-----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, bSOMkYBWV7jJlhxapmRM9vcc3Chc+APxyqpY+dM9K/HcEaRmC/+rYa4eOmNJG+2I iLs/O8eIHtMJY8QjGSIQrA== 0000837278-94-000006.txt : 19941103 0000837278-94-000006.hdr.sgml : 19941103 ACCESSION NUMBER: 0000837278-94-000006 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 19941101 EFFECTIVENESS DATE: 19941101 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTENNIAL NEW YORK TAX EXEMPT TRUST CENTRAL INDEX KEY: 0000837278 STANDARD INDUSTRIAL CLASSIFICATION: 0000 IRS NUMBER: 133481209 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 033-23494 FILM NUMBER: 94557169 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-05584 FILM NUMBER: 94557170 BUSINESS ADDRESS: STREET 1: 3410 SOUTH GALENA ST CITY: DENVER STATE: CO ZIP: 80231 BUSINESS PHONE: 3036713200 MAIL ADDRESS: STREET 1: 3410 S GALENA ST STREET 2: 3410 S GALENA ST CITY: DENVER STATE: CO ZIP: 80231 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER NEW YORK TAX EXEMPT CASH RESERVES DATE OF NAME CHANGE: 19900530 485BPOS 1 Registration No. 33-23494 File No. 811-5584 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. 9 / X / and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X / Amendment No. 11 / X / CENTENNIAL NEW YORK TAX EXEMPT TRUST (Exact Name of Registrant as Specified in Charter) 3410 South Galena Street, Denver, Colorado 80231 (Address of Principal Executive Offices) 1-303-671-3200 (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 shares under the Securities Act of 1933 pursuant to Rule 24f-2 promulgated under the Investment Company Act of 1940. A Rule 24f-2 Notice for the Registrant's fiscal year ended June 30, 1994 was filed on August 30, 1994. FORM N-1A CENTENNIAL NEW YORK TAX EXEMPT TRUST Cross Reference Sheet Part A of Form N-1A Item No. Prospectus Heading - --------- ------------------ 1 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 Trust; Inside Back Cover; Additional Information - The Custodian and the Transfer Agent; Trust Expenses 6 Dividends and Taxes; Additional Information; Management of the Trust 7 How To Buy Shares; Exchanges of Shares 8 How To Redeem Shares 9 * Part B of Form N-1A Item No. Statement of Additional Information Heading - --------- ------------------------------------------- 10 Cover Page 11 Cover Page 12 * 13 Investment Objective and Policies; Investment Restrictions; Appendix A - Description of Securities Ratings 14 Trustees and Officers; Investment Management Services 15 Investment Management Services; Trustees and Officers - Major Shareholders 16 Investment Management Services; (Prospectus - Management of the Trust); Service Plan 17 Investment Management Services - Portfolio Transactions 18 Additional Information - Description of the Trust 19 Yield Information; Purchase, Redemption and Pricing of Shares; Automatic Withdrawal Plan Provisions 20 Additional Information - Tax Status of the Trust's Dividends and Distributions 21 Investment Management Services - Portfolio Transactions; Additional Information - General Distributor's Agreement 22 Yield Information 23 Financial Statements ____________________________ *Not applicable or negative answer. Centennial New York Tax Exempt Trust 3410 South Galena Street, Denver, Colorado 80231 1-800-525-9310 Centennial New York Tax Exempt Trust (the "Trust") is a no-load "money-market" mutual fund with the investment objective of seeking the maximum current income exempt from Federal, New York State and New York City income taxes for individual investors that is consistent with preservation of capital. The Trust seeks to achieve this objective by investing in municipal obligations meeting specified quality standards, the income from which is tax-exempt as described above. Normally, the Trust will invest at least 80% of its assets in U.S. dollar-denominated, high quality tax-exempt municipal obligations. See "The Trust and Its Investment Policies." An investment in the Trust is neither insured nor guaranteed by the U.S. Government. Shares of the Trust are not deposits or obligations of any bank, are not guaranteed by any bank, and are not insured by the FDIC or any other agency. While the Trust seeks to maintain a stable net asset value of $1.00 per share, there can be no assurance that the Trust will be able to do so. See "The Trust and Its Investment Policies." Shares of the Trust may be purchased directly from dealers having sales agreements with the Trust's Distributor and also are offered to participants in Automatic Purchase and Redemption Programs (the "Programs") established by certain brokerage firms with which the Trust's Distributor has entered into agreements for that purpose. See "How to Buy Shares" in the Prospectus. Program participants should also read the description of the Program provided by their broker. This Prospectus sets forth concisely information about the Trust that a prospective investor should know before investing. A Statement of Additional Information about the Trust (the "Additional Statement") dated November 1, 1994, has been filed with the Securities and Exchange Commission ("SEC") and is available without charge upon written request to Shareholder Services, Inc. ("the Transfer Agent"), P.O. Box 5143, Denver, Colorado 80217-5143 or by calling the toll-free number shown above. The Additional Statement (which is incorporated by reference in its entirety in this Prospectus) contains more detailed information about the Trust and its management. Investors are advised to read and retain this Prospectus for future reference. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. This Prospectus is effective November 1, 1994. Table of Contents Page Trust Expenses 2 Financial Highlights 3 Yield Information 4 The Trust and Its Investment Policies 4 Investment Restrictions 8 Management of the Trust 8 How To Buy Shares 8 Purchases Through Automatic Purchase and Redemption Programs 9 Direct Purchases 9 Automatic Investment Plans 10 General 10 Service Plan 10 How To Redeem Shares 11 Program Participants 11 Shares of the Trust Owned Directly 11 Regular Redemption Procedure 11 Expedited Redemption Procedure 11 Checkwriting 12 Telephone Redemptions 12 Automatic Withdrawal Plans 12 General Information on Redemptions 12 Exchanges of Shares 13 Dividends and Taxes 15 Additional Information 17 Trust Expenses The following table sets forth: (i) the fees that an investor in the Trust might pay, and (ii) the expenses paid by the Trust in its fiscal year ended June 30, 1994. Shareholder Transaction Expenses Maximum Sales Charge on Purchases None Sales Charge on Reinvested Dividends None Redemption Fees None Exchange Fee $5.00 Annual Trust Operating Expenses (as a percentage of average net assets) Management Fees (after expense assumption) 0.28% 12b-1 (Service Plan) Fees 0.18% Other Expenses 0.34% Total Trust Operating Expenses (after expense assumption) 0.80% The purpose of this table is to assist an investor in understanding the various costs and expenses that an investor in the Trust will bear directly (shareholder transaction expenses) or indirectly (annual trust operating expenses). "Other Expenses" includes such expenses as custodial and transfer agent fees, audit, legal and other business operating expenses, but excludes extraordinary expenses. The Annual Trust Operating Expenses shown are net of a voluntary expense assumption undertaking by the Trust's investment manager, Centennial Asset Management Corporation (the "Manager"). Without such assumption, "Management Fees" and "Total Fund Operating Expenses" would have been 0.50% and 1.02% of average net assets, respectively. The expense assumption undertaking is described in "Investment Management Services" in the Additional Statement and may be amended or withdrawn at any time. For further details, see the Trust's Financial Statements included in the Additional Statement. The following example applies the above-stated expenses (after expense assumption) to a hypothetical $1,000 investment in shares of the Trust over the time periods shown below, assuming a 5% annual rate of return on the investment and also assuming that the shares are redeemed at the end of each stated period. The amounts shown below are the cumulative costs of such hypothetical $1,000 investment for the periods shown. 1 year 3 years 5 years 10 years ------ ------- ------- -------- $8 $26 $44 $99 This example should not be considered a representation of past or future expenses or performance. Expenses are subject to change and actual performance and expenses may be less or greater than those illustrated above. Financial Highlights Selected data for a share of the Trust outstanding throughout each period The information in the table below has been audited by Deloitte & Touche LLP, independent auditors, whose report on the financial statements of the Trust for the fiscal year ended June 30, 1994 is included in the Additional Statement.
NINE MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, JUNE 30, SEPTEMBER 30, - --------------------------------------- ----------- - ------------ 1994 1993 1992 1991 1990 1989(1) ------- ------- ------- ------- ------- ------ PER SHARE OPERATING DATA: Net asset value, beginning of period............. $ 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.................................... .02 .02 .03 .05 .04 .04 Dividends and distributions to shareholders...... (.02) (.02) (.03) (.05) (.04) (.04) ------- ------- ------- ------- ------- ------ Net asset value, end of period................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- ------ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in (thousands)........ $26,519 $24,994 $24,103 $21,439 $ 9,133 $4,935 Average net assets (in thousands)................ $25,419 $24,257 $23,221 $16,766 $ 7,008 $2,084 Number of shares outstanding at end of period (in thousands)..................................... 26,518 24,994 24,105 21,443 9,135 4,934 Ratios to average net assets: Net investment income............................ 1.67% 1.74% 3.00% 4.42% 4.98%(2) 5.41%(2) Expenses, before voluntary assumption by the Manager........................................ 1.02% .98% 1.09% 1.08% 1.48%(2) 2.21%(2) Expenses, net of voluntary assumption by the Manager........................................ .80% .80% .80% .72% .96%(2) 1.00%(2)
- ------------ (1) For the period from January 3, 1989 (commencement of operations) to September 30, 1989. (2) Annualized. Yield Information From time to time, the "yield," "tax-equivalent yield" and "compounded effective yield" of an investment in the Trust may be advertised. All yield figures are based on historical earnings per share and are not intended to indicate future performance. The "yield" of the Trust is the income generated by an investment in the Trust over a seven- day period, which is then "annualized." In annualizing, the amount of income generated by the investment during that seven days is assumed to be generated each week over a 52-week period, and is shown as a percentage of the investment. The "compounded effective yield" is calculated similarly, but the annualized income earned by an investment in the Trust is assumed to be reinvested. The "compounded effective yield" will be slightly higher than the yield because of the effect of the assumed reinvestment. The Trust's "tax-equivalent yield" is calculated by dividing that portion of the Trust's "yield" (calculated as described above) which is tax-exempt by one minus a stated income tax rate and adding the result to the portion (if any) of the Trust's yield that is not tax-exempt. The "tax-equivalent yield" is then compounded and annualized in the same manner as the Trust's yield. See "Yield Information" in the Additional Statement for additional information about the methods of calculating these yields. From time to time the Manager may voluntarily assume a portion of the Trust's expenses (which may include the management fee), thereby lowering the overall expense ratio per share and increasing the Trust's yield during the time such expenses are assumed. The Trust and Its Investment Policies The Trust is a no-load tax-exempt money market fund. It is an open- end, non-diversified, management investment company organized on July 29, 1988 as a Massachusetts business trust. The Trust's investment objective is to seek the maximum current income exempt from Federal, New York State and New York City income taxes for individual investors as is consistent with preservation of capital. The Trust's shares may be purchased at their net asset value, which will remain fixed at $1.00 per share except under extraordinary circumstances (see "Determination of Net Asset Value Per Share" in the Additional Statement for further information). There can be no assurance, however, that the Trust's net asset value will not vary or that the Trust will achieve its investment objective. The value of Trust shares is not insured or guaranteed by any government agency. However, shares held in brokerage accounts may be eligible for coverage by the Securities Investor Protection Corporation for losses arising from the insolvency of the brokerage firm. The Trust's investment policies and practices are not "fundamental" policies (as defined below) unless a particular policy is identified as fundamental. The Board may change non- fundamental investment policies without shareholder approval. Under normal market conditions, the Trust attempts to invest 100% of its assets, and will invest at least 80% of its assets in municipal bonds, municipal notes (including tax anticipation notes, bond anticipation notes, revenue anticipation notes, construction loan notes and other short-term loans), tax-exempt commercial paper and other debt obligations issued by or on behalf of the State of New York, and other states, and the District of Columbia, their political subdivisions, or any commonwealth or territory of the United States, or their respective agencies, instrumentalities or authorities, the interest from which is not subject to federal individual income tax, in the opinion of bond counsel to the respective issuer (collectively, "Municipal Securities") and will invest at least 65% of its total assets in obligations of the State of New York and its political subdivisions, agencies, authorities or instrumentalities or those of commonwealths or territories of the U.S., the interest from which is not subject to New York State and New York City personal income tax in the opinion of bond counsel to the respective issuer ("New York Municipal Securities"). The Trust may also purchase Municipal Securities with demand features that meet the requirements of Rule 2a-7 (discussed below). All Municipal Securities in which the Trust invests must have, or, pursuant to regulations adopted by the Securities and Exchange Commission, be deemed to have, remaining maturities of one year or less at the date the Trust purchases them. In seeking its objective, as a matter of fundamental policy, normally the Trust will make no investment that will reduce the portion of its total assets which are invested in Municipal Securities to less than 80%. The balance of the Trust's assets may be invested in investments the income from which may be taxable, including: (i) repurchase agreements (described below); (ii) Municipal Securities issued to benefit a private user ("Private Activity Municipal Securities"), the interest from which may be subject to Federal alternative minimum tax (see "Dividends and Taxes" below and "Private Activity Municipal Securities" in the Additional Statement); and (iii) certain temporary investments defined below in "Temporary Investments." The Trust may hold Temporary Investments pending the investment of proceeds from the sale of Trust shares or portfolio securities, pending settlement of Municipal Securities purchases or to meet anticipated redemptions. Normally, the Trust will not invest more than 20% of its total assets in Private Activity Municipal Securities and other taxable investments described above. No independent investigation has been made by the Manager as to the users of proceeds of such offerings or the application of such proceeds. To the extent the Trust receives income from taxable investments, it may not achieve its investment objective. Investments in unrated Municipal Securities will not exceed 20% of the Trust's total assets. Ratings of Securities. Under Rule 2a-7 of the Investment Company Act of 1940 (the "Investment Company Act"), the Trust uses the amortized cost method to value its portfolio securities to determine the Trust's net asset value per share. Rule 2a-7 places restrictions on a money market fund's investments. Under the Rule, the Trust may purchase only those securities that the Trust's Board of Trustees has determined have minimal credit risks and are "Eligible Securities." 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 the Manager to be of comparable quality to investments that are "Eligible Securities" rated by Rating Organizations. The Rule permits the Trust to purchase "First Tier Securities," which are Eligible Securities rated in the highest rating category for short-term debt obligations by at least two Rating Organizations, or, if only one Rating Organization has rated a particular security, by that Rating Organization, or comparable unrated securities. Under the Rule, the Trust may also invest in "Second Tier Securities," which are Eligible Securities that are not "First Tier Securities." Additionally, under Rule 2a-7, the Trust must maintain a dollar-weighted average portfolio maturity of no more than 90 days; and the maturity of any single portfolio investment may not exceed 397 days. Some of the Trust's existing investment restrictions described below and in the Additional Statement (which are fundamental policies that may be changed only by shareholder vote) are more restrictive than the provisions of Rule 2a-7, and the Trust must restrict the maturity of portfolio securities to one year or less. The Trust's Board has adopted procedures under Rule 2a-7 pursuant to which the Board has delegated to the Manager certain responsibilities, in accordance with that Rule, of conforming the Trust's investments with the requirements of the Rule and those procedures. Appendix A of the Additional Statement contains information on the rating categories of Rating Organizations. Ratings at the time of purchase will determine whether securities may be acquired under the above restrictions. Subsequent downgrades in ratings may require reassessment of the credit risk presented by a security and may require its sale. The rating restrictions described in this Prospectus do not apply to banks in which the Trust's cash is kept. See "Municipal Securities" and "Ratings of Securities" in "Investment Objective and Policies" in the Additional Statement for further details. Floating Rate/Variable Rate Obligations. Some of the Municipal Securities the Trust may purchase may have variable or floating interest rates. Variable rates are adjustable at stated periodic intervals of no more than one year. Floating rates are automatically adjusted according to a specified market rate for such investments, such as the PSA Municipal Swap Index or J.J. Kenney Index. The Trust may purchase these obligations if they have a remaining maturity of one year or less; if their maturity is greater than one year, they may be purchased if they have a demand feature that permits the Trust to recover the principal amount of the underlying security at specified intervals not exceeding one year and on not more than 30 days' notice. The Manager may determine that an unrated floating rate or variable rate demand obligation meets the Trust's quality standards solely by reason of being backed by a letter of credit or guarantee issued by a bank that meets the Trust's quality standards. However, the letter of credit or bank guarantee must be rated or meet the other requirements of Rule 2a-7. See "Floating Rate/Variable Rate Obligations" in the Additional Statement for more details. Puts and Stand-By Commitments. For liquidity purposes, the Trust may purchase Municipal Securities with puts from banks, brokers, dealers or other institutions. A put gives the Trust the right to sell the underlying security within a specified time at a stated price. Under a stand-by commitment, a dealer agrees to purchase, at the Trust's option, specified Municipal Securities at a stated price on same-day settlement. The aggregate price of a security subject to a put or a stand-by commitment may be higher than the price which otherwise would be paid for the security without such put or stand-by commitment, thereby increasing the cost of such security and reducing its yield. See "Puts and Stand-By Commitments" in the Additional Statement for further details. When-Issued Securities. The Trust may invest in Municipal Securities on a "when-issued" or "delayed delivery" basis. In those transactions, the Trust obligates itself to purchase or sell securities, with delivery and payment to occur at a later date, to secure what is considered to be an advantageous price and yield at the time the obligation is entered into. The price, which is generally expressed in yield terms, is fixed at the time the commitment to purchase is made, but delivery and payment for when-issued securities take place at a later date (normally within 45 days of purchase). During the period between purchase and settlement, no payment is made by the Trust to the issuer and no interest accrues to the Trust from the investment. Although the Trust is subject to the risk of adverse market fluctuation during that period, the Manager does not believe that the Trust's net asset value or income will be materially adversely affected by the Trust's purchase of Municipal Securities on a "when-issued" or "delayed delivery" basis. See "When-Issued and Delayed Delivery Transactions" in the Additional Statement for more details. Municipal Lease Securities. The Trust may invest in municipal lease obligations. While some municipal lease securities may be deemed to be "illiquid" securities (the purchase of which would be limited as described below in "Illiquid and Restricted Securities"), the Trust may invest more than 5% of its net assets in municipal lease obligations that the Manager has determined to be liquid under guidelines set by the Trust's Board of Trustees. See "Municipal Securities" in the Additional Statement for more details. Illiquid and Restricted Securities. The Trust may buy securities whose disposition would be subject to legal restrictions ("restricted securities"). The Trust will not purchase or otherwise acquire any security if, as a result, more than 10% of its net assets would be invested in securities that are illiquid by virtue of the absence of a readily available market or because of legal or contractual restrictions on resale. Such securities include (i) repurchase agreements maturing in more than seven days, (ii) certain municipal lease obligations that are considered illiquid securities, (iii) securities for which market quotations are not readily available; and (iv) bank loan participation agreements. The Manager will determine whether particular municipal lease obligations are liquid, using guidelines established by the Trust's Board of Trustees. This policy is not a fundamental policy and does not limit purchases of (1) restricted securities eligible for resale to qualified institutional purchasers pursuant to Rule 144A under the Securities Act of 1933 that are determined to be liquid by the Board of Trustees or the Manager under Board-approved guidelines, or (2) commercial paper that may be sold without registration under Section 4(2) of the Securities Act of 1933. Such guidelines take into account trading activity for such securities and the availability of reliable pricing information, among other factors. If there is a lack of trading interest in particular Rule 144A securities, the Trust's holdings of those securities may be illiquid. If more than 10% of the value of the Trust's net assets consists of illiquid securities, the Manager would consider appropriate steps to protect the Trust's maximum flexibility. There may be undesirable delays in selling illiquid securities at prices representing their fair value. Non-diversification. The Trust is classified as a "non-diversified" investment company under the Investment Company Act of 1940 (the "Investment Company Act"), so that the proportion of the Trust's assets that may be invested in the securities of a single issuer is not limited by the Investment Company Act. An investment in the Trust will therefore entail greater risk than an investment in a diversified investment company because a higher percentage of investments among fewer issuers may result in greater fluctuation in the total market value of the Trust's portfolio, and economic, political or regulatory developments may have a greater impact on the value of the Trust's portfolio than would be the case if the portfolio were diversified among more issuers. However, the Trust intends to conduct its operations so as to qualify as a "regulated investment company" for purposes of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), which will relieve the Trust from liability for Federal income tax to the extent its earnings are distributed to shareholders. Among the requirements for such qualification are that: (1) not more than 25% of the market value of the Trust's total assets will be invested in the securities of a single issuer, and (2) with respect to 50% of the market value of its total assets, not more than 5% of the market value of its total assets may be invested in the securities of a single issuer and the Trust must not own more than 10% of the outstanding voting securities of a single issuer. Repurchase Agreements. The Trust may acquire securities that are subject to repurchase agreements in order to generate income while providing liquidity. The Trust's repurchase agreements must comply with the collateral requirements of Rule 2a-7. However, if the seller of the securities fails to pay the agreed-upon repurchase price on the delivery date, the Trust's risks may include the costs of disposing of the collateral for the agreement and losses that might result from any delays in foreclosing on the collateral. Income earned on repurchase transactions is not tax-exempt and accordingly, under normal market conditions, the Trust will limit its investments in repurchase transactions to 20% of its total assets. 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 its total assets. The Trust presently does not intend that the value of securities loaned during the current fiscal year will exceed 5% of the Trust's total assets. The income from such loans, when distributed by the Trust, will be taxable. See "Loans of Portfolio Securities" in the Additional Statement for further information. Temporary Investments. The Trust may hold the following "Temporary Investments" that are Eligible Securities: (i) obligations issued or guaranteed by the U.S. Government or its agencies or instrumentalities; (ii) bankers acceptances; (iii) taxable commercial paper rated in the highest category by a Rating Organization; (iv) short-term taxable debt obligations rated in one of the two highest rating categories of a Rating Organization; or (v) certificates of deposit of domestic banks with assets of $1 billion or more. To the extent the Trust assumes a temporary defensive position, a significant portion of the Trust's distributions may be subject to Federal, New York State and local taxes. Special Considerations - New York Municipal Securities. Because the Trust concentrates its investments in New York Municipal Securities, the market value and marketability of such Municipal Securities and the interest income and repayment of principal to the Trust from them could be adversely affected by a default or financial crisis relating to any of such issuers. Investors should consider these matters and the financial difficulties experienced in past years by New York State and certain of its agencies and subdivisions (particularly New York City), as well as economic trends in New York, summarized in the Additional Statement under "Special Investment Considerations - New York Municipal Securities." Investment Restrictions The Trust has certain investment restrictions which, together with its investment objective, are fundamental policies, changeable only by the vote of a "majority" (as defined in the Investment Company Act) of the Trust's outstanding voting securities. Under some of those restrictions, the Trust cannot: (1) make loans, except that the Trust may purchase debt securities described in "The Trust and Its Investment Policies" and repurchase agreements, and the Trust may lend its portfolio securities as described in its investment policy stated above; (2) borrow money in excess of 10% of the value of its total assets or make any investment when borrowings exceed 5% of the value of its total assets; it may borrow only as a temporary measure for extraordinary or emergency purposes; no assets of the Trust may be pledged, mortgaged or assigned to secure a debt; (3) invest more than 25% of its total assets in any one industry; however, for the purposes of this restriction Municipal Securities and U.S. Government obligations are not considered to be part of any single industry. The percentage restrictions described in this Prospectus and in the Additional Statement apply only at the time of investment and require no action by the Trust as a result of subsequent changes in value of the investments or the size of the Trust. A supplementary list of investment restrictions is contained in "Investment Restrictions" in the Additional Statement. Management of the Trust The Trust's Board of Trustees has overall responsibility for the management of the Trust under the laws of Massachusetts governing the responsibilities of trustees of business trusts. "Trustees and Officers" in the Additional Statement identifies the Trust's Trustees and officers and provides information about them. Subject to the authority of the Board, the Manager is responsible for the day-to-day management of the Trust's business, supervises the investment operations of the Trust and the composition of its portfolio and furnishes the Trust advice and recommendations with respect to investments, investment policies and the purchase and sale of securities, pursuant to a management agreement with the Trust (the "Agreement"). The Trust's management fee, payable monthly to the Manager under the terms of the Agreement, is computed as a percentage of the Trust's aggregate net assets as of the close of business each day at the following annual rates: 0.50% of the first $250 million of net assets; 0.475% of the next $250 million; 0.45% of the next $250 million; 0.425% of the next $250 million and 0.40% of net assets in excess of $1 billion. The Agreement lists examples of expenses paid by the Trust, the major categories of which relate to interest, taxes, brokerage commissions, certain insurance premiums, fees to certain Trustees, legal and audit expenses, transfer agent and custodian expenses, certain registration expenses and non-recurring expenses, including litigation. For further information about the Agreement, including a description of expense assumption arrangements by the Manager, exculpation provisions and portfolio transactions, see "Investment Management Services" in the Additional Statement. The Manager, a wholly-owned subsidiary of Oppenheimer Management Corporation ("OMC"), has operated as an investment adviser since 1978. The Manager and OMC currently advise U.S. investment companies with assets aggregating over $28 billion as of June 30, 1994, and having more than 1.8 million shareholder accounts. OMC is 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 the 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) but there is no guarantee that the Trust will maintain a stable net asset value of $1.00 per share. Centennial Asset Management Corporation, which also acts as the Trust's distributor (and in that capacity is referred to as the "Distributor"), may in its sole discretion accept or reject any order for purchase of Trust shares. Oppenheimer Funds Distributor, Inc., an affiliate of the Distributor, acts as the Trust's sub-distributor (the "Sub-Distributor"). The minimum initial investment is $500 ($2,500 if by Federal Funds wire), except as otherwise described in this Prospectus. Subsequent purchases must be in amounts of $25 or more, and may be made through authorized dealers or brokers or by forwarding payment to the Distributor at P.O. Box 5143, Denver, Colorado 80217, with the name(s) of all account owners, the account number and the name of the Trust. The minimum initial and subsequent purchase requirements are waived on purchases made by reinvesting dividends from any of the "Eligible Funds" listed in "Exchange Privilege" below or by reinvesting distributions from unit investment trusts for which reinvestment arrangements have been made with the Distributor. Under an Automatic Investment Plan or military allotment plan, initial and subsequent investments must be at least $25. No share certificates will be issued unless specifically requested in writing by an investor or the dealer or broker. The Trust intends to be as fully invested as practicable to maximize its yield. Therefore, dividends will accrue on newly-purchased shares only after the Distributor accepts the purchase order for them at its address in Denver, Colorado, on a day the New York Stock Exchange is open (a "regular business day"), under one of the methods of purchasing shares described below. The purchase will be made at the net asset value next determined after the Distributor accepts the purchase order. The Trust's net asset value per share is determined twice each regular business day, at 12:00 Noon and at 4:00 P.M. (all references to time in this Prospectus are to New York time) by dividing the net assets of the Trust by the total number of its shares outstanding. The Trust's Board of Trustees has established procedures for valuing the Trust's assets, using the amortized cost method as described in "Determination of Net Asset Value Per Share" in the Additional Statement. Purchases Through Automatic Purchase and Redemption Programs. Shares of the Trust are available under Automatic Purchase and Redemption Programs ("Programs") of broker-dealers that have entered into agreements with the Distributor for that purpose. Broker-dealers whose clients participate in such Programs will invest the "free cash balances" of such client's Program account in shares of the Trust if the Trust has been selected as the primary Trust by the client for the Program account. Such purchases will be made by the broker-dealer under the procedures described in "Guaranteed Payment," below. The Program may have minimum investment requirements established by the broker-dealer. The description of the Program provided by the broker-dealer should be consulted for details, and all questions about investing in, exchanging or redeeming shares of the Trust through a Program should be directed to the broker-dealer. Direct Purchases. An investor may directly purchase shares of the Trust through any dealer which has a sales agreement with the Distributor or the Sub-Distributor. There are two ways to make a direct initial investment: either (1) complete a Centennial Funds New Account Application and mail it with payment to the Distributor at P.O. Box 5143, Denver, Colorado 80217-5143 (if no dealer is named in the Application, the Sub-Distributor will act as the dealer), or (2) order the shares through your dealer or broker. Purchases made by Application should have a check enclosed, or payment may be made by one of the alternative means described below. - - Payment by Check. Orders for shares purchased by check in U.S. dollars drawn on a U.S. bank will be effected on the regular business day on which the check (and the purchase application, if the account is new) is accepted by the Distributor. Dividends will begin to accrue on such shares the next regular business day after the purchase order is accepted. For other checks, the shares will not be purchased until the Distributor is able to convert the purchase payment to Federal Funds, and dividends will begin to accrue on such shares on the next regular business day. - Payment by Federal Funds Wire. Shares of the Trust may be purchased by Federal Funds wire. The minimum investment by wire is $2,500. The investor must first call the Distributor's Customer Service Department at 1-800-525-9310 to notify the Distributor of the transmittal of the wire and to order the shares. The investor's bank must wire the Federal Funds to Citibank, N.A., ABA No. 0210-0008-9 for credit to Concentration Account No. 3737-5674, for further credit to Centennial New York Tax Exempt Trust Custodian Account No. 845-766. The wire must state the investor's name. Shares will be purchased on the regular business day on which, prior to 4:00 P.M., the Federal Funds are received by Citibank, N.A. and the Distributor has received and accepted the investor's notification of the wire order. Shares will be purchased at the net asset value next determined after receipt of the Federal Funds and the order. Dividends on newly purchased shares will begin to accrue on the purchase date if the Federal Funds and order for the purchase are received and accepted by 12:00 Noon. Dividends will begin to accrue on the next regular business day if the Federal Funds and purchase order are received and accepted between 12:00 Noon and 4:00 P.M. The investor must also send the Distributor a completed Application when the purchase order is placed to establish a new account. - Guaranteed Payment. Broker-dealers with sales agreements with the Distributor (including broker-dealers who have made special arrangements with the Distributor for purchases for Program accounts) may place purchase orders with the Distributor to purchase shares of the Trust. If an order is received between 12:00 Noon and 4:00 P.M. on a regular business day with the broker-dealer's guarantee that payment for such shares in Federal Funds will be received by the Custodian prior to 4:00 P.M. the next regular business day, the order will be effected at 4:00 P.M. on the day the order is received, and dividends on such shares will begin to accrue on the next regular business day after the Federal Funds are received by the required time. If the broker-dealer guarantees that the Federal Funds payment will be received by the Trust's Custodian by 2:00 P.M. on a regular business day on which an order is placed for shares after 12:00 Noon, the order will be effected at 4:00 P.M. that day and dividends will begin to accrue on such shares on the purchase date. Automatic Investment Plans. Direct investors may purchase shares of the Trust automatically. Automatic Investment Plans may be used to make regular monthly investments ($25 minimum) from the investor's account at a bank or other financial institution. To establish an Automatic Investment Plan from a bank account, a check (minimum $25) for the initial purchase must accompany the application. Shares purchased by Automatic Investment Plan payments are subject to the redemption restrictions for recent purchases described in "How to Redeem Shares." The amount of the Automatic Investment Plan payment may be changed or the automatic investments terminated at any time by writing to the Transfer Agent. A reasonable period (approximately 15 days) is required after receipt of such instructions to implement them. The Trust reserves the right to amend, suspend, or discontinue offering such plans at any time without prior notice. General. Dealers and brokers who process orders for the Trust's shares on behalf of their customers may charge a fee for this service. That fee can be avoided by purchasing shares directly from the Trust. The sale of shares will be suspended during any period when the determination of net asset value is suspended, and may be suspended by the Board of Trustees whenever the Board judges it in the best interest of the Trust to do so. Service Plan. The Trust has adopted a service plan (the "Plan") under Rule 12b-1 of the Investment Company Act pursuant to which the Trust will reimburse the Distributor for all or a portion of its costs incurred in connection with the personal service and maintenance of accounts that hold Trust shares. The Distributor will use all the fees received from the Trust to compensate dealers, brokers, banks, or other institutions ("Recipients") each quarter for providing personal service and maintenance of accounts that hold Trust shares. The services to be provided by Recipients under the Plan include, but shall not be limited to, the following: answering routine inquiries from the Recipient's customers concerning the Trust, providing such customers with information on their investment in Trust shares, assisting in the establishment and maintenance of accounts or sub-accounts in the Trust, making the Trust's investment plans and dividend payment options available, and providing such other information and customer liaison services and the maintenance of accounts as the Distributor or the Trust may reasonably request. Plan payments by the Trust to the Distributor will be made quarterly in the amount of the lesser of: (i) 0.05% (0.20% annually) of the net asset value of the Trust, computed as of the close of each business day or (ii) the Distributor's actual distribution expenses for that quarter of the type approved by the Board. Any unreimbursed expenses incurred for any quarter by the Distributor may not be recovered in later periods. The Plan has the effect of increasing annual expenses of the Trust by up to 0.20% of average annual net assets from what its expenses would otherwise be. In addition, the Manager may, under the Plan, from time to time from its own resources (which may include the profits derived from the advisory fee it receives from the Trust), make payments to Recipients for distribution, administrative and accounting services performed by Recipients. For further details, see "Service Plan" in the Additional Statement. How To Redeem Shares Program Participants. Program participants may redeem shares in the Program by writing checks as described below, or by contacting their dealer or broker. Program participants may also arrange for "Expedited Redemptions," as described below, only through their dealer or broker. Shares of the Trust Owned Directly. Shares of the Trust owned by a shareholder directly (not through a Program) (a "direct shareholder"), may be redeemed in the following ways: - Regular Redemption Procedure. A direct shareholder who wishes to redeem some or all shares in an