPOSIT -- 1.2%
Mitsubishi Bank Ltd., 5.60%, 1/25/95....................................................... 10,000,000 9,962,667
Mitsubishi Bank Ltd., 5.87%, 2/17/95....................................................... 10,000,000 9,999,165
Mitsubishi Bank Ltd., 6.20%, 2/6/95........................................................ 15,000,000 15,000,000
--------------
34,961,832
--------------
DOMESTIC CERTIFICATES OF DEPOSIT -- 1.4%
Huntington National Bank, 5.82%, 1/4/95(1)................................................. 20,000,000 19,994,140
LaSalle National Bank, 5.57%, 1/17/95...................................................... 5,000,000 5,000,000
LaSalle National Bank, 5.87%, 2/6/95....................................................... 15,000,000 15,000,000
--------------
39,994,140
--------------
Total Certificates of Deposit (Cost $74,955,972)........................................... 74,955,972
--------------
DIRECT BANK OBLIGATIONS -- 1.8%
ABN Amro Bank NV, guaranteeing commercial paper of:
ABN Amro Bank, Canada, 5.85%, 2/24/95.................................................... 10,000,000 9,912,250
First National Bank of Boston, 5.72%, 1/3/95(1)............................................ 13,000,000 13,001,098
PNC Bank, N.A., 5.66%, 1/4/95(1)........................................................... 10,000,000 9,994,356
PNC Bank, N.A., 5.82%, 1/4/95(1)........................................................... 15,000,000 14,995,428
South Carolina National Bank, 8.95%, 1/30/95............................................... 5,000,000 5,014,155
--------------
Total Direct Bank Obligations (Cost $52,917,287)........................................... 52,917,287
--------------
LETTERS OF CREDIT -- 3.3%
Banc One Dayton, guaranteeing commercial paper of:
Nationwide Funding Corp., 6.28%, 1/5/95(1)(2)............................................ 17,267,000 17,267,000
Credit Suisse, guaranteeing commercial paper of:
Queensland Alumina Ltd., 5.60%, 1/17/95.................................................. 10,000,000 9,975,111
Credit Suisse, guaranteeing commercial paper of:
Queensland Alumina Ltd., 5.80%, 2/1/95................................................... 8,000,000 7,960,044
Credit Suisse, guaranteeing commercial paper of:
Queensland Alumina Ltd., 5.85%, 2/13/95.................................................. 10,834,000 10,758,297
Credit Suisse, guaranteeing commercial paper of:
Queensland Alumina Ltd., 6.07%, 2/6/95................................................... 6,091,000 6,054,028
Mitsubishi Bank Ltd., guaranteeing commercial paper of:
Mitsubishi Motors Credit of America, 5.45%, 1/13/95...................................... 6,000,000 5,989,100
Mitsubishi Bank Ltd., guaranteeing commercial paper of:
Mitsubishi Motors Credit of America, 5.50%, 1/17/95...................................... 5,000,000 4,987,779
</TABLE>
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
Daily Cash Accumulation Fund, Inc.
