Registration No. 33-30471
File No. 811-5871
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
PRE-EFFECTIVE AMENDMENT NO. __ / /
POST-EFFECTIVE AMENDMENT NO. 6 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
Amendment No. 9 / X /
CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
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(Exact Name of Registrant as Specified in Charter)
3410 South Galena Street, Denver, Colorado 80231
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(Address of Principal Executive Offices)
1-303-671-3200
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(Registrant's Telephone Number)
Andrew J. Donohue, Esq.
Oppenheimer Management Corporation
Two World Trade Center, New York, New York 10048-0203
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box):
/ / Immediately upon filing pursuant to paragraph (b)
/ X / On November 1, 1994, pursuant to paragraph (b)
/ / 60 days after filing, pursuant to paragraph (a)
/ / On ---------, pursuant to paragraph (a)(i)
/ / 75 days after filing, pursuant to paragraph (a)(ii)
/ / On ---------, pursuant to paragraph (a)(ii) of Rule 485
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The Registrant has registered an indefinite number of shares under the
Securities Act of 1933 pursuant to Rule 24f-2 promulgated under the
Investment Company Act of 1940. A Rule 24f-2 Notice for the Registrant's
fiscal year ended June 30, 1994 was filed on August 30, 1994.
<PAGE>
FORM N-1A
CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
Cross Reference Sheet
Part A of
Form N-1A
Item No. Prospectus Heading
1 Cover Page
2 Trust Expenses
3 Condensed Financial Information; Yield Information
4 Cover Page; The Trust and Its Investment Policies; Investment
Restrictions
5 Management of the Trust; Trust Expenses; Inside Back Cover;
Additional Information - The Custodian and the Transfer Agent
6 Dividends and Taxes; Additional Information; Management of
the Trust
7 How to Buy Shares; Exchanges of Shares
8 How to Redeem Shares
9 *
Part B of
Form N-1A
Item No. Statement of Additional Information Heading
10 Cover Page
11 Cover Page
12 *
13 Investment Objective and Policies; Investment Restrictions;
Appendix A - Description of Securities Ratings
14 Trustees and Officers; Investment Management Services
15 Investment Management Services; Trustees and Officers - Major
Shareholders
16 Investment Management Services; Service Plan
17 Investment Management Services - Portfolio Transactions
18 Additional Information - Description of the Trusts
19 Yield Information; Purchase, Redemption and Pricing of
Shares; Automatic Withdrawal Plan Provisions
20 Additional Information - Tax Status of the Trust's Dividends
and Distributions
21 Investment Management Services - Portfolio Transactions;
Additional Information - General Distributor's Agreement;
Service Plan
22 Yield Information
23 Financial Statements
________________
*Not applicable or negative answer.
<PAGE>
Centennial
California Tax Exempt Trust
3410 South Galena Street, Denver, Colorado 80231
1-800-525-9310
Centennial California Tax Exempt Trust (the "Trust") is a no-load
money market mutual fund with the investment objective of seeking the
maximum current interest income exempt from Federal and California
personal income taxes for individual investors as is consistent with
preservation of capital. The Trust seeks to achieve this objective by
investing in municipal obligations meeting specified quality standards,
the income from which is tax-exempt as described above. Normally, the
Trust will invest at least 80% of its assets in U.S. dollar-denominated,
high quality tax-exempt municipal obligations. See "The Trust and Its
Investment Policies."
An investment in the Trust is neither insured nor guaranteed by the
U.S. Government. Shares of the Trust are not deposits or obligations of
any bank, are not guaranteed by any bank, and are not insured by the FDIC
or any other agency. While the Trust seeks to maintain a stable net asset
value of $1.00 per share, there can be no assurance that the Trust will
be able to do so. See "The Trust and Its Investment Policies."
Shares of the Trust may be purchased directly from dealers having
sales agreements with the Trust's Distributor and also are offered to
participants in Automatic Purchase and Redemption Programs (the
"Programs") established by certain brokerage firms with which the Trust's
Distributor has entered into agreements for that purpose. See "How to Buy
Shares" in the Prospectus. Program participants should also read the
description of the Program provided by their broker.
This Prospectus sets forth concisely information about the Trust that
a prospective investor should know before investing. A Statement of
Additional Information about the Trust (the "Additional Statement") dated
November 1, 1994, has been filed with the Securities and Exchange
Commission ("SEC") and is available without charge upon written request
to Shareholder Services, Inc. ("the Transfer Agent"), P.O. Box 5143,
Denver, Colorado 80217-5143 or by calling the toll-free number shown
above. The Additional Statement (which is incorporated by reference in
its entirety in this Prospectus) contains more detailed information about
the Trust and its management.
Investors are advised to read and retain this Prospectus for future
reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus is effective November 1, 1994.
<PAGE>
Table of Contents
Page
Trust Expenses . . . . . . . . . . . . . . . . 2
Financial Highlights . . . . . . . . . . . . . 3
Yield Information. . . . . . . . . . . . . . . 4
The Trust and Its Investment Policies. . . . . 4
Investment Restrictions. . . . . . . . . . . . 7
Management of the Trust. . . . . . . . . . . . 8
How To Buy Shares
Purchases Through Automatic Purchase
and Redemption Programs. . . . . . . . . 9
Direct Purchases. . . . . . . . . . . . . .10
Automatic Investment Plans. . . . . . . . .10
General . . . . . . . . . . . . . . . . . .10
Service Plan. . . . . . . . . . . . . . . .10
How To Redeem Shares . . . . . . . . . . . . .11
Program Participants. . . . . . . . . . . .11
Shares of the Trust Owned Directly. . . . .11
Regular Redemption Procedure. . . . . . . .11
Expedited Redemption Procedure. . . . . . .11
Checkwriting. . . . . . . . . . . . . . . .12
Automatic Withdrawal Plan . . . . . . . . .12
General Information on Redemptions. . . . .12
Exchanges of Shares. . . . . . . . . . . . . .13
Dividends and Taxes. . . . . . . . . . . . . .15
Additional Information . . . . . . . . . . . .17
<PAGE>
Trust Expenses
The following table sets forth: (1) the fees that an investor in the
Trust might pay, and (2) the expenses paid by the Trust during the fiscal
year ended June 30, 1994.
Shareholder Transaction Expenses
Maximum Sales Charge on Purchases
(as a percentage of offering price). . . . . . None
Sales Charge on Reinvested Dividends . . . . . . None
Redemption Fees. . . . . . . . . . . . . . . . . None
Exchange Fee . . . . . . . . . . . . . . . . . .$5.00
Annual Trust Operating Expenses (as a percentage of
average net assets)
Management Fees (after expense assumption) . . .0.43%
12b-1 (Distribution Plan) Fees . . . . . . . . .0.20%
Other Expenses . . . . . . . . . . . . . . . . .0.17%
Total Trust Operating Expenses
(after expense assumption) . . . . . . . . .0.80%
The purpose of this table is to assist an investor in understanding
the various costs and expenses that an investor in the Trust will bear
directly (shareholder transaction expenses) or indirectly (annual trust
operating expenses). "Other Expenses" includes such expenses as custodial
and transfer agent fees, audit, legal and other business operating
expenses, but excludes extraordinary expenses. The Annual Trust Operating
Expenses shown are net of a voluntary expense assumption undertaking by
the Trust's investment manager, Centennial Asset Management Corporation
(the "Manager"). Without such assumption, "Management Fees" and "Total
Trust Operating Expenses" would have been 0.50% and 0.87% of average net
assets, respectively. The expense assumption undertaking is described in
"Investment Management Services" in the Additional Statement and may be
withdrawn or amended at any time. For further details, see the Trust's
Financial Statements in the Additional Statement.
The following example applies the above-stated expenses (after
expense assumption) to a hypothetical $1,000 investment in shares of the
Trust over the time periods shown below, assuming a 5% annual rate of
return on the investment and also assuming that the shares are redeemed
at the end of each stated period. The amounts shown below are the
cumulative costs of such hypothetical $1,000 investment for the periods
shown.
1 year 3 years 5 years 10 years
$8 $26 $44 $99
This example should not be considered a representation of past or
future expenses or performance. Expenses are subject to change and actual
performance and expenses may be less or greater than those illustrated
above.
<PAGE>
Financial Highlights
Selected data for a share of the Trust outstanding throughout each period
The information in the table below has been audited by Deloitte &
Touche LLP, independent auditors, whose report on the financial statements
of the Trust for the fiscal year ended June 30, 1994 is included in the
Additional Statement.
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------------------------
1994 1993 1992 1991 1990(1)
-------- ------ ------ ------ --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period ............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations -
net investment income and net realized gain
on investments ................................................. .02 .02 .03 .04 .003
Dividends and distributions to shareholders ...................... (.02) (.02) (.03) (.04) (.003)
------- ------- ------- ------- -------
Net asset value, end of period ................................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
------- ------- ------- ------- -------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......................... $60,376 $58,079 $48,483 $32,337 $2,018
Average net assets (in thousands) ................................ $65,520 $56,082 $40,684 $16,150 $1,914
Number of shares outstanding at end of period
(in thousands) ................................................. 60,376 58,076 48,484 32,337 2,018
Ratios to average net assets:
Net investment income .......................................... 1.79% 1.90% 3.13% 4.09% 6.29%(2)
Expenses, before voluntary assumption by the Manager ........... .87% .86% .91% 1.09% 2.53%(2)
Expenses, net of voluntary assumption by the Manager ........... .80% .80% .80% .84% .90%(2)
</TABLE>
1. For the period from June 12, 1990 (commencement of operations) to June
30, 1990.
2. Annualized.
<PAGE>
Yield Information
From time to time, the "yield," "tax-equivalent yield" and
"compounded effective yield" of an investment in the Trust may be
advertised. All yield figures are based on historical earnings per share
and are not intended to indicate future performance. The "yield" of the
Trust is the income generated by an investment in the Trust over a seven-
day period, which is then "annualized." In annualizing, the amount of
income generated by the investment during that seven days is assumed to
be generated each week over a 52-week period, and is shown as a percentage
of the investment. The "compounded effective yield" is calculated
similarly, but the annualized income earned by an investment in the Trust
is assumed to be reinvested. The "compounded effective yield" will be
slightly higher than the yield because of the effect of the assumed
reinvestment. The Trust's "tax-equivalent yield" is calculated by
dividing that portion of the Trust's "yield" (calculated as described
above) which is tax-exempt by one minus a stated income tax rate and
adding the result to the portion (if any) of the Trust's yield that is not
tax-exempt. The "tax-equivalent yield" is then compounded and annualized
in the same manner as the Trust's yield. See "Yield Information" in the
Additional Statement for further information on the methods of calculating
these yields. From time to time the Manager may voluntarily assume a
portion of the Trust's expenses (which may include the management fee),
thereby lowering the overall expense ratio per share and increasing the
Trust's yield during the time such expenses are assumed.
The Trust And Its Investment Policies
The Trust is a no-load tax-exempt money market fund. It is an open-
end, non-diversified, management investment company organized as a
Massachusetts business trust on August 7, 1989. The Trust's investment
objective is to seek the maximum current interest income exempt from
Federal and California personal income taxes for individual investors as
is consistent with preservation of capital. The Trust's shares may be
purchased at their net asset value, which will remain fixed at $1.00 per
share except under extraordinary circumstances (see "Determination of Net
Asset Value Per Share" in the Additional Statement for further
information). There can be no assurance, however, that the Trust's net
asset value will not vary or that the Trust will achieve its investment
objective. The value of Trust shares is not insured or guaranteed by any
government agency. However, shares held in brokerage accounts may be
eligible for coverage by the Securities Investor Protection Corporation
for losses arising from the insolvency of the brokerage firm. The Trust's
investment policies and practices are not "fundamental" policies (as
defined below) unless a particular policy is identified as fundamental.
The Board may change non-fundamental investment policies without
shareholder approval.
In seeking its objective, the Trust invests in tax-exempt securities,
consisting of 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 and other debt obligations, which include variable rate demand notes
and put bonds issued by or on behalf of the State of California, other
states, and the District of Columbia, their political subdivisions, or any
commonwealth or territory of the United States, or their respective
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 (collectively, these are referred to as
"Municipal Securities"), and in Municipal Securities the interest from
which is not subject to California personal income tax in the opinion of
bond counsel to the respective issuer (collectively, these are referred
to as "California Municipal Securities"). The Trust may also purchase
Municipal Securities with demand features that meet the requirements of
Rule 2a-7 (discussed below). All Municipal Securities in which the Trust
invests must have, or, pursuant to regulations adopted by the SEC, be
deemed to have, remaining maturities of one year or less at the date the
Trust purchases them.
Under normal market conditions, the Trust attempts to invest 100% of
its assets in Municipal Securities and at least 65% of its assets in
California Municipal Securities, and, as a fundamental policy, the Trust
will make no investment that will reduce the portion of its total assets
that are invested in Municipal Securities to less than 80%. The balance
of the Trust's assets may be invested in investments the income from which
may be taxable, including: (i) repurchase agreements (explained below);
(ii) Municipal Securities issued to benefit a private user ("Private
Activity Municipal Securities"), the interest from which may be subject
to Federal alternative minimum tax (see "Dividends and Taxes" below and
"Private Activity Municipal Securities" in the Additional Statement); and
(iii) certain temporary investments defined below in "Temporary
Investments." The Trust may hold Temporary Investments pending the
investment of proceeds from the sale of Trust shares or portfolio
securities, pending settlement of Municipal Securities purchases or to
meet anticipated redemptions. Normally, the Trust will not invest more
than 20% of its total assets in Private Activity Municipal Securities and
the taxable investments described above. No independent investigation has
been made by the Manager as to the users of proceeds of such offerings or
the application of such proceeds. To the extent the Trust receives income
from taxable investments, it may not achieve its investment objective.
Further information about the Trust's investment policies and restrictions
is set forth in the Statement of Additional Information.
Ratings of Securities.
Under Rule 2a-7 of the Investment Company Act of 1940 (the
"Investment Company Act"), the Trust uses the amortized cost method to
value its portfolio securities to determine the Trust's net asset value
per share. Rule 2a-7 places restrictions on a money market fund's
investments. Under the Rule, the Trust may purchase only those securities
that the Trust's Board of Trustees has determined have minimal credit
risks and are "Eligible Securities." An "Eligible Security" is (a) one
that has received a rating in one of the two highest short-term rating
categories by any two "nationally-recognized statistical rating
organizations" (as defined in the Rule) ("Rating Organizations"), or, if
only one Rating Organization has rated that security, by that Rating
Organization, or (b) an unrated security that is judged by the Manager to
be of comparable quality to investments that are "Eligible Securities"
rated by Rating Organizations.
The Rule permits the Trust to purchase "First Tier Securities," which
are Eligible Securities rated in the highest rating category for short-
term debt obligations by at least two Rating Organizations, or, if only
one Rating Organization has rated a particular security, by that Rating
Organization, or comparable unrated securities. Under the Rule, the Trust
may also invest in "Second Tier Securities," which are Eligible Securities
that are not "First Tier Securities." Additionally, under Rule 2a-7, the
Trust must maintain a dollar-weighted average portfolio maturity of no
more than 90 days. Per the Trust's fundamental investment restrictions
(which may be changed only by shareholder vote) the maturity of any single
portfolio investment may not exceed one year, which is more restrictive
than the provisions of Rule 2a-7. Rule 2a-7 restricts the maturity of
portfolio securities to 397 days or less. The Trust's Board has adopted
procedures under Rule 2a-7 pursuant to which the Board has delegated to
the Manager certain responsibilities, in accordance with that Rule, of
conforming the Trust's investments with the requirements of the Rule and
those procedures.
Appendix A of the Additional Statement contains information on the
rating categories of Rating Organizations. Ratings at the time of
purchase will determine whether securities may be acquired under the above
restrictions. Subsequent downgrades in ratings may require reassessment
of the credit risk presented by a security and may require its sale. The
rating restrictions described in this Prospectus do not apply to banks in
which the Trust's cash is kept.
Floating Rate/Variable Rate Obligations
Some of the Municipal Securities the Trust may purchase may have
variable or floating interest rates. Variable rates are adjustable at
stated periodic intervals of no more than one year. Floating rates are
automatically adjusted according to a specified market rate for such
investments, such as the PSA Municipal Swap Index or the J.J. Kenney
Index. The Trust may purchase these obligations if they have a remaining
maturity of one year or less; if their maturity is greater than one year,
they may be purchased if they have a demand feature that permits the Trust
to recover the principal amount of the underlying security at specified
intervals not exceeding one year and on not more than 30 days' notice.
The Manager may determine that an unrated floating rate or variable rate
demand obligation meets the Trust's quality standards solely by reason of
being backed by a letter of credit or guarantee issued by a bank that
meets the Trust's quality standards. However, the letter of credit or
bank guarantee must be rated or meet the other requirements of Rule 2a-7.
Municipal Lease Obligations
The Trust 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 sources; such revenue may be diverted to the funding of other
municipal service projects. Payments of interest and/or principal with
respect to the certificates are not guaranteed and do not constitute an
obligation of the state or any of its political subdivisions. While some
municipal lease securities may be deemed to be "illiquid" securities (the
purchase of which would be limited as described below in "Illiquid and
Restricted Securities"), from time to time the Trust may invest more than
5% of its net assets in municipal lease obligations that the Manager has
determined to be liquid under guidelines set by the Trust's Board of
Trustees.
Puts and Stand-By Commitments
For liquidity purposes, the Trust may purchase Municipal Securities
with puts from banks, brokers, dealers or other institutions. The put
gives the Trust the right to sell the underlying security within a
specified time at a stated price. Under a stand-by commitment, a dealer
agrees to purchase, at the Trust's option, specified Municipal Securities
at a stated price on same-day settlement. The aggregate price of a
security subject to a put or a stand-by commitment may be higher than the
price which otherwise would be paid for the security without such put or
stand-by commitment, thereby increasing the cost of such security and
reducing its yield.
When-Issued or Delayed-Delivery Securities
The Trust may purchase Municipal Securities on a "when-issued" basis,
and may purchase or sell such securities on a "delayed delivery" basis.
"When-issued" and "delayed delivery" refer to securities whose terms and
indenture are available and for which a market exists, but which are not
available for immediate delivery. The Trust does not intend to make such
purchases for speculative purposes. During the period between the
purchase and settlement, no payment is made for the security and no
interest accrues to the buyer from the investment.
Non-diversification
The Trust is a "non-diversified" investment company under the
Investment Company Act. As a result, it may invest its assets in a single
issuer or limited number of issuers without limitation by the Investment
Company Act. However, the Trust intends to conduct its operations so as
to qualify as a "regulated investment company" for purposes of the
Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"),
pursuant to which: (1) not more than 25% of the market value of the
Trust's total assets will be invested in the securities of a single
issuer, and (2) with respect to 50% of the market value of its total
assets, not more than 5% of the market value of its total assets may be
invested in the securities of a single issuer and the Trust must not own
more than 10% of the outstanding voting securities of a single issuer.
An investment in the Trust therefore will entail greater risk than an
investment in a diversified investment company because a higher percentage
of investments among fewer issuers may result in greater fluctuation in
the total market value of the Trust's portfolio, and economic, political
or regulatory developments may have a greater impact on the value of the
Trust's portfolio than would be the case if the portfolio were diversified
among more issuers.
Repurchase Agreements
The Trust may acquire securities subject to repurchase agreements to
generate income and for liquidity purposes to meet anticipated
redemptions, or pending the investment of proceeds from sales of Trust
shares or settlement of purchases of portfolio investments. The Trust's
repurchase agreements will be fully collateralized. However, if the
seller of the securities fails to pay the agreed-upon repurchase price on
the delivery date, the Trust's risks may include any costs of disposing
of the collateral for the agreement, and losses that might result from any
delays in foreclosing on the collateral. Income earned on repurchase
transactions is not tax-exempt and, accordingly, under normal market
conditions, the Trust will limit its investments in repurchase
transactions to 20% of its total assets. When the Trust assumes a
temporary defensive position, there is no limit on the amount of its
assets that may be subject to repurchase agreements maturing in seven days
or less.
Illiquid and Restricted Securities
Under the policies and procedures established by the Trust's Board
of Trustees, the Manager determines the liquidity of the Trust's
investments. Investments may be illiquid because of the absence of an
active trading market, making it difficult to value them or dispose of
them promptly at an acceptable price. A restricted security is one that
has a contractual restriction on its resale or which cannot be sold
publicly until it is registered under the Securities Act of 1933. The
Trust will not invest more than 10% of its net assets in illiquid or
restricted securities. This policy does not limit purchases of: (1)
restricted securities eligible for resale to qualified institutional
purchasers pursuant to Rule 144A under the Securities Act of 1933 that are
determined to be liquid by the Board of Trustees or by the Manager under
Board-approved guidelines, or (2) commercial paper that may be sold
without registration under Sections 3(a)(3) or 4(2) of the Securities Act
of 1933. If due to changes in relative value, more than 10% of the value
of the Trust's net assets consist of illiquid securities, the Manager
would consider appropriate steps to protect the Trust's maximum
flexibility. There may be undesirable delays in selling illiquid
securities at prices representing their fair value.
Loans of Portfolio Securities
To attempt to increase its income, the Trust may lend its portfolio
securities (other than in repurchase transactions) to certain types of
eligible borrowers approved by the Board of Trustees. Each loan must be
collateralized in accordance with applicable regulatory requirements.
After any loan, the value of the securities loaned may not exceed 25% of
the total value of the Trust's assets. There are some risks in connection
with securities lending. The Trust might experience a delay in receiving
additional collateral to secure a loan, or a delay in recovery of the
loaned securities. The Trust does not intend to engage in securities loan
transactions during the current fiscal year. The income from such loans,
when distributed by the Trust, will be taxable.
Temporary Investments
The Trust may hold the following "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) taxable commercial paper rated in the highest category
by a Rating Organization; (iv) short-term taxable debt obligations rated
in one of the two highest rating categories of a Rating Organization; or
(v) certificates of deposit of domestic banks with assets of $1 billion
or more. To the extent the Trust assumes a temporary defensive position,
a significant portion of the Trust's distributions may be subject to
Federal and California income taxes.
Special Considerations - California Municipal
Securities
Because the Trust concentrates its investments in California
Municipal Securities, the market value and marketability of such Municipal
Securities and the interest income to the Trust from them could be
adversely affected by a default or a financial crisis relating to any of
such issuers. Investors should consider these matters as well as
economic trends in California, summarized in the Additional Statement
under "Special Investment Considerations - California Municipal
Securities."
Investment Restrictions
The Trust has certain investment restrictions which, together with
its investment objective, are fundamental policies, changeable only by the
vote of a "majority" (as defined in the Investment Company Act) of the
Trust's outstanding voting securities. Under some of those restrictions,
the Trust cannot: (1) make loans, except that the Trust may purchase debt
securities described in "The Trust and Its Investment Policies," and other
securities substantially similar thereto, and repurchase agreements, and
the Trust may lend its portfolio securities as described in its investment
policy stated above; (2) borrow money in excess of 10% of the value of its
total assets or make any investment when borrowings exceed 5% of the value
of its total assets; it may borrow only as a temporary measure for
extraordinary or emergency purposes; no assets of the Trust may be
pledged, mortgaged or assigned to secure a debt; (3) enter into a
repurchase agreement or purchase a security subject to a call if the
scheduled repurchase or redemption date is greater than one year; (4)
invest more than 25% of its total assets in any one industry; however for
the purposes of this restriction, Municipal Securities and U.S. Government
obligations are not considered to be part of any single industry; (5)
invest in any debt instrument having a maturity in excess of one year from
the date of purchase, unless purchased subject to a demand feature which
may not exceed one year and requires payment on not more than 30 days'
notice; or (6) invest more than 5% of the value of its total assets in
securities of companies that have operated less than three years,
including the operations of predecessors. The percentage restrictions
described above and in the Additional Statement apply only at the time of
investment and require no action by the Trust as a result of subsequent
changes in value of the investments or the size of the Trust. A
supplementary list of investment restrictions is contained in "Investment
Restrictions" in the Additional Statement.
Management of the Trust
The Trust's Board of Trustees has overall responsibility for the
management of the Trust under the laws of Massachusetts governing the
responsibilities of trustees of business trusts. "Trustees and Officers"
in the Additional Statement identifies the Trust's Trustees and officers
and provides information about them. Subject to the authority of the
Board, the Manager is responsible for the day-to-day management of the
Trust's business, supervises the investment operations of the Trust and
the composition of its portfolio and furnishes the Trust advice and
recommendations with respect to investments, investment policies and the
purchase and sale of securities, pursuant to a management agreement (the
"Agreement") with the Trust. The management fee, payable monthly to the
Manager under the terms of the Agreement, is computed on the aggregate net
assets as of the close of business each day at the following annual rates:
0.50% of the first $250 million of net assets; 0.475% of the next $250
million of net assets; 0.45% of the next $250 million of net assets;
0.425% of the next $250 million of net assets and 0.40% of net assets in
excess of $1 billion.
The Agreement lists examples of expenses paid by the Trust, the major
categories of which relate to interest, taxes, brokerage commissions,
certain insurance premiums, fees to certain Trustees, legal and audit
expenses, transfer agent and custodian expenses, certain registration
expenses and non-recurring expenses, including litigation costs. For
further information about the Agreement, including a description of
expense arrangements, exculpation provisions and portfolio transactions,
see "Investment Management Services" in the Additional Statement.
The Manager, a wholly-owned subsidiary of Oppenheimer Management
Corporation ("OMC"), has operated as an investment adviser since 1978.
The Manager and OMC currently advise U.S. investment companies with assets
aggregating over $28 billion as of June 30, 1994, and having more than 1.8
million shareholder accounts. OMC is owned by Oppenheimer Acquisition
Corp., a holding company owned in part by senior management of OMC and the
Manager and ultimately controlled by Massachusetts Mutual Life Insurance
Company, a mutual life insurance company which also advises pension plans
and investment companies.
How To Buy Shares
Shares of the Trust may be purchased at their offering price, which
is the net asset value per share, without sales charge. The net asset
value will remain fixed at $1.00 per share, except under extraordinary
circumstances (see "Determination of Net Asset Value Per Share" in the
Additional Statement for further details) but there is no guarantee that
the Trust will maintain a stable net asset value of $1.00 per share.
Centennial Asset Management Corporation, which also acts as the Trust's
distributor (and in that capacity is referred to as the "Distributor"),
may in its sole discretion accept or reject any order for purchase of the
Trust's shares. Oppenheimer Funds Distributor, Inc., an affiliate of the
Distributor, acts as the Trust's sub-distributor (the "Sub-Distributor").
The minimum initial investment is $500 ($2,500 if by Federal Funds
wire), except as otherwise described in this Prospectus. Subsequent
purchases must be in amounts of $25 or more, and may be made through
authorized dealers or brokers or by forwarding payment to the Distributor
at P.O. Box 5143, Denver, Colorado 80217, with the name(s) of all account
owners, the account number and the name of the Trust. The minimum initial
and subsequent purchase requirements are waived on purchases made by
reinvesting dividends from any of the "Eligible Funds" listed in "Exchange
Privilege" below or by reinvesting distributions from unit investment
trusts for which reinvestment arrangements have been made with the
Distributor. Under an Automatic Investment Plan or military allotment
plan, initial and subsequent investments must be at least $25. No share
certificates will be issued unless specifically requested in writing by
an investor or the dealer or broker.
The Trust intends to be as fully invested as practicable to maximize
its yield. Therefore, dividends will accrue on newly-purchased shares
only after the Distributor accepts the purchase order for them at its
address in Denver, Colorado, on a day the New York Stock Exchange is open
(a "regular business day") under one of the methods of purchasing shares
described below. The purchase will be made at the net asset value next
determined after the Distributor accepts the purchase order.
The Trust's net asset value per share is determined twice each
regular business day, at 12:00 Noon and at 4:00 P.M. (all references to
time in this Prospectus are to New York time) by dividing the net assets
of the Trust by the total number of its shares outstanding. The Trust's
Board of Trustees has established procedures for valuing the Trust's
assets, using the amortized cost method, as described in "Determination
of Net Asset Value Per Share" in the Additional Statement.
Purchases Through Automatic Purchase and
Redemption Programs
Shares of the Trust are available under Automatic Purchase and
Redemption Programs ("Programs") of broker-dealers that have entered into
agreements with the Distributor for that purpose. Broker-dealers whose
clients participate in such Programs will invest the "free cash balances"
of such client's Program account in shares of the Trust if the Trust has
been selected as the primary Trust by the client for the Program account.
Such purchases will be made by the broker-dealer under the procedures
described in "Guaranteed Payment," below. The Program may have minimum
investment requirements established by the broker-dealer. The description
of the Program provided by the broker-dealer should be consulted for
details, and all questions about investing in, exchanging or redeeming
shares of the Trust through a Program should be directed to the broker-
dealer.
Direct Purchases
An investor may directly purchase shares of the Trust through any
dealer which has a sales agreement with the Distributor or the Sub-
Distributor. There are two ways to make a direct initial investment:
either (1) complete a Centennial Funds New Account Application and mail
it with payment to the Distributor at P.O. Box 5143, Denver, Colorado
80217-5143 (if no dealer is named in the Application, the Sub-Distributor
will act as the dealer), or (2) order the shares through your dealer or
broker. Purchases made by Application should have a check enclosed, or
payment may be made by one of the alternative means described below.
-- Payment by Check. Orders for shares purchased by check in U.S.
dollars drawn on a U.S. bank will be effected on the regular business day
on which the check (and the purchase application, if the account is new)
is accepted by the Distributor. Dividends will begin to accrue on such
shares the next regular business day after the purchase order is accepted.
For other checks, the shares will not be purchased until the Distributor
is able to convert the purchase payment to Federal Funds, and dividends
will begin to accrue on such shares on the next regular business day.
-- Payment by Federal Funds Wire. Shares of the Trust may be
purchased by Federal Funds wire. The minimum investment by wire is
$2,500. The investor must first call the Distributor's Wire Department
at 1-800-852-8457 to notify the Distributor of the transmittal of the wire
and to order the shares. The investor's bank must wire the Federal Funds
to Citibank, N.A., ABA No. 0210-0008-9 for credit to Concentration Account
No. 3737-5674, for further credit to Centennial California Tax Exempt
Trust, Custodian Account No. 845-873. The wire must state the investor's
name. Shares will be purchased on the regular business day on which,
prior to 4:00 P.M., the Federal Funds are received by Citibank, N.A. and
the Distributor has received and accepted the investor's notification of
the wire order. Shares will be purchased at the net asset value next
determined after receipt of the Federal Funds and the order. Dividends
on newly purchased shares will begin to accrue on the purchase date if the
Federal Funds and order for the purchase are received and accepted by
12:00 Noon. Dividends will begin to accrue on the next regular business
day if the Federal Funds and purchase order are received and accepted
between 12:00 Noon and 4:00 P.M. The investor must also send the
Distributor a completed Application when the purchase order is placed to
establish a new account.
-- Guaranteed Payment. Broker-dealers with sales agreements with the
Distributor (including broker-dealers who have made special arrangements
with the Distributor for purchases for Program accounts) may place
purchase orders with the Distributor to purchase shares of the Trust. If
an order is received between 12:00 Noon and 4:00 P.M. on a regular
business day, with the broker-dealer's guarantee that payment for such
shares in Federal Funds will be received by the Custodian prior to 4:00
P.M. the next regular business day, the order will be effected at 4:00
P.M. on the day the order is received, and dividends on such shares will
begin to accrue on the next regular business day the Federal Funds are
received by the required time. If the broker-dealer guarantees that the
Federal Funds payment will be received by the Trust's Custodian by 2:00
P.M. on a regular business day on which an order is placed for shares
after 12:00 Noon, the order will be effected at 4:00 P.M. that day and
dividends will begin to accrue on such shares on the purchase date.
Automatic Investment Plans
Direct investors may purchase shares of the Trust automatically.
Automatic Investment Plans may be used to make regular monthly investments
($25 minimum) from the investor's account at a bank or other financial
institution. To establish an Automatic Investment Plan from a bank
account, a check (minimum $25) for the initial purchase must accompany the
application. Shares purchased by Automatic Investment Plan payments are
subject to the redemption restrictions for recent purchases described in
"How to Redeem Shares." The amount of the Automatic Investment Plan
payment may be changed or the automatic investments terminated at any time
by writing to the Transfer Agent. A reasonable period (approximately 15
days) is required after receipt of such instructions to implement them.
The Trust reserves the right to amend, suspend, or discontinue offering
such plans at any time without prior notice.
General
Dealers and brokers who process orders for the Trust's shares on
behalf of their customers may charge a fee for this service. That fee can
be avoided by purchasing shares directly from the Trust. The sale of
shares will be suspended during any period when the determination of net
asset value is suspended, and may be suspended by the Board of Trustees
whenever the Board judges it in the best interest of the Trust to do so.
Service Plan
The Trust has adopted a service plan (the "Plan") under Rule 12b-1
of the Investment Company Act pursuant to which the Trust will reimburse
the Distributor for all or a portion of its costs incurred in connection
with the personal service and maintenance of accounts that hold Trust
shares. The Distributor will use all the fees received from the Trust to
compensate dealers, brokers, banks, or other institutions ("Recipients")
each quarter for providing personal service and maintenance of accounts
that hold Trust shares. The services to be provided by Recipients under
the Plan include, but shall not be limited to, the following: answering
routine inquiries from the Recipient's customers concerning the Trust,
providing such customers with information on their investment in Trust
shares, assisting in the establishment and maintenance of accounts or sub-
accounts in the Trust, making the Trust's investment plans and dividend
payment options available, and providing such other information and
customer liaison services and the maintenance of accounts as the
Distributor or the Trust may reasonably request. Plan payments by the
Trust to the Distributor will be made quarterly in the amount of the
lesser of: (i) 0.05% (0.20% annually) of the net asset value of the Trust,
computed as of the close of each business day or (ii) the Distributor's
actual distribution expenses for that quarter of the type approved by the
Board. Any unreimbursed expenses incurred for any quarter by the
Distributor may not be recovered in later periods. The Plan has the
effect of increasing annual expenses of the Trust by up to 0.20% of
average annual net assets from what its expenses would otherwise be. In
addition, the Manager may, under the Plan, from time to time from its own
resources (which may include the profits derived from the advisory fee it
receives from the Trust), make payments to Recipients for distribution,
administrative and accounting services performed by Recipients. For
further details, see "Service Plan" in the Additional Statement.
How to Redeem Shares
Program Participants
Program participants may redeem shares in the Program by writing
checks as described below, or by contacting their dealer or broker.
Program participants may also arrange for "Expedited Redemptions," as
described below, only through their dealer or broker.
Shares of the Trust Owned Directly
Shares of the Trust owned by a shareholder directly (not through a
Program) (a "direct shareholder"), may be redeemed in the following ways:
-- Regular Redemption Procedure. A direct shareholder who wishes to
redeem some or all shares in an account (whether or not represented by
certificates) under the Trust's regular redemption procedures, must send
the following to the Transfer Agent for the Trust, Shareholder Services,
Inc., P.O. Box 5143, Denver, Colorado 80217; (send courier or express mail
deliveries to 10200 E. Girard Avenue, Building D, Denver, Colorado 80231):
(1) a written request for redemption signed by all registered owners
exactly as the shares are registered, including fiduciary titles, if any,
and specifying the account number and the dollar amount or number of
shares to be redeemed; (2) a guarantee of the signatures of all registered
owners on the redemption request or on the endorsement on the share
certificate or accompanying stock power, by a U.S. bank, trust company,
credit union or savings association, or a foreign bank having a U.S.
correspondent bank, or by a U.S. registered dealer or broker in
securities, municipal securities or government securities, or by a U.S.
national securities exchange, registered securities association or
clearing agency; (3) any share certificates issued for any of the shares
to be redeemed; and (4) any additional documents which may be required by
the Transfer Agent for redemption by corporations, partnerships or other
organizations, executors, administrators, trustees, custodians or
guardians, or if the redemption is requested by anyone other than the
shareholder(s) of record. Transfers of shares are subject to similar
requirements. A signature guarantee is not required for redemptions of
$50,000 or less, requested by and payable to all shareholders of record,
to be sent to the address of record for that account. To avoid delay
in redemption or transfer, shareholders having questions about these
requirements should contact the Transfer Agent in writing or by calling
1-800-525-9310 before submitting a request. From time to time the
Transfer Agent in its discretion may waive any or certain of the foregoing
requirements in particular cases. Redemption or transfer requests will
not be honored until the Transfer Agent receives all required documents
in proper form.
