Registration No.333-201
File No. 811-7489
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. 4 / X /
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 / X /
Amendment No. 6 / X /
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Oppenheimer International Growth Fund
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(Exact Name of Registrant as Specified in Charter)
Two World Trade Center, New York, New York 10048-0203
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(Address of Principal Executive Offices)
212-323-0200
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(Registrant's Telephone Number)
ANDREW J. DONOHUE, ESQ.
OppenheimerFunds, Inc.
Two World Trade Center, New York, New York 10048-0203
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
/ / Immediately upon filing pursuant to paragraph (b)
/X/On March 30, 1998, pursuant to paragraph
(b)
/ / 60 days after filing, pursuant to paragraph (a)(1)
/ On _____________, pursuant to paragraph (a)(1)
/ / 75 days after filing, pursuant to paragraph (a)(2)
/ / On _______, pursuant to paragraph (a)(2) of Rule 485.
<PAGE>
FORM N-1A
Oppenheimer International Growth Fund
Cross Reference Sheet
Part A of
Form N-1A
Item No. Prospectus Heading
1 Front Cover Page
2 Expenses; Overview of the Fund
3 Financial Highlights, Performance of the Fund
4 Front Cover Page; Investment Objective and Policies; How the
Fund is Managed
5 Expenses; How the Fund is Managed; Back Cover
5A *
6 Investment Objective and Policies - Portfolio Turnover,
Dividends, Capital Gains and Taxes; How the Fund is
Managed -- Organization and History; The
Transfer Agent
7 How to Exchange Shares; Special Investor Services;
Distribution and Service Plan for Class A shares;
Distribution and Service Plan for Class B Shares; How
to Buy Shares; How to Exchange Shares; How to Sell Shares;
Shareholder
Account Rules and Policies
8 How to Sell Shares; How to Exchange Shares; Special Investor
Services
9 *
Part B of
Form N-1A
Item No. Heading in Statement of Additional Information or Prospectus
10 Cover Page
11 Cover Page
12 Investment Objective and Policies
13 Investment Objective and Policies; Other Investment
Techniques and Strategies; Additional Investment Restrictions
14 How the Fund is Managed -- Trustees and Officers of the Fund
15 How the Fund is Managed -- Major Shareholders
16 How the Fund is Managed; Additional Information about the
Fund; Distribution and Service Plans; Back Cover
17 How the Fund is Managed
18 Additional Information about the Fund
19 About Your Account -- How to Buy Shares, How to Sell Shares,
How to Exchange Shares
20 Dividends, Capital Gains and Taxes
21 How the Fund is Managed; Additional Information about the
Fund - The Distributor; Distribution and Service Plans
22 Performance of the Fund
23 Financial Statements
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*Not applicable or negative answer.
<PAGE>
OPPENHEIMER INTERNATIONAL GROWTH FUND
Prospectus dated March 30, 1998
Oppenheimer International Growth Fund is a mutual fund with the investment
objective of capital appreciation. Current income is not an objective. The Fund
invests primarily in common stocks of foreign companies in countries throughout
the world, including emerging markets. The Fund emphasizes investments in
"growth-type" companies in industry sectors that the portfolio manager believes
have appreciation possibilities. The Fund may also use "hedging" instruments to
try to reduce the risks of market and currency fluctuations that affect the
value of the securities the Fund holds.
Some of the Fund's investment techniques may be considered speculative.
Foreign investing involves special risks that do not affect investments in
domestic issuers, such as currency fluctuations. Investments in emerging markets
can be very volatile. These techniques may increase the risks of investing in
the Fund and the Fund's operating costs. You should carefully review the risks
associated with an investment in the Fund. Please refer to "Investment Policies
and Strategies" for more information about the types of securities the Fund
invests in and the risks of investing in the Fund.
This Prospectus explains concisely what you should know before investing
in the Fund. Please read this Prospectus carefully and keep it for future
reference. You can find more detailed information about the Fund in the March
30, 1998 Statement of Additional Information. For a free copy, call
OppenheimerFunds Services, the Fund's Transfer Agent, at 1-800-525-7048, or
write to the Transfer Agent at the address on the back cover. The Statement of
Additional Information has been filed with the Securities and Exchange
Commission and is incorporated into this Prospectus by reference (which means
that it is legally part of this Prospectus).
[OppenheimerFunds Logo]
Shares of the Fund are not deposits or obligations of any bank, are not
guaranteed by any bank, are not insured by the F.D.I.C. or any other agency, and
involve investment risks, including the possible loss of the principal amount
invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-1-
<PAGE>
Contents
ABOUT THE FUND
3 Expenses
5 A Brief Overview of the Fund
Financial Highlights
8 Investment Objective and Policies
9 Other Investment Techniques and Strategies
11 Other Investment Restrictions
16 How the Fund is Managed
18 Performance of the Fund
ABOUT YOUR ACCOUNT
19 How to Buy Shares
Class A Shares
Class B Shares
Class C Shares
Class Y Shares
30 Special Investor Services
AccountLink
Automatic Withdrawal and Exchange Plans
Reinvestment Privilege
Retirement Plans
32 How to Sell Shares
By Mail
By Telephone
34 How to Exchange Shares
35 Shareholder Account Rules and Policies
37 Dividends, Capital Gains and Taxes
A-1 Appendix A: Special Sales Charge Arrangements
<PAGE>
ABOUT THE FUND
Expenses
The Fund pays a variety of expenses directly for management of its assets,
administration, distribution of its shares and other services, and those
expenses are subtracted from the Fund's assets to calculate the Fund's net asset
value per share. All shareholders therefore pay those expenses indirectly.
Shareholders pay other expenses directly, such as sales charges and account
transaction charges. The following tables are provided to help you understand
your direct expenses of investing in the Fund and the share of the Fund's
business operating expenses that you will bear indirectly.
|X| Shareholder Transaction Expenses are charges you pay when you
buy or sell shares of the Fund. Please refer to "About Your Account,"
starting on page ___, for an explanation of how
and when these charges apply.
Class A Class B Class C Class Y
------ -------- -------- ---------
Maximum Sales Charge on 5.75% None None None
Purchases (as a % of
offering price)
Maximum Deferred Sales Charge None(1) 5% in the 1% if None
(as a % of the lower of the 1st year, redeemed
original offering price or redemption declining to within 12
proceeds) 1% in the months of
6th year purchase(2)
and eliminated
thereafter(2)
Maximum Sales Charge on None None None None
Reinvested Dividends
Exchange Fee None None None None
Redemption Fee None None None None
(1) If you invest $1 million or more ($500,000 or more for purchases by
"Retirement Plans," as defined in "Class A Contingent Deferred Sales Charge" on
page __) in Class A shares, you may have to pay a sales charge of up to 1% if
you sell your shares within 12 calendar months (18 months for shares purchased
prior to May 1, 1997) from the end of the calendar month during which you
purchased those shares. See "How to Buy Shares - Buying Class A Shares," below.
(2) For more information on contingent deferred sales charges, see "How to Buy
Shares -- Buying Class B Shares" and "How to Buy Shares -- Buying Class C
Shares" below.
|X| Annual Fund Operating Expenses are paid out of the Fund's
assets and represent the Fund's expenses in operating its business. For
example, the Fund pays management fees to its
investment adviser, OppenheimerFunds, Inc. (which is referred to in this
Prospectus as the "Manager"). The rates of the Manager's fees are set forth in
"How the Fund is Managed," below. The Fund has other regular expenses for
services, such as transfer agent fees, custodial fees paid to the bank that
holds its portfolio securities, audit fees and legal expenses. Those expenses
are detailed in the Fund's Financial Statements in the Statement of Additional
Information.
Annual Fund Operating Expenses (as a Percentage of Average Net Assets)
Class A Class B Class C Class Y
Shares Shares Shares Shares
------- ------- ------------------
Management Fees 0.80% 0.80% 0.80% 0.80%
12b-1 Distribution Plan Fees 0.23% 1.00% 1.00% None
Other Expenses 0.75% 0.76% 0.75% 0.75%
Total Fund Operating 1.78% 2.56% 2.55% 1.55%
Expenses
The Fund commenced operations on March 25, 1996. The Annual Fund Operating
Expenses, including "Other Expenses" in the table above are based upon the
Fund's expenses during its fiscal year ended November 30, 1997. These amounts
are shown as a percentage of the average net assets of each class of the Fund's
shares for that period. The 12b-1 Plan Fees for Class A shares are service fees.
The maximum fee is 0.25% of average net assets of that class. For Class B and
Class C shares, the 12b-1 Distribution Plan Fees are service fees (the maximum
fee is 0.25% of average net assets of the respective class) and the asset-based
sales charge of 0.75%. These plans are described in greater detail in "How to
Buy Shares."
The actual expenses for each class of shares in future years may be more
or less than the numbers in the table, depending on a number of factors,
including changes in the actual value of the Fund's assets represented by each
class of shares. Class Y shares were not available during the fiscal year ended
November 30, 1997. Therefore, the Annual Fund Operating Expenses shown for Class
Y shares are based on the amount that would have been payable in that period
assuming that Class Y shares were outstanding during such fiscal year.
|X| Examples. To try to show the effect of these estimated expenses on an
investment over time, we have created the hypothetical examples shown below.
Assume that you make a $1,000 investment in each class of shares of the Fund,
that the Fund's annual return is 5%, and that its operating expenses for each
class are the ones shown in the Annual Fund Operating Expenses table above. If
you were to redeem your shares at the end of each period shown below, your
investment would incur the following expenses by the end of 1, 3, 5 and 10
years:
1 year 3 years 5 years 10 years
------ ------- -------- -----------
Class A Shares $75 $110 $148 $255
Class B Shares $76 $110 $156 $253
Class C Shares $36 $ 79 $136 $289
Class Y Shares $16 $ 49 $ 84 $185
If you did not redeem your investment, it would incur the following
expenses:
1 year 3 years 5 years 10 years
------ -------- --------------------
Class A Shares $75 $110 $148 $255
Class B Shares $26 $ 80 $136 $253
Class C Shares $26 $ 79 $136 $289
Class Y Shares $16 $ 49 $ 84 $185
Because of the effect of the asset-based sales charge and contingent
deferred sales charge imposed on Class B and Class C shares, long-term holders
of Class B and Class C shares could pay the economic equivalent of more than the
maximum front-end sales charge allowed under applicable regulations. For Class B
shareholders, the automatic conversion of Class B shares to Class A Shares is
designed to minimize the likelihood that this will occur. Please refer to "How
to Buy Shares -- Buying Class B Shares" for more information.
These examples show the effect of expenses on an investment, but are not
meant to state or predict actual or expected costs or investment returns of the
Fund, all of which may be more or less than those shown.
A Brief Overview of the Fund
Some of the important facts about the Fund are summarized below, with references
to the section of this Prospectus where more complete information can be found.
You should carefully read the entire Prospectus before making a decision about
investing in the Fund. Keep the Prospectus for reference after you invest,
particularly for information about your account, such as how to sell or exchange
shares.
|X| What Is The Fund's Investment Objective? The Fund's investment
objective is to seek capital appreciation.
|X| What Does the Fund Invest In? The Fund primarily invests in foreign
common stocks of "growth type" companies considered to have appreciation
possibilities. Investments in debt securities may be made to a limited degree in
normal market conditions and without limitation as a temporary defensive measure
or for liquidity purposes in uncertain market conditions. The Fund may also use
hedging instruments and some derivative investments to try to manage investment
risks. These investments are more fully explained in "Investment Objective and
Policies," starting on page ___.
|X| Who Manages the Fund? The Fund's investment adviser is
OppenheimerFunds, Inc., which (including subsidiaries) manages investment
company portfolios having over $75 billion in assets as of December 31, 1997.
The Manager is paid an advisory fee by the Fund, based on its net assets. The
Fund's portfolio manager, who is primarily responsible for the selection of the
Fund's securities, is George Evans. The Fund's Board of Trustees, which is
elected by shareholders, oversees the investment adviser and the portfolio
manager. Please refer to "How the Fund is Managed," starting on page ___ for
more information about the Manager and its fees.
|X| How Risky is the Fund? All investments carry risks to some degree. It
is important to remember that the Fund is designed for long-term investors. The
Fund's investments are subject to changes in their value from a number of
factors such as changes in general stock market movements or the change in value
of particular stocks because of an event affecting the issuer. The Fund's
investments in foreign securities are subject to additional risks associated
with investing abroad, such as the effect of currency rate changes on stock
values and the special risks of investing in emerging markets. These changes
affect the value of the Fund's investments and its price per share.
In the Oppenheimer funds spectrum, the Fund is expected to be more
volatile than stock funds that do not invest primarily for capital appreciation
or in emerging markets, and funds that invest primarily in debt securities. The
fact that the Fund is a relatively new fund with a short operating history is
also a factor to consider. While the Manager tries to reduce risks by
diversifying investments, by carefully researching securities before they are
purchased for the portfolio, and in some cases by using hedging techniques,
there is no guarantee of success in achieving the Fund's objective, and your
shares may be worth more or less than their original cost when you redeem them.
Please refer to "Investment Objective and Policies" starting on page ___ for a
more complete discussion of the Fund's investment risks.
|X| How Can I Buy Shares? You can buy shares through your dealer or
financial institution, or you can purchase shares directly through the
Distributor by completing an Application or by using an Automatic Investment
Plan under AccountLink. Please refer to "How to Buy Shares" beginning on page
___ for more details.
|X| Will I Pay a Sales Charge to Buy Shares? The Fund has three classes of
shares. Each class has the same investment portfolio but different expenses.
Class A shares are offered with a front-end sales charge, starting at 5.75%, and
reduced for larger purchases. Class B and Class C shares are offered without a
front-end sales charge, but may be subject to a contingent deferred sales charge
if redeemed within 6 years or 12 months, respectively, of purchase. There is
also an annual asset-based sales charge on Class B and Class C shares. Please
review "How to Buy Shares" starting on page ___ for more details, including a
discussion about factors you and your financial advisor should consider in
determining which class may be appropriate for you. The Fund also offers Class Y
shares to certain institutional investors; such shares are not available for
sales to individual investors.
|X| How Can I Sell My Shares? Shares can be redeemed by mail or by
telephone call to the Transfer Agent on any business day, or through your
dealer. Please refer to "How to Sell Shares" on page ___. The Fund also offers
exchange privileges to other Oppenheimer funds, described in "How to Exchange
Shares" on page ___.
|X| How Has the Fund Performed? The Fund measures its performance by
quoting its average annual total returns and cumulative total returns, which
measure historical performance. Those returns can be compared to the returns
(over similar periods) of other funds. Of course, other funds may have different
objectives, investments and levels of risk. The Funds's performance can also be
compared to that of a broad stock market index, which we have done on pages ____
and _____. Please remember that past performance does not guarantee future
results.
Financial Highlights
The table on the following page presents selected financial information about
the Fund, including per share data, expense ratios and other data based on the
Fund's average net assets. This information has been audited by KPMG Peat
Marwick LLP, the Fund's independent auditors, whose report on the Fund's
financial statements for the fiscal period ended November 30, 1997 is included
in the Statement of Additional Information. Class Y shares were not publicly
offered during any of the periods shown; therefore, information on this class of
shares is not included in the table below or in the Fund's other financial
statements.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS CLASS A CLASS B CLASS C
-------------------------- ------------------------- ---------------------------
YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30,
1997 1996(1) 1997 1996(1) 1997 1996(1)
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $11.74 $10.00 $11.65 $10.00 $11.66 $10.00
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.05)(2) (.01) (.12)(2) (.10) (.13)(2) (.09)
Net realized and
unrealized gain 2.68(2) 1.75 2.62(2) 1.75 2.64(2) 1.75
------ ------ ------ ------ ------ ------
Total income from
investment operations 2.63 1.74 2.50 1.65 2.51 1.66
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $14.37 $11.74 $14.15 $11.65 $14.17 $11.66
====== ====== ====== ====== ====== ======
================================================================================================================================
TOTAL RETURN, AT NET ASSET
VALUE(3) 22.40% 17.40% 21.46% 16.50% 21.53% 16.60%
================================================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $122,720 $16,918 $90,565 $8,673 $21,908 $2,149
- --------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 66,156 $ 8,992 $45,553 $3,628 $10,864 $ 938
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment loss (0.36)% (0.26)%(4) (1.14)% (1.46)%(4) (1.18)% (1.48)%(4)
Expenses 1.78% 1.88%(4)(5) 2.56% 2.84%(4)(5) 2.55% 2.82%(4)(5)
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 64.2% 42.6% 64.2% 42.6% 64.2% 42.6%
Average brokerage commission rate(7) $0.0075 $0.0137 $0.0075 $0.0137 $0.0075 $0.0137
</TABLE>
1. For the period from March 25, 1996 (commencement of operations) to November
30, 1996.
2. Based on average shares outstanding for the period.
3. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or commencement of operations), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
4. Annualized.
5. The expense ratio reflects the effect of expenses paid indirectly by the
Fund. 6. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended November 30, 1997 were $237,460,822 and $73,217,631, respectively. 7.
Total brokerage commissions paid on applicable purchases and sales of portfolio
securities for the period, divided by the total number of related shares
purchased and sold. Generally, non-U.S. commissions are lower than U.S.
commissions when expressed as cents per share but higher when expressed as a
percentage of transactions because of the lower per-share prices of many
non-U.S. securities.
<PAGE>
-2-
Investment Objective and Policies
Objective. The Fund invests its assets to seek capital appreciation.
Investment Policies and Strategies. The Fund seeks capital appreciation by
emphasizing investments in common stocks of foreign "growth-type" companies,
which are described below. The Fund may invest in securities of smaller, less
well-known companies as well as those of large, well-known companies (if they
are "growth-type" companies). The Fund may hold preferred stock, warrants and
rights. Current income is not a consideration in the selection of portfolio
securities. A portion of the Fund's assets may be invested in securities for
liquidity purposes.
As a matter of fundamental policy, under normal market conditions (when
the Manager believes that the securities markets are not in a volatile or
unstable period) the Fund will invest at least 65% of its total assets in
foreign common and preferred stocks of at least three different countries other
than the United States. The Fund may invest up to 100% of its assets in foreign
securities.
o What are "Growth-Type" Companies? They are companies that the Manager
believes are entering into a growth cycle in their business, with the
expectation that their stock will increase in value. Growth companies may
include larger, established companies that the Manager believes are entering a
growth phase, perhaps because of the development of new products or markets,
improved sales, technological developments, or for other reasons. Growth
companies may also include companies that generate or apply new technologies,
new or improved distribution techniques, or new services, companies that own or
develop natural resources, companies that may benefit from changing consumer
demands or lifestyles, or companies with projected earnings growth in excess of
the average. They may include newer companies that may be in new or developing
industries, or which are developing new products or services, or expanding into
new markets for their products. In any case, growth-type companies have what the
Manager believes to be favorable prospects for the long-term. Newer growth-type
companies normally retain a large part of their earnings for research,
development and investment in capital assets. Therefore, they tend not to
emphasize the payment of dividends. Since the Fund does not invest for current
income, that is not considered to be a negative factor in selecting a stock.
In selecting stocks for investment, the Manager looks for companies with
capable management, sound financial and accounting policies, successful product
development and marketing, as well as other factors.
|X| Can the Fund's Investment Objective and Policies Change? The Fund's
investment policies and techniques are not "fundamental" unless this Prospectus
or the Statement of Additional Information says that a particular policy is
"fundamental." The Fund's investment objective is a
fundamental policy.
|X| Foreign Securities. "Foreign Securities" selected by the Fund
include equity securities issued by companies organized under the laws of a
foreign country, and debt securities (such as
convertible debentures or bonds) issued or guaranteed by foreign companies or by
foreign governments or their agencies. Foreign securities also include
securities that are traded primarily on a foreign securities exchange or
over-the-counter market, as well as securities of companies that derive a
significant portion of their revenue or profits from foreign business,
investments or sales or have a significant portion of their assets abroad.
Foreign securities may include securities of foreign issuers represented in the
U.S. markets by American Depository Receipts (ADRs) or other similar
arrangements. The Fund will hold foreign currency only in connection with the
purchase or sale of foreign securities.
|X| Foreign securities have special risks. While foreign securities offer
special investment opportunities, there are also special risks. Because the Fund
may purchase securities denominated in foreign currencies or traded primarily in
foreign markets, a change in the value of a foreign currency against the U.S.
dollar will result in a change in the U.S. dollar value of those foreign
securities. Foreign issuers are not required to use generally-accepted
accounting principles that apply to U.S. issuers. If securities of a foreign
issuer are not registered for sale in the U.S. under U.S. securities laws, the
issuer does not have to comply with disclosure requirements that U.S. companies
are subject to. The value of foreign investments may be affected by other
factors, including exchange control regulations, expropriation or
nationalization of a company's assets, foreign taxes, delays in settlement of
transactions, changes in governmental, economic or monetary policy in the U.S.
or abroad, or other political and economic factors.
In addition, it is generally more difficult to obtain court judgments
outside the U.S. if the Fund were to sue a foreign issuer or broker. Additional
costs may be incurred because foreign brokerage commissions are generally higher
than U.S. rates, and there are additional custodial costs associated with
holding securities abroad. More information about the risks and potential
rewards of investing in foreign securities is contained in the Statement of
Additional Information.
|X| Emerging Market Risks. The Fund can invest in securities in any
country, developed or undeveloped, including "emerging" markets. In general,
"emerging" markets may offer special investment opportunities because their
securities markets, industries, capital structure and consumer consumption are
growing rapidly, but these countries involve special risks not present in mature
foreign markets (such as England, Germany and Japan, for example). Settlement of
securities trades may be subject to extended delays, so that the Fund may not
receive the proceeds of sales of securities on a timely basis. Emerging markets
may have smaller, less developed trading markets and exchanges, which may entail
a lack of liquidity (so that the Fund may not be able to dispose of those
securities rapidly) and greater volatility, which can affect the value of the
securities held by the Fund, and therefore its net asset value per share. There
may also be less developed legal and accounting systems and a greater
possibility of government limitations on foreign investment.
|X| Factors Used in Selecting Foreign Securities. The Fund's portfolio
manager presently intends to employ an investment strategy in selecting foreign
securities that considers the effects of worldwide trends on the growth of
various business sectors. These trends or "global themes" currently include
telecommunications expansion, emerging consumer markets, infrastructure
development, natural resource use and development, corporate restructuring,
capital market development in foreign countries, health care expansion, and
global integration. These trends, which may affect the growth of companies which
have businesses in these sectors or which are affected by their development, may
suggest opportunities for investing the Fund's assets. The Manager does not
invest a fixed or specific amount of the Fund's assets in any one sector, and
these themes or this investment strategy may change over time.
The Fund may also seek to take advantage of changes in the business cycle
by investing in companies that are sensitive to those changes as well as in
"special situations" the Manager believes present opportunities for capital
growth. For example, when a country's economy is expanding, companies in the
financial services and consumer products industries may be in a position to
benefit from changes in the business cycle and these situations may present
long-term growth opportunities.
When investing the Fund's assets, the Manager considers many factors,
including the global themes discussed above, general economic conditions and the
trends in foreign stock markets. The Fund may try to hedge against losses in the
value of its portfolio of securities by using hedging strategies and derivative
investments, described below.
|X| Debt Securities. The Fund may invest in debt securities of foreign
companies or governments, but presently does not plan to invest more than 5% of
its total assets in debt securities. To the extent that the Fund does invest in
debt securities, it will primarily focus on convertible debt securities, that
is, securities that can be converted into the issuer's common stock at the
Fund's election. These securities entitle the owner to receive interest until
the security is redeemed (or converted) or matures. On maturity the principal is
repaid. The Manager considers convertible securities to be "equity equivalents"
because of the conversion feature, and the security's rating has less impact on
the investment decision than in the case of non-convertible securities.
These securities are subject to interest rate risks (the price of the
security will tend to decrease when interest rates rise, and to increase when
interest rates fall). They are also subject to "credit risk" (the risk of the
issuer's default). The Fund can invest in debt securities that are unrated or
which have ratings in any category (including ratings below investment grade,
which involve greater risks of default), but will primarily focus on investment
grade securities to the extent it invests in debt securities. A discussion of
the rating categories of principal rating organizations is contained in the
Statement of Additional Information.
|X| Domestic Securities. In general, the Fund does not expect to
hold significant amounts of securities of U.S. issuers (that is, more than
10% of the Fund's total invested assets). It can, however, hold common and
preferred stocks of U.S. companies and may hold U.S. debt securities to the same
extent described in "Debt Securities" above. However, when market conditions are
unstable it may invest without limit in U.S. Government securities or
high-quality U.S. commercial paper for temporary defensive purposes, as
discussed below in "Temporary Defensive Measures."
Fundamental policies are those that cannot be changed without the approval
of a "majority" of the Fund's outstanding voting shares. The term "majority" is
defined in the Investment Company Act to be a particular percentage of
outstanding voting shares (and this term is explained in the Statement of
Additional Information). The Fund's Board of Trustees may change non-fundamental
policies without shareholder approval, although significant changes will be
described in amendments to this Prospectus.
|X| Stock Investment Risks. Because the Fund normally invests
most, or a substantial portion, of its assets in stocks, the value of the
Fund's portfolio will be affected by changes in the
stock markets. At times, the stock markets can be volatile, and stock prices can
change substantially. This market risk will affect the Fund's net asset values
per share, which will fluctuate as the values of the Fund's portfolio securities
change. Not all stock prices change uniformly or at the same time, not all stock
markets move in the same direction at the same time, and other factors can
affect a particular stock's prices (for example, poor earnings reports by an
issuer, loss of major customers, major litigation against an issuer, or changes
in government regulations affecting an industry). Not all of these factors can
be predicted.
As discussed below, the Fund attempts to limit market risks by
diversifying its investments, that is, by not holding a substantial amount of
stock of any one company and by not investing too great a percentage of the
Fund's assets in any one company.
Because of the types of securities the Fund invests in and the investment
techniques the Fund uses, some of which may be speculative, the Fund is designed
for investors who are investing for the long-term and who are willing to accept
greater risks of loss of their investment in the hope of achieving capital
appreciation. It is not intended for investors seeking assured income and
preservation of capital. Investing for capital appreciation entails the risk of
loss of all or part of your investment. Because changes in securities market
prices can occur at any time, there is no assurance that the Fund will achieve
its investment objective, and when you redeem your shares, they may be worth
more or less than what you paid for them.
o Portfolio Turnover. "Portfolio turnover" describes the rate at which the
Fund traded its portfolio securities during its last fiscal year. For example,
if a fund sold all of its securities during its last fiscal year, its portfolio
turnover rate would have been 100%. Portfolio turnover affects brokerage costs
the Fund pays. The Fund normally does not engage in substantial short-term
trading to try to achieve its objective. The Financial Highlights table above
shows the Fund's portfolio turnover rates during prior fiscal years.
Other Investment Techniques and Strategies
The Fund may also use the investment techniques and strategies described below.
These techniques involve certain risks. The Statement of Additional Information
contains more information about these practices, including limitations on their
use that may help to reduce
some of the risks.
|X| Temporary Defensive Measures. When market conditions are
unstable, as a temporary defensive measure, the Fund may invest without limit
in debt securities, such as securities issued by
the U.S. Government or its agencies or instrumentalities, cash equivalents and
commercial paper in the top two rating categories of a nationally-recognized
securities rating organization such as Standard & Poor's Corporation. It is
expected that in this case the Fund would select short-term debt securities
(which are securities maturing in one year or less from date of purchase), since
those securities usually may be disposed of quickly and their prices tend not to
be as volatile as the prices of longer term debt securities.
|X| Loans of Portfolio Securities. To raise cash for liquidity purposes,
the Fund may lend its portfolio securities, other than in repurchase
transactions, to brokers, dealers and other financial institutions. The Fund
must receive collateral for a loan. These loans are limited to not more than 25%
of the value of the Fund's total assets and are subject to the conditions
described in the Statement of Additional Information. The Fund presently does
not intend to engage in loans of securities that will exceed 5% of the value of
the Fund's total assets in the coming year.
|X| Repurchase Agreements. To maintain liquidity to meet shareholder
redemption requests or to settle portfolio trades, the Fund may enter into
repurchase agreements. In a repurchase transaction, the Fund buys a security and
simultaneously sells it to the vendor for delivery at a future date. They are
used primarily for cash liquidity purposes.
Repurchase agreements must be fully collateralized. However, if the vendor
fails to pay the resale price on the delivery date, the Fund may incur costs in
disposing of the collateral and may experience losses if there is any delay in
its ability to do so. The Fund will not enter into a repurchase agreement that
causes more than 10% of its net assets to be subject to repurchase agreements
having a maturity beyond seven days. There is no limit on the amount of the
Fund's net assets that may be subject to repurchase agreements of seven days or
less.
|X| Borrowing for Leverage. The Fund may borrow up to 10% of the value of
its net assets from banks on an unsecured basis to buy securities.
That percentage limit is a fundamental policy.
This is a speculative investment method known as "leverage." This investing
technique may subject the Fund to greater risks and costs than funds that do not
borrow. These risks may include the possibility that the Fund's net asset value
per share will fluctuate more than funds that don't borrow. The Fund can borrow
only if it maintains a 300% ratio of net assets to borrowings at all times in
the manner set forth in the Investment Company Act. More detail is provided in
"Borrowing for Leverage" in the Statement of Additional Information.
|X| Warrants and Rights. Warrants basically are options to purchase stock
at set prices that are valid for a limited period of time. Rights are similar to
warrants but normally have a short duration and are distributed directly by the
issuer to its shareholders. The Fund may invest up to 5% of its total assets in
warrants or rights. That 5% limitation does not apply to warrants the Fund has
acquired as part of units with other securities or that are attached to other
securities. No more than 2% of the Fund's total assets may be invested in
warrants not listed on either The New York Stock Exchange or The American Stock
Exchange. For further details, see "Warrants and Rights" in the Statement of
Additional Information.
|X| Special Situations. The Fund may invest in securities of
companies that are in "special situations" that the Manager believes may
present opportunities for capital growth. A "special
situation" may be an event such as a proposed merger, reorganization, or other
unusual development that is expected to occur and which may result in an
increase in the value of a company's securities, regardless of general business
conditions or the movement of prices in the securities market as a whole. There
is a risk that the price of the security may decline if the anticipated
development fails to occur.
|X| Investing In Small, Unseasoned Companies. The Fund may invest in
securities of small, unseasoned companies. These are companies that have been in
operation less than three years, including the operations of any predecessors.
Securities of these companies may have limited liquidity (which means that the
Fund may have difficulty selling them at an acceptable price when it wants to)
and the price of these securities may be volatile. See "Investing in Small,
Unseasoned Companies" in the Statement of Additional Information for a further
discussion of the risks involved in such investments.
|X| Illiquid and Restricted Securities. Under the policies and procedures
established by the Fund's Board of Trustees, the Manager determines the
liquidity of certain of the Fund's investments. Investments may be illiquid
because of the absence of an active trading market, making it difficult to value
them or dispose of them promptly at an acceptable price. A restricted security
is one that has a contractual restriction on its resale or that cannot be sold
publicly until it is registered under the Securities Act of 1933. The Fund will
not invest more than 10% of its net assets in illiquid or restricted securities
(the Board may increase that limit to 15%). The Fund's percentage limitation on
these investments does not apply to certain restricted securities that are
eligible for resale to qualified institutional purchasers. The Manager monitors
holdings of illiquid securities on an ongoing basis to determine whether to sell
any holdings to maintain adequate liquidity. Illiquid securities include
repurchase agreements maturing in more than seven days, and include certain
participation interests other than those with puts exercisable within seven
days.
|X| Hedging. As described below, the Fund may purchase and sell certain
kinds of futures contracts, put and call options, forward contracts, and options
on futures and broadly-based stock indices. These are all referred to as
"hedging instruments." The Fund does not use hedging instruments for speculative
purposes, and has limits on their use, described below. The types of hedging
instruments the Fund may use are described below and in greater detail in "Other
Investment Techniques and Strategies" in the Statement of Additional
Information.
The Fund may buy and sell options, futures and forward contracts for a
number of purposes. It may do so to try to manage its exposure to the
possibility that the prices of its portfolio securities may decline, or to
establish a position in the securities market as a temporary substitute for
purchasing individual securities. Some of these strategies, such as selling
futures, buying puts and writing covered calls, hedge the Fund's portfolio
against price fluctuations.
Other hedging strategies, such as buying futures and call options, tend to
increase the Fund's exposure to the securities market. Forward contracts are
used to try to manage foreign currency risks on the Fund's foreign investments.
Foreign currency options are used to try to protect against declines in the
dollar value of foreign securities the Fund owns, or to protect against an
increase in the dollar cost of buying foreign securities. Writing covered call
options may also provide income to the Fund for liquidity purposes.
o Futures. The Fund may buy and sell futures contracts that relate to(1)
broadly-based stock indices (these are referred to as Stock Index Futures) and
(2) foreign currencies (these are called Forward Contracts and are discussed
below).
o Put and Call Options. The Fund may buy and sell exchange-traded and
over-the-counter put and call options, including index options, securities
options, currency options, and options on the other types of futures described
in "Futures," above. A call or put may be purchased only if, after the purchase,
the value of all call and put options held by the Fund will not exceed 5% of the
Fund's total assets.
If the Fund sells (that is, writes) a call option, it must be "covered."
That means the Fund must own the security subject to the call while the call is
outstanding, or, for other types of written calls, the Fund must segregate
liquid assets to enable it to satisfy its obligations if the call is exercised.
After the Fund writes a call, not more than 25% of the Fund's total assets may
be subject to calls.
The Fund may buy puts whether or not it holds the underlying investment in
the portfolio. If the Fund writes a put, the put must be covered by segregated
liquid assets. The Fund will not write puts if more than 50% of the Fund's net
assets would have to be segregated to cover put options.
o Forward Contracts. Forward contracts are foreign currency exchange
contracts. They are used to buy or sell foreign currency for future delivery at
a fixed price. The Fund uses them to try to "lock in" the U.S. dollar price of a
security denominated in a foreign currency that the Fund has bought or sold, or
to protect against possible losses from changes in the relative values of the
U.S. dollar and foreign currency. The Fund limits its net exposure under forward
contracts in a particular foreign currency to the amount of its assets
denominated in that currency or denominated in a closely-correlated currency.
|X| Hedging Instruments can be volatile investments and may involve
special risks. The use of hedging instruments requires special skills and
knowledge of investment techniques that are different from what is required for
normal portfolio management. If the Manager uses a hedging instrument at the
wrong time or judges market conditions incorrectly, hedging strategies may
reduce the Fund's return. The Fund could also experience losses if the prices of
its futures and options positions were not correlated with its other investments
or if it could not close out a position because of an illiquid market for the
future or option.
Options trading involves the payment of premiums and has special tax
effects on the Fund. There are also special risks in particular hedging
strategies. If a covered call written by the Fund is exercised on a security
that has increased in value, the Fund will be required to sell the security at
the call price and will not be able to realize any profit if the security has
increased in value above the call price. The use of forward contracts may reduce
the gain that would otherwise result from a change in the relationship between
the U.S. dollar and a foreign currency. These risks and the hedging strategies
the Fund may use are described in greater detail in the Statement of Additional
Information.
|X| Derivative Investments. In general, a "derivative investment" is
a specially designed investment. Its performance is linked to the performance
of another investment or security, such as an option, future, index, currency or
commodity. The Fund can invest in a number of different kinds of "derivative
investments." They are used in some cases for hedging purposes and in other
cases to attempt to seek increased total return. In the broadest sense,
exchange-traded options and futures contracts (discussed in "Hedging," below)
may be considered "derivative investments."
