Daily Cash Accumulation Fund, Inc.
Prospectus dated April 25, 1997
Daily Cash Accumulation Fund, Inc. is a no-load "money market" mutual fund that
seeks 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.
An investment in the Fund is neither insured nor guaranteed by
the U.S. Government. 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 "Investment Objective and
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 explains concisely what you should know before
investing in the Fund. Please read this Prospectus carefully and keep it for
future reference. You can find more detailed information about the Fund in the
April 25, 1997 Statement of Additional Information. For a free copy, call
Shareholder Services, Inc., the Fund's Transfer Agent, at 1-800-525-9310 or
write to the Transfer Agent at the address on the back cover. The Statement of
Additional Information has been filed with the Securities and Exchange
Commission and is incorporated into this Prospectus by reference (which means
that it is legally part of this Prospectus).
Shares of the 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
and involve investment risks including the possible loss of the principal amount
invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
Contents
ABOUT THE FUND
Expenses
Financial Highlights
Investment Objective and Policies
How the Fund Is Managed
Performance of the Fund
ABOUT YOUR ACCOUNT
How to Buy Shares
Purchases Through Automatic Purchase and Redemption
Programs
Direct Purchases
Payment by Check
Payment by Federal Funds Wire
Guaranteed Payment
Automatic Investment Plan
General
Service Plan
How to Sell Shares
Program Participants
Shares of the Fund Owned Directly
Regular Redemption Procedure
Expedited Redemption Procedure
Check Writing
Telephone Redemptions
Automatic Withdrawal Plan
General Information on Redemptions
Distributions from Retirement Plans
Exchanges of Shares
Retirement Plans
Dividends, Distributions and Taxes
<PAGE>
ABOUT THE FUND
Expenses
The following tables set 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, 1996.
o Shareholder Transaction Expenses
Maximum Sales Charge on Purchases
(as a % of Offering price) None
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Maximum Sales Charge on Reinvested Dividends None
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Redemption Fee None(1)
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Exchange Fee None
(1) There is a $10 transaction fee for redemptions paid by Federal Funds wire,
but not for redemptions paid by check.
o Annual Fund Operating Expenses
(as a percentage of average annual net assets)
Management Fees (after expense assumption) 0.36%
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12b-1 Service Plan Fees 0.20%
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Other Expenses 0.11%
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Total Fund Operating Expenses
(after expense assumption) 0.67%
The purpose of these tables is to assist an investor in understanding
the various costs and expenses that an investor in the Fund will bear directly
(shareholder transaction expenses) and 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, "Management Fees" and "Total Fund Operating Expenses" would have
been 0.37% and 0.68% of average net assets, respectively. The expense assumption
undertaking is
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described in "The Manager and Its Affiliates" in the Statement of Additional
Information and may be withdrawn or amended at any time. For further details
concerning expenses, see the Fund's financial statements included in the
Statement of Additional Information.
o Example. The following example applies the operating expenses shown
in the table 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 $21 $37 $83
This example shows the effect of expenses on an investment in the Fund,
but is not meant to predict actual or expected costs or investment returns of
the Fund, all of which may be more or less than those shown.
Financial Highlights
The table on the following page 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, 1996 is included in the Statement of
Additional Information.
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FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Year Ended December 31,
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1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
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<S> <C> <C> <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 $1.00 $1.00
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Income from investment operations -
net investment income and net realized
gain .05 .05 .04 .03 .03 .06 .08 .08 .07 .06
Dividends and distributions to shareholders (.05) (.05) (.04) (.03) (.03) (.06) (.08) (.08) (.07) (.06)
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Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
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TOTAL RETURN, AT NET ASSET VALUE(1) 4.93% 5.47% 3.77% 2.69% 3.54% 5.87% 7.93% 8.94% 7.18% 6.51%
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RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in millions) $3,602 $3,524 $2,958 $3,589 $4,061 $5,208 $5,025 $4,920 $3,128 $2,555
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Average net assets (in millions) $3,591 $3,379 $3,378 $3,940 $4,760 $5,434 $4,849 $4,112 $2,809 $2,541
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Ratios to average net assets:
Net investment income 4.82% 5.32% 3.64% 2.67% 3.50% 5.64% 7.61% 8.58% 7.01% 6.10%
Expenses, before voluntary
reimbursement by the Manager 0.68% 0.71% 0.74% 0.74% 0.70% 0.67% 0.68% 0.71% 0.77% 0.78%
Expenses, net of voluntary
reimbursement by the Manager 0.67% N/A 0.73% N/A N/A N/A N/A N/A N/A N/A
</TABLE>
1. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns are not
annualized for periods of less than one full year. Total returns reflect changes
in net investment income only.
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Investment Objective and Policies
Objective and 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 could 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
securities 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 investment
policies without shareholder approval. The Fund's investment objective is a
fundamental policy.
Securities in Which the Fund Invests. The following is a brief
description of the types of securities in which the Fund may
invest:
|X| 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.
|X| 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"
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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.
|X| 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.
o Floating Rate/Variable Rate Notes. Some of the notes the Fund may
purchase may have variable or floating interest rates. Variable rates are
adjustable at stated periodic intervals of no more than one year. Floating rates
are automatically adjusted according to a specified market rate for such
investments, such as the prime rate of a bank, or the 90 day U.S. Treasury bill
rate. The Fund may purchase these obligations if they have a remaining maturity
of one year or less; if their maturity is greater than one year, they may be
purchased if they have a demand feature that permits the Fund to recover the
principal amount of the underlying security at specified intervals not exceeding
one year and upon no more than 30 days' notice. Such obligations may be secured
by bank letters of credit or other credit support arrangements. See "Floating
Rate/Variable Rate Obligations" in the Statement of Additional Information for
more details.
|X| 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.
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o 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 Manager under
procedures approved by 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. Under current provisions of Rule 2a-7, 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
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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.
Other Investment Techniques and Strategies. The Fund may also use the investment
techniques and strategies described below. The Statement of Additional
Information contains more information about some of these practices.
o 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.
o 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
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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.
o Illiquid and Restricted Securities. Under the policies and procedures
established by the Fund's Board of Directors, the Manager determines the
liquidity of certain of the Fund's investments. Investments may be illiquid
because of the absence of an active trading market, making it difficult to value
them or dispose of them promptly at an acceptable price. A restricted security
is one that has a contractual restriction on its resale or which cannot be sold
publicly until it is registered under the Securities Act of 1933. 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. The Fund's percentage limitation on these investments
does not apply to certain restricted securities that are eligible for resale to
qualified institutional purchasers. The Manager monitors holdings of illiquid
securities on an ongoing basis and at times the Fund may be required to sell
some holdings to maintain adequate liquidity. 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.
o 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 of the Fund's outstanding voting
securities" (as defined in the Investment Company Act). See the Statement of
Additional Information. Under some of those restrictions, the Fund cannot do any
of the following:
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o make loans, except through the purchase of the kinds of debt
securities described above; repurchase agreements are not considered loans for
purposes of this restriction; the Fund may also lend its portfolio securities as
described in the Statement of Additional Information;
o 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;
o invest more than 5% of the value of its total assets in securities of
any one issuer, not including government or government agency securities;
o purchase more than 10% of the outstanding non-voting securities or
more than 10% of the total debt securities of any one issuer;
o 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; or
o 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.
Unless the Prospectus states that a percentage restriction applies on
an ongoing basis, it applies only at the time the Fund makes an investment, and
the Fund need not sell securities to meet the percentage limits if the value of
the investment increases in proportion to the size of the Fund. Additional
investment restrictions are listed in "Other Investment Restrictions" in the
Statement of Additional Information.
How the Fund is Managed
Organization and History. 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 of the
Fund" 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
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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 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 or conversion rights. Under the
provisions of the Fund's By-Laws and as permitted by Maryland law, the Fund does
not anticipate holding annual meetings.
The Manager and Its Affiliates. The Manager, a wholly-owned subsidiary of
OppenheimerFunds, Inc., has operated as an investment adviser since 1978.
OppenheimerFunds, Inc. is owned by Oppenheimer Acquisition Corp., a holding
company owned in part by senior management of OppenheimerFunds, Inc., and
ultimately controlled by Massachusetts Mutual Life Insurance Company. The
Manager and its affiliates currently advise U.S. investment companies with
assets aggregating over $60 billion as of March 31, 1997, and having more than 3
million shareholder accounts.
o Fees and Expenses. 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. The Fund's management fee for its last fiscal year ended December
31, 1996 was 0.36% (after expense assumption by the Manager). See "The Manager
and Its Affiliates" in the Statement of Additional Information for more complete
information about the Agreement, including a discussion of expense arrangements,
exculpation provisions and portfolio transactions.
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o The Custodian. 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 "The Manager and Its Affiliates" 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 rating
restrictions under Rule 2a-7 described under "Investment Objective and Policies"
do not apply to banks in which the Fund's cash is kept.
o The Transfer Agent. Shareholder Services, Inc., a subsidiary of
OppenheimerFunds, Inc., 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.
Performance of the Fund
Yield. 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 result in a reduction of 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
"Performance of the Fund" in the Statement of Additional Information for more
information about the methods of calculating these yields.