account (whether or not represented by certificates) under the Trust's regular redemption procedures, must send the following to the Transfer Agent for the Trust, Shareholder Services, Inc., P.O. Box 5143, Denver, Colorado 80217; (send courier or express mail deliveries to 10200 E. Girard Avenue, Building D, Denver, Colorado 80231): (1) a written request for redemption signed by all registered owners exactly as the shares are registered, including fiduciary titles, if any, and specifying the account number and the dollar amount or number of shares to be redeemed; (2) a guarantee of the signatures of all registered owners on the redemption request or on the endorsement on the share certificate or accompanying stock power, by a U.S. bank, trust company, credit union or savings association, or a foreign bank having a U.S. correspondent bank, or by a U.S. registered dealer or broker in securities, municipal securities or government securities, or by a U.S. national securities exchange, registered securities association or clearing agency; (3) any share certificates issued for any of the shares to be redeemed; and (4) any additional documents which may be required by the Transfer Agent for redemption by corporations, partnerships or other organizations, executors, administrators, trustees, custodians, or guardians, or if the redemption is requested by anyone other than the shareholder(s) of record. Transfers of shares are subject to similar requirements. A signature guarantee is not required for redemptions of $50,000 or less, requested by and payable to all shareholders of record, to be sent to the address of record for that account. To avoid delay in redemption or transfer, shareholders having questions about these requirements should contact the Transfer Agent in writing or by calling 1-800-525-9310 before submitting a request. From time to time the Transfer Agent in its discretion may waive any or certain of the foregoing requirements in particular cases. Redemption or transfer requests will not be honored until the Transfer Agent receives all required documents in proper form. - Expedited Redemption Procedure. In addition to the regular redemption procedure set forth above, direct shareholders whose shares are not represented by certificates may arrange to have redemption proceeds of $2,500 or more wired in Federal Funds to a designated commercial bank if the bank is a member of the Federal Reserve wire system. To place a wire redemption request, call the Transfer Agent at 1-800-852-8457. The account number of the designated financial institution, 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). No dividends are paid on the proceeds of redeemed shares awaiting transmittal by wire. Shares redeemed prior to 12:00 Noon do not earn dividends on the redemption date. The wire for the redemption proceeds of shares redeemed between 12:00 Noon and 4:00 P.M., normally will be transmitted by the Transfer Agent to the shareholder's designated bank account on the next bank business day after the redemption. Shares redeemed between 12:00 Noon and 4:00 P.M. earn dividends on the redemption date. See "Purchase, Redemption and Pricing of Shares" in the Additional Statement for further details. - - Check Writing. Upon request, the Transfer Agent will provide any direct shareholder or Program participant whose shares are not represented by certificates with forms of drafts ("checks") payable through a bank selected by the Trust (the "Bank"). Program participants must arrange for check writing through their brokers or dealers. The Transfer Agent will arrange for checks written by direct shareholders to be honored by the Bank after obtaining a specimen signature card from the shareholder(s). Shareholders of joint accounts may elect to have checks honored with a single signature. Checks may be made payable to the order of anyone in any amount not less than $250 and will be subject to the Bank's rules and regulations governing checks. For Program participants, checks will be drawn against the primary account designated by the Program participant. If a check is presented for an amount greater than the account value, it will not be honored. Shares purchased by check or Automatic Investment Plan payments within the prior 15 days may not be redeemed by checkwriting. A check presented to the Bank for payment that would require redemption of some or all of the shares so purchased is subject to non-payment. Checks may not be presented for payment at the offices of the Bank or the Trust's Custodian. This limitation does not affect the use of checks for the payment of bills or to obtain cash at other banks. The Trust reserves the right to amend, suspend or discontinue check writing privileges at any time without prior notice. - Telephone Redemptions. Direct shareholders of the 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. Automatic Withdrawal Plan. A direct shareholder can authorize the Transfer Agent to redeem shares (minimum $50) automatically on a monthly, quarterly, semi-annual or annual basis under an Automatic Withdrawal Plan. Shares will be redeemed as of 4:00 P.M. three business days prior to the date requested by the shareholder for receipt of the payment. The Trust cannot guarantee receipt of payment on the date requested and reserves the right to amend, suspend or cease offering such plans at any time without prior notice. For further details, refer to "Automatic Withdrawal Plan Provisions" in the Additional Statement. General Information on Redemptions. The redemption price will be the net asset value per share of the Trust next determined after the receipt by the Transfer Agent of a request in proper form. Under certain unusual circumstances, shares of the Trust may be redeemed "in kind" (i.e., by payment in portfolio securities). For details, see "Purchase, Redemption and Pricing of Shares - Redemption of Shares" in the Additional Statement. Under the Internal Revenue Code, the Trust may be required to impose "backup" withholding of Federal income tax at the rate of 31% from any taxable dividends and distributions the Trust may make, if the shareholder has not furnished the Trust a certified tax identification number or has not complied with provisions of the Internal Revenue Code and regulations thereunder. Payment for redeemed shares is made ordinarily in cash and forwarded within seven days of the Transfer Agent's receipt of redemption instructions in proper form, except under unusual circumstances as determined by the SEC. The Transfer Agent may delay forwarding a redemption check for recently-purchased shares only until the purchase check has cleared which may take up to 15 days or more. Such delay may be avoided if the shareholder arranges telephone or written assurance satisfactory to the Transfer Agent from the bank on which the payment was drawn or by purchasing shares by Federal Funds wire, as described above. The Trust makes no charge for redemption. Dealers or brokers may charge a fee for handling redemption transactions, but such fee can be avoided by requesting the redemption directly through the Transfer Agent. Under certain circumstances, the proceeds of redemptions of shares of the Trust acquired by exchange of Class A shares of "Eligible Funds" (described below) purchased subject to a contingent deferred sales charge ("CDSC") may be subject to the CDSC (see "Exchange Privilege" below). Exchanges of Shares Exchange Privilege Shares of the Trust held under Programs may be exchanged for shares of Centennial Money Market Trust, Centennial Government Trust, Centennial Tax Exempt Trust and Centennial California Tax Exempt Trust (collectively, the "Centennial Trusts") only by instructions of the broker. Shares of the Trust may, under certain circumstances, be exchanged by direct shareholders for Class A shares of the following funds, all collectively referred to as "Eligible Funds": (i) Oppenheimer Target Fund, Oppenheimer Champion High Yield Fund, Oppenheimer Asset Allocation Fund, Oppenheimer Discovery Fund, Oppenheimer U.S. Government Trust, Oppenheimer Global Growth & Income Fund, Oppenheimer Global Emerging Growth Fund, Oppenheimer Limited-Term Government Fund, Oppenheimer Intermediate Tax-Exempt Bond Fund, Oppenheimer Fund, Oppenheimer Global Fund, Oppenheimer Time Fund, Oppenheimer Growth Fund, Oppenheimer Equity Income Fund, Oppenheimer Gold & Special Minerals Fund, Oppenheimer Insured Tax-Exempt Bond Fund, Oppenheimer Main Street Income & Growth Fund, Oppenheimer Main Street California Tax-Exempt Fund, Oppenheimer Florida Tax-Exempt Fund, Oppenheimer New Jersey Tax-Exempt Fund, Oppenheimer Investment Grade Bond Fund, Oppenheimer Value Stock Fund, Oppenheimer California Tax-Exempt Fund, Oppenheimer Pennsylvania Tax-Exempt Fund, Oppenheimer High Yield Fund, Oppenheimer Total Return Fund, Inc., Oppenheimer Mortgage Income Fund, Oppenheimer Tax-Free Bond Fund, Oppenheimer New York Tax-Exempt Fund, Oppenheimer Strategic Income Fund, Oppenheimer Strategic Income & Growth Fund, Oppenheimer Strategic Short-Term Income Fund and Oppenheimer Strategic Investment Grade Bond Fund; and (ii) the following "Money Market Funds": Oppenheimer Money Market Fund, Inc., Oppenheimer Cash Reserves, any Centennial Trust, and Daily Cash Accumulation Fund, Inc. There is an initial sales charge on the purchase of Class A shares of each Eligible Fund except the Money Market Funds (under certain circumstances described below, redemption proceeds of Money Market Fund shares may be subject to a CDSC). Shares of the Trust and of the other Eligible Funds may be exchanged at net asset value if all of the following conditions are met: (1) shares of the fund selected for exchange are available for sale in the shareholder's state of residence; (2) the respective prospectuses of the funds whose shares are to be exchanged and acquired offer the Exchange Privilege to the investor; (3) newly-purchased shares (by initial or subsequent investment) are held in an account for at least 7 days and all other shares at least one day 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 Trust) purchased without a sales charge may be exchanged for shares of Eligible Funds offered with a sales charge upon payment of the sales charge (or, if applicable, may be used to purchase shares of Eligible Funds subject to a CDSC); and shares of the Trust acquired by reinvestment of dividends and distributions from any Eligible Fund (except Oppenheimer Cash Reserves) or from any unit investment trust for which reinvestment arrangements have been made with the Distributor may be exchanged at net asset value for shares of any Eligible Fund. The redemption proceeds of shares of the Trust, acquired by exchange of shares of an Eligible Fund purchased subject to a CDSC, that are redeemed within 18 months of the end of the calendar month of the initial purchase of the exchanged shares will be subject to the CDSC as described in the prospectus of that other Eligible Fund; in determining whether the CDSC is payable, shares of the Trust not subject to the CDSC are redeemed first, including shares purchased by reinvestment of dividends and capital gains distributions from any Eligible Fund or shares of the Trust acquired by exchange of shares of Eligible Funds on which a front-end sales charge was paid or credited, and then other shares are redeemed in the order of purchase. An exchange may be made by submitting an Exchange Authorization Form to the Transfer Agent, signed by all registered owners. In addition, direct shareholders of the Trust may exchange shares of the Trust for shares of any Centennial Trust by telephone exchange instructions to the Transfer Agent by a shareholder or the dealer or representative of record for an account. The Trust may modify, suspend or discontinue these exchange privileges at any time, and will do so on 60 days' notice if such notice is required by regulations adopted under the Investment Company Act. The Trust reserves the right to reject requests submitted in bulk on behalf of 10 or more accounts. Exchange requests must be received by the Transfer Agent by 4:00 P.M. on a regular business day to be effected that day. The number of shares exchanged may be less than the number requested if the number requested would include shares subject to a restriction cited above or shares covered by a certificate that is not tendered with such request. Only the shares available for exchange without restriction will be exchanged. Direct shareholders may place a telephone exchange request by calling the Transfer Agent at 1-800-852-8457. Telephone exchange calls may be recorded by the Transfer Agent. Telephone exchanges are subject to the rules described above. By exchanging shares by telephone, the shareholder is acknowledging receipt of a prospectus of the fund to which the exchange is made and that for full or partial exchanges, any special account features such as Automatic Investment Plans and Automatic Withdrawal Plans will be switched to the new account unless the Transfer Agent is otherwise instructed. Telephone exchange privileges automatically apply to each direct shareholder of record and the dealer representative of record unless and until the Transfer Agent receives written instructions from the shareholder(s) of record cancelling such privileges. If an account has multiple owners, the Transfer Agent may rely on the instructions of any one owner. The Transfer Agent, the Trust and the Distributor have 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 and the Distributor do not use such procedures, they may be liable for losses due to unauthorized transactions, but otherwise they 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. Shares to be exchanged are redeemed on the day the Transfer Agent receives an exchange request in proper form (the "Redemption Date") as of 4:00 P.M. Normally, shares of the fund to be acquired are purchased on the Redemption Date, but such purchases may be delayed by either fund for up to five business days if it determines that it would be disadvantaged by an immediate transfer of the redemption proceeds. The Trust in its discretion reserves the right to refuse any exchange request that will disadvantage it. The Eligible Funds have different investment objectives and policies. Each of those funds 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 help defray administrative expenses. Dealers and brokers who process exchange orders on behalf of customers may charge for their services. Those charges may be avoided by requesting the Trust directly to exchange shares. For Federal tax purposes, an exchange is treated as a redemption and purchase of shares. Dividends and Taxes This discussion relates solely to Federal tax laws and New York income tax laws and is not exhaustive; a qualified tax adviser should be consulted. A portion of the Trust's dividends and distributions may be subject to Federal, state and local taxation. The Additional Statement contains further discussion of tax matters affecting the Trust and its distributions, and information about the possible applicability of the Alternative Minimum Tax to the Trust's dividends and distributions (see "Investment Objective and Policies - Private Activity Municipal Securities"). Dividends. The Trust intends to declare all of its net income, as defined below, as dividends on each regular business day and to pay dividends monthly. Dividends will be payable to shareholders as described in "How to Buy Shares" above. All dividends for the accounts of Program participants are automatically reinvested in additional shares of the Trust. Dividends accumulated since the prior payment will be reinvested in full and fractional shares of the Trust (or paid in cash) at net asset value on the third Thursday of each calendar month. Such investors may receive cash payments by asking the broker to redeem shares. Dividends payable to direct shareholders will also be automatically reinvested in shares of the Trust at net asset value, unless the shareholder asks the Transfer Agent in writing to pay dividends in cash, or to reinvest them in another Eligible Fund, as described in "Dividend Reinvestment in Another Fund" in the Additional Statement. That notice must be received prior to a dividend record date to be effective as to that dividend. If a shareholder redeems all shares at any time during a month, the redemption proceeds include all dividends accrued up to the redemption date for shares redeemed prior to 12:00 Noon, and include all dividends accrued through the redemption date for shares redeemed between 12:00 Noon and 4:00 P.M. Dividends and the proceeds of redemptions of Trust shares represented by checks returned to the Transfer Agent by the Postal Service as undeliverable will be invested in shares of the Trust, as promptly as possible after the return of such checks to the Transfer Agent, to enable the investor to earn a return on otherwise idle funds. Under the terms of a Program, a broker-dealer may pay out the value of some or all of a Program participant's Trust shares prior to redemption of such shares by the Trust. In such cases, the shareholder will be entitled to dividends on such shares only up to and including the date of such payment. Dividends on such shares accruing between the date of payment and the date such shares are redeemed by the Trust will be paid to the broker-dealer. It is anticipated that such payments will occur only to satisfy debit balances arising in a shareholder's account under a Program. The Trust's net investment income for dividend purposes consists of all interest accrued on portfolio assets, less all expenses of the Trust for the applicable period. Distributions from net realized gains on securities, if any, will be paid at least once each year, and may be made more frequently in compliance with the Internal Revenue Code and the Investment Company Act. Any net realized capital loss is carried forward to offset against capital gains in later years. The Fund will not make any distributions from net realized securities gains unless capital loss carry forwards, if any, have been used or have expired. Long-term capital gains, if any, will be identified separately when tax information for the Trust is distributed to shareholders. Receipt of tax-exempt income must be reported on the taxpayer's Federal income tax return. The Additional Statement describes how dividends and distributions received by direct shareholders of the Trust may be reinvested in shares of any Eligible Fund at net asset value. To effect its policy of maintaining a net asset value of $1.00 per share, the Trust, under certain circumstances, may withhold dividends or make distributions from capital or capital gains. Tax Status of the Trust's Dividends. The Trust intends to qualify under the Internal Revenue Code during each fiscal year to pay "exempt- interest dividends" to its shareholders, and so qualified during its last fiscal year. Exempt-interest dividends which are derived from net investment income earned by the Trust on Municipal Securities will be excludable from gross income of shareholders for Federal income tax purposes. This allocation will be made by uniformly applying a designated percentage to all income dividends made during the Trust's calendar year. Such designation will normally be made following the end of such fiscal year as to income dividends paid in the prior year. The percentage of income designated as tax-exempt may differ substantially from the percentage of the Trust's income that was tax-exempt for a given period. A shareholder treats a dividend as a receipt of ordinary income (whether paid in cash or reinvested in additional shares) if derived from net interest income earned by the Trust from one or more of: (i) certain taxable temporary investments (such as certificates of deposit, commercial paper and obligations of the U.S. government, its agencies or instrumentalities and repurchase agreements), (ii) income from securities loans or repurchase agreements, (iii) an excess of net short-term capital gains over net long-term capital losses. Losses realized by shareholders on the redemption or other disposition of Trust shares within six months of purchase (which period may be shortened by regulation and may be extended in certain circumstances) will be disallowed for Federal income tax purposes to the extent of exempt-interest dividends received on such shares. For corporate shareholders, all of the Trust's dividends will be a component of adjusted current earnings for determining Federal corporate alternative minimum tax. 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. Interest on loans used to purchase shares of the Trust may not be deducted for Federal tax purposes. Under rules used by the Internal Revenue Service to determine when borrowed funds are deemed used for the purpose of purchasing or carrying particular assets, the purchase of Trust shares may be considered to have been made with borrowed funds even though the borrowed funds are not directly traceable to the purchase of shares. The Trust also intends to qualify during each fiscal year to pay "exempt- interest dividends" that will be exempt from New York State and New York City personal income taxes to the extent the Trust's income is derived from New York state municipal securities. Distributions, including "exempt interest dividends", may be subject to New York state franchise taxes if received by a corporation. Dividends paid by the Trust derived from net short-term capital gains are taxable to shareholders as ordinary income whether received in cash or reinvested. Any distribution of long-term capital gain, when designated by the Trust as a capital gain dividend, is taxable to shareholders as long-term capital gain, whether received in cash or reinvested and regardless of how long Trust shares have been held. The Trust will report annually to its shareholders the percentage of interest income it received during the preceding year on Municipal Securities. It will also report the net amount of its income that is subject to alternative minimum tax. Receipt of tax-exempt income must be reported on a taxpayer's Federal income tax return. Tax Status of the Trust. If the 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. The Trust so qualified during its last fiscal year and intends to qualify in the current and future fiscal years, while reserving the right not to so qualify. However, the Internal Revenue Code contains a number of complex tests relating to qualification which the Trust might not meet in any particular year. If the Trust does not qualify, it would be treated for Federal tax purposes as an ordinary corporation, would receive no tax deduction for payments made to shareholders and would be unable to pay "exempt-interest dividends" as discussed above. Additional Information Description of the Trust and its Shares. Each share of the Trust represents an interest in the Trust equal to the interest of each other share and each shareholder is entitled to one vote per share (and a fractional vote for a fractional share) on matters submitted to their vote, and to participate pro-rata in dividends and distributions and in the net distributable assets of the Trust on liquidation. Shares do not have preemptive, subscription or cumulative voting rights. The Trust's Board of Trustees is empowered to issue additional "series" of shares of the Trust, which may have separate assets and liabilities. The Trust does not anticipate holding annual meetings. Under certain circumstances, shareholders have the right to remove a Trustee. See "Additional Information" in the Additional Statement for details. The Custodian and the Transfer Agent. The Custodian of the assets of the Trust is Citibank, N.A. The Manager and its affiliates presently have banking relationships with the Custodian. See "Additional Information" in the Additional Statement for further information. The Trust's cash balances in excess of $100,000 held by the Custodian are not protected by Federal deposit insurance. Such uninsured balances may at times be substantial. The rating restrictions under Rule 2a-7 (see "Ratings of Securities," herein) do not apply to banks in which the Trust's cash is kept. Shareholder Services, Inc., a subsidiary of OMC, acts as Transfer Agent and shareholder servicing agent on an at-cost basis for the Trust and the other funds advised by the Manager. The fees to the Transfer Agent do not include payments for any services of the type paid, or to be paid, by the Trust to the distributor and to Recipients under any Service Plan. Shareholders should direct any inquiries regarding the Trust to the Transfer Agent at the address or toll-free phone number on the back cover. Program participants should direct any inquiries regarding the Trust to their broker. No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this Prospectus, and if given or made such information and representations must not be relied upon as having been authorized by the Trust, the Manager, the Distributor or any affiliate thereof. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby in any state to any person to whom it is unlawful to make such offer in such state. Investment Adviser and Distributor Centennial Asset Management Corporation 3410 South Galena Street Denver, Colorado 80231 Transfer and Shareholder Servicing Agent Shareholder Services, Inc. P.O. Box 5143 Denver, Colorado 80217-5143 1-800-525-9310 Custodian of Portfolio Securities Citibank, N.A. 399 Park Avenue New York, New York 10043 Independent Auditors Deloitte & Touche LLP 1560 Broadway Denver, Colorado 80202 Legal Counsel Myer, Swanson & Adams, P.C. 1600 Broadway Denver, Colorado 80202 STATEMENT OF ADDITIONAL INFORMATION CENTENNIAL NEW YORK TAX EXEMPT TRUST 3410 South Galena Street, Denver, Colorado 80231 1-800-525-9310 This Statement of Additional Information (the "Additional Statement") is not a Prospectus. This Additional Statement should be read in conjunction with the Prospectus (the "Prospectus") dated November 1, 1994, of Centennial New York Tax Exempt Trust (the "Trust"), which may be obtained upon written request to Shareholder Services, Inc. (the "Transfer Agent"), P.O. Box 5143, Denver, Colorado 80217-5143, or by calling the toll-free number shown above. TABLE OF CONTENTS Page Investment Objective and Policies 2 Special Investment Considerations - New York Municipal Securities 8 Investment Restrictions 15 Trustees and Officers 16 Investment Management Services 19 Service Plan 21 Purchase, Redemption and Pricing of Shares 22 Yield Information 24 Additional Information 26 Automatic Withdrawal Plan Provisions 27 Independent Auditors' Report 30 Financial Statements 31 Appendix A: Description of Securities Ratings A-1 Appendix B: Tax Equivalent Yield Tables B-1 This Additional Statement is effective November 1, 1994. INVESTMENT OBJECTIVE AND POLICIES The investment objective and policies of the Trust are described in the Prospectus. Set forth below is supplemental information about those policies. Certain capitalized terms used in this Additional Statement are defined in the Prospectus. The Trust will not make investments with the objective of seeking capital growth. However, the value of the securities held by the Trust may be affected by changes in general interest rates. Because the current value of debt securities varies inversely with changes in prevailing interest rates, if interest rates increase after a security is purchased, that security would normally decline in value. Conversely, should interest rates decrease after a security is purchased, its value would rise. However, those fluctuations in value will not generally result in realized gains or losses to the Trust since the Trust does not usually intend to dispose of securities prior to their maturity. A debt security held to maturity is redeemable by its issuer at full principal value plus accrued interest. To a limited degree, the Trust may engage in short-term trading to attempt to take advantage of short-term market variations, or may dispose of a portfolio security prior to its maturity if, on the basis of a revised credit evaluation of the issuer or other considerations, the Trust believes such disposition advisable or it needs to generate cash to satisfy redemptions. In such cases, the Trust may realize a capital gain or loss. There are, of course, variations in the quality of Municipal Securities, both within a particular classification and between classifications, depending on numerous factors. The yields of Municipal Securities depend on, among other things, general conditions of the Municipal Securities market, size of a particular offering, the maturity of the obligation and rating of the issue. The market value of Municipal Securities will vary as a result of changing evaluations of the ability of their issuers to meet interest and principal payments, as well as changes in the interest rates payable on new issues of Municipal Securities. Municipal Securities. Municipal Bonds. The principal classifications of Municipal Securities are "general obligations" (secured by the issuer's pledge of its full faith, credit and taxing power for the payment of principal and interest) and "revenue obligations" (payable only from the revenues derived from a particular facility or class of facilities, or specific excise tax or other revenue source); and "Industrial Development Bonds". General Obligation Bonds. Issuers of general obligation bonds include states, counties, cities, towns, and regional districts. The proceeds of these obligations are used to fund a wide range of public projects, including construction or improvement of schools, highways and roads, and water and sewer systems. The basic security behind general obligation bonds is the issuer's pledge of its full faith and credit and taxing power for the payment of principal and interest. The taxes that can be levied for the payment of debt service may be limited or unlimited as to the rate or amount of special assessments. Revenue Bonds. The principal security for a revenue bond is generally the net revenues derived from a particular facility, group of facilities, or, in some cases, the proceeds of a special excise or other specific revenue source. Revenue bonds are issued to finance a wide variety of capital projects including: electric, gas, water and sewer systems; highways, bridges, and tunnels; port and airport facilities; colleges and universities; and hospitals. Although the principal security behind these bonds may vary, many provide additional security in the form of a debt service reserve fund whose money may be used to make principal and interest payments on the issuer's obligations. Housing finance authorities have a wide range of security, including partially or fully insured mortgages, rent subsidized and/or collateralized mortgages, and/or the net revenues from housing or other public projects. Some authorities provide further security in the form of a state's ability (without obligation) to make up deficiencies in the debt service reserve fund. Industrial Development Bonds. Industrial development bonds, which are considered municipal bonds if the interest paid is exempt from Federal income tax, are issued by or on behalf of public authorities to raise money to finance various privately operated facilities for business and manufacturing, housing, sports, and pollution control. These bonds are also used to finance public facilities such as airports, mass transit systems, ports, and parking. The payment of the principal and interest on such bonds is dependent solely on the ability of the facility's user to meet its financial obligations and the pledge, if any, of real and personal property so financed as security for such payment. Municipal Notes. Municipal Securities having a maturity when issued of less than one year are generally known as Municipal Notes. Municipal Notes generally are used to provide for short-term working capital needs and include: Tax Anticipation Notes. Tax anticipation notes are issued to finance working capital needs of municipalities. Generally, they are issued in anticipation of seasonal tax revenue, such as income, sales, use or business taxes, and are payable from these specific future taxes. Revenue Anticipation Notes. Revenue anticipation notes are issued in expectation of receipt of other types of revenue, such as Federal revenues available under Federal revenue sharing programs. Bond Anticipation Notes. Bond anticipation notes are issued to provide interim financing until long-term financing can be arranged. In most cases, the long-term bonds then provide the money for the repayment of the notes. Construction Loan Notes. Construction loan notes are sold to provide construction financing. After successful completion and acceptance, many projects receive permanent financing through the Federal Housing Administration. Tax-Exempt Commercial Paper. Tax-exempt commercial paper is a short-term obligation issued by state and local governments or their agencies to finance seasonal working capital needs or as short-term financing in anticipation of longer-term financing. Floating Rate/Variable Rate Obligations. Floating rate and variable rate demand notes are tax-exempt obligations which may have a stated maturity in excess of one year, but may include features that permit the holder to recover the principal amount of the underlying security on not more than thirty days' notice at any time or at specified intervals not exceeding one year. The issuer of such notes normally has a corresponding right, after a given period, to prepay in its discretion the outstanding principal amount of the note plus accrued interest upon a specified number of days notice to the holder. The interest rate on a floating rate demand note is based on a stated prevailing market rate, such as the PSA Municipal Swap Index, or J.J. Kenney Index, or some other standard, and is adjusted automatically each time such rate is adjusted. The interest rate on a variable rate demand note is also based on a stated prevailing market rate but is adjusted automatically at specified intervals of no 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. Puts and Stand-by Commitments. When the Trust buys Municipal Securities, it may obtain a stand-by commitment from the seller to repurchase the securities that entitles the Trust to achieve same-day settlement from the repurchaser and to receive an exercise price equal to the amortized cost of the underlying security plus accrued interest, if any, at the time of exercise. A put purchased in conjunction with a Municipal Security enables the Trust to sell the underlying security within a specified period of time at a fixed exercise price. The Trust may pay for a stand-by commitment or put either separately in cash or by paying a higher price for the securities acquired subject to the stand-by commitment or put. The Trust will enter into these transactions only with banks and dealers which, in the Manager's opinion, present minimal credit risks. The Trust's purchases of puts are subject to the provisions of Rule 2a-7 under the Investment Company Act because the Trust uses the amortized cost method to value its portfolio securities. That Rule, which is subject to change, states (among other things) that the Trust may not, with respect to 75% of the amortized cost of its assets, have invested more than 5% of the total amortized cost value of its assets in securities issued by or subject to puts from the same institution. An unconditional put or guarantee with respect to a security will not be deemed to be issued by the institution providing the guarantee or put provided that the value of all securities held by the Trust and issued or guaranteed by the issuer providing the guarantee or put shall not exceed 10% of the Trust's total assets. The Trust's ability to exercise a put or stand-by commitment will depend on the ability of the bank or dealer to pay for the securities if the put or stand-by commitment is exercised. If the bank or dealer should default on its obligation, the Trust might not be able to recover all or a portion of any loss sustained from having to sell the security elsewhere. Puts and stand-by commitments are not transferable by the Trust, and therefore terminate if the Trust sells the underlying security to a third party. The Trust intends to enter into these arrangements to facilitate portfolio liquidity, although such arrangements may enable the Trust to sell a security at a pre-arranged price which may be higher than the prevailing market price at the time the put or stand-by commitment is exercised. However, the Trust might refrain from exercising a put or stand-by commitment if the exercise price is significantly higher than the prevailing market price, to avoid imposing a loss on the seller which could jeopardize the Trust's business relationship with the seller. Any consideration paid by the Trust for the put or stand-by commitment (which increases the cost of the security and reduces the yield otherwise available from the security) will be reflected on the Trust's books as unrealized depreciation while the put or stand-by commitment is held, and a realized gain or loss when the put or commitment is exercised or expires. Interest income received by the Trust from Municipal Securities subject to puts or stand-by commitments may not qualify as tax-exempt in its hands if the terms of the put or stand-by commitment cause the Trust not to be treated as the tax owner of the underlying Municipal Securities. When-Issued and Delayed Delivery Transactions. As stated in the Prospectus, the Trust may invest in Municipal Securities on a "when- issued" or "delayed delivery" basis. Payment for and delivery of the securities generally settles within thirty days of the date the offer is accepted. The purchase price and yield are fixed at the time the buyer enters into the commitment. During the period between the time of commitment and settlement, no payment is made by the Trust to the issuer and no interest accrues to the Trust from the investment. However, the Trust intends to be as fully invested as possible and will not invest in when-issued securities if its income or net asset value will be materially adversely affected. At the time the Trust makes the commitment to purchase a Municipal Security on a when-issued basis, it will record the transaction on its books and reflect the value of the security in determining its net asset value. It will also segregate cash or liquid high-grade Municipal Securities equal in value to the commitment for the when-issued securities. While when-issued securities may be sold prior to settlement date, the Trust intends to acquire the securities upon settlement unless a prior sale appears desirable for investment reasons. There is a risk that the yield available in the market when delivery occurs may be higher than the yield on the security acquired. Municipal Lease Obligations. Municipal leases may take the form of a lease or an installment purchase contract issued by a state or local government authority to obtain funds to acquire a wide variety of equipment and facilities. Although lease obligations do not constitute general obligations of the municipality for which the municipality's taxing power is pledged, a lease obligation is ordinarily backed by the municipality's covenant to budget for, appropriate and make the payments due under the lease obligation. However, certain lease obligations contain "non-appropriation" clauses which provide that the municipality has no obligation to make lease or installment purchase payments in future years unless money is appropriated for such purpose on a yearly basis. In addition to the risk of "non-appropriation," municipal lease securities do not yet have a highly developed market to provide the degree of liquidity of conventional municipal bonds. Municipal leases, like other municipal debt obligations, are subject to the risk of non-payment. The ability of issuers of municipal leases to make timely lease payments may be adversely affected in general economic downturns and as relative governmental cost burdens are reallocated among federal, state and local governmental units. Such non-payment would result in a reduction of income to the Fund, and could result in a reduction in the value of the municipal lease experiencing non-payment and a potential decrease in the net asset value of the Fund. Private Activity Municipal Securities. The Tax Reform Act of 1986 (the "Tax Reform Act") reorganized, as well as amended, the rules governing tax exemption for interest on Municipal Securities. The Tax Reform Act generally did not change the tax treatment of bonds issued in order to finance governmental operations. Thus, interest on obligations issued by or on behalf of a state or local government, the proceeds of which are used to finance the operations of such governments (e.g., general obligation bonds) continues to be tax-exempt. However, the Tax Reform Act further limited the use of tax-exempt bonds for non- governmental (private) purposes. More stringent restrictions were placed on the use of proceeds of such bonds. Interest on certain private activity bonds (other than those specified as "qualified" tax-exempt private activity bonds, e.g., exempt facility bonds including certain industrial development bonds, qualified mortgage bonds, qualified Section 501(c)(3) bonds, qualified student loan bonds, etc.) is taxable under the revised rules. Interest on certain private activity bonds issued after August 7, 1986, which continues to be tax-exempt will be treated as a tax preference item subject to the alternative minimum tax (discussed below) to which certain taxpayers are subject. Further, a private activity bond which would otherwise be a qualified tax-exempt private activity bond will not, under Internal Revenue Code Section 147(a), be a qualified bond for any period during which it is held by a person who is a "substantial user" of the facilities or by a "related person" of such a substantial user. This "substantial user" provision is applicable primarily to exempt facility bonds, including industrial development bonds. The Trust may not be an appropriate investment for entities which are "substantial users" (or persons related thereto) of such exempt facilities, and such persons should consult their own tax advisers before purchasing shares. A "substantial user" of such facilities is defined generally as a "non- exempt person who regularly uses part of a facility" financed from the proceeds of exempt facility bonds. Generally, an individual will not be a "related person" under the Internal Revenue Code unless such investor or the investor's immediate family (spouse, brothers, sisters and immediate descendants) own directly or indirectly in the aggregate