<PAGE>
OPPENHEIMER TAX-EXEMPT CASH RESERVES
3410 South Galena Street, Denver, Colorado 80231
1-800-525-7048
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 12, 1994
TO THE SHAREHOLDERS OF
OPPENHEIMER TAX-EXEMPT CASH RESERVES:
Notice is hereby given that a Special Meeting of Shareholders of
Oppenheimer Tax-Exempt Cash Reserves (the "Fund") will be held at the
offices of the Fund, 3410 South Galena Street, Denver, Colorado 80231, on
July 12, 1994 at 9:00 A.M., Denver time, or any adjournment thereof, for
the following purposes:
1. To approve or disapprove an Agreement and Plan of Reorganization
between the Fund and Centennial Tax Exempt Trust ("CTET") which
contemplates the exchange of substantially all the assets of the Fund for
shares of CTET and the distribution of such shares to the shareholders of
the Fund, and the liquidation of the Fund.
2. To act upon such other matters as may properly come before the meeting
or any adjournment or adjournments thereof.
The close of business on April 15, 1994 has been fixed as the record date
for the determination of shareholders entitled to notice of and to vote
at the meeting.
By Order of the Board of Trustees,
George C. Bowen, Secretary
May 15, 1994
- -----------------------------------------------------------------------
Shareholders who do not expect to attend the meeting are requested to
indicate voting instructions on the enclosed proxy and return it in the
accompanying stamped envelope. In order to avoid unnecessary expense, we
ask your cooperation in mailing your proxy no matter how large or small
your holdings may be.
<PAGE>
Investors are advised to read and retain this Proxy Statement/Prospectus
for future reference.
CENTENNIAL TAX EXEMPT TRUST
3410 South Galena Street, Denver, Colorado 80231
1-800-525-7048
PROXY STATEMENT AND PROSPECTUS
Centennial Tax Exempt Trust ("CTET") has filed with the Securities
and Exchange Commission a Registration Statement for the registration of
its shares to be offered to the shareholders of Oppenheimer Tax-Exempt
Cash Reserves (the "Fund"), 3410 South Galena Street, Denver, Colorado
80231, pursuant to an Agreement and Plan of Reorganization between CTET
and the Fund. This Proxy Statement of the Fund also constitutes a
Prospectus of Centennial Tax Exempt Trust filed as part of such
Registration Statement. CTET is a mutual fund with the investment
objective of seeking the maximum short-term interest income exempt from
Federal income taxes that is consistent with low capital risk and the
maintenance of liquidity. It seeks to achieve its objective through
investments in obligations issued by states, territories and possessions
of the United States or by the District of Columbia, or their political
subdivisions, authorities and corporations, the income from which is
exempt from Federal income taxes.
This Proxy Statement/Prospectus sets forth concisely information about
CTET that shareholders of the Fund should know before voting. A copy of
the prospectus for CTET dated October 29, 1993 is enclosed, and is
incorporated by reference in this Prospectus. A Prospectus and Statement
of Additional Information (the "Additional Statement") about the Fund
dated April 29, 1994, and Additional Statement about CTET dated October
29, 1993 have been filed with the Securities and Exchange Commission and
are available without charge upon written request to Oppenheimer
Shareholder Services ("OSS"), P.O. Box 5270, Denver, Colorado 80217 or by
calling OSS at the toll-free number shown above. The Form N-14 Statement
of Additional Information to this Prospectus of CTET (which is
incorporated in its entirety by reference in this Prospectus) contains
more detailed information about CTET and its management, and is also
available by written request to OSS at the same address immediately above
or by calling OSS at the toll-free number shown above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Proxy Statement and Prospectus is dated May 12, 1994.
<PAGE>
TABLE OF CONTENTS
PROXY STATEMENT AND PROSPECTUS Page
Introduction. . . . . . . . . . . . . . . . . . . . . . . . 1
Shares Outstanding and Entitled to Vote. . . . . . . . . 2
Costs of the Transaction . . . . . . . . . . . . . . . . 2
Synopsis. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Reasons for the Transaction. . . . . . . . . . . . . . . 3
Investment Objectives and Policies . . . . . . . . . . . 3
Investment Advisory and Distribution Fees. . . . . . . . 4
Purchases, Exchanges and Redemptions . . . . . . . . . . 4
Tax Consequences of the Transaction. . . . . . . . . . . 5
Principal Risk Factors. . . . . . . . . . . . . . . . . . . 5
Approval Or Disapproval Of The Reorganization Plan
(THE PROPOSAL). . . . . . . . . . . . . . . . . . . . . . 6
Summary of Proposal and Vote Required. . . . . . . . . . 6
Basis for the Proposal . . . . . . . . . . . . . . . . . 7
Tax Aspects. . . . . . . . . . . . . . . . . . . . . . . 8
Financial Information. . . . . . . . . . . . . . . . . . 10
Comparison Between the Fund and CTET. . . . . . . . . . . . 10
Investment Objectives and Policies . . . . . . . . . . . 11
Illiquid and Restricted Securities. . . . . . . . . . 12
Ratings of Securities . . . . . . . . . . . . . . . . 13
Floating Rate/Variable Rate Obligations . . . . . . . 14
Puts and Standby Commitments. . . . . . . . . . . . . 14
When-Issued Securities. . . . . . . . . . . . . . . . 15
Certificates of Participation . . . . . . . . . . . . 15
Repurchase Agreements . . . . . . . . . . . . . . . . 15
Loans of Portfolio Securities . . . . . . . . . . . . 15
Other Policies . . . . . . . . . . . . . . . . . . . . . 15
Portfolio Transactions and Turnover. . . . . . . . . . . 16
Expense Ratios and Performance . . . . . . . . . . . . . 16
Shareholder Services . . . . . . . . . . . . . . . . . . 17
Rights of Shareholders . . . . . . . . . . . . . . . . . 17
Management and Distribution Arrangements . . . . . . . . 17
Method Of Carrying Out The Reorganization Plan. . . . . . . 20
Vote Required. . . . . . . . . . . . . . . . . . . . . . 22
Other Business. . . . . . . . . . . . . . . . . . . . . . . 22
Agreement and Plan of Reorganization. . . . . . . . . . . . A-1
<PAGE>
OPPENHEIMER TAX-EXEMPT CASH RESERVES
3410 South Galena Street, Denver, Colorado 80231
1-800-525-7048
PROXY STATEMENT AND PROSPECTUS
Special Meeting of Shareholders
To Be Held on July 12, 1994
Introduction
This proxy statement is furnished to the shareholders of Oppenheimer
Tax-Exempt Cash Reserves (the "Fund") in connection with the solicitation
by the Board of Trustees of the Fund of proxies to be used at the Special
Meeting of Shareholders to be held July 12, 1994 at 10:00 A.M., Denver
time, or any adjournment thereof, to approve or disapprove an Agreement
and Plan of Reorganization (the "Reorganization Plan") which contemplates
the exchange of substantially all of the assets of the Fund for shares of
Centennial Tax Exempt Trust ("CTET"), the distribution of those shares to
the Fund's shareholders, and the liquidation of the Fund as set forth
herein. It is expected that the mailing of this proxy statement will
commence on or about May 15, 1994.
The enclosed proxy, if properly executed and returned, will be voted
(or counted as an abstention) in accordance with the choices specified
thereon, and will be included in determining whether there is a quorum to
conduct the meeting. The proxy will be voted in favor of the Proposal
unless a choice is indicated to vote against or to abstain from voting on
the Proposal. Shares owned of record by broker-dealers for the benefit
of their customers ("street account shares") will be voted by the broker-
dealer based on instructions received from its customers. If no
instructions are received, the broker-dealer may (if permitted under
applicable stock exchange rules), as record holder, vote such shares on
the Proposal in the same proportion as that broker-dealer votes street
account shares for which voting instructions were received in time to be
voted. If a shareholder executes and returns a proxy but fails to
indicate how the votes should be cast, the proxy will be voted in favor
of the Proposal.
The proxy may be revoked at any time prior to the voting thereof by:
(i) written instructions addressed to the Secretary of the Fund at 3410
South Galena Street, Denver, Colorado 80231; (ii) attendance at the
meeting and voting in person; or (iii) signing and returning a new proxy
(if returned and received prior to the meeting).
Shares Outstanding and Entitled to Vote. As of April 15, 1994, the record
date, there were 33,062,766.09 shares of the Fund outstanding and
1,052,957,853.400 shares of CTET outstanding. Each shareholder of the
Fund will be entitled to one vote for each share and a fractional vote for
each fractional share held on the record date. Shareholders of CTET will
not vote on the Proposal.
To the knowledge of the Fund, as of the record date, no shareholder
owned of record or beneficially 5% or more of the outstanding shares of
the Fund except PaineWebber FBO Rich Township TTEE of Schools, 2440
Lincoln Highway, Olympia Fields, IL 60461, which owned of record
2,685,113.310 shares (approximately 8.12% of the outstanding shares) of
the Fund as of the record date.
To the knowledge of CTET, as of the record date, no shareholder owned
of record or beneficially 5% or more of its outstanding shares except A.G.
Edwards & Sons, Inc. ("Edwards"), One North Jefferson Street, St. Louis,
Missouri 63103, a broker-dealer that was the record owner of
1,045,104,751.680 shares (approximately 99.25% of outstanding shares).
CTET is informed that all such shares were beneficially owned for the
benefit of brokerage clients of Edwards, with no such client owning 5% or
more of CTET's outstanding shares on the record date.
CTET is informed that Edwards will vote the shares of CTET it owns
as record owner in accordance with instructions received from its
brokerage clients. Upon consummation of the proposed reorganization,
Edwards would continue to beneficially own 5% or more of the outstanding
shares of CTET on the basis of present holdings and commitments. In
addition, as of the record date, the Trustees and officers of the Fund as
a group owned less than 1% of the outstanding shares of either the Fund
or CTET, and the Trustees and officers of CTET as a group owned less than
1% of the outstanding shares of either the Fund or CTET.
Costs of the Transaction. The cost of printing and mailing the proxies
and proxy statements will be borne by the Fund. The Fund and CTET will
bear the cost of their respective tax opinion. Any documents such as
existing prospectuses or annual reports that are included in that mailing
will be a cost of the fund issuing the document. Any other out-of-pocket
expenses of CTET and the Fund associated with this reorganization,
including legal, accounting and transfer agent expenses, will be borne by
the Fund and CTET, respectively, in the amounts so incurred by each. In
addition to the solicitation of proxies by mail, proxies may be solicited
by officers of the Fund or officers and employees of Oppenheimer
Shareholder Services ("OSS"), the Fund's transfer agent, personally or by
telephone or telegraph. Any expenses so incurred will be borne by OSS.