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
------ ------------
<S> <C> <C>
LETTERS OF CREDIT (CONTINUED)
Mitsubishi Bank Ltd., guaranteeing commercial paper of:
Mitsubishi Motors Credit of America, 5.50%, 1/18/95..................................... $ 10,000,000 $ 9,974,028
Mitsubishi Bank Ltd., guaranteeing commercial paper of:
Mitsubishi Motors Credit of America, 5.65%-5.70%, 1/9/95................................ 15,000,000 14,981,111
Sanwa Bank Ltd., guaranteeing commercial paper of:
Orix America, Inc., 5.47%, 1/9/95(2).................................................... 5,000,000 4,993,922
Sanwa Bank Ltd., guaranteeing commercial paper of:
Orix America, Inc., 5.56%, 2/1/95(2).................................................... 5,000,000 4,976,061
Total Letters of Credit (Cost $97,916,481)................................................ --------------
97,916,481
--------------
SHORT-TERM NOTES -- 87.4%
ASSET-BACKED -- 13.9%
Asset Securitization Cooperative, 5.40%, 1/13/95(2)....................................... 15,000,000 14,973,000
Asset Securitization Cooperative, 5.65%, 1/11/95(2)....................................... 15,000,000 14,976,458
Asset Securitization Cooperative, 6.05%-6.10%, 2/1/95(2).................................. 35,000,000 34,816,583
Beta Finance, Inc., 5.80%- 5.82%, 2/21/95(2).............................................. 36,000,000 35,704,030
CIESCO L.P., 5.27%, 1/24/95............................................................... 15,000,000 14,949,496
Cooperative Association of Tractor Dealers, Inc., 5.55%, 1/23/95.......................... 5,000,000 4,983,042
Cooperative Association of Tractor Dealers, Inc., 6.07%, 1/19/95.......................... 11,300,000 11,265,705
CXC, Inc., 5.75%, 2/10/95................................................................. 10,000,000 9,936,111
CXC, Inc., 5.98%, 2/1/95(2)............................................................... 20,000,000 19,897,011
CXC, Inc., 6.15%, 2/16/95................................................................. 15,000,000 14,882,125
Falcon Asset Securitization Corp., 6.10%, 1/10/95(2)...................................... 5,025,000 5,017,337
Falcon Asset Securitization Corp., 6.10%, 1/20/95(2)...................................... 5,400,000 5,382,615
Falcon Asset Securitization Corp., 6.10%, 1/23/95(2)...................................... 5,525,000 5,504,404
Falcon Asset Securitization Corp., 6.12%, 2/10/95(2)...................................... 15,000,000 14,898,000
Falcon Asset Securitization Corp., 6.15%, 2/6/95(2)....................................... 15,000,000 14,907,750
First Deposit Master Trust 1993-3, 5.375%, 1/17/95(2)(3).................................. 4,900,000 4,888,294
First Deposit Master Trust 1993-3, 5.42%, 1/23/95(2)(3)................................... 5,900,000 5,880,458
First Deposit Master Trust 1993-3, 5.08%, 2/8/95(2)(3).................................... 15,000,000 14,919,567
Preferred Receivables Funding Corp., 5.625%-5.70%, 1/9/95................................. 29,775,000 29,737,535
Preferred Receivables Funding Corp., 5.65%, 1/10/95....................................... 10,000,000 9,985,875
Preferred Receivables Funding Corp., 5.80%, 2/14/95....................................... 30,000,000 29,787,333
Riverwoods Funding Corp., 6%, 1/11/95..................................................... 10,000,000 9,983,333
Riverwoods Funding Corp., 6%, 1/9/95...................................................... 10,000,000 9,986,667
Sheffield Receivables Corp., 5.98%, 2/1/95................................................ 20,000,000 19,897,011
</TABLE>
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
Daily Cash Accumulation Fund, Inc.
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
------ ------------
<S> <C> <C>
SHORT-TERM NOTES (CONTINUED)
ASSET-BACKED (CONTINUED)
SMM Trust 1994-A, 6.425%, 3/17/95(1)(2)(3)................................................ $ 35,000,000 $ 34,997,407
Structured Enhanced Return Trust 1994 Series A-07, 5.87%, 1/4/95(1)(2)(3)................. 10,000,000 9,998,997
Structured Enhanced Return Trust 1994 Series A-11, 5.865%, 1/3/95(1)(2)(3)................ 10,000,000 10,000,000
--------------
412,156,144
--------------
BANKS -- 2.7%
Chase Manhattan Corp., 5.36%, 1/13/95..................................................... 20,000,000 19,964,267
Chase Manhattan Corp., 5.40%, 1/17/95..................................................... 10,000,000 9,976,000
Fleet Financial Group, Inc., 6.08%, 1/17/95............................................... 15,000,000 14,959,467
NationsBank Corp., 5.84%, 2/15/95......................................................... 10,000,000 9,927,000