There are special risks in investing in derivative investments. The
company issuing the instrument may fail to pay the amount due on the maturity of
the instrument. Also, the underlying investment or security on which the
derivative is based, and the derivative itself, might not perform the way the
Manager expected it to perform. The performance of derivative investments may
also be influenced by interest rate and stock market changes in the U.S. and
abroad. All of this can mean that the Fund may realize less principal or income
from the investment than expected. Certain derivative investments held by the
Fund may trade in the over-the-counter market and may be illiquid. Please refer
to "Illiquid and Restricted Securities" for an explanation.
Other Investment Restrictions
The Fund has certain investment restrictions that are fundamental policies.
Under these restrictions, the Fund cannot do any of the following:
o The Fund cannot buy securities issued or guaranteed by any one issuer
(except the U.S. Government or any of its agencies or instrumentalities) if,
with respect to 75% of its total assets, more than 5% of the Fund's total assets
would be invested in securities of that issuer, or the Fund would then own more
than 10% of that issuer's voting securities; and
o The Fund cannot concentrate investments in any particular industry.
Therefore the Fund will not purchase the securities of companies in any one
industry if, thereafter, 25% or more of the value of the Fund's total assets
would consist of securities of companies in that industry.
Unless the Prospectus states that a percentage restriction applies on an
ongoing basis, it applies only at the time the Fund makes an investment, and the
Fund need not sell securities to meet the percentage limits if the value of the
investment increases in proportion to the size of the Fund. Other investment
restrictions are listed in "Investment Restrictions" in the Statement of
Additional Information.
How the Fund is Managed
Organization and History. The Fund was organized in December 1995 as a
Massachusetts business trust. The Fund is an open-end, diversified management
investment company, with an unlimited number of authorized shares of beneficial
interest.
The Fund is governed by a Board of Trustees, which is responsible for
protecting the interests of shareholders under Massachusetts law. The Trustees
periodically meet throughout the year to oversee the Fund's activities, review
its performance, and review the actions of the Manager. The Trustees are elected
by shareholders of the Fund, the initial Board has been elected by the Manager
as sole initial shareholder. "Trustees and Officers of the Fund" in the
Statement of Additional Information names the Trustees and officers of the Fund
and provides more information about them. Although the Fund will not normally
hold annual meetings of Fund shareholders, it may hold shareholder meetings from
time to time on important matters, and shareholders have the right to call a
meeting to remove a Trustee or to take other action described in the Fund's
Declaration of Trust.
The Board of Trustees has the power, without shareholder approval, to
divide unissued shares of the Fund into two or more classes. The Board has done
so, and the Fund currently has three classes of shares, Class A, Class B, Class
C and Class Y. All classes invest in the same investment portfolio. Each class
has its own dividends and distributions and pays certain expenses, which may be
different for the different classes. Each class may have a different net asset
value. Each share has one vote at shareholder meetings, with fractional shares
voting proportionally. Only shares of a particular class vote as a class on
matters that affect that class alone.
Shares are freely transferrable.
The Manager and Its Affiliates. The Fund is managed by the Manager,
OppenheimerFunds, Inc., which is responsible for selecting the Fund's
investments and handling its day-to-day business. The Manager carries out its
duties, subject to the policies established by the Board of Trustees, under an
Investment Advisory Agreement which states the Manager's responsibilities. The
Agreement sets the fees paid by the Fund to the Manager and describes the
expenses that the Fund is responsible to pay to conduct its business.
The Manager has operated as an investment adviser since 1959. The Manager
(including subsidiaries) currently manages investment companies, including other
Oppenheimer funds, with assets of more than $75 billion as of December 31, 1997,
and with more than 3.5 million shareholder accounts. The Manager is owned by
Oppenheimer Acquisition Corp., a holding company that is owned in part by senior
officers of the Manager and controlled by Massachusetts Mutual Life Insurance
Company.
The management and distribution services provided to the Fund by the
Manager, and the services provided by the Distributor and the Transfer Agent to
shareholders, depend on the smooth functioning of their computer systems. Many
computer software systems in use today cannot distinguish the year 2000 from the
year 1900 because of the way dates are encoded and calculated. That failure
could have a negative impact on handling securities trades, pricing and account
services. The Manager, Distributor and Transfer Agent have been actively working
on necessary changes to their computer systems to deal with the year 2000 and
expect that their systems will be adapted in time for that event, although there
cannot be assurance of success.
|X| Portfolio Manager. The Portfolio Manager of the Fund is George
Evans, who is employed by the Manager. He is the person principally
responsible for the day-to-day management of the Fund's portfolio. During the
past five years, Mr. Evans has also served as an officer and portfolio manager
for other Oppenheimer funds.
|X| Fees and Expenses. Under the Investment Advisory Agreement the Fund
pays the Manager the following annual fees, which decline on additional assets
as the Fund grows: 0.80% of the first $250 million of average annual net assets,
0.77% of the next $250 million, 0.75% of the next $500 million, 0.69% of the
next $1 billion, and 0.67% of average annual net assets in excess of $2 billion.
The Fund's management fee for its last fiscal period ended November 30, 1997,
was 0.80% of average annual net assets for its Class A, Class B and Class C
shares.
The Fund pays expenses related to its daily operations, such as custodian
fees, certain Trustees' fees, transfer agency fees, legal fees and auditing
costs. Those expenses are paid out of the Fund's assets and are not paid
directly by shareholders. However, those expenses reduce the net asset value of
shares, and therefore are indirectly borne by shareholders through their
investment. More information about the Investment Advisory Agreement and the
other expenses paid by the Fund is contained in the Statement of Additional
Information.
There is also information about the Fund's brokerage policies and
practices in "Brokerage Policies of the Fund" in the Statement of Additional
Information. That section discusses how brokers and dealers are selected for the
Fund's portfolio transactions. When deciding which brokers to use, the Manager
is permitted by the Investment Advisory Agreement to consider whether brokers
have sold shares of the Fund or any other funds for which the Manager serves as
investment adviser.
|X| The Distributor. The Fund's shares are sold through dealers, brokers
and other financial institutions that have a sales agreement with
OppenheimerFunds Distributor, Inc., a subsidiary of the Manager that acts as the
Fund's Distributor. The Distributor also distributes the shares of other
Oppenheimer funds and is sub-distributor for funds managed by a subsidiary of
the Manager.
|X| The Transfer Agent. The Fund's transfer agent is OppenheimerFunds
Services, a division of the Manager, which acts as the shareholder servicing
agent for the Fund on an "at-cost" basis. It also acts as the shareholder
servicing agent for the other Oppenheimer funds. Shareholders should direct
inquiries about their accounts to the Transfer Agent at the address and
toll-free number shown below in this Prospectus and on the back cover.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses the terms "total
return" and "average annual total return" to illustrate its performance. The
performance of each class of shares is shown
separately, because the performance of each class will usually be different as a
result of the different kinds of expenses each class bears. These returns
measure the performance of a hypothetical account in the Fund over various
periods, and do not show the performance of each shareholder's account (which
will vary if dividends are received in cash, or shares are sold or purchased).
The Fund's performance information may help you see how well your Fund has done
over time and to compare it to other funds or market indices.
It is important to understand that the Fund's total returns represent past
performance and should not be considered to be predictions of future returns or
performance. This performance data is described below, but more detailed
information about how total returns are calculated is contained in the Statement
of Additional Information, which also contains information about other ways to
measure and compare the Fund's performance. The Fund's investment performance
will vary over time, depending on market conditions, the composition of the
portfolio, expenses and which class of shares you purchase.
|X| Total Returns. There are different types of total returns used to
measure the Fund's performance. Total return is the change in value of a
hypothetical investment in the Fund over a given period, assuming that all
dividends and capital gains distributions are reinvested in additional shares.
The cumulative total return measures the change in value over the entire period
(for example, ten years). An average annual total return shows the average rate
of return for each year in a period that would produce the cumulative total
return over the entire period. However, average annual total returns do not show
the Fund's actual year-by-year performance.
When total returns are quoted for Class A shares, normally the current
maximum initial sales charge has been deducted. When total returns are shown for
Class B or Class C shares, normally the contingent deferred sales charge that
applies to the period for which total return is shown has been deducted.
However, total returns may also be quoted "at net asset value," without
considering the effect of the sales charge, and those returns would be less if
sales charges were deducted.
How Has the Fund Performed? Below is a discussion by the Manager of the Fund's
performance during its fiscal period ended November 30, 1997, followed by a
graphical comparison of the Fund's performance to an appropriate broad-based
market index.
|X| Management's Discussion of Performance. During the fiscal year ended
November 30, 1997, the Fund's portfolio manager emphasized investments in
European companies that have recognized that market expansion is essential to
growth. The Fund's investments in French banks were intended to take advantage
of restructuring occurring in that industry after several years of economic
difficulty. The Fund sought to reduce investments in Japanese stocks, due to
poor performance in the Japanese stock market in the face of a persistent
banking crisis and an economic slow-down. An exception was made in that the
Fund's largest investment as of the end of the fiscal year was in a
multinational company based in Japan that derived most of its revenues from
international markets. The Fund's portfolio holdings, allocations and
strategies are subject to change.
|X| Comparing the Fund's Performance to the Market. The graphs below show
the performance of a hypothetical $10,000 investment in Class A, Class B and
Class C shares of the Fund held until November 30, 1997. In each case,
performance is measured since inception of the Fund on March 25, 1996. Since
Class Y shares were not issued prior to November 30, 1997, there are no
comparisons shown for that class.
The Fund's performance is compared to the Morgan Stanley Capital
International EAFE Index, an unmanaged index of the performance of 20 of the
principal stock markets in Europe, Australia and the Far East, and is widely
recognized as a measure of international stock performance. Index performance
reflects the reinvestment of dividends but does not consider the effect of
capital gains or transaction costs, and none of the data below shows the effect
of taxes. Also, the Fund's performance reflects the deduction of the maximum
sales charge of 5.75% for Class A shares, the applicable contingent deferred
sales charge on Class B and Class C shares, and reinvestment of all dividends
and capital gains distributions, and the effect of Fund operating expenses.
While index comparisons may be useful to provide a benchmark for the Fund's
performance, it must be noted that the Fund's investments are not limited to the
securities in the Morgan Stanley Capital International EAFE Index. Moreover, the
index performance data does not reflect any assessment of the risk of the
investments included in the index.
Comparison of Change in Value of $10,000 Hypothetical Investments in Class A,
Class B and Class C Shares of Oppenheimer International Growth Fund and the
Morgan Stanley Capital International EAFE Index
(Graphs)
Oppenheimer International Growth Fund
Average Annual Total Return Average Annual Total Return
of Class A Shares of the of Class B Shares of the
Fund at 11/30/97(1) Fund at 11/30/97(2)
- ------------------------- --------------------------
1 Year: Life of Class: 1 Year: Life of Class:
15.36% 19.78% 16.46% 20.86%
Average Annual Total Return
of Class C Shares of the
Fund at 11/30/97 (3)
- -------------------------
1 Year: Life of Class:
20.53% 23.05%
- --------------------
Average annual total returns and ending account values in the graphs show change
in share value and include reinvestment of all dividends and capital gains
distributions. The performance information for the Morgan Stanley Capital
International EAFE Index in each of the graphs begins on 3/29/96. (1) Class A
returns are shown net of the applicable 5.75% maximum initial sales charge. The
inception date of the Fund (Class A shares) was 3/31/96. (2) Class B shares of
the Fund were first publicly offered on 3/25/96. Returns are shown net of the
applicable 5% and 4% contingent deferred sales charges, respectively, for the
one-year period and the life of class. The ending account value in the graph is
net of the applicable 4% contingent deferred sales charge. (3) Class C shares of
the Fund were first publicly offered on 3/25/96. The return for the one-year
result is shown net of the applicable 1% contingent deferred sales charge.
Past performance is not predictive of future performance. Graphs are not drawn
to same scale.
-3-
<PAGE>
ABOUT YOUR ACCOUNT
How to Buy Shares
Classes of Shares. The Fund offers investors four different classes of shares:
Class A, Class B, Class C and Class Y. The different classes of shares represent
investments in the same portfolio of securities but are subject to different
expenses and will likely have different share prices.
o Class A Shares. If you buy Class A shares, you may pay an initial sales
charge on investments up to $1 million (up to $500,000 for purchases by
"Retirement Plans," as defined in "Class A Contingent Deferred Sales Charge" on
page ____.) If you purchase Class A shares as part of an investment of at least
$1 million ($500,000 for Retirement Plans) in shares of one or more Oppenheimer
funds, you will not pay an initial sales charge, but if you sell any of those
shares within 12 months of buying them (18 months if the shares were purchased
prior to May 1, 1997), you may pay a contingent deferred sales charge. The
amount of that sales charge will vary depending on the amount you invested.
Sales charge rates are described in "Buying Class A Shares" below.
o Class B Shares. If you buy Class B shares, you pay no sales charge at
the time of purchase, but if you sell your shares within six years of buying
them, you will normally pay a contingent deferred sales charge. That sales
charge varies depending on how long you own your shares, as described in "Buying
Class B Shares" below.
o Class C Shares. If you buy Class C shares, you pay no sales charge at
the time of purchase, but if you sell your shares within 12 months of buying
them, you will normally pay a contingent deferred sales charge of 1%, as
discussed in "Buying Class C Shares" below.
o Class Y Shares. Class Y shares are offered only to certain institutional
investors that have special agreements with the Distributor.
Which Class of Shares Should You Choose? Once you decide that the Fund is an
appropriate investment for you, the decision as to which class of shares is
better suited to your needs depends on a number of factors which you should
discuss with your financial advisor. The Fund's operating costs that apply to a
class of shares and the effect of the different types of sales charges on your
investment will vary your investment results over time. The most important
factors are how much you plan to invest and how long you plan to hold your
investment. If your goals and objectives change over time and you plan to
purchase additional shares, you should re-evaluate those factors to see if you
should consider another class of shares.
In the following discussion, to help provide you and your financial
advisor with a framework in which to choose a class, we have made some
assumptions using a hypothetical investment in the Fund. We assumed you are an
individual investor and therefore ineligible to purchase Class Y shares. We used
the maximum sales charge rates that apply to Class A, Class B and Class C
shares, and considered the effect of the annual asset-based sales charge on
Class B and Class C shares (which, like all expenses, will affect your
investment return). For the sake of comparison, we
have
assumed that there is a 10% rate of appreciation in the investment each year. Of
course, the actual performance of your investment cannot be predicted and will
vary, based on the Fund's actual investment returns and the operating expenses
borne by the class you invest
in.
The factors discussed below are not intended to be investment advice or
recommendations, because each investor's financial considerations are different.
The discussion below of the factors to consider in purchasing a particular class
of shares assumes that you will purchase only one class of shares and not a
combination of shares of different classes.
|X| How Long Do You Expect to Hold Your Investment? While future financial
needs cannot be predicted with certainty, knowing how long you expect to hold
your investment will assist you in selecting the appropriate class of shares.
Because of the effect of class-based expenses, your choice will also depend on
how much you plan to invest. For example, the reduced sales charges available
for larger purchases of Class A shares may, over time, offset the effect of
paying an initial sales charge on your investment (which reduces the amount of
your investment dollars used to buy shares for your account), compared to the
effect over time of higher class-based expenses on Class B or Class C shares for
which no initial sales charge is paid.
|X| Investing for the Short Term. If you have a short-term investment
horizon (that is, you plan to hold your shares for not more than six years),you
should probably consider purchasing Class A or Class C shares rather than Class
B shares, because of the effect of the Class B contingent deferred sales charge
if you redeem in less than 7 years, as well as the effect of the Class B
asset-based sales charge on the investment return for that class in the
short-term. Class C shares might be the appropriate choice (especially for
investments of less than $100,000), because there is no initial sales charge on
Class C shares, and the contingent deferred sales charge does not apply to
amounts you sell after holding them one year.
However, if you plan to invest more than $100,000 for the shorter term,
then the more you invest and the more your investment horizon increases toward
six years, Class C shares might not be as advantageous as Class A shares. That
is because the annual asset-based sales charge on Class C shares will have a
greater impact on your account over the longer term than the reduced front-end
sales charge available for larger purchases of Class A shares. For example,
Class A might be more advantageous than Class C (as well as Class B) for
investments of more than $100,000 expected to be held for 5 or 6 years (or
more). For investments over $250,000 expected to be held 4 to 6 years (or more),
Class A shares may become more advantageous than Class C (and Class B). If
investing $500,000 or more, Class A may be more advantageous as your investment
horizon approaches 3 years or more.
And for investors who invest $1 million or more, in most cases Class A
shares will be the most advantageous choice, no matter how long you intend to
hold your shares. For that reason, the Distributor normally will not accept
purchase orders of $500,000 or more of Class B shares or $1 million or more of
Class C shares from a single investor.
|X| Investing for the Longer Term. If you are investing for the longer
term, for example, for retirement, and do not expect to need access to your
money for seven years or more, Class B shares may be an appropriate
consideration, if you plan to invest less than $100,000. If you plan to invest
more than $100,000 over the long term, Class A shares will likely be more
advantageous than Class B shares or Class C shares, as discussed above, because
of the effect of the expected lower expenses for Class A shares and the reduced
initial sales charges available for larger investments in Class A shares under
the Fund's Right of Accumulation.
Of course, these examples are based on approximations of the effect of
current sales charges and expenses on a hypothetical investment over time, using
the assumed annual performance return stated above, and therefore, you should
analyze your options carefully.
|X| Are There Differences in Account Features That Matter to You? Because
some account features may not be available to Class B or Class C shareholders,
or other features (such as Automatic Withdrawal Plans) might not be advisable
(because of the effect of the contingent deferred sales charge) for Class B or
Class C shareholders, you should carefully review how you plan to use your
investment account before deciding which class of shares to buy. Share
certificates are not available for Class B or Class C shares, and if you are
considering using your shares as collateral for a loan, that may be a factor to
consider.
|X| How Does It Affect Payments to My Broker? A salesperson, such as a
broker, or any other person who is entitled to receive compensation for selling
Fund shares may receive different compensation for selling one class than for
selling another class. It is important that investors understand that the
purposes of the Class B and Class C contingent deferred sales charges and
asset-based sales charges are the same as the purpose of the front-end sales
charge on sales of Class A shares: that is, to compensate the Distributor for
commissions it pays to dealers and financial institutions for selling shares.
The Distributor may pay additional periodic compensation from its own resources
to securities dealers or financial institutions based upon the value of shares
of the Fund owned by the dealer or financial institution for its own account or
for its customers.
How Much Must You Invest? You can open a Fund account with a minimum initial
investment of $1,000 and make additional investments at any time with as little
as $25. There are reduced minimum investments under special investment plans.
o With Asset Builder Plans, Automatic Exchange Plans, 403(b)(7) custodial
plans and military allotment plans, you can make initial and subsequent
investments of as little as $25; and subsequent purchases of at least $25 can be
made by telephone through AccountLink.
o Under pension, profit-sharing plans and Individual Retirement Accounts
IRAs), you can make an initial investment of as little as $250 (if your IRA is
established under an asset builder plan, the $25 minimum applies), and
subsequent investments may be as little as $25.
o There is no minimum investment requirement if you are buying shares by
reinvesting dividends from the Fund or other Oppenheimer funds (a list of them
appears in the Statement of Additional Information, or you can ask your dealer
or call the Transfer Agent), or by reinvesting distributions from unit
investment trusts that have made arrangements with the Distributor.
|X| How Are Shares Purchased? You can buy shares several ways -- through
any dealer, broker or financial institution that has a sales agreement with the
Distributor, directly through the Distributor, or automatically from your bank
account through an Asset Builder Plan under the OppenheimerFunds AccountLink
service. The Distributor may appoint certain servicing agents as the
Distributor's agent to accept purchase (and redemption) orders. When you buy
shares, be sure to specify Class A, Class B, or Class C shares. If you do not
choose, your investment will be made in Class A shares.
|X| Buying Shares Through Your Dealer. Your dealer will place your
order with the Distributor on your behalf.
|X| Buying Shares Through the Distributor. Complete an OppenheimerFunds
New Account Application and return it with a check payable to "OppenheimerFunds
Distributor, Inc." Mail it to P.O. Box 5270, Denver, Colorado 80217. If you
don't list a dealer on the application, the Distributor will act as your agent
in buying the shares. However, it is recommended that you discuss your
investment first with a financial advisor, to be sure that it is appropriate for
you.
o Payments by Federal Funds Wire. Shares may be purchased by Federal
Funds wire. The minimum investment is $2,500. You must first call the
Distributor's Wire Department at 1-800-525-
7041 to notify the Distributor of the wire and receive further instructions.
|X| Buying Shares Through OppenheimerFunds AccountLink. You can use
AccountLink to link your Fund account with an account at a U.S. bank or other
financial institution that is an Automated Clearing House (ACH) member. You can
then transmit funds electronically to purchase shares, to have the Transfer
Agent send redemption proceeds, or to transmit dividends and distributions to
your bank account.
Shares are purchased for your account on the regular business day the
Distributor is instructed by you to initiate the ACH transfer to buy shares. You
can provide those instructions automatically, under an Asset Builder Plan,
described below, or by telephone instructions using OppenheimerFunds PhoneLink,
also described below. You should request AccountLink privileges on the
application or dealer settlement instructions used to establish your account.
Please refer to "AccountLink" below for more details.
|X| Asset Builder Plans. You may purchase shares of the Fund (and up to
four other Oppenheimer funds) automatically each month from your account at a
bank or other financial institution under an Asset Builder Plan with
AccountLink. Details are in the Statement of Additional Information.
|X| At What Price Are Shares Sold? Shares are sold at the public offering
price based on the net asset value (and any initial sales charge that applies)
that is next determined after the Distributor receives the purchase order in
Denver, Colorado, or the order is received and transmitted to the Distributor by
an entity authorized by the Fund to accept purchase or redemption orders. The
Fund has authorized the Distributor, certain broker-dealers and agents or
intermediaries designated by the Distributor or those broker-dealers to accept
orders. In most cases, to enable you to receive that day's offering price, the
Distributor or an authorized entity must receive your order by the time of day
The New York Stock Exchange closes, which is normally 4:00 P.M., New York time,
but may be earlier on some days (all references to time in this Prospectus mean
"New York time"). The net asset value of each class of shares is determined as
of that time on each day The New York Stock Exchange is open (which is a
"regular business day"). If you buy shares through a dealer, the dealer must
receive your order by the close of The New York Stock Exchange on a regular
business day and normally your order must be transmitted to the Distributor so
that it is received before the Distributor's close of business that day, which
is normally 5:00 P.M. The Distributor, in its sole discretion, may reject any
purchase order for the Fund's shares.
Special Sales Charge Arrangements for Certain Persons. Appendix A to this
Prospectus sets forth conditions for the waiver of, or exemption from, sales
charges or the special sales charge rates that apply to purchases of shares of
the Fund (including purchases by exchange) by a person who was a shareholder of
one of the Former Quest for Value Funds (as defined in that Appendix).
Buying Class A Shares. Class A shares are sold at their offering price, which is
normally net asset value plus an initial sales charge. However, in some cases,
described below, purchases are not subject to an initial sales charge, and the
offering price will be the net asset value. In some cases, reduced sales charges
may be available, as described below. Out of the amount you invest, the Fund
receives the net asset value to invest for your account. The sales charge varies
depending on the amount of your purchase. A portion of the sales charge may be
retained by the Distributor and allocated to your dealer as commission. The
current sales charge rates and commissions paid to dealers and brokers are as
follows:
Front-End Sales Front-End Sales
Charge as a Charge as a Commissions
Percentage of Percentage of Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
- ------------------------------------------------------------------------------
Less than $25,000 5.75% 6.10% 4.75%
- ------------------------------------------------------------------------------
$25,000 or more but
less than $50,000 5.50% 5.82% 4.75%
- ------------------------------------------------------------------------------
$50,000 or more but
less than $100,000 4.75% 4.99% 4.00%
- ------------------------------------------------------------------------------
$100,000 or more but
less than $250,000 3.75% 3.90% 3.00%
- ------------------------------------------------------------------------------
$250,000 or more but
less than $500,000 2.50% 2.56% 2.00%
- ------------------------------------------------------------------------------
$500,000 or more but
less than $1 million 2.00% 2.04% 1.60%
|X| Class A Contingent Deferred Sales Charge. There is no initial
sales charge on purchases of Class A shares of any one or more of the
Oppenheimer funds in the following cases:
o Purchases aggregating $1 million or more;
o Purchases by a retirement plan qualified under section 401(a) if the
retirement plan has total plan assets of $500,000 or more.
o Purchases by a retirement plan qualified under sections 401(a) or 401(k)
of the Internal Revenue Code, by a non-qualified deferred compensation plan,
employee benefit plan, group retirement plan (see "How to Buy Shares -
Retirement Plans" in the Statement of Additional Information for further
details), an employee's 403(b)(7) custodial plan account, SEP IRA, SARSEP, or
SIMPLE plan (all of these plans are collectively referred to as "Retirement
Plans"), that: (1) buys shares costing $500,000 or more or (2) has, at the time
of purchase, 100 or more eligible participants, or (3) certifies that it
projects to have annual plan purchases of $200,000 or more; or
o Purchases by an OppenheimerFunds Rollover IRA if the purchases are made
(1) through a broker, dealer, bank or registered investment adviser that has
made special arrangements with the Distributor for these purchases, or (2) by a
direct rollover of a distribution from a qualified retirement plan if the
administrator of that plan has made special arrangements with the Distributor
for those purchases.
The Distributor pays dealers of record commissions on those purchases in
an amount equal to (i) 1.0% for non-Retirement Plan accounts, and (ii) for
Retirement Plan accounts, 1.0% of the first $2.5 million, plus 0.50% of the next
$2.5 million, plus 0.25% of purchases over $5 million, calculated on a calendar
year basis. That commission will be paid only on those purchases that were not
previously subject to a front-end sales charge and dealer commission. No sales
commission will be paid to the dealer, broker or financial institution on Class
A shares purchased with the redemption proceeds of shares of a mutual fund
offered as an investment option in a Retirement Plan in which Oppenheimer funds
are also offered as investment options under a special arrangement with the
Distributor if the purchase occurs more than 30 days after the addition of the
Oppenheimer funds as an investment option to the Retirement Plan.
If you redeem any of those shares purchased prior to May 1, 1997, within
18 months of the end of the calendar month of their purchase, a contingent
deferred sales charge (called the "Class A contingent deferred sales charge")
may be deducted from the redemption proceeds. A Class A contingent deferred
sales charge may be deducted from the proceeds of any of those shares purchased
on or after May 1, 1997 that are redeemed within 12 months of the end of the
calendar month of their purchase. That sales charge may be equal to 1.0% of the
lesser of (1) the aggregate net asset value of the redeemed shares (not
including shares purchased by reinvestment of dividends or capital gains
distributions) or (2) the original offering price (which is the original net
asset value) of the redeemed shares. However, the Class A contingent deferred
sales charge will not exceed the aggregate amount of the commissions the
Distributor paid to your dealer on all Class A shares of all Oppenheimer funds
you purchased subject to the Class A contingent deferred sales charge.
In determining whether a contingent deferred sales charge is payable, the
Fund will first redeem shares that are not subject to the sales charge,
including shares purchased by reinvestment of dividends and capital gains, and
then will redeem other shares in the order that you purchased them. The Class A
contingent deferred sales charge is waived in certain cases described in
"Waivers of Class A Sales Charges" below.
No Class A contingent deferred sales charge is charged on exchanges of
shares under the Fund's exchange privilege (described below). However, if the
shares acquired by exchange are redeemed within 12 months (18 months for shares
purchased prior to May 1, 1997) of the end of the calendar month of the purchase
of the exchanged shares, the contingent deferred sales charge will apply.
|X| Special Arrangements With Dealers. The Distributor may advance up to
13 months' commissions to dealers that have established special arrangements
with the Distributor for Asset Builder Plans for their clients.
Reduced Sales Charges for Class A Share Purchases. You may be eligible to buy
Class A shares at reduced sales charge rates in one or more of the following
ways:
|X| Right of Accumulation. To qualify for the lower sales charge rates
that apply to larger purchases of Class A shares, you and your spouse can add
together Class A and Class B shares you purchase for your individual accounts,
or jointly, or for trust or custodial accounts on behalf of your children who
are minors. A fiduciary can count all shares purchased for a trust, estate or
other fiduciary account (including one or more employee benefit plans of the
same employer) that has multiple accounts.
Additionally, you can add together current purchases of Class A and Class
B shares of the Fund and other Oppenheimer funds to reduce the sales charge rate
that applies to current purchases of Class A shares. You can also include Class
A and Class B shares of Oppenheimer funds you previously purchased subject to an
initial or contingent deferred sales charge to reduce the sales charge rate for
current purchases of Class A shares, provided that you still hold your
investment in one of the Oppenheimer funds. The Distributor will add the value,
at current offering price, of the shares you previously purchased and currently
own to the value of current purchases to determine the sales charge rate that
applies. The Oppenheimer funds are listed in "Reduced Sales Charges" in the
Statement of Additional Information, or a list can be obtained from the
Distributor. The reduced sales charge will apply only to current purchases and
must be requested when you buy your shares.
|X| Letter of Intent. Under a Letter of Intent, if you purchase Class A
shares or Class A shares and Class B shares of the Fund and other Oppenheimer
funds during a 13-month period, you can reduce the sales charge rate that
applies to your purchases of Class A shares. The total amount of your intended
purchases of both Class A and Class B shares will determine the reduced sales
charge rate for the Class A shares purchased during that period. This can
include purchases made up to 90 days before the date of the Letter. More
information is contained in the Application and in "Reduced Sales Charges" in
the Statement of Additional Information. In order to receive a waiver of the
Class A contingent deferred sales charge, you must notify the Transfer Agent as
to which conditions apply.
|X| Waivers of Class A Sales Charges. The Class A sales charges are not
imposed in the circumstances described below. There is an explanation of this
policy in "Reduced Sales Charges" in the Statement of Additional Information. In
order to receive a waiver of the Class A contingent deferred sales charge, you
must notify the Transfer Agent as to which conditions apply.
Waivers of Initial and Contingent Deferred Sales Charges for Certain
Purchasers. Class A shares purchased by the following investors are not subject
to any Class A sales charges:
o the Manager or its affiliates;
o present or former officers, directors, trustees and employees (and their
"immediate families" as defined in "Reduced Sales Charges" in the Statement of
Additional Information) of the Fund, the Manager and its affiliates, and
retirement plans established by them for their employees;
o registered management investment companies, or separate accounts of
insurance companies having an agreement with the Manager or the Distributor for
that purpose;
o dealers or brokers that have a sales agreement with the Distributor, if
they purchase shares for their own accounts or for retirement plans for their
employees;
o employees and registered representatives (and their spouses) of dealers
or brokers described above or financial institutions that have entered into
sales arrangements with such dealers or brokers (and are identified to the
Distributor) or with the Distributor; the purchaser must certify to the
Distributor at the time of purchase that the purchase is for the purchaser's own
account (or for the benefit of such employee's spouse or minor children);
o dealers, brokers, banks or registered investment advisers that have
entered into an agreement with the Distributor providing specifically for the
use of shares of the Fund in particular investment products or employee benefit
plans made available to their clients (those clients may be charged the
transaction fee by their dealer, broker, bank or adviser for the purchase or
sale of fund shares);
o (1) investment advisors and financial planners who have entered into an
agreement for this purpose with the Distributor and who charge an advisory,
consulting or other fee for their services and buy shares for their own accounts
or the accounts of their clients, and (2) retirement plans and deferred
compensation plans and trusts used to fund those plans (including, for example,
plans qualified or created under sections 401(a), 403(b) or 457 of the Internal
Revenue Code), and "rabbi trusts" that buy shares for their own accounts, in
each case if those purchases are made through a broker or agent or other
financial intermediary that has made special arrangements with the Distributor
for those purchases; (3) clients of such investment advisors or financial
planners (that have entered into an agreement for this purpose with the
Distributor) who buy shares for their own accounts may also purchase shares
without sales charge but only if their accounts are linked to a master account
of their investment advisor or financial planner on the books and records of the
broker, agent or financial intermediary with which the Distributor has made such
special arrangements (each of these investors may be charged a fee by the
broker, agent or financial intermediary for purchasing shares).
o Employee benefit plans purchasing shares through a shareholder servicing
agent which the Distributor has appointed as its agent to accept those purchase
orders;
o directors, trustees, officers or full-time employees of OpCap Advisors
or its affiliates, their relatives or any trust, pension, profit sharing or
other benefit plan which beneficially owns shares for those persons;
o accounts for which Oppenheimer Capital is the investment adviser (the
Distributor must be advised of this arrangement) and persons who are directors
or trustees of the company or trust which is the beneficial owner of such
accounts;
o any unit investment trust that has entered into an appropriate
agreement with the Distributor; or
o qualified retirement plans that had agreed with the former Quest for
Value Advisors to purchase shares of any of the Former Quest for Value Funds at
net asset value, with such shares to be held through DCXchange, a sub-transfer
agency mutual fund clearinghouse, provided that such arrangements are
consummated and share purchases commence by December 31, 1996.
Waivers of Initial and Contingent Deferred Sales Charges in Certain
Transactions. Class A shares issued or purchased in the following transactions
are not subject to Class A sales charges:
o shares issued in plans of reorganization, such as mergers, asset
acquisitions and exchange offers, to which the Fund is a party;
o shares purchased by the reinvestment of loan repayments by a participant
in a retirement plan for which the Manager or its affiliates acts as sponsor;
o shares purchased by the reinvestment of dividends or other distributions
reinvested from the Fund or other Oppenheimer funds (other than Oppenheimer Cash
Reserves) or unit investment trusts for which reinvestment arrangements have
been made with the
Distributor;
o shares purchased and paid for with the proceeds of shares redeemed in
the prior 30 days from a mutual fund (other than a fund managed by the Manager
or any of its subsidiaries) on which an initial sales charge or contingent
deferred sales charge was paid (this waiver also applies to shares purchased by
exchange of shares of Oppenheimer Money Market Fund, Inc. that were purchased
and paid for in this manner); this waiver must be requested when the purchase
order is placed for your shares of the Fund, and the Distributor may require
evidence of your qualification for this waiver; or
o shares purchased with the proceeds of maturing principal of units of any
Qualified Unit Investment Liquid Trust Series.
Waivers of the Class A Contingent Deferred Sales Charge for Certain Redemptions.