more than 50% in value of the equity of a corporation or partnership which is a "substantial user" of a facility financed from the proceeds of exempt facility bonds. In addition, limitations on the dollar amount of private activity bonds which each state may issue were revised downward by the Tax Reform Act, which will reduce the supply of such bonds. The value of the Trust's portfolio could be affected if there is a reduction in the availability of such bonds. That value may also be affected by a 1988 U.S. Supreme Court decision upholding the constitutionality of the imposition of a Federal tax on the interest earned on Municipal Securities issued in bearer form. A Municipal Security is treated as a taxable private activity bond under a test for (a) a trade or business use and security interest, or (b) a private loan restriction. Under the trade or business use and security interest test, an obligation is a private activity bond if (i) more than 10% of bond proceeds are used for private business purposes and (ii) 10% or more of the payment of principal or interest on the issue is directly or indirectly derived from such private use or is secured by the privately used property or the payments related to the use of the property. For certain types of users, a 5% threshold is substituted for this 10% threshold. (The term "private business use" means any direct or indirect use in a trade or business carried on by an individual or entity other than a state or municipal governmental unit.) Under the private loan restriction, the amount of bond proceeds which may be used to make private loans is limited to the lesser of 5% or $5.0 million of the proceeds. Thus, certain issues of Municipal Securities could lose their tax-exempt status retroactively if the issuer fails to meet certain requirements as to the expenditure of the proceeds of that issue or use of the bond- financed facility. The Trust makes no independent investigation of the users of such bonds or their use of proceeds. If the Trust holds a bond that loses its tax-exempt status retroactively, an adjustment to the tax- exempt income previously paid to shareholders may result. The Federal alternative minimum tax is designed to ensure that all taxpayers pay some tax, even if they have no other income tax obligation. This is accomplished in part by including in taxable income certain tax preference items in arriving at alternative minimum taxable income. The Tax Reform Act made tax-exempt interest from certain private activity bonds a tax preference item for purposes of the alternative minimum tax on individuals and corporations. Any exempt-interest dividend paid by a regulated investment company will be treated as interest on a specific private activity bond to the extent of its proportionate share of the interest on such bonds received by the regulated investment company. The U.S. Treasury is authorized to issue regulations implementing this provision. In addition, corporate taxpayers subject to the alternative minimum tax may, under some circumstances, have to include exempt-interest dividends in calculating their alternative minimum taxable income in situations where the "adjusted current earnings" of the corporation exceeds its alternative minimum taxable income. The Trust may hold Municipal Securities the interest on which (and thus a proportionate share of the exempt-interest dividends paid by the Trust) will be subject to the Federal alternative minimum tax. For calendar year 1993, approximately 10.0% of the Trust dividends paid to shareholders were a tax preference item for shareholders subject to the Federal alternative minimum tax. The Trust anticipates that under normal circumstances it will not purchase any such securities in an amount greater than 20% of the Trust's total assets. Ratings of Securities. The prospectus describes "Eligible Securities" in which the Trust may invest and indicates that if a security's rating is downgraded, the Manager and/or the Board may have to reassess the security's credit risks. If a security has ceased to be a First Tier Security, the Manager will promptly reassess whether the security continues to present "minimal credit risks." If the Manager becomes aware that any Rating Organization has downgraded its rating of a Second Tier Security or rated an unrated security below its second highest rating category, the Trust's Board of Trustees shall promptly reassess whether the security presents minimal credit risks and whether it is in the best interests of the Trust to dispose of it. If a security is in default, or ceases to be an Eligible Security, or is determined no longer to present minimal credit risks, the Board must determine whether it would be in the best interests of the Trust to dispose of the security; but if the Trust disposes of the security within 5 days of the Manager learning of the downgrade, the Manager will provide the Board with subsequent notice of such downgrade. The Rating Organizations currently designated as such by the Securities and Exchange Commission ("SEC") are Standard & Poor's Corporation, Moody's Investors Service, Inc., Fitch Investors Services, Inc., Duff and Phelps, Inc., IBCA Limited, its affiliate, IBCA, Inc. and Thomson BankWatch, Inc. A description of the ratings categories of those Rating Organizations is contained in Appendix A. Repurchase Agreements. In a repurchase transaction, the Trust acquires a security from, and simultaneously resells it to, an approved vendor which meets the requirements of Rule 2a-7. The resale price exceeds the purchase price by an amount that reflects an agreed-upon interest rate effective for the period during which the repurchase agreement is in effect. The majority of these transactions run from day to day, and delivery pursuant to the resale typically will occur within one to five days of the purchase. Repurchase agreements are considered loans under the Investment Company Act, collateralized by the underlying security. The Trust's repurchase agreements require that at all times while the repurchase agreement is in effect, the value of the collateral must equal or exceed the repayment obligation 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. Under applicable regulatory requirements (which are subject to change), the loan collateral must, on each business day, be at least equal to the value of the loaned securities and must consist of cash, bank letters of credit or securities of the U.S. Government (or its agencies or instrumentalities) or other cash equivalents in which the Trust is permitted to invest. To be acceptable as collateral, letters of credit must obligate a bank to pay amounts demanded by the Trust if the demand meets the terms of the letter. Such terms and the issuing bank must be satisfactory to the Trust. The Trust receives an amount equal to the dividends or interest on loaned securities and also receives one or more of: (a) negotiated loan fees, (b) interest on securities used as collateral, or (c) interest on short-term debt securities purchased with such loan collateral; either type of interest may be shared with the borrower. The Trust may also pay reasonable finder's, custodian and administrative fees and will not lend its portfolio securities to any officer, trustee, employee or affiliate of the Trust or the Manager. The terms of the Trust's loans must meet certain tests under the Internal Revenue Code and permit the Trust to reacquire loaned securities on five days' notice or in time to vote on any important matter. Income from securities loans is not included in the exempt- interest dividends paid by the Trust. Special Investment Considerations - New York Municipal Securities. As explained in the Prospectus, the Trust is highly sensitive to the fiscal stability of New York State (the "State") and its subdivisions, agencies, instrumentalities or authorities, including New York City, which issue the Municipal Securities in which the Trust concentrates its investments. The following information on risk factors in concentrating in New York Municipal Securities is only a summary, based on publicly available information, and official statements relating to offerings of New York issuers of Municipal Securities prior to June 28, 1994, and no representation is made as to the accuracy of such information. During the mid-1970's the State, some of its agencies, instrumentalities and public benefit corporations (the "Authorities"), and certain of its municipalities faced serious financial difficulties. To address many of these financial problems, the State developed various programs, many of which were successful in ameliorating the financial crisis. Any further financial problems experienced by these Authorities or municipalities could have a direct adverse effect on the New York Municipal Securities in which the Trust invests. New York City General. More than any other municipality, the fiscal health of New York City (the "City") has a significant effect on the fiscal health of the State. The national economic downturn which began in July 1990 adversely affected the local economy which had been declining since late 1989. As a result, the City experienced job losses in 1990 and 1991 and real Gross City Product ("GCP") fell in those two years. Beginning in 1992, the improvement in the national economy helped stabilize conditions in the City. Employment losses moderated toward year-end and real GCP increased, boosted by strong wage gains. On July 8, 1994, the City submitted to the Control Board a fourth quarter modification to the City's financial plan for the 1994 fiscal year (the "1994 Modification") which projects a balanced budget in accordance with GAAP for the 1994 fiscal year, after taking into account a discretionary transfer of $171 million in resources to the 1995 fiscal year. For each of the 1981 through 1993 fiscal years, the City achieved balanced operating results as reported in accordance with generally accepted accounting principles ("GAAP") and the City's 1994 fiscal year results are projected to be balanced in accordance with GAAP. For fiscal year 1995, the City has adopted a budget which has halted the trend in recent years of substantial increases in City spending from one year to the next. The City was required to close substantial budget gaps in recent years in order to maintain balanced operating results. There can be no assurance that the City will continue to maintain a balanced budget, or that it can maintain a balanced budget without additional tax or other revenue increases or reductions in City services, which could adversely affect the City's economic base. The Mayor is responsible for preparing the City's four-year financial plan, including the City's current financial plan for the 1994 through 1997 fiscal years (the "1994-1997 Financial Plan", "Financial Plan" or "City Plan"). The City's projections set forth in the City Plan are based on various assumptions and contingencies which are uncertain and which may not materialize. Changes in major assumptions could significantly affect the City's ability to balance its budget as required by State law and to meet its annual cash flow and financing requirements. Such assumptions and contingencies include the timing of any regional and local economic recovery, the impact on real estate tax revenues of the current downturn in the real estate market, wage increases for City employees consistent with those assumed in the City Plan, employment growth, provision of State and Federal aid and mandate relief and the impact on the New York City region of the tax increases contained in President Clinton's economic plan. Implementation of the City Plan is also dependent upon the City's ability to market its securities successfully in the public credit markets. The City's financing program for fiscal years 1994 through 1997 contemplates the issuance of $11.7 billion of general obligation bonds primarily to reconstruct and rehabilitate the City's infrastructure and physical assets and to make capital investments. In addition, the City issues revenue and tax anticipation notes to finance seasonal working capital requirements. The success of projected public sales of City bonds and notes will be subject to prevailing market conditions, and no assurance can be given that such sales will be completed. If the City were unable to sell its general obligation bonds and notes, it would be prevented from meeting its planned operating and capital expenditures. The City Comptroller and other agencies and public officials have issued reports and make public statements which, among other things, state that projected revenues may be less and future expenditures may be greater than forecast in the City Plan. In addition, the Control Board staff and others have questioned whether the City has the capacity to generate sufficient revenues in the future to provide the level of services included in the Financial Plan. It is reasonable to expect that such reports and statements will continue to be issued and to engender public comment. 1994-1997 Financial Plan. The 1994-1997 Financial Plan projects revenues and expenditures for the 1994 fiscal year balanced in accordance with GAAP. The Financial Plan sets forth actions to close a projected gap of approximately $2.0 billion in the 1994 fiscal year. The gap-closing actions for the 1994 fiscal year include agency actions, including productivity savings and savings from restructuring the delivery of City services; service reductions; the sale of delinquent real property tax receivables; discretionary transfers from the 1993 fiscal year; reduced debt service costs, resulting from refinancings and other actions; proposed increased Federal assistance; a proposed continuation of the personal income tax surcharge; proposed increased State aid; and various revenue actions. The Financial Plan also sets forth projections for the 1995 through 1997 fiscal years and outlines a proposed gap-closing program to close projected budget gaps of $1.7 billion, $2.5 billion and $2.7 billion for the 1995 through 1997 years, respectively. These projections take into account expected increases in Federal and State assistance. Various actions proposed in the City Plan, including the proposed continuation of the personal income tax surcharge and the proposed increase in State aid, are subject to approval by the Governor and the State Legislature, and the proposed increase in Federal aid is subject to approval by Congress and the President. The State Legislature has failed to approve proposals for the State assumption of certain Medicaid costs, mandate relief and reallocation in State education aid in previous sessions, thereby increasing the uncertainty as to the receipt of the State assistance included in the City Plan. If these actions cannot be implemented, the City will be required to take other actions to decrease expenditures or increase revenues to maintain a balanced financial plan. The Financial Plan reflects certain cost and expenditure increases including increases in salaries and benefits paid to City employees pursuant to certain collective bargaining agreements. In the event of a collective bargaining impasse, the terms of wage settlements could be determined through the impasse procedure in the New York City Collective Bargaining Law, which can impose a binding settlement. Ratings. As of December 9, 1993, Moody's rated the City's general obligation bonds Baa1, S&P rated such bonds A- and Fitch has rated such bonds A-. Such ratings reflect only the views of these rating agencies, from which an explanation of the significance of such ratings may be obtained. There is no assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely. Any such downward revision or withdrawal could have an adverse effect on the market prices of bonds. Outstanding Net Indebtedness. As of September 30, 1993, the City and the Municipal Assistance Corporation for the City of New York had, respectively, $19.977 billion and $4.542 billion of outstanding net long- term debt. The City depends on the State for State aid both to enable the City to balance its budget and to meet its cash requirements. If the State experiences revenue shortfalls or spending increases beyond its projections during its 1994 fiscal year or subsequent years, such developments could result in reductions in anticipated State aid to the City. In addition, there can be no assurance that State budgets in future fiscal years will be adopted by the April 1 statutory deadline and that there will not be adverse effects on the City's cash flow and additional City expenditures as a result of such delays. Litigation. The City is a defendant in a significant number of lawsuits. Such litigation includes, but is not limited to, routine litigation incidental to the performance of its government and other functions, actions commenced and claims asserted against the City arising out of alleged constitutional violations, alleged torts, alleged breaches of contracts and other violations of law and condemnation proceedings and other tax and miscellaneous actions. While the ultimate outcome and fiscal impact, if any, on the proceedings and claims are not currently predictable, adverse determination in certain of them might have a material adverse effect upon the City's ability to carry out the City Plan. As of June 30, 1993, the City estimated its potential future liability on account of all outstanding claims to be approximately $2.2 billion. New York State The State has historically been one of the wealthiest states in the nation. For decades, however, the State economy has grown more slowly than that of the nation as a whole, resulting in the gradual erosion of its relative economic affluence. The causes of this relative decline are varied and complex, in many cases involving national and international developments beyond the State's control. Part of the reason for the long- term relative decline in the State economy has been attributed to the combined State and local tax burden, which is one of the highest in the nation. The existence of this tax burden limits the State's ability to impose higher taxes in the event of future financial difficulties. Recently, the State has been relatively successful in bringing the rate of growth in the public sector in the State in line with changes in the private economy. As a result of the national and regional economic recession, the State's tax receipts for its 1991 and 1992 fiscal years were substantially lower than projected, which resulted in reductions in State aid to localities for the State's 1992 and 1993 fiscal years from amounts previously projected. The State completed its 1993 fiscal year with a positive margin of $671 million in the General Fund. The State's economy, as measured by employment, started to recover near the start of the 1993 calendar year and the State completed its 1994 fiscal year with a cash- basis positive balance of $1.026 billion in the State's General Fund (the major operating fund of the State). The State updates its Financial Plans quarterly to adjust for changing economic conditions. The State's 1994-95 Financial Plan, which is based upon the enacted State budget, projects a balanced General Fund. The State's 1994-95 Financial Plan provided the City with savings through various actions, which include increased State education aid and State assumption of certain costs previously paid by the City and restoration of certain prior year revenue sharing reductions. However, the State legislature failed to enact a substantial portion of the proposed state assumption of local Medical costs, other significant mandate relief items, and certain Medicaid costs containment items proposed by the Governor, which would have provided the City with additional savings. The Division of the Budget has cautioned that its projections are subject to various risks and that actual economic growth may be weaker than projected due to such factors as consumer attitudes towards spending, Federal financial and monetary policies, the availability of credit and the condition of the world economy. There can be no assurance that the State will not face substantial potential budget gaps in future years resulting from a significant disparity between tax revenues projected from a lower recurring receipts base and the spending required to maintain state programs at current levels. To address any potential budgetary imbalance, the State may need to take significant actions to align recurring receipts and disbursements in future fiscal years. Composition of State Cash Receipts and Disbursements. Substantially all State non-pension financial operations are accounted for in the State's governmental funds group. Governmental funds include the General Fund, which receives all income not required by law to be deposited in another fund and which for the State's 1994-95 fiscal year is expected to account for approximately 52% of total projected governmental fund receipts; Special Revenue Funds, which receive the preponderance of moneys received by the State from the Federal government and other income the use of which is legally restricted to certain purposes and which is expected to comprise approximately 39% of total projected governmental funds receipts in the 1994-95 fiscal year; Capital Projects Funds, used to finance the acquisition and construction of major capital facilities by the State and to aid in certain of such projects conducted by local governments or public authorities; and Debt Service Funds, which are used for the accumulation of moneys for the payment of principal of and interest on long-term debt and to meet lease-purchase and other contractual-obligation commitments. Receipts in Capital Projects and Debt Service Funds comprise an aggregate of approximately 10% of total projected governmental funds receipts in the 1994-95 fiscal year. A legislative change implemented in August 1990 affects the way in which a portion of the State's sales and use tax collections are recorded as receipts in the General Fund. Pursuant to legislation creating the Local Government Assistance Corporation ("LGAC"), the Comptroller is required to credit the equivalent of one percentage point of the four percent sales and use tax collections to the Local Government Assistance Tax Fund (the "Tax Fund"), which is a Debt Service Fund, for purposes of making payments to LGAC to provide for the payment of debt service on its bonds and notes. To the extent that these moneys are not necessary for payment to LGAC, they are transferred from the Tax Fund to the General Fund and are reported in the General Fund as a transfer from other funds, rather than as sales and use tax receipts. During the State's 1991-92 and 1992-93 fiscal years $1.435 billion and $1.504 billion, respectively, in sales and use tax receipts were credited to the Tax Fund, and $1.527 billion is estimated to be credited to the Tax Fund during the State's 1993-94 fiscal year. For the 1991-92 fiscal year, the amount transferred to the General Fund from the Tax Fund was $1.316 billion, after providing for the payment of $119 million to LGAC for the purpose of meeting debt service on its bonds and its other cash requirements. For the 1992-93 fiscal year, $1.280 billion was transferred to the General Fund from the Tax Fund after providing for payment of $224 million to LGAC for debt services and other cash requirements, while $1.262 billion is estimated to be transferred in 1993-94, after payment of $247 million to LGAC for debt service and other cash requirements. The enacted 1993-94 Executive Budget includes several changes in the manner in which General Fund tax receipts are recorded. Receipts from user taxes and fees are reduced by approximately $434 million to reflect receipts that are dedicated for highway and bridge capital purposes, which are to be deposited in the Capital Projects Funds. Also, business taxes are reduced by approximately $176 million to reflect tax receipts that are dedicated for transportation purposes and which will be deposited in the Special Revenue and Capital Project Funds. Authorities. The fiscal stability of the State is related to the fiscal stability of its Authorities, which generally have responsibility for financing, constructing and operating revenue-producing public benefit facilities. Authorities are not subject to the constitutional restrictions on the incurrence of debt which apply to the State itself, and may issue bonds and notes within the amounts of, and as otherwise restricted by, their legislative authorization. As of September 30, 1992, the latest data available, there were 18 Authorities that had outstanding debt of $100 million or more. The aggregate outstanding debt, including refunding bonds, of these 18 Authorities was $62.2 billion as of September 30, 1992, of which approximately $8.2 billion was moral obligation debt and approximately $17.1 billion was financed under lease-purchase or contractual-obligation financing arrangements. Authorities are generally supported by revenues generated by the projects financed or operated, such as fares, user fees on bridges, highway tolls and rentals for dormitory rooms and housing. In recent years, however, the State has provided financial assistance through appropriations, in some cases of a recurring nature, to certain of the 18 Authorities for operating and other expenses and, in fulfillment of its commitments on moral obligation indebtedness or otherwise, for debt service. This operating assistance is expected to continue to be required in future years. The State's experience has been that if an Authority suffers serious financial difficulties, both the ability of the State and the Authorities to obtain financing in the public credit markets and the market price of the State's outstanding bonds and notes may be adversely affected. The New York State Housing Finance Agency ("HFA") and the New York State Urban Development Corporation ("UDC") have in the past required substantial amounts of assistance from the State to meet debt service costs or to pay operating expenses. Further assistance, possibly in increasing amounts, may be required for these, or other, Authorities in the future. In addition, certain statutory arrangements provide for State local assistance payments otherwise payable to localities to be made under certain circumstances to certain Authorities. The State has no obligation to provide additional assistance to localities whose local assistance payments have been paid to Authorities under these arrangements. However, in the event that such local assistance payments are so diverted, the affected localities could seek additional State funds. Ratings. On June 6, 1990, Moody's changed its rating on all State's outstanding general obligation bonds from A1 to A. On March 26, 1990, Standard & Poor's changed its rating of all of the State's outstanding general obligation bonds from AA- to A. On January 13, 1992, Standard & Poor's changed its rating of all of the State's outstanding general obligation bonds from A to A- and in addition reduced its ratings on the State's moral obligation, lease purchase, guaranteed and contractual obligation debt. S&P also continued its negative rating outlook assessment on State general obligation debt. On April 26, 1993, S&P revised its rating outlook assessment to stable. On June 8, 1993, S&P affirmed the State's A- rating and continued its outlook as stable. On January 6, 1992, Moody's reduced its ratings on outstanding limited- liability State lease-purchased and contractual obligations from A to Baa1. On June 8, 1993 Moody's reconfirmed its A rating on the State's general long-term indebtedness. Ratings reflect only the respective views of such organizations, and an explanation of the significance of such ratings may be obtained from the rating agency furnishing the same. There is no assurance that a particular rating will continue for any given period of time or that any such rating will not be revised downward or withdrawn entirely, if in the judgment of the agency originally establishing the rating, circumstances so warrant. A downward revision or withdrawal of such ratings, or either of them, may have an effect on the market price of the State Municipal Securities in which the New York Fund invests. General Obligation Debt. As of September 30, 1993, the State had approximately $5.134 billion in general obligation bonds, excluding refunding bonds, and $224 million in bond anticipation notes outstanding. On May 4, 1993, the State issued $850 million in tax and revenue anticipation notes which will mature on December 31, 1993. Principal and interest due on general obligation bonds and interest due on bond anticipation notes and on tax and revenue anticipation notes were $890.0 million and $818.8 million for the 1991-92 and 1992-93 fiscal years, respectively, and are estimated to be $785.1 million for the State's 1993- 94 fiscal year, not including interest on refunding bonds to the extent that such interest is to be paid from escrowed funds. Litigation. As a result of the United States Supreme Court decision in the case of State of Delaware v. State of New York, the State may be required to make certain significant payments during the 1993-94 fiscal year or thereafter. On November 16, 1993, the Court of Appeals, the State's highest court, affirmed the decision of the Appellate Division (Third Department) of the State's Supreme Court in three actions (McDermott, et. al. v. Regan, et. al.; v. Puma, et al.; and Guzdek, et al. v. Regan, et al.) declaring unconstitutional certain legislation enacted in 1990. That legislation mandated a change in the actuarial funding method for determining contributions by the State and its local governments to the State and local retirement systems from the aggregate cost (AC) method, previously used by the Comptroller, to the projected unit credit (PUC) method, and it required the application of the surplus reported under the PUC method as a credit to employer contributions. As a result, contributions to the retirement systems have been significantly reduced since the State's 1990 -91 fiscal year. The Court of Appeals held, among other things, that the State Constitution, which prohibits the benefits of membership in the retirement systems from being impaired or diminished, was violated because the PUC legislation impaired "the means designed to assure benefits to public employees by depriving the Comptroller of his personal responsibility to maintain "the security and sources of benefits" of the pension fund." As a result of this decision, the Comptroller has developed a plan to return to the AC method and to restore prior funding levels of the retirement systems. The Comptroller expects to achieve this objective in a manner that, consistent with his fiduciary responsibilities, will neither require the State to make additional contributions in its 1993-94 fiscal year nor materially and adversely affect the financial condition of the State thereafter. The Comptroller's plan calls for a return to the AC method, using a four-year phase-in the New York State and Local Employees' Retirement System (ERS), with State AC contributions capped at a percentage of payroll that increases each year during the phase-in. Although State contributions capped at a percentage of payroll that increases each year during the phase-in. Although State contributions to ERS under the plan are expected to be lower during the phase-in period than they would have been if the AC method were reinstated immediately, they are expected to exceed PUC levels by $30 million in fiscal 1994-95, $63 million in fiscal 1995-96, $116 million in fiscal 1996-97, and $193 million in fiscal year 1997-98. The excess over PUC levels is expected to peak at $241 million in fiscal 1998- 99, when State contributions under the Comptroller's plan are first projected to exceed levels that would have been required by an immediate return to the AC method. The excess over PUC levels is projected to decline after fiscal 1998-99, and, beginning in fiscal 2001-02, State contributions required under the Comptroller's plan are projected to be less than PUC requirements would have been. The State is a defendant in numerous legal proceedings pertaining to matters incidental to the performance of routine governmental operations. Such litigation includes, but is not limited to, claims asserted against the State arising from alleged torts, alleged breaches of contracts, condemnation proceedings and other alleged violations of State and Federal laws. Included in the State's outstanding litigation are a number of cases challenging the constitutionality or the adequacy and effectiveness of a variety of significant social welfare programs primarily involving the State's mental hygiene programs. Adverse judgments in these matters generally could result in injunctive relief coupled with prospective changes in patient care which could require substantial increased financing of the litigated programs in the future. Because of the prospective nature of these matters, no provision for this potential exposure has been made in the State's audited financial statements for the 1991-92 fiscal year. Adverse developments in any of these proceedings or the initiation of new proceedings could affect the ability of the State to maintain a balanced State Plan. In its audited financial statements for the 1992-93 fiscal year, the State reported its estimated liability for awarded and anticipated unfavorable judgments as $721 million. Other Localities. Certain localities in addition to the City could have financial problems leading to requests for additional State assistance during the State's 1993-94 fiscal year and thereafter. The potential impact on the State of such actions by localities is not included in the projections of the State receipts and disbursements in the State's 1993-94 fiscal year. Fiscal difficulties experienced by the City of Yonkers ("Yonkers") resulted in the creation of the Financial Control Board for the City of Yonkers (the "Yonkers Board") by the State in 1984. The Yonkers Board is charged with oversight of the fiscal affairs of Yonkers. Future actions taken by the Governor or the State Legislature to assist Yonkers could result in allocation of State resources in amounts that cannot yet be determined. INVESTMENT RESTRICTIONS The Trust's significant investment restrictions are set forth in the Prospectus. The following investment restrictions are also fundamental policies of the Trust, and, together with the fundamental policies and investment objective described in the Prospectus, cannot be changed without the vote of a "majority" of the Trust's outstanding shares. Under the Investment Company Act, such "majority" vote is defined as the vote of the holders of the lesser of: (i) 67% or more of the shares present or represented by proxy at a shareholder meeting, if the holders of more than 50% of the outstanding shares are present or represented by proxy, or (ii) more than 50% of the outstanding shares. Under these additional restrictions, the Trust cannot: (1) invest in any debt instrument having a maturity in excess of one year from the date of purchase, unless purchased subject to a demand feature which may not exceed one year and requires payment on not more than 30 days' notice; (2) enter into a repurchase agreement or purchase a security subject to a call if the scheduled repurchase or redemption date is greater than one year; (3) invest in commodities or commodity contracts, or invest in interests in oil, gas, or other mineral exploration or development programs; (4) invest in real estate; however, the Trust may purchase debt securities issued by companies which invest in real estate or interests therein; (5) purchase securities on margin or make short sales of securities; (6) invest in or hold securities of any issuer if those officers and trustees or directors 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; (7) underwrite securities of other companies except insofar as the Trust may be deemed an underwriter under the Securities Act of 1933 in connection with the disposition of portfolio securities; (8) invest more than 5% of the value of its total assets in securities of companies that have operated less than three years, including the operations of predecessors; or (9) purchase securities of other investment companies, except in connection with a merger, consolidation, acquisition or reorganization. For purposes of investment restriction (6) above and the investment restrictions in the Prospectus, the identification of the "issuer" of a Municipal Security depends on the terms and conditions of the security. When the assets and revenues of an agency, authority, instrumentality or other political subdivision are separate from those of the government creating the subdivision and the security is backed only by the assets and revenues of the subdivision, such subdivision would be deemed to be the sole issuer. Similarly, in the case of an industrial development bond, if that bond is backed only by the assets and revenues of the nongovernmental user, then such nongovernmental user would be deemed to be the sole issuer. However, if in either case the creating government or some other entity guarantees the security, such guarantee would be considered a separate security and would be treated as an issue of such government or other agency. For purposes of the Trust's compliance with Rule 2a-7 when investing in puts (see "Puts and Stand-by Commitments" above), a put will be considered to be issued by the party to which the Trust will look for payment of the exercise price, and an unconditional put will be considered to be a guarantee of the underlying security. In applying the restrictions in the Prospectus as to the Trust's investments, the Manager will consider a nongovernmental user of facilities financed by industrial development bonds as being in a particular industry, despite the fact that there is no industry concentration limitation as to municipal securities the Trust may own. Although this application of the restriction is not technically a fundamental policy of the Trust, it will not be changed without shareholder approval. This is not a fundamental policy, and therefore may be changed without shareholder approval. Should any such change be made, the Prospectus and/or Additional Statement will be supplemented to reflect the change. TRUSTEES AND OFFICERS The Trustees and officers of the Trust and their principal occupations and business affiliations during the past five years are listed below. Each Trustee is a Trustee, Director or Managing General Partner of Daily Cash Accumulation Fund, Inc., Centennial Money Market Trust, Centennial Government Trust, Centennial Tax Exempt Trust, Centennial California Tax Exempt Trust, Centennial America Fund, L.P. (collectively with the Trust the "Centennial Trusts"), Oppenheimer Total Return Fund, Inc., Oppenheimer High Yield Fund, Oppenheimer Equity Income Fund, Oppenheimer Cash Reserves, Oppenheimer Strategic Funds Trust, Oppenheimer Strategic Income & Growth Fund, Oppenheimer Strategic Short- Term Income Fund, Oppenheimer Strategic Investment Grade Bond Fund, Oppenheimer Variable Account Funds, Oppenheimer Champion High Yield Fund, Oppenheimer Main Street Funds, Inc., Oppenheimer Limited-Term Government Fund, Oppenheimer Tax-Exempt Bond Fund, Oppenheimer Investment Grade Bond Fund, Oppenheimer Value Stock Fund and The New York Tax-Exempt Income Fund, Inc. (collectively referred to as the "Denver OppenheimerFunds"). Mr. Fossel is President and Mr. Swain is Chairman of all of the funds listed. All other officers, with the exception of Mr. Carbuto, hold similar positions with all of the funds listed. As of September 30, 1994, the Trustees and officers of the Trust in the aggregate owned less than 1% of the Trust's outstanding shares. ROBERT G. AVIS, Trustee* One North Jefferson Ave., St. Louis, Missouri 63103 Vice Chairman of A.G. Edwards & Sons, Inc. (a broker-dealer) and A.G. Edwards, Inc. (its parent holding company); Chairman of A.G.E. Asset Management and A.G. Edwards Trust Company (its affiliated investment adviser and trust company, respectively). WILLIAM A. BAKER, Trustee 197 Desert Lakes Drive, Palm Springs, California 92264 Management Consultant. CHARLES CONRAD, JR., Trustee 1447 Vista del Cerro, Las Cruces, New Mexico 88005 Vice President of McDonnell Douglas Space Systems Co.; formerly associated with the National Aeronautics and Space Administration. RAYMOND J. KALINOWSKI, Trustee 44 Portland Drive, St. Louis, Missouri 63131 Formerly Vice Chairman and a Director of A.G. Edwards, Inc., parent holding company of A.G. Edwards & Sons, Inc. (a broker-dealer), of which he was a Senior Vice President. C. HOWARD KAST, Trustee 2552 East Alameda, Denver, Colorado 80209 Formerly Managing Partner of Deloitte, Haskins & Sells (an accounting firm). ROBERT M. KIRCHNER, Trustee 7500 E. Arapahoe Rd., Englewood, Colorado 80112 President of The Kirchner Company (management consultants). NED M. STEEL, Trustee 3416 South Race Street, Englewood, Colorado 80112 Chartered Property and Casualty Underwriter; Senior Vice President and a Director of Van Gilder Insurance Corp. (insurance brokers). JAMES C. SWAIN, Chairman and Trustee* 3410 South Galena Street, Denver, Colorado 80231 President and Director of Centennial Asset Management Corporation (the "Manager"); Vice Chairman of Oppenheimer Management Corporation ("OMC"), the immediate parent of the Manager; formerly Chairman of the Board of Shareholder Services, Inc. (the "Transfer Agent"), the Trust's transfer agent, which is a subsidiary of OMC. JON S. FOSSEL, Trustee and President* Two World Trade Center, New York, New York 10048 Chairman, Chief Executive Officer and a director of OMC; President and Director of Oppenheimer Acquisition Corp. ("OAC"), OMC's parent holding company; President and a director of HarbourView Asset Management Corporation, an investment adviser subsidiary of OMC ("HarbourView"); a director of the Transfer Agent and Shareholder Financial Services, Inc. ("SFSI"), transfer agent subsidiaries of OMC; formerly President of OMC. ANDREW J. DONOHUE, Vice President 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. MICHAEL A. CARBUTO, Vice President and Portfolio Manager Two World Trade Center, New York, New York 10048 Vice President of the Manager and OMC; an officer of other OppenheimerFunds. GEORGE C. BOWEN, Vice President, Secretary and Treasurer 3410 South Galena Street, Denver, Colorado 80231 Senior Vice President and Treasurer of OMC; Vice President and Treasurer of OFDI and HarbourView; Senior Vice President, Treasurer, Assistant Secretary and a director of the Manager; Vice President, Treasurer and Secretary of the Transfer Agent and SFSI; an officer of other OppenheimerFunds; formerly