Brokerage houses, banks and other fiduciaries will be requested to forward
soliciting material to the beneficial owners of shares of the Fund and to
obtain authorization for the execution of proxies. For those services,
they will be reimbursed by the Fund for their out-of-pocket expenses.
Synopsis
The following is a synopsis of the information contained in or
incorporated by reference in this Prospectus and Proxy Statement regarding
the proposed reorganization, and presents key considerations for
shareholders of the Fund to assist them in determining whether to approve
the reorganization with CTET. Shareholders of the Fund should carefully
review this proxy statement and prospectus, and, in particular, the
enclosed prospectus of CTET.
Reasons for the Transaction. The Fund, at March 25, 1994, had
approximately $27.7 million in assets, which is approximately 2.5% of
CTET's total assets of $1,112.4 million on such date. The Fund has not
grown as anticipated, and the Manager does not expect the Fund's assets
to grow significantly in the future. Combining the assets of the Fund and
CTET is expected to result in certain economies of scale, resulting in
lower expenses in proportion to assets. CTET, as the clearly larger fund,
is the appropriate fund to be the survivor.
Investment Objectives and Policies. The Fund and CTET are no-load "money
market" mutual funds with similar investment objectives. Both funds are
diversified registered investment companies. The portfolios of both the
Fund and CTET are managed subject to the limitations of Rule 2a-7 under
the Investment Company Act, under which the Fund and CTET use the
amortized cost method to value their portfolio securities.
The Fund seeks maximum current income exempt from Federal income tax
consistent with stability of principal. Under normal market conditions,
the Fund attempts to invest 100% of its assets in Municipal Securities,
and, as a fundamental policy, will make no investment that will reduce the
portion of its total assets invested in Municipal Securities to less than
80%. A fundamental investment policy is one that cannot be changed
without shareholder approval, whereas a non-fundamental investment policy
may be changed by the Board of Trustees without shareholder approval.
CTET seeks maximum short-term interest income exempt from Federal
income taxes consistent with low capital risk and maintenance of
liquidity. Under normal market conditions, CTET attempts to invest 100%
of its assets in Municipal Securities, and will make no investment that
will reduce the portion of its total assets that are invested in Municipal
Securities to less than 80%.
Both the Fund and CTET may borrow up to 10% of their total assets for
extraordinary or emergency purposes. CTET may pledge up to 10% of its net
assets for borrowing whereas the Fund may not. Both the Fund and CTET may
invest up to 20% of their total assets in certain taxable securities, and
may invest more than 20% of their total assets in taxable securities if
the fund has adopted a defensive posture.
Investment Advisory and Distribution Fees. The Fund and CTET obtain
investment management services from Oppenheimer Management Corporation
("OMC") and Centennial Asset Management Corporation ("CAMC"),
respectively. CAMC is a wholly-owned subsidiary of OMC. The management
fee is payable monthly computed on the net asset value of each fund as of
the close of business each day. The management fee rate paid by CTET is
slightly less than that paid by the Fund. Details are set forth herein
under "Comparison between the Fund and CTET - Management and Distribution
Arrangements."
At December 31, 1993, the Fund had approximately $23.9 million in net
assets and CTET had $1,008.9 million in net assets.
Oppenheimer Funds Distributor, Inc. ("OFDI"), a wholly-owned
subsidiary of OMC, is the general distributor of shares of the Fund and
is the sub-distributor of shares of CTET. CAMC, the investment adviser
to CTET, also acts as the general distributor of shares of CTET. The
services provided by OFDI and CAMC (each is referred to as the
"Distributor") in its role as general distributor are substantially the
same.
Both the Fund and CTET have service plans pursuant to Rule 12b-1
under the Investment Company Act under which each fund reimburses its
distributor for certain expenses incurred in connection with personal
services and the maintenance of shareholder accounts. The maximum annual
fee payable by the Fund and CTET pursuant to their respective service
plans is .20% of its average annual net assets.
Purchases, Exchanges and Redemptions. Procedures for the purchase,
exchange and redemption of shares of the Fund and CTET are comparable.
Shareholders of the Fund and shareholders of CTET who do not hold their
shares through programs established by certain brokers may exchange their
shares at net asset value for shares of the same funds within the
Oppenheimer/Centennial family of funds. The conditions to which exchanges
are subject, for a $5 fee, are the same for both the Fund and CTET.
Shareholders of the Fund and CTET may redeem their shares by written
request, by check writing, or may wire redemption proceeds of $2,500 or
more in Federal Funds to a designated commercial bank if the bank is a
member of the Federal Reserve wire system (and provided the shares are not
represented by certificates). Shareholders of the Fund and shareholders
of CTET who do not hold their shares through programs established by
certain brokers may redeem their shares by telephone. The Fund and CTET
may redeem accounts valued at less than $200 and $500, respectively.
The Fund offers the following services not offered by CTET:
AccountLink and PhoneLink. OppenheimerFunds AccountLink is a means to
link a shareholder's fund account with an account at a qualifying bank.
It can be used to transmit funds by electronic funds transfers for account
transactions, including subsequent share purchases. OppenheimerFunds
PhoneLink is the automated telephone system that enable shareholders of
the Fund to initiate account transactions automatically by telephone,
including exchanges, redemptions and purchases. The $5 exchange fee is
waived for exchanges made between existing accounts using PhoneLink.
Tax Consequences of the Transaction. In the opinion of Deloitte & Touche,
tax counsel to the Fund and CTET, the proposed transaction will qualify
as a tax-free reorganization for Federal income tax purposes. As a
result, no gain or loss will be recognized by the Fund, CTET, or the
shareholders of the Fund for Federal income tax purposes as a result of
the proposed transaction. For further information about the tax
consequences of the proposed transaction, see "Tax Aspects" below.
Principal Risk Factors
The values of Municipal Securities will vary as a result of changing
evaluations by rating services and investors of the ability of issuers of
such securities to meet interest and principal payments. Such values will
also change in response to changes in interest rates. If interest rates
rise, the values of outstanding Municipal Securities will probably
decline. However, changes in the value of Municipal Securities held in
either fund's portfolio arising from these or other factors will not
affect income derived from those securities. Although both the Fund and
CTET intend to maintain a net asset value per share of $1.00, as with any
investment in securities, the value of a shareholder's investment in
either the Fund or CTET may fluctuate. There can be no assurance that
either the Fund or CTET will achieve its investment objective. The Fund's
Board of Trustees concluded that there should be no additional risk to a
Trust shareholder in becoming a shareholder of CTET.
APPROVAL OR DISAPPROVAL OF THE REORGANIZATION PLAN
(THE PROPOSAL)
Summary of Proposal and Vote Required
At a meeting held on February 23, 1994, the Fund's Board of Trustees
unanimously adopted and recommended to the shareholders of the Fund that
they approve an Agreement and Plan of Reorganization (the "Reorganization
Plan"). The Reorganization Plan (a copy of which is set forth in full as
Exhibit A to this Proxy Statement and Prospectus) contemplates a
reorganization under which (i) all of the assets of the Fund (other than
the cash reserve described below (the "Cash Reserve")) would be exchanged
for shares of CTET; (ii) these shares would be distributed among the
shareholders of the Fund in exchange for their Trust shares, and (iii) the
shares of the Fund would be cancelled and the Fund would be dissolved and
liquidated and its registration under the Investment Company Act of 1940
would be terminated. CTET will not assume any of the Fund's liabilities
except for portfolio securities purchased which have not settled and
outstanding shareholder redemption and dividend checks.
The result of the carrying out of the Reorganization Plan would be
that: (i) CTET would add to its gross assets all of the assets (net of
any liability for portfolio securities purchased but not settled and
outstanding shareholder dividend and redemption checks) of the Fund other
than its Cash Reserve; and (ii) the shareholders of the Fund would become
shareholders of CTET upon the closing.
In essence, shareholders of the Fund who vote their shares in favor
of the Reorganization Plan are electing to redeem their shares of the Fund
(at net asset value on the Valuation Date referred to below under "Method
of Carrying Out the Reorganization Plan," calculated after subtracting the
Cash Reserve) and to reinvest the proceeds in shares of CTET at net asset
value without sales charge. The Cash Reserve is that amount retained by
the Fund which is sufficient in the discretion of the Fund's Board of
Trustees for the payment of: (a) the Fund's expenses of liquidation, and
(b) its liabilities, other than those assumed by CTET. CTET shall not
assume the liabilities of the Fund except for portfolio securities
purchased which have not settled and for shareholder redemption and
dividend checks outstanding. Other than the cost of printing and mailing
proxies and proxy statement that will be borne by the Fund, the Fund and
CTET will bear all of their respective expenses associated with the
reorganization, including tax opinions, legal, accounting, printing of any
existing fund documents that are included in the proxy mailing, transfer
agency, filing, transfer taxes, and similar expenses incurred by the Fund
or CTET. Management estimates that such expenses associated with the
reorganization to be borne by the Fund will not exceed $25,000. The
Fund's liabilities as of the date of the transfer of assets will consist
primarily of accrued but unpaid normal operating expenses of the Fund.
(See "Method of Carrying Out the Reorganization Plan" below.)
The affirmative vote of the holders of a majority (as defined in the
Investment Company Act of 1940) of the outstanding voting shares of the
Fund entitled to vote at the meeting is required for the approval of the
Reorganization Plan, including the liquidation and dissolution of the
Fund. Shareholders of CTET will not vote on the Proposal.
Basis for the Proposal
The Board of Trustees of the Fund, including the Trustees who are not
interested persons of the Fund, have determined that the reorganization
of the Fund would be in the best interests of the Fund's shareholders and
that no Trust shareholder's interest would be diluted as a consequence
thereof, and recommend approval by the Fund's shareholders. In addition
to the reasons set forth above under "Reasons for the Transaction," the
Fund's Board concluded that a reorganization with CTET is in the best
interests of the Fund's shareholders because they will become shareholders
in a larger fund and should benefit from the economies of scale available
to a larger fund. These economies of scale should result in lower costs
per account for each shareholder through lower investment advisory fees,
operating expenses and transfer agency expenses. The Trustees also
considered that the maximum investment advisory fee rate of CTET is less
than that of the Fund. CTET's expense ratio for the fiscal year ended
June 30, 1993 and the six months ended December 31, 1993 (unaudited), were
.76% and .77% (annualized), respectively, of average net assets. The
Fund's expense ratio for the fiscal year ended December 31, 1993, was
1.10% of average net assets. Absent the voluntary assumption of expenses
by OMC that was terminated January 24, 1994, the Fund's expense ratio
would have been 1.41% for the same period.