The Class A contingent deferred sales charge is also waived if shares that would
otherwise be subject to the contingent deferred sales charge are redeemed in the
following cases:
o to make Automatic Withdrawal Plan payments that are limited annually to
no more than 12% of the original account value;
o involuntary redemptions of shares by operation of law or involuntary
redemptions of small accounts (see "Shareholder Account Rules and Policies,"
below);
o if, at the time of purchase of shares (prior to May 1, 1997) the dealer
agreed in writing to accept the dealer's portion of the sales commission in
installments of 1/18th of the commission per month (and no further commission
will be payable if the shares are redeemed within 18 months of purchase);
o if, at the time of purchase of shares (if purchased during the period
May 1, 1997 through December 31, 1997) the dealer agreed in writing to accept
the dealer's portion of the sales commission in installments of 1/12th of the
commission per month (and no further commission will be payable if the shares
are redeemed within 12 months of purchase);
o for distributions from Retirement Plans, deferred compensation plans or
other employee benefit plans for any of the following purposes: (1) following
the death or disability (as defined in the Internal Revenue Code) of the
participant or beneficiary (the death or disability must occur after the
participant's account was established); (2) to return excess contributions; (3)
to return contributions made due to a mistake of fact; (4) hardship withdrawals,
as defined in the plan; (5) under a Qualified Domestic Relations Order, as
defined in the Internal Revenue Code; (6) to meet the minimum distribution
requirements of the Internal Revenue Code; (7) to establish "substantially equal
periodic payments" as described in Section 72(t) of the Internal Revenue Code;
(8) for retirement distributions or loans to participants or beneficiaries; (9)
separation from service; (10) participant-directed redemptions to purchase
shares of a mutual fund (other than a fund managed by the Manager or its
subsidiary) offered as an investment option in a Retirement Plan in which
Oppenheimer funds are also offered as investment options under a special
arrangement with the Distributor, or (11) plan termination or "in-service
distributions", if the redemption proceeds are rolled over directly to an
OppenheimerFunds IRA;
o for distributions from Retirement Plans having 500 or more eligible
participants, except distributions due to termination of all of the Oppenheimer
funds as an investment option under the Plan; and
o for distributions from 401(k) plans sponsored by broker-dealers that
have entered into a special agreement with the Distributor allowing this waiver.
Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class A
shares to reimburse the Distributor for a portion of its costs incurred in
connection with the personal service and maintenance of shareholder accounts
that hold Class A shares. Under the Plan, the Fund pays a service fee monthly to
the Distributor at the rate of 0.25% of the average annual net assets of the
class. The Distributor uses the service fee to compensate dealers, brokers,
banks and other financial institutions quarterly for providing personal service
and maintenance of accounts of their customers that hold Class A shares.
Services to be provided include, among others, answering customer
inquiries about the Fund, assisting in establishing and maintaining accounts in
the Fund, making the Fund's investment plans available and providing other
services at the request of the Fund or the Distributor. Payments are made by the
Distributor quarterly at an annual rate not to exceed 0.25% of the average net
assets of Class A shares held in accounts of the service providers or their
customers. The payments under the Plan increase the annual expenses of Class A
shares. For more details, please refer to "Distribution and Service Plans" in
the Statement of Additional Information.
Buying Class B Shares. Class B shares are sold at net asset value per share
without an initial sales charge. However, if Class B shares are redeemed within
6 years of their purchase, a contingent deferred sales charge will be deducted
from the redemption proceeds. That sales charge will not apply to shares
purchased by the reinvestment of dividends or capital gains distributions. The
contingent deferred sales charge will be based on the lesser of the net asset
value of the redeemed shares at the time of redemption or the original offering
price (which is the original net asset value). The contingent deferred sales
charge is not imposed on the amount of your account value represented by an
increase in net asset value over the initial purchase price. The Class B
contingent deferred sales charge is paid to the Distributor to reimburse its
expenses of providing distribution-related services to the Fund in connection
with the sale of Class B shares.
To determine whether the contingent deferred sales charge applies to a
redemption, the Fund redeems shares in the following order: (1) shares acquired
by reinvestment of dividends and capital gains distributions, (2) shares held
for over 6 years, and (3) shares held the longest during the 6-year period. The
contingent deferred sales charge is not imposed in the circumstances described
in "Waivers of Class B and Class C Sales Charges," below.
The amount of the contingent deferred sales charge will depend on the
number of years since you invested and the dollar amount being redeemed,
according to the following schedule:
Contingent Deferred
Sales Charge on Redemptions in
Years Since Beginning of Month In That Year (As % of Amount
Which Purchase Order Was Accepted Subject to Charge)
- --------------------------------- ----------------------------
0-1 5.0%
1-2 4.0%
2-3 3.0%
3-4 3.0%
4-5 2.0%
5-6 1.0%
6 and following None
In the table, a "year" is a 12-month period. All purchases are considered
to have been made on the first regular business day of the month in which the
purchase was made.
|X| Automatic Conversion of Class B Shares. 72 months after you purchase
Class B shares, those shares will automatically convert to Class A shares. This
conversion feature relieves Class B shareholders of the asset-based sales charge
that applies to Class B shares under the Class B Distribution and Service Plan,
described below. The conversion is based on the relative net asset value of the
two classes, and no sales load or other charge is imposed. When Class B shares
convert, any other Class B shares that were acquired by the reinvestment of
dividends and distributions on the converted shares will also convert to Class A
shares. The conversion feature is subject to the continued availability of a tax
ruling described in "Alternative Sales Arrangements -- Class A, Class B and
Class C Shares" in the Statement of Additional Information.
Buying Class C Shares. Class C shares are sold at net asset value per share
without an initial sales charge. However, if Class C shares are redeemed within
12 months of their purchase, a contingent deferred sales charge of 1.0% will be
deducted from the redemption proceeds. That sales charge will not apply to
shares purchased by the reinvestment of dividends or capital gains
distributions. The contingent deferred sales charge will be based on the lesser
of the net asset value of the redeemed shares at the time of redemption or the
original offering price (which is the original net asset value). The contingent
deferred sales charge is not imposed on the amount of your account value
represented by the increase in net asset value over the initial purchase price.
The Class C contingent deferred sales charge is paid to compensate the
Distributor for its expenses of providing distribution-related services to the
Fund in connection with the sale of Class C shares.
To determine whether the contingent deferred sales charge applies to a
redemption, the Fund redeems shares in the following order: (1) shares acquired
by reinvestment of dividends and capital gains distributions, (2) shares held
for over 12 months, and (3) shares held the longest during the 12-month period.
Distribution and Service Plans for Class B and Class C Shares. The Fund has
adopted Distribution and Service Plans for Class B and Class C shares to
compensate the Distributor for its services and costs in distributing Class B
and Class C shares and servicing accounts. Under the Plans, the Fund pays the
Distributor an annual "asset-based sales charge" of 0.75% per year on Class B
shares that are outstanding for 6 years or less and on Class C shares. The
Distributor also receives a service fee of 0.25% per year under each plan.
Under each Plan, both fees are computed on the average of the net asset
value of shares in the respective class, determined as of the close of each
regular business day during the period. The asset-based sales charge and service
fees increase Class B and Class C expenses by up to 1.00% of the net assets per
year of the respective class.
The Distributor uses the service fees to compensate dealers for providing
personal services for accounts that hold Class B or Class C shares. Those
services are similar to those provided under the Class A Service Plan, described
above. The Distributor pays the 0.25% service fees to dealers in advance for the
first year after Class B or Class C shares have been sold by the dealer. After
the shares have been held for a year, the Distributor pays the service fees to
dealers on a quarterly basis.
The asset-based sales charge allows investors to buy Class B or Class C
shares without a front-end sales charge while allowing the Distributor to
compensate dealers that sell those shares. The Fund pays the asset-based sales
charges to the Distributor for its services rendered in distributing Class B and
Class C shares. Those payments are at a fixed rate that is not related to the
Distributor's expenses. The services rendered by the Distributor include paying
and financing the payment of sales commissions, service fees and other costs of
distributing and selling Class B and Class C shares.
The Distributor currently pays sales commissions of 3.75% of the purchase
price of Class B shares to dealers from its own resources at the time of sale.
The total amount paid by the Distributor to the dealer at the time of sale of
Class B shares is therefore 4.00% of the purchase price. The Fund pays the
asset-based sales charge to the Distributor for its services rendered in
connection with the distribution of Class B shares. Those payments, retained by
the Distributor, are at a fixed rate which is not related to the Distributor's
expenses. The services rendered by the Distributor include paying and financing
the payment of sales commissions, service fees, and other costs of distributing
and selling Class B shares. If a dealer has a special agreement with the
Distributor, the Distributor may pay the Class B service fee and the asset-based
sales charge to the dealer quarterly in lieu of paying the sales commission and
service fee advance at the time of purchase.
The Distributor currently pays sales commissions of 0.75% of the purchase
price of Class C shares to dealers from its own resources at the time of sale.
The total up-front commission paid by the Distributor to the dealer at the time
of sale of Class C shares is therefore 1.00% of the purchase price. The
Distributor retains the asset-based sales charge during the first year Class C
shares are outstanding to recoup the sales commissions it has paid, the advances
of the service fee payments it has made and its financing costs and other
expenses. The Distributor plans to pay the asset-based sales charge as an
ongoing commission to the dealer on Class C shares that have been outstanding
for a year or more. If a dealer has a special agreement with the Distributor,
the Distributor may pay the Class C service fee and the asset-based sales charge
to the dealer quarterly in lieu of paying the sales commission and service fee
advance at the time of purchase.
The Distributor's actual expenses in selling Class B and Class C shares
may be more than the payments it receives from contingent deferred sales charges
collected on redeemed shares and from the Fund under the Distribution and
Service Plans for Class B and Class C shares. If either Plan is terminated by
the Fund, the Board of Trustees may allow the Fund to continue payments of the
asset-based sales charge to the Distributor for distributing shares before the
Plan was terminated. At November 30, 1997, the end of the Class B Plan year and
Class C Plan year, the Distributor had incurred unreimbursed expenses under the
Class B Plan and Class C Plan of $3,036,155 and $293,442, respectively (equal to
3.35% and 1.34% of the Fund's net assets represented by Class B and Class C
shares, respectively, on that date).
|X| Waivers of Class B and Class C Sales Charges. The Class B and Class C
contingent deferred sales charges will not be applied to shares purchased in
certain types of transactions nor will it apply to Class B and Class C shares
redeemed in certain circumstances as described below. The reasons for this
policy are in "Reduced Sales Charges" in the Statement of Additional
Information. In order to receive a waiver of the Class B or Class C contingent
deferred sales charge, you must notify the Transfer Agent as to which conditions
apply.
Waivers for Redemptions in Certain Cases. The Class B and Class C
contingent deferred sales charges will be waived for redemptions of shares in
the following cases, if the Transfer Agent is notified that these conditions
apply to the redemption:
[ ] distributions to participants or beneficiaries from Retirement Plans,
if the distributions are made (a) under an Automatic Withdrawal Plan after the
participant reaches age 59-1/2, as long as the payments are no more than 10% of
the account value annually (measured from the date the Transfer Agent receives
the request), or (b) following the death or disability (as defined in the
Internal Revenue Code) of the participant or beneficiary (the death or
disability must have occurred after the account was established);
o redemptions from accounts other than Retirement Plans following the
death or disability of the last surviving shareholder, including a trustee of a
"grantor" trust or revocable living trust for which the trustee is also the sole
beneficiary (the death or disability must have occurred after the account was
established, and for disability you must provide evidence of a determination of
disability by the Social Security Administration);
o returns of excess contributions to Retirement Plans;
o distributions from retirement plans to make "substantially equal
periodic payments" as permitted in Section 72 (1) of the Internal Revenue Code
that do not exceed 10% of the account value annually, measured from the date the
transfer agent receives the request;
o shares redeemed involuntarily, as described in "Shareholder
Account Rules and Policies," below; or
o distributions from OppenheimerFunds prototype 401(k) plans and from
certain Massachusetts Mutual Life Insurance Company prototype 401(k) plans (1)
for hardship withdrawals; (2) under a Qualified Domestic Relations Order, as
defined in the Internal Revenue Code; (3) to meet minimum distribution
requirements as defined in the Internal Revenue Code; (4) to make "substantially
equal periodic payments" as described in Section 72(t) of the Internal Revenue
Code; (5) for separation from service; or (6) for loans to participants or
beneficiaries, or
o distributions from 401(k) plans sponsored by broker-dealers that have
entered into a special agreement with the Distributor allowing this waiver.
Waivers for Shares Sold or Issued in Certain Transactions. The contingent
deferred sales charge is also waived on Class B and Class C shares sold or
issued in the following cases:
o shares sold to the Manager or its affiliates; o shares sold to
registered management investment companies or
separate accounts of insurance companies having an agreement with the Manager
or the Distributor for that purpose; and
o shares issued in plans of reorganization to which the Fund is a
party.
Buying Class Y Shares. The Distributor does not anticipate that the public
offering of Class Y shares will commence prior to May 1, 1998. Class Y shares
are sold at net asset value per share without sales charge directly to certain
institutional investors, such as insurance companies, registered investment
companies and employee benefit plans, that have special agreements with the
Distributor for this purpose. These include Massachusetts Mutual Life Insurance
Company, an affiliate of the Manager, which may purchase Class Y shares of the
Fund and other Oppenheimer funds for asset allocation programs, investment
companies or separate investment accounts it sponsors and offers to its
customers. Individual investors are not able to invest in Class Y shares
directly.
While Class Y shares are not subject to initial or contingent deferred
sales charges or asset-based sales charges, an institutional investor buying the
shares for its customers' accounts may impose charges on those accounts. The
procedures for purchasing, redeeming, exchanging, or transferring the Fund's
other classes of shares, and the special account features that apply to those
shares described elsewhere in this Prospectus (other than provisions as to the
timing of the Fund's receipt of purchase, redemption and exchange orders) in
general do not apply to Class Y shares. Special Investor Services
AccountLink. OppenheimerFunds AccountLink links your Fund account to your
account at your bank or other financial institution to enable you to send money
electronically between those accounts to perform a number of types of account
transactions. These include purchases of shares by telephone (either through a
service representative or by PhoneLink, described below), automatic investments
under Asset Builder Plans, and sending dividends and distributions or Automatic
Withdrawal Plan payments directly to your bank account. Please call the Transfer
Agent for more information.
AccountLink privileges should be requested on your dealer's settlement
instructions if you buy your shares through your dealer. After your account is
established, you can request AccountLink privileges by sending
signature-guaranteed instructions to the Transfer Agent. AccountLink privileges
will apply to each shareholder listed in the registration on your account as
well as to your dealer representative of record unless and until the Transfer
Agent receives written instructions terminating or changing those privileges.
After you establish AccountLink for your account, any change of bank account
information must be made by signature-guaranteed instructions to the Transfer
Agent signed by all shareholders who own the account.
|X| Using AccountLink to Buy Shares. Purchases may be made by telephone
only after your account has been established. To purchase shares in amounts up
to $250,000 through a telephone representative, call the Distributor at
1-800-852-8457. The purchase payment will be debited from your bank account.
|X| PhoneLink. PhoneLink is the OppenheimerFunds automated telephone
system that enables shareholders to perform a number of account transactions
automatically using a touch-tone phone. PhoneLink may be used on
already-established Fund accounts after you obtain a Personal Identification
Number (PIN), by calling the special PhoneLink number:
1-800-533-3310.
o Purchasing Shares. You may purchase shares in amounts up to $100,000 by
phone, by calling 1-800-533-3310. You must have established AccountLink
privileges to link your bank account with the Fund, to pay for these purchases.
o Exchanging Shares. With the OppenheimerFunds Exchange Privilege,
described below, you can exchange shares automatically by phone from your Fund
account to another Oppenheimer funds account you have already established by
calling the special PhoneLink number. Please refer
to "How to Exchange Shares," below, for details.
o Selling Shares. You can redeem shares by telephone automatically by
calling the PhoneLink number and the Fund will send the proceeds directly to
your AccountLink bank account. Please refer to "How to Sell Shares," below, for
details.
Shareholder Transactions by Fax. Requests for certain account transactions may
be sent to the Transfer Agent by fax (telecopier). Please call 1-800-525-7048
for information about which transactions are included. Transaction requests
submitted by fax are subject to the same rules and restrictions as written and
telephone requests described in this Prospectus.
OppenheimerFunds Internet Web Site. Information about the Fund, including your
account balance, daily share prices, market and Fund portfolio information, may
be obtained by visiting the OppenheimerFunds Internet Web Site, at the following
Internet address: http://www.oppenheimerfunds.com. In 1998, the Transfer Agent
anticipates offering certain account transactions through the Internet Web Site.
To find out more information about those transactions and procedures, please
visit the Web Site.
Automatic Withdrawal and Exchange Plans. The Fund has several plans that enable
you to sell shares automatically or exchange them to another Oppenheimer funds
account on a regular basis:
|X| Automatic Withdrawal Plans. If your Fund account is worth
$5,000 or more, you can establish an Automatic Withdrawal Plan to receive
payments of at least $50 on a monthly, quarterly,
semi-annual or annual basis. The checks may be sent to you or sent automatically
to your bank account on AccountLink. You may even set up certain types of
withdrawals of up to $1,500 per month by telephone. You should consult the
Statement of Additional Information for more details.
|X| Automatic Exchange Plans. You can authorize the Transfer Agent to
exchange automatically an amount you establish in advance for shares of up to
five other Oppenheimer funds on a monthly, quarterly, semi-annual or annual
basis under an Automatic Exchange Plan. The minimum purchase for each
Oppenheimer funds account is $25. These exchanges are subject to the terms of
the Exchange Privilege, described below.
Reinvestment Privilege. If you redeem some or all of your Class A or Class B
shares of the Fund, you have up to 6 months to reinvest all or part of the
redemption proceeds in Class A shares of the Fund or other Oppenheimer funds
without paying a sales charge. This privilege applies to Class A shares that you
purchased subject to an initial sales charge and to Class A or Class B shares on
which you paid a contingent deferred sales charge when you redeemed them. This
privilege does not apply to Class C shares. You must be sure to ask the
Distributor for this privilege when you send your payment. Please consult the
Statement of Additional Information for more details.
Retirement Plans. Fund shares are available as an investment for your retirement
plans. If you participate in a plan sponsored by your employer, the plan trustee
or administrator must make the purchase of shares for your retirement plan
account. The Distributor offers a number of different retirement plans that can
be used by individuals and employers:
o Individual Retirement Accounts including rollover IRAs, for individuals
and their spouses and SIMPLE IRAs offered by employers
o 403(b)(7) Custodial Plans for employees of eligible tax-exempt
organizations, such as schools, hospitals and charitable organizations
o SEP-IRAs (Simplified Employee Pension Plans) for small business owners
or people with income from self-employment, including SAR/SEP-IRAs
o Pension and Profit-Sharing Plans for self-employed persons and
other employers
o 401(k) Prototype Retirement Plans for businesses
Please call the Distributor for the OppenheimerFunds plan documents, which
contain important information and applications.
How to Sell Shares
You can arrange to take money out of your account by selling (redeeming)
some or all of your shares on any regular business day. Your shares will be sold
at the next net asset value calculated after your order is received and accepted
by the Transfer Agent. The Fund offers you a number of ways to sell your shares:
in writing or by telephone. You can also set up Automatic Withdrawal Plans to
redeem shares on a regular basis, as described above. If you have questions
about any of these procedures, and especially if you are redeeming shares in a
special situation, such as due to the death of the owner, or from a retirement
plan, please call the Transfer Agent first, at 1-800-525-7048, for assistance.
|X| Retirement Accounts. To sell shares in an Oppenheimer funds
retirement account in your name, call the Transfer Agent for a distribution
request form. There are special income tax withholding requirements for
distributions from retirement plans and you must submit a withholding form with
your request to avoid delay. If your retirement plan account is held for you by
your employer, you must arrange for the distribution request to be sent by the
plan administrator or trustee. There are additional details in the Statement of
Additional Information.
|X| Certain Requests Require a Signature Guarantee. To protect you
and the Fund from fraud, certain redemption requests must be in writing and
must include a signature guarantee in the following situations (there may be
other situations also requiring a signature guarantee):
o You wish to redeem more than $50,000 worth of shares and receive
a check
o The redemption check is not payable to all shareholders listed
on the account statement
o The redemption check is not sent to the address of record on
your account statement
o Shares are being transferred to a Fund account with a different
owner or name
o Shares are redeemed by someone other than the owners (such as an
Executor)
|X| Where Can I Have My Signature Guaranteed? The Transfer Agent will
accept a guarantee of your signature by a number of financial institutions,
including: a U.S. bank, trust company, credit union or savings association, or
by a foreign bank that has 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, a registered securities association
or a clearing agency. If you are signing on behalf of a corporation, partnership
or other business, or as a fiduciary, you must also include your title in the
signature.
Selling Shares by Mail. Write a "letter of instructions" that includes:
o Your name
o The Fund's name
o Your Fund account number (from your account statement)
o The dollar amount or number of shares to be redeemed
o Any special payment instructions o Any share certificates for the
shares you are selling
o The signatures of all registered owners exactly as the account is
registered, and
o Any special requirements or documents requested by the Transfer Agent to
assure proper authorization of the person asking to sell shares.
Use the following address for Send courier or Express Mail
requests by mail: requests to:
OppenheimerFunds Services OppenheimerFunds Services
P.O. Box 5270 10200 E. Girard Avenue
Denver, Colorado 80217 Building D
Denver, Colorado 80231
Selling Shares by Telephone. You and your dealer representative of record may
also sell your shares by telephone. To receive the redemption price on a regular
business day, your call must be received by the Transfer Agent by the close of
The New York Stock Exchange that day, which is normally 4:00 P.M., but may be
earlier on some days. You may not redeem shares held in an Oppenheimer funds
retirement plan or under a share certificate by telephone.
o To redeem shares through a service representative, call
1-800-852-8457
o To redeem shares automatically on PhoneLink, call 1-800-533-3310
Whichever method you use, you may have a check sent to the address on the
account statement, or, if you have linked your Fund account to your bank account
on AccountLink, you may have the proceeds sent to that bank account.
|X| Telephone Redemptions Paid by Check. Up to $50,000 may be
redeemed by telephone, in any 7-day period. The check must be payable to all
owners of record of the shares and must be sent to the address on the account
statement. This service is not available within 30 days of changing the address
on an account.
|X| Telephone Redemptions Through AccountLink. There are no dollar limits
on telephone redemption proceeds sent to a bank account designated when you
establish AccountLink. Normally the ACH transfer to your bank is initiated on
the business day after the redemption. You do not receive dividends on the
proceeds of the shares you redeemed while they are waiting to be transferred.
Selling Shares Through Your Dealer. The Distributor has made arrangements to
repurchase Fund shares from dealers and brokers on behalf of their customers.
Please call your dealer for more information about this procedure. Brokers or
dealers may charge for that service. Please refer to "Special Arrangements for
Repurchase of Shares from Dealers and Brokers" in the Statement of Additional
Information for more details.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of certain Oppenheimer
funds at net asset value per share at the time of exchange, without sales
charge. To exchange shares, you must meet several conditions:
o Shares of the fund selected for exchange must be available for sale in
your state of residence.
o The prospectuses of this Fund and the fund whose shares you want to buy
must offer the exchange privilege.
o You must hold the shares you buy when you establish your account for at
least 7 days before you can exchange them; after the account is open 7 days, you
can exchange shares every regular business day.
o You must meet the minimum purchase requirements for the fund you
purchase by exchange.
o Before exchanging into a fund, you should obtain and read its
prospectus.
Shares of a particular class of the Fund may be exchanged only for shares
of the same class in the other Oppenheimer funds. For example, you can exchange
Class A shares of this Fund only for Class A shares of another fund. At present,
Oppenheimer Money Market Fund, Inc., offers only one class of shares, which are
considered to be Class A shares for this purpose. In some cases, sales charges
may be imposed on exchange transactions. Please refer to "How to Exchange
Shares" in the Statement of Additional Information for more details.
Exchanges may be requested in writing or by telephone:
|X| Written Exchange Requests. Submit an OppenheimerFunds Exchange
Request form, signed by all owners of the account. Send it to the Transfer
Agent at the addresses listed in "How
to Sell Shares."
|X| Telephone Exchange Requests. Telephone exchange requests may be
made either by calling a service representative at 1-800-852-8457 or by using
PhoneLink for automated exchanges,
by calling 1-800-533-3310. Telephone exchanges may be made only between accounts
that are registered with the same name(s) and address. Shares held under
certificates may not be exchanged by telephone.
You can find a list of Oppenheimer funds currently available for exchanges
in the Statement of Additional Information or obtain one by calling a service
representative at 1-800-525-7048. That list can change from time to time.
There are certain exchange policies you should be aware of:
[ ] Shares are normally redeemed from one fund and purchased from the other
fund in the exchange transaction on the same regular business day on which the
Transfer Agent receives an exchange request that is in proper form by the close
of The New York Stock Exchange that day, which is normally 4:00 P.M., but may be
earlier on some days. However, either fund may delay the purchase of shares of
the fund you are exchanging into up to seven days if it determines it would be
disadvantaged by a same-day transfer of the proceeds to buy shares. For example,
the receipt of multiple exchange requests from a dealer in a "market-timing"
strategy might require the sale of portfolio securities at a time or price
disadvantageous to the Fund.
o Because excessive trading can hurt fund performance and harm
shareholders, the Fund reserves the right to refuse any exchange request that
will disadvantage it, or to refuse multiple exchange requests submitted by a
shareholder or dealer.
o The Fund may amend, suspend or terminate the exchange privilege at any
time. Although the Fund will attempt to provide you notice whenever it is
reasonably able to do so, it may impose these changes at any time.
o For tax purposes, exchanges of shares involve a redemption of the shares
of the fund you own and a purchase of shares of the other fund, which may result
in a capital gain or loss. For more information about taxes affecting exchanges,
please refer to "How to Exchange Shares" in the Statement of Additional
Information.
o If the Transfer Agent cannot exchange all the shares you request because
of a restriction cited above, only the shares eligible for exchange will be
exchanged.
Shareholder Account Rules and Policies
|X| Net Asset Value Per Share is determined for each class of shares as of
the close of The New York Stock Exchange on each day the Exchange is open by
dividing the value of the Fund's net assets attributable to a class by the
number of shares of that class that are outstanding. The Fund's Board of
Trustees has established procedures to value the Fund's securities to determine
net asset value. In general, securities values are based on market value. There
are special procedures for valuing illiquid and restricted securities and
obligations for which market values cannot be readily obtained. These procedures
are described more completely in the Statement of Additional Information.
|X| The offering of shares may be suspended during any period in which the
determination of net asset value is suspended, and the offering may be suspended
by the Board of Trustees at any time the Board believes it is in the Fund's best
interest to do so.
|X| Telephone Transaction Privileges for purchases, redemptions or
exchanges may be modified, suspended or terminated by the Fund at any time.
If an account has more than one owner,
the Fund and the Transfer Agent may rely on the instructions of any one owner.
Telephone privileges apply to each owner of the account and the dealer
representative of record for the account unless and until the Transfer Agent
receives cancellation instructions from an owner of
the account.
|X| The Transfer Agent will record any telephone calls to verify data
concerning transactions and has adopted other procedures to confirm that
telephone instructions are genuine, by requiring callers to provide tax
identification numbers and other account data or by using PINs, and by
confirming such transactions in writing. If the Transfer Agent does not use
reasonable procedures it may be liable for losses due to unauthorized
transactions, but otherwise neither the Transfer Agent nor the Fund will be
liable for losses or expenses arising out of telephone instructions reasonably
believed to be genuine. If you are unable to reach the Transfer Agent during
periods of unusual market activity, you may not be able to complete a telephone
transaction and should consider placing your order by mail.
|X| Redemption or transfer requests will not be honored until the Transfer
Agent receives all required documents in proper form. From time to time, the
Transfer Agent in its discretion may waive certain of the requirements for
redemptions stated in this Prospectus.
|X| Dealers that can perform account transactions for their clients by
participating in NETWORKING through the National Securities Clearing Corporation
are responsible for obtaining their clients' permission to perform those
transactions and are responsible to their clients who are shareholders of the
Fund if the dealer performs any transaction erroneously or improperly.
|X| The redemption price for shares will vary from day to day because the
values of the securities in the Fund's portfolio fluctuate, and the redemption
price, which is the net asset value per share, will normally be different for
Class A, Class B, Class C and Class Y shares. Therefore, the redemption value of
your shares may be more or less than their original cost.
|X| Payment for redeemed shares is made ordinarily in cash and forwarded
by check or through AccountLink (as elected by the shareholder under the
redemption procedures described above) within 7 days after the Transfer Agent
receives redemption instructions in proper form, except under unusual
circumstances determined by the Securities and Exchange Commission delaying or
suspending such payments. For accounts registered in the name of a
broker/dealer, payment will be forwarded within 3 business days. The Transfer
Agent may delay forwarding a check or processing a payment via AccountLink for
recently purchased shares, but only until the purchase payment has cleared. That
delay may be as much as 10 days from the date the shares were purchased. That
delay may be avoided if you purchase shares by federal funds wire or certified
check, or arrange with your bank to provide telephone or written assurance to
the Transfer Agent that your purchase payment has cleared.
|X| Involuntary redemptions of small accounts may be made by the Fund if
the account value has fallen below $500 for reasons other than the fact that the
market value of shares has dropped, and in some cases involuntary redemptions
may be made to repay the Distributor for losses from the cancellation of share
purchase orders.
|X| Under unusual circumstances, shares of the Fund may be redeemed "in
kind", which means that the redemption proceeds will be paid with securities
from the Fund's portfolio. Please refer to "How to Sell Shares" in the Statement
of Additional Information for more details.
|X| "Backup Withholding" of Federal income tax may be applied at the rate
of 31% from taxable dividends, distributions and redemption proceeds (including
exchanges) if you fail to furnish the Fund a correct and properly certified
Social Security or Employer Identification Number when you sign your
application, or if you underreport your income to the Internal Revenue Service.
|X| The Fund does not charge a redemption fee, but if your dealer or
broker handles your redemption, they may charge a fee. That fee can be avoided
by redeeming your Fund shares directly through the Transfer Agent. Under the
circumstances described in "How To Buy Shares," you may be subject to a
contingent deferred sales charge when redeeming certain Class A, Class B and
Class C shares.
|X| To avoid sending duplicate copies of materials to households, the Fund
will mail only one copy of each annual and semi-annual report to shareholders
having the same last name and address on the Fund's records. However, each
shareholder may call the Transfer Agent at 1-800-525-7048 to ask that copies of
those materials be sent personally to that shareholder.
Dividends, Capital Gains and Taxes
Dividends. The Fund declares dividends separately for Class A, Class B, Class C
and Class Y shares from net investment income, if any, on an annual basis and
normally pays those dividends to shareholders in December, but the Board of
Trustees can change that date. The Board may also cause the Fund to declare
dividends after the close of the Fund's fiscal year (which ends November 30th).
Because the Fund does not have an objective of seeking current income, the
amounts of dividends it pays, if any, will likely be small. Dividends paid on
Class A and Class Y shares will generally be higher than for Class B or Class C
shares because expenses allocable to Class B and Class C shares will generally
be higher. There is no fixed dividend rate and there can be no assurance that
the Fund will pay any dividends.
Capital Gains. The Fund may make distributions annually in December out of any
net short-term or long-term capital gains, and the Fund may make supplemental
distributions of capital gains following the end of its fiscal year. Long-term
capital gains will be separately identified in the tax information the Fund
sends you after the end of the year. Short-term capital gains are treated as
dividends for tax purposes. There can be no assurance that the Fund will pay any
capital gains distributions in a particular year.
Distribution Options. When you open your account, specify on your application
how you want to receive your distributions. For OppenheimerFunds retirement
accounts, all distributions are reinvested. For other accounts, you have four
options:
|X| Reinvest All Distributions in the Fund. You can elect to
reinvest all dividends and long-term capital gains distributions in
additional shares of the Fund.
|X| Reinvest Long-Term Capital Gains Only. You can elect to
reinvest long-term capital gains in the Fund while receiving dividends by
check or sent to your bank account on AccountLink.
|X| Receive All Distributions in Cash. You can elect to receive a
check for all dividends and long-term capital gains distributions or have
them sent to your bank on AccountLink.
|X| Reinvest Your Distributions in Another Oppenheimer Fund Account.
You can reinvest all distributions in the same class of shares of another
Oppenheimer fund account you have
established.
Taxes. If your account is not a tax-deferred retirement account, you should
be aware of the following tax implications of investing in the Fund.
Long-term capital gains are taxable as long-term
capital gains when distributed to shareholders. It does not matter how long you
held your shares. Dividends paid from short-term capital gains and net
investment income are taxable as ordinary income. Distributions are subject to
federal income tax and may be subject to state or local taxes. Your
distributions are taxable when paid, whether you reinvest them in additional
shares or take them in cash. Every year the Fund will send you and the IRS a
statement showing the amount of all taxable distributions you received in the
previous year. So that the Fund will not have to pay taxes on the amounts it
distributes to shareholders as dividends and capital gains, the Fund intends to
manage its investments so that it will qualify as a "regulated investment
company" under the Internal Revenue Code, although it reserves the right not to
qualify in a particular year.
When more than 50% of its assets are invested in foreign securities at the
end of any fiscal year, the Fund may elect that Section 853 of the Internal
Revenue Code will apply to it to permit shareholders to take a credit (or a
deduction) on their own federal income tax returns for foreign taxes paid by the
Fund. "Dividends, Capital Gains and Taxes" in the Statement of Additional
Information contains further information about this tax provision.
|X| "Buying a Dividend". If you buy shares on or just before the
ex-dividend date, or just before the Fund declares a capital gains distribution,
you will pay the full price for the shares and then receive a portion of the
price back as a taxable dividend or capital gain, respectively.
|X| Taxes on Transactions. Share redemptions, including redemptions
for exchanges, are subject to capital gains tax. Generally speaking, a capital
gain or loss is the difference between the price you paid for the shares and the
price you receive when you sell them.
|X| Returns of Capital. In certain cases distributions made by the
Fund may be considered a non-taxable return of capital to shareholders. If
that occurs, it will be identified in notices to
shareholders. A non-taxable return of capital may reduce your tax basis in
your Fund shares.
This information is only a summary of certain Federal tax information
about your investment. More information is contained in the Statement of
Additional Information, and in addition you should consult with your tax adviser
about the effect of an investment in the Fund on your particular tax situation.
-4-
<PAGE>
APPENDIX A
Special Sales Charge Arrangements for Shareholders of the Fund Who Were
Shareholders of the Former Quest for Value Funds
The initial and contingent deferred sales charge rates and waivers for
Class A, Class B and Class C shares of the Fund described elsewhere in this
Prospectus are modified as described below for those shareholders of (i) Quest
for Value Fund, Inc., Quest for Value Growth and Income Fund, Quest for Value
Opportunity Fund, Quest for Value Small Capitalization Fund and Quest for Value
Global Equity Fund, Inc. on November 24, 1995, when OppenheimerFunds, Inc.
became the investment adviser to those funds, and (ii) Quest for Value U.S.
Government Income Fund, Quest for Value Investment Quality Income Fund, Quest
for Value Global Income Fund, Quest for Value New York Tax-Exempt Fund, Quest
for Value National Tax-Exempt Fund and Quest for Value California Tax-Exempt
Fund when those funds merged into various Oppenheimer funds on November 24,
1995. The funds listed above are referred to in this Prospectus as the "Former
Quest for Value Funds." The waivers of initial and contingent deferred sales
charges described in this Appendix apply to shares of the Fund (i) acquired by
such shareholder pursuant to an exchange of shares of one of the Oppenheimer
funds that was one of the Former Quest for Value Funds or (ii) received by such
shareholder pursuant to the merger of any of the Former Quest for Value Funds
into an Oppenheimer fund on November 24, 1995.