-- Expedited Redemption Procedure. In addition to the regular
redemption procedure set forth above, direct shareholders whose shares are
not represented by certificates may arrange to have redemption proceeds
of $2,500 or more wired in Federal Funds to a designated commercial bank
if the bank is a member of the Federal Reserve wire system. To place a
wire redemption request, call the Transfer Agent at 1-800-852-8457. The
account number of the designated financial institution must be supplied
to the Transfer Agent on the Application or dealer settlement instructions
establishing the account or may be added to existing accounts or changed
only by signature-guaranteed instructions to the Transfer Agent from all
shareholders of record. Such redemption requests may be made by
telephone, wire or written instructions to the Transfer Agent. The wire
for the redemption proceeds of shares redeemed prior to 12:00 Noon,
normally will be transmitted by the Transfer Agent to the shareholder's
designated bank account on the day the shares are redeemed (or, if that
day is not a bank business day, on the next bank business day). No
dividends are paid on the proceeds of redeemed shares awaiting transmittal
by wire. Shares redeemed prior to 12:00 Noon do not earn dividends on the
redemption date. The wire for the redemption proceeds of shares redeemed
between 12:00 Noon and 4:00 P.M., normally will be transmitted by the
Transfer Agent to the shareholder's designated bank account on the next
bank business day after the redemption. Shares redeemed between 12:00
Noon and 4:00 P.M. earn dividends on the redemption date. See "Purchase,
Redemption and Pricing of Shares" in the Additional Statement for further
details.
-- Checkwriting. Upon request, the Transfer Agent will provide any
direct shareholder or Program participant whose shares are not represented
by certificates with forms of drafts ("checks") payable through a bank
selected by the Trust (the "Bank"). Program participants must arrange for
check writing through their brokers or dealers. The Transfer Agent will
arrange for checks written by direct shareholders to be honored by the
Bank after obtaining a specimen signature card from the shareholder(s).
Shareholders of joint accounts may elect to have checks honored with a
single signature. Checks may be made payable to the order of anyone in
any amount not less than $250 and will be subject to the Bank's rules and
regulations governing checks. For Program Participants, checks will be
drawn against the primary account designated by the Program participant.
If a check is presented for an amount greater than the account value, it
will not be honored. Shares purchased by check or Automatic Investment
Plan payments within the prior 15 days may not be redeemed by check
writing. A check presented to the Bank for payment that would require
redemption of some or all of the shares so purchased is subject to non-
payment. Checks may not be presented for payment at the offices of the
Bank or the Trust's Custodian. This limitation does not affect the use
of checks for the payment of bills or to obtain cash at other banks. The
Trust reserves the right to amend, suspend or discontinue check writing
privileges at any time without prior notice.
-- Telephone Redemptions. Direct shareholders of the Trust may
redeem their shares by telephone by calling the Transfer Agent at 1-800-
852-8457. This procedure for telephone redemptions is not available to
Program participants. Proceeds of telephone redemptions will be paid by
check payable to the shareholder(s) of record and sent to the address of
record for the account. Telephone redemptions are not available within 30
days of a change of the address of record. Up to $50,000 may be redeemed
by telephone, within any seven day period.
The Transfer Agent may record any calls. Telephone redemptions may
not be available if all lines are busy, and shareholders would have to use
the Trust's regular redemption procedures described above. Telephone
redemption privileges are not available for newly-purchased (within the
prior 15 days) shares or for shares represented by certificates.
Telephone redemption privileges apply automatically to each shareholder
and the dealer representative of record unless the Transfer Agent receives
cancellation instructions from a shareholder of record. If an account has
multiple owners, the Transfer Agent may rely on the instructions of any
one owner.
Automatic Withdrawal Plan
Direct shareholders of the Trust can authorize the Transfer Agent to
redeem shares (minimum $50) automatically on a monthly, quarterly, semi-
annual or annual basis under an Automatic Withdrawal Plan. Shares will
be redeemed as of 4:00 P.M. three business days prior to the date
requested by the shareholder for receipt of the payment. The Trust cannot
guarantee receipt of payment on the date requested and reserves the right
to amend, suspend or cease offering such plans at any time without prior
notice. For further details, see the "Automatic Withdrawal Plan
Provisions" in the Additional Statement.
General Information on Redemptions
The redemption price will be the net asset value per share of the
Trust next determined after the receipt by the Transfer Agent of a request
in proper form. Under certain unusual circumstances, shares of the Trust
may be redeemed "in kind" (i.e., by payment in portfolio securities).
Under certain circumstances, the Trust may involuntarily redeem small
accounts if the account has fallen below $200 in value. For details, see
"Purchase, Redemption and Pricing of Shares - Redemption of Shares" in the
Additional Statement. Under the Internal Revenue Code, the Trust may be
required to impose "backup" withholding of Federal income tax at the rate
of 31% from any taxable dividends and distributions the Trust may make,
if the shareholder has not furnished the Trust a certified tax
identification number or has not otherwise complied with provisions of the
Internal Revenue Code and regulations thereunder.
Payment for redeemed shares is made ordinarily in cash and forwarded
within seven days of the Transfer Agent's receipt of redemption
instructions in proper form, except under unusual circumstances as
determined by the Securities and Exchange Commission. The Transfer Agent
may delay forwarding a redemption check for recently-purchased shares only
until the purchase check has cleared, which may take up to 15 days or
more. Such delay may be avoided if the shareholder arranges telephone or
written assurance satisfactory to the Transfer Agent from the bank on
which the payment was drawn or by purchasing shares by Federal Funds wire,
as described above. The Trust makes no charge for redemption. Dealers
or brokers may charge a fee for handling redemption transactions, but such
fee can be avoided by requesting the redemption directly through the
Transfer Agent. Under certain circumstances, the proceeds of redemptions
of shares of the Trust acquired by exchange of Class A shares of "Eligible
Funds" (described below) purchased subject to a contingent deferred sales
charge ("CDSC") may be subject to the CDSC (see "Exchange Privilege"
below).
Exchanges of Shares
Shares of the Trust held under Programs may be exchanged for shares
of Centennial Money Market Trust, Centennial Government Trust, Centennial
Tax Exempt Trust and Centennial New York Tax Exempt Trust (collectively,
the "Centennial Trusts") only by instructions of the broker. Shares of
the Trust may, under certain conditions, be exchanged by direct
shareholders for Class A shares of the following funds, all collectively
referred to as "Eligible Funds": (i) Oppenheimer Target Fund, Oppenheimer
Champion High Yield Fund, Oppenheimer Asset Allocation Fund, Oppenheimer
Discovery Fund, Oppenheimer U.S. Government Trust, Oppenheimer Global
Growth & Income Fund, Oppenheimer Global Emerging Growth Fund, Oppenheimer
Limited-Term Government Fund, Oppenheimer Intermediate Tax-Exempt Bond
Fund, Oppenheimer Fund, Oppenheimer Global Fund, Oppenheimer Time Fund,
Oppenheimer Growth Fund, Oppenheimer Equity Income Fund, Oppenheimer Gold
& Special Minerals Fund, Oppenheimer Insured Tax-Exempt Bond Fund,
Oppenheimer Main Street Income & Growth Fund, Oppenheimer Main Street
California Tax-Exempt Fund, Oppenheimer Florida Tax-Exempt Fund,
Oppenheimer New Jersey Tax-Exempt Fund, Oppenheimer Investment Grade Bond
Fund, Oppenheimer Value Stock Fund, Oppenheimer California Tax-Exempt
Fund, Oppenheimer Pennsylvania Tax-Exempt Fund, Oppenheimer High Yield
Fund, Oppenheimer Total Return Fund, Inc., Oppenheimer Mortgage Income
Fund, Oppenheimer Tax-Free Bond Fund, Oppenheimer New York Tax-Exempt
Fund, Oppenheimer Strategic Income Fund, Oppenheimer Strategic Income &
Growth Fund, Oppenheimer Strategic Short-Term Income Fund and Oppenheimer
Strategic Investment Grade Bond Fund; and (ii) the following "Money Market
Funds": Oppenheimer Money Market Fund, Inc., Oppenheimer Cash Reserves,
the Centennial Trusts and Daily Cash Accumulation Fund, Inc. There is an
initial sales charge on the purchase of Class A shares of each Eligible
Fund except the Money Market Funds (under certain circumstances described
below, redemption proceeds of Money Market Fund shares may be subject to
a CDSC).
Shares of the Trust and of the other Eligible Funds may be exchanged
at net asset value if all of the following conditions are met: (1) shares
of the fund selected for exchange are available for sale in the
shareholder's state of residence; (2) the respective prospectuses of the
funds whose shares are to be exchanged and acquired offer the Exchange
Privilege to the investor; (3) newly-purchased shares (by initial or
subsequent investment) are held in an account for at least 7 days prior
to the exchange; and (4) the aggregate net asset value of the shares
surrendered for exchange is at least equal to the minimum investment
requirements of the fund whose shares are to be acquired.
In addition to the conditions stated above: shares of Eligible Funds
may be exchanged for shares of any Money Market Fund; shares of any Money
Market Fund (including the Trust) purchased without a sales charge may be
exchanged for shares of Eligible Funds offered with a sales charge upon
payment of the sales charge (or, if applicable, may be used to purchase
shares of Eligible Funds subject to a CDSC); and shares of the Trust
acquired by reinvestment of dividends and distributions from any Eligible
Fund (except Oppenheimer Cash Reserves) or from any unit investment trust
for which reinvestment arrangements have been made with the Distributor
may be exchanged at net asset value for shares of any Eligible Fund. The
redemption proceeds of shares of the Trust, acquired by exchange of shares
of an Eligible Fund purchased subject to a CDSC, that are redeemed within
18 months of the end of the calendar month of the initial purchase of the
exchanged shares will be subject to the CDSC as described in the
prospectus of that other Eligible Fund. In determining whether the CDSC
is payable, shares of the Trust not subject to the CDSC are redeemed
first, including shares purchased by reinvestment of dividends and capital
gains distributions from any Eligible Fund or shares of the Trust acquired
by exchange of shares of Eligible Funds on which a front-end sales charge
was paid or credited, and then other shares are redeemed in the order of
purchase.
An exchange may be made by submitting an Exchange Authorization Form
to the Transfer Agent, signed by all registered owners. In addition,
direct shareholders of the Trust may exchange shares of the Trust for
shares of any Centennial Trust by telephone exchange instructions to the
Transfer Agent by a shareholder or the dealer representative of record for
an account. The Trust may modify, suspend or discontinue these exchange
privileges at any time, and will do so on 60 days' notice if such notice
is required by regulations adopted under the Investment Company Act. The
Trust reserves the right to reject requests submitted in bulk on behalf
of 10 or more accounts. Exchange requests must be received by the
Transfer Agent by 4:00 P.M. on a regular business day to be effected that
day. The number of shares exchanged may be less than the number requested
if the number requested would include shares subject to a restriction
cited above or shares covered by a certificate that is not tendered with
such request. Only the shares available for exchange without restriction
will be exchanged.
Direct shareholders may place a telephone exchange request by calling
the Transfer Agent at 1-800-852-8457. Telephone exchange calls may be
recorded by the Transfer Agent. Telephone exchanges are subject to the
rules described above. By exchanging shares by telephone, the shareholder
is acknowledging receipt of a prospectus of the fund to which the exchange
is made and that for full or partial exchanges, any special account
features such as Automatic Investment Plans and Automatic Withdrawal Plans
will be switched to the new account unless the Transfer Agent is otherwise
instructed. Telephone exchange privileges automatically apply to each
direct shareholder of record and the dealer representative of record
unless and until the Transfer Agent receives written instructions from the
shareholder(s) of record cancelling such privileges. If an account has
multiple owners, the Transfer Agent may rely on the instructions of any
one owner. The Transfer Agent has adopted reasonable procedures to
confirm that telephone instructions are genuine, by requiring callers to
provide tax identification number(s) and other account data and by
recording calls and confirming such transactions in writing. If the
Transfer Agent does not use such procedures, it may be liable for losses
due to unauthorized transactions, but otherwise it will not be liable for
losses or expenses arising out of any telephone instructions it reasonably
believes to be genuine. The Transfer Agent reserves the right to require
shareholders to confirm, in writing, telephone exchange privileges for an
account. Shares acquired by telephone exchange must be registered exactly
as the account from which the exchange was made. Certificated shares are
not eligible for telephone exchange. If all telephone exchange lines are
busy (which might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request telephone
exchanges and would have to submit written exchange requests.
Shares to be exchanged are redeemed on the day the Transfer Agent
receives an exchange request in proper form (the "Redemption Date") as of
4:00 P.M. Normally, shares of the fund to be acquired are purchased on
the Redemption Date, but such purchases may be delayed by either fund for
up to five business days if it determines that it would be disadvantaged
by an immediate transfer of the redemption proceeds. The Trust in its
discretion reserves the right to refuse any exchange request that will
disadvantage it.
The Eligible Funds have different investment objectives and policies.
Each of those funds except the Money Market Funds imposes a sales charge
on purchases of Class A shares. For complete information, including sales
charges and expenses, a prospectus of the fund into which the exchange is
being made should be read prior to an exchange. If a sales charge is
assessed on all shares acquired by exchange, there is no service charge.
Otherwise, a $5 service charge will be deducted from the account into
which the exchange is made to help defray administrative expenses.
Dealers and brokers who process exchange orders on behalf of customers may
charge for their services. Those charges may be avoided by requesting the
Trust directly to exchange shares. For Federal tax purposes, an exchange
is treated as a redemption and purchase of shares.
Dividends and Taxes
This discussion relates solely to Federal tax laws and California
income tax laws and is not exhaustive; a qualified tax adviser should be
consulted. A portion of the Trust's dividends may be subject to federal,
state and local taxation. The Additional Statement contains further
discussion of tax matters affecting the Trust and its distributions, and
information about the possible applicability of the Alternative Minimum
Tax to the Trust's dividends and distributions.
Dividends
The Trust intends to declare all of its net income, as defined below,
as dividends on each regular business day and to pay dividends monthly.
Dividends will be payable to shareholders as described in "How to Buy
Shares" above.
All dividends for the accounts of Program participants are
automatically reinvested in additional shares of the Trust. Dividends
accumulated since the prior payment will be reinvested in full and
fractional shares of the Trust (or paid in cash) at net asset value on the
third Thursday of each calendar month. Program participants may receive
cash payments by asking the broker to redeem shares. Dividends payable
to direct shareholders will also be automatically reinvested in shares of
the Trust at net asset value, unless the shareholder asks the Transfer
Agent in writing to pay dividends in cash, or to reinvest them in another
Eligible Fund, as described in "Dividend Reinvestment in Another Fund" in
the Additional Statement. That notice must be received prior to a
dividend record date to be effective as to that dividend. If a
shareholder redeems all shares at any time during a month, the redemption
proceeds include all dividends accrued up to but not including the
redemption date for shares redeemed prior to 12:00 Noon, and include all
dividends accrued through the redemption date for shares redeemed between
12:00 Noon and 4:00 P.M. Dividends and the proceeds of redemptions of
Trust shares represented by checks returned to the Transfer Agent by the
Postal Service as undeliverable will be invested in shares of the Trust,
as promptly as possible after the return of such checks to the Transfer
Agent, to enable the investor to earn a return on otherwise idle
funds.
Under the terms of a Program, a broker-dealer may pay out the value
of some or all of a Program participant's Trust shares prior to redemption
of such shares by the Trust. In such cases, the shareholder will be
entitled to dividends on such shares only up to and including the date of
such payment. Dividends on such shares accruing between the date of
payment and the date such shares are redeemed by the Trust will be paid
to the broker-dealer. It is anticipated that such payments will occur
only to satisfy debit balances arising in a shareholder's account under
a Program.
The Trust's net investment income for dividend purposes consists of
all interest accrued on portfolio assets, less all expenses of the Trust
for the applicable period. Distributions from net realized gains on
securities, if any, will be paid at least once a year, and may be made
more frequently in compliance with the Internal Revenue Code and the
Investment Company Act. Any net realized capital loss is carried forward
to offset against capital gains in later years. The Trust will not make
any distributions from net realized securities gains unless capital loss
carry forwards, if any, have been used or have expired. Long-term capital
gains, if any, will be identified separately when tax information for the
Trust is distributed to shareholders. Receipt of tax-exempt income must
be reported on the taxpayer's Federal income tax return. The Additional
Statement describes how dividends and distributions received by direct
shareholders of the Trust may be reinvested in shares of any Eligible Fund
at net asset value. To effect its policy of maintaining a net asset value
of $1.00 per share, the Trust, under certain circumstances, may withhold
dividends or make distributions from capital or capital gains.
Tax Status of the Trust's Dividends and Distributions
The Trust intends to qualify under the Internal Revenue Code during
each fiscal year to pay "exempt-interest dividends" to its shareholders,
and qualified during its last fiscal year. Exempt-interest dividends
which are derived from net investment income earned by the Trust on
Municipal Securities will be excludable from gross income of the
shareholders for Federal income tax purposes. Net investment income
includes income allocated from Municipal Securities in the Trust's
portfolio which are free from Federal and California individual income
taxes. This allocation will be made by uniformly applying a designated
percentage to all income dividends made during the tax year. Such
designation will normally be made following the end of each fiscal year
as to income dividends paid in the prior year. The percentage of income
designated as tax-exempt may differ substantially from the percentage of
the Trust's income that was tax-exempt for a given period. The net amount
of any income on Municipal Securities subject to the alternative minimum
tax will be identified when tax information is distributed by the Trust.
All or a portion of the Trust's exempt-interest dividends may be a
component of the "adjusted current earnings" preference item under the
corporate alternative minimum tax. The Trust will report annually to
shareholders the percentage of interest income it received during the
preceding year on Municipal Securities. Although not subject to tax, the
receipt of tax-exempt income must be reported on the taxpayer's Federal
income tax return. Shareholders receiving Social Security benefits should
be aware that exempt-interest dividends are a factor in determining
whether such benefits are subject to Federal income tax.
A shareholder treats a dividend as a receipt of ordinary income
(whether paid in cash or reinvested in additional shares) if derived from
net interest income earned by the Trust from one or more of: (i) certain
taxable temporary investments (such as certificates of deposit, commercial
paper, obligations of the U.S. government, its agencies or
instrumentalities or repurchase agreements), (ii) income from securities
loans, or (iii) an excess of net short-term capital gains over net long-
term capital losses. Losses realized by shareholders on the redemption
or other disposition of Trust shares within six months of purchase (which
period may be shortened by regulation and may be extended in certain
circumstances) will be disallowed for Federal income tax purposes to the
extent of exempt-interest dividends received on such shares.
In any year in which the Trust qualifies as a regulated investment
company under the Internal Revenue Code, (i) the Trust will also qualify
as a regulated investment company for California corporate income and
franchise tax purposes, and (ii) provided that the Trust's assets satisfy
the 50% requirement discussed below, the Trust will be qualified under
California law to pay "exempt-interest dividends" which will be exempt
from the California personal income tax. Individual shareholders of the
Trust will not be subject to California personal income tax on exempt-
interest dividends received from the Trust to the extent such
distributions are attributable to interest on obligations which, if held
by an individual, would not be subject to California personal income tax,
provided that at least 50% of the Trust's assets at the close of each
quarter of its taxable year are invested in such obligations.
Distributions from the Trust attributable to other sources will generally
be taxable to shareholders as ordinary income. However, amounts treated
as long-term capital gain distributions for Federal income tax purposes
are treated as long-term capital gains for California personal income tax
purposes. In addition, distributions to shareholders of other than
exempt-interest dividends are includable in income subject to the
California alternative minimum tax. Interest on indebtedness
incurred or continued by shareholders to purchase or carry shares of the
Trust will not be deductible for Federal or California personal income tax
purposes.
Distributions from investment income and long-term and short-term
capital gains will generally not be excluded from taxable income in
determining the California corporate franchise or income tax for corporate
shareholders. Distributions are also includable in income that is subject
to the corporate alternative minimum tax.
If the Trust has net realized long-term capital gains in a taxable
year, it may make an annual "long-term capital gains distribution," which
will be so identified when paid and when tax information is distributed.
Long-term gains are taxable to shareholders as long-term capital gains,
whether received in cash or reinvested, regardless of how long the Trust
shares have been held. Losses realized by shareholders on the redemption
or other sale of shares within six months of purchase (which period may
be shortened by regulation and may be extended in certain circumstances)
will be treated for Federal income tax purposes as a long-term capital
loss to the extent that the shareholder received (or was treated as
receiving, as described below) a capital-gain dividend on the shares. The
Trust will report annually to its shareholders the percentage of interest
income it received during the preceding year on Municipal Securities. It
will also report the net amount of its income that is subject to the
alternative minimum tax. Receipt of tax-exempt income must be reported
on a taxpayer's Federal income tax return. The Trust will be subject to
Federal income tax on its undistributed net long-term capital gains. For
Federal income tax purposes, any undistributed net long-term capital gains
of the Trust will be treated as distributed to shareholders, and will be
taxable to shareholders. Shareholders will be entitled to a Federal
income tax credit in the amount of the tax paid by the Trust on the
undistributed net long-term capital gains, however.
Additional Information
Description of the Trust and its Shares
Each share of the Trust represents an interest in the Trust equal to
the interest of each other share in the Trust and entitles the holder to
one vote per share (and a fractional vote for a fractional share) on
matters submitted to a shareholder vote, and to participate pro-rata in
dividends and distributions and in the net distributable assets of the
Trust on liquidation. The Trustees may divide or combine shares into a
greater or lesser number of shares without thereby changing the
proportionate beneficial interest in the Trust. Shares do not have
cumulative voting rights or conversion, preemptive or subscription rights.
The Trust's Board of Trustees is empowered to issue additional "series"
of shares of the Trust, which may have separate assets and liabilities.
The Trust does not anticipate holding annual meetings. Under certain
circumstances, shareholders of the Trust have the right to remove a
Trustee. See "Additional Information" in the Additional Statement for
details.
The Custodian and the Transfer Agent
The Custodian of the assets of the Trust is Citibank, N.A. The
Manager and its affiliates presently have banking relationships with the
Custodian; see "Additional Information" in the Additional Statement for
further information. The Trust's cash balances in excess of $100,000 held
by the Custodian are not protected by Federal deposit insurance. Such
uninsured balances may at times be substantial. The rating restrictions
under Rule 2a-7 (see "Ratings of Securities," herein) do not apply to
banks in which the Trust's cash is kept.
Shareholder Services, Inc., a subsidiary of OMC, acts as Transfer
Agent and shareholder servicing agent on an at-cost basis for the Trust,
and all of the other funds managed by the Manager. The fees to the
Transfer Agent do not include payments for any services of the type paid,
or to be paid, by the Trust to the Distributor and to Recipients under any
Service Plan. Shareholders should direct any inquiries regarding the
Trust to the Transfer Agent at the address or toll-free phone number on
the back cover. Program participants should direct any inquiries
regarding the Trust to their broker.
<PAGE>
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in
this Prospectus, and if given or made such information and representations
must not be relied upon as having been authorized by the Trust, the
Manager, the Distributor, or any affiliate thereof. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to buy any
of the securities offered hereby in any state to any person to whom it is
unlawful to make such offer in such state.
Investment Adviser and Distributor
Centennial Asset Management Corporation
3410 South Galena Street
Denver, Colorado 80231
Transfer and Shareholder Servicing Agent
Shareholder Services, Inc.
P.O. Box 5143
Denver, Colorado 80217-5143
1-800-525-9310
Custodian of Portfolio Securities
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Independent Auditors
Deloitte & Touche LLP
1560 Broadway
Denver, Colorado 80202
Legal Counsel
Myer, Swanson & Adams, P.C.
1600 Broadway
Denver, Colorado 80202
PR180.1194.R * Printed on recycled paper
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
3410 South Galena Street, Denver, Colorado 80231
1-800-525-9310
This Statement of Additional Information (the "Additional Statement")
is not a Prospectus. This Additional Statement should be read in
conjunction with the Prospectus (the "Prospectus") dated November 1, 1994
of Centennial California Tax Exempt Trust (the "Trust"), which may be
obtained upon written request to Shareholder Services, Inc. (the "Transfer
Agent"), P.O. Box 5143, Denver, Colorado 80217-5143 or by calling the
toll-free number shown above.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Investment Objective and Policies. . . . . . . . . . . . . .1
Special Investment Considerations - California
Municipal Securities. . . . . . . . . . . . . . . . . . .8
Investment Restrictions. . . . . . . . . . . . . . . . . . .10
Trustees and Officers. . . . . . . . . . . . . . . . . . . .11
Investment Management Services . . . . . . . . . . . . . . .14
Service Plan . . . . . . . . . . . . . . . . . . . . . . . .16
Purchase, Redemption and Pricing of Shares . . . . . . . . .18
Yield Information. . . . . . . . . . . . . . . . . . . . . .20
Additional Information . . . . . . . . . . . . . . . . . . .22
Automatic Withdrawal Plan Provisions . . . . . . . . . . . .23
Independent Auditors' Report . . . . . . . . . . . . . . . .25
Financial Statements . . . . . . . . . . . . . . . . . . . .26
Appendix A: Description of Securities Ratings. . . . . . . .A-1
Appendix B: Tax Equivalent Yield Table . . . . . . . . . . .B-1
</TABLE>
This Additional Statement is effective November 1, 1994.
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The investment objective and policies of the Trust are described in
the Prospectus. Set forth below is supplemental information about those
policies. Certain capitalized terms used in this Additional Statement are
defined in the Prospectus.
The Trust will not make investments with the objective of seeking
capital growth. However, the value of the securities held by the Trust may
be affected by changes in general interest rates. Because the current
value of debt securities varies inversely with changes in prevailing
interest rates, if interest rates increase after a security is purchased,
that security would normally decline in value. Conversely, should
interest rates decrease after a security is purchased, its value would
rise. However, those fluctuations in value will not generally result in
realized gains or losses to the Trust since the Trust does not usually
intend to dispose of securities prior to their maturity. A debt security
held to maturity is redeemable by its issuer at full principal value plus
accrued interest. To a limited degree, the Trust may engage in short-term
trading to attempt to take advantage of short-term market variations, or
may dispose of a portfolio security prior to its maturity if, on the basis
of a revised credit evaluation of the issuer or other considerations, the
Trust believes such disposition advisable or it needs to generate cash to
satisfy redemptions. In such cases, the Trust may realize a capital gain
or loss. The Trust will not engage in option activity.
There are, of course, variations in the security of Municipal
Securities, both within a particular classification and between
classifications, depending on numerous factors. The yields of Municipal
Securities depend on, among other things, general conditions of the
Municipal Securities market, size of a particular offering, the maturity
of the obligation and rating of the issue. The market value of Municipal
Securities will vary as a result of changing evaluations of the ability
of their issuers to meet interest and principal payments, as well as
changes in the interest rates payable on new issues of Municipal
Securities.
Municipal Securities
Municipal Bonds. The two principal classifications of Municipal Bonds
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).
General Obligation Bonds. Issuers of general obligation bonds
include states, counties, cities, towns, and regional districts. The
proceeds of these obligations are used to fund a wide range of public
projects, including construction or improvement of schools, highways and
roads, and water and sewer systems. The basic security behind general
obligation bonds is the issuer's pledge of its full faith and credit and
taxing power for the payment of principal and interest. The taxes that
can be levied for the payment of debt service may be limited or unlimited
as to the rate or amount of special assessments.
Revenue Bonds. The principal security for a revenue bond is
generally the net revenues derived from a particular facility, group of
facilities, or, in some cases, the proceeds of a special excise or other
specific revenue source. Revenue bonds are issued to finance a wide
variety of capital projects including: electric, gas, water and sewer
systems; highways, bridges, and tunnels; port and airport facilities;
colleges and universities; and hospitals. Although the principal security
behind these bonds may vary, many provide additional security in the form
of a debt service reserve fund whose money may be used to make principal
and interest payments on the issuer's obligations. Housing finance
authorities have a wide range of security, including partially or fully
insured mortgages, rent subsidized and/or collateralized mortgages, and/or
the net revenues from housing or other public projects. Some authorities
provide further security in the form of a state's ability (without
obligation) to make up deficiencies in the debt service reserve fund.
Industrial Development Bonds. Industrial development bonds, which
are considered municipal bonds if the interest paid is exempt from Federal
income tax, are issued by or on behalf of public authorities to raise
money to finance various privately operated facilities for business and
manufacturing, housing, sports, and pollution control. These bonds are
also used to finance public facilities such as airports, mass transit
systems, ports, and parking. The payment of the principal and interest
on such bonds is dependent solely on the ability of the facility's user
to meet its financial obligations and the pledge, if any, of real and
personal property so financed as security for such payment.
Municipal Notes. Municipal Securities having a maturity when issued
of less than one year are generally known as Municipal Notes. Municipal
Notes generally are used to provide for short-term working capital needs
and include:
Tax Anticipation Notes. Tax anticipation notes are issued to finance
working capital needs of municipalities. Generally, they are issued in
anticipation of seasonal tax revenue, such as income, sales, use or
business taxes, and are payable from these specific future taxes.
Revenue Anticipation Notes. Revenue anticipation notes are issued
in expectation of receipt of other types of revenue, such as Federal
revenues available under Federal revenue sharing programs.
Bond Anticipation Notes. Bond anticipation notes are issued to
provide interim financing until long-term financing can be arranged. In
most cases, the long-term bonds then provide the money for the repayment
of the notes.
Construction Loan Notes. Construction loan notes are sold to provide
construction financing. After successful completion and acceptance, many
projects receive permanent financing through the Federal Housing
Administration.
Tax-Exempt Commercial Paper. Tax-exempt commercial paper is a short-
term obligation issued by state and local governments or their agencies
to finance seasonal working capital needs or as short-term financing in
anticipation of longer-term financing.
Municipal Lease Obligations. From time to time the Trust may invest more
than 5% of its net assets in municipal lease obligations, generally
through the acquisition of certificates of participation, that the Manager
has determined to be liquid under guidelines set by the Board of
Directors. Those guidelines require the Manager to evaluate: (1) the
frequency of trades and price quotations for such securities; (2) the
number of dealers or other potential buyers willing to purchase or sell
such securities; (3) the availability of market-makers; and (4) the nature
of the trades for such securities. The Manager will also evaluate the
likelihood of a continuing market for such securities throughout the time
they are held by the Trust and the credit quality of the instrument.
Municipal leases may take the form of a lease or an installment purchase
contract issued by a state or local government authority to obtain funds
to acquire a wide variety of equipment and facilities. Although lease
obligations do not constitute general obligations of the municipality for
which the municipality's taxing power is pledged, a lease obligation is
ordinarily backed by the municipality's covenant to budget for,
appropriate and make the payments due under the lease obligation.
However, certain lease obligations contain "non-appropriation" clauses
which provide that the municipality has no obligation to make lease or
installment purchase payments in future years unless money is appropriated
for such purpose on a yearly basis. 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 sources;
such revenue may be diverted to the funding of other municipal service
projects. Payments of interest and/or principal with respect to the
certificates are not guaranteed and do not constitute an obligation of the
State of California or any of its political subdivisions.
In addition to the risk of "non-appropriation," municipal lease
securities do not yet have a highly developed market to provide the degree
of liquidity of conventional municipal bonds. Municipal leases, like
other municipal debt obligations, are subject to the risk of non-payment.
The ability of issuers of municipal leases to make timely lease payments
may be adversely affected in general economic downturns and as relative
governmental cost burdens are reallocated among federal, state and local
governmental units. Such non-payment would result in a reduction of
income to the Trust, and could result in a reduction in the value of the
municipal lease experiencing non-payment and a potential decrease in the
net asset value of the Trust. Municipal lease obligations purchased by
the Trust must meet the credit quality requirements of Rule 2a-7.
Floating Rate/Variable Rate Obligations. Floating rate and variable
rate demand notes are tax-exempt obligations which may have a stated
maturity in excess of one year, but may include features that permit the
holder to recover the principal amount of the underlying security on not
more than thirty days' notice at any time or at specified intervals not
exceeding one year. The issuer of such notes normally has a corresponding
right, after a given period, to prepay in its discretion the outstanding
principal amount of the note plus accrued interest upon a specified number
of days notice to the holder. The interest rate on a floating rate demand
note is based on a stated prevailing market rate, such as the PSA
Municipal Swap Index or the J.J. Kenney Index, or some other standard, and
is adjusted automatically each time such rate is adjusted. The interest
rate on a variable rate demand note is also based on a stated prevailing
market rate but is adjusted automatically at specified intervals of no
less than one year. Generally, the changes in the interest rate on such
securities reduce the fluctuation in their market value. As interest
rates decrease or increase, the potential for capital appreciation or
depreciation is less than that for fixed-rate obligations of the same
maturity. There is no limit on the amount of the Trust's assets that may
be invested in floating rate and variable rate obligations. Floating rate
or variable rate obligations which do not provide for recovery of
principal and interest within thirty days may be subject to the
limitations applicable to illiquid securities described in "Illiquid and
Restricted Securities" in the Prospectus.
Puts and Stand-by Commitments. When the Trust buys Municipal Securities,
it may obtain a stand-by commitment from the seller to repurchase the
securities that entitles the Trust to achieve same-day settlement from the
repurchaser and to receive an exercise price equal to the amortized cost
of the underlying security plus accrued interest, if any, at the time of
exercise. A put purchased in conjunction with a Municipal Security
enables the Trust to sell the underlying security within a specified
period of time at a fixed exercise price. The Trust may pay for a stand-
by commitment or put either separately in cash or by paying a higher price
for the securities acquired subject to the stand-by commitment or put.
The Trust will enter into these transactions only with banks and dealers
which, in the Manager's opinion, present minimal credit risks. The
Trust's purchases of puts are subject to the provisions of Rule 2a-7 under
the Investment Company Act because the Trust uses the amortized cost
method to value its portfolio securities. That Rule, which is subject to
change, states (among other things) that the Trust may not, with respect
to 75% of the amortized cost of its assets, have invested more than 5% of
the total amortized cost value of its assets in securities issued by or
subject to puts from the same institution. An unconditional put or
guarantee with respect to a security will not be deemed to be issued by
the institution providing the guarantee or put provided that the value of
all securities held by the Trust and issued or guaranteed by the issuer
providing the guarantee or put shall not exceed 10% of the Trust's total
assets.
The Trust's ability to exercise a put or stand-by commitment will
depend on the ability of the bank or dealer to pay for the securities if
the put or stand-by commitment is exercised. If the bank or dealer should
default on its obligation, the Trust might not be able to recover all or
a portion of any loss sustained from having to sell the security
elsewhere. Puts and stand-by commitments are not transferable by the
Trust, and therefore terminate if the Trust sells the underlying security
to a third party. The Trust intends to enter into these arrangements to
facilitate portfolio liquidity, although such arrangements may enable the
Trust to sell a security at a pre-arranged price which may be higher than
the prevailing market price at the time the put or stand-by commitment is
exercised. However, the Trust might refrain from exercising a put or
stand-by commitment if the exercise price is significantly higher than the
prevailing market price, to avoid imposing a loss on the seller which
could jeopardize the Trust's business relationship with the seller. Any
consideration paid by the Trust for the put or stand-by commitment (which
increases the cost of the security and reduces the yield otherwise
available from the security) will be reflected on the Trust's books as
unrealized depreciation while the put or stand-by commitment is held, and
a realized gain or loss when the put or commitment is exercised or
expires. Interest income received by the Trust from Municipal Securities
subject to puts or stand-by commitments may not qualify as tax exempt in
its hands if the
terms of the put or stand-by commitment cause the Trust not to be treated
as the tax owner of the underlying Municipal Securities.