Capitalization Table (Unaudited)
As of December 31, 1993
<TABLE>
<CAPTION>
Surviving Fund
Pro Forma*
Oppenheimer Centennial Centennial
Tax-Exempt Tax Exempt Tax Exempt
Cash Reserves Trust Trust
<S> <C> <C> <C>
Net Assets $23,896,907 $1,010,404,665 $1,034,301,572
Shares Outstanding 23,897,803 1,010,389,464 1,034,287,267
Net Asset Value Per Share$0.999963 $1.000015 $1.000014
________________
* Reflects issuance of 23,897,803 shares of Centennial Tax Exempt Trust
in exchange for securities and cash aggregating $23,896,907 of Oppenheimer
Tax-Exempt Cash Reserves.
</TABLE>
Tax Aspects
The Reorganization Plan provides that there shall be coordination
between the Fund and CTET as to their respective portfolios so that, after
the closing, CTET will be in compliance with all of its investment
policies and restrictions. The Fund will recognize capital gain or loss
on any sales made pursuant to this paragraph. If the Fund realizes net
gain from the sale of securities prior to the Closing Date, such gain, to
the extent not offset by capital loss carryforwards, will be distributed
to shareholders prior to the Closing Date and will be taxable to
shareholders as capital gain.
Immediately prior to the Valuation Date, the Fund will pay a dividend
or dividends which together with all previous dividends shall have the
effect of distributing to the Fund's shareholders all of the Fund's
investment company taxable income, if any, for taxable years ending on or
prior to the Closing Date (computed without regard to any deduction for
dividends paid) and all of its net capital gain, if any, realized in
taxable years ending on or prior to the Closing Date (after reduction for
any available capital loss carry-forward). Such dividends from taxable
income and capital gain distributions will be includable in the taxable
income of the Fund's shareholders as ordinary income and capital gain,
respectively.
The exchange of the assets of the Fund for shares of CTET and the
assumption by CTET of certain liabilities of the Fund is intended to
qualify for Federal income tax purposes as a tax-free reorganization under
Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the
"Code"). As a condition to the closing of the proposed transaction, the
Fund and CTET will receive the opinion of Deloitte & Touche, tax counsel
to the Fund and CTET, to the effect that, based on the Reorganization Plan
and on the existing provisions of the Code, Treasury Regulations issued
thereunder, current Revenue Rulings, Revenue Procedures and court
decisions, for Federal income tax purposes:
(1) the Fund's transfer of substantially all of its assets to CTET
in exchange for CTET shares and CTET's assumption of certain of the Fund's
liabilities, followed by the Fund's distribution of CTET shares to the
Fund's shareholders as part of the liquidation of the Fund will qualify
as a tax-free "reorganization" within the meaning of Section 368(a)(1) of
the Code. For purposes of this opinion, "substantially all" means at
least 90 percent of the fair market value of the net assets of the Fund
and at least 70 percent of the fair market value of the gross assets of
the Fund. The Fund and CTET will each be "a party to a reorganization"
within the meaning of Section 368(b) of the Code,
(2) no gain or loss will be recognized by the shareholders of the
Fund upon the exchange of CTET shares for the shares of the Fund (Section
354(a) of the Code),
(3) the Fund will not recognize gain or loss under the provisions
of the Code upon the transfer of substantially all of its shares to CTET
in exchange for CTET shares and CTET's assumption of certain liabilities
of the Fund (Sections 361(a) and 357(a) of the Code),
(4) CTET will not recognize gain or loss upon receipt of the Fund's
assets in exchange for CTET shares (Section 1032(a) of the Code),
(5) the basis of CTET shares received by the shareholders of the
Fund will be the same as the basis in the shares of the Fund surrendered
in exchange therefor (Section 358(a)(1) of the Code),
(6) the holding period of shares received in exchange for Fund
shares by the shareholders of the Fund will include the period during
which the Fund shares surrendered were held, provided that such Fund
shares are capital assets on the date of the exchange (Section 1223(1) of
the Code),
(7) the tax basis of the assets of the Fund acquired by CTET will
be the same as the tax basis of such assets to the Fund immediately prior
to the transaction (Section 362(b) of the Code), and
(8) the holding period of the assets of the Fund in the hands of
CTET will include the period during which those assets were held by the
Fund (Section 1223(2) of the Code).
Shareholders of the Fund should consult their tax advisors regarding
the effect, if any, of the proposed transaction in light of their
individual circumstances. Since the foregoing discussion only relates to
the Federal income tax consequences of the proposed transaction,
shareholders of the Fund should also consult their tax advisers as to
state and local tax consequences, if any, of the proposed transaction.
Financial Information
The transaction will be accounted for by CTET in its financial
statements similar to a pooling. Further financial information as to the
Fund is contained in the current prospectus dated April 29, 1994, and in
its audited financial statements as of December 31, 1993, which are
included in the Additional Statement, both of which are incorporated
herein and which are available without charge from OSS, P.O. Box 5270,
Denver, Colorado 80217 or by calling OSS toll-free at 1-800-525-7048.
Financial information on CTET is contained in its current prospectus dated
October 29, 1993, enclosed herewith, and in its audited financial
statements as of June 30, 1993, which are included in the Additional
Statement and which are also available without charge from Shareholder
Services Inc. ("SSI"), P.O. Box 5143, Denver, Colorado 80217 or by calling
SSI toll-free at 1-800-525-7048.
COMPARISON BETWEEN THE FUND AND CTET
Information about the Fund and CTET is presented below. In addition,
the following information is incorporated herein by reference from: (i)
CTET's Prospectus dated October 29, 1993, enclosed herewith; (ii) the
Fund's Prospectus dated April 29, 1994 and the Fund's Annual Report dated
December 31, 1993, each of which may be obtained without charge by writing
to OSS or by calling OSS, toll-free at 1-800-525-7048; and (iii) CTET's
Annual Report dated June 30, 1993 and CTET's Semi-Annual Report
(unaudited) dated December 31, 1993, each of which may be obtained without
charge by writing to SSI or by calling SSI, toll-free, at 1-800-525-7048.
Additional information about the following matters is contained in
the Form N-14 Additional Statement dated May 12, 1994, which incorporates
by reference CTET's Statement of Additional Information dated October 29,
1993 and the Fund's Prospectus and Statement of Additional Information
dated April 29, 1994: the organization and operation of CTET and the Fund,
including more information on their investment policies and practices;
information about CTET's and the Fund's Board of Trustees and their
responsibilities; a further description of the services provided by CTET
and the Fund's investment adviser, distributor, and shareholder transfer
agent; dividend policies; tax matters; an explanation of the method of
determining the offering price and net asset value of the shares of CTET
and the Fund; purchase, redemption and exchange programs; and distribution
arrangements.
The Fund and CTET are subject to the informational requirements of
the Securities Exchange Act of 1934 and in accordance therewith, file
reports and other information with the Securities and Exchange Commission
("SEC"). Proxy material, reports and other information about the Fund and
CTET which are of public record can be inspected and copied at public
reference facilities maintained by the SEC in Washington, D.C. and certain
of its regional offices, and copies of such materials can be obtained at
prescribed rates from the Public Reference Branch, Office of Consumer
Affairs and Information Services, SEC, Washington, D.C. 20549.
Investment Objectives and Policies
The Fund and CTET are no-load "money market" mutual funds with similar
investment objectives. Both the Fund and CTET are diversified registered
investment companies.
The Fund seeks maximum current income exempt from Federal income tax
that is consistent with stability of principal. Under normal market
conditions, the Fund attempts to invest 100% of its assets in Municipal
Securities, and, as a fundamental policy, will make no investment that
will reduce the portion of its total assets invested in Municipal
Securities to less than 80%. CTET seeks maximum short-term interest
income exempt from Federal income taxes consistent with low capital risk
and maintenance of liquidity. Under normal market conditions, CTET
attempts to invest 100% of its assets in Municipal Securities, and CTET
will make no investment that will reduce the portion of its total assets
that are invested in Municipal Securities to less than 80%. Both the Fund
and CTET may invest more than 20% of their total assets in taxable
securities if the fund has adopted a defensive position.
Municipal Securities are municipal bonds, municipal notes (which
include tax anticipation notes, bond anticipation notes, revenue
anticipation notes, construction loan notes and other short-term loans),
tax-exempt commercial paper, certificates of participation and other debt
obligations (which include variable rate demand notes and put bonds)
issued by or on behalf of various states and the District of Columbia, any
commonwealth or territory of the United States, or their respective
political subdivisions, agencies, instrumentalities or authorities, the
interest from which is not subject to Federal individual income tax, in
the opinion of bond counsel to the respective issuer. The two principal
classifications of Municipal Securities are "general obligations" (secured
by the issuer's pledge of its full faith, credit and taxing power for the
payment of principal and interest) and "revenue obligations" (payable only
from the revenues derived from a particular facility or class of
facilities, or specific excise tax or other revenue source).
Both the Fund and CTET are managed subject to the limitations of Rule
2a-7, under which the Fund and CTET use the amortized cost method to value
their portfolio securities. Rule 2a-7 places restrictions on a money
market fund's investments. Under the Rule, the Fund and CTET may purchase
only those securities that have minimal credit risks and are "Eligible
Securities" as defined in the Rule. See "Ratings of Securities," below.
The Fund and CTET may hold the following taxable "Temporary
Investments" that are Eligible Securities: (i) obligations issued or
guaranteed by the U.S. Government or its agencies or instrumentalities;
(ii) bankers acceptances; (iii) commercial paper rated in the highest
category by a Rating Organization; (iv) short-term debt obligations rated
in one of the two highest rating categories of a Rating Organization; or
(v) certificates of deposit of domestic banks with total assets of $1
billion or more. The Fund may also hold taxable repurchase agreements as
a temporary investment.
The short-term tax-exempt market has evolved since the early 1980's
whereby a number of the attractive issues are now issued by small
municipalities or "pass-through" agencies or authorities for the benefit
of a private entity or project. The Tax Reform Act of 1986 (the "Tax
Reform Act") limited the use of tax-exempt bonds for non-governmental
(private) purposes. More stringent restrictions were placed on the use
of proceeds of such bonds. Interest on "qualified" tax-exempt private
activity bonds (e.g., exempt facility bonds, including certain industrial
development bonds, qualified mortgage bonds, qualified Section 501(c)(3)
bonds, qualified student loan bonds, etc.) remains tax-exempt under the
revised rules and the Fund and CTET generally invest only in "qualified"
tax-exempt private activity bonds. In addition, under the Tax Reform Act,
interest on certain private activity bonds which continues to be tax-
exempt will be subject to the alternative minimum tax ("AMT"). CTET
infrequently invests in AMT private activity bonds.