Class A Sales Charges
|X| Reduced Class A Initial Sales Charge Rates for Certain Former
Quest Shareholders
o Purchases by Groups, Associations and Certain Qualified
Retirement Plans. The following table sets forth the initial sales charge
rates for Class A shares purchased by a "Qualified
Retirement Plan" through a single broker, dealer or financial institution, or by
members of "Associations" formed for any purpose other than the purchase of
securities if that Qualified Retirement Plan or that Association purchased
shares of any of the Former Quest for Value Funds or received a proposal to
purchase such shares from OCC Distributors prior to November 24, 1995. For this
purpose only, a "Qualified Retirement Plan" includes any 401(k) plan, 403(b)
plan, and SEP/IRA or IRA plan for employees of a single employer.
Front-End Front-End
Sales Sales Commission
Charge Charge as
as a as a Percentage
Number of Percentage Percentage of
Eligible of Offering of Amount Offering
Employees Price Invested Price
or Members
9 or fewer 2.50% 2.56% 2.00%
At least 10 but
not more than 49 2.00% 2.04% 1.60%
For purchases by Qualified Retirement plans and Associations having 50 or
more eligible employees or members, there is no initial sales charge on
purchases of Class A shares, but those shares are subject to the Class A
contingent deferred sales charge described on pages ___ and ___ of this
Prospectus.
Purchases made under this arrangement qualify for the lower of the sales
charge rate in the table based on the number of eligible employees in a
Qualified Retirement Plan or members of an Association or the sales charge rate
that applies under the Rights of Accumulation described above in the Prospectus.
In addition, purchases by 401(k) plans that are Qualified Retirement Plans
qualify for the waiver of the Class A initial sales charge if they qualified to
purchase shares of any of the Former Quest For Value Funds by virtue of
projected contributions or investments of $1 million or more each year.
Individuals who qualify under this arrangement for reduced sales charge rates as
members of Associations, or as eligible employees in Qualified Retirement Plans
also may purchase shares for their individual or custodial accounts at these
reduced sales charge rates, upon request to the Fund's Distributor.
|X| Waiver of Class A Sales Charges for Certain Shareholders. Class A
shares of the Fund purchased by the following investors are not subject to any
Class A initial or contingent deferred sales charges:
o Shareholders of the Fund who were shareholders of the AMA Family of
Funds on February 28, 1991 and who acquired shares of any of the Former Quest
for Value Funds by merger
of a portfolio of the AMA Family of Funds.
o Shareholders of the Fund who acquired shares of any Former Quest for
Value Fund by merger of any of the portfolios of the Unified Funds.
|X| Waiver of Class A Contingent Deferred Sales Charge in Certain
Transactions. The Class A contingent deferred sales charge will not apply to
redemptions of Class A shares of the Fund purchased by the following investors
who were shareholders of any Former Quest for Value Fund:
o Investors who purchased Class A shares from a dealer that is or was not
permitted to receive a sales load or redemption fee imposed on a shareholder
with whom that dealer has a fiduciary relationship under the Employee Retirement
Income Security Act of 1974 and regulations adopted under that law.
o Participants in Qualified Retirement Plans that purchased shares of any
of the Former Quest For Value Funds pursuant to a special "strategic alliance"
with the distributor of those funds. The Fund's Distributor will pay a
commission to the dealer for purchases of Fund shares as described above in
"Class A Contingent Deferred Sales Charge.
Class A, Class B and Class C Contingent Deferred Sales Charge Waivers
|X| Waivers for Redemptions of Shares Purchased Prior to March 6,
1995. In the following cases, the contingent deferred sales charge will be
waived for redemptions of Class A, Class B or Class C shares of the Fund
acquired by exchange from an Oppenheimer fund that was a Former Quest for Value
Fund or into which a former Quest for Value Fund merged, if those shares were
purchased prior to March 6, 1995 in connection with (i) distributions to
participants or beneficiaries of plans qualified under Section 401(a) of the
Internal Revenue Code or from custodial accounts under Section 403(b)(7) of the
Code, Individual Retirement Accounts, deferred compensation plans under Section
457 of the Code, and other employee benefit plans, and returns of excess
contributions made to each type of plan, (ii) withdrawals under an automatic
withdrawal plan holding only either Class B or Class C shares if the annual
withdrawal does not exceed 10% of the initial value of the account, and (iii)
liquidation of a shareholder's account if the aggregate net asset value of
shares held in the account is less than the required minimum value of such
accounts.
|X| Waivers for Redemptions of Shares Purchased on or After March 6, 1995
but Prior to November 24, 1995. In the following cases, the contingent deferred
sales charge will be waived for redemptions of Class A, Class B or Class C
shares of the Fund acquired by exchange from an Oppenheimer fund that was a
Former Quest For Value Fund or into which such fund merged, if those shares were
purchased on or after March 6, 1995, but prior to November 24, 1995: (1)
distributions to participants or beneficiaries from Individual Retirement
Accounts under Section 408(a) of the Internal Revenue Code or retirement plans
under Section 401(a), 401(k), 403(b) and 457 of the Code, if those distributions
are made either (a) to an individual participant as a result of separation from
service or (b) following the death or disability (as defined in the Code) of the
participant or beneficiary; (2) returns of excess contributions to such
retirement plans; (3) redemptions other than from retirement plans following the
death or disability of the shareholder(s) (as evidenced by a determination of
total disability by the U.S. Social Security Administration); (4) withdrawals
under an automatic withdrawal plan (but only for Class B or C shares) where the
annual withdrawals do not exceed 10% of the initial value of the account; and
(5) liquidation of a shareholder's account if the aggregate net asset value of
shares held in the account is less than the required minimum account value. A
shareholder's account will be credited with the amount of any contingent
deferred sales charge paid on the redemption of any Class A, Class B or Class C
shares of the Fund described in this section if within 90 days after that
redemption, the proceeds are invested in the same Class of shares in this Fund
or another Oppenheimer fund.
-5-
<PAGE>
APPENDIX TO PROSPECTUS OF
OPPENHEIMER INTERNATIONAL GROWTH FUND
Graphic material included in Prospectus of Oppenheimer International
Growth Fund: "Comparison of Change in Value of $10,000 Hypothetical Investments
in Class A, Class B and Class C shares of Oppenheimer International Growth Fund
and the Morgan Stanley Capital International EAFE Index."
Linear graphs will be included in the Prospectus of Oppenheimer
International Growth Fund (the "Fund") depicting the initial subsequent account
values of hypothetical $10,000 investments in Class A, Class B and Class C
shares of the Fund during the period March 25, 1996 (first public offering of
Class A, Class B and Class C shares) to November 30, 1997; in each case
comparing such values with the same investment over the same time periods in the
Morgan Stanley EAFE Index. The Morgan Stanley Capital International EAFE Index
comparison begins on March 31, 1996. Set forth below are the relevant data
points that will appear on each linear graph. Additional information with
respect to the foregoing, including a description of the Morgan Stanley Capital
International EAFE Index, is set forth in the Prospectus under "Performance of
the Fund -Management's Discussion of Performance."
Oppenheimer
Fiscal International Morgan Stanley Capital
Year Ended Growth Fund International EAFE Index
- ----------- ----------- -----------------------------
Class A
-------
03/25/96 9,425 10,000(1)
11/30/96 11,065 10,462
11/30/97 13,544 10,449
Class B
-------
03/25/96 10,000 10,000(1)
11/30/96 11,650 10,462
11/30/97 13,750 10,449
Class C
-------
03/25/96 10,000 10,000(1)
11/30/96 11,560 10,462
11/30/97 14,170 10,449
- --------------
(1) Index value as of March 31, 1996.
Oppenheimer International Growth Fund
Two World Trade Center
New York, New York 10048-0203
1-800-525-7048
Investment Adviser
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
Distributor
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer and Shareholder Servicing Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
OppenheimerFunds Internet Web Site
http://www.oppenheimerfunds.com
Custodian of Portfolio Securities
The Bank of New York
One Wall Street
New York, New York 10015
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
No dealer, broker, salesperson or any other person has been authorized to give
any information or to make any representations other than those contained in
this Prospectus or the Statement of Additional Information, and if given or
made, such information and representations must not be relied upon as having
been authorized by the Fund, OppenheimerFunds, Inc., OppenheimerFunds
Distributor, Inc. 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 an
offer in such state.
PR0825.001.0398 * Printed on recycled paper
<PAGE>
Oppenheimer International Growth Fund
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
Statement of Additional Information dated March 30, 1998
This Statement of Additional Information of Oppenheimer International
Growth Fund is not a Prospectus. This document contains additional information
about the Fund and supplements information in the Prospectus dated March 30,
1998. It should be read together with the Prospectus, which may be obtained by
writing to the Fund's Transfer Agent, OppenheimerFunds Services at P.O. Box
5270, Denver, Colorado 80217 or by calling the Transfer Agent at the toll-free
number shown above.
Table of Contents
Page
About the Fund
Investment Objective and Policies............................................2
Investment Policies and Strategies.........................................2
Other Investment Techniques and Strategies.................................7
Other Investment Restrictions.............................................16
How the Fund is Managed.....................................................17
Organization of the Fund..................................................17
Trustees and Officers of the Fund.........................................18
The Manager and Its Affiliates............................................23
Brokerage Policies of the Fund..............................................24
Performance of the Fund.....................................................26
Distribution and Service Plans..............................................29
About Your Account
How to Buy Shares.........................................................31
How to Sell Shares........................................................39
How to Exchange Shares....................................................42
Dividends, Capital Gains and Taxes..........................................44
Additional Information About the Fund.......................................45
Financial Information About the Fund6
Independent Auditors' Report................................................46
Financial Statements........................................................47
Appendix A: Corporate Industry Classifications............................A-1
Appendix B: Description of Ratings........................................B-1
<PAGE>
About the Fund
Investment Objective and Policies
Investment Policies and Strategies. The investment objective and policies of the
Fund are described in the Prospectus. Set forth below is supplemental
information about those policies and the types of securities in which the Fund
may invest, as well as the strategies the Fund may use to try to achieve its
objective. Capitalized terms used in this Statement of Additional Information
have the same meanings as those terms have in the Prospectus.
In selecting securities for the Fund's portfolio, the Fund's investment
adviser, OppenheimerFunds, Inc. (the "Manager"), evaluates the merits of
securities primarily through the exercise of its own investment analysis. This
may include, among other things, evaluation of the history of the issuer's
operations, prospects for the industry of which the issuer is part, the issuer's
financial condition, the issuer's pending product developments and developments
by competitors, the effect of general market and economic conditions on the
issuer's business, and legislative proposals or new laws that might affect the
issuer.
The Fund intends to spread its investments (invest risk) among the markets
of at least three foreign countries under normal market conditions. The
percentage of the Fund's assets invested in particular foreign countries will
vary from time to time based on the Manager's assessment of the appreciation
possibilities of particular issuers as well as market and economic conditions in
a particular county, balance of payments, rates of inflation, economic
self-sufficiency, and social and political factors that may affect specific
markets.
The portion of the Fund's assets allocated to securities selected for
capital appreciation and the investment techniques used will depend upon the
judgment of the Fund's Manager as to the future movement of the equity
securities markets. If the Manager believes that economic conditions favor a
rising market, the Fund will emphasize securities and investment methods
selected for high capital growth. If the Manager believes that a market decline
is likely, defensive securities and investment methods may be emphasized.
Current income is not a consideration in the selection of portfolio
securities for the Fund, whether for appreciation, defensive or liquidity
purposes. The fact that a security has a low yield or does not pay current
income will not be an adverse factor in selecting securities to try to achieve
the Fund's investment objective of capital appreciation unless the Manager
believes that the lack of yield might adversely affect appreciation
possibilities.
o Investing in Securities of Growth-Type Companies. The Fund emphasizes
securities of "growth-type" companies. Such issuers typically are those the
goods or services of which have relatively favorable long-term prospects for
increasing demand for their products, or increasing earnings prospects, or ones
which develop new products, services or markets and normally retain a relatively
large part of their earnings for research, development and investment in capital
assets. They may include companies in the natural resources fields or those
developing industrial applications for new scientific knowledge having potential
for technological innovation, such as information technology, biochemistry,
communications, environmental products, oceanography, business services and new
consumer products. Growth-type companies may include relatively new businesses
as well as larger mature businesses that the Manager believes are entering a
grow phase because of the development of new products, businesses, markets or
other factors. Therefore, the Manger does not limit the selection of investments
in growth-type companies to issuers having a market capitalization within a
specific range.
o Investing in Small, Unseasoned Companies. Some growth-type companies may
be newer start-up businesses that do not have a substantial operating history.
The securities of these small, unseasoned companies may have a limited trading
market, which may adversely affect the Fund's ability to sell them and can
reduce the price the Fund might be able to obtain for them. If other investors
holding the same securities as the Fund sell them when the Fund attempts to
dispose of its holdings, the Fund may receive lower prices than might otherwise
be obtained, because of the thinner market for such securities. Additionally,
investments in these companies tend to involve greater risks then larger more
established companies, such as the risk that their securities may be subject to
more abrupt or erratic market movements. These companies also may have limited
product lines, markets or financial resources.
o Foreign Securities. "Foreign securities" include companies organized
under the laws of countries other than the United States, debt securities of
foreign governments, and equity and debt securities of U.S. corporations
denominated in non-U.S. currencies, that are traded on foreign securities
exchanges or in the foreign over-the-counter markets. Securities of foreign
issuers that are represented by American Depository Receipts or similar
depository arrangements and that are listed on a U.S. securities exchange or
traded in the U.S. over-the-counter markets are also considered "foreign
securities" for the purpose of the Fund's investment allocations, because they
are subject to some of the special considerations and risks, discussed below,
that apply to foreign securities traded and held abroad, typically because the
issuer of the security is domiciled in a foreign country, or has substantial
assets or business operations in a foreign county, or its securities are
primarily trades on a foreign securities exchange.
Investing in foreign securities offers the Fund potential benefits not
available from investing in securities of domestic issuers, such as the
opportunity to invest in foreign issuers that appear to offer growth potential,
or in foreign countries with economic policies or business cycles different from
those of the U.S. It may enable the Fund to take advantage of foreign stock
markets that do not move in a manner parallel to U.S. markets. If the Fund's
portfolio securities are held in foreign countries, the countries in which the
securities are held abroad and the sub-custodians or depositories holding them
must be approved by the Fund's Board of Trustees to the extent that approval is
required under applicable rules of the Securities and Exchange Commission. In
buying foreign securities, the Fund may convert U.S. dollars into foreign
currency, but only to effect securities transactions on foreign securities
exchanges and not to hold such currency as an investment.
o Risks of Foreign Investing. Investing in foreign securities involves
special additional risks and considerations not typically associated with
investing in securities of issuers traded in the U.S. These include: fluctuation
in value of foreign portfolio investments due to changes in currency rates and
control regulations (e.g., currency blockage); transaction charges for currency
exchange; lack of public information about foreign issuers; lack of uniform
accounting, auditing and financial reporting standards comparable to those
applicable to domestic issuers; less volume on foreign exchanges than on U.S.
exchanges, which affects the ability to dispose of a security; greater
volatility and less liquidity in some foreign markets, particularly emerging
markets, than in the U.S.; less governmental oversight and regulation of foreign
issuers, stock exchanges and brokers than in the U.S.; greater difficulties in
commencing lawsuits against foreign issuers; higher brokerage commission rates
than in the U.S.; increased risks of delays in settlement of portfolio
transactions or loss of certificates for portfolio securities; possibilities in
some countries of expropriation or nationalization of assets, confiscatory
taxation, political, financial or social instability or adverse diplomatic
developments; unfavorable differences between the U.S. economy and foreign
economies; and the effects of foreign taxes on income and capital gains In the
past, U.S. Government policies have discouraged certain investments abroad by
U.S. investors, through taxation or other restrictions, and it is possible that
such restrictions could be re-imposed. Costs of transactions in foreign
securities are generally higher than for transactions in U.S. securities,
including higher custodial costs, which will increase the Fund's expenses over
those typically associated with funds that do not invest in foreign securities.
A number of current significant political demographic and economic
developments may affect investments in foreign securities and in securities of
companies with operations overseas. Such developments include dramatic political
changes in government and economic policies in several Eastern European
countries, Germany and the republics comprising the former Soviet Union, as well
as unification of the European Economic Community. The course of any of one or
more of these events and the effect on trade barriers, competition and markets
for consumer goods and services is uncertain. With roughly two-thirds of all
outstanding equity securities now traded outside of the United States, the
Fund's international scope enables it to attempt to take advantage of other
world markets and companies and seek to protect itself against declines in any
single economy.
o Special Risks of "Emerging Markets." Investments in securities traded in
"emerging markets" (which are trading markets that are relatively new in
countries with developing economies) involve more risks that other foreign
securities. Emerging markets may have extended settlement periods for securities
transactions so that the Fund might not receive the repayment of principal or
income on its investments on a timely basis, which could affect its net asset
value. There may be a lack of liquidity for emerging market securities. Interest
rates and foreign currency exchange rates may be more volatile. Government
limitations on foreign investments may be more likely to be imposed than in more
developed countries. Emerging markets may respond in a more volatile manner to
economic changes than those of more developed countries.
o Convertible Securities. While convertible securities are a form of debt
security in many cases, their conversion feature (allowing conversion into
equity securities) causes them to be regarded more as "equity equivalents." As a
result, the rating assigned to the security has less impact on the Manager's
investment decision with respect to convertible securities than in the case of
non-convertible fixed-income securities. To determine whether convertible
securities should be regarded as "equity equivalents," the Manager examines the
following factors: (1) whether, at the option of the investor, the convertible
security can be exchanged for a fixed number of shares of common stock of the
issuer, (2) whether the issuer of the convertible securities has restated its
earnings per share of common stock on a fully diluted basis (considering the
effect of converting the convertible securities), and (3) the extent to which
the convertible security may be a defensive "equity substitute," providing the
ability to participate in any appreciation in the price of the issuer's common
stock.
o Special Risks of Lower-Rated Securities. The Fund may invest in
higher-yielding, lower- rated debt securities, commonly known as "junk bonds,"
because these securities generally offer higher income potential than investment
grade securities. As stated in the Prospectus, the Fund does not presently
intend to invest more than 5% of its total assets in debt securities.
Lower-rated securities are also referred to as lower-grade securities.
"Lower-grade" debt securities are those rated below "investment grade," which
means they have a rating lower than "Baa" by Moody's Investors Service, Inc.
("Moody's") or lower than "BBB" by Standard & Poor's Corporation ("S&P") or
similar ratings by other rating organizations. The Fund may invest in securities
rated as low as "C" or "D" or which may be in default at the time the Fund buys
them. While securities rated "Baa" by Moody's or "BBB" by S&P are investment
grade and are not regarded as "junk bonds," those securities may be subject to
greater market fluctuations and risks of loss of income and principal than
higher grade securities and may be considered to have certain speculative
characteristics. The Fund may invest in unrated securities that the Manager
believes offer yields and risks comparable to rated securities.
High-yield, lower-grade securities, whether rated or unrated, often have
speculative characteristics. Lower-grade securities have special risks that make
them riskier investments than investment grade securities. They may be subject
to greater market fluctuations and risk of loss of income and principal than
lower yielding, investment grade securities. There may be less of a market for
them and therefore they may be harder to sell at an acceptable price. There is a
relatively greater possibility that the issuer's earnings may be insufficient to
make the payments of interest due on the bonds. The issuer's low
creditworthiness may increase the potential for its insolvency. Further, a
decline in the high-yield bond market is likely during an economic downturn. An
economic downturn or an increase in interest rates could severely disrupt the
market for high-yield securities and adversely affect the value of outstanding
securities and the ability of issuers to repay principal and interest.
These risks mean that the Fund may not achieve the expected income from
lower-grade securities, and that the Fund's net asset value per share may be
affected by declines in value of these securities. The Fund is not obligated to
dispose of securities when issuers are in default or if the rating of the
security is reduced.
o Warrants and Rights. Warrants basically are options to purchase equity
securities at specified prices valid for a specific period of time. Their prices
do not necessarily move in a manner parallel to the prices of the underlying
securities. The price paid for a warrant will be lost unless the warrant is
exercised prior to expiration. Rights are similar to warrants, but normally have
a short duration and are distributed directly by the issuer to its shareholders.
Warrants and rights have no voting rights, receive no dividends and have no
rights with respect to the assets of the issuer.
o Illiquid and Restricted Securities. To enable the Fund to sell (in the
Unites States) restricted securities not registered under the Securities Act of
1933, the Fund may have to cause those securities to be registered. The expenses
of registration of restricted securities may be negotiated by the Fund with the
issuer at the time such securities are purchased by the Fund, if such
registration is required before such securities may be sold publicly. When
registration must be arranged because the Fund wishes to sell the security, a
considerable period may elapse between the time the decision is made to sell the
securities and the time the Fund would be permitted to sell them. The Fund would
bear the risks of any downward price fluctuation during that period. The Fund
may also acquire, through private placements, securities having contractual
restrictions on their resale, which might limit the Fund's ability to dispose of
such securities and might lower the amount realizable upon the sale of such
securities. Illiquid securities include repurchase agreements maturing in more
than seven days, and may include certain participation interests other than
those with puts exercisable within seven days.
The Fund has percentage limitations that apply to purchases of restricted
securities, as stated in the Prospectus. Those percentage restrictions do not
limit purchases of restricted securities that are eligible for sale to qualified
institutional purchasers pursuant to Rule 144A under the Securities Act of 1933,
provided that those securities have been determined to be liquid by the Board of
Trustees of the Fund or by the Manager under Board-approved guidelines. Those
guidelines take into account the trading activity for such securities and the
availability of reliable pricing information, among other factors. If there is a
lack of trading interest in a particular Rule 144A security, the Fund's holding
of that security may be deemed to be illiquid.
o Repurchase Agreements. The Fund may acquire securities subject to
repurchase agreements for liquidity purposes to meet anticipated redemptions, or
pending the investment of the proceeds from sales of Fund shares, or pending the
settlement of purchases of portfolio securities.
In a repurchase transaction, the Fund acquires a security from, and
simultaneously resells it to, an approved vendor. An "approved vendor" is a
commercial bank or the U.S. branch of a foreign bank, or a broker-dealer which
has been designated a primary dealer in government securities, which must meet
credit requirements set by the Fund's Board of Trustees from time to time. 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 of 1940, as amended (the "Investment Company Act"),
collateralized by the underlying security. The Fund's repurchase agreements
require that at all times while the repurchase agreement is in effect, the value
of the collateral must equal or exceed the repurchase price to fully
collateralize the repayment obligation. Additionally, the Fund's Manager will
impose creditworthiness requirements to confirm that the vendor is financially
sound and will continuously monitor the collateral's value.
o Loans of Portfolio Securities. The Fund may lend its portfolio
securities subject to the restrictions stated in the Prospectus. Under
applicable regulatory requirements (which are subject to change), the loan
collateral must, on each business day, at least equal the market value of the
loaned securities and must consist of cash, bank letters of credit, U.S.
government securities, or other cash equivalents in which the Fund is permitted
to invest. To be acceptable as collateral, letters of credit must obligate a
bank to pay amounts demanded by the Fund if the demand meets the terms of the
letter. Such terms and the issuing bank must be satisfactory to the Fund. In a
portfolio securities lending transaction, the Fund receives from the borrower an
amount equal to the interest paid or the dividends declared on the loaned
securities during the term of the loan as well as the interest on the collateral
securities, less any finder's, administrative or other fees the Fund pays in
connection with the loan. The Fund may share the interest it receives on the
collateral securities with the borrower as long as it realizes at least a
minimum amount of interest required by the lending guidelines established by its
Board of Trustees. The Fund will not lend its portfolio securities to any
officer, trustee, employee or affiliate of the Fund or its Manager. The terms of
the Fund's loans must meet certain tests under the Internal Revenue Code and
permit the Fund to reacquire loaned securities on five business days' notice or
in time to vote on any important matter.
o Borrowing For Leverage. From time to time, the Fund may increase its
ownership of securities by borrowing from banks on an unsecured basis and
investing the borrowed funds, subject to the restrictions stated in the
Prospectus. Any such borrowing will be made only from banks, and pursuant to the
requirements of the Investment Company Act, will be made only to the extent that
the value of the Fund's assets, less its liabilities other than borrowings, is
equal to at least 300% of all borrowings including the proposed borrowing. If
the value of the Fund's assets, when computed in that manner, should fail to
meet the 300% asset coverage requirement, the Fund is required within three days
to reduce its bank debt to the extent necessary to meet that coverage
requirement. To do so, the Fund may have to sell a portion of its investments at
a time when it would otherwise not want to sell the securities. Interest on
money the Fund borrows is an expense the Fund would not otherwise incur, so that
during periods of substantial borrowings, its expenses may increase more than
the expenses of funds that do not borrow.
Other Investment Techniques and Strategies
o Hedging With Options and Futures Contracts. The Fund may use hedging
instruments for the purposes described in the Prospectus. When hedging to
attempt to protect against declines in the market value of the Fund's portfolio,
or to permit the Fund to retain unrealized gains in the value of portfolio
securities which have appreciated, or to facilitate selling securities for
investment reasons, the Fund may: (i) sell Futures, (ii) buy puts on such
Futures or securities, or (iii) write covered calls on securities or on Futures.
When hedging to establish a position in the equity securities markets as a
temporary substitute for the purchase of individual equity securities the Fund
may: (i) buy Futures, or (ii) buy calls on such Futures or securities held by
it. Normally, the Fund would then purchase the equity securities and terminate
the hedging position.
The Fund's strategy of hedging with Futures and options on Futures will be
incidental to the Fund's investment activities in the underlying cash market. In
the future, the Fund may employ hedging instruments and strategies that are not
presently contemplated but which may be developed, to the extent such investment
methods are consistent with the Fund's investment objective, and are legally
permissible and disclosed in the Prospectus. Additional information about the
hedging instruments the Fund may use is provided below.
o Stock Index Futures. The Fund may buy and sell futures contracts relating
to a securities index ("Financial Futures"), including "Stock Index Futures," a
type of Financial Future for which the index used as the basis for trading is a
broadly-based stock index (including stocks that are not limited to issuers in a
particular industry or group of industries). A stock index assigns relative
values to the common stocks included in the index and fluctuates with the
changes in the market value of those stocks. Stock indices cannot be purchased
or sold directly. Financial Futures are contracts based on the future value of
the basket of securities that comprise the underlying index. The contracts
obligate the seller to deliver, and the purchaser to take, cash to settle the
futures transaction or to enter into an offsetting contract. No physical
delivery of the securities underlying the index is made on settling the futures
obligation. No monetary amount is paid or received by the Fund on the purchase
or sale of a Financial Future or Stock Index Future.
Upon entering into a Futures transaction, the Fund will be required to
deposit an initial margin payment, in cash or U.S. Treasury bills, with the
futures commission merchant (the "futures broker"). Initial margin payments will
be deposited with the Fund's Custodian in an account registered in the futures
broker's name; however, the futures broker can gain access to that account only
under certain specified conditions. As the Future is marked to market (that is,
its value on the Fund's books is changed) to reflect changes in its market
value, subsequent margin payments, called variation margin, will be paid to or
by the futures broker on a daily basis.
At any time prior to the expiration of the Future, the Fund may elect to
close out its position by taking an opposite position, at which time a final
determination of variation margin is made and additional cash is required to be
paid by or released to the Fund. Any gain or loss is then realized by the Fund
on the Future for tax purposes. Although Financial Futures by their terms call
for settlement by the delivery of cash, in most cases the settlement obligation
is fulfilled without such delivery by entering into an offsetting transaction.
All Futures transactions are effected through a clearinghouse associated with
the exchange on which the contracts are traded.
o Writing Covered Calls. As described in the Prospectus, the Fund may
write covered calls. When the Fund writes a call on an investment, it receives a
premium and agrees to sell the callable investment to a purchaser of a
corresponding call during the call period (usually not more than 9 months) at a
fixed exercise price (which may differ from the market price of the underlying
investment) regardless of market price changes during the call period. To
terminate its obligation on a call it has written, the Fund may purchase a
corresponding call in a "closing purchase transaction." A profit or loss will be
realized, depending upon whether the net of the amount of option transaction
costs and the premium received on the call the Fund has written is more or less
than the price of the call the Fund subsequently purchased. A profit may also be
realized if the call lapses unexercised, because the Fund retains the underlying
investment and the premium received. Those profits are considered short-term
capital gains for Federal income tax purposes, as are premiums on lapsed calls,
and when distributed by the Fund are taxable as ordinary income. If the Fund
could not effect a closing purchase transaction due to the lack of a market, it
would have to hold the callable investment until the call lapsed or was
exercised.
The Fund may also write calls on Futures without owning a futures contract
or deliverable securities, provided that at the time the call is written, the
Fund covers the call by segregating in escrow an equivalent dollar value of
deliverable securities or liquid assets of any type, including equity and debt
securities. The Fund will segregate additional liquid assets if the value of the
escrowed assets drops below 100% of the current value of the Future. In no
circumstances would an exercise notice as to a Future put the Fund in a short
futures position.
The Fund's Custodian, or a securities depository acting for the Custodian,
will act as the Fund's escrow agent, through the facilities of the Options
Clearing Corporation ("OCC"), as to the investments on which the Fund has
written options that are traded on exchanges, or as to other acceptable escrow
securities, so that no margin will be required from the Fund for such option
transactions. OCC will release the securities covering a call on the expiration
of the call or when the Fund enters into a closing purchase transaction. Call
writing affects the Fund's turnover rate and the brokerage commissions it pays.
Commissions, normally higher than on general securities transactions, are
payable on writing or purchasing a call.
o Purchasing Puts and Calls. The Fund may purchase calls to protect against
the possibility that the Fund's portfolio will not participate in an anticipated
rise in the securities market. When the Fund purchases a call, it pays a premium
(other than in a closing purchase transaction) and, except as to calls on stock
indices, has the right to buy the underlying investment from a seller of a
corresponding call on the same investment during the call period at a fixed
exercise price. In purchasing a call, the Fund benefits only if the call is sold
at a profit or if, during the call period, the market price of the underlying
investment is above the sum of the call price, transaction costs, and the
premium paid, and the call is exercised. If the call is not exercised or sold
(whether or not at a profit), it will become worthless at its expiration date
and the Fund will lose its premium payment and the right to purchase the
underlying investment. When the Fund purchases a call on a stock index, it pays
a premium, but settlement is in cash rather than by delivery of the underlying
investment to the Fund.
When the Fund purchases a put, it pays a premium and, except as to puts on
stock indices, has the right to sell the underlying investment to a seller of a
corresponding put on the same investment during the put period at a fixed
exercise price. Buying a put on an investment the Fund owns (a "protective put")
enables the Fund to attempt to protect itself during the put period against a
decline in the value of the underlying investment below the exercise price by
selling the underlying investment at the exercise price to a seller of a
corresponding put. If the market price of the underlying investment is equal to
or above the exercise price and as a result the put is not exercised or resold,
the put will become worthless at its expiration and the Fund will lose the
premium payment and the right to sell the underlying investment. However, the
put may be sold prior to expiration (whether or not at a profit).
Puts and calls on broadly-based stock indices or Stock Index Futures are
similar to puts and calls on securities or futures contracts except that all
settlements are in cash and gain or loss depends on changes in the index in
question (and thus on price movements in the stock market generally) rather than
on price movements of individual securities or futures contracts. When the Fund
buys a call on a stock index or Stock Index Future, it pays a premium. If the
Fund exercises the call during the call period, a seller of a corresponding call
on the same investment will pay the Fund an amount of cash to settle the call if
the closing level of the stock index or Future upon which the call is based is
greater than the exercise price of the call. That cash payment is equal to the
difference between the closing price of the call and the exercise price of the
call times a specified multiple (the "multiplier") which determines the total
dollar value for each point of difference. When the Fund buys a put on a stock
index or Stock Index Future, it pays a premium and has the right during the put
period to require a seller of a corresponding put, upon the Fund's exercise of
its put, to deliver cash to the Fund to settle the put if the closing level of
the stock index or Stock Index Future upon which the put is based is less than
the exercise price of the put. That cash payment is determined by the
multiplier, in the same manner as described above as to calls.
When the Fund purchases a put on a stock index, or on a Stock Index Future
not owned by it, the put protects the Fund to the extent that the index moves in
a similar pattern to the securities the Fund holds. The Fund can either resell
the put or, in the case of a put on a Stock Index Future, buy the underlying
investment and sell it at the exercise price. The resale price of the put will
vary inversely with the price of the underlying investment. If the market price
of the underlying investment is above the exercise price, and as a result the
put is not exercised, the put will become worthless on the expiration date. In
the event of a decline in price of the underlying investment, the Fund could
exercise or sell the put at a profit to attempt to offset some or all of its
loss on its portfolio securities.
The Fund's option activities may affect its portfolio turnover rate and
brokerage commissions. The exercise of calls written by the Fund may cause the
Fund to sell related portfolio securities, thus increasing its turnover rate.
The exercise by the Fund of puts on securities will cause the sale of underlying
investments, increasing portfolio turnover. Although the decision whether to
exercise a put it holds is within the Fund's control, holding a put might cause
the Fund to sell the related investments for reasons that would not exist in the
absence of the put. The Fund may pay a brokerage commission each time it buys or
sells a call, put or an underlying investment in connection with the exercise of
a put or call. Those commissions may be higher than the commissions for direct
purchases or sales of the underlying investments.
Premiums paid for options are small in relation to the market value of the
underlying investments and, consequently, put and call options offer large
amounts of leverage. The leverage offered by trading in options could result in
the Fund's net asset value being more sensitive to changes in the value of the
underlying investments.
o Options on Foreign Currency. The Fund may write and purchase calls on
foreign currencies. The Fund may purchase and write puts and calls on foreign
currencies that are traded on a securities or commodities exchange or
over-the-counter markets or are quoted by major recognized dealers in such
options. It does so to protect against declines in the dollar value of foreign
securities and against increases in the dollar cost of foreign securities to be
acquired. If the Manager anticipates a rise in the dollar value of a foreign
currency in which securities to be acquired are denominated, the increased cost
of such securities may be partially offset by purchasing calls or writing puts
on that foreign currency. If a decline in the dollar value of a foreign currency
is anticipated, the decline in value of portfolio securities denominated in that
currency may be partially offset by writing calls or purchasing puts on that
foreign currency. However, in the event of currency rate fluctuations adverse to
the Fund's position, it would lose the premium it paid and transactions costs.