Senior Vice President/Comptroller and Secretary of OAMC. ROBERT G. ZACK, Assistant Secretary Two World Trade Center, New York, New York 10048 Senior Vice President and Associate General Counsel of OMC; Assistant Secretary of the Transfer Agent and SFSI; an officer of other OppenheimerFunds. ROBERT BISHOP, Assistant Treasurer 3410 South Galena Street, Denver, Colorado 80231 Assistant Vice President of OMC/Mutual Fund Accounting; an officer of other OppenheimerFunds; formerly a Fund Controller for the Manager, prior to which he was an Accountant for Yale & Seffinger, P.C., an accounting firm, and previously an Accountant and Commissions Supervisor for Stuart James Company, Inc., a broker-dealer. SCOTT FARRAR, Assistant Treasurer 3410 South Galena Street, Denver, Colorado 80231 Assistant Vice President of OMC/Mutual Fund Accounting; an officer of other OppenheimerFunds; formerly a Fund Controller for the Manager, prior to which he was an International Mutual Fund Supervisor for Brown Brothers, Harriman Co., a bank, and previously a Senior Fund Accountant for State Street Bank & Trust Company, before which he was a sales representative for Central Colorado Planning. ___________________ *A Trustee who is an "interested person" of the Trust as defined in the Investment Company Act. Remuneration of Trustees. The officers of the Trust (including Messrs. Fossel and Swain) are affiliated with the Manager and receive no salary or fee from the Trust. The Trust has an Audit and Review Committee 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 Trust. During the fiscal year ended June 30, 1994, the remuneration (including expense reimbursements) paid by the Trust to the Trustees as a group (excluding Mr. Swain and Mr. Fossel) for services as trustees and as members of one or more committees totaled $1,306. Major Shareholders. As of September 30, 1994, A.G. Edwards & Sons, Inc., 1 North Jefferson Avenue, St. Louis, MO 63103 ("Edwards"), which in turn is owned by A.G. Edwards, Inc., was the record owner of 18,851,327.50 shares of the Trust (approximately 78.6% of outstanding shares). The Trust is informed that the shares held of record by Edwards were beneficially owned for the benefit of its brokerage clients.As of that date, no other person owned of record or was known by the Trust to own beneficially 5% or more of the outstanding shares of the Trust. INVESTMENT MANAGEMENT SERVICES The Manager is wholly owned by OMC which is a wholly-owned subsidiary of Oppenheimer Acquisition Corp. ("OAC"), a holding company controlled by Massachusetts Mutual Life Insurance Company. The remaining stock of OAC is owned by: (i) certain of OMC's directors and officers, some of whom may serve as officers of the Trust, and two of whom (Mr. James C. Swain and Mr. Fossel) serves as a Trustee of the Trust and (ii) Edwards, which owns less than 5% of its equity. The management fee is payable monthly to the Manager under the terms of the investment advisory agreement between the Manager and the Trust (the "Agreement"), and is computed on the aggregate net assets of the Trust as of the close of business each day. The Agreement requires the Manager, at its expense, to provide the Trust with adequate office space, facilities and equipment and to provide and supervise the activities of all administrative and clerical personnel required to provide effective administration of the Trust, including the compilation and maintenance of records with respect to its operations, the preparation and filing of specified reports, and composition of proxy materials and registration statements for continuous public sale of shares of the Trust. Expenses not expressly assumed by the Manager under the Agreement or by the Distributor of the shares of the Trust are paid by the Trust. A description of examples of such expenses is in the Prospectus. The Agreement contains no expense limitation. However, independently of the Agreement, the Manager has undertaken that the total expenses of the Trust in any fiscal year (including the management fee, but excluding taxes, interest, brokerage commissions, distribution assistance payments and extraordinary expenses such as litigation costs) shall not exceed (and the Manager undertakes to assume any amount by which such expenses shall exceed) the most stringent state securities law expense limitation applicable to the sale of the Trust's shares. At present, the Trust's shares will be sold only in New York State, which currently has no expense limitation applicable to sales of mutual fund shares. In addition, independently of the Agreement, the Manager has temporarily undertaken to assume any expenses of the Trust in any fiscal year they exceed 0.80% of the Trust's average annual net assets. The payment of the management fee at the end of any month will be reduced so that there will not be any accrued but unpaid liability under those expense limitations. Any assumption of the Trust's expenses under either limitation lowers the Trust's overall expense ratio and increases its yield and total return during the time such expenses are assumed. The Manager reserves the right to terminate or amend either of these undertakings at any time. For the fiscal years ended June 30, 1992, 1993 and 1994 the management fees payable by the Trust to the Manager would have been $116,115, $121,281 and $127,154, respectively. Those amounts do not reflect the effect of the expense assumptions of $67,751, $43,840 and $55,589, respectively, in those periods by the Manager. The Agreement provides that the Manager is not liable for any loss sustained by reason of good faith errors or omissions in connection with matters to which the Agreement relates, except a loss resulting by reason of its willful misfeasance, bad faith, gross negligence or reckless disregard for its obligations thereunder. The Manager is permitted by the Agreement to act as investment adviser for any other person, firm or corporation. If the Manager shall no longer act as investment adviser to the Trust, the right of the Trust to use the name "Centennial" as part of its name may be withdrawn. Portfolio Transactions. Portfolio decisions are based upon the recommendations and judgment of the Manager subject to the overall authority of the Board of Trustees. As most purchases made by the Trust are principal transactions at net prices, the Trust incurs little or no brokerage costs. The Trust deals directly with the selling or purchasing principal or market maker without incurring charges for the services of a broker on its behalf unless it is determined that a better price or execution may be obtained by using the services of a broker. Purchases of portfolio securities from underwriters include a commission or concession paid by the issuer to the underwriter, and purchases from dealers include a spread between the bid and asked prices. The Trust seeks to obtain prompt and reliable execution of orders at the most favorable net price. If dealers or brokers are used for portfolio transactions, transactions may be directed to dealers or brokers furnishing execution and research services. The research services provided by a particular dealer or broker may be useful only to one or more of the advisory accounts of the Manager or its affiliates and investment research received for the commissions of those other accounts may be useful to both 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 dealer or 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 dealers or 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 firms which are affiliated with the Trust or the Manager if that dealer or broker is acting as principal. The Board of Trustees has permitted the Manager to use concessions on fixed price offerings to obtain research, in the same manner as is permitted for agency transactions. The Trust's policy of investing in short-term debt securities with maturities of less than one year results in high portfolio turnover. However, since brokerage commissions, if any, are small and securities are usually held to maturity, high turnover does not have an appreciable adverse effect upon the net asset value or income of the Trust. Other funds advised by the Manager have investment objectives and policies similar to that of the Trust. Such other funds may purchase or sell the same securities at the same time as the Trust, which could affect the supply or price of such securities. If two or more of such funds purchase the same security on the same day from the same dealer, the Manager may average the price of the transactions and allocate the cost among such funds. SERVICE PLAN The Trust has adopted a service plan (the "Plan") under Rule 12b-1 of the Investment Company Act, described in the Prospectus. No payment will be made by the Distributor to any Recipient if the aggregate net asset value of Trust shares held by it or its customers at the end of a calendar quarter is less than the minimum level of qualified holdings, if any, established under the Plan from time to time by the "Independent Trustees". Currently, no minimum holding level has been established by the Board of Trustees. For the Trust's fiscal year ended June 30, 1994, payments under the Plan totalled $46,156, all of which were paid by the Distributor to Recipients, including $131 paid to an affiliate of the Distributor, as reimbursement for costs incurred with the personal service and maintenance of accounts that hold Trust shares. The Distributor has entered into Supplemental Distribution Assistance Agreements ("Supplemental Agreements") under the Plan with selected dealers distributing shares of Oppenheimer Cash Reserves, Centennial Government Trust, Centennial California Tax Exempt Trust, Centennial America Fund, L.P. and the Trust. Quarterly payments by the Distributor for distribution-related services will range from 0.10% to 0.30%, annually, of the average net asset value of shares of the above-mentioned funds owned during the quarter beneficially or of record by the dealer or its customers. However, no payment shall be made to any dealer for any quarter during which the average net asset value of shares of the above- mentioned funds owned during that quarter by the dealer or its customers is less than $5 million. Payments made pursuant to Supplemental Agreements are not a Trust expense, but are made by the Distributor out of its own resources or out of the resources of the Manager which may include profits derived from the advisory fee it receives from the Trust. Payments to affiliates of the Distributor are not permitted. The Plan shall, unless terminated as described below, continue in effect from year to year but only so long as such continuance is specifically approved at least annually by the Trust's Board of Trustees including its Independent Trustees by a vote cast in person at a meeting called for that purpose. The Supplemental Agreements are subject to the same renewal requirement. The Plan and the Supplemental Agreements may be terminated at any time by the vote of a majority of the Independent Trustees or by the vote of the holders of a "majority" of the Trust's outstanding voting securities. The Supplemental Agreements will automatically terminate in the event of their "assignment" (as defined in the Investment Company Act), and each may be terminated by the Distributor: (i) in the event the Trust terminates the Plan, or (ii) if the net asset value of shares of the above-mentioned funds covered by Supplemental Agreements held by the dealer or its customers is less than $5 million for two or more consecutive quarters. A dealer may terminate a Supplemental Agreement at any time upon giving 30 days' notice. The Plan may not be amended without shareholder approval, as set forth above, to increase materially the amount of payments to be made and all material amendments must be approved by the Board and the Independent Trustees. The Glass-Steagall Act and other applicable laws and regulations, among other things, generally prohibit Federally-chartered or supervised banks from engaging in the business of underwriting, selling or distributing securities as principals. Accordingly, the Distributor may pay banks only for sales made on an agency basis or for the performance of administrative and shareholder servicing functions. While the matter is not free from doubt, the Manager believes that such laws do not preclude a bank from performing the services required of a Recipient. However, judicial or administrative decisions or interpretations of such laws, as well as changes in either Federal or state statutes or regulations relating to the permissible activities of banks or their subsidiaries or affiliates, could prevent certain banks from continuing to perform all or a part of these services. If a bank were so prohibited, shareholders of the Trust who were clients of such bank would be permitted to remain as shareholders, and if a bank could no longer provide those service functions, alternate means for continuing the servicing of such shareholders would be sought. In such event, shareholders serviced by such bank might no longer be able to avail themselves of any automatic investment or other services then being provided by such bank. It is not expected that shareholders would suffer any adverse financial consequences as a result of any of those occurrences. The Board of Trustees will consider appropriate modifications to the Trust's operations, including discontinuance of payments under the Plan to such institutions in the event of any future change in such laws or regulations which may adversely affect the ability of such institutions to provide these services. In addition, certain banks and financial institutions may be required to register as dealers under state law. While the Plan is in effect, the Treasurer of the Trust shall provide a report to the Board of Trustees in writing at least quarterly on the amount of all payments made pursuant to the Plan and the identity of each Recipient that received any such payment and the purposes for which payments were made. The Plan further provides that while it is in effect, the selection and nomination of those Trustees of the Trust who are not "interested persons" of the Trust is committed to the discretion of the Independent Trustees. This does not prevent the involvement of others in such selection and nomination if the final decision as to the selection or nomination is approved by a majority of the Independent Trustees. PURCHASE, REDEMPTION AND PRICING OF SHARES Determination of Net Asset Value Per Share. The net asset value per share of the Trust is determined twice a day, as of 12:00 Noon and 4:00 P.M., on each day the New York Stock Exchange (the "Exchange") is open (a "regular business day"), by dividing the Trust's net assets (the total value of the Trust's portfolio securities, cash and other assets less all liabilities) by the total number of shares outstanding. Shares of the Trust are sold at their offering price (net asset value, without a sales charge) as described in the Prospectus. The Exchange's most recent annual holiday schedule states that it will close New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The Exchange may also close on other days. Dealers other than Exchange members may conduct trading in Municipal Securities on certain days on which the Exchange is closed (e.g., Good Friday), so that securities of the same type held by the Trust may be traded, and its net asset value per share may be significantly affected, on such days when shareholders may not purchase or redeem shares. The Trust will seek to maintain a net asset value of $1.00 per share for purchases and redemptions. There can be no assurance that it will do so. The Trust operates under SEC Rule 2a-7 under which it may use the amortized cost method of valuing its shares. The amortized cost method values a security initially at its cost and thereafter assumes a constant amortization of any premium or accretion of any discount, regardless of the impact of fluctuating interest rates on the market value of the security. This method does not take into account unrealized capital gains or losses. The Trust's Board of Trustees has established procedures intended to stabilize the Trust's net asset value at $1.00 per share. If the Trust's net asset value per share were to deviate from $1.00 by more than 0.5%, Rule 2a-7 requires the Board promptly to consider what action, if any, should be taken. If the Trustees find that the extent of any such deviation may result in material dilution or other unfair results to shareholders, the Board will take such steps as it considers appropriate to eliminate or reduce any such dilution or unfair results, including without limitation selling portfolio securities prior to maturity, shortening the average portfolio maturity, withholding or reducing dividends, reducing the number of outstanding Trust shares without monetary consideration, or calculating net asset value per share by using available market quotations. As long as it uses Rule 2a-7, the Trust must abide by certain conditions described in the Prospectus. Some of those conditions which relate to portfolio management are that the Trust must: (i) maintain a dollar-weighted average portfolio maturity not in excess of 90 days; (ii) limit its investments, including repurchase agreements, to those instruments which are denominated in U.S. dollars, and which are rated in one of the two highest short-term rating categories by at least two "nationally-recognized statistical rating organizations" ("NRSROs"), as defined in the Rule, or by one NRSRO if only one NRSRO has rated the security; an instrument that is not rated must be of comparable quality as determined under the Board procedures; and (iii) not purchase any instruments with a remaining maturity of more than one year. Under Rule 2a-7, the maturity of an instrument is generally considered to be its stated maturity (or in the case of an instrument called for redemption, the date on which the redemption payment must be made), with special exceptions for certain variable rate demand and floating rate instruments. Repurchase agreements and securities loan agreements are, in general, treated as having a maturity equal to the period scheduled until repurchase or return, or if subject to demand, equal to the notice period. While the amortized cost method provides certainty in valuation, there may be periods during which the value of an instrument as determined by amortized cost, is higher or lower than the price the Trust would receive if it sold the instrument. During periods of declining interest rates, the daily yield on shares of the Trust may tend to be lower (and net investment income and daily dividends higher) than a like computation made by a fund with identical investments utilizing a method of valuation based upon market prices or estimates of market prices for its portfolio. Thus, if the use of amortized cost by the Trust resulted in a lower aggregate portfolio value on a particular day, a prospective investor in the Trust would be able to obtain a somewhat higher yield than would result from investment in a fund utilizing solely market values, and existing investors in the Trust would receive less investment income than if the Trust were priced at market value. Conversely, during periods of rising interest rates, the daily yield on Trust shares will tend to be higher and its aggregate value lower than that of a portfolio priced at market value. A prospective investor would receive a lower yield than from an investment in a portfolio priced at market value, while existing investors in the Trust would receive more investment income than if the Trust were priced at market value. Redemption of Shares. Information on how to redeem shares of the Trust is stated in the Prospectus. The Prospectus states that payment for shares tendered for redemption is ordinarily made in cash. If, however, the Board of Trustees determines that it would be detrimental to the best interests of the remaining shareholders of the Trust to make payment wholly in cash, the redemption price may be paid in whole or in part by a distribution in kind of securities from the portfolio of the Trust in lieu of cash or in conformity with applicable Securities and Exchange Commission rules. The Trust has elected to be governed by Rule 18f-1 under the Investment Company Act, pursuant to which the Trust is obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of the net assets of the Trust during any 90-day period for any one shareholder. If shares are redeemed in kind, the redeeming shareholder might incur transaction or other costs in converting the assets to cash. The method of valuing securities used to make redemptions in kind will be the same as the method of valuing securities described under "Determination of Net Asset Value" above, and such valuation will be made as of the same time the redemption price is determined. Expedited Redemption Procedures. Under the Expedited Redemption Procedure available to direct shareholders of the Trust, discussed in the Prospectus, the wiring of redemption proceeds may be delayed if the Trust's Custodian bank is not open for business on a day that the Trust would normally authorize the wire to be made, which is usually the same day for redemptions prior to 12:00 Noon and the Trust's next regular business day for redemptions between 12:00 Noon and 4:00 P.M. In those circumstances, the wire will not be transmitted until the next bank business day on which the Trust is open for business, and no dividends will be paid on the proceeds of redeemed shares awaiting transfer by wire. Dividend Reinvestment in Another Fund. Direct shareholders of the Trust may elect to reinvest all dividends and/or distributions in shares of any of the other funds listed in the Prospectus as "Eligible Funds" at net asset value without sales charge. To elect this option, a shareholder must notify the Transfer Agent in writing, and either must have an existing account in the fund selected for reinvestment or must obtain a prospectus for that fund and 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 The Trust's current yield is calculated for a seven-day period of time in accordance with regulations adopted under the Investment Company Act. First, a base period return is calculated for the seven-day period by determining the net change in the value of a hypothetical pre-existing account having one share at the beginning of the seven day period. The change includes dividends declared on the original share and dividends declared on any shares purchased with dividends on that share, but such dividends are adjusted to exclude any realized or unrealized capital gains or losses affecting the dividends declared. Next, the base period return is multiplied by 365/7, to obtain the current yield to the nearest hundredth of one percent. The compounded effective yield for a seven-day period is calculated by (a) adding 1 to the base period return (obtained as described above), (b) raising the sum to a power equal to 365 divided by 7, and (c) subtracting 1 from the result. For the seven-day period ended June 30, 1994, the Trust's current yield was 1.84%, and its compounded effective yield was 1.86%. The yield as calculated above may vary for accounts less than approximately $100 in value due to the effect of rounding off each daily dividend to the nearest full cent. Since the calculation of yield under either procedure described above does not take into consideration any realized or unrealized gains or losses on the Trust's portfolio securities which may affect dividends, the return on dividends declared during a period may not be the same on an annualized basis as the yield for that period. The Trust's "tax-equivalent yield" adjusts the Trust's current yield, as calculated above, by a combined Federal, New York State and New York City tax rate. The tax-equivalent yield is computed by dividing the tax- exempt portion of the Trust's current yield by one minus a stated income tax rate and adding the result to the portion (if any) of the Trust's current yield that is not tax-exempt. The tax-equivalent yield may be compounded as described above to provide a compounded effective tax equivalent yield. The tax-equivalent yield may be used to compare the tax effects of income derived from the Trust with income from taxable investments at the tax rates stated. Appendix B includes a tax equivalent yield table, based on various effective tax brackets for individual taxpayers. Such tax brackets are determined by a taxpayer's Federal, New York State and City taxable income (the net amount subject to income tax after deductions and exemptions). The tax equivalent yield table assumes that the investor is taxed at the highest bracket, regardless of whether a switch to non-taxable investments would cause a lower bracket to apply, and that state income tax payments are fully deductible for income tax purposes. For taxpayers with income above certain levels, otherwise allowable itemized deductions are limited. For the seven-day period ended June 30, 1994, the Trust's tax-equivalent yield was 3.47% and its tax- equivalent compounded yield was 3.51% for an investment subject to a 47.05% combined effective tax rate (the maximum for a New York City resident). Yield information may be useful to investors in reviewing the Trust's performance. The Trust's yield may be compared to that of other investments, by citing various indices such as The Bank Rate Monitor National Index (provided by Bank Rate MonitorTM), which measures the average rate paid on bank money market accounts, NOW accounts and certificates of deposit by the 100 largest banks and thrift institutions in the top ten metropolitan areas. However, a number of factors should be considered before using yield information as a basis for comparison with other investments. An investment in the Trust is not insured. Its yield is not guaranteed and normally will fluctuate on a daily basis. The yield for any given past period is not an indication or representation by the Trust of future yields or rates of return on its shares. The Trust's yield is affected by portfolio quality, portfolio maturity, type of instruments held and operating expenses. The Trust's performance reflects the voluntary assumption of expenses by the Manager, absent which such figures would have been lower than those shown above. When comparing the Trust's yield and investment risk with that of other investments, investors should understand that certain other investment alternatives, such as certificates of deposit, U.S. Government Securities, money market instruments or bank accounts may provide fixed yields or yields that may vary above a stated minimum, and also that bank accounts may be insured or guaranteed. Certain types of bank accounts may not pay interest when the balance falls below a specified level and may limit the number of withdrawals by check per month. In order to compare the Trust's dividends to the rate of return on taxable investments federal and New York state and city income taxes on such investments should be considered. ADDITIONAL INFORMATION Description of the Trust. Until February 1, 1990, the Trust's name was "Oppenheimer New York Tax-Exempt Cash Reserves." The Trust's Declaration of Trust contains an express disclaimer of shareholder or Trustee liability for the Trust's obligations, and provides for indemnification and reimbursement of expenses out of its property for any shareholder held personally liable for its obligations. The Declaration of Trust also provides that the Trust shall, upon request, assume a defense of any claim made against any shareholder for any act or obligation of the Trust and satisfy any judgment thereon. Thus, while Massachusetts law permits a shareholder of a trust (such as the Trust) to be held personally liable as a "partner" for the Trust's obligations under certain circumstances, the risk of a Trust shareholder incurring any financial loss on account of shareholder liability is highly unlikely and is limited to the relatively remote circumstance in which the Trust itself would be unable to meet its obligations. Any person doing business with the Trust, and any shareholder of the Trust, agrees under the Trust's Declaration of Trust to look solely to the assets of the Trust for satisfaction of any claim or demand which may arise out of any dealings with the Trust, and the Trustees shall have no personal liability to any such person, to the extent permitted by law. It is not contemplated that regular annual meetings of shareholders will be held. The Trust will hold meetings when required to do so by the Investment Company Act or other applicable law, or when a shareholder meeting is called by the Trustees or upon proper request of the shareholders. Shareholders have the right, upon the declaration in writing or vote of two-thirds of the outstanding shares of the Trust, to remove a Trustee. The Trustees will call a meeting of shareholders to vote on the removal of a Trustee upon the written request of the record holders of 10% of its outstanding shares. In addition, if the Trustees receive a request from at least 10 shareholders (who have been shareholders for at least six months) holding in the aggregate shares of the Trust valued at $25,000 or more or holding 1% or more of the Trust's outstanding shares, whichever is less, that they wish to communicate with other shareholders to request a meeting to remove a Trustee, the Trustees will then either make the Trust's shareholder list available to the applicants or mail their communication to all other shareholders at the applicants' expense, or the Trustees may take such other action as set forth in Section 16(c) of the Investment Company Act. Tax Status of the Trust's Dividends and Distributions. The Federal and New York 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, by December 31 each year, the Trust must distribute 98% of its taxable investment income earned from January 1 through December 31 of that year and 98% of its capital gains realized in the period from November 1 of the prior year through October 31 of the current year or else the Trust must pay an excise tax on the amounts not distributed. While it is presently anticipated that the Trust 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 make such distributions at the mandated levels and to pay the excise tax, which would reduce the amount available for distribution to shareholders. The Custodian and the Transfer Agent. The Custodian's responsibilities include safeguarding and controlling the Trust's portfolio securities and handling the delivery of portfolio securities to and from the Trust. The Manager has represented to the Trust that its banking relationships with the Custodian have been and will continue to be unrelated to and unaffected by the relationships between the Trust and the Custodian. It will be the practice of the Trust to deal with the Custodian in a manner uninfluenced by any banking relationship the Custodian may have with the Manager or its affiliates. The Transfer Agent (Shareholder Services, Inc.) is responsible for maintaining the Trust's shareholder registry and shareholder accounting records, and for shareholder servicing and administrative functions. General Distributor's Agreement. Under the General Distributor's Agreement between the Trust and the Distributor, the Distributor acts as the Trust's principal underwriter in the continuous public offering of its shares. The General Distributor is not obligated to sell a specific number of shares. Expenses normally attributable to sales (other than those paid under the Service Plan), including advertising and the cost of printing and mailing prospectuses other than those furnished to existing shareholders, are borne by the Distributor. Independent Auditors and Financial Statements. The independent auditors of the Trust examine the Trust's financial statements and perform other related audit services. They also serve as auditors for the Manager and for Oppenheimer Management Corporation ("OMC") the Manager's immediate parent, and for certain other funds advised by the Manager and OMC. AUTOMATIC WITHDRAWAL PLAN PROVISIONS By requesting an Automatic Withdrawal Plan, the shareholder agrees to the terms and conditions applicable to such plans, as stated below and elsewhere in the Application for such Plans, the Prospectus and this Statement of Additional Information as they may be amended from time to time by the Trust and/or the Distributor. When adopted, such amendments will automatically apply to existing Plans. Trust shares will be redeemed as necessary to meet withdrawal payments. Shares acquired without a sales charge will be redeemed first and thereafter shares acquired with reinvested dividends and distributions followed by shares acquired with a sales charge will be redeemed to the extent necessary to make withdrawal payments. Depending upon the amount withdrawn, the investor's principal may be depleted. Payments made to shareholders under such plans should not be considered as a yield or income on an investment. Purchases of additional shares concurrently with withdrawals are undesirable because of sales charges on purchases when made. Accordingly, a shareholder may not maintain an Automatic Withdrawal Plan while simultaneously making regular purchases. 1. Shareholder Services, Inc., the Transfer Agent of the Trust, will administer the Automatic Withdrawal Plan (the "Plan") as agent for the person (the "Planholder") who executed the Plan authorization and application submitted to the Transfer Agent. 2. Certificates will not be issued for shares of the Trust purchased for and held under the Plan, but the Transfer Agent will credit all such shares to the account of the Planholder on the records of the Trust. Any share certificates now held by the Planholder may be surrendered unendorsed to the Transfer Agent with the Plan application so that the shares represented by the certificate may be held under the Plan. Those shares will be carried on the Planholder's Plan Statement. 3. Distributions of capital gains must be reinvested in shares of the Trust, which will be done at net asset value without a sales charge. Dividends may be paid in cash or reinvested. 4. Redemptions of shares in connection with disbursement payments will be made at the net asset value per share determined on the redemption date. 5. Checks or ACH payments will be transmitted approximately three business days prior to the date selected for receipt of the monthly or quarterly payment (the date of receipt is approximate), according to the choice specified in writing by the Planholder. 6. The amount and the interval of disbursement payments and the address to which checks are to be mailed may be changed at any time by the Planholder on written notification to the Transfer Agent. The Planholder should allow at least two weeks' time in mailing such notification before the requested change can be put in effect. 7. The Planholder may, at any time, instruct the Transfer Agent by written notice (in proper form in accordance with the requirements of the then-current prospectus of the Trust) to redeem all, or any part of, the shares held under the Plan. In such case, the Transfer Agent will redeem the number of shares requested at the net asset value per share in effect in accordance with the Trust's usual redemption procedures and will mail a check for the proceeds of such redemption to the Planholder. 8. The Plan may, at any time, be terminated by the Planholder on written notice to the Transfer Agent, or by the Transfer Agent upon receiving directions to that effect from the Trust. the Transfer Agent will also terminate the Plan upon receipt of evidence satisfactory to it of the death or legal incapacity of the Planholder. Upon termination of the Plan by the Transfer Agent or the Trust, shares remaining unredeemed will be held in an uncertificated account in the name of the Planholder, and the account will continue as a dividend-reinvestment, uncertificated account unless and until proper instructions are received from the Planholder, his executor or guardian, or as otherwise appropriate. 9. For purposes of using shares held under the Plan as collateral, the Planholder may request issuance of a portion of his shares in certificated form. Upon written request from the Planholder, the Transfer Agent will determine the number of shares as to which a certificate may be issued, so as not to cause the withdrawal checks to stop because of exhaustion of uncertificated shares needed to continue payments. Should such uncertificated shares become exhausted, Plan withdrawals will terminate. 10. The Transfer Agent shall incur no liability to the Planholder for any action taken or omitted by the Transfer Agent in good faith. 11. In the event that the Transfer Agent shall cease to act as transfer agent for the Trust, the Planholder will be deemed to have appointed any successor transfer agent to act as his agent in administering the Plan. INDEPENDENT AUDITORS' REPORT Centennial New York Tax Exempt Trust The Board of Trustees and Shareholders of Centennial New York Tax Exempt Trust: We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Centennial New York Tax Exempt Trust as of June 30, 1994, the related statement of operations for the year then ended, the statements of changes in net assets for the years ended June 30, 1994 and 1993, and the financial highlights for the period January 3, 1989 (commencement of operations) to June 30, 1994. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned at June 30, 1994 by correspondence with the custodian. 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 New York Tax Exempt Trust at June 30, 1994, the results of its operations, the changes in its net assets, and the financial highlights for the respective stated periods, in conformity with generally accepted accounting principles. DELOITTE & TOUCHE Denver, Colorado July 22, 1994 STATEMENT OF INVESTMENTS June 30, 1994 Centennial New York Tax Exempt Trust
FACE MARKET AMOUNT VALUE-NOTE 1 ------- ------------ MUNICIPAL BONDS AND NOTES-99.6% NEW YORK-95.8% City of New York Development Corp. Mtg. Revenue Bonds, Columbus Multifamily Project, Series A, 2.05% (1) ......... $2,500,000 $ 2,500,000 City of New York Housing Development Corp. Mtg. Revenue Bonds: East 96th Street Project, Series A, 2.15% (1) ............. 300,000 300,000 Queenswood Multifamily Project, Series A, 2.05% (1) ....... 200,000 200,000 City of New York Municipal Water Finance Authority Revenue Bonds: Series C, 3% (1) .......................................... 1,000,000 1,000,000 Water and Sewer System Project, Series C, 3% (1) .......... 200,000 200,000 City of New York Trust Cultural Resources Revenue Refunding Bonds: American Museum of Natural History, Series A, MBIA Insured, 2% (1) .................................................... 500,000 500,000 Erie County, New York Water Authority Revenue Bonds, Series A AMBAC Insured, 2% (1) ..................................... 1,000,000 1,000,000 Geneva, New York Industrial Development Agency Civic Facility Revenue Bonds, Colleges of the Seneca, Series A, 2.25% (1) ................................................. 960,000 960,000 Nassau County, New York Industrial Development Agency Revenue Bonds, Cold Spring Harbor Labor Project, 2% (1) .................................................... 1,000,000 1,000,000 Nassau County, New York Revenue Bonds, Series 32, 2.30% (1) ...................................... 1,000,000 1,000,000 New York State Energy Research and Development Authority: Revenue Bonds: Electric and Gas Corp., Series 84A, 2.80% 12/1/94 (2) ... 1,000,000 1,000,000 Long Island Lighting Co., Series B, 2.85%, 11/1/94 (2) .. 900,000 900,000 Rochester Gas and Electric Co., 2.80% (1) ............... 600,000 600,000 Revenue Refunding Bonds, Electric and Gas Corp., Series B, 2.45%, 8/2/94 (2) ....................................... 1,000,000 1,000,000 New York State Environmental Facility Solid Waste Disposal Revenue Bonds, General Electric Co. Project, Series A, 2.50%, 7/11/94 (2) ........................................ 1,000,000 1,000,000 New York State Housing Finance Agency Revenue Bonds: Mount Sinai School of Medicine, Series A, 2.55% (1) ....... 1,000,000 1,000,000 Normandie Court I Project, 2.05% (1) ...................... 1,000,000 1,000,000 New York State Job Development Authority Guaranteed Revenue Bonds: 1984 Series C-1 to C-30, 2.60% (1) ........................ 775,000 775,000 1984 Series E-1 to E-55, 2.60% (1) ........................ 1,460,000 1,460,000 1984 Series F-1 to F-17, 2.60% (1) ........................ 450,000 450,000 Special Purpose, Series C-1, 2.75% (1) .................... 65,000 65,000 New York State Local Government Assistance Corp. Revenue Bonds, Series A, 2.05% (1) ....................................... 1,300,000 1,300,000
STATMENT OF INVESTMENTS (Continued) Centennial New York Tax Exempt Trust
FACE MARKET AMOUNT VALUE-NOTE 1 ------- ------------- MUNICIPAL BONDS AND NOTES (CONTINUED) NEW YORK (CONTINUED) New York State Mtg. Agency Revenue Bonds, Series 40B, 3.15%, 9/29/94 (2) ........................................ $2,000,000 $ 2,000,000 North Hempstead, New York Solid Waste Management Authority Revenue Refunding Bonds, Series A, 2.15% (1) .............. 2,000,000 2,000,000 Port Authority of New York and New Jersey Consolidated Revenue Bonds, 2.60%, 7/11/94 (2) ................................. 800,000 800,000 Seneca County, New York Industrial Development Agency Civic Facilities Revenue Bonds, New York Chiropractic College, 2% (1) .................................................... 400,000 400,000 Triborough Bridge and Tunnel Authority of New York Revenue Bonds, Series BT-42, 2.30% (1) ................................... 1,000,000 1,000,000 U.S. POSSESSIONS-3.8% Puerto Rico Industrial Medical and Environmental Pollution Control Facilities Authority Revenue Bonds, Merck & Co., Inc. Series A, 2.70%, 12/1/94 ............................................ 1,000,000 1,000,199 ------------ Total Investments at Value (Cost $26,410,199) ............... 99.6% 26,410,199 Other Assets Net of Liabilities ............................. 0.4 108,703 --------- ------------ Net Assets .................................................. 100.0% $26,518,902 ========= ============ 1. Floating or variable rate obligation maturing in more than one year. The interest rate, which is based on specific, or an index of, market interest rates is subject to change periodically and is the effective rate on June 30, 1994. A demand feature allows the recovery of principal at any time, or at specified intervals not exceeding one year, on up to 30 days' notice. 2. Put obligation redeemable at full face value on the date reported.
