-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, DGNNvhXFpgvaAhmx68FXEvYXp4cQjCcQtti+L8xe5E5YoM/ZjiR/aU2tVIUZn+8K ia5o9una8EiZXcPZsRKOBg== 0000357247-94-000011.txt : 19941031 0000357247-94-000011.hdr.sgml : 19941031 ACCESSION NUMBER: 0000357247-94-000011 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 19941028 EFFECTIVENESS DATE: 19941028 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTENNIAL GOVERNMENT TRUST /CO/ CENTRAL INDEX KEY: 0000357247 STANDARD INDUSTRIAL CLASSIFICATION: 0000 IRS NUMBER: 846172630 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 002-75812 FILM NUMBER: 94555692 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-03391 FILM NUMBER: 94555693 BUSINESS ADDRESS: STREET 1: 3410 S GALENA ST CITY: DENVER STATE: CO ZIP: 80231 BUSINESS PHONE: 3036713200 MAIL ADDRESS: STREET 2: 3410 SOUTH GALENA STREET CITY: DENVER STATE: CO ZIP: 80231 FORMER COMPANY: FORMER CONFORMED NAME: DAILY CASH GOVERNMENT FUND DATE OF NAME CHANGE: 19851009 485BPOS 1 CENTENNIAL GOVERNMENT TRUST P/E #23 Registration No. 2-75812 File No. 811-3391 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X / PRE-EFFECTIVE AMENDMENT NO. ___ / / POST-EFFECTIVE AMENDMENT NO. 23 / X / and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X / AMENDMENT NO. 18 / X / CENTENNIAL GOVERNMENT TRUST - ----------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) 3410 South Galena Street Denver, Colorado, 80231 - ----------------------------------------------------------------------- (Address of Principal Executive Offices) (303) 671-3200 - ----------------------------------------------------------------------- (Registrant's Telephone Number) ANDREW J. DONOHUE, ESQ. Oppenheimer Management Corporation Two World Trade Center, New York, New York 10048-0203 - ----------------------------------------------------------------------- (Name and Address of Agent for Service) It is proposed that this filing will become effective (check appropriate box): / / Immediately upon filing pursuant to paragraph (b) / X / On November 1, 1994 pursuant to paragraph (b) / / 60 days after filing pursuant to paragraph (a) (i) / / On _________ pursuant to paragraph (a) (i) / / 75 Days after filing, pursuant to paragraph (a) (ii) / / On ________, pursuant to paragraph (a) (ii) of Rule 485 - ------------------------------------------------------------------- The Registrant has registered an indefinite number of its shares under the Securities Act of 1933 pursuant to Rule 24f-2 promulgated under the Investment Company Act of 1940. A Rule 24f-2 Notice for the Registrant's fiscal year ended June 30, 1993 was filed on August 31, 1994. FORM N-1A CENTENNIAL GOVERNMENT TRUST Cross Reference Sheet Part A of Form N-1A Item No. Prospectus Heading - --------- ------------------ 1 Front Cover Page 2 Trust Expenses 3 Financial Highlights; Yield Information 4 Cover Page; The Trust and Its Investment Policies; Investment Restrictions 5 Management of the Trusts; Trust Expenses; Additional Information - The Custodian and the Transfer Agent; Back Cover 6 Dividends, Distributions and Taxes; Additional Information; Management of the Trust 7 How to Buy Shares; Exchanges of Shares and Retirement Plans; Service Plan; Back Cover; How to Redeem Shares 8 How to Redeem Shares; Exchanges of Shares and Retirement Plans 9 * Part B of Form N-1A Item No. Statement of Additional Information Heading - --------- ------------------------------------------- 10 Cover Page 11 Cover Page 12 Additional Information 13 Investment Objective and Policies; Investment Restrictions; Exhibit A - Description of Securities Ratings 14 Trustees and Officers; Investment Management Services 15 Trustees and Officers - Major Shareholders; Investment Management Services 16 Investment Management Services; Service Plan; Additional Information; Back Cover 17 Investment Management Services - Portfolio Transactions 18 Additional Information - Description of the Trusts 19 Purchase, Redemption and Pricing of Shares; Automatic Withdrawal Plan Provisions; Yield Information 20 Additional Information - Tax Status of the Trust's Dividends and Distributions 21 Investment Management Services; Additional Information - General Distributor's Agreement; Service Plan 22 Yield Information 23 Financial Statements - ----------- * Not applicable or negative answer. Centennial Government Trust 3410 South Galena Street, Denver, Colorado 80231 Telephone 1-800-525-9310 Centennial Government Trust (the "Trust") is a no-load "money market" mutual fund with the investment objective of seeking a high current level of income consistent with preservation of capital and the maintenance of liquidity, through investment in a diversified portfolio of short-term debt instruments issued or guaranteed by the U.S. Government or its agencies or instrumentalities and maturing in, or having been called for redemption in, one year or less. See "The Trust and its Investment Policies." An investment in the Trust is neither insured nor guaranteed by the U.S. Government. Shares of the Trust are not deposits or obligations of any bank, are not guaranteed by any bank, and are not insured by the FDIC or any other agency.While the Trust seeks to maintain a stable net asset value of $1.00 per share, there can be no assurance that the Trust will be able to do so. See "The Trust and Its Investment Policies." Shares of the Trust may be purchased directly from dealers having sales agreements with the Trust's Distributor and also are offered to participants in Automatic Purchase and Redemption Programs (the "Programs") established by certain brokerage firms with which the Trust's Distributor has entered into agreements for that purpose. (See "How to Buy Shares" in the Appendix.) The information in this Prospectus should be read together with the information in the Appendix which is part of this Prospectus. Program participants should also read the description of the Program provided by their broker. This Prospectus sets forth concisely information about the Trust that a prospective investor should know before investing. A Statement of Additional Information about the Trust (the "Additional Statement"), dated November 1, 1994, has been filed with the Securities and Exchange Commission and is available without charge upon written request to Shareholder Services, Inc. (the "Transfer Agent"), P.O. Box 5143, Denver, Colorado 80217-5143 or by calling the Transfer Agent at the toll-free number shown above. The Additional Statement (which is incorporated by reference in its entirety in this Prospectus) contains more detailed information about the Trust and its management. Investors are advised to read and retain this Prospectus for future reference. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. This Prospectus is effective November 1, 1994 Table of Contents Page Trust Expenses Financial Highlights Yield Information The Trust and its Investment Policies Investment Restrictions Appendix Management of the Trusts How to Buy Shares Purchases Through Automatic Purchase and Redemption Programs Direct Purchases Guaranteed Payment Automatic Investment Plans General Service Plan How to Redeem Shares Program Participants Shares of the Trusts Owned Directly Regular Redemption Procedure Expedited Redemption Procedure Check Writing Telephone Redemptions Retirement Plans Holding Shares of Government Trust and Money Market Trust Automatic Withdrawal Plans General Information on Redemptions Exchanges of Shares and Retirement Plans Dividends, Distributions and Taxes Additional Information Trust Expenses The following table sets forth the fees that an investor in the Trust might pay and the expenses paid by the Trust during its fiscal year ended June 30, 1994. Shareholder Transaction Expenses Maximum Sales Charge on Purchases (as a percentage of offering price) None Sales Charge on Reinvested Dividends None Redemption Fees None Exchange Fee $5.00 Annual Trust Operating Expenses (as a percentage of average net assets) Management Fees 0.48% 12b-1 (Service Plan) Fees 0.20% Other Expenses 0.11% Total Trust Operating Expenses 0.79% The purpose of this table is to assist an investor in understanding the various costs and expenses that an investor in the Trust will bear directly (shareholder transaction expenses) or indirectly (annual trust operating expenses). "Other Expenses" includes such expenses as custodial and transfer agent fees, audit and legal and other business operating expenses, but excludes extraordinary expenses. For further details, see the Trust's financial statements included in the Additional Statement. The following example applies the above-stated expenses to a hypothetical $1,000 investment in shares of the Trust over the time periods shown below, assuming a 5% annual rate of return on the investment and also assuming that the shares were redeemed at the end of each stated period. The amounts shown below are the cumulative costs of such hypothetical $1,000 investment for the periods shown. 1 year 3 years 5 years 10 years $8 $25 $44 $98 This example should not be considered a representation of past or future expenses or performance. Expenses are subject to change and actual performance and expenses may be less or greater than those shown above. Financial Highlights Selected data for a share of beneficial interest outstanding throughout each period The information in the table below has been audited by Deloitte & Touche LLP, independent auditors, whose report on the financial statements of the Trust for the fiscal year ended June 30, 1994, is included in the Additional Statement. FINANCIAL HIGHLIGHTS Centennial Government Trust
Year Ended June 30, - ------------------------------------------------------------------------------------------------------------ 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 --------- --------- --------- --------- --------- --------- --------- --------- --------- - --------- PER SHARE OPERATING DATA: Net asset value, beginning of year.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 Income from investment operations -- net investment income and net realized gain on investments.......... .03 .04 .04 .07 .08 .08 .06 .05 .07 .08 Dividends and distributions to shareholders......... (.03) (.04) (.04) (.07) (.08) (.08) (.06) (.05) (.07) (.08) --------- --------- --------- --------- --------- --------- --------- --------- --------- - --------- Net asset value, end of year................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 --------- --------- --------- --------- --------- --------- --------- --------- --------- - --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- - --------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (in thousands)....... $ 613,443 $ 637,102 $ 574,717 $ 533,154 $ 219,003 $ 151,898 $ 90,035 $ 67,042 $ 78,550 $ 53,690 Average net assets (in thousands)........... $ 665,494 $ 633,017 $ 581,563 $ 418,268 $ 200,570 $ 121,909 $ 82,815 $ 74,084 $ 68,515 $ 65,241 Number of shares outstanding at end of year (in thousands)........... 613,282 637,018 574,722 533,125 218,986 151,901 90,036 67,042 78,550 53,690 Ratios to average net assets: Net investment income............. 2.79% 2.81% 4.38% 6.44% 7.75% 8.11% 5.94% 5.17% 6.59% 8.53% Expenses............. .79% .79% .78% .79% .84% .85% .90% .96% .93% .86%
See accompanying Notes to Financial Statements. Yield Information From time to time the "yield" and "compounded effective yield" of an investment in the Trust may be advertised. Both yield figures are based on historical earnings and are not intended to indicate future performance. The "yield" of the Trust is the income generated by an investment in the Trust over a seven-day period, which is then "annualized." In annualizing, the amount of income generated by the investment during that seven days is assumed to be generated each week over a 52-week period, and is shown as a percentage of the investment. The "compounded effective yield" is calculated similarly, but the annualized income earned by an investment in the Trust is assumed to be reinvested. The "compounded effective yield" will therefore be slightly higher than the yield because of the effect of the assumed reinvestment. See "Yield Information" in the Additional Statement for additional information about the methods of calculating these yields. The Trust and Its Investment Policies The Trust is a no-load "money-market" fund. It is an open-end, diversified management investment company organized as a Massachusetts business trust on January 18, 1982. The Trust's investment objective is to seek high current income consistent with the preservation of capital and the maintenance of liquidity. The value of Trust shares is not insured or guaranteed by any government agency. However, shares held in brokerage accounts would be eligible for coverage by the Securities Investor Protection Corporation for losses arising from the insolvency of the brokerage firm. The Trust's shares may be purchased at their net asset value, which will remain fixed at $1.00 per share except under extraordinary circumstances (see "Determination of Net Asset Value Per Share" in the Additional Statement for further information). There can be no assurance, however, that the Trust's net asset value will not vary or that the Trust will achieve its investment objective. The Trust's investment policies and practices are not "fundamental" policies (as defined below) unless a particular policy is identified as fundamental. The Board may change non-fundamental investment policies without shareholder approval. In seeking its objective, the Trust invests principally in obligations issued or guaranteed by the U.S. Government or its agencies or instrumentalities and maturing in twelve months or less from the date of purchase, or in repurchase agreements (described below) under which such obligations are purchased. The securities in which the Trust may invest may not yield as high a level of current income as longer-term or lower-rated securities, which generally have less liquidity and experience greater price fluctuation. Securities issued or guaranteed by the U.S. Government include a variety of U.S. Treasury securities that differ only in their interest rates, maturities and dates of issuance. Treasury Bills have maturities of one year or less. Treasury Notes have maturities of from one to ten years and Treasury Bonds generally have maturities of greater than ten years at the date of issuance. U.S. Government agencies or instrumentalities which issue or guarantee securities, also include, but are not limited to, the Federal Housing Administration, Farmers Home Administration, Export-Import Bank of the United States, Small Business Administration, Government National Mortgage Association, General Services Administration, Central Bank for Cooperatives, Federal Home Loan Bank, Federal Home Loan Mortgage Corporation, Federal Intermediate Credit Bank, Federal Land Bank, Maritime Administration, Tennessee Valley Authority, District of Columbia Armory Board, Federal National Mortgage Association and the Student Loan Marketing Association. The Trust will not invest in securities issued by the Inter-American Development Bank, the Asian- American Development Bank and the International Bank for Reconstruction and Development or in pooled mortgages offered by the Federal Housing Administration or Veterans Administration. Obligations of some U.S. Government agencies and instrumentalities may not be supported by the full faith and credit of the United States. Some are backed by the right of the issuer to borrow from the U.S. Treasury; others, such as the Federal National Mortgage Association, by discretionary authority of the U.S. Government to purchase the agencies' obligations; while still others, such as the Student Loan Marketing Association, are supported only by the credit of the instrumentality. In the case of securities not backed by the full faith and credit of the United States, the Trust must look principally to the agency issuing or guaranteeing the obligation for ultimate repayment, and may not be able to assert a claim against the United States itself in the event the agency or instrumentality does not meet its commitments. Certain Debt Obligations The Trust may invest in variable rate notes, variable rate master demand notes or in master demand notes (described in "Investment Objective and Policies" in the Additional Statement) that meet the requirements of Rule 2a-7 (discussed below). The Trust may also purchase debt obligations which are Eligible Securities, as defined below, and that either mature within twelve months from the date of purchase or have been called for redemption by the issuer, with such redemption to be effective within one year. - -Floating Rate/Variable Rate Notes. Some of the notes the Trust may purchase may have variable or floating interest rates. Variable rates are adjustable at stated periodic intervals of no more than one year. Floating rates are automatically adjusted according to a specified market rate for such investments, such as the prime rate of a bank, or the 91-day U.S. Treasury bill rate. The Trust may purchase these obligations if they have a remaining maturity of one year or less; if their maturity is greater than one year, they may be purchased if they have a demand feature that permits the Trust to recover the principal amount of the underlying security at specified intervals not exceeding one year and upon not more than 30 days' notice. Such obligations may be secured by bank letters of credit or other credit support arrangements. See "Floating Rate/Variable Rate Obligations" in the Additional Statement for more details. Ratings of Securities Under Rule 2a-7 of the Investment Company Act of 1940, as amended (the "Investment Company Act") the Trust uses the amortized cost method to value its portfolio securities to determine the Trust's net asset value per share. Rule 2a-7 places restrictions on a money market fund's investments. Under the Rule, the Trust may purchase only those securities that the Trust's Board of Trustees has determined have minimal credit risks and are "Eligible Securities." With respect to ratings, an "Eligible Security" is (a) one that has received a rating in one of the two highest short-term rating categories by any two "nationally-recognized statistical rating organizations" (as defined in the Rule) ("Rating Organizations"), or, if only one Rating Organization has rated that security, by that Rating Organization, or (b) an unrated security that is judged by Centennial Asset Management Corporation, the Trust's investment manager (the "Manager"), to be of comparable quality to investments that are "Eligible Securities" rated by Rating Organizations. The Rule permits the Trust to purchase "First Tier Securities," which are Eligible Securities rated in the highest rating category for short-term debt obligations by at least two Rating Organizations, or, if only one Rating Organization has rated a particular security, by that Rating Organization, or comparable unrated securities. Under the Rule, the Trust may invest only up to 5% of its assets in "Second Tier Securities," which are Eligible Securities that are not "First Tier Securities." In addition to the overall 5% limit on Second Tier Securities, the Trust may not invest more than (i) 5% of its total assets in the securities of any one issuer (other than the U.S. Government, its agencies or instrumentalities) or (ii) 1% of its total assets or $1 million (whichever is greater) in Second Tier Securities of any one issuer. Additionally, under Rule 2a-7, the Trust must maintain a dollar-weighted average portfolio maturity of no more than 90 days. Some of the Trust's existing investment restrictions (which are fundamental policies that may be changed only by shareholder vote) are more restrictive than the provisions of Rule 2a-7. The Trust's Board has adopted procedures under Rule 2a-7 pursuant to which the Board has delegated to the Manager certain responsibilities, in accordance with that Rule, of conforming the Trust's investments with the requirements of the Rule and those procedures. Exhibit A of the Additional Statement contains additional information on the rating categories of Rating Organizations. Ratings at the time of purchase will determine whether securities may be acquired under the above restrictions. Subsequent downgrades in ratings may require reassessments of the credit risk presented by a security and may require its sale. The rating restrictions described in this Prospectus do not apply to banks in which the Trust's cash is kept. See "Ratings of Securities" in "Investment Objective and Policies" in the Additional Statement for further details. Repurchase Agreements The Trust may acquire securities subject to repurchase agreements. The Trust's repurchase agreements must comply with the collateral requirements of Rule 2a-7. If the vendor fails to pay the agreed-upon repurchase price on the delivery date, the Trust's risks may include any costs of disposing of such collateral, and any loss resulting from any delay in foreclosing on the collateral. There is no limit on the amount of the Trust's net assets that may be subject to repurchase agreements having a maturity of seven days or less. The Trust ordinarily will not purchase or otherwise acquire any security or invest in a repurchase agreement if, as a result, more than 10% of its net assets (taken at current value) would be invested in repurchase agreements not entitling the holder to payment of principal within seven days. See "Repurchase Agreements" in the Additional Statement for further details. Loans of Portfolio Securities To attempt to increase its income, the Trust may lend its portfolio securities to qualified borrowers (other than in repurchase transactions) if the loan is collateralized in accordance with applicable regulatory requirements, and if, after any loan, the value of the securities loaned does not exceed 25% of the value of the Trust's total assets. The Trust will not enter into any securities lending agreements having a duration of greater than one year. Any securities received as collateral for a loan must mature in twelve months or less. The Trust presently does not intend to engage in securities loan transactions in the coming year. See "Loans of Portfolio Securities" in the Additional Statement for further information. Investment Restrictions The Trust has certain investment restrictions which, together with its investment objective, are fundamental policies changeable only by the vote of a "majority" (as defined in the Investment Company Act) of the Trust's outstanding voting securities. Under some of those restrictions, the Trust cannot: (1) invest in any security other than those discussed under "The Trust and Its Investment Policies," above; (2) enter into repurchase agreements maturing in more than seven days or purchase securities which are restricted as to resale or for which market quotations are not readily available, if any such investment would cause more than 10% of the Trust's assets to be invested in such securities; (3) borrow money in excess of 10% of the value of its total assets, and then only as a temporary measure for extraordinary or emergency purposes; provided that the Trust will not make any investment at a time during which such borrowing exceeds 5% of the value of its assets; no assets of the Trust may be pledged, mortgaged or assigned to secure a debt; (4) make loans, except through (i) the purchase of debt securities listed under "The Trust and Its Investment Policies," (ii) the purchase of such debt securities subject to repurchase agreements, or (iii) loans of securities as described under "Loans of Portfolio Securities," above; or (5) invest in any debt instrument having a maturity in excess of one year from the date of the investment, or, in the case of a debt instrument subject to a repurchase agreement or called for redemption, having a repurchase or redemption date more than one year from the date of the investment. The percentage restrictions above apply only at the time of investment and require no action by the Trust as a result of subsequent changes in value of the investments or the size of the Trust. A supplementary list of investment restrictions is contained in the Additional Statement. APPENDIX This Appendix is part of the Prospectuses of Centennial Money Market Trust ("Money Market Trust"), Centennial Tax Exempt Trust ("Tax Exempt Trust") and Centennial Government Trust ("Government Trust"), each of which is referred to in this Appendix individually as a "Trust" and collectively are referred to as the "Trusts." Unless otherwise indicated, the information in this Appendix applies to each Trust. Management of the Trusts The Board of Trustees of each Trust has overall responsibility for the management of that Trust under the laws of Massachusetts governing the responsibilities of trustees of business trusts. "Trustees and Officers" in the Additional Statement identifies the Trustees and officers and provides information about them. Subject to the authority of the Board, the Trusts' investment manager, Centennial Asset Management Corporation (the "Manager"), supervises the investment operations of each Trust and the composition of its portfolio and furnishes the Trusts advice and recommendations with respect to investments, investment policies and the purchase and sale of securities, pursuant to a management agreement (collectively, the "Agreements") with each Trust. The management fee is payable monthly to the Manager under the terms of each Trust's Agreement and is computed on the aggregate net assets of the respective Trust as of the close of business each day. The annual rates applicable to Money Market Trust and Government Trust are as follows: 0.50% of the first $250 million of net assets; 0.475% of the next $250 million of net assets; 0.45% of the next $250 million of net assets; 0.425% of the next $250 million of net assets; and 0.40% of net assets in excess of $1 billion. See the Additional Statement for an explanation of the Manager's reimbursement arrangement for the Trusts set forth in their Agreements and the Manager's voluntary expense assumption for Money Market Trust. The annual rates applicable to Tax Exempt Trust are as follows: 0.50% of the first $250 million of net assets; 0.475% of the next $250 million of net assets; 0.45% of the next $250 million of net assets; 0.425% of the next $250 million of net assets; 0.40% of the next $250 million of net assets; 0.375% of the next $250 million of net assets; 0.35% of the next $500 million of net assets; and 0.325% of net assets in excess of $2 billion. Furthermore, under Tax Exempt Trust's Agreement, when the value of Tax Exempt Trust's net assets is less than $1.5 billion, the annual fee payable to the Manager shall be reduced by $100,000 based on average net assets computed daily and paid monthly at the annual rates, but in no event shall the annual fee be less than $0. "Investment Management Services" in the Additional Statement contains more information about the Agreements, including a description of the exculpation provisions, expense assumption arrangements and portfolio transactions. The Manager, a wholly-owned subsidiary of Oppenheimer Management Corporation ("OMC"), has operated as an investment adviser since 1978. The Manager and its affiliates currently advise U.S. investment companies with assets aggregating over $28 billion as of June 30, 1994, and having more than 1.8 million shareholder accounts. OMC is wholly owned by Oppenheimer Acquisition Corp., a holding company owned in part by senior management of OMC and the Manager, and ultimately controlled by Massachusetts Mutual Life Insurance Company, a mutual life insurance company which also advises pension plans and investment companies. How to Buy Shares Shares of each Trust may be purchased at their offering price, which is net asset value per share, without sales charge. The net asset value will remain fixed at $1.00 per share, except under extraordinary circumstances (see "Determination of Net Asset Value Per Share" in the Additional Statement for further details). There can be no guarantee that any Trust will maintain a stable net asset value of $1.00 per share. Centennial Asset Management Corporation, which also acts as the distributor for each Trust (and in that capacity is referred to as the "Distributor"), may in its sole discretion accept or reject any order for purchase of a Trust's shares. Oppenheimer Funds Distributor, Inc. ("OFDI"), an affiliate of the Distributor, acts as the sub-distributor for each Trust (the "Sub-Distributor"). The minimum initial investment is $500 ($2,500 if by Federal Funds wire), except as otherwise described in this Prospectus. Subsequent purchases must be in amounts of $25 or more, and may be made through authorized dealers or brokers or by forwarding payment to the Distributor at P.O. Box 5143, Denver, Colorado 80217, with the name(s) of all account owners, the account number and the name of the Trust. The minimum initial and subsequent purchase requirements are waived on purchases made by reinvesting dividends from any of the "Eligible Funds" listed in "Exchange Privilege" below or by reinvesting distributions from unit investment trusts for which reinvestment arrangements have been made with the Distributor. Under an Automatic Investment Plan or military allotment plan, initial and subsequent investments must be at least $25. No share certificates will be issued unless specifically requested in writing by an investor or the dealer or broker. Each Trust intends to be as fully invested as practicable to maximize its yield. Therefore, dividends will accrue on newly- purchased shares only after the Distributor accepts the purchase order at its address in Denver, Colorado, on a day the New York Stock Exchange is open (a "regular business day"), under one of the methods of purchasing shares described below. The purchase will be made at the net asset value next determined after the Distributor accepts the purchase order. Each Trust's net asset value per share is determined twice each regular business day, at 12:00 Noon and 4:00 P.M. (all references to times in this Prospectus are to New York time) by dividing the net assets of the Trust by the total number of its shares outstanding. Each Trust's Board of Trustees has established procedures for valuing the Trust's assets, using the amortized cost method as described in "Determination of Net Asset Value Per Share" in the Additional Statement. Purchases Through Automatic Purchase and Redemption Programs Shares of each Trust are available under Automatic Purchase and Redemption Programs ("Programs") of broker-dealers that have entered into agreements with the Distributor for that purpose. Broker-dealers whose clients participate in such Programs will invest the "free cash balances" of such client's Program account in shares of the Trust selected as the primary Trust by the client for the Program account. Such purchases will be made by the broker-dealer under the procedures described in "Guaranteed Payment," below. The Program may have minimum investment requirements established by the broker-dealer. The description of the Program provided by the broker-dealer should be consulted for details, and all questions about investing in, exchanging or redeeming shares of a Trust through a Program should be directed to the broker-dealer. Direct Purchases An investor may directly purchase shares of the Trusts through any dealer which has a sales agreement with the Distributor or the Sub- Distributor. There are two ways to make a direct initial investment: either (1) complete a Centennial Funds New Account Application and mail it with payment to the Distributor at P.O. Box 5143, Denver, Colorado 80217 (if no dealer is named in the Application, the Sub-Distributor will act as the dealer), or (2) order the shares through your dealer or broker. Purchases made by Application should have a check enclosed, or payment may be made by one of the alternative means described below. -- Payment by check. Orders for shares purchased by check in U.S. dollars drawn on a U.S. bank will be effected on the regular business day on which the check (and the purchase application, if the account is new) is accepted by the Distributor. Dividends will begin to accrue on such shares the next regular business day after the purchase order is accepted. For other checks, the shares will not be purchased until the Distributor is able to convert the purchase payment to Federal Funds, and dividends will begin to accrue on such shares on the next regular business day. -- Payment by Federal Funds Wire. Shares of each Trust may be purchased by direct shareholders by Federal Funds wire. The minimum investment by wire is $2,500. The investor must first call the Distributor's Wire Department at 1-800-852-8457 to notify the Distributor of the transmittal of the wire and to order the shares. The investor's bank must wire the Federal Funds to Citibank, N.A., ABA No. 0210-0008-9, for credit to Concentration Account No. 3737-5674 (Centennial Money Market Trust or Centennial Tax Exempt Trust) or Concentration Account No. 3741-9796 (Centennial Government Trust), for further credit to the following account numbers for the respective Trust: (i) Centennial Money Market Trust Custodian Account No. 099920, (ii) Centennial Government Trust Custodian Account No. 099975, or (iii) Centennial Tax Exempt Trust Custodian Account No. 099862. The wire must state the investor's name. Shares will be purchased on the regular business day on which, prior to 4:00 P.M., the Federal Funds are received by Citibank, N.A. (the "Custodian") and the Distributor has received and accepted the investor's notification of the wire order, at the net asset value next determined after receipt of the Federal Funds and the order. Dividends on newly purchased shares will begin to accrue on the purchase date if the Federal Funds and order for the purchase are received and accepted by 12:00 Noon. Dividends will begin to accrue on the next regular business day if the Federal Funds and purchase order are received and accepted between 12:00 Noon and 4:00 P.M. The investor must also send the Distributor a completed Application when the purchase order is placed to establish a new account. Guaranteed Payment Broker-dealers with sales agreements with the Distributor (including broker-dealers who have made special arrangements with the Distributor for purchases for Program accounts) may place purchase orders with the Distributor for purchases of a Trust's shares prior to 12:00 Noon on a regular business day, and the order will be effected at the net asset value determined at 12:00 Noon that day if the broker- dealer guarantees that payment for such shares in Federal Funds will be received by the Trust's Custodian prior to 2:00 P.M. on the same day. Dividends on such shares will begin to accrue on the purchase date. If an order is received between 12:00 Noon and 4:00 P.M. on a regular business day with the broker-dealer's guarantee that payment for such shares in Federal Funds will be received by the Custodian prior to 4:00 P.M. the next regular business day, the order will be effected at 4:00 P.M. on the day the order is received, and dividends on such shares will begin to accrue on the next regular business day the Federal Funds are received by the required time. If the broker-dealer guarantees that the Federal Funds payment will be received by the Trust's Custodian by 2:00 P.M. on a regular business day on which an order is placed for shares after 12:00 Noon, the order will be effected at 4:00 P.M. that day and dividends will begin to accrue on such shares on the purchase date. Automatic Investment Plans Direct investors may purchase shares of a Trust automatically. Automatic Investment Plans may be used to make regular monthly investments ($25 minimum) from the investor's account at a bank or other financial institution. To establish an Automatic Investment Plan from a bank account, a check (minimum $25) for the initial purchase must accompany the application. Shares purchased by Automatic Investment Plan payments are subject to the redemption restrictions for recent purchases described in "How to Redeem Shares." The amount of the Automatic Investment Plan payment may be changed or the automatic investments terminated at any time by writing to Shareholder Services, Inc. (the "Transfer Agent"). A reasonable period (approximately 15 days) is required after receipt of such instructions to implement them. The Trusts reserve the right to amend, suspend, or discontinue offering Automatic Investment Plans at any time without prior notice. General Dealers and brokers who process orders for a Trust's shares on behalf of their customers may charge a fee for this service. That fee can be avoided by purchasing shares directly from a Trust. The sale of shares will be suspended during any period when the determination of net asset value is suspended, and may be suspended by the Board of Trustees whenever the Board judges it in the best interest of a Trust to do so. Service Plan Each Trust has adopted a Service Plan (the "Plan") under Rule 12b- 1 of the Investment Company Act pursuant to which the Trust will reimburse the Distributor for all or a portion of its costs incurred in connection with the personal service and maintenance of accounts that hold Trust shares. The Distributor will use all the fees received from the Trust to compensate dealers, brokers, banks, or other institutions ("Recipients") each quarter for providing personal service and maintenance of accounts that hold Trust shares. The services to be provided by Recipients under the Plan include, but shall not be limited to, the following: answering routine inquiries from the Recipient's customers concerning the Trust, providing such customers with information on their investment in Trust shares, assisting in the establishment and maintenance of accounts or sub-accounts in the Trust, making the Trust's investment plans and dividend payment options available, and providing such other information and customer liaison services and the maintenance of accounts as the Distributor or the Trust may reasonably request. Plan payments by the Trust to the Distributor will be made quarterly in the amount of the lesser of: (i) 0.05% (0.20% annually) of the net asset value of the Trust, computed as of the close of each business day or (ii) the Distributor's actual distribution expenses for that quarter of the type approved by the Board. Each Trust may make monthly payments to the Distributor (and the Distributor to Recipients) in any month where Trust assets held by a Recipient for itself or on behalf of its customers in that month exceed $200 million. Any unreimbursed expenses incurred for any quarter by the Distributor may not be recovered in later periods. The Plan has the effect of increasing annual expenses of the Trust by up to 0.20% of average annual net assets from what its expenses would otherwise be. In addition, the Manager may, under the Plan, from time to time from its own resources (which may include the profits derived from the advisory fee it receives from the Trust), make payments to Recipients for distribution, administrative and accounting services performed by Recipients. For further details, see "Service Plan" in the Additional Statement. How to Redeem Shares Program Participants A Program participant