A call written on a foreign currency by the Fund is covered if the Fund
owns the underlying foreign currency covered by the call or has an absolute and
immediate right to acquire that foreign currency without additional cash
consideration (or for additional cash consideration held in a segregated account
by its custodian) upon conversion or exchange of other foreign currency held in
its portfolio. A call may be written by the Fund on a foreign currency to
provide a hedge against a decline due to an expected adverse change in the
exchange rate in the U.S. dollar value of a security which the Fund owns or has
the right to acquire and which is denominated in the currency underlying the
option. This is a cross-hedging strategy. In such circumstances, the Fund
collateralizes the option by maintaining in a segregated account with the Fund's
Custodian, cash or U.S. Government Securities in an amount not less than the
value of the underlying foreign currency in U.S. dollars marked-to-market daily.
o Forward Contracts. The Fund may enter into foreign currency exchange
contracts ("Forward Contracts"), which obligate the seller to deliver and the
purchaser to take a specific amount of foreign currency at a specific future
date for a fixed price. A Forward Contract involves bilateral obligations of one
party to purchase, and another party to sell, a specific currency at a future
date (which may be any fixed number of days from the date of the contract agreed
upon by the parties), at a price set at the time the contract is entered into.
These contracts are generally traded in the interbank market conducted directly
between currency traders (usually large commercial banks) and their customers.
The Fund may enter into a Forward Contract in order to "lock in" the U.S. dollar
price of a security denominated in a foreign currency which it has purchased or
sold but which has not yet settled, or to protect against a possible loss
resulting from an adverse change in the relationship between the U.S. dollar and
a foreign currency.
There is a risk that use of Forward Contracts may reduce the gain that
would otherwise result from a change in the relationship between the U.S. dollar
and a foreign currency. Forward contracts include standardized foreign currency
futures contracts which are traded on exchanges and are subject to procedures
and regulations applicable to other Futures. The Fund may also enter into a
forward contract to sell a foreign currency denominated in a currency other than
that in which the underlying security is denominated. This is done in the
expectation that there is a greater correlation between the foreign currency of
the forward contract and the foreign currency of the underlying investment than
between the U.S. dollar and the foreign currency of the underlying investment.
This technique is referred to as "cross hedging." The success of cross hedging
is dependent on many factors, including the ability of the Manager to correctly
identify and monitor the correlation between foreign currencies and the U.S.
dollar. To the extent that the correlation is not identical, the Fund may
experience losses or gains on both the underlying security and the cross
currency hedge.
The Fund may use Forward Contracts to protect against uncertainty in the
level of future exchange rates. The use of Forward Contracts does not eliminate
fluctuations in the prices of the underlying securities the Fund owns or intends
to acquire, but it does fix a rate of exchange in advance. In addition, although
Forward Contracts limit the risk of loss due to a decline in the value of the
hedged currencies, at the same time they limit any potential gain that might
result should the value of the currencies increase.
There is no limitation as to the percentage of the Fund's assets that may
be committed to foreign currency exchange contracts. The Fund does not enter
into such forward contracts or maintain a net exposure in such contracts to the
extent that the Fund would be obligated to deliver an amount of foreign currency
in excess of the value of the Fund's assets denominated in that currency, or
enter into a "cross hedge," unless it is denominated in a currency or currencies
that the Manager believes will have price movements that tend to correlate
closely with the currency in which the investment being hedged is denominated.
See "Tax Aspects of Covered Calls and Hedging Instruments" below for a
discussion of the tax treatment of foreign currency exchange contracts
The Fund may enter into Forward Contracts with respect to specific
transactions. For example, when the Fund enters into a contract for the purchase
or sale of a security denominated in a foreign currency, or when the Fund
anticipates receipt of dividend payments in a foreign currency, the Fund may
desire to "lock-in" the U.S. dollar price of the security or the U.S. dollar
equivalent of such payment by entering into a Forward Contract, for a fixed
amount of U.S. dollars per unit of foreign currency, for the purchase or sale of
the amount of foreign currency involved in the underlying transaction
("transaction hedge"). The Fund will thereby be able to protect itself against a
possible loss resulting from an adverse change in the relationship between the
currency exchange rates during the period between the date on which the security
is purchased or sold, or on which the payment is declared, and the date on which
such payments are made or received.
The Fund may also use Forward Contracts to lock in the U.S. dollar value
of portfolio positions ("position hedge"). In a position hedge, for example,
when the Fund believes that foreign currency may suffer a substantial decline
against the U.S. dollar, it may enter into a forward sale contract to sell an
amount of that foreign currency approximating the value of some or all of the
Fund's portfolio securities denominated in such foreign currency, or when the
Fund believes that the U.S. dollar may suffer a substantial decline against a
foreign currency, it may enter into a forward purchase contract to buy that
foreign currency for a fixed dollar amount. In this situation the Fund may, in
the alternative, enter into a forward contract to sell a different foreign
currency for a fixed U.S. dollar amount where the Fund believes that the U.S.
dollar value of the currency to be sold pursuant to the forward contract will
fall whenever there is a decline in the U.S. dollar value of the currency in
which portfolio securities of the Fund are denominated ("cross hedge").
The Fund's Custodian will place liquid assets of any type, in a separate
account of the Fund having a value equal to the aggregate amount of the Fund's
commitments under forward contracts to cover its short positions. If the value
of the securities placed in the separate account declines, additional cash or
securities will be placed in the account on a daily basis so that the value of
the account will equal the amount of the Fund's net commitments with respect to
such contracts. As an alternative to maintaining all or part of the separate
account, the Fund may purchase a call option permitting the Fund to purchase the
amount of foreign currency being hedged by a forward sale contract at a price no
higher than the forward contract price, or the Fund may purchase a put option
permitting the Fund to sell the amount of foreign currency subject to a forward
purchase contract at a price as high or higher than the forward contract price.
Unanticipated changes in currency prices may result in poorer overall
performance for the Fund than if it had not entered into such contracts.
The precise matching of the Forward Contract amounts and the value of the
securities involved will not generally be possible because the future value of
such securities in foreign currencies will change as a consequence of market
movements in the value of these securities between the date the Forward Contract
is entered into and the date it is sold. Accordingly, it may be necessary for
the Fund to purchase additional foreign currency on the spot (i.e., cash) market
(and bear the expense of such purchase), if the market value of the security is
less than the amount of foreign currency the Fund is obligated to deliver and if
a decision is made to sell the security and make delivery of the foreign
currency. Conversely, it may be necessary to sell on the spot market some of the
foreign currency received upon the sale of the portfolio security if its market
value exceeds the amount of foreign currency the Fund is obligated to deliver.
The projection of short-term currency market movements is extremely difficult,
and the successful execution of a short-term hedging strategy is highly
uncertain. Forward Contracts involve the risk that anticipated currency
movements will not be accurately predicted, causing the Fund to sustain losses
on these contracts and transactions costs.
At or before the maturity of a Forward Contract requiring the Fund to sell
a currency, the Fund may either sell a portfolio security and use the sale
proceeds to make delivery of the currency or retain the security and offset its
contractual obligation to deliver the currency by purchasing a second contract
pursuant to which the Fund will obtain, on the same maturity date, the same
amount of the currency that it is obligated to deliver. Similarly, the Fund may
close out a Forward Contract requiring it to purchase a specified currency by
entering into a second contract entitling it to sell the same amount of the same
currency on the maturity date of the first contract. The Fund would realize a
gain or loss as a result of entering into such an offsetting Forward Contract
under either circumstance to the extent the exchange rate or rates between the
currencies involved moved between the execution dates of the first contract and
offsetting contract.
The cost to the Fund of engaging in Forward Contracts varies with factors
such as the currencies involved, the length of the contract period and the
market conditions then prevailing. Because Forward Contracts are usually entered
into on a principal basis, no fees or commissions are involved. Because such
contracts are not traded on an exchange, the Fund must evaluate the credit and
performance risk of each particular counterparty under a Forward Contract.
Although the Fund values its assets daily in terms of U.S. dollars, it does
not intend to convert all of its holdings of foreign currency deposits into U.S.
dollars on a daily basis. The Fund may convert foreign currency from time to
time, and investors should be aware of the costs of currency conversion. Foreign
exchange dealers do not charge a fee for conversion, but they do seek to realize
a profit based on the difference between the prices at which they buy and sell
various currencies. Thus, a dealer may offer to sell a foreign currency to the
Fund at one rate, while offering a lesser rate of exchange should the Fund
desire to resell that currency to the dealer.
o Regulatory Aspects of Hedging Instruments. The Fund is required to
operate within certain guidelines and restrictions with respect to its use of
Futures and options on Futures established by the Commodity Futures Trading
Commission ("CFTC"). In particular the Fund is exempted from registration with
the CFTC as a "commodity pool operator" if the Fund complies with the
requirements of Rule 4.5 adopted by the CFTC. The Rule does not limit the
percentage of the Fund's assets that may be used for Futures margin and related
options premiums for a bona fide hedging position. However, under the Rule the
Fund must limit its aggregate initial Futures margin and related options
premiums to no more than 5% of the Fund's total assets for hedging purposes that
are not considered bona fide hedging strategies under the Rule. Under the Rule,
the Fund also must use short Futures and Futures options on Futures positions
solely for bona fide hedging purposes within the meaning and intent of the
applicable provisions of the Commodity Exchange Act.
Transactions in options by the Fund are subject to limitations established
by option exchanges governing the maximum number of options that may be written
or held by a single investor or group of investors acting in concert, regardless
of whether the options were written or purchased on the same or different
exchanges or are held in one or more accounts or through one or more different
exchanges or through one or more brokers. Thus the number of options which the
Fund may write or hold may be affected by options written or held by other
entities, including other investment companies having the same adviser as the
Fund (or an adviser that is an affiliate of the Fund's adviser). The exchanges
also impose position limits on Futures transactions. An exchange may order the
liquidation of positions found to be in violation of those limits and may impose
certain other sanctions.
Due to requirements under the Investment Company Act, when the Fund
purchases a Future, the Fund will maintain, in a segregated account or accounts
with its Custodian, liquid assets of any type, including equity and debt
securities of any grade, in an amount equal to the market value of the
securities underlying such Future, less the margin deposit applicable to it.
o Tax Aspects of Covered Calls and Hedging Instruments. The Fund intends to
qualify as a "regulated investment company" under the Internal Revenue Code
(although it reserves the right not to qualify). That qualification enables the
Fund to "pass through" its income and realized capital gains to shareholders
without having to pay tax on them. This avoids a "double tax" on that income and
capital gains, since shareholders normally will be taxed on the dividends and
capital gains they receive from the Fund (unless the Fund's shares are held in a
retirement account or the shareholder is otherwise exempt from tax).
Certain foreign currency exchange contracts (Forward Contracts) in which
the Fund may invest are treated as "section 1256 contracts." Gains or losses
relating to section 1256 contracts generally are characterized under the
Internal Revenue Code as 60% long-term and 40% short-term capital gains or
losses. However, foreign currency gains or losses arising from certain section
1256 contracts (including Forward Contracts) generally are treated as ordinary
income or loss. In addition, section 1256 contracts held by the Fund at the end
of each taxable year are "marked-to-market" with the result that unrealized
gains or losses are treated as though they were realized. These contracts also
may be marked-to-market for purposes of the excise tax applicable to investment
company distributions and for other purposes under rules prescribed pursuant to
the Internal Revenue Code. An election can be made by the Fund to exempt these
transactions from this marked-to-market treatment.
Certain Forward Contracts entered into by the Fund may result in
"straddles" for Federal income tax purposes. The straddle rules may affect the
character and timing of gains (or losses) recognized by the Fund on straddle
positions. Generally, a loss sustained on the disposition of a position(s)
making up a straddle is allowed only to the extent such loss exceeds any
unrecognized gain in the offsetting positions making up the straddle. Disallowed
loss is generally allowed at the point where there is no unrecognized gain in
the offsetting positions making up the straddle, or the offsetting position is
disposed of.
Under the Internal Revenue Code, gains or losses attributable to
fluctuations in exchange rates which occur between the time the Fund accrues
interest or other receivables or accrues expenses or other liabilities
denominated in a foreign currency and the time the Fund actually collects such
receivables or pays such liabilities generally are treated as ordinary income or
ordinary loss. Similarly, on disposition of debt securities denominated in a
foreign currency and on disposition of foreign currency forward contracts, gains
or losses attributable to fluctuations in the value of a foreign currency
between the date of acquisition of the security or contract and the date of
disposition also are treated as an ordinary gain or loss. Currency gains and
losses are offset against market gains and losses on each trade before
determining a net "section 988" gain or loss under the Internal Revenue Code,
which may ultimately increase or decrease the amount of the Fund's investment
company income available for distribution to its shareholders.
o Risks of Hedging With Options and Futures. An option position may be
closed out only on a market that provides secondary trading for options of the
same series, and there is no assurance that a liquid secondary market will exist
for any particular option. In addition to the risks associated with hedging that
are discussed in the Prospectus and above, there is a risk in using short
hedging by (i) selling Stock Index Futures or (ii) purchasing puts on stock
indices or Stock Index Futures to attempt to protect against declines in the
value of the Fund's equity securities. The risk is that the prices of Stock
Index Futures will correlate imperfectly with the behavior of the cash (i.e.,
market value) prices of the Fund's equity securities. The ordinary spreads
between prices in the cash and futures markets are subject to distortions, due
to differences in the natures of those markets. First, all participants in the
futures markets are subject to margin deposit and maintenance requirements.
Rather than meeting additional margin deposit requirements, investors may close
out futures contracts through offsetting transactions which could distort the
normal relationship between the cash and futures markets. Second, the liquidity
of the futures markets depends on participants entering into offsetting
transactions rather than making or taking delivery. To the extent participants
decide to make or take delivery, liquidity in the futures markets could be
reduced, thus producing distortion. Third, from the point of view of
speculators, the deposit requirements in the futures markets are less onerous
than margin requirements in the securities markets. Therefore, increased
participation by speculators in the futures markets may cause temporary price
distortions.
The risk of imperfect correlation increases as the composition of the
Fund's portfolio diverges from the securities included in the applicable index.
To compensate for the imperfect correlation of movements in the price of the
equity securities being hedged and movements in the price of the hedging
instruments, the Fund may use hedging instruments in a greater dollar amount
than the dollar amount of equity securities being hedged if the historical
volatility of the prices of the equity securities being hedged is more than the
historical volatility of the applicable index. It is also possible that if the
Fund has used hedging instruments in a short hedge, the market may advance and
the value of equity securities held in the Fund's portfolio may decline. If that
occurred, the Fund would lose money on the hedging instruments and also
experience a decline in value in its portfolio securities. However, while this
could occur for a very brief period or to a very small degree, over time the
value of a diversified portfolio of equity securities will tend to move in the
same direction as the indices upon which the hedging instruments are based.
If the Fund uses hedging instruments to establish a position in the
equities markets as a temporary substitute for the purchase of individual equity
securities (long hedging) by buying Stock Index Futures and/or calls on such
Futures, on securities or on stock indices, it is possible that the market may
decline. If the Fund then concludes not to invest in equity securities at that
time because of concerns as to a possible further market decline or for other
reasons, the Fund will realize a loss on the hedging instruments that is not
offset by a reduction in the price of the equity securities purchased.
o Short Sales. The Fund may not sell securities short except in
collateralized transactions where the Fund owns an equivalent amount of the
securities sold short. No more than 15% of the Fund's net assets will be held as
collateral for such short sales at any time.
Other Investment Restrictions
The Fund's significant investment restrictions are described in the
Prospectus. The following are also fundamental policies, and together with the
Fund's fundamental policies described in the Prospectus, cannot be changed
without the approval of a "majority" of the Fund's outstanding voting
securities. Such a "majority" vote is defined in the Investment Company Act as
the vote of the holders of the lesser of: (i) 67% or more of the shares present
or represented by proxy at a shareholders meeting, if the holders of more than
50% of the outstanding shares are present or represented by proxy; or (ii) more
than 50% of the outstanding shares.
Under these additional restrictions, the Fund cannot do any of the
following:
o The Fund cannot invest in companies for the primary purpose of
acquiring control or management thereof;
o The Fund cannot invest in commodities or in commodities contracts, other
than the hedging instruments permitted by any of its other investment
policies, whether or not any such hedging instrument is considered to be
a commodity or a commodity contract;
o The Fund cannot invest in real estate or in interests in real estate, but
it can purchase readily marketable securities of companies holding real
estate or interests therein;
o The Fund cannot purchase securities on margin; however, the Fund can make
margin deposits in connection with any of the hedging instruments
permitted by any of its other investment policies;
o The Fund cannot lend money, but the Fund can engage in repurchase
transactions and can invest in all or a portion of an issue of bonds,
debentures, commercial paper, or other similar
corporate obligations, whether or not publicly distributed, provided
that the Fund's purchase
of obligations that are not publicly distributed shall be subject to
any applicable percentage
limitation on the Fund's holdings of illiquid and restricted
securities; the Fund may also lend
its portfolio securities, subject to any restrictions adopted by the
Board of Trustees and set forth
in the Prospectus;
o The Fund cannot mortgage or pledge any of its assets; this prohibition
does not prohibit the escrow arrangements contemplated by the writing of
covered call options or other collateral or margin arrangements in
connection with any of the Hedging Instruments permitted by any of its
other investment policies;
o The Fund cannot underwrite securities of other companies, except to the
extent that it might be deemed to be an underwriter for purposes of the
Securities Act of 1933 in the resale of any securities held in its own
portfolio;
o The Fund cannot invest or hold securities of any issuer if those officers
and trustees of the Fund or officers and directors of its adviser owning
individually more than 0.5% of the securities of such issuer together own
more than 5% of the securities of that issuer;
o The Fund cannot issue "senior securities", but this does not prohibit it
from borrowing money for investment or emergency purposes, or entering
into margin, collateral or escrow arrangements as permitted by its other
invest policies; or
o The Fund cannot invest in other open-end investment companies, or invest
more than 5% of its net assets at the time of purchase in closed-end
investment companies, including small business investment companies, nor
make any such investments at commission rates in excess of normal
brokerage commissions.
The percentage restrictions described above and in the Prospectus apply only
at the time of investment and require no action by the Fund as a result of
subsequent changes in relative values.
For purposes of the Fund's policy not to concentrate its assets, described
in "Other Investment Restrictions" in the Prospectus, the Fund has adopted the
industry classifications set forth in Appendix A to this Statement of Additional
Information. This is not a fundamental
policy.
How the Fund Is Managed
Organization of the Fund. As a Massachusetts business trust, the Fund is not
required to hold, and does not plan to hold, regular annual meetings of
shareholders. The Fund 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 Fund, 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 shares of the Fund
valued at $25,000 or more or holding at least 1% of the Fund's outstanding
shares, whichever is less, stating that they wish to communicate with other
shareholders to request a meeting to remove a Trustee, the Trustees will then
either make the Fund'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 under Section 16(c) of the
Investment Company Act.
The Fund's Declaration of Trust contains an express disclaimer of
shareholder or Trustee liability for the Fund'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 Fund shall, upon request, assume the defense of any claim
made against any shareholder for any act or obligation of the Fund and satisfy
any judgment thereon. Thus, while Massachusetts law permits a shareholder of a
business trust (such as the Fund) to be held personally liable as a "partner"
under certain circumstances, the risk of a Fund shareholder incurring financial
loss on account of shareholder liability is limited to the relatively remote
circumstances in which the Fund would be unable to meet its obligations
described above. Any person doing business with the Trust, and any shareholder
of the Trust, agrees under the Trust's Declaration of Trust to look solely to
the assets of the Trust for satisfaction of any claim or demand which may arise
out of any dealings with the Trust, and the Trustees shall have no personal
liability to any such person, to the extent permitted by law.
Trustees and Officers of the Fund. The Fund's Trustees and officers and their
principal occupations and business affiliations during the past five years are
set forth below. The address for each Trustee and officer is Two World Trade
Center, New York, New York 10048-0203, unless another address is listed below.
All of the Trustees are also trustees or directors of Oppenheimer Enterprise
Fund, Oppenheimer Growth Fund, Oppenheimer Municipal Bond Fund, Oppenheimer
Money Market Fund, Inc., Oppenheimer Capital Appreciation Fund, Oppenheimer U.S.
Government Trust, Oppenheimer New York Municipal Fund, Oppenheimer California
Municipal Fund, Oppenheimer Multi-State Municipal Trust, Oppenheimer Multiple
Strategies Fund, Oppenheimer Gold & Special Minerals Fund, Oppenheimer Global
Growth & Income Fund, Oppenheimer Discovery Fund, Oppenheimer International
Small Company Fund, Oppenheimer Developing Markets Fund, Oppenheimer Series
Fund, Inc., Oppenheimer Multi-Sector Income Trust, Oppenheimer Institutional
Growth Fund and Oppenheimer World Bond Fund (collectively, the "New York-based
Oppenheimer funds"), except that Ms. Macaskill is not a director of Oppenheimer
Money Market Fund, Inc. Ms. Macaskill and Messrs. Spiro, Donohue, Bishop, Bowen,
Farrar and Zack hold the same respective offices with the New York- based
Oppenheimer funds as with the Fund. As of March 6, 1998, the Trustees and
officers of the Fund as a group owned less than 1% of the outstanding Class A
shares; none held any Class B or Class C shares of the Fund. That statement does
not include ownership of shares held of record by an employee benefit plan for
employees of the Manager (one of the Trustees of the Fund listed below, Ms.
Macaskill, and one of the officers, Mr. Donohue, are trustees of that plan)
other than the shares beneficially owned under that plan by the officers of the
Fund listed above.
Leon Levy, Chairman of the Board of Trustees; Age: 72
31 West 52nd Street, New York, NY 10019
General Partner of Odyssey Partners, L.P. (investment partnership) (since 1982)
and Chairman of Avatar Holdings, Inc. (real estate development).
Robert G. Galli, Trustee; Age: 64
19750 Beach Road, Jupiter Island, FL 33469
Formerly he held the following positions: Vice Chairman of OppenheimerFunds,
Inc. (the "Manager") (October 1995 to December 1997), Vice President (June 1990
to March 1994) and Counsel of Oppenheimer Acquisition Corp. ("OAC"), the
Manager's parent holding company; Executive Vice President (December 1977 to
October 1995), General Counsel and a director "Distributor"),(December 1975 to
October 1993) of the Manager; Executive Vice President and a director of
OppenheimerFunds Distributor, Inc. (the "Distributor") (July 1978 to October
1993); Executive Vice President and a director of HarbourView Asset Management
Corporation ("HarbourView") (April 1986 to October 1995), an investment adviser
subsidiary of the Manager; Vice President and a director (October 1988 to
October 1993) and Secretary (March 1981 to September 1988) of Centennial Asset
Management Corporation ("Centennial"), an investment adviser subsidiary of the
Manager; a director (November 1989 to October 1993) and Executive Vice President
(November 1989 to January 1990) of Shareholder Financial Services, Inc. ("SFSI")
, a transfer agent subsidiary of the Manager; a director of Shareholder
Services, Inc. ("SSI") (August 1984 to October 1993), a transfer agent
subsidiary of the Manager ; an officer of other Oppenheimer funds. Benjamin
Lipstein, Trustee; Age 74 591 Breezy Hill Road, Hillsdale, N.Y. 12529 Professor
Emeritus of Marketing, Stern Graduate School of Business Administration, New
York University .
Bridget A. Macaskill, President and Trustee*; Age: 49
President (since June 1991), Chief Executive Officer (since September 1995) and
a Director (since December 1994) of the Manager; President and director (since
June 1991) of HarbourView; Chairman and a director of SSI (since August 1994),
and SFSI (September 1995); President (since September 1995) and a director
(since October 1990) of OAC; President (since September 1995) and a director
(since November 1989) of Oppenheimer Partnership Holdings, Inc., a holding
company subsidiary of the Manager; a director of Oppenheimer Real Asset
Management, Inc. (since July 1996); President and a director (since October
1997) of OppenheimerFunds International Ltd., an offshore fund manager
subsidiary of the Manager ("OFIL") and Oppenheimer Millennium Funds plc (since
October 1997); President and a director or trustee of other Oppenheimer funds; a
director of the NASDAQ Stock Market, Inc. and of Hillsdown Holdings plc (a U.K.
food company); formerly an Executive Vice President of the Manager.
Elizabeth B. Moynihan, Trustee; Age: 68
801 Pennsylvania Avenue, N.W., Washington, D.C. 20004
Author and architectural historian; a trustee of the Freer Gallery of Art
(Smithsonian Institution), the Institute of Fine Arts (New York University),
National Building Museum; a member of the Trustees Council, Preservation League
of New York State, and of the Indo-U.S. Sub-Commission on Education and Culture.
Kenneth A. Randall, Trustee; Age: 70
6 Whittaker's Mill, Williamsburg, Virginia 23185
A director of Dominion Resources, Inc. (electric utility holding company),
Dominion Energy, Inc. (electric power and oil & gas producer), Texas
Cogeneration Company (cogeneration company), Prime Retail, Inc. (real estate
investment trust); formerly President and Chief Executive Officer of The
Conference Board, Inc. (international economic and business research) and a
director of Lumbermens Mutual Casualty Company, American Motorists Insurance
Company and American Manufacturers Mutual Insurance Company.
Edward V. Regan, Trustee; Age: 67
40 Park Avenue, New York, New York 10016
Chairman of Municipal Assistance Corporation for the City of New York; Senior
Fellow of Jerome Levy Economics Institute, Bard College; a member of the U.S.
Competitiveness Policy Council; a director of River Bank America (real estate
manager); Trustee, Financial Accounting Foundation (FASB and GASB); formerly New
York State Comptroller and trustee, New York State and Local Retirement Fund.
- ------------------
*A Trustee who is an "interested person" of the Fund as defined in the
Investment Company Act.
Russell S. Reynolds, Jr., Trustee; Age: 66
8 Sound Shore Drive, Greenwich, Connecticut 06830
Founder Chairman of Russell Reynolds Associates, Inc. (executive recruiting);
Chairman of Directorship Inc. (corporate governance consulting); a director of
Professional Staff Limited (U.K); a trustee of Mystic Seaport Museum,
International House and Greenwich Historical Society.
Donald W. Spiro, Vice Chairman and Trustee*; Age: 72
Chairman Emeritus (since August 1991) and a director (since January 1969) of the
Manager; formerly Chairman of the Manager and the Distributor.
Pauline Trigere, Trustee; Age: 85
498 Seventh Avenue, New York, New York 10018
Chairman and Chief Executive Officer of Trigere, Inc. (design and sale of
women's fashions).
Clayton K. Yeutter, Trustee; Age: 67
1325 Merrie Ridge Road, McLean, Virginia 22101
Of Counsel, Hogan & Hartson (a law firm); a director of B.A.T. Industries, Ltd.
(tobacco and financial services), Caterpillar, Inc. (machinery), ConAgra, Inc.
(food and agricultural products), Farmers Insurance Company (insurance), FMC
Corp. (chemicals and machinery) and Texas Instruments, Inc. (electronics);
formerly (in descending chronological order) , Counsellor to the President
(Bush) for Domestic Policy, Chairman of the Republican National Committee,
Secretary of the U.S. Department of Agriculture, and U.S. Trade Representative.
Andrew J. Donohue, Secretary; Age: 47
Executive Vice President (since January 1993), General Counsel (since October
1991) and a Director (since September 1995) of the Manager; Executive Vice
President and General Counsel (since September 1993) and a director (since
January 1992) of the Distributor; Executive Vice President, General Counsel and
a director of HarbourView, SSI, SFSI and Oppenheimer Partnership Holdings, Inc.
(since September 1995) and MultiSource Services, Inc. (a broker-dealer) (since
December 1995); President and a director of Centennial (since September 1995);
President, General Counsel and a director of Oppenheimer Real Asset Management,
Inc. (since July 1996); General Counsel (since May 1996) and Secretary (since
April 1997) of OAC; A director of OFIL and Oppenheimer Millennium Funds plc
(since October 1997); an officer of other Oppenheimer funds.
George Evans, Vice President and Portfolio Manager; Age: 38
Vice President of the Manager (since September 1990) and HarbourView (since
July 1994); an officer
of other Oppenheimer funds.
George C. Bowen, Treasurer; Age: 61
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President (since September 1987) and Treasurer (since March 1985) of
the Manager; Vice President (since June 1983) and Treasurer (since March 1985)
of the Distributor; Vice President (since October 1989) and Treasurer (since
April 1986) of HarbourView; Senior Vice President (since February 1992),
Treasurer (since July 1991) and a director (since December 1991) of Centennial;
President, Treasurer and a director of Centennial Capital Corporation (since
June 1989); Vice President and
Treasurer (since August 1978) and Secretary (since April 1981) of SSI; Vice
President, Treasurer and Secretary of SFSI (since November 1989); Treasurer of
OAC (since June 1990); Treasurer of Oppenheimer Partnership Holdings, Inc.
(since November 1989); Vice President and Treasurer of Oppenheimer Real Asset
Management, Inc. (since July 1996); Chief Executive Officer, Treasurer and a
director of MultiSource Services, Inc., a broker-dealer (since December 1995); a
trustee or director and an officer of other Oppenheimer funds.
Robert J. Bishop, Assistant Treasurer; Age: 39
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); an
officer of other Oppenheimer funds; formerly an Assistant Vice President of the
Manager/Mutual Fund Accounting (April 1994-May 1996), and a Fund Controller for
the Manager.
Scott T. Farrar, Assistant Treasurer; Age: 32
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); Assistant
Treasurer of Oppenheimer Millennium Funds plc (since October 1997); an officer
of other Oppenheimer funds; formerly an Assistant Vice President of the
Manager/Mutual Fund Accounting (April 1994-May 1996), and a Fund Controller for
the Manager.
Robert G. Zack, Assistant Secretary; Age: 49
Senior Vice President (since May 1985) and Associate General Counsel (since May
1981) of the Manager, Assistant Secretary of SSI (since May 1985), and SFSI
(since November 1989); Assistant Secretary of Oppenheimer Millennium Funds plc
(since October 1997); an officer of other Oppenheimer funds.
|X| Remuneration of Trustees. The officers of the Fund and certain Trustees
of the Fund (Ms. Macaskill and Mr. Spiro) who are affiliated with the Manager
receive no salary or fee from the Fund. Mr. Galli received no salary or fee
prior to January 1, 1998. The remaining Trustees of the Fund received the
compensation shown below. The compensation from the Fund was paid during its
fiscal year ended November 30, 1997. The compensation from all of the New
York-based Oppenheimer funds includes the Fund and is compensation received as a
director, trustee or member of a committee of the Board during the 1997 calendar
year.
Retirement Total
Aggregate Benefits Compensation
Compensation Accrued as From All
From Part of Fund New York-based
Name and Position the Fund(1) Expenses Oppenheimer
Funds(3)
Leon Levy, $3,565 $6,564 $158,500
Chairman and Trustee
Benjamin Lipstein $3,081 $5,674 $137,000
Study Committee Chairman,
Audit Committee Member
and Trustee(2)
Elizabeth B. Moynihan $2,170 $3,997 $96,500
Study Committee Member
and Trustee
Kenneth A. Randall $1,990 $3,665 $88,500
Audit Committee Chairman
and Trustee
Edward V. Regan $1,968 $3,624 $87,500
Proxy Committee Chairman,
Audit Committee Member
and Trustee
Russell S. Reynolds, Jr. $1,473 $2,713 $65,500
Proxy Committee Member
and Trustee
Pauline Trigere, Trustee $1,316 $2,423 $58,500
Clayton K. Yeutter $1,473 $2,713 $65,500
Proxy Committee Member
and Trustee
- ----------------------
(1)For the fiscal year ended November 30, 1997.
(2)Committee position held during a portion of the period shown.
(3)For the 1997 calendar year.
The Fund has adopted a retirement plan that provides for payment to a
retired Trustee of up to 80% of the average compensation paid during that
Trustee's five years of service in which the highest compensation was received.
A Trustee must serve in that capacity for any of the New York-based Oppenheimer
funds for at least 15 years to be eligible for the maximum payment. Because each
Trustee's retirement benefits will depend on the amount of the Trustee's future
compensation and length of service, the amount of those benefits cannot be
determined as of this time nor can the Fund estimate the number of years of
credited service that will be used to determine those benefits.
Deferred Compensation Plan. The Board of Trustees has adopted a Deferred
Compensation Plan for disinterested Trustees that enables Trustees to elect to
defer receipt of all or a portion of the annual fees they are entitled to
receive from the Fund. Under the plan, the compensation deferred by a Trustee is
periodically adjusted as though an equivalent amount had been invested in shares
of one or more Oppenheimer funds selected by the Trustee. The amount paid to the
Trustee under the plan will be determined based upon the performance of the
selected funds. Deferral of Trustees' fees under the plan will not materially
affect the Fund's assets, liabilities or net income per share. The plan will not
obligate the Fund to retain the services of any Trustee or to pay any particular
level of compensation to any Trustee. Pursuant to an Order issued by the
Securities and Exchange Commission, the Fund may, without shareholder approval,
and notwithstanding its fundamental policy restricting investment in other
open-end investment companies, as described in the Fund's Statement of
Additional Information, invest in the funds selected by the Trustee under the
plan for the limited purpose of determining the value of the Trustee's deferred
fee account.
o Major Shareholders. As of March 6, 1998, no person owned of record or was
known by the Fund to own beneficially 5% or more of the Fund's outstanding Class
A, Class B or Class C shares (no Class Y shares were outstanding), except
Charles Schwab & Co., Inc. ("Charles Schwab"), 101 Montgomery St., San
Francisco, California 94104, which owned of record 621,438.598 Class A shares
(representing 6.04% of the Class A shares outstanding as of such date); and
Merrill Lynch Pierce Fenner & Smith Inc. ("Merrill Lynch"), 4800 Deer Lake Drive
East, Jacksonville, Florida 32246, which owned of record 468,972.599 and
259,746.703 Class B and Class C shares, respectively (representing 6.49% and
14.33% of the Class B and Class C shares, respectively, outstanding as of such
date). The Manager has been advised that such shares were held by Charles Schwab
and Merrill Lynch for the benefit of their respective customers.
The Manager and Its Affiliates. The Manager is wholly-owned by Oppenheimer
Acquisition Corp. ("OAC"), a holding company controlled by Massachusetts Mutual
Life Insurance Company. OAC is also owned in part by certain of the Manager's
directors and officers, some of whom also serve as officers of the Fund, and two
of whom (Ms. Macaskill and Mr. Spiro) serve as Trustees of the Fund.
The Manager and the Fund have a Code of Ethics. It is designed to detect
and prevent improper personal trading by certain employees, including portfolio
managers, that would compete with or take advantage of the Fund's portfolio
transactions. Compliance with the Code of Ethics is carefully monitored and
strictly enforced by the Manager.
|X| Portfolio Manager. The portfolio manager of the Fund is Mr. George
Evans, a Vice President of the Manager. He is the person principally responsible
for the day-to-day management of the Fund's portfolio. Mr. Evans' background is
described in the Prospectus under "Portfolio Manager." Other members of the
Manager's Equity Portfolio Department, particularly Messrs. William Wilby and
Frank Jennings, provide the Portfolio Manager with counsel and support in
managing the Fund's portfolio.
o The Investment Advisory Agreement. A management fee is payable monthly to
the Manager under the terms of the investment advisory agreement between the
Manager and the Fund and is computed on the aggregate net assets of the Fund as
of the close of business each day. The investment advisory agreement requires
the Manager, at its expense, to provide the Fund with adequate office space,
facilities and equipment, and to provide and supervise the activities of all
administrative and clerical personnel required to provide effective corporate
administration for the Fund, 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 Fund.