See accompanying Notes to Financial Statements. STATEMENT OF ASSETS AND LIABILITIES June 30, 1994 Centennial New York Tax Exempt Trust ASSETS: Investments, at value (cost $26,410,199) - see accompanying statement.............................. $ 26,410,199 Cash............................................................................................... 260,132 Receivables: Interest...................................................................................... 75,099 Shares of beneficial interest sold............................................................ 55,624 Other.............................................................................................. 7,320 ------------- Total assets............................................................................. 26,808,374 ------------- LIABILITIES: Payables and other liabilities: Shares of beneficial interest redeemed........................................................ 228,902 Service plan fees - Note 3.................................................................... 11,129 Dividends..................................................................................... 17,780 Other......................................................................................... 31,661 ------------- Total liabilities........................................................................ 289,472 ------------- NET ASSETS......................................................................................... $ 26,518,902 ------------- ------------- COMPOSITION OF NET ASSETS: Paid-in capital.................................................................................... $ 26,518,166 Accumulated net realized gain from investment transactions......................................... 736 ------------- NET ASSETS - Applicable to 26,518,166 shares of beneficial interest outstanding.................... $ 26,518,902 ------------- ------------- NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE..................................... $ 1.00
See accompanying Notes to Financial Statements. 5 STATEMENT OF OPERATIONS For the Year Ended June 30, 1994 Centennial New York Tax Exempt Trust INVESTMENT INCOME - Interest....................................................................... $ 626,536 ------------- EXPENSES: Management fees - Note 3........................................................................... 127,154 Service plan fees - Note 3......................................................................... 46,156 Transfer and shareholder servicing agent fees - Note 3............................................. 43,215 Custodian fees and expenses........................................................................ 12,257 Shareholder reports................................................................................ 9,562 Legal and auditing fees............................................................................ 7,514 Registration and filing fees....................................................................... 1,364 Trustees' fees and expenses........................................................................ 1,306 Other.............................................................................................. 10,335 ------------- Total expenses........................................................................... 258,863 Less assumption of expenses by Centennial Asset Management Corporation - Note 3.................... (55,589) ------------- Net expenses............................................................................. 203,274 ------------- NET INVESTMENT INCOME.............................................................................. 423,262 NET REALIZED GAIN ON INVESTMENTS................................................................... 1,817 ------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................................... $ 425,079 ------------- -------------
See accompanying Notes to Financial Statements. STATEMENTS OF CHANGES IN NET ASSETS Centennial New York Tax Exempt Trust
YEAR ENDED JUNE 30, -------------------- 1994 1993 -------- -------- OPERATIONS: Net investment income........................................................................ $ 423,262 $ 421,860 Net realized gain on investments............................................................. 1,817 1,633 ----------- ---------- Net increase in net assets resulting from operations....................................... 425,079 423,493 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS.................................................. (423,702) (421,860) BENEFICIAL INTEREST TRANSACTIONS: Net increase in net assets resulting from beneficial interest transactions - Note 2.......... 1,523,824 889,153 ----------- ---------- NET ASSETS: Total increase............................................................................... 1,525,201 890,786 Beginning of year............................................................................ 24,993,701 24,102,915 ----------- ---------- End of Year.................................................................................. $26,518,902 $24,993,701 ----------- ---------- ----------- ----------
See accompanying Notes to Financial Statements. FINANCIAL HIGHLIGHTS Centennial New York Tax Exempt Trust
NINE MONTHS ENDED PERIOD ENDED YEAR ENDED JUNE 30, JUNE 30, SEPTEMBER 30, --------------------------------------- ----------- ------------ 1994 1993 1992 1991 1990 1989(1) ------- ------- ------- ------- ------- ------ PER SHARE OPERATING DATA: Net asset value, beginning of period............. $ 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.................................... .02 .02 .03 .05 .04 .04 Dividends and distributions to shareholders...... (.02) (.02) (.03) (.05) (.04) (.04) ------- ------- ------- ------- ------- ------ Net asset value, end of period................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- ------ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in (thousands)........ $26,519 $24,994 $24,103 $21,439 $ 9,133 $4,935 Average net assets (in thousands)................ $25,419 $24,257 $23,221 $16,766 $ 7,008 $2,084 Number of shares outstanding at end of period (in thousands)..................................... 26,518 24,994 24,105 21,443 9,135 4,934 Ratios to average net assets: Net investment income............................ 1.67% 1.74% 3.00% 4.42% 4.98%(2) 5.41%(2) Expenses, before voluntary assumption by the Manager........................................ 1.02% .98% 1.09% 1.08% 1.48%(2) 2.21%(2) Expenses, net of voluntary assumption by the Manager........................................ .80% .80% .80% .72% .96%(2) 1.00%(2)
- ------------ (1) For the period from January 3, 1989 (commencement of operations) to September 30, 1989. (2) Annualized. See accompanying Notes to Financial Statements. NOTES TO FINANCIAL STATEMENTS Centennial New York Tax Exempt Trust 1. SIGNIFICANT ACCOUNTING POLICIES Centennial New York Tax Exempt Trust (the Trust) is registered under the Investment Company Act of 1940, as amended, as a non-diversified, open-end management investment company. The Trust's investment advisor is Centennial Asset Management Corporation (the Manager), a subsidiary of Oppenheimer Management Corporation (OMC). The following is a summary of significant accounting policies consistently followed by the Trust. INVESTMENT VALUATION. Portfolio securities are valued on the basis of amortized cost, which approximates market value. FEDERAL INCOME TAXES. The Trust intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to shareholders. Therefore, no federal income tax provision is required. 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:
Years Ended June 30, ------------------------------------------------------------ 1994 1993 ----------------------------- ----------------------------- SHARES AMOUNT SHARES AMOUNT ------------- -------------- ------------- -------------- Sold............................................... 75,789,053 $ 75,789,053 55,874,424 $ 55,874,424 Dividends and distributions reinvested............. 405,612 405,612 413,652 413,652 Redeemed........................................... (74,670,841) (74,670,841) (55,398,923) (55,398,923) ------------- -------------- ------------- -------------- Net increase.................................. 1,523,824 $ 1,523,824 889,153 $ 889,153 ------------- -------------- ------------- -------------- ------------- -------------- ------------- --------------
NOTES TO FINANCIAL STATEMENTS (Continued) Centennial New York Tax Exempt 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% the first $250 million of net assets with a reduction of .025% on each $250 million thereafter, to .40% on net assets in excess of $1 billion. The Manager has agreed to assume Trust expenses (with specified exceptions) in excess of the most stringent applicable regulatory limit on Trust expenses. In addition, the Manager has voluntarily undertaken to assume Trust expenses in excess of .80% of average annual net assets. Shareholder Services, Inc. (SSI), a subsidiary of OMC, is the transfer and shareholder servicing agent for the Trust, and for other registered investment companies. SSI's total costs of providing such services are allocated ratably to these companies. Under an approved service plan, the Trust may expend up to .20% of its net assets annually to reimburse Centennial Asset Management Corporation, as distributor, for costs incurred in connection with the personal service and maintenance of accounts that hold shares of the Trust, including amounts paid to brokers/dealers, banks and other institutions. APPENDIX A DESCRIPTION OF SECURITIES RATINGS Below is a description of the two highest rating categories for Short Term Debt and Long Term Debt by the "Nationally-Recognized Statistical Rating Organizations" which the Manager evaluates in purchasing securities on behalf of the Trust. The ratings descriptions are based on information supplied by the ratings organizations to subscribers. Short Term Debt Ratings. Moody's Investors Service, Inc. ("Moody's"): The following rating designations for commercial paper (defined by Moody's as promissory obligations not having original maturity in excess of nine months), are judged by Moody's to be investment grade, and indicate the relative repayment capacity of rated issuers: Prime-1: Superior capacity for repayment. Capacity will normally be evidenced by the following characteristics: (a) leveling market positions in well-established industries; (b) high rates of return on funds employed; (c) conservative capitalization structures with moderate reliance on debt and ample asset protection; (d) broad margins in earning coverage of fixed financial charges and high internal cash generation; and (e) well established access to a range of financial markets and assured sources of alternate liquidity. Prime-2: Strong capacity for repayment. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, will be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained. Moody's ratings for state and municipal short-term obligations are designated "Moody's Investment Grade" ("MIG"). Short-term notes which have demand features may also be designated as "VMIG". These rating categories are as follows: MIG1/VMIG1: Best quality. There is present strong protection by established cash flows, superior liquidity support or demonstrated broadbased access to the market for refinancing. MIG2/VMIG2: High quality. Margins of protection are ample although not so large as in the preceding group. Standard & Poor's Corporation ("S&P"): The following ratings by S&P for commercial paper (defined by S&P as debt having an original maturity of no more than 365 days) assess the likelihood of payment: A-1: Strong capacity for timely payment. Those issues determined to possess extremely strong safety characteristics are denoted with a plus sign (+) designation. A-2: Satisfactory capacity for timely payment. However, the relative degree of safety is not as high as for issues designated "A-1". S&P's ratings for Municipal Notes due in three years or less are: SP-1: Very strong or strong capacity to pay principal and interest. Those issues determined to possess overwhelming safety characteristics will be given a plus (+) designation. SP-2: Satisfactory capacity to pay principal and interest. S&P assigns "dual ratings" to all municipal debt issues that have a demand or double feature as part of their provisions. The first rating addresses the likelihood of repayment of principal and interest as due, and the second rating addresses only the demand feature. With short-term demand debt, S&P's note rating symbols are used with the commercial paper symbols (for example, "SP-1+/A-1+"). Fitch Investors Service, Inc. ("Fitch"): Fitch assigns the following short-term ratings to debt obligations that are payable on demand or have original maturities of generally up to three years, including commercial paper, certificates of deposit, medium-term notes, and municipal and investment notes: F-1+: Exceptionally strong credit quality; the strongest degree of assurance for timely payment. F-1: Very strong credit quality; assurance of timely payment is only slightly less in degree than issues rated "F- 1+". F-2: Good credit quality; satisfactory degree of assurance for timely payment, but the margin of safety is not as great as for issues assigned "F-1+" or "F-1" ratings. Duff & Phelps, Inc. ("Duff & Phelps"): The following ratings are for commercial paper (defined by Duff & Phelps as obligations with maturities, when issued, of under one year), asset-backed commercial paper, and certificates of deposit (the ratings cover all obligations of the institution with maturities, when issued, of under one year, including bankers' acceptance and letters of credit): Duff 1+: Highest certainty of timely payment. Short-term liquidity, including internal operating factors and/or access to alternative sources of funds, is outstanding, and safety is just below risk-free U.S. Treasury short- term obligations. Duff 1: Very high certainty of timely payment. Liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. Duff 1-: High certainty of timely payment. Liquidity factors are strong and supported by good fundamental protection factors. Risk factors are very small. Duff 2: Good certainty of timely payment. Liquidity factors and company fundamentals are sound. Although ongoing funding needs may enlarge total financing requirements, access to capital markets is good. Risk factors are small. IBCA Limited or its affiliate IBCA Inc. ("IBCA"): Short-term ratings, including commercial paper (with maturities up to 12 months), are as follows: A1+: Obligations supported by the highest capacity for timely repayment. A1: Obligations supported by a very strong capacity for timely repayment. A2: Obligations supported by a strong capacity for timely repayment, although such capacity may be susceptible to adverse changes in business, economic, or financial conditions. Thomson BankWatch, Inc. ("TBW"): The following short-term ratings apply to commercial paper, certificates of deposit, unsecured notes, and other securities having a maturity of one year or less. TBW-1: The highest category; indicates the degree of safety regarding timely repayment of principal and interest is very strong. TBW-2: The second highest rating category; while the degree of safety regarding timely repayment of principal and interest is strong, the relative degree of safety is not as high as for issues rated "TBW-1". Long Term Debt Ratings. These ratings are relevant for securities purchased by the Trust with a remaining maturity of 397 days or less, or for rating issuers of short-term obligations. Moody's: Bonds (including municipal bonds) are rated as follows: Aaa: Judged to be the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edge." Interest payments are protected by a large or by an exceptionally stable margin, and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong positions of such issues. Aa: Judged to be of high quality by all standards. Together with the "Aaa" group they comprise what are generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in "Aaa" securities or fluctuations of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in "Aaa" securities. Moody's applies numerical modifiers "1", "2" and "3" in its "Aa" rating classification. The modifier "1" indicates that the security ranks in the higher end of its generic rating category; the modifier "2" indicates a mid-range ranking; and the modifier "3" indicates that the issue ranks in the lower end of its generic rating category. Standard & Poor's: Bonds (including municipal bonds) are rated as follows: AAA: The highest rating assigned by S&P. Capacity to pay interest and repay principal is extremely strong. AA A strong capacity to pay interest and repay principal and differ from "AAA" rated issues only in small degree. Fitch: AAA: Considered to be investment grade and of the highest credit quality. The obligor has an exceptionally strong ability to pay interest and repay principal, which is unlikely to be affected by reasonably foreseeable events. AA: Considered to be investment grade and of very high credit quality. The obligor's ability to pay interest and repay principal is very strong, although not quite as strong as bonds rated "AAA". Plus (+) and minus (-) signs are used in the "AA" category to indicate the relative position of a credit within that category. Because bonds rated in the "AAA" and "AA" categories are not significantly vulnerable to foreseeable future developments, short-term debt of these issuers is generally rated "F-1+". Duff & Phelps: AAA: The highest credit quality. The risk factors are negligible, being only slightly more than for risk-free U.S. Treasury debt. AA: High credit quality. Protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions. Plus (+) and minus (-) signs are used in the "AA" category to indicate the relative position of a credit within that category. IBCA: Long-term obligations (with maturities of more than 12 months) are rated as follows: AAA: The lowest expectation of investment risk. Capacity for timely repayment of principal and interest is substantial such that adverse changes in business, economic, or financial conditions are unlikely to increase investment risk significantly. AA: A very low expectation for investment risk. Capacity for timely repayment of principal and interest is substantial. Adverse changes in business, economic, or financial conditions may increase investment risk albeit not very significantly. A plus (+) or minus (-) sign may be appended to a long term rating to denote relative status within a rating category. TBW: TBW issues the following ratings for companies. These ratings assess the likelihood of receiving payment of principal and interest on a timely basis and incorporate TBW's opinion as to the vulnerability of the company to adverse developments, which may impact the market's perception of the company, thereby affecting the marketability of its securities. A: Possesses an exceptionally strong balance sheet and earnings record, translating into an excellent reputation and unquestioned access to its natural money markets. If weakness or vulnerability exists in any aspect of the company's business, it is entirely mitigated by the strengths of the organization. A/B: The company is financially very solid with a favorable track record and no readily apparent weakness. Its overall risk profile, while low, is not quite as favorable as for companies in the highest rating category. APPENDIX B TAX EQUIVALENT YIELD TABLES The equivalent yield tables below compare tax-free income with taxable income under Federal, New York State and New York City income tax rates effective January 1, 1994. Combined taxable income refers to the net amount subject to Federal, New York State and New York City income tax after deductions and exemptions. The tables assume that an investor's highest tax bracket applies to the change in taxable income resulting from a switch between taxable and non-taxable investments, that the investor is not subject to the Alternative Minimum Tax and that New York State and local income tax payments are fully deductible for Federal income tax purposes. They do not reflect the phaseout of itemized deductions and personal exemptions at higher income levels, resulting in higher effective tax rates and tax equivalent yields.
New York State Residents - ------------------------ Combined Taxable Income - ---------------------- A Centennial New York Tax Exempt Trust Yield Single Return Joint Return of: - ------------- ------------ Combined 1.0% 1.5% 2.0% 2.5% Effective Is Approximately Not Not Tax Equivalent to a Taxable Over Over Over Over Bracket Yield of: - ---- ---- ---- ---- --------- ------------------------- $ 16,000 $ 22,000 20.10% 1.25% 1.88% 2.50% 3.13% $ 22,000 $ 26,000 20.95% 1.27% 1.90% 2.53% 3.16% $ 13,000 $ 22,100 $ 26,000 $ 36,900 21.69% 1.28% 1.92% 2.55% 3.19% $ 22,100 $ 53,500 $ 36,900 $ 89,150 33.67% 1.51% 2.26% 3.02% 3.77% $ 53,500 $115,000 $ 89,150 $140,000 36.43% 1.57% 2.36% 3.15% 3.93% $115,000 $250,000 $140,000 $250,000 41.04% 1.70% 2.54% 3.39% 4.24% $250,000 $250,000 44.36% 1.80% 2.70% 3.59% 4.49% New York State Residents - ----------------------- Combined Taxable Income - ---------------------- A Centennial New York Tax Exempt Trust Yield Single Return Joint Return of: - ------------- ------------ Combined 3.0% 3.5% 4.0% Effective Is Approximately Not Not Tax Equivalent to a Taxable Over Over Over Over Bracket Yield of: - ---- ---- ---- ---- --------- ------------------------- $ 16,000 $ 22,000 20.10% 3.75% 4.38% 5.01% $ 22,000 $ 26,000 20.95% 3.80% 4.43% 5.06% $ 13,000 $ 22,100 $ 26,000 $ 36,900 21.69% 3.83% 4.47% 5.11% $ 22,100 $ 53,500 $ 36,900 $ 89,150 33.67% 4.52% 5.28% 6.03% $ 53,500 $115,000 $ 89,150 $140,000 36.43% 4.72% 5.51% 6.29% $115,000 $250,000 $140,000 $250,000 41.04% 5.09% 5.94% 6.78% $250,000 $250,000 44.36% 5.39% 6.29% 7.19% New York City Residents - ------------------------ Combined Taxable Income - ---------------------- A Centennial New York Tax Exempt Trust Yield Single Return Joint Return of: - ------------- ------------ Combined 1.0% 1.5% 2.0% 2.5% Effective Is Approximately Not Not Tax Equivalent to a Taxable Over Over Over Over Bracket Yield of: - ---- ---- ---- ---- --------- ------------------------- $ 16,000 $ 22,000 23.21% 1.30% 1.95% 2.60% 3.26% $ 22,000 $ 26,000 24.06% 1.32% 1.98% 2.63% 3.29% $ 26,000 $ 27,000 24.80% 1.33% 1.99% 2.66% 3.32% $ 15,000 $ 22,100 $ 27,000 $ 36,900 25.33% 1.34% 2.01% 2.68% 3.35% $ 22,100 $ 25,000 $ 36,900 $ 45,000 36.75% 1.58% 2.37% 3.16% 3.95% $ 25,000 $ 53,500 $ 45,000 $ 89,150 36.84% 1.58% 2.37% 3.17% 3.96% $ 53,500 $ 60,000 $ 89,150 $108,000 39.47% 1.65% 2.48% 3.30% 4.13% $ 60,000 $115,000 $108,000 $140,000 39.51% 1.65% 2.48% 3.31% 4.13% $115,000 $250,000 $140,000 $250,000 43.89% 1.78% 2.67% 3.56% 4.46% $250,000 $250,000 47.05% 1.89% 2.83% 3.78% 4.72% New York City Residents - ----------------------- Combined Taxable Income - ---------------------- A Centennial New York Tax Exempt Trust Yield Single Return Joint Return of: - ------------- ------------ Combined 3.0% 3.5% 4.0% Effective Is Approximately Not Not Tax Equivalent to a Taxable Over Over Over Over Bracket Yield of: - ---- ---- ---- ---- --------- ------------------------- $ 16,000 $ 22,000 23.21% 3.91% 4.56% 5.21% $ 22,000 $ 26,000 24.06% 3.95% 4.61% 5.27% $ 26,000 $ 27,000 24.80% 3.99% 4.65% 5.32% $ 15,000 $ 22,100 $ 27,000 $ 36,900 25.33% 4.02% 4.69% 5.36% $ 22,100 $ 25,000 $ 36,900 $ 45,000 36.75% 4.74% 5.53% 6.32% $ 25,000 $ 53,500 $ 45,000 $ 89,150 36.84% 4.75% 5.54% 6.33% $ 53,500 $ 60,000 $ 89,150 $108,000 39.47% 4.96% 5.78% 6.61% $ 60,000 $115,000 $108,000 $140,000 39.51% 4.96% 5.79% 6.61% $115,000 $250,000 $140,000 $250,000 43.89% 5.35% 6.24% 7.13% $250,000 $250,000 47.05% 5.67% 6.61% 7.55%
Investment Adviser and Distributor Centennial Asset Management Corporation 3410 South Galena Street Denver, Colorado 80231 Transfer and Shareholder Servicing Agent Shareholder Services, Inc. P.O. Box 5143 Denver, Colorado 80201-5143 1-800-525-9310 Custodian of Portfolio Securities Citibank, N.A. 399 Park Avenue New York, New York 10043 Independent Auditors Deloitte & Touche LLP 1560 Broadway Denver, Colorado 80202 Legal Counsel Myer, Swanson & Adams, P.C. 1600 Broadway Denver, Colorado 80202 PR 780 (11/94) * Printed on recycled paper Centennial New York Tax Exempt Trust Effective November 1, 1994 CENTENNIAL NEW YORK TAX EXEMPT TRUST FORM N-1A PART C OTHER INFORMATION ITEM 24. Financial Statements and Exhibits --------------------------------- (a) Financial Statements: -------------------- (1) Condensed Financial Information (See Part A): Filed herewith. (2) Independent Auditors' Report (See Part B): Filed herewith. (3) Statement of Investments (See Part B): Filed herewith. (4) Statement of Assets and Liabilities (See Part B): Filed herewith. (5) Statement of Operations (See Part B): Filed herewith. (6) Statement of Changes in Net Assets (See Part B): Filed herewith. (7) Notes to Financial Statements (See Part B): Filed herewith. (8) Independent Auditors' Consent: Filed herewith. (b) Exhibits: -------- (1) Amended Declaration of Trust dated February 1, 1990 - Filed with Post-Effective Amendment No. 3, to the Registrant's Registration Statement, 1/30/90, refiled herewith pursuant to Item 102 of Regulation S-T, and incorporated herein by reference. (2) Amended By-Laws dated 6/26/90 - Filed with Post-Effective Amendment No. 6 to the Registrant's Registration Statement, 10/29/91, refiled herewith pursuant to Item 102 of Regulation S-T, and incorporated herein by reference. (3) Not applicable. (4) Specimen Share Certificate - Filed with Post-Effective Amendment No. 6 to the Registrant's Registration Statement, 10/29/91, refiled herewith pursuant to Item 102 of Regulation S-T, and incorporated herein by reference. (5) Investment Advisory Agreement dated 10/22/90 - Filed with Post- Effective Amendment No. 5 to Registrant's Registration Statement, 10/29/90, refiled herewith pursuant to Item 102 of Regulation S-T, and incorporated herein by reference. (6) (a) General Distributor's Agreement between Registrant and Centennial Asset Management Corporation dated 10/13/92 - Filed with Post-Effective Amendment No. 8 to Registrant's Registration Statement, 10/28/93, and incorporated herein by reference. (b) Form of Centennial Asset Management Corporation (formerly Centennial Capital Corporation) Dealer Agreement Filed with Post-Effective Amendment No. 6 to the Registration Statement of Centennial Government Trust (Reg. No. 2- 75812), 8/26/84, and incorporated herein by reference. (c) Sub-Distributor's Agreement dated May 28, 1993 between Centennial Asset Management Corporation and Oppenheimer Funds Distributor, Inc. - Filed with Post-Effective Amendment No. 8 to Registrant's Registration Statement, 10/28/93, and incorporated herein by reference. (7) Not applicable. (8) Custodian Agreement dated December 22, 1988 - filed with Post- Effective Amendment No. 6 to the Registrant's Registration Statement, 10/29/91, and refiled herewith pursuant to Item 102 of Regulation S-T, and incorporated herein by reference. (9) Not applicable. (10) Opinion and Consent of Counsel dated 9/22/87 - Filed with Pre- Effective Amendment No. 1 to the Registrant's Registration Statement, 11/28/88 and refiled herewith pursuant to Item 102 of Regulation S-T, and incorporated herein by reference. (11) Not applicable. (12) Not applicable. (13) Investment letter from Oppenheimer Management Corporation to Registrant dated 12/5/88 - Filed with Pre-Effective Amendment No. 1 to Registrant's Registration Statement, 11/28/88, and refiled herewith pursuant to Item 102 of Regulation S-T, and incorporated herein by reference. (14) Not applicable. (15) (a) Service Plan and Agreement under Rule 12b-1 between Registrant and Centennial Asset Management Corporation, dated as of 8/24/93 - Filed with Post-Effective Amendment No. 8 to Registrant's Registration Statement, 10/28/93, and incorporated herein by reference. (16) Performance Data Computation Schedule - Filed herewith. (17) Financial Data Schedule - Filed herewith. -- Powers of Attorney - Filed with Post-Effective Amendment No. 8 to Registrant's Registration Statement, 10/29/93, and incorporated herein by reference. Item 25. Persons Controlled by and Under Common Control with Registrant -------------------------------------------------------------- None Item 26. Number of Holders of Securities ------------------------------- Number of Record Holders Title of Class as of September 30, 1994 -------------- ------------------------ Shares of Beneficial Interest 1,555 Item 27. Indemnification --------------- Reference is made to the provisions of Article SEVENTH of Registrant's Amended Declaration of Trust. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to trustees, officers and controlling persons of Registrant pursuant to the foregoing provisions or otherwise, Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Registrant of expenses incurred or paid by a trustee, officer or controlling person of Registrant in the successful defense of any action, suit or proceeding) is asserted by such trustee, officer or controlling person, Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. ITEM 28. (a) Business and Other Connections of Investment Adviser ---------------------------------------------------- Centennial Asset Management Corporation is the investment adviser and distributor of Registrant; it and certain subsidiaries and affiliates act in the same capacity for other registered investment companies as described in Parts A and B. (b) Business and Other Connections of Officers and Directors of Investment Adviser --------------------------------------------------------- For information as to the business, profession, vocation or employment of a substantial nature of each of the officers and directors of such Investment Adviser, reference is made to Form ADV of Centennial Asset Management Corporation, formerly Centennial Capital Corporation, filed under the Investment Advisers Act of 1940, which is incorporated herein by reference. Item 29. Principal Underwriters ---------------------- (a) Centennial Asset Management Corporation is the Distributor of the Registrant's shares. It is also the distributor of the shares of each of the other open-end 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 under the possession of Centennial Asset Management Corporation, 3410 South Galena Street, Denver, Colorado 80231. Item 31. Management Services ------------------- Not Applicable. Item 32. Undertakings ------------ (a) Not Applicable. (b) Not Applicable. (c) Not Applicable. (d) Registrant undertakes to call a meeting of shareholders for the purpose of voting upon the question of removing a Trustee or Trustees when requested to do so by the holders of at least 10% of the Registrant's outstanding shares and in connection with such meeting to comply with the provisions of Section 16(c) of the Investment Company Act of 1940 relating to shareholder communications. 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 31st day of October, 1994. CENTENNIAL NEW YORK TAX EXEMPT TRUST /s/ James C. Swain by: -------------------------- James C. Swain, Chairman Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated: Signatures Title Date - ----------- ------- ------ /s/ James C. Swain Chairman of the Board October 31, 1994 - ---------------------- of Trustees, Trustee James C. Swain and Principal Executive Officer /s/ Jon S. Fossel President and Trustee October 31, 1994 - ---------------------- Jon S. Fossel /s/ George Bowen Treasurer and October 31, 1994 - ---------------------- Principal Financial George Bowen and Accounting Officer /s/ Robert G. Avis Trustee October 31, 1994 - ---------------------- Robert G. Avis /s/ William A. Baker Trustee October 31, 1994 - ---------------------- William A. Baker /s/ Charles Conrad, Jr. Trustee October 31, 1994 - ---------------------- Charles Conrad, Jr. /s/ Raymond J. Kalinowski Trustee October 31, 1994 - ---------------------- Raymond J. Kalinowski /s/ C. Howard Kast Trustee October 31, 1994 - ---------------------- C. Howard Kast /s/ Robert M. Kirchner Trustee October 31, 1994 - ---------------------- Robert M. Kirchner /s/ Ned M. Steel Trustee October 31, 1994 - ---------------------- Ned M. Steel *By: /s/ Robert G. Zack -------------------------------- Robert G. Zack, Attorney-in-Fact CENTENNIAL NEW YORK TAX EXEMPT TRUST EXHIBIT INDEX Exhibit Description - ------- ----------- 24(a)(8) Independent Auditors' Consent 24(b)(1) Amended Declaration of Trust dated 2/1/90 24(b)(2) Amended By-Laws dated 6/26/90 24(b)(4) Specimen Share Certificate 24(b)(5) Investment Advisory Agreement dated 10/22/90 24(b)(8) Custodian Agreement dated 12/22/88 24(b)(10) Opinion and Consent of Counsel dated 9/22/87 24(b)(13) Investment Letter dated 12/5/88 24(b)(16) Performance Data Computation Schedule 24(b)(17) Financial Data Schedule EX-23 2 Exhibit 24(a)(8) INDEPENDENT AUDITORS' CONSENT Centennial New York Tax Exempt Trust: We hereby consent to the use in this Post-Effective Amendment No. 9 to Registration Statement No. 33-23494 of our report dated July 22, 1994 on the financial statements of Centennial New York Tax Exempt 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 DELOITTE & TOUCHE LLP Denver, Colorado October 28, 1994 PROSP\780CONS EX-3 3 Exhibit 24(b)(1) AMENDED DECLARATION OF TRUST OF CENTENNIAL NEW YORK TAX EXEMPT TRUST AMENDED DECLARATION OF TRUST, made February 1, 1990, by and among the individuals executing this Amended Declaration of Trust as the Trustees. WHEREAS, the Trustees established Oppenheimer New York Tax-Exempt Cash Reserves, a Trust Fund under the laws of the Commonwealth of Massachusetts, for the investment and reinvestment of funds contributed thereto, under a Declaration of Trust dated July 26, 1988; WHEREAS, the Trustees desire to amend said Declaration of Trust without shareholder approval, as permitted under ARTICLE SEVENTH, to change the Trust's name to Centennial New York Tax Exempt Trust; NOW, THEREFORE, the Trustees declare that all money and property contributed to the trust fund hereunder shall be held and managed under this Declaration of Trust IN TRUST as herein set forth below. FIRST: This Trust shall be known as CENTENNIAL NEW YORK TAX EXEMPT TRUST. SECOND: Whenever used herein, unless otherwise required by the context or specifically provided: 1. All terms used in this Declaration of Trust which are defined in the 1940 Act (defined below) shall have the meanings given to them in the 1940 Act. 2. "Board" or "Board of Trustees" or the "Trustees" means the Board of Trustees of the Trust. 3. "By-Laws" means the By-Laws of the Trust as amended from time to time. 4. "Commission" means the Securities and Exchange Commission. 5. "Declaration of Trust" shall mean this Declaration of Trust as amended or restated from time to time. 6. The "1940 Act" refers to the Investment Company Act of 1940 and the Rules and Regulations of the Commission thereunder, all as amended from time to time. 7. "Series" refers to Series of Shares established and designated under or in accordance with the provisions of Article FOURTH. 8. "Shareholder" means a record owner of Shares of the Trust. 9. "Shares" refers to the transferable units of interest into which the beneficial interest in the Trust or any Series of the Trust (as the context may require) shall be divided from time to time and includes fractions of Shares as well as whole Shares. 10. The "Trust" refers to the Massachusetts business trust created by this Declaration of Trust, as amended or restated from time to time. 11. "Trustees" refers to the individual trustees in their capacity as trustees hereunder of the Trust and their successor or successors for the time being in office as such trustees. THIRD: The purpose or purposes for which the Trust is formed and the business or objects to be transacted, carried on and promoted by it are as follows: 1. To hold, invest or reinvest its funds, and in connection therewith to hold part or all of its funds in cash, and to purchase or otherwise acquire, hold for investment or otherwise, sell, sell short, assign, negotiate, transfer, exchange or otherwise dispose of or turn to account or realize upon, securities (which term "securities" shall for the purposes of this Declaration of Trust, without limitation of the generality thereof, be deemed to include any stocks, shares, bonds, financial futures contracts, indexes, debentures, notes, mortgages or other obligations, and any certificates, receipts, warrants or other instruments representing rights to receive, purchase or subscribe for the same, or evidencing or representing any other rights or interests therein, or in any property or assets) created or issued by any issuer (which term "issuer" shall for the purposes of this Declaration of Trust, without limitation of the generality thereof be deemed to include any persons, firms, associations, corporations, syndicates, combinations, organizations, governments, or subdivisions thereof) and in financial instruments (whether they are considered as securities or commodities); and to exercise, as owner or holder of any securities or financial instruments, all rights, powers and privileges in respect thereof; and to do any and all acts and things for the preservation, protection, improvement and enhancement in value of any or all such securities or financial instruments. 2. To borrow money and pledge assets in connection with any of the objects or purposes of the Trust, and to issue notes or other obligations evidencing such borrowings, to the extent permitted by the 1940 Act and by the Trust's fundamental investment policies under the 1940 Act. 3. To issue and sell its Shares in such Series and amounts and on such terms and conditions, for such purposes and for such amount or kind of consideration (including without limitation thereto, securities) now or hereafter permitted by the laws of the Commonwealth of Massachusetts and by this Declaration of Trust, as the Trustees may determine. 4. To purchase or otherwise acquire, hold, dispose of, resell, transfer, reissue or cancel its Shares, or to classify or reclassify any unissued Shares or any Shares previously issued and reacquired of any Series into one or more series that may have been established and designated from time to time, all without the vote or consent of the Shareholders of the Trust, in any manner and to the extent now or hereafter permitted by this Declaration of Trust. 5. To conduct its business in all its branches at one or more offices in New York, Colorado and elsewhere in any part of the world, without restriction or limit as to extent. 6. To carry out all or any of the foregoing objects and purposes as principal or agent, and alone or with associates or to the extent now or hereafter permitted by the laws of Massachusetts, as a member of, or as the owner or holder of any stock of, or share of interest in, any issuer, and in connection therewith or make or enter into such deeds or contracts with any issuers and to do such acts and things and to exercise such powers, as a natural person could lawfully make, enter into, do or exercise. 7. To do any and all such further acts and things and to exercise any and all such further powers as may be necessary, incidental, relative, conducive, appropriate or desirable for the accomplishment, carrying out or attainment of all or any of the foregoing purposes or objects. The foregoing objects and purposes shall, except as otherwise expressly provided, be in no way limited or restricted by reference to, or inference from, the terms of any other clause of this or any other Article of this Declaration of Trust, and shall each be regarded as independent and construed as powers as well as objects and purposes, and the enumeration of specific purposes, objects and powers shall not be construed to limit or restrict in any manner the meaning of general terms or the general powers of the Trust now or hereafter conferred by the laws of the Commonwealth of Massachusetts nor shall the expression of one thing be deemed to exclude another, though it be of a similar or dissimilar nature, not expressed; provided, however, that the Trust shall not carry on any business, or exercise any powers, in any state, territory, district or country except to the extent that the same may lawfully be carried on or exercised under the laws thereof. FOURTH: 1. The beneficial interest in the Trust shall be divided into Shares, all without par value, but the Trustees shall have the authority from time to time to create one or more Series of Shares in addition to the Series specifically established and designated in part 2 of this Article FOURTH, as they deem necessary or desirable, to establish and designate such Series, and to fix and determine the relative rights and preferences as between the different Series of Shares as to right of redemption and the price, terms and manner of redemption, special and relative rights as to dividends and other distributions and on liquidation, sinking or purchase fund provisions, conversion on liquidation, conversion rights, and conditions under which the several Series shall have individual voting rights or no voting rights. Except as aforesaid, all Shares of the different Series shall be identical. (a) The number of authorized Shares and the number of Shares of each Series that may be issued is unlimited, and the Trustees may issue Shares of any Series for such consideration and on such terms as they may determine (or for no consideration if pursuant to a Share dividend or split-up), all without action or approval of the Shareholders. All Shares when so issued on the terms determined by the Trustees shall be fully paid and non-assessable. The Trustees may classify or reclassify any unissued Shares or any Shares previously issued and reacquired of any Series into one or more Series that may be established and designated from time to time. The Trustees may hold as treasury Shares (of the same or some other Series), reissue for such consideration and on such terms as they may determine, or cancel, at their discretion from time to time, any Shares of any Series reacquired by the Trust. (b) The establishment and designation of any Series of Shares in addition to that established and designated in part 2 of this Article FOURTH shall be effective upon the execution by a majority of the Trustees of an instrument setting forth such establishment and designation and the relative rights and preferences of such Series, or as otherwise provided in such instrument. At any time that there are no Shares outstanding of any particular Series previously established and designated, the Trustees may by an instrument executed by a majority of their number abolish that Series and the establishment and designation thereof. Each instrument referred to in this paragraph shall be an amendment to this Declaration of Trust, and the Trustees may make any such amendment without shareholder approval. (c) Any Trustee, officer or other agent of the Trust, and any organization in which any such person is interested may acquire, own, hold and dispose of Shares of any Series of the Trust to the same extent as if such person were not a Trustee, officer or other agent of the Trust; and the Trust may issue and sell or cause to be issued and sold and may purchase Shares of any Series from any such person or any such organization subject only to the general limitations, restrictions or other provisions applicable to the sale or purchase of Shares of such Series generally. 