may redeem shares in the Program by writing checks as described below, or by contacting the dealer or broker. A Program participant may also arrange for "Expedited Redemptions," as described below, only through the dealer or broker. Shares of the Trusts Owned Directly Shares of the Trusts owned by a shareholder directly (not through a Program) (a "direct shareholder"), may be redeemed in the following ways: -- Regular Redemption Procedure. To redeem some or all shares in an account (whether or not represented by certificates) under the Trust's regular redemption procedures, a direct shareholder must send the following to the transfer agent for the Trust, Shareholder Services, Inc. (the "Transfer Agent"), P.O. Box 5143, Denver, Colorado 80217 [send courier or express mail deliveries to 10200 E. Girard Avenue, Building D, Denver, Colorado 80231]: (1) a written request for redemption signed by all registered owners exactly as the shares are registered, including fiduciary titles, if any, and specifying the account number and the dollar amount or number of shares to be redeemed; (2) a guarantee of the signatures of all registered owners on the redemption request or on the endorsement on the share certificate or accompanying stock power, by a U.S. bank, trust company, credit union or savings association, or a foreign bank having a U.S. correspondent bank, or by a U.S. registered dealer and broker in securities, municipal securities or government securities, or by a U.S. national securities exchange, registered securities association or clearing agency; (3) any share certificates issued for any of the shares to be redeemed; and (4) any additional documents which may be required by the Transfer Agent for redemption by corporations, partnerships or other organizations, executors, administrators, trustees, custodians, or guardians, or if the redemption is requested by anyone other than the shareholder(s) of record. A signature guarantee is not required for redemptions of $50,000 or less, requested by and payable to all shareholders of record, to be sent to the address of record for that account. Transfers of shares are subject to similar requirements. To avoid delay in redemption or transfer, shareholders having questions about these requirements should contact the Transfer Agent in writing or by calling 1-800-525-9310 before submitting a request. From time to time the Transfer Agent in its discretion may waive any or certain of the foregoing requirements in particular cases. Redemption or transfer requests will not be honored until the Transfer Agent receives all required documents in proper form. -- Expedited Redemption Procedure. In addition to the regular redemption procedure set forth above, direct shareholders whose shares are not represented by certificates may arrange to have redemption proceeds of $2,500 or more wired in Federal Funds to a designated commercial bank if the bank is a member of the Federal Reserve wire system. To place a wire redemption request, call the Transfer Agent at 1-800-852-8457. The account number of the designated financial institution and the bank ABA number must be supplied to the Transfer Agent on the Application or dealer settlement instructions establishing the account or may be added to existing accounts or changed only by signature-guaranteed instructions to the Transfer Agent from all shareholders of record. Such redemption requests may be made by telephone, wire or written instructions to the Transfer Agent. The wire for the redemption proceeds of shares redeemed prior to 12:00 noon normally will be transmitted by the Transfer Agent to the shareholder's designated bank account on the day the shares are redeemed (or, if that day is not a bank business day, on the next bank business day). Shares redeemed prior to 12:00 noon do not earn dividends on the redemption date. The wire for the redemption proceeds of shares redeemed between 12:00 noon and 4:00 P.M. normally will be transmitted by the Transfer Agent to the shareholder's designated bank account on the next bank business day after the redemption. Shares redeemed between 12:00 noon and 4:00 P.M. earn dividends on the redemption date. See "Purchase, Redemption and Pricing of Shares" in the Additional Statement for further details. -- Check Writing. Upon request, the Transfer Agent will provide any direct shareholder of the Trusts or Program participant whose shares are not represented by certificates with forms of drafts ("checks") payable through a bank selected by the Trust (the "Bank"). Checks may be made payable to the order of anyone in any amount not less than $250, and will be subject to the Bank's rules and regulations governing checks. Program participants' checks will be payable from the primary account designated by the Program participant. The Transfer Agent will arrange for checks written by direct shareholders to be honored by the Bank after obtaining a specimen signature card from the shareholder(s). Program participants should arrange for check-writing through their brokers or dealers. If a check is presented for an amount greater than the account value, it will not be honored. Shareholders of joint accounts may elect to have checks honored with a single signature. Checks issued for one Trust account must not be used if the shareholder's account has been transferred to a new account or if the account number or registration has changed. Shares purchased by check or Automatic Investment Plan payments within the prior 15 days may not be redeemed by Check Writing. A check that would require redemption of some or all of the shares so purchased is subject to non-payment. The Bank will present checks to the Trust to redeem shares to cover the amount of the check. Checks may not be presented for cash payment at the offices of the Bank or the Trust's Custodian. This limitation does not affect the use of checks for the payment of bills or to obtain cash at other banks. The Trust reserves the right to amend, suspend, or discontinue check writing privileges at any time without prior notice. -- Telephone Redemptions. Direct shareholders of the Trusts may redeem their shares by telephone by calling the Transfer Agent at 1- 800-852-8457. This procedure for telephone redemptions is not available to Program participants. Proceeds of telephone redemptions will be paid by check payable to the shareholder(s) of record and sent to the address of record for the account. Telephone redemptions are not available within 30 days of a change of the address of record. Up to $50,000 may be redeemed by telephone, once in every seven day period. The Transfer Agent may record any calls. Telephone redemptions may not be available if all lines are busy, and shareholders would have to use the Trusts' regular redemption procedures described above. Telephone redemption privileges are not available for newly-purchased (within the prior 15 days) shares or for shares represented by certificates. Telephone redemption privileges apply automatically to each shareholder and the dealer representative of record unless the Transfer Agent receives cancellation instructions from a shareholder of record. If an account has multiple owners, the Transfer Agent may rely on the instructions of any one owner. Retirement Plans Holding Shares of Government Trust and Money Market Trust Requests for distributions from OppenheimerFunds-sponsored Individual Retirement Accounts ("IRAs"), 403(b)(7) custodial plans, or pension or profit-sharing plans of direct shareholders for which the Manager or its affiliates act as sponsors should be addressed to "Bank of Boston c/o Shareholder Services, Inc." at the above address, and must: (i) state the reason for distribution; (ii) state the owner's awareness of tax penalties if the distribution is premature; and (iii) conform to the requirements of the plan and the Trust's requirements for regular redemptions discussed above. Participants (other than self-employed persons) in OppenheimerFunds-sponsored pension or profit- sharing plans may not directly request redemption of their accounts. The employer or plan administrator must sign the request. Distributions from such plans are subject to additional requirements under the Internal Revenue Code and certain documents (available from the Transfer Agent) must be completed before the distribution may be made. Distributions from retirement plans are subject to withholding requirements under the Internal Revenue Code of 1986, as amended, and IRS Form W-4P (available from the Transfer Agent) must be submitted to the Transfer Agent with the distribution request, or the distribution may be delayed. Unless the shareholder has provided the Transfer Agent with a certified tax identification number, the Internal Revenue Code requires that tax be withheld from any distribution even if the shareholder elects not to have tax withheld. The Trustee, the Trusts, the Manager, the Distributor and the Transfer Agent assume no responsibility to determine whether a distribution satisfies the conditions of applicable tax laws and will not be responsible for any penalties assessed. Automatic Withdrawal Plans Direct shareholders of the Trusts can authorize the Transfer Agent to redeem shares (minimum $50) automatically on a monthly, quarterly, semi-annual or annual basis under an Automatic Withdrawal Plan. Shares will be redeemed as of 4:00 P.M. three days prior to the date requested by the shareholder for receipt of the payment. The Trusts cannot guarantee receipt of payment on the date requested and reserve the right to amend, suspend or cease offering such Plan at any time without prior notice. Required minimum distributions from OppenheimerFunds- sponsored retirement plans may not be arranged on this basis. For further details, see the Automatic Withdrawal Plan provisions included as Exhibit B to the Additional Statement. General Information on Redemptions The redemption price will be the net asset value per share of the Trust next determined after the receipt by the Transfer Agent of a request in proper form. Under certain unusual circumstances, the Board of Trustees of Tax Exempt Trust may involuntarily redeem small accounts (valued at less than $500). Should the Board elect to exercise this right, it may also fix, in accordance with the Investment Company Act, the requirements for any notice to be given to the shareholders in question (not less than 30 days), or may set requirements for permission to allow the shareholder to increase the investment so that the shares would not be involuntarily redeemed. The Board of Trustees of Tax Exempt Trust may also involuntarily redeem shares in amounts sufficient to reimburse the Trust or the Distributor for any loss due to cancellation of a share purchase order. Under the Internal Revenue Code, the Trusts may be required to impose "backup" withholding of Federal income tax at the rate of 31% from any taxable dividends and distributions the Trust may make if the shareholder has not furnished the Trust with a certified taxpayer identification number or has not complied with provisions of the Internal Revenue Code relating to reporting dividends. Payment for redeemed shares is made ordinarily in cash and forwarded within seven days of the Transfer Agent's receipt of redemption instructions in proper form, except under unusual circumstances as determined by the Securities and Exchange Commission. The Transfer Agent may delay forwarding a redemption check for recently-purchased shares only until the purchase check has cleared, which may take up to 15 or more days from the purchase date. Such delay may be avoided if the shareholder arranges telephone or written assurance satisfactory to the Transfer Agent from the bank on which the purchase payment was drawn, or by purchasing shares by Federal Funds wire, as described above. The Trust makes no charge for redemption. Dealers or brokers may charge a fee for handling redemption transactions, but such fee can be avoided by requesting the redemption directly through the Transfer Agent. Under certain circumstances, the proceeds of redemption of shares of a Trust acquired by exchange of shares of "Eligible Funds" (described below) purchased subject to a contingent deferred sales charge ("CDSC") may be subject to the CDSC (see "Exchange Privilege" below). Exchanges of Shares and Retirement Plans Exchange Privilege Shares of each of the Trusts held under Programs may be exchanged for shares of Centennial Money Market Trust, Centennial Government Trust, Centennial Tax Exempt Trust, Centennial California Tax Exempt Trust and Centennial New York Tax Exempt Trust if available for sale in the shareholder's state of residence only by instructions of the broker. Shares of the Trusts may, under certain conditions, be exchanged by direct shareholders for Class A shares of the following funds, all collectively referred to as "Eligible Funds": (i) Oppenheimer Target Fund, Oppenheimer Champion High Yield Fund, Oppenheimer Asset Allocation Fund, Oppenheimer Discovery Fund, Oppenheimer U.S. Government Trust, Oppenheimer Global Environment Fund, Oppenheimer Global Growth & Income Fund, Oppenheimer Global Emerging Growth Fund, Oppenheimer Limited-Term Government Fund, Oppenheimer Intermediate Tax-Exempt Bond Fund, Oppenheimer Insured Tax-Exempt Bond Fund, Oppenheimer Fund, Oppenheimer Global Fund, Oppenheimer Time Fund, Oppenheimer Growth Fund, Oppenheimer Equity Income Fund, Oppenheimer Main Street California Tax-Exempt Fund, Oppenheimer Main Street Income & Growth Fund, Oppenheimer Gold & Special Minerals Fund, Oppenheimer Investment Grade Bond Fund, Oppenheimer Value Stock Fund, Oppenheimer California Tax-Exempt Fund, Oppenheimer Pennsylvania Tax-Exempt Fund, Oppenheimer Florida Tax-Exempt Fund, Oppenheimer New Jersey Tax-Exempt Fund, Oppenheimer New York Tax-Exempt Fund, Oppenheimer High Yield Fund, Oppenheimer Total Return Fund, Inc., Oppenheimer Mortgage Income Fund, Oppenheimer Tax-Free Bond Fund, Oppenheimer Strategic Income Fund, Oppenheimer Strategic Income & Growth Fund, Oppenheimer Strategic Short-Term Income Fund and Oppenheimer Strategic Investment Grade Bond Fund; and (ii) the following "Money Market Funds": Centennial Money Market Trust, Centennial Government Trust, Centennial America Fund, L.P., Centennial California Tax Exempt Trust, Centennial New York Tax Exempt Trust and Centennial Tax Exempt Trust (collectively, the "Centennial Trusts"), Oppenheimer Money Market Fund, Inc., Oppenheimer Cash Reserves and Daily Cash Accumulation Fund, Inc. There is an initial sales charge on the purchase of Class A shares of each Eligible Fund except the Money Market Funds (under certain circumstances described below, redemption proceeds of Money Market Fund shares may be subject to a CDSC). Shares of the Trusts and of the other Eligible Funds may be exchanged at net asset value, if all of the following conditions are met: (1) shares of the fund selected for exchange are available for sale in the shareholder's state of residence; (2) the respective prospectuses of the funds whose shares are to be exchanged and acquired offer the Exchange Privilege to the investor; (3) newly- purchased shares (by initial or subsequent investment) are held in an account for at least 7 days prior to the exchange; and (4) the aggregate net asset value of the shares surrendered for exchange into a new account is at least equal to the minimum investment requirements of the fund whose shares are to be acquired. In addition to the conditions stated above, shares of Eligible Funds may be exchanged for shares of any Money Market Fund; shares of any Money Market Fund (including the Trusts) purchased without a sales charge may be exchanged for shares of Eligible Funds offered with a sales charge upon payment of the sales charge (or, if applicable, may be used to purchase shares of Eligible Funds subject to a CDSC); and shares of a Trust acquired by reinvestment of dividends and distributions from any Eligible Fund, except Oppenheimer Cash Reserves, or from any unit investment trust for which reinvestment arrangements have been made with the Distributor may be exchanged at net asset value for shares of any Eligible Fund. The redemption proceeds of shares of a Trust acquired by exchange of Class A shares of an Eligible Fund purchased subject to a CDSC, that are redeemed within 18 months of the end of the calendar month of the initial purchase of the exchanged shares, will be subject to the CDSC as described in the prospectus of that other eligible fund; in determining whether the CDSC is payable, shares of the Trust not subject to the CDSC are redeemed first, including shares purchased by reinvestment of dividends and capital gains distributions from any Eligible Fund or shares of the Trust acquired by exchange of shares of Eligible Funds on which a front-end sales charge was paid or credited, and then other shares are redeemed in the order of purchase. -- How to Exchange Shares. An exchange may be made by submitting an Exchange Authorization Form to the Transfer Agent, signed by all registered owners. In addition, direct shareholders of the Trusts may exchange shares of a Trust for shares of any Eligible Fund by telephone exchange instructions to the Transfer Agent by a shareholder or the dealer representative of record for an account. The Trusts may modify, suspend or discontinue this exchange privilege at any time, and will do so on 60 days' notice if such notice is required by regulations adopted under the Investment Company Act. The Trusts reserve the right to reject requests submitted in bulk on behalf of 10 or more accounts. Exchange requests must be received by the Transfer Agent by 4:00 P.M. on a regular business day to be effected that day. The number of shares exchanged may be less than the number requested if the number requested would include shares subject to a restriction cited above or shares covered by a certificate that is not tendered with such request. Only the shares available for exchange without restriction will be exchanged. -- Telephone Exchanges. Direct shareholders may place a telephone exchange request by calling the Transfer Agent at 1-800-852-8457. Telephone exchange calls may be recorded by the Transfer Agent. Telephone exchanges are subject to the rules described above. By exchanging shares by telephone, the shareholder is acknowledging receipt of a prospectus of the fund to which the exchange is made and that for full or partial exchanges, any special account features such as Automatic Investment Plans, Automatic Withdrawal Plans and retirement plan contributions will be switched to the new account unless the Transfer Agent is otherwise instructed. Telephone exchange privileges automatically apply to each direct shareholder of record and the dealer representative of record unless and until the Transfer Agent receives written instructions from the shareholder(s) of record cancelling such privileges. If an account has multiple owners, the Transfer Agent may rely on the instructions of any one owner. The Transfer Agent has adopted reasonable procedures to confirm that telephone instructions are genuine, by requiring callers to provide tax identification number(s) and other account data and by recording calls and confirming such transactions in writing. If the Transfer Agent does not use such procedures, it may be liable for losses due to unauthorized transactions, but otherwise will not be liable for losses or expenses arising out of telephone instructions reasonably believed to be genuine. The Transfer Agent reserves the right to require shareholders to confirm, in writing, telephone exchange privileges for an account. Shares acquired by telephone exchange must be registered exactly as the account from which the exchange was made. Certificated shares are not eligible for telephone exchange. If all telephone exchange lines are busy (which might occur, for example, during periods of substantial market fluctuations), shareholders might not be able to request telephone exchanges and would have to submit written exchange requests. -- General Information on Exchanges. Shares to be exchanged are redeemed on the day the Transfer Agent receives an exchange request in proper form (the "Redemption Date"), as of 4:00 P.M. Normally, shares of the fund to be acquired are purchased on the Redemption Date, but such purchases may be delayed by either fund up to five business days if it determines that it would be disadvantaged by an immediate transfer of the redemption proceeds. The Trust in its discretion reserves the right to refuse any exchange request that will disadvantage it. The Eligible Funds have different investment objectives and policies. Each of those funds imposes a sales charge on purchases of Class A shares except the Money Market Funds. For complete information, including sales charges and expenses, a prospectus of the fund into which the exchange is being made should be read prior to an exchange. If a sales charge is assessed on all shares acquired by exchange, there is no service charge. Otherwise, a $5 service charge will be deducted from the account into which the exchange is made to defray administrative expenses. Dealers and brokers who process exchange orders on behalf of their customers may charge for their services. Those charges may be avoided by requesting the Trust directly to exchange shares. For Federal tax purposes, an exchange is treated as a redemption and purchase of shares. Retirement Plans The Distributor has available for direct shareholders who purchase shares of Government Trust and Money Market Trust: (i) individual retirement accounts (IRAs), including Simplified Employee Pension Plans (SEP IRAs); (ii) prototype pension and profit-sharing plans for corporations and self-employed individuals; and (iii) Section 403(b)(7) custodial plans for employees of public educational institutions and organizations of the type described in Section 501(c)(3) of the Internal Revenue Code. The minimum initial IRA, SEP IRA, pension or profit-sharing plan investment is normally $250. The minimum initial 403(b)(7) plan investment is $25. For further details, including the administrative fees, the appropriate retirement plan should be requested from the Distributor. Retirement plans are not available to direct shareholders who purchase shares of Tax Exempt Trust. Dividends, Distributions and Taxes This discussion relates solely to Federal tax laws and is not exhaustive; a qualified tax adviser should be consulted. Dividends and distributions may be subject to Federal, state and local taxation. Information about the possible applicability of the Alternative Minimum Tax to Tax Exempt Trust's dividends and distributions is contained in "Investment Objective and Policies - Private Activity Municipal Securities" in the Additional Statement. The Additional Statement contains further discussion of tax matters affecting the Trusts and their distributions. Dividends and Distributions Each Trust intends to declare all of its net income, as defined below, as dividends on each regular business day and to pay dividends monthly. Dividends will be payable to shareholders as described in "How to Buy Shares" above. All dividends and distributions for the accounts of Program participants are automatically reinvested in additional shares of the Trust selected. Dividends accumulated since the prior payment will be reinvested in full and fractional shares of the respective Trust at net asset value on the third Thursday of each calendar month. If a shareholder redeems all shares at any time during a month, the redemption proceeds include all dividends accrued up to the redemption date for shares redeemed prior to 12:00 noon, and include all dividends accrued through the redemption date for shares redeemed between 12:00 noon and 4:00 P.M. Such investors may receive cash payments by asking the broker to redeem shares. Participants in an A.G. Edwards & Sons, Inc. Cash Convenience Account Program (other than those whose Account is an Individual Retirement Account) holding shares of Tax Exempt Trust or Government Trust will receive account statements five times a year, at the end of March, May, August, October and December, if the only activity in their account during that period is the automatic reinvestment of dividends. Dividends and distributions payable to direct shareholders of the Trusts will also be automatically reinvested in shares of the respective Trust at net asset value, on the third Thursday of each calendar month, unless the shareholder asks the Transfer Agent in writing to pay dividends and distributions in cash or to reinvest them in another Eligible Fund, as described in "Dividend Reinvestment in Another Fund" in the Additional Statement. That notice must be received prior to the record date for a dividend to be effective as to that dividend. Dividends, distributions and the proceeds of redemptions of Trust shares represented by checks returned to the Transfer Agent by the Postal Service as undeliverable will be reinvested in shares of the respective Trust, as promptly as possible after the return of such check to the Transfer Agent to enable the investor to earn a return on otherwise idle funds. Under the terms of a Program, a broker-dealer may pay out the value of some or all of a Program participant's Trust shares prior to redemption of such shares by the Trust. In such cases, the shareholder will be entitled to dividends on such shares only up to and including the date of such payment. Dividends on such shares accruing between the date of payment and the date such shares are redeemed by the Trusts will be paid to the broker-dealer. It is anticipated that such payments will occur only to satisfy debit balances arising in a shareholder's account under a Program. A Trust's net investment income for dividend purposes consists of all interest accrued on portfolio assets, less all expenses of the Trust for such period. Distributions from net realized gains on securities, if any, will be paid at least once each year, and may be made more frequently in compliance with the Internal Revenue Code and the Investment Company Act. Long-term capital gains, if any, will be identified separately when tax information is distributed. No Trust will make any distributions from net realized securities gains unless capital loss carry forwards, if any, have been used or have expired. Receipt of tax-exempt income must be reported on the taxpayer's Federal income tax return. To effect its policy of maintaining a net asset value of $1.00 per share, each Trust, under certain circumstances, may withhold dividends or make distributions from capital or capital gains. The Additional Statement describes how dividends and distributions received by direct shareholders of the Trusts may be reinvested in shares of any Eligible Fund at net asset value. Tax Status of Money Market Trust's and Government Trust's Dividends and Distributions Dividends paid by these Trusts derived from net investment income or net short-term capital gains are taxable to shareholders as ordinary income, whether received in cash or reinvested. If either Trust has net realized long-term capital gains in a fiscal year, it may pay an annual "long-term capital gains distribution," which will be so identified when paid and when tax information is distributed. Long-term capital gains are taxable to shareholders as long-term capital gains, whether received in cash or reinvested, regardless of how long Fund shares have been held. Although income from securities issued by the U.S. Government may be exempt from income taxation by various states, such exemptions may not apply when the income is received in the form of a dividend from either of these Trusts. The Government Trust will advise shareholders of the percentage of its income earned on federal obligations. Tax Status of Tax Exempt Trust's Dividends and Distributions This Trust intends to qualify under the Internal Revenue Code during each fiscal year to pay "exempt-interest dividends" to its shareholders and did so qualify during its last fiscal year. Exempt- interest dividends which are derived from net investment income earned by the Trust on Municipal Securities will be excludable from gross income of shareholders for Federal income tax purposes. Net investment income includes the allocation of amounts of income from the Municipal Securities in the portfolio of the Trust which is excludable from gross income for Federal individual income tax purposes, less expenses. Expenses are accrued daily. This allocation will be made by the use of one designated percentage applied uniformly to all income dividends made during the calendar year. Such designation will normally be made following the end of each fiscal year as to income dividends paid in the prior year. The percentage of income designated as tax-exempt may substantially differ from the percentage of the Trust's income that was tax-exempt for a given period. Although from time to time a portion of the exempt-interest dividends paid by the Trust may be an item of tax preference for shareholders subject to the alternative minimum tax, all of the dividends (excluding distributions) paid by the Trust during the calendar year ended December 31, 1993 were exempt from Federal income taxes. The net amount of any income on Municipal Securities subject to the alternative minimum tax will be identified when tax information is distributed by the Trust. The Trust will report annually to shareholders the percentage of interest income it received during the preceding year on Municipal Securities. Receipt of tax-exempt income must be reported on the taxpayer's Federal income tax return. Shareholders receiving Social Security benefits should be aware that exempt-interest dividends are a factor in determining whether such benefits are subject to Federal income tax. A Trust shareholder treats a dividend as a receipt of ordinary income (whether paid in cash or reinvested in additional shares) if derived from net interest income earned by the Trust from one or more of: (i) certain taxable temporary investments (such as certificates of deposit, commercial paper, obligations of the U.S. government, its agencies or instrumentalities, and repurchase agreements), (ii) income from securities loans, or (iii) an excess of net short-term capital gains over net long-term capital losses. Additionally, all or a portion of the Trust's exempt-interest dividends may be a component of the "adjusted current earnings" preference item under the Federal corporate alternative minimum tax. Under the Internal Revenue Code, interest on loans to purchase shares of the Trust may not be deducted for Federal tax purposes. In addition, under rules used by the Internal Revenue Service for determining when borrowed funds are deemed used for the purpose of purchasing or carrying particular assets, the purchase of shares of the Trust may be considered to have been made with borrowed funds even though the borrowed funds are not directly traceable to the purchase of shares. Furthermore, under Section 147(a) of the Internal Revenue Code, persons who are "substantial users" (or persons related thereto) of facilities financed by industrial development bonds or Private Activity Municipal Securities should refer to "Private Activity Municipal Securities" in the Additional Statement of Tax Exempt Trust and should consult their own tax advisers before purchasing shares. No investigation as to the users of the facilities financed by such bonds has been made by the Trust. Tax Status of the Trusts If a Trust qualifies as a "regulated investment company" under the Internal Revenue Code, it will not be liable for Federal income taxes on amounts paid by it as dividends and distributions. Each Trust qualified during its last fiscal year and intends to qualify in the current and future fiscal years, while reserving the right not to qualify. However, the Internal Revenue Code contains a number of complex tests relating to such qualification that a Trust might not meet in any particular year. If a Trust does not qualify, it would be treated for tax purposes as an ordinary corporation and receive no tax deduction for payments made to shareholders. Tax Exempt Trust would then be unable to pay "exempt-interest dividends" as discussed before. Dividends paid by any Trust will not be eligible for the dividends- received deduction for corporations. For information as to "backup" withholding on taxable dividends, see "How to Redeem Shares," above. Additional Information Description of Shares and of the Trusts Each share of each Trust represents an interest in that Trust equal to the interest of each other share of the Trust and entitles the holder to one vote per share (and a fractional vote for a fractional share) on matters submitted to a shareholder vote. The Trustees may divide or combine the shares into a greater or lesser number of shares without thereby changing the proportionate beneficial interest in the Trust. Shares do not have cumulative voting rights or conversion, preemptive or subscription rights. Shares of each Trust have equal liquidation rights as to the assets of that Trust. Each Trust's Board of Trustees is empowered to issue additional "series" of shares of that Trust, which may have separate assets and liabilities. The Trusts do not anticipate holding annual meetings. Under certain circumstances, shareholders of each Trust have the right to remove a Trustee. Although the Declaration of Trust of each Trust states that when issued, shares are fully-paid and nonassessable, shareholders may be held personally liable as "partners" for the Trust's obligations. However, the risk of a shareholder incurring any financial loss is limited to the relatively remote circumstances in which the Trust is unable to meet its obligations. See "Additional Information" in the Additional Statement for details. The Custodian and the Transfer Agent The Custodian of the assets of the Trusts is Citibank, N.A. The Manager and its affiliates presently have banking relationships with the Custodian. See "Additional Information" in the Additional Statement for further information. Each Trust's cash balances in excess of $100,000 held by the Custodian are not protected by Federal deposit insurance. Such uninsured balances may at times be substantial. The foregoing rating restrictions under Rule 2a-7 described under "The Trust and Its Investment Policies" do not apply to banks in which a Trust's cash is kept. Shareholder Services, Inc., a subsidiary of OMC, acts as Transfer Agent and shareholder servicing agent for the Trusts and the other funds advised by the Manager, on an at-cost basis. The fees to the Transfer Agent do not include payments for any services of the type paid, or to be paid, by the Trusts to the Distributor and to Recipients under the Service Plan. Shareholders should direct any inquiries regarding the Trusts to the Transfer Agent at the address or toll-free number on the back cover. Program participants should direct any inquiries regarding the Trust to their broker. No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this Prospectus, and if given or made such information and representations must not be relied upon as having been authorized by the respective Trust, the Manager, the Distributor or any affiliate thereof. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby in any state to any person to whom it is unlawful to make such offer in such state. Investment Adviser and Distributor Centennial Asset Management Corporation 3410 South Galena Street Denver, Colorado 80231 Transfer Agent and Shareholder Servicing Agent Shareholder Services, Inc. P.O. Box 5143 Denver, Colorado 80217-5143 1-800-525-9310 Custodian of Portfolio Securities Citibank, N.A. 399 Park Avenue New York, New York 10043 Independent Auditors Deloitte & Touche LLP 1560 Broadway Denver, Colorado 80202 Legal Counsel Myer, Swanson & Adams, P.C. 1600 Broadway - Suite 1850 Denver, Colorado 80202 Centennial Government Trust Prospectus Effective November 1, 1994 Centennial Government Trust Prospectus Effective November 1, 1994 STATEMENT OF ADDITIONAL INFORMATION CENTENNIAL GOVERNMENT TRUST 3410 South Galena Street, Denver, Colorado 80231 1-800-525-9310 This Statement of Additional Information (the "Additional Statement") is not a Prospectus. This Additional Statement should be read together with the Prospectus dated November 1, 1994 (the "Prospectus") of Centennial Government Trust (the "Trust"), which may be obtained upon written request to Shareholder Services, Inc. (the "Transfer Agent"), P.O. Box 5143, Denver, Colorado 80217 or by calling the Transfer Agent at the toll-free number shown above. TABLE OF CONTENTS Page Investment Objective and Policies 2 Investment Restrictions 4 Appendix Trustees and Officers A-1 Investment Management Services A-4 Service Plan A-6 Purchase, Redemption and Pricing of Shares A-8 Yield Information A-10 Additional Information A-11 Exhibit A: Description of Securities Ratings A-13 Exhibit B: Automatic Withdrawal Plan Provisions A-17 Independent Auditors' Report A-18 Financial Statements A-19 This Additional Statement is effective November 1, 1994. INVESTMENT OBJECTIVE AND POLICIES The investment objectives and policies of the Trust are described in the Prospectus. Set forth below is supplemental information about those policies. Certain capitalized terms used in this Additional Statement are defined in the Prospectus. The Trust will not make investments with the objective of seeking capital growth. However, the value of the securities held by the Trust may be affected by changes in general interest rates. Because the current value of debt securities varies inversely with changes in prevailing interest rates, if interest rates increase after a security is purchased, that security would normally decline in value. Conversely, should interest rates decrease after a security is purchased, its value would rise. However, those fluctuations in value will not generally result in realized gains or losses to the Trust since the Trust does not usually intend to dispose of securities prior to their maturity. A debt security held to maturity is redeemable by its issuer at full principal value plus accrued interest. To a limited degree, the Trust may engage in short-term trading to attempt to take advantage of short-term market variations, or may dispose of a portfolio security prior to its maturity if, on the basis of a revised credit evaluation of the issuer or other considerations, the Trust believes such disposition advisable or needs to generate cash to satisfy redemptions. In such cases, the Trust may realize a capital gain or loss. Repurchase Agreements. In a repurchase transaction, the Trust acquires a security from, and simultaneously resells it to, an approved vendor (a U.S. commercial bank or the U.S. branch of a foreign bank having total domestic assets of at least $1 billion or a broker-dealer with a net capital of at least $50 million and which has been designated a primary dealer in government securities). The resale price exceeds the purchase price by an amount that reflects an agreed- upon interest rate effective for the period during which the repurchase agreement is in effect. The majority of these transactions run from day to day, and delivery pursuant to resale typically will occur within one to five days of the purchase. Repurchase agreements are considered "loans" under the Investment Company Act, collateralized by the underlying security. The Trust's repurchase agreements require that at all times while the repurchase agreement is in effect, the value of the collateral must equal or exceed the repurchase price to fully collateralize the repayment obligation. Additionally, the Manager will impose creditworthiness requirements to confirm that the vendor is financially sound, and will continuously monitor the collateral's value. Loans of Portfolio Securities. The Trust may lend its portfolio securities, subject to the restrictions stated in the Prospectus, to attempt to increase the Trust's income to distribute to shareholders. Under applicable regulatory requirements (which are subject to change), the loan collateral must, on each business day, at least equal the value of the loaned securities and must consist of cash, bank letters of credit or U.S. Government Securities. To be acceptable as collateral, letters of credit must obligate a bank to pay amounts demanded by the Trust if the demand meets the terms of the letter. The Trust receives an amount equal to the dividends or interest on loaned securities and also receives one or more of (a) negotiated loan fees, (b) interest on securities used as collateral, or (c) interest on short-term debt securities purchased with such loan collateral; either type of interest may be shared with the borrower. The Trust may also pay reasonable finder's, custodian and administrative fees and will not lend its portfolio securities to any officer, trustee, employee or affiliate of the Trust or the Manager. The terms of the Trust's loans must meet applicable tests under the Internal Revenue Code and permit the Trust to reacquire loaned securities on five days' notice or in time to vote on any important matter. Floating Rate/Variable Rate Obligations. The Trust may invest in instruments with floating or variable interest rates. The interest rate on a floating rate obligation is based on a stated prevailing market rate, such as a bank's prime rate, the 91-day U.S. Treasury Bill rate, the rate of return on commercial paper or bank certificates of deposit, or some other standard, and is adjusted automatically each time such market rate is adjusted. The interest rate on a variable rate obligation is also based on a stated prevailing market rate but is adjusted automatically at a specified interval of no more than one year. Generally, the changes in the interest rate on such securities reduce the fluctuation in their market value. As interest rates decrease or increase, the potential for capital appreciation or depreciation is less than that for fixed-rate obligations of the same maturity. Some variable rate or floating rate obligations in which the Trust may invest have a demand feature entitling the holder to demand payment at an amount approximately equal to amortized cost or the principal amount thereof plus accrued interest at any time, or at specified intervals not exceeding one year. These notes may or may not be backed by bank letters of credit. Variable rate demand notes may include master demand notes, which are obligations that permit the Trust to invest fluctuating amounts, which may change daily without penalty, pursuant to direct arrangements between the Trust, as lender, and the borrower. The Manager, on behalf of the Trust, will consider on an ongoing basis the creditworthiness of the issuers of the floating and variable rate obligations in the Trust's portfolio. Master Demand Notes. A master demand note is a corporate obligation that permits the investment of fluctuating amounts by the Trust at varying rates of interest pursuant to direct arrangements between the Trust, as lender, and the corporate borrower that issues the note. These notes permit daily changes in the amounts borrowed. The Trust has the right to increase the amount under the note at any time up to the full amount provided by the note agreement, or to decrease the amount, and the borrower may repay up to the full amount of the note at any time without penalty. Because variable amount master demand notes are direct lending arrangements between the lender and the borrower, it is not generally contemplated that such instruments will be traded. There is no secondary market for these notes, although they are redeemable and thus immediately repayable by the borrower at face value, plus accrued interest, at any time. Accordingly, the Trust's right to redeem is dependent on the ability of the borrower to pay principal and interest on demand. In evaluating the master demand arrangements, the Manager considers the earning power, cash flow, and other liquidity ratios of the issuer. Master demand notes are not typically rated by credit rating agencies. If they are not rated, the Trust may invest in them only if, at the time of an investment, they are Eligible Securities. The Manager will continuously monitor the borrower's financial ability to meet all of its obligations because the Trust's liquidity might be impaired if the borrower were unable to pay principal and interest on demand. Ratings of Securities. The Prospectus describes "Eligible Securities" in which the Trust may invest and indicates that if a security's rating is downgraded, the Manager and/or the Board may have to reassess the security's credit risks. If a security has ceased to be a First Tier Security, Centennial Asset Management Corporation (the "Manager") will promptly reassess whether the security continues to present "minimal credit risks." If the Manager becomes aware that any Rating Organization has downgraded its rating of a Second Tier Security or rated an unrated security below its second highest rating category, the Trust's Board of Trustees shall promptly reassess whether the security presents minimal credit risks and whether it is in the best interests of the Trust to dispose of it; but if the Trust disposes of the security within five days of the Manager learning of the downgrade, the Manager will provide the Board with subsequent notice of such downgrade. If a security is in default, or ceases to be an Eligible Security, or is determined no longer to present minimal credit risks, the Board must determine whether it would be in the best interests of the Trust to dispose of the security. The Rating Organizations currently designated as such by the Securities and Exchange Commission ("SEC") are Standard & Poor's Corporation, Moody's Investors Service, Inc., Fitch Investors Services, Inc., Duff and Phelps, Inc., IBCA Limited and its affiliate, IBCA, Inc., and Thomson Bankwatch, Inc. A description of the ratings categories of those Rating Organizations is contained in Exhibit A. INVESTMENT RESTRICTIONS The Trust's significant investment restrictions are set forth in the Prospectus. The following investment restrictions are also fundamental policies of the Trust, and together with the fundamental policies and restrictions described in the Prospectus, cannot be changed without the vote of a "majority" of the Trust's outstanding shares. Under the Investment Company Act, such a "majority" vote is defined as the vote of the holders of the lesser of: (i) 67% or more of the shares present or represented by proxy at a shareholders meeting, if the holders of more than 50% of the outstanding shares are present or represented by proxy, or (ii) more than 50% of the outstanding shares. Under these additional restrictions, the Trust cannot: (1) invest in commodities or commodity contracts or invest in interests in oil, gas or other mineral exploration or development programs; (2) invest in real estate; (3) purchase securities on margin or make short sales of securities; (4) invest in or hold securities of any issuer if those officers and Trustees of the Trust or its adviser who beneficially own individually more than 0.5% of the securities of such issuer together own more than 5% of the securities of such issuer; (5) underwrite securities of other companies; or (6) invest in securities of other investment companies, except as they may be acquired as part of a merger, consolidation or acquisition of assets. APPENDIX This Appendix is part of the Additional Statement of Centennial Money Market Trust ("Money Market Trust"), Centennial Tax Exempt Trust ("Tax Exempt Trust") and Centennial Government Trust ("Government Trust"), each of which is referred to in this Appendix individually as a "Trust" and collectively are referred to as the "Trusts." Unless otherwise indicated, the information in this Appendix applies to each Trust. TRUSTEES AND OFFICERS The Trustees and officers of the Trusts and their principal business affiliations and occupations during the past five years are listed below. All Trustees are Trustees of each of the Trusts. The Trustees are also trustees, directors, or managing general partners of Centennial California Tax Exempt Trust, Centennial New York Tax Exempt Trust, Daily Cash Accumulation Fund, Inc., Oppenheimer Champion High Yield Fund, Centennial America Fund, L.P., Oppenheimer Limited-Term Government Fund, Oppenheimer Tax-Exempt Bond Fund, Oppenheimer Main Street Funds, Inc., Oppenheimer Cash Reserves, Oppenheimer Equity Income Fund, Oppenheimer High Yield Fund, Oppenheimer Integrity Funds, Oppenheimer Strategic Funds Trust, Oppenheimer Strategic Income & Growth Fund, Oppenheimer Strategic Short-Term Income Fund, Oppenheimer Strategic Investment Grade Bond Fund, Oppenheimer Total Return Fund, Inc., Oppenheimer Variable Account Funds and The New York Tax-Exempt Income Fund, Inc. (all of the foregoing funds are collectively referred to as the "Denver OppenheimerFunds"). Mr. Fossel is President and Mr. Swain is Chairman of the Denver OppenheimerFunds. All of the officers except Mr. Carbuto, Ms. Wolf, Mr. Zimmer and Ms. Warmack hold similar positions with each of the Denver OppenheimerFunds. As of September 30, 1994, the Trustees and officers of each Trust in the aggregate owned less than 1% of the outstanding shares of that Trust. ROBERT G. AVIS, Trustee * One North Jefferson Ave., St. Louis, Missouri 63103 Vice Chairman of A.G. Edwards & Sons, Inc. (a broker-dealer) and A.G. Edwards, Inc. (its parent holding company); Chairman of A.G.E. Asset Management and A.G. Edwards Trust Company (its affiliated investment adviser and trust company, respectively). WILLIAM A. BAKER, Trustee 197 Desert Lakes Drive, Palm Springs, California 92264 Management Consultant. CHARLES CONRAD, JR., Trustee 1447 Vista del Cerro, Las Cruces, New Mexico 88005 Vice President of McDonnell Douglas Space Systems Co.; formerly associated with National Aeronautics and Space Administration. JON S. FOSSEL, President and Trustee * Two World Trade Center, New York, New York 10048-0203 Chairman, Chief Executive Officer and a director of Oppenheimer Management Corporation ("OMC"), the immediate parent of Centennial Asset Management Corporation (the "Manager"); President and director of Oppenheimer Acquisition Corp. ("OAC"), OMC's parent holding company; President and a director of HarbourView Asset Management Corporation, a subsidiary of OMC ("HarbourView"); a director of Shareholder Services, Inc. ("SSI"), the Trust's Transfer Agent, and Shareholder Financial Services, Inc. ("SFSI"), transfer agent subsidiaries of OMC; formerly President of OMC. RAYMOND J. KALINOWSKI, Trustee 44 Portland Drive, St. Louis, Missouri 63131 Formerly Vice Chairman and a director of A.G. Edwards, Inc., parent holding company of A.G. Edwards & Sons, Inc. (a broker- dealer), of which he was a Senior Vice President. C. HOWARD KAST, Trustee 2552 E. Alameda, Denver, Colorado 80209 Formerly Managing Partner of Deloitte Haskins & Sells (an accounting firm). ROBERT M. KIRCHNER, Trustee 7500 E. Arapahoe Road, Englewood, Colorado 80112 President of The Kirchner Company (management consultants). NED M. STEEL, Trustee 3416 South Race Street, Englewood, Colorado 80110 Chartered Property and Casualty Underwriter; formerly Senior Vice President and a director of the Van Gilder Insurance Corp. (insurance brokers). JAMES C. SWAIN, Chairman and Trustee * 3410 South Galena Street, Denver, Colorado 80231 President and a Director of the Manager; Vice Chairman of OMC; formerly Chairman of the Board of SSI. MICHAEL A. CARBUTO, Vice President and Portfolio Manager of Tax Exempt Trust Two World Trade Center, New York, New York 10048-0203 Vice President of the Manager; an officer of other OppenheimerFunds. DOROTHY WARMACK, Vice President and Portfolio Manager of Money Market Trust and Government Trust 3410 South Galena Street, Denver, Colorado 80231 Vice President of the Manager and OMC; an officer of other OppenheimerFunds. CAROL E. WOLF, Vice President and Portfolio Manager of Money Market Trust and Government Trust 3410 South Galena Street, Denver, Colorado 80231 Vice President of the Manager and OMC; an officer of other OppenheimerFunds. ARTHUR J. ZIMMER, Vice President and Portfolio Manager of Money Market Trust and Government Trust 3410 South Galena Street, Denver, Colorado 80231 Vice President of the Manager and OMC; an officer of other OppenheimerFunds; formerly Vice President of Hanifen Imhoff Management Company (mutual fund investment advisor). ANDREW J. DONOHUE, Vice President Two World Trade Center, New York, New York 10048-0203 Executive Vice President and General Counsel of OMC and Oppenheimer Funds Distributor, Inc. ("OFDI"); an officer of other OppenheimerFunds; formerly Senior Vice President and Associate General Counsel of OMC and OFDI; Partner in Kraft & McManimon (a law firm); an officer of First Investors Corporation (a broker- dealer) and First Investors Management Company, Inc. (broker- dealer and investment adviser); director and an officer of First Investors Family of Funds and First Investors Life Insurance Company. GEORGE C. BOWEN, Vice President, Secretary and Treasurer 3410 South Galena Street Denver, Colorado 80231 Senior Vice President, Treasurer, Assistant Secretary and a director of the Manager; Vice President and Treasurer of OFDI and HarbourView; Senior Vice President and Treasurer of OMC; Vice President, Treasurer and Secretary of SSI and SFSI; an officer of other OppenheimerFunds. ROBERT BISHOP, Assistant Treasurer 3410 South Galena Street, Denver, Colorado 80231 Assistant Vice President of OMC/Mutual Fund Accounting; an officer of other OppenheimerFunds; formerly a Fund Controller for OMC, prior to which he was an Accountant for Yale & Seffinger, P.C., an accounting firm, and previously an Accountant and Commissions Supervisor for Stuart James Company, Inc., a broker-dealer. SCOTT FARRAR, Assistant Treasurer 3410 South Galena Street, Denver, Colorado 80231 Assistant Vice President of OMC/Mutual Fund Accounting; an officer of other OppenheimerFunds; formerly a Fund Controller for OMC, prior to which he was an International Mutual Fund Supervisor for Brown Brothers, Harriman Co., a bank, and previously a Senior Fund Accountant for State Street Bank & Trust Company, before which he was a sales representative for Central Colorado Planning. ROBERT G. ZACK, Assistant Secretary Two World Trade Center, New York, New York 10048-0203 Senior Vice President and Associate General Counsel of OMC; Assistant Secretary of SSI and SFSI; an officer of other OppenheimerFunds. [FN] ____________________________ * A Trustee who is an "interested person" of the Trusts as defined in the Investment Company Act. Remuneration of Trustees and Officers. The officers of the Trusts (including Messrs. Swain and Fossel) are affiliated with the Manager and receive no salary or fee from the Trusts. The Trusts have an Audit and Review Committee, composed of William A. Baker (Chairman), Charles Conrad, Jr. and Robert M. Kirchner. This Committee meets regularly to review audit procedures, financial statements and other financial and operational matters of the Trusts. During the fiscal year ended June 30, 1994, the remuneration (including expense reimbursements) paid by the Trusts to the Trustees as a group for services as trustees and as members of one or more committees totaled: Money Market Trust: $21,277; Tax Exempt Trust: $15,726; and Government Trust: $10,387. Major Shareholders. As of September 30, 1994, A.G. Edwards & Sons, Inc. ("A.G. Edwards"), 1 North Jefferson Avenue, St. Louis, MO 63103 was the record owner of 2,822,454,504.740 shares of Money Market Trust, 981,569,185.100 shares of Tax Exempt Trust and 633,638,298.290 shares of Government Trust (approximately 99.6%, 96.1% and 97.8% of outstanding shares, respectively, of these Trusts). A.G. Edwards has advised the Trusts that all such shares are held for the benefit of brokerage clients and that no such client owned beneficially 5% or more of the outstanding shares of any of the Trusts. INVESTMENT MANAGEMENT SERVICES The Manager is wholly-owned by OMC, which is a wholly-owned subsidiary of OAC, a holding company controlled by Massachusetts Mutual Life Insurance Company. The remaining stock of OAC is owned by: (i) certain of OMC's directors and officers, some of whom may serve as officers of the Trusts, and two of whom (Messrs. James C. Swain and Jon S. Fossel) serve as a Trustee of the Trusts and (ii) A.G. Edwards, which owns less than 5% of its equity. The management fee is payable monthly to the Manager under the terms of the investment advisory agreements between the Manager and each Trust (collectively, the "Agreements"), and is computed on the aggregate net assets of the respective Trust as of the close of business each day. The management fees paid to the Manager by the Trusts during their last three fiscal periods were as follows: (a) $3,824,936, $7,254,206 and $9,435,959 paid for the fiscal years ended June 30, 1992, 1993 and 1994, respectively, of Money Market Trust; (b) $4,164,955, $4,426,198 and $4,761,673 paid for the fiscal years ended June 30, 1992, 1993 and 1994, respectively, of Tax Exempt Trust; and (c) $2,804,557, $3,035,760 and $3,182,956 paid for the fiscal years ended June 30, 1992, 1993 and 1994, respectively, of Government Trust. The Agreements require the Manager, at its expense, to provide the Trusts with adequate office space, facilities and equipment, and to provide and supervise the activities of all administrative and clerical personnel required to provide effective administration for the Trusts, including the compilation and maintenance of records with respect to operations, the preparation and filing of specified reports, and the composition of proxy materials and registration statements for continuous public sale of shares of the Trusts. Expenses not expressly assumed by the Manager under the Agreements or as Distributor of the shares of the Trusts, are paid by the Trusts. The Agreements list examples of expenses paid by the Trusts, the major categories of which relate to interest, taxes, certain insurance premiums, fees to unaffiliated Trustees, legal, bookkeeping and audit expenses, custodian and transfer agent expenses, share issuance costs, certain printing costs (excluding the cost of printing prospectuses for sales materials) and registration fees, and non-recurring expenses, including litigation. Under its Agreement with the Money Market Trust and the Government Trust, the Manager has agreed to reimburse each Trust to the extent that the Trust's total expenses (including the management fee but excluding interest, taxes, brokerage commissions, and extraordinary expenses such as litigation costs) exceed in any fiscal year the lesser of: (i) 1.5% of average annual net assets of the Trust up to $30 million plus 1% of the average annual net assets in excess of $30 million or; (ii) 25% of the total annual investment income of the Trust. Independently of the Money Market Trust's Agreement, the Manager has voluntarily agreed to waive a portion of the management fee otherwise payable to it by the Money Market Trust to the extent necessary to: (a) permit the Money Market Trust to have a seven-day yield equal to that of Daily Cash Accumulation Fund, Inc., and (b) to reduce, on an annual basis, the management fee paid on the average net assets of the Trust in excess of $1 billion from 0.40% to: 0.40% of average net assets in excess of $1 billion but less than $1.25 billion; 0.375% of average net assets in excess of $1.25 billion but less than $1.50 billion; 0.35% of average net assets in excess of $1.50 billion but less than $2 billion; and 0.325% of average net assets in excess of $2 billion. This undertaking became effective as of December 1, 1991, and may be modified or terminated by the Manager at any time. For the fiscal years ended June 30, 1993 and 1994, the Manager reimbursed Money Market Trust its expenses in the amounts of $900,512 and $1,201,403, respectively. Under its Agreement with Tax Exempt Trust, the Manager has agreed to assume that Trust's expenses to the extent that the total expenses (as described above) of the Trust exceed the most stringent limits prescribed by any state in which the Trust's shares are offered for sale. The payment of the management fee at the end of any month will be reduced so that at no time will there be any accrued but unpaid liabilities under any of these expense assumptions. No reimbursement or assumption was necessary by the Manager to Government Trust or Tax Exempt Trust during their respective three most recent fiscal years. The Agreements permit the Manager to act as investment adviser for any other person, firm or corporation. The Tax Exempt Trust Agreement provides that the Manager assumes no responsibility under the Agreement other than that which is imposed by law, and shall not be responsible for any action of the Board of Trustees of the Trust in following or declining to follow any advice or recommendations of the Manager. The Agreement provides that the Manager shall not be liable for any error of judgment or mistake of law, or for any loss suffered by the Trust in connection with matters to which the Agreement relates, except a loss resulting by reason of the Manager's willful misfeasance, bad faith or gross negligence in the performance of its duties, or its reckless disregard of its obligations and duties under the Agreement. The Agreements of Money Market Trust and Government Trust provide that the Manager shall not be liable for any loss sustained by reason of the adoption of an investment policy or the purchase, sale or retention of any security on its recommendation, whether or not such recommendation shall have been based upon its own investigation and research or upon investigation and research made by any other individual, firm or corporation, if such recommendation shall have been made and such other individual, firm or corporation shall have been selected with due care and in good faith, provided that nothing in the Agreements shall be construed to protect the Manager against any liability to such Trusts or their shareholders by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of its reckless disregard of its obligations and duties under such Agreements. Portfolio Transactions. Portfolio decisions are based upon the recommendations and judgment of the Manager subject to the overall authority of the Board of Trustees. As most purchases made by the Trust are principal transactions at net prices, the Trust incurs little or no brokerage costs. The Trust's policy of investing in short-term debt securities with maturities of less than one year results in high portfolio turnover. However, since brokerage commissions, if any, are small and securities are usually held to maturity, high turnover does not have an appreciable adverse effect upon the net asset value or income of the Trust in periods of stable or declining rates, and may have a positive effect in periods of rising interest rates. The Trust seeks to obtain prompt and reliable execution of orders at the most favorable net price. If brokers are used for portfolio transactions, transactions may be directed to brokers furnishing execution and research services. The research services provided by a particular broker may be useful only to one or more of the advisory accounts of the Manager and its affiliates, and investment research received for the commissions of those other accounts may be useful both to the Trust and one or more of such other accounts. Such research, which may be supplied by a third party at the instance of a broker, includes information and analyses on particular companies and industries as well as market or economic trends and portfolio strategy, receipt of market quotations for portfolio evaluations, information systems, computer hardware and similar products and services. If a research service also assists the Manager in a non-research capacity (such as bookkeeping or other administrative functions), then only the percentage or component that provides assistance to the Manager in the investment decision-making process may be paid for in commission dollars. The research services provided by brokers broaden the scope and supplement the research activities of the Manager by making available additional views for consideration and comparisons, and enabling the Manager to obtain market information for the valuation of securities held in the Trust's portfolio or being considered for purchase. In the rare instances where the Trust pays commissions for research, the Board of Trustees, including the independent Trustees of the Trust, will review information furnished by the Manager as to the commissions paid to brokers furnishing such services in an effort to ascertain that the amount of such commissions was reasonably related to the value or the benefit of such services. The Trust does not direct the handling of purchases or sales of portfolio securities, whether on a principal or agency basis, to brokers for selling shares of the Trust. No portfolio transactions are handled by brokers which are affiliated with the Trust or the Manager if that broker is acting as principal. The Board of Trustees has permitted the Manager to use concessions on fixed price offerings to obtain research, in the same manner as is permitted for agency transactions. SERVICE PLAN Each Trust has adopted a Service Plan (the "Plan") under Rule 12b- 1 of the Investment Company Act, pursuant to which the Trust will reimburse the Distributor for a portion of its costs incurred in connection with the services rendered to the Trust, as described in the Prospectus. Each Plan has been approved: (i) by a votie of the Board of Trustees of the Trust, including a majority of the "Independent Trustees" (those Trustees of the Trust who are not "interested persons," as defined in the Investment Company Act, and who have no direct or indirect financial interest in the operation of the Plan or in any agreements relating to the Plan) cast in person at a meeting called for the purpose of voting on the Plan; and (ii) by the vote of the holders of a "majority" (as defined under the Investment Company Act) of that Trust's outstanding voting securities. In approving each Plan, the Board determined that it is likely each Plan will benefit the shareholders of that Trust. The Distributor has entered into Supplemental Distribution Assistance Agreements ("Supplemental Agreements") under the Plan with selected dealers distributing shares of Centennial Government Trust, Centennial America Fund, L.P., Oppenheimer Cash Reserves, Centennial New York Tax Exempt Trust and Centennial California Tax Exempt Trust. Quarterly payments by the Distributor, which are not a Trust expense, for distribution-related services will range from 0.10% to 0.30%, annually, of the average net asset value of shares of these funds owned during the quarter beneficially or of record by the dealer or its customers. However, no payment shall be made to any dealer for any quarter during which the average net asset value of shares of such funds owned during that quarter by the dealer or its customers is less than $5 million. Payments made pursuant to Supplemental Agreements are not a fund expense, but are made by the Distributor out of its own resources or out of the resources of the Manager which may include profits derived from the advisory fee it receives from each such fund. No such supplemental payments will be paid to any dealer which is an "affiliate" (as defined in the Investment Company Act) of the Distributor. Each Plan, unless terminated as described below, shall continue in effect from year to year but only so long as such continuance is specifically approved at least annually by each Trust's Board of Trustees, including its Independent Trustees, by a vote cast in person at a meeting called for that purpose. The Supplemental Agreements are subject to the same renewal requirement. A Plan and the Supplemental Agreements may be terminated at any time by the vote of a majority of the Trust's Independent Trustees or by the vote of the holders of a "majority" (as defined in the Investment Company Act) of the Trust's outstanding voting securities. The Supplemental Agreements will automatically terminate in the event of their "assignment" (as defined in the Investment Company Act), and each may be terminated by the Distributor: (i) in the event Government Trust amends its Plan, or (ii) if the net asset value of shares of the funds covered by the Supplemental Agreements held by the dealer or its customers is less than $5 million for two or more consecutive quarters. A dealer may terminate a Supplemental Agreement at any time upon giving 30 days' notice. Each Plan may not be amended to increase materially the amount of payments to be made unless such amendment is approved by the shareholders of that Trust. All material amendments must be approved by the Independent Trustees. Under each Plan, no payment will be made to any Recipient in any quarter if the aggregate net asset value of all Trust shares held by the Recipient for itself and its customers did not exceed a minimum amount, if any, that may be determined from time to time by a majority of the Trust's Independent Trustees. The Board of Trustees has set the fee at the maximum rate and set no minimum amount. The Plans permit the Distributor and the Manager to make additional distribution payments to Recipients from their own resources (including profits from advisory fees) at no cost to a Trust. The Distributor and the Manager may, in their sole discretion, increase or decrease the amount of distribution assistance payments they make to Recipients from their own assets. Each Recipient who is to receive distribution payments for any month or quarter shall certify in writing that the aggregate payments to be received from the applicable Trust during that month or quarter do not exceed the Recipient's administrative and sales related costs in rendering distribution assistance during the month or quarter, and will reimburse the Trust for any excess. For each Trust's fiscal year ended June 30, 1994, payments under its Plan totalled $4,647,715, $2,104,473 and $1,328,950 for Money Market Trust, Tax Exempt Trust and Government Trust, respectively, all of which was paid by the Distributor to A.G. Edwards & Sons, Inc. (and, with respect to Money Market Trust, $8,887 paid to A.G. Edwards Trust) as a Recipient under the Plans, with the exception of (i) $92, $9,953 and $22,331 paid by Money Market Trust, Tax Exempt Trust and Government Trust, respectively, to other Recipients, and (ii) $7,282 paid by Tax Exempt Trust to an affiliate of the Distributor, as a Recipient. Payments received by the Distributor under the Plans will not be used to pay any interest expense, carrying charge, or other financial costs, or allocation of overhead by the Distributor. Any unreimbursed expenses incurred for any fiscal quarter by the Distributor may not be recovered under that Plan in subsequent fiscal quarters. While the Plan is in effect, the Treasurer of each Trust shall provide a report to the Board of Trustees in writing at least quarterly on the amount of all payments made pursuant to the Plan, the identity of each Recipient that received any such payment, and the purposes for which the payments were made. The Plan further provides that while it is in effect, the election and nomination of those Trustees of a Trust who are not "interested persons" of the Trust is committed to the discretion of the Independent Trustees. This does not prevent the involvement of others in such selection and nomination if the final decision on any such selection or nomination is approved by a majority of the Independent Trustees. The Glass-Steagall Act and other applicable laws and regulations, among other things, generally prohibit Federally-chartered or supervised banks from engaging in the business of underwriting, selling or distributing securities as principals. Accordingly, the Distributor may pay banks only for sales made on an agency basis or for the performance of administrative and shareholder servicing functions. While the matter is not free from doubt, the Manager believes that such laws do not preclude a bank from performing the services required of a Recipient. However, judicial or administrative decisions or interpretations of such laws, as well as changes in either Federal or state statutes or regulations relating to the permissible activities of banks or their subsidiaries or affiliates, could prevent certain banks from continuing to perform all or a part of these services. If a bank were so prohibited, shareholders of a Trust who were clients of such bank would be permitted to remain as shareholders, and if a bank could no longer provide those service functions, alternate means for continuing the servicing of such shareholders would be sought. In such event, shareholders serviced by such bank might no longer be able to avail themselves of any automatic investment or other services then being provided by such bank. It is not expected that shareholders would suffer any adverse financial consequences as a result of any of those occurrences. The Board of Trustees will consider appropriate modifications to each Trust's operations, including discontinuance of payments under the Plan to such institutions, in the event of any future change in such laws or regulations which may adversely affect the ability of such institutions to provide these services. In addition, certain banks and financial institutions may be required to register as dealers under state law. PURCHASE, REDEMPTION AND PRICING OF SHARES Determination of Net Asset Value Per Share. The net asset value of each Trust's shares is determined twice each day as of 12:00 noon and 4:00 P.M., New York time, on each day the New York Stock Exchange (the "Exchange") is open (a "regular business day"), by dividing that Trust's net assets (the total value of the Trust's portfolio securities, cash and other assets less all liabilities) by the total number of shares outstanding. The Exchange's most recent annual holiday schedule states that it will close New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The Exchange may also close on other days. Dealers other than Exchange members may conduct trading in Municipal Securities on certain days on which the Exchange is closed (e.g., Good Friday), so that securities of the same type held by Tax Exempt Trust may be traded, and its net asset value per share may be affected significantly, on such days when shareholders may not purchase or redeem shares. The Trusts will seek to maintain a net asset value of $1.00 per share for purchases and redemptions. There can be no assurance that each Trust will do so. Each Trust operates under Rule 2a-7 under which a Trust may use the amortized cost method of valuing their shares. The amortized cost method values a security initially at its cost and thereafter assumes a constant amortization of any premium or accretion of any discount, regardless of the impact of fluctuating interest rates on the market value of the security. This method does not take into account unrealized capital gains or losses. Each Trust's Board of Trustees has established procedures intended to stabilize the Trust's net asset value at $1.00 per share. If a Trust's net asset value per share were to deviate from $1.00 by more than 0.5%, Rule 2a-7 requires the Board promptly to consider what action, if any, should be taken. If the Trustees find that the extent of any such deviation may result in material dilution or other unfair effects on shareholders, the Board will take whatever steps it considers appropriate to eliminate or reduce such dilution or unfair effects, including, without limitation, selling portfolio securities prior to maturity, shortening the average portfolio maturity, withholding or reducing dividends, reducing the outstanding number of Trust shares without monetary consideration, or calculating net asset value per share by using available market quotations. As long as the Trusts use Rule 2a-7, each Trust must abide by certain conditions described in the Prospectus. Some of those conditions which relate to portfolio management are that each Trust must: (i) maintain a dollar-weighted average portfolio maturity not in excess of 90 days; (ii) limit its investments, including repurchase agreements, to those instruments which are denominated in U.S. dollars and which are rated in one of the two highest short-term rating categories by at least two "nationally-recognized statistical rating organizations" ("Rating Organizations") as defined in Rule 2a-7, or by one Rating Organization if only one Rating Organization has rated the security; an instrument that is not rated must be of comparable quality as determined by the Board; and (iii) not purchase any instruments with a remaining maturity of more than 397 days. Under Rule 2a-7, the maturity of an instrument is generally considered to be its stated maturity (or in the case of an instrument called for redemption, the date on which the redemption payment must be made), with special exceptions for certain variable rate demand and floating rate instruments. Repurchase agreements and securities loan agreements are, in general, treated as having a maturity equal to the period scheduled until repurchase or return, or if subject to demand, equal to the notice period. While the amortized cost method provides certainty in valuation, there may be periods during which the value of an instrument, as determined by amortized cost, is higher or lower than the price the Trust would receive if it sold the instrument. During periods of declining interest rates, the daily yield on shares of the Trust may tend to be lower (and net investment income and daily dividends higher) than a like computation made by a fund with identical investments utilizing a method of valuation based upon market prices or estimates of market prices for its portfolio. Thus, if the use of amortized cost by the Trusts resulted in a lower aggregate portfolio value on a particular day, a prospective investor in one of the Trusts would be able to obtain a somewhat higher yield than would result from investment in a fund utilizing solely market values, and existing investors in the Trusts would receive less investment income than if the Trust were priced at market value. Conversely, during periods of rising interest rates, the daily yield on Trust shares will tend to be higher and its aggregate value lower than that of a portfolio priced at market value. A prospective investor would receive a lower yield than from an investment in a portfolio priced at market value, while existing investors in the Trust would receive more investment income than if the Trust were