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ABOUT YOUR ACCOUNT
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. OppenheimerFunds Distributor, Inc. ("OFDI") an
affiliate of the Distributor, 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 "Dividend Reinvestment in Another Fund" in the Statement of
Additional Information or by reinvesting distributions from unit investment
trusts for which reinvestment arrangements have been made with the Distributor.
Under an Automatic Investment Plan, 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 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 (the "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.
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The Fund's net asset value per share is determined twice each regular
business day, at 12:00 Noon and the close of the 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
selected as the primary Fund by the client for the program account. Such
purchases will be made by the broker-dealer under the procedures described in
"Guaranteed Payment," below. The Program may have minimum investment
requirements established by the broker-dealer. The description of the Program
provided by the broker-dealer should be consulted for details, and all questions
about investing in, exchanging or redeeming 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.
|X| 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
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dividends will begin to accrue on such shares on the next regular business day.
|X| Payment by Federal Funds Wire. Shares may be purchased by
direct shareholders by Federal Funds wire. The minimum investment
by wire is $2,500. The investor must first call the Distributor's
Wire Department at 1-800-852-8457, to notify the Distributor of the
transmittal of the wire and to order the shares. The investor's
bank must wire the Federal Funds to Citibank, N.A., ABA No. 0210-
0008-9, for credit to Concentration Account No. 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 the
Custodian prior to the close of the Exchange, which is normally 4:00 P.M., but
may be earlier on some days and the Distributor has received and accepted the
investor's notification of the wire order prior to the close of the Exchange.
Those shares will be purchased at the net asset value next determined after
receipt of the Federal Funds and the order. Dividends on newly purchased shares
will begin to accrue on the purchase date if the Federal Funds and order for the
purchase are received and accepted by 12:00 Noon. Dividends will begin to accrue
on the next regular business day if the Federal Funds and purchase order are
received and accepted between 12:00 Noon and the close of the Exchange. The
investor must also send the Distributor a completed Application when the
purchase order is placed to establish a new account.
|X| 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 Sell
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 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.
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|X| 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 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 at the close of the Exchange on
the day the order is received, and dividends on such shares will begin to accrue
on the next regular business day after the Federal Funds are received. 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
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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) 0.20%
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 Sell Shares
Program Participants. A Program participant may sell (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:
|X| 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
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owners on the redemption request or on the endorsement on the share certificate
or accompanying stock power, by a U.S. bank, trust company, credit union or
savings association, or a foreign bank having a U.S. correspondent bank, or by a
U.S. registered dealer or broker in securities, municipal securities or
government securities, or by a U.S. national securities exchange, registered
securities association or clearing agency; (3) any share certificates issued for
any of the shares to be redeemed; and (4) any additional documents which may be
required by the Transfer Agent for redemption by corporations, partnerships or
other organizations, executors, administrators, trustees, custodians, guardians,
or from Individual Retirement Accounts ("IRAs") or other retirement plans, or if
the redemption is requested by anyone other than the shareholder(s) of record. A
signature guarantee is not required for redemptions of $50,000 or less,
requested by and payable to all shareholders of record, to be sent to the
address of record for that account. Transfers of shares are subject to similar
requirements.
To avoid delay in redemptions or transfers, shareholders having
questions about these requirements should contact the Transfer Agent in writing
or by calling 1-800-525-9310 before submitting a request. From time to time the
Transfer Agent in its discretion may waive any or certain of the foregoing
requirements in particular cases. Redemption or transfer requests will not be
honored until the Transfer Agent receives all required documents in proper form.
|X| 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
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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
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. There is a $10 fee for each wire. See "Purchase, Redemption and
Pricing of Shares" in the Statement of Additional Information for further
details.
|X| 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.
o 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
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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.
|X| 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. For accounts registered in the name of a
broker-dealer, payment will be forwarded within three business days. The
Transfer Agent may delay forwarding a redemption check for recently purchased
shares only until the purchase payment has cleared, which may take up to 10 days
or more from the purchase date. Such delay may be avoided if the shareholder
arranges telephone or written assurance satisfactory to the transfer agent from
the bank on which the purchase payment was drawn, or by purchasing shares by
Federal Funds wire as described above. Under the Internal Revenue Code of
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1986, as amended (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 of shares. 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, 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.
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Exchanges of Shares
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 certain
"Eligible Funds" which are listed in the Statement of Additional Information.
Direct shareholders may also obtain a list of the Eligible Funds by calling the
transfer agent at 1-800-525-9310. The list of Eligible Funds may change from
time to time.
Shares of the Fund and of the other Eligible Funds may be exchanged, 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 the Fund may be
exchanged by direct shareholders for shares of any Money Market Fund at net
asset value. A list of the Money Market Funds appears in the Statement of
Additional Information. 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.
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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 Class A 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. Although the Fund will attempt to provide you
with notice whenever reasonably able to do so, it may impose these changes at
anytime. The Fund reserves the right to reject multiple exchange requests
submitted by a shareholder or dealer. Exchange requests must be received by the
Transfer Agent by the close of the 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.
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 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. Dealers and brokers who process exchange orders on
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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.
Telephone Exchanges. Direct shareholders may place a telephone exchange request
by calling the Transfer Agent at 1-800-852-8457. 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 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 canceling such privileges. If an account has multiple owners, the
Transfer Agent may rely on the instructions of any one owner. 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.
Telephone Instructions. 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 or by using PINs, and by
confirming such transactions in writing. If the Transfer Agent does not use such
reasonable 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 or redemption privileges for an account.
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)
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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
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
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
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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. 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.
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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.
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No dealer, broker, salesperson or any other person has been authorized to give
any information or to make any representations other than those contained in
this Prospectus or 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.
Investment Advisor and Distributor
Centennial Asset Management Corporation
6803 South Tucson Way
Englewood, Colorado 80112
Sub-Distributor
OppenheimerFunds Distributor, Inc.
P.O. Box 5254
Denver, Colorado 80217
Daily Cash
Transfer and Shareholder Servicing Agent Accumulation Fund, Inc.
Shareholder Services, Inc.
P.O. Box 5143 Prospectus
Denver, Colorado 80217-5143
1-800-525-9310 Dated April 25, 1997
Custodian of Portfolio Securities
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Independent Auditors
Deloitte & Touche LLP
555 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Myer, Swanson, Adams & Wolf, P.C.
1600 Broadway
Denver, Colorado 80202
PR0140.002.0497 Printed on recycled paper
<PAGE>
Daily Cash Accumulation Fund, Inc.
6803 South Tucson Way, Englewood, Colorado 80112
1-800-525-9310
Statement of Additional Information dated April 25, 1997
This Statement of Additional Information of Daily Cash Accumulation
Fund, Inc. is not a Prospectus. This document contains additional information
about the Fund and supplements information in the Prospectus dated April 25,
1997. It should be read together with the Prospectus, which may be obtained by
writing to Shareholder Services, Inc., the Fund's Transfer Agent, P.O. Box 5143,
Denver, Colorado 80217, or by calling the toll-free number shown above.
Contents Page
About the Fund
Investment Objective and Policies...........................................
Other Investment Restrictions...............................................
Directors and Officers of the Fund..........................................
The Manager and Its Affiliates..............................................
Performance of the Fund.....................................................
Service Plan................................................................
About Your Account
Purchase, Redemption and Pricing of Shares..................................
Dividends and Taxes.........................................................
Financial Information About the Fund
Independent Auditors' Report................................................
Financial Statements........................................................
Appendices
Appendix A: Description of Securities Ratings...............................A-1
Appendix B: Automatic Withdrawal Plan Provisions............................B-1
Appendix C: Industry Classifications........................................C-1
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ABOUT THE FUND
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
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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 of 1940, as amended (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 to
qualified borrowers (other than in repurchase transactions) to attempt to raise
the Fund's income for liquidity purposes. Under applicable regulatory
requirements (which are subject to change), the loan collateral must, on
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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. After any loan, the value of the securities loaned can 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 to lend its portfolio securities, but
if it does, the value of securities loaned will not exceed 5% of the value of
the Fund's net assets in the coming year.
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 or 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 interests from a bank in
whose obligations the Fund may invest, and subject to the restriction described
above on
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investments in illiquid securities. Only loans which mature in one year or less
may be the subject of participation interests.
Other 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 holders of the lesser of:(i) 67%
or more of the shares present or represented by proxy at a shareholder's
meeting, if the holders of more than 50% of the outstanding shares are present
or represented by proxy, or (ii) more than 50% of the outstanding shares. Under
these additional restrictions, the Fund cannot do any of the following:
o The Fund cannot invest in commodities or commodity contracts, or
invest in interests in oil, gas, or other mineral exploration or development
programs;
o The Fund cannot invest in real estate; however, the Fund may purchase
debt securities issued by companies which invest in real estate or interests
therein;
o The Fund cannot purchase securities on margin or make short sales of
securities; o The Fund cannot 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;
o The Fund cannot underwrite securities of other companies;
o The Fund cannot 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
o The Fund cannot invest in securities of other investment companies.