Expenses not expressly assumed by the Manager under the advisory agreement
or by the Distributor under the General Distributor's Agreement are paid by the
Fund. The advisory agreement lists examples of expenses paid by the Fund, the
major categories of which relate to interest, taxes, brokerage commissions, fees
to certain Trustees, legal and audit expenses, custodian and transfer agent
expenses, share issuance costs, certain printing and registration costs and
non-recurring expenses, including litigation costs. For the Fund's fiscal period
ended November 30, 1997 and the fiscal year ended November 30, 1997, the
management fees paid by the Fund to the Manager totalled $73,489 and $976,002,
respectively. The Investment Advisory Agreement contains no expense limitation.
The Agreement provides that in the absence of willful misfeasance, bad
faith, gross negligence in the performance of its duties, or reckless disregard
for its obligations and duties thereunder, the Manager is not liable for any
loss sustained by reason of good faith errors or omissions in connection with
any matters to which the Agreement relates. The Agreement permits the Manager to
act as investment adviser for any other person, firm or corporation and to use
the name "Oppenheimer" in connection with other investment companies for which
it may act as investment adviser or general distributor. If the Manager shall no
longer act as investment adviser to the Fund, the right of the Fund to use the
name "Oppenheimer" as part of its name may be withdrawn.
o The Distributor. Under its General Distributor's Agreement with the
Fund, the Distributor acts as the Fund's principal underwriter in the continuous
public offering of the Fund's Class A, Class B, Class C and Class Y shares but
is not obligated to sell a specific number of shares. Expenses normally
attributable to sales, (excluding payments under the Distribution and Service
Plans but including advertising and the cost of printing and mailing
prospectuses, other than those furnished to existing shareholders), are borne by
the Distributor. During the Fund's fiscal period ended November 30, 1996 and
fiscal year ended November 30, 1997, the aggregate sales charges on sales of the
Fund's Class A shares were $116,839 and $1,433,719, respectively, of which the
Distributor and an affiliated broker-dealer retained in the aggregate $38,416
and $________________$411,249, respectively. During the same period, the
aggregate sales charges on sales of the Fund's Class B shares were $161,136 and
$2,575,841, of which the Distributor and an affiliated broker-dealer retained in
the aggregate $4,122 and $133,149, respectively. During the same period, the
aggregate sales charges on sales of the Fund's Class C shares were $15,012 and
$189,963, respectively, of which the Distributor and an affiliated broker-dealer
retained in the aggregate $25 and $1,539, respectively. For additional
information about distribution of the Fund's shares and the payments made by the
Fund to the Distributor in connection with such activities, please refer to
"Distribution and Service Plans," below.
o The Transfer Agent. OppenheimerFunds Services, the Fund's Transfer
Agent, is responsible for maintaining the Fund's shareholder registry and
shareholder accounting records, and for shareholder
servicing and administrative functions.
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory Agreement. One of the duties of
the Manager under the advisory agreement is to arrange the portfolio
transactions for the Fund. The advisory agreement contains provisions relating
to the employment of broker-dealers ("brokers") to effect the Fund's portfolio
transactions. In doing so, the Manager is authorized by the advisory agreement
to employ broker-dealers, including "affiliated" brokers, as that term is
defined in the Investment Company Act, as may, in its best judgment based on all
relevant factors, implement the policy of the Fund to obtain, at reasonable
expense, the "best execution" (prompt and reliable execution at the most
favorable price obtainable) of such transactions. The Manager need not seek
competitive commission bidding but is expected to minimize the commissions paid
to the extent consistent with the interest and policies of the Fund as
established by its Board of Trustees. Purchases of securities from underwriters
include a commission or concession paid by the issuer to the underwriter, and
purchases from dealers include a spread between the bid and asked price.
Under the advisory agreement, the Manager is authorized to select brokers
that provide brokerage and/or research services for the Fund and/or the other
accounts over which the Manager or its affiliates have investment discretion.
The commissions paid to such brokers may be higher than another qualified broker
would have charged if a good faith determination is made by the Manager that the
commission is fair and reasonable in relation to the services provided. Subject
to the foregoing considerations, the Manager may also consider sales of shares
of the Fund and other investment companies managed by the Manager or its
affiliates as a factor in the selection of brokers for the Fund's portfolio
transactions.
Description of Brokerage Practices Followed by the Manager. Subject to the
provisions of the advisory agreement, and the procedures and rules described
above, allocations of brokerage are generally made by the Manager's portfolio
traders based upon recommendations from the Manager's portfolio managers. In
certain instances, portfolio managers may directly place trades and allocate
brokerage, also subject to the provisions of the advisory agreement and the
procedures and rules described above. In either case, brokerage is allocated
under the supervision of the Manager's executive officers. Transactions in
securities other than those for which an exchange is the primary market are
generally done with principals or market makers. Brokerage commissions are paid
primarily for effecting transactions in listed securities or for certain
fixed-income agency transactions in the secondary market, and are otherwise paid
only if it appears likely that a better price or execution can be obtained. When
the Fund engages in an option transaction, ordinarily the same broker will be
used for the purchase or sale of the option and any transaction in the
securities to which the option relates. When possible, concurrent orders to
purchase or sell the same security by more than one of the accounts managed by
the Manager or its affiliates are combined. The transactions effected pursuant
to such combined orders are averaged as to price and allocated in accordance
with the purchase or sale orders actually placed for each account. Option
commissions may be relatively higher than those which would apply to direct
purchases and sales of portfolio securities.
The research services provided by a particular broker may be useful only
to one or more of the advisory accounts of the Manager and its affiliates, and
investment research received for the commissions of those other accounts may be
useful both to the Fund and one or more of such other accounts. Such research,
which may be supplied by a third party at the instance of a broker, includes
information and analyses on particular companies and industries as well as
market or economic trends and portfolio strategy, receipt of market quotations
for portfolio evaluations, information systems, computer hardware and similar
products and services. If a research service also assists the Manager in a
non-research capacity (such as bookkeeping or other administrative functions),
then only the percentage or component that provides assistance to the Manager in
the investment decision-making process may be paid for in commission dollars.
The 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 Board has also permitted the Manager to use stated
commissions on secondary fixed-income agency trades to obtain research where the
broker has represented to the Manager that: (i) the trade is not from or for the
broker's own inventory, (ii) the trade was executed by the broker on an agency
basis at the stated commission, and (iii) the trade is not a riskless principal
transaction.
The research services provided by brokers broaden the scope and supplement
the research activities of the Manager, by making available additional views for
consideration and comparisons, and by enabling the Manager to obtain market
information for the valuation of securities held in the Fund's portfolio or
being considered for purchase. The Board of Trustees, including the
"independent" Trustees of the Fund (those Trustees of the Fund who are not
"interested persons" as defined in the Investment Company Act, and who have no
direct or indirect financial interest in the operation of the advisory agreement
or the Distribution Plans described below) annually reviews information
furnished by the Manager as to the commissions paid to brokers furnishing such
services so that the Board may ascertain whether the amount of such commissions
was reasonably related to the value or benefit of such services.
During the Fund's fiscal period ended November 30, 1996 and fiscal year
ended November 30, 1997, the total brokerage commissions paid by the Fund (not
including spreads or concessions on principal transactions on a net trade basis)
were $112,197 and $____________$708,344, respectively. Of those amounts, during
that same periods, $99,711 and $676,943, respectively, was paid to brokers as
commissions in return for research services; the aggregate dollar amount of
those transactions was $20,392,990 and $227,995,345, respectively. The
transactions giving rise to those commissions were allocated in accordance with
the Manager's internal allocation procedures.
Performance of the Fund
Total Return Information. As described in the Prospectus, from time to time the
"average annual total return," "cumulative total return," "average annual total
return at net asset value" and "total return at net asset value" of a class of
shares of the Fund may be advertised. An explanation of how these total returns
are calculated for each class and the components of those calculations is set
forth below.
The Fund's advertisements of its performance data must, under applicable
rules of the Securities and Exchange Commission, include the average annual
total returns for each advertised class of shares of the Fund for the 1, 5, and
10-year periods (or the life of the class, if less) ending as of the most
recently-ended calendar quarter prior to the publication of the advertisement.
This enables an investor to compare the Fund's performance to the performance of
other funds for the same periods. However, a number of factors should be
considered before using such information as a basis for comparison with other
investments. An investment in the Fund is not insured; its returns and share
prices are not guaranteed and normally will fluctuate on a daily basis. When
redeemed, an investor's shares may be worth more or less than their original
cost. Returns for any given past period are not a prediction or representation
by the Fund of future returns. The returns of each class of shares of the Fund
are affected by portfolio quality, the type of investments the Fund holds and
its operating expenses allocated to the particular class.
o Average Annual Total Returns. The "average annual total return" of a
class of shares is an average annual compounded rate of return for each year in
a specified number of years. It is the rate of return based on the change in
value of a hypothetical initial investment of $1,000 ("P" in the formula below)
held for a number of years ("n") to achieve an Ending Redeemable Value ("ERV")
of that investment, according to the following formula:
LEFT ( {~ERV~} OVER P~ right) SUP
{1/n}~-1~=~Average~Annual~Total~ Return
o Cumulative Total Returns. The cumulative "total return" calculation
measures the change in value of a hypothetical investment of $1,000 over an
entire period of years. Its calculation uses some of the same factors as average
annual total return, but it does not average the rate of return on an annual
basis. Cumulative total return is determined as follows:
ALIGNC {ERV~-~ P~} over P~ =~Total~ Return
In calculating total returns for Class A shares, the current maximum sales
charge of 5.75% (as a percentage of the offering price) is deducted from the
initial investment ("P") (unless the return is shown at net asset value, as
described below). For Class B shares, the payment of the applicable contingent
deferred sales charge (5.0% for the first year, 4.0% for the second year, 3.0%
for the third and fourth years, 2.0% in the fifth year, 1.0% in the sixth year
and none thereafter) is applied to the investment result for the period shown
(unless the total return is shown at net asset value, as described below). For
Class C shares, the payment of the 1.0% contingent deferred sales charge is
applied to the investment result for the one-year period (or less). Class Y
shares are not subject to a sales charge. Total returns also assume that all
dividends and capital gains distributions during the period are reinvested to
buy additional shares at net asset value per share, and that the investment is
redeemed at the end of the period. The average annual total returns on an
investment in Class A shares for the one-year period ended November 30, 1997 and
from March 25, 1996 (inception of the offering) through November 30, 1997, were
15.36% and 19.78%, respectively. The cumulative total return on an investment in
Class A shares from March 25, 1996 through November 30, 1997 was 35.44%. The
average annual total returns on an investment in Class B shares for the one-year
period ended November 30, 1997 and from March 25, 1996 (inception of the
offering) through November 30, 1997, were 16.46% and 20.86%, respectively. The
cumulative total return on an investment in Class B shares from March 25, 1996
through November 30, 1997 was 37.50%. The average annual total returns on an
investment in Class C shares for the one-year period ended November 30, 1997 and
from March 25, 1996 (inception of the offering) through November 30, 1997, were
20.53% and 23.05%, respectively. The cumulative total return on an investment in
Class C shares from March 25, 1996 through November 30, 1997 was 41.70%.
o Total Returns at Net Asset Value. From time to time the Fund may also
quote an average annual total return at net asset value or a cumulative total
return at net asset value for Class A, Class B, Class C and Class Y shares. Each
is based on the difference in net asset value per share at the beginning and the
end of the period for a hypothetical investment in that class of shares (without
considering front-end or contingent deferred sales charges) and takes into
consideration the reinvestment of dividends and capital gains distributions. The
average annual total returns at net asset value on an investment in Class A
shares for the one-year period ended November 30, 1997 and from March 25, 1996
(inception of the offering) through November 30, 1997, were 22.40% and 24.08%,
respectively. The cumulative total return at net asset value on an investment in
Class A shares from March 25, 1996 through November 30, 1997 was 43.70%. The
average annual total returns at net asset value on an investment in Class B
shares for the one-year period ended November 30, 1997 and from March 25, 1996
(inception of the offering) through November 30, 1997, were 21.46% and 22.94%,
respectively. The cumulative total return at net asset value on an investment in
Class B shares from March 25, 1996 through November 30, 1997 was 41.50%. The
average annual total returns at net asset value on an investment in Class C
shares for the one-year period ended November 30, 1997 and from March 25, 1996
(inception of the offering) through November 30, 1997, were 21.53% and 23.05%,
respectively. The cumulative total return at net asset value on an investment in
Class C shares from March 25, 1996 through November 30, 1997 was 41.70%.
Total return information may be useful to investors in reviewing the
performance of the Fund's Class A, Class B or Class C shares. However, when
comparing total return of an investment in shares of the Fund with that of other
alternatives, investors should understand that as the Fund is an aggressive
equity fund seeking capital appreciation, its shares are subject to greater
market risks and volatility than shares of funds having other investment
objectives and that the Fund is designed for investors who are willing to accept
greater risk of loss in the hopes of realizing greater gains.
Other Performance Comparisons. From time to time the Fund may publish the
ranking of its Class A, Class B, Class C or Class Y shares by Lipper Analytical
Services, Inc. ("Lipper"), a widely- recognized independent mutual fund
monitoring service. Lipper monitors the performance of regulated investment
companies, including the Fund, and ranks their performance for various periods
based on categories relating to investment objectives. The performance of the
Fund's classes is ranked against (i) all other funds, (ii) all other
"international" funds and (iii) all other "international" funds in a specific
size category. The Lipper performance rankings are based on total returns that
include the reinvestment of capital gain distributions and income dividends but
do not take sales charges or taxes into consideration.
From time to time the Fund may publish the star ranking of the performance
of its Class A, Class B, Class C and Class Y shares by Morningstar, Inc., an
independent mutual fund monitoring service. Morningstar ranks mutual funds in
broad investment categories: domestic stock funds, international stock funds,
taxable bond funds and municipal bond funds, based on risk-adjusted total
investment returns. The Fund is ranked among international stock funds.
Investment return measures a fund's or class' one, three, five and ten-year
average annual total returns (depending on the inception of the fund or class)
in excess of 90-day U.S. Treasury bill returns after considering the fund's
sales charges and expenses. Risk measures a fund's or class' performance below
90-day U.S. Treasury bill returns. Risk and investment return are combined to
produce star rankings reflecting performance relative to the average fund in the
fund's category.
Five stars is the "highest"
ranking (top 10%), four stars is "above average" (next 22.5%), three stars is
"average" (next 35%), two stars is "below average" (next 22.5%) and one star is
"lowest" (bottom 10%). The current star ranking is the fund's or class' 3-year
ranking or its combined 3- and 5-year ranking (weighted 60%/40%, respectively,
or its combined 3-, 5- and 10-year ranking (weighted 40%, 30% and 30%,
respectively), depending on the inception of the fund or class. Rankings are
subject to change monthly.
The Fund may also compare its performance to that of other funds in its
Morningstar Category. In addition to its star ranking, Morningstar also
categorizes and compares a fund's 3-year performance based on Morningstar's
classification of the fund's investments and investment style, rather than how a
fund defines its investment objective. Morningstar's four broad categories
(domestic equity, international equity, municipal bond and taxable bond) are
each further subdivided into categories based on types of investments and
investment styles. Those comparisons by Morningstar are based on the same risk
and return measurements as its star rankings but do not consider the effect of
sales charges.
From time to time, the Fund may include in its advertisements and sales
literature performance information about the Fund cited in other newspapers and
periodicals, such as The New York Times, which may include performance
quotations from other sources, including Lipper.
The total return on an investment in the Fund's Class A, Class B, Class C
or Class Y shares may be compared with performance for the same period of the
Morgan Stanley World Index, an unmanaged index of issuers on the stock exchanges
of 20 foreign countries and the United States and widely recognized as a measure
of global stock market performance. The performance of such Index includes a
factor for the reinvestment of dividends but does not reflect expenses or taxes.
The performance of the Fund's Class A, Class B, Class C or Class Y shares may
also be compared in publications to (i) the performance of various market
indices or to other investments for which reliable performance data is
available, and (ii) to averages, performance rankings or other benchmarks
prepared by recognized mutual fund statistical services.
From time to time, the Fund's Manager may publish rankings or ratings of
the Manager (or Transfer Agent) or the investor services provided by them to
shareholders of the Oppenheimer funds, other than performance rankings of the
Oppenheimer funds themselves. Those ratings or rankings of shareholder/investor
services by third parties may compare the Oppenheimer funds' services to those
of other mutual fund families selected by the rating or ranking services and may
be based upon the opinions of the rating or ranking service itself, based on its
research or judgment, or based upon surveys of investors, brokers, shareholders
or others.
Distribution and Service Plans
The Fund has adopted Distribution and Service Plans for Class A, Class B
and Class C shares of the Fund under Rule 12b-1 of the Investment Company Act,
pursuant to which the Fund makes payments to the Distributor in connection with
the distribution and/or servicing of the shares of that class, as described in
the Prospectus. No such Plan has been adopted for Class Y shares. Each Plan has
been approved by a vote of the Manager as the initial shareholder of the Fund
and will be submitted for approval by the Board of Trustees of the Fund,
including a majority of the Independent Trustees, cast in person at a meeting
called for the purpose of voting on that Plan.
In addition, under the Plans the Manager and the Distributor, in their
sole discretion, from time to time may use their own resources (which, in the
case of the Manager, may include profits from the advisory fee it receives from
the Fund) to make payments to brokers, dealers or other financial institutions
(each is referred to as a "Recipient" under the Plans) for distribution and
administrative services they perform, at no cost to the Fund. The Distributor
and the Manager may, in their sole discretion, increase or decrease the amount
of payments they make to Recipients from their own resources.
Unless terminated as described below, each Plan continues in effect from
year to year but only as long as its continuance is specifically approved at
least annually by the Fund's Board of Trustees and its Independent Trustees by a
vote cast in person at a meeting called for the purpose of voting on such
continuance. A Plan for a particular class 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" (as defined in the Investment Company Act) of the outstanding
shares of that class. None of the Plans may be amended to increase materially
the amount of payments to be made unless such amendment is approved by
shareholders of the class affected by the amendment. In addition, because Class
B shares of the Fund automatically convert into Class A shares after six years,
the Fund is required by a Securities and Exchange Commission rule to obtain the
approval of Class B as well as Class A shareholders for a proposed amendment to
the Class A Plan that would materially increase the amount to be paid under the
Class A Plan. Such approval must be by a "majority" of the Class A and Class B
shares (as defined in the Investment Company Act), voting separately by class.
All material amendments must be approved by the Independent Trustees.
While the Plans are in effect, the Treasurer of the Fund shall provide
separate written reports to the Fund's Board of Trustees at least quarterly on
the amount of all payments made pursuant to each Plan, the purpose for which the
payments were made and the identity of each Recipient that received any payment.
The report for each Plan shall also include the distribution costs for that
quarter. Those reports, including the allocations on which they are based, will
be subject to the review and approval of the Independent Trustees in the
exercise of their fiduciary duty. Each Plan further provides that while it is in
effect, the selection and nomination of those Trustees of the Fund who are not
"interested persons" of the Fund is committed to the discretion of the
Independent Trustees. This does not prevent the involvement of others in such
selection and nomination if the final decision on selection or nomination is
approved by a majority of the Independent Trustees.
Under the Plans, no payment will be made to any Recipient in any quarter
if the aggregate net asset value of all Fund shares held by the Recipient for
itself and its customers, did not exceed a minimum amount, if any, that may be
determined from time to time by a majority of the Fund's Independent Trustees.
Initially, the Board of Trustees has set the fees at the maximum rate and has
set no minimum amount of assets to qualify for payment.
Any unreimbursed expenses incurred by the Distributor with respect to
Class A shares for any fiscal year may not be recovered in subsequent years.
Payments received by the Distributor under the Plan for Class A shares will not
be used to pay any interest expense, carrying charge, or other financial costs,
or allocation of overhead by the Distributor. For the fiscal period ended
November 30, 1997, payments under the Class A Plan totalled $149,393, all of
which was paid by the Distributor to Recipients, including $12,197 paid to MML
Investor Services, Inc., an affiliate of the Distributor.
The Class B and the Class C Plans allow the service fee payment to be paid
by the Distributor to Recipients in advance for the first year such shares are
outstanding, and thereafter on a quarterly basis, as described in the
Prospectus. The advance payment is based on the net asset value of Class B and
Class C shares sold. An exchange of shares does not entitle the Recipient to an
advance service fee payment. In the event Class B or Class C shares are redeemed
during the first year that the shares are outstanding, the Recipient will be
obligated to repay to the Distributor a pro rata portion of the Distributor's
advance payment for those shares. For the fiscal period ended November 30, 1997,
payments under the Class B Plan totalled $453,262, of which $_______$412,248 was
retained. During this period, payments under the Class C Plan totalled $108,112,
of which $_______$83,329 was retained.
Although the Class B and Class C Plans permit the Distributor to retain
both the asset-based sales charges and the service fees on such shares, or to
pay Recipients the service fee on a quarterly basis, without payment in advance,
the Distributor presently intends to pay the service fee to Recipients in the
manner described above. A minimum holding period may be established from time to
time under the Class B Plan and the Class C Plan by the Board. Initially, the
Board has set no minimum holding period. All payments under the Class B Plan and
the Class C Plan are subject to the limitations imposed by the Conduct Rules of
the National Association of Securities Dealers, Inc., on payments of asset-based
sales charges and service fees.
The Class B and Class C Plans provide for the distributor to be
compensated at a flat rate, whether the Distributor's distribution expenses are
more or less than the amounts paid by the Fund during that period. Such payments
are made in recognition that the Distributor (i) pays sales commissions to
authorized brokers and dealers at the time of sale and pays service fees as
described in the Prospectus, (ii) may finance such commissions and/or the
advance of the service fee payment to Recipients under those Plans, or may
provide such financing from its own resources, or from an affiliate, (iii)
employs personnel to support distribution of shares, and (iv) may bear the costs
of sales literature, advertising and prospectuses (other than those furnished to
current shareholders), state "blue sky" registration fees and certain other
distribution expenses.
ABOUT YOUR ACCOUNT
How To Buy Shares
Alternative Sales Arrangements - Class A, Class B, Class C and Class Y Shares.
The availability of four classes of shares permits the individual investor to
choose the method of purchasing shares that is more beneficial to the investor
depending on the amount of the purchase, the length of time the investor expects
to hold shares and other relevant circumstances. Investors should understand
that the purpose and function of the deferred sales charge and asset-based sales
charge with respect to Class B and Class C shares are the same as those of the
initial sales charge with respect to Class A shares. Any salesperson or other
person entitled to receive compensation for selling Fund shares may receive
different compensation with respect to one class of shares than the other. The
Distributor normally will not accept any order for $500,000 or $1 million or
more of Class B or Class C shares, respectively, on behalf of a single investor
(not including dealer "street name" or omnibus accounts) because generally it
will be more advantageous for that investor to purchase Class A shares of the
Fund instead. A fourth class of shares, Class Y shares, may be purchased only by
certain institutional investors at net asset value per share.
The four classes of shares each represent an interest in the same
portfolio investments of the Fund. However, each class has different shareholder
privileges and expenses.
The net income
attributable to Class B and Class C shares and the dividends payable on such
shares will be reduced by incremental expenses borne solely by those classes,
including the asset-based sales charges.
The conversion of Class B shares to Class A shares after six years is
subject to the continuing availability of a private letter ruling from the
Internal Revenue Service, or an opinion of counsel or tax adviser, to the effect
that the conversion of Class B shares does not constitute a taxable event for
the holder under Federal income tax law. If such a revenue ruling or opinion is
no longer available, the automatic conversion feature may be suspended, in which
event no further conversions of Class B shares would occur while such suspension
remained in effect. Although Class B shares could then be exchanged for Class A
shares on the basis of relative net asset value of the two classes, without the
imposition of a sales charge or fee, such exchange could constitute a taxable
event for the holder, and absent such exchange, Class B shares might continue to
be subject to the asset-based sales charge for longer than six years.
The methodology for calculating the net asset value, dividends and
distributions of the Fund's Class A, Class B, Class C and Class Y shares
recognizes two types of expenses. General expenses that do not pertain
specifically to a class are allocated pro rata to the shares of each class,
based on the percentage of the net assets of such class to the Fund's total
assets, and then equally to each outstanding share within a given class. Such
general expenses include (i) management fees, (ii) legal, bookkeeping and audit
fees, (iii) printing and mailing costs of shareholder reports, Prospectuses,
Statements of Additional Information and other materials for current
shareholders, (iv) fees to Independent Trustees, (v) custodian expenses, (vi)
share issuance costs, (vii) organization and start-up costs, (viii) interest,
taxes and brokerage commissions, and (ix) non-recurring expenses, such as
litigation costs. Other expenses that are directly attributable to a class are
allocated equally to each outstanding share within that class. Such expenses
include (i) Distribution Plan fees, (ii) incremental transfer and shareholder
servicing agent fees and expenses, (iii) registration fees and (iv) shareholder
meeting expenses, to the extent that such expenses pertain to a specific class
rather than to the Fund as a whole.
Determination of Net Asset Values Per Share. The net asset values per share of
Class A, Class B, Class C and Class Y shares of the Fund are determined as of
the close of business of The New York Stock Exchange (the "Exchange") on each
day that the Exchange is open, by dividing the value of the Fund's net assets
attributable to that class by the number of shares of that class outstanding.
The Exchange normally closes at 4:00 P.M. New York time, but may close earlier
on some days (for example, in case of weather emergencies or on days falling
before a holiday). The Exchange's most recent annual holiday schedule (which is
subject to change) states that it will close on New Year's
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. It may also
close on other days. Trading may occur in debt securities and in foreign
securities when the Exchange is closed (including weekends and holidays).
Because the Fund's net asset value will not be calculated at those times, if
securities held in the Fund's portfolio are traded at such time, the net asset
values per share of Class A, Class B , Class C and Class Y shares of the Fund
may be significantly affected at times when shareholders may not purchase or
redeem shares.
The Fund's Board of Trustees has established procedures for the valuation
of the Fund's securities, generally as follows: (i) equity securities traded on
a securities exchange or on the Automated Quotation System ("NASDAQ") of the
Nasdaq Stock Market, Inc. for which last sale information is regularly reported
are valued at the last reported sale price on their primary exchange or NASDAQ
that day (or, in the absence of sales that day, at values based on the last sale
price of the preceding trading day, or closing "bid" prices that day); (ii)
securities traded on a foreign securities exchange are generally valued at the
last sale price available to the pricing service approved by the Fund's Board of
Trustees or to the Manager as reported by the principal exchange on which the
security is traded at its last trading session on or immediately preceding the
valuation date, or at the mean between "bid" and "ask" prices obtained from the
principal exchange or two active market makers in the security on the basis of
reasonable inquiry; (iii) long-term debt securities having a remaining maturity
in excess of 60 days are valued based on the mean between the "bid" and "ask"
prices determined by a portfolio pricing service approved by the Fund's Board of
Trustees or obtained by the Manager from two active market makers in the
security on the basis of reasonable inquiry; (iv) debt instruments having a
maturity of more than 397 days when issued, and non-money market type
instruments having a maturity of 397 days or less when issued, which have a
remaining maturity of 60 days or less are valued at the mean between "bid" and
"ask" prices determined by a pricing service approved by the Fund's Board of
Trustees or obtained by the Manager from two active market makers in the
security on the basis of reasonable inquiry; (v) money market-type debt
securities held by a non-money market fund that had a maturity of less than 397
days when issued that have a remaining maturity of 60 days or less, and debt
instruments held by a money market fund that have a remaining maturity of 397
days or less, shall be valued at cost, adjusted for amortization of premiums and
accretion of discount; and (vi) securities (including restricted securities) not
having readily-available market quotations are valued at fair value determined
under the Board's procedures. If the Manager is unable to locate two market
makers willing to give quotes (see (ii), (iii) and (iv) above), the security may
be priced at the mean between the "bid" and "ask" prices provided by a single
active market maker (which in certain cases may be in "bid" price if no price is
available).
In the case of U.S. Government Securities and mortgage-backed securities,
where last sale information is not generally available, such pricing procedures
may include "matrix" comparisons to the prices for comparable instruments on the
basis of quality, yield, maturity and other special factors involved. The
Manager may use pricing services approved by the Board of Trustees to price U.S.
Government Securities, or mortgage-backed securities for which last sale
information is not generally available. The Manager will monitor the accuracy of
such pricing services, which may include comparing prices used for portfolio
evaluation to actual sales prices of selected securities.
Trading in securities on European and Asian exchanges and over-the-counter
markets is normally completed before the close of the New York Stock Exchange.
Events affecting the values of foreign securities traded in securities markets
that occur between the time their prices are determined and the close of the New
York Stock Exchange will not be reflected in the Fund's calculation of net asset
value unless the Board of Trustees or the Manager, under procedures established
by the Board of Trustees, determines that the particular event is likely to
effect a material change in the value of such security. Foreign currency,
including forward contracts, will be valued at the closing price in the London
foreign exchange market that day as provided by a reliable bank, dealer or
pricing service. The values of securities denominated in foreign currency will
be converted to U.S. dollars at the closing price in the London foreign exchange
market that day as provided by a reliable bank, dealer or pricing service.
Puts, calls and Futures are valued at the last sales price on the
principal exchange on which they are traded, or on NASDAQ, as applicable, as
determined by a pricing service approved by the Board of Trustees or by the
Manager. If there were no sales that day, value shall be the last sale price on
the preceding trading day if it is within the spread of the closing "bid" and
"ask" prices on the principal exchange or on NASDAQ on the valuation date, or,
if not, value shall be the closing "bid" price on the principal exchange or on
NASDAQ on the valuation date. If the put, call or future is not traded on an
exchange or on NASDAQ, it shall be valued at the mean between "bid" and "ask"
prices obtained by the Manager from two active market makers (which in certain
cases may be the "bid" price if no "ask" price is available).
When the Fund writes an option, an amount equal to the premium received is
included in the Fund's Statement of Assets and Liabilities as an asset, and an
equivalent credit is included in the liability section. The credit is adjusted
("marked-to-market") to reflect the current market value of the option. In
determining the Fund's gain on investments, if a call or put written by the Fund
is exercised, the proceeds are increased by the premium received. If a call or
put written by the Fund expires, the Fund has a gain in the amount of the
premium; if the Fund enters into a closing purchase transaction, it will have a
gain or loss depending on whether the premium received was more or less than the
cost of the closing transaction. If the Fund exercises a put it holds, the
amount the Fund receives on its sale of the underlying investment is reduced by
the amount of premium paid by the Fund.
AccountLink. When shares are purchased through AccountLink, each purchase must
be at least $25. Shares will be purchased on the regular business day the
Distributor is instructed to initiate the Automated Clearing House ("ACH")
transfer to buy shares. Dividends will begin to accrue on shares purchased by
the proceeds of ACH transfers on the business day the Fund receives Federal
Funds for the purchase through the ACH system before the close of the Exchange.
The Exchange normally closes at 4:00 P.M., but may close earlier on certain
days. If Federal Funds are received on a business day after the close of the
Exchange, the shares will be purchased and dividends will begin to accrue on the
next regular business day. The proceeds of ACH transfers are normally received
by the Fund 3 days after the transfers are initiated. The Distributor and the
Fund are not responsible for any delays in purchasing shares resulting from
delays in ACH transmissions.
Reduced Sales Charges. As discussed in the Prospectus, a reduced sales charge
rate may be obtained for Class A shares under Right of Accumulation and Letters
of Intent because of the economies of sales efforts and reduction in expenses
realized by the Distributor, dealers and brokers making such sales. No sales
charge is imposed in certain other circumstances described in the Prospectus
because the Distributor incurs little or no selling expenses. The term
"immediate family" refers to one's spouse, children, grandchildren,
grandparents, parents, parents-in-law, brothers and sisters, sons- and
daughters- in-law, aunts, uncles, nieces and nephews, a sibling's spouse and a
spouse's siblings. Relations by virtue of a remarriage (step-children,
step-parents, etc.) are included.
o The Oppenheimer Funds. The Oppenheimer funds are those mutual funds
for which the Distributor acts as the distributor or the sub-distributor and
include the Fund and the following funds:
Oppenheimer Municipal Bond Fund Oppenheimer New York Municipal Fund Oppenheimer
California Municipal Fund Oppenheimer Intermediate Municipal Fund Oppenheimer
Insured Municipal Fund Oppenheimer Main Street California Municipal Fund
Oppenheimer Florida Municipal Fund Oppenheimer Pennsylvania Municipal Fund
Oppenheimer New Jersey Municipal Fund Oppenheimer Discovery Fund Oppenheimer
Developing Markets Fund Oppenheimer Capital Appreciation Fund Oppenheimer Growth
Fund Oppenheimer Equity Income Fund Oppenheimer Multiple Strategies Fund
Oppenheimer MidCap Fund Oppenheimer International Small Company Fund Oppenheimer
Total Return Fund, Inc. Oppenheimer Main Street Income & Growth
Fund
Oppenheimer High Yield Fund Oppenheimer Champion Income Fund Oppenheimer Bond
Fund Oppenheimer Limited-Term Government Fund Oppenheimer Gold & Special
Minerals Fund Oppenheimer Strategic Income Fund Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund Oppenheimer U.S. Government Trust
Oppenheimer International Bond Fund Oppenheimer Enterprise Fund Oppenheimer Real
Asset Fund Oppenheimer Quest Value Fund, Inc. Oppenheimer Quest Opportunity
Value Fund Oppenheimer Quest Small Cap Value Fund Oppenheimer Quest Global Value
Fund, Inc. Oppenheimer Quest Growth & Income Value Fund Oppenheimer Quest
Officers Value Fund
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Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Bond Fund for Growth
Oppenheimer Disciplined Value Fund
Oppenheimer Disciplined Allocation Fund
Oppenheimer LifeSpan Balanced Fund
Oppenheimer LifeSpan Income Fund
Oppenheimer LifeSpan Growth Fund
Oppenheimer Bond Fund for Growth
Limited TermNew York Municipal Fund
Rochester Fund Municipals
and the following "Money Market Funds":
Oppenheimer Money Market Fund, Inc.
Oppenheimer Cash Reserves
Centennial Money Market Trust
Centennial Tax Exempt Trust
Centennial Government Trust
Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust
Centennial America Fund, L.P.
There is an initial sales charge on the purchase of Class A shares of each of
the Oppenheimer funds except Money Market Funds (under certain circumstances
described herein, redemption proceeds of Money Market Fund shares may be subject
to a contingent deferred sales charge).
o Letters of Intent. A Letter of Intent ("Letter") is the investor's
statement of intention to purchase Class A or Class A and Class B shares of the
Fund (and other eligible Oppenheimer funds) during the 13-month period from the
investor's first purchase pursuant to the Letter (the "Letter of Intent
period"), which may, at the investor's request, include purchases made up to 90
days prior to the date of the Letter. The Letter states the investor's intention
to make the aggregate amount of purchases (excluding any purchases made by
reinvestment of dividends or distributions or purchases made at net asset value
without sales charge), which together with the investor's holdings of such funds
(calculated at their respective public offering prices calculated on the date of
the Letter) will equal or exceed the amount specified in the Letter. This
enables the investor to count the shares to be purchased under the Letter of
Intent to obtain the reduced sales charge rate (as set forth in the Prospectus)
that applies under the Right of Accumulation to current purchases of Class A
shares. Each purchase of Class A shares under the Letter will be made at the
public offering price (including the sales charge) that applies to a single
lump-sum purchase of shares in the amount intended to be purchased under the
Letter.