Private Activity Municipal Securities. The Tax Reform Act of 1986 (the
"Tax Reform Act") reorganized, as well as amended, the rules governing tax
exemption for interest on Municipal Securities. The Tax Reform Act
generally did not change the tax treatment of bonds issued in order to
finance governmental operations. Thus, interest on obligations issued by
or on behalf of a state or local government, the proceeds of which are
used to finance the operations of such governments (e.g., general
obligation bonds) continues to be tax-exempt. However, the Tax Reform Act
further limited the use of tax-exempt bonds for non-governmental (private)
purposes. More stringent restrictions were placed on the use of proceeds
of such bonds. Interest on certain private activity bonds (other than
those specified as "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.) is taxable under the revised rules.
Interest on certain private activity bonds issued after August 7,
1986, which continues to be tax-exempt will be treated as a tax preference
item subject to the Federal alternative minimum tax (discussed below) to
which certain taxpayers are subject. Further, a private activity bond
which would otherwise be a qualified tax-exempt private activity bond will
not, under Internal Revenue Code Section 147(a), be a qualified bond for
any period during which it is held by a person who is a "substantial user"
of the facilities or by a "related person" of such a substantial user.
This "substantial user" provision is applicable primarily to exempt
facility bonds, including industrial development bonds. The Trust may not
be an appropriate investment for entities which are "substantial users"
(or persons related thereto) of such exempt facilities, and such persons
should consult their own tax advisers before purchasing shares. A
"substantial user" of such facilities is defined generally as a "non-
exempt person who regularly uses part of a facility" financed from the
proceeds of exempt facility bonds. Generally, an individual will not be
a "related person" under the Internal Revenue Code unless such investor
or the investor's immediate family (spouse, brothers, sisters and
immediate descendants) own directly or indirectly in the aggregate more
than 50% in value of the equity of a corporation or partnership which is
a "substantial user" of a facility financed from the proceeds of exempt
facility bonds. In addition, limitations on the dollar amount of private
activity bonds which each state may issue were revised downward by the Tax
Reform Act, which will reduce the supply of such bonds. The value of the
Trust's portfolio could be affected if there is a reduction in the
availability of such bonds. That value may also be affected by a 1988
U.S. Supreme Court decision upholding the constitutionality of the
imposition of a Federal tax on the interest earned on Municipal Securities
issued in bearer form.
A Municipal Security is treated as a taxable private activity bond
under a test for (a) a trade or business use and security interest, or (b)
a private loan restriction. Under the trade or business use and security
interest test, an obligation is a private activity bond if (i) more than
10% of bond proceeds are used for private business purposes and (ii) 10%
or more of the payment of principal or interest on the issue is directly
or indirectly derived from such private use or is secured by the privately
used property or the payments related to the use of the property. For
certain types of uses, a 5% threshold is substituted for this 10%
threshold. (The term "private business use" means any direct or indirect
use in a trade or business carried on by an individual or entity other
than a state or municipal governmental unit.) Under the private loan
restriction, the amount of bond proceeds which may be used to make private
loans is limited to the lesser of 5% or $5.0 million of the proceeds.
Thus, certain issues of Municipal Securities could lose their tax-exempt
status retroactively if the issuer fails to meet certain requirements as
to the expenditure of the proceeds of that issue or use of the bond-
financed facility. The Trust makes no independent investigation of the
users of such bonds or their use of proceeds. If the Trust holds a bond
that loses its tax-exempt status retroactively, an adjustment to the tax-
exempt income previously paid to shareholders may result.
The Federal alternative minimum tax is designed to ensure that all
taxpayers pay some tax, even if they have no other income tax obligation.
This is accomplished in part by including in taxable income certain tax
preference items in arriving at alternative minimum taxable income. The
Tax Reform Act made tax-exempt interest from certain private activity
bonds a tax preference item for purposes of the alternative minimum tax
on individuals and corporations. Any exempt-interest dividend paid by a
regulated investment company will be treated as interest on a specific
private activity bond to the extent of its proportionate share of the
interest on such bonds received by the regulated investment company. The
U.S. Treasury is authorized to issue regulations implementing this
provision. In addition, corporate taxpayers subject to the alternative
minimum tax may, under some circumstances, have to include exempt-interest
dividends in calculating their alternative minimum taxable income in
situations where the "adjusted current earnings" of the corporation
exceeds its alternative minimum taxable income. The Trust may hold
Municipal Securities the interest on which (and thus a proportionate share
of the exempt-interest dividends paid by the Trust) will be subject to the
Federal alternative minimum tax. For fiscal year 1993, approximately 6.78%
of the Trust dividends paid to shareholders were a tax preference item for
shareholders subject to the Federal alternative minimum tax. The Trust
anticipates that under normal circumstances it will not purchase any such
securities in an amount greater than 20% of the Trust's total assets.
Ratings of Securities. The prospectus describes "Eligible Securities" in
which the Trust may invest and indicates that if a security's rating is
downgraded, the Manager and/or the Board may have to reassess the
security's credit risks. If a security has ceased to be a First Tier
Security, the Manager will promptly reassess whether the security
continues to present "minimal credit risks." If the Manager becomes aware
that any Rating Organization has downgraded its rating of a Second Tier
Security or rated an unrated security below its second highest rating
category, the Trust's Board of Trustees shall promptly reassess whether
the security presents minimal credit risks and whether it is in the best
interests of the Trust to dispose of it. If a security is in default, or
ceases to be an Eligible Security, or is determined no longer to present
minimal credit risks, the Board must determine whether it would be in the
best interests of the Trust to dispose of the security; but if the Trust
disposes of the security within 5 days of the Manager learning of the
downgrade, the Manager will provide the Board with subsequent notice of
such downgrade. The Rating Organizations currently designated as such by
the Securities and Exchange Commission ("SEC") are Standard & Poor's
Corporation, Moody's Investors Service, Inc., Fitch Investors Services,
Inc., Duff and Phelps, Inc., IBCA Limited, its affiliate, IBCA, Inc. and
Thomson BankWatch, Inc. A discussion of the ratings categories of those
Rating Organizations is contained in Appendix A.
Other Investment Techniques and Strategies
When-Issued and Delayed Delivery Transactions. As stated in the
Prospectus, the Trust may invest in Municipal Securities on a "when-
issued" or "delayed delivery" basis. Payment for and delivery of the
securities generally settles within 30 days of the date the offer is
accepted. The purchase price and yield are fixed at the time the buyer
enters into the commitment. During the period between the time of
commitment and settlement, no payment is made by the Trust to the issuer
and no interest accrues to the Trust from the investment. However, the
Trust intends to be as fully invested as possible and will not invest in
when-issued securities if its income or net asset value will be materially
adversely affected. At the time the Trust makes the commitment to
purchase a Municipal Security on a when-issued basis, it will record the
transaction on its books and reflect the value of the security in
determining its net asset value. It will also segregate cash or liquid
high-grade Municipal Securities equal in value to the commitment for the
when-issued securities. While when-issued securities may be sold prior
to settlement date, the Trust intends to acquire the securities upon
settlement unless a prior sale appears desirable for investment reasons.
There is a risk that the yield available in the market when delivery
occurs may be higher than the yield on the security acquired.
Repurchase Agreements. The Trust may acquire securities subject to
repurchase agreements for liquidity purposes to meet anticipated
redemptions, or pending the investment of the proceeds from sales of Trust
shares, or pending the settlement of purchases of portfolio securities.
In a repurchase transaction, the Trust acquires a security, from, and
simultaneously resells it to, an approved vendor which satisfies the
requirements of Rule 2a-7. The resale price exceeds the purchase price
by an amount that reflects an agreed-upon interest rate effective for the
period during which the repurchase agreement is in effect. The majority
of these transactions run from day to day, and delivery pursuant to the
resale typically will occur within one to five days of the purchase.
Repurchase agreements are considered loans under the Investment Company
Act, collateralized by the underlying security. The Trust's repurchase
agreements require that at all times while the repurchase agreement is in
effect, the value of the collateral must equal or exceed the repurchase
price to fully collateralize the repayment obligation. Additionally, the
Manager will impose creditworthiness requirements to confirm that the
vendor is financially sound and will continuously monitor the collateral's
value.
Loans of Portfolio Securities. The Trust may lend its portfolio
securities subject to the restrictions stated in the Prospectus, to
attempt to increase the Trust's income for liquidity purposes. Under
applicable regulatory requirements (which are subject to change), the loan
collateral must, on each business day, be at least equal to the value of
the loaned securities and must consist of cash, bank letters of credit or
securities of the U.S. Government (or its agencies or instrumentalities)
or other cash equivalents in which the Trust is permitted to invest. To
be acceptable as collateral, letters of credit must obligate a bank to pay
amounts demanded by the Trust if the demand meets the terms of the letter.
Such terms and the issuing bank must be satisfactory to the Trust. The
Trust receives an amount equal to the dividends or interest on loaned
securities and also receives one or more of: (a) negotiated loan fees, (b)
interest on securities used as collateral, or (c) interest on short-term
debt securities purchased with such loan collateral; either type of
interest may be shared with the borrower. The Trust may also pay
reasonable finder's, custodian and administrative fees and will not lend
its portfolio securities to any officer, trustee, employee or affiliate
of the Trust or the Manager. The terms of the Trust's loans must meet
certain tests under the Internal Revenue Code and permit the Trust to
reacquire loaned securities on five days' notice or in time to vote on any
important matter. Income from securities loans is not included in the
exempt-interest dividends paid by the Trust.
SPECIAL INVESTMENT CONSIDERATIONS - CALIFORNIA
MUNICIPAL SECURITIES
As stated in the Prospectus, the values of the Trust's California
Municipal Securities are highly sensitive to the fiscal stability of
California and its subdivisions, agencies, instrumentalities or
authorities, which issue the Municipal Securities in which the Trust
concentrates its investments. Certain amendments to the California State
constitution, legislative measures, executive orders, civil actions and
voter initiatives in recent years that could adversely affect the ability
of California issuers to pay interest and principal on Municipal
Securities are described below. The following constitutes only a brief
summary, and is based on information drawn from the relevant statutes and
certain other publicly available information. The Trust has not
independently verified such information.
Changes in California constitutional and other laws during the last
several years have caused concerns about the ability of California state
and municipal issuers to obtain sufficient revenue to pay their bond
obligations. In 1978, California voters approved an amendment to the
California Constitution known as Proposition 13, which added Article XIIIA
to the California Constitution. Article XIIIA limits ad valorem taxes on
real property and restricts the ability of taxing entities to increase
real property taxes. However, legislation passed subsequent to
Proposition 13 provided for the redistribution of California's General
Fund surplus to local agencies, the reallocation of revenues to local
agencies and the assumption of certain local obligations by the state so
as to help California municipal issuers raise revenue to pay their bond
obligations. It is unknown whether additional revenue redistribution
legislation will be enacted in the future and whether, if enacted, such
legislation will provide sufficient revenue for such California issuers
to pay their obligations.
The state is also subject to another constitutional amendment,
Article XIIIB, which may have an adverse impact on California state and
municipal issuers. Article XIIIB restricts the state from spending
certain appropriations in excess of an appropriations limit imposed for
each state and local government entity. If revenues exceed such
appropriations limit, such revenues must be returned either as revisions
in the tax rates or fee schedules. In 1988, California voters approved
an initiative known as Proposition 98, which in addition to amending
Article XIIIB, amended Article XVI to require a minimum level of funding
for public schools and community colleges. In 1992-93 and 1993-94, the
state budget met part of its commitment to education through $1.8 billion
in off-book loans. The legality of these loans was challenged in a
lawsuit by the California Teachers Association. A lower court in
California has ruled against the state, and under this decision the
schools would not be required to repay these loans. If upheld on appeal,
the ruling would increase the state's officially recognized 1994-95 year-
end deficit by $1.8 billion.
Because of the uncertain impact of the aforementioned legislation,
the possible inconsistencies in the respective terms of the statutes and
the impossibility of predicting the level of future appropriations and
applicability of related statutes to such questions, it is not currently
possible to assess the impact of such legislation and policies on the long
term ability of the State of California and California municipal issuers
to pay interest or repay principal on their obligations.
California has substantial size, wealth and a diverse economy. It
is the largest in population of the states, and accounts for about 13% of
personal income in the U.S. Through the 1980s, the rate of state
population growth was more than twice that for the country. However,
although the national economic recovery continued at a strong pace in the
first quarter of 1994, California is still experiencing the effects of a
recession. However, the state's budget for fiscal year 1994-95 assumes
that the state will begin to recover from recessionary conditions in 1994,
with a modest upturn in 1994 and continuing in 1995. Substantial
contraction in California's defense related industries, overbuilding in
commercial real estate, and consolidation and decline in the state's
financial services industry will likely produce slower overall growth for
several years.
Although the median home prices in the state have continued to
decline, home sales have increased sharply. Median home prices in July
1994 were down 1.0% from July 1993, while home sales increased 4.6% from
a year earlier. Unemployment, however, has been above the national
average since 1990. In July 1994, unemployment in California stood at
9.0% versus 6.1% for the nation. Overall, the state has lost
approximately 600,000 jobs since the spring of 1990, notwithstanding the
continued increase in the state's population. Employment is expected to
fall 0.3% in 1994. With a slow recovery, economic forecasts predict
annual growth in employment of 1.5% and 1.6% in 1995 and 1996,
respectively. Personal bankruptcy filings also continue to increase, as
statewide filings rose 17% in 1992.
These economic difficulties have exacerbated the budget imbalance
which has been evident since 1985-86. Since that time, the state has
recorded General Fund operating deficits in five of the past six fiscal
years. Many of these problems have been attributable to a great
population increase which has increased demand for educational and social
services at a pace far greater than the growth in revenues.
By June 30, 1994, the General Fund had an accumulated deficit, on a
budgeted basis, of approximately $2.0 billion. In addition, the deficit
over the previous three years had exhausted the state's available cash
reserves and resources. In July and August, 1994, the state was required
to issue a total of $7 billion of short-term revenue anticipation warrants
to fund, in part, the state's cash flow management needs for the 1994-95
fiscal year.
On July 8, 1994, the Governor signed into law a new $57.5 billion
budget which includes General Fund spending of $40.9 billion, up 4.2% from
the level of spending during the 1993-94 fiscal year. The budget also
envisions General Fund spending climbing another 8.4% in the 1995-96
fiscal year. The budget forecasts levels of revenue and expenditures
which will result in operating surpluses in both 1994-95 and 1995-96,
leading to the elimination of the budget deficit by June 30, 1996.
Because of the State of California's continuing budget problems, the
state's General Obligation bonds were downgraded in July 1994 from Aa to
A1 by Moody's, from A+ to A by Standard & Poor's and from AA to A by
Fitch. All three rating agencies expressed uncertainty in the state's
ability to balance its budget by 1996.
On January 17, 1994, Northridge, California experienced an earthquake
that registered 6.8 on the Richter scale, resulting in significant
property damage to private and public facilities throughout the Los
Angeles and Ventura Counties, and to parts of the Orange and San
Bernardino Counties. The total amount of damage is estimated to be
between $13 billion and $20 billion. In mid-February Congress approved
an earthquake relief package totaling about $8.6 billion, bringing total
federal support to $9.5 billion. The California legislature approved $2
billion in bond financing in mid-March for earthquake recovery costs and
seismic safety improvements. However, the bond issue was rejected by
California voters in the June 1994 election. It now appears that the
state will pay for its share of the recovery costs through a reallocation
of existing funds and borrowing from the federal government. The
Commission on State Finance believes that, although it may carry long-term
implications for the City of Los Angeles, the earthquake will not derail
the state's economic recovery.
INVESTMENT RESTRICTIONS
The Trust's significant investment restrictions are set forth in the
Prospectus. The following investment restrictions are also fundamental
policies of the Trust and, together with the fundamental policies and
investment objective described in the Prospectus, cannot be changed
without the vote of a "majority" of the Trust's outstanding shares. Under
the Investment Company Act, such a "majority" vote is defined as the vote
of the holders of the lesser of (i) 67% or more of the shares present or
represented by proxy at a shareholder meeting, if the holders of more than
50% of the outstanding shares are present or represented by proxy, or (ii)
more than 50% of the outstanding shares. Under these additional
restrictions, the Trust cannot: (1) invest in commodities or commodity
contracts, or invest in interests in oil, gas, or other mineral
exploration or development programs; (2) invest in real estate; however,
the Trust may purchase Municipal Bonds or Notes secured by interests in
real estate; (3) make short sales of securities or purchase securities on
margin, except for short-term credits necessary for the clearance of
purchases and sales of portfolio securities; (4) invest in or hold
securities of any issuer if those officers and Trustees of the Trust or
the Manager individually owning more than 0.5% of the securities of such
issuer together own more than 5% of the securities of such issuer; (5)
underwrite securities of other companies; or (6) invest in securities of
other investment companies except as they may be acquired as part of a
merger, consolidation or acquisition of assets.
For purposes of investment restriction (4) above and the investment
restrictions in the Prospectus, the identification of the "issuer" of a
Municipal Security depends on the terms and conditions of the security.
When the assets and revenues of an agency, authority, instrumentality or
other political subdivision are separate from those of the government
creating the subdivision and the security is backed only by the assets and
revenues of the subdivision, such subdivision would be deemed to be the
sole issuer. Similarly, in the case of an industrial development bond,
if that bond is backed only by the assets and revenues of the
nongovernmental user, then such nongovernmental user would be deemed to
be the sole issuer. However, if in either case the creating government
or some other entity guarantees the security, such guarantee would be
considered a separate security and would be treated as an issue of such
government or other agency. For purposes of the Trust's compliance with
Rule 2a-7 when investing in puts (see "Puts and Stand-by Commitments,"
above), a put will be considered to be issued by the party to which the
Trust will look for payment of the exercise price, and an unconditional
put will be considered to be a guarantee of the underlying security.
In applying the restrictions in the Prospectus as to the Trust's
investments, the Manager will consider a nongovernmental user of
facilities financed by industrial development bonds as being in a
particular industry, despite the fact that there is no industry
concentration limitation as to municipal securities the Trust may own.
Although this application of the restriction is not technically a
fundamental policy of the Trust, it will not be changed without
shareholder approval. Should any such change be made, the Prospectus
and/or Additional Statement will be supplemented to reflect the
change.
TRUSTEES AND OFFICERS
The Trustees and officers of the Trust and their principal business
affiliations and occupations during the past five years are listed below.
Each Trustee is a trustee, director or managing general partner of Daily
Cash Accumulation Fund, Inc., Centennial Tax Exempt Trust, Centennial
Money Market Trust, Centennial Government Trust, Centennial America Fund,
L.P., Centennial New York Tax Exempt Trust, Oppenheimer Variable Account
Funds, Oppenheimer Champion High Yield Fund, Oppenheimer Main Street
Funds, Inc., Oppenheimer Total Return Fund, Inc., Oppenheimer Equity
Income Fund, Oppenheimer High Yield Fund, Oppenheimer Cash Reserves,
Oppenheimer Strategic Funds Trust, Oppenheimer Strategic Income & Growth
Fund, Oppenheimer Strategic Short-Term Income Fund, Oppenheimer Strategic
Investment Grade Bond Fund, Oppenheimer Limited-Term Government Fund,
Oppenheimer Tax-Exempt Bond Fund, Oppenheimer Integrity Funds and The New
York Tax-Exempt Income Fund, Inc. (collectively referred to as the "Denver
OppenheimerFunds"). Mr. Fossel is President and Mr. Swain is Chairman of
all of the funds listed. Messrs. Bishop, Bowen, Donohue, Farrar and Zack
hold similar positions with all such funds. As of September 30, 1994, the
Trustees and officers of the Trust in the aggregate owned less than 1% of
the Trust's outstanding shares.
ROBERT G. AVIS, Trustee*
One North Jefferson Ave., St. Louis, Missouri 63103
Vice Chairman of A.G. Edwards & Sons, Inc. (a broker-dealer) and A.G.
Edwards, Inc., its parent holding company; Chairman of A.G.E. Asset
Management and A.G. Edwards Trust Company (its affiliated investment
adviser and trust company, respectively).
WILLIAM A. BAKER, Trustee
197 Desert Lakes Drive, Palm Springs, California 92264
Management Consultant.
CHARLES CONRAD, JR., Trustee
1447 Vista del Cerro, Las Cruces, New Mexico 88005
Vice President of McDonnell Douglas Space Systems Co.; formerly
associated with the National Aeronautics and Space
Administration.
JON S. FOSSEL, Trustee and President*
Two World Trade Center, New York, New York 10048
Chairman, Chief Executive Officer and a Director of Oppenheimer
Management Corporation ("OMC"), the immediate parent of Centennial
Asset Management Corporation (the "Manager"); President and Director
of Oppenheimer Acquisition Corp. ("OAC"), OMC's parent holding
company; President and a Director of HarbourView Asset Management
Corporation ("HarbourView"), an investment adviser subsidiary of OMC;
a Director of Shareholder Financial Services, Inc. ("SFSI") and
Shareholder Services, Inc. (the "Transfer Agent"), transfer agent
subsidiaries of OMC; formerly President of OMC.
RAYMOND J. KALINOWSKI, Trustee
44 Portland Drive, St. Louis, Missouri 63131
Formerly Vice Chairman and a Director of A.G. Edwards, Inc., parent
holding company of A.G. Edwards & Sons, Inc. (a broker-dealer), of
which he was a Senior Vice President.
C. HOWARD KAST, Trustee
2552 East Alameda, Denver, Colorado 80209
Formerly Managing Partner of Deloitte, Haskins & Sells (an accounting
firm).
ROBERT M. KIRCHNER, Trustee
7500 E. Arapahoe Road, Englewood, Colorado 80112
President of The Kirchner Company (management consultants).
NED M. STEEL, Trustee
3416 South Race Street, Denver, Colorado 80110
Chartered property and Casualty Underwriter; formerly Senior Vice
President and a Director of Van Gilder Insurance Corp. (insurance
brokers).
JAMES C. SWAIN, Chairman*
3410 South Galena Street, Denver, Colorado 80231
President and a Director of the Manager; Vice Chairman of OMC;
formerly Chairman of the Transfer Agent.
ANDREW J. DONOHUE, Vice President
Two World Trade Center, New York, New York 10048
Executive Vice President and General Counsel of OMC and Oppenheimer
Funds Distributor, Inc. ("OFDI"); an officer of other
OppenheimerFunds; formerly Senior Vice President and Associate
General Counsel of OMC and OFDI, a Partner in Kraft & McManimon (a
law firm), an officer of First Investors Corporation (a broker-
dealer) and First Investors Management Company, Inc. (broker-dealer
and investment adviser), and a director and an officer of First
Investors Family of Funds and First Investors Life Insurance
Company.
MICHAEL CARBUTO, Vice President and Portfolio Manager
Two World Trade Center, New York, New York 10048
Vice President of the Manager and OMC; an officer of other
OppenheimerFunds.
GEORGE C. BOWEN, Vice President, Treasurer, and Secretary
3410 South Galena Street, Denver, Colorado 80231
Senior Vice President, Treasurer, Assistant Secretary and a director
of the Manager; Senior Vice President and Treasurer of OMC; Vice
President and Treasurer of OFDI and HarbourView; Vice President,
Treasurer and Secretary of the Transfer Agent and SFSI; an officer
of other OppenheimerFunds.
ROBERT BISHOP, Assistant Treasurer
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of OMC/Mutual Fund Accounting; an officer
of other OppenheimerFunds; formerly a Fund Controller for the
Manager, prior to which he was an Accountant for Yale & Seffinger,
P.C., an accounting firm, and previously an Accountant and
Commissions Supervisor for Stuart James Company, Inc., a broker-
dealer.
SCOTT FARRAR, Assistant Treasurer
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of OMC/Mutual Fund Accounting; an officer
of other OppenheimerFunds; formerly a Fund Controller for the
Manager, prior to which he was an International Mutual Fund
Supervisor for Brown Brothers, Harriman Co., a bank, and previously
a Senior Fund Accountant for State Street Bank & Trust Company,
before which he was a sales representative for Central Colorado
Planning.
ROBERT G. ZACK, Assistant Secretary
Two World Trade Center, New York, New York 10048
Senior Vice President and Associate General Counsel of OMC; Assistant
Secretary of the Transfer Agent and SFSI; an officer of other
OppenheimerFunds.
[FN]
- ------------------
*A Trustee who is an "interested person" of the Trust as defined in the
Investment Company Act.
Remuneration of Trustees and Officers. The officers of the Trust
(including Messrs. Fossel and Swain) are affiliated with the Manager and
receive no salary or fee from the Trust. The Trust has an Audit and
Review Committee, comprised of William A. Baker (Chairman), Charles
Conrad, Jr. and Robert M. Kirchner. This Committee meets regularly to
review audits, audit procedures, financial statements and other financial
and operational matters of the Trust. During the fiscal year ended June
30, 1994, the remuneration (including expense reimbursements) paid by the
Trust to the Trustees as a group (excluding Messrs. Fossel and Swain) for
services as trustees and as members of one or more committees totaled
$1,825.
Major Shareholders. As of September 30, 1994, A.G. Edwards & Sons,
Inc. ("Edwards"), 1 North Jefferson Avenue, St. Louis, MO 63103, was the
record owner of 59,263,545.430 shares of the Trust (approximately 99.7%
of outstanding shares). The Trust has been informed that the shares held
of record by Edwards were beneficially owned by its brokerage clients. As
of that date, no other person owned of record or was known by the Trust
to own beneficially 5% or more of the Trust's outstanding shares.
INVESTMENT MANAGEMENT SERVICES
The Manager is wholly-owned by OMC, which is a wholly-owned
subsidiary of Oppenheimer Acquisition Corp. ("OAC"), a holding company
controlled by Massachusetts Mutual Life Insurance Company. The remaining
stock of OAC is owned by (i) certain of OMC's directors and officers, some
of whom may also serve as officers of the Trust, and two of whom (Messrs.
Jon S. Fossel and James C. Swain) serves as Trustee of the Trust and (ii)
Edwards, which owns less than 5% of its equity.
The management fee is payable monthly to the Manager under the terms
of the investment advisory agreement between the Manager and the Trust
(the "Agreement"), and is computed on the aggregate net assets of the
Trust as of the close of business each day. The Agreement requires the
Manager, at its expense, to provide the Trust with adequate office space,
facilities and equipment, and to provide and supervise the activities of
all administrative and clerical personnel required to provide effective
administration for the Trust, including the compilation and maintenance
of records with respect to its operations, the preparation and filing of
specified reports, and the composition of proxy materials and registration
statements for continuous public sale of shares of the Trust. Expenses
not expressly assumed by the Manager under the Agreement or by the
Distributor of the shares of the Trust, are paid by the Trust. A
description of examples of such expenses is in the Prospectus.
The Agreement contains no expense limitation. However, independently
of the Agreement, the Manager has undertaken that the total expenses of
the Trust in any fiscal year shall not exceed the most stringent
applicable state regulatory limitation. California's regulatory
limitation is currently 2.5% of the first $30 million of net assets, 2%
on the next $70 million of net assets and 1.5% of assets in excess of $100
million. In addition, the Manager has undertaken that the total expenses
of the Trust, in any fiscal year of the Trust, exclusive of taxes,
interest, brokerage commissions and non-recurring expenses, including
litigation, shall not exceed 0.80% of the average annual net assets of the
Trust. 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
those expense limitations. Any assumption of the Trust's expenses under
either limitation lowers the Trust's overall expense ratio and increases
its yield and total return during the time such expenses are assumed. The
Manager reserves the right to vary the amount of expenses assumed or
eliminate the assumption of expenses altogether. For the fiscal years
ended June 30, 1992, 1993 and 1994, the management fees payable by the
Trust would have been $203,420, $280,452 and $327,466, respectively.
Those amounts do not reflect the effect of the expense assumptions of
$43,058, $33,188 and $48,265, respectively, in those periods by the
Manager.
The Agreement provides that in the absence of willful misfeasance,
bad faith, or gross negligence in the performance of its duties or
reckless disregard of its obligations and duties thereunder, the Manager
is not liable for any loss sustained by reason of any good faith errors
or omissions in connection with any matters covered by the Agreement. The
Agreement permits the Manager to act as investment adviser for any other
person, firm or corporation and to use the name "Centennial" in connection
with one or more additional companies for which it may act as investment
adviser or general distributor. If the Manager shall no longer act as
investment adviser to the Trust, the right of the Trust to use the name
"Centennial" as part of its name may be withdrawn.
Portfolio Transactions. Portfolio decisions are based upon the
recommendations and judgment of the Manager subject to the overall
authority of the Board of Trustees. As most purchases made by the Trust
are principal transactions at net prices, the Trust incurs little or no
brokerage costs. The Trust deals directly with the selling or purchasing
principal or market maker without incurring charges for the services of
a broker on its behalf unless it is determined that a better price or
execution may be obtained by using the services of a broker. Purchases
of portfolio securities from underwriters include a commission or
concession paid by the issuer to the underwriter, and purchases from
dealers include a spread between the bid and asked prices.
The Trust seeks to obtain prompt and reliable execution of orders at
the most favorable net price. If brokers are used for portfolio
transactions, transactions may be directed to brokers furnishing execution
and research services. The research services provided by a particular
broker may be useful only to one or more of the advisory accounts of the
Manager and its affiliates, and investment research received for the
commissions of those other accounts may be useful both to the Trust and
one or more of such other accounts. Such research, which may be supplied
by a third party at the instance of a broker, includes information and
analyses on particular companies and industries as well as market or
economic trends and portfolio strategy, receipt of market quotations for
portfolio evaluations, information systems, computer hardware and similar
products and services. If a research service also assists the Manager in
a non-research capacity (such as bookkeeping or other administrative
functions), then only the percentage or component that provides assistance
to the Manager in the investment decision-making process may be paid for
in commission dollars. The research services provided by brokers broaden
the scope and supplement the research activities of the Manager by making
available additional views for consideration and comparisons, and enabling
the Manager to obtain market information for the valuation of securities
held in the Trust's portfolio or being considered for purchase. In the
rare instances where the Trust pays commissions for research, the Board
of Trustees, including the independent Trustees of the Trust, will review
information furnished by the Manager as to the commissions paid to brokers
furnishing such services in an effort to ascertain that the amount of such
commissions was reasonably related to the value or the benefit of such
services. The Trust does not direct the handling of purchases or sales
of portfolio securities, whether on a principal or agency basis, to
brokers for selling shares of the Trust. No portfolio transactions are
handled by brokers which are affiliated with the Trust or the Manager if
that broker is acting as principal. The Board of Trustees has permitted
the Manager to use concessions on fixed price offerings to obtain
research, in the same manner as is permitted for agency transactions. The
Trust's policy of investing in short-term debt securities with maturities
of less than one year results in high portfolio turnover. However, since
brokerage commissions, if any, are small and securities are usually held
to maturity, high turnover does not have an appreciable adverse effect
upon the net asset value or income of the Trust.
Other funds advised by the Manager have investment objectives and
policies similar to that of the Trust. Such other funds may purchase or
sell the same securities at the same time as the Trust, which could affect
the supply or price of such securities. If two or more of such funds
purchase the same security on the same day from the same dealer, the
Manager may average the price of the transactions and allocate the cost
among such funds.
SERVICE PLAN
The Trust has adopted a service plan (the "Plan") under Rule 12b-1
of the Investment Company Act, pursuant to which the Trust will reimburse
the Distributor quarterly for a portion of its costs incurred in
connection with the services rendered to the Trust, as described in the
Prospectus. No payment will be made by the Distributor to any dealer,
bank or other institution ("Recipient") if the aggregate net asset value
of the Trust shares held by it or its customers at the end of a calendar
quarter is less than the minimum level of qualified holdings, if any,
established under the Plan from time to time by the "Independent
Trustees". Currently, no minimum level of qualified holdings has been
established by the Board of Trustees. The Distributor will make monthly
payments to a Recipient if the aggregate net asset value of the Trust's
shares held by it or its customers are in excess of $20 million. For the
Trust's fiscal year ended June 30, 1994, payments under the Plan totalled
$131,944, all of which was paid by the Distributor to Recipients,
including $12 paid to an affiliate of the Distributor.
The Distributor has entered into Supplemental Distribution Assistance
Agreements ("Supplemental Agreements") under the Plan with selected
dealers distributing shares of Oppenheimer Cash Reserves, Centennial
Government Trust, Centennial New York Tax Exempt Trust, Centennial America
Fund, L.P. and the Trust. Quarterly payments by the Distributor for
distribution-related services will 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 shares of the above-
mentioned funds owned during that quarter by the dealer or its customers
is less than $5 million. Payments made pursuant to Supplemental
Agreements are not a Trust expense, but are made by the Distributor out
of its own resources or out of the resources of the Manager which may
include profits derived from the advisory fee it receives from the Trust.
Payments to affiliates of the Distributor are not permitted under the
Supplemental Agreements.
The Plan shall, unless terminated as described below, continue in
effect from year to year but only so long as such continuance is
specifically approved at least annually by the Trust's Board of Trustees
including its Independent Trustees by a vote cast in person at a meeting
called for that purpose. The Supplemental Agreements are subject to the
same renewal requirement. The Plan and the Supplemental Agreements may
be terminated at any time by the vote of a majority of the Independent
Trustees or by the vote of the holders of a "majority" of the Trust's
outstanding voting securities. The Supplemental Agreements will
automatically terminate in the event of their "assignment" (as defined in
the Investment Company Act), and each may be terminated by the
Distributor: (i) in the event the Trust amends the Plan, or (ii) if the
net asset value of shares of the above-mentioned funds covered by
Supplemental Agreements held by the dealer or its customers is less than
$5 million for two or more consecutive quarters. A dealer may terminate
a Supplemental Agreement at any time upon giving 30 days' notice. The
Plan may not be amended without shareholder approval, as set forth above,
to increase materially the amount of payments to be made, and all material
amendments must be approved by the Board and the Independent Trustees.
Under the Plan, no payment will be made to any Recipient in any
quarter if the aggregate net asset value of all Trust shares held by
the Recipient for itself and its customers did not exceed a minimum
amount, if any, that may be determined from time to time by a majority of
the Trust's Independent Trustees. The Board of Trustees has set the fee
at the maximum rate and set no minimum amount. The Plans permit the
Distributor and the Manager to make additional distribution payments to
Recipients from their own resources (including profits from advisory fees)
at no cost to a Trust. The Distributor and the Manager may, in their sole
discretion, increase or decrease the amount of distribution assistance
payments they make to Recipients from their own assets.
Each Recipient who is to receive distribution payments for any month
or quarter shall certify in writing that the aggregate payments to be
received from the Trust and the Distributor during that month or quarter
do not exceed the Recipient's costs in rendering services and for the
maintenance of accounts during the month or quarter, and will reimburse
the Trust for any excess.
The Glass-Steagall Act and other applicable laws and regulations,
among other things, generally prohibit Federally-chartered or supervised
banks from engaging in the business of underwriting, selling or
distributing securities as principals. Accordingly, the Distributor may
pay banks only for sales made on an agency basis or for the performance
of administrative and shareholder servicing functions. While the matter
is not free from doubt, the Manager believes that such laws do not
preclude a bank from performing the services required of a Recipient.
However, judicial or administrative decisions or interpretations of such
laws, as well as changes in either Federal or state statutes or
regulations relating to the permissible activities of banks or their
subsidiaries or affiliates, could prevent certain banks from continuing
to perform all or a part of these services. If a bank were so prohibited,
shareholders of the Trust who were clients of such bank would be permitted
to remain as shareholders, and if a bank could no longer provide those
service functions, alternate means for continuing the servicing of such
shareholders would be sought. In such event, shareholders serviced by
such bank might no longer be able to avail themselves of any automatic
investment or other services then being provided by such bank. It is not
expected that shareholders would suffer any adverse financial consequences
as a result of any of those occurrences. The Board of Trustees will
consider appropriate modifications to the Trust's operations, including
discontinuance of payments under the Plan to such institutions, in the
event of any future change in such laws or regulations which may adversely
affect the ability of such institutions to provide these services. In
addition, certain banks and financial institutions may be required to
register as dealers under state law.