Unless the Prospectus or this Statement of Additional Information
states that a percentage restriction applies on an ongoing basis, it applies
only at the time the Fund makes an investment, and the Fund need not sell
securities to meet the percentage limits if the value of the investment
increases in proportion to the size of the Fund. For purposes of the Fund's
policy not to concentrate described in "Investment Restrictions" 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 of the Fund
The Fund's Directors and officers and their principal business affiliations and
occupations during the past five years are listed below. Sam Freedman became a
Director of the Fund on June 27, 1996. All of the directors are also trustees or
directors of Centennial America Fund L.P., Centennial Money Market Trust,
Centennial Tax Exempt Trust, Centennial Government Trust, Centennial New York
Tax Exempt Trust, Centennial California Tax Exempt Trust (the "Centennial
Funds"), Oppenheimer Cash Reserves, Oppenheimer Champion Income Fund,
Oppenheimer Equity Income Fund, Oppenheimer Limited-Term Government Fund,
Oppenheimer Integrity Funds, Oppenheimer International Bond Fund, Oppenheimer
High Yield Fund, Oppenheimer Main Street Funds, Inc.,
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Oppenheimer Real Asset Fund, Oppenheimer Strategic Income Fund, Oppenheimer
Strategic Income & Growth Fund, Oppenheimer Municipal Fund, Oppenheimer Total
Return Fund, Inc., Oppenheimer Variable Account Funds, Panorama Series Funds,
Inc., and The New York Tax - Exempt Income Fund, Inc. (together with the
Centennial Funds, the "Denver Oppenheimer funds") except for Ms. Macaskill and
Mr. Fossel. Ms. Macaskill and Mr. Fossel are Trustees, Directors or Managing
General Partners of all the Denver-based Oppenheimer funds except Oppenheimer
Integrity Funds, Oppenheimer Strategic Income Fund, Panorama Series Funds, Inc.
and Oppenheimer Variable Account Funds. Also, Mr. Fossel is not a trustee of
Centennial New York Tax-Exempt Trust nor a managing general partner of
Centennial America Fund L.P. Ms. Macaskill is President and Mr. Swain is
Chairman and CEO of the Denver Oppenheimer funds. All of the officers except
Ms. Warmack, Ms. Wolf and Mr. Zimmer hold similar positions as officers of all
the Denver Oppenheimer funds. As of April 7, 1997, the directors and officers
of the Fund as a group owned of record or beneficially less than 1% of its
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 plan two of the officers listed below, Ms. Macaskill and Mr.
Donohue, are trustees) other than the shares beneficially owned under that plan
by the officers of the Fund listed above.
ROBERT G. AVIS, Director; Age 65*
One North Jefferson Ave., St. Louis, Missouri 63103
Vice Chairman of A.G. Edwards & Sons, Inc. (a broker-dealer) and A.G. Edwards,
Inc. (its parent holding company); Chairman of A.G.E. Asset Management and A.G.
Edwards Trust Company (its affiliated investment adviser and trust company,
respectively).
WILLIAM A. BAKER, Director; Age 82
197 Desert Lakes Drive, Palm Springs, California 92264
Management Consultant.
CHARLES CONRAD, JR., Director; Age 67* 1501 Quail Street, Newport Beach,
CA 92660
Chairman and CEO of Universal Space Lines, Inc. (a space services management
company); formerly Vice President of McDonnell Douglas Space Systems Co. and
associated with the National Aeronautics and Space Administration.
JON S. FOSSEL, Directors, Age 55*
P.O. Box 44, Mead Street, Waccabuc, New York 10597
Member of the Board of Governors of the Investment Company Institute (a national
trade association of investment companies), Chairman of the Investment Company
Institute Education Foundation; formerly Chairman and a director of
OppenheimerFunds, Inc. ("OFI"), President and a director of Oppenheimer
Acquisition Corp.("OAC"), OFI's parent holding company, and Shareholder
Services, Inc .("SSI") and Shareholder Financial Services, Inc. ("SFSI"),
transfer agent subsidiaries of OFI.
SAM FREEDMAN, Director; Age 56
4975 Lakeshore Drive, Littleton, Colorado 80123
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Formerly Chairman and Chief Executive Officer of OppenheimerFunds Services,
Chairman, Chief Executive Officer and a director of SSI, Chairman, Chief
Executive and Officer and director of SFSI, Vice President and director of OAC
and a director of OFI.
RAYMOND J. KALINOWSKI, Director; Age 67
44 Portland Drive, St. Louis, Missouri 63131
Director of Wave Technologies International, Inc. (a computer products
training company); formerly Vice Chairman and a director of A.G. Edwards, Inc.,
parent holding company of A.G. Edwards & Sons, Inc. (a broker-dealer), of which
he was a Senior Vice President.
C. HOWARD KAST, Director; Age 75
2552 East Alameda, Denver, Colorado 80209
Formerly Managing Partner of Deloitte, Haskins & Sells (an accounting firm).
ROBERT M. KIRCHNER, Director; Age 75
7500 E. Arapahoe Road, Englewood, Colorado 80112
President of The Kirchner Company (management consultants).
BRIDGET A. MACASKILL, President and Director; Age 48*
President, Chief Executive Officer and a Director of OFI and HarbourView Asset
Management Corporation ("HarbourView"), a subsidiary of OFI; Chairman and a
director of SSI and SFSI.; President and a director of OAC and Oppenheimer
Partnership Holdings, Inc., a holding company subsidiary of OFI; a director of
Oppenheimer Real Asset Management, Inc.; formerly an Executive Vice President of
OFI.
NED M. STEEL, Director; Age 81
3416 South Race Street, Englewood, Colorado 80110
Chartered Property and Casualty Underwriter; a director of Visiting Nurse
Corporation of Colorado; formerly Senior Vice President and a Director of Van
Gilder Insurance Corp. (insurance brokers).
JAMES C. SWAIN, Chairman, Chief Executive Officer and Director; Age 63*
6803 South Tucson Way, Englewood, Colorado 80112 Vice Chairman of the OFI;
formerly President and a director of Centennial Asset Management
Corporation (the "Manager"), and Chairman of the Board of SSI.
DOROTHY G. WARMACK, Vice President and Portfolio Manager; Age 60
Vice President of OFI and the Manager; an officer of other Oppenheimer funds.
CAROL E. WOLF, Vice President and Portfolio Manager; Age 45
Vice President of OFI and the Manager; an officer of other Oppenheimer funds.
ARTHUR J. ZIMMER, Vice President and Portfolio Manger; Age 50
Vice President of the OFI and the Manager; an officer of other Oppenheimer
funds.
ANDREW J. DONOHUE, Vice President and Secretary; Age 46
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Executive Vice President, General Counsel and a Director of OFI,
OppenheimerFunds Distributor, Inc. , HarbourView, SSI, SFSI, Oppenheimer
Partnership Holdings, Inc. and MultiSource Services, Inc. (a broker-dealer);
President and a director of the Manager; President and a director of
Oppenheimer Real Asset Management, Inc.; General Counsel of OAC; an
officer of other Oppenheimer funds.
GEORGE C. BOWEN, Vice President, Treasurer and Assistant Secretary; Age 60 6803
Tucson Way, Englewood, Colorado 80112 Senior Vice President and Treasurer of
OFI; Vice President and Treasurer of OppenheimerFunds Distributor, Inc. and
HarbourView; Senior Vice President, Treasurer, Assistant Secretary and a
director of the Manager; President, Treasurer and a director of Centennial
Capital Corporation; Senior Vice President, Treasurer and Secretary of SSI; Vice
President, Treasurer and Secretary of SFSI; Treasurer of OAC; Treasurer of
Oppenheimer Partnership Holdings, Inc.; Vice President and Treasurer of
Oppenheimer Real Asset Management, Inc.; Chief Executive Officer, Treasurer and
a director of MultiSource Services, Inc. (a broker-dealer); an officer of other
Oppenheimer funds.
ROBERT G. ZACK, Assistant Secretary; Age 48
Senior Vice President and Associate General Counsel of OFI, Assistant Secretary
of SSI and SFSI; an officer of other Oppenheimer funds.
ROBERT J. BISHOP, Assistant Treasurer; Age 38
6803 Tucson Way, Englewood, Colorado 80112
Vice President of the OFI /Mutual Fund Accounting; an officer of other
Oppenheimer funds; formerly a Fund Controller for OFI.
SCOTT T. FARRAR, Assistant Treasurer; Age 31
6803 Tucson Way, Englewood, Colorado 80112
Vice President of OFI/Mutual Fund Accounting; an officer of other Oppenheimer
funds; formerly a Fund Controller for OFI.
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* A director who is an "interested person" of the Fund as defined in the
Investment Company Act .
Remuneration of Directors. The officers of the Fund and certain directors of the
Fund (Ms. Macaskill and Mr. Swain) who are affiliated with the Manager receive
no salary or fees from the Fund. Mr. Fossel did not receive any salary or fees
from the Fund prior to January 1, 1997. The remaining directors of the Fund
received the total amounts shown below. Mr. Freedman received no compensation
from the Fund before June 27, 1996, the date he became a director. The
compensation from the Fund was paid during fiscal year ended December 31, 1996.