In submitting a Letter, the investor makes no commitment to purchase shares,
but if the investor's purchases of shares within the Letter of Intent period,
when added to the value (at offering price) of the investor's holdings of shares
on the last day of that period, do not equal or exceed the intended purchase
amount, the investor agrees to pay the additional amount of sales charge
applicable to such purchases, as set forth in "Terms of Escrow," below (as those
terms may be amended from time to time). The investor agrees that shares equal
in value to 5% of the intended purchase amount will be held in escrow by the
Transfer Agent subject to the Terms of Escrow. Also, the investor agrees to be
bound by the terms of the Prospectus, this Statement of Additional Information
and the Application used for such Letter of Intent, and if such terms are
amended, as they may be from time to time by the Fund, that those amendments
will apply automatically to existing Letters of Intent.
If the total eligible purchases made during the Letter of Intent period do
not equal or exceed the intended purchase amount, the commissions previously
paid to the dealer of record for the account and the amount of sales charge
retained by the Distributor will be adjusted to the rates applicable to actual
purchases. For purchases of shares of the Fund and other Oppenheimer funds by
OppenheimerFunds prototype 401(k) plans under a Letter of Intent, the Transfer
Agent will not hold shares in escrow. If the intended purchases amount under the
Letter entered into by an OppenheimerFunds prototype 401(k) plan is not
purchased by the plan by the end of the Letter of Intent period, there normally
will be no adjustment of commission previously paid to the broker-dealer or
financial institution of record for shares purchased for accounts held in the
name of that plan. If total eligible purchases during the Letter of Intent
period exceed the intended purchase amount and exceed the amount needed to
qualify for the next sales charge rate reduction set forth in the applicable
prospectus, the sales charges paid will be adjusted to the lower rate, but only
if and when the dealer returns to the Distributor the excess of the amount of
commissions allowed or paid to the dealer over the amount of commissions that
apply to the actual amount of purchases. The excess commissions returned to the
Distributor will be used to purchase additional shares for the investor's
account at the net asset value per share in effect on the date of such purchase,
promptly after the Distributor's receipt thereof.
In determining the total amount of purchases made under a Letter, shares
redeemed by the investor prior to the termination of the Letter of Intent period
will be deducted. It is the responsibility of the dealer of record and/or the
investor to advise the Distributor about the Letter in placing any purchase
orders for the investor during the Letter of Intent period. All of such
purchases must be made through the Distributor.
o Terms of Escrow That Apply to Letters of Intent.
1. Out of the initial purchase (or subsequent purchases if necessary) made
pursuant to a Letter, shares of the Fund equal in value to 5% of the intended
purchase amount specified in the Letter shall be held in escrow by the Transfer
Agent. For example, if the intended purchase amount is $50,000, the escrow shall
be shares valued in the amount of $2,500 (computed at the public offering price
adjusted for a $50,000 purchase). Any dividends and capital gains distributions
on the escrowed shares will be credited to the investor's account.
2. If the intended purchase amount specified under the Letter is completed
within the thirteen- month Letter of Intent period, the escrowed shares will be
promptly released to the investor.
3. If, at the end of the thirteen-month Letter of Intent period the total
purchases pursuant to the Letter are less than the intended purchase amount
specified in the Letter, the investor must remit to the Distributor an amount
equal to the difference between the dollar amount of sales charges actually paid
and the amount of sales charges which would have been paid if the total amount
purchased had been made at a single time. Such sales charge adjustment will
apply to any shares redeemed prior to the completion of the Letter. If such
difference in sales charges is not paid within twenty days after a request from
the Distributor or the dealer, the Distributor will, within sixty days of the
expiration of the Letter, redeem the number of escrowed shares necessary to
realize such difference in sales charges. Full and fractional shares remaining
after such redemption will be released from escrow. If a request is received to
redeem escrowed shares prior to the payment of such additional sales charge, the
sales charge will be withheld from the redemption proceeds.
4. By signing the Letter, the investor irrevocably constitutes and appoints
the Transfer Agent as attorney-in-fact to surrender for redemption any or all
escrowed shares.
5. The shares eligible for purchase under the Letter (or the holding of
which may be counted toward completion of a Letter) include (a) Class A shares
sold with a front-end sales charge or subject to a Class A contingent deferred
sales charge, (b) Class B shares acquired subject to a contingent deferred sales
charge, and (c) Class A or Class B shares acquired in exchange for either (i)
Class A shares of one of the other Oppenheimer funds that were acquired subject
to a Class A initial or contingent deferred sales charge or (ii) Class B shares
of one of the other Oppenheimer funds that were acquired subject to a contingent
deferred sales charge.
6. Shares held in escrow hereunder will automatically be exchanged for
shares of another fund to which an exchange is requested, as described in the
section of the Prospectus entitled "How to Exchange Shares," and the escrow will
be transferred to that other fund.
Asset Builder Plans. To establish an Asset Builder Plan from a bank account, a
check (minimum $25) for the initial purchase must accompany the application.
Shares purchased by Asset Builder Plan payments from bank accounts are subject
to the redemption restrictions for recent purchases described in "How To Sell
Shares," in the Prospectus. Asset Builder Plans also enable shareholders of
Oppenheimer Cash Reserves to use those accounts for monthly automatic purchases
of shares of up to four other Oppenheimer funds. If you make payments from your
bank account to purchase shares of the Fund, your bank account will be
automatically debited normally four to five business days prior to the
investment dates selected in the Account Application. Neither the Distributor
the Transfer Agent nor the Fund shall be responsible for any delays in
purchasing shares resulting from delays in ACH transmission.
There is a front-end sales charge on the purchase of certain Oppenheimer
funds, or a contingent deferred sales charge may apply to shares purchased by
Asset Builder payments. An application should be obtained from the Distributor,
completed and returned, and a prospectus of the selected fund(s) should be
obtained from the Distributor or your financial advisor before initiating Asset
Builder payments. The amount of the Asset Builder investment may be changed or
the automatic investments may be terminated at any time by writing to the
Transfer Agent. A reasonable period (approximately 15 days) is required after
the Transfer Agent's receipt of such instructions to implement them. The Fund
reserves the right to amend, suspend, or discontinue offering such plans at any
time without prior notice.
Cancellation of Purchase Orders. Cancellation of purchase orders for the Fund's
shares (for example, when a purchase check is returned to the Fund unpaid)
causes a loss to be incurred when the net asset value of the Fund's shares on
the cancellation date is less than on the purchase date. That loss is equal to
the amount of the decline in the net asset value per share multiplied by the
number of shares in the purchase order. The investor is responsible for that
loss. If the investor fails to compensate the Fund for the loss, the Distributor
will do so. The Fund may reimburse the Distributor for that amount by redeeming
shares from any account registered in that investor's name, or the Fund or the
Distributor may seek other redress.
Retirement Plans. In describing certain types of employee benefit plans that may
purchase Class A shares without being subject to the Class A contingent deferred
sales charge, the term "employee benefit plan" means any plan or arrangement,
whether or not "qualified" under the Internal Revenue Code, including, medical
savings accounts, payroll deduction plans or similar plans in which Class A
shares are purchased by a fiduciary or other person for the account of
participants who are employees of a single employer or of affiliated employers,
if the Fund account is registered in the name of the fiduciary or other person
for the benefit of participants in the plan.
The term "group retirement plan" means any qualified or non-qualified
retirement plan (including 457 plans, SEPs, SARSEPs, 403(b) plans other than
public school 403(b) plans, and SIMPLE plans) for employees of a corporation or
a sole proprietorship, members and employees of a partnership or association or
other organized group of persons (the members of which may include other
groups), if the group or association has made special arrangements with the
Distributor and all members of the group or association participating in or who
are eligible to participate in the plan(s) purchase Class A shares of the Fund
through a single investment dealer, broker, or other financial institution
designated by the group. "Group retirement plan" also includes qualified
retirement plans and non-qualified deferred compensation plans and IRAs that
purchase Class A shares of the Fund through a single investment dealer, broker,
or other financial institution, if that broker-dealer has made special
arrangements with the Distributor enabling those plans to purchase Class A
shares of the Fund at net asset value but subject to a contingent deferred sales
charge.
In addition to the discussion in the Prospectus relating to the ability of
Retirement Plans to purchase Class A shares at net asset value in certain
circumstances, there is no initial sales charge on purchases of Class A shares
of any one or more of the Oppenheimer funds by a Retirement Plan in the
following cases:
(i) the recordkeeping for the Retirement Plan is performed on a daily
valuation basis by Merrill Lynch Pierce Fenner & Smith, Inc. ("Merrill Lynch")
and, on the date the plan sponsor signs the Merrill Lynch recordkeeping service
agreement, the Retirement Plan has $3 million or more in assets invested in
mutual funds other than those advised or managed by Merrill Lynch Asset
Management, L.P. ("MLAM") that are made available pursuant to a Service
Agreement between Merrill Lynch and the mutual fund's principal underwriter or
distributor and in funds advised or managed by MLAM (collectively, the
"Applicable Investments"); or
(ii) the recordkeeping for the Retirement Plan is performed on a daily
valuation basis by an independent record keeper whose services are provided
under a contract or arrangement between the Retirement Plan and Merrill Lynch.
On the date the plan sponsor signs the Merrill Lynch record keeping service
agreement, the Plan must have $3 million or more in assets, excluding assets
held in money market funds, invested in Applicable Investments; or
(iii) the Plan has 500 or more eligible employees, as determined by the
Merrill Lynch plan conversion manager on the date the plan sponsor signs the
Merrill Lynch record keeping service
agreement.
If a Retirement Plan's records are maintained on a daily valuation basis by
Merrill Lynch or an independent record keeper under a contract or alliance
arrangement with Merrill Lynch, and if on the date the plan sponsor signs the
Merrill Lynch record keeping service agreement the Retirement Plan has less than
$3 million in assets, excluding money market funds, invested in Applicable
Investments, then the Retirement Plan may purchase only Class B shares of one or
more of the Oppenheimer funds. Otherwise, the Retirement Plan will be permitted
to purchase Class A shares of one or more of the Oppenheimer funds. Any of those
Retirement Plans that currently invest in Class B shares of the Fund will have
their Class B shares be converted to Class A shares of the Fund once the Plan's
Applicable Investments have reached $5 million.
Any redemptions of shares of the Fund held by Retirement Plans whose records
are maintained on a daily valuation basis by Merrill Lynch or an independent
record keeper under a contract with Merrill Lynch that are currently invested in
Class B shares of the Fund shall not be subject to the Class B CDSC.
How to Sell Shares
Information on how to sell shares of the Fund is stated in the
Prospectus. The information below
supplements the terms and conditions for redemptions set forth in the
Prospectus.
o Involuntary Redemptions. The Fund's Board of Trustees has the right
to cause the involuntary redemption of the shares held in any account if the
aggregate net asset value of those shares
is less than $500 or such lesser amount as the Board may fix. The Board of
Trustees will not cause the involuntary redemption of shares in an account if
the aggregate net asset value of the shares has fallen below the stated minimum
solely as a result of market fluctuations. Should the Board elect to exercise
this right, it may also fix, in accordance with the Investment Company Act, the
requirements for any notice to be given to the shareholders in question (not
less than 30 days), or the Board may set requirements for granting permission to
the Shareholder to increase the investment, and set other terms and conditions
so that the shares would not be involuntarily redeemed.
o Payments "In Kind". The Prospectus states that payment for shares tendered
for redemption is ordinarily made in cash. However, the Board of Trustees of the
Fund may determine that it would be detrimental to the best interests of the
remaining shareholders of the Fund to make payment of a redemption order wholly
or partly in cash. In that case the Fund may pay the redemption proceeds in
whole or in part by a distribution "in kind" of securities from the portfolio of
the Fund, in lieu of cash, in conformity with applicable rules of the Securities
and Exchange Commission. The Fund has elected to be governed by Rule 18f-1 under
the Investment Company Act, pursuant to which the Fund is obligated to redeem
shares solely in cash up to the lesser of $250,000 or 1% of the net assets of
the Fund during any 90-day period for any one shareholder. If shares are
redeemed in kind, the redeeming shareholder might incur brokerage or other costs
in selling the securities for cash. The method of valuing securities used to
make redemptions in kind will be the same as the method the Fund uses to value
its portfolio securities described above under the "Determination of Net Asset
Values Per Share" and that valuation will be made as of the time the redemption
price is determined.
Reinvestment Privilege. Within six months of a redemption, a shareholder may
reinvest all or part of the redemption proceeds of (i) Class A shares that
you purchased subject to an initial sales charge, or
(ii) Class B shares on which you paid a contingent deferred sales charge when
you redeemed them, without sales charge. This privilege does not apply to Class
C or Class Y shares. The reinvestment may be made without sales charge only in
Class A shares of the Fund or any of the other Oppenheimer funds into which
shares of the Fund are exchangeable as described below, at the net asset value
next computed after the Transfer Agent receives the reinvestment order. The
shareholder must ask the Distributor for that privilege at the time of
reinvestment. Any capital gain that was realized when the shares were redeemed
is taxable, and reinvestment will not alter any capital gains tax payable on
that gain. If there has been a capital loss on the redemption, some or all of
the loss may not be tax deductible, depending on the timing and amount of the
reinvestment. Under the Internal Revenue Code, if the redemption proceeds of
Fund shares on which a sales charge was paid are reinvested in shares of the
Fund or another of the Oppenheimer funds within 90 days of payment of the sales
charge, the shareholder's basis in the shares of the Fund that were redeemed may
not include the amount of the sales charge paid. That would reduce the loss or
increase the gain recognized from the redemption. However, in that case the
sales charge would be added to the basis of the shares acquired by the
reinvestment of the redemption proceeds. The Fund may amend, suspend or cease
offering this reinvestment privilege at any time as to shares redeemed after the
date of such amendment, suspension or cessation.
Transfers of Shares. Shares are not subject to the payment of a contingent
deferred sales charge of either class at the time of transfer to the name of
another person or entity (whether the transfer occurs by absolute assignment,
gift or bequest, not involving, directly or indirectly, a public sale). The
transferred shares will remain subject to the contingent deferred sales charge,
calculated as if the transferee shareholder had acquired the transferred shares
in the same manner and at the same time as the transferring shareholder. If less
than all shares held in an account are transferred, and some but not all shares
in the account would be subject to a contingent deferred sales charge if
redeemed at the time of transfer, the priorities described in the Prospectus
under "How to Buy Shares" for the imposition of the Class B or the Class C
contingent deferred sales charge will be followed in determining the order in
which shares are transferred.
Distributions From Retirement Plans. Requests for distributions from
OppenheimerFunds-sponsored IRAs, 403(b)(7) custodial plans, 401(k) plans, or
pension or profit-sharing plans should be addressed to "Trustee, Oppenheimer
funds Retirement Plans," c/o the Transfer Agent at its address listed in "How To
Sell Shares" in the Prospectus or on the back cover of this Statement of
Additional Information. The request must: (i) state the reason for the
distribution; (ii) state the owner's awareness of tax penalties if the
distribution is premature; and (iii) conform to the requirements of the plan and
the Fund's other redemption requirements. Participants (other than self-employed
persons maintaining a plan account in their own name) in
OppenheimerFunds-sponsored prototype pension, profit-sharing plans or 401(k)
plans may not directly redeem or exchange shares held for their accounts under
those plans. The employer or plan administrator must sign the request.
Distributions from pension and profit sharing plans are subject to special
requirements under the Internal Revenue Code and certain documents (available
from the Transfer Agent) must be completed before the distribution may be made.
Distributions from retirement plans are subject to withholding requirements
under the Internal Revenue Code, and IRS Form W-4P (available from the Transfer
Agent) must be submitted to the Transfer Agent with the distribution request, or
the distribution may be delayed. Unless the shareholder has provided the
Transfer Agent with a certified tax identification number, the Internal Revenue
Code requires that tax be withheld from any distribution even if the shareholder
elects not to have tax withheld. The Fund, the Manager, the Distributor, the
Trustee and the Transfer Agent assume no responsibility to determine whether a
distribution satisfies the conditions of applicable tax laws and will not be
responsible for any tax penalties assessed in connection with a distribution.
Special Arrangements for Repurchase of Shares from Dealers and Brokers. The
Distributor is the Fund's agent to repurchase its shares from authorized dealers
or brokers on behalf of their customers. The shareholder should contact the
broker or dealer to arrange this type of redemption The repurchase price per
share will be the net asset value next computed after the Distributor receives
the order placed by the dealer or broker, except that if the Distributor
receives a repurchase order from a dealer or broker after the close of The New
York Stock Exchange on a regular business day, it will be processed at that
day's net asset value if the order was received by the dealer or broker from its
customers prior to the time the Exchange closed (normally that is 4:00 P.M., but
may be earlier some days) and the order was transmitted to and received by the
Distributor prior to its close of business that day (normally 5:00 P.M.).
Ordinarily, for accounts redeemed by a broker-dealer under this procedure,
payment will be made within three business days after the shares have been
redeemed upon the Distributor's receipt of the required redemption documents in
proper form, with the signature(s) of the registered owners guaranteed on the
redemption document as described in the Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning shares of the Fund
valued at $5,000 or more 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 three business days
prior to the date requested by the shareholder for receipt of the payment.
Automatic withdrawals of up to $1,500 per month may be requested by telephone if
payments are to be made by check payable to all shareholders of record and sent
to the address of record for the account (and if the address has not been
changed within the prior 30 days). Required minimum distributions from
OppenheimerFunds retirement plans may not be arranged on this basis. Payments
are normally made by check, but shareholders having AccountLink privileges (see
"How To Buy Shares") may arrange to have Automatic Withdrawal Plan payments
transferred to the bank account designated on the OppenheimerFunds New Account
Application or signature-guaranteed instructions. Shares are normally redeemed
pursuant to an Automatic Withdrawal Plan three business days before the date you
select in the Account Application. If a contingent deferred sales charge applies
to the redemption, the amount of the check or payment will be reduced
accordingly. The Fund cannot guarantee receipt of a payment on the date
requested and reserves the right to amend, suspend or discontinue offering such
plans at any time without prior notice. Because of the sales charge assessed on
Class A share purchases, shareholders should not make regular additional Class A
share purchases while participating in an Automatic Withdrawal Plan. Class B and
Class C shareholders should not establish withdrawal plans, because of the
imposition of the contingent deferred sales charge on such withdrawals (except
where the Class B or the Class C contingent deferred sales charge is waived as
described in the Prospectus in "Waivers of Class B and Class C Sales Charges").
By requesting an Automatic Withdrawal or Exchange Plan, the shareholder
agrees to the terms and conditions applicable to such plans, as stated below as
well as in the Prospectus. These provisions may be amended from time to time by
the Fund and/or the Distributor. When adopted, such amendments will
automatically apply to existing Plans.
o Automatic Exchange Plans. Shareholders can authorize the Transfer Agent
(on the OppenheimerFunds Application or signature-guaranteed instructions) to
exchange a pre-determined amount of shares of the Fund for shares (of the same
class) of other Oppenheimer funds automatically on a monthly, quarterly,
semi-annual or annual basis under an Automatic Exchange Plan. The minimum amount
that may be exchanged to each other fund account is $25. Exchanges made under
these plans are subject to the restrictions that apply to exchanges as set forth
in "How to Exchange Shares" in the Prospectus and below in this Statement of
Additional Information.
o Automatic Withdrawal Plans. Fund shares will be redeemed as necessary to
meet withdrawal payments. Shares acquired without a sales charge will be
redeemed first and shares acquired with reinvested dividends and capital gains
distributions will be redeemed next, followed by shares acquired with a sales
charge, to the extent necessary to make withdrawal payments. Depending upon the
amount withdrawn, the investor's principal may be depleted. Payments made under
withdrawal plans should not be considered as a yield or income on your
investment. It may not be desirable to purchase additional Class A shares while
making automatic withdrawals because of the sales charges that apply to
purchases when made. Accordingly, a shareholder normally may not maintain an
Automatic Withdrawal Plan while simultaneously making regular purchases of Class
A shares.
The Transfer Agent will administer the investor's Automatic Withdrawal Plan
(the "Plan") as agent for the investor (the "Planholder") who executed the Plan
authorization and application submitted to the Transfer Agent. Neither the Fund
nor the Transfer Agent shall incur any liability to the Planholder for any
action taken or omitted by the Transfer Agent in good faith to administer the
Plan. Certificates will not be issued for shares of the Fund purchased for and
held under the Plan, but the Transfer Agent will credit all such shares to the
account of the Planholder on the records of the Fund. Any share certificates
held by a 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.
For accounts subject to Automatic Withdrawal Plans, distributions of capital
gains must be reinvested in shares of the Fund, which will be done at net asset
value without a sales charge. Dividends on shares held in the account may be
paid in cash or reinvested.
Redemptions of shares needed to make withdrawal payments will be made at the
net asset value per share determined on the redemption date. Checks or
AccountLink payments of the proceeds of Plan withdrawals will normally be
transmitted three business days prior to the date selected for receipt of the
payment (receipt of payment on the date selected cannot be guaranteed),
according to the choice specified in writing by the Planholder.
The amount and the interval of disbursement payments and the address to
which checks are to be mailed or AccountLink payments are to be sent may be
changed at any time by the Planholder by writing to the Transfer Agent. The
Planholder should allow at least two weeks' time in mailing such notification
for the requested change to be put in effect. The Planholder may, at any time,
instruct the Transfer Agent by written notice (in proper form in accordance with
the requirements of the then-current Prospectus of the Fund) to redeem all, or
any part of, the shares held under the Plan. In that case, the Transfer Agent
will redeem the number of shares requested at the net asset value per share in
effect in accordance with the Fund's usual redemption procedures and will mail a
check for the proceeds to the Planholder.
The Plan may be terminated at any time by the Planholder by writing to the
Transfer Agent. A Plan may also be terminated at any time by the Transfer Agent
upon receiving directions to that effect from the Fund. The Transfer Agent will
also terminate a Plan upon receipt of evidence satisfactory to it of the death
or legal incapacity of the Planholder. Upon termination of a Plan by the
Transfer Agent or the Fund, shares that have not been redeemed from the account
will be held in uncertificated form 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 or his or her
executor or guardian, or other authorized person.
To use Class A shares held under the Plan as collateral for a debt, the
Planholder may request issuance of a portion of the Class A shares in
certificated form. Share certificates are not issued for Class B shares or Class
C shares. Upon written request from the Planholder, the Transfer Agent will
determine the number of Class A shares for which a certificate may be issued
without causing the withdrawal checks to stop because of exhaustion of
uncertificated shares needed to continue payments. However, should such
uncertificated shares become exhausted, Plan withdrawals will terminate.
If the Transfer Agent ceases to act as transfer agent for the Fund, the
Planholder will be deemed to have appointed any successor transfer agent to act
as agent in administering the Plan.
How To Exchange Shares
As stated in the Prospectus, shares of a particular class of Oppenheimer
funds having more than one class of shares may be exchanged only for shares of
the same class of other Oppenheimer funds. At present Rochester Fund Municipals
and Limited Term New York Municipal Fund are not "Eligible Funds" for purposes
of the exchange privilege in the Prospectus. Shares of the Oppenheimer funds
that have a single class without a class designation are deemed "Class A" shares
for this purpose. All Oppenheimer funds offer Class A, Class B and Class C
shares except Oppenheimer Money Market Fund, Inc., Centennial Money Market
Trust, Centennial Tax-Exempt Trust, Centennial Government Trust, Centennial New
York Tax-Exempt Trust, Centennial California Tax-Exempt Trust and Centennial
America Fund, L.P., which offer only Class A shares, and Oppenheimer Main Street
California Tax- Exempt Fund which only offers Class A and Class B shares (Class
B and Class C shares of Oppenheimer Cash Reserves are generally only available
by exchange from the same class of other Oppenheimer funds or thorough
OppenheimerFunds sponsored 401(k) plans). A current list showing which funds
offer which class can be obtained by calling the Distributor at 1-800-525-7048.
For accounts established on or before March 8, 1996 holding Class M shares
of Oppenheimer Bond Fund for Growth, Class M shares can be exchanged only for
Class A shares of other Oppenheimer funds. Exchanges to Class M shares of
Oppenheimer Bond Fund for Growth are permitted from Class A shares of
Oppenheimer Money Market Fund, Inc. or Oppenheimer Cash Reserves that were
acquired by exchange from Class M shares. Otherwise no exchanges of any class of
any Oppenheimer fund into Class M shares are permitted.
Class A shares of Oppenheimer funds may be exchanged at net asset value for
shares of any Money Market Fund. Shares of any Money Market Fund purchased
without a sales charge may be exchanged for shares of Oppenheimer funds offered
with a sales charge upon payment of the sales charge (or, if applicable, may be
used to purchase shares of Oppenheimer funds subject to a contingent deferred
sales charge). However, shares of Oppenheimer Money Market Fund, Inc., purchased
with the redemption proceeds of shares of other mutual funds (other than funds
managed by the Manager or its subsidiaries) redeemed within the 30 days prior to
that purchase may subsequently be exchanged for shares of other Oppenheimer
funds without being subject to an initial or contingent deferred sales charge,
whichever is applicable. To qualify for this privilege, the investor or the
investor's dealer must notify the Distributor of eligibility for this privilege
at the time the shares of Oppenheimer Money Market Fund, Inc., are purchased,
and, if requested, must supply proof of entitlement to this privilege.
Shares of this Fund acquired by reinvestment of dividends or distributions
from any other of the Oppenheimer funds (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
of the Oppenheimer funds. No contingent deferred sales charge is imposed on
exchanges of shares of any class purchased subject to a contingent deferred
sales charge. However, when Class A shares acquired by exchange of Class A
shares of other Oppenheimer funds purchased subject to a Class A contingent
deferred sales charge are redeemed within 12 months (18 months for shares
purchased prior to May 1, 1997) of the end of the calendar month of the initial
purchase of the exchanged Class A shares, the Class A contingent deferred sales
charge is imposed on the redeemed shares (see "Class A Contingent Deferred Sales
Charge" in the Prospectus). The Class B contingent deferred sales charge is
imposed on Class B shares acquired by exchange if they are redeemed within 6
years of the initial purchase of the exchanged Class B shares. The Class C
contingent deferred sales charge is imposed on Class C shares acquired by
exchange if they are redeemed within 12 months of the initial purchase of the
exchanged Class C shares.
When Class B shares or Class C shares are redeemed to effect an exchange,
the priorities described in "How To Buy Shares" in the Prospectus for the
imposition of the Class B or the Class C contingent deferred sales charge will
be followed in determining the order in which the shares are exchanged.
Shareholders should take into account the effect of any exchange on the
applicability and rate of any contingent deferred sales charge that might be
imposed in the subsequent redemption of remaining shares. Shareholders owning
shares of more than one class must specify whether they intend to exchange Class
A, Class B or Class C shares.
The Fund reserves the right to reject telephone or written exchange requests
submitted in bulk by anyone on behalf of more than one account. The Fund may
accept requests for exchanges of up to 50 accounts per day from representatives
of authorized dealers that qualify for this privilege. In connection with any
exchange request, the number of shares exchanged may be less than the number
requested if the exchange or the number requested would include shares subject
to a restriction cited in the Prospectus or this Statement of Additional
Information or would include shares covered by a share certificate that is not
tendered with the request. In those cases, only the shares available for
exchange without restriction will be exchanged.
When exchanging shares by telephone, a shareholder must either have an
existing account in, or obtain and acknowledge receipt of a prospectus of, the
fund to which the exchange is to be made. For full or partial exchanges of an
account made by telephone, any special account features such as Asset Builder
Plans, Automatic Withdrawal Plans, and retirement plan contributions will be
switched to the new account unless the Transfer Agent is instructed otherwise.
If all telephone lines are busy (which might occur, for example, during periods
of substantial market fluctuations), shareholders might not be able to request
exchanges by telephone and would have to submit written exchange requests.
Shares to be exchanged are redeemed on the regular business day the Transfer
Agent receives an exchange request in proper form (the "Redemption Date").
Normally, shares of the fund to be acquired are purchased on the Redemption
Date, but such purchases may be delayed by either fund up to five business days
if it determines that it would be disadvantaged by an immediate transfer of the
redemption proceeds. The Fund reserves the right, in its discretion, to refuse
any exchange request that may disadvantage it (for example, if the receipt of
multiple exchange requests from a dealer might require the disposition of
portfolio securities at a time or at a price that might be disadvantageous to
the Fund).
The different Oppenheimer funds available for exchange have different
investment objectives, policies and risks, and a shareholder should assure that
the Fund selected is appropriate for his or her investment and should be aware
of the tax consequences of an exchange. For federal income tax purposes, an
exchange transaction is treated as a redemption of shares of one fund and a
purchase of shares of another. "Reinvestment Privilege," above, discusses some
of the tax consequences of reinvestment of redemption proceeds in such cases.
The Fund, the Distributor, and the Transfer Agent are unable to provide
investment, tax or legal advice to a shareholder in connection with an exchange
request or any other investment transaction.
Dividends, Capital Gains and Taxes
Tax Status of the Fund's Dividends and Distributions. The Federal tax treatment
of the Fund's dividends and capital gains distributions is explained in the
Prospectus under the caption "Dividends, Capital Gains and Taxes." Special
provisions of the Internal Revenue Code govern the eligibility of the Fund's
dividends for the dividends-received deduction for corporate shareholders.
Long-term capital gains distributions are not eligible for the deduction.
Because of the Fund's emphasis on foreign securities, it is unlikely that the
Fund's dividends will qualify for this deduction.
Under the Internal Revenue Code, by December 31 each year the Fund 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 Fund must pay an excise tax on the amounts not distributed. While it is
presently anticipated that the Fund will meet those requirements, the Fund's
Board of Trustees and the Manager might determine in a particular year that it
would be in the best interest of shareholders for the Fund not to make such
distributions at the required levels and to pay the excise tax on the
undistributed amounts. That would reduce the amount of income or capital gains
available for distribution to shareholders.
If the Fund has more than 50% of its total assets invested in foreign
securities at the end of its fiscal year, it may elect the application of
Section 853 of the Internal Revenue Code to permit shareholders to take a credit
(or, at their option, a deduction) for foreign taxes paid by the Fund. Under
Section 853, shareholders would be entitled to treat the foreign taxes withheld
from interest and dividends paid to the Fund from its foreign investments as a
credit on their federal income taxes. As an alternative, shareholders could, if
to their advantage, treat the foreign tax withheld as a deduction from gross
income in computing taxable income rather than as a tax credit. In substance,
the Fund's election would enable shareholders to benefit from the same foreign
tax credit or deduction that would be received if they had been the record
owners of the Fund's foreign securities and had paid foreign taxes on the income
received.
If the Fund qualifies as a "regulated investment company" under the
Internal Revenue Code, it will not be liable for Federal income taxes on amounts
paid by it as dividends and distributions. The Fund intends to qualify in the
current and future fiscal years, but reserves the right not to do so. The
Internal Revenue Code contains a number of complex tests relating to such
qualification, and a Fund might not meet those tests in any particular year.
Dividends, distributions and the proceeds of the redemption of Fund shares
represented by checks returned to the Transfer Agent by the Postal Service as
undeliverable will be invested in shares of Oppenheimer Money Market Fund, Inc.,
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.
Dividend Reinvestment in Another Fund. Shareholders of the Fund may elect to
reinvest all dividends and/or capital gains distributions in shares of the same
class of any of the other Oppenheimer funds listed in "Reduced Sales Charges,"
above, at net asset value without sales charge. To elect this option, a
shareholder must notify the Transfer Agent in writing and either have an
existing account in the fund selected for reinvestment or must obtain a
prospectus for that fund and an application from the Distributor 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.
Dividends and/or distributions from shares of other Oppenheimer funds may
be invested in shares of this Fund on the same basis.
Additional Information About the Fund
The Custodian. The Bank of New York is the Custodian of the Fund's assets. The
Custodian's responsibilities include safeguarding and controlling the Fund's
portfolio securities and handling the delivery of such securities to and from
the Fund. The Manager has represented to the Fund that the banking relationships
between the Manager and the Custodian have been and will continue to be
unrelated to and unaffected by the relationship between the Fund and the
Custodian. It will be the practice of the Fund to deal with the Custodian in a
manner uninfluenced by any banking relationship the Custodian may have with the
Manager and its affiliates. The Fund's cash balances with the Custodian in
excess of $100,000 are not protected by Federal deposit insurance. Such
uninsured balances at times may be substantial.
Independent Auditors. The independent auditors of the Fund audit the Fund's
financial statements and perform other related audit services. They also act as
auditors for certain other funds advised by the Manager.