PNC Funding Corp., 5.08%, 3/2/95.......................................................... 25,000,000 24,788,333
--------------
79,615,067
--------------
BEVERAGES: ALCOHOLIC -- 0.6%
Seagram (Joseph E.) & Sons, Inc., 5.90%, 2/24/95(2)....................................... 18,000,000 17,840,700
--------------
BEVERAGES: SOFT DRINKS -- 1.9%
Coca-Cola Enterprises, Inc., 5.55%, 1/4/95(2)............................................. 15,000,000 14,993,062
Coca-Cola Enterprises, Inc., 5.80%, 2/13/95(2)............................................ 30,000,000 29,792,167
Coca-Cola Enterprises, Inc., 6%, 1/30/95(2)............................................... 10,000,000 9,951,667
--------------
54,736,896
--------------
BROKER/DEALERS -- 15.1%
Bear Stearns Cos., Inc., 5.79%, 1/3/95(1)................................................. 10,000,000 10,000,000
Bear Stearns Cos., Inc., 5.97%, 1/4/95(1)................................................. 10,000,000 10,000,000
Bear Stearns Cos., Inc., 6.178%, 1/3/95(1)................................................ 17,000,000 17,000,000
Bear Stearns Cos., Inc., 6.244%, 1/9/95(1)................................................ 5,000,000 5,000,000
BT Securities Corp., 5.92%, 1/4/95(1)..................................................... 10,000,000 10,000,000
CS First Boston Group, Inc., 5.10%, 3/8/95(2)............................................. 10,000,000 9,906,500
CS First Boston Group, Inc., 5.82%, 1/31/95............................................... 10,000,000 9,951,500
CS First Boston Group, Inc., 6.12%, 2/8/95................................................ 25,000,000 24,838,500
Dean Witter, Discover & Co., 5.16%, 1/17/95............................................... 5,000,000 4,988,533
Dean Witter, Discover & Co., 5.35%, 1/12/95............................................... 25,000,000 24,959,132
Goldman Sachs Group L.P., 5.08%, 3/1/95................................................... 17,000,000 16,858,466
Goldman Sachs Group L.P., 5.685%, 1/4/95(1)(2)(3)(4)...................................... 10,000,000 10,000,000
Goldman Sachs Group L.P., 5.738%, 1/13/95(1)(2)(3)(4)..................................... 10,000,000 10,000,000
Goldman Sachs Group L.P., 5.92%, 1/4/95(1)(2)(3).......................................... 5,000,000 5,000,000
Goldman Sachs Group L.P., 6.145%, 1/13/95(1)(2)(3)........................................ 25,000,000 25,000,000
Goldman Sachs Group L.P., 6.375%, 3/21/95(1)(2)(3)........................................ 28,000,000 28,000,000
</TABLE>
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
Daily Cash Accumulation Fund, Inc.
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
------ ------------
<S> <C> <C>
SHORT-TERM NOTES (CONTINUED)
BROKER/DEALERS (CONTINUED)
Goldman Sachs Group L.P., 6.575%, 3/8/95(1)(2)(3)......................................... $ 15,000,000 $ 15,011,215
Lehman Brothers Holdings, Inc., 5.61%, 1/12/95............................................ 11,000,000 11,000,000
Lehman Brothers Holdings, Inc., 6.15%, 1/3/95(1).......................................... 10,000,000 10,000,000
Lehman Brothers Holdings, Inc., 6.22%, 1/3/95(1).......................................... 127,900,000 127,900,000
Morgan Stanley Group, Inc., 5.49%, 1/3/95(1).............................................. 59,700,000 59,700,000
--------------
445,113,846
--------------
BUILDING MATERIALS GROUP -- 0.3%
Compagnie de Saint-Gobain SA, 5.08%, 3/1/95............................................... 10,000,000 9,916,744
--------------
COMMERCIAL FINANCE -- 1.3%
CIT Group Holdings, Inc., 6.309%, 1/11/95(1)(4)........................................... 38,500,000 38,500,000
--------------
CONGLOMERATES -- 4.5%
ITT Corp., 5.87%, 2/15/95................................................................. 25,000,000 24,816,563
ITT Corp., 6.02%, 2/1/95(2)............................................................... 10,000,000 9,948,161
ITT Corp., 6.15%, 2/6/95(2)............................................................... 10,000,000 9,938,500
ITT Corp., 6.22%, 2/6/95.................................................................. 10,000,000 9,937,800
Mitsubishi International Corp., 5.50%, 1/24/95............................................ 5,000,000 4,982,431
Mitsubishi International Corp., 5.60%, 2/1/95............................................. 5,000,000 4,975,889
Mitsubishi International Corp., 5.82%, 2/17/95............................................ 12,000,000 11,908,820
Mitsubishi International Corp., 5.85%, 2/21/95............................................ 21,700,000 21,520,160
Pacific Dunlop Ltd., 5.12%, 2/21/95(2).................................................... 25,000,000 24,818,667
Pacific Dunlop Ltd., 5.12%, 2/28/95(2).................................................... 10,000,000 9,917,511