priced at market value. Expedited Redemption Procedures. Under the Expedited Redemption Procedure available to direct shareholders of the Trusts, as discussed in the Appendix to the Prospectus, the wiring of redemption proceeds may be delayed if the Trust's Custodian bank is not open for business on a day that the Trust would normally authorize the wire to be made, which is usually same day for redemptions prior to 12:00 noon, and the Trust's next regular business day for redemptions between 12:00 noon and 4:00 P.M. In those circumstances, the wire will not be transmitted until the next bank business day on which the Trust is open for business, and no dividends will be paid on the proceeds of redeemed shares waiting transfer by wire. Dividend Reinvestment in Another Fund. Direct shareholders of the Trusts may elect to reinvest all dividends and/or distributions in shares of any of the other funds listed in the Prospectus as "Eligible Funds" at net asset value without sales charge. To elect this option, a shareholder must notify the Transfer Agent in writing, and either must have an existing account in the fund selected for reinvestment or must obtain a prospectus for that fund and an application from the Transfer Agent to establish an account. The investment will be made at the net asset value per share in effect at the close of business on the payable date of the dividend or distribution. YIELD INFORMATION Each Trust's current yield is calculated for a seven-day period of time, in accordance with regulations adopted under the Investment Company Act. First, a base period return is calculated for the seven- day period by determining the net change in the value of a hypothetical pre-existing account having one share at the beginning of the seven-day period. The change includes dividends declared on the original share and dividends declared on any shares purchased with dividends on that share, but such dividends are adjusted to exclude any realized or unrealized capital gains or losses affecting the dividends declared. Next, the base period return is multiplied by 365/7 to obtain the current yield to the nearest hundredth of one percent. The compounded effective yield for a seven day period is calculated by (a) adding 1 to the base period return (obtained as described above), (b) raising the sum to a power equal to 365 divided by 7 and (c) subtracting 1 from the result. For the seven day period ended June 30, 1994, the "current yield" for Money Market Trust, Tax Exempt Trust and Government Trust was 3.68%, 2.07% and 3.59%, respectively. The seven-day compounded effective yield for that period was 3.75%, 2.09% and 3.65%, respectively. The yield as calculated above may vary for accounts less than approximately $100 in value due to the effect of rounding off each daily dividend to the nearest full cent. Since the calculation of yield under either procedure described above does not take into consideration any realized or unrealized gains or losses on each Trust's portfolio securities which may affect dividends, the return on dividends declared during a period may not be the same on an annualized basis as the yield for that period. Tax Exempt Trust's "tax equivalent yield" adjusts Tax Exempt Trust's current yield, as calculated above, by a stated Federal tax rate. The tax equivalent yield is computed by dividing the tax-exempt portion of the Trust's current yield by one minus a stated income tax rate and adding the result to the portion (if any) of the Trust's current yield that is not tax-exempt. The tax equivalent yield may be compounded as described above to provide a compounded effective tax equivalent yield. The tax equivalent yield may be used to compare the tax effects of income derived from the Trust with income from taxable investments at the tax rates stated. Exhibit C, which is applicable only to Tax Exempt Trust, includes a tax equivalent yield table, based on various effective tax brackets for individual taxpayers. Such tax brackets are determined by a taxpayer's Federal taxable income (the net amount subject to Federal income tax after deductions and exemptions). The tax equivalent yield table assumes that the investor is taxed at the highest bracket, regardless of whether a switch to non-taxable investments would cause a lower bracket to apply and that state income tax payments are fully deductible for income tax purposes. For taxpayers with income above certain levels, otherwise allowable itemized deductions are limited. The Tax Exempt Trust's tax equivalent yield for the seven-day period ended June 30, 1994 was 3.43%. Its tax- equivalent compounded effective yield for the same period was 3.46% for an investor in the highest Federal tax bracket. Yield information may be useful to investors in reviewing each Trust's performance. A Trust may make comparisons between its yield and that of other investments, by citing various indices such as The Bank Rate Monitor National Index (provided by Bank Rate Monitor TM), which measures the average rate paid on bank money market accounts, NOW accounts and certificates of deposit by the 100 largest banks and thrift institutions in the top ten metropolitan areas. However, a number of factors should be considered before using yield information as a basis for comparison with other investments. An investment in a Trust is not insured. Its yield is not guaranteed and normally will fluctuate on a daily basis. The yield for any given past period is not an indication or representation by the Trust of future yields or rates of return on its shares. Each Trust's yield is affected by portfolio quality, portfolio maturity, type of instruments held and operating expenses. When comparing a Trust's yield with that of other investments, investors should understand that certain other investment alternatives such as certificates of deposit, U.S. Government Securities, money market instruments or bank accounts may provide fixed yields or yields that may vary above a stated minimum, and also that bank accounts may be insured. Certain types of bank accounts may not pay interest when the balance falls below a specified level and may limit the number of withdrawals by check per month. In order to compare the Tax Exempt Trust's dividends to the rate of return on taxable investments, Federal income taxes on such investments should be considered. ADDITIONAL INFORMATION Description of the Trusts. Each Trust's Declaration of Trust contains an express disclaimer of shareholder and Trustee liability for the Trust's obligations, and provides for indemnification and reimbursement of expenses out of its property for any shareholder held personally liable for its obligations. Each Declaration of Trust also provides that the Trust shall, upon request, assume a defense of any claim made against any shareholder for any act or obligation of the Trust and satisfy any judgment thereon. Thus, while Massachusetts law permits a shareholder of a trust (such as the Trust) to be held personally liable as a "partner" for the Trust's obligations under certain circumstances, the risk of a Trust shareholder incurring any financial loss on account of shareholder liability is highly unlikely and is limited to the relatively remote circumstance in which the Trust would be unable to meet its obligations described above. Any person doing business with the Trust, and any shareholder of the Trust, agrees under the Trust's Declaration of Trust to look solely to the assets of the Trust for satisfaction of any claim or demand which may arise out of any dealings with the Trust, and the Trustees shall have no personal liability to any such person, to the extent permitted by law. It is not contemplated that regular annual meetings of shareholders will be held. The Trust will hold meetings when required to do so by the Investment Company Act or other applicable law, or when a shareholder meeting is called by the Trustees or upon proper request of the shareholders. Shareholders have the right, upon the declaration in writing or vote of two-thirds of the outstanding shares of the Trust, to remove a Trustee. The Trustees will call a meeting of shareholders to vote on the removal of a Trustee upon the written request of the shareholders of 10% of its outstanding shares. In addition, if the Trustees receive a request from at least 10 shareholders (who have been shareholders for at least six months) holding in the aggregate shares of the Trust valued at $25,000 or more or holding 1% or more of the Trust's outstanding shares, whichever is less, that they wish to communicate with other shareholders to request a meeting to remove a Trustee, the Trustees will then either make the Trust's shareholder list available to the applicants or mail their communication to all other shareholders at the applicants' expense, or the Trustees may take such other action as set forth in Section 16(c) of the Investment Company Act. Tax Status of the Trust's Dividends and Distributions. The Federal tax treatment of the Trust's dividends and distributions to shareholders is explained in the Prospectus under the caption "Dividends, Distributions and Taxes." Under the Internal Revenue Code, the Trust must distribute by December 31 each year 98% of its taxable investment income earned from January 1 through December 31 of that year and 98% of its capital gains realized from the prior November 1 through October 31 of that year or else must pay an excise tax on the amounts not distributed. While it is presently anticipated that the Trust's distributions will meet those requirements, the Trust's Board and the Manager might determine in a particular year that it might be in the best interest of the Trust not to distribute income or capital gains at the mandated levels and to pay the excise tax on the undistributed amounts, which would reduce the amount available for distribution to shareholders. The Custodian and the Transfer Agent. The Custodian's responsibilities include safeguarding and controlling the Trusts' portfolio securities and handling the delivery of portfolio securities to and from the Trusts. The Manager has represented to the Trusts that its banking relationships with the Custodian have been and will continue to be unrelated to and unaffected by the relationships between the Trusts and the Custodian. It will be the practice of the Trusts to deal with the Custodian in a manner uninfluenced by any banking relationship the Custodian may have with the Manager or its affiliates. Shareholder Services, Inc., the Transfer Agent, is responsible for maintaining each Trust's shareholder registry and shareholder accounting records, and for shareholder servicing and administrative functions. General Distributor's Agreement. Under the General Distributor's Agreement between each Trust and the Distributor, the Distributor acts as each Trust's principal underwriter in the continuous public offering of its shares but is not obligated to sell a specific number of shares. Expenses normally attributable to sales (other than those paid under the Distribution Plan), including advertising and the cost of printing and mailing prospectuses other than those furnished to existing shareholders, are borne by the Distributor. Independent Auditors and Financial Statements. The independent auditors of the Trusts examine the Trusts' financial statements and perform other related audit services. They also act as auditors for the Manager and for Oppenheimer Management Corporation, the Manager's immediate parent, as well as for certain other funds advised by the Manager and Oppenheimer Management Corporation. Exhibit A DESCRIPTION OF SECURITIES RATINGS Below is a description of the two highest rating categories for Short Term Debt and Long Term Debt by the "Nationally-Recognized Statistical Rating Organizations" which the Manager evaluates in purchasing securities on behalf of the Trust. The ratings descriptions are based on information supplied by the ratings organizations to subscribers. Short Term Debt Ratings. Moody's Investors Service, Inc. ("Moody's"): The following rating designations for commercial paper (defined by Moody's as promissory obligations not having original maturity in excess of nine months), are judged by Moody's to be investment grade, and indicate the relative repayment capacity of rated issuers: Prime-1: Superior capacity for repayment. Capacity will normally be evidenced by the following characteristics: (a) leveling market positions in well-established industries; (b) high rates of return on funds employed; (c) conservative capitalization structures with moderate reliance on debt and ample asset protection; (d) broad margins in earning coverage of fixed financial charges and high internal cash generation; and (e) well established access to a range of financial markets and assured sources of alternate liquidity. Prime-2: Strong capacity for repayment. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, will be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained. Moody's ratings for state and municipal short-term obligations are designated "Moody's Investment Grade" ("MIG"). Short-term notes which have demand features may also be designated as "VMIG". These rating categories are as follows: MIG1/VMIG1: Best quality. There is present strong protection by established cash flows, superior liquidity support or demonstrated broadbased access to the market for refinancing. MIG2/VMIG2: High quality. Margins of protection are ample although not so large as in the preceding group. Standard & Poor's Corporation ("S&P"): The following ratings by S&P for commercial paper (defined by S&P as debt having an original maturity of no more than 365 days) assess the likelihood of payment: A-1: Strong capacity for timely payment. Those issues determined to possess extremely strong safety characteristics are denoted with a plus sign (+) designation. A-2: Satisfactory capacity for timely payment. However, the relative degree of safety is not as high as for issues designated "A-1". S&P's ratings for Municipal Notes due in three years or less are: SP-1: Very strong or strong capacity to pay principal and interest. Those issues determined to possess overwhelming safety characteristics will be given a plus (+) designation. SP-2: Satisfactory capacity to pay principal and interest. S&P assigns "dual ratings" to all municipal debt issues that have a demand or double feature as part of their provisions. The first rating addresses the likelihood of repayment of principal and interest as due, and the second rating addresses only the demand feature. With short-term demand debt, S&P's note rating symbols are used with the commercial paper symbols (for example, "SP-1+/A-1+"). Fitch Investors Service, Inc. ("Fitch"): Fitch assigns the following short-term ratings to debt obligations that are payable on demand or have original maturities of generally up to three years, including commercial paper, certificates of deposit, medium-term notes, and municipal and investment notes: F-1+: Exceptionally strong credit quality; the strongest degree of assurance for timely payment. F-1: Very strong credit quality; assurance of timely payment is only slightly less in degree than issues rated "F-1+". F-2: Good credit quality; satisfactory degree of assurance for timely payment, but the margin of safety is not as great as for issues assigned "F-1+" or "F-1" ratings. Duff & Phelps, Inc. ("Duff & Phelps"): The following ratings are for commercial paper (defined by Duff & Phelps as obligations with maturities, when issued, of under one year), asset-backed commercial paper, and certificates of deposit (the ratings cover all obligations of the institution with maturities, when issued, of under one year, including bankers' acceptance and letters of credit): Duff 1+: Highest certainty of timely payment. Short-term liquidity, including internal operating factors and/or access to alternative sources of funds, is outstanding, and safety is just below risk-free U.S. Treasury short-term obligations. Duff 1: Very high certainty of timely payment. Liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. Duff 1-: High certainty of timely payment. Liquidity factors are strong and supported by good fundamental protection factors. Risk factors are very small. Duff 2: Good certainty of timely payment. Liquidity factors and company fundamentals are sound. Although ongoing funding needs may enlarge total financing requirements, access to capital markets is good. Risk factors are small. IBCA Limited or its affiliate IBCA Inc. ("IBCA"): Short-term ratings, including commercial paper (with maturities up to 12 months), are as follows: A1: Obligations supported by the highest capacity for timely repayment. A1: Obligations supported by a very strong capacity for timely repayment. A2: Obligations supported by a strong capacity for timely repayment, although such capacity may be susceptible to adverse changes in business, economic, or financial conditions. Thomson BankWatch, Inc. ("TBW"): The following short-term ratings apply to commercial paper, certificates of deposit, unsecured notes, and other securities having a maturity of one year or less. TBW-1: The highest category; indicates the degree of safety regarding timely repayment of principal and interest is very strong. TBW-2: The second highest rating category; while the degree of safety regarding timely repayment of principal and interest is strong, the relative degree of safety is not as high as for issues rated "TBW-1". Long Term Debt Ratings. These ratings are relevant for securities purchased by the Trust with a remaining maturity of 397 days or less, or for rating issuers of short-term obligations. Moody's: Bonds (including municipal bonds) are rated as follows: Aaa: Judged to be the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edge." Interest payments are protected by a large or by an exceptionally stable margin, and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong positions of such issues. Aa: Judged to be of high quality by all standards. Together with the "Aaa" group they comprise what are generally known as high- grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in "Aaa" securities or fluctuations of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in "Aaa" securities. Moody's applies numerical modifiers "1", "2" and "3" in its "Aa" rating classification. The modifier "1" indicates that the security ranks in the higher end of its generic rating category; the modifier "2" indicates a mid-range ranking; and the modifier "3" indicates that the issue ranks in the lower end of its generic rating category. Standard & Poor's: Bonds (including municipal bonds) are rated as follows: AAA: The highest rating assigned by S&P. Capacity to pay interest and repay principal is extremely strong. AA: A strong capacity to pay interest and repay principal and differ from "AAA" rated issues only in small degree. Fitch: AAA: Considered to be investment grade and of the highest credit quality. The obligor has an exceptionally strong ability to pay interest and repay principal, which is unlikely to be affected by reasonably foreseeable events. AA: Considered to be investment grade and of very high credit quality. The obligor's ability to pay interest and repay principal is very strong, although not quite as strong as bonds rated "AAA". Plus (+) and minus (-) signs are used in the "AA" category to indicate the relative position of a credit within that category. Because bonds rated in the "AAA" and "AA" categories are not significantly vulnerable to foreseeable future developments, short-term debt of these issuers is generally rated "F-1+". Duff & Phelps: AAA: The highest credit quality. The risk factors are negligible, being only slightly more than for risk-free U.S. Treasury debt. AA: High credit quality. Protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions. Plus (+) and minus (-) signs are used in the "AA" category to indicate the relative position of a credit within that category. IBCA: Long-term obligations (with maturities of more than 12 months) are rated as follows: AAA: The lowest expectation of investment risk. Capacity for timely repayment of principal and interest is substantial such that adverse changes in business, economic, or financial conditions are unlikely to increase investment risk significantly. AA: A very low expectation for investment risk. Capacity for timely repayment of principal and interest is substantial. Adverse changes in business, economic, or financial conditions may increase investment risk albeit not very significantly. A plus (+) or minus (-) sign may be appended to a long term rating to denote relative status within a rating category. TBW: TBW issues the following ratings for companies. These ratings assess the likelihood of receiving payment of principal and interest on a timely basis and incorporate TBW's opinion as to the vulnerability of the company to adverse developments, which may impact the market's perception of the company, thereby affecting the marketability of its securities. A: Possesses an exceptionally strong balance sheet and earnings record, translating into an excellent reputation and unquestioned access to its natural money markets. If weakness or vulnerability exists in any aspect of the company's business, it is entirely mitigated by the strengths of the organization. A/B: The company is financially very solid with a favorable track record and no readily apparent weakness. Its overall risk profile, while low, is not quite as favorable as for companies in the highest rating category. Exhibit B AUTOMATIC WITHDRAWAL PLAN PROVISIONS By requesting an Automatic Withdrawal Plan, the shareholder agrees to the terms and conditions applicable to such plans, as stated below and elsewhere in the Application for such Plans, and the Prospectus and this Statement of Additional Information as they may be amended from time to time by the Trust and/or the Distributor. When adopted, such amendments will automatically apply to existing Plans. Trust shares will be redeemed as necessary to meet withdrawal payments. Shares acquired without a sales charge will be redeemed first and thereafter shares acquired with reinvested dividends and distributions followed by shares acquired with a sales charge will be redeemed to the extent necessary to make withdrawal payments. Depending upon the amount withdrawn, the investor's principal may be depleted. Payments made to shareholders under such plans should not be considered as a yield or income on investment. Purchases of additional shares concurrently with withdrawals are undesirable because of sales charges on purchases when made. Accordingly, a shareholder may not maintain an Automatic Withdrawal Plan while simultaneously making regular purchases. 1. Shareholder Services, Inc., the Transfer Agent of the Trust, will administer the Automatic Withdrawal Plan (the "Plan") as agent for the person (the "Planholder") who executed the Plan authorization and application submitted to the Transfer Agent. 2. Certificates will not be issued for shares of the Trust purchased for and held under the Plan, but the Transfer Agent will credit all such shares to the account of the Planholder on the records of the Trust. Any share certificates now held by the Planholder may be surrendered unendorsed to the Transfer Agent with the Plan application so that the shares represented by the certificate may be held under the Plan. Those shares will be carried on the Planholder's Plan Statement. 3. Distributions of capital gains must be reinvested in shares of the Trust, which will be done at net asset value without a sales charge. Dividends may be paid in cash or reinvested. 4. Redemptions of shares in connection with disbursement payments will be made at the net asset value per share determined on the redemption date. 5. Checks or ACH payments will be transmitted three business days prior to the date selected for receipt of the monthly or quarterly payment (the date of receipt is approximate), according to the choice specified in writing by the Planholder. 6. The amount and the interval of disbursement payments and the address to which checks are to be mailed may be changed at any time by the Planholder on written notification to the Transfer Agent. The Planholder should allow at least two weeks' time in mailing such notification before the requested change can be put in effect. 7. The Planholder may, at any time, instruct the Transfer Agent by written notice (in proper form in accordance with the requirements of the then-current Prospectus of the Trust) to redeem all, or any part of, the shares held under the Plan. In such case, the Transfer Agent will redeem the number of shares requested at the net asset value per share in effect in accordance with the Trust's usual redemption procedures and will mail a check for the proceeds of such redemption to the Planholder. 8. The Plan may, at any time, be terminated by the Planholder on written notice to the Transfer Agent, or by the Transfer Agent upon receiving directions to that effect from the Trust. The Transfer Agent will also terminate the Plan upon receipt of evidence satisfactory to it of the death or legal incapacity of the Planholder. Upon termination of the Plan by the Transfer Agent or the Trust, shares remaining unredeemed will be held in an uncertificated account in the name of the Planholder, and the account will continue as a dividend- reinvestment, uncertificated account unless and until proper instructions are received from the Planholder, his executor or guardian, or as otherwise appropriate. 9. For purposes of using shares held under the Plan as collateral, the Planholder may request issuance of a portion of his shares in certificated form. Upon written request from the Planholder, the Transfer Agent will determine the number of shares as to which a certificate may be issued, so as not to cause the withdrawal checks to stop because of exhaustion of uncertificated shares needed to continue payments. Should such uncertificated shares become exhausted, Plan withdrawals will terminate. 10. The Transfer Agent shall incur no liability to the Planholder for any action taken or omitted by the Transfer Agent in good faith. 11. In the event that the Transfer Agent shall cease to act as transfer agent for the Trust, the Planholder will be deemed to have appointed any successor transfer agent to act as his agent in administering the Plan. INDEPENDENT AUDITORS' REPORT Centennial Government Trust The Board of Trustees and Shareholders of Centennial Government Trust: We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Centennial Government Trust as of June 30, 1994, the related statement of operations for the year then ended, the statements of changes in net assets for the years ended June 30, 1994 and 1993, and the financial highlights for the period July 1, 1984 to June 30, 1994. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned at June 30, 1994 by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements and financial highlights present fairly, in all material respects, the financial position of Centennial Government Trust at June 30, 1994, the results of its operations, the changes in its net assets, and the financial highlights for the respective stated periods, in conformity with generally accepted accounting principles. DELOITTE & TOUCHE /s/ DELOITTE & TOUCHE - --------------------- Denver, Colorado July 22, 1994 STATEMENT OF INVESTMENTS June 30, 1994 Centennial Government Trust
Face Market Value REPURCHASE AGREEMENTS -- 19.4% Amount See Note 1 ------------- ------------ Repurchase agreement with Morgan Guaranty Trust Co., 4.30%, dated 6/30/94, to be repurchased at $105,212,566 on 7/1/94, collateralized by Federal National Mortgage Assn. Participation Certificates, 6.50%, 12/1/23-4/1/24, with a value of $39,067,805 and Government National Mortgage Assn., 6.50%-7%, 9/15/23-6/15/24, with a value of $69,683,743.................... $ 105,200,000 $105,200,000 Repurchase agreement with First Chicago Capital Markets, 4.22%, dated 6/30/94, to be repurchased at $14,001,641 on 7/1/94, collateralized by U.S. Treasury Notes., 5.125%, 11/30/98, with a value of $14,291,213..................................................... 14,000,000 14,000,000 ------------ Total Repurchase Agreements (Cost $119,200,000)............................................. 119,200,000 ------------ U.S. GOVERNMENT OBLIGATIONS -- 80.1% Federal Farm Credit Bank, 4.34%-4.67%, 7/18/94-11/28/94..................................... 38,000,000 37,906,055 Federal Home Loan Bank: 3.44%-4.58%, 7/5/94-11/18/94.............................................................. 72,500,000 71,961,222 3.322%-4.65%, 7/7/94-8/18/94(1)........................................................... 46,000,000 45,974,124 Federal Home Loan Mortgage Corp.: 4.37%, 8/19/94............................................................................ 14,500,000 14,413,753 4.50%, 9/3/94(1).......................................................................... 50,000,000 49,902,089 Federal National Mortgage Assn., 3.60%-4.64%, 7/7/94-11/18/94............................... 107,040,000 106,297,666 Small Business Administration, 4.25%-8.875%, 7/1/94(1)...................................... 75,085,960 79,181,895 Student Loan Marketing Assn.: 4.61%-4.70%, 7/1/94-7/5/94(1)............................................................. 65,500,000 65,411,114 5.48%, 6/30/95............................................................................ 20,000,000 20,003,125 ------------ Total U.S. Government Obligations (Cost $491,051,043)....................................... 491,051,043 ------------
Total Investments, at Value (Cost $610,251,043)................................................. 99.5% 610,251,043 Other Assets Net of Liabilities................................................................. .5 3,191,459 ----- -------------- Net Assets...................................................................................... 100.0% $ 613,442,502 ----- -------------- ----- --------------
- ------------ 1. Variable rate security. The interest rate, which is based on specific, or an index of, market interest rates, is subject to change periodically and is the effective rate on June 30, 1994. See accompanying Notes to Financial Statements. 3 STATEMENT OF ASSETS AND LIABILITIES June 30, 1994 Centennial Government Trust
ASSETS: Investments, at value (cost $610,251,043) -- see accompanying statement.................................... $610,251,043 Cash....................................................................................................... 1,047,353 Receivables: Shares of beneficial interest sold....................................................................... 6,107,522 Interest and principal paydowns.......................................................................... 3,449,444 Other...................................................................................................... 108,468 ------------ Total assets.......................................................................................... 620,963,830 ------------ LIABILITIES: Payables and other liabilities: Shares of beneficial interest redeemed................................................................... 6,502,429 Dividends................................................................................................ 877,960 Service plan fees -- Note 3.............................................................................. 48,537 Other.................................................................................................... 92,402 ------------ Total liabilities..................................................................................... 7,521,328 ------------ NET ASSETS................................................................................................. $613,442,502 ------------ ------------ COMPOSITION OF NET ASSETS: Paid-in capital............................................................................................ $613,281,725 Accumulated net realized gain from investment transactions................................................. 160,777 ------------ NET ASSETS -- Applicable to 613,281,725 shares of beneficial interest outstanding.......................... $613,442,502 ------------ ------------ NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE............................................. $1.00
See accompanying Notes to Financial Statements. 4 STATEMENT OF OPERATIONS For the Year Ended June 30, 1994 Centennial Government Trust INVESTMENT INCOME -- Interest............................................................................... $23,830,047 ----------- EXPENSES: Management fees -- Note 3................................................................................... 3,182,956 Service plan fees -- Note 3................................................................................. 1,328,950 Transfer and shareholder servicing agent fees -- Note 3..................................................... 417,466 Custodian fees and expenses................................................................................. 82,795 Registration and filing fees................................................................................ 79,295 Shareholder reports......................................................................................... 61,247 Legal and auditing fees..................................................................................... 23,841 Trustees' fees and expenses................................................................................. 10,387 Other....................................................................................................... 69,752 ----------- Total expenses......................................................................................... 5,256,689 ----------- NET INVESTMENT INCOME....................................................................................... 18,573,358 ----------- NET REALIZED GAIN ON INVESTMENTS............................................................................ 166,504 ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................................................ $18,739,862 ----------- -----------
See accompanying Notes to Financial Statements. 5 STATEMENTS OF CHANGES IN NET ASSETS Centennial Government Trust
Year Ended June 30, ---------------------------- 1994 1993 ------------ ------------ OPERATIONS: Net investment income...................................................................... $ 18,573,358 $ 17,796,282 Net realized gain on investments........................................................... 166,504 89,483 ------------ ------------ Net increase in net assets resulting from operations.................................. 18,739,862 17,885,765 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS................................................ (18,663,114) (17,796,282) BENEFICIAL INTEREST TRANSACTIONS: Net increase (decrease) in net assets resulting from beneficial interest transactions -- Note 2................................................................... (23,735,954) 62,295,251 ------------ ------------ NET ASSETS: Total increase (decrease).................................................................. (23,659,206) 62,384,734 Beginning of year.......................................................................... 637,101,708 574,716,974 ------------ ------------ End of year................................................................................ $613,442,502 $637,101,708 ------------ ------------ ------------ ------------
See accompanying Notes to Financial Statements. 6 FINANCIAL HIGHLIGHTS Centennial Government Trust
Year Ended June 30, - ------------------------------------------------------------------------------------------------------------ 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 --------- --------- --------- --------- --------- --------- --------- --------- --------- - --------- PER SHARE OPERATING DATA: Net asset value, beginning of year.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 Income from investment operations -- net investment income and net realized gain on investments.......... .03 .04 .04 .07 .08 .08 .06 .05 .07 .08 Dividends and distributions to shareholders......... (.03) (.04) (.04) (.07) (.08) (.08) (.06) (.05) (.07) (.08) --------- --------- --------- --------- --------- --------- --------- --------- --------- - --------- Net asset value, end of year................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 --------- --------- --------- --------- --------- --------- --------- --------- --------- - --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- - --------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (in thousands)....... $ 613,443 $ 637,102 $ 574,717 $ 533,154 $ 219,003 $ 151,898 $ 90,035 $ 67,042 $ 78,550 $ 53,690 Average net assets (in thousands)........... $ 665,494 $ 633,017 $ 581,563 $ 418,268 $ 200,570 $ 121,909 $ 82,815 $ 74,084 $ 68,515 $ 65,241 Number of shares outstanding at end of year (in thousands)........... 613,282 637,018 574,722 533,125 218,986 151,901 90,036 67,042 78,550 53,690 Ratios to average net assets: Net investment income............. 2.79% 2.81% 4.38% 6.44% 7.75% 8.11% 5.94% 5.17% 6.59% 8.53% Expenses............. .79% .79% .78% .79% .84% .85% .90% .96% .93% .86%
See accompanying Notes to Financial Statements. 7 NOTES TO FINANCIAL STATEMENTS Centennial Government Trust 1. SIGNIFICANT ACCOUNTING POLICIES Centennial Government Trust (the Trust) is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The Trust's investment advisor is Centennial Asset Management Corporation (the Manager), a subsidiary of Oppenheimer Management Corporation (OMC). The following is a summary of significant accounting policies consistently followed by the Trust. Investment Valuation -- Portfolio securities are valued on the basis of amortized cost, which approximates market value. Repurchase Agreements -- The Trust requires the custodian to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian's vault, all securities held as collateral for repurchase agreements. If the seller of the agreement defaults and the value of the collateral declines, or if the seller enters an insolvency proceeding, realization of the value of the collateral by the Trust may be delayed or limited. Federal Income Taxes -- The Trust intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to shareholders. Therefore, no federal income tax provision is required. Distributions to Shareholders -- The Trust intends to declare dividends from net investment income each day the New York Stock Exchange is open for business and pay such dividends monthly. To effect its policy of maintaining a net asset value of $1.00 per share, the Trust may withhold dividends or make distributions of net realized gains. Other -- Investment transactions are accounted for on the date the investments are purchased or sold (trade date). Realized gains and losses on investments are determined on an identified cost basis, which is the same basis used for federal income tax purposes. 2. SHARES OF BENEFICIAL INTEREST The Trust has authorized an unlimited number of no par value shares of beneficial interest. Transactions in shares of beneficial interest were as follows:
Year Ended June 30, ------------------------------------------------------------------- 1994 1993 -------------------------------- -------------------------------- Shares Amount Shares Amount -------------- --------------- -------------- --------------- Sold.............................. 2,133,375,320 $ 2,133,375,320 1,995,315,893 $ 1,995,315,893 Dividends and distributions reinvested...................... 18,030,062 18,030,062 17,570,813 17,570,813 Redeemed.......................... (2,175,141,336) (2,175,141,336) (1,950,591,455) (1,950,591,455) -------------- --------------- -------------- --------------- Net increase (decrease)......... (23,735,954) $ (23,735,954) 62,295,251 $ 62,295,251 -------------- --------------- -------------- --------------- -------------- --------------- -------------- ---------------
8 NOTES TO FINANCIAL STATEMENTS (continued) Centennial Government Trust 3. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES Management fees paid to the Manager were in accordance with the investment advisory agreement with the Trust which provides for an annual fee of .50% on the first $250 million of net assets with a reduction of .025% on each $250 million thereafter, to .40% on net assets in excess of $1 billion. The Manager has agreed to reimburse the Trust if aggregate expenses (with specified exceptions) exceed the lesser of 1.50% of the first $30 million of average annual net assets of the Trust, plus 1% of average annual net assets in excess of $30 million; or 25% of the total annual investment income of the Trust. Shareholder Services, Inc. (SSI), a subsidiary of OMC, is the transfer and shareholder servicing agent for the Trust, and for other registered investment companies. SSI's total costs of providing such services are allocated ratably to these companies. Under an approved service plan, the Trust may expend up to .20% of its net assets annually to reimburse certain securities dealers and other financial institutions and organizations for costs incurred in distributing Trust shares. During the year ended June 30, 1994, the Trust paid $22,331 to a broker/dealer affiliated with the Manager as reimbursement for distribution-related expenses. Investment Adviser and Distributor Centennial Asset Management Corporation 3410 South Galena Street Denver, Colorado 80231 Transfer Agent Shareholder Services, Inc. P.O. Box 5143 Denver, Colorado 80217 1-800-525-9310 Custodian Citibank, N.A. 399 Park Avenue New York, New York 10043 Independent Auditors Deloitte & Touche LLP 1560 Broadway Denver, Colorado 80202 Legal Counsel Myer, Swanson & Adams, P.C. 1600 Broadway - Suite 1850 Denver, Colorado 80202 CENTENNIAL GOVERNMENT TRUST FORM N-1A PART C OTHER INFORMATION Item 24. Financial Statements and Exhibits --------------------------------- (a) Financial Statements -------------------- (1) Condensed Financial Information (See Part A): Filed herewith. (2) Independent Auditors' Report (See Part B): Filed herewith. (3) Statement of Investments, June 30, 1994 (See Part B): Filed herewith. (4) Statement of Assets and Liabilities, June 30, 1994 (See Part B): Filed herewith. (5) Statement of Operations for the year ended June 30, 1994 (See Part B): Filed herewith. (6) Statements of Changes in Net Assets for the years ended June 30, 1993 and 1994 (See Part B): Filed herewith. (7) Notes to Financial Statements (See Part B): Filed herewith. (8) Independent Auditors' Consent: Filed herewith. (b) Exhibits -------- (1) Restated Declaration of Trust dated September 27, 1985: Filed with Registrant's Post-Effective Amendment No. 9, 9/27/85, and refiled herewith pursuant to Item 102 of Regulation S-T. (2) By-Laws, as amended through June 26, 1990: Filed with Registrant's Post-Effective Amendment No. 19, 10/31/91, and refiled herewith pursuant to Item 102 of Regulation S-T. (3) Not applicable. (4) Specimen Share Certificate: Filed with Registrant's Post-Effective Amendment No. 9, 9/23/85, and refiled herewith pursuant to Item 102 of Regulation S-T. (5) Investment Advisory Agreement dated October 22, 1990: Filed with Registrant's Post-Effective Amendment No. 18, 10/31/90, and refiled herewith pursuant to Item 102 of Regulation S- T. (6) (i) General Distributor's Agreement dated October 13, 1992 between Registrant and Centennial Asset Management Corporation: Filed with Registrant's Post-Effective Amendment No. 21, 10/29/93, and incorporated herein by reference. (ii) Form of Centennial Asset Management Corporation Dealer Agreement: Filed with Registrant's Post-Effective Amendment No. 6, 10/26/84, and refiled herewith pursuant to Item 102 of Regulation S-T. (iii) Sub-Distributor's Agreement dated May 28, 1993 between Centennial Asset Management Corporation and Oppenheimer Funds Distributor, Inc.: Filed with Registrant's Post-Effective Amendment No. 21, 10/29/93, and incorporated herein by reference. (7) Not applicable. (8) (i) Custodian Agreement dated 5/7/82: Filed with Registrant's Post-Effective Amendment No. 11, 10/31/86 and refiled herewith pursuant to Item 102 of Regulation S-T. (ii) Amendment dated September 27, 1985, to Custodian Agreement: Filed with Registrant's Post-Effective Amendment No. 9, 9/23/85, and refiled herewith pursuant to Item 102 of Regulation S-T. (9) Not applicable. (10) Opinion and Consent of Counsel dated 4/7/82: Filed with Registrant's Pre-Effective Amendment No. 1, 4/13/82, and refiled herewith pursuant to Item 102 of Regulation S-T. (11) Not applicable. (12) Not applicable. (13) Not applicable. (14) (i) Form of Individual Retirement Account Plan (IRA) Agreement: Previously filed with Post-Effective Amendment No. 21 of Oppenheimer U.S. Government Trust (File No. 2-76645), 8/25/93, and incorporated herein by reference. (ii) Form of prototype Standardized and Non- Standardized Profit-Sharing Plan for self-employed persons and corporations: Filed with Post-Effective Amendment No. 3 of Oppenheimer Global Growth & Income Fund (File No. 33-33799), 1/31/92, and incorporated herein by reference. (iii) Form of Tax Sheltered Retirement Plan and Custody Agreement for employees of public schools and tax-exempt Organizations: Filed with Post-Effective Amendment No. 47 of Oppenheimer Growth Fund (Reg. No. 2-45272), 10/21/94 and incorporated herein by reference. (iv) Form of Simplified Employee Pension IRA: Previously filed with Post-Effective Amendment No. 36 of Oppenheimer Equity Income Fund (File No. 2-33043), 10/23/91, and incorporated herein by reference. (v) Form of SAR-SEP Simplified Employee Pension IRA: Previously filed with Post-Effective Amendment No. 19 to the Registration Statement for Oppenheimer Integrity Funds (File No. 2- 76547), 3/1/94, and incorporated herein by reference. (15) Service Plan and Agreement under Rule 12b-1 dated August 24, 1993 between Registrant and Centennial Asset Management Corporation: Filed with Registrant's Post-Effective Amendment No. 21, 10/29/93, and incorporated herein by reference. (16) Performance Data Computation Schedule: Filed herewith. (17) Financial Data Schedule: Filed herewith. -- Powers of Attorney: Filed with Registrant's Post Effective Amendment No. 21, 10/29/93, and incorporated herein by reference. Item 26. Number of Holders of Securities ------------------------------- Number of Record Holders as of Title of Class September 30, 1994 -------------- ---------------- Shares of Beneficial Interest 35,351 Item 27. Indemnification --------------- Reference is made to Section 12 of Article SEVENTH of Registrant's Restated Declaration of Trust, dated September 27, 1985, filed as Exhibit 24(b)(1) to this registration statement. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to trustees, officers and controlling persons of Registrant pursuant to the foregoing provisions or otherwise, Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Registrant of expenses incurred or paid by a trustee, officer or controlling person of Registrant in the successful defense of any action, suit or proceeding) is asserted by such trustee, officer or controlling person, Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. Item 28. (a) Business and Other Connections of Investment Adviser ---------------------------------------------------- Centennial Asset Management Corporation is the investment adviser of Registrant; it and certain subsidiaries and affiliates act in the same capacity for other registered investment companies as described in Parts A and B. (b) Business and Other Connections of Officers and Directors of Centennial Capital Corporation ---------------------------------------------- For information as to the business, profession, vocation or employment of a substantial nature of each of the officers and directors of Centennial Asset Management Corporation, reference is made to Form ADV of Centennial Asset Management Corporation, as filed under the Investment Advisers Act of 1940, which is incorporated herein by reference. Item 29. Principal Underwriter --------------------- (a) Centennial Asset Management Corporation is the principal underwriter. It is also the principal underwriter of each of the other registered investment companies of which it is the investment adviser, as described in Parts A and B. (b) The information contained in the registration on Form BD of Centennial Asset Management Corporation, filed under the Securities Exchange Act of 1934 is incorporated herein by reference. (c) Not applicable. Item 30. Location of Accounts and Records -------------------------------- The accounts, books and other documents required to be maintained by Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and rules promulgated thereunder are in the possession of Centennial Asset Management Corporation, 3410 South Galena Street, Denver, Colorado 80231. Item 31. Management Services ------------------- Not applicable. Item 32. Undertakings ------------ (a) Not applicable. (b) Not applicable. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and/or the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver and State of Colorado on the 28th day of October, 1994. CENTENNIAL GOVERNMENT TRUST By: /s/ James C. Swain* ----------------------------- James C. Swain, Chairman Attest: /s/ George C. Bowen* - -------------------------- George C. Bowen, Secretary Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities on the dates indicated: Signatures Title Date - ---------- ----- ---- /s/ James C. Swain* Chairman, Trustee October 28, 1994 - ------------------ and Principal James C. Swain Executive Officer /s/ Jon S. Fossel* President and October 28, 1994 - ----------------- Trustee Jon S. Fossel /s/ George C. Bowen* Treasurer and October 28, 1994 - ------------------- Principal Financial George C. Bowen and Accounting Officer /s/ Robert G. Avis* Trustee October 28, 1994 - ------------------ Robert G. Avis /s/ William A. Baker* Trustee October 28, 1994 - -------------------- William A. Baker /s/ Charles Conrad, Jr.* Trustee October 28, 1994 - ----------------------- Charles Conrad, Jr. /s/ Raymond J. Kalinowski* Trustee October 28, 1994 - ------------------------- Raymond J. Kalinowski /s/ C. Howard Kast* Trustee October 28, 1994 - ------------------ C. Howard Kast /s/ Robert M. Kirchner* Trustee October 28, 1994 - ---------------------- Robert M. Kirchner /s/ Ned M. Steel* Trustee October 28, 1994 - ---------------- Ned M. Steel *By: /s/ Robert G. Zack - -------------------------------- Robert G. Zack, Attorney-in-Fact CENTENNIAL GOVERNMENT TRUST EXHIBIT INDEX Form N-1A Item No. Description 24 (a) (8) Independent Auditor's Consent 24 (b) (1) Restated Declaration of Trust dated 9/27/85 24 (b) (2) By-Laws (as amended through 6/26/90) 24 (b) (4) Specimen Share Certificate 24 (b) (5) Investment Advisory Agreement dated 10/22/90 24 (b) (6) (ii) Form of Dealer Agreement 24 (b) (8) (i) Custodian Agreement dated 5/7/82 24 (b) (8) (ii) Amendment dated 9/27/85 to Custodian Agreement 24 (b) (10) Opinion and Consent of Counsel dated 4/7/82 24 (b) (16) Performance Data Computation Schedule 24 (b) (17) Financial Data Schedule EX-23 2 CONSENT INDEPENDENT AUDITORS' CONSENT Centennial Government Trust: We consent to the use in this Post-Effective Amendment No. 23 to Registration Statement No. 2-75812 of our report dated July 22, 1994 on the financial statements of Centennial Government Trust appearing in the Statement of Additional Information, which is a part of such Registration Statement, and to the reference to us under the caption "Financial Highlights" appearing in the Prospectus, which is also a part of such Registration Statement. /s/ Deloitte & Touche LLP _ _ _ _ _ _ _ _ _ _ _ _ _ DELOITTE & TOUCHE LLP Denver, Colorado October 28, 1994 EX-3 3 RESTATED DEC. OF TRUST RESTATED DECLARATION OF TRUST OF CENTENNIAL GOVERNMENT TRUST RESTATED DECLARATION OF TRUST, made September 27, 1985 by and among the individuals executing this Declaration of Trust as the initial Trustees. WHEREAS, a majority of the Trustees established Daily Cash Government Fund, a business trust under the laws of the Commonwealth of Massachusetts, for the investment and reinvestment of funds contributed thereto, under a Declaration of Trust dated January 18, 1982; WHEREAS, the Trustees desire to make permitted changes to said Declaration of Trust, one of which is to change the name of the Trust to Centennial Government Trust; WHEREAS, such changes have been approved by the shareholders of Daily Cash Government Fund at a shareholders meeting held September 27, 1985; NOW THEREFORE, the Trustees declare that all money and property contributed to the business trust known as Daily Cash Government Fund established January 18, 1982 shall henceforth be held and managed under this Restated Declaration of Trust IN TRUST as herein set forth below. FIRST: The Trust shall be known as CENTENNIAL GOVERNMENT TRUST. SECOND: Whenever used herein, unless otherwise required by the context or specifically provided: 1. All terms used in this Declaration of Trust that are defined in the 1940 Act shall have the meanings given to them in the 1940 Act. 2. The "Trust" refers to Centennial Government Trust. 3. "Shareholder" means a record owner of Shares of the Trust. 4. The "Trustees" refers to the individual trustees in their capacity as trustees hereunder of the Trust and their successor or successors for the time being in office as such trustees. 5. "Shares" means the equal proportionate units of interest into which the beneficial interest in the Trust shall be divided from time to time and includes fractions of Shares as well as whole Shares. 6. The "1940 Act" refers to the Investment Company Act of 1940, as amended from time to time. 7. "Commission" means the Securities and Exchange Commission. 8. "Board" means the Board of Trustees of the Trust. THIRD: The purpose or purposes for which the Trust is formed and the business or objects to be transacted, carried on and promoted by it are as follows: 1. To hold, invest or reinvest its funds, and in connection therewith to hold part or all of its funds in cash, and to purchase or otherwise acquire, hold for investment or otherwise, sell, sell short, assign, negotiate, transfer, exchange or otherwise dispose of or turn to account or realize upon, securities (which term "securities" shall for the purposes of this Declaration of Trust, without limitation of the generality thereof, be deemed to include any stocks, shares, bonds, debentures, notes, mortgages or other obligations, and any certificates, receipts, warrants or other instruments representing rights to receive, purchase or subscribe for the same, or evidencing or representing any other rights or interests therein, or in any property or assets) created or issued by any issuer (which term "issuer" shall for the purposes of this Declaration of Trust, without limitation of the generality thereof be deemed to include any persons, firms, associations, corporations, syndicates, combinations, organizations, governments, or subdivisions thereof) and to exercise, as owner or holder of any securities, all rights, powers and privileges in respect thereof; and to do any and all acts and things for the preservation, protection, improvement and enhancement in value of any or all such securities or financial instruments. 2. To borrow money and pledge assets in connection with any of the objects or purposes of the Trust, and to issue notes or other obligations evidencing such borrowings, to the extent permitted by the 1940 Act and by the Trust's fundamental investment policies under the 1940 Act. 3. To issue and sell its Shares in such amounts and on such terms and conditions, for such purposes and for such amount or kind of consideration (including without limitation thereto, securities) now or hereafter permitted by the laws of the Commonwealth of Massachusetts and by this Declaration of Trust, as the Trustees may determine. 4. To purchase or otherwise acquire, hold, dispose of, resell, transfer, reissue or cancel (all without the vote or consent of the Shareholders of the Trust) its Shares, in any manner and to the extent now or hereafter permitted by this Declaration of Trust. 5. To conduct its business in all its branches at one or more offices in Massachusetts and elsewhere in any part of the world, without restriction or limit as to extent. 6. To carry out all or any of the foregoing objects and purposes as principal or agent, and alone or with associates or, to the extent now or hereafter permitted by the laws of Massachusetts, as a member of, or as the owner or holder of any stock of, or share of interest in, any issuer, and in connection therewith to make or enter into such deeds or contracts with any issuers and to do such acts and things and to exercise such powers, as a natural person could lawfully make, enter into, do or exercise. 7. To do any and all such further acts and things and to exercise any and all such further powers as may be necessary, incidental, relative, conducive, appropriate or desirable for the accomplishment, carrying out or attainment of all or any of the foregoing purposes or objects. The foregoing objects and purposes shall, except as otherwise expressly provided, be in no way limited or restricted by reference to, or inference from, the terms of any other clause of this or any other Article of this Declaration of Trust, and shall each be regarded as independent and construed as powers as well as objects and purposes, and the enumeration of specific purposes, objects and powers shall not be construed to limit or restrict in any manner the meaning of general terms or the general powers of the Trust now or hereafter conferred by the laws of the Commonwealth of Massachusetts nor shall the expression of one thing be deemed to exclude another, though it be of like nature, not expressed; provided, however, that the Trust shall not carry on any business, or exercise any powers, in any state, territory, district or country except to the extent that the same may lawfully be carried on or exercised under the laws thereof. FOURTH: The beneficial interest in the Trust shall at all times be divided into an unlimited number of transferrable Shares, without par value, each of which shall represent an equal proportionate interest in the Trust with each other Share outstanding, none having priority or preference over another. The Trustees may from time to time divide or combine the Shares into a greater or lesser number without thereby changing the proportionate beneficial interests in the Trust. Contributions to the Trust may be accepted for, and Shares shall be redeemed as, whole Shares and/or 1/1,000ths of a Share or multiples thereof. The Board of Trustees of the Trust may classify unissued shares into one or more additional classes which shall, together with the issued shares of stock of the Trust have such designations as the Board shall determine, and which shall be treated for all purposes other than as to dividends as if all shares were shares of one class. The dividend payable to the holders of each such class shall, subject to any applicable rule, regulation or order of the Securities and Exchange Commission or other applicable law or regulation, be determined by the Board and need not be individually declared but may be declared and paid in accordance with a formula adopted by the Board. The Board of Trustees may in the alternative classify unissued shares into one or more additional classes which shall, together with the issued shares of stock of the Trust, have such designations as the Board may determine and shall, subject to any applicable rule, regulation or order of the Securities and Exchange Commission or other applicable law or regulation, have the following characteristics. (a) All consideration received by the Trust for the issue or sale of shares of stock of each such class, together with all income, earnings, profits and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation thereof, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same may be, shall irrevocably belong to the class of shares of stock with respect to which such assets, payments, or funds were received by the Trust for all purposes, subject only to the rights of creditors, and shall be so handled upon the books of account of the Trust. Such assets, income, earnings, profits and proceeds thereof, including any proceeds derived from the sale, exchange, or liquidation thereof, any asset derived from any reinvestment of such proceeds, in whatever form the same may be, are herein referred to as "assets belonging to" such class. (b) Dividends or distributions on shares of any such class of stock, whether payable in stock or cash, shall be paid only out of earnings, surplus or other assets belonging to such class. (c) In the event of the liquidation or dissolution of the Trust shareholders of each such class shall be entitled to receive, as a class, out of the assets of the Trust available for distribution to shareholders, but other than general assets not belonging to any particular class of stock, the assets belonging to such class; and the assets so distributable to the shareholders of any such class shall be distributed among such shareholders in proportion to the number of shares of such class held by them and recorded on the books of the Trust. In the event that there are any general assets not belonging to any particular class of stock and available for distribution, such distribution shall be made to the holders of stock of all classes in proportion to the asset value of the respective classes. (d) The assets belonging to any such class of stock shall be charged with the liabilities in respect to such class and shall also be charged with its share of the general liabilities of the Trust, in proportion to the asset value of the respective classes. The determination of the Board of Trustees shall be conclusive as to the amount of liabilities, including accrued expenses and reserves, and as to the allocation of the same as to a given class, and as to whether the same, or general assets of the Trust, are allocable to one or more classes. The liabilities so allocated to a class are herein referred to as "liabilities belonging to" such class. (e) At all meetings of stockholders, each stockholder of each share of stock of each class of the Trust shall be entitled to one vote for each share of stock irrespective of the class standing in his name on the books of the Trust, except that where a vote of the holders of the shares of stock of any class, or of more than one class, voting by class, is required by the Investment Company Act of 1940 and/or Massachusetts law as to any proposal, only the holders of such class or classes, voting by class, shall be entitled to vote upon such proposal and the holders of any other class or classes shall not be entitled to vote thereon. Any fractional share, if any such fractional shares are outstanding, shall carry proportionately all the rights of a whole share, including the right to vote and the right to receive dividends; there shall be no cumulative voting rights with respect to any shares or class of shares of the Trust. (f) The provision of Article FIFTH relating to voting shall apply when the Trust has only one class of shares outstanding or when the Trust has more than one class of shares outstanding but which differ only as to their dividend rights. (g) When the Trust has more than one class of shares outstanding having separate assets and liabilities: (i) the redemption rights provided to the holders of the Trust's shares shall be deemed to apply only to the assets belonging to the class of stock in question; and (ii) the net asset value per share as provided for in Article SEVENTH shall be applied as if each class of shares were the Trust as referred to in such computation, but with its assets limited to the assets belonging to such class and its liabilities belonging to such class. (h) The ownership of Shares shall be recorded in the books of the Trust or a transfer agent. The Trustees may make such rules as they consider appropriate for the transfer of shares and similar matters. The record books of the Trust or any transfer agent, as the case may be, shall be conclusive as to who are the holders of Shares and as to the number of Shares held from time to time by each. (i) The Trustees shall accept investments in the Trust from such persons and on such terms as they may from time to time authorize. After the date of the initial contribution of capital (which shall occur prior to the initial public offering of Shares of the Trust), the number of Shares to represent the initial contribution shall be considered as outstanding and the amount received by the Trustees on account of the contribution shall be treated as an asset of the Trust. Subsequent to such initial contribution of capital, Shares (including Shares which may have been redeemed or repurchased by the Trust) may be issued or sold at a price which will net the Trust, before paying any taxes in connection with such issue or sale, not less than the net asset value (as defined in Article SEVENTH, Section 13) thereof; provided, however, that the Trustees may in their discretion impose a sales charge upon investments in the Trust. (j) Shareholders shall know no pre-emptive or other right to subscribe to any additional shares or other securities issued by the Trust or the Trustees. FIFTH: The following provisions are hereby adopted with respect to voting Shares of the Trust and certain other rights: 1. The Shareholders shall have the power to vote (i) for the election of Trustees when that issue is submitted to them, (ii) with respect to the amendment of this Declaration of Trust, (iii) to the same extent as the shareholders of a Massachusetts business corporation, as to whether or not a court action, proceeding or claim should be brought or maintained derivatively or as a class action on behalf of the Trust or the Shareholders, and (iv) with respect to those matters relating to the Trust as may be required by the 1940 Act or required by law, by this Declaration of Trust, or the By-Laws of the Trust or any registration statement of the Trust filed with the Commission or any State, or as the Trustees may consider desirable. 2. At all meetings of Shareholders, each Shareholder shall be entitled to one vote for each Share standing in his name on the books of the Trust on the date, fixed in accordance with the By-Laws, for determination of Shareholders entitled to vote at such meeting except for Shares redeemed prior to the meeting. Any fractional Share shall carry proportionately all the rights of a whole share, including the right to vote and the right to receive dividends. The presence in person or by proxy of the holders of one-third of the Shares outstanding and entitled to vote thereat shall constitute a quorum at any meeting of the Shareholders. If at any meeting of the Shareholders there shall be less than a quorum present, the Shareholders present at such meeting may, without further notice, adjourn the same from time to time until a quorum shall attend, but no business shall be transacted at any such adjourned meeting except such as might have been lawfully transacted had the meeting not been adjourned. 3. Each Shareholder, upon request to the Trust in proper form determined by the Trust, shall be entitled to require the Trust to redeem all or any part of the Shares standing in the name of such Shareholder. The method of computing such net asset value, the time at which such net asset value shall be computed and the time within which the Trust shall make payment therefor, shall be determined as hereinafter provided in Article SEVENTH of this Declaration of Trust. Notwithstanding the foregoing, the Trustees may suspend the right of the Shareholders to require the Trust to redeem Shares when permitted or required to do so by the 1940 Act. 4. No Shareholder shall, as such holder, have any right to purchase or subscribe for any security of the Trust which it may issue or sell, other than such right, if any, as the Trustees, in their discretion, may determine. 5. All persons who shall acquire Shares shall acquire the same subject to the provisions of the Declaration of Trust. SIXTH: (A) Each Trustee shall hold office until the annual meeting of Shareholders next succeeding his election or until his successor is duly elected and qualifies. The initial number of Trustees shall be ten and the persons who shall act as such until the first annual meeting or until their successors are duly chosen and qualify are the initial trustees executing this Declaration of Trust or any counterpart thereof. The Trust shall not be required to hold annual meetings of shareholders unless required by the 1940 Act, the provisions of this Declaration of Trust, or any other applicable law. However, the By-Laws of the Trust may fix the number of Trustees at a number greater than that named in this Declaration of Trust and may authorize the Trustees, by vote of a majority of the entire number of Trustees, to increase or decrease the number of Trustees fixed by this Declaration of Trust or the By-Laws within limits specified in the By- Laws, provided that in no case shall the number of Trustees be less than three, and to fill the vacancies created by any such increase in the number of Trustees. Unless otherwise provided by the By-Laws of the Trust, the Trustees need not be shareholders. The Trustees may fill vacancies on the Board of Trustees which may occur for any reasons. (B) A Trustee at any time may be removed either with or without cause by resolution duly adopted by the affirmative vote of the holders of two-thirds of the outstanding Shares, present in person or by proxy at any meeting of Shareholders called for such purpose; such a meeting shall be called by the Trustees when requested in writing to do so by the record holders of not less than ten per centum of the outstanding Shares. (C) The Trustees shall make available a list of names and addresses of all Shareholders as recorded on the books of the Trust, upon receipt of the request in writing signed by not less than ten Shareholders, who have been such for at least six months, holding shares of the Trust valued at not less than $25,000 at current offering price (as defined in the Trust's Prospectus and/or Statement of Additional Information) or at least 1% in amount of the entire amount of Shares issued and outstanding; such request must state that such Shareholders wish to communicate with other shareholders with a view to obtaining signatures to a request for a meeting to take action pursuant to part (B) of this Article SIXTH and accompanied by a form of communication to the Shareholders. The Trustees may, in their discretion, satisfy their obligation under this part (C) by either making available the Shareholder list to such Shareholders at the principal offices of the Trust, or at the offices of the Trust's transfer agent, during regular business hours, or by mailing a copy of such communication and form of request, at the expense of such requesting Shareholders, to all other Shareholders. SEVENTH: The following provisions are hereby adopted for the purpose of defining, limiting and regulating the powers of the Trust and of the Trustees and Shareholders. 1. As soon as any Trustee is duly elected by the Shareholders or the Trustees and shall have accepted this trust, the Trust estate shall vest in the new Trustee or Trustees, together with the continuing Trustees, without any further act or conveyance, and he shall be deemed a Trustee hereunder. 2. The death, declination, resignation, retirement, removal, or incapacity of the Trustees, or any one of them shall not operate to annul the Trust or to revoke any existing agency created pursuant to the terms of this Declaration of Trust. 3. The assets of the Trust shall be held separate and apart from any assets now or hereafter held in any capacity other than as Trustee hereunder by the Trustees or any successor Trustees. All of the assets of the Trust shall at all times be considered as vested in the Trustees. Except as provided in this Declaration of Trust, no Shareholder shall have, as a holder of beneficial interest in the Trust, (a) any authority, power or right whatsoever to transact business for or on behalf of the Trust, or on behalf of the Trustees, in connection with the property or assets of the Trust, nor (b) any interest in the specific property or assets of the Trust, or in any part thereof, except the right to receive the waiver and distributable amounts arising therefrom as set forth herein. 4. The Trustees in all instances shall act as principals, and are and shall be free from the control of the Shareholders. The Trustees shall have full power and authority to do any and all acts and to make and execute any and all contracts and instruments that they may consider necessary or appropriate in connection with the management of the Trust. The Trustees shall not in any way be bound or limited by present or future laws or customs in regard to trust investments, but shall have full authority and power to make any and all investments which they, in their uncontrolled discretion, shall deem proper to accomplish the purpose of this Trust. Subject to any applicable limitation in this Declaration of Trust or by the By-Laws of the Trust, the Trustees shall have power and authority: (a) to adopt By-Laws not inconsistent with this Declaration of Trust providing for the conduct of the business of the Trust and to amend and repeal them to the extent that they do not reserve that right to the Shareholders; (b) to elect and remove such officers and appoint and terminate such officers as they consider appropriate; (c) to employ a bank or trust company as custodian of any assets of the Trust subject to any conditions set forth in this Declaration of Trust or in the By-Laws; (d) To retain a transfer agent and shareholder servicing agent, or both; (e) To provide for the distribution of Shares either through a principal underwriter or the Trust itself, or both; (f) To set record dates in the manner provided for in the By-Laws of the Trust; (g) to delegate such authority as they consider desirable to any officers of the Trust and to any agent, custodian or underwriter, including the authority to sign any supplemental Declaration of Trust on behalf of the Trustees; (h) to vote or give assent, or exercise any rights of ownership, with respect to stock or other securities or property; and to execute and deliver powers of attorney to such person or persons as the Trustees shall deem proper, granting to such person or persons such power and discretion with relation to securities or property as the Trustees shall deem proper; (i) to exercise powers and rights of subscription or otherwise which in any manner arise out of ownership of securities; (j) to hold any security or property in a form not indicating any trust, whether in bearer, unregistered or other negotiable form; or either in its own name or in the name of a custodian or a nominee or nominees, subject in either case to proper safeguards according to the usual practice of Massachusetts business trusts or investment companies; (k) to consent to or participate in any plan for the reorganization, consolidation or merger of any corporation or concern, any security of which is held in the Trust; to consent to any contract, lease, mortgage, purchase, or sale of property by such corporation or concern, and to pay calls or subscriptions with respect to any security held in the Trust; (l) to compromise, arbitrate, or otherwise adjust claims in favor of or against the Trust or any matter in controversy including, but not limited to, claims for taxes; (m) to make, in the manner provided in the By-Laws, distributions of income and of capital gains to Shareholders; (n) to borrow money to the extent and in the manner permitted by the 1940 Act and any fundamental policy thereunder as to borrowing; (o) to enter into investment advisory or management contracts, subject to the 1940 Act, with any one or more corporations, partnerships, trusts, associations or other persons; if the other party or parties to any such contract are authorized to enter into securities transactions on behalf of the Trust, such transactions shall be deemed to have been authorized by all of the Trustees; and (p) to change the name of the Trust as they consider appropriate without prior shareholder approval. 5. No one dealing with the Trustees shall be under any obligation to make any inquiry concerning the authority of the Trustees, or to see to the application of any payments made or property transferred to the Trustees or upon their order. 6.(a) The Trustees shall have no power to bind any Shareholder personally or to call upon any Shareholder for the payment of any sum of money or assessment whatsoever other than such as the Shareholder may at any time personally agree to pay by way of subscription to any Shares or otherwise. Every note, bond, contract or other undertaking issued by or on behalf of the Trust or the Trustees relating to the Trust shall include a recitation limiting the obligation represented thereby to the Trust and its assets (but the omission of such recitation shall not operate to bind any Shareholder). (b) Whenever this Declaration of Trust calls for or permits any action to be taken by the Trustees hereunder, such action shall mean that taken by the Board of Trustees by vote of the majority of Trustees as set forth from time to time in the By-Laws of the Trust or as required pursuant to the provisions of the 1940 Act and the rules and regulations promulgated thereunder. (c) The Trustees shall possess and exercise any and all such additional powers as are reasonably implied from the powers herein contained such as may be necessary or convenient in the conduct of any business or enterprise of the Trust, to do and perform anything necessary, suitable, or proper for the accomplishment of any of the purposes, or the attainment of any one or more of the objects, herein enumerated, or which shall at any time appear conducive to or expedient for the protection or benefit of the Trust, and to do and perform all other acts and things necessary or incidental to the purposes herein before set forth, or that may be deemed necessary by the Trustees. (d) The Trustees shall have the power to determine conclusively whether any moneys, securities, or other properties of the Trust are, for the purposes of this Trust, to be considered as capital or income and in what manner any expenses or disbursements are to be borne as between capital and income whether or not in the absence of this provision such moneys, securities, or other properties would be regarded as capital or income and whether or not in the absence of this provision such expenses or disbursements would ordinarily be charged to capital or to income. 