The compensation from the Denver-based Oppenheimer funds includes compensation
received as a director, trustee, managing partner or member of a committee of
the Board of those funds during calendar year 1996.
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<TABLE>
<CAPTION>
Total
Compensation
Aggregate From All
Compensation Denver-based
Name Position from Fund Oppenheimer funds
<S> <C> <C> <C>
Robert G. Avis Director $3,409 $58,003
William A. Baker Audit and Review $4,685 $79,715
Committee, Chairman and
Director
Charles Conrad, Jr. Audit and Review $4,391 $74,717
Committee Member and
Director
Sam Freedman Director $1,734 $29,502
Raymond J. Kalinowski Risk Oversight Committee
Member, Director $4,359 $74,173
C. Howard Kast Risk Oversight Committee
Member, Director $4,359 $74,173
Robert M. Kirchner Audit and Review $4,391 $74,717
Committee and
Director
Ned M. Steel Director $3,409 $58,003
</TABLE>
Major Shareholders. As of April 7, 1997, 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
3,475,220,498.760 shares (approximately 98.91% of the shares outstanding).
The Fund has been informed that the shares held of record by Edwards were
owned for the benefit of its brokerage clients.
The Manager and Its Affiliates
The Manager is a wholly-owned subsidiary of OppenheimerFunds, Inc. ("OFI"),
which is wholly-owned by Oppenheimer Acquisition Corporation ("OAC"), a holding
company controlled by Massachusetts Mutual Life Insurance Company. OAC is also
owned by certain of OFI's directors and officers, some of whom may also serve as
officers of the Fund, and two of whom (Ms. Macaskill and Mr. Swain) serve as
Directors of the Fund.
Investment Advisory Agreement. The Manager supervises the investment
operations of the Fund
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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, 1996, 1995 and
1994, the Fund paid the Manager management fees of $12,933,033, $12,746,352 and
$11,918,801 respectively, pursuant to the Agreement. The management fees for the
fiscal year ended December 31, 1996 and 1994, are net of a voluntary expense
assumption by the Manager which reduced the management fees in those years
by $441,801 and $125,691, respectively. In the absence of such voluntary
expense assumption, the management fees payable by the Fund would have been
$13,374,834 in fiscal 1996 and $11,918,801 in fiscal 1994.
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 commission, 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.
Due to changes in federal securities laws, such state regulations no longer
apply. During the Fund's last fiscal year, the Fund's expenses did not exceed
the most stringent state regulatory limit and the voluntary undertaking was not
invoked.
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) to at least equal the 7-day yield of Centennial Money Market Trust.
The Manager reserves the right to modify or terminate this voluntary undertaking
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
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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.
Custodian. 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.
Transfer Agent. 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.
Distributor. 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), including 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, OppenheimerFunds, Inc., the Manager's immediate
parent, as well as for certain other funds advised by the Manager and
OppenheimerFunds, Inc.
Portfolio Transactions. Portfolio decisions are based upon the 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 may be 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
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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.
Performance of the Fund
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, 1996, the Fund's yield was
4.86% and its compounded effective yield was 4.98%.
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 Monitor TM), which measures the average rate paid
on bank money market accounts, NOW accounts and certificates of deposit by the
100 largest banks and thrift institutions in the top ten metropolitan areas.
However, a number of factors should be considered before using yield information
as a basis for comparison with other investments. An investment in 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.
Service Plan
-12-
<PAGE>
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 personal
service and maintenance of shareholder accounts as described in the Prospectus.
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, 1996 totaled $7,123,026 of which
$5,925,646 was paid to A. G. Edwards and the balance retained by the
Distributor.
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 Plan 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 Plan automatically 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.
ABOUT YOUR ACCOUNT
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
-13-
<PAGE>
(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 Board of Directors has established procedures for the valuation of
the Fund's securities, which provide that money market debt securities that had
a maturity of less than 397 days when issued that have a remaining maturity of
60 days or less are valued at cost, adjusted for amortization of premiums and
accretion of discounts.
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 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.
Dividends and Taxes
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
-14-
<PAGE>
October 31 of the current 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 "Eligible Funds" listed below 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.
Eligible Funds:
Limited Term New York Municipal Fund*
Oppenheimer Bond Fund
Oppenheimer Bond Fund for Growth
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Champion Income Fund
Oppenheimer Developing Markets Fund
Oppenheimer Disciplined Allocation Fund
Oppenheimer Disciplined Value Fund
Oppenheimer Discovery Fund
Oppenheimer Enterprise Fund
Oppenheimer Equity Income Fund
Oppenheimer Florida Municipal Fund
Oppenheimer Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer High Yield Fund
Oppenheimer Insured Municipal Fund
Oppenheimer Intermediate Municipal Fund
Oppenheimer International Bond Fund
Oppenheimer International Growth Fund
Oppenheimer LifeSpan Balanced Fund
Oppenheimer LifeSpan Growth Fund
Oppenheimer LifeSpan Income Fund
Oppenheimer Limited-Term Government Fund
-15-
<PAGE>
Oppenheimer Main Street Income & Growth Fund
Oppenheimer Main Street California Municipal Fund
Oppenheimer Multiple Strategies Fund
Oppenheimer Municipal Bond Fund
Oppenheimer New Jersey Municipal Fund
Oppenheimer New York Municipal Fund
Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Growth & Income Value Fund
Oppenheimer Quest Officers Value Fund
Oppenheimer Quest Opportunity Value Fund
Oppenheimer Quest Small Cap Value Fund
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Real Asset Fund
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Strategic Income Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer U.S. Government Trust
Oppenheimer Value Stock Fund
Oppenheimer World Bond Fund
Rochester Fund Municipals
The New York Tax Exempt Income Fund, Inc.
the following "Money Market Funds":
Centennial America Fund L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Oppenheimer Cash Reserves
Oppenheimer Money Market Fund, Inc.
There is an initial sales charge on the purchase of Class A shares of each
Eligible Fund except the Money Market Funds (under certain circumstances,
described in the Prospectus, redemption proceeds of Money Market Fund shares may
be subject to a CDSC).
*Shares of the Fund are not exchangeable for shares of Limited Term New York
Municipal Fund prior to May 1, 1997.
-16-
<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, 1996, the related statement of operations for the year then ended,
the statements of changes in net assets for the years ended December 31, 1996
and 1995, and the financial highlights for the period January 1, 1992 to
December 31, 1996. 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 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, 1996 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, 1996, 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 22, 1997
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1996 Daily Cash Accumulation Fund, Inc.
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
--------- -----------
<S> <C> <C>
BANKERS' ACCEPTANCES-0.1%
First National Bank of Boston, 5.30%,
5/2/97 (Cost $4,910,931) ....................... $ 5,000,000 $ 4,910,931
-----------
CERTIFICATES OF DEPOSIT-1.6%
DOMESTIC CERTIFICATES OF DEPOSIT-0.4%
LaSalle National Bank:
5.51%, 4/4/97 ................................ 8,000,000 8,000,000
5.55%, 2/11/97 ............................... 7,000,000 7,000,000
-----------
15,000,000
-----------
YANKEE CERTIFICATES OF DEPOSIT-1.2%
Societe Generale North America, Inc.:
5.45%, 2/10/97 ............................... 8,000,000 8,000,087
5.50%, 4/21/97 ............................... 5,000,000 5,000,000
5.55%, 2/6/97 ................................ 10,000,000 10,000,000
5.62%, 3/25/97 ............................... 8,000,000 8,001,957
5.92%, 9/17/97 ............................... 10,000,000 10,020,031
-----------
41,022,075
-----------
Total Certificates of Deposit (Cost $56,022,075) 56,022,075
-----------
DIRECT BANK OBLIGATIONS-4.2%
ABN Amro Bank Canada, 5.43%, 1/10/97................ 10,000,000 9,986,425
Bayerische Vereinsbank AG, 5.35%, 4/10/97........... 8,150,000 8,030,093
FCC National Bank, 5.55%, 2/14/97................... 10,000,000 10,000,000
First National Bank of Boston:
5.44%, 1/10/97 ................................... 5,000,000 5,000,000
5.44%, 1/13/97 ................................... 5,000,000 5,000,000
5.47%, 2/12/97 ................................... 10,000,000 10,000,000
5.47%, 2/21/97 ................................... 10,000,000 10,000,000
5.47%, 4/3/97 .................................... 7,000,000 7,000,000
5.50%, 3/14/97 ................................... 10,000,000 10,000,000
5.50%, 3/17/97 ................................... 15,000,000 15,000,000
5.50%, 4/4/97 .................................... 5,000,000 5,000,000
Huntington National Bank:...........................
5.35%, 1/2/97 .................................... 10,000,000 10,000,000
5.35%, 1/8/97 .................................... 7,000,000 7,000,000
5.53%, 2/3/97 .................................... 15,000,000 15,001,002
</TABLE>
3
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1996 (continued) Daily Cash Accumulation
Fund, Inc.