--------------
132,764,502
--------------
CONSUMER FINANCE (PERSONAL LOANS) -- 3.9%
Sears Roebuck Acceptance Corp., 5.10%, 1/23/95............................................ 21,000,000 20,934,550
Sears Roebuck Acceptance Corp., 5.83%, 1/31/95............................................ 35,000,000 34,829,958
Sears Roebuck Acceptance Corp., 5.83%, 2/8/95............................................. 25,000,000 24,846,153
Sears Roebuck Acceptance Corp., 5.90%, 2/6/95............................................. 35,000,000 34,793,500
--------------
115,404,161
--------------
DIVERSIFIED FINANCE -- 11.6%
Ford Motor Credit Co., 5.80%-6.13%, 2/6/95................................................ 72,500,000 72,071,250
Ford Motor Credit Co., 6.05%, 1/30/95..................................................... 10,000,000 9,951,264
General Electric Capital Corp., 5.82%, 2/21/95............................................ 15,000,000 14,876,325
General Motors Acceptance Corp., 5.81%, 2/13/95........................................... 15,000,000 14,895,904
General Motors Acceptance Corp., 5.92%, 1/30/95........................................... 30,000,000 29,856,933
</TABLE>
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
Daily Cash Accumulation Fund, Inc.
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
------ ------------
<S> <C> <C>
SHORT-TERM NOTES (CONTINUED)
DIVERSIFIED FINANCE NOTES (CONTINUED)
General Motors Acceptance Corp., 6.10%, 1/25/95........................................... $ 18,000,000 $ 17,926,800
General Motors Acceptance Corp., 6.15%, 2/3/95............................................ 35,000,000 34,802,688
General Motors Acceptance Corp., 6.20%, 2/9/95............................................ 10,000,000 9,932,833
General Motors Acceptance Corp., 6.65%, 2/10/95........................................... 16,500,000 16,523,216
Household Finance Corp., 6.25%, 1/3/95(1)................................................. 15,000,000 14,998,733
ITT Financial Corp., 5.45%-5.52%, 1/17/95................................................. 18,000,000 17,956,151
ITT Financial Corp., 5.83%, 2/15/95....................................................... 45,000,000 44,672,062
ITT Financial Corp., 5.94%, 2/1/95........................................................ 25,000,000 24,872,125
ITT Financial Corp., 6.125%, 1/27/95...................................................... 9,000,000 8,960,188
Transamerica Finance Corp., 5.10%, 2/3/95................................................. 10,000,000 9,953,250
--------------
342,249,722
--------------
ELECTRIC COMPANIES -- 2.6%
Central & Southwest Corp., 5.98%, 2/8/95.................................................. 10,000,000 9,936,878
Central & Southwest Corp., 6.12%, 2/13/95................................................. 15,000,000 14,890,350
Central & Southwest Corp., 6.15%, 2/2/95.................................................. 20,000,000 19,890,667
Vattenfall Treasury, Inc., guaranteed by Vattenfall AB, 5.80%, 1/30/95.................... 7,000,000 6,967,294
Vattenfall Treasury, Inc., guaranteed by Vattenfall AB, 5.80%, 2/21/95.................... 25,000,000 24,794,583
--------------
76,479,772
--------------
FACTORING -- 3.4%
CSW Credit, Inc., 5.70%, 1/9/95........................................................... 20,000,000 19,974,667
CSW Credit, Inc., 6.08%, 1/31/95.......................................................... 15,000,000 14,924,000
CSW Credit, Inc., 6.10%, 2/10/95.......................................................... 15,000,000 14,898,333
CSW Credit, Inc., 6.10%-6.17%, 2/13/95.................................................... 45,000,000 44,670,453
CSW Credit, Inc., 6.12%, 2/14/95.......................................................... 7,000,000 6,947,640
--------------
101,415,093
--------------
FINANCIAL SERVICES: MISCELLANEOUS -- 3.8%
Countrywide Funding Corp., 6.10%, 1/4/95.................................................. 15,000,000 14,992,375
Countrywide Funding Corp., 6.20%, 1/3/95.................................................. 9,000,000 8,996,900
Countrywide Funding Corp., 6.30%, 1/5/95.................................................. 65,000,000 64,954,500
Fleet Mortgage Group, Inc., 6.10%, 1/20/95................................................ 25,000,000 24,919,514
--------------
113,863,289
--------------
HEALTHCARE: MISCELLANEOUS -- 2.0%
American Home Products, 5.95%, 2/21/95(2)................................................. 35,000,000 34,704,979
Sherwood Medical Co., 5.95%, 2/21/95(2)................................................... 25,000,000 24,789,271
--------------
59,494,250
--------------
</TABLE>
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
Daily Cash Accumulation Fund, Inc.