Oppenheimer Management Corporation is the investment adviser to the
Fund and Centennial Asset Management Corporation is the investment adviser
to CTET. The Fund and CTET have the same Board of Trustees and the same
portfolio manager.
Illiquid and Restricted Securities. The Fund and CTET may buy securities
whose disposition would be subject to legal restrictions ("restricted
securities"). CTET and the Fund will not purchase or otherwise acquire
any security if, as a result, more than 10% of its net assets (taken at
current value) 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. Certain restricted securities are
illiquid. This policy includes repurchase agreements maturing in more
than seven days. This policy does not limit the acquisition of: (i)
restricted securities eligible for resale to qualified institutional
purchasers pursuant to Rule 144A under the Securities Act of 1933 that are
determined to be liquid by the Board of Trustees or by the Manager under
Board-approved guidelines, or (ii) commercial paper that is exempt from
registration under Section 4(2) of the Securities Act of 1933. If due to
changes in relative value, more than 10% of the value of either fund's net
assets consist of illiquid securities, the investment adviser would
consider appropriate steps to protect that fund's maximum flexibility.
There may be undesirable delays in selling illiquid securities at prices
representing their fair value.
Ratings of Securities. Under Rule 2a-7 of the Investment Company Act of
1940 (the "Investment Company Act") the Fund and CTET use the amortized
cost method to value their 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 and CTET may purchase
only those securities that the Board of Trustees has determined have
minimal credit risks and are "Eligible Securities." An "Eligible
Security" is (a) one that has received a rating in one of the two highest
short-term rating categories by any two "nationally-recognized statistical
rating organizations" (as defined in the Rule) ("Rating Organizations"),
or, if only one Rating Organization has rated that security, by that
Rating Organization, or (b) an unrated security that is judged by the
investment adviser to be of comparable quality to investments that are
"Eligible Securities" rated by Rating Organizations. The Rule permits the
Fund and CTET 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 and CTET may
also invest in "Second Tier Securities," which are Eligible Securities
that are not "First Tier Securities."
Additionally, under Rule 2a-7, the Fund and CTET must maintain a
dollar-weighted average portfolio maturity of no more than 90 days. The
maturity of any single portfolio investment purchased by CTET may not
exceed 397 days pursuant to Rule 2a-7. The Fund has a fundamental policy
that the maturity of any single portfolio investment may not exceed one
year, which was the maximum maturity under Rule 2a-7 before it was
recently amended. Under Rule 2a-7, CTET and the Fund may purchase longer-
term Municipal Securities with demand features that shorten the remaining
maturity to no more than 397 days and one year, respectively.
The Board has adopted procedures under Rule 2a-7 pursuant to which
the Board has delegated to the investment adviser certain
responsibilities, in accordance with that Rule, of conforming the Fund's
and CTET's investments with the requirements of the Rule and those
procedures. Ratings at the time of purchase will determine whether
securities may be acquired under the above restrictions. The rating
restrictions described in this Prospectus do not apply to banks in which
the Fund's or CTET's cash is kept. Subsequent downgrades in ratings may
require reassessments of the credit risks presented by a security and may
require its sale.
Floating Rate/Variable Rate Obligations. Some of the Municipal Securities
the Fund and CTET may purchase may have variable or floating interest
rates. Variable rates are adjustable at stated periodic intervals of no
more than one year. Floating rates are automatically adjusted according
to a specified market rate for such investments, such as the prime rate
of a bank, or the 91-day U.S. Treasury bill rate. CTET may purchase these
obligations if they have an ultimate maturity of 397 days or less; if
their maturity is greater than 397 days, they may be purchased if they
have a demand feature that permits CTET to recover the principal amount
of the underlying security on not more than thirty days' notice at any
time or at specified intervals not exceeding 397 days. The Fund may
purchase those obligations if they have an ultimate maturity of one year
or less (per the prior rules under Rule 2a-7); 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 on not more than thirty days' notice at any time or at specified
intervals not exceeding one year. The investment adviser may determine
that an unrated Municipal Security including a floating rate or variable
rate demand obligation meets the Fund's or CTET's quality standards by
reason of being backed by a letter of credit or guarantee issued by a bank
that meets the Fund's or CTET's quality standards.
Puts and Standby Commitments. For liquidity purposes, the Fund and CTET
may purchase Municipal Securities with puts from banks, brokers, dealers
or other institutions. The put gives the fund the right to sell the
underlying security within a specified time at a stated price. Under a
standby commitment, a dealer agrees to purchase, at the fund's option,
specified Municipal Securities at a stated price on same-day settlement.
The aggregate price of a security subject to a put or standby commitment
may be higher than the price which otherwise would be paid for the
security without such put or standby commitment, thereby increasing the
cost of such security and reducing its yield.
When-Issued Securities. The Fund and CTET may invest in Municipal
Securities on a "when-issued" or "delayed delivery" basis. The price,
which is generally expressed in yield terms, is fixed at the time the
commitment to purchase is made, but delivery and payment for when-issued
securities takes place at a later date (normally within 45 days of
purchase). No income accrues to the fund until it takes delivery of when-
issued securities. The fund is subject to the risk of adverse market
fluctuation between purchase and settlement. The investment advisers do
not believe that either fund's net asset value or income will be
materially adversely affected by its purchase of Municipal Securities on
a "when-issued" or "delayed delivery" basis.
Certificates of Participation. Subject to the provisions of Rule 2a-7 and
the limitation on illiquid securities, CTET and the Fund may invest in
certificates of participation, which are tax-exempt obligations that
evidence the holder's right to share in lease, installment loan or other
financing payments by a public entity. Projects financed with
certificates of participation generally are not subject to state
constitutional debt limitations or other statutory requirements that may
be applicable to Municipal Securities. Payments by the public entity on
the obligation underlying the certificates are derived from available
revenue services. Such revenue may be diverted to the funding of other
municipal service projects.
Repurchase Agreements. The Fund and CTET may acquire securities that are
subject to repurchase agreements. Both fund's repurchase agreements must
comply with the collateral requirements of Rule 2a-7. If the vendor fails
to pay the agreed-upon resale 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 funds'
investments in repurchase agreements not entitling the holder to payment
of principal within seven days are subject to the funds' net assets
limitation on investments in illiquid securities. When either fund
assumes a temporary defensive position, there is no limit on the amount
of the fund's assets that may be subject to repurchase agreements having
a maturity of seven days or less. Income earned on repurchase
transactions is not tax-exempt and accordingly, under normal market
conditions, both funds will limit their investments in repurchase
transactions to no more than 20% of their respective total assets.
Loans of Portfolio Securities. To attempt to increase its income, the
Fund and CTET may lend their portfolio securities (other than in
repurchase transactions) to brokers, dealers and other financial
institutions meeting certain specified credit conditions if the loan is
collateralized in accordance with applicable regulatory requirements and
if, after any loan, the value of the securities loaned does not exceed 25%
of the fund's total assets. Neither the Fund nor CTET lend portfolio
securities. Should that policy change, neither fund presently intends
that the value of the securities loaned will exceed 5% of the value of the
fund's total assets. The income from such loans, when distributed by the
Fund and CTET, will be taxable.
Other Policies
More information on the investment policies and practices of the Fund
and CTET, including those described above, is included in each fund's
prospectus and Statement of Additional Information. The Fund and CTET
have other fundamental investment policies that are essentially the same,
and are summarized under the caption "Investment Restrictions" in their
respective prospectuses and Statements of Additional Information.
Portfolio Transactions and Turnover
Brokerage practices for the Fund and CTET are the same. As most
purchases made by the Fund and CTET are principal transactions at net
prices, both funds incur little or no brokerage costs.
Expense Ratios and Performance
CTET's expense ratios for the fiscal year ended June 30, 1993 and the
six months ended December 31, 1993 (unaudited) were .76% and .77%
(annualized), respectively, of the average net assets. The Fund's expense
ratio for the fiscal year ended December 31, 1993 was 1.10% of average net
assets. Absent the voluntary assumption of expenses by OMC that was
terminated January 24, 1994, the Fund's expense ratio would have been
1.41% for the same period. Further details are set forth under "Trust
Expenses" and "Financial Highlights" in CTET's prospectus dated October
29, 1993 which accompanies this Prospectus, and under "Financial
Highlights" in the Fund's Annual Report as of December 31, 1993, CTET's
Annual Report as of June 30, 1993 and CTET's Semi-Annual Report
(unaudited) dated December 31, 1993, all of which are included in the N-14
Additional Statement.
The Fund's yield and tax-equivalent yield for the seven days ended
December 31, 1993 was 1.85%, and 3.06%, respectively. CTET's yield and
tax-equivalent yield for the seven days ended December 31, 1993 was 2.12%
and 3.51%, respectively.
Shareholder Services
The services available to the shareholders of CTET and the Fund are
generally the same. The minimum initial investments for shares of the
Fund and CTET are $1,000 and $500, respectively, and, in each case, $2,500
for Federal Funds wire purchases. Subsequent purchases of shares of the
Fund and CTET must be at least $25. Both the Fund and CTET offer Asset
Builder (systematic investment) Plans and Automatic Withdrawal Plans. A
discussion of procedures for purchases, redemptions and exchanges of
shares of the Fund and CTET is set forth above in the Synopsis.
Rights of Shareholders
Shares of the Fund and of CTET are redeemable at their net asset
value. The shares of each such fund entitle the holder to one vote per
share on all matters submitted to shareholders. All shares of each such
fund participate equally in its dividends and distributions and in its net
assets on liquidation. All shares of each, when issued, are fully paid
and non-assessable (except as set forth in the Fund's and CTET's
Prospectus and Additional Statement) and have no preference, preemptive
or conversion rights. It is not contemplated that the Fund or CTET will
hold regular annual meetings of shareholders. Under the Investment
Company Act of 1940, shareholders of the Fund and CTET do not have rights
of appraisal as a result of the transactions contemplated by the
Reorganization Plan. However, they have the right at any time prior to
the consummation of such transaction to redeem their shares at net asset
value.
Management and Distribution Arrangements
Oppenheimer Management Corporation ("OMC"), with its principal office
located at Two World Trade Center, New York, New York 10048-0203, acts as
the investment adviser for the Fund pursuant to an investment advisory
agreement.