<PAGE>
INDEPENDENT AUDITORS' REPORT
================================================================================
The Board of Trustees and Shareholders of
Oppenheimer International Growth Fund:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer International Growth Fund as of November 30, 1997,
and the related statement of operations for the year then ended, the statement
of changes in net assets for the year then ended and the period from March 25,
1996 (commencement of operations) to November 30, 1996, and the financial
highlights for the year ended November 30, 1997 and the period ended November
30, 1996. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
November 30, 1997 by correspondence with the custodian and brokers; and where
confirmations were not received from brokers, we performed other auditing
procedures. 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, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Oppenheimer International Growth Fund as of November 30, 1997, the
results of its operations for the year then ended, the changes in its net assets
for the year then ended and the period from March 25, 1996 (commencement of
operations) to November 30, 1996, and the financial highlights for the year
ended November 30, 1997 and the period ended November 30, 1996, in conformity
with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
- ------------------------------
KPMG PEAT MARWICK LLP
Denver, Colorado
December 19, 1997
<PAGE>
STATEMENT OF INVESTMENTS November 30, 1997
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
=======================================================================================================================
<S> <C> <C>
COMMON STOCKS--87.4%
- -----------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS--9.8%
- -----------------------------------------------------------------------------------------------------------------------
AUTOS & HOUSING--1.7%
IRSA Inversiones y Representaciones SA 400,000 $
1,300,000
- -----------------------------------------------------------------------------------------------------------------------
Porsche AG, Preference 1,700 2,640,846
-----------
3,940,846
- -----------------------------------------------------------------------------------------------------------------------
LEISURE & ENTERTAINMENT--5.2%
EMI Group plc 250,000 1,902,462
- -----------------------------------------------------------------------------------------------------------------------
Nintendo Co. Ltd. 100,000 10,342,801
-----------
12,245,263
- -----------------------------------------------------------------------------------------------------------------------
MEDIA--2.9%
Grupo Televisa SA, Sponsored GDR(1)(2) 60,000
2,220,000
- -----------------------------------------------------------------------------------------------------------------------
Lusomundo SGPS SA(3) 441,000 3,597,302
- -----------------------------------------------------------------------------------------------------------------------
Roto Smeets de Boer 30,000 1,110,691
-----------
6,927,993
- -----------------------------------------------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS--12.5%
- -----------------------------------------------------------------------------------------------------------------------
BEVERAGES--1.8%
Cadbury Schweppes plc 400,000 4,155,433
- -----------------------------------------------------------------------------------------------------------------------
HEALTHCARE/DRUGS--4.7%
Biocompatibles International plc(1) 350,818 3,360,053
- -----------------------------------------------------------------------------------------------------------------------
Glaxo Wellcome plc 126,188 2,771,039
- -----------------------------------------------------------------------------------------------------------------------
Novartis AG 1,500 2,396,738
- -----------------------------------------------------------------------------------------------------------------------
Oxford Molecular Group plc(1) 214,285 742,039
- -----------------------------------------------------------------------------------------------------------------------
Torii Pharmaceutical Co. Ltd. 101,000 1,867,659
-----------
11,137,528
- -----------------------------------------------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES--3.6%
Nichii Gakkan Co. 75,000 2,438,785
- -----------------------------------------------------------------------------------------------------------------------
Novogen Ltd.(1) 1,348,175 2,001,767
- -----------------------------------------------------------------------------------------------------------------------
Ortivus AB, A Shares(1) 13,700 470,213
- -----------------------------------------------------------------------------------------------------------------------
Ortivus AB, B Shares(1) 96,750 3,471,032
-----------
8,381,797
- -----------------------------------------------------------------------------------------------------------------------
HOUSEHOLD GOODS--2.4%
Wella AG, Preference 8,000 5,737,518
- -----------------------------------------------------------------------------------------------------------------------
ENERGY--10.7%
- -----------------------------------------------------------------------------------------------------------------------
ENERGY SERVICES & PRODUCERS--8.5%
Cie Generale de Geophysique SA(1) 35,000
3,794,366
- -----------------------------------------------------------------------------------------------------------------------
Cie Generale de Geophysique SA, Sponsored ADR(1) 10,200
220,575
- -----------------------------------------------------------------------------------------------------------------------
Coflexip SA, Sponsored ADR 100,000 4,975,000
</TABLE>
11 Oppenheimer International Growth Fund
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
ENERGY SERVICES & PRODUCERS (CONTINUED)
Expro International Group plc 600,000 $ 5,964,567
- ---------------------------------------------------------------------------------------------------
Fred. Olsen Energy ASA(1) 30,000 638,229
- ---------------------------------------------------------------------------------------------------
Smedvig AS, Series B 90,000 2,290,117
- ---------------------------------------------------------------------------------------------------
Transocean Offshore, Inc. 44,600 2,115,712
------------
19,998,566
- ---------------------------------------------------------------------------------------------------
OIL-INTEGRATED--2.2%
Novus Petroleum Ltd. 1,005,333 3,061,099
- ---------------------------------------------------------------------------------------------------
Petroleo Brasileiro SA, Preference 10,295,000 2,110,830
------------
5,171,929
- ---------------------------------------------------------------------------------------------------
FINANCIAL--24.1%
- ---------------------------------------------------------------------------------------------------
BANKS--13.7%
Banco de Galicia y Buenos Aires SA de CV, Sponsored ADR 61,700 1,449,950
- ---------------------------------------------------------------------------------------------------
Cie Financiere de Paribas, Series A 75,000 5,418,405
- ---------------------------------------------------------------------------------------------------
Commerzbank AG 60,000 2,092,040
- ---------------------------------------------------------------------------------------------------
Credit Suisse Group 50,000 7,312,259
- ---------------------------------------------------------------------------------------------------
Credito Italiano 2,000,000 5,474,378
- ---------------------------------------------------------------------------------------------------
Liechtenstein Global Trust AG 5,000 3,121,300
- ---------------------------------------------------------------------------------------------------
Societe Generale 40,785 5,361,093
- ---------------------------------------------------------------------------------------------------
Unibanco-Uniao de Bancos Brasileiros SA, Sponsored GDR
Representing 500 Units of one Preferred Share of Unibanco
and one Preferred Share of Unibanco Holdings SA(1) 40,000 1,150,000
- ---------------------------------------------------------------------------------------------------
Unibanco-Uniao de Bancos Brasileiros SA, Units (each unit consists of one
preferred share of Unibanco and one preferred
b share of Unibanco Holdings)(1)(4) 15,000,000 946,517
------------
32,325,942
- ---------------------------------------------------------------------------------------------------
INSURANCE--10.4%
Istituto Nazionale delle Assicurazioni 3,000,000 5,225,543
- ---------------------------------------------------------------------------------------------------
Ockham Holdings plc(3) 2,700,000 3,899,520
- ---------------------------------------------------------------------------------------------------
Reinsurance Australia Corp. Ltd. 356,188 862,760
- ---------------------------------------------------------------------------------------------------
Schweizerische Lebensversicherungs & Rentenanstalt 7,500 4,987,066
- ---------------------------------------------------------------------------------------------------
Skandia Forsakrings AB 180,000 9,488,439
------------
24,463,328
- ---------------------------------------------------------------------------------------------------
INDUSTRIAL--15.1%
- ---------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.8%
Murata Manufacturing. Co. Ltd. 60,000 1,800,588
- ---------------------------------------------------------------------------------------------------
INDUSTRIAL SERVICES--6.6%
BAU Holding AG 300 17,158
- ---------------------------------------------------------------------------------------------------
BAU Holdings AF, Preference 51,000 2,341,689
- ---------------------------------------------------------------------------------------------------
Boskalis Westminster 251,287 4,398,895
</TABLE>
12 Oppenheimer International Growth Fund
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------
<S> <C> <C>
INDUSTRIAL SERVICES (CONTINUED)
Cia de Saneamento Basico do Estado de San Paulo 6,050,000 $ 1,407,066
- ----------------------------------------------------------------------------------------
Fugro NV 77,419 2,648,200
- ----------------------------------------------------------------------------------------
ICTS International NV(1) 285,000 2,778,750
- ----------------------------------------------------------------------------------------
MRC Allied Industries, Inc.(1) 10,000,000 459,374
- ----------------------------------------------------------------------------------------
Swisslog Holding AG, Registered(1) 20,000 1,536,100
-------------
15,587,232
- ----------------------------------------------------------------------------------------
MANUFACTURING--2.2%
Powerscreen International plc 300,449 3,342,010
- ----------------------------------------------------------------------------------------
Stork NV 50,394 1,845,460
-------------
5,187,470
- ----------------------------------------------------------------------------------------
TRANSPORTATION--5.5%
Frontline Ltd.(1) 750,000 3,629,147
- ----------------------------------------------------------------------------------------
Internatio-Muller NV 50,100 1,539,832
- ----------------------------------------------------------------------------------------
MIF Ltd.(1)(5) 85,000 1,359,192
- ----------------------------------------------------------------------------------------
Smit Internationale NV, CVA 225,000 6,394,775
-------------
12,922,946
- ----------------------------------------------------------------------------------------
TECHNOLOGY--13.5%
- ----------------------------------------------------------------------------------------
COMPUTER HARDWARE--2.0%
Canon, Inc. 120,000 2,895,984
- ----------------------------------------------------------------------------------------
Eidos plc(1) 100,000 1,106,426
- ----------------------------------------------------------------------------------------
Imagineer Co. Ltd. 75,000 705,191
-------------
4,707,601
- ----------------------------------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES--8.4%
Cap Gemini SA 65,000 5,538,249
- ----------------------------------------------------------------------------------------
JBA Holdings plc 350,000 5,811,695
- ----------------------------------------------------------------------------------------
Misys plc 178,841 5,045,042
- ----------------------------------------------------------------------------------------
SAP AG, Preference 6,000 1,847,118
- ----------------------------------------------------------------------------------------
Versant Object Technology Corp.(1) 95,000 1,419,062
-------------
19,661,166
- ----------------------------------------------------------------------------------------
ELECTRONICS--1.5%
Sony Corp. 40,000 3,416,259
- ----------------------------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY--1.6%
Ordina Beheer NV(1) 130,000 1,961,819
- ----------------------------------------------------------------------------------------
Tandberg Television ASA(1) 177,000 1,772,025
-------------
3,733,844
</TABLE>
13 Oppenheimer International Growth Fund
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
UTILITIES--1.7%
- -------------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.4%
Cia Paranaense Energia, Sponsored ADR, Preference B Shares 60,000
$ 903,750
- -------------------------------------------------------------------------------------------------------------------------
TELEPHONE UTILITIES--1.3%
Telecomunicacoes Brasileiras SA, Sponsored ADR 30,000
3,131,250
------------
Total Common Stocks (Cost $193,702,546)
205,538,249
<CAPTION>
UNITS
=========================================================================================================================
<S> <C> <C>
RIGHTS, WARRANTS AND CERTIFICATES--0.3%
- -------------------------------------------------------------------------------------------------------------------------
Cia de Saneamento Basico do Estado de San Paulo Rts., Exp. 12/97 763
--
- -------------------------------------------------------------------------------------------------------------------------
Novogen Ltd. Wts., Exp. 12/98 654,300 738,700
------------
Total Rights, Warrants and Certificates (Cost $753,619)
738,700
<CAPTION>
FACE
AMOUNT
=========================================================================================================================
<S> <C> <C>
REPURCHASE AGREEMENTS--11.2%
- -------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 5.70%, dated 11/29/97,
to be repurchased at $26,412,540 on 12/1/97, collateralized by U.S. Treasury
Bonds, 11.25%, 2/15/15, with a value of $5,945,260, U.S. Treasury Nts.,
6.125%-7.50%, 11/15/01-8/15/07, with a value of $15,150,076, and U.S. Treasury
Bills maturing 5/28/99,
with a value of $5,866,582 (Cost $26,400,000) $ 26,400,000
26,400,000
- -------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $220,856,165)
98.9% 232,676,949
- -------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.1
2,515,556
------------ ------------
NET ASSETS 100.0% $235,192,505
============ ============
</TABLE>
14 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Distribution of investments by country of issue, as a percentage of total
investments at value, is as follows:
<TABLE>
<CAPTION>
COUNTRY MARKET VALUE PERCENT
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Great Britain $ 38,100,287 16.4%
- ---------------------------------------------------------------------------------------------
United States 29,934,775 12.9
- ---------------------------------------------------------------------------------------------
France 25,307,688 10.9
- ---------------------------------------------------------------------------------------------
Japan 23,467,267 10.1
- ---------------------------------------------------------------------------------------------
The Netherlands 22,678,422 9.7
- ---------------------------------------------------------------------------------------------
Switzerland 19,353,463 8.3
- ---------------------------------------------------------------------------------------------
Sweden 13,429,683 5.8
- ---------------------------------------------------------------------------------------------
Germany 12,317,521 5.3
- ---------------------------------------------------------------------------------------------
Italy 10,699,921 4.6
- ---------------------------------------------------------------------------------------------
Norway 9,688,710 4.2
- ---------------------------------------------------------------------------------------------
Brazil 9,649,413 4.1
- ---------------------------------------------------------------------------------------------
Australia 6,664,326 2.9
- ---------------------------------------------------------------------------------------------
Portugal 3,597,302 1.5
- ---------------------------------------------------------------------------------------------
Argentina 2,749,950 1.2
- ---------------------------------------------------------------------------------------------
Austria 2,358,847 1.0
- ---------------------------------------------------------------------------------------------
Mexico 2,220,000 0.9
- ---------------------------------------------------------------------------------------------
Philippines 459,374 0.2
------------ -----
Total $232,676,949 100.0%
============ =====
</TABLE>
1. Non-income producing security.
2. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $2,220,000 or 0.94% of the Fund's net
assets as of November 30, 1997.
3. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer, and is or was an affiliate as defined in the
Investment Company Act of 1940, at or during the period ended November 30, 1997.
The aggregate fair value of securities of affiliated companies held by the Fund
as of November 30, 1997, amounts to $7,496,822. Transactions during the period
in which the issuer was an affiliate were as follows:
<TABLE>
<CAPTION>
SHARES GROSS GROSS SHARES
NOVEMBER 30, 1996 ADDITIONS REDUCTIONS
NOVEMBER 30, 1997
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lusomundo SGPS SA 40,000 426,000 25,000 441,000
- --------------------------------------------------------------------------------------------------------
Ockham Holdings plc -- 2,700,000 -- 2,700,000
</TABLE>
4. Units may be comprised of several components, such as debt and equity and/or
warrants to purchase equity at some point in the future. For units which
represent debt securities, face amount disclosed represents total underlying
principal.
5. Identifies issues considered to be illiquid or restricted--See Note 6 of
Notes to Financial Statements.
See accompanying Notes to Financial Statements.
15 Oppenheimer International Growth Fund
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES November 30, 1997
<TABLE>
=============================================================================================================
<S> <C>
ASSETS
Investments, at value (including repurchase agreements of $26,400,000)--see
accompanying statement:
Unaffiliated companies (cost $213,547,431) $225,180,127
Affiliated companies (cost $7,308,734) 7,496,822
- -------------------------------------------------------------------------------------------------------------
Unrealized appreciation on forward foreign currency exchange contracts--Note 5
308,631
- -------------------------------------------------------------------------------------------------------------
Receivables:
Investments sold 6,135,772
Shares of beneficial interest sold 2,148,005
Interest and dividends 225,917
- -------------------------------------------------------------------------------------------------------------
Deferred organization costs--Note 1 12,803
- -------------------------------------------------------------------------------------------------------------
Other 927
------------
Total assets 241,509,004
=============================================================================================================
LIABILITIES
Bank overdraft 577,920
- -------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 5,000,222
Shares of beneficial interest redeemed 224,760
Distribution and service plan fees 91,599
Transfer and shareholder servicing agent fees 66,897
Trustees' fees--Note 1 49,879
Other 305,222
------------
Total liabilities 6,316,499
=============================================================================================================
NET ASSETS $235,192,505
============
=============================================================================================================
COMPOSITION OF NET ASSETS
Paid-in capital $219,677,359
- -------------------------------------------------------------------------------------------------------------
Accumulated net investment loss (40,740)
- -------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions
3,465,952
- -------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and
liabilities denominated in foreign currencies 12,089,934
------------
Net assets $235,192,505
============
</TABLE>
16 Oppenheimer International Growth Fund
<PAGE>
<TABLE>
=================================================================================================================
<S> <C>
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $122,720,086 and 8,542,249 shares of beneficial interest outstanding)
$14.37
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $15.25
- -----------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $90,564,815 and
6,399,267 shares of beneficial interest outstanding) $14.15
- -----------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $21,907,604
and 1,546,171 shares of beneficial interest outstanding) $14.17
</TABLE>
See accompanying Notes to Financial Statements.
17 Oppenheimer International Growth Fund
<PAGE>
STATEMENT OF OPERATIONS For the Year Ended November 30, 1997
<TABLE>
==================================================================================================
<S> <C>
INVESTMENT INCOME
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $46,070) $ 1,198,289
Affiliated companies (net of foreign withholding taxes of $11,459) 64,932
- --------------------------------------------------------------------------------------------------
Interest 468,774
-----------
Total income 1,731,995
==================================================================================================
EXPENSES
Management fees--Note 4 976,002
- --------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 149,393
Class B 453,262
Class C 108,112
- --------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 431,128
- --------------------------------------------------------------------------------------------------
Custodian fees and expenses 206,456
- --------------------------------------------------------------------------------------------------
Shareholder reports 121,085
- --------------------------------------------------------------------------------------------------
Registration and filing fees 57,643
- --------------------------------------------------------------------------------------------------
Trustees' fees and expenses--Note 1 50,597
- --------------------------------------------------------------------------------------------------
Legal and auditing fees 40,364
- --------------------------------------------------------------------------------------------------
Other 23,974
-----------
Total expenses 2,618,016
==================================================================================================
NET INVESTMENT LOSS (886,021)
==================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on:
Investments:
Unaffiliated companies 7,134,528
Affiliated companies (32,323)
Foreign currency transactions (2,765,883)
-----------
Net realized gain 4,336,322
- --------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 11,918,884
Translation of assets and liabilities denominated in foreign currencies (2,378,439)
-----------
Net change 9,540,445
-----------
Net realized and unrealized gain 13,876,767
==================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
$12,990,746
===========
</TABLE>
See accompanying Notes to Financial Statements.
18 Oppenheimer International Growth Fund
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1997 1996(1)
===================================================================================================================
<S> <C> <C>
OPERATIONS
Net investment loss $ (886,021) $ (61,280)
- -------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 4,336,322 (21,004)
- -------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 9,540,445
2,549,489
------------ -----------
Net increase in net assets resulting from operations 12,990,746
2,467,205
===================================================================================================================
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from beneficial
interest transactions--Note 2:
Class A 98,104,269 15,320,568
Class B 77,610,892 7,990,083
Class C 18,746,638 1,962,104
===================================================================================================================
NET ASSETS
Total increase 207,452,545 27,739,960
- -------------------------------------------------------------------------------------------------------------------
Beginning of period 27,739,960 --
------------ -----------
End of period (including accumulated net investment
losses of $40,740 and $21,513, respectively) $235,192,505
$27,739,960
============ ===========
</TABLE>
1. For the period from March 25, 1996 (commencement of operations) to November
30, 1996.
See accompanying Notes to Financial Statements.
19 Oppenheimer International Growth Fund
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
------------------------------------
YEAR ENDED NOVEMBER 30,
1997 1996(1)
=========================================================================================
<S> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $11.74 $10.00
- -----------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.05)(2) (.01)
Net realized and unrealized gain 2.68(2) 1.75
------ ------
Total income from investment operations 2.63 1.74
- -----------------------------------------------------------------------------------------
Net asset value, end of period $14.37 $11.74
====== ======
=========================================================================================
TOTAL RETURN, AT NET ASSET VALUE(3) 22.40% 17.40%
=========================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $122,720 $16,918
- -----------------------------------------------------------------------------------------
Average net assets (in thousands) $ 66,156 $ 8,992
- -----------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment loss (0.36)% (0.26)%(4)
Expenses 1.78% 1.88%(4)(5)
- -----------------------------------------------------------------------------------------
Portfolio turnover rate(6) 64.2% 42.6%
Average brokerage commission rate(7) $0.0075 $0.0137
</TABLE>
1. For the period from March 25, 1996 (commencement of operations) to November
30, 1996.
2. Based on average shares outstanding for the period.
3. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or commencement of operations), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
4. Annualized.
5. The expense ratio reflects the effect of expenses paid indirectly by the
Fund.
20 Oppenheimer International Growth Fund
<PAGE>
<TABLE>
<CAPTION>
CLASS B CLASS C
- ------------------------------- -------------------------------
YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30,
1997 1996(1) 1997 1996(1)
================================================================================
<S> <C> <C> <C>
$11.65 $10.00 $11.66 $10.00
- --------------------------------------------------------------------------------
(.12)(2) (.10) (.13)(2) (.09)
2.62(2) 1.75 2.64(2) 1.75
------ ------ ------ ------
2.50 1.65 2.51 1.66
- --------------------------------------------------------------------------------
$14.15 $11.65 $14.17 $11.66
====== ====== ====== ======
================================================================================
21.46% 16.50% 21.53% 16.60%
================================================================================
$90,565 $8,673 $21,908 $2,149
- --------------------------------------------------------------------------------
$45,553 $3,628 $10,864 $ 938
- --------------------------------------------------------------------------------
(1.14)% (1.46)%(4) (1.18)% (1.48)%(4)
2.56% 2.84%(4)(5) 2.55% 2.82%(4)(5)
- --------------------------------------------------------------------------------
64.2% 42.6% 64.2% 42.6%
$0.0075 $0.0137 $0.0075 $0.0137
</TABLE>
6. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended November 30, 1997 were $237,460,822 and $73,217,631, respectively.
7. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period, divided by the total number of related
shares purchased and sold. Generally, non-U.S. commissions are lower than U.S.
commissions when expressed as cents per share but higher when expressed as a
percentage of transactions because of the lower per-share prices of many
non-U.S. securities.
See accompanying Notes to Financial Statements.
21 Oppenheimer International Growth Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer International Growth Fund (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's investment objective is capital
appreciation, primarily through investments in common stocks of foreign
companies. The Fund's investment advisor is OppenheimerFunds, Inc. (the
Manager). The Fund offers Class A, Class B and Class C shares. Class A shares
are sold with a front-end sales charge. Class B and Class C shares may be
subject to a contingent deferred sales charge. All classes of shares have
identical rights to earnings, assets and voting privileges, except that each
class has its own distribution and/or service plan, expenses directly
attributable to that class and exclusive voting rights with respect to matters
affecting that class. Class B shares will automatically convert to Class A
shares six years after the date of purchase. The following is a summary of
significant accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Trustees to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount. Forward foreign currency exchange contracts are valued
based on the closing prices of the forward currency contract rates in the London
foreign exchange markets on a daily basis as provided by a reliable bank or
dealer.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on investments
is separately identified from fluctuations arising from changes in market values
of securities held and reported with all other foreign currency gains and losses
in the Fund's Statement of Operations.
22 Oppenheimer International Growth Fund
<PAGE>
================================================================================
REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES. Income, expenses (other
than those attributable to a specific class) and gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
- --------------------------------------------------------------------------------
TRUSTEES' FEES AND EXPENSES. The Fund has adopted a nonfunded retirement plan
for the Fund's independent trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. During the year ended
November 30, 1997, a provision of $32,791 was made for the Fund's projected
benefit obligations and payments of $1,509 were made to retired trustees,
resulting in an accumulated liability of $40,740 at November 30, 1997.
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
ORGANIZATION COSTS. The Manager advanced $15,000 for organization and start-up
costs of the Fund. Such expenses are being amortized over a five-year period
from the date operations commenced. In the event that all or part of the
Manager's initial investment in shares of the Fund is withdrawn during the
amortization period, the redemption proceeds will be reduced to reimburse the
Fund for any unamortized expenses, in the same ratio as the number of shares
redeemed bears to the number of initial shares outstanding at the time of such
redemption.
23 Oppenheimer International Growth Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of the recognition of certain foreign currency gains (losses)
as ordinary income (loss) for tax purposes. The character of the distributions
made during the year from net investment income or net realized gains may differ
from its ultimate characterization for federal income tax purposes. Also, due to
timing of dividend distributions, the fiscal year in which amounts are
distributed may differ from the fiscal year in which the income or realized gain
was recorded by the Fund.
The Fund adjusts the classification of distributions to shareholders to
reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended November 30, 1997, amounts have been reclassified to reflect a
decrease in accumulated net realized gain on investments of $866,794.
Accumulated net investment loss was decreased by the same amount.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Realized gains and losses on investments and unrealized
appreciation and depreciation are determined on an identified cost basis, which
is the same basis used for federal income tax purposes.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
24 Oppenheimer International Growth Fund
<PAGE>
================================================================================
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of beneficial
interest. Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30, 1997 PERIOD ENDED
NOVEMBER 30, 1996(1)
---------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 9,482,388 $131,799,793 1,689,570 $17,975,411
Redeemed (2,380,909) (33,695,524) (248,800) (2,654,843)
---------- ------------ --------- -----------
Net increase 7,101,479 $ 98,104,269 1,440,770 $15,320,568
========== ============ ========= ===========
- ------------------------------------------------------------------------------------------------------
Class B:
Sold 6,811,211 $ 93,996,802 784,237 $ 8,424,204
Redeemed (1,156,189) (16,385,910) (39,992) (434,121)
---------- ------------ --------- -----------
Net increase 5,655,022 $ 77,610,892 744,245 $ 7,990,083
========== ============ ========= ===========
- ------------------------------------------------------------------------------------------------------
Class C:
Sold 2,911,937 $ 40,604,864 206,770 $ 2,202,270
Redeemed (1,550,039) (21,858,226) (22,497) (240,166)
---------- ------------ --------- -----------
Net increase 1,361,898 $ 18,746,638 184,273 $ 1,962,104
========== ============ ========= ===========
</TABLE>
1. For the period from March 25, 1996 (commencement of operations) to November
30, 1996.
================================================================================
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At November 30, 1997, net unrealized appreciation on investments of $11,820,784
was composed of gross appreciation of $24,626,574 and gross depreciation of
$12,805,790.
================================================================================
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 0.80% of the first
$250 million of average annual net assets, 0.77% of the next $250 million, 0.75%
of the next $500 million, 0.69% of the next $1 billion, and 0.67% of average
annual net assets in excess of $2 billion.
For the year ended November 30, 1997, commissions (sales charges paid by
investors) on sales of Class A shares totaled $1,433,719, of which $411,249 was
retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker/dealer. Sales
charges advanced to broker/dealers by OFDI on sales of the Fund's Class B and
Class C shares totaled $2,575,841 and $189,963, respectively, of which $133,149
and $1,539, respectively, were paid to an affiliated broker/dealer. During the
year ended November 30, 1997, OFDI received contingent deferred sales charges of
$69,652 and $11,033, respectively, upon redemption of Class B and Class C
shares, as reimbursement for sales commissions advanced by OFDI at the time of
sale of such shares.
25 Oppenheimer International Growth Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (continued)
OppenheimerFunds Services (OFS), a division of the Manager, is the transfer and
shareholder servicing agent for the Fund and for other registered investment
companies. OFS's total costs of providing such services are allocated ratably to
these companies.
The Fund has adopted a Service Plan for Class A shares to reimburse OFDI
for a portion of its costs incurred in connection with the personal service and
maintenance of shareholder accounts that hold Class A shares. Reimbursement is
made quarterly at an annual rate that may not exceed 0.25% of the average annual
net assets of Class A shares of the Fund. OFDI uses the service fee to reimburse
brokers, dealers, banks and other financial institutions quarterly for providing
personal service and maintenance of accounts of their customers that hold Class
A shares. During the year ended November 30, 1997, OFDI paid $12,197 to an
affiliated broker/dealer as reimbursement for Class A personal service and
maintenance expenses.
The Fund has adopted Distribution and Service Plans for Class B and
Class C shares to compensate OFDI for its costs in distributing Class B and
Class C shares and servicing accounts. Under the Plans, the Fund pays OFDI an
annual asset-based sales charge of 0.75% per year on Class B and Class C shares
for its services rendered in distributing Class B and Class C shares. OFDI also
receives a service fee of 0.25% per year to compensate dealers for providing
personal services for accounts that hold Class B and C shares. Each fee is
computed on the average annual net assets of Class B and Class C shares,
determined as of the close of each regular business day. During the year ended
November 30, 1997, OFDI retained $412,248 and $83,329, respectively, as
compensation for Class B and Class C sales commissions and service fee advances,
as well as financing costs. If either Plan is terminated by the Fund, the Board
of Trustees may allow the Fund to continue payments of the asset-based sales
charge to OFDI for distributing shares before the Plan was terminated. As of
November 30, 1997, OFDI had incurred unreimbursed expenses of $3,036,155 for
Class B and $293,442 for Class C.
================================================================================
5. FORWARD CONTRACTS
A forward foreign currency exchange contract (forward contract) is a commitment
to purchase or sell a foreign currency at a future date, at a negotiated rate.
The Fund uses forward contracts to seek to manage foreign currency
risks. They may also be used to tactically shift portfolio currency risk. The
Fund generally enters into forward contracts as a hedge upon the purchase or
sale of a security denominated in a foreign currency. In addition, the Fund may
enter into such contracts as a hedge against changes in foreign currency
exchange rates on portfolio positions.
Forward contracts are valued based on the closing prices of the forward
currency contract rates in the London foreign exchange markets on a daily basis
as provided by a reliable bank or dealer. The Fund will realize a gain or loss
upon the closing or settlement of the forward transaction.
26 Oppenheimer International Growth Fund
<PAGE>
================================================================================
Securities held in segregated accounts to cover net exposure on outstanding
forward contracts are noted in the Statement of Investments where applicable.
Gains and losses on outstanding contracts (unrealized appreciation or
depreciation on forward contracts) are reported in the Statement of Assets and
Liabilities. Realized gains and losses are reported with all other foreign
currency gains and losses in the Fund's Statement of Operations.
Risks include the potential inability of the counterparty to meet the
terms of the contract and unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
At November 30, 1997, outstanding forward contracts were as follows:
<TABLE>
<CAPTION>
CONTRACT VALUATION AS OF
UNREALIZED
CONTRACTS TO SELL EXPIRATION DATE AMOUNT (000s)
NOVEMBER 30, 1997 APPRECIATION
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Japanese Yen (JPY) 2/17/98 2,481,600 JPY $19,691,369
$308,631
</TABLE>
================================================================================
6. ILLIQUID AND RESTRICTED SECURITIES
At November 30, 1997, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933, may
have contractual restrictions on resale, and are valued under methods approved
by the Board of Trustees as reflecting fair value. A security may be considered
illiquid if it lacks a readily-available market or if its valuation has not
changed for a certain period of time. The Fund intends to invest no more than
10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limit. The aggregate value of illiquid or restricted securities
subject to this limitation at November 30, 1997 was $1,359,192, which represents
0.58% of the Fund's net assets.
================================================================================
7. BANK BORROWINGS
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the year ended November
30, 1997.
<PAGE>
3
3
<PAGE>
Appendix A
Corporate Industry Classifications
Aerospace/Defense Air Transportation Auto Parts Distribution Automotive Bank
Holding Companies Banks Beverages Broadcasting Broker-Dealers Building Materials
Cable Television Chemicals Commercial Finance Computer Hardware Computer
Software Conglomerates Consumer Finance Containers Convenience Stores Department
Stores Diversified Financial Diversified Media Drug Stores Drug Wholesalers
Durable Household Goods Education Electric Utilities Electrical Equipment
Electronics
Energy Services & Producers
Entertainment/Film
Environmental
Food
Gas Utilities
Gold
Health Care/Drugs Health Care/Supplies & Services Homebuilders/Real Estate
Hotel/Gaming Industrial Services Information Technology Insurance Leasing &
Factoring Leisure Manufacturing Metals/Mining Nondurable Household Goods Oil -
Integrated Paper Publishing/Printing Railroads Restaurants Savings & Loans
Shipping Special Purpose Financial Specialty Retailing Steel Supermarkets
Telecommunications - Technology Telephone - Utility Textile/Apparel Tobacco Toys
Trucking Wireless Services
A-1
<PAGE>
APPENDIX B: DESCRIPTION OF RATINGS
Categories of Rating Services
Description of Moody's Investors Service, Inc. Bond Ratings
Aaa: Bonds which are rated "Aaa" are judged to be the best quality and to
carry the smallest degree of investment risk. 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, the changes that can be
expected are most unlikely to impair the fundamentally strong position of such
issues.
Aa: Bonds which are rated "Aa" are 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 with "Aaa" securities or fluctuation 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 those of
"Aaa" securities.
A: Bonds which are rated "A" possess many favorable investment
attributes and are to be considered as upper-medium grade obligations.
Factors giving security to principal and interest are
considered adequate but elements may be present which suggest a susceptibility
to impairment sometime in the future.
The investments in which the Fund will principally invest will be in the
lower-rated categories described below.
Baa: Bonds which are rated "Baa" are considered medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and have
speculative characteristics as well.
Ba: Bonds which are rated "Ba" are judged to have speculative elements;
their future cannot be considered well-assured. Often the protection of interest
and principal payments may be very moderate and not well safeguarded during both
good and bad times over the future. Uncertainty of position characterizes bonds
in this class.
B: Bonds which are rated "B" generally lack characteristics of desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated "Caa" are of poor standing and may be in
default or there may be present elements of danger with respect to principal
or interest.
Ca: Bonds which are rated "Ca" represent obligations which are
speculative in a high degree and are often in default or have other marked
shortcomings.
C: Bonds which are rated "C" are the lowest rated class of bonds and can be
regarded as having extremely poor prospects of ever attaining any real
investment standing.
Description of Standard & Poor's Corporation Bond Ratings
AAA: "AAA" is the highest rating assigned to a debt obligation and
indicates an extremely strong capacity to pay principal and interest.
AA: Bonds rated "AA" also qualify as high-quality debt obligations. Capacity
to pay principal and interest is very strong, and in the majority of instances
they differ from "AAA" issues only in small degree.
A: Bonds rated "A" have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to adverse effects of change in
circumstances and economic conditions.
The investments in which the Fund will principally invest will be in the
lower-rated categories, described below.
BBB: Bonds rated "BBB" are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this category
than for bonds in the "A" category.
BB, B, CCC, CC: Bonds rated "BB," "B," "CCC" and "CC" are regarded, on
balance, as predominantly speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the obligation.
"BB" indicates the lowest degree of speculation and "CC" the highest degree.
While such bonds will likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk exposures to adverse
conditions.
C: Bonds on which no interest is being paid are rated "C".
D: Bonds rated "D" are in payment default and payment of interest and/or
repayment of principal is in arrears.
A-2
<PAGE>
Investment Adviser
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
Distributor
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer and Shareholder Servicing Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
The Bank of New York
One Wall Street
New York, New York 10015
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
<PAGE>
OPPENHEIMER INTERNATIONAL GROWTH FUND
FORM N-1A
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
- -------- ---------------------------------
(a) Financial Statements:
(1) Financial Highlights (See Parts A and B): Filed herewith.
(2) Report of Independent Auditors (See Part B): Filed herewith.
(3) Statement of Investments (See Part B): Filed herewith.
(4) Statement of Assets and Liabilities (See Part B):
Filed herewith.
(5) Statement of Operations (See Part B): Filed
herewith
.
(6) Statement of Changes in Net Assets (See Part B): Filed
herewith.
(7) Notes to Financial Statements (See Part B): Filed herewith.
(b) Exhibits:
(1) Declaration of Trust dated 12/8/95: Previously filed with registrant's
initial Registration Statement, 1/16/96, and incorporated herein by reference.
(a) Amended and Restated Declaration of Trust dated 10/9/97: Filed
herewith.
(2) By-Laws dated 12/8/95: Previously filed with Registrant's initial
Registration Statement, 1/16/96, and incorporated herein by reference.
(3) Not applicable.
(4) (i) Specimen Class A Share Certificate: Previously filed with
Registrant's Post-Effective Amendment No. 2, 3/24/97, and incorporated herein by
reference.
(ii) Specimen Class B Share Certificate: Previously filed with Registrant's
Post-Effective Amendment No. 2, 3/24/97, and incorporated herein by reference.
(iii) Specimen Class C Share Certificate: Previously filed with
Registrant's Post-Effective Amendment No. 2, 3/24/97, and incorporated herein by
reference.
(iv) Specimen Class Y Share Certificate: Filed herewith.
(5) Investment Advisory Agreement
between Registrant and OppenheimerFunds, Inc. dated 3/21/96:
Filed herewith.
(6) (i) General Distributor's Agreement between Registrant and
OppenheimerFunds Distributor, Inc. dated 3/21/96: Filed herewith.
(ii) Form of OppenheimerFunds Distributor, Inc. Dealer Agreement:
Filed with Post-Effective Amendment No. 14 of Oppenheimer Main Street
Funds, Inc. (Reg. No. 33-17850), 9/30/94, and incorporated herein by
reference.
(iii) Form of OppenheimerFunds Distributor, Inc. Broker
Agreement: Filed with Post-Effective Amendment No. 14 of Oppenheimer
Main Street Funds, Inc. (Reg. No. 33- 17850), 9/30/94, and
incorporated herein by reference.
(iv) Form of OppenheimerFunds Distributor, Inc. Agency Agreement:
Filed with Post-Effective Amendment No. 14 of Oppenheimer Main Street
Funds, Inc. (Reg. No. 33- 17850), 9/30/94, and incorporated herein by
reference.
(v) Broker Agreement between Oppenheimer Fund Management,Inc. and
Newbridge Securities