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
------ ------------
<S> <C> <C>
SHORT-TERM NOTES (CONTINUED)
HOUSEWARES -- 1.4%
Newell Co., 5.82%, 2/17/95(2)............................................................. $ 25,000,000 $ 24,810,041
Newell Co., 6.15%, 1/11/95(2)............................................................. 18,400,000 18,368,567
--------------
43,178,608
--------------
INSURANCE -- 8.7%
Internationale Nederlanden Verzekeringen, NV, guaranteeing commercial paper of:
Internationale Nederlanden U.S. Insurance Holdings, Inc., 5.80%, 1/25/95................ 10,950,000 10,907,660
Internationale Nederlanden NV, guaranteeing commercial paper of:
Internationale Nederlanden U.S. Insurance Holdings, Inc., 6%, 1/30/95................... 10,000,000 9,951,667
Pacific Mutual Life Insurance Co., 5.633%, 1/3/95(1)(2)(3)(4)............................. 50,000,000 50,000,000
Protective Life Insurance Co., 6.15%, 1/3/95(1)(2)(4)..................................... 20,000,000 20,000,000
Protective Life Insurance Co., 6.31%, 1/9/95(2)(4)........................................ 20,000,000 20,000,000
Sun Life Insurance Co., 6.275%, 1/4/95(1)(4).............................................. 145,000,000 145,000,000
--------------
255,859,327
--------------
LEASE FINANCING -- 4.1%
International Lease Finance Corp., 5.15%, 1/17/95......................................... 10,000,000 9,977,111
International Lease Finance Corp., 5.75%, 2/8/95.......................................... 17,000,000 16,896,819
International Lease Finance Corp., 5.82%, 2/22/95......................................... 10,000,000 9,915,933
International Lease Finance Corp., 5.87%, 2/1/95.......................................... 20,000,000 19,898,906
International Lease Finance Corp., 6%, 2/3/95............................................. 10,000,000 9,945,000
Sanwa Business Credit Corp., 5.74%, 1/3/95(1)............................................. 15,000,000 15,000,000
Sanwa Business Credit Corp., 5.90%, 1/30/95............................................... 10,000,000 9,952,472
Sanwa Business Credit Corp., 5.97%, 2/24/95............................................... 10,000,000 9,910,450
Sanwa Business Credit Corp., 6.10%, 1/19/95............................................... 5,000,000 4,984,750
Sanwa Business Credit Corp., 6.12%, 2/3/95................................................ 5,000,000 4,971,950
Sanwa Business Credit Corp., 6.125%, 2/7/95............................................... 10,000,000 9,937,049
--------------
121,390,440
--------------
MANUFACTURING: DIVERSIFIED INDUSTRIALS -- 0.6%
Bowater PLC, 5.40%, 1/11/95(2)............................................................ 11,000,000 10,983,500
Hanson Finance (UK) PLC, guaranteed by Hanson PLC, 5.42%, 1/13/95......................... 7,000,000 6,987,353
--------------
17,970,853
--------------
RETAIL STORES: DEPARTMENT, GENERAL AND SPECIALTY -- 0.4%
St. Michael Finance Ltd., guaranteed by Marks & Spencer, PLC, 5.09%, 2/28/95.............. 11,045,000 10,954,425
--------------
</TABLE>
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
Daily Cash Accumulation Fund, Inc.