Centennial Asset Management Corporation ("CAMC"), a wholly-owned
subsidiary of OMC located at 3410 South Galena Street, Denver, Colorado
80231, acts as the investment adviser for CTET pursuant to an investment
advisory agreement.
The monthly management fee payable by the Fund and CTET to its
respective investment adviser and the 12b-1 distribution fees paid by each
fund to its Distributor are described above under "Synopsis - Investment
Advisory and Distribution Plan Fees." Further details are set forth
below.
The Fund pays a management fee at the annual rate of: 0.500% of the
first $250 million of net assets; 0.475% of the next $250 million of net
assets; 0.450% of the next $250 million of net assets; 0.425% of the next
$250 million of net assets and 0.400% of net assets in excess of $1
billion.
CTET pays a management fee at the annual rate of: 0.500% of the first
$250 million of net assets; 0.475% of the next $250 million of net assets;
0.450% of the next $250 million of net assets; 0.425% of the next $250
million of net assets; 0.400% of the next $250 million of net assets;
0.375% of the next $250 million of net assets; 0.350% of the next $500
million of net assets; and 0.325% of net assets in excess of $2 billion.
Furthermore, under CTET's investment advisory agreement with the Manager,
when the value of CTET's net assets is less than $1.5 billion, the annual
fee payable to the Manager shall be reduced by $100,000 based on average
net assets computed daily and paid monthly at the annual rates, but in no
event shall the annual fee be less than $0.
Under the investment advisory agreements with the Fund and with CTET,
the investment advisers provide investment management services, including
the making of investment decisions and the placing of purchase and sale
orders for portfolio transactions. The investment advisers also provide
the Fund and CTET, respectively, with adequate office space, facilities
and equipment and provide and supervise the activities of all
administrative and clerical personnel required to provide effective
administration, including the compilation and maintenance of records with
respect to its operations, the preparation and filing of specified
reports, and composition of proxy materials and registration statements
for continuous public sale of shares of each fund.
For the fiscal year ended December 31, 1993, the management fee paid
by the Fund to OMC totaled $118,909. The Fund's investment advisory
agreement contains no expense limitation. Independently of its investment
advisory agreement with the Fund, OMC has voluntarily undertaken to assume
the expenses of the Fund (excluding non-recurring expenses, such as
litigation) to the extent they exceed the most stringent state regulatory
limitation on fund expenses that is applicable unless a waiver is
obtained. At present, that limitation is imposed by California and limits
expenses (with specified exclusions) to 2.5% of the first $30 million of
average annual net assets, 2% of the next $70 million of average net
assets and 1.5% of average net assets in excess of $100 million. Prior
to January 24, 1994, OMC had also voluntarily undertaken to assume the
expenses of the Fund (excluding non-recurring expenses, such as
litigation) in excess of 1.10% of the Fund's average annual net assets.
The current expense assumption will apply to the expenses to be borne by
the Fund in this reorganization.
For the fiscal year ended June 30, 1993 and the six months ended
December 31, 1993 (unaudited), the management fees paid by CTET were
$4,426,198 and $2,341,529, respectively. Under CTET's investment advisory
agreement, CAMC has undertaken that the total expenses of CTET in any
fiscal year shall not exceed the most stringent applicable state
regulatory limitation. At present, that limitation is imposed by
California. The payment of the management fee at the end of any month
will be reduced so that there will not be any accrued but unpaid liability
under this expense assumption undertaking.
As noted above under "Synopsis - Investment Advisory and Distribution
Fees," both the Fund and CTET have service plans pursuant to Rule 12b-1
under the Investment Company Act under which on a quarterly basis each
fund reimburses its Distributor for certain expenses in connection with
the personal services and maintenance of shareholder accounts. The
Distributor makes payments to certain broker-dealers that provide those
services. The maximum annual fee payable by the Fund and CTET pursuant
to their respective service plans is .20% of its average annual net
assets. CTET may make monthly (rather than quarterly) 12b-1 service fee
payments to the Distributor (and the Distributor to qualifying broker-
dealers) in any month where a dealer's Qualified Holdings in that month
exceed $200 million.
The Distributor has entered into Supplemental Distribution Assistance
Agreements ("Supplemental Agreements") under the Fund's 12b-1 Service Plan
with selected dealers distributing shares of the Fund, Oppenheimer Cash
Reserves, Centennial Government Trust, Centennial New York Tax Exempt
Trust, Centennial America Fund, L.P. and Centennial California Tax-Exempt
Trust. Quarterly payments by the Distributor for distribution-related
services range from 0.10% to 0.30%, annually, of the average net asset
value of shares of the above-mentioned funds owned during the quarter
beneficially or of record by the dealer or its customers. However, no
payment shall be made to any dealer for any quarter during which the
average net asset value of share of the above-mentioned funds owned during
that quarter by the dealer or its customers is less than $5 million. The
Supplemental Agreements do not include CTET. Payments made pursuant to
Supplemental Agreements are not an expense of the Fund, but are made by
the Distributor out of its own resources or out of the resources of the
Manager which may include profits derived from the advisory fee it
receives from the Fund. Payments to affiliates of the Distributor are not
permitted.
CAMC is a wholly-owned subsidiary of Oppenheimer Management
Corporation ("OMC"). OMC is controlled by a holding company owned in part
by senior management of OMC and ultimately controlled by Massachusetts
Mutual Life Insurance Company, a mutual life insurance company that also
advises pension plans and investment companies. OMC has operated as an
investment company adviser since 1959. It and its affiliates currently
advise U.S. investment companies with assets aggregating over $26 billion
as of December 31, 1993 with more than 1.8 million shareholder accounts.
Shareholder Services, Inc. ("SSI"), a wholly-owned subsidiary of OMC, acts
as transfer and shareholder servicing agent on an at-cost basis for CTET.
Oppenheimer Shareholder Services ("OSS"), a division of OMC, acts as
transfer and shareholder servicing agent on an at-cost basis for the Fund.
Both OSS and SSI provide the same services for other open-end investment
companies advised by OMC and CAMC.
METHOD OF CARRYING OUT THE REORGANIZATION PLAN
The consummation of the transactions contemplated by the
Reorganization Plan is contingent upon the approval of the Proposal by the
shareholders of the Fund and the receipt of the opinions and certificates
set forth in Sections 10 and 11 of the Reorganization Plan and the
occurrence of the events described in those Sections. Under the
Reorganization Plan, all the assets of the Fund, excluding the Cash
Reserve, will be delivered to CTET in exchange for shares of CTET. The
Cash Reserve to be retained by the Fund will be sufficient in the
discretion of the Fund's Board of Trustees for the payment of the Fund's
liabilities, and the Fund's expenses of dissolution.
The actual exchange of assets is expected to take place on or about
July 15, 1994 (defined in the Reorganization Plan as the "Closing Date")
on the basis of net asset values as of the close of business on the
preceding business day (the "Valuation Date"). Under the Reorganization
Plan, all redemptions of shares of the Fund shall be permanently suspended
on the Valuation Date; only redemption requests received in proper form
on or prior to the close of business on that date shall be fulfilled by
it; redemption requests received by the Fund after that date will be
treated as requests for redemptions of the shares of CTET to be
distributed to the shareholders requesting redemption. The exchange of
assets for shares will be done on the basis of the per share net asset
value of the shares of CTET, and the value of the assets of the Fund to
be transferred as of the close of business on the Valuation Date, in the
manner used by CTET in the valuation of assets. CTET is not assuming any
of the liabilities of the Fund, except for portfolio securities purchased
which have not settled and outstanding shareholder redemption and dividend
checks.
The net asset value of the shares transferred by CTET to the Fund
will be the same as the value of the assets received by CTET. For
example, if, on the Valuation Date, the Fund were to have securities with
a market value of $95,000 and cash in the amount of $10,000 (of which
$5,000 was to be retained by it as the Cash Reserve), the value of the
assets which would be transferred to CTET would be $100,000. Assuming the
net asset value per share of CTET were $1.00 per share at the close of
business on the Valuation Date, the number of shares to be issued would
be 100,000 ($100,000 divided by $1.00). These 100,000 shares of CTET would be
distributed to the former shareholders of the Fund. This example is given
for illustration purposes only and does not bear any relationship to the
dollar amounts or shares expected to be involved in the reorganization.
After the Closing Date, the Fund will distribute on a pro rata basis
to its shareholders of record on the Valuation Date the shares of CTET
received by the Fund at the closing, in liquidation and cancellation of
the outstanding shares of the Fund. To assist the Fund in this
distribution, CTET will, in accordance with a shareholder list supplied
by the Fund, cause its transfer agent to credit and confirm an appropriate
number of shares of CTET to each shareholder of the Fund. Certificates for
shares of CTET will be issued upon written request of a former shareholder
of the Fund but only for whole shares with fractional shares credited to
the name of the shareholder on the books of CTET. Former shareholders of
the Fund who wish certificates representing their shares of CTET must,
after receipt of their confirmations, make a written request to SSI, P.O.
Box 5143, Denver, Colorado 80217. Shareholders of the Fund holding
certificates representing their shares will not be required to surrender
their certificates to anyone in connection with the reorganization. After
the reorganization, however, it will be necessary for such shareholders
to surrender such certificates in order to redeem, transfer or pledge any
shares of CTET.
Under the Reorganization Plan, within one year after the Closing
Date, the Fund shall: (a) file a final report on Form N-SAR to the
Securities and Exchange Commission under the Investment Company Act of
1940; (b) either pay or make provision for all of its debts and taxes; and
(c) either (i) transfer any remaining amount of the Cash Reserve to CTET,
if such remaining amount is not material (as defined below) or (ii)
distribute such remaining amount to the shareholders of the Fund who were
such on the Valuation Date. Such remaining amount shall be deemed to be
material if the amount to be distributed, after deducting the estimated
expenses of the distribution, equals or exceeds one cent per share of the
number of Fund shares outstanding on the Valuation Date. Within one year
after the Closing Date, the Fund shall effect its dissolution with the
proper Massachusetts authorities and terminate its registration under the
Investment Company act of 1940.
Under the Reorganization Plan, either the Fund or CTET may abandon
and terminate the Reorganization Plan without liability if the other party
breaches any material provision of the Reorganization Plan or, if prior
to the closing, any legal, administrative or other proceeding shall be
instituted or threatened: (i) seeking to restrain or otherwise prohibit
the transactions contemplated by the Reorganization Plan and/or (ii)
asserting a material liability of either party, which proceeding has not
been terminated or the threat thereto removed prior to the Closing Date.