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
--------- -----------
<S> <C> <C>
DIRECT BANK OBLIGATIONS-4.2% (CONTINUED)
National Westminster Bank of Canada:
5.36%, 4/7/97 ................................. $ 7,000,000 $ 6,899,946
5.40%, 2/18/97 ................................ 5,000,000 4,964,000
Societe Generale North America, Inc.:
5.30%, 4/11/97 ................................ 5,000,000 4,926,389
5.38%, 2/7/97 ................................. 7,000,000 6,961,294
------------
Total Direct Bank Obligations (Cost $150,769,149) 150,769,149
------------
LETTERS OF CREDIT-6.0%
Bank of America NT & SA, guaranteeing commercial paper of:
Formosa Plastics Corp., USA-Series A, 5.34%, 3/21/97 5,000,000 4,941,408
Hyundai Motor Finance Co., 5.37%, 4/21/97 5,000,000 4,917,958
Bank One, Cleveland, guaranteeing commercial paper of:
Capital One Funding Corp.-Series 1995F, 5.85%, 1/2/97(1) 10,650,000 10,650,000
Capital One Funding Corp.-Series 1995F, 5.85%, 1/2/97(1)(2) 8,900,000 8,900,000
Barclays Bank PLC, guaranteeing commercial paper of:
Banco Bradesco S.A.-Grand Cayman Branch:
Series A, 5.31%, 4/28/97 ............ 11,000,000 10,810,167
Series A, 5.35%, 4/18/97 ............ 5,000,000 4,920,493
Series B, 5.33%, 5/20/97 ............ 5,000,000 4,897,101
Banco Real S.A., Grand Cayman Branch:
Series A, 5.32%, 4/22/97 ............ 5,000,000 4,917,983
Series A, 5.37%, 4/21/97 ............ 10,000,000 9,835,917
Petroleo Brasileiro, S.A.-Petrobras II:
Series C, 5.35%, 4/1/97 ............. 5,000,000 4,933,125
Series C, 5.38%, 4/3/97 ............. 5,000,000 4,931,256
Petroleo Brasileiro, S.A.-Petrobras:
Series A, 5.30%, 5/5/97 ............. 5,000,000 4,908,722
Series A, 5.31%, 5/6/97 ............. 15,000,000 14,723,438
Series A, 5.31%, 5/7/97 ............. 5,000,000 4,907,075
Series A, 5.37%, 4/7/97 ............. 5,000,000 4,928,400
Series B, 5.32%, 6/3/97 ............. 5,000,000 4,886,950
Series B, 5.40%, 4/9/97 ............. 10,000,000 9,853,000
</TABLE>
4
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1996 (Continued) Daily Cash Accumulation
Fund, Inc.
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
----------- -----------
<S> <C> <C>
LETTERS OF CREDIT-6.0% (CONTINUED)
Bayerische Vereinsbank AG, guaranteeing commercial paper of:
Banco Rio de la Plata S.A.:
Series A, 5.40%, 1/21/97 ............................ $ 5,000,000 $4,985,000
Series A, 5.43%, 1/17/97 ............................ 10,000,000 9,975,867
Series A, 5.40%, 1/22/97 ............................ 5,000,000 4,984,250
Galicia Funding Corp.:
Series A, 5.36%, 3/3/97(3)........................... 5,000,000 4,954,589
Series B, 5.35%, 3/3/97(3)........................... 5,000,000 4,954,674
Series B, 5.45%, 3/4/97(3)........................... 10,000,000 9,907,000
Credit Suisse, guaranteeing commercial paper of:
COSCO (Cayman) Co., Ltd., 5.38%, 3/14/97............. 15,000,000 14,838,600
Societe Generale, guaranteeing commercial paper of:
Girsa Funding Corp., 5.32%, 4/3/97(3)................ 9,000,000 8,877,640
Nacional Financiera, SNC:
Series A, 5.31%, 2/24/97........................... 20,000,000 19,840,700
Series A, 5.44%, 1/8/97............................ 5,000,000 4,994,711
Series A, 5.44%, 1/9/97............................ 5,000,000 4,993,956
Series B, 5.33%, 3/3/97............................ 5,000,000 4,954,843
-----------
Total Letters of Credit (Cost $217,124,823)............ 217,124,823
-----------
SHORT-TERM NOTES-86.7%
AUTOMOTIVE-0.8%
BMW U.S. Capital Corp.:
5.31%, 2/24/97 ................................... 10,000,000 9,920,350
5.32%, 2/20/97 ................................... 20,000,000 19,852,222
-----------
29,772,572
-----------
BANKS-0.7%
Bankers Trust Co., New York, 5.35%, 11/26/97(1)............ 10,000,000 9,993,799
CoreStates Capital Corp.:
5.36%, 6/27/97 .......................................... 5,000,000 4,868,233
5.47%, 7/14/97(1)........................................ 5,000,000 5,000,000
5.70%, 6/27/97(1)........................................ 5,000,000 5,000,000
-----------
24,862,032
-----------
</TABLE>
5
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1996 (Continued) Daily Cash Accumulation
Fund, Inc.
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
--------- -----------
<S> <C> <C>
BEVERAGES-3.2%
Coca-Cola Enterprises, Inc.:
5.31%, 3/19/97(3) .......................................... $12,000,000 $11,863,453
5.31%, 3/7/97(3) ........................................... 27,000,000 26,739,910
5.32%, 2/26/97(3) .......................................... 15,000,000 14,875,867
5.32%, 2/27/97(3) .......................................... 10,000,000 9,915,767
5.33%, 2/19/97(3) .......................................... 15,000,000 14,891,179
5.34%, 1/31/97(3) .......................................... 17,000,000 16,924,350
5.35%, 3/11/97(3) .......................................... 5,000,000 4,948,729
5.35%, 3/18/97(3) .......................................... 8,000,000 7,909,644
5.35%, 3/24/97(3) .......................................... 7,000,000 6,914,697
-----------
114,983,596
-----------
BROKER/DEALERS-12.5%
CS First Boston, Inc.:
5.31%, 1/30/97 ............................................ 7,000,000 6,970,057
5.31%, 2/20/97 ............................................ 15,000,000 14,889,375
5.33%, 2/13/97(3) ......................................... 25,000,000 24,840,661
5.35%, 2/12/97(3) ......................................... 10,000,000 9,937,642
5.38%, 3/4/97(1)(4) ....................................... 10,000,000 10,000,000
5.58%, 1/21/97(1)(4) ...................................... 10,000,000 10,000,000
Goldman Sachs Group, L.P.:
5.31%, 3/21/97 ............................................ 23,000,000 22,731,992
5.31%, 5/5/97 ............................................. 15,000,000 14,725,650
5.38%, 3/14/97 ............................................ 10,000,000 9,892,400
5.42%, 1/17/97 ............................................ 10,000,000 9,975,911
5.43%, 1/13/97 ............................................ 30,000,000 29,945,700
5.50%, 4/4/97 ............................................. 15,000,000 14,786,875
8.25%, 1/2/97 ............................................. 52,550,000 52,539,173
Merrill Lynch & Co., Inc.:
5.31%, 2/28/97 ............................................ 5,000,000 4,957,225
5.33%, 1/2/97 ............................................. 20,000,000 19,997,036
5.33%, 1/24/97 ............................................ 20,000,000 19,931,894
5.33%, 3/10/97 ............................................ 20,000,000 19,798,644
5.35%, 1/28/97 ............................................ 5,000,000 4,979,937
5.40%, 1/31/97(1) ......................................... 20,000,000 20,000,000
5.40%, 2/10/97 ............................................ 12,000,000 11,928,000
5.42%, 1/23/97 ............................................ 35,000,000 34,884,897
5.42%, 12/19/97(1) ........................................ 15,000,000 14,999,534
5.43%, 10/24/97(1) ........................................ 10,000,000 9,998,378
5.44%, 1/21/97 ............................................ 10,000,000 9,969,778
</TABLE>
6
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1996 (Continued) Daily Cash Accumulation
Fund, Inc.