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
------ ------------
<S> <C> <C>
SHORT-TERM NOTES (CONTINUED)
TECHNOLOGY -- 0.5%
Electronic Data Systems Corp., 5.52%, 1/17/95............................................ $ 6,000,000 $ 5,985,280
Electronic Data Systems Corp., 5.63%, 1/24/95............................................ 4,000,000 3,985,612
Electronic Data Systems Corp., 5.77%, 2/15/95............................................ 5,000,000 4,963,938
--------------
14,934,830
--------------
TELECOMMUNICATIONS -- 3.4%
NYNEX Corp., 5.10%, 1/17/95.............................................................. 10,000,000 9,977,333
NYNEX Corp., 5.60%, 1/20/95.............................................................. 5,000,000 4,985,222
NYNEX Corp., 5.82%, 2/13/95.............................................................. 30,000,000 29,791,450
NYNEX Corp., 5.85%-6.12%, 2/16/95........................................................ 56,000,000 55,574,219
--------------
100,328,224
--------------
TOBACCO -- 0.7%
American Brands, Inc., 5.52%, 1/18/95.................................................... 5,000,000 4,986,967
American Brands, Inc., 5.58%, 1/23/95.................................................... 15,000,000 14,948,850
--------------
19,935,817
--------------
Total Short-Term Notes (Cost $2,584,102,710)............................................................. 2,584,102,710
--------------
U.S. GOVERNMENT OBLIGATIONS -- 5.6%
Small Business Administration, 5.625%-10.125%, 1/1/95(1) (Cost $166,916,983)............. 161,581,146 166,916,983
--------------
Total Investments, at Value (Cost $2,986,729,141)............................................ 101.0% 2,986,729,141
Liabilities in Excess of Other Assets........................................................ (1.0) (28,496,978)
----- --------------
Net Assets................................................................................... 100.0% $2,958,232,163
----- --------------
----- --------------
</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 December 31, 1994.
2. Security purchased in private placement transaction, without registration
under the Securities Act of 1933 (the Act). The securities are carried at
amortized cost, and amount to $707,773,403, or 23.9% of the Fund's net
assets.
3. In addition to being restricted, the security is considered illiquid by
virtue of the absence of a readily available market or because of legal or
contractual restrictions on resale, illiquid securities amount to
$223,695,938, or 7.6% of the Fund's net assets, at December 31, 1994. The
Fund may not invest more than 10% of its net assets (determined at the time
of purchase) in illiquid securities.
4. Put obligation redeemable at full face value on the date reported.
See accompanying Notes to Financial Statements.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES December 31, 1994
Daily Cash Accumulation Fund, Inc.
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $2,986,729,141) -- see accompanying statement........................ $2,986,729,141
Cash.............................................................................................. 6,444,695
Receivables:
Interest and principal paydowns................................................................. 8,380,640
Shares of capital stock sold.................................................................... 533,647
Other............................................................................................. 199,523
--------------
Total assets................................................................................. 3,002,287,646
--------------
LIABILITIES:
Payables and other liabilities:
Shares of capital stock redeemed................................................................ 42,240,559
Service plan fees -- Note 3.................................................................... 265,121
Other........................................................................................... 1,549,803
--------------
Total liabilities............................................................................ 44,055,483
--------------
NET ASSETS........................................................................................ $2,958,232,163
--------------
--------------
COMPOSITION OF NET ASSETS:
Par value of shares of capital stock.............................................................. $ 295,813,146
Additional paid-in capital........................................................................ 2,662,318,310
Accumulated net realized gain (loss) from investment transactions................................. 100,707
--------------
NET ASSETS -- Applicable to 2,958,131,456 shares of capital stock outstanding.................... $2,958,232,163
--------------
--------------
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE....................................
$1.00
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
STATEMENT OF OPERATIONS For the Year Ended December 31, 1994
Daily Cash Accumulation Fund, Inc.