The foregoing explanation of the method of carrying out the
Reorganization Plan is only a summary of the terms and conditions of the
Agreement and Plan of Reorganization, and shareholders should read the
entire Agreement which is included in this Proxy Statement as Exhibit A.
In the event that the Reorganization Plan is not consummated for any
reason, the Fund's Board of Trustees will consider and may submit to the
shareholders other alternatives.
Vote Required
An affirmative vote of the holders of a "majority" (as defined in the
Investment Company Act of 1940) of the outstanding voting securities of
the Fund is required for approval of this Proposal. Such "majority" vote
is defined in the Investment Company Act as the vote of the holders of the
lesser of: (i) 67% or more of the voting securities present or represented
by proxy at the shareholders meeting, if the holders of more than 50% of
the outstanding voting securities are present or represented by proxy, or
(ii) more than 50% of the outstanding voting securities. The Board of
Trustees recommends a vote in favor of approving the proposed
reorganization with CTET.
OTHER BUSINESS
The Fund's Board of Trustees knows of no business other than the
matter specified above which will be presented at the meeting. Since
matters not known at the time of this solicitation may come before the
meeting, the proxy as solicited confers discretionary authority with
respect to such matters as properly come before the meeting and it is the
intention of the persons named in the proxy to vote this proxy in
accordance with their judgment on such matters.
OPPENHEIMER TAX-EXEMPT CASH RESERVES
By Order of the Board of Trustees
George C. Bowen, Secretary
May 15, 1994
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated this 23rd day of February,
1994, by and between Oppenheimer Tax-Exempt Cash Reserves (the "Fund"),
a Massachusetts business trust, and Centennial Tax Exempt Trust ("CTET"),
a Massachusetts business trust.
W I T N E S S E T H:
WHEREAS, the parties are each open-end investment companies of the
management type; and
WHEREAS, the parties hereto desire to provide for the reorganization
pursuant to Section 368(a)(1) of the Internal Revenue Code of 1986, as
amended (the "Code") of the Fund through the acquisition by CTET of
substantially all of the assets of the Fund in exchange for the shares of
beneficial interest ("shares") of CTET and the assumption by CTET of
certain liabilities of the Fund, which shares of CTET are thereafter to
be distributed by the Fund pro rata to its shareholders in complete
liquidation of the Fund and complete cancellation of its shares;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree as follows:
1. The parties hereto hereby adopt a Plan of Reorganization pursuant to
Section 368(a)(1) of the Code as follows: The reorganization will be
comprised of the acquisition by CTET of substantially all of the
properties and assets of the Fund in exchange for shares of CTET and the
assumption by CTET of certain liabilities of the Fund, followed by the
distribution of such CTET shares to the shareholders of the Fund in
exchange for their shares of the Fund, all upon and subject to the terms
of the Agreement hereinafter set forth.
The share transfer books of the Fund will be permanently closed at the
close of business on the Valuation Date (as hereinafter defined) and only
redemption requests received in proper form on or prior to the close of
business on the Valuation Date shall be fulfilled by the Fund; redemption
requests received by the Fund after that date shall be treated as requests
for the redemption of the shares of CTET to be distributed to the
shareholder in question as provided in Section 5.
2. On the Closing Date (as hereinafter defined), all of the assets of
the Fund on that date, excluding a cash reserve (the "Cash Reserve") to
be retained by the Fund sufficient in its discretion for the payment of
the expenses of the Fund's dissolution and its liabilities, but not in
excess of the amount contemplated by Section 10E, shall be delivered as
provided in Section 8 to CTET, in exchange for and against delivery to the
Fund on the Closing Date of a number of shares of CTET having an aggregate
net asset value equal to the value of the assets of the Fund so
transferred and delivered.
3. The net asset value of shares of CTET and the value of the assets of
the Fund to be transferred shall in each case be determined as of the
close of business of the New York Stock Exchange on the Valuation Date.
The computation of the net asset value of the shares of CTET and the Fund
shall be done in the manner used by CTET and the Fund, respectively, in
the computation of such net asset value per share as set forth in their
respective prospectuses. The methods used by CTET in such computation
shall be applied to the valuation of the assets of the Fund to be
transferred to CTET.
The Fund shall declare and pay, immediately prior to the Valuation Date,
a dividend or dividends which, together with all previous such dividends,
shall have the effect of distributing to the Fund's shareholders all of
the Fund's investment company taxable income for taxable years ending on
or prior to the Closing Date (computed without regard to any dividends
paid) and all of its net capital gain, if any, realized in taxable years
ending on or prior to the Closing Date (after reduction for any capital
loss carry-forward).
4. The closing shall be at the office of Oppenheimer Management
Corporation (the "Agent"), Two World Trade Center, Suite 3400, New York,
New York 10048, at 4:00 P.M. New York time on July 15, 1994, or at such
other time or place as the parties may designate or as provided below (the
"Closing Date"). The business day preceding the Closing Date is herein
referred to as the "Valuation Date."
In the event that on the Valuation Date either party has, pursuant to the
Investment Company Act of 1940 (the "Act") or any rule, regulation or
order thereunder, suspended the redemption of its shares or postponed
payment therefor, the Closing Date shall be postponed until the first
business day after the date when both parties have ceased such suspension
or postponement; provided, however, that if such suspension shall continue
for a period of 60 days beyond the Valuation Date, then the other party
to this Agreement shall be permitted to terminate this Agreement without
liability to either party for such termination.
5. As soon as practicable after the closing, the Fund shall distribute
on a pro rata basis to the shareholders of the Fund on the Valuation Date
the shares of CTET received by the Fund on the Closing Date in exchange
for the assets of the Fund in liquidation and cancellation of the
outstanding shares of the Fund; for the purpose of the distribution by the
Fund of such shares of CTET to its shareholders, CTET will promptly cause
its transfer agent to: (a) credit an appropriate number of shares of CTET
on the books of CTET to each shareholder of the Fund in accordance with
a list (the "Shareholder List") of its shareholders received from the
Fund; and (b) confirm an appropriate number of shares of CTET to each
shareholder of the Fund; certificates for shares of CTET will be issued
upon written request of a former shareholder of the Fund but only for
whole shares with fractional shares credited to the name of the
shareholder on the books of CTET.
The Shareholder List shall indicate, as of the close of business on the
Valuation Date, the name and address of each shareholder of the Fund,
indicating his or her share balance. The Fund agrees to supply the
Shareholder List to CTET not later than the Closing Date. Shareholders
of the Fund holding certificates representing their shares shall not be
required to surrender their certificates to anyone in connection with the
reorganization. After the Closing Date, however, it will be necessary for
such shareholders to surrender their certificates in order to redeem,
transfer or pledge the shares of CTET which they received.
6. Within one year after the closing, the Fund shall (a) either pay or
make provision for payment of all of its liabilities and taxes, and (b)
either (i) transfer any remaining amount of the Cash Reserve to CTET, if
such remaining amount (as reduced by the estimated cost of distributing
it to shareholders) is not material (as defined below) or (ii) distribute
such remaining amount to the shareholders of the Fund on the Valuation
Date. Such remaining amount shall be deemed to be material if the amount
to be distributed, after deduction of the estimated expenses of the
distribution, equals or exceeds one cent per share of the Fund outstanding
on the Valuation Date.
7. Prior to the Closing Date, there shall be coordination between the
parties as to their respective portfolios so that, after the closing, CTET
will be in compliance with all of its investment policies and
restrictions. At the Closing, the Fund shall deliver to CTET two copies
of a list setting forth the securities then owned by the Fund. Promptly
after the Closing, the Fund shall provide CTET a list setting forth the
respective federal income tax bases thereof.
8. Portfolio securities or written evidence acceptable to CTET of record
ownership thereof by The Depository Trust Company or through the Federal
Reserve Book Entry System or any other depository approved by the Fund
pursuant to Rule 17f-4 under the Act shall be endorsed and delivered, or
transferred by appropriate transfer or assignment documents, by the Fund
on the Closing Date to CTET, or at its direction, to its custodian bank,
in proper form for transfer in such condition as to constitute good
delivery thereof in accordance with the custom of brokers and shall be
accompanied by all necessary state transfer stamps, if any. The cash
delivered shall be in the form of certified or bank cashiers' checks or
by bank wire or intra-bank transfer payable to the order of CTET for the
account of CTET. Shares of CTET representing the number of shares of CTET
being delivered against the assets of the Fund, registered in the name of
the Fund, shall be transferred to the Fund on the Closing Date. Such
shares shall thereupon be assigned by the Fund to its shareholders so that
the shares of CTET may be distributed as provided in Section 5.
If, at the Closing Date, the Fund is unable to make delivery under this
Section 8 to CTET of any of its portfolio securities or cash for the
reason that any of such securities purchased by the Fund, or the cash
proceeds of a sale of portfolio securities, prior to the Closing Date have
not yet been delivered to it or the Fund's custodian, then the delivery
requirements of this Section 8 with respect to said undelivered securities
or cash will be waived and the Fund will deliver to CTET by or on the
Closing Date and with respect to said undelivered securities or cash
executed copies of an agreement or agreements of assignment in a form
reasonably satisfactory to CTET, together with such other documents,
including a due bill or due bills and brokers' confirmation slips as may
reasonably be required by CTET.
9. CTET shall not assume the liabilities (except for portfolio
securities purchased which have not settled and for shareholder redemption
and dividend checks outstanding) of the Fund, but the Fund will,
nevertheless, use its best efforts to discharge all known liabilities, so
far as may be possible, prior to the Closing Date. The cost of printing
and mailing the proxies and proxy statements will be borne by the Fund.
The Fund and CTET will bear the cost of their respective tax opinion. Any
documents such as existing prospectuses or annual reports that are
included in that mailing will be a cost of the fund issuing the document.
Any other out-of-pocket expenses of CTET and the Fund associated with this
reorganization, including legal, accounting and transfer agent expenses,
will be borne by the Fund and CTET, respectively, in the amounts so
incurred by each.
10. The obligations of CTET hereunder shall be subject to the following
conditions:
A. The Board of Trustees of the Fund shall have authorized the execution
of this Agreement, and the shareholders of the Fund shall have approved
the Agreement and the transactions contemplated herein, and the Fund shall
have furnished to CTET copies of resolutions to that effect certified by
the Secretary or an Assistant Secretary of the Fund; such shareholder
approval shall have been by the vote of the holders of a majority as
defined in the Investment Company Act of 1940 of the outstanding voting
securities of the Fund at a meeting for which proxies have been solicited
by the Proxy Statement and Prospectus.