While the Plan is in effect, the Treasurer of the Trust shall provide
a report to the Board of Trustees in writing at least quarterly on the
amount of all payments made pursuant to the Plan and the identity of each
Recipient that received any such payment and the purposes for which the
payments were made. The Plan further provides that while it is in effect,
the selection and nomination of those Trustees of the Trust who are not
"interested persons" of the Trust is committed to the discretion of the
Independent Trustees. This does not prevent the involvement of others in
such selection and nomination if the final decision as to the selection
or nomination is approved by a majority of the Independent Trustees.
PURCHASE, REDEMPTION AND PRICING OF SHARES
Determination of Net Asset Value Per Share. The net asset value per share
of the Trust is determined twice a day, as of 12:00 Noon and 4:00 P.M.,
on each day the New York Stock Exchange (the "Exchange") is open (a
"regular business day"), by dividing the Trust's net assets (the total
value of the Trust's portfolio securities, cash and other assets less all
liabilities) by the total number of shares outstanding. Shares of the
Trust are sold at their offering price (net asset value, without a sales
charge) as described in the Prospectus. The Exchange's most recent annual
holiday schedule states that it will close New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving
Day and Christmas Day. The Exchange may also close on other days.
Dealers other than Exchange members may conduct trading in Municipal
Securities on certain days on which the Exchange is closed (e.g., Good
Friday), so that securities
of the same type held by the Trust may be traded, and its net asset value
per share may be significantly affected, on such days when shareholders
may not purchase or redeem shares.
The Trust will seek to maintain a net asset value of $1.00 per share
for purchases and redemptions. There can be no assurance that it will do
so. The Trust operates under SEC Rule 2a-7 under which it may use the
amortized cost method of valuing its shares. The amortized cost method
values a security initially at its cost and thereafter assumes a constant
amortization of any premium or accretion of any discount, regardless of
the impact of fluctuating interest rates on the market value of the
security. This method does not take into account unrealized capital gains
or losses.
The Trust's Board of Trustees has established procedures intended to
stabilize the Trust's net asset value at $1.00 per share. If the Trust's
net asset value per share were to deviate from $1.00 by more than 0.5%,
Rule 2a-7 requires the Board promptly to consider what action, if any,
should be taken. If the Trustees find that the extent of any such
deviation may result in material dilution or other unfair effects on
shareholders, the Board will take whatever steps it considers appropriate
to eliminate or reduce such dilution or unfair effects, including, without
limitation, selling portfolio securities prior to maturity, shortening the
average portfolio maturity, withholding or reducing dividends, reducing
the outstanding number of Trust shares without monetary consideration, or
calculating net asset value per share by using available market
quotations.
As long as the Trust uses Rule 2a-7, the Trust must abide by certain
conditions described in the Prospectus. Some of those conditions which
relate to portfolio management are that the Trust must: (i) maintain a
dollar-weighted average portfolio maturity not in excess of 90 days; (ii)
limit its investments, including repurchase agreements, to those
instruments which are denominated in U.S. dollars, and which are rated in
one of the two highest short-term rating categories by at least two
"nationally-recognized statistical rating organizations" ("NRSROs"), as
defined in the Rule, or by one NRSRO if only one NRSRO has rated the
security; an instrument that is not rated must be of comparable quality
as determined under the Board procedures; and (iii) not purchase any
instruments with a remaining maturity of more than one year. Under Rule
2a-7, the maturity of an instrument is generally considered to be its
stated maturity (or in the case of an instrument called for redemption,
the date on which the redemption payment must be made), with special
exceptions for certain variable rate demand and floating rate instruments.
Repurchase agreements and securities loan agreements are, in general,
treated as having a maturity equal to the period scheduled until
repurchase or return, or if subject to demand, equal to the notice period.
While the amortized cost method provides certainty in valuation,
there may be periods during which the value of an instrument as determined
by amortized cost is higher or lower than the price the Trust would
receive if it sold the instrument. During periods of declining interest
rates, the daily yield on shares of the Trust may tend to be lower (and
net investment income and daily dividends higher) than a like computation
made by a fund with identical investments utilizing a method of valuation
based upon market prices or estimates of market prices for its portfolio.
Thus, if the use of amortized cost by the Trust resulted in a lower
aggregate portfolio value on a particular day, a prospective investor in
the Trust would be able to obtain a somewhat higher yield than would
result from investment in a fund utilizing solely market values, and
existing investors in the Trust would receive less investment income than
if the Trust were priced at market value. Conversely, during periods of
rising interest rates, the daily yield on Trust shares will tend to be
higher and its aggregate value lower than that of a portfolio priced at
market value. A prospective investor would receive a lower yield than
from an investment in a portfolio priced at market value, while existing
investors in the Trust would receive more investment income than if the
Trust were priced at market value.
Redemption of Shares. Information on how to redeem shares of the Trust
is stated in the Prospectus. The Prospectus states that payment for
shares tendered for redemption is ordinarily made in cash. If, however,
the Board of Trustees determines that it would be detrimental to the best
interests of the remaining shareholders of the Trust to make payment
wholly in cash, the redemption price may be paid in whole or in part by
a distribution in kind of securities from the portfolio of the Trust in
lieu of cash or in conformity with applicable Securities and Exchange
Commission rules. The Trust has elected to be governed by Rule 18f-1
under the Investment Company Act, pursuant to which the Trust is obligated
to redeem shares solely in cash up to the lesser of $250,000 or 1% of the
net assets of the Trust during any 90-day period for any one shareholder.
If shares are redeemed in kind, the redeeming shareholder might incur
transaction or other costs in converting the assets to cash. The method
of valuing securities used to make redemptions in kind will be the same
as the method of valuing securities described under "Determination of Net
Asset Value" above, and such valuation will be made as of the same time
the redemption price is determined.
The Trust's Board of Trustees has the right to cause the involuntary
redemption of shares held in any account if the aggregate net asset value
of such shares is less than $200 or such lesser amount as the Board may
fix. Should the Board elect to exercise this right, it may also fix, in
accordance with the Investment Company Act, the requirements for any
notice to be given to the shareholder(s) in question (not less than 30
days) or may set requirements for permission to allow the shareholder to
increase the investment so that the shares would not be involuntarily
redeemed.
Expedited Redemption Procedures. Under the Expedited Redemption Procedure
available to direct shareholders of the Trust, discussed in the
Prospectus, the wiring of redemption proceeds may be delayed if the
Trust's Custodian bank is not open for business on a day that the Trust
would normally authorize the wire to be made, which is usually the same
day for redemptions prior to 12:00 Noon and the Trust's next regular
business day for redemptions between 12:00 Noon and 4:00 P.M. In those
circumstances, the wire will not be transmitted until the next bank
business day on which the Trust is open for business and no dividends will
be paid on the proceeds of redeemed shares awaiting transfer by wire.
Dividend Reinvestment in Another Fund. Direct shareholders of the Trust
may elect to reinvest all dividends and/or distributions in shares of any
of the other funds listed in the Prospectus as "Eligible Funds" at net
asset value without sales charge. To elect this option, a shareholder
must notify the Transfer Agent in writing, and either must have an
existing account in the fund selected for reinvestment or must obtain a
prospectus for that fund and application from the Transfer Agent
to establish an account. The investment will be made at the net asset
value per share in effect at the close of business on the payable date of
the dividend or distribution.
YIELD INFORMATION
The Trust's current yield is calculated for a seven-day period of
time in accordance with regulations adopted under the Investment Company
Act. First, a base period return is calculated for the seven-day period
by determining the net change in the value of a hypothetical pre-existing
account having one share at the beginning of the seven-day period. The
change includes dividends declared on the original share and dividends
declared on any shares purchased with dividends on that share, but such
dividends are adjusted to exclude any realized or unrealized capital gains
or losses affecting the dividends declared. Next, the base period return
is multiplied by 365/7, to obtain the current yield to the nearest
hundredth of one percent. The compounded effective yield for a seven-day
period is calculated by (a) adding 1 to the base period return (obtained
as described above), (b) raising the sum to a power equal to 365 divided
by 7 and (c) subtracting 1 from the result. For the seven-day period
ended June 30, 1994, the Trust's current yield was 2.24% and its
compounded effective yield was 2.27%.
The yield as calculated above may vary for accounts less than
approximately $100 in value due to the effect of rounding off each daily
dividend to the nearest full cent. Since the calculation of yield under
either procedure described above does not take into consideration any
realized or unrealized gains or losses on the Trust's portfolio securities
which may affect dividends, the return on dividends declared during a
period may not be the same on an annualized basis as the yield for that
period.
The Trust's "tax equivalent yield" adjusts the Trust's current yield,
as calculated above, by a stated combined Federal and California tax rate.
The tax equivalent yield is computed by dividing the tax-exempt portion
of the Trust's current yield by one minus a stated income tax rate and
adding the result to the portion (if any) of the Trust's current yield
that is not tax-exempt. The tax equivalent yield may be compounded as
described above to provide a compounded effective tax equivalent yield.
The tax equivalent yield may be used to compare the tax effects of income
derived from the Trust with income from taxable investments at the tax
rates stated. Appendix B includes a tax equivalent yield table, based on
various effective tax brackets for individual taxpayers. Such tax
brackets are determined by a taxpayer's Federal and state taxable income
(the net amount subject to Federal and state income tax after deductions
and exemptions). The tax equivalent yield table assumes that the investor
is taxed at the highest bracket, regardless of whether a switch to non-
taxable investments would cause a lower bracket to apply, and that state
income tax payments are fully deductible for income tax purposes. For
taxpayers with income above certain levels, otherwise allowable itemized
deductions are limited. For the seven-day period ended June 30, 1994, the
Trust's tax-equivalent yield was 4.17% and its tax-equivalent compounded
effective yield was 4.22% for an investment subject to a 46.24% combined
effective tax rate.
Yield information may be useful to investors in reviewing the Trust's
performance. The Trust's yield may be compared to that of other
investments, by citing various indices such as The Bank Rate Monitor
National Index (provided by Bank Rate Monitor (Trademark) ), which
measures the average rate paid on bank money market accounts, NOW accounts
and certificates of deposit by the 100 largest banks and thrift
institutions in the top ten metropolitan areas. However, a number of
factors should be considered before using yield information as a basis for
comparison with other investments. An investment in the Trust is not
insured. Its yield is not guaranteed and normally will fluctuate on a
daily basis. The yield for any given past period is not an indication or
representation by the Trust of future yields or rates of return on its
shares. The Trust's yield is affected by portfolio quality, portfolio
maturity, type of instruments held and operating expenses. The Trust's
performance reflects the voluntary assumption of expenses by the Manager,
absent which such figures would have been lower than those shown above.
When comparing the Trust's yield and investment risk with that of other
investments, investors should understand that certain other investment
alternatives, such as certificates of deposit, U.S. Government Securities,
money market instruments or bank accounts may provide fixed yields or
yields that may vary above a stated minimum, and also that bank accounts
may be insured or guaranteed. Certain types of bank accounts may not pay
interest when the balance falls below a specified level and may limit the
number of withdrawals by check per month. In order to compare the Trust's
dividends to the rate of return on taxable investments, federal and state
income taxes on such investments should be considered.
ADDITIONAL INFORMATION
Description of the Trust. The Trust's Declaration of Trust contains an
express disclaimer of shareholder or Trustee liability for the Trust's
obligations, and provides for indemnification and reimbursement of
expenses out of its property for any shareholder held personally liable
for its obligations. The Declaration of Trust also provides that the
Trust shall, upon request, assume a defense of any claim made against any
shareholder for any act or obligation of the Trust and satisfy any
judgment thereon. Thus, while Massachusetts law permits a shareholder of
a trust (such as the Trust) to be held personally liable as a "partner"
for the Trust's obligations under certain circumstances, the risk of a
Trust shareholder incurring any financial loss on account of such
shareholder liability is limited to the relatively remote circumstance in
which the Trust itself would be unable to meet its obligations. Any
person doing business with the Trust, and any shareholder of the Trust,
agrees under the Trust's Declaration of Trust to look solely to the assets
of the Trust for satisfaction of any claim or demand which may arise out
of any dealings with the Trust, and the Trustees shall have no personal
liability to any such person, to the extent permitted by law. It is not
contemplated that regular annual meetings of shareholders will be held.
The Trust will hold meetings when required to do so by the Investment
Company Act or other applicable law, or when a shareholder meeting is
called by the Trustees or upon proper request of the shareholders.
Shareholders have the right, upon the declaration in writing or vote of
two-thirds of the outstanding shares of the Trust, to remove a Trustee.
The Trustees will call a meeting of shareholders to vote on the removal
of a Trustee upon the written request of the record holders of 10% of its
outstanding shares. In addition, if the Trustees receive a request from
at least 10 shareholders (who have been shareholders for at least six
months) holding in the aggregate shares of the Trust valued at $25,000 or
more or holding 1% or more of the Trust's outstanding shares, whichever
is less, that they wish to communicate with other shareholders to request
a meeting to remove a Trustee, the Trustees will then either make the
Trust's shareholder list available to the applicants or mail their
communication to all other shareholders at the applicants' expense, or the
Trustees may take such other action as set forth in Section 16(c) of the
Investment Company Act.
Tax Status of the Trust's Dividends and Distributions. The Federal and
California tax treatment of the Trust's dividends to shareholders is
explained in the Prospectus under the caption "Dividends and Taxes."
Under the Internal Revenue Code, by December 31 each year the Trust must
distribute 98% of its taxable investment income earned from January 1
through December 31 and 98% of its capital gains realized in the period
from November 1 of the prior year through October 31 of the current year
or else must pay an excise tax on the amounts not distributed. While it
is presently anticipated that the Trust's distributions will meet those
requirements, the Trust's Board and Manager might determine in a
particular year that is in the best interests of the Trust not to make
distributions at the mandated levels and to pay the excise tax on the
undistributed amounts, which would reduce the amount available for
distribution to shareholders.
The Custodian and the Transfer Agent. The Custodian's responsibilities
include safeguarding and controlling the Trust's portfolio securities and
handling the delivery of portfolio securities to and from the Trust. The
Manager has represented to the Trust that its banking relationships with
the Custodian have been and will continue to be unrelated to and
unaffected by the relationships between the Trust and the Custodian. It
will be the practice of the Trust to deal with the Custodian in a manner
uninfluenced by any banking relationship the Custodian may have with the
Manager or its affiliates. The Transfer Agent (Shareholder Services,
Inc.) is responsible for maintaining the Trust's shareholder registry and
shareholder accounting records, and for shareholder servicing and
administrative functions.
General Distributor's Agreement. Under the General Distributor's
Agreement between the Trust and the Distributor, the Distributor acts as
the Trust's principal underwriter in the continuous public offering of its
shares. The General Distributor is not obligated to sell a specific
number of shares. Expenses normally attributable to sales (other than
those paid under the Service Plan), including advertising and the cost of
printing and mailing prospectuses other than those furnished to existing
shareholders, are borne by the Distributor.
Independent Auditors and Financial Statements. The independent auditors
of the Trust examine the Trust's financial statements and perform other
related audit services. They also serve as auditors for the Manager and
affiliates, and for certain other funds advised by the Manager and
affiliates.
AUTOMATIC WITHDRAWAL PLAN PROVISIONS
By requesting an Automatic Withdrawal Plan, the shareholder agrees
to the terms and conditions applicable to such plans, as stated below and
elsewhere in the Application for such Plans, the Prospectus and this
Statement of Additional Information as they may be amended from time to
time by the Trust and/or the Distributor. When adopted, such amendments
will automatically apply to existing Plans.
Trust shares will be redeemed as necessary to meet withdrawal
payments. Shares acquired without a sales charge will be redeemed first
and thereafter shares acquired with reinvested dividends and distributions
followed by shares acquired with a sales charge will be redeemed to the
extent necessary to make withdrawal payments. Depending upon the amount
withdrawn, the investor's principal may be depleted. Payments made to
shareholders under such plans should not be considered as a yield or
income on an investment. Purchases of additional shares concurrently with
withdrawals are undesirable because of sales charges on purchases when
made. Accordingly, a shareholder may not maintain an Automatic Withdrawal
Plan while simultaneously making regular purchases.
1. Shareholder Services, Inc., the Transfer Agent of the Trust, will
administer the Automatic Withdrawal Plan (the "Plan") as agent for the
person (the "Planholder") who executed the Plan authorization and
application submitted to the Transfer Agent.
2. Certificates will not be issued for shares of the Trust purchased
for and held under the Plan, but the Transfer Agent will credit all such
shares to the account of the Planholder on the records of the Trust. Any
share certificates now held by the Planholder may be surrendered
unendorsed to the Transfer Agent with the Plan application so that the
shares represented by the certificate may be held under the Plan. Those
shares will be carried on the Planholder's Plan Statement.
3. Distributions of capital gains must be reinvested in shares of
the Trust, which will be done at net asset value without a sales charge.
Dividends may be paid in cash or reinvested.
4. Redemptions of shares in connection with disbursement payments
will be made at the net asset value per share determined on the redemption
date.
5. Checks or ACH payments will be transmitted approximately three
business days prior to the date selected for receipt of the monthly or
quarterly payment (the date of receipt is approximate), according to the
choice specified in writing by the Planholder.
6. The amount and the interval of disbursement payments and the
address to which checks are to be mailed may be changed at any time by the
Planholder on written notification to the Transfer Agent. The Planholder
should allow at least two weeks' time in mailing such notification before
the requested change can be put in effect.
7. The Planholder may, at any time, instruct the Transfer Agent by
written notice (in proper form in accordance with the requirements of the
then-current prospectus of the Trust) to redeem all, or any part of, the
shares held under the Plan. In such case, the Transfer Agent will redeem
the number of shares requested at the net asset value per share in effect
in accordance with the Trust's usual redemption procedures and will mail
a check for the proceeds of such redemption to the Planholder.
8. The Plan may, at any time, be terminated by the Planholder on
written notice to the Transfer Agent, or by the Transfer Agent upon
receiving directions to that effect from the Trust. The Transfer Agent
will also terminate the Plan upon receipt of evidence satisfactory to it
of the death or legal incapacity of the Planholder. Upon termination of
the Plan by the Transfer Agent or the Trust, shares remaining unredeemed
will be held in an uncertificated account in the name of the Planholder,
and the account will continue as a dividend-reinvestment, uncertificated
account unless and until proper instructions are received from the
Planholder, his executor or guardian, or as otherwise appropriate.
9. For purposes of using shares held under the Plan as collateral,
the Planholder may request issuance of a portion of his shares in
certificated form. Upon written request from the Planholder, the Transfer
Agent will determine the number of shares as to which a certificate may
be issued, so as not to cause the withdrawal checks to stop because of
exhaustion of uncertificated shares needed to continue payments. Should
such uncertificated shares become exhausted, Plan withdrawals will
terminate.
10. The Transfer Agent shall incur no liability to the Planholder
for any action taken or omitted by the Transfer Agent in good faith.
11. In the event that the Transfer Agent shall cease to act as
transfer agent for the Trust, the Planholder will be deemed to have
appointed any successor transfer agent to act as his agent in
administering the Plan.
<PAGE>
INDEPENDENT AUDITORS' REPORT
Centennial California Tax Exempt Trust
The Board of Trustees and Shareholders of
Centennial California Tax Exempt Trust:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Centennial California Tax
Exempt Trust as of June 30, 1994, the related statement of operations for
the year then ended, the statements of changes in net assets for the years
ended June 30, 1994 and 1993, and the financial highlights for the period
June 12, 1990 (commencement of operations) to June 30, 1994. These
financial statements and financial highlights are the responsibility of
the Trust's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned at June 30, 1994 by correspondence with
the custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Centennial
California Tax Exempt Trust at June 30, 1994, the results of its
operations, the changes in its net assets, and the financial highlights
for the respective stated periods, in conformity with generally accepted
accounting principles.
DELOITTE & TOUCHE
/s/ Deloitte & Touche
---------------------
Denver, Colorado
July 22, 1994
<PAGE>
STATEMENT OF INVESTMENTS June 30, 1994
Centennial California Tax Exempt Trust
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT VALUE -- NOTE 1
---------- ----------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- 101.6%
CALIFORNIA -- 101.6%
Anaheim, California Certificates of Participation, 1993 Refunding Projects, AMBAC
Insured, 2.10% (1)................................................................ $1,000,000 $1,000,000
Anaheim, California Electric Revenue Anticipation Nts., 2.70%, 9/1/94 (2)........... 2,000,000 2,000,000
Anaheim, California Housing Authority Multifamily Housing Revenue Refunding Bonds,
Park Vista Apts., Series A, 2.60% (1)............................................. 3,000,000 3,000,000
California Health Facilities Finance Revenue Bonds:
Health Dimensions, Inc., Series A, 2.35%, 8/1/94 (2)................................ 2,000,000 2,000,000
Huntington Memorial Hospital, 2.20% (1)............................................. 700,000 700,000
Kaiser Permanente Medical, Series B, 2.15% (1)...................................... 900,000 900,000
Pooled Loan Program, Series B, FGIC Insured, 2.50% (1).............................. 500,000 500,000
Scripps Memorial Hospital, Series A, MBIA Insured, 2.50% (1)........................ 500,000 500,000
California Pollution Control Finance Authority Revenue Bonds:
Chevron Chemical Co. Project, 2.85%, 11/15/94 (2)................................... 2,275,000 2,275,000
Chevron USA, Inc. Project, 2.85%, 11/15/94 (2)...................................... 500,000 500,000
San Diego Gas and Electric, 2.90%, 9/1/94 (2)....................................... 4,000,000 4,000,000
California State General Obligation Bonds, Series A-3, MBIA Insured, 2.80% (1)...... 2,500,000 2,500,000
Contra Costa County, California Multifamily Housing Revenue Refunding Bonds, Del
Norte Place Apts., Series A, 2.95% (1)............................................ 2,500,000 2,500,000
Costa Mesa, California Certificates of Participation, Orange County Performing Arts
Center, 2.83% (1)................................................................. 2,860,000 2,860,000
Fairfield, California Industrial Development Revenue Bonds, Herman G. Rowland, 2.83%
(1)............................................................................... 1,050,000 1,050,000
First Nationwide Bank of Sacramento, California Multifamily Housing Revenue Bonds,
Grantor Trust, Series 1, Class K, 2.35% (1)....................................... 1,000,000 1,000,000
Huntington Park, California Redevelopment Agency Multifamily Housing Revenue Bonds,
Casa Rita Apts., Series A, 2.70% (1).............................................. 1,500,000 1,500,000
Irvine, California Multifamily Housing Revenue Bonds, Series 1983A, 2.65% (1)....... 1,000,000 1,000,000
Kern, California Community College District Certificates of Participation, Finance
Project, 2.55% (1)................................................................ 1,000,000 1,000,000
Kern County, California Union High School District Certificates of Participation,
Finance Project, 2.50% (1)........................................................ 1,600,000 1,600,000
Los Angeles, California Multifamily Housing Revenue Bonds, Series K, 2.40% (1)...... 2,500,000 2,500,000
Los Angeles County, California Housing Authority Revenue Bonds, Park Sierra Project,
2.80% (1)......................................................................... 1,000,000 1,000,000
Los Angeles County, California Transportation Commission Revenue Bonds, Second Sub.
Sales Tax, 2.75%, 7/11/94 (2)..................................................... 2,000,000 2,000,000
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
Centennial California Tax Exempt Trust
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT VALUE -- NOTE 1
---------- ----------------
<S> <C> <C>
Municipal Bonds and Notes (Continued)
California (Continued)
Northern California Public Power Agency Revenue Bonds, Geothermal Project No. 3,
Series 84A, 11.50%, 7/1/94 (2).................................................... $3,790,000 $3,903,700
Ontario, California Multifamily Revenue Bonds, Mtg. Residential Park Centre, Series
A, 2.30% (1)...................................................................... 2,400,000 2,400,000
Orange County, California Apt. Development Revenue Refunding Bonds, Series A, 2.45%
(1)............................................................................... 1,000,000 1,000,000
Orange County, California Municipal Water District Refunding Certificates of
Participation, Allen McColloch Project, Series A, 3% (1).......................... 4,000,000 4,000,000
Palm Springs, California Community Redevelopment Agency Certificates of
Participation, Headquarters Hotel, Series 7, 3% (1)............................... 500,000 500,000
San Bernardino County, California Multifamily Housing Authority Revenue Refunding
Bonds, Monterey Villas Apts. Project, Series A, 2.70% (1)......................... 2,125,000 2,125,000
San Diego, California Multifamily Housing Revenue Refunding Bonds, Coral Point Apts.
Project, Series A, 2.70% (1)...................................................... 2,500,000 2,500,000
San Diego County, California Regional Transportation District Revenue Bonds, Series
BT-134, 3%, 7/21/94 (2)........................................................... 2,000,000 2,000,000
San Marcos, California Redevelopment Agency Multifamily Housing Bonds, San Marcos
Retirement Village Project, 3% (1)................................................ 2,500,000 2,500,000
Southern California Rapid Transit District Certificates of Participation, Series
BT-10, MBIA Insured, 2.35% (1).................................................... 1,000,000 1,000,000
Stockton, California Industrial Development Authority Revenue Bonds, Citation
Circuit Co., 2.71% (1)............................................................ 375,000 375,000
Visalia, California Industrial Development Revenue Bonds, Akers West Assoc., 2.75%
(1)............................................................................... 1,150,000 1,150,000
----------------
Total Investments, at Value (Cost $61,338,700)...................................... 101.6% 61,338,700
Liabilities in Excess of Other Assets............................................... (1.6) (963,037)
---------- ----------------
Net Assets.......................................................................... 100.0% $60,375,663
---------- ----------------
---------- ----------------
</TABLE>
1. Floating or variable rate obligation maturing in more than one year. The
interest rate, which is based on specific, or an index of, market interest
rates, is subject to change periodically and is the effective rate on June
30, 1994. A demand feature allows the recovery of principal at any time, or
at specified intervals not exceeding one year, on up to 30 days' notice.
2. Put obligation redeemable at full face value on the date reported.
See accompanying Notes to Financial Statements.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES June 30, 1994
Centennial California Tax Exempt Trust
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $61,338,700) - see
accompanying statement..................................... $61,338,700
Cash 122,159
Receivables:
Interest .................................................. 437,913
Shares of beneficial interest sold ........................ 352,007
Deferred organization costs .................................. 3,881
Other ........................................................ 9,139
----------
Total assets ............................................ 62,263,799
----------
LIABILITIES:
Payables and other liabilities:
Shares of beneficial interest redeemed .................... 1,766,596
Dividends ................................................. 49,707
Service plan fees - Note 3 ................................ 33,359
Other ..................................................... 38,474
----------
Total liabilities ....................................... 1,888,136
----------
NET ASSETS ................................................... $60,375,663
===========
COMPOSITION OF NET ASSETS:
Paid-in capital ............................................. $60,375,604
Accumulated net realized gain from investment
transactions .............................................. 59
----------
NET ASSETS - Applicable to 60,375,604 shares of
beneficial interest outstanding ........................... $60,375,663
===========
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE
PER SHARE ................................................. $1.00
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
STATEMENT OF OPERATIONS For the Year Ended June 30, 1994
Centennial California Tax Exempt Trust
<TABLE>
<S> <C>
INVESTMENT INCOME - Interest ................................. $1,698,190
----------
EXPENSES:
Management fees - Note 3 ..................................... 327,466
Service plan fees - Note 3 ................................... 131,944
Custodian fees and expenses .................................. 36,500
Transfer and shareholder servicing agent fees
- Note 3 ................................................... 28,354
Shareholder reports .......................................... 17,830
Legal and auditing fees ...................................... 10,096
Registration and filing fees ................................. 2,729
Trustees' fees and expenses .................................. 1,825
Other ........................................................ 15,020
----------
Total expenses ........................................... 571,764
Less assumption of expenses by Centennial Asset
Management Corporation - Note 3 ............................ (48,265)
----------
Net expenses ............................................. 523,499
----------
NET INVESTMENT INCOME ......................................... 1,174,691
NET REALIZED GAIN ON INVESTMENTS .............................. 80
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .......... $1,174,771
==========
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Centennial California Tax Exempt Trust
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
------------------------
1994 1993
---------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income ................... $ 1,174,691 $ 1,066,789
Net realized gain on investments ........ 80 4,381
----------- -----------
Net increase in net assets resulting
from operations ..................... 1,174,771 1,071,170
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS .......................... (1,177,627) (1,066,789)
BENEFICIAL INTEREST TRANSACTIONS:
Net increase in net assets resulting
from beneficial interest
transactions - Note 2 ................. 2,299,586 9,591,873
----------- -----------
NET ASSETS:
Total increase .......................... 2,296,730 9,596,254
Beginning of year ....................... 58,078,933 48,482,679
----------- -----------
End of year ............................. $60,375,663 $58,078,933
=========== ===========
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
FINANCIAL HIGHLIGHTS
Centennial California Tax Exempt Trust
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------------------------
1994 1993 1992 1991 1990(1)
-------- ------ ------ ------ --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period ............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations -
net investment income and net realized gain
on investments ................................................. .02 .02 .03 .04 .003
Dividends and distributions to shareholders ...................... (.02) (.02) (.03) (.04) (.003)
------- ------- ------- ------- -------
Net asset value, end of period ................................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
------- ------- ------- ------- -------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......................... $60,376 $58,079 $48,483 $32,337 $2,018
Average net assets (in thousands) ................................ $65,520 $56,082 $40,684 $16,150 $1,914
Number of shares outstanding at end of period
(in thousands) ................................................. 60,376 58,076 48,484 32,337 2,018
Ratios to average net assets:
Net investment income .......................................... 1.79% 1.90% 3.13% 4.09% 6.29%(2)
Expenses, before voluntary assumption by the Manager ........... .87% .86% .91% 1.09% 2.53%(2)
Expenses, net of voluntary assumption by the Manager ........... .80% .80% .80% .84% .90%(2)
</TABLE>
1. For the period from June 12, 1990 (commencement of operations) to
June 30, 1990.
2. Annualized.
See accompanying Notes to Financial Statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Centennial California Tax Exempt Trust
1. SIGNIFICANT ACCOUNTING POLICIES
Centennial California Tax Exempt Trust (the Trust) is registered
under the Investment Company Act of 1940, as amended, as a
non-diversified, open-end management investment company. The Trust's
investment advisor is Centennial Asset Management Corporation (the
Manager), a subsidiary of Oppenheimer Management Corporation (OMC). The
following is a summary of significant accounting policies consistently
followed by the Trust.
INVESTMENT VALUATION. Portfolio securities are valued on the basis
of amortized cost, which approximates market value.
FEDERAL INCOME TAXES. The Trust intends to continue to comply with
provisions of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to shareholders.
Therefore, no federal income tax provision is required.
ORGANIZATION COSTS. The Manager advanced $18,743 for organization
and start-up costs of the Trust. Such expenses are being amortized over
a five-year period from the date operations commenced. In the event that
all or part of the Manager's initial investment in shares of the Trust is
withdrawn during the amortization period, the redemption proceeds will be
reduced to reimburse the Trust for any unamortized expenses, in the same
ratio as the number of shares redeemed bears to the number of initial
shares outstanding at the time of such redemption.
DISTRIBUTIONS TO SHAREHOLDERS. The Trust intends to declare
dividends from net investment income each day the New York Stock Exchange
is open for business and pay such dividends monthly. To effect its policy
of maintaining a net asset value of $1.00 per share, the Trust may
withhold dividends or make distributions of net realized gains.
OTHER. Investment transactions are accounted for on the date the
investments are purchased or sold (trade date). Realized gains and losses
on investments are determined on an identified cost basis, which is the
same basis used for federal income tax purposes.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Centennial California Tax Exempt Trust
2. SHARES OF BENEFICIAL INTEREST
The Trust has authorized an unlimited number of no par value shares
of beneficial interest. Transactions in shares of beneficial interest were
as follows:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------------------------------------------
1994 1993
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
Sold.......................................... 231,741,608 $ 231,741,608 193,288,887 $ 193,288,887
Dividends and distributions reinvested........ 1,131,972 1,131,972 1,045,494 1,045,494
Redeemed...................................... (230,573,994) (230,573,994) (184,742,508) (184,742,508)
------------ ------------- ------------ -------------
Net increase............................. 2,299,586 $ 2,299,586 9,591,873 $ 9,591,873
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
</TABLE>
3. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Trust which provides for an annual
fee of .50% on the first $250 million of net assets with a reduction of
.025% on each $250 million thereafter, to .40% on net assets in excess of
$1 billion. The Manager has agreed to assume Trust expenses (with
specified exceptions) in excess of the regulatory limitation of the State
of California. In addition, the Manager has voluntarily undertaken to
assume Trust expenses in excess of .80% of average annual net assets.
Shareholder Services, Inc. (SSI), a subsidiary of OMC, is the
transfer and shareholder servicing agent for the Trust, and for other
registered investment companies. SSI's total costs of providing such
services are allocated ratably to these companies.
Under an approved service plan, the Trust may expend up to .20% of
its net assets annually to reimburse Centennial Asset Management
Corporation, as distributor, for costs incurred in connection with the
personal service and maintenance of accounts that hold shares of the
Trust, including amounts paid to brokers, dealers, banks and other
institutions.
<PAGE>
APPENDIX A
DESCRIPTION OF SECURITIES RATINGS
Below is a description of the two highest rating categories for Short Term
Debt and Long Term Debt by the "Nationally-Recognized Statistical Rating
Organizations" which the Manager evaluates in purchasing securities on
behalf of the Trust. The ratings descriptions are based on information
supplied by the ratings organizations to subscribers.
Short Term Debt Ratings.
Moody's Investors Service, Inc. ("Moody's"): The following rating
designations for commercial paper (defined by Moody's as promissory
obligations not having original maturity in excess of nine months), are
judged by Moody's to be investment grade, and indicate the relative
repayment capacity of rated issuers:
Prime-1: Superior capacity for repayment. Capacity will normally be
evidenced by the following characteristics: (a) leveling market
positions in well-established industries; (b) high rates of
return on funds employed; (c) conservative capitalization
structures with moderate reliance on debt and ample asset
protection; (d) broad margins in earning coverage of fixed
financial charges and high internal cash generation; and (e)
well established access to a range of financial markets and
assured sources of alternate liquidity.
Prime-2: Strong capacity for repayment. This will normally be evidenced
by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, will
be more subject to variation. Capitalization characteristics,
while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
Moody's ratings for state and municipal short-term obligations are
designated "Moody's Investment Grade" ("MIG"). Short-term notes which
have demand features may also be designated as "VMIG". These rating
categories are as follows:
MIG1/VMIG1: Best quality. There is present strong protection by
established cash flows, superior liquidity support or
demonstrated broadbased access to the market for
refinancing.
MIG2/VMIG2: High quality. Margins of protection are ample although
not so large as in the preceding group.
Standard & Poor's Corporation ("S&P"): The following ratings by S&P for
commercial paper (defined by S&P as debt having an original maturity of
no more than 365 days) assess the likelihood of payment:
A-1: Strong capacity for timely payment. Those issues determined to
possess extremely strong safety characteristics are denoted with
a plus sign (+) designation.
A-2: Satisfactory capacity for timely payment. However, the relative
degree of safety is not as high as for issues designated "A-1".
S&P's ratings for Municipal Notes due in three years or less are:
SP-1: Very strong or strong capacity to pay principal and interest.
Those issues determined to possess overwhelming safety
characteristics will be given a plus (+) designation.
SP-2: Satisfactory capacity to pay principal and interest.
S&P assigns "dual ratings" to all municipal debt issues that have a demand
or double feature as part of their provisions. The first rating addresses
the likelihood of repayment of principal and interest as due, and the
second rating addresses only the demand feature. With short-term demand
debt, S&P's note rating symbols are used with the commercial paper symbols
(for example, "SP-1+/A-1+").