2. Without limiting the authority of the Trustees set forth in part 1 of this Article FOURTH to establish and designate any further Series, the Trustees hereby establish one Series of Shares having the same name as the Trust. The Shares of that Series and any Shares of any further Series that may from time to time be established and designated by the Trustees shall (unless the Trustees otherwise determine with respect to some further Series at the time of establishing and designating the same) have the following relative rights and preferences: (a) Assets Belonging to Series. All consideration received by the Trust for the issue or sale of Shares of a particular Series, together with all assets in which such consideration is invested or reinvested, all income, earnings, profits, and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same may be, shall irrevocably belong to that Series for all purposes, subject only to the rights of creditors, and shall be so recorded upon the books of account of the Trust. Such consideration, assets, income, earnings, profits, and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds, in whatever form the same may be, together with any General Items allocated to that Series as provided in the following sentence, are herein referred to as "assets belonging to" that Series. In the event that there are any assets, income, earnings, profits, and proceeds thereof, funds, or payments which are not readily identifiable as belonging to any particular Series (collectively "General Items"), the Trustees shall allocate such General Items to and among any one or more of the Series established and designated from time to time in such manner and on such basis as they, in their sole discretion, deem fair and equitable; and any General Items so allocated to a particular Series shall belong to that Series. Each such allocation by the Trustees shall be conclusive and binding upon the shareholders of all Series for all purposes. (b) Liabilities Belonging to Series. The assets belonging to each particular Series shall be charged with the liabilities of the Trust in respect of that Series and all expenses, costs, charges and reserves attributable to that Series, and any general liabilities, expenses, costs, charges or reserves of the Trust which are not readily identifiable as belonging to any particular Series shall be allocated and charged by the Trustees to and among any one or more of the Series established and designated from time to time in such manner and on such basis as the Trustees in their sole discretion deem fair and equitable. The liabilities, expenses, costs, charges and reserves allocated and so charged to a Series are herein referred to as "liabilities belonging to" that Series. Each allocation of liabilities, expenses, costs, charges and reserves by the Trustees shall be conclusive and binding upon the holders of all Series for all purposes. (c) Dividends. Dividends and distributions on Shares of a particular Series may be paid to the holders of Shares of that Series, with such frequency as the Trustees may determine, which may be daily or otherwise pursuant to a standing resolution or resolutions adopted only once or with such frequency as the Trustees may determine, from such of the income, and surplus capital gains accrued or realized, from the assets belonging to that Series, as the Trustees may determine, after providing for actual and accrued liabilities belonging to that Series. All dividends and distributions on Shares of a particular Series shall be distributed pro rata to the holders of that Series in proportion to the number of Shares of that Series held by such holders at the date and time of record established for the payment of such dividends or distributions, except that in connection with any dividend or distribution program or procedure the Trustees may determine that no dividend or distribution shall be payable on Shares as to which the Shareholder's purchase order and/or payment have not been received by the time or times established by the Trustees under such program or procedure. Such dividends and distributions may be made in cash or Shares or a combination thereof as determined by the Trustees or pursuant to any program that the Trustees may have in effect at the time for the election by each Shareholder of the mode of the making of such dividend or distribution to that Shareholder. Any such dividend or distribution paid in Shares will be paid at the net asset value thereof as determined in accordance with paragraph 13 of Article SEVENTH. (d) Liquidation. In the event of the liquidation or dissolution of the Trust, the Shareholders of each Series that has been established and designated shall be entitled to receive, as a Series, when and as declared by the Trustees, the excess of the assets belonging to that Series over the liabilities belonging to that Series. The assets so distributable to the Shareholders of any particular Series shall be distributed among such Shareholders in proportion to the number of Shares of that Series held by them and recorded on the books of the Trust. (e) Transfer. All Shares of each particular Series shall be transferable, but transfers of Shares of a particular Series will be recorded on the Share transfer records of the Trust applicable to that Series only at such times as Shareholders shall have the right to require the Trust to redeem Shares of that Series and at such other times as may be permitted by the Trustees. (f) Equality. All Shares of each particular Series shall represent an equal proportionate interest in the assets belonging to that Series (subject to the liabilities belonging to that Series), and each Share of any particular Series shall be equal to each other Share of that Series; but the provisions of this sentence shall not restrict any distinctions permissible under subsection (c) of part 2 of this Article FOURTH that may exist with respect to dividends and distributions on Shares of the same Series. The Trustees may from time to time divide or combine the Shares of any particular Series into a greater or lesser number of Shares of that Series without thereby changing the proportionate beneficial interest in the assets belonging to that Series or in any way affecting the rights of Shares of any other Series. (g) Fractions. Any fractional Share of any Series, if any such fractional Share is outstanding, shall carry proportionately all the rights and obligations of a whole Share of that Series, including those rights and obligations with respect to voting, receipt of dividends and distributions, redemption of Shares, and liquidation of the Trust. (h) Conversion Rights. Subject to compliance with the requirements of the 1940 Act, the Trustees shall have the authority to provide that holders of Shares of any Series shall have the right to exchange said Shares into Shares of one or more other Series of Shares in accordance with such requirements and procedures as may be established by the Trustees. (i) Ownership of Shares. The ownership of Shares shall be recorded on the books of the Trust or of a transfer or similar agent for the Trust, which books shall be maintained separately for the Shares of each Series that has been established and designated. No certification certifying the ownership of Shares need be issued except as the Trustees may otherwise determine from time to time. The Trustees may make such rules as they consider appropriate for the issuance of Shares certificates, the use of facsimile signatures, the transfer of Shares and similar matters. The record books of the Trust as kept by the Trust or any transfer or similar agent, as the case may be, shall be conclusive as to who are the Shareholders and as to the number of Shares of each Series held from time to time by each such Shareholder. (j) Investments in the Trust. The Trustees may accept investments in the Trust from such persons and on such terms and for such consideration, not inconsistent with the provisions of the 1940 Act, as they from time to time authorize. The Trustees may authorize any distributor, principal underwriter, custodian, transfer agent or other person to accept orders for the purchase or sale of Shares that conform to such authorized terms and to reject any purchase or sale orders for Shares whether or not conforming to such authorized terms. FIFTH: The following provisions are hereby adopted with respect to voting Shares of the Trust and certain other rights: 1. The Shareholders shall have the power to vote (a) for the election of Trustees when that issue is submitted to them, (b) with respect to the amendment of this Declaration of Trust except where the Trustees are given authority to amend the Declaration of Trust without shareholder approval, (c) to the same extent as the shareholders of a Massachusetts business corporation, as to whether or not a court action, proceeding or claim should be brought or maintained derivatively or as a class action on behalf of the Trust or the Shareholders, and (d) with respect to those matters relating to the Trust as may be required by the 1940 Act or required by law, by this Declaration of Trust, or the By-Laws of the Trust or any registration statement of the Trust filed with the Commission or any State, or as the Trustees may consider desirable. 2. The Trust will not hold shareholder meetings unless required by the 1940 Act, the provisions of this Declaration of Trust, or any other applicable law. The Trustees may call a meeting of shareholders. 3. At all meetings of Shareholders, each Shareholder shall be entitled to one vote on each matter submitted to a vote of the Shareholders of the affected Series for each Share standing in his name on the books of the Trust on the date, fixed in accordance with the By-Laws, for determination of Shareholders of the affected Series entitled to vote at such meeting (except, if the Board so determines, for Shares redeemed prior to the meeting), and each such Series shall vote as an individual class ("Individual Class Voting"); a Series shall be deemed to be affected when a vote of the holders of that Series on a matter is required by the 1940 Act; provided, however, that as to any matter with respect to which a vote of Shareholders is required by the 1940 Act or by any applicable law that must be complied with, such requirements as to a vote by Shareholders shall apply in lieu of Individual Class Voting as described above. Any fractional Share shall carry proportionately all the rights of a whole Share, including the right to vote and the right to receive dividends. The presence in person or by proxy of the holders of one- third of the Shares, or of the Shares of any Series, outstanding and entitled to vote thereat shall constitute a quorum at any meeting of the Shareholders or of that Series, respectively; provided however, that if any action to be taken by the Shareholders or by a Series at a meeting requires an affirmative vote of a majority, or more than a majority, of the shares outstanding and entitled to vote, then in such event the presence in person or by proxy of the holders of a majority of the shares outstanding and entitled to vote at such a meeting shall constitute a quorum for all purposes. At a meeting at which is a quorum is present, a vote of a majority of the quorum shall be sufficient to transact all business at the meeting. If at any meeting of the Shareholders there shall be less than a quorum present, the Shareholders or the Trustees present at such meeting may, without further notice, adjourn the same from time to time until a quorum shall attend, but no business shall be transacted at any such adjourned meeting except such as might have been lawfully transacted had the meeting not been adjourned. 4. Each Shareholder, upon request to the Trust in proper form determined by the Trust, shall be entitled to require the Trust to redeem from the net assets of that Series all or part of the Shares of such Series standing in the name of such Shareholder. The method of computing such net asset value, the time at which such net asset value shall be computed and the time within which the Trust shall make payment therefor, shall be determined as hereinafter provided in Article SEVENTH of this Declaration of Trust. Notwithstanding the foregoing, the Trustees, when permitted or required to do so by the 1940 Act, may suspend the right of the Shareholders to require the Trust to redeem Shares. 5. No Shareholder shall, as such holder, have any right to purchase or subscribe for any security of the Trust which it may issue or sell, other than such right, if any, as the Trustees, in their discretion, may determine. 6. All persons who shall acquire Shares shall acquire the same subject to the provisions of the Declaration of Trust. 7. Cumulative voting for the election of Trustees shall not be allowed. SIXTH: 1. The persons who shall act as initial Trustees until the first meeting or until their successors are duly chosen and qualify are the initial trustees executing this Declaration of Trust or any counterpart thereof. However, the By-Laws of the Trust may fix the number of Trustees at a number greater or lesser than the number of initial Trustees and may authorize the Trustees to increase or decrease the number of Trustees, to fill any vacancies on the Board which may occur for any reason including any vacancies created by any such increase in the number of Trustees, to set and alter the terms of office of the Trustees and to lengthen or lessen their own terms of office or make their terms of office of indefinite duration, all subject to the 1940 Act. Unless otherwise provided by the By-Laws of the Trust, the Trustees need not be Shareholders. 2. A Trustee at any time may be removed either with or without cause by resolution duly adopted by the affirmative vote of the holders of two-thirds of the outstanding Shares, present in person or by proxy at any meeting of Shareholders called for such purpose; such a meeting shall be called by the Trustees when requested in writing to do so by the record holders of not less than ten per centum of the outstanding Shares. A Trustee may also be removed by the Board of Trustees as provided in the By-Laws of the Trust. 3. The Trustees shall make available a list of names and addresses of all Shareholders as recorded on the books of the Trust, upon receipt of the request in writing signed by not less than ten Shareholders (who have been shareholders for at least six months) holding in the aggregate shares of the Trust valued at not less than $25,000 at current offering price (as defined in the Trust's Prospectus and/or Statement of Additional Information) or holding not less than 1% in amount of the entire amount of Shares issued and outstanding; such request must state that such Shareholders wish to communicate with other shareholders with a view to obtaining signatures to a request for a meeting to take action pursuant to part 2 of this Article SIXTH and accompanied by a form of communication to the Shareholders. The Trustees may, in their discretion, satisfy their obligation under this part 3 by either making available the Shareholder list to such Shareholders at the principal offices of the Trust, or at the offices of the Trust's transfer agent, during regular business hours, or by mailing a copy of such communication and form of request, at the expense of such requesting Shareholders, to all other Shareholders, and the Trustees may also take such other action as may be permitted under Section 16(c) of the 1940 Act. 4. The Trust may at any time or from time to time apply to the Commission for one or more exemptions from all or part of said Section 16(c) and, if an exemptive order or orders are issued by the Commission, such order or orders shall be deemed part of Section 16(c) for the purposes of parts 2 and 3 of this Article SIXTH. SEVENTH: The following provisions are hereby adopted for the purpose of defining, limiting and regulating the powers of the Trust, the Trustees and the Shareholders. 1. As soon as any Trustee is duly elected by the Shareholders or the Trustees and shall have accepted this trust, the Trust estate shall vest in the new Trustee or Trustees, together with the continuing Trustees, without any further act or conveyance, and he shall be deemed a Trustee hereunder. 2. The death, declination, resignation, retirement, removal, or incapacity of the Trustees, or any one of them shall not operate to annul or terminate the Trust but the Trust shall continue in full force and effect pursuant to the terms of this Declaration of Trust. 3. The assets of the Trust shall be held separate and apart from any assets now or hereafter held in any capacity other than as Trustee hereunder by the Trustees or any successor Trustees. All of the assets of the Trust shall at all times be considered as vested in the Trustees. No Shareholder shall have, as such holder of beneficial interest in the Trust, any authority, power or right whatsoever to transact business for or on behalf of the Trust, or on behalf of the Trustees, in connection with the property or assets of the Trust, or in any part thereof. 4. The Trustees in all instances shall act as principals, and are and shall be free from the control of the Shareholders. The Trustees shall have full power and authority to do any and all acts and to make and execute, and to authorize the officers and agents of the Trust to make and execute, any and all contracts and instruments that they may consider necessary or appropriate in connection with the management of the Trust. The Trustees shall not in any way be bound or limited by present or future laws or customs in regard to Trust investments, but shall have full authority and power to make any and all investments which they, in their uncontrolled discretion, shall deem proper to accomplish the purpose of this Trust. Subject to any applicable limitation in this Declaration of Trust or by the By-Laws of the Trust, the Trustees shall have power and authority: (a) to adopt By-Laws not inconsistent with this Declaration of Trust providing for the conduct of the business of the Trust and to amend and repeal them to the extent that they do not reserve that right to the Shareholders; (b) to elect and remove such officers and appoint and terminate such officers as they consider appropriate with or without cause, and to appoint and designate from among the Trustees such committees as the Trustees may determine, and to terminate any such committee and remove any member of such committee; (c) to employ a bank or trust company as custodian of any assets of the Trust subject to any conditions set forth in this Declaration of Trust or in the By-Laws; (d) To retain a transfer agent and shareholder servicing agent, or both; (e) To provide for the distribution of Shares either through a principal underwriter or the Trust itself or both; (f) To set record dates in the manner provided for in the By- Laws of the Trust; (g) to delegate such authority as they consider desirable to any officers of the Trust and to any agent, custodian or underwriter; (h) to vote or give assent, or exercise any rights of ownership, with respect to stock or other securities or property held in Trust hereunder; and to execute and deliver powers of attorney to such person or persons as the Trustees shall deem proper, granting to such person or persons such power and discretion with relation to securities or property as the Trustees shall deem proper; (i) to exercise powers and rights of subscription or otherwise which in any manner arise out of ownership of securities held in trust hereunder; (j) to hold any security or property in a form not indicating any trust, whether in bearer, unregistered or other negotiable form, or either in its own name or in the name of a custodian or a nominee or nominees, subject in either case to proper safeguards according to the usual practice of Massachusetts business trusts or investment companies; (k) to consent to or participate in any plan for the reorganization, consolidation or merger of any corporation or concern, any security of which is held in the Trust; to consent to any contract, lease, mortgage, purchase, or sale of property by such corporation or concern, and to pay calls or subscriptions with respect to any security held in the Trust; (l) to compromise, arbitrate, or otherwise adjust claims in favor of or against the Trust or any matter in controversy including, but not limited to, claims for taxes; (m) to make, in the manner provided in the By-Laws, distributions of income and of capital gains to Shareholders; (n) to borrow money to the extent and in the manner permitted by the 1940 Act and the Trust's fundamental policy thereunder as to borrowing; (o) to enter into investment advisory or management contracts, subject to the 1940 Act, with any one or more corporations, partnerships, trusts, associations or other persons; (p) to change the name of the Trust or any Series of the Trust as they consider appropriate without prior shareholder approval; (q) to establish Trustees' fees or compensation and fees or compensation for committees of the Trustees to be paid by the Trust or each Series thereof in such manner and amount as the Trustees may determine. 5. No one dealing with the Trustees shall be under any obligation to make any inquiry concerning the authority of the Trustees, or to see to the application of any payments made or property transferred to the Trustees or upon their order. 6. (a) The Trustees shall have no power to bind any Shareholder personally or to call upon any Shareholder for the payment of any sum of money or assessment whatsoever other than such as the Shareholder may at any time personally agree to pay by way of subscription to any Shares or otherwise. There is hereby expressly disclaimed shareholder liability for the acts and obligations of the Trust. Every note, bond, contract or other undertaking issued by or on behalf of the Trust or the Trustees relating to the Trust shall include a notice and provision limiting the obligation represented thereby to the Trust and its assets (but the omission of such notice and provision shall not operate to impose any liability or obligation on any Shareholder). (b) Whenever this Declaration of Trust calls for or permits any action to be taken by the Trustees hereunder, such action shall mean that taken by the Board of Trustees by vote of the majority of a quorum of Trustees as set forth from time to time in the By-Laws of the Trust or as required by the 1940 Act. (c) The Trustees shall possess and exercise any and all such additional powers as are reasonably implied from the powers herein contained such as may be necessary or convenient in the conduct of any business or enterprise of the Trust, to do and perform anything necessary, suitable, or proper for the accomplishment of any of the purposes, or the attainment of any one or more of the objects, herein enumerated, or which shall at any time appear conducive to or expedient for the protection or benefit of the Trust, and to do and perform all other acts and things necessary or incidental to the purposes herein before set forth, or that may be deemed necessary by the Trustees. (d) The Trustees shall have the power, to the extent not inconsistent with the 1940 Act, to determine conclusively whether any moneys, securities, or other properties of the Trust are, for the purposes of this Trust, to be considered as capital or income and in what manner any expenses or disbursements are to be borne as between capital and income whether or not in the absence of this provision such moneys, securities, or other properties would be regarded as capital or income and whether or not in the absence of this provision such expenses or disbursements ordinarily be charged to capital or to income. 7. The By-Laws of the Trust may divide the Trustees into classes and prescribe the tenure of office of the several classes, but no class shall be elected for a period shorter than that from the time of the election following the division into classes until the next meeting and thereafter for a period shorter than the interval between meetings or for a period longer than five years, and the term of office of at least one class shall expire each year. 8. The Shareholders shall have the right to inspect the records, documents, accounts and books of the Trust, subject to reasonable regulations of the Trustees, not contrary to Massachusetts law, as to whether and to what extent, and at what times and places, and under what conditions and regulations, such right shall be exercised. 9. Any officer elected or appointed by the Trustees or by the Shareholders or otherwise, may be removed at any time, with or without cause, in such lawful manner as may be provided in the By-Laws of the Trust. 10. The Trustees shall have power to hold their meetings, to have an office or offices and, subject to the provisions of the laws of Massachusetts, to keep the books of the Trust outside of said Commonwealth at such places as may from time to time be designated by them. Action may be taken by the Trustees without a meeting by unanimous written consent or by telephone or similar method of communication. 11. Securities held by the Trust shall be voted in person or by proxy by the President or a Vice-President, or such officer or officers of the Trust as the Trustees shall designate for the purpose, or by a proxy or proxies thereunto duly authorized by the Trustees, except as otherwise ordered by vote of the holders of a majority of the Shares outstanding and entitled to vote in respect thereto. 12. (a) Subject to the provisions of the 1940 Act, any Trustee, officer or employee, individually, or any partnership of which any Trustee, officer or employee may be a member, or any corporation or association of which any Trustee, officer or employee may be an officer, partner, director, trustee, employee or stockholder, or otherwise may have an interest, may be a party to, or may be pecuniarily or otherwise interested in, any contract or transaction of the Trust, and in the absence of fraud no contract or other transaction shall be hereby affected or invalidated; provided that in such case a Trustee, officer or employee or a partnership, corporation or association of which a Trustee, officer or employee is a member, officer, director, trustee, employee or stockholder is so interested, such fact shall be disclosed or shall have been known to the Trustees including those Trustees who are not so interested and who are neither "interested" nor "affiliated" persons as those terms are defined in the 1940 Act, or a majority thereof; and any Trustee who is so interested, or who is also a director, officer, partner, trustee, employee or stockholder of such other corporation or a member of such partnership or association which is so interested, may be counted in determining the existence of a quorum at any meeting of the Trustees which shall authorize any such contract or transaction, and may vote thereat to authorize any such contract or or transaction, with like force and effect as if he were not so interested. (b) Specifically, but without limitation of the foregoing, the Trust may enter into a management or investment advisory contract or underwriting contract and other contracts with, and may otherwise do business with any manager or investment adviser for the Trust and/or principal underwriter of the Shares of the Trust or any subsidiary or affiliate of any such manager or investment adviser and/or principal underwriter and may permit any such firm or corporation to enter into any contracts or other arrangements with any other firm or corporation relating to the Trust notwithstanding that the Trustee of the Trust may be composed in part of partners, directors, officers or employees of any such firm or corporation, and officers of the Trust may have been or may be or become partners, directors, officers or employees of any such firm or corporation, and in the absence of fraud the Trust and any such firm or corporation may deal freely with each other, and no such contract or transaction between the Trust and any such firm or corporation shall be invalidated or in any way affected thereby, nor shall any Trustee or officer of the Trust be liable to the Trust or to any Shareholder or creditor thereof or to any other person for any loss incurred by it or him solely because of the existence of any such contract or transaction; provided that nothing herein shall protect any director or officer of the Trust against any liability to the trust or to its security holders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office. (c) As used in this paragraph the following terms shall have the meanings set forth below: (i) the term "indemnitee" shall mean any present or former Trustee, officer or employee of the Trust, any present or former Trustee, partner, Director or officer of another trust, partnership, corporation or association whose securities are or were owned by the Trust or of which the Trust is or was a creditor and who served or serves in such capacity at the request of the Trust, and the heirs, executors, administrators, successors and assigns of any of the foregoing; however, whenever conduct by an indemnitee is referred to, the conduct shall be that of the original indemnitee rather than that of the heir, executor, administrator, successor or assignee; (ii) the term "covered proceeding" shall mean any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, to which an indemnitee is or was a party or is threatened to be made a party by reason of the fact or facts under which he or it is an indemnitee as defined above; (iii) the term "disabling conduct" shall mean willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office in question; (iv) the term "covered expenses" shall mean expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by an indemnitee in connection with a covered proceeding; and (v) the term "adjudication of liability" shall mean, as to any covered proceeding and as to any indemnitee, an adverse determination as to the indemnitee whether by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent. (d) The Trust shall not indemnify any indemnitee for any covered expenses in any covered proceeding if there has been an adjudication of liability against such indemnitee expressly based on a finding of disabling conduct. (e) Except as set forth in paragraph (d) above, the Trust shall indemnify any indemnitee for covered expenses in any covered proceeding, whether or not there is an adjudication of liability as to such indemnitee, such indemnification by the Trust to be to the fullest extent now or hereafter permitted by any applicable law unless the By-laws limit or restrict the indemnification to which any indemnitee may be entitled. The Board of Trustees may adopt bylaw provisions to implement sub- paragraphs (c), (d) and (e) hereof. (f) Nothing herein shall be deemed to affect the right of the Trust and/or any indemnitee to acquire and pay for any insurance covering any or all indemnitees to the extent permitted by applicable law or to affect any other indemnification rights to which any indemnitee may be entitled to the extent permitted by applicable law. Such rights to indemnification shall not, except as otherwise provided by law, be deemed exclusive of any other rights to which such indemnitee may be entitled under any statute, By-Law, contract or otherwise. 13. For purposes of the computation of net asset value, as in this Declaration of Trust referred to, the following rules shall apply: (a) The net asset value per Share of any Series, as of the time of valuation on any day, shall be the quotient obtained by dividing the value, as at such time, of the net assets of that Series (i.e., the value of the assets of that Series less its liabilities exclusive of its surplus) by the total number of Shares of that Series outstanding at such time. The assets and liabilities of any Series shall be determined in accordance with generally accepted accounting principles; provided, however, that in determining the liabilities of any Series there shall be included such reserves as may be authorized or approved by the Trustees, and provided further that in connection with the accrual of any fee or refund payable to or by an investment adviser of the Trust for such Series, the amount of which accrual is not definitely determinable as of any time at which the net asset value of each Share of that Series is being determined due to the contingent nature of such fee or refund, the Trustees are authorized to establish from time to time formulae for such accrual, on the basis of the contingencies in question to the date of such determination, or on such other basis as the Trustees may establish. (i) Shares of a Series to be issued shall be deemed to be outstanding as of the time of the determination of the net asset value per Share applicable to such issuance and the net price thereof shall be deemed to be an asset of that Series; (ii) Shares of a Series to be redeemed by the Trust shall be deemed to be outstanding until the time of the determination of the net asset value applicable to such redemption and thereupon and until paid the redemption price thereof shall be deemed to be a liability of that Series; and (iii) Shares of a Series voluntarily purchased or contracted to be purchased by the Trust pursuant to the provisions of paragraph 4 of Article FIFTH shall be deemed to be outstanding until whichever is the later of (i) the time of the making of such purchase or contract of purchase, and (ii) the time of which the purchase price is determined, and thereupon and until paid, the purchase price thereof shall be deemed to be a liability of that Series. (b) The Trustees are empowered, in their absolute discretion, to establish bases or times, or both, for determining the net asset value per Share of any Series in accordance with the 1940 Act and to authorize the voluntary purchase by any Series, either directly or through an agent, of Shares of any Series upon such terms and conditions and for such consideration as the Trustees shall deem advisable in accordance with the 1940 Act. 14. Payment of the net asset value per Share of any Series properly surrendered to it for redemption shall be made by the Trust within seven days, or as specified in any applicable law or regulation, after tender of such stock or request for redemption to the Trust for such purpose plus any period of time during which the right of the holders of the shares of that Series to require the Trust to redeem such shares has been suspended. Any such payment may be made in portfolio securities of that Series and/or in cash, as the Trustees shall deem advisable, and no Shareholder shall have a right, other than as determined by the Trustees, to have his Shares redeemed in kind. 15. The Trust shall have the right, at any time and without prior notice to the Shareholder, to redeem Shares of the Series held by such Shareholder held in any account registered in the name of such Shareholder for its current net asset value, if and to the extent that such redemption is necessary to reimburse either that Series of the Trust or the distributor (i.e., principal underwriter) of the Shares for any loss either has sustained by reason of the failure of such Shareholder to make timely and good payment for Shares purchased or subscribed for by such Shareholder, regardless of whether such Shareholder was a Shareholder at the time of such purchase or subscription; subject to and upon such terms and conditions as the Trustees may from time to time prescribe. EIGHTH: The name "Centennial" included in the name of the Trust and of any Series shall be used pursuant to a royalty-free, non-exclusive license from Centennial Asset Management Corporation, incidental to and as part of an advisory, management or supervisory contract which may be entered into by the Trust with Centennial Asset Management Corporation. Such license shall allow Centennial Asset Management Corporation to inspect and control the nature and quality of services offered by the Trust under such name. The license may be terminated by Centennial Asset Management Corporation upon termination of such advisory management or supervisory contract or without cause upon 60 days' written notice, in which case neither the Trust nor any Series shall have any further right to use the name "Centennial" in its name or otherwise and the Trust, the Shareholders and its officers and Trustees shall promptly take whatever action may be necessary to change its name accordingly. NINTH: 1. In case any Shareholder or former Shareholder shall be held to be personally liable solely by reason of his being or having been a Shareholder and not because of his acts or omissions or for some other reason, the Shareholder or former Shareholder (or the Shareholders, heirs, executors, administrators or other legal representatives or in the case of a corporation or other entity, its corporate or other general successor) shall be entitled out of the Trust estate to be held harmless from and indemnified against all loss and expense arising from such liability. The Trust shall, upon request by the Shareholder, assume the defense of any such claim made against any Shareholder for any act or obligation of the Trust and satisfy any judgment thereon. 2. It is hereby expressly declared that a trust and not a partnership is created hereby. No individual Trustee hereunder shall have any power to bind the Trust, the Trust's officers or any Shareholder. All persons extending credit to, doing business with, contracting with or having or asserting any claim against the Trust or the Trustees shall look only to the assets of the Trust for payment under any such credit, transaction, contract or claim; and neither the Shareholders nor the Trustees, nor any of their agents, whether past, present or future, shall be personally liable therefor; notice of such disclaimer shall be given in each agreement, obligation or instrument entered into or executed by the Trust or the Trustees. Nothing in this Declaration of Trust shall protect a Trustee against any liability to which such Trustee would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee hereunder. 3. The exercise by the Trustees of their powers and discretion hereunder in good faith and with reasonable care under the circumstances then prevailing, shall be binding upon everyone interested. Subject to the provisions of paragraph 2 of this Article NINTH, the Trustees shall not be liable for errors of judgment or mistakes of fact or law. The Trustees may take advice of counsel or other experts with respect to the meaning and operations of this Declaration of Trust, applicable laws, contracts, obligations, transactions or any other business the Trust may enter into, and subject to the provisions of paragraph 2 of this Article NINTH, shall be under no liability for any act or omission in accordance with such advice or for failing to follow such advice. The Trustees shall not be required to give any bond as such, nor any surety if a bond is required. 4. This Trust shall continue without limitation of time but subject to the provisions of sub-sections (a), (b), (c) and (d) of this paragraph 4. (a) The Trustees, with the favorable vote of the holders of a majority of the outstanding voting securities, as defined in the 1940 Act, of any one or more Series entitled to vote, may sell and convey the assets of that Series (which sale may be subject to the retention of assets for the payment of liabilities and expenses) to another issuer for a consideration which may be or include securities of such issuer. Upon making provision for the payment of liabilities, by assumption by such issuer or otherwise, the Trustees shall distribute the remaining proceeds ratably among the holders of the outstanding Shares of the Series the assets of which have been so transferred. (b) The Trustees, with the favorable vote of the holders of a majority of the outstanding voting securities, as defined in the 1940 Act, of any one or more Series entitled to vote, may at any time sell and convert into money all the assets of that Series. Upon making provisions for the payment of all outstanding obligations, taxes and other liabilities, accrued or contingent, of that Series, the Trustees shall distribute the remaining assets of that Series ratably among the holders of the outstanding Shares of that Series. (c) The Trustees, with the favorable vote of the holders of a majority of the outstanding voting securities, as defined in the 1940 Act, of any one or more Series entitled to vote, may otherwise alter, convert or transfer the assets of that Series or those Series. (d) Upon completion of the distribution of the remaining proceeds or the remaining assets as provided in sub-sections (a) and (b), and in subsection (c) where applicable, the Series the assets of which have been so transferred shall terminate, and if all the assets of the Trust have been so transferred, the Trust shall terminate and the Trustees shall be discharged of any and all further liabilities and duties hereunder and the right, title and interest of all parties shall be cancelled and discharged. 