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
--------- -----------
<S> <C> <C>
BROKER/DEALERS-12.5% (CONTINUED)
Morgan Stanley Group, Inc.:
5.26%, 6/27/97(1) ...................................... $36,815,000 $ 36,815,000
5.41%, 2/3/97 .......................................... 10,000,000 9,950,408
-----------
449,446,167
-----------
BUILDING MATERIALS-0.1%
Compagnie de Saint-Gobain, 5.38%, 4/23/97.................. 5,000,000 4,916,311
-----------
CHEMICALS-0.2%
Monsanto Co., 5.30%, 1/27/97(3)............................ 6,900,000 6,873,588
-----------
COMMERCIAL FINANCE-12.3% CIT Group Holdings, Inc.:
5.31%, 1/24/97 .......................................... 15,000,000 14,949,112
5.33%, 11/20/97(1) ...................................... 15,000,000 14,989,942
5.35%, 5/1/97(1) ........................................ 10,000,000 9,996,244
5.35%, 6/11/97(1) ....................................... 10,000,000 9,994,762
5.37%, 9/17/97(1) ....................................... 20,000,000 19,989,710
5.67%, 3/1/98(1) ........................................ 38,500,000 38,500,000
Countrywide Home Loans:
5.33%, 1/23/97 .......................................... 24,000,000 23,921,827
5.33%, 2/19/97 .......................................... 5,000,000 4,963,726
5.33%, 3/3/97 ........................................... 5,000,000 4,954,843
5.34%, 1/8/97 ........................................... 9,000,000 8,990,655
5.34%, 3/12/97 .......................................... 5,000,000 4,948,083
5.36%, 3/5/97 ........................................... 16,000,000 15,849,920
5.37%, 3/4/97 ........................................... 10,000,000 9,907,517
FINOVA Capital Corp.:
5.37%, 2/18/97 .......................................... 3,000,000 2,978,520
5.37%, 2/24/97 .......................................... 10,000,000 9,919,450
5.37%, 2/28/97 .......................................... 7,000,000 6,939,326
5.38%, 1/7/97 ........................................... 8,000,000 7,992,827
5.38%, 2/20/97 .......................................... 5,000,000 4,962,639
5.40%, 1/15/97 .......................................... 5,000,000 4,989,500
5.40%, 2/27/97 .......................................... 32,000,000 31,727,682
5.43%, 2/26/97 .......................................... 20,000,000 19,831,067
5.49%, 2/5/97 ........................................... 5,000,000 4,973,312
5.53%, 1/24/97 .......................................... 5,000,000 4,982,335
5.68%, 1/17/97 .......................................... 3,000,000 2,992,427
6.06%, 2/21/97(1) ....................................... 15,000,000 15,000,000
</TABLE>
7
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1996 (Continued) Daily Cash Accumulation
Fund, Inc.
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
--------- -----------
<S> <C> <C>
COMMERCIAL FINANCE-12.3% (CONTINUED) Heller Financial, Inc.:
5.41%, 3/17/97 ............................................. $20,000,000 $19,774,479
5.42%, 2/6/97 .............................................. 7,000,000 6,962,060
5.43%, 1/14/97 ............................................. 15,000,000 14,970,587
5.45%, 3/20/97 ............................................. 5,000,000 4,940,958
5.45%, 3/21/97 ............................................. 2,000,000 1,976,081
5.46%, 10/1/97(1) .......................................... 20,000,000 19,997,008
5.46%, 10/10/97(1) ......................................... 13,000,000 12,997,991
5.55%, 4/10/97 ............................................. 7,000,000 6,893,162
5.55%, 4/2/97 .............................................. 9,500,000 9,366,723
5.59%, 12/18/97(1) ......................................... 15,000,000 15,000,000
5.66%, 1/15/97 ............................................. 10,000,000 10,000,518
5.69%, 3/28/97(1) .......................................... 20,000,000 20,001,439
-----------
442,126,432
-----------
COMPUTER SOFTWARE-0.3%
First Data Corp.:
5.37%, 6/10/97 ............................................ 5,000,000 4,880,667
5.40%, 2/25/97 ............................................ 5,000,000 4,958,750
-----------
9,839,417
-----------
CONGLOMERATES-1.0%
Mitsubishi International Corp.:
5.34%, 1/8/97 ............................................... 9,500,000 9,490,136
5.43%, 2/7/97 ............................................... 19,000,000 18,893,964
5.44%, 2/14/97 .............................................. 7,800,000 7,748,139
----------
36,132,239
-----------
CONSUMER FINANCE-3.0%
American Express Corp., 5.32%, 1/3/97 ....................... 15,000,000 14,995,567
Island Finance Puerto Rico, Inc.:
5.32%, 3/11/97 .............................................. 13,700,000 13,560,306
5.34%, 3/24/97 .............................................. 5,100,000 5,037,967
5.36%, 1/15/97 .............................................. 8,000,000 7,983,324
5.39%, 3/25/97 .............................................. 16,500,000 16,294,955
5.44%, 3/20/97 .............................................. 10,000,000 9,882,133
</TABLE>
8
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1996 (Continued) Daily Cash Accumulation
Fund, Inc.
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
--------- -----------
<S> <C> <C>
CONSUMER FINANCE-3.0% (CONTINUED)
Sears Roebuck Acceptance Corp.:
5.31%, 3/3/97 ........................................... $25,000,000 $ 24,775,063
5.32%, 3/31/97 .......................................... 9,000,000 8,881,630
5.43%, 1/16/97 .......................................... 5,000,000 4,988,688
------------
106,399,633
------------
DIVERSIFIED FINANCIAL-14.5%
Associates Corp. of North America, 7.28%, 1/2/97 .......... 75,000,000 74,984,833
Ford Motor Credit Co.:
5.32%, 1/10/97 .......................................... 15,000,000 14,980,050
5.32%, 1/6/97 ........................................... 24,300,000 24,282,045
5.32%, 1/8/97 ........................................... 13,600,000 13,585,932
5.32%, 1/9/97 ........................................... 15,000,000 14,982,267
5.40%, 1/2/97 ........................................... 75,000,000 74,985,167
5.57%, 5/12/97(1) ....................................... 15,000,000 15,001,935
General Electric Capital Corp.:
5.31%, 1/15/97 .......................................... 15,000,000 14,969,025
5.50%, 1/31/97 .......................................... 5,000,000 4,977,083
General Electric Capital Services, 7.12%, 1/2/97 .......... 78,000,000 77,984,573
General Motors Acceptance Corp.:
5.35%, 1/8/97 ........................................... 21,000,000 20,978,154
5.35%, 3/3/97 ........................................... 5,000,000 4,954,674
5.38%, 2/18/97 .......................................... 10,000,000 9,928,267
5.41%, 4/10/97 .......................................... 5,000,000 5,058,018
5.41%, 4/7/97 ........................................... 27,975,000 27,569,817
5.45%, 1/16/97 .......................................... 10,000,000 9,977,292
5.45%, 2/12/97 .......................................... 13,000,000 12,917,342
5.45%, 2/12/97 .......................................... 17,000,000 16,891,908
5.45%, 2/4/97 ........................................... 8,900,000 8,854,190
5.45%, 2/6/97 ........................................... 10,000,000 9,945,500
5.45%, 4/21/97(1) ....................................... 15,000,000 14,991,777
5.47%, 2/14/97 .......................................... 18,500,000 18,376,317
5.48%, 3/11/97 .......................................... 5,000,000 4,947,483
5.48%, 3/26/97 .......................................... 5,025,000 4,960,747
Household Finance Corp., 5.30%, 2/24/97.................... 15,000,000 14,880,750
Transamerica Finance Corp., 5.33%, 3/17/97 ................ 5,000,000 4,944,479
----------
520,909,625
-----------
</TABLE>
9
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1996 (Continued) Daily Cash Accumulation
Fund, Inc.
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
--------- ---------
<S> <C> <C>
ELECTRICAL EQUIPMENT-0.4%
Xerox Corp., 5.30%, 1/10/97 ............................. $15,000,000 $14,980,125
-----------
ELECTRONICS-2.3%
Avnet, Inc., 5.34%, 3/14/97 .............................. 5,000,000 4,946,600
Mitsubishi Electric Finance America, Inc.:
5.32%, 2/21/97(3) ...................................... 10,000,000 9,924,633
5.33%, 1/30/97(3) ...................................... 16,285,000 16,214,929
5.35%, 1/15/97(3) ...................................... 10,000,000 9,979,194
5.36%, 2/5/97(3) ....................................... 25,000,000 24,869,722
5.37%, 1/3/97(3) ....................................... 16,734,000 16,729,008
-----------
82,664,086
-----------
ENVIRONMENTAL-0.1%
WMX Technologies, Inc., 5.36%, 4/18/97(3).................. 5,000,000 4,920,344
-----------
HEALTHCARE/DRUGS-0.1%
Sandoz Corp., 5.30%, 1/23/97(3)............................ 5,000,000 4,983,806
-----------
HEALTHCARE/SUPPLIES & SERVICES-0.5%
American Home Products, 5.33%, 1/10/97(3)................. 10,000,000 9,986,675
Sherwood Medical Co., 5.32%, 1/24/97(3).................... 7,000,000 6,976,208
-----------
16,962,883
-----------
INDUSTRIAL SERVICES-0.4%
Atlas Copco AB, 5.30%, 2/24/97(3)......................... 5,000,000 4,960,250
PHH Corp., 5.79%, 3/26/97(1).............................. 10,000,000 9,998,653
-----------
14,958,903
-----------
INSURANCE-6.8%
Allstate Life Insurance Co., 5.38%, 1/3/97(1)............. 10,000,000 10,000,000
General American Life Insurance Co., 5.58%, 1/3/97(1)..... 30,000,000 30,000,000
Jackson National Life:
5.39%, 1/3/97(1) ....................................... 15,000,000 15,000,000
5.40%, 1/3/97(1) ....................................... 30,000,000 30,000,000
Pacific Mutual Life Insurance Co., 5.57%, 1/2/97(1)(4).....50,000,000 50,000,000
Protective Life Insurance Co., 5.52%, 1/26/97(1)(4)........20,000,000 20,000,000
</TABLE>
10
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1996 (Continued) Daily Cash Accumulation
Fund, Inc.