Fitch Investors Service, Inc. ("Fitch"): Fitch assigns the following
short-term ratings to debt obligations that are payable on demand or have
original maturities of generally up to three years, including commercial
paper, certificates of deposit, medium-term notes, and municipal and
investment notes:
F-1+: Exceptionally strong credit quality; the strongest degree of
assurance for timely payment.
F-1: Very strong credit quality; assurance of timely payment is only
slightly less in degree than issues rated "F-1+".
F-2: Good credit quality; satisfactory degree of assurance for timely
payment, but the margin of safety is not as great as for issues
assigned "F-1+" or "F-1" ratings.
Duff & Phelps, Inc. ("Duff & Phelps"): The following ratings are for
commercial paper (defined by Duff & Phelps as obligations with maturities,
when issued, of under one year), asset-backed commercial paper, and
certificates of deposit (the ratings cover all obligations of the
institution with maturities, when issued, of under one year, including
bankers' acceptance and letters of credit):
Duff 1+: Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or access to
alternative sources of funds, is outstanding, and safety is
just below risk-free U.S. Treasury short-term obligations.
Duff 1: Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection
factors. Risk factors are minor.
Duff 1-: High certainty of timely payment. Liquidity factors are
strong and supported by good fundamental protection factors.
Risk factors are very small.
Duff 2: Good certainty of timely payment. Liquidity factors and
company fundamentals are sound. Although ongoing funding
needs may enlarge total financing requirements, access to
capital markets is good. Risk factors are small.
IBCA Limited or its affiliate IBCA Inc. ("IBCA"): Short-term ratings,
including commercial paper (with maturities up to 12 months), are as
follows:
A1+: Obligations supported by the highest capacity for timely
repayment.
A1: Obligations supported by a very strong capacity for timely
repayment.
A2: Obligations supported by a strong capacity for timely repayment,
although such capacity may be susceptible to adverse changes in
business, economic, or financial conditions.
Thomson BankWatch, Inc. ("TBW"): The following short-term ratings apply
to commercial paper, certificates of deposit, unsecured notes, and other
securities having a maturity of one year or less.
TBW-1: The highest category; indicates the degree of safety regarding
timely repayment of principal and interest is very strong.
TBW-2: The second highest rating category; while the degree of safety
regarding timely repayment of principal and interest is strong,
the relative degree of safety is not as high as for issues
rated "TBW-1".
Long Term Debt Ratings. These ratings are relevant for securities
purchased by the Trust with a remaining maturity of 397 days or less, or
for rating issuers of short-term obligations.
Moody's: Bonds (including municipal bonds) are rated as follows:
Aaa: Judged to be the best quality. They carry the smallest degree of
investment risk and are generally referred to as "gilt edge."
Interest payments are protected by a large or by an exceptionally
stable margin, and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong
positions of such issues.
Aa: Judged to be of high quality by all standards. Together with the
"Aaa" group they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in "Aaa" securities or
fluctuations of protective elements may be of greater amplitude
or there may be other elements present which make the long-term
risks appear somewhat larger than in "Aaa" securities.
Moody's applies numerical modifiers "1", "2" and "3" in its "Aa" rating
classification. The modifier "1" indicates that the security ranks in the
higher end of its generic rating category; the modifier "2" indicates a
mid-range ranking; and the modifier "3" indicates that the issue ranks
in the lower end of its generic rating category.
Standard & Poor's: Bonds (including municipal bonds) are rated as
follows:
AAA: The highest rating assigned by S&P. Capacity to pay interest and
repay principal is extremely strong.
AA: A strong capacity to pay interest and repay principal and differ
from "AAA" rated issues only in small degree.
Fitch:
AAA: Considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA: Considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay
principal is very strong, although not quite as strong as bonds
rated "AAA". Plus (+) and minus (-) signs are used in the "AA"
category to indicate the relative position of a credit within
that category.
Because bonds rated in the "AAA" and "AA" categories are not significantly
vulnerable to foreseeable future developments, short-term debt of these
issuers is generally rated "F-1+".
Duff & Phelps:
AAA: The highest credit quality. The risk factors are negligible,
being only slightly more than for risk-free U.S. Treasury debt.
AA: High credit quality. Protection factors are strong. Risk is
modest but may vary slightly from time to time because of
economic conditions. Plus (+) and minus (-) signs are used in
the "AA" category to indicate the relative position of a credit
within that category.
IBCA: Long-term obligations (with maturities of more than 12 months) are
rated as follows:
AAA: The lowest expectation of investment risk. Capacity for timely
repayment of principal and interest is substantial such that
adverse changes in business, economic, or financial conditions
are unlikely to increase investment risk significantly.
AA: A very low expectation for investment risk. Capacity for timely
repayment of principal and interest is substantial. Adverse
changes in business, economic, or financial conditions may
increase investment risk albeit not very significantly.
A plus (+) or minus (-) sign may be appended to a long term rating to
denote relative status within a rating category.
TBW: TBW issues the following ratings for companies. These ratings
assess the likelihood of receiving payment of principal and interest on
a timely basis and incorporate TBW's opinion as to the vulnerability of
the company to adverse developments, which may impact the market's
perception of the company, thereby affecting the marketability of its
securities.
A: Possesses an exceptionally strong balance sheet and earnings
record, translating into an excellent reputation and unquestioned
access to its natural money markets. If weakness or
vulnerability exists in any aspect of the company's business, it
is entirely mitigated by the strengths of the organization.
A/B: The company is financially very solid with a favorable track
record and no readily apparent weakness. Its overall risk
profile, while low, is not quite as favorable as for companies in
the highest rating category.
<PAGE>
APPENDIX B
TAX-EQUIVALENT YIELDS
The equivalent yield tables below compare tax-free income with taxable
income under Federal individual income tax rates effective January 1,
1994, and California state individual income tax rates effective January
1, 1993 (California tax brackets are adjusted for inflation sometime
between June 1 and August 1 of the current year). "Combined Taxable
Income" refers to the net amount subject to Federal and California income
taxes after deductions and exemptions. The tables assume that an
investor's highest tax bracket applies to the change in taxable income
resulting from a switch between taxable and non-taxable investments, and
that state tax payments are currently deductible for Federal tax purposes
and that the investor is not subject to Federal or state alternative
minimum tax. The income tax brackets are subject to indexing in future
years to reflect changes in the Consumer Price Index. The brackets do not
reflect the phaseout of itemized deductions and personal exemptions at
higher income levels, resulting in higher effective tax rates (and tax
equivalent yields).
<TABLE>
<CAPTION>
Combined Taxable Income
A Tax-Exempt Yield of:
Joint Return
Effective Tax Bracket1.0%1.5% 2.0% 2.5% 3.0% 3.5% 4.0%
But
Over Not OverFederalCal. CombinedIs Equivalent to a Taxable Yield of:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 22,118$ 34,90615.00% 4.00% 18.40% 1.23% 1.84% 2.45% 3.06% 3.68% 4.29% 4.90%
$ 34,906$ 38,00015.00% 6.00% 20.10% 1.25% 1.88% 2.50% 3.13% 3.75% 4.38% 5.01%
$ 38,000$ 48,45628.00% 6.00% 32.32% 1.48% 2.22% 2.96% 3.69% 4.43% 5.17% 5.91%
$ 48,456$ 61,24028.00% 8.00% 33.76% 1.51% 2.26% 3.02% 3.77% 4.53% 5.28% 6.04%
$ 61,240$ 91,85028.00% 9.30% 34.70% 1.53% 2.30% 3.06% 3.83% 4.59% 5.36% 6.13%
$ 91,850$140,00031.00% 9.30% 37.42% 1.60% 2.40% 3.20% 3.99% 4.79% 5.59% 6.39%
$140,000$212,38036.00% 9.30% 41.95% 1.72% 2.58% 3.45% 4.31% 5.17% 6.03% 6.89%
$212,380$250,00036.00% 10.00% 42.40% 1.74% 2.60% 3.47% 4.34% 5.21% 6.08% 6.94%
$250,000$424,76039.60% 10.00% 45.64% 1.84% 2.76% 3.68% 4.60% 5.52% 6.44% 7.36%
$424,760-- 39.60% 11.00% 46.24% 1.86% 2.79% 3.72% 4.65% 5.58% 6.51% 7.44%
</TABLE>
<TABLE>
<CAPTION>
Single return:
But
Over Not Over
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 17,453$ 22,75015.00% 6.00% 20.10% 1.25% 1.88% 2.50% 3.13% 3.75% 4.38% 5.01%
$ 22,750$ 24,22828.00% 6.00% 32.32% 1.48% 2.22% 2.96% 3.69% 4.43% 5.17% 5.91%
$ 24,228$ 30,62028.00% 8.00% 33.76% 1.51% 2.26% 3.02% 3.77% 4.53% 5.28% 6.04%
$ 30,620$ 55,10028.00% 9.30% 34.70% 1.53% 2.30% 3.06% 3.83% 4.59% 5.36% 6.13%
$ 55,100$106,19031.00% 9.30% 37.42% 1.60% 2.40% 3.20% 3.99% 4.79% 5.59% 6.39%
$106,190$115,00031.00% 10.00% 37.90% 1.61% 2.42% 3.22% 4.03% 4.83% 5.64% 6.44%
$115,000$212,38036.00% 10.00% 42.40% 1.74% 2.60% 3.47% 4.34% 5.21% 6.08% 6.94%
$212,380$250,00036.00% 11.00% 43.04% 1.76% 2.63% 3.51% 4.39% 5.27% 6.14% 7.02%
$250,000-- 39.60% 11.00% 46.24% 1.86% 2.79% 3.72% 4.65% 5.58% 6.51% 7.44%
<PAGE>
Investment Adviser and Distributor
Centennial Asset Management Corporation
3410 South Galena Street
Denver, Colorado 80231
Transfer And Shareholder Servicing Agent
Shareholder Services, Inc.
P.O. Box 5270
Denver, Colorado 80217-5270
1-800-525-9310
Custodian of Portfolio Securities
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Independent Auditors
Deloitte & Touche LLP
1560 Broadway
Denver, Colorado 80202
Legal Counsel
Myer, Swanson & Adams, P.C.
1600 Broadway
Denver, Colorado 80202
<PAGE>
CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
FORM N-1A
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
(1) Condensed Financial Information (See Part A): Filed
herewith.
(2) Independent Auditors' Report (See Part B): Filed herewith.
(3) Statement of Investments (See Part B): Filed herewith.
(4) Statement of Assets and Liabilities (See Part B): Filed
herewith.
(5) Statement of Operations (See Part B): Filed herewith.
(6) Statement of Changes in Net Assets (See Part B): Filed
herewith.
(7) Notes to Financial Statements (See Part B): Filed herewith.
(b) Exhibits
(1) Declaration of Trust dated 8/7/89 - Filed with Registrant's
Initial Registration Statement, 8/11/89, and refiled herewith pursuant to
Item 102 of Regulation S-T.
(2) Amended By-Laws dated 6/26/90 - Filed with Registrant's
Post-Effective Amendment No. 3, 10/22/91, and refiled herewith pursuant
to Item 102 of Regulation S-T.
(3) Not applicable.
(4) Specimen Share Certificate - Filed with Registrant's Pre-
Effective Amendment No. 3, 5/17/90, and refiled herewith pursuant to Item
102 of Regulation S-T.
(5) Investment Advisory Agreement dated 10/22/90 - Filed with
Registrant's Post-Effective Amendment No. 2, 10/29/90, and refiled
herewith pursuant to Item 102 of Regulation S-T.
(6) (a) General Distributor's Agreement between the Registrant
and Centennial Asset Management Corporation dated 10/13/92 - Filed with
Registrant's Post-Effective Amendment No. 5, 10/28/93, and incorporated
herein by reference.
(b) Form of Centennial Asset Management Corporation
(formerly Centennial Capital Corporation) Dealer Agreement -filed with
Post-Effective Amendment No. 6 to the Registration Statement of Centennial
Government Trust (File No. 2-75812), 10/26/84, and refiled herewith
pursuant to Item 102 of Regulation S-T.
(c) Sub-Distributor's Agreement dated May 28, 1993 between
Centennial Asset Management Corporation and Oppenheimer Funds Distributor,
Inc. - Filed with Registrant's Post-Effective Amendment No. 5, 10/28/93,
and incorporated herein by reference.
(7) Not applicable.
(8) Custodian Agreement dated as of 6/1/90 - Filed with
Registrant's Post- Effective Amendment No. 3, 10/22/91, and refiled
herewith pursuant to Item 102 of Regulation S-T.
(9) Not applicable.
(10) Opinion and Consent of Counsel dated 2/20/90 - Filed with
Registrant's Pre-Effective Amendment No. 2, 2/22/90, and refiled herewith
pursuant to Item 102 of Regulation S-T.
(11) Independent Auditors' Consent: Filed herewith.
(12) Not applicable.
(13) Investment Letter dated 5/8/90 from Centennial Asset
Management Corporation to Registrant - Filed with Registrant's Pre-
Effective Amendment No. 3, 5/17/90, and refiled herewith pursuant to Item
102 of Regulation S-T.
(14) Not applicable.
(15) (a) Service Plan and Agreement under Rule 12b-1 between
Registrant and Centennial Asset Management Corporation dated as of 8/24/93
- - Filed with Registrant's Post-Effective Amendment No. 5, 10/28/93, and
incorporated herein by reference.
(16) Performance Data Computation Schedule - Filed herewith.
(17) Financial Data Schedule - Filed herewith.
-- Powers of Attorney - Previously filed with Registrant's
Post-Effective Amendment No. 5, 10/28/93, and incorporated herein by
reference.
Item 25. Persons Controlled by and Under Common Control with Registrant
None
Item 26. Number of Holders of Securities
Number of
Record Holders as
Title of Class of September 30, 1994
Shares of Beneficial Interest 2,087
Item 27. Indemnification
Reference is made to paragraphs (c) through (f) of Section 12 of
Article SEVENTH of Registrant's Declaration of Trust, filed as Exhibit
24(b)(1) to this registration statement.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of Registrant pursuant to the foregoing provisions or
otherwise, Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by Registrant of expenses incurred or
paid by a Trustee, officer or controlling person of Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
Trustee, officer or controlling person, Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed
in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
Item 28. (a) Business and Other Connections of Investment Adviser
Centennial Asset Management Corporation is the investment
adviser and distributor of Registrant; it and certain subsidiaries and
affiliates act in the same capacity for other registered investment
companies as described in Parts A and B.
(b) Business and Other Connections of Officers and Directors
of Investment Adviser
For information as to the business, profession, vocation
or employment of a substantial nature of each of the officers and
directors of such Investment Adviser, reference is made to Form ADV of
Centennial Asset Management Corporation, formerly Centennial Capital
Corporation, filed under the Investment Advisers Act of 1940, which is
incorporated herein by reference.
Item 29. Principal Underwriters
(a) Centennial Asset Management Corporation is the Distributor of
the Registrant's shares. It is also the Distributor of the shares of and
each of the other open-end registered investment companies of which it is
the investment adviser, as described in Parts A and B of this Registration
Statement.
(b) The information contained in the registrations on Form BD of
Centennial Asset Management Corporation, filed under the Securities
Exchange Act of 1934, is incorporated herein by reference.
(c) Not applicable.
Item 30. Location of Accounts and Records
The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940
and rules promulgated thereunder are in the possession of Centennial Asset
Management Corporation, 3410 South Galena Street, Denver, Colorado 80231.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Registrant undertakes to call a meeting of shareholders for the
purpose of voting upon the question of removal of a Trustee or Trustees
when requested to do so in writing by the record holders of at least 10%
of Registrant's outstanding shares and in connection with such meeting to
comply with the provisions of Section 16(c) of the Investment Company Act
of 1940 relating to shareholder communications.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant certifies that it meets all
the requirements for effectiveness of this Registration Statement pursuant
to Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver and State of Colorado on
the 27th day of October, 1994.
CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
By: /s/ James C. Swain*
---------------------------------------
James C. Swain, Chairman
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities on the dates indicated:
Signatures Title Date
- ---------- ----- ----
/s/ James C. Swain* Chairman of the
- ------------------ Board of Trustees October 27, 1994
James C. Swain
/s/ Jon S. Fossel* Chief Executive
- -------------------- Officer and October 27, 1994
Jon S. Fossel Director
/s/ George C. Bowen* Chief Financial
- ------------------- and Accounting October 27, 1994
George C. Bowen Officer
/s/ Robert G. Avis* Trustee October 27, 1994
- ------------------
Robert G. Avis
/s/ William A. Baker* Trustee October 27, 1994
- --------------------
William A. Baker
/s/ Charles Conrad, Jr.* Trustee October 27, 1994
- -----------------------
Charles Conrad, Jr.
/s/ Raymond J. Kalinowski* Trustee October 27, 1994
- -------------------------
Raymond J. Kalinowski
/s/ C. Howard Kast* Trustee October 27, 1994
- ------------------
C. Howard Kast
/s/ Robert M. Kirchner* Trustee October 27, 1994
- ----------------------
Robert M. Kirchner
/s/ Ned M. Steel* Trustee October 27, 1994
- ----------------
Ned M. Steel
*By: /s/ Robert G. Zack
- --------------------------------
Robert G. Zack, Attorney-in-Fact
<PAGE>
CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
Registration No. 33-30471
Post-Effective Amendment No. 6
Index to Exhibits
Exhibit Description
24(b)(1) Declaration of Trust dated 8/7/89
24(b)(2) Amended By-Laws dated 6/26/90
24(b)(4) Specimen Share Certificate
24(b)(5) Investment Advisory Agreement dated 10/22/90
24(b)(6)(b) Form of Dealer Agreement
24(b)(8) Custodian Agreement dated as of 6/1/90
24(b)(10) Opinion and Consent of Counsel dated 2/20/90
24(b)(11) Independent Auditors' Consent
24(b)(13) Investment Letter dated 5/8/90
24(b)(16) Performance Data Computation Schedule
24(b)(17) Financial Data Schedule
</TABLE>
<PAGE>
Exhibit 24(b)(1)
DECLARATION OF TRUST
OF
CENTENNIAL CALIFORNIA TAX-EXEMPT TRUST
DECLARATION OF TRUST, made August 7, 1989, by and among the
individuals executing this Declaration of Trust as the initial Trustees.
WHEREAS, the Trustees wish to establish a trust fund under the laws
of the Commonwealth of Massachusetts, for the investment and reinvestment
of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed under
this Declaration of Trust IN TRUST as herein set forth below.
FIRST: This Trust shall be known as CENTENNIAL CALIFORNIA TAX-EXEMPT
TRUST.
SECOND: Whenever used herein, unless otherwise required by the
context or specifically provided:
1. All terms used in this Declaration of Trust which are defined
in the 1940 Act (defined below) shall have the meanings given to them in
the 1940 Act.
2. "Board" or "Board of Trustees" or the "Trustees" means the Board
of Trustees of the Trust.
3. "By-Laws" means the By-Laws of the Trust as amended from time
to time.
4. "Commission" means the Securities and Exchange Commission.
5. "Declaration of Trust" shall mean this Declaration of Trust as
amended or restated from time to time.
6. The "1940 Act" refers to the Investment Company Act of 1940 and
the Rules and Regulations of the Commission thereunder, all as amended
from time to time.
7. "Series" refers to Series of Shares established and designated
under or in accordance with the provisions of Article FOURTH.
8. "Shareholder" means a record owner of Shares of the Trust.
9. "Shares" refers to the transferable units of interest into which
the beneficial interest in the Trust or any Series of the Trust (as the
context may require) shall be divided from time to time and includes
fractions of Shares as well as whole Shares.
10. The "Trust" refers to the Massachusetts business trust created
by this Declaration of Trust, as amended or restated from time to time.
11. "Trustees" refers to the individual trustees in their capacity
as trustees hereunder of the Trust and their successor or successors for
the time being in office as such trustees.
THIRD: The purpose or purposes for which the Trust is formed and the
business or objects to be transacted, carried on and promoted by it are
as follows:
1. To hold, invest or reinvest its funds, and in connection
therewith to hold part or all of its funds in cash, and to purchase or
otherwise acquire, hold for investment or otherwise, sell, sell short,
assign, negotiate, transfer, exchange or otherwise dispose of or turn to
account or realize upon, securities (which term "securities" shall for the
purposes of this Declaration of Trust, without limitation of the
generality thereof, be deemed to include any stocks, shares, bonds,
financial futures contracts, indexes, debentures, notes, mortgages or
other obligations, and any certificates, receipts, warrants or other
instruments representing rights to receive, purchase or subscribe for the
same, or evidencing or representing any other rights or interests therein,
or in any property or assets) created or issued by any issuer (which term
"issuer" shall for the purposes of this Declaration of Trust, without
limitation of the generality thereof be deemed to include any persons,
firms, associations, corporations, syndicates, combinations,
organizations, governments, or subdivisions thereof) and in financial
instruments (whether they are considered as securities or commodities);
and to exercise, as owner or holder of any securities or financial
instruments, all rights, powers and privileges in respect thereof; and to
do any and all acts and things for the preservation, protection,
improvement and enhancement in value of any or all such securities or
financial instruments.
2. To borrow money and pledge assets in connection with any of the
objects or purposes of the Trust, and to issue notes or other obligations
evidencing such borrowings, to the extent permitted by the 1940 Act and
by the Trust's fundamental investment policies under the 1940 Act.
3. To issue and sell its Shares in such Series and amounts and on
such terms and conditions, for such purposes and for such amount or kind
of consideration (including without limitation thereto, securities) now
or hereafter permitted by the laws of the Commonwealth of Massachusetts
and by this Declaration of Trust, as the Trustees may determine.
4. To purchase or otherwise acquire, hold, dispose of, resell,
transfer, reissue or cancel its Shares, or to classify or reclassify any
unissued Shares or any Shares previously issued and reacquired of any
Series into one or more series that may have been established and
designated from time to time, all without the vote or consent of the
Shareholders of the Trust, in any manner and to the extent now or
hereafter permitted by this Declaration of Trust.
5. To conduct its business in all its branches at one or more
offices in New York, Colorado and elsewhere in any part of the world,
without restriction or limit as to extent.
6. To carry out all or any of the foregoing objects and purposes
as principal or agent, and alone or with associates or to the extent now
or hereafter permitted by the laws of Massachusetts, as a member of, or
as the owner or holder of any stock of, or share of interest in, any
issuer, and in connection therewith or make or enter into such deeds or
contracts with any issuers and to do such acts and things and to exercise
such powers, as a natural person could lawfully make, enter into, do or
exercise.
7. To do any and all such further acts and things and to exercise
any and all such further powers as may be necessary, incidental, relative,
conducive, appropriate or desirable for the accomplishment, carrying out
or attainment of all or any of the foregoing purposes or objects.
The foregoing objects and purposes shall, except as otherwise
expressly provided, be in no way limited or restricted by reference to,
or inference from, the terms of any other clause of this or any other
Article of this Declaration of Trust, and shall each be regarded as
independent and construed as powers as well as objects and purposes, and
the enumeration of specific purposes, objects and powers shall not be
construed to limit or restrict in any manner the meaning of general terms
or the general powers of the Trust now or hereafter conferred by the laws
of the Commonwealth of Massachusetts nor shall the expression of one thing
be deemed to exclude another, though it be of a similar or dissimilar
nature, not expressed; provided, however, that the Trust shall not carry
on any business, or exercise any powers, in any state, territory, district
or country except to the extent that the same may lawfully be carried on
or exercised under the laws thereof.
FOURTH:
1. The beneficial interest in the Trust shall be divided into
Shares, all without par value, but the Trustees shall have the authority
from time to time to create one or more Series of Shares in addition to
the Series specifically established and designated in part 2 of this
Article FOURTH, as they deem necessary or desirable, to establish and
designate such Series, and to fix and determine the relative rights and
preferences as between the different Series of Shares as to right of
redemption and the price, terms and manner of redemption, special and
relative rights as to dividends and other distributions and on
liquidation, sinking or purchase fund provisions, conversion on
liquidation, conversion rights, and conditions under which the several
Series shall have individual voting rights or no voting rights. Except
as aforesaid, all Shares of the different Series shall be identical.
(a) The number of authorized Shares and the number of Shares
of each Series that may be issued is unlimited, and the Trustees may issue
Shares of any Series for such consideration and on such terms as they may
determine (or for no consideration if pursuant to a Share dividend or
split-up), all without action or approval of the Shareholders. All Shares
when so issued on the terms determined by the Trustees shall be fully paid
and non-assessable. The Trustees may classify or reclassify any unissued
Shares or any Shares previously issued and reacquired of any Series into
one or more Series that may be established and designated from time to
time. The Trustees may hold as treasury Shares (of the same or some other
Series), reissue for such consideration and on such terms as they may
determine, or cancel, at their discretion from time to time, any Shares
of any Series reacquired by the Trust.
(b) The establishment and designation of any Series of Shares
in addition to that established and designated in part 2 of this Article
FOURTH shall be effective upon the execution by a majority of the Trustees
of an instrument setting forth such establishment and designation and the
relative rights and preferences of such Series, or as otherwise provided
in such instrument. At any time that there are no Shares outstanding of
any particular Series previously established and designated, the Trustees
may by an instrument executed by a majority of their number abolish that
Series and the establishment and designation thereof. Each instrument
referred to in this paragraph shall be an amendment to this Declaration
of Trust, and the Trustees may make any such amendment without shareholder
approval.
(c) Any Trustee, officer or other agent of the Trust, and any
organization in which any such person is interested may acquire, own, hold
and dispose of Shares of any Series of the Trust to the same extent as if
such person were not a Trustee, officer or other agent of the Trust; and
the Trust may issue and sell or cause to be issued and sold and may
purchase Shares of any Series from any such person or any such
organization subject only to the general limitations, restrictions or
other provisions applicable to the sale or purchase of Shares of such
Series generally.
2. Without limiting the authority of the Trustees set forth in part
1 of this Article FOURTH to establish and designate any further Series,
the Trustees hereby establish one Series of Shares having the same name
as the Trust. The Shares of that Series and any Shares of any further
Series that may from time to time be established and designated by the
Trustees shall (unless the Trustees otherwise determine with respect to
some further Series at the time of establishing and designating the same)
have the following relative rights and preferences:
(a) Assets Belonging to Series. All consideration received by
the Trust for the issue or sale of Shares of a particular Series, together
with all assets in which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to that Series for
all purposes, subject only to the rights of creditors, and shall be so
recorded upon the books of account of the Trust. Such consideration,
assets, income, earnings, profits, and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of such assets,
and any funds or payments derived from any reinvestment of such proceeds,
in whatever form the same may be, together with any General Items
allocated to that Series as provided in the following sentence, are
herein referred to as "assets belonging to" that Series. In the event
that there are any assets, income, earnings, profits, and proceeds
thereof, funds, or payments which are not readily identifiable as
belonging to any particular Series (collectively "General Items"), the
Trustees shall allocate such General Items to and among any one or more
of the Series established and designated from time to time in such manner
and on such basis as they, in their sole discretion, deem fair and
equitable; and any General Items so allocated to a particular Series shall
belong to that Series. Each such allocation by the Trustees shall be
conclusive and binding upon the shareholders of all Series for all
purposes.
(b) Liabilities Belonging to Series. The assets belonging to
each particular Series shall be charged with the liabilities of the Trust
in respect of that Series and all expenses, costs, charges and reserves
attributable to that Series, and any general liabilities, expenses, costs,
charges or reserves of the Trust which are not readily identifiable as
belonging to any particular Series shall be allocated and charged by the
Trustees to and among any one or more of the Series established and
designated from time to time in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. The
liabilities, expenses, costs, charges and reserves allocated and so
charged to a Series are herein referred to as "liabilities belonging to"
that Series. Each allocation of liabilities, expenses, costs, charges and
reserves by the Trustees shall be conclusive and binding upon the holders
of all Series for all purposes.
(c) Dividends. Dividends and distributions on Shares of a
particular Series may be paid to the holders of Shares of that Series,
with such frequency as the Trustees may determine, which may be daily or
otherwise pursuant to a standing resolution or resolutions adopted only
once or with such frequency as the Trustees may determine, from such of
the income, and surplus capital gains accrued or realized, from the assets
belonging to that Series, as the Trustees may determine, after providing
for actual and accrued liabilities belonging to that Series. All
dividends and distributions on Shares of a particular Series shall be
distributed pro rata to the holders of that Series in proportion to the
number of Shares of that Series held by such holders at the date and time
of record established for the payment of such dividends or distributions,
except that in connection with any dividend or distribution program or
procedure the Trustees may determine that no dividend or distribution
shall be payable on Shares as to which the Shareholder's purchase order
and/or payment have not been received by the time or times established by
the Trustees under such program or procedure. Such dividends and
distributions may be made in cash or Shares or a combination thereof as
determined by the Trustees or pursuant to any program that the Trustees
may have in effect at the time for the election by each Shareholder of the
mode of the making of such dividend or distribution to that Shareholder.
Any such dividend or distribution paid in Shares will be paid at the net
asset value thereof as determined in accordance with paragraph 13 of
Article SEVENTH.
(d) Liquidation. In the event of the liquidation or
dissolution of the Trust, the Shareholders of each Series that has been
established and designated shall be entitled to receive, as a Series, when
and as declared by the Trustees, the excess of the assets belonging to
that Series over the liabilities belonging to that Series. The assets so
distributable to the Shareholders of any particular Series shall be
distributed among such Shareholders in proportion to the number of Shares
of that Series held by them and recorded on the books of the Trust.
(e) Transfer. All Shares of each particular Series shall be
transferable, but transfers of Shares of a particular Series will be
recorded on the Share transfer records of the Trust applicable to that
Series only at such times as Shareholders shall have the right to require
the Trust to redeem Shares of that Series and at such other times as may
be permitted by the Trustees.
(f) Equality. All Shares of each particular Series shall
represent an equal proportionate interest in the assets belonging to that
Series (subject to the liabilities belonging to that Series), and each
Share of any particular Series shall be equal to each other Share of that
Series; but the provisions of this sentence shall not restrict any
distinctions permissible under subsection (c) of part 2 of this Article
FOURTH that may exist with respect to dividends and distributions on
Shares of the same Series. The Trustees may from time to time divide or
combine the Shares of any particular Series into a greater or lesser
number of Shares of that Series without thereby changing the proportionate
beneficial interest in the assets belonging to that Series or in any way
affecting the rights of Shares of any other Series.
(g) Fractions. Any fractional Share of any Series, if any such
fractional Share is outstanding, shall carry proportionately all the
rights and obligations of a whole Share of that Series, including those
rights and obligations with respect to voting, receipt of dividends and
distributions, redemption of Shares, and liquidation of the Trust.
(h) Conversion Rights. Subject to compliance with the
requirements of the 1940 Act, the Trustees shall have the authority to
provide that holders of Shares of any Series shall have the right to
exchange said Shares into Shares of one or more other Series of Shares in
accordance with such requirements and procedures as may be established by
the Trustees.
(i) Ownership of Shares. The ownership of Shares shall be
recorded on the books of the Trust or of a transfer or similar agent for
the Trust, which books shall be maintained separately for the Shares of
each Series that has been established and designated. No certification
certifying the ownership of Shares need be issued except as the Trustees
may otherwise determine from time to time. The Trustees may make such
rules as they consider appropriate for the issuance of Share certificates,
the use of facsimile signatures, the transfer of Shares and similar
matters. The record books of the Trust as kept by the Trust or any
transfer or similar agent, as the case may be, shall be conclusive as to
who are the Shareholders and as to the number of Shares of each Series
held from time to time by each such Shareholder.
(j) Investments in the Trust. The Trustees may accept
investments in the Trust from such persons and on such terms and for such
consideration, not inconsistent with the provisions of the 1940 Act, as
they from time to time authorize. The Trustees may authorize any
distributor, principal underwriter, custodian, transfer agent or other
person to accept orders for the purchase or sale of Shares that conform
to such authorized terms and to reject any purchase or sale orders for
Shares whether or not conforming to such authorized terms.
FIFTH: The following provisions are hereby adopted with respect to
voting Shares of the Trust and certain other rights:
1. The Shareholders shall have the power to vote (a) for the
election of Trustees when that issue is submitted to them, (b) with
respect to the amendment of this Declaration of Trust except where the
Trustees are given authority to amend the Declaration of Trust without
shareholder approval, (c) to the same extent as the shareholders of a
Massachusetts business corporation, as to whether or not a court action,
proceeding or claim should be brought or maintained derivatively or as a
class action on behalf of the Trust or the Shareholders, and (d) with
respect to those matters relating to the Trust as may be required by the
1940 Act or required by law, by this Declaration of Trust, or the By-Laws
of the Trust or any registration statement of the Trust filed with the
Commission or any State, or as the Trustees may consider desirable.
2. The Trust will not hold shareholder meetings unless required by
the 1940 Act, the provisions of this Declaration of Trust, or any other
applicable law. The Trustees may call a meeting of shareholders.
3. At all meetings of Shareholders, each Shareholder shall be
entitled to one vote on each matter submitted to a vote of the
Shareholders of the affected Series for each Share standing in his name
on the books of the Trust on the date, fixed in accordance with the By-
Laws, for determination of Shareholders of the affected Series entitled
to vote at such meeting (except, if the Board so determines, for Shares
redeemed prior to the meeting), and each such Series shall vote as an
individual class ("Individual Class Voting"); a Series shall be deemed to
be affected when a vote of the holders of that Series on a matter is
required by the 1940 Act; provided, however, that as to any matter with
respect to which a vote of Shareholders is required by the 1940 Act or by
any applicable law that must be complied with, such requirements as to a
vote by Shareholders shall apply in lieu of Individual Class Voting as
described above. Any fractional Share shall carry proportionately all the
rights of a whole Share, including the right to vote and the right to
receive dividends. The presence in person or by proxy of the holders of
one-third of the Shares, or of the Shares of any Series, outstanding and
entitled to vote thereat shall constitute a quorum at any meeting of the
Shareholders or of that Series, respectively; provided however, that if
any action to be taken by the Shareholders or by a Series at a meeting
requires an affirmative vote of a majority, or more than a majority, of
the shares outstanding and entitled to vote, then in such event the
presence in person or by proxy of the holders of a majority of the shares
outstanding and entitled to vote at such a meeting shall constitute a
quorum for all purposes. At a meeting at which is a quorum is present,
a vote of a majority of the quorum shall be sufficient to transact all
business at the meeting. If at any meeting of the Shareholders there
shall be less than a quorum present, the Shareholders or the Trustees
present at such meeting may, without further notice, adjourn the same from
time to time until a quorum shall attend, but no business shall be
transacted at any such adjourned meeting except such as might have been
lawfully transacted had the meeting not been adjourned.
4. Each Shareholder, upon request to the Trust in proper form
determined by the Trust, shall be entitled to require the Trust to redeem
from the net assets of that Series all or part of the Shares of such
Series standing in the name of such Shareholder. The method of computing
such net asset value, the time at which such net asset value shall be
computed and the time within which the Trust shall make payment therefor,
shall be determined as hereinafter provided in Article SEVENTH of this
Declaration of Trust. Notwithstanding the foregoing, the Trustees, when
permitted or required to do so by the 1940 Act, may suspend the right of
the Shareholders to require the Trust to redeem Shares.
5. No Shareholder shall, as such holder, have any right to purchase
or subscribe for any security of the Trust which it may issue or sell,
other than such right, if any, as the Trustees, in their discretion, may
determine.
6. All persons who shall acquire Shares shall acquire the same
subject to the provisions of the Declaration of Trust.
7. Cumulative voting for the election of Trustees shall not be
allowed.
SIXTH:
1. The persons who shall act as initial Trustees until the first
meeting or until their successors are duly chosen and qualify are the
initial trustees executing this Declaration of Trust or any counterpart
thereof. However, the By-Laws of the Trust may fix the number of Trustees
at a number greater or lesser than the number of initial Trustees and may
authorize the Trustees to increase or decrease the number of Trustees, to
fill any vacancies on the Board which may occur for any reason including
any vacancies created by any such increase in the number of Trustees, to
set and alter the terms of office of the Trustees and to lengthen or
lessen their own terms of office or make their terms of office of
indefinite duration, all subject to the 1940 Act. Unless otherwise
provided by the By-Laws of the Trust, the Trustees need not be
Shareholders.