5. The original or a copy of this instrument and of each restated declaration of trust or instrument supplemental hereto shall be kept at the office of the Trust where it may be inspected by any Shareholder. A copy of this instrument and of each supplemental or restated declaration of trust shall be filed with the Secretary of the Commonwealth of Massachusetts, as well as any other governmental office where such filing may from time to time be required. Anyone dealing with the Trust may rely on a certificate by an officer of the Trust as to whether or not any such supplemental or restated declarations of trust have been made and as to any matters in connection with the Trust hereunder, and, with the same effect as if it were the original, may rely on a copy certified by an officer of the Trust to be a copy of this instrument or of any such supplemental or restated declaration of trust. In this instrument or in any such supplemental or restated declaration of trust, references to this instrument, and all expressions like "herein", "hereof" and "hereunder" shall be deemed to refer to this instrument as amended or affected by any such supplemental or restated declaration of trust. This instrument may be executed in any number of counterparts, each of which shall be deemed as original. 6. The Trust set forth in this instrument is created under and is to be governed by and construed and administered according to the laws of the Commonwealth of Massachusetts. The Trust shall be of the type commonly called a Massachusetts business trust, and without limiting the provisions hereof, the Trust may exercise all powers which are ordinarily exercised by such a trust. 7. The Board of Trustees is empowered to cause the redemption of the Shares held in any account if the aggregate net asset value of such Shares (taken at cost or value, as determined by the Board) has been reduced to $200 or less upon such notice to the shareholder in question, with such permission to increase the investment in question and upon such other terms and conditions as may be fixed by the Board of Trustees in accordance with the 1940 Act. 8. In the event that any person advances the organizational expenses of the Trust, such advances shall become an obligation of the Trust subject to such terms and conditions as may be fixed by, and on a date fixed by, or determined with criteria fixed by the Board of Trustees, to be amortized over a period or periods to be fixed by the Board. 9. Whenever any action is taken under this Declaration of Trust including action which is required or permitted by the 1940 Act or any other applicable law, such action shall be deemed to have been properly taken if such action is in accordance with the construction of the 1940 Act or such other applicable law then in effect as expressed in "no action" letters of the staff of the Commission or any release, rule, regulation or order under the 1940 Act or any decision of a court of competent jurisdiction, notwithstanding that any of the foregoing shall later be found to be invalid or otherwise reversed or modified by any of the foregoing. 10. Any action which may be taken by the Board of Trustees under this Declaration of Trust or its By-Laws may be taken by the description thereof in the then effective prospectus and/or statement of additional information relating to the Shares under the Securities Act of 1933 or in any proxy statement of the Trust rather than by formal resolution of the Board. 11. Whenever under this Declaration of Trust, the Board of Trustees is permitted or required to place a value on assets of the Trust, such action may be delegated by the Board, and/or determined in accordance with a formula determined by the Board, to the extent permitted by the 1940 Act. 12. If authorized by vote of the Trustees and the favorable vote of the holders of a majority of the outstanding voting securities, as defined in the 1940 Act, entitled to vote, or by any larger vote which may be required by applicable law in any particular case, the Trustees shall amend or otherwise supplement this instrument, by making a Restated Declaration of Trust or a Declaration of Trust supplemental hereto, which thereafter shall form a part hereof; any such Supplemental or Restated Declaration of Trust may be executed by and on behalf of the Trust and the Trustees by an officer or officers of the Trust. IN WITNESS WHEREOF, the undersigned have executed this instrument as of the 1st day of February, 1990. /s/ W.A. Baker /s/ Charles Conrad, Jr. - -------------------------- ------------------------------ William A. Baker, Trustee Charles Conrad, Jr., Trustee 197 Desert Lakes Drive 921 Delvin Drive Palm Springs, CA 92264 St. Louis, MO 63145 /s/ C. Howard Kast /s/ Robert M. Kirchner - -------------------------- ------------------------------- C. Howard Kast, Trustee Robert M. Kirchner, Trustee 2552 East Alameda 2800 S. University Boulevard Denver, CO 80209 Denver, CO 80210 /s/ Ned M. Steel /s/ James C. Swain - -------------------------- -------------------------------- Ned M. Steel, Trustee James C. Swain, Trustee 3236 S. Steele Street 14115 W. 59th Place Denver, CO 80210 Arvada, CA 80004 /s/ Joseph A. Uhl - -------------------------- Joseph A. Uhl, Trustee 20 Crestmoor Drive Denver, CO 80220 ORGZN\7802 EX-3 4 Exhibit 24(b)(2) CENTENNIAL NEW YORK TAX EXEMPT TRUST BY-LAWS (as amended through June 26, 1990) ARTICLE I SHAREHOLDERS Section 1. Place of Meeting. All meetings of the Shareholders (which terms as used herein shall, together with all other terms defined in the Declaration of Trust, have the same meaning as in the Declaration of Trust) shall be held at the principal office of the Trust or at such other place as may from time to time be designated by the Board of Trustees and stated in the notice of meting. Section 2. Shareholder Meetings. Meetings of the Shareholders for any purpose or purposes may be called by the Chairman of the Board of Trustees, if any, or by the President or by the Board of Trustees and shall be called by the Secretary upon receipt of the request in writing signed by Shareholders holding not less than one third 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 have, for at least six months prior to making such requests, held 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 Stockholders. 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 Trust. No notice of the time, place or purpose of any meeting of Shareholders need be given to any Shareholder who attends in person or by proxy or to any Shareholder who, in writing executed and filed with the records of the meeting, either before or after the holding thereof, waives such notice. Section 4. Record Dates. The Board of Trustees may fix, in advance, 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 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 Shareholders 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 Trust, upon receipt of the request in writing signed by not less than ten Shareholders holding Shares of the Trust valued at $25,000 or more at current offering price (as defined in the Trust's Prospectus) or holding not less than one percent in amount of the entire number of shares of the Trust issued and outstanding; such request must state that such Shareholders wish to communicate with other Shareholders with a view to obtaining signatures to a request for a meeting pursuant to Section 2 of Article II of these By-Laws and be accompanied by a form of communication to the Shareholders. The Board of Trustees may, in its discretion, satisfy its obligation under this Section 5 by either making available the Shareholder List to such Shareholders at the principal offices of the Trust, or at the offices of the Trust's transfer agent, during regular business hours, or by mailing a copy of such Shareholders' proposed communication and form of request, at their expense, to all other Shareholders. 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 Trust 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 such as might have been lawfully transacted had the meeting not been adjourned. Section 7. Voting and Inspectors. At all meetings of Shareholders, every Shareholder of 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 or matter, and such vote shall be taken upon the request of the holders of ten percent (10%) of the Shares entitled to vote on such election or matter. Section 8. Conduct of Shareholders' Meetings. The meetings of the Shareholders shall be presided over by the Chairman of the Board of Trustees, if any, or if he shall not be present, by the President, or if he shall not be present, by a Vice-President, or if none of the Chairman of the Board of Trustees, the President or any Vice-President is present, by a chairman to be elected at the meeting. The Secretary of the Trust, if present, shall act as Secretary of such meetings, or if he is not present, an Assistant Secretary shall so act; if neither the Secretary nor an Assistant Secretary is present, than the meeting shall elect its secretary. Section 9. Concerning Validity of Proxies, Ballots, Etc. At every meeting of the Shareholders, all proxies shall be received and taken in charge of and all ballots shall be received and canvassed by the secretary of the meeting, who shall decide all questions touching the qualification of voters, the validity of the proxies, and the acceptance or rejection of votes, unless inspectors of election shall have been appointed as provided in Section 7, in which event such inspectors of election shall decide all such questions. ARTICLE II BOARD OF TRUSTEES Section 1. Number and Tenure of Office. The business and property of the Trust shall be conducted and managed by a Board of Trustees consisting of the number of initial Trustees, which number may be increased or decreased as provided in Section 2 of this Article. Each Trustee shall, except as otherwise provided herein, hold office until the next meeting of Shareholders of the Trust following his election called for the purpose of electing Trustees or until his successor is duly elected and qualifies. Trustees need not be Shareholders. Section 2. Increase or Decrease in Number of Trustees; Removal. The Board of Trustees, by the vote of a majority of the entire Board, may increase the number of Trustees to a number not exceeding fifteen, and may elect Trustees to fill the vacancies created by any such increase in the number of Trustees until the next meeting called for the purpose of electing Trustees or until their successors are duly elected and qualify; the Board of Trustees, by the vote of a majority of the entire Board, may likewise decrease the number of Trustees to a number not less than three but the tenure of office of any Trustee shall not be affected by any such decrease. Vacancies occurring other than by reason of any such increase shall be filled as provided for a Massachusetts business trust. 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 become 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 the majority of the Shares of the Trust, present in person or by proxy at any meeting of Shareholders at which such vote may be taken, provided that a quorum is present. Any Trustee at any time may be removed for cause by resolution duly adopted at any meeting of the Board of Trustees provided that notice thereof is contained in the notice of such meeting and that such resolution is adopted by the vote of at least two thirds of the Trustees whose removal is not proposed. As used herein, "for cause" shall mean any cause which under Massachusetts law would permit the removal of a Trustee of a business trust. Section 3. Place of Meeting. The Trustees may hold their meetings, have one or more offices, and keep the books of the Trust outside Massachusetts, at any office or offices of the Trust or at any other place as they may from time to time by resolution determine, or, in the case of meetings, as they may from time to time by resolution determine or as shall be specified or fixed in the respective notices or waivers of notice thereof. Section 4. Regular Meetings. Regular meetings of the Board of Trustees shall be held at such time and on such notice, if any, as the Trustees may from time to time determine. Section 5. Special Meetings. Special meetings of the Board of Trustees may be held from time to time upon call of the Chairman of the Board of Trustees, if any, the President or two or more of the Trustees, by oral, telegraphic or written notice duly served on or sent or mailed to each Trustee not less than one day before such meeting. No notice need be given to any Trustee who attends in person or to any Trustee who in writing executed and filed with the records of the meeting either before or after the holding thereof, waives such notice. Such notice or waiver of notice need not state the purpose or purposes of such meeting. Section 6. Quorum. 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 meeeting 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 Trust (including the power to authorize the seal of the Trust to be affixed to all papers which may require it) except as provided by law and except the power to increase or decrease the size of, or fill vacancies on, the Board. The Executive Committee may fix its own rules of procedure, and may meet, when and as provided by such rules or by resolution of the Board of Trustees, but in every case the presence of a majority shall be necessary to constitute a quorum. In the absence of any member of the Executive Committee, the members thereof present at any meeting, whether or not they constitute a quorum, may appoint a member of the Board of Trustees to act in the place of such absent member. Section 8. Other Committees. The Board of Trustees, by the affirmative vote of a majority of the entire Board, may appoint other committees which shall in each case consist of such number of members (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 Trust for their services as may from time to time be voted by the Board of Trustees. Section 11. Dividends. Dividends or distributions payable on the Shares of any Series may, but need not be, declared by specific resolution of the Board as to each dividend or distribution; in lieu of such specific resolutions, the Board may, by general resolution, determine the method of computation thereof, the method of determining the Shareholders of the Series to which they are payable and the methods of determining whether and to which Shareholders they are to be paid in cash or in additional Shares. Section 12. Indemnification. Before an indemnitee shall be indemnified by the Trust, there shall be a reasonable determination upon review of the facts that the person to be indemnified was not liable by reason of disabling conduct as defined in the Declaration of Trust. Such determination may be made either by vote of a majority of a quorum of the Board who are neither "interested persons" of the Trust or the investment adviser nor parties to the proceeding or by independent legal counsel. The Trust may advance attorneys' fees and expenses incurred in a covered proceeding to the indemnitee if the indemnitee undertakes to repay the advance unless it is determined that he is entitled to indemnification under the Declaration of Trust. Also at least one of the following conditions must be satisfied: (1) the indemnitee provides security for his undertaking, or (2) the Trust is insured against losses arising by reason of lawful advances, or (3) a majority of the disinterested nonparty Trustees or independent legal counsel in a written opinion shall determine, based upon review of all of the facts, that there is reason to believe that the indemnitee will ultimately be found entitled to indemnification. ARTICLE III OFFICERS Section 1. Executive Officers. The executive officers of the 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. Certificates of Shares. Each Shareholder of any Series of the Trust may be issued a certificate or certificates for his Shares of that Series, in such form as the Board of Trustees may from time to time prescribe, but only if and to the extent and on the conditions described by the Board. Section 2. Transfer of Shares. Shares of any Series shall be transferable on the books of the Trust by the holder thereof in person or by his duly authorized attorney or legal representative, upon surrender and cancellation of certificates, if any, for the same number of Shares of that Series, duly endorsed or accompanied by proper instruments of assignment and transfer, with such proof of the authenticity of the signature as the Trust or its agent may reasonably require; in the case of shares not represented by certificates, the same or similar requirements may be imposed by the Board of Trustees. Section 3. Share Ledgers. The share ledgers of the Trust, containing the name and address of the Shareholders of each Series and the number of shares of that Series, held by them respectively, shall be kept at the principal offices of the Trust or, if the Trust employs a transfer agent, at the offices of the transfer agent of the Trust. Section 4. Lost, Stolen or Destroyed Certificates. The Board of Trustees may determine the conditions upon which a new certificate may be issued in place of a certificate which is alleged to have been lost, stolen or destroyed; and may, in their discretion, require the owner of such certificate or his legal representative to give bond, with sufficient surety to the Trust and the transfer agent, if any, to indemnify it and such transfer agent against any and all loss or claims which may arise by reason of the issue of a new certificate in the place of the one so lost, stolen or destroyed. ARTICLE V SEAL The Board of Trustees shall provide a suitable seal of the Trust, in such form and bearing such inscriptions as it may determine. ARTICLE VI FISCAL YEAR The fiscal year of the Trust shall be fixed by the Board of Trustees. ARTICLE VII AMENDMENT OF BY-LAWS The By-Laws of the Trust may be altered, amended, added to or repealed by the Shareholders or by majority vote of the entire Board of Trustees, but any such alteration, amendment, addition or repeal of the By-Laws by action of the Board of Trustees may be altered or repealed by the Shareholders. ORGZN\780 EX-99 5 Exhibit 24(b)(4) CENTENNIAL NEW YORK TAX EXEMPT TRUST Share Certificate (8-1/2" x 11") I. FACE OF CERTIFICATE (All text and other matter lies within 8-5/16" x 10-5/8" decorative border, 5/16" wide) (upper left corner, box with heading: NUMBER [of shares] (upper right corner) share certificate no. (upper right box with heading: SHARES below cert. no.) (centered below boxes) Centennial New York Tax Exempt Trust A MASSACHUSETTS BUSINESS TRUST (at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR CERTAIN DEFINITIONS (box with number) CUSIP 151358 108 (at left) is the owner of (centered) FULLY PAID SHARES OF BENEFICIAL INTEREST OF CENTENNIAL NEW YORK TAX EXEMPT TRUST (hereinafter called the "Trust"), transferable only on the books of the Trust by the holder hereof in person or by duly authorized attorney, upon surrender of this certificate properly endorsed. This certificate and the shares represented hereby are issued and shall be held subject to all of the provisions of the Declaration of Trust of the Trust to all of which the holder by acceptance hereof assents. This certificate is not valid until countersigned by the Transfer Agent. WITNESS the facsimile seal of the Trust and the signatures of its duly authorized officers. (signature Dated: (signature at left of seal) at right of seal) _______________________ ___________________ SECRETARY PRESIDENT (centered at bottom) 1-1/2" diameter facsimile seal with legend CENTENNIAL NEW YORK TAX EXEMPT TRUST SEAL 1988 COMMONWEALTH OF MASSACHUSETTS (at lower right, printed vertically) Countersigned SHAREHOLDER SERVICES, INC. Denver (CO) Transfer Agent By ____________________________ Authorized Signature II. BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension) The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM - as tenants in common TEN ENT - as tenants by the entirety JT TEN WROS NOT TC - as joint tenants with rights of survivorship and not as tenants in common UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________ (Cust) (Minor) UNDER UGMA/UTMA ___________________ (State) Additional abbreviations may also be used though not in the above list. For Value Received ................ hereby sell(s), assign(s), and transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE AND PROVIDE CERTIFICATION BY TRANSFEREE (box for identifying number) _______________________________________________________________________ (Please print or type name and address of assignee) ______________________________________________________ ________________________________________________ Shares of beneficial interest represented by the within Certificate, and do hereby irrevocably constitute and appoint ___________________________ Attorney to transfer the said shares on the books of the within named Trust with full power of substitution in the premises. Dated: ______________________ Signed: __________________________ ___________________________________ (Both must sign if joint owners) Signature(s) __________________________ guaranteed Name of Guarantor by: _____________________________ Signature of Officer/Title (text printed NOTICE: The signature(s) to this assignment must vertically to right correspond with the name(s) as written upon the of above paragraph) face of the certificate in every particular without alteration or enlargement or any change whatever. (text printed in Signatures must be guaranteed by a financial box to left of institution of the type described in the signature(s)) current prospectus of the Fund. PLEASE NOTE: This document contains a watermark when viewed at an angle. It is invalid Centennial without this watermark: ASSET MANAGEMENT CORPORATION _______________________________________________________________________ THIS SPACE MUST NOT BE COVERED IN ANY WAY edgar\780CERT EX-10 6 Exhibit 24(b)(5) INVESTMENT ADVISORY AGREEMENT AGREEMENT made this 22nd day of October, 1990, by and between CENTENNIAL NEW YORK TAX EXEMPT TRUST (hereinafter referred to as the "Fund"), and CENTENNIAL ASSET MANAGEMENT CORPORATION (hereinafter referred to as "Centennial"). WHEREAS, the Fund is an open-end, non-diversified management investment company registered as such with the Securities and Exchange Commission (the "Commission") pursuant to the Investment Company Act of 1940 (the "Investment Company Act"), and Centennial is a registered investment adviser; NOW, THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth, it is agreed by and between the parties, as follows: 1. General Provision. The Fund hereby employs Centennial and Centennial hereby undertakes to act as the investment adviser of the Fund and to perform for the Fund such other duties and functions as are hereinafter set forth. Centennial shall, in all matters, give to the Fund and the Fund's Board of Trustees the benefit of its best judgment, effort, advice and recommendations and shall, at all times conform to, and use its best efforts to enable the Fund to conform to (i) the provisions of the Investment Company Act and any rules or regulations thereunder; (ii) any other applicable provisions of state or federal law; (iii) the provisions of the Declaration of Trust and By-Laws of the Fund as amended from time to time; (iv) policies and determinations of the Board of Trustees of the Fund; (v) the fundamental policies and investment restrictions of the Fund as reflected in the Fund's registration statement under the Investment Company Act or as such policies may, from time to time, be amended by the Fund's shareholders; and (vi) the Prospectus and Statement of Additional Information of the Fund in effect from time to time. The appropriate officers and employees of Centennial shall be available upon reasonable notice for consultation with any of the Trustees and officers of the Fund with respect to any matters dealing with the business and affairs of the Fund including the valuation of portfolio securities of the Fund which securities are either not registered for public sale or not traded on any securities market. 2. Investment Management. (a) Centennial shall, subject to the direction and control by the Fund's Board of Trustees, (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 determine what securities shall be purchased or sold by the Fund; and (iii) arrange, subject to the provisions of paragraph 7 hereof, for the purchase of securities and other investments for the Fund and the sale of securities and other investments held in the portfolio of the Fund. (b) Provided that the Fund shall not be required to pay any compensation other than as provided by the terms of this Agreement and subject to the provisions of paragraph 7 hereof, Centennial may obtain investment information, research or assistance from any other person, firm or corporation to supplement, update or otherwise improve its investment management services. (c) Provided that nothing herein shall be deemed to protect Centennial from willful misfeasance, bad faith or gross negligence in the performance of its duties, or reckless disregard of its obligations and duties under this Agreement, Centennial shall not be liable for any loss sustained by reason of good faith errors or omissions in connection with any matters to which this Agreement relates. (d) Nothing in this Agreement shall prevent Centennial or any officer thereof from acting as investment adviser for any other person, firm or corporation and shall not in any way limit or restrict Centennial or any of its directors, officers, stockholders or employees from buying, selling or trading any securities for its or their own account or for the account of others for whom it or they may be acting, provided that such activities will not adversely affect or otherwise impair the performance by Centennial of its duties and obligations under this Agreement. 3. Other Duties of Centennial. Centennial shall, at its own expense, provide and supervise the activities of all administrative and clerical personnel as shall be required to provide effective corporate administration for the Fund, including the compilation and maintenance of such records with respect to its operations as may reasonably be required; the preparation and filing of such reports with respect thereto as shall be required by the Commission; composition of periodic reports with respect to operations of the Fund for its shareholders; composition of proxy materials for meetings of the Fund's shareholders, and the composition of such registration statements as may be required by federal and state securities laws for continuous public sale of shares of the Fund. Centennial shall, at its own cost and expense, also provide the Fund with adequate office space, facilities and equipment. Centennial shall, at its own expense, provide such officers for the Fund as the Fund's Board may request. 4. Allocation of Expenses. All other costs and expenses of the Fund not expressly assumed by Centennial under this Agreement, shall be paid by the Fund, including, but not limited to (i) interest and taxes; (ii) brokerage commissions; (iii) insurance premiums for fidelity and other coverage requisite to its operations; (iv) compensation and expenses of its trustees other than those associated or affiliated with Centennial; (v) legal and audit expenses; (vi) custodian and transfer agent fees and expenses; (vii) expenses incident to the redemption of its shares; (viii) expenses incident to the issuance of its shares against payment herefor by or on behalf of the subscribers thereto; (ix) fees and expenses, other than as hereinabove provided, incident to the registration under federal securities laws of shares of the Fund for public sale; (x) expenses of printing and mailing reports, notices and proxy materials to shareholders of the Fund; (xi) except as noted above, all other expenses incidental to holding meetings of the Fund's shareholders; and (xii) such extraordinary non-recurring expenses as may arise, including litigation, affecting the Fund and any legal obligation which the Fund may have (on behalf of the Fund) to indemnify its officers and trustees with respect thereto. Any officers or employees of Centennial or any entity controlling, controlled by or under common control with Centennial, who may also serve as officers, trustees or employees of the Fund shall not receive any compensation from the Fund for their services. 5. Compensation of Centennial. The Fund agrees to pay Centennial and Centennial agrees to accept as full compensation for the performance of all functions and duties on its part to be performed pursuant to the provisions hereof, a fee computed on the aggregate net asset value of the Fund as of the close of each business day and payable monthly at the annual rate of .500% of the first $250 million of net assets; .475% of the next $250 million of net assets; .450% of the next $250 million of net assets; .425% of the next $250 million of net assets; and .400% of net assets in excess of $1 billion. 6. Use of Name "Centennial." Centennial hereby grants to the Fund a royalty-free, non-exclusive license to use the name "Centennial" in the name of the Fund for the duration of this Agreement and any extensions or renewals thereof. To the extent necessary to protect Centennial's rights to the name "Centennial" under applicable law, such license shall allow Centennial to inspect and, subject to control by the Fund's Board, control the nature and quality of services offered by the Fund under such name. Such license may, upon termination of this Agreement, be terminated by Centennial, in which event the Fund shall promptly take whatever action may be necessary to change its name and discontinue any further use of the name "Centennial" in the name of the Fund or otherwise. The name "Centennial" may be used by Centennial in connection with any of its activities, or licensed by Centennial to any other party. 7. Portfolio Transactions and Brokerage. Centennial is authorized, in arranging the purchase and sale of the Fund's portfolio securities, to employ or deal with such members of securities or commodities exchanges, brokers or dealers (hereinafter "broker-dealers"), as may, in its best judgment, implement the policy of the Fund to obtain, at reasonable expense, the "best execution" (prompt and reliable execution at the most favorable security price obtainable) of the Fund's portfolio transactions as well as to obtain the benefit of such investment information or research as will be of significant assistance to the performance by Centennial of its investment management functions. 8. Duration. This Agreement will take effect on the date first set forth above. Unless earlier terminated pursuant to paragraph 9 hereof or by operation of law, this Agreement shall remain in effect until December 31, 1991, and thereafter will continue in effect from year to year, so long as such continuance shall be approved at least annually by the Fund's Board of Trustees, including the vote of the 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 any such party, cast in person at a meeting called for the purpose of voting on such approval, or by the holders of a "majority" (as defined in the Investment Company Act) of the outstanding voting securities of the Fund and by such a vote of the Fund's Board of Trustees. 9. Termination. This Agreement may be terminated (i) by Centennial at any time without penalty upon giving the Fund sixty days' written notice (which notice may be waived by the Fund); or (ii) by the Fund at any time without penalty upon sixty days' written notice to Centennial (which notice may be waived by Centennial) provided that such termination by the 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" of the outstanding voting securities of the Fund (as defined in the Investment Company Act). 10. Assignment or Amendment. This Agreement may not be amended or the rights of Centennial hereunder sold, transferred, pledged or otherwise in any manner encumbered without the affirmative vote or written consent of the holders of the "majority" of the outstanding voting securities of the Fund. This Agreement shall automatically and immediately terminate in the event of its "assignment." 11. Disclaimer of Shareholder Liability. Centennial understands that the obligations of the Fund under this Agreement are not binding upon any Trustee or shareholder of the Fund personally, but bind only the Fund and the Fund's property. Centennial represents that it has notice of the provisions of the Declaration of Trust of the Fund disclaiming Trustee and shareholder liability for acts or obligations of the Fund. 12. Definitions. The terms and provisions of the Agreement shall be interpreted and defined in a manner consistent with the provisions and definitions of the Investment Company Act. CENTENNIAL NEW YORK TAX EXEMPT 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 - ------------------ --------------------- ADVISORY\780 EX-10 7 Exhibit 24(b)(8) CUSTODIAN AGREEMENT I. DESIGNATION OF CUSTODIAN CENTENNIAL NEW YORK TAX EXEMPT TRUST (the "Fund"), an open-end series management investment company organized as a Massachusetts business trust having an office at 3410 South Galena Street, Denver, Colorado 80231, hereby designates Citibank, N.A. (the "Bank"), a National Banking Corporation incorporated under the laws of the United States of America and having an office at 399 Park Avenue, New York, NY 10043, as Custodian of the Property (as defined in Section III) of the Fund. By its acceptance, the Bank agrees to serve as such Custodian upon the terms and conditions set forth in this Agreement. II. DELIVERY OF DOCUMENTS (a) Documents delivered. The Fund delivers to the Bank herewith the following documents: (i) Resolutions authorizing the appointment of the Bank as the custodian of the Fund and the execution by the Fund of this Agreement; (ii) copies, certified by the appropriate officer or officers, of the charter and the by-laws of the Fund; and (iii) incumbency and signature certificates identifying and containing the signatures of the officers of the Fund and/or other signatories authorized to sign Instructions (as defined below) on behalf of the Fund, specifying the number of signatures required for Instructions and identifying the trustees and the other officers, if any, of the Fund. (b) Changes. In case of any change or changes affecting any of the documents described in this Section II, the Fund shall deliver new documents to the Bank, to the extent necessary to reflect such change or changes. Unless and until such new documents are delivered and an authorized signatory of the Bank has issued a receipt for the delivery thereof, the Bank shall be under no obligation to act (or omit to act), in accordance with any such change, nor shall the Bank be liable for failure so to act (or omit to act), but the Bank shall act in accordance with the documents which such new documents are to replace. (c) Additional information. The Fund shall furnish to the Bank any additional information and documentation relating to the Fund and the Fund's management company (if any) which the Bank may reasonably request. (d) "Resolutions" defined. The term "Resolutions," as used in this Agreement, means (i) if the trustees of the Fund are authorized to transact business of the Fund by signing an instrument setting forth such business, resolutions signed by the number of trustees of the Fund so authorized and (ii) in all other cases, copies of resolutions of the trustees of the Fund, certified by the appropriate officer or officers of the Fund. (e) "Depository" defined. The term "Depository" as used in this Agreement means any "system" or "person" contemplated by Section 17 (f) of the Investment Company Act of 1940 in which the Banks may, under that Section and any rules, regulations or orders thereunder, deposit all or part of the Fund's securities with the consent of the Fund, and to which the Fund has consented. (f) "Receipt" of payment defined. Whenever this Agreement contemplates receipt of payment by the Bank, such receipt shall mean receipt by the Bank of (i) cash or check of a national securities exchange certified or issued by a bank (which term, as used in this Agreement, shall include a trust company and a Federal Reserve Bank), or a Depository; or (ii) written or telegraphic advice from a bank, registered clearing agency or a Depository that funds have or will be credited to the account of the Fund or the Bank at one or more of the foregoing; or (iii) a bank wire from a correspondent bank of the Bank; or (iv) payment other than the foregoing, if specified in Instructions relating to the transaction in question. III. THE PROPERTY (a) Property delivered. The Fund shall deliver the Property, or cause the Property to be delivered, to the Bank or a Depository, subject to the provisions of this Agreement. Upon delivery, the securities at the time included in the Property, unless held by a Depository, shall be in bearer form or shall be registered in the name of a nominee of the Bank (with or without indication of fiduciary status) or shall be properly endorsed and in form for transfer satisfactory to the Bank. (b) "Property" defined. The term "Property," as used in the Agreement, means: (i) any and all securities and other property which the Fund may from time to time deposit, or cause to be deposited, with the Bank or a Depository, (ii) all income, including option premiums, in respect of any of such securities or other property, (iii) all proceeds of the sale of any such securities or other property, (iv) all proceeds, of the sale of securities issued by the Fund, which are received by the Bank from time to time from the Fund or its transfer agent, and (v) any stocks, shares, bonds, financial futures contracts, indexes, debentures, notes, mortgages and other obligations, and any certificates, receipts, warrants or other financial instruments representing absolute or conditional rights or options to receive, purchase, subscribe for or sell the same or evidencing or representing any other rights or interests therein, or any other property or assets, irrespective of their form, the name by which they may be described, whether considered as securities or commodities, or the character or form of the entities by which they are issued or created. (c) Holding of Securities. The Bank shall hold in a separate account, and physically segregate at all times from those of any other persons, firms or corporations, pursuant to the provisions hereof, all securities which are part of the Property, other than those held by a Depository. All such securities are to be held or disposed of by the Bank, or by a Depository, subject at all times to Instructions pursuant to the terms of this Agreement. The Bank shall have no power or authority to (or to cause a Depository to) assign, hypothecate, pledge, or otherwise dispose of any such securities except pursuant to Instructions and only for the account of the Fund, as set forth in Section VI of this Agreement. The Bank will, upon receipt of proper Instructions, segregate cash and/or securities of the Fund into escrow accounts in the name of a designated broker or exchange clearing organization which is a party with the Fund to an agreement relating to the financial futures contracts described in paragraph (b) of this Section III. The Bank will confirm the terms of such escrow to the broker or clearing organization and provide a copy of such confirmation to the Fund. The Bank will not, however, make any payment or transfer from any such escrow account except to the named broker or clearing organization upon receipt of written notice by such broker or clearing organization representing that the Fund is in default of a specified obligation for which the escrow was established and setting forth the amount represented to be due by the Fund to such broker or clearing organization. IV. REGISTRATION OF SECURITIES: COMMERCIAL ACCOUNTS; OVERDRAFTS; RECEIPT OF SECURITIES (a) Registration of securities. The securities included in the Property shall, unless held by a Depository, be held in bearer form or in the name of one or more nominees of the Bank. (b) Commercial accounts. The Bank shall open and maintain a commercial account or accounts in the name of the Fund, subject only to the Bank's draft or order after receipt of Instructions, and the Bank shall deposit in such account or accounts all cash constituting, or which is to become, part of the Property. The Bank shall make payments of cash to or for the account, of the Fund from such cash accounts only pursuant to Section VI of this Agreement or as otherwise specifically provided in this Agreement. (c) Overdrafts. At the sole discretion of the Bank, the Bank will permit the incurrence of cash overdrafts in any account of the Fund with the Bank (i) in aid of the timely and orderly clearance of securities transactions in the course of the Fund's normal business, trading and investment operations or (ii) in connection with payments to Shareholders all or a portion of whose shares in the Fund have been or are being Redeemed, but only upon receipt by the Bank of Instructions to do so. The Bank shall not be obligated to incur or permit the incurrence of any such overdraft and the Bank shall not be liable to the Fund or any third party for any refusal, failure or neglect on the part of the Bank to incur or permit the incurrence of any such overdraft. As used in this Agreement, the terms "Redeem" and "Redemption" refer to redemptions, purchases and other acquisitions by the Fund of shares in the Fund from Shareholders, and the term "Shareholder" means a shareholder