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest........................................................................................... $147,806,217
------------
EXPENSES:
Management fees -- Note 3......................................................................... 11,918,801
Service plan fees -- Note 3....................................................................... 6,661,667
Transfer and shareholder servicing agent fees -- Note 3........................................... 5,076,668
Shareholder reports................................................................................ 386,525
Custodian fees and expenses........................................................................ 310,880
Registration and filing fees....................................................................... 163,365
Legal and auditing fees............................................................................ 66,104
Directors' fees and expenses....................................................................... 43,404
Other.............................................................................................. 231,806
------------
Total expenses................................................................................ 24,859,220
------------
Less reimbursement of expenses by Centennial Asset Management Corporation -- Note 3............... (125,619)
------------
Net expenses....................................................................................... 24,733,601
NET INVESTMENT INCOME (LOSS)....................................................................... 123,072,616
NET REALIZED GAIN (LOSS) ON INVESTMENTS............................................................ (27,746)
------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....................................
$123,044,870
------------
------------
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Daily Cash Accumulation Fund, Inc.
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------
1994 1993
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss)............................................... $ 123,072,616 $ 105,100,335
Net realized gain (loss) on investments.................................... (27,746) 9,018
-------------- --------------
Net increase (decrease) in net assets resulting from operations.......... 123,044,870 105,109,353
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS................................ (123,088,801)
(105,233,465)
CAPITAL STOCK TRANSACTIONS:
Net increase (decrease) in net assets resulting from capital stock
transactions -- Note 2................................................... (630,590,211) (472,064,008)
-------------- --------------
NET ASSETS
Total increase (decrease).................................................. (630,634,142) (472,188,120)
Beginning of period........................................................ 3,588,866,305 4,061,054,425
-------------- --------------
End of period.............................................................. $2,958,232,163 $3,588,866,305
-------------- --------------
-------------- --------------
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
FINANCIAL HIGHLIGHTS
Daily Cash Accumulation Fund, Inc.
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- ----- ----- -----
Income from investment
operations -- net investment income
and net realized gain on
investments.......................... .04(1) .03 .03 .06 .08 .08 .07 .06
Dividends and distributions to
shareholders......................... (.04) (.03) (.03) (.06) (.08) (.08) (.07) (.06)
----- ----- ----- ----- ----- ----- ----- -----
Net asset value, end of period......... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- ----- ----- -----
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
millions)............................ $2,958 $3,589 $4,061 $5,208 $5,025 $4,920 $3,128 $2,555
Average net assets (in millions)....... $3,378 $3,940 $4,760 $5,434 $4,849 $4,112 $2,809 $2,541
Number of shares outstanding at end of
period (in millions)................. 2,958 3,589 4,061 5,208 5,024 4,920 3,128 2,555
Ratios to average net assets:
Net investment income................ 3.64% 2.67% 3.50% 5.64% 7.61% 8.58% 7.01% 6.10%
Expenses............................. .73%(1) .74% .70% .67% .68% .71% .77% .78%
<CAPTION>
1986 1985
------ ------
<S> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period... $1.00 $1.00
----- -----
Income from investment
operations -- net investment income
and net realized gain on
investments.......................... .06 .07
Dividends and distributions to
shareholders......................... (.06) (.07)
----- -----
Net asset value, end of period......... $1.00 $1.00
----- -----
----- -----
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
millions)............................ $2,635 $2,311
Average net assets (in millions)....... $2,530 $2,071
Number of shares outstanding at end of
period (in millions)................. 2,635 2,311
Ratios to average net assets:
Net investment income................ 6.11% 7.46%
Expenses............................. .78% .80%
</TABLE>
1. Net investment income would have been $.04 per share absent the voluntary
expense limitation, resulting in an expense ratio of .74%.
See accompanying Notes to Financial Statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Daily Cash Accumulation Fund, Inc.
1. SIGNIFICANT ACCOUNTING POLICIES
Daily Cash Accumulation Fund, Inc. (the Fund) is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. The Fund'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 Fund.
Investment Valuation -- Portfolio securities are valued on the basis of
amortized cost, which approximates market value.
Federal Income Taxes -- The Fund 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 Fund 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 Fund 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. CAPITAL STOCK
The Fund has authorized 15,000,000,000 shares of $.10 par value capital stock.