2. A Trustee at any time may be removed either with or without
cause by resolution duly adopted by the affirmative vote of the holders
of two-thirds of the outstanding Shares, present in person or by proxy at
any meeting of Shareholders called for such purpose; such a meeting shall
be called by the Trustees when requested in writing to do so by the record
holders of not less than ten per centum of the outstanding Shares. A
Trustee may also be removed by the Board of Trustees as provided in the
By-Laws of the Trust.
3. The Trustees shall make available a list of names and addresses
of all Shareholders as recorded on the books of the Trust, upon receipt
of the request in writing signed by not less than ten Shareholders (who
have been shareholders for at least six months) holding in the aggregate
shares of the Trust valued at not less than $25,000 at current offering
price (as defined in the Trust's Prospectus and/or Statement of Additional
Information) or holding not less than 1% in amount of the entire amount
of Shares issued and outstanding; such request must state that such
Shareholders wish to communicate with other shareholders with a view to
obtaining signatures to a request for a meeting to take action pursuant
to part 2 of this Article SIXTH and accompanied by a form of communication
to the Shareholders. The Trustees may, in their discretion, satisfy their
obligation under this part 3 by either making available the Shareholder
list to such Shareholders at the principal offices of the Trust, or at the
offices of the Trust's transfer agent, during regular business hours, or
by mailing a copy of such communication and form of request, at the
expense of such requesting Shareholders, to all other Shareholders, and
the Trustees may also take such other action as may be permitted under
Section 16(c) of the 1940 Act.
4. The Trust may at any time or from time to time apply to the
Commission for one or more exemptions from all or part of said Section
16(c) and, if an exemptive order or orders are issued by the Commission,
such order or orders shall be deemed part of Section 16(c) for the
purposes of parts 2 and 3 of this Article SIXTH.
SEVENTH: The following provisions are hereby adopted for the purpose
of defining, limiting and regulating the powers of the Trust, the Trustees
and the Shareholders.
1. As soon as any Trustee is duly elected by the Shareholders or
the Trustees and shall have accepted this trust, the Trust estate shall
vest in the new Trustee or Trustees, together with the continuing
Trustees, without any further act or conveyance, and he shall be deemed
a Trustee hereunder.
2. The death, declination, resignation, retirement, removal, or
incapacity of the Trustees, or any one of them shall not operate to annul
or terminate the Trust but the Trust shall continue in full force and
effect pursuant to the terms of this Declaration of Trust.
3. The assets of the Trust shall be held separate and apart from
any assets now or hereafter held in any capacity other than as Trustee
hereunder by the Trustees or any successor Trustees. All of the assets
of the Trust shall at all times be considered as vested in the Trustees.
No Shareholder shall have, as such holder of beneficial interest in the
Trust, any authority, power or right whatsoever to transact business for
or on behalf of the Trust, or on behalf of the Trustees, in connection
with the property or assets of the Trust, or in any part thereof.
4. The Trustees in all instances shall act as principals, and are
and shall be free from the control of the Shareholders. The Trustees
shall have full power and authority to do any and all acts and to make and
execute, and to authorize the officers and agents of the Trust to make and
execute, any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust.
The Trustees shall not in any way be bound or limited by present or future
laws or customs in regard to Trust investments, but shall have full
authority and power to make any and all investments which they, in their
uncontrolled discretion, shall deem proper to accomplish the purpose of
this Trust. Subject to any applicable limitation in this Declaration of
Trust or by the By-Laws of the Trust, the Trustees shall have power and
authority:
(a) to adopt By-Laws not inconsistent with this Declaration of
Trust providing for the conduct of the business of the Trust and to amend
and repeal them to the extent that they do not reserve that right to the
Shareholders;
(b) to elect and remove such officers and appoint and terminate
such officers as they consider appropriate with or without cause, and to
appoint and designate from among the Trustees such committees as the
Trustees may determine, and to terminate any such committee and remove any
member of such committee;
(c) to employ a bank or trust company as custodian of any
assets of the Trust subject to any conditions set forth in this
Declaration of Trust or in the By-Laws;
(d) To retain a transfer agent and shareholder servicing agent,
or both;
(e) To provide for the distribution of Shares either through
a principal underwriter or the Trust itself or both;
(f) To set record dates in the manner provided for in the By-
Laws of the Trust;
(g) to delegate such authority as they consider desirable to
any officers of the Trust and to any agent, custodian or underwriter;
(h) to vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property held in
Trust hereunder; and to execute and deliver powers of attorney to such
person or persons as the Trustees shall deem proper, granting to such
person or persons such power and discretion with relation to securities
or property as the Trustees shall deem proper;
(i) to exercise powers and rights of subscription or otherwise
which in any manner arise out of ownership of securities held in trust
hereunder;
(j) to hold any security or property in a form not indicating
any trust, whether in bearer, unregistered or other negotiable form, or
either in its own name or in the name of a custodian or a nominee or
nominees, subject in either case to proper safeguards according to the
usual practice of Massachusetts business trusts or investment companies;
(k) to consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or concern, any
security of which is held in the Trust; to consent to any contract, lease,
mortgage, purchase, or sale of property by such corporation or concern,
and to pay calls or subscriptions with respect to any security held in the
Trust;
(l) to compromise, arbitrate, or otherwise adjust claims in
favor of or against the Trust or any matter in controversy including, but
not limited to, claims for taxes;
(m) to make, in the manner provided in the By-Laws,
distributions of income and of capital gains to Shareholders;
(n) to borrow money to the extent and in the manner permitted
by the 1940 Act and the Trust's fundamental policy thereunder as to
borrowing;
(o) to enter into investment advisory or management contracts,
subject to the 1940 Act, with any one or more corporations, partnerships,
trusts, associations or other persons;
(p) to change the name of the Trust or any Series of the Trust
as they consider appropriate without prior shareholder approval;
(q) to establish Trustees' fees or compensation and fees or
compensation for committees of the Trustees to be paid by the Trust or
each Series thereof in such manner and amount as the Trustees may
determine.
5. No one dealing with the Trustees shall be under any obligation
to make any inquiry concerning the authority of the Trustees, or to see
to the application of any payments made or property transferred to the
Trustees or upon their order.
6. (a) The Trustees shall have no power to bind any Shareholder
personally or to call upon any Shareholder for the payment of any sum of
money or assessment whatsoever other than such as the Shareholder may at
any time personally agree to pay by way of subscription to any Shares or
otherwise. There is hereby expressly disclaimed shareholder liability for
the acts and obligations of the Trust. Every note, bond, contract or other
undertaking issued by or on behalf of the Trust or the Trustees relating
to the Trust shall include a notice and provision limiting the obligation
represented thereby to the Trust and its assets (but the omission of such
notice and provision shall not operate to impose any liability or
obligation on any Shareholder).
(b) Whenever this Declaration of Trust calls for or permits any
action to be taken by the Trustees hereunder, such action shall mean that
taken by the Board of Trustees by vote of the majority of a quorum of
Trustees as set forth from time to time in the By-Laws of the Trust or as
required by the 1940 Act.
(c) The Trustees shall possess and exercise any and all such
additional powers as are reasonably implied from the powers herein
contained such as may be necessary or convenient in the conduct of any
business or enterprise of the Trust, to do and perform anything necessary,
suitable, or proper for the accomplishment of any of the purposes, or the
attainment of any one or more of the objects, herein enumerated, or which
shall at any time appear conducive to or expedient for the protection or
benefit of the Trust, and to do and perform all other acts and things
necessary or incidental to the purposes herein before set forth, or that
may be deemed necessary by the Trustees.
(d) The Trustees shall have the power, to the extent not
inconsistent with the 1940 Act, to determine conclusively whether any
moneys, securities, or other properties of the Trust are, for the purposes
of this Trust, to be considered as capital or income and in what manner
any expenses or disbursements are to be borne as between capital and
income whether or not in the absence of this provision such moneys,
securities, or other properties would be regarded as capital or income and
whether or not in the absence of this provision such expenses or
disbursements ordinarily be charged to capital or to income.
7. The By-Laws of the Trust may divide the Trustees into classes
and prescribe the tenure of office of the several classes, but no class
shall be elected for a period shorter than that from the time of the
election following the division into classes until the next meeting and
thereafter for a period shorter than the interval between meetings or for
a period longer than five years, and the term of office of at least one
class shall expire each year.
8. The Shareholders shall have the right to inspect the records,
documents, accounts and books of the Trust, subject to reasonable
regulations of the Trustees, not contrary to Massachusetts law, as to
whether and to what extent, and at what times and places, and under what
conditions and regulations, such right shall be exercised.
9. Any officer elected or appointed by the Trustees or by the
Shareholders or otherwise, may be removed at any time, with or without
cause, in such lawful manner as may be provided in the By-Laws of the
Trust.
10. The Trustees shall have power to hold their meetings, to have
an office or offices and, subject to the provisions of the laws of
Massachusetts, to keep the books of the Trust outside of said Commonwealth
at such places as may from time to time be designated by them. Action may
be taken by the Trustees without a meeting by unanimous written consent
or by telephone or similar method of communication.
11. Securities held by the Trust shall be voted in person or by
proxy by the President or a Vice-President, or such officer or officers
of the Trust as the Trustees shall designate for the purpose, or by a
proxy or proxies thereunto duly authorized by the Trustees, except as
otherwise ordered by vote of the holders of a majority of the Shares
outstanding and entitled to vote in respect thereto.
12. (a) Subject to the provisions of the 1940 Act, any Trustee,
officer or employee, individually, or any partnership of which any
Trustee, officer or employee may be a member, or any corporation or
association of which any Trustee, officer or employee may be an officer,
partner, director, trustee, employee or stockholder, or otherwise may have
an interest, may be a party to, or may be pecuniarily or otherwise
interested in, any contract or transaction of the Trust, and in the
absence of fraud no contract or other transaction shall be hereby affected
or invalidated; provided that in such case a Trustee, officer or employee
or a partnership, corporation or association of which a Trustee, officer
or employee is a member, officer, director, trustee, employee or
stockholder is so interested, such fact shall be disclosed or shall have
been known to the Trustees including those Trustees who are not so
interested and who are neither "interested" nor "affiliated" persons as
those terms are defined in the 1940 Act, or a majority thereof; and any
Trustee who is so interested, or who is also a director, officer, partner,
trustee, employee or stockholder of such other corporation or a member of
such partnership or association which is so interested, may be counted in
determining the existence of a quorum at any meeting of the Trustees which
shall authorize any such contract or transaction, and may vote thereat to
authorize any such contract or or transaction, with like force and effect
as if he were not so interested.
(b) Specifically, but without limitation of the foregoing, the
Trust may enter into a management or investment advisory contract or
underwriting contract and other contracts with, and may otherwise do
business with any manager or investment adviser for the Trust and/or
principal underwriter of the Shares of the Trust or any subsidiary or
affiliate of any such manager or investment adviser and/or principal
underwriter and may permit any such firm or corporation to enter into any
contracts or other arrangements with any other firm or corporation
relating to the Trust notwithstanding that the Trustee of the Trust may
be composed in part of partners, directors, officers or employees of any
such firm or corporation, and officers of the Trust may have been or may
be or become partners, directors, officers or employees of any such firm
or corporation, and in the absence of fraud the Trust and any such firm
or corporation may deal freely with each other, and no such contract or
transaction between the Trust and any such firm or corporation shall be
invalidated or in any way affected thereby, nor shall any Trustee or
officer of the Trust be liable to the Trust or to any Shareholder or
creditor thereof or to any other person for any loss incurred by it or him
solely because of the existence of any such contract or transaction;
provided that nothing herein shall protect any director or officer of the
Trust against any liability to the trust or to its security holders to
which he would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in
the conduct of his office.
(c) As used in this paragraph the following terms shall have
the meanings set forth below:
(i) the term "indemnitee" shall mean any present or former
Trustee, officer or employee of the Trust, any present or former Trustee,
partner, Director or officer of another trust, partnership, corporation
or association whose securities are or were owned by the Trust or of which
the Trust is or was a creditor and who served or serves in such capacity
at the request of the Trust, and the heirs, executors, administrators,
successors and assigns of any of the foregoing; however, whenever conduct
by an indemnitee is referred to, the conduct shall be that of the original
indemnitee rather than that of the heir, executor, administrator,
successor or assignee;
(ii) the term "covered proceeding" shall mean any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, to which an indemnitee
is or was a party or is threatened to be made a party by reason of the
fact or facts under which he or it is an indemnitee as defined above;
(iii) the term "disabling conduct" shall mean willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office in question;
(iv) the term "covered expenses" shall mean expenses
(including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by an indemnitee in connection
with a covered proceeding; and
(v) the term "adjudication of liability" shall mean, as
to any covered proceeding and as to any indemnitee, an adverse
determination as to the indemnitee whether by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent.
(d) The Trust shall not indemnify any indemnitee for any
covered expenses in any covered proceeding if there has been an
adjudication of liability against such indemnitee expressly based on a
finding of disabling conduct.
(e) Except as set forth in paragraph (d) above, the Trust shall
indemnify any indemnitee for covered expenses in any covered proceeding,
whether or not there is an adjudication of liability as to such
indemnitee, such indemnification by the Trust to be to the fullest extent
now or hereafter permitted by any applicable law unless the By-laws limit
or restrict the indemnification to which any indemnitee may be entitled.
The Board of Trustees may adopt bylaw provisions to implement sub-
paragraphs (c), (d) and (e) hereof.
(f) Nothing herein shall be deemed to affect the right of the
Trust and/or any indemnitee to acquire and pay for any insurance covering
any or all indemnitees to the extent permitted by applicable law or to
affect any other indemnification rights to which any indemnitee may be
entitled to the extent permitted by applicable law. Such rights to
indemnification shall not, except as otherwise provided by law, be deemed
exclusive of any other rights to which such indemnitee may be entitled
under any statute, By-Law, contract or otherwise.
13. For purposes of the computation of net asset value, as in this
Declaration of Trust referred to, the following rules shall apply:
(a) The net asset value per Share of any Series, as of the time
of valuation on any day, shall be the quotient obtained by dividing the
value, as at such time, of the net assets of that Series (i.e., the value
of the assets of that Series less its liabilities exclusive of its
surplus) by the total number of Shares of that Series outstanding at such
time. The assets and liabilities of any Series shall be determined in
accordance with generally accepted accounting principles; provided,
however, that in determining the liabilities of any Series there shall be
included such reserves as may be authorized or approved by the Trustees,
and provided further that in connection with the accrual of any fee or
refund payable to or by an investment adviser of the Trust for such
Series, the amount of which accrual is not definitely determinable as of
any time at which the net asset value of each Share of that Series is
being determined due to the contingent nature of such fee or refund, the
Trustees are authorized to establish from time to time formulae for such
accrual, on the basis of the contingencies in question to the date of such
determination, or on such other basis as the Trustees may establish.
(ii) Shares of a Series to be issued shall be deemed to be
outstanding as of the time of the determination of the net asset value per
Share applicable to such issuance and the net price thereof shall be
deemed to be an asset of that Series;
(ii) Shares of a Series to be redeemed by the Trust shall
be deemed to be outstanding until the time of the determination of the net
asset value applicable to such redemption and thereupon and until paid the
redemption price thereof shall be deemed to be a liability of that Series;
and
(iii) Shares of a Series voluntarily purchased or
contracted to be purchased by the Trust pursuant to the provisions of
paragraph 4 of Article FIFTH shall be deemed to be outstanding until
whichever is the later of (i) the time of the making of such purchase or
contract of purchase, and (ii) the time of which the purchase price is
determined, and thereupon and until paid, the purchase price thereof shall
be deemed to be a liability of that Series.
(b) The Trustees are empowered, in their absolute discretion,
to establish bases or times, or both, for determining the net asset value
per Share of any Series in accordance with the 1940 Act and to authorize
the voluntary purchase by any Series, either directly or through an agent,
of Shares of any Series upon such terms and conditions and for such
consideration as the Trustees shall deem advisable in accordance with the
1940 Act.
14. Payment of the net asset value per Share of any Series properly
surrendered to it for redemption shall be made by the Trust within seven
days, or as specified in any applicable law or regulation, after tender
of such stock or request for redemption to the Trust for such purpose plus
any period of time during which the right of the holders of the shares of
that Series to require the Trust to redeem such shares has been suspended.
Any such payment may be made in portfolio securities of that Series and/or
in cash, as the Trustees shall deem advisable, and no Shareholder shall
have a right, other than as determined by the Trustees, to have his Shares
redeemed in kind.
15. The Trust shall have the right, at any time and without prior
notice to the Shareholder, to redeem Shares of the Series held by such
Shareholder held in any account registered in the name of such Shareholder
for its current net asset value, if and to the extent that such redemption
is necessary to reimburse either that Series of the Trust or the
distributor (i.e., principal underwriter) of the Shares for any loss
either has sustained by reason of the failure of such Shareholder to make
timely and good payment for Shares purchased or subscribed for by such
Shareholder, regardless of whether such Shareholder was a Shareholder at
the time of such purchase or subscription; subject to and upon such terms
and conditions as the Trustees may from time to time prescribe.
EIGHTH: The name "Centennial" included in the name of the Trust and
of any Series shall be used pursuant to a royalty-free, non-exclusive
license from Centennial Capital Corporation, incidental to and as part of
an advisory, management or supervisory contract which may be entered into
by the Trust with Centennial Capital Corporation. Such license shall
allow Centennial Capital Corporation to inspect and control the nature and
quality of services offered by the Trust under such name. The license may
be terminated by Centennial Capital Corporation upon termination of such
advisory management or supervisory contract or without cause upon 60 days'
written notice, in which case neither the Trust nor any Series shall have
any further right to use the name "Centennial" in its name or otherwise
and the Trust, the Shareholders and its officers and Trustees shall
promptly take whatever action may be necessary to change its name
accordingly.
NINTH:
1. In case any Shareholder or former Shareholder shall be held to
be personally liable solely by reason of his being or having been a
Shareholder and not because of his acts or omissions or for some other
reason, the Shareholder or former Shareholder (or the Shareholders, heirs,
executors, administrators or other legal representatives or in the case
of a corporation or other entity, its corporate or other general
successor) shall be entitled out of the Trust estate to be held harmless
from and indemnified against all loss and expense arising from such
liability. The Trust shall, upon request by the Shareholder, assume the
defense of any such claim made against any Shareholder for any act or
obligation of the Trust and satisfy any judgment thereon.
2. It is hereby expressly declared that a trust and not a
partnership is created hereby. No individual Trustee hereunder shall have
any power to bind the Trust, the Trust's officers or any Shareholder. All
persons extending credit to, doing business with, contracting with or
having or asserting any claim against the Trust or the Trustees shall look
only to the assets of the Trust for payment under any such credit,
transaction, contract or claim; and neither the Shareholders nor the
Trustees, nor any of their agents, whether past, present or future, shall
be personally liable therefor; notice of such disclaimer shall be given
in each agreement, obligation or instrument entered into or executed by
the Trust or the Trustees. Nothing in this Declaration of Trust shall
protect a Trustee against any liability to which such Trustee would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
the office of Trustee hereunder.
3. The exercise by the Trustees of their powers and discretion
hereunder in good faith and with reasonable care under the circumstances
then prevailing, shall be binding upon everyone interested. Subject to
the provisions of paragraph 2 of this Article NINTH, the Trustees shall
not be liable for errors of judgment or mistakes of fact or law. The
Trustees may take advice of counsel or other experts with respect to the
meaning and operations of this Declaration of Trust, applicable laws,
contracts, obligations, transactions or any other business the Trust may
enter into, and subject to the provisions of paragraph 2 of this Article
NINTH, shall be under no liability for any act or omission in accordance
with such advice or for failing to follow such advice. The Trustees shall
not be required to give any bond as such, nor any surety if a bond is
required.
4. This Trust shall continue without limitation of time but subject
to the provisions of sub-sections (a), (b), (c) and (d) of this paragraph
4.
(a) The Trustees, with the favorable vote of the holders of a
majority of the outstanding voting securities, as defined in the 1940 Act,
of any one or more Series entitled to vote, may sell and convey the assets
of that Series (which sale may be subject to the retention of assets for
the payment of liabilities and expenses) to another issuer for a
consideration which may be or include securities of such issuer. Upon
making provision for the payment of liabilities, by assumption by such
issuer or otherwise, the Trustees shall distribute the remaining proceeds
ratably among the holders of the outstanding Shares of the Series the
assets of which have been so transferred.
(b) The Trustees, with the favorable vote of the holders of
a majority of the outstanding voting securities, as defined in the 1940
Act, of any one or more Series entitled to vote, may at any time sell and
convert into money all the assets of that Series. Upon making provisions
for the payment of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of that Series, the Trustees shall
distribute the remaining assets of that Series ratably among the holders
of the outstanding Shares of that Series.
(c) The Trustees, with the favorable vote of the holders of a
majority of the outstanding voting securities, as defined in the 1940 Act,
of any one or more Series entitled to vote, may otherwise alter, convert
or transfer the assets of that Series or those Series.
(d) Upon completion of the distribution of the remaining
proceeds or the remaining assets as provided in sub-sections (a) and (b),
and in subsection (c) where applicable, the Series the assets of which
have been so transferred shall terminate, and if all the assets of the
Trust have been so transferred, the Trust shall terminate and the Trustees
shall be discharged of any and all further liabilities and duties
hereunder and the right, title and interest of all parties shall be
cancelled and discharged.
5. The original or a copy of this instrument and of each restated
declaration of trust or instrument supplemental hereto shall be kept at
the office of the Trust where it may be inspected by any Shareholder. A
copy of this instrument and of each supplemental or restated declaration
of trust shall be filed with the Secretary of the Commonwealth of
Massachusetts, as well as any other governmental office where such filing
may from time to time be required. Anyone dealing with the Trust may rely
on a certificate by an officer of the Trust as to whether or not any such
supplemental or restated declarations of trust have been made and as to
any matters in connection with the Trust hereunder, and, with the same
effect as if it were the original, may rely on a copy certified by an
officer of the Trust to be a copy of this instrument or of any such
supplemental or restated declaration of trust. In this instrument or in
any such supplemental or restated declaration of trust, references to this
instrument, and all expressions like "herein", "hereof" and "hereunder"
shall be deemed to refer to this instrument as amended or affected by any
such supplemental or restated declaration of trust. This instrument may
be executed in any number of counterparts, each of which shall be deemed
as original.
6. The Trust set forth in this instrument is created under and is
to be governed by and construed and administered according to the laws of
the Commonwealth of Massachusetts. The Trust shall be of the type
commonly called a Massachusetts business trust, and without limiting the
provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust.
7. The Board of Trustees is empowered to cause the redemption of
the Shares held in any account if the aggregate net asset value of such
Shares (taken at cost or value, as determined by the Board) has been
reduced to $200 or less upon such notice to the shareholder in question,
with such permission to increase the investment in question and upon such
other terms and conditions as may be fixed by the Board of Trustees in
accordance with the 1940 Act.
8. In the event that any person advances the organizational
expenses of the Trust, such advances shall become an obligation of the
Trust subject to such terms and conditions as may be fixed by, and on a
date fixed by, or determined with criteria fixed by the Board of Trustees,
to be amortized over a period or periods to be fixed by the Board.
9. Whenever any action is taken under this Declaration of Trust
including action which is required or permitted by the 1940 Act or any
other applicable law, such action shall be deemed to have been properly
taken if such action is in accordance with the construction of the 1940
Act or such other applicable law then in effect as expressed in "no
action" letters of the staff of the Commission or any release, rule,
regulation or order under the 1940 Act or any decision of a court of
competent jurisdiction, notwithstanding that any of the foregoing shall
later be found to be invalid or otherwise reversed or modified by any of
the foregoing.
10. Any action which may be taken by the Board of Trustees under
this Declaration of Trust or its By-Laws may be taken by the description
thereof in the then effective prospectus and/or statement of additional
information relating to the Shares under the Securities Act of 1933 or in
any proxy statement of the Trust rather than by formal resolution of the
Board.
11. Whenever under this Declaration of Trust, the Board of Trustees
is permitted or required to place a value on assets of the Trust, such
action may be delegated by the Board, and/or determined in accordance with
a formula determined by the Board, to the extent permitted by the 1940
Act.
12. If authorized by vote of the Trustees and the favorable vote of
the holders of a majority of the outstanding voting securities, as defined
in the 1940 Act, entitled to vote, or by any larger vote which may be
required by applicable law in any particular case, the Trustees shall
amend or otherwise supplement this instrument, by making a Restated
Declaration of Trust or a Declaration of Trust supplemental hereto, which
thereafter shall form a part hereof; any such Supplemental or Restated
Declaration of Trust may be executed by and on behalf of the Trust and the
Trustees by an officer or Officers of the Trust.
IN WITNESS WHEREOF, the undersigned have executed this instrument as
of the 7th day of August, 1989.
/s/ William A. Baker /s/ Charles Conrad, Jr.
- -------------------------------- ---------------------------------
William A Baker, Trustee Charles Conrad, Jr., Trustee
197 Desert Lakes Drive 921 Delvin Drive
Palm Springs, California 92264 St. Louis, Missouri 63145
/s/ Ned M. Steel /s/ Robert M. Kirchner
- -------------------------------- ---------------------------------
Ned M. Steel, Trustee Robert M. Kirchner, Trustee
3236 S. Steele Street 2800 S. University Boulevard
Denver, Colorado Denver, Colorado 80210
/s/ James C. Swain /s/ Joseph A. Uhl
- -------------------------------- ---------------------------------
James C. Swain, Trustee Joseph A. Uhl, Trustee
14115 W. 59th Place 20 Crestmoor Drive
Arvada, California 80004 Denver, Colorado 80220
/s/ C. Howard Kast,
- -------------------------------
C. Howard Kast, Trustee
2552 East Alameda
Denver, Colorado 80209
<PAGE>
Exhibit 24(b)(2)
CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
BY-LAWS
(as amended through June 26, 1990)
ARTICLE I
SHAREHOLDERS
Section 1. Place of Meeting. All meetings of the Shareholders
(which terms as used herein shall, together with all other terms defined
in the Declaration of Trust, have the same meaning as in the Declaration
of Trust) shall be held at the principal office of the Trust or at such
other place as may from time to time be designated by the Board of
Trustees and stated in the notice of meting.
Section 2. Shareholder Meetings. Meetings of the Shareholders for
any purpose or purposes may be called by the Chairman of the Board of
Trustees, if any, or by the President or by the Board of Trustees and
shall be called by the Secretary upon receipt of the request in writing
signed by Shareholders holding not less than one third of the entire
number of Shares issued and outstanding and entitled to vote thereat.
Such request shall state the purpose or purposes of the proposed meeting.
In addition, meetings of the Shareholders shall be called by the Board of
Trustees upon receipt of the request in writing signed by Shareholders
that hold not less than ten percent of the entire number of Shares issued
and outstanding and entitled to vote thereat, stating that the purpose of
the proposed meeting is the removal of a Trustee.
Section 3. Notice of Meetings of Shareholders. Not less than ten
days' and not more than 120 days' written notice of every meeting of
Shareholders, stating the time and place thereof (and the general nature
of the business proposed to be transacted at any special or extraordinary
meeting), shall be given to each Shareholder entitled to vote thereat by
leaving the same with him or at his residence or usual place of business
or by mailing it, postage prepaid and addressed to him at his address as
it appears upon the books of the Trust.
No notice of the time, place or purpose of any meeting of
Shareholders need be given to any Shareholder who attends in person or by
proxy or to any Shareholder who, in writing executed and filed with the
records of the meeting, either before or after the holding thereof, waives
such notice.
Section 4. Record Dates. The Board of Trustees may fix, in advance
or from time to time, a record date not exceeding 120 days and not less
than 10 days preceding the date of any meeting of Shareholders or any
Series for the determination of the Shareholders of record entitled to
notice of and to vote at a Shareholders' meeting; for the determination
of shareholders entitled to receive dividends, distributions, rights or
allotments of rights; or for any other purpose requiring the fixing of a
record date. Only Shareholders of record on such date shall be entitled
to notice of and to vote at such meeting, receive such dividends, rights
or allotments, or otherwise participate as the case may be.
Section 5. Access to Shareholder List. The Board of Trustees
shall make available a list of the names and addresses of all shareholders
as recorded on the books of the Trust, upon receipt of the request in
writing signed by not less than ten Shareholders (who have been such for
at least 6 months) holding Shares of the Trust valued at $25,000 or more
at current offering price (as defined in the Trust's Prospectus) or
holding not less than one percent in amount of the entire number of shares
of the Trust issued and outstanding; such request must state that such
Shareholders wish to communicate with other Shareholders with a view to
obtaining signatures to a request for a meeting to remove one or more
trustees pursuant to Section 2 of Article I and Section 2 of Article II
of these By-Laws and be accompanied by a form of communication to the
Shareholders. The Board of Trustees may, in its discretion, satisfy its
obligation under this Section 5 by either, as required by Section 16(c)
of the Investment Company Act, making available the Shareholder List to
such Shareholders at the principal offices of the Trust, or at the offices
of the Trust's transfer agent, during regular business hours, or by
mailing a copy of such Shareholders' proposed communication and form of
request, at their expense, to all other Shareholders. Notwithstanding the
foregoing, the Board of Trustees may also take such other action as may
be permitted under Section 16(c) of the Investment Company Act.
Section 6. Quorum, Adjournment of Meetings. The presence in person
or by proxy of the holders of record of more than one-third of the Shares,
or of the shares of any Series, of the Trust issued and outstanding and
entitled to vote thereat, shall constitute a quorum, respectively, at all
meetings of the Shareholders; provided, however, that if any action to be
taken by the Shareholders or by a Series at a meeting requires an
affirmative vote of a majority, or more than a majority, of the shares
outstanding and entitled to vote, then in such event the presence in
person or by proxy of the holders of a majority of the shares outstanding
and entitled to vote at such a meeting shall constitute a quorum for all
purposes. At a meeting at which a quorum is present, a vote of a majority
of the quorum shall be sufficient to transact all business at the meeting.
If at any meeting of the Shareholders there shall be less than a quorum
present, the Shareholders or Trustees present at such meeting may, without
further notice, adjourn the same from time to time until a quorum shall
attend, but no business shall be transacted at any such adjourned meeting
except such as might have been lawfully transacted had the meeting not
been adjourned.
Section 7. Voting and Inspectors. At all meetings of Shareholders,
each Shareholder shall be entitled to one vote on each matter submitted
to a vote of the Shareholders of the affected Series for each Share
standing in his name on the books of the Trust on the date fixed for
determination of Shareholders of the affected Series entitled to vote at
such meeting (except, if the Board so determines, for Shares redeemed
prior to the meeting), and each such Series shall vote as an individual
class ("Individual Class Voting"); a Series shall be deemed to be affected
when a vote of the holders of that Series on a matter is required by the
Investment Company Act of 1940; provided, however, that as to any matter
with respect to which a vote of Shareholders is required by the Investment
Company Act of 1940 or by any applicable law that must be complied with,
such requirements as to a vote by Shareholders shall apply in lieu of
Individual Class Voting as described above. Any fractional Share shall
carry proportionately all the rights of a whole Share, including the right
to vote and the right to receive dividends. Any Shareholder thus
entitled to vote at any such meeting of Shareholders shall be entitled to
vote either in person or by proxy appointed by instrument in writing
subscribed by such Shareholder or his duly authorized attorney-in-fact.
All elections of Trustees shall be had by a plurality of the votes
cast and all questions shall be decided by a majority of the votes cast,
in each case at a duly constituted meeting, except as otherwise provided
in the Declaration of Trust or in these By-Laws or by specific statutory
provision superseding the restrictions and limitations contained in the
Declaration of Trust or in these By-Laws.
At any election of Trustees, the Board of Trustees prior thereto may,
or, if they have not so acted, the Chairman of the meeting may, and upon
the request of the holders of ten percent (10%) of the Shares entitled to
vote at such election shall, appoint two inspectors of election who shall
first subscribe an oath or affirmation to execute faithfully the duties
of inspectors at such election with strict impartiality and according to
the best of their ability, and shall after the election make a certificate
of the result of the vote taken. No candidate for the office of Trustee
shall be appointed such Inspector.
The Chairman of the meeting may cause a vote by ballot to be taken
upon any election or matter, and such vote shall be taken upon the request
of the holders of ten percent (10%) of the Shares entitled to vote on such
election or matter.
Section 8. Conduct of Shareholders' Meetings. The meetings of the
Shareholders shall be presided over by the Chairman of the Board of
Trustees, if any, or if he shall not be present, by the President, or if
he shall not be present, by a Vice-President, or if none of the Chairman
of the Board of Trustees, the President or any Vice-President is present,
by a chairman to be elected at the meeting. The Secretary of the Trust,
if present, shall act as Secretary of such meetings, or if he is not
present, an Assistant Secretary shall so act, or if neither the Secretary
nor an Assistant Secretary is present, than the meeting shall elect its
secretary.
Section 9. Concerning Validity of Proxies, Ballots, Etc. At every
meeting of the Shareholders, all proxies shall be received and taken in
charge of and all ballots shall be received and canvassed by the secretary
of the meeting, who shall decide all questions touching the qualification
of voters, the validity of the proxies, and the acceptance or rejection
of votes, unless inspectors of election shall have been appointed as
provided in Section 7, in which event such inspectors of election shall
decide all such questions.
ARTICLE II
BOARD OF TRUSTEES
Section 1. Number and Tenure of Office. The business and affairs
of the Trust shall be conducted and managed by a Board of Trustees
consisting of the number of initial Trustees, which number may be
increased or decreased as provided in Section 2 of this Article. Each
Trustee shall, except as otherwise provided herein, hold office until the
next meeting of Shareholders of the Trust following his election called
for the purpose of electing Trustees or until his successor is duly
elected and qualifies. Trustees need not be Shareholders.
Section 2. Increase or Decrease in Number of Trustees; Removal. The
Board of Trustees, by the vote of a majority of the entire Board, may
increase the number of Trustees to a number not exceeding fifteen, and may
elect Trustees to fill the vacancies created by any such increase in the
number of Trustees until the next meeting called for the purpose of
electing Trustees or until their successors are duly elected and qualify;
the Board of Trustees, by the vote of a majority of the entire Board, may
likewise decrease the number of Trustees to a number not less than three
but the tenure of office of any Trustee shall not be affected by any such
decrease. Vacancies occurring other than by reason of any such increase
shall be filled by a vote of a majority of the entire Board then sitting.
In the event that after the proxy material has been printed for a meeting
of Shareholders at which Trustees are to be elected and any one or more
nominees named in such proxy material should die, become incapacitated or
fail to stand for election, the authorized number of Trustees shall be
automatically reduced by the number of such nominees, unless the Board of
Trustees prior to the meeting shall otherwise determine.
A Trustee at any time may be removed either with or without cause by
resolution duly adopted by the affirmative votes of the holders of not
less than two-thirds of the outstanding Shares of the Trust, present in
person or by proxy at any meeting of Shareholders at which such vote may
be taken, provided that a quorum is present. Any Trustee at any time may
be removed for cause by resolution duly adopted at any meeting of the
Board of Trustees provided that notice thereof is contained in the notice
of such meeting and that such resolution is adopted by the vote of at
least two thirds of the Trustees whose removal is not proposed. As used
herein, "for cause" shall mean any cause which under Massachusetts law
would permit the removal of a Trustee of a business trust.
Section 3. Place of Meeting. The Trustees may hold their meetings,
have one or more offices, and keep the books of the Trust outside
Massachusetts, at any office or offices of the Trust or at any other place
as they may from time to time by resolution determine, or, in the case of
meetings, as they may from time to time by resolution determine or as
shall be specified or fixed in the respective notices or waivers of notice
thereof.
Section 4. Regular Meetings. Regular meetings of the Board of
Trustees shall be held at such time and on such notice, if any, as the
Trustees may from time to time determine.