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
--------- -----------
<S> <C> <C>
INSURANCE-6.8% (CONTINUED)
TransAmerica Life Insurance & Annuity Co.:
5.38%, 10/15/97(1) .................................. $25,000,000 $ 25,000,000
5.38%, 8/7/97(1)(4) ................................. 25,000,000 25,000,000
5.38%, 9/30/97(1) ................................... 20,000,000 20,000,000
TransAmerica Occidental Life, 5.38%, 9/29/97(1)......... 20,000,000 20,000,000
-----------
245,000,000
-----------
LEASING & FACTORING-0.9%
International Lease Finance Corp.:
5.30%, 3/7/97 ........................................ 10,000,000 9,904,306
5.33%, 2/3/97 ........................................ 13,775,000 13,707,698
5.33%, 2/7/97 ........................................ 10,000,000 9,945,219
-----------
33,557,223
-----------
NONDURABLE HOUSEHOLD GOODS-0.1%
Newell Co., 5.33%, 3/7/97(3)............................. 5,000,000 4,951,882
-----------
OIL-INTEGRATED-0.3%
Repsol International Finance, 5.35%, 3/28/97............. 10,000,000 9,872,194
-----------
SAVINGS & LOANS-0.2%
First Bank FSB, 5.58%, 8/29/97(1)........................ 7,000,000 6,999,550
-----------
SPECIAL PURPOSE FINANCIAL-23.1%
Asset Backed Capital Finance, Inc.:
5.45%, 3/12/97(3) 15,000,000 14,841,042
5.48%, 12/15/97(1)(4) ................................. 15,000,000 14,994,921
Asset-Securitization Cooperative:
5.31%, 1/29/97(3) ..................................... 10,000,000 9,958,700
5.31%, 2/18/97(3) ..................................... 15,000,000 14,893,867
5.31%, 2/26/97(3) ..................................... 25,000,000 24,793,500
5.33%, 3/11/97(3) ..................................... 7,000,000 6,928,489
5.33%, 3/17/97(3) ..................................... 10,000,000 9,888,958
5.34%, 3/18/97(3) ..................................... 14,200,000 14,039,919
5.35%, 3/19/97(3) ..................................... 10,000,000 9,885,569
</TABLE>
11
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1996 (Continued) Daily Cash Accumulation
Fund, Inc.
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
--------- -----------
<S> <C> <C>
SPECIAL PURPOSE FINANCIAL-23.1% (CONTINUED)
Beta Finance, Inc.:
5.32%, 5/12/97(1)(3) ............................................... $15,000,000 $15,001,041
5.35%, 3/17/97(3) .................................................. 10,000,000 9,888,542
5.35%, 4/17/97(3) .................................................. 15,000,000 14,763,708
Cooperative Association of Tractor Dealers, Inc., 5.50%, 2/4/97 ...... 8,200,000 8,157,406
CXC, Inc.:
5.31%, 2/25/97(3) .................................................. 15,000,000 14,878,313
5.32%, 1/7/97(3) ................................................... 15,000,000 14,986,700
5.32%, 3/12/97(3) .................................................. 10,000,000 9,896,556
5.33%, 1/8/97(3) ................................................... 20,000,000 19,979,272
5.35%, 1/16/97(3) .................................................. 5,000,000 4,988,854
5.35%, 2/5/97(3) ................................................... 25,000,000 24,869,965
Falcon Asset Securitization Corp.:
5.30%, 2/25/97(3) .................................................. 15,000,000 14,878,542
5.32%, 1/13/97(3) .................................................. 21,000,000 20,962,760
5.33%, 1/7/97(3) ................................................... 16,000,000 15,985,787
First Deposit Master Trust 1993-3:
5.32%, 1/24/97(3) .................................................. 5,000,000 4,983,006
5.32%, 2/24/97(3) .................................................. 12,000,000 11,904,240
5.32%, 2/26/97(3) .................................................. 5,900,000 5,851,174
5.32%, 2/27/97(3) .................................................. 17,000,000 16,856,803
5.35%, 1/21/97(3) .................................................. 9,200,000 9,172,656
5.35%, 3/20/97(3) .................................................. 5,000,000 4,942,042
5.65%, 1/9/97(3) ................................................... 5,000,000 4,993,944
Fleet Funding Corp.:
5.32%, 1/9/97(3) ................................................... 27,026,000 26,994,049
5.45%, 1/17/97(3) .................................................. 25,000,000 24,939,444
New Center Asset Trust:
5.35%, 4/1/97 ...................................................... 15,000,000 14,799,375
5.40%, 2/6/97 ...................................................... 15,000,000 14,919,000
5.43%, 1/29/97 ..................................................... 25,000,000 24,894,417
7.30%, 1/2/97 ...................................................... 100,000,000 99,979,722
RACERS Series 1996-MM-12-3, 5.59%, 12/15/97(1)(4) .................... 15,000,000 15,000,000
</TABLE>
12
<PAGE>
STATEMENT OF INVESTMENTS DECEMBER 31, 1996 (Continued) Daily Cash Accumulation
Fund, Inc.
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
--------- -----------
<S> <C> <C>
SPECIAL PURPOSE FINANCIAL-23.1% (CONTINUED)
Sheffield Receivables Corp.:
5.32%, 1/16/97 ................................................... $ 7,450,000 $ 7,433,486
5.32%, 1/16/97(3) ................................................ 10,000,000 9,977,833
5.32%, 1/6/97(3) ................................................. 26,160,000 26,140,648
Short Term Card Account Trust 1995-1, Class A1, 5.61%, 1/15/97(1)(4) 15,000,000
15,000,000 Sigma Finance, Inc.:
5.30%, 5/16/97(3) ................................................ 5,000,000 4,900,625
5.31%, 5/12/97(3) ................................................ 10,000,000 9,806,775
5.31%, 5/14/97(3) ................................................ 6,500,000 6,372,486
5.31%, 5/19/97(3) ................................................ 5,000,000 4,898,225
5.32%, 5/6/97(3) ................................................. 5,000,000 4,907,639
5.33%, 3/3/97(3) ................................................. 5,000,000 4,954,843
5.37%, 4/15/97(3) ................................................ 15,000,000 14,767,300
5.37%, 4/28/97(3) ................................................ 21,000,000 20,634,668
5.37%, 4/8/97(3) ................................................. 14,000,000 13,797,432
5.38%, 1/3/97(3) ................................................. 10,000,000 9,997,011
5.38%, 4/9/97(3) ................................................. 24,000,000 23,649,024
5.44%, 2/28/97(3) ................................................ 10,000,000 9,912,356
5.45%, 1/24/97(3) ................................................ 5,000,000 4,982,590
5.45%, 2/19/97(3) ................................................ 15,000,000 14,888,729
SMM Trust:
1996-B, 5.42%, 8/4/97(4) ......................................... 10,000,000 10,000,000
1996-I, 5.71%, 5/29/97(1)(4) ..................................... 10,000,000 10,000,000
1996-V, 5.98%, 3/26/97(4) ........................................ 10,000,000 10,000,000
TIERS Series DCMT 1996-A, 5.64%, 10/15/97(1)(4)............ ........ 5,000,000 5,000,000
-----------
831,713,953
-----------
TELECOMMUNICATIONS-TECHNOLOGY-2.9%
GTE Corp., 5.48%, 4/1/97 ............................................ 10,000,000 9,863,000
NYNEX Corp.:
5.32%, 2/21/97 .................................................... 8,000,000 7,939,707
5.33%, 2/18/97 .................................................... 5,000,000 4,964,467
5.34%, 1/27/97 .................................................... 5,000,000 4,980,717
5.34%, 3/6/97 ..................................................... 10,000,000 9,905,067
5.34%, 3/7/97 ..................................................... 7,000,000 6,932,508
</TABLE>
13
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1996 (Continued) Daily Cash Accumulation
Fund, Inc.
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
--------- -----------
<S> <C> <C>
TELECOMMUNICATIONS-TECHNOLOGY-2.9% (CONTINUED)
5.35%, 1/10/97 ........................................................... $20,000,000 $ 19,973,250
5.35%, 1/24/97 ........................................................... 10,000,000 9,965,819
5.35%, 3/5/97 ............................................................ 5,000,000 4,953,363
5.42%, 1/13/97 ........................................................... 15,000,000 14,972,900
5.42%, 1/17/97 ........................................................... 9,400,000 9,377,607
--------------
103,828,405
--------------
Total Short-Term Notes (Cost $3,121,654,966)................................ 3,121,654,966
--------------
U.S. GOVERNMENT AGENCIES-0.9%
Federal Home Loan Bank, 5.68%, 8/1/97 (Cost $33,982,579)(1) ................ 34,000,000
33,982,579
--------------
FOREIGN GOVERNMENT OBLIGATIONS-1.0%
Bayerische Landesbank Girozentrale, 5.07%, 7/29/97(1) ...................... 15,000,000
15,000,000
Westdeutsche Landesbank Girozentrale, guaranteeing commercial paper of:
Unibanco-Uniao de Bancos Brasileiros SA-Grand Cayman-Series A, 5.37%, 4/7/97 5,000,000
4,928,400
Comision Federal de Electricidad:
Series A, 5.31%, 2/18/97 ............................................... 10,000,000 9,929,200
Series A, 5.36%, 3/11/97 ............................................... 5,000,000 4,948,633
--------------
Total Foreign Government Obligations (Cost $34,806,233)....