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1994 December 31, 1993
--------------------------------- ---------------------------------
Shares Amount Shares Amount
-------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Sold.......................... 7,074,792,010 $ 7,074,792,010 9,243,874,957 $ 9,243,874,957
Dividends and
distributions
reinvested.................. 120,864,868 120,864,868 103,269,781 103,269,781
Redeemed...................... (7,826,247,089) (7,826,247,089) (9,819,208,746) (9,819,208,746)
-------------- --------------- -------------- ---------------
Net decrease............. (630,590,211) $ (630,590,211) (472,064,008) $ (472,064,008)
-------------- --------------- -------------- ---------------
-------------- --------------- -------------- ---------------
</TABLE>
3. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for an annual fee of .45% on the
first $500 million of net assets with a reduction of .025% on each $500 million
thereafter, to .25% on net assets in excess of $4 billion. The Manager has
agreed to reimburse the Fund if aggregate expenses (with specified exceptions)
exceed the most stringent applicable regulatory limit on Fund expenses. A
voluntary undertaking to waive a portion of its management fee to ensure that
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
Daily Cash Accumulation Fund, Inc.
the Fund's management fee does not exceed .35% of average annual net assets was
terminated December 1, 1994. In addition, the Manager has voluntarily undertaken
to assume Trust expenses to the level needed to maintain a seven-day yield at
least equal to, and a dividend equal to, that of Centennial Money Market Trust
Fund another registered investment company advised by the Manager effective
December 1, 1994.
Shareholder Services, Inc. (SSI), a subsidiary of OMC, is the transfer and
shareholder servicing agent for the Fund, and for other registered investment
companies. SSI's total costs of providing such services are allocated ratably to
these companies.
Under an approved plan of distribution, the Fund 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 Fund shares.
<PAGE>
APPENDIX A
DESCRIPTION OF SECURITIES RATINGS
Below is a description of the two highest rating categories for Short Term
Debt and Long Term Debt by the "Nationally-Recognized Statistical Rating
Organizations" which the Manager evaluates in purchasing securities on
behalf of the Fund. 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 Fund 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.
<PAGE>
APPENDIX 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 Fund and/or the Distributor. When adopted, such amendments
will automatically apply to existing Plans.
Fund shares will be redeemed as necessary to meet withdrawal
payments. Depending on the amount withdrawn, the investor's principal may
be depleted. Payments made to shareholders under such plans may 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. Accordingly, a shareholder may not maintain an
Automatic Withdrawal Plan while simultaneously making regular purchases.
1. Shareholder Services, Inc. (the "Transfer Agent") 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 Funds
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
Fund. 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 Fund, 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 into 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 Fund) 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 Fund'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 Fund. 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 Fund, 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 Fund, the Planholder will be deemed to have
appointed any successor transfer agent to act as his agent in
administering the Plan.
<PAGE>
APPENDIX C
INDUSTRY CLASSIFICATIONS
Aerospace/Defense
Air Transportation
Auto Parts Distribution
Automotive
Bank Holding Companies
Banks
Beverages
Broadcasting
Broker-Dealers
Building Materials
Cable Television
Chemicals
Commercial Finance
Computer Hardware
Computer Software
Conglomerates
Consumer Finance
Containers
Convenience Stores
Department Stores
Diversified Financial
Diversified Media
Drug Stores
Drug Wholesalers
Durable Household Goods
Education
Electric Utilities
Electrical Equipment
Electronics
Energy Services & Producers
Entertainment/Film
Environmental
Food
Gas Transmission
Gas Utilities
Gold
Health Care/Drugs
Health Care/Supplies & Services
Homebuilders/Real Estate
Hotel/Gaming
Industrial Services
Insurance
Leasing & Factoring
Leisure
Manufacturing
Metals/Mining
Nondurable Household Goods
Oil - Integrated
Paper
Publishing/Printing
Railroads
Restaurants
Savings & Loans
Shipping
Special Purpose Financial
Specialty Retailing
Steel
Supermarkets
Telecommunications - Technology
Telephone - Utility
Textile/Apparel
Tobacco
Toys
Trucking
C-1
<PAGE>
Investment Adviser and Distributor
Centennial Asset Management Corporation
3410 South Galena Street
Denver, Colorado 80231
Transfer and Shareholder Servicing Agent
Shareholder Services, Inc.
P.O. Box 5143
Denver, Colorado 80217
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 & Wolf, P.C.
Colorado State Bank Building
1600 Broadway
Denver, Colorado 80202