7. The By-Laws of the Trust may divide the Trustees into classes and prescribe the tenure of office of the several classes, but no class shall be elected for a period shorter than that from the time of the election following the division into classes until the next meeting and thereafter for a period shorter than the interval between meetings or for a period longer than five years, and the term of office of at least one class shall expire each year. 8. The Shareholders shall have the right to inspect the records, documents, accounts and books of the Trust, subject to reasonable regulations of the Trustees, not contrary to Massachusetts law, as to whether and to what extent, and at what times and places, and under what conditions and regulations, such right shall be exercised. 9. Any Trustee, or any officer elected or appointed by the Trustees or by any committee of the Trustees or by the Shareholders or otherwise, may be removed at any time, with or without cause, in such lawful manner as may be provided in the By-Laws of the Trust. 10. If the By-Laws so provide, the Trustees shall have power to hold their meetings, to have an office or offices and, subject to the provisions of the laws of Massachusetts, to keep the books of the Trust outside of said Commonwealth at such places as may from time to time be designated by them. 11. Securities held by the Trust shall be voted in person or by proxy by the President or a Vice-President, or such officer or officers of the Trust as the Trustees shall designate for the purpose, or by a proxy or proxies thereunto duly authorized by the Trustees, except as otherwise ordered by vote of the holders of a majority of the Shares outstanding and entitled to vote in respect thereto. 12.(a) Subject to the provisions of the 1940 Act, any Trustee, officer or employee, individually, or any partnership of which any Trustee, officer or employee may be a member, or any corporation or association of which any Trustee, officer or employee may be an officer, director, trustee, employee or stockholder, may be a party to, or may be pecuniarily or otherwise interested in, any contract or transaction of the Trust, and in the absence of fraud no contract or other transaction shall be thereby affected or invalidated; provided that in case a Trustee, or a partnership, corporation or association of which a Trustee is a member, officer, director, trustee, employee or stockholder is so interested, such fact shall be disclosed or shall have been known to the Trustees or a majority thereof; and any Trustee who is so interested, or who is also a director, officer, trustee, employee or stockholder of such other corporation or a member of such partnership which is so interested, may be counted in determining the existence of a quorum at any meeting of the Trustees which shall authorize any such contract or transaction, and may vote thereat to authorize any such contract or transaction, with like force and effect as if he or she were not such director, officer, trustee, employee or stockholder of such other trust or corporation or association or a member of a partnership so interested. (b) Specifically, but without limitation of the foregoing, the Trust may enter into a management or investment advisory contract or underwriting contract and other contracts with, and may otherwise do business with any manager or investment adviser for the Trust and/or principal underwriter of the Shares of the Trust or any subsidiary or affiliate of any such manager or investment adviser and/or principal underwriter and may permit any such firm or corporation to enter into any contracts or other arrangements with any other firm or corporation relating to the Trust notwithstanding that the Trustees of the Trust may be composed in part of partners, directors, officers or employees of any such firm or corporation, and officers of the Trust may have been or may be or become partners, directors, officers or employees of any such firm or corporation, and in the absence of fraud the Trust and any such firm or corporation may deal freely with each other, and no such contract or transaction between the Trust and any such firm or corporation shall be invalidated or in any way affected thereby, nor shall any Trustee or officer of the Trust be liable to the Trust or to any Shareholder or creditor thereof or to any other person for any loss incurred by it or him solely because of the existence of any such contract or transaction; provided that nothing herein shall protect any director or officer of the Trust against any liability to the trust or to its security holders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office. (c) As used in this paragraph the following terms shall have the meanings set forth below: (i) the term "indemnitee" shall mean any present or former Trustee or officer of the Trust, any present or former Trustee or officer of another trust whose securities are or were owned by the Trust or of which the Trust is or was a creditor and who served or serves in such capacity at the request of the Trust, and the heirs, executors and administrators of any of the foregoing; however, whenever conduct by an indemnitee is referred to, the conduct shall be that of the original indemnitee rather than that of the heir, executor or administrator; (ii) the term "covered proceeding" shall mean any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, to which an indemnitee is or was a party or is threatened to be made a party by reason of the fact or facts under which he is an indemnitee as defined above; (iii) the term "disabling conduct" shall mean willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office in question; (iv) the term "covered expenses" shall mean expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by an indemnitee in connection with a covered proceeding; and (v) the term "adjudication of liability" shall mean, as to any covered proceeding and as to any indemnitee, an adverse determination as to the indemnitee whether by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent. (d) The Trust shall not indemnify any indemnitee for any covered expenses in any covered proceeding if there has been an adjudication of liability against such indemnitee expressly based on a finding of disabling conduct. (e) Except as set forth in (d) above, the Trust shall indemnify any indemnitee for covered expenses in any covered proceeding, whether or not there is an adjudication of liability as to such indemnitee, if a determination has been made that the indemnitee was not liable by reason of disabling conduct by (i) a final decision of the court or other body before which the covered proceeding was brought; or (ii) in the absence of such decision, a reasonable determination, based on a review of the facts, by either (a) the vote of a majority of a quorum of Trustees who are neither "interested persons", as defined in the 1940 Act nor parties to the covered proceedings, or (b) an independent legal counsel in a written opinion; provided that such Trustees or counsel, in reaching such determination, may but need not presume the absence of disabling conduct on the part of the indemnitee by reason of the manner in which the covered proceeding was terminated. (f) Covered expenses incurred by an indemnitee in connection with a covered proceeding shall be advanced by the Trust to an indemnitee prior to the final disposition of a covered proceeding upon the request of the indemnitee for such advance and the undertaking by or on behalf of the indemnitee to repay the advance unless it is ultimately determined that the indemnitee is entitled to indemnification hereunder, but only if one or more of the following is the case: (i) the indemnitee shall provide a security for such undertaking; (ii) the Trust shall be insured against losses arising out of any lawful advances; or (iii) there shall have been a determination, based on a review of the readily available facts (as opposed to a full trial-type inquiry) that there is a reason to believe that the indemnitee ultimately will be found entitled to indemnification by either independent legal counsel in a written opinion or by the vote of a majority of a quorum of trustees who are neither "interested persons" as defined in the 1940 Act nor parties to the covered proceeding. (g) Nothing herein shall be deemed to affect the right of the Trust and/or any indemnitee to acquire and pay for any insurance covering any or all indemnities to the extent permitted by the 1940 Act or to affect any other indemnification rights to which any indemnitee may be entitled to the extent permitted by the 1940 Act. 13. For purposes of the computation of net asset value, as in this Declaration of Trust referred to, the following rules shall apply: (a) The net asset value of each Share of the Trust tendered to the Trust for redemption shall be determined as of the close of business on the New York Stock Exchange succeeding the tender of such share; (b) The net asset value of each Share of the Trust for the purpose of the issue of such shares shall be determined as of the close of business on the New York Stock Exchange next succeeding the receipt of an order to purchase such shares; (c) The net asset value of each Share at the time of valuation on any day, shall be the quotient obtained by dividing the value, as at such time, of the net assets of that Series (i.e., the value of the assets of the Trust less its liabilities exclusive of its surplus) by the total number of Shares outstanding at such time. The assets and liabilities of any Series shall be determined in accordance with generally accepted accounting principles, provided, however, that in determining the liabilities of the Trust there shall be included such reserves for taxes or contingent liabilities as may be authorized or approved by the Trustees, and provided further that in determining the value of the assets of the Trust for the purpose of obtaining the net asset value, each security listed on the New York Stock Exchange shall be valued on the basis of the closing sale at the time of valuation on the business day as of which such value is being determined; if there be no sale on such day, then the security shall be valued on the basis of the mean between the closing bid and asked prices on such day; if no bid and asked prices are quoted for such day, then the security shall be valued by such method as the Trustees shall deem in good faith to reflect its fair market value; securities not listed on the New York Stock Exchange shall be valued in like manner on the basis of quotations on any other stock exchange which the Trustees may from time to time approve for that purpose; readily marketable securities traded in the over-the-counter market shall be valued at the mean between their bid and asked prices, or, if the Trustees shall so determine, at their bid prices; and all other assets of the Trust and all securities as to which the Trust might be considered an "underwriter" (as that term is defined in the Securities Act of 1933), whether or not such securities are listed or traded in the over-the- counter market, shall be valued by such method as they shall deem in good faith to reflect their fair market value. In connection with the accrual of any fee or refund payable to or by an investment adviser of the Trust, the amount of which accrual is not definitely determinable as of any time at which the net asset value of each Share of the Trust is being determined due to the contingent nature of such fee or refund, the Trustees are authorized to established from time to time formula for such accrual, on the basis of the contingencies in question to the date of such determination, or on such other basis as the Trustees may establish. (1) Shares to be issued shall be deemed to be outstanding as of the time of the determination of the net asset value per share applicable to such issuance and the net price thereof shall be deemed to be an asset of the Trust; and (2) Shares to be redeemed by the Trust shall be deemed to be outstanding until the time of the determination of the net asset value applicable to such redemption and thereupon and until paid the redemption price thereof shall be deemed to be a liability of the Trust; and (3) Shares voluntarily purchased or contracted to be purchased by the Trust pursuant to the provisions of paragraph 13(s) of this Article SEVENTH shall be deemed to be outstanding until whichever is the later of (i) the time of the making of such purchase or contract of purchase, and (ii) the time at which the purchase price is determined, and thereupon and until paid, the purchase price thereof shall be deemed to be a liability of the Trust. (d) The net asset value of each Share of the Trust, as of any time other than the close of business on the New York Stock Exchange on any day, may be determined by applying to the net asset value as of the close of business on that Exchange on the preceding business day, computed as provided in paragraph 8(c) of this Article SEVENTH, such adjustments as are authorized by or pursuant to the direction of the Trustees and designed reasonably to reflect any material changes in the market value of securities and other assets held and any other material changes in the assets or liabilities of the Trust and in the number of its outstanding Shares which shall have taken place since the close of business on such preceding business day. (e) In addition to the foregoing, the Trustees are empowered, in their absolute discretion, to establish other bases or times, or both, for determining the net asset value of each Share of Trust in accordance with the 1940 Act and to authorize the voluntary purchase by the Trust, either directly or through an agent, of Shares of the Trust upon such terms and conditions and for such consideration as the Trustees shall deem advisable in accordance with any such provision, rule or regulation. (f) Payment of the net asset of Shares of the Trust properly surrendered to it for redemption shall be made by the Trust within seven days after tender of such stock to the Trust for such purpose plus any period of time during which the right of the holders of the shares of the Trust to require the Trust to redeem such shares has been suspended. Any such payment may be made in portfolio securities of the Trust and/or in cash, as the Trustees shall deem advisable, and no Shareholder shall have the right, other than as determined by the Trustees, to have Shares redeemed in kind. EIGHTH: The name "Centennial Government Trust" included in the name of the Trust shall be used pursuant to a royalty-free, non-exclusive license from Centennial Capital Corporation. The license may be terminated by Centennial Capital Corporation with or without cause upon 60 days' notice, in which case the Trust shall have any further right to use the name "Centennial Government Trust" in its name or otherwise and the Trust, the Shareholders and its officers and Trustees shall promptly take whatever action may be necessary to change its name accordingly. NINTH: 1. In case any Shareholder or former Shareholder shall be held to be personally liable solely by reason of his being or having been a Shareholder and not because of his acts or omissions or for some other reason, the Shareholder or former Shareholder (or his heirs, executors, administrators or other legal representatives or in the case of a corporation or other entity, its corporate or other general successor) shall be entitled out of the Trust estate to be held harmless from and indemnified against all loss and expense arising from such liability. The Trust shall, upon request by the Shareholder, assume the defense of any claim made against any Shareholder for any act or obligation of the Trust and satisfy any judgment thereon. 2. It is hereby expressly declared that a trust and not a partnership is created hereby. No individual Trustee hereunder shall have any power to bind personally either the Trust's officers or any Shareholder. All persons extending credit to, contracting with or having any claim against the Trust or the Trustees shall look only to the assets of the Trust for payment under any such credit, contract or claim; and neither the Shareholders nor the Trustees, nor any of their agents, whether past, present or future, shall be personally liable therefor. Nothing in this Declaration of Trust shall protect a Trustee against any liability to which such Trustee would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee hereunder. 3. The exercise by the Trustees of their powers and discretion hereunder in good faith and with reasonable care under the circumstances then prevailing, shall be binding upon everyone. Subject to the provisions of paragraph 2 of this Article NINTH, the Trustees shall not be liable for errors of judgment or mistakes of fact or law. The Trustees may take advice of counsel or other experts with respect to the meaning and operations of this Declaration of Trust, and subject to the provisions of paragraph 2 of this Article NINTH, shall be under no liability for any act or omission in accordance with such advice or for failing to follow such advice. The Trustees shall not be required to give any bond as such, nor any surety if a bond is required. 4. This Trust shall continue without limitation of time but subject to the provisions of sub-sections (a), (b) and (c) of this paragraph 4. (a) The Trustees, with the favorable vote of the holders of more than 50% of the outstanding Shares entitled to vote, may sell and convey the assets of the Trust (which sale may be subject to the retention of assets for the payment of liabilities and expenses) to another issuer for a consideration which may be or include securities of such issuer. Upon making provision for the payment of liabilities, by assumption by such issuer or otherwise, the Trustees shall distribute the remaining proceeds ratably among the holders of Shares of the Trust then outstanding. (b) The Trustees, with the favorable vote of the holders of more than 50% of the outstanding Shares entitled to vote, may at any time sell and convert into money all the assets of the Trust. Upon making provisions for the payment of all outstanding obligations, taxes and other liabilities, accrued or contingent, of the Trust shall distribute the remaining assets of that Series ratably among the holders of the outstanding Shares. (c) Upon completion of the distribution of the remaining proceeds or the remaining assets as provided in sub-sections (a) and (b), the Trust shall terminate and the Trustees shall be discharged of any and all further liabilities and duties hereunder and the right, title and interest of all parties shall be cancelled and discharged. 5. The original or a copy of this instrument and of each declaration of trust supplemental hereto shall be kept at the office of the Trust where it may be inspected by any Shareholder. A copy of this instrument and of each supplemental declaration of trust shall be filed with the Massachusetts Secretary of State, as well as any other governmental office where such filing may from time to time be required. Anyone dealing with the Trust may rely on a certificate by an officer of the Trust as to whether or not any such supplemental declarations of trust have been made and as to any matters in connection with the Trust hereunder, and, with the same effect as if it were the original, may rely on a copy certified by an officer of the Trust to be a copy of this instrument or of any such supplemental declaration of trust. In this instrument or in any such supplemental declaration of trust, references to this instrument, and all expressions like "herein", "hereof" and "hereunder" shall be deemed to refer to this instrument as amended or affected by any such supplemental declaration of trust. This instrument may be executed in any number of counterparts, each of which shall be deemed an original. 6. The Trust set forth in this instrument is created under and is to be governed by and construed and administered according to the laws of the Commonwealth of Massachusetts. The Trust shall be of the type commonly called a Massachusetts business trust, and without limiting the provisions hereof, the Trust may exercise all powers which are ordinarily exercised by such a trust. 7. If authorized by vote of the Trustees and the favorable vote of more than 50% of the outstanding Shares entitled to vote, or by any larger vote which may be required by applicable law in any particular case, the Trustees shall amend or otherwise supplement this instrument, by making a Declaration of Trust supplemental hereto, which thereafter shall form a part hereof. IN WITNESS WHEREOF, the undersigned have executed this instrument as of the 27th day of September, 1994. /s/ W. A. Baker /s/ Charles Conrad, Jr. William A. Baker, Trustee Charles Conrad, Jr., Trustee 197 Desert Lakes Drive 19411 Merion Court Palm Springs, California 92264 Huntington Beach, California /s/ Fred E. Neef /s/ Robert M. Kirchner Fred E. Neef, Trustee Robert M. Kirchner, Trustee 2800 S. University Boulevard 2800 S. University Boulevard Denver, Colorado 80210 Denver, Colorado 80210 /s/ Ned M. Steel /s/ Henry D. Owen Ned M. Steel, Trustee Henry D. Owen 3236 S. Steele Steet 2947 University Terrace,N.W. Denver, Colorado Washington, D.C. 20015 /s/ Robert G. Galli /s/ Joseph A. Uhl Joseph A. Uhl, Trustee Joseph A. Uhl 115 Edgewood Drive 20 Crestmoor Drive Allendale, New Jersey 07401 Denver, Colorado 80220 /s/ James C. Swain James C. Swain, Trustee 23554 Wayne's Way Golden, California 80401 EX-3 4 BYLAWS CENTENNIAL GOVERNMENT TRUST BY-LAWS (as amended through June 26, 1990) ARTICLE I SHAREHOLDERS Section 1. Place of Meeting. All meetings of the Shareholders (which terms as used herein shall, together with all other terms defined in the Declaration of Trust, have the same meaning as in the Declaration of Trust) shall be held at the principal office of the Fund or at such other place as may from time to time be designated by the Board of Trustees and stated in the notice of meeting. Section 2. Shareholder Meetings. Meetings of the Shareholders for any purpose or purposes may be called by the Chairman of the Board of Trustees, if any, or by the President or by the Board of Trustees and shall be called by the Secretary upon receipt of the request in writing signed by Shareholders holding not less than one third in amount of the entire number of Shares issued and outstanding and entitled to vote thereat. Such request shall state the purpose or purposes of the proposed meeting. In addition, meetings of the Shareholders shall be called by the Board of Trustees upon receipt of the request in writing signed by Shareholders that hold not less than ten percent in amount of the entire number of Shares issued and outstanding and entitled to vote thereat, stating that the purpose of the proposed meeting is the removal of a Trustee. Section 3. Notice of Meetings of Shareholders. Not less than ten days' and not more than 120 days' written or printed notice of every meeting of Shareholders, stating the time and place thereof (and the general nature of the business proposed to be transacted at any special or extraordinary meeting), shall be given to each Shareholder entitled to vote thereat by leaving the same with him or at his residence or usual place of business or by mailing it, postage prepaid and addressed to him at his address as it appears upon the books of the Fund. No notice of the time, place or purpose of any meeting of Shareholders need be given to any Shareholder who attends in person or by proxy or to any Shareholder who, in writing executed and filed with the records of the meeting, either before or after the holding thereof, waives such notice. Section 4. Record Dates. The Board of Trustees may fix, in advance, a date, not exceeding 120 days and not less than ten days preceding the date of any meeting of Shareholders, and not exceeding 120 days preceding any dividend payment date or any date and entitled to receive such dividends or rights for the allotment of rights, as a record date for the determination of the Shareholders entitled to receive such dividend or rights, as the case may be; and only Shareholder of record on such date and entitled to receive such dividends or rights shall be entitled to notice of and to vote at such meeting or to receive such dividends or rights, as the case may be. Section 5. Access to Shareholder List. The Board of Trustees shall make available a list of the names and addresses of all shareholders as recorded on the books of the Fund, upon receipt of the request in writing signed by not less than ten Shareholders (who have been such for at least six months) holding Shares of the Fund valued at $25,000 or more at current offering price (as defined in the Fund's Prospectus), or holding not less than one percent in amount of the entire number of shares of the Fund issued and outstanding; such request must state that such Shareholders wish to communicate with other Shareholders with a view to obtaining signatures to a request for a meeting pursuant to Section 2 of Article II of these By-Laws and accompanied by a form of communication to the Shareholders. The Board of Trustees may, in its discretion, satisfy its obligation under this Section 5 by either making available the Shareholder List to such Shareholders at the principal offices of the Fund, or at the offices of the Fund's transfer agents, during regular business hours, or by mailing a copy of such Shareholders' proposed communication and form of request, at their expense, to all other Shareholders. Section 6. Quorum, Adjournment of Meetings. The presence in person or by proxy of the holders of record of more than 50% of the Shares of the stock of the Fund issued and outstanding and entitled to vote thereat, shall constitute a quorum at all meetings of the Shareholders. If at any meeting of the Shareholders there shall be less than a quorum present, the Shareholders present at such meeting may, without further notice, adjourn the same from time to time until a quorum shall attend, but no business shall be transacted at any such adjourned meeting except as might have been lawfully transacted had the meeting not been adjourned. Section 7. Voting and Inspectors. At all meetings of Shareholders, every Shareholder or record entitled to vote thereat shall be entitled to vote at such meeting either in person or by proxy appointed by instrument in writing subscribed by such Shareholder or his duly authorized attorney- in-fact. All elections of Trustees shall be had by a plurality of the votes cast and all questions shall be decided by a majority of the votes cast, in each case at a duly constituted meeting, except as otherwise provided in the Declaration of Trust or in these By-Laws or by specific statutory provision superseding the restrictions and limitations contained in the Declaration of Trust or in these By-Laws. At any election of Trustees, the Board of Trustees prior thereto may, or, if they have not so acted, the Chairman of the meeting may, and upon the request of the holders of ten percent (10%) of the Shares entitled to vote at such election shall, appoint two inspectors of election who shall first subscribe an oath or affirmation to execute faithfully the duties of inspectors at such election with strict impartiality and according to the best of their ability, and shall after the election make a certificate of the result of the vote taken. No candidate for the office of Trustee shall be appointed such Inspector. The Chairman of the meeting may cause a vote by ballot to be taken upon any election of the matter, and such vote shall be taken upon the request of the holders of ten percent (10%) of the Shares entitled to vote on such election or matter. Section 8. Conduct of Shareholders' Meetings. The meetings of the Shareholders shall be presided over by the Chairman of the Board of Trustees, if any, or if he shall not be present, by the President, or if he shall not be present, by a Vice-President, or if neither the Chairman of the Board of Trustees, the President nor any Vice-President is present, by a chairman to be elected at the meeting. The Secretary of the Fund, if present, shall act as Secretary of such meetings, or if he is not present, an Assistant Secretary shall so act, or if neither the Secretary nor an Assistant Secretary is present, then the meeting shall elect its secretary. Section 9. Concerning Validity of Proxies, Ballots, Etc. At every meeting of the Shareholders, all proxies shall be received and taken in charge of and all ballots shall be received and canvassed by the secretary of the meeting, who shall decide all questions touching the qualification of voters, the validity of the proxies, and the acceptance or rejection of votes, unless inspectors of election shall have been appointed as provided in Section 7, in which event such inspectors of election shall decide all such questions. ARTICLE II BOARD OF TRUSTEES Section 1. Number and Tenure of Office. The business and property of the Fund shall be conducted and managed by a Board of Trustees consisting of the number of initial Trustees, which number may be increased or decreased as provided in Section 2 of this Article. Each Trustee shall, except as otherwise provided herein, hold office until the meeting of Shareholders of the Fund next succeeding his election or until his successor is duly elected and qualifies. Trustees need not be Shareholders. Section 2. Increase or Decrease in Number of Trustees; Removal. The Board of Trustees, by the vote of a majority of the entire Board, may increase the number of Trustees to a number not exceeding fifteen, and may elect Trustees to fill the vacancies occurring for any reason, including vacancies created by any such increase in the number of Trustees until the next annual meeting or until their successors are duly elected and qualify; the Board of Trustees, by the vote of a majority of the entire Board, may likewise decrease the number of Trustees to a number not less than three but the tenure of office of any Trustee shall not be affected by any such decrease. In the event that after the proxy material has been printed for a meeting of Shareholders at which Trustees are to be elected and any one or more nominees named in such proxy material dies or becomes incapacitated, the authorized number of Trustees shall be automatically reduced by the number of such nominees, unless the Board of Trustees prior to the meeting shall otherwise determine. A Trustee at any time may be removed either with or without cause by resolution duly adopted by the affirmative votes of the holders of two- thirds of the outstanding Shares of the Fund, present in person or by proxy at any meeting of Shareholders at which such vote may be taken, provided that a quorum is present. Any Trustee at any time may be removed for cause by resolution duly adopted at any meeting of the Board of Trustees provided that notice thereof is contained in the notice of such meeting and that such resolution is adopted by the vote of at least two- thirds of the Trustees whose removal is not proposed. As used herein, "for cause" shall mean any cause which under Massachusetts law would permit the removal of a Trustee of a business trust. Section 3. Place of Meeting. The Trustees may hold their meetings, have one or more offices, and keep the books of the Fund outside Massachusetts, at any office or offices of the Fund or at any other place as they may from time to time by resolution determine, or, in the case of meetings, as they may from time to time by resolution determine or as shall be specified or fixed in the respective notices or waivers of notice thereof. Section 4. Regular Meetings. Regular meetings of the Board of Trustees shall be held at such time and on such notice, if any, as the Trustees may from time to time determine. One such regular meeting during each fiscal year of the Fund shall be designated an annual meeting of the Board of Trustees. Section 5. Special Meetings. Special meetings of the Board of Trustees may be held from time to time upon call of the Chairman of the Board of Trustees, if any, the President or two or more of the Trustees, by oral, telegraphic or written notice duly served on or sent or mailed to each Trustee not less than one day before such meeting. No notice need be given to any Trustee who attends in person or to any Trustee who in writing executed and filed with the records of the meeting either before or after the holding thereof, waives such notice. Such notice or waiver of notice need not state the purpose or purposes of such meeting. Section 6. Quorum. One-third of the Trustees then in office shall constitute a quorum for the transaction of business, provided that a quorum shall in no case be less than two Trustees. If at any meeting of the Board there shall be less than a quorum present (in person or by open telephone line, to the extent permitted by the Investment Company Act of 1940 (the "1940 Act")), a majority of those present may adjourn the meeting from time to time until a quorum shall have been obtained. The act of the majority of the Trustees present at any meeting at which there is a quorum shall be the act of the Board, except as may be otherwise specifically provided by statute, by the Declaration of Trust or by these By-Laws. Section 7. Executive Committee. The Board of Trustees may, by the affirmative vote of a majority of the entire Board, elect from the Trustees an Executive Committee to consist of such number of Trustees as the Board may from time to time determine. The Board of Trustees by such affirmative vote shall have power at any time to change the members of such Committee and may fill vacancies in the Committee by election from the Trustees. When the Board of Trustees is not in session, the Executive Committee shall have and may exercise any or all of the powers of the Board of Trustees in the management of the business and affairs of the Fund (including the power to authorize the seal of the Fund to be affixed to all papers which may require it) except as provided by law and except the power to increase or decrease the size of, or fill vacancies on, the Board. The Executive Committee may fix its own rules of procedure, and may meet, when and as provided by such rules or by resolution of the Board of Trustees, but in every case the presence of a majority shall be necessary to constitute a quorum. In the absence of any member of the Executive Committee, the members thereof present at any meeting, whether or not they constitute a quorum, may appoint a member of the Board of Trustees to act in the place of such absent member. Section 8. Other Committees. The Board of Trustees, by the affirmative vote of a majority of the entire Board, may appoint other committees which shall in each case consist of such number of members (not less than two) and shall have and may exercise such powers as the Board may determine in the resolution appointing them. A majority of all members of any such committee may determine its action, and fix the time and place of its meetings, unless the Board of Trustees shall otherwise provide. The Board of Trustees shall have power at any time to change the members and powers of any such committee, to fill vacancies, and to discharge any such committee. Section 9. Informal Action by and Telephone Meetings of Trustees and Committees. Any action required or permitted to be taken at any meeting of the Board of Trustees or any committee thereof may be taken without a meeting, if a written consent to such action is signed by all members of the Board, or of such committee, as the case may be. Trustees or members of a committee of the Board of Trustees may participate in a meeting by means of a conference telephone or similar communications equipment; such participation shall, except as otherwise required by the 1940 Act, have the same effect as presence in person. Section 10. Compensation of Trustees. Trustees shall be entitled to receive such compensation from the Fund for their services as may from time to time be voted by the Board of Trustees. Section 11. Dividends. Dividends or distributions payable on the Shares of any Series of the Fund may, but need not be, declared by specific resolution of the Board as to each dividend or distribution; in lieu of such specific resolutions, the Board may, by general resolution, determine the method of computation thereof, the method of determining the Shareholders of the Series to which they are payable and the methods of determining whether and to which Shareholders they are to be paid in cash or in additional Shares. Section 12. Indemnification. The Declaration of Trust shall not be deemed to affect any other indemnification rights to which an indemnitee may be entitled to the extent permitted by applicable law. Such rights to indemnification shall not be deemed exclusive of any other rights to which such indemnitee may be entitled under any statue, By-Law, contract or otherwise. ARTICLE III OFFICERS Section 1. Executive Officers. The executive officers of the Fund shall include a Chairman of the Board of Trustees, a President, one or more Vice-Presidents (the number thereof to be determined by the Board of Trustees), a Secretary and a Treasurer. The Chairman of the Board and the President shall be selected from among the Trustees. The Board of Trustees may also in its discretion appoint Assistant Secretaries, Assistant Treasurers, and other officers, agents and employees, who shall have authority and perform such duties as the Board or the Executive Committee may determine. The Board of Trustees may fill any vacancy which may occur in any office. Any two offices, except those of Chairman of the Board and Secretary and President and Secretary, may be held by the same person, but no officer shall execute, acknowledge or verify any instrument in more than one capacity, if such instrument is required by law or these By-Laws to be executed, acknowledged or verified by two or more officers. Section 2. Term of Office. The term of office of all officers shall be until their respective successors are chosen and qualify; however, any officer may be removed from office at any time with or without cause by the vote of a majority of the entire Board of Trustees. Section 3. Powers and Duties. The officers of the Fund shall have such powers and duties as generally pertain to their respective offices, as well as such powers and duties as may from time to time be conferred by the Board of Trustees or the Executive Committee. Unless otherwise ordered by the Board of Trustees, the Chairman of the Board shall be the Chief Executive Officer. ARTICLE IV SHARES Section 1. Share Certificates. Each Shareholder of any Series of the Fund may be issued a certificate or certificates for his Shares of that Series, in such form as the Board of Trustees may from time to time prescribe, but only if and to the extent and on the conditions described by the Board. Section 2. Transfer of Shares. Shares of any Series shall be transferable on the books of the Fund by the holder thereof in person or by his duly authorized attorney or legal representative, upon surrender and cancellation of certificates, if any, for the same number of Shares of that Series, duly endorsed or accompanied by proper instruments of assignment and transfer, with such proof of the authenticity of the signature as the Fund or its agent may reasonably require; in the case of shares not represented by certificates, the same or similar requirements may be imposed by the Board of Trustees. Section 3. Share Ledgers. The share ledgers of the Fund, containing the name and address of the Shareholders of each Series of the Fund and the number of shares of that Series, held by them respectively, shall be kept at the principal offices of the Fund or, if the Fund employs a transfer agent, at the offices of the transfer agent of the Fund. Section 4. Lost, Stolen or Destroyed Certificates. The Board of Trustees may determine the conditions upon which a new certificate may be issued in place of a certificate which is alleged to have been lost, stolen or destroyed; and may, in their discretion, require the owner of such certificate or his legal representative to give bond, with sufficient surety to the Fund and the transfer agent, if any, to indemnify it and such transfer agent against any and all loss or claims which may arise by reason of the issue of a new certificate in the place of the one so lost, stolen or destroyed. ARTICLE V SEAL The Board of Trustees shall provide a suitable seal of the Fund, in such form and bearing such inscriptions as it may determine. ARTICLE VI FISCAL YEAR The fiscal year of the Fund shall be fixed by the Board of Trustees. ARTICLE VII AMENDMENT OF BY-LAWS The By-Laws of the Fund may be altered, amended, added to or repealed by the Shareholders or by majority vote of the entire Board of Trustees, but any such alteration, amendment, addition or repeal of the By-Laws by action of the Board of Trustees may be altered or repealed by the Shareholders. ORGZN/170 170.BYL EX-99 5 SPECIMEN SHARE CERTIFICATE CENTENNIAL GOVERNMENT TRUST Share Certificate (8-1/2" x 11") I. FACE OF CERTIFICATE (All text and other matter lies within 8-5/16" x 10-5/8" decorative border, 5/16" wide) (upper left corner, box with heading: NUMBER [of shares] (upper right corner) [share certificate no.] (upper right box with heading: SHARES below cert. no.) (centered below boxes) Centennial Government Trust A MASSACHUSETTS BUSINESS TRUST (at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR CERTAIN DEFINITIONS (box with number) CUSIP 150910 107 (at left) is the owner of (centered) FULLY PAID SHARES OF BENEFICIAL INTEREST OF CENTENNIAL GOVERNMENT TRUST (hereinafter called the "Trust"), transferable only on the books of the Trust by the holder hereof in person or by duly authorized attorney, upon surrender of this certificate properly endorsed. This certificate and the shares represented hereby are issued and shall be held subject to all of the provisions of the Declaration of Trust to all of which the holder by acceptance hereof assents. This certificate is not valid until countersigned by the Transfer Agent. WITNESS the facsimile seal of the Trust and the signatures of its duly authorized officers. (signature Dated: (signature at left of seal) at right of seal) _______________________ ___________________ SECRETARY PRESIDENT (centered at bottom) 1-1/2" diameter facsimile seal with legend CENTENNIAL GOVERNMENT TRUST SEAL 1986 COMMONWEALTH OF MASSACHUSETTS (at lower right, printed vertically) Countersigned SHAREHOLDER SERVICES, INC. Denver (CO) Transfer Agent By ____________________________ Authorized Signature II. BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension) The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM - as tenants in common TEN ENT - as tenants by the entirety JT TEN WROS NOT TC - as joint tenants with rights of survivorship and not as tenants in common UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________ (Cust) (Minor) UNDER UGMA/UTMA ___________________ (State) Additional abbreviations may also be used though not in the above list. For Value Received ................ hereby sell(s), assign(s), and transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE AND PROVIDE CERTIFICATION BY TRANSFEREE (box for identifying number) _______________________________________________________________________ (Please print or type name and address of assignee) ______________________________________________________ ______________________________________________________ Shares of beneficial interest represented by the within Certificate, and do hereby irrevocably constitute and appoint ___________________ Attorney to transfer the said shares on the books of the within named Trust with full power of substitution in the premises. Dated: ______________________ Signed: __________________________ ___________________________________ (Both must sign if joint owners) Signature(s) __________________________ guaranteed Signature of Office/Title by: _____________________________ Officer (text printed NOTICE: The signature(s) to this assignment must vertically to right correspond with the name(s) as written upon the of above paragraph) face of the certificate in every particular without alteration or enlargement or any change whatever. (text printed in Signatures must be guaranteed by a financial box to left of institution of the type described in the current signature(s) prospectus of the Trust. Please Note: This document contains Centennial a watermark when viewed at an angle. Asset Management Corporation It is invalid without this watermark: _______________________________________________________________________ THIS SPACE MUST NOT BE COVERED IN ANY WAY edgar\170cert EX-10 6 INVESTMENT ADVISORY INVESTMENT ADVISORY AGREEMENT AGREEMENT made as of the 22nd day of October, 1990, by and between CENTENNIAL GOVERNMENT TRUST (hereinafter called the "Fund"), and CENTENNIAL ASSET MANAGEMENT CORPORATION (hereinafter called the "Management Corporation"). WITNESSETH: WHEREAS, the Fund is an open-end diversified management investment company registered as such with the Securities and Exchange Commission (the "Commission") pursuant to the Investment Company Act of 1940 (the "Investment Company Act"), and the Management Corporation is a registered investment adviser; NOW, THEREFORE, in consideration of the mutual promises and agreements herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, it is agreed by and between the parties hereto as follows: 1. General The Management Corporation agrees, all as more fully set forth herein, to act as investment adviser to the Fund with respect to the investment of its assets; to supervise and arrange the purchase of securities for and the sale of securities held in the portfolio of the Fund; and to furnish personnel and facilities as shall be required to provide effective administration of the Fund. 2. Duties and Obligations of the Management Corporation with respect to Investments of Assets of the Fund (a) Subject to the succeeding provisions of this section and subject to the direction and control of the Board of Trustees of the Fund, the Management Corporation shall: (i) Regularly provide investment advice and recommendations to the Fund with respect to its investments, investment policies and the purchase and sale of securities; (ii) Supervise continuously the investment program of the Fund and the composition of its portfolio; and (iii) Arrange, subject to the provisions of paragraph "4" hereof, for the purchase of securities and other investments for and the sale of securities and other investments held in the portfolio of the Fund. (b) Any investment advice furnished by the Management Corporation under this section shall at all times conform to, and be in accordance with, any requirements imposed by: (1) the provisions of the Investment Company Act of 1940, and of any rules or regulations in force thereunder; (2) any other applicable provision of law; (3) the provisions of the Declaration of Trust and By-Laws of the Fund as amended from time to time; (4) any policies and determinations of the Board of Trustees of the Fund; and (5) the terms of the registration statement of the Fund, as amended from time to time, under the Securities Act of 1933 and the Investment Company Act of 1940. (c) The Management Corporation shall give the Fund the benefit of its best judgment and effort in rendering services hereunder, but the Management Corporation shall not be liable for any loss sustained by reason of the adoption of any investment policy or the purchase, sale or retention of any security on its recommendation, whether or not such recommendation shall have been based upon its own investigation and research or upon investigation and research made by any other individual, firm or corporation, if such recommendation shall have been made and such other individual firm or corporation shall have been selected with due care and in good faith. Nothing herein contained shall, however, be construed to protect the Management Corporation against any liability to the Fund or its security holders by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of its reckless disregard of its obligations and duties under this Agreement. (d) Nothing in this Agreement shall prevent the Management Corporation or any officer thereof from acting as investment adviser for any other person, firm or corporation and shall not in any way limit or restrict the Management Corporation or any of its directors, officers, stockholders or employees from buying, selling or trading any securities for its or their own accounts or for the accounts of others for whom it or they may be acting, provided however that the Management Corporation expressly represents that it will undertake no activities which, in its judgment, will adversely affect the performance of its obligations to the Fund under this Agreement. 3. Allocation of Expenses The Management Corporation shall at its expense provide all executive, administrative and clerical personnel as shall be required to provide effective administration for the Fund, including the compilation and maintenance of records with respect to its operations as may reasonably be required; the preparation and filing of such reports with respect thereto as shall be required by rules or regulations promulgated by the Securities and Exchange Commission; the composition of registration statements required by Federal securities laws for continuous public sale of shares of the Fund; composition of periodic reports with respect to its operations for the shareholders of the Fund; and composition of proxy materials for meetings of the Fund's shareholders. The Management Corporation shall, at its own cost and expense, also provide the Fund with adequate office space, facilities and equipment. The Management Corporation shall, at its own expense, provide such officers for the Fund as the Fund's Board may request. All other costs and expenses not expressly assumed by the Management Corporation under this Agreement, or to be paid by the General Distributor of the shares of the Fund, shall be paid by the Fund, including, but not limited to (i) interest and taxes; (ii) brokerage commissions, if any; (iii) insurance premiums for fidelity and other coverage requisite to its operations; (iv) compensation and expenses of its Trustees other than those associated or affiliated with the Management Corporation; (v) legal and audit expenses; (vi) custodian and transfer agent fees and expenses; (vii) expenses incident to the redemption of its shares; (viii) expenses incident to the issuance of its shares against payment therefor by or on behalf of the subscribers thereto; (ix) fees and expenses, other than as hereinabove provided, incident to the registration under Federal and State securities laws of shares of the Fund for public sale; (x) expenses of printing and mailing reports, notices, and proxy material to shareholders of the Fund; (xi) except as noted above, all other expenses incidental to holding regular annual meetings of the Fund's shareholders; and (xii) such extraordinary non-recurring expenses as may arise, including litigation affecting the Fund and the legal obligation which the Fund may have to indemnify its officers and Trustees with respect thereto. 4. Portfolio Transactions and Brokerage (a) The Management Corporation is authorized, for the purchase and sale of the Fund's portfolio securities, to employ such securities dealers as may, in the best judgment of the Management Corporation, implement the policy of the Fund to obtain prompt and reliable execution of orders at the most favorable net price. Consistent with this policy, the Management Corporation is authorized to direct the execution of the Fund's portfolio transactions to dealers furnishing statistical information or research deemed by the Management Corporation to be useful or valuable to the performance of its investment advisory functions for the Fund. 5. Compensation of the Management Corporation (a) The Fund agrees to pay the Management Corporation and the Management Corporation agrees to accept as full compensation for all services rendered by the Management Corporation as such, an annual fee payable monthly and computed on the net asset value of the Fund as of the close of business each day at the following annual rates: .500% of the first $250 million of net assets; .475% of the next $250 million of net assets; .450% of the next $250 million of net assets; .425% of the next $250 milion of net assets; and .400% of net assets in excess of $1 billion. (b) Regardless of any of the above provisions, the Management Corporation guarantees that the total expenses of the Fund in any fiscal year, exclusive of taxes, interest and brokerage commissions, and extraordinary expenses such as litigation costs, shall not exceed, and the Management Corporation undertakes to pay or refund to the Fund any amount by which such expenses shall exceed the lesser of (i) 1.5% of the average annual net assets of the Fund up to $30 million and 1% of its average annual net assets in excess of $30 million; or (ii) 25% of total annual investment income of the Fund. 6. Use of Name The Management Corporation hereby grants to the Fund a royalty-free, non-exclusive license to use the name "Centennial" in the name of the Fund, and any trademarks or servicemarks, whether or not registered, which it may own. To the extent necessary to protect the Management Corporation's rights to the name "Centennial" under applicable law, such license shall allow the Management Corporation to inspect and, subject to control by the Fund's Board, control the nature and quality of services offered by the Fund under such name. The license may be terminated by the Management Corporation upon termination of this Agreement in which case the Fund shall have no further right to use the name "Centennial" in its name or otherwise or any of such marks, and the Fund, the holders of its shares, and its officers and Trustees shall promptly take whatever action may be necessary to change its name accordingly. The name "Centennial" or any of said marks may be used or licensed by the Management Corporation in connection with any of its activities, or licensed by the Management Corporation to any other party. 7. Duration and Termination (a) This Agreement shall go into effect on the date first set forth above and shall continue in effect until December 31, 1991, and thereafter from year to year, but only so long as such continuance is specifically approved at least annually by the Board of Trustees, including the vote of a majority of the Trustees of the Fund who are not parties to this Agreement or "interested persons" (as defined in the Investment Company Act of 1940) of any such party cast in person at a meeting called for the purpose of voting on such approval, or by the vote of the holders of a "majority" (as so defined) of the outstanding voting securities of the Fund and by such a vote of the Board of Trustees. (a) This Agreement may be terminated by the Management Corporation at any time without penalty upon giving the Fund sixty days' written notice (which notice may be waived by the Fund) and may be terminated by the Fund at any time without penalty upon giving the Management Corporation sixty days' notice (which notice may be waived by the Management Corporation), provided that such termination by the Fund shall be directed or approved by the vote of a majority of all of the Trustees of the Fund then in office or by the vote of the holders of a "majority" (as defined in the Investment Company Act of 1940) of the voting securities of the Fund at the time outstanding and entitled to vote. This Agreement shall automatically terminate in the event of its "assignment" (as that term is defined in the Investment Company Act of 1940). 8. Disclaimer of Shareholder Liability The Management Corporation understands that the obligations of this Agreement are not binding upon any Trustee or shareholder of the Fund personally, but bind only the Fund's property. The Management Corporation represents that it has notice of the provisions of the Declaration of Trust disclaiming Trustee and shareholder liability for acts or obligations of the Fund. IN WITNESS WHEREOF, the parties hereto have caused the foregoing instrument to be executed by their duly authorized officers as of the day and year first above written. CENTENNIAL GOVERNMENT TRUST Attest: /s/ Sara L. Badler By:/s/ Robert G. Galli CENTENNIAL ASSET MANAGEMENT CORPORATION Attest: /s/ Sara L. Badler By:/s/ Katherine P. Feld ADVAG/170 170.IAA EX-10 7 DEALER AGREEMENT DEALER AGREEMENT Between Centennial Capital Corporation and To: Centennial Capital Corporation 3410 South Galena Street P.O. Box 5061 Denver, Colorado 80231 Gentlemen: We desire to enter into an agreement with you for the sale and distribution of the shares of each of the open-end investment companies of which you are, or may become, Distributor or Sub-distributor (hereinafter collectively referred to as the "Funds" and individually as a "Fund") and whose shares are offered to the public at an offering price which may or may not include a sales charge (hereinafter referred to as "Shares"). Upon acceptance of this Agreement by you, we understand that we may offer and sell Shares subject, however, to all of the terms and conditions hereof and to your right, without notice, to suspend or terminate the sale of the Shares of any one or more of the Funds. 1. We understand that the Shares will be offered and sold at the current offering price in effect at the time the order for such Shares is confirmed and accepted by you. All purchase requests and applications submitted by us are subject to acceptance or rejection in your sole discretion, and, if accepted, each purchase will be deemed to have been consummated at your office. 2. We certify (a) that we are a member of the National Association of Securities Dealers, Inc. ("NASD") and agree to maintain membership in the NASD or (b) in the alternative that we are a foreign dealer not eligible for membership in the NASD. In either case, we agree to abide by all the rules and regulations of the Securities and Exchange Commission and the NASD which are binding upon underwriters and dealers in the distribution of the securities of open-end investment companies, including without limitation, Section 26 of Article III of the NASD Rules of Fair Practice, all of which are incorporated herein as if set forth in full. We further agree to comply with all applicable State and Federal laws and the rules and regulations of authorized regulatory agencies. We agree that we will not sell or offer for sale Shares in any state or jurisdiction where they have not been qualified for sale or if you have not advised us in advance that such sale is exempt from such qualification requirements. 3. We will offer and sell Shares of any Fund only in accordance with the terms and conditions of its then current Prospectus and we will make no representations not included in said Prospectus or in any authorized supplemental material supplied by you. We will use our best efforts in the development and promotion of sales of Shares and agree to be responsible for the proper instruction and training of all sales personnel employed by us, in order that the Shares will be offered in accordance with the terms and conditions of this Agreement and all applicable laws, rules and regulations. We agree to hold you harmless and indemnify you, in the event we, or any of our sales representatives, should violate any law, rule or regulation, or any provisions of this Agreement, which violation may result in liability to you, or any Fund; and in the event you determine to refund any amounts paid by any investor by reason of any such violation on our part, we shall return to you any commissions previously paid or discounts allowed by you to us with respect to the transaction for which the refund is made. All expenses which we incur in connection with our activities under this Agreement shall be borne by us. 4. We understand and agree that, where applicable, the sales charge and dealer commission relative to any sales of Fund Shares made by us will be in an amount as set forth in the then current Prospectus of such Fund. 5. We understand that commissions, where applicable, are subject to change by you from time to time, upon 30 days' written notice, and any orders placed after the effective date of such change shall be subject to the rates in effect at the time of receipt of the payment by you. Such 30 day period may be waived at your sole option in the event such change increases the commission due us. 6. Payments for purchases of Shares made by wire order from us shall be made to you and received by you together with all necessary applications and other documents required to establish an account within five business days after the acceptance of our order or such shorter time as may be required by law. If such payment is not received by you, we understand that you reserve the right, without notice, forthwith to cancel the sale, or, at your option, to sell the Shares ordered by us back to the Fund, in which latter case we may be held responsible for any loss, including loss of profit, suffered by you resulting from our failure to make the aforesaid payment. Where sales of any Fund's Shares are contingent upon the Fund's receipt of funds in payment therefor, we will forward promptly to you any purchase orders and/or payments received by us from investors. 7. We agree to purchase Shares only from you or from our customers. If we purchase Shares from you, we agree that all such purchases shall be made only to cover orders received by us from our customers, or for our own bona fide investment. If we purchase Shares from our customers, we agree to pay such customers not less than the applicable repurchase price as established by the then current applicable Fund Prospectus. 8. Unless at the time of transmitting an order we advise you to the contrary, you may consider the order to be the total holding of the investor and assume that the investor is not entitled to any reduction in sales price beyond that accorded to the amount of the purchase as determined by the schedule set forth in the then current Prospectus. 9. We understand and agree that if any Shares sold by us under the terms of this Agreement are redeemed by any of the Funds (including redemptions resulting from an exchange for shares of another Fund) or are repurchased by you as agent for the Fund or are tendered to a Fund for redemption within seven business days after your confirmation to us of our original purchase order for such shares, we shall pay forthwith to you the full amount of the commission allowed to us on the original sale, provided you notify us of such repurchase or redemption within ten days of the date upon which written redemption requests and, if applicable, Share certificates are delivered to you or to the Fund. 10. Your obligations to us under this Agreement are subject to all the provisions of any distributorship agreements entered into between you and the Funds. We understand and agree that in performing our services covered by this Agreement we are acting as principal, and you are in no way responsible for the manner of our performance or for any of our acts or omissions in connection therewith. Nothing in this Agreement shall be construed to constitute us or any of our agents, employees or representatives as your agent, partner or employee, or the agent or employee of the Funds. 11. We may terminate this Agreement by notice in writing to you, which termination shall become effective thirty (30) days after the date of our mailing such notice to you. We agree that you have and reserve the right, in your sole discretion without notice, to suspend sales of Shares of any of the Funds, or to withdraw entirely the offering of Shares of any of the Funds, or, in your sole discretion, to modify, amend or cancel this Agreement upon written notice to us of such modification, amendment or cancellation, which shall be effective on the date stated in such notice. Without limiting the foregoing, you may terminate this Agreement for cause on violation by us of any of the provisions of this Agreement, said termination to become effective on the date of mailing notice to us of such termination. Without limiting the foregoing, any provision hereof to the contrary notwithstanding, our expulsion from the NASD will automatically terminate this Agreement without notice; our suspension from the NASD, the appointment of a trustee for all or substantially all of our business assets, or violation of applicable State or Federal laws or rules and regulations of authorized regulatory agencies will terminate this Agreement effective upon the date of your mailing notice to us of such termination. Your failure to terminate for any cause shall not constitute a waiver of your right to terminate at a later date for any such cause. All notices, hereunder shall be to the respective parties at the addresses listed hereon, unless changed by notice given in accordance with this Agreement. 12. This Agreement shall become effective as of the date when it is executed and dated by you below and shall be in substitution of any prior agreement between you and us covering any of the Funds. This Agreement and all the rights and obligations of the parties hereunder shall be governed by and construed under the laws of the State of Colorado. This Agreement is not assignable or transferable, except that your firm may assign or transfer this Agreement to any successor firm or corporation which becomes the Distributor or Subdistributor of the Funds DEALER FIRM (NAME) ------------------------------- (ADDRESS) ----------------------------------------- By: ------------------------------------------------ (AUTHORIZED SIGNATURE) ----------------------------------------------------- (NAME) (TITLE) Accepted: CENTENNIAL CAPITAL CORPORATION By: _ _ _ _ _ _ _ _ _ _ _ _ _ _ ofmi\1701 EX-10 8 CUSTODIAN AGREEMENT CUSTODIAN AGREEMENT DAILY CASH GOVERNMENT FUND AND CITIBANK, N.A. DATED: May 7, 1982 CUSTODIAN AGREEMENT I. DESIGNATION OF CUSTODIAN DAILY CASH GOVERNMENT FUND (the "Fund"), an unincorporated business trust organized under the laws of the Commonwealth of Massachusetts, having an office at 3600 South Yosemite Street, Denver, Colorado, and engaged principally in the business of investing and reinvesting its assets in securities, hereby designates Citibank, N.A. (the "Bank"), a National Banking Corporation incorporated under the laws of the United States of America and having an office at One Citicorp Center, New York, NY 10043, custodian of the Property (as defined in Section III). By its acceptance, the Bank agrees to serve as such custodian upon the terms and conditions set forth in this agreement. II. DELIVERY OF DOCUMENTS (a) Documents Delivered. The Fund delivers to the Bank herewith the following documents: (1) Resolutions, as defined in subsection (d), authorizing the appointment of the Bank as the custodian of the Fund and the execution by the Fund of this Agreement; (2) copies, certified by the appropriate officer or officers, of the charter and the by-laws of the Fund; and (3) incumbency and signature certificates identifying and containing the signatures of the officers of the Fund and/or other signatories authorized to sign instructions on behalf of the Fund, specifying the number of signatures required for Instructions and identifying the directors and the other officers, if any, of the Fund. (b) Changes. In case of any change or changes affecting any of the documents described in this Section II, the Fund shall deliver new documents to the Bank, to the extent necessary to reflect such change or changes. Unless and until such new documents are delivered to the Bank at the address set forth in Section XVI the Bank shall be under no obligation to act (or omit to act) in accordance with any such change, nor shall the Bank be liable for failure so to act (or omit to act), but the Bank shall act in accordance with the documents which such new documents are to replace. (c) Additional Information. The Fund shall furnish to the Bank any additional information and documentation relating to the Fund management company which the Bank may reasonably request. (d) "Resolutions" Defined. The term "Resolutions," as used in this Agreement, means (1) if the directors of the Fund are authorized to transact business of the Fund by signing an instrument setting forth such business, resolutions signed by the number of directors of the Fund so authorized and (2) in all other cases, copies of resolutions of the directors of the Fund, certified by the appropriate officer or officers of the Fund. (e) "Depository" Defined. The term "Depository" as used in this Agreement means any "system" or "person" contemplated by Section 12(f) of the Investment Company Act of 1940 in which the Bank may, under that Section and any rules, regulations or orders thereunder, deposit all or part of the Fund's securities with the consent of the Fund and to which the Fund has consented and continues to consent. (f) "Receipt of payment" Defined. Whenever this Agreement contemplates receipt of payment by the Bank such receipt shall mean receipt by the Bank of: (i) cash or checks certified or issued by a bank (which term, as used in this Agreement, shall include a trust company and a Federal Reserve Bank), trust company or member firm of the New York Stock Exchange or a Depository; or (ii) written or telegraphic advice from a bank, registered clearing agency, a Federal Reserve Bank, Subcustodian or a Depository that funds have been or will be credited to the account of the Fund or the Bank at one or more of the foregoing; or (iii) a bank wire from a correspondent bank of the Bank; or (iv) payment in property other than the foregoing, if specified in instructions relating to the transaction in question. III. THE PROPERTY (a) "Property" Defined. The term "Property," as used in the Agreement, means: (i) any and all securities, including without limitation option premiums, in respect of any of such securities or other property, (ii) all income, including without limitation option premiums, in respect of any of such securities or other property, (iii) all proceeds of the sale of such securities or other property, and (iv) all proceeds of the sale of securities issued by the Fund, which are received by the Bank from time to time from the Fund or its transfer agent. (b) Property Delivered. The Fund shall deliver the Property, or cause the Property to be delivered, to the Bank or to a Subcustodian or a Depository, subject to the provisions of this Agreement. Upon delivery, the securities at the time included in the Property, unless held by a depository or a subcustodian shall be in bearer form or shall be registered in the name of the nominee of the Bank (with or without indication of fiduciary status) or shall be properly endorsed and in form for transfer satisfactory to the Bank. (c) Options. The Property shall include documents representing puts, calls or straddles or other options of a character similar thereto. (d) Holding of Securities. The Bank shall hold in a separate account, and physically segregated at all times from those of any other persons, firms or corporations, pursuant to the provisions hereof, all securities which are part of the Property, other than those held by a Depository or a Subcustodian. All such securities are to be held or disposed of by the Bank, or by a Subcustodian or a Depository subject at all times to Instructions pursuant to the terms of this Agreement. The Bank shall have no power or authority to (or to cause a Subcustodian or Depository to) assign, hypothecate, pledge, or otherwise dispose of any such securities except pursuant to Instructions and only for the account of the Fund, as set forth in Section VI of this Agreement. (e) Depositories. The terms of the use of a Depository under this Agreement shall be governed by the terms and conditions of rule 17f-4 under the Investment Company Act of 1940 (or any successor rule, regulation or any applicable order) to which terms and conditions the parties hereto agree as if set forth in full in this Agreement. The parties also agree that such terms and conditions shall supersede any conflicting provisions of this Agreement. Nothing herein shall be deemed to require that the Bank ascertain, as a condition to the use of a Depository that any required action has been taken by the Board of Directors of the Fund other than mutual consent to such use. If and to the extent that a Depository permits the withdrawal of a security from a Depository in certificate form and the Fund requires a certificate for making a loan or otherwise, the Bank shall take all necessary and appropriate action to obtain such certificate upon receipt of an Instruction requesting the same. The Bank shall be liable to the Fund for any loss or damage resulting from the use of a Depository arising by reason of any negligence, misfeasance, or misconduct on the part of the Bank or of any of its employees or agents. The Bank agrees that it will effectively enforce such rights as it may have against a Depository and will use its best efforts, and will enforce any such rights as it may have against a Depository, to require that a Depository shall take all appropriate and necessary steps to obtain replacement of any certificated security in a Depository which has been lost, apparently destroyed or wrongfully taken. (f) Appointment of Subcustodian. The Bank may at any time or times and from time to time, in each case only upon the prior written consent by the Fund, appoint (and may, upon the prior written consent of the Fund remove) any other bank or banks or trust company or trust companies as the Bank's agent or subcustodian to carry out such of the provisions of this agreement as the bank may from time to time direct. Any such subcustodian (referred to herein as a "Subcustodian") must be qualified to act in such capacity under the provisions of the Investment Company Act of 1940 and any rules, regulations or orders promulgated thereunder and as in effect from time to time. Any such Subcustodian designated hereunder shall be deemed to be the agent of the Bank, and receipt and possession of Property of the Fund shall be deemed to be receipt and possession of such Property by the bank. The Bank agrees that it will take necessary steps to assure that the Subcustodian Agreement between the Bank and any Subcustodian designated hereunder shall require such Subcustodian to hold and keep the Property of the Fund physically segregated from the securities and property of other persons. The Bank hereby agrees to indemnify the Fund against any and all losses arising from the negligence of any Subcustodian it has appointed with respect to the Property of the Fund held by it. IV. REGISTRATION OF SECURITIES; COMMERCIAL ACCOUNTS; OVERDRAFTS (a) Registration of Securities. The securities included in the Property, unless held by a Subcustodian or a Depository, shall be held in bearer form or in the name of one or more nominees of the Bank, or shall be properly endorsed and in form for transfer satisfactory to the Bank. The Fund shall provide the Bank appropriate instruments to enable the Bank to hold or deliver in proper form for transfer, or to register in the name of a nominee of the Bank, securities held in the name of the Fund. (b) Commercial Accounts. The Bank shall open and maintain a commercial account or accounts in the name of the Fund, subject only to the Bank's draft or order only if the Bank has received instructions or as otherwise specifically provided in this Agreement, and the Bank shall deposit in such account or accounts all monies constituting, or which are to become, part of the Property. The Bank shall make payments to or for the account of the Fund only pursuant to Section VI of the Agreement or as otherwise specifically provided in this Agreement. (c) Overdrafts. (1) At the sole discretion of the Bank, the Bank will permit the incurrence of cash overdrafts in any account of the Fund with the Bank (a) in aid of the timely and orderly clearance of securities transactions in the course of the Fund's normal business, trading and investment operations or (b) in connection with payments to shareholders all or a portion of whose shares in the Fund have been or are being redeemed (as defined below), but the Bank may exercise in its discretion to permit overdrafts only upon the Bank's compliance with the notice requirements hereunder stated and upon receipt by the Bank of instructions to do so. (2) The Bank shall provide notice to the Fund of overdrafts within five (5) days of the occurrence of such overdrafts. Notice shall be given by the Bank by telephone to the Fund's manager of fund accounting or by making available to the Fund necessary information on the Fund's account balances that may be requested by the Fund by teleprocessing for the Fund to ascertain whether or not overdrafts have been incurred. If notice of such overdrafts is timely given by the Bank to the Fund, it shall be conclusively presumed that the Bank had instructions authorizing such overdrafts from the time such overdrafts were incurred. If the Bank does not give timely notice of such overdrafts, (A) those overdrafts covered by instructions expressly requesting said overdrafts shall be considered authorized by the Fund and compensable under subsection (d) of this section, and (B) those overdrafts not covered by such express instructions shall be compensable under subsection (d) of this section only to the extent that the Fund did not incur a loss or change its position to its detriment by relying on the absence of timely notice from the Bank. (3) The Bank shall not be obligated to incur or permit the incurrence of any such overdraft and the Bank shall not be liable to the Fund or any third party for any refusal, failure or neglect on the part of the Bank to incur or permit the incurrence of any such overdraft. (4) As used in this Agreement, the terms "Redeem" and "Redemption" refer to redemptions, purchases and other acquisitions by the Fund of shares in the Fund from Shareholders, and the term "Shareholder" means a shareholders or former shareholder of the Fund. (d) Payment of Overdrafts; Interest; Compensating Balances. (1) The Fund shall pay to the Bank, and the Bank may deduct from the