B. CTET shall have received an opinion dated the Closing Date of counsel
to the Fund, to the effect that (i) the Fund is a business trust duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts with full powers to carry on its business
as then being conducted and to enter into and perform this Agreement; and
(ii) that all action necessary to make this Agreement, according to its
terms, valid, binding and enforceable on the Fund and to authorize
effectively the transactions contemplated by this Agreement have been
taken by the Fund.
C. The representations and warranties of the Fund contained herein shall
be true and correct at and as of the Closing Date, and CTET shall have
been furnished with a certificate of the President, or a Vice President,
or the Secretary or the Assistant Secretary or the Treasurer of the Fund,
dated the Closing Date, to that effect.
D. On the Closing Date, the Fund shall have furnished to CTET a
certificate of the Treasurer or Assistant Treasurer of the Fund as to the
amount of the capital loss carry-over and net unrealized appreciation or
depreciation, if any, with respect to the Fund as of the Closing Date.
E. The Cash Reserve shall not exceed 10% of the value of the net assets,
nor 30% in value of the gross assets, of the Fund at the close of business
on the Valuation Date.
F. A Registration Statement filed by CTET under the Securities Act of
1933 on Form N-14 and containing a preliminary form of the Proxy Statement
and Prospectus, shall have become effective under that Act not later than
December 31, 1994.
G. On the Closing Date, CTET shall have received a letter of Andrew J.
Donohue or other senior executive officer of Oppenheimer Management
Corporation acceptable to CTET, stating that nothing has come to his
attention which in his judgment would indicate that as of the Closing Date
there were any material actual or contingent liabilities of the Fund
arising out of litigation brought against the Fund or claims asserted
against it, or pending or to the best of his knowledge threatened claims
or litigation not reflected in or apparent from the most recent audited
financial statements and footnotes thereto of the Fund delivered to CTET.
Such letter may also include such additional statements relating to the
scope of the review conducted by such person and his responsibilities and
liabilities as are not unreasonable under the circumstances.
H. CTET shall have received an opinion, dated the Closing Date, of
Deloitte & Touche, to the same effect as the opinion contemplated by
Section 11.E. of this Agreement.
I. CTET shall have received at the closing all of the assets of the Fund
to be conveyed hereunder, which assets shall be free and clear of all
liens, encumbrances, security interests, restrictions and limitations
whatsoever.
11. The obligations of the Fund hereunder shall be subject to the
following conditions:
A. The Board of Trustees of CTET shall have authorized the execution of
this Agreement, and the transactions contemplated hereby, and CTET shall
have furnished to the Fund copies of resolutions to that effect certified
by the Secretary or an Assistant Secretary of CTET.
B. The Fund's shareholders shall have approved this Agreement and the
transactions contemplated hereby, by an affirmative vote of the holders
of a majority as defined in the Investment Company Act of 1940 of the
outstanding voting securities of the Fund, and the Fund shall have
furnished CTET copies of resolutions to that effect certified by the
Secretary or an Assistant Secretary of the Fund.
C. The Fund shall have received an opinion dated the Closing Date of
counsel to CTET, to the effect that (i) CTET is a business trust duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts with full powers to carry on its business
as then being conducted and to enter into and perform this Agreement; (ii)
all action necessary to make this Agreement, according to its terms,
valid, binding and enforceable upon CTET and to authorize effectively the
transactions contemplated by this Agreement have been taken by CTET, and
(iii) the shares of CTET to be issued hereunder are duly authorized and
when issued will be validly issued, fully-paid and non-assessable, except
as set forth in CTET's Prospectus and Statement of Additional Information.
D. The representations and warranties of CTET contained herein shall be
true and correct at and as of the Closing Date, and the Fund shall have
been furnished with a certificate of the President, a Vice President or
the Secretary or an Assistant Secretary or the Treasurer of CTET to that
effect dated the Closing Date.
E. The Fund shall have received an opinion of Deloitte & Touche to the
effect that the Federal tax consequences of the transaction, if carried
out in the manner outlined in this Plan of Reorganization and in
accordance with (i) the Fund's representation that there is no plan or
intention by any Fund shareholder who owns 5% or more of the Fund's
outstanding shares, and, to the Fund's best knowledge, there is no plan
or intention on the part of the remaining Fund shareholders, to redeem,
sell, exchange or otherwise dispose of a number of CTET shares received
in the transaction that would reduce the Fund shareholders' ownership of
CTET shares to a number of shares having a value, as of the Closing Date,
of less than 50% of the value of all of the formerly outstanding Fund
shares as of the same date, and (ii) the representation by each of the
Fund and CTET that, as of the Closing Date, the Fund and CTET will qualify
as regulated investment companies or will meet the diversification test
of Section 368(a)(2)(F)(ii) of the Code, will be as follows:
1. The transactions contemplated by the Agreement will qualify as a tax-
free "reorganization" within the meaning of Section 368(a)(1) of the
Internal Revenue Code of 1986, as amended, and under the regulations
promulgated thereunder.
2. The Fund and CTET will each qualify as a "party to a reorganization"
within the meaning of Section 368(b)(2).
3. No gain or loss will be recognized by the shareholders of the Fund
upon the distribution of shares of beneficial interest in CTET to the
shareholders of the Fund pursuant to Section 354.
4. Under Section 361(a) no gain or loss will be recognized by the Fund
by reason of the transfer of substantially all its assets in exchange for
shares of CTET.
5. Under Section 1032 no gain or loss will be recognized by CTET by
reason of the transfer of substantially all the Fund's assets in exchange
for shares of CTET and CTET's assumption of certain liabilities of the
Fund.
6. The shareholders of the Fund will have the same tax basis and holding
period for the shares of beneficial interest in CTET that they receive as
they had for the Fund shares that they previously held, pursuant to
section 358(a) and 1223(1), respectively.
7. The securities transferred by the Fund to CTET will have the same tax
basis and holding period in the hands of CTET as they had for the Fund,
pursuant to section 362(b) and 1223(1), respectively.
F. The Cash Reserve shall not exceed 10% of the value of the net assets,
nor 30% in value of the gross assets, of the Fund at the close of business
on the Valuation Date.
G. A Registration Statement filed by CTET under the Securities Act of
1933 on Form N-14, containing a preliminary form of the Proxy Statement
and Prospectus, shall have become effective under that Act not later than
December 31, 1994.
H. On the Closing Date, the Fund shall have received a letter of Andrew
J. Donohue or other senior executive officer of Oppenheimer Management
Corporation acceptable to the Fund, stating that nothing has come to his
attention which in his judgment would indicate that as of the Closing Date
there were any material actual or contingent liabilities of CTET arising
out of litigation brought against CTET or claims asserted against it, or
pending or, to the best of his knowledge, threatened claims or litigation
not reflected in or apparent by the most recent audited financial
statements and footnotes thereto of CTET delivered to the Fund. Such
letter may also include such additional statements relating to the scope
of the review conducted by such person and his responsibilities and
liabilities as are not unreasonable under the circumstances.
I. The Fund shall acknowledge receipt of the shares of CTET.
12. The Fund hereby represents and warrants that:
A. The financial statements of the Fund as at December 31, 1993
heretofore furnished to CTET, present fairly the financial position,
results of operations, and changes in net assets of the Fund as of that
date, in conformity with generally accepted accounting principles applied
on a basis consistent with the preceding year; and that from December 31,
1993 through the date hereof there have not been, and through the Closing
Date there will not be, any material adverse change in the business or
financial condition of the Fund, it being agreed that a decrease in the
size of the Fund due to a diminution in the value of its portfolio and/or
redemption of its shares shall not be considered a material adverse
change;
B. Contingent upon approval of this Agreement by the Fund's shareholders,
the Fund has authority to transfer all of the assets of the Fund to be
conveyed hereunder free and clear of all liens, encumbrances, security
interests, restrictions and limitations whatsoever;
C. The prospectus as amended and supplemented contained in the Fund's
Registration Statement under the Securities Act of 1933, as amended, is
true, correct and complete, conforms to the requirements of the Securities
Act of 1933 and does not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Registration
Statement, as amended, was, as of the date of the filing of the last Post-
Effective Amendment, true, correct and complete, conformed to the
requirements of the Securities Act of 1933 and did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading;
D. There is no material contingent liability of the Fund and no material
claim and no material legal, administrative or other proceedings pending
or, to the knowledge of the Fund, threatened against the Fund, not
reflected in such prospectus;
E. There are no material contracts outstanding to which the Fund is a
party other than those ordinary in the conduct of its business;
F. The Fund is a business trust duly organized, validly existing and in
good standing under the laws of the Commonwealth of Massachusetts; and has
all necessary and material Federal and state authorizations to own all of
its assets and to carry on its business as now being conducted; and the
Fund is duly registered under the Investment Company Act of 1940 and such
registration has not been rescinded or revoked and is in full force and
effect;
G. All Federal and other tax returns and reports of the Fund required by
law to be filed have been filed, and all Federal and other taxes shown due
on said returns and reports have been paid or provision shall have been
made for the payment thereof and to the best of the knowledge of the Fund
no such return is currently under audit and no assessment has been
asserted with respect to such returns and to the extent such tax returns
with respect to the taxable year of the Fund ended December 31, 1993 have
not been filed, such returns will be filed when required and the amount
of tax shown as due thereon shall be paid when due; and
H. The Fund has elected to be treated as a regulated investment company
and, for each fiscal year of its operations, the Fund has met the
requirements of Subchapter M of the Code for qualification and treatment
as a regulated investment company and the Fund intends to meet such
requirements with respect to its current taxable year.