Section 5. Special Meetings. Special meetings of the Board of
Trustees may be held from time to time upon call of the Chairman of the
Board of Trustees, if any, the President or two or more of the Trustees,
by oral, telegraphic or written notice duly served on or sent or mailed
to each Trustee not less than one day before such meeting. No notice need
be given to any Trustee who attends in person or to any Trustee who in
writing executed and filed with the records of the meeting either before
or after the holding thereof, waives such notice. Such notice or waiver
of notice need not state the purpose or purposes of such meeting.
Section 6. Quorum. A majority of the Trustees then in office shall
constitute a quorum for the transaction of business, provided that a
quorum shall in no case be less than two Trustees. If at any meeting of
the Board there shall be less than a quorum present (in person or by open
telephone line, to the extent permitted by the Investment Company Act of
1940 (the "1940 Act")), a majority of those present may adjourn the
meeting from time to time until a quorum shall have been obtained. The
act of the majority of the Trustees present at any meeting at which there
is a quorum shall be the act of the Board, except as may be otherwise
specifically provided by statute, by the Declaration of Trust or by these
By-Laws.
Section 7. Executive Committee. The Board of Trustees may, by the
affirmative vote of a majority of the entire Board, elect from the
Trustees an Executive Committee to consist of such number of Trustees (but
not less than two) as the Board may from time to time determine. The Board
of Trustees by such affirmative vote shall have power at any time to
change the members of such Committee and may fill vacancies in the
Committee by election from the Trustees. When the Board of Trustees is
not in session, the Executive Committee shall have and may exercise any
or all of the powers of the Board of Trustees in the management of the
business and affairs of the Trust (including the power to authorize the
seal of the Trust to be affixed to all papers which may require it) except
as provided by law and except the power to increase or decrease the size
of, or fill vacancies on, the Board. The Executive Committee may fix its
own rules of procedure, and may meet, when and as provided by such rules
or by resolution of the Board of Trustees, but in every case the presence
of a majority shall be necessary to constitute a quorum. In the absence
of any member of the Executive Committee, the members thereof present at
any meeting, whether or not they constitute a quorum, may appoint a member
of the Board of Trustees to act in the place of such absent member.
Section 8. Other Committees. The Board of Trustees, by the
affirmative vote of a majority of the entire Board, may appoint other
committees which shall in each case consist of such number of members of
the Board (not less than two) and shall have and may exercise such powers
as the Board may determine in the resolution appointing them. A majority
of all members of any such committee may determine its action, and fix the
time and place of its meetings, unless the Board of Trustees shall
otherwise provide. The Board of Trustees shall have power at any time to
change the members and powers of any such committee, to fill vacancies,
and to discharge any such committee.
Section 9. Informal Action by and Telephone Meetings of Trustees and
Committees. Any action required or permitted to be taken at any meeting
of the Board of Trustees or any committee thereof may be taken without a
meeting, if a written consent to such action is signed by all members of
the Board, or of such committee, as the case may be. Trustees or members
of a committee of the Board of Trustees may participate in a meeting by
means of a conference telephone or similar communications equipment; such
participation shall, except as otherwise required by the 1940 Act, have
the same effect as presence in person.
Section 10. Compensation of Trustees and Committee Members.
Trustees and members of the Committees appointed by the Board shall be
entitled to receive such compensation from the Trust for their services
as may from time to time be voted by the Board of Trustees.
Section 11. Dividends. Dividends or distributions payable on the
Shares of any Series of the Trust may, but need not be, declared by
specific resolution of the Board as to each dividend or distribution; in
lieu of such specific resolutions, the Board may, by general resolution,
determine the method of computation thereof, the method of determining the
Shareholders of the Series to which they are payable and the methods of
determining whether and to which Shareholders they are to be paid in cash
or in additional Shares.
Section 12. Indemnification. Before an indemnitee shall be
indemnified by the Trust, there shall be a reasonable determination upon
review of the facts that the person to be indemnified was not liable by
reason of disabling conduct as defined in the Declaration of Trust. Such
determination may be made either by vote of a majority of a quorum of the
Board who are neither "interested persons" of the Trust or the investment
adviser nor parties to the proceeding or by independent legal counsel.
The Trust may advance attorneys' fees and expenses incurred in a covered
proceeding to the indemnitee if the indemnitee undertakes to repay the
advance unless it is determined that he is entitled to indemnification
under the Declaration of Trust. Also at least one of the following
conditions must be satisfied: (1) the indemnitee provides security for his
undertaking, or (2) the Trust is insured against losses arising by reason
of lawful advances, or (3) a majority of the disinterested nonparty
Trustees or independent legal counsel in a written opinion shall
determine, based upon review of all of the facts, that there is reason to
believe that the indemnitee will ultimately be found entitled to
indemnification.
ARTICLE III
OFFICERS
Section 1. Executive Officers. The executive officers of the Trust
shall include a Chairman of the Board of Trustees, a President, one or
more Vice-Presidents (the number thereof to be determined by the Board of
Trustees), a Secretary and a Treasurer. The Chairman of the Board and the
President shall be selected from among the Trustees. The Board of
Trustees may also in its discretion appoint Assistant Secretaries,
Assistant Treasurers, and other officers, agents and employees, who shall
have authority and perform such duties as the Board or the Executive
Committee may determine. The Board of Trustees may fill any vacancy which
may occur in any office. Any two offices, except those of Chairman of the
Board and Secretary and President and Secretary, may be held by the same
person, but no officer shall execute, acknowledge or verify any instrument
in more than one capacity, if such instrument is required by law or these
By-Laws to be executed, acknowledged or verified by two or more officers.
Section 2. Term of Office. The term of office of all officers shall
be until their respective successors are chosen and qualify; however, any
officer may be removed from office at any time with or without cause by
the vote of a majority of the entire Board of Trustees.
Section 3. Powers and Duties. The officers of the Trust shall have
such powers and duties as generally pertain to their respective offices,
as well as such powers and duties as may from time to time be conferred
by the Board of Trustees or the Executive Committee. Unless otherwise
ordered by the Board of Trustees, the Chairman of the Board shall be the
Chief Executive Officer.
ARTICLE IV
SHARES
Section 1. Share Certificates. Each Shareholder of any Series of
the Trust may be issued a certificate or certificates for his Shares of
that Series, in such form as the Board of Trustees may from time to time
prescribe, but only if and to the extent and on the conditions described
by the Board. Except as a Shareholder may be given the right by the
Trust's Registration Statement to have a certificate issued to him, all
of the Shares of the Trust or any Series shall be issued without
certificates.
Section 2. Transfer of Shares. Shares of any Series shall be
transferable on the books of the Trust by the holder thereof in person or
by his duly authorized attorney or legal representative, upon surrender
and cancellation of certificates, if any, for the same number of Shares
of that Series, duly endorsed or accompanied by proper instruments of
assignment and transfer, with such proof of the authenticity of the
signature as the Trust or its agent may reasonably require; in the case
of shares not represented by certificates, the same or similar
requirements may be imposed by the Board of Trustees.
Section 3. Share Ledgers. The share ledgers of the Trust,
containing the name and address of the Shareholders of each Series of the
Trust and the number of shares of that Series, held by them respectively,
shall be kept at the principal offices of the Fund or, if the Trust
employs a transfer agent, at the offices of the transfer agent of the
Trust.
Section 4. Lost, Stolen or Destroyed Certificates. The Board of
Trustees may determine the conditions upon which a new certificate may be
issued in place of a certificate which is alleged to have been lost,
stolen or destroyed; and may, in their discretion, require the owner of
such certificate or his legal representative to give bond, with sufficient
surety to the Trust and the transfer agent, if any, to indemnify it and
such transfer agent against any and all loss or claims which may arise by
reason of the issue of a new certificate in the place of the one so lost,
stolen or destroyed.
ARTICLE V
SEAL
The Board of Trustees shall provide a suitable seal of the Trust, in
such form and bearing such inscriptions as it may determine.
ARTICLE VI
FISCAL YEAR
The fiscal year of the Trust shall be fixed by the Board of Trustees.
ARTICLE VII
AMENDMENT OF BY-LAWS
The By-Laws of the Trust may be altered, amended, added to or
repealed by the Shareholders or by majority vote of the entire Board of
Trustees, but any such alteration, amendment, addition or repeal of the
By-Laws by action of the Board of Trustees may be altered or repealed by
the Shareholders.
<PAGE>
Exhibit 24(b)4
CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-5/16" x 10-5/8" decorative border, 5/16" wide)
(upper left corner, box with heading: NUMBER [of shares]
(upper right corner) [share certificate no.]
(upper right box with heading: SHARES
below cert. no.)
(centered
below boxes) Centennial California Tax Exempt Trust
A MASSACHUSETTS BUSINESS TRUST
(at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
(box with number)
CUSIP 15133P 102
(at left) is the owner of
(centered) FULLY PAID SHARES OF BENEFICIAL INTEREST OF
CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
(hereinafter called the "Trust"), transferable only on the
books of the Trust by the holder hereof in person or by
duly authorized attorney, upon surrender of this
certificate properly endorsed. This certificate and the
shares represented hereby are issued and shall be held
subject to all of the provisions of the Declaration of
Trust of the Trust to all of which the holder by
acceptance hereof assents. This certificate is not valid
until countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Trust and the signatures
of its duly authorized officers.
(signature Dated: (signature
at left of seal) at right of seal)
--------------------- -----------------
SECRETARY PRESIDENT
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
SEAL
1989
COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed
vertically) Countersigned
SHAREHOLDER SERVICES, INC.
Denver (CO) Transfer Agent
By---------------------------------
Authorized Signature
II. BACK OF CERTIFICATE (text reads from top to bottom of 11"
dimension)
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out
in full according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA ___________________
(State)
Additional abbreviations may also be used though not in the above list.
For Value Received ................ hereby sell(s), assign(s), and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)
- -----------------------------------------------------------------------
(Please print or type name and address of assignee)
- -----------------------------------------------------------------------
- -------------------------------------------------------- Shares of
beneficial interest represented by the within Certificate, and do hereby
irrevocably constitute and appoint ___________________ Attorney to
transfer the said shares on the books of the within named Trust with full
power of substitution in the premises.
Dated: ----------------------
Signed: --------------------------------
----------------------------------------
(Both must sign if joint owners)
Signature(s) ---------------------------
guaranteed Name of Guarantor
by: ------------------------------------
Signature of Officer/Title
(text printed NOTICE: The signature(s) to this assignment must
vertically to right correspond with the name(s) as written upon the
of above paragraph) face of the certificate in every particular
without alteration or enlargement or any change
whatever.
(text printed in Signatures must be guaranteed by a financial
box to left of institution of the type described in the
signature(s)) current prospectus of the Fund.
PLEASE NOTE: This document contains CENTENNIAL
a watermark when viewed at an angle. ASSET MANAGEMENT CORPORATION
It is invalid without this watermark:
- -------------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE>
Exhibit 24(b)(5)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 22nd day of October, 1990, by and between
CENTENNIAL CALIFORNIA TAX EXEMPT TRUST (hereinafter referred to as the
"Trust"), and CENTENNIAL ASSET MANAGEMENT CORPORATION (hereinafter
referred to as "Centennial").
WHEREAS, the Trust is an open-end, non-diversified management
investment company registered as such with the Securities and Exchange
Commission (the "Commission") pursuant to the Investment Company Act of
1940 (the "Investment Company Act"), and Centennial is a registered
investment adviser;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, it is agreed by and between the parties, as
follows:
1. General Provision.
The Trust hereby employs Centennial and Centennial hereby undertakes
to act as the investment adviser of the Trust and to perform for the Trust
such other duties and functions as are hereinafter set forth. Centennial
shall, in all matters, give to the Trust and the Trust's Board of Trustees
the benefit of its best judgment, effort, advice and recommendations and
shall, at all times conform to, and use its best efforts to enable the
Trust to conform to (i) the provisions of the Investment Company Act and
any rules or regulations thereunder; (ii) any other applicable provisions
of state or federal law; (iii) the provisions of the Declaration of Trust
and By-Laws of the Trust as amended from time to time; (iv) policies and
determinations of the Board of Trustees of the Trust; (v) the fundamental
policies and investment restrictions of the Trust as reflected in the
Trust's registration statement under the Investment Company Act or as such
policies may, from time to time, be amended by the Trust's shareholders;
and (vi) the Prospectus and Statement of Additional Information of the
Trust in effect from time to time. The appropriate officers and employees
of Centennial shall be available upon reasonable notice for consultation
with any of the Trustees and officers of the Trust with respect to any
matters dealing with the business and affairs of the Trust including the
valuation of portfolio securities of the Trust which securities are either
not registered for public sale or not traded on any securities market.
2. Investment Management.
(a) Centennial shall, subject to the direction and control by the
Trust's Board of Trustees, (i) regularly provide investment advice and
recommendations to the Trust with respect to its investments, investment
policies and the purchase and sale of securities; (ii) supervise
continuously the investment program of the Trust and the composition of
its portfolio and determine what securities shall be purchased or sold by
the Trust; and (iii) arrange, subject to the provisions of paragraph 7
hereof, for the purchase of securities and other investments for the Trust
and the sale of securities and other investments held in the portfolio of
the Trust.
(b) Provided that the Trust shall not be required to pay any
compensation other than as provided by the terms of this Agreement and
subject to the provisions of paragraph 7 hereof, Centennial may obtain
investment information, research or assistance from any other person, firm
or corporation to supplement, update or otherwise improve its investment
management services.
(c) Provided that nothing herein shall be deemed to protect
Centennial from willful misfeasance, bad faith or gross negligence in the
performance of its duties, or reckless disregard of its obligations and
duties under this Agreement, Centennial shall not be liable for any loss
sustained by reason of good faith errors or omissions in connection with
any matters to which this Agreement relates.
(d) Nothing in this Agreement shall prevent Centennial or any
officer thereof from acting as investment adviser for any other person,
firm or corporation and shall not in any way limit or restrict Centennial
or any of its directors, officers, stockholders or employees from buying,
selling or trading any securities for its or their own account or for the
account of others for whom it or they may be acting, provided that such
activities will not adversely affect or otherwise impair the performance
by Centennial of its duties and obligations under this Agreement.
3. Other Duties of Centennial.
Centennial shall, at its own expense, provide and supervise the
activities of all administrative and clerical personnel as shall be
required to provide effective corporate administration for the Trust,
including the compilation and maintenance of such records with respect to
its operations as may reasonably be required; the preparation and filing
of such reports with respect thereto as shall be required by the
Commission; composition of periodic reports with respect to operations of
the Trust for its shareholders; composition of proxy materials for
meetings of the Trust's shareholders, and the composition of such
registration statements as may be required by federal and state securities
laws for continuous public sale of shares of the Trust. Centennial shall,
at its own cost and expense, also provide the Trust with adequate office
space, facilities and equipment. Centennial shall, at its own expense,
provide such officers for the Trust as the Trust's Board may request.
4. Allocation of Expenses.
All other costs and expenses of the Trust not expressly assumed by
Centennial under this Agreement, shall be paid by the Trust, including,
but not limited to (i) interest and taxes; (ii) brokerage commissions;
(iii) insurance premiums for fidelity and other coverage requisite to its
operations; (iv) compensation and expenses of its trustees other than
those affiliated with Centennial; (v) legal and audit expenses; (vi)
custodian and transfer agent fees and expenses; (vii) expenses incident
to the redemption of its shares; (viii) expenses incident to the issuance
of its shares against payment therefor by or on behalf of the subscribers
thereto; (ix) fees and expenses, other than as hereinabove provided,
incident to the registration under federal securities laws of shares of
the Trust for public sale; (x) expenses of printing and mailing reports,
notices and proxy materials to shareholders of the Trust; (xi) except as
noted above, all other expenses incidental to holding meetings of the
Trust's shareholders; and (xii) such extraordinary non-recurring expenses
as may arise, including litigation, affecting the Trust and any legal
obligation which the Trust may have (on behalf of the Trust) to indemnify
its officers and trustees with respect thereto. Any officers or employees
of Centennial or any entity controlling, controlled by or under common
control with Centennial, who may also serve as officers, trustees or
employees of the Trust shall not receive any compensation from the Trust
for their services.
5. Compensation of Centennial.
The Fund agrees to pay Centennial and Centennial agrees to accept as
full compensation for the performance of all functions and duties on its
part to be performed pursuant to the provisions hereof, a fee computed on
the aggregate net asset value of the Trust as of the close of each
business day and payable monthly at the annual rate of .500% of the first
$250 million of net assets; .475% of the next $250 million of net assets;
.450% of the next $250 million of net assets; .425% of the next $250
million of net assets and .400% of net assets in excess of $1 billion.
6. Use of Name "Centennial."
Centennial hereby grants to the Trust a royalty-free, non-exclusive
license to use the name "Centennial" in the name of the Trust for the
duration of this Agreement and any extensions or renewals thereof. To the
extent necessary to protect Centennial's rights to the name "Centennial"
under applicable law, such license shall allow Centennial to inspect and,
subject to control by the Trust's Board, control the nature and quality
of services offered by the Trust under such name. Such license may, upon
termination of this Agreement, be terminated by Centennial, in which event
the Trust shall promptly take whatever action may be necessary to change
its name and discontinue any further use of the name "Centennial" in the
name of the Trust or otherwise. The name "Centennial" may be used by
Centennial in connection with any of its activities, or licensed by
Centennial to any other party.
7. Portfolio Transactions and Brokerage.
Centennial is authorized, in arranging the purchase and sale of the
Trust's portfolio securities, to employ or deal with such members of
securities or commodities exchanges, brokers or dealers (hereinafter
"broker-dealers"), as may, in its best judgment, implement the policy of
the Trust to obtain, at reasonable expense, the "best execution" (prompt
and reliable execution at the most favorable security price obtainable)
of the Trust's portfolio transactions as well as to obtain the benefit of
such investment information or research as will be of significant
assistance to the performance by Centennial of its investment management
functions.
8. Duration.
This Agreement will take effect on the date first set forth above.
Unless earlier terminated pursuant to paragraph 9 hereof, this Agreement
shall remain in effect until December 31, 1991, and thereafter will
continue in effect from year to year, so long as such continuance shall
be approved at least annually by the Trust's Board of Trustees, including
the vote of the majority of the trustees of the Trust who are not parties
to this Agreement or "interested persons" (as defined in the Investment
Company Act) of any such party, cast in person at a meeting called for the
purpose of voting on such approval, or by the holders of a "majority" (as
defined in the Investment Company Act) of the outstanding voting
securities of the Trust and by such a vote of the Trust's Board of
Trustees.
9. Termination.
This Agreement may be terminated (i) by Centennial at any time
without penalty upon giving the Trust sixty days' written notice (which
notice may be waived by the Trust); or (ii) by the Trust at any time
without penalty upon sixty days' written notice to Centennial (which
notice may be waived by Centennial) provided that such termination by the
Trust shall be directed or approved by the vote of a majority of all of
the trustees of the Trust then in office or by the vote of the holders of
a "majority" of the outstanding voting securities of the Trust (as defined
in the Investment Company Act).
10. Assignment or Amendment.
This Agreement may not be amended or the rights of Centennial
hereunder sold, transferred, pledged or otherwise in any manner encumbered
without the affirmative vote or written consent of the holders of the
"majority" of the outstanding voting securities of the Trust. This
Agreement shall automatically and immediately terminate in the event of
its "assignment."
11. Disclaimer of Shareholder Liability.
Centennial understands that the obligations of the Trust under this
Agreement are not binding upon any Trustee or shareholder of the Trust
personally, but bind only the Trust and the Trust's property. Centennial
represents that it has notice of the provisions of the Declaration of
Trust of the Trust disclaiming shareholder liability for acts or
obligations of the Trust.
12. Definitions. The terms and provisions of the Agreement shall be
interpreted and defined in a manner consistent with the provisions and
definitions of the Investment Company Act.
CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
Attest:
/s/ Mitchell Lindauer By: /s/ Michael A. Carbuto
- --------------------- ---------------------------------------
Mitchell Lindauer Michael A. Carbuto, Vice President
CENTENNIAL ASSET MANAGEMENT CORPORATION
Attest:
/s/ Mitchell Lindauer By: /s/ Katherine P. Feld
- --------------------- ----------------------------------
Mitchell Lindauer Katherine P. Feld
<PAGE>
Exhibit 24(b)(6)(b)
DEALER AGREEMENT
Between
Centennial Capital Corporation
and
To: Centennial Capital Corporation
3410 South Galena Street
P.O. Box 5061
Denver, Colorado 80231
Gentlemen:
We desire to enter into an agreement with you for the sale and
distribution of the shares of each of the open-end investment companies
of which you are, or may become, Distributor or Sub-distributor
(hereinafter collectively referred to as the "Funds" and individually as
a "Fund") and whose shares are offered to the public at an offering price
which may or may not include a sales charge (hereinafter referred to as
"Shares"). Upon acceptance of this Agreement by you, we understand that
we may offer and sell Shares, subject, however, to all of the terms and
conditions hereof and to your right, without notice, to suspend or
terminate the sale of the Shares of any one or more of the Funds.
1. We understand that the Shares will be offered and sold at the
current offering price in effect at the time the order for such Shares is
confirmed and accepted by you. All purchase requests and applications
submitted by us are subject to acceptance or rejection in your sole
discretion, and, if accepted, each purchase will be deemed to have been
consummated at your office.
2. We certify (a) that we are a member of the National Association
of Securities Dealers, Inc. ("NASD") and agree to maintain membership in
the NASD or (b) in the alternative that we are a foreign dealer not
eligible for membership in the NASD. In either case, we agree to abide
by all the rules and regulations of the Securities and Exchange Commission
and the NASD which are binding upon underwriters and dealers in the
distribution of the securities of open-end investment companies, including
without limitation, Section 26 of Article III of the NASD Rules of Fair
Practice, all of which are incorporated herein as if set forth in full.
We further agree to comply with all applicable State and Federal laws and
the rules and regulations of authorized regulatory agencies. We agree that
we will not sell or offer for sale Shares in any state or jurisdiction
where they have not been qualified for sale or if you have not advised us
in advance that such sale is exempt from such qualification requirements.
3. We will offer and sell Shares of any Fund only in accordance with
the terms and conditions of its then current Prospectus and we will make
no representations not included in said Prospectus or in any authorized
supplemental material supplied by you. We will use our best efforts in
the development and promotion of sales of Shares and agree to be
responsible for the proper instruction and training of all sales personnel
employed by us, in order that the Shares will be offered in accordance
with the terms and conditions of this Agreement and all applicable laws,
rules and regulations. We agree to hold you harmless and indemnify you,
in the event we, or any of our sales representatives, should violate any
law, rule or regulation, or any provisions of this Agreement, which
violation may result in liability to you, or any Fund; and in the event
you determine to refund any amounts paid by any investor by reason of any
such violation on our part, we shall return to you any commissions
previously paid or discounts allowed by you to us with respect to the
transaction for which the refund is made. All expenses which we incur in
connection with our activities under this Agreement shall be borne by us.
4. We understand and agree that, where applicable, the sales charge
and dealer commission relative to any sales of Fund Shares made by us will
be in an amount as set forth in the then current Prospectus of such Fund.
5. We understand that commissions, where applicable, are subject
to change by you from time to time, upon 30 days' written notice, and any
orders placed after the effective date of such change shall be subject to
the rates in effect at the time of receipt of the payment by you. Such
30 day period may be waived at your sole option in the event such change
increases the commission due us.
6. Payments for the purchase of Shares made by wire order from us
shall be made to you and received by you together with all necessary
applications and other documents required to establish an account within
five business days after the acceptance of our order or such shorter time
as may be required by law. If such payment is not received by you, we
understand that you reserve the right, without notice, forthwith to cancel
the sale, or, at your option, to sell the Shares ordered by us back to the
Fund, in which latter case we may be held responsible for any loss,
including loss of profit, suffered by you resulting from our failure to
make the aforesaid payment. Where sales of any Fund's Shares are
contingent upon the Fund's receipt of funds in payment therefor, we will
forward promptly to you any purchase orders and/or payments received by
us from investors.
7. We agree to purchase Shares only from you or from our customers.
If we purchase Shares from you, we agree that all such purchases shall be
made only to cover orders received by us from our customers, or for our
own bona fide investment. If we purchase Shares from our customers, we
agree to pay such customers not less than the applicable repurchase price
as established by the then current Fund Prospectus.
8. Unless at the time of transmitting an order we advise you to the
contrary, you may consider the order to be the total holding of the
investor and assume that the investor is not entitled to any reduction in
sales price beyond that accorded to the amount of the purchase as
determined by the schedule set forth in the then current Prospectus.
9. We understand and agree that if any Shares sold by us under the
terms of this Agreement are redeemed by any of the Funds (including
redemptions resulting from an exchange for shares of another Fund) or are
repurchased by you as agent for the Fund or are tendered to a Fund for
redemption within seven business days after your confirmation to us of our
original purchase order for such shares, we shall pay forthwith to you the
full amount of the commission allowed to us on the original sale, provided
you notify us of such repurchase or redemption within ten days of the date
upon which written redemption requests and, if applicable, Share
certificates are delivered to you or to the Fund.
10. Your obligations to us under this Agreement are subject to all
the provisions of any distributorship agreements entered into between you
and the Funds. We understand and agree that in performing our services
covered by this Agreement we are acting as principal, and you are in no
way responsible for the manner of our performance or for any of our acts
or omissions in connection therewith. Nothing in this Agreement shall be
construed to constitute us or any of our agents, employees or
representatives as your agent, partner or employee of the Funds.
of you or any of the Funds.
11. We may terminate this Agreement by notice in writing to you,
which termination shall become effective thirty (30) days after the date
of our mailing such notice to you. We agree that you have and reserve the
right, in your sole discretion without notice, to suspend sales of Shares
of any of the Funds, or to withdraw entirely the offering of Shares of any
of the Funds, or, in your sole discretion, to modify, amend or cancel this
Agreement upon written notice to us of such modification, amendment or
cancellation, which shall be effective on the date stated in such notice.
Without limiting the foregoing, you may terminate this Agreement for cause
on violation by us of any of the provisions of this Agreement, said
termination to become effective on the date of mailing notice to us of
such termination. Without limiting the foregoing, any provision hereof
to the contrary notwithstanding, our expulsion from the NASD will
automatically terminate this Agreement without notice; our suspension from
the NASD, the appointment of a trustee for all or substantially all of our
business assets, or violation of applicable State or Federal laws or rules
and regulations of authorized regulatory agencies will terminate this
Agreement effective upon the date of your mailing notice to us of such
termination. Your failure to terminate for any cause shall not constitute
a waiver of your right to terminate at a later date for any such cause.
All notices, hereunder shall be to the respective parties at the addresses
listed hereon, unless changed by notice given in accordance with this
Agreement.
12. This Agreement shall become effective as of the date when it is
executed and dated by you below and shall be in substitution of any prior
agreement between you and us covering any of the Funds. This Agreement
and all the rights and obligations of the parties hereunder shall be
governed by and construed under the laws of the State of Colorado. This
Agreement is not assignable or transferable, except that your firm may
assign or transfer this Agreement to any successor firm or corporation
which becomes the Distributor or Subdistributor of the Funds
DEALER FIRM (NAME) -------------------------------
(ADDRESS) ----------------------------------------
By: ----------------------------------------------
(AUTHORIZED SIGNATURE)
--------------------------------------------------
(NAME) (TITLE)
Accepted:
CENTENNIAL CAPITAL CORPORATION
- ------------------------------------
<PAGE>
Exhibit 24(b)(8)
CUSTODIAN AGREEMENT
I. DESIGNATION OF CUSTODIAN
CENTENNIAL CALIFORNIA TAX EXEMPT TRUST (the "Fund"), an open-end
series management investment company organized as a Massachusetts business
trust having an office at 3410 South Galena Street, Denver, Colorado
80231, hereby designates Citibank, N.A. (the "Bank"), a National Banking
Corporation incorporated under the laws of the United States of America
and having an office at 399 Park Avenue, New York, NY 10043, as Custodian
of the Property (as defined in Section III) of the Fund. By its
acceptance, the Bank agrees to serve as such Custodian upon the terms and
conditions set forth in this Agreement.
II. DELIVERY OF DOCUMENTS
(a) Documents delivered. The Fund delivers to the Bank herewith the
following documents:
(i) Resolutions authorizing the appointment of the Bank as the
custodian of the Fund and the execution by the Fund of
this Agreement;
(ii) copies, certified by the appropriate officer or officers,
of the charter and the by-laws of the Fund; and
(iii) incumbency and signature certificates identifying and
containing the signatures of the officers of the Fund
and/or other signatories authorized to sign
Instructions (as defined below) on behalf of the
Fund, specifying the number of signatures required
for Instructions and identifying the trustees and the
other officers, if any, of the Fund.
(b) Changes. In case of any change or changes affecting any of the
documents described in this Section II, the Fund shall deliver new
documents to the Bank, to the extent necessary to reflect such change or
changes. Unless and until such new documents are delivered and an
authorized signatory of the Bank has issued a receipt for the delivery
thereof, the Bank shall be under no obligation to act (or omit to act),
in accordance with any such change, nor shall the Bank be liable for
failure so to act (or omit to act), but the Bank shall act in accordance
with the documents which such new documents are to replace.
(c) Additional information. The Fund shall furnish to the Bank any
additional information and documentation relating to the Fund and the
Fund's management company (if any) which the Bank may reasonably request.
(d) "Resolutions" defined. The term "Resolutions," as used in this
Agreement, means (i) if the trustees of the Fund are authorized to
transact business of the Fund by signing an instrument setting forth such
business, resolutions signed by the number of trustees of the Fund so
authorized and (ii) in all other cases, copies of resolutions of the
trustees of the Fund, certified by the appropriate officer or officers of
the Fund.
(e) "Depository" defined. The term "Depository" as used in this
Agreement means any "system" or "person" contemplated by Section 17 (f)
of the Investment Company Act of 1940 in which the Banks may, under that
Section and any rules, regulations or orders thereunder, deposit all or
part of the Fund's securities with the consent of the Fund, and to which
the Fund has consented.
(f) "Receipt" of payment defined. Whenever this Agreement
contemplates receipt of payment by the Bank, such receipt shall mean
receipt by the Bank of (i) cash or check of a national securities exchange
certified or issued by a bank (which term, as used in this Agreement,
shall include a trust company and a Federal Reserve Bank), or a
Depository; or (ii) written or telegraphic advice from a bank, registered
clearing agency or a Depository that funds have or will be credited to the
account of the Fund or the Bank at one or more of the foregoing; or (iii)
a bank wire from a correspondent bank of the Bank; or (iv) payment other
than the foregoing, if specified in Instructions relating to the
transaction in question.
III. THE PROPERTY
(a) Property delivered. The Fund shall deliver the Property, or
cause the Property to be delivered, to the Bank or a Depository, subject
to the provisions of this Agreement. Upon delivery, the securities at the
time included in the Property, unless held by a Depository, shall be in
bearer form or shall be registered in the name of a nominee of the Bank
(with or without indication of fiduciary status) or shall be properly
endorsed and in form for transfer satisfactory to the Bank.
(b) "Property" defined. The term "Property," as used in the
Agreement, means:
(i) any and all securities and other property which the Fund
may from time to time deposit, or cause to be deposited,
with the Bank or a Depository,
(ii) all income, including option premiums, in respect of any
of such securities or other property,
(iii) all proceeds of the sale of any such securities or
other property,
(iv) all proceeds, of the sale of securities issued by the
Fund, which are received by the Bank from time to time
from the Fund or its transfer agent, and
(v) any stocks, shares, bonds, financial futures contracts,
indexes, debentures, notes, mortgages and other
obligations, and any certificates, receipts, warrants or
other financial instruments representing absolute or
conditional rights or options to receive, purchase,
subscribe for or sell the same or evidencing or
representing any other rights or interests therein, or any
other property or assets, irrespective of their form, the
name by which they may be described, whether considered as
securities or commodities, or the character or form of the
entities by which they are issued or created.
(c) Holding of Securities. The Bank shall hold in a separate
account, and physically segregate at all times from those of any other
persons, firms or corporations, pursuant to the provisions hereof, all
securities which are part of the Property, other than those held by a
Depository. All such securities are to be held or disposed of by the
Bank, or by a Depository, subject at all times to Instructions pursuant
to the terms of this Agreement. The Bank shall have no power or authority
to (or to cause a Depository to) assign, hypothecate, pledge, or otherwise
dispose of any such securities except pursuant to Instructions and only
for the account of the Fund, as set forth in Section VI of this Agreement.
The Bank will, upon receipt of proper Instructions, segregate
cash and/or securities of the Fund into escrow accounts in the name of a
designated broker or exchange clearing organization which is a party with
the Fund to an agreement relating to the financial futures contracts
described in paragraph (b) of this Section III. The Bank will confirm the
terms of such escrow to the broker or clearing organization and provide
a copy of such confirmation to the Fund. The Bank will not, however, make
any payment or transfer from any such escrow account except to the named
broker or clearing organization upon receipt of written notice by such
broker or clearing organization representing that the Fund is in default
of a specified obligation for which the escrow was established and setting
forth the amount represented to be due by the Fund to such broker or
clearing organization.
IV. REGISTRATION OF SECURITIES:
COMMERCIAL ACCOUNTS; OVERDRAFTS; RECEIPT OF SECURITIES
(a) Registration of securities. The securities included in the
Property shall, unless held by a Depository, be held in bearer form or in
the name of one or more nominees of the Bank.
(b) Commercial accounts. The Bank shall open and maintain a
commercial account or accounts in the name of the Fund, subject only to
the Bank's draft or order after receipt of Instructions, and the Bank
shall deposit in such account or accounts all cash constituting, or which
is to become, part of the Property. The Bank shall make payments of cash
to or for the account, of the Fund from such cash accounts only pursuant
to Section VI of this Agreement or as otherwise specifically provided in
this Agreement.
(c) Overdrafts. At the sole discretion of the Bank, the Bank will
permit the incurrence of cash overdrafts in any account of the Fund with
the Bank (i) in aid of the timely and orderly clearance of securities
transactions in the course of the Fund's normal business, trading and
investment operations or (ii) in connection with payments to Shareholders
all or a portion of whose shares in the Fund have been or are being
Redeemed, but only upon receipt by the Bank of Instructions to do so. The
Bank shall not be obligated to incur or permit the incurrence of any such
overdraft and the Bank shall not be liable to the Fund or any third party
for any refusal, failure or neglect on the part of the Bank to incur or
permit the incurrence of any such overdraft. As used in this Agreement,
the terms "Redeem" and "Redemption" refer to redemptions, purchases and
other acquisitions by the Fund of shares in the Fund from Shareholders,
and the term "Shareholder" means a shareholder or former shareholder of
the Fund.
(d) Payment of overdrafts; interest. The Fund shall pay to the
Bank, and the Bank may deduct from the Property, the amount of each
overdraft referred to in Section IV (c), together with interest thereon
at such rate as the Bank may from time to time notify to the Fund (such
rate not to exceed the rate at such time charged by the Bank to its prime
commercial borrowers by more than 1-1/2 percentage points), upon the
Bank's demand therefore.
(e) "Receipt" of securities defined. Whenever this Agreement
contemplates receipt of securities by the Bank, such receipt shall mean
receipt by the Bank of (i) securities in bearer form or in form of
transfer satisfactory to the Bank; or (ii) written or telegraphic advice
from a Depository that securities have been credited to the account of the
Fund or the Bank at the Depository; or (iii) written or telegraphic advice
from any bank or responsible commercial agent doing business in the United
States or any foreign country and designated by the Bank as its agent for
this purpose that such securities have been deposited with it.
V. INSTRUCTIONS
(a) "Instructions" defined. As used in this Agreement, the term
"Instructions" means instructions, with respect to any specified
transaction (except as otherwise indicated in this Agreement), in writing
or by telecopier, tested telegram, cable or Telex or by facsimile sending
device, signed in the name of the Fund by the requisite number of Fund
officers or authorized signatories of the Fund as the Board of Trustees
or executive committee of the Fund has authorized to give the particular
class of Instructions in question. Different persons may be authorized
to give Instructions for different purposes. Instructions may be general
or specific in terms.