34,806,233
--------------
Total Investments, at Value................................................. 100.5% 3,619,270,756
Liabilities in Excess of Other Assets....................................... (0.5) (17,781,686)
----- --------------
Net Assets.................................................................. 100.0% $3,601,489,070
===== ==============
</TABLE>
14
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1996 (Continued) Daily Cash Accumulation
Fund, Inc.
Short-term notes, direct bank obligations and letters of credit are generally
traded on a discount basis; the interest rate is the discount rate received by
the Fund at the time of purchase. Other securities normally bear interest at the
rates shown.
1. Floating or variable rate obligation. 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, 1996. This instrument
may also have a demand feature which allows the recovery of principal at any
time, or at specified intervals not exceeding one year, on up to 30 days'
notice. Maturity date shown represents effective maturity based on variable
rate and, if applicable, demand feature.
2. Put obligation redeemable at full face value on the date reported.
3. Restricted securities, including those issued in exempt transactions without
registration under the Securities Act of 1933 (the Act), amounting to
$881,361,667, or 24.47% of the Fund's net assets, have been determined to be
liquid pursuant to guidelines adopted by the Board of Directors.
4. Restricted securities which are considered illiquid, by virtue of the absence
of a readily available market or because of legal or contractual restrictions
on resale, amount to $194,994,921, or 5.41% of the Fund's net assets. The
Fund may not invest more than 10% of its net assets (determined at the time
of purchase) in illiquid securities.
See accompanying Notes to Financial Statements.
15
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES December 31, 1996 Daily Cash Accumulation
Fund, Inc.
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments, at value-see accompanying statement ............. $3,619,270,756
Cash ......................................................... 4,025,043
Receivables:
Interest ................................................... 7,239,494
Shares of capital stock sold ............................... 435,693
Other ........................................................ 71,879
--------------
Total assets ............................................. 3,631,042,865
--------------
LIABILITIES:
Payables and other liabilities:
Shares of capital stock redeemed ........................... 28,952,775
Service plan fees .......................................... 235,143
Dividends .................................................. 8,792
Directors' fees ............................................ 4,452
Other ........................................................ 352,633
--------------
Total liabilities .......................................... 29,553,795
--------------
NET ASSETS ................................................... $3,601,489,070
==============
COMPOSITION OF NET ASSETS:
Par value of shares of capital stock ......................... $ 360,135,211
Additional paid-in capital ................................... 3,241,216,896
Accumulated net realized gain on investment transactions ..... 136,963
--------------
NET ASSETS-applicable to 3,601,352,108 shares of capital
stock outstanding .......................................... $3,601,489,070
==============
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE
PER SHARE .................................................. $1.00
</TABLE>
See accompanying Notes to Financial Statements.
16
<PAGE>
STATEMENT OF OPERATIONS For the Year Ended December 31, 1996 Daily Cash
Accumulation Fund, Inc.
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME-Interest ............................................................. $ 197,327,796
-------------
EXPENSES:
Management fees-Note 3 ................................................................. 13,374,834
Service plan fees-Note 3 ............................................................... 7,123,026
Transfer and shareholder servicing agent fees-Note 3 ................................... 2,910,657
Custodian fees and expenses ............................................................ 384,166
Registration and filing fees ........................................................... 342,496
Shareholder reports .................................................................... 273,627
Legal and auditing fees ................................................................ 45,581
Directors' fees and expenses ........................................................... 30,738
Insurance expenses ..................................................................... 29,160
Other .................................................................................. 11,999
-------------
Total expenses ....................................................................... 24,526,284
Less reimbursement of expenses by Centennial Asset Management Corporation-Note 3 .....
(441,801)
-------------
Net expenses ......................................................................... 24,084,483
-------------
NET INVESTMENT INCOME .................................................................. 173,243,313
NET REALIZED GAIN ON INVESTMENTS ....................................................... 2,534
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ...................................
$ 173,245,847
=============
</TABLE>
See accompanying Notes to Financial Statements.
17
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS Daily Cash Accumulation Fund, Inc.
<TABLE>
<CAPTION>
Year Ended December 31,
1996 1995
--------------- ---------------
OPERATIONS:
<S> <C> <C>
Net investment income ................................. $ 173,243,313 $ 179,893,318
Net realized gain ..................................... 2,534 664,800
--------------- ---------------
Net increase in net assets resulting from operations .. 173,245,847 180,558,118
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS ........... (173,245,601)
(180,522,108)
CAPITAL STOCK TRANSACTIONS:
Net increase in net assets resulting from capital stock
transactions-Note 2 ................................. 77,763,723 565,456,928
--------------- ---------------
NET ASSETS:
Total increase ........................................ 77,763,969 565,492,938
Beginning of period ................................... 3,523,725,101 2,958,232,163
--------------- ---------------
End of period ......................................... $ 3,601,489,070 $ 3,523,725,101
=============== ===============
</TABLE>
See accompanying Notes to Financial Statements.
18
<PAGE>
FINANCIAL HIGHLIGHTS
Daily Cash Accumulation Fund, Inc.
<TABLE>
<CAPTION>
Year Ended December 31,
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period ................................... $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment
operations-net investment
income and net realized gain ................ .05 .05 .04 .03 .03
Dividends and distributions to shareholders ... (.05) (.05) (.04) (.03) (.03)
----- ----- ----- ----- -----
Net asset value, end of period ................ $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
TOTAL RETURN, AT
NET ASSET VALUE(1) .......................... 4.93% 5.47% 3.77% 2.69% 3.54%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in millions) ....... $3,602 $3,524 $2,958 $3,589 $4,061
Average net assets (in millions) .............. $3,591 $3,379 $3,378 $3,940 $4,760
RATIOS TO AVERAGE NET ASSETS:
Net investment income ......................... 4.82% 5.32% 3.64% 2.67% 3.50%
Expenses, before voluntary reimbursement
by the Manager .............................. 0.68% 0.71% 0.74% 0.74% 0.70%
Expenses, net of voluntary reimbursement
by the Manager .............................. 0.67% N/A 0.73% N/A N/A
</TABLE>
1. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns are
not annualized for periods of less than one full year.
See accompanying Notes to Financial Statements.
<PAGE>
19
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 objective is to seek 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. The Fund's investment
adviser is Centennial Asset Management Corporation (the Manager), a subsidiary
of OppenheimerFunds, Inc. (OFI). The following is a summary of significant
accounting policies consistently followed by the Fund.
Investment Valuation-Portfolio securities are valued on the basis of amortized
cost, which approximates market value.
Federal 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 or excise 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.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued) Daily Cash Accumulation Fund, Inc.
2. CAPITAL STOCK
The Fund has authorized 15,000,000,000 shares of $0.10 par value capital stock.
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
Year Ended December 31, 1996 Year Ended December 31, 1995
------------------------------------ ------------------------------------
Shares Amount Shares Amount
-------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Sold ...................... 7,263,772,507 $ 7,263,772,507 7,320,626,109 $
7,320,626,109
Dividends and distributions
reinvested ................ 170,695,960 170,695,960 177,673,219 177,673,219
Redeemed .................. (7,356,704,744) (7,356,704,744) (6,932,842,400)
(6,932,842,400)
-------------- --------------- -------------- ---------------
Net increase .............. 77,763,723 $ 77,763,723 565,456,928 $ 565,456,928
============== =============== ==============
===============
</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 a fee of 0.45% on the first
$500 million of average annual net assets with a reduction of 0.025% on each
$500 million thereafter, to 0.25% 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.
Independently of the investment advisory 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 seven-day yield (computed in
accordance with procedures specified pursuant to regulations adopted under the
Investment Company Act of 1940) to at least equal the seven-day yield of
Centennial Money Market Trust, a related Fund for which the Manager also serves
as investment adviser.
Shareholder Services, Inc. (SSI), a subsidiary of OFI, 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 0.20% of its
net assets annually to reimburse certain securities dealers and other financial
institutions and organizations for costs incurred in distributing Fund shares.
21
<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
broad-based access to the market for
refinancing.
MIG2/VMIG2: High quality. Margins of protection are
ample although not so
large as in the preceding group.
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
<PAGE>
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
A-2
<PAGE>
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
A-3
<PAGE>
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 (+)
A-4
<PAGE>
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.
A-5
<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
B-1
<PAGE>
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.
B-2
<PAGE>
APPENDIX C
Industry Classifications
Corporate 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
<PAGE>
Food
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 Advisor and Distributor
Centennial Asset Management Corporation
6803 South Tucson Way
Englewood, Colorado 80112
Transfer and Shareholder Servicing Agent
Shareholder Services, Inc.
P.O. Box 5143
Denver, Colorado 80217
1-800 525-9310
Custodian
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Independent Auditors
Deloitte & Touche LLP
555 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Myer, Swanson, Adams & Wolf, P.C.
1600 Broadway
Denver, Colorado 80202
PX0140.001.0497