13. CTET hereby represents and warrants that:
A. The financial statements of CTET as at June 30, 1993 (audited) and
December 31, 1993 (unaudited) heretofore furnished to the Fund, present
fairly the financial position, results of operations, and changes in net
assets of CTET, as of that date, in conformity with generally accepted
accounting principles applied on a basis consistent with the preceding
year; and that from June 30, 1993 through the date hereof there have not
been, and through the Closing Date there will not be, any material adverse
changes in the business or financial condition of CTET, it being
understood that a decrease in the size of CTET due to a diminution in the
value of its portfolio and/or redemption of its shares shall not be
considered a material or adverse change;
B. The prospectus as amended and supplemented contained in CTET's
Registration Statement under the Securities Act of 1933, as amended, is
true, correct and complete, conforms to the requirements of the Securities
Act of 1933 and does not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Registration
Statement, as amended, was, as of the date of the filing of the last Post-
Effective Amendment, true, correct and complete, conformed to the
requirements of the Securities Act of 1933 and did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading;
C. There is no material contingent liability of CTET and no material
claim and no material legal, administrative or other proceedings pending
or, to the knowledge of CTET, threatened against CTET, not reflected in
such prospectus;
D. There are no material contracts outstanding to which CTET is a party
other than those ordinary in the conduct of its business;
E. CTET is a business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts; has all
necessary and material Federal and state authorizations to own all its
properties and assets and to carry on its business as now being conducted;
the shares of CTET which it issues to the Fund pursuant to this Agreement
will be duly authorized, validly issued, fully-paid and non-assessable,
except as otherwise set forth in CTET's Registration Statement; and will
conform to the description thereof contained in CTET's Registration
Statement, will be duly registered under the Securities Act of 1933 and
in the states where registration is required; and CTET is duly registered
under the Investment Company Act of 1940 and such registration has not
been revoked or rescinded and is in full force and effect;
F. All Federal and other tax returns and reports of CTET required by law
to be filed have been filed, and all Federal and other taxes shown due on
said returns and reports have been paid or provision shall have been made
for the payment thereof and to the best of the knowledge of CTET no such
return is currently under audit and no assessment has been asserted with
respect to such returns and to the extent such tax returns with respect
to the taxable year of CTET ended June 30, 1993 have not been filed, such
returns will be filed when required and the amount of tax shown as due
thereon shall be paid when due;
G. CTET has elected to be treated as a regulated investment company and,
for each fiscal year of its operations, CTET has met the requirements of
Subchapter M of the Code for qualification and treatment as a regulated
investment company and CTET intends to meet such requirements with respect
to its current taxable year;
H. CTET has no plan or intention (i) to dispose of any of the assets
transferred by the Fund, other than in the ordinary course of business,
or (ii) to redeem or reacquire any of the shares issued by it in the
reorganization other than pursuant to valid requests of shareholders; and
I. After consummation of the transactions contemplated by the Agreement,
CTET intends to operate its business in a substantially unchanged manner.
14. Each party hereby represents to the other that no broker or finder
has been employed by it with respect to this Agreement or the transactions
contemplated hereby. Each party also represents and warrants to the other
that the information concerning it in the Proxy Statement and Prospectus
will not as of its date contain any untrue statement of a material fact
or omit to state a fact necessary to make the statements concerning it
therein not misleading and that the financial statements concerning it
will present the information shown fairly in accordance with generally
accepted accounting principles applied on a basis consistent with the
preceding year. Each party also represents and warrants to the other that
this Agreement is valid, binding and enforceable in accordance with its
terms and that the execution, delivery and performance of this Agreement
will not result in any violation of, or be in conflict with, any provision
of any charter, by-laws, contract, agreement, judgment, decree or order
to which it is subject or to which it is a party. CTET hereby represents
to and covenants with the Fund that, if the reorganization becomes
effective, CTET will treat each shareholder of the Fund who received any
of CTET's shares as a result of the reorganization as having made the
minimum initial purchase of shares of CTET received by such shareholder
for the purpose of making additional investments in shares of CTET,
regardless of the value of the shares of CTET received.
15. CTET agrees that it will prepare and file a Registration Statement
under the Securities Act of 1933 on Form N-14 which shall contain a
preliminary form of proxy statement and prospectus contemplated by Rule
145 under the Securities Act of 1933. The final form of such proxy
statement and prospectus is referred to in this Agreement as the "Proxy
Statement and Prospectus." Each party agrees that it will use its best
efforts to have such Registration Statement declared effective and to
supply such information concerning itself for inclusion in the Proxy
Statement and Prospectus as may be necessary or desirable in this
connection.
16. The obligations of the parties under this Agreement shall be subject
to the right of either party to abandon and terminate this Agreement
without liability if the other party breaches any material provision of
this Agreement or if any material legal, administrative or other
proceeding shall be instituted or threatened between the date of this
Agreement and the Closing Date (i) seeking to restrain or otherwise
prohibit the transactions contemplated hereby and/or (ii) asserting a
material liability of either party, which proceeding has not been
terminated or the threat thereof removed prior to the Closing Date.
17. This Agreement may be executed in several counterparts, each of which
shall be deemed an original, but all taken together shall constitute one
Agreement. The rights and obligations of each party pursuant to this
Agreement shall not be assignable.
18. All prior or contemporaneous agreements and representations are
merged into this Agreement, which constitutes the entire contract between
the parties hereto. No amendment or modification hereof shall be of any
force and effect unless in writing and signed by the parties and no party
shall be deemed to have waived any provision herein for its benefit unless
it executes a written acknowledgement of such waiver.
19. The Fund understands that the obligations of CTET under this
Agreement are not binding upon any Trustee or shareholder of CTET
personally, but bind only CTET and CTET's property. The Fund represents
that it has notice of the provisions of the Declaration of Trust of CTET
disclaiming shareholder and Trustee liability for acts or obligations of
CTET.
20. CTET understands that the obligations of the Fund under this
Agreement are not binding upon any Trustee or shareholder of the Fund
personally, but bind only the Fund and the Fund's property. CTET
represents that it has notice of the provisions of the Declaration of
Trust of the Fund disclaiming shareholder and Trustee liability for acts
or obligations of the Fund.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed and attested by its officers thereunto duly authorized on the
date first set forth above.
Attest: OPPENHEIMER TAX-EXEMPT CASH RESERVES
/s/ Robert G. Zack /s/ George C. Bowen
- --------------------- -------------------------------------
Robert G. Zack George C. Bowen
Assistant Secretary Treasurer
Attest: CENTENNIAL TAX EXEMPT TRUST
/s/ Robert G. Zack /s/ Andrew J. Donohue
- --------------------- -------------------------------------
Robert G. Zack Andrew J. Donohue
Assistant Secretary Vice President
<PAGE>
Oppenheimer Tax-Exempt Cash Reserves Proxy for Shareholders Meeting to
be held July 12, 1994
- --------------------------------------------------------------------------
Your shareholder Your prompt response can save your
vote is important! Fund the expense of another
mailing.
Please mark your proxy on the
reverse side, date and sign it,
and return it promptly in the
accompanying envelope, which
requires no postage if mailed in
the United States.
Please detach at perforation before mailing.
Oppenheimer Tax-Exempt Cash Reserves Proxy for Shareholders Meeting to
be held July 12, 1994
- --------------------------------------------------------------------------
The undersigned shareholder of PROXY SOLICITED ON BEHALF OF
Oppenheimer Tax-Exempt Cash Reserves TRUSTEES, WHICH RECOMMENDS A VOTE
(the "Fund"), does hereby appoint FOR THE PROPOSAL ON THE REVERSE
Robert Bishop, George C. Bowen, SIDE. THE SHARES REPRESENTED
Andrew J. Donohue and Scott HEREBY WILL BE VOTED AS
Farrar, and each of them, as INDICATED ON THE REVERSE SIDE OR
attorneys-in-fact and proxies of FOR IF NO CHOICE IS INDICATED.
the undersigned, with full power
of substitution, to attend the
Meeting of Shareholders of the
Fund to be held July 12, 1994,
at 3410 South Galena Street,
Denver, Colorado 80231 at 10:00
A.M., Denver time and at all
adjournments thereof, and to
vote the shares held in the name
of the undersigned on the record
date for said meeting for the
election of Trustees and on the
proposals specified on the reverse
side. Said attorneys-in-fact shall
vote in accordance with their best
judgment as to any other matter.
Over
<PAGE>
Oppenheimer Tax-Exempt Cash Reserves Proxy for Shareholders Meeting to
be held JuLY 12, 1994
- --------------------------------------------------------------------------
Your shareholder Your prompt response can save your
vote is important! Fund money.
Please vote, sign and mail your
proxy ballot (this card) in the
enclosed postage-paid envelope
today, no matter how many shares
you own. A majority of the
Fund's shares must be
represented in person or by
proxy. Please vote your proxy
so your Fund can avoid the
expense of another mailing.
Please detach at perforation before mailing.
1. Approval of of an Agreement and Plan of Reorganization between the Fund
and Centennial Tax Exempt Trust ("CTET"), and the transactions
contemplated thereby, including the transfer of substantially all the
assets of the Fund in exchange for shares of CTET, the distribution of
such shares to the shareholders of the Fund, the liquidation of the Fund
and the cancellation of the outstanding shares of the Fund (Proposal No.
1)
NOTE: Please sign exactly as your name(s) appear hereon. When signing
as custodian, attorney, executor, administrator, trustee, etc., please
give your full title as such. All joint owners should sign this proxy.
If the account is registered in the name of a corporation, partnership or
other entity, a duly authorized individual must sign on its behalf and
give title.
Dated , 1994
-------------------------------------------------
Month Day
Signatures(s)
-------------------------------------------------
Signatures(s)
-------------------------------------------------
Please read both sides of this ballot. 770
<PAGE>
May, 1994
Your vote counts...
Dear Oppenheimer Tax-Exempt Cash Reserves Shareholder:
We have scheduled a shareholder meeting for July 12, 1994 to consider
and vote upon an important proposal for your Fund. A notice of the
meeting and a proxy statement detailing the proposal are enclosed. Your
Board of Trustees, which represents you in matters regarding your Fund,
recommends approval of the proposal now being submitted to shareholders
for a vote.
What is the proposal?
A reorganization of your Fund into Centennial Tax Exempt Trust has
been proposed. One of the responsibilities of your Fund's Board of
Trustees and its investment advisor is to look for cost-effective ways to
manage your Fund. Although many fund expenses are relatively fixed, we
are constantly evaluating ways to lower them. By merging the assets of
your Fund with Centennial Tax Exempt Trust, the combined expenses will be
spread across a larger number of shareholders, and we anticipate that the
per share expenses of the combined funds will be lower than your Fund's
current per share expenses.
How would this affect my investment?
Both mutual funds are tax-exempt money market funds with virtually
the same investment objective. Centennial Tax Exempt Trust seeks the
maximum Federally tax-exempt interest income from short-term investments
consistent with low capital risk and high liquidity.
How do you vote?
No matter how large or small your investment, your vote is important,
so please review the proxy statement carefully. To cast your vote, simply
mark, sign and date the enclosed ballot and return it in the postage-paid
envelope today.
If you have questions regarding the proposal, please contact your
financial advisor or call us at 1-800-525-7048.
Sincerely,
Jon S. Fossel
P.S. Casting your vote is quick and easy, so please take a moment to
complete the proxy ballot.