(b) Instructions consistent with charter, etc. Although the Bank
may take cognizance of the provisions of the charter and by-laws of the
Fund as from time to time amended, the Bank may assume that any
Instructions received hereunder are not in any way inconsistent with any
provision of such charter or by-laws or any vote, resolution or proceeding
of the shareholders or the trustees, or of any committee of either
thereof, of the Fund.
(c) Authority of Fund's signatories. The incumbency and signature
certificates most recently delivered to the Bank pursuant to Section II
(a) (iii) shall constitute evidence of the authority of the signatories
designated therein to act on behalf of the Fund.
VI. TRANSACTIONS REQUIRING INSTRUCTIONS
(a) Payments of cash. The Bank shall make payments of cash to or
for the account of the Fund only as follows or as otherwise specifically
provided in this Agreement:
(i) upon receipt of Instructions to do so, the Bank shall make
payment for and receive all securities purchased for the
account of the Fund (insofar as cash is available, or
insofar as the Bank is willing to permit an overdraft or
overdrafts in the Fund's account or accounts with the
Bank, for such purpose), payment to be made only upon
receipt of the securities, provided that, if any such
securities (or any securities to be received free for the
Fund's account) are not received by the Bank on or before
the thirtieth day following the date of the Bank's receipt
of the Instructions to receive such securities, the Bank
may, but need not, consider such Instructions cancelled
unless and until the Bank received further Instructions
reinstating such original Instructions;
(ii) upon receipt of Instructions to do so, the Bank shall make
payment to a bank of principal of or interest on bank
loans made to the Fund;
(iii) upon receipt of Instructions to do so, the Bank shall
make payments for the Redemption of shares of the
Fund (subject to the provisions of Section VIII (a)
of this Agreement);
(iv) upon receipt of Instructions to do so, the Bank shall make
payments for the payment of dividends, taxes, management
or supervisory fees or operating expenses (including,
without limitation thereto, fees for legal, accounting and
auditing services);
(v) upon receipt of Instructions to do so, the Bank shall make
payments in connection with conversion, exchange or
surrender of securities owned or subscribed to by the Fund
held by or to be received by the Bank;
(vi) upon receipt of Instructions to do so, the Bank will make
payments pursuant to a specified agreement for loaning the
Fund's securities (which Instructions shall identify the
loan agreement under which the payment is to be made, the
date of payment, the name of the borrower and the
securities to be received, if any in exchange for the
payment); and
(vii) upon receipt of Instructions to do so, the Bank shall
make payment for other proper corporate purposes, but
only on receipt of a Resolution certified as set
forth in the definition of that term and
countersigned by another officer of the Fund
specifying the amount of such payment, setting forth
the purpose for which such payment is to be made,
declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom
such payment is to be made.
(b) Transfer, Exchange or Delivery of Securities. The bank shall
transfer, exchange or deliver securities which are part of the Property
only as follows: upon receipt of Instructions to do so, the Bank shall
deliver (or cause a Depository to deliver) securities against such payment
or other consideration or written receipt therefor as shall be specified
in such Instructions, in the following cases: (i) upon sales of such
securities for the account of the Fund and receipt by the Bank of payment
therefor; (ii) for examination by a broker selling for the account of the
Fund in accordance with street delivery custom; (iii) for payment when
such Property has been called, redeemed or retired, or has otherwise
become payable at the option of the holder thereof; (iv) in exchange for,
or for conversion into, other securities and/or cash pursuant to any plan
of merger, consolidation or reorganization, recapitalization, readjustment
or other rearrangement of the issuer; (v) for deposit with a
reorganization committee or protective committee pursuant to a deposit
agreement; (vi) for conversion into or exchange for other securities, or
into or for other securities and cash, in accordance with any conversion
or exchange right or option relating thereto; (vii) in the case of
warrants, rights or other similar securities, upon the exercise thereof;
(viii) in the case of interim receipts or temporary securities, upon the
surrender thereof for definitive securities; (ix) upon the exercise of
a call written by the Fund for which the Bank (or a Depository) has
written an escrow receipt (which term, as used in this Agreement, shall
include an option guarantee letter), subject to the provisions of Section
VI(e); (x) for the deposit of securities in a Depository; (xi) for the
purpose of Redemption in kind of shares of the Fund (subject to Section
VIII(a) of this Agreement); (xii) for the purpose of loaning securities
against receipt by the Bank of collateral therefor (the Instructions as
to which shall specify the securities to be delivered, the loan agreement
under which the delivery is to be made, the date of delivery, the name of
the borrower and the amount of collateral to be received in connection
therewith); and (xiii) for other proper corporate purposes. The Bank
shall make a delivery described in Section VI(c)(xiii) only on receipt of
a Resolution certified as set forth in the definition of that term and
countersigned by another officer of the Fund specifying the securities,
setting forth the purpose for which such delivery is to be made, declaring
such purpose to be a proper corporate purpose and naming the person or
persons to whom said delivery is to be made.
(c) Exercise of rights, etc. The Bank shall deal with rights,
warrants and similar securities received by it hereunder only in the
manner and to the extent ordered by Instructions received by the Bank.
(d) Voting. Neither the Bank nor its nominees shall vote any of the
securities included in the Property or authorize the voting of any such
securities or give any consent, approval or waiver with respect thereto,
except as directed by Instructions received by the Bank. The Bank shall
promptly deliver, or cause to be executed and delivered, to the Fund all
notices, proxies and proxy soliciting materials with relation to such
securities, such proxies to be executed by the registered holder of such
securities (if registered otherwise than in the name of the Fund) but
without indicating the manner in which such proxies are to be voted.
(e) Escrow receipts. In accordance with mutually agreed-upon
arrangements and upon receipt of Instructions to do so, the Bank will
execute, or cause a Depository to execute, an escrow receipt relating to
a call written by the Fund upon receipt of payment for the premium
therefor. Such Instructions shall contain all information necessary for
the issuance of such receipts and will authorize the deposit of the
securities named in such Instructions into an escrow account of the Fund.
Securities so deposited into an escrow account will be held by the Bank
or Depository subject to the terms of such escrow receipt. However, the
Bank agrees that it will not deliver, or cause a Depository to deliver,
any securities deposited in an escrow account pursuant to an exercise
notice unless the Bank has received Instructions to do so or (i) the Bank
has duly requested the issuance of such Instructions, (ii) at least two
business days have elapsed since the receipt of such request by the Fund,
and (iii) the Fund has not advised the Bank by Instructions that it has
purchased securities that are to be delivered by the Bank or a Depository
pursuant to the exercise notice. The Fund agrees that it will not issue
any Instructions to the Bank with respect to the Property which shall
conflict with the terms of any escrow receipt executed by the Bank or any
Depository in relation to the Fund and which is then in effect. The
parties understand that the Fund may write calls on securities
("underlying securities") which are not part of the Property and issue
Instructions to the Bank to execute, or cause a Depository to execute, an
escrow receipt on securities ("convertible securities") which are, or are
to be, part of the Property and are convertible into the underlying
securities. In such event, the Fund agrees that (i) any Instructions by
it as to the execution of the escrow receipt will relate only to such
convertible securities, and (ii) any Instructions by it as to the delivery
of securities relating to such call will relate only to such convertible
securities without responsibility on the part of the Bank to effect any
conversion thereof.
VII. TRANSACTIONS NOT REQUIRING INSTRUCTIONS
(a) Collection of income and other payments. In the absence of
contrary instructions, the Bank shall:
(i) collect and receive, for the account of the Fund, all
income and other payments and distributions, including
(without limitation) stock dividends, rights, warrants and
similar items, included or to be included in the Property,
and promptly advise the Fund of such receipt;
(ii) take any action which may be necessary and proper in
connection with the collection and receipt of such income
and other payments and distributions, including (without
limitation) the execution of ownership and exemption
certificates, the presentation of coupons and other
interest items, the presentation for payment of securities
which have become payable as a result of their being
called, redeemed or retired, or otherwise becoming
payable, otherwise than at the option of the holder
thereof, and the endorsement for collection of checks,
drafts and other negotiable instruments; and
(iii) receive and hold for the account of the Fund all
securities received as a distribution on securities
held by the Fund as a result of a stock dividend,
share split-up or reorganization, recapitalization,
readjustment or other rearrangement or distribution
of rights or similar securities issued with respect
to any securities of the Fund held by the Bank
hereunder, provided that the Bank shall not be
required to transact any item of business referred to
in this Section VII(a) with respect to a security
which is not covered by a published securities manual
reasonably available to the Custodian Services
Department of the Bank (or the successor to such
Department in the event of any administrative
rearrangement of the Bank) unless and until such
Custodian Services Department (or its successor) has
received a notice specifying (x) the item of business
in question and (y) such additional information as
will permit the Bank to transact such item of
business properly and without unreasonable
inconvenience to such Custodian Services Department
(or its successor).
(b) Cash disbursements. In the absence of contrary Instructions,
the Bank may make cash disbursements for minor expenses in handling
securities and for similar items in connection with the Bank's duties
under this Agreement. The Bank shall promptly advise the Fund of
disbursements so made.
(c) Delivery of information and documents. The Bank shall promptly
deliver to the Fund all information and documents received by the Bank and
relating to the Property including (without limitation) pendency of calls
and maturities of securities and expiration of rights in connection
therewith received by the Bank from issuers of securities being held for
the Fund. With respect to tender or exchange offers, the Bank shall
transmit promptly to the Fund all written information received from
issuers of the securities whose tender or exchange is being sought and
from the party (or his agents) making the tender or exchange offer.
VIII TRANSACTIONS REQUIRING SPECIAL INSTRUCTIONS
(a) Redemptions. Upon receipt of Instructions to do so, the Bank
shall deliver Property in connection with Redemptions (insofar as monies
or, in a case referred to in clause (iii) below, other Property is
available, or insofar as the Bank is willing to permit an overdraft or
overdrafts in the Fund's account or accounts with the Bank for such
purpose), provided that the Instructions covering each Redemption shall
contain (i) the number of shares Redeemed, (ii) the net asset value
(determined pursuant to the regulations of the Fund, as from time to time
amended, which govern determination of net asset value) of such shares on
the effective date of such Redemption and (iii) specification of any
Property other than cash which the Bank is to deliver pursuant thereto.
(b) Extraordinary transactions. In the case of any of the following
transactions, not in the ordinary course of the business of the Fund:
(i) the merger or consolidation of the Fund and another
investment company,
(ii) the sale by the Fund of all or substantially all of its
assets, or
(iii) liquidation of the Fund or dissolution of the Fund
and distribution of its assets,
the Bank shall deliver Property only upon receipt of Instructions and
advice of counsel satisfactory to the Bank (who may be counsel for the
Fund, at the option of the Bank) to the effect that all necessary
corporate action therefor has been taken, or will be taken concurrently
with the Bank's action.
IX. RIGHT TO RECEIVE ADVICE
(a) Advice of Fund. If the Bank shall be in doubt as to any action
to be taken or omitted by it, it may request, and shall receive, from the
Fund directions or advice, including Instructions where appropriate.
(b) Advice of counsel. If the Bank shall be in doubt as to any
questions of law involved in any action to be taken or omitted by the
Bank, it may request advice from counsel of its own choosing (who may be
counsel for the Fund, at the option of the Bank).
(c) Conflicting advice. In case of conflict between directions,
advice or Instructions received by the Bank pursuant to Section IX(a) and
advice received by the Bank pursuant to Section IX(b), the Bank shall be
entitled to rely on and follow the advice received pursuant to Section
IX(b) alone.
(d) Absolute protection to Bank. The Bank shall be absolutely
protected in any action or inaction which it takes in reliance on any
directions, advice or Instructions received pursuant to Section IX(a) or
(b) or which the Bank, after receipt of any such directions, advice or
Instructions, in good faith believes to be consistent with such
directions, advice or Instructions, as the case may be. However, nothing
in this Section IX shall be construed as imposing upon the Bank any
obligation (i) to seek such directions, advice or Instructions, or (ii)
to act in accordance with such directions or advice when received, unless,
under the terms of another provision of this Agreement, the same is a
condition to the Bank's properly taking or omitting to take such action.
X. STATEMENTS
The Bank shall render to the Fund statements of the transactions in
the accounts of the Fund at the following times: the Bank shall furnish
the Fund both on a daily and a monthly basis with a statement summarizing
all transactions and entries for the account of the Fund. The Bank shall
furnish the Fund at the end of every month with a list of the portfolio
securities held by it or a Depository as custodian for the Fund, adjusted
for all commitments confirmed by the Fund as of such time, certified by
a duly authorized officer of the Bank. The books and records of the Bank
pertaining to its actions under this Agreement shall be open to inspection
and audit at all times by officers of the Fund, its auditors and officers
of its investment adviser.
XI. COMPENSATION
(a) Ordinary services. The Fund shall pay to the Bank, and the Bank
may deduct from the Property, for its services under this Agreement (other
than the services referred to in Section XI(c)) compensation based on a
schedule of charges to be agreed from time to time.
(b) Expenses. The Fund shall reimburse the Bank for all expenses,
taxes and other charges (including, without limitation, interest and other
items charged by brokers in respect of debit balances and delayed
deliveries) paid by the Bank with respect to the property of the Fund, or
incurred by the Bank on behalf of the Fund in the performance of the
Bank's duties hereunder, provided that the Bank shall be entitled to
reimbursement with respect to the fees and disbursements of counsel only
(i) as set forth in Sections XI(c) and XII or (ii) when the Fund breaches
or threatens to breach, or the Fund's management company (if any)
threatens to cause a breach, of this Agreement or when it would reasonably
appear to a man untrained in the law that such a breach exists or is
threatened, to the extent that the fees and disbursements of such counsel
relate to such actual or apparent breach or threatened breach. If the
Bank submits to the Fund a bill for such reimbursement and the Fund does
not, within 15 days after such submission, notify the Bank that the bill
is disapproved and make a reasonable counter-offer in writing, the bill
shall be deemed approved and the Bank may deduct such reimbursement from
the Property.
(c) Extraordinary services. The Fund shall pay to the Bank, and the
Bank may deduct from the Property, for its services as the Fund's agent
in paying a Shareholder consideration, consisting wholly or partially of
property other than cash, in connection with the Redemption of all or any
part of such Shareholder's shares in the Fund compensation equal to 1/10
of 1% of the amount computed by subtracting from the aggregate Redemption
price of such shares the cash, if any, paid to such Shareholder in respect
of such Redemption. Without limiting the generality of the provisions of
Section XI(b),
the Fund shall reimburse to the Bank, and the Bank may deduct from the
Property reimbursement for, the fees and disbursements of the Bank's
counsel attributable to such counsel's services in respect of each such
Redemption.
XII. INDEMNIFICATION
The Fund, as sole owner of the Property, will indemnify the Bank and
each of the Bank's nominees, and hold the Bank and such nominees harmless,
and the Bank may deduct from the Property indemnification, against all
costs, liabilities (including, without limitation, liabilities under the
Securities Act of 1933, the Securities Exchange Act of 1934, the
Investment Company Act of 1940 and any state and foreign securities and
blue sky laws, all as from time to time amended) and expenses, including
(without limitation) attorney's fees and disbursements, arising directly
or indirectly (i) from the fact that securities included in the Property
are registered in the name of any such nominee, or (ii) without limiting
the generality of the foregoing clause (i), from any action or thing which
the Bank takes or does or omits to take or do, (A) at the request or on
the directions or in reliance on the advice of the Fund, or of the Fund's
management company (if any), or (B) upon Instructions, provided that
neither the Bank nor any of its nominees shall be indemnified against any
liability to the Fund or to its Shareholders (or any expense incident to
such liability) arising out of (x) the Bank's or such nominee's own
willful misfeasance, bad faith, negligence or reckless disregard of its
duties under this Agreement or (y) the Bank's own negligent failure to
perform its duties under Section VII(a)(ii).
XIII. RESPONSIBILITY: COLLECTIONS
(a) Responsibility of Bank. The Bank shall be under no duty to take
any action on behalf of the Fund except as specifically set forth herein
or as may be specifically agreed to by the Bank in writing. In the
performance of the Bank's duties hereunder, the Bank shall be obligated
to exercise care and diligence, but the Bank shall not be liable for any
act or omission which does not constitute gross negligence, willful
misfeasance or bad faith on the part of the Bank or reckless disregard by
the Bank of its duties under this Agreement, provided that the Bank shall
be responsible for its own negligent failure to perform any of its duties
under this Agreement. Without limiting the generality of the foregoing
or of any other provisions of this Agreement, the Bank shall not be under
any duty or obligation to inquire into and shall not be liable for or in
respect of (i) the validity or invalidity or authority or lack thereof of
any Instruction, notice or other instrument which conforms to the
applicable requirements of this Agreement, if any, and which the Bank
reasonably believes to be genuine, or (ii) the validity or invalidity of
the issuance of any securities included or to be included in the Property,
the legality or illegality of the purchase of such securities, or the
propriety or impropriety of the amount paid therefor, or (iii) the
legality or illegality of the sale (or exchange) of any Property or the
propriety or impropriety of the amount for which such Property is sold (or
exchanged), nor shall the Bank be under any duty or obligation to
ascertain whether any property at any time delivered to or held by the
Bank may properly be held by or for the Fund.
(b) Collections. All collections of monies or other property in
respect, or which are to become part, of the Property shall be at the sole
risk of the Fund.
(c) Depositories. In using the facilities of a Depository, the Bank
undertakes to comply with the requirements of Rule 17f-4(d) insofar as the
same apply to a custodian, and shall be responsible for the prompt and
effective enforcement of its rights against the Depository in respect of
the property including the proper replacement of any certificated security
which has been lost, destroyed, wrongfully taken, mislaid or erroneously
delivered while in the custody of the Depository.
XIV. ADVERTISING
No printed or other matter in any language which mentions the Bank's
name other than in the context of the Bank's rights, powers or duties as
the custodian of the Fund shall be issued by the Fund or on the Fund's
behalf unless the Bank shall first have been given notice thereof.
XV. EFFECTIVE DATE; TERMINATION; SUCCESSOR; DISSOLUTION
(a) Effective date. This Agreement shall become effective as of the
date entered in the final paragraph of this Agreement and shall continue
in effect until terminated in the manner set forth below.
(b) Termination. Either party to this Agreement may terminate this
Agreement, without penalty, upon at least two weeks' prior written notice
to the other. The effective date of such notice shall be specified in
such notice, except that, at the option of the party receiving the notice
of termination, the effective date of termination may be postponed, by
notice (given prior to the effective date specified in the termination
notice) to the other party, to a date not more than sixty days from the
date of the notice of termination, provided that the Fund shall have no
right so to postpone the effective date of termination if the Fund is at
the time in default under the provisions of Section XIV.
(c) Successor custodian. The Bank shall, in the event of such
termination, deliver the Property, or cause it to be delivered, to any new
custodian which may be designated in Instructions received by the Bank.
(d) Successor custodian not available. In the event that no new
custodian can be found by the Fund at the time of termination of this
Agreement, the Fund shall, before authorizing the delivery of the Property
to anyone other than a successor custodian, submit to its shareholders the
question of whether the Fund shall be liquidated or shall function without
a custodian. The Bank shall, pending the finding of such a new custodian,
the dissolution of the Fund or the decision of the Fund's shareholders
that the Fund shall function without a custodian, continue to hold the
Property in safekeeping subject to the terms of this Agreement, but the
Bank will not carry out any transaction requiring Instructions, the
Instructions with respect to which are received by the Bank subsequent to
the effective date of the termination of this Agreement, or issue any
advice provided for by Section VII or any statement provided for by
Section X, provided that, upon its receipt of Instructions to do so, the
Bank will deliver the Property to a new custodian (which shall be a
person, firm or corporation having aggregate capital, surplus and
undivided profits of at least $2,000,000 as shown by its last published
report, and meeting such other requirements as may be imposed by
applicable law), distribute the Property (after liquidating any part of
the Property which does not consist of cash, if such Instructions so
order) upon dissolution of the Fund or deliver the Property to any other
person if the Fund's shareholders have decided that the Fund shall
function without a custodian. The Bank shall not be liable to the Fund
or any third party on account of any incidents or omissions occurring
during such period of safekeeping except those arising through the Bank's
own willful misconduct or negligence.
(e) Dissolution; no successor custodian. Upon its receipt of
Instructions to do so, the Bank shall distribute the Property (after
liquidating any part of the Property which does not consist of cash, if
such Instructions so order) upon dissolution of the Fund or deliver the
Property to any person who is to take the place of the Fund's custodian
if the Fund's shareholders have decided that the Fund shall function
without a custodian, provided, in either case, that such Instructions
shall be accompanied by a certified copy of the minutes of the meeting of
the Fund's shareholders at which the same was approved.
XVI. NOTICES
All notices and other communications, including Instructions
(collectively referred to as "Notices" in this Section XVI), hereunder
shall be in writing or by tested telegram, cable or Telex. Notices shall
be addressed (i) if to the Bank, at the Bank's address set forth at the
head of this Agreement, marked for the attention of the Custodian Services
Department (or its successor, referred to in Section VII(a)), (ii) if to
the Fund, at the address of the Fund set forth at the head of this
Agreement, or (iii) if to either of the foregoing, at such other address
as shall have been notified to the sender of any such Notice or other
communication. If the location of the sender of a Notice and the address
of the addressee thereof are, at the time of sending, more than 100 miles
apart, the Notice shall be sent by airmail, in which case it shall be
deemed given three days after it is sent, or by tested telegram, cable or
Telex, in which case it shall be deemed given immediately, and, if the
location of the sender of a Notice and the address of the addressee
thereof are, at time of sending, not more than 100 miles apart, the Notice
may be sent by first-class mail, in which case it shall be deemed given
two days after it is sent, or by messenger, in which case it shall be
deemed given on the day it is delivered, or by tested telegram or Telex,
in which case it shall be deemed given immediately, provided that the Bank
shall in no event be liable in respect of any delay in its actual receipt
of any Notice. All postage, cable, telegraph and Telex charges arising
from the Sending of a Notice hereunder shall be paid by the sender.
XVII. DEPOSITORIES; ASTRA
The Fund authorizes the Bank, for any securities held hereunder, to
use the services of any United States central securities depository
permitted to perform such services for registered investment companies and
their custodians under Rule 17f-4 under the Act ("System"), the use of
which is subject to the terms and conditions of this Section XVII.
The terms of the use of any System under this Agreement shall be
governed by the terms and conditions of Rule 17f-4 under the Investment
Company Act of 1940, to which terms and conditions the parties hereto
agree as if set forth in full in this Agreement. The parties also agree
that such terms and conditions shall supersede any conflicting provisions
of this Agreement. Nothing herein shall be deemed to require that the
Custodian ascertain, as a condition to the use of any System, that any
required action has been taken by the Board of Trustees of the Fund.
If and to the extent that a System permits the withdrawal of a
security from that System in certificate form and the Fund requires a
certificate for making a loan or otherwise, the Bank shall take all
necessary and appropriate action to obtain such certificate upon receipt
of an officer's certificate requesting the same.
The liability of the Bank to the Fund in connection with the use of
any System shall be subject to the provisions of Section XIII of this
Agreement.
The Bank agrees that it will effectively enforce such rights as it
may have against any System and will use its best efforts, and will
enforce any such rights as it may have against any System, to require that
such System shall take all appropriate and necessary steps to obtain
replacement of any certificated security in such System which has been
lost, apparently destroyed, wrongfully taken, mislaid or erroneously
delivered while in the custody of the System.
The Fund can have dial-up access to its own custodian account in the
Bank's computerized accounting system (the "ASTRA System") in order to:
(i) accept or reject executed securities transactions (other than in
foreign securities) as submitted for confirmation by brokers and dealers
through the Institutional Delivery ("ID") System of Depository Trust
Company ("DTC") in which the Bank is a participant; and (ii) issue
instructions for the settlement of accepted transactions by the Bank
(through the ID System of DTC or otherwise) pursuant to the terms of this
Agreement.
1. The Bank will provide such current instructions and password as
may be necessary for the Fund to have dial-up access to its own custody
account in the ASTRA System, which instructions and password, including
any changed instructions or password, will be delivered personally or by
certified mail, return receipt requested, to such officer(s) of the Fund
as may, from time to time, be designated in a written instruction given
by the Fund in accordance with Article V of this Agreement and signed by
the Secretary, Assistant Secretary or Treasurer of the Fund.
2. The Bank will change such instructions or password as frequently
as may reasonably be requested by the Fund for security reasons.
3. The Bank is obligated and authorized to act and rely upon any
instructions received by it through the ASTRA System, as fully as in the
case of instructions given pursuant to Article V of this Agreement,
regardless of whether such instructions have been authorized by the Fund,
provided that such instructions are accompanied by the code password and
account identification information furnished, from time to time, by the
Bank to the Fund as hereinabove provided. Any such instructions received
by the Bank through the ASTRA System will be considered "Instructions" for
all purposes under this Agreement, including without limitation the
indemnification provisions of Article XII hereof.
4. Both the Fund and the Bank will keep for at least five years and
produce on request, in machine readable form, copies of any instructions
sent or received pursuant to the provisions hereof.
XVIII. MISCELLANEOUS
(a) Amendments, etc. This Agreement or any part hereof may be
changed or waived only by an instrument in writing signed by the party
against which enforcement of such change or waiver is sought. The
headings in this Agreement are for convenience of reference only, are not
a part of this Agreement and shall be disregarded in connection with any
interpretation of all or any part of this Agreement.
(b) Entire Agreement. This Agreement embodies the entire agreement
and understanding between the parties hereto, and supersedes all prior
agreements and understandings, relating to the subject matter hereof,
provided that the parties hereto may embody in one or more separate
documents their agreement, if any, with respect to delegated and/or oral
Instructions.
(c) Successors and assigns; assignment. All terms of this Agreement
shall be binding upon the respective successors and assigns of the parties
hereto, the Fund's management company (if any) and the Fund's shareholders
and shall inure to the benefit of and be enforceable by the parties hereto
and their respective successors and assigns, provided that this Agreement
shall not be assignable in whole or in part by either party hereto without
the written consent of the other party hereto.
(d) Counterparts. This Agreement may be executed simultaneously in
several counterparts, each of which shall be deemed an original but all
of which, taken together, shall constitute one and the same Agreement.
(e) Disclaimer of Shareholder Liability. The Bank 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. The Bank represents that it has notice of the
provisions of the Declaration of Trust of the Fund disclaiming shareholder
liability for acts or obligations of the Fund.
(f) Governing Law. This Agreement shall be construed and enforced
in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by the hands of their signatories thereunto duly authorized
as of the 1st day of June, 1990.
CITIBANK, N.A.
By: /s/ Reginald Monachino
---------------------------------
Reginal Monachino, Vice President
CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
By: /s/ Robert G. Galli
---------------------------------------
Robert G. Galli, Vice President
<PAGE>
Exhibit 24(b)(10)
HAMILTON, MYER, SWANSON & FAATZ, P.C.
ATTORNEYS AT LAW
THE COLORADO STATE BANK BUILDING
1600 BROADWAY, SUITE 600
DENVER, COLORADO 80202-4988
TELEPHONE (303) 830-0500
FACSIMILE (303) 860-7855
February 20, 1990
Centennial California Tax Exempt Trust
3410 South Galena Street
Denver, Colorado 80231
Gentlemen:
In connection with the proposed public offering of shares of shares of
beneficial interest of Centennial California Tax Exempt Trust (the
"Trust"), we have examined such records and documents as we deem necessary
for the purpose of this opinion.
The Trust is a business trust duly organized and validly existing under
the laws of the Commonwealth of Massachusetts. As of the date of this
letter, it is our opinion that the indefinite number of shares of the
Trust covered by the Registration Statement on Form N-1A (SEC Reg. No.
33-30471), when issued and paid for in accordance with the terms of the
offering, as set forth in the Prospectus and Statement of Additional
Information forming a part of the Registration Statement, will be, when
such Registration Statement shall have become effective, legally issued,
fully paid and non-assessable by the Trust subject to the matters set
forth in the next paragraph.
Under Massachusetts law, shareholders of the Trust may, under certain
circumstances, be held personally liable as partners for the obligations
of the Trust. The Declaration of Trust does, however, contain an express
disclaimer of shareholder liability for acts or obligations of the Trust
and requires that notice of such disclaimer be given in each agreement,
obligation, or instrument entered into or executed by the Trust or the
Trustees. The Declaration of Trust provides for indemnification out of
the trust property of any shareholder held personally liable for the
obligations of the Trust. The Declaration of Trust also provides that the
Trust shall, upon request, assume the defense of any claim made against
any shareholder for any act or obligation of the Trust and satisfy any
judgment thereon.
We hereby consent to the filing of this opinion as an Exhibit to such
Registration Statement and to the reference to Counsel in such Prospectus
and/or Statement of Additional Information. We also consent to the filing
of this opinion with the authorities administering the securities laws of
any jurisdiction in connection with the registration or qualification
under such laws of the Trust and its shares.
Very truly yours,
HAMILTON, MYER, SWANSON FAATZ & CLARK
By /s/ Allan B. Adams
------------------------
Allan B. Adams
<PAGE>
Exhibit 24(b)(11)
INDEPENDENT AUDITORS' CONSENT
Centennial California Tax Exempt Trust:
We consent to the use in this Post-Effective Amendment No. 6 to
Registration Statement No. 33-30471 of our report dated July 22, 1994
appearing in the Statement of Additional Information, which is a part of
such Registration Statement, and to the reference to us under the caption
"Financial Highlights" appearing in the Prospectus, which is also a part
of such Registration Statement.
/s/ DELOITTE & TOUCHE LLP
- -------------------------
DELOITTE & TOUCHE LLP
Denver, Colorado
October 27, 1994
<PAGE>
Exhibit 24(b)(13)
CENTENNIAL ASSET MANAGEMENT CORPORATION
3410 South Galena Street
Denver, Colorado 80231
May 8, 1990
The Board of Trustees
Centennial California Tax Exempt Trust
3410 South Galena Street
Denver, CO 80231
To the Board of Trustees:
Centennial Asset Management Corporation ("Centennial") herewith purchases
100,000 shares of Centennial California Tax Exempt Trust (the "Trust") for
an aggregated purchase of $100,000.
In connection with such purchase, Centennial represents that such purchase
is made for investment purposes by Centennial without any present
intention of redeeming or selling such shares; and furthermore that
Centennial agrees to advance the start-up expenses of the Trust and in
that regard agrees that such advances for such start-up expenses shall be
reimbursed to Centennial by the Trust over a five-year period that
commences on the effective date of the Trust's initial prospectus;
provided, however, that if any of the above-referenced shares of the Trust
purchased by Centennial are redeemed during the five-year period in which
such expenses are amortized by the Trust, the redemption proceeds will be
reduced by the proportionate amount of the unamortized organizational
expenses represented by the ratio the number of shares redeemed bears to
the number of initial shares remaining at the time of such redemption.
Very truly yours,
CENTENNIAL ASSET MANAGEMENT CORPORATION
By: /s/ Robert G. Galli
-----------------------------------------
Robert G. Galli, Executive Vice President
<PAGE>
Centennial California Tax Exempt Trust
Exhibit 24(b)(16) to Form N-1A
Performance Data Computation Schedule
1. YIELD AND EFFECTIVE YIELD FOR 7-DAY PERIOD ENDED 06/30/94:
Calculations of the Fund's "Yield" and "Compounded Effective Yield"
set forth in the section entitled "Yield Information" in the Statement of
Additional Information were made as follows:
Date Daily Accrual Per Share (in $)
06/24/94 $0.0000611
06/25/94 0.0000612
06/26/94 0.0000612
06/27/94 0.0000627
06/28/94 0.0000605
06/29/94 0.0000575
06/30/94 0.0000657
---------
Seven Day
Total: $0.0004299
==========
Current Yield: $0.0004299/ 7 * 365 = 2.24%
=====
365/7
Effective Yield: ($0.0004299+ 1 ) - 1 = 2.27%
=====
<PAGE>
Centennial California Tax Exempt Trust
Page 2
2. TAX EQUIVALENT CURRENT AND EFFECTIVE YIELDS FOR THE 7-DAY PERIOD
ENDED 06/30/94:
The Fund's current tax equivalent yield is calculated using the
following formula:
[ a / ( 1 - c ) ] + b = Tax Equivalent Yield
The symbols above represent the following factors:
a = 7-day current yield of tax-exempt security positions in the
portfolio.
b = 7-day current yield of taxable security positions in the
portfolio.
c = Combined stated tax rate (e.g., federal and state income tax
rates for an individual in the 39.6% federal tax bracket filing
singly).
Example: [ 0.0224 / ( 1 - .4624) ] + 0 = 4.17%
=====
The Fund's effective tax equivalent yield is calculated using the
following formula:
[ a / ( 1 - c ) ] + b = Tax Equivalent Yield
The symbols above represent the following factors:
a = 7-day effective yield of tax-exempt security positions in the
portfolio.
b = 7-day effective yield of taxable security positions in the
portfolio.
c = Combined stated tax rate (e.g., federal and state income tax
rates for an individual in the 39.6% federal tax bracket filing
singly).
Example: [ 0.0227 / ( 1 - .4624) ] + 0 = 4.22%
=====
<PAGE>
Centennial California Tax Exempt Trust
Page 3
3. TAX EQUIVALENT CURRENT AND EFFECTIVE YIELDS FOR THE 30-DAY PERIOD
ENDED 06/30/94:
The Fund's current tax equivalent yield is calculated using the
following formula:
[ a / ( 1 - c ) ] + b = Tax Equivalent Yield
The symbols above represent the following factors:
a = 30-day current yield of tax-exempt security positions in the
portfolio.
b = 30-day current yield of taxable security positions in the
portfolio.
c = Combined stated tax rate (e.g., federal and state income tax
rates for an individual in the 39.6% federal tax bracket filing
singly).
Example: [ 0.0191 / ( 1 - .4624) ] + 0 = 3.55%
=====
The Fund's effective tax equivalent yield is calculated using the
following formula:
[ a / ( 1 - c ) ] + b = Tax Equivalent Yield
The symbols above represent the following factors:
a = 30-day effective yield of tax-exempt security positions in the
potfolio.
b = 30-day effective yield of taxable security positions in the
portfolio.
c = Combined stated tax rate (e.g., federal and state income tax
rates for an individual in the 39.6% federal tax bracket filing
singly).
Example: [ 0.0193 / ( 1 - .4624) ] + 0 = 3.59%
=====
Combined Stated Tax Rate Formula:
1 - [ ( 1 - d )( 1 - e ) ] = Combined Stated Tax Rate
The symbols above represent the following factors:
d = Stated federal tax rate (e.g., federal income tax rate for an
individual in the 39.6% federal tax bracket filing singly).
e = Stated California State tax rate (e.g., for an individual in the
39.6% federal and 11% state tax bracket filing singly).
Example: 1 - [ ( 1 - .3960)( 1 - .1100) ] = 46.24%
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000854437
<NAME> CENTENNIAL CALIFORNIA TAX-EXEMPT TRUST
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1994
<PERIOD-START> JUL-01-1993
<PERIOD-END> JUN-30-1994
<INVESTMENTS-AT-COST> 61338700
<INVESTMENTS-AT-VALUE> 61338700
<RECEIVABLES> 789920
<ASSETS-OTHER> 9139
<OTHER-ITEMS-ASSETS> 126040
<TOTAL-ASSETS> 62263799
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1888136
<TOTAL-LIABILITIES> 1888136
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 60375604
<SHARES-COMMON-STOCK> 60375604
<SHARES-COMMON-PRIOR> 58076018
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 59
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 60375663
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1698190
<OTHER-INCOME> 0
<EXPENSES-NET> 523499
<NET-INVESTMENT-INCOME> 1174691
<REALIZED-GAINS-CURRENT> 80
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1174771
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1177627
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 231741608
<NUMBER-OF-SHARES-REDEEMED> 230573994
<SHARES-REINVESTED> 1131972
<NET-CHANGE-IN-ASSETS> 2296730
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 2915
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 327466
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 571764
<AVERAGE-NET-ASSETS> 65520000
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .02
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 80
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