or former shareholder of the Fund. (d) Payment of overdrafts; interest. The Fund shall pay to the Bank, and the Bank may deduct from the Property, the amount of each overdraft referred to in Section IV (c), together with interest thereon at such rate as the Bank may from time to time notify to the Fund (such rate not to exceed the rate at such time charged by the Bank to its prime commercial borrowers by more than 1-1/2 percentage points), upon the Bank's demand therefore. (e) "Receipt" of securities defined. Whenever this Agreement contemplates receipt of securities by the Bank, such receipt shall mean receipt by the Bank of (i) securities in bearer form or in form of transfer satisfactory to the Bank; or (ii) written or telegraphic advice from a Depository that securities have been credited to the account of the Fund or the Bank at the Depository; or (iii) written or telegraphic advice from any bank or responsible commercial agent doing business in the United States or any foreign country and designated by the Bank as its agent for this purpose that such securities have been deposited with it. V. INSTRUCTIONS (a) "Instructions" defined. As used in this Agreement, the term "Instructions" means instructions, with respect to any specified transaction (except as otherwise indicated in this Agreement), in writing or by telecopier, tested telegram, cable or Telex or by facsimile sending device, signed in the name of the Fund by the requisite number of Fund officers or authorized signatories of the Fund as the Board of Trustees or executive committee of the Fund has authorized to give the particular class of Instructions in question. Different persons may be authorized to give Instructions for different purposes. Instructions may be general or specific in terms. (b) Instructions consistent with charter, etc. Although the Bank may take cognizance of the provisions of the charter and by-laws of the Fund as from time to time amended, the Bank may assume that any Instructions received hereunder are not in any way inconsistent with any provision of such charter or by-laws or any vote, resolution or proceeding of the shareholders or the trustees, or of any committee of either thereof, of the Fund. (c) Authority of Fund's signatories. The incumbency and signature certificates most recently delivered to the Bank pursuant to Section II (a) (iii) shall constitute evidence of the authority of the signatories designated therein to act on behalf of the Fund. VI. TRANSACTIONS REQUIRING INSTRUCTIONS (a) Payments of cash. The Bank shall make payments of cash to or for the account of the Fund only as follows or as otherwise specifically provided in this Agreement: (i) upon receipt of Instructions to do so, the Bank shall make payment for and receive all securities purchased for the account of the Fund (insofar as cash is available, or insofar as the Bank is willing to permit an overdraft or overdrafts in the Fund's account or accounts with the Bank, for such purpose), payment to be made only upon receipt of the securities, provided that, if any such securities (or any securities to be received free for the Fund's account) are not received by the Bank on or before the thirtieth day following the date of the Bank's receipt of the Instructions to receive such securities, the Bank may, but need not, consider such Instructions cancelled unless and until the Bank received further Instructions reinstating such original Instructions; (ii) upon receipt of Instructions to do so, the Bank shall make payment to a bank of principal of or interest on bank loans made to the Fund; (iii) upon receipt of Instructions to do so, the Bank shall make payments for the Redemption of shares of the Fund (subject to the provisions of Section VIII (a) of this Agreement); (iv) upon receipt of Instructions to do so, the Bank shall make payments for the payment of dividends, taxes, management or supervisory fees or operating expenses (including, without limitation thereto, fees for legal, accounting and auditing services); (v) upon receipt of Instructions to do so, the Bank shall make payments in connection with conversion, exchange or surrender of securities owned or subscribed to by the Fund held by or to be received by the Bank; (vi) upon receipt of Instructions to do so, the Bank will make payments pursuant to a specified agreement for loaning the Fund's securities (which Instructions shall identify the loan agreement under which the payment is to be made, the date of payment, the name of the borrower and the securities to be received, if any in exchange for the payment); and (vii) upon receipt of Instructions to do so, the Bank shall make payment for other proper corporate purposes, but only on receipt of a Resolution certified as set forth in the definition of that term and countersigned by another officer of the Fund specifying the amount of such payment, setting forth the purpose for which such payment is to be made, declaring such purpose to be a proper corporate purpose, and naming the person or persons to whom such payment is to be made. (b) Transfer, Exchange or Delivery of Securities. The bank shall transfer, exchange or deliver securities which are part of the Property only as follows: upon receipt of Instructions to do so, the Bank shall deliver (or cause a Depository to deliver) securities against such payment or other consideration or written receipt therefor as shall be specified in such Instructions, in the following cases: (i) upon sales of such securities for the account of the Fund and receipt by the Bank of payment therefor; (ii) for examination by a broker selling for the account of the Fund in accordance with street delivery custom; (iii) for payment when such Property has been called, redeemed or retired, or has otherwise become payable at the option of the holder thereof; (iv) in exchange for, or for conversion into, other securities and/or cash pursuant to any plan of merger, consolidation or reorganization, recapitalization, readjustment or other rearrangement of the issuer; (v) for deposit with a reorganization committee or protective committee pursuant to a deposit agreement; (vi) for conversion into or exchange for other securities, or into or for other securities and cash, in accordance with any conversion or exchange right or option relating thereto; (vii) in the case of warrants, rights or other similar securities, upon the exercise thereof; (viii) in the case of interim receipts or temporary securities, upon the surrender thereof for definitive securities; (ix) upon the exercise of a call written by the Fund for which the Bank (or a Depository) has written an escrow receipt (which term, as used in this Agreement, shall include an option guarantee letter), subject to the provisions of Section VI(e); (x) for the deposit of securities in a Depository; (xi) for the purpose of Redemption in kind of shares of the Fund (subject to Section VIII(a) of this Agreement); (xii) for the purpose of loaning securities against receipt by the Bank of collateral therefor (the Instructions as to which shall specify the securities to be delivered, the loan agreement under which the delivery is to be made, the date of delivery, the name of the borrower and the amount of collateral to be received in connection therewith); and (xiii) for other proper corporate purposes. The Bank shall make a delivery described in Section VI(c)(xiii) only on receipt of a Resolution certified as set forth in the definition of that term and countersigned by another officer of the Fund specifying the securities, setting forth the purpose for which such delivery is to be made, declaring such purpose to be a proper corporate purpose and naming the person or persons to whom said delivery is to be made. (c) Exercise of rights, etc. The Bank shall deal with rights, warrants and similar securities received by it hereunder only in the manner and to the extent ordered by Instructions received by the Bank. (d) Voting. Neither the Bank nor its nominees shall vote any of the securities included in the Property or authorize the voting of any such securities or give any consent, approval or waiver with respect thereto, except as directed by Instructions received by the Bank. The Bank shall promptly deliver, or cause to be executed and delivered, to the Fund all notices, proxies and proxy soliciting materials with relation to such securities, such proxies to be executed by the registered holder of such securities (if registered otherwise than in the name of the Fund) but without indicating the manner in which such proxies are to be voted. (e) Escrow receipts. In accordance with mutually agreed-upon arrangements and upon receipt of Instructions to do so, the Bank will execute, or cause a Depository to execute, an escrow receipt relating to a call written by the Fund upon receipt of payment for the premium therefor. Such Instructions shall contain all information necessary for the issuance of such receipts and will authorize the deposit of the securities named in such Instructions into an escrow account of the Fund. Securities so deposited into an escrow account will be held by the Bank or Depository subject to the terms of such escrow receipt. However, the Bank agrees that it will not deliver, or cause a Depository to deliver, any securities deposited in an escrow account pursuant to an exercise notice unless the Bank has received Instructions to do so or (i) the Bank has duly requested the issuance of such Instructions, (ii) at least two business days have elapsed since the receipt of such request by the Fund, and (iii) the Fund has not advised the Bank by Instructions that it has purchased securities that are to be delivered by the Bank or a Depository pursuant to the exercise notice. The Fund agrees that it will not issue any Instructions to the Bank with respect to the Property which shall conflict with the terms of any escrow receipt executed by the Bank or any Depository in relation to the Fund and which is then in effect. The parties understand that the Fund may write calls on securities ("underlying securities") which are not part of the Property and issue Instructions to the Bank to execute, or cause a Depository to execute, an escrow receipt on securities ("convertible securities") which are, or are to be, part of the Property and are convertible into the underlying securities. In such event, the Fund agrees that (i) any Instructions by it as to the execution of the escrow receipt will relate only to such convertible securities, and (ii) any Instructions by it as to the delivery of securities relating to such call will relate only to such convertible securities without responsibility on the part of the Bank to effect any conversion thereof. VII. TRANSACTIONS NOT REQUIRING INSTRUCTIONS (a) Collection of income and other payments. In the absence of contrary instructions, the Bank shall: (i) collect and receive, for the account of the Fund, all income and other payments and distributions, including (without limitation) stock dividends, rights, warrants and similar items, included or to be included in the Property, and promptly advise the Fund of such receipt; (ii) take any action which may be necessary and proper in connection with the collection and receipt of such income and other payments and distributions, including (without limitation) the execution of ownership and exemption certificates, the presentation of coupons and other interest items, the presentation for payment of securities which have become payable as a result of their being called, redeemed or retired, or otherwise becoming payable, otherwise than at the option of the holder thereof, and the endorsement for collection of checks, drafts and other negotiable instruments; and (iii) receive and hold for the account of the Fund all securities received as a distribution on securities held by the Fund as a result of a stock dividend, share split-up or reorganization, recapitalization, readjustment or other rearrangement or distribution of rights or similar securities issued with respect to any securities of the Fund held by the Bank hereunder, provided that the Bank shall not be required to transact any item of business referred to in this Section VII(a) with respect to a security which is not covered by a published securities manual reasonably available to the Custodian Services Department of the Bank (or the successor to such Department in the event of any administrative rearrangement of the Bank) unless and until such Custodian Services Department (or its successor) has received a notice specifying (x) the item of business in question and (y) such additional information as will permit the Bank to transact such item of business properly and without unreasonable inconvenience to such Custodian Services Department (or its successor). (b) Cash disbursements. In the absence of contrary Instructions, the Bank may make cash disbursements for minor expenses in handling securities and for similar items in connection with the Bank's duties under this Agreement. The Bank shall promptly advise the Fund of disbursements so made. (c) Delivery of information and documents. The Bank shall promptly deliver to the Fund all information and documents received by the Bank and relating to the Property including (without limitation) pendency of calls and maturities of securities and expiration of rights in connection therewith received by the Bank from issuers of securities being held for the Fund. With respect to tender or exchange offers, the Bank shall transmit promptly to the Fund all written information received from issuers of the securities whose tender or exchange is being sought and from the party (or his agents) making the tender or exchange offer. VIII TRANSACTIONS REQUIRING SPECIAL INSTRUCTIONS (a) Redemptions. Upon receipt of Instructions to do so, the Bank shall deliver Property in connection with Redemptions (insofar as monies or, in a case referred to in clause (iii) below, other Property is available, or insofar as the Bank is willing to permit an overdraft or overdrafts in the Fund's account or accounts with the Bank for such purpose), provided that the Instructions covering each Redemption shall contain (i) the number of shares Redeemed, (ii) the net asset value (determined pursuant to the regulations of the Fund, as from time to time amended, which govern determination of net asset value) of such shares on the effective date of such Redemption and (iii) specification of any Property other than cash which the Bank is to deliver pursuant thereto. (b) Extraordinary transactions. In the case of any of the following transactions, not in the ordinary course of the business of the Fund: (i) the merger or consolidation of the Fund and another investment company, (ii) the sale by the Fund of all or substantially all of its assets, or (iii) liquidation of the Fund or dissolution of the Fund and distribution of its assets, the Bank shall deliver Property only upon receipt of Instructions and advice of counsel satisfactory to the Bank (who may be counsel for the Fund, at the option of the Bank) to the effect that all necessary corporate action therefor has been taken, or will be taken concurrently with the Bank's action. IX. RIGHT TO RECEIVE ADVICE (a) Advice of Fund. If the Bank shall be in doubt as to any action to be taken or omitted by it, it may request, and shall receive, from the Fund directions or advice, including Instructions where appropriate. (b) Advice of counsel. If the Bank shall be in doubt as to any questions of law involved in any action to be taken or omitted by the Bank, it may request advice from counsel of its own choosing (who may be counsel for the Fund, at the option of the Bank). (c) Conflicting advice. In case of conflict between directions, advice or Instructions received by the Bank pursuant to Section IX(a) and advice received by the Bank pursuant to Section IX(b), the Bank shall be entitled to rely on and follow the advice received pursuant to Section IX(b) alone. (d) Absolute protection to Bank. The Bank shall be absolutely protected in any action or inaction which it takes in reliance on any directions, advice or Instructions received pursuant to Section IX(a) or (b) or which the Bank, after receipt of any such directions, advice or Instructions, in good faith believes to be consistent with such directions, advice or Instructions, as the case may be. However, nothing in this Section IX shall be construed as imposing upon the Bank any obligation (i) to seek such directions, advice or Instructions, or (ii) to act in accordance with such directions or advice when received, unless, under the terms of another provision of this Agreement, the same is a condition to the Bank's properly taking or omitting to take such action. X. STATEMENTS The Bank shall render to the Fund statements of the transactions in the accounts of the Fund at the following times: the Bank shall furnish the Fund both on a daily and a monthly basis with a statement summarizing all transactions and entries for the account of the Fund. The Bank shall furnish the Fund at the end of every month with a list of the portfolio securities held by it or a Depository as custodian for the Fund, adjusted for all commitments confirmed by the Fund as of such time, certified by a duly authorized officer of the Bank. The books and records of the Bank pertaining to its actions under this Agreement shall be open to inspection and audit at all times by officers of the Fund, its auditors and officers of its investment adviser. XI. COMPENSATION (a) Ordinary services. The Fund shall pay to the Bank, and the Bank may deduct from the Property, for its services under this Agreement (other than the services referred to in Section XI(c)) compensation based on a schedule of charges to be agreed from time to time. (b) Expenses. The Fund shall reimburse the Bank for all expenses, taxes and other charges (including, without limitation, interest and other items charged by brokers in respect of debit balances and delayed deliveries) paid by the Bank with respect to the property of the Fund, or incurred by the Bank on behalf of the Fund in the performance of the Bank's duties hereunder, provided that the Bank shall be entitled to reimbursement with respect to the fees and disbursements of counsel only (i) as set forth in Sections XI(c) and XII or (ii) when the Fund breaches or threatens to breach, or the Fund's management company (if any) threatens to cause a breach, of this Agreement or when it would reasonably appear to a man untrained in the law that such a breach exists or is threatened, to the extent that the fees and disbursements of such counsel relate to such actual or apparent breach or threatened breach. If the Bank submits to the Fund a bill for such reimbursement and the Fund does not, within 15 days after such submission, notify the Bank that the bill is disapproved and make a reasonable counter-offer in writing, the bill shall be deemed approved and the Bank may deduct such reimbursement from the Property. (c) Extraordinary services. The Fund shall pay to the Bank, and the Bank may deduct from the Property, for its services as the Fund's agent in paying a Shareholder consideration, consisting wholly or partially of property other than cash, in connection with the Redemption of all or any part of such Shareholder's shares in the Fund compensation equal to 1/10 of 1% of the amount computed by subtracting from the aggregate Redemption price of such shares the cash, if any, paid to such Shareholder in respect of such Redemption. Without limiting the generality of the provisions of Section XI(b), the Fund shall reimburse to the Bank, and the Bank may deduct from the Property reimbursement for, the fees and disbursements of the Bank's counsel attributable to such counsel's services in respect of each such Redemption. XII. INDEMNIFICATION The Fund, as sole owner of the Property, will indemnify the Bank and each of the Bank's nominees, and hold the Bank and such nominees harmless, and the Bank may deduct from the Property indemnification, against all costs, liabilities (including, without limitation, liabilities under the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940 and any state and foreign securities and blue sky laws, all as from time to time amended) and expenses, including (without limitation) attorney's fees and disbursements, arising directly or indirectly (i) from the fact that securities included in the Property are registered in the name of any such nominee, or (ii) without limiting the generality of the foregoing clause (i), from any action or thing which the Bank takes or does or omits to take or do, (A) at the request or on the directions or in reliance on the advice of the Fund, or of the Fund's management company (if any), or (B) upon Instructions, provided that neither the Bank nor any of its nominees shall be indemnified against any liability to the Fund or to its Shareholders (or any expense incident to such liability) arising out of (x) the Bank's or such nominee's own willful misfeasance, bad faith, negligence or reckless disregard of its duties under this Agreement or (y) the Bank's own negligent failure to perform its duties under Section VII(a)(ii). XIII. RESPONSIBILITY: COLLECTIONS (a) Responsibility of Bank. The Bank shall be under no duty to take any action on behalf of the Fund except as specifically set forth herein or as may be specifically agreed to by the Bank in writing. In the performance of the Bank's duties hereunder, the Bank shall be obligated to exercise care and diligence, but the Bank shall not be liable for any act or omission which does not constitute gross negligence, willful misfeasance or bad faith on the part of the Bank or reckless disregard by the Bank of its duties under this Agreement, provided that the Bank shall be responsible for its own negligent failure to perform any of its duties under this Agreement. Without limiting the generality of the foregoing or of any other provisions of this Agreement, the Bank shall not be under any duty or obligation to inquire into and shall not be liable for or in respect of (i) the validity or invalidity or authority or lack thereof of any Instruction, notice or other instrument which conforms to the applicable requirements of this Agreement, if any, and which the Bank reasonably believes to be genuine, or (ii) the validity or invalidity of the issuance of any securities included or to be included in the Property, the legality or illegality of the purchase of such securities, or the propriety or impropriety of the amount paid therefor, or (iii) the legality or illegality of the sale (or exchange) of any Property or the propriety or impropriety of the amount for which such Property is sold (or exchanged), nor shall the Bank be under any duty or obligation to ascertain whether any property at any time delivered to or held by the Bank may properly be held by or for the Fund. (b) Collections. All collections of monies or other property in respect, or which are to become part, of the Property shall be at the sole risk of the Fund. (c) Depositories. In using the facilities of a Depository, the Bank undertakes to comply with the requirements of Rule 17f-4(d) insofar as the same apply to a custodian, and shall be responsible for the prompt and effective enforcement of its rights against the Depository in respect of the property including the proper replacement of any certificated security which has been lost, destroyed, wrongfully taken, mislaid or erroneously delivered while in the custody of the Depository. XIV. ADVERTISING No printed or other matter in any language which mentions the Bank's name other than in the context of the Bank's rights, powers or duties as the custodian of the Fund shall be issued by the Fund or on the Fund's behalf unless the Bank shall first have been given notice thereof. XV. EFFECTIVE DATE; TERMINATION; SUCCESSOR; DISSOLUTION (a) Effective date. This Agreement shall become effective as of the date entered in the final paragraph of this Agreement and shall continue in effect until terminated in the manner set forth below. (b) Termination. Either party to this Agreement may terminate this Agreement, without penalty, upon at least two weeks' prior written notice to the other. The effective date of such notice shall be specified in such notice, except that, at the option of the party receiving the notice of termination, the effective date of termination may be postponed, by notice (given prior to the effective date specified in the termination notice) to the other party, to a date not more than sixty days from the date of the notice of termination, provided that the Fund shall have no right so to postpone the effective date of termination if the Fund is at the time in default under the provisions of Section XIV. (c) Successor custodian. The Bank shall, in the event of such termination, deliver the Property, or cause it to be delivered, to any new custodian which may be designated in Instructions received by the Bank. (d) Successor custodian not available. In the event that no new custodian can be found by the Fund at the time of termination of this Agreement, the Fund shall, before authorizing the delivery of the Property to anyone other than a successor custodian, submit to its shareholders the question of whether the Fund shall be liquidated or shall function without a custodian. The Bank shall, pending the finding of such a new custodian, the dissolution of the Fund or the decision of the Fund's shareholders that the Fund shall function without a custodian, continue to hold the Property in safekeeping subject to the terms of this Agreement, but the Bank will not carry out any transaction requiring Instructions, the Instructions with respect to which are received by the Bank subsequent to the effective date of the termination of this Agreement, or issue any advice provided for by Section VII or any statement provided for by Section X, provided that, upon its receipt of Instructions to do so, the Bank will deliver the Property to a new custodian (which shall be a person, firm or corporation having aggregate capital, surplus and undivided profits of at least $2,000,000 as shown by its last published report, and meeting such other requirements as may be imposed by applicable law), distribute the Property (after liquidating any part of the Property which does not consist of cash, if such Instructions so order) upon dissolution of the Fund or deliver the Property to any other person if the Fund's shareholders have decided that the Fund shall function without a custodian. The Bank shall not be liable to the Fund or any third party on account of any incidents or omissions occurring during such period of safekeeping except those arising through the Bank's own willful misconduct or negligence. (e) Dissolution; no successor custodian. Upon its receipt of Instructions to do so, the Bank shall distribute the Property (after liquidating any part of the Property which does not consist of cash, if such Instructions so order) upon dissolution of the Fund or deliver the Property to any person who is to take the place of the Fund's custodian if the Fund's shareholders have decided that the Fund shall function without a custodian, provided, in either case, that such Instructions shall be accompanied by a certified copy of the minutes of the meeting of the Fund's shareholders at which the same was approved. XVI. NOTICES All notices and other communications, including Instructions (collectively referred to as "Notices" in this Section XVI), hereunder shall be in writing or by tested telegram, cable or Telex. Notices shall be addressed (i) if to the Bank, at the Bank's address set forth at the head of this Agreement, marked for the attention of the Custodian Services Department (or its successor, referred to in Section VII(a)), (ii) if to the Fund, at the address of the Fund set forth at the head of this Agreement, or (iii) if to either of the foregoing, at such other address as shall have been notified to the sender of any such Notice or other communication. If the location of the sender of a Notice and the address of the addressee thereof are, at the time of sending, more than 100 miles apart, the Notice shall be sent by airmail, in which case it shall be deemed given three days after it is sent, or by tested telegram, cable or Telex, in which case it shall be deemed given immediately, and, if the location of the sender of a Notice and the address of the addressee thereof are, at time of sending, not more than 100 miles apart, the Notice may be sent by first-class mail, in which case it shall be deemed given two days after it is sent, or by messenger, in which case it shall be deemed given on the day it is delivered, or by tested telegram or Telex, in which case it shall be deemed given immediately, provided that the Bank shall in no event be liable in respect of any delay in its actual receipt of any Notice. All postage, cable, telegraph and Telex charges arising from the Sending of a Notice hereunder shall be paid by the sender. XVII. DEPOSITORIES; ASTRA The Fund authorizes the Bank, for any securities held hereunder, to use the services of any United States central securities depository permitted to perform such services for registered investment companies and their custodians under Rule 17f-4 under the Act ("System"), the use of which is subject to the terms and conditions of this Section XVII. The terms of the use of any System under this Agreement shall be governed by the terms and conditions of Rule 17f-4 under the Investment Company Act of 1940, to which terms and conditions the parties hereto agree as if set forth in full in this Agreement. The parties also agree that such terms and conditions shall supersede any conflicting provisions of this Agreement. Nothing herein shall be deemed to require that the Custodian ascertain, as a condition to the use of any System, that any required action has been taken by the Board of Trustees of the Fund. If and to the extent that a System permits the withdrawal of a security from that System in certificate form and the Fund requires a certificate for making a loan or otherwise, the Bank shall take all necessary and appropriate action to obtain such certificate upon receipt of an officer's certificate requesting the same. The liability of the Bank to the Fund in connection with the use of any System shall be subject to the provisions of Section XIII of this Agreement. The Bank agrees that it will effectively enforce such rights as it may have against any System and will use its best efforts, and will enforce any such rights as it may have against any System, to require that such System shall take all appropriate and necessary steps to obtain replacement of any certificated security in such System which has been lost, apparently destroyed, wrongfully taken, mislaid or erroneously delivered while in the custody of the System. The Fund can have dial-up access to its own custodian account in the Bank's computerized accounting system (the "ASTRA System") in order to: (i) accept or reject executed securities transactions (other than in foreign securities) as submitted for confirmation by brokers and dealers through the Institutional Delivery ("ID") System of Depository Trust Company ("DTC") in which the Bank is a participant; and (ii) issue instructions for the settlement of accepted transactions by the Bank (through the ID System of DTC or otherwise) pursuant to the terms of this Agreement. 1. The Bank will provide such current instructions and password as may be necessary for the Fund to have dial-up access to its own custody account in the ASTRA System, which instructions and password, including any changed instructions or password, will be delivered personally or by certified mail, return receipt requested, to such officer(s) of the Fund as may, from time to time, be designated in a written instruction given by the Fund in accordance with Article V of this Agreement and signed by the Secretary, Assistant Secretary or Treasurer of the Fund. 2. The Bank will change such instructions or password as frequently as may reasonably be requested by the Fund for security reasons. 3. The Bank is obligated and authorized to act and rely upon any instructions received by it through the ASTRA System, as fully as in the case of instructions given pursuant to Article V of this Agreement, regardless of whether such instructions have been authorized by the Fund, provided that such instructions are accompanied by the code password and account identification information furnished, from time to time, by the Bank to the Fund as hereinabove provided. Any such instructions received by the Bank through the ASTRA System will be considered "Instructions" for all purposes under this Agreement, including without limitation the indemnification provisions of Article XII hereof. 4. Both the Fund and the Bank will keep for at least five years and produce on request, in machine readable form, copies of any instructions sent or received pursuant to the provisions hereof. XVIII. MISCELLANEOUS (a) Amendments, etc. This Agreement or any part hereof may be changed or waived only by an instrument in writing signed by the party against which enforcement of such change or waiver is sought. The headings in this Agreement are for convenience of reference only, are not a part of this Agreement and shall be disregarded in connection with any interpretation of all or any part of this Agreement. (b) Entire Agreement. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof, provided that the parties hereto may embody in one or more separate documents their agreement, if any, with respect to delegated and/or oral Instructions. (c) Successors and assigns; assignment. All terms of this Agreement shall be binding upon the respective successors and assigns of the parties hereto, the Fund's management company (if any) and the Fund's shareholders and shall inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns, provided that this Agreement shall not be assignable in whole or in part by either party hereto without the written consent of the other party hereto. (d) Counterparts. This Agreement may be executed simultaneously in several counterparts, each of which shall be deemed an original but all of which, taken together, shall constitute one and the same Agreement. (e) Disclaimer of Shareholder Liability. The Bank understands that the obligations of the Fund under this Agreement are not binding upon any trustee or shareholder of the Fund personally, but bind only the Fund and the Fund's property. The Bank represents that it has notice of the provisions of the Declaration of Trust of the Fund disclaiming shareholder liability for acts or obligations of the Fund. (f) Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of New York. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by the hands of their signatories thereunto duly authorized as of the 22nd day of December, 1988. CITIBANK, N.A. By: /s/ Reginald Monachino ______________________________ Reginald Monachino Reginald Monachino, Vice President __________________________________ (Name and Title) CENTENNIAL NEW YORK TAX EXEMPT TRUST By: /s/ Robert G. Galli _______________________________ Robert G. Galli, Vice President CUSTODY\780 EX-5 8 Exhibit 24(b)(10) September 22, 1987 The Board of Trustees Centennial New York Tax Exempt Trust Two World Trade Center New York, N.Y. 10048-0669 Dear Sirs: In connection with the proposed public offering of shares of beneficial interest in Centennial New York Tax Exempt Trust (the "Fund"), we have examined such records and documents and have made such further investigations and examinations as we deemed necessary for the purpose of this opinion. It is our opinion that the Fund is a business trust duly organized and validly existing under the laws of the Commonwealth of Massachusetts and that an indefinite number of shares of the Fund covered by the Fund's Registration Statement as amended on Form N-1A, (SEC Reg. No. 33-22293) ( the "Registration Statement"), when issued and paid for in accordance with the terms of the offering, as set forth in the Prospectus and Statement of Additional Information forming a part of the Registration Statement, legally issued, fully paid and non-assessable by the Fund to the extent set forth in the Registration Statement. We hereby consent to the filing of this opinion as an Exhibit to the said Registration Statement and to the reference to us in the Prospectus and Statement of Additional Information forming a part thereof. We also consent to the filing of this opinion with the authorities administering the "Blue Sky" or securities law of any jurisdiction in connection with the registration or qualification under such law of the Fund's shares. Very truly yours, /s/ ------------------------------ Gordon Hurwitz Butowsky Weitzen Shalov & Wein OPINION\780 EX-4 9 Exhibit 24(b)(13) December 5, 1988 The Board of Trustees Centennial New York Tax Exempt Trust Two World Trade Center New York, N.Y. 10048-0669 To the Board of Trustees: Oppenheimer Management Corporation ("OMC") herewith purchase 100,000 shares of Centennial New York Tax Exempt Trust (the "Fund") for an aggregated purchase of $100,000. In connection with such purchase, OMC represents that such purchase is made for investment purposes by OMC without any present intention of redeeming or selling such shares; and furthermore that OMC agrees to advance the start-up expenses of the Fund and in that regard agrees that such advances for such start-up expenses shall be reimbursed to OMC by the Fund over a five-year period that commences on the effective date of the Fund's initial prospectus; provided, however, that if any of the above- referenced shares of the Fund purchased by OMC are redeemed during the five-year period in which such expenses are amortized by the Fund, OMC will reimburse the Fund for any unamortized organization expenses in the same proportion as the number of shares redeemed bears to the number of initial shares remaining at the time of such redemption. Very truly yours, OPPENHEIMER MANAGEMENT CORPORATION By: /s/ Robert G. Galli _____________________________ Robert G. Galli Executive Vice President OPINION\7802 EX-99 10 Centennial New York Tax Exempt Trust Exhibit 24(b)(16) to Form N-1A Performance Data Computation Schedule 1. YIELD AND EFFECTIVE YIELD FOR 7-DAY PERIOD ENDED 06/30/94: Calculations of the Fund's "Yield" and "Compounded Effective Yield" set forth in the section entitled "Yield Information" in the Statement of Additional Information were made as follows: Date Daily Accrual Per Share (in $) 06/24/94 $0.0000510 06/25/94 0.0000511 06/26/94 0.0000511 06/27/94 0.0000511 06/28/94 0.0000527 06/29/94 0.0000492 06/30/94 0.0000464 Seven Day Total: $0.0003526 Current Yield: $0.0003526 / 7 * 365 = 1.84% 365/7 Effective Yield: ( $0.0003526 + 1) - 1 = 1.86% Centennial New York Tax Exempt Trust Page 2 2. TAX EQUIVALENT CURRENT AND EFFECTIVE YIELDS FOR THE 7-DAY PERIOD ENDED 06/30/94: The Fund's current tax equivalent yield is calculated using the following formula: [ a / (1 - c)] + b = Tax Equivalent Yield The symbols above represent the following factors: a = 7-day current yield of tax-exempt security positions in the portfolio. b = 7-day current yield of taxable security positions in the portfolio. c = Combined stated tax rate (e.g., federal, state and New York City income tax rates for an individual in the 39.6% federal tax bracket filing singly). Example: 0.0184 / ( 1 - .4705 ) ] + 0 = 3.47% The Fund's effective tax equivalent yield is calculated using the following formula: [a / ( 1 - c )] + b = Tax Equivalent Yield The symbols above represent the following factors: a = 7-day effective yield of tax-exempt security positions in the portfolio. b = 7-day effective yield of taxable security positions in the portfolio. c = Combined stated tax rate (e.g., federal, state and New York City income tax rates for an individual in the 39.6% federal tax bracket filing singly). Example: 0.0186 / ( 1 - .4705 ) ] + 0 = 3.51% Centennial New York Tax Exempt Trust Page 3 3. TAX EQUIVALENT CURRENT AND EFFECTIVE YIELDS FOR THE 30-DAY PERIOD ENDED 06/30/94: The Fund's current tax equivalent yield is calculated using the following formula: [ a / ( 1 - c ) ] + b = Tax Equivalent Yield The symbols above represent the following factors: a = 30-day current yield of tax-exempt security positions in the portfolio. b = 30-day current yield of taxable security positions in the portfolio. c = Combined stated tax rate (e.g., federal, state and New York City income tax rates for an individual in the 39.6% federal tax bracket filing singly). Example: [0.0168 / ( 1 - .4705 ) ] + 0 = 3.17% The Fund's effective tax equivalent yield is calculated using the following formula: [ a / ( 1 - c ) ] + b = Tax Equivalent Yield The symbols above represent the following factors: a = 30-day effective yield of tax-exempt security positions in the portfolio. b = 30-day effective yield of taxable security positions in the portfolio. c = Combined stated tax rate (e.g., federal, state and New York City income tax rates for an individual in the 39.6% federal tax bracket filing singly). Example: [0.0169 / ( 1 - .4705 ) ] + 0 = 3.19% Centennial New York Tax Exempt Trust Page 4 Combined Stated Tax Rate Formula 1 - {(1-d)(1-[e+f])} = Combined Stated Tax Rate The symbols above represent the following factors: d = Stated federal tax rate (e.g., federal income tax rate for an individual in the 39.6% federal tax bracket filing singly) e = Stated New York State tax rate (e.g., for an individual in the 39.6% federal and 7.875% state tax bracket filing singly). f = Stated New York City tax rate (e.g., for an individual in the 39.6% federal and 4.46% City tax bracket filing singly). Example: 1 - {(1 - .3960)(1 - [.07875 + .0446])} = 47.05% prosp\780perf EX-27 11
6 0000837278 CENTENNIAL NEW YORK TAX-EXEMPT TRUST 12-MOS JUN-30-1994 JUL-01-1993 JUN-30-1994 26410199 26410199 130723 7320 260132 26808374 0 0 289472 289472 0 26518166 26518166 24994342 0 0 736 0 0 26518902 0 626536 0 203274 423262 1817 0 425079 0 423702 0 0 75789053 74670841 405612 1525201 0 (641) 0 0 127154 0 258863 25419000 1.0 .02 0 .02 0 0 1.00 80 0 0
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