Property, the amount of each compensable overdraft referred to in Section IV (c), together with interest thereon at such rate as the Bank may from time to time notify to the Fund (such rate not to exceed on a daily basis the closing offered rate for Federal Funds), upon the Bank's demand therefor. (2) In lieu of paying part or all the interest due on overdrafts, in accordance with the preceding subsection (such determination to be made by the Fund in its sole discretion), the Fund may deposit with the Bank in a non-interest bearing account cash for such a period and in such an amount that the interest that would have been paid on such deposit at a rate equal to the closing offered Adjusted Federal Funds Rate as defined below on a daily basis equals the interest due on the overdrafts. (3) The adjusted Federal Funds rate is the Federal Funds rate multiplied by a fraction consisting of, in the numerator, one and, in the denominator, one plus the prevailing reserve requirement, expressed as a percentage, on such deposits. (e) "Receipt" of Securities Defined. Whenever this Agreement contemplates receipt of securities by the Bank, such receipt shall mean receipt by the Bank of: (i) securities in bearer form or in form for transfer satisfactory to the Bank or: (ii) written or telegraphic advice from a Depository that securities have been credited to the account of the Fund or the Bank at the Depository; or (iii) written or telegraphic advice from any Subcustodian designated by the Bank hereunder that such securities have been deposited with such Subcustodian for the account of the Fund. V. INSTRUCTIONS (a) "Instructions" Defined. As used in this Agreement, the term "instructions" means instructions, with respect to any specified transaction (except as otherwise indicated in this Agreement), in writing or by telecopier, tested telegram, cable or Telex or by facsimile sending device, signed by the requisite number of officers or authorized signatories of the Fund as specified in the incumbency and signature certificate(s) provided to the Bank by the Fund pursuant to Section II(a) or (b) hereof. (b) Instructions Consistent With Charter, etc. Although the Bank may take cognizance of the provisions of the charter and by-laws of the Fund as from time to time amended, the Bank may assume that any instructions received hereunder are not in any way inconsistent with any provision of such charter or by-laws or any vote, resolution or proceeding of the shareholders or the directors, or of any committee of either thereof, of the Fund. (c) Authority of Fund's Signatories. The incumbency and signature certificates most recently delivered to the Bank pursuant to Section II (a)(3) shall constitute conclusive evidence of the authority of the signatories designated therein to act on behalf of the Fund. VI. TRANSACTIONS REQUIRING INSTRUCTIONS The bank shall not undertake any transactions of the nature set forth in the subdivisions of this Section unless the Bank has received instructions to do so as set forth below, and upon receipt of such appropriate instructions the Bank shall undertake the actions set forth below: (a) Purchases. Upon receipt of instructions to do so, the Bank shall make payment for and receive all securities purchased for the account of the Fund (insofar as monies are available, or insofar as the Bank is willing to permit an overdraft or overdrafts in the Fund's account or accounts with the Bank, for such purpose), payment to be made only upon receipt of the securities, in form for transfer satisfactory to the bank (or with respect to securities eligible for transfer on the books of a Depository, upon receipt of wire confirmation of such Depository; provided, however, that, if any such securities (or any securities to be received free for the Fund's account) are not received by the Bank on or before the thirtieth day following the date of the Bank's receipt of the instructions to receive such securities, the bank may, but need not, consider such instructions cancelled unless and until the Bank receives further instructions reinstating such original instructions; (b) Sales. Upon receipt of instructions to do so, the Bank shall deliver Property sold by the Fund against payment therefor (1) in cash or by check certified or issued by a bank, trust company or member firm of the New York Stock Exchange or (2) wholly or partially in property other than cash, as specified in such instructions. (c) Miscellaneous Transactions. Upon receipt of instructions to do so, the Bank shall deliver (or cause a Subcustodian or Depository to deliver) Property against such payment or other consideration or written receipt therefor as shall be specified in such instructions, in the following cases: (1) for examination by a broker selling for the account of the Fund in accordance with street delivery custom; (2) for payment when such Property has been called, redeemed or retired, or has otherwise become payable at the option of the holder thereof; (3) in exchange for, or for conversion into other securities and/or cash pursuant to any plan of merger, consolidation or reorganization, recapitalization, readjustment or other rearrangement of the issuer; (4) for deposit with a reorganization committee or protective committee pursuant to a deposit agreement; (5) for conversion into or exchange for other securities, or into or for other securities and cash, in accordance with any conversion or exchange right or option relating thereto subject to the provisions of Section VI(f) of this Agreement; (6) in the case of warrants, rights or other similar securities, upon the exercise thereof; (7) in the case of interim receipts or temporary securities, upon the surrender thereof for definitive securities; (8) for delivery to designated brokers as collateral in connection with any short sales effected or to be effected by the Fund so long as any Property so delivered consists of either U.S. government obligations or securities fungible with the securities which are the subject of such short sales; (9) in connection with any short sale effected or to be effected by the Fund, for deposit in a segregated commercial account with the Bank, pursuant to the provisions of Section IV(b) hereof, of an amount of United States Government obligations which, when added to the amount of cash (if any) deposited in said account will be (A) equal to the difference between the market value of the securities sold short by the Fund at the time they were sold and any cash or government securities deposited as collateral with the broker in connection with the short sale (not including the proceeds from the short sale), and (B) until the Fund replaces the borrowed security, for the purpose of daily maintaining the segregated account at a level so that (Y) the amount deposited in it plus the amount deposited with the broker (not including the proceeds from the short sale) will equal the current market value of the securities sold short, and (Z) the amount deposited in it plus the amount deposited with the broker (not including the proceeds from the short sale), will not be less than the market value of the securities at the time they were sold short; provided; however, that the Bank shall not be responsible for ensuring that the amount deposited in such account complies with the foregoing; (10) upon sales of securities for the account of the Fund and receipt by the Bank of payment therefor, including upon sales by the Fund through designated brokers of put and/or call options written by persons other than the Fund, combinations thereof and similar options issued by the Options Clearing Corporation or any similar clearing corporation. (11) for delivery to (A) broker-custodians to fulfill put and similar options written by persons other than the Fund held in the custody of such broker-custodians and exercised by the Fund, or (B) to designated brokers to fulfill put and similar options issued by the Options Clearing Corporation, or any similar clearing corporation and exercised by the Fund, in which event the Bank will deliver any non-negotiable certificates (against receipt for such certificates) issued by the Options Clearing Corporation, or any similar clearing corporation; and (12) as collateral in connection with any loan to be made to the Fund or any loans of portfolio securities made by the Fund. (d) Payments. Without limiting the generality of the foregoing, upon receipt of instructions to do so, the Bank shall make payment with respect to any transaction described in Section VI(c)(3) to (11) inclusive, in the amount specified in such Instructions. (e) Cash Disbursements. Upon receipt of Instructions to do so (subject to the provisions of Section VII(b)), the Bank shall make cash disbursement for the account of the Fund, in the amount specified in such instructions, in connection with the payment of (1) any dividend or other distribution declared by the Fund, or (2) any tax, expense or liability of the Fund. Any cash disbursements which are made otherwise than for (i) purchases of securities by the Fund (as provided for in Section VI (a)), (ii) Redemption of shares of the Fund (as provided for in Section VIII(a)), (iii) payments of principal of or interest on loans made to the Fund, (iv) payments to the banks under this Agreement or for the payment of dividends, distributions, taxes, management or supervisory fees or operating expenses (including, without limitation, fees for legal, accounting and auditing services), (v) payments in connection with securities loans, made by the Fund, (vi) payments in connection with the conversion exchange or surrender of securities owned or subscribed to by the Fund, or (vii) payments contemplated by Section IV(c) or Section VII(b) of this Agreement, shall be made by the Bank only on receipt of instructions specifying the amount of such payment, setting forth the purpose for which such payment is to be made, declaring such purpose to be a proper corporate purpose and naming the person or persons to whom such payment is to be made. (f) Exercise of rights, etc. The Bank shall deal with rights, warrants and similar securities received by it hereunder only in the manner and to the extent ordered by instructions received by the Bank and, in the event instructions are not received a reasonable time before any action is required to be taken with respect thereto, the Bank may take or refrain from taking such action in its discretion. (g) Voting. Neither the Bank nor its nominees shall vote any of the securities included in the Property or authorize the voting of any such securities or give any consent, approval or waiver with respect thereto, except as directed by Instructions received from the Bank. The Bank shall promptly deliver or cause to be executed and delivered to the Fund all notices, proxies and proxy solicitation material with relation to such securities, such proxies to be executed by the registered holder of such securities (if registered otherwise than in the name of the Fund) but without indicating the manner in which such proxies are to be voted. (h) Release of Funds. Except as otherwise specifically provided in this Agreement, the Bank shall release to the Fund, or otherwise apply for the account of the Fund, the Property or any part thereof, as directed by instructions received by the Bank. (i) Limitation. Except as otherwise expressly provided in this Agreement, the Bank shall not deliver or otherwise dispose of any of the Property except to the Fund or against countervalue, including (without limitation) payment or other consideration or receipt therefor pursuant to Sections VI(b) and (c). VII. TRANSACTIONS NOT REQUIRING INSTRUCTIONS (a) Collection of Income and Other Payments. In the absence of contrary instructions, the Bank shall without first seeking instruction to do so: (1) collect and receive, for the account of the Fund, all income and other payments and distributions, including (without limitation) stock dividends, rights, warrants and similar items, included or to be included in the Property, and promptly advise the Fund in writing of such receipt; (2) take any action which may be necessary and proper in connection with the collection and receipt of such income and other payments and distributions, including (without limitation) the execution of ownership and exemption certificates, the presentation of coupons or other interest items, the presentation for payment of securities which have become payable as a result of their being called, redeemed or retired, or otherwise becoming payable, otherwise than at the option of the holder thereof, and the endorsement for collection of checks, drafts and other negotiable instruments; and (3) receive and hold for the account of the Fund all securities received as a distribution on securities held by the Fund where such distributed securities are received as a result of a stock dividend, share split-up or reorganization, recapitalization, readjustment or other rearrangement or distribution of rights or similar securities issued with respect to any securities of the Fund held by the Bank hereunder, (4) exchange interim receipts or temporary securities for definitive securities; and (5) execute as agent on behalf of the Fund all necessary ownership certificates required by the Internal Revenue Code or the Income Tax Regulations of the United States Treasury Department or under the laws of any State now or hereafter in effect, inserting the Fund's name on such certificates as the owner of the securities covered thereby, to the extent the Bank may lawfully do so; provided, however, that the Bank shall not be required to transact any item of business referred to in this Section VII(a) with respect to a security issued outside of the United States or which is not covered by a published securities manual reasonably available to the Asset Services Department of the Bank (or the successor to such Department in the event of any administrative rearrangement of the Bank) unless and until such Asset Services Department (or its successor) has received a notice specifying (X) the item of business in question and (Y) such additional information as will permit the Bank to transact such item of business properly and without unreasonable inconvenience to such Asset Services Department (or its successor). (b) Cash disbursements. In the absence of contrary Instructions, the Bank may make cash disbursements for minor expenses in handling securities and for similar items in connection with the Bank's duties under this Agreement. The Bank shall promptly advise the Fund in writing of disbursements so made. (c) Delivery of Information and Documents. The Bank shall promptly deliver to the Fund all information and documents received by the Bank and relating to the Property including (without limitation) pendency of calls and maturities of securities and expiration of rights in connection therewith received by the Bank from issuers of securities being held for the Fund. With respect to tender or exchange offers, the Bank shall transmit promptly to the Fund all written information received from issuers of the securities whose tender or exchange is being sought or from the party (or his agents) making the tender or exchange offer; and the Bank shall promptly deliver all other notices, proxies, reports and other financial information. VIII TRANSACTIONS REQUIRING SPECIAL INSTRUCTIONS The Bank shall not undertake any transactions of the nature set forth below in the subdivisions of this Section unless the Bank has received instructions to do so which conform to the specific requirements set forth below, and upon receipt of such appropriate instructions the Bank shall undertake the actions set forth below; (a) Redemptions. Upon receipt of instructions to do so, the Bank shall deliver Property in connection with Redemptions (insofar as monies or, in a case referred to in clause (3) below, other Property is available, or insofar as the Bank is willing to permit an overdraft or overdrafts in the Fund's account or accounts with the Bank, for such purpose), provided, however, that the Instructions covering each Redemption shall contain (1) the number of shares Redeemed, (2) the net asset value (determined pursuant to the regulations of the Fund, as from time to time amended, which govern determination of net asset value) of such shares on the effective date of such Redemption and (3) specification of any Property other than cash which the Bank is to deliver pursuant thereto. (b) Extraordinary Transactions. In the case of any of the following transactions, not in the ordinary course of the business of the Fund: (1) the merger or consolidation of the Fund and another investment company, (2) the sale by the Fund of all or substantially all of its assets, or (3) liquidation of the Fund or dissolution of the Fund and distribution of its assets, the Bank shall deliver Property only upon receipt of Instructions and advice of counsel satisfactory to the Bank (who may be counsel for the Fund, at the option of the Bank) to the effect that all necessary corporate action therefor has been taken, or will be taken concurrently with the Bank's action. IX. RIGHT TO RECEIVE ADVICE (a) Advice of Fund. If the Bank shall be in doubt as to any action to be taken or omitted by it, it may request, and shall receive, from the Fund directions or advice, including Instructions where appropriate. (b) Advice of Counsel. If the Bank shall be in doubt as to any questions of law involved in any action to be taken or omitted by the Bank, it may request advice from counsel of its own choosing (who may be counsel for the Fund, at the option of the Bank). (c) Conflicting Advice. In case of conflict between directions, advice or instructions received by the Bank pursuant to Section IX(a) and advice received by the Bank pursuant to Section IX(b), the Bank shall be entitled to rely on and follow the advice received pursuant to Section IX(b) alone. (d) Absolute Protection to Bank. The Bank shall be absolutely protected in any action or inaction which it takes in reliance on any directions, advice or instructions received pursuant to Section IX(a) or (unless Section IX(b) is applicable) (b) or which the Bank, after receipt of any such directions, advice or instructions, in good faith believes to be consistent with such directions, advice or Instructions, as the case may be. However, nothing in this Section IX shall be construed as imposing upon the Bank any obligation (1) to seek such directions, advice or Instructions, or (2) to act in accordance with such directions or advice when received, unless, under the terms of another provision of this Agreement, the same is a condition to the Bank's properly taking or omitting to take such action. X. STATEMENTS (a) Statements. The Bank shall render to the Fund statements of the transactions in the accounts of the Fund at the following times: (1) Daily advices as to transactions; (2) Monthly Cash Statements Recapitulation; and (3) Such other statements and advice as the Fund may reasonably request. (b) Access. The Bank agrees to provide access from time to time to the portfolio securities held by the Bank for the account of the Fund to such of the Fund's authorized officers, auditors and counsel as the Fund may request in writing upon reasonable notice, for any proper corporate purpose, subject in each case to such physical security requirements as the Bank may deem necessary or advisable. XI. COMPENSATION (a) Ordinary Services. The Fund shall pay to the Bank, and the Bank may deduct from the Property, for its services under this Agreement (other than the services referred to in Section XI(c)) compensation based on a schedule of charges to be agreed upon in writing from time to time. (b) Expenses. The Fund shall reimburse the Bank for all expenses, taxes and other charges (including, without limitation, interest and other items charged by brokers in respect of debit balances and delayed deliveries) paid by the Bank with respect to the property of the Fund, or incurred by the Bank on behalf of the Fund in the performance of the Bank's duties hereunder, provided, however, that the Bank shall be entitled to reimbursement with respect to the fees and disbursements of counsel only (1) as set forth in Sections XI(c) and XIII or (2) when the Fund breaches or threatens to breach, or the Fund's investment advisor (if any) threatens to cause a breach, of this Agreement to the extent that the fees and disbursements of such counsel relate to such actual or apparent breach or threatened breach. If the Bank submits to the Fund a bill for such reimbursement and the Fund does not, within 15 days after such submission, notify the Bank that the bill is disapproved and make a reasonable counter-offer in writing, the bill shall be deemed approved and the Bank may deduct such reimbursement from the Property. (c) Extraordinary services. The Fund shall pay to the Bank, and the Bank may deduct from the Property, for its services as the Fund's agent in paying to a Shareholder consideration, consisting wholly or partially of property other than cash, in connection with the Redemption of all or any part of such Shareholder's shares in the Fund compensation equal to 1/10 of 1% of the amount computed by subtracting from the aggregate Redemption price of such shares the cash, if any, paid to such Shareholder in respect of such Redemption. Without limiting the generality of the provisions of Section XI(b), the Fund shall reimburse to the Bank, and the Bank may deduct from the Property reimbursement for, the fees and disbursements of the Bank's counsel attributable to such counsel's services in respect of each such Redemption. XII. INDEMNIFICATION The Fund, as sole owner of the Property, will indemnify the Bank and each of the Bank's nominees, and hold the Bank and such nominees harmless, and the Bank may deduct from the Property indemnification, against all costs, liabilities (including, without limitation, liabilities under the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940 and any state and foreign securities and blue sky laws, all as from time to time amended) any expenses, including (without limitation) attorney's fees and disbursements, arising directly or indirectly (1) from the fact that securities included in the Property are registered in the name of any such nominee or (2) without limiting the generality of the foregoing clause (1), from any action or thing which the Bank takes or does or omits to take or do, (A) at the request or on the directions or in reliance on the advice of the Fund, or of the Fund's investment adviser (if any), or (B) upon Instructions, provided. however, that neither the Bank nor any of its nominees shall be indemnified against any liability to the Fund or to its Shareholders (or any expense incident to such liability) arising out of the Bank's or such nominee's own willful misfeasance, bad faith, gross negligence or reckless disregard of its duties under this Agreement or (Y) the Bank's own negligent failure to perform its duties under Section VII(a)(2). XIII. RESPONSIBILITY: COLLECTIONS (a) Responsibility of Bank. The Bank shall be under no duty to take any action on behalf of the Fund except as specifically set forth herein or as may be specifically agreed to by the Bank in writing. In the performance of the Bank's duties hereunder, the Bank shall be obligated to exercise care and diligence, but the Bank shall not be liable for any act or omission which does not willful misfeasance, bad faith or negligence on the part of the Bank or any Subcustodian it has appointed or reckless disregard by the Bank or by any Subcustodian it has appointed, pursuant to this Agreement, of its duties under this Agreement. Without limiting the generality of the foregoing or of any other provision of this Agreement, the Bank shall not be under any duty or obligation to inquire into and shall not be liable for or in respect of (1) the validity or invalidity or authority or lack thereof of any instruction, notice or other instrument which conforms to the applicable requirements of this Agreement, if any, and which the Bank reasonably believes to be genuine, or (2) the validity or invalidity of the issuance of any securities included or to be included in the Property, the legality or illegality of the purchase of such securities, or the propriety or impropriety of the amount paid therefor, or (3) the legality or illegality of the sale (or exchange) of any Property or the propriety or impropriety of the amount for which such Property is sold (or exchanged), nor shall the Bank be under any duty or obligation to ascertain whether any property at any time delivered to or held by the Bank may properly be held by or for the Fund or (4) the compliance of any instruction, notice or other instrument with any restrictions on the Fund's investment powers or policies, imposed by law or contained in its charter, by-laws, registration statements or amendments thereto, or in its Prospectus or elsewhere. The Bank agrees that it will use its best efforts to assist the Fund to enforce any rights the Fund may have in connection with the use of a Depository as defined in Section II (e). (b) Collections. All collections of monies or other property in respect, or which are to become part, of the Property shall be at the sole risk of the Fund. (c) Enforcement against Subcustodian. In using the facilities of a Subcustodian it has appointed, the Bank shall be responsible for the prompt and effective enforcement of its rights against the Subcustodian in respect of the Property including the proper replacement of any certificated security which has been lost, destroyed, wrongfully taken, mislaid or erroneously delivered while in the custody of the Subcustodian. XIV. ADVERTISING No printed or other matter in any language (including, without limitation, prospectuses, notices to shareholders, annual reports and promotional material) which mentions the Bank's name or the rights, powers or duties of the custodian of the Fund shall be issued by the Fund or on the Fund's behalf unless the Bank shall first have given its specific written consent thereto, other than a new or revised version of such item which contains the same information as to the Bank as in a previous version previously consented to by the Bank. XV. EFFECTIVE DATE; TERMINATION; SUCCESSOR; DISSOLUTION (a) Effective Date. This Agreement shall become effective as of the date entered in the final paragraph of this Agreement and shall continue in effect until terminated in the manner set forth below. Upon execution of this Agreement, any Custodian agreement previously entered into between the Bank and the Fund shall terminate, however, all rights, liabilities and causes of action arising under such prior agreement from the conduct of the parties thereunder shall survive the execution hereof. (b) Termination. Either party to this Agreement may terminate this Agreement, without penalty, upon at least one month prior written notice to the other. The effective date of such notice shall be specified in such notice, except that, at the option of the party receiving the notice of termination, the effective date of termination may be postponed, by notice (given prior to the effective date specified in the termination notice) to the other party, to a date not more than 120 days from the date of the notice of termination; provided, however, that the Fund shall have no right to so postpone the effective date of termination if the Fund is at the time in default under the provisions of Section XIV. (c) Successor Custodian. The Bank shall, in the event of such termination, deliver the Property, or cause it to be delivered, to any new custodian which may be designated in instructions received by the Bank. (d) Successor Custodian Not Available. In the event that no new custodian can be found by the Fund at the effective date of termination of this Agreement, the Fund shall, before authorizing the delivery of the Property to anyone other than a successor custodian, submit to its directors, or if required by law to its shareholders, the question of whether the Fund shall be liquidated or shall function without a custodian. The Bank shall, pending the finding of such a new custodian, the dissolution of the Fund or the decision of the directors or shareholders that the Fund shall function without a custodian, continue to hold the Property in safekeeping subject to the terms of this Agreement, but the Bank will not carry out any transaction requiring instructions, the instructions with respect to which are received by the Bank subsequent to the effective date of the termination of this Agreement, or issue any advice provided for by Section VII or any statement provided for by Section X, provided, however, that, upon its receipt of instructions to do so, the Bank will deliver the Property to a new custodian (which shall be a person, firm or corporation meeting such requirements as may be imposed by applicable law), distribute the Property (after liquidating any part of the Property which does not consist of cash, if such Instructions so order) upon dissolution of the Fund or deliver the Property to any other person if the shareholders have decided that the Fund shall function without a custodian. The Bank shall not be liable to the Fund or any third party on account of any incidents or omissions occurring during such period of safekeeping except those arising through the Bank's own willful misconduct or gross negligence. (e) Dissolution; No Successor Custodian. Upon its receipt of instructions to do so, the Bank shall distribute the Property (after liquidating any part of the Property which does not consist of cash, if such instructions so order) upon dissolution of the Fund or deliver the Property to any person who is to take the place of the Fund's custodian if the directors or shareholders have decided that the Fund shall function without a custodian, provided, however, in either case, that such instructions shall be accompanied by a certified copy of the minutes of the meeting of the directors or shareholders at which the same was approved; and, provided, further, that the Bank shall not be required to make such distribution or delivery until it shall have received payment in full for its services to the Fund under this Agreement. XVI. NOTICES Except as provided to the contrary in Section V(d) all notices and other communications, including instructions (collectively referred to as "Notices" in this Section XVI), hereunder shall be in writing or by telecopier, tested telegram, cable, Telex or facsimile sending device. Notices shall be addressed (1) if the Bank, to: A.S.D. Mutual Funds Department Investment Management Group Box 2806 New York, New York 10043 (or such department's successor referred to in Section VII(a)), (2) if to the Fund, to the attention of its Treasurer, 3600 South Yosemite Street, Denver, Colorado 80237 or (3) if to either of the foregoing, at such other address as shall have been notified to the sender of any such Notice or other communication. If the location of the sender of a Notice and the address thereof are, at the time of sending, more than 100 miles apart, the Notice shall be sent by airmail or its equivalent, in which case it shall be deemed given three days after it is sent, or by tested telegram, telecopier, cable, Telex or facsimile sending device, in which case it shall be deemed given immediately, and, if the location of the sender of a Notice and the address of the addressee thereof are, at the time of sending, not more than 100 miles apart, the Notice may be sent by first- class mail, in which case it shall be deemed given two days after it is sent, or by messenger, in which case it deemed given on the day it is delivered, or by tested telegram or Telex, in which case it shall be deemed given immediately, provided, however, that the addressee shall in no event be liable in respect of any delay other than on the part of the addressee in its actual receipt of any Notice. All postage, cable, telegraph, telecopier, facsimile sending device and Telex charges arising from the sending of a Notice hereunder shall be paid by the sender. XVII. MISCELLANEOUS (a) Amendments, etc. This Agreement or any part hereof may be changed or waived only by an instrument in writing signed by the party against which enforcement of such change or waiver is sought. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of New York. The headings in this Agreement are for convenience of reference only, are not a part of this Agreement and shall be disregarded in connection with any interpretation of all or any part of this Agreement. (b) Entire Agreement. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof, provided that the parties hereto may embody in one or more separate documents their agreement, if any, with respect to delegated and/or oral instructions. (c) Successors and Assigns; Assignment. All terms of this Agreement shall be binding upon the respective successors and assigns of the parties hereto, the Fund's investment adviser (if any) and the Shareholders and shall inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns, provided, however that this Agreement shall not be assignable in whole or in part by either party hereto without the written consent of the other party hereto. (d) Shareholder Liability. The Bank understands that the obligations of the Fund under this Agreement are not binding upon any shareholder of the Fund personally, but bind only the Fund's property; the Bank represents that it has notice of the provisions of the Declaration of Trust disclaiming shareholder liability for acts or obligations of the Fund. (e) Counterparts. This Agreement may be executed simultaneously in several counterparts, each of which shall be deemed an original but all of which, taken together, shall constitute one and the same Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by the hands of their signatories thereunto duly authorized as of the 7th day of May, 1982. CITIBANK, N.A. By:--------------------------- DAILY CASH GOVERNMENT FUND By:------------------------------ CUSTODY/1702 170.CA EX-10 9 AMENDMENT TO CUSTODIAN AGREEMENT CENTENNIAL GOVERNMENT TRUST (a Massachusetts Business Trust) AMENDMENT TO CUSTODIAN AGREEMENT Amendment dated September 27, 1985 to Custodian Agreement dated May 7, 1982 between Daily Cash Government Fund and Citibank, N.A. WHEREAS, Daily Cash Government Fund (an open-end, diversified investment company organized as a Massachusetts business trust in 1982) has acquired the assets of Centennial Government Trust (an open-end, diversified investment company organized as a Massachusetts business trust in 1981) in exchange for shares of Daily Cash Government Fund pursuant to an Agreement and Plan of Reorganization approved by the shareholders of Centennial Government Trust at a special meeting held September 26, 1985; WHEREAS, the shareholders of Daily Cash Government Fund, at the annual meeting of shareholders held September 27, 1985, approved a proposal to amend the Fund's Declaration of Trust to, among other things, change the name of Daily Cash Government Fund to Centennial Government Trust and henceforth authorize the Trustees to change the name of the Fund as they consider appropriate; NOW THEREFORE, the Custodian Agreement dated May 7, 1982 between Daily Cash Government Fund and Citibank, N.A. is amended as follows: 1. The first sentence of Article I is hereby amended to delete "Daily Cash Government Fund" and insert in place thereof "Centennial Government Trust". 2. Except as expressly modified by the foregoing, such Custodian Agreement remains in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by the hands of their signatures thereunto duly authorized as of the 27th day of September, 1985. CITIBANK, N.A. By: ---------------------- CENTENNIAL GOVERNMENT TRUST By: ----------------------- George C. Bowen Vice President, custody/170 Secretary & Treasurer 170.ACA EX-5 10 OPINION OF COUNSEL . April 7, 1982 Securities and Exchange Commission 500 North Capitol Street, N.W> Washington, D.C. 20549 Re: Daily Cash Government Fund Gentlemen: In connection with the public offering of the no par value shares of Daily Cash Government Fund, a business trust organized under the laws of the Commonwealth of Massachusetts, (the "Trust"), as counsel for the Trust, we have examined such records and documents and have made such further investigation and examination as we deem necessary for the purpose of this opinion. The Trust is authorized to issue an unlimited number of full and fractional shares of transferable beneficial interests, without par value, each of which represents an equal proportionate interest in the Trust with each other share outstanding, none having priority or preference over another. Under Massachusetts law, shareholders of the Trust may, under certain circumstances, be held personally liable as partners for the obligations of the Trust. The Declaration of Trust does, however, contain an express disclaimer of shareholder liability for acts or obligations of the Trust and requires that notice of such disclaimer be given in each agreement, obligation, or instrument entered into or executed by the Trust or the Trustees. The Declaration of Trust provides for indemnification out of the Trust property of any shareholder held personally liable for the obligations of the Trust. The Declaration of Trust also provides that the Trust shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the Trust and satisfy any judgment thereon. An indefinite number of shares of the Trust are being registered with the Securities and Exchange Commission by filing Form N-1. As of the date of this letter, it is our opinion that the shares of the Trust when issued and paid for in accordance with the terms of the offering, as set forth in the prospectus forming a part of said Registration Statement, will be, when such registration shall become effective, legally issued and, subject to the matters mentioned in the preceding paragraph, full paid and nonassessable by the Trust. We hereby consent to the use of our name in the Prospectus forming part of the Registration Statement and the filing of this opinion as an exhibit thereto. Sincerely, NEEF, SWANSON, MYER & CLARK By /s/ Rendle Myer Rendle Myer opin/170 EX-99 11 PERFORMANCE COMPUTATION DATA Centennial Government Trust Exhibit 24(b)(16) to Form N-1A Performance Data Computation Schedule 1. YIELD AND EFFECTIVE YIELD FOR 7-DAY PERIOD ENDED 06/30/94: Calculations of the Fund's "Yield" and "Compounded Effective Yield" set forth in the section entitled "Yield Information" in the Statement of Additional Information were made as follows: Date Daily Accrual Per Share (in $) 06/24/94 $0.0001014 06/25/94 0.0001014 06/26/94 0.0001014 06/27/94 0.0000953 06/28/94 0.0000971 06/29/94 0.0000928 06/30/94 0.0000983 Seven Day Total $0.0006877 Current Yield: $0.0006877/ 7 * 365 = 3.59% 365/7 Effective Yield: ( $0.0006877 + 1) -1 = 3.65% EX-27 12 FINANCIAL DATA
6 0000357247 CENTENNIAL GOVERNMENT TRUST 12-MOS JUN-30-1994 JUL-01-1993 JUN-30-1994 610251043 610251043 9556966 108468 1047353 620963830 0 0 7521328 7521328 0 613281725 613281725 637017679 0 0 160777 0 0 613442502 0 23830047 0 5256689 18573358 166504 0 18739862 0 18663114 0 0 2133375320 2175141336 18030062 (23659206) 0 84029 0 0 3182956 0 5256689 665494000 1.0 .03 0 .03 0 0 1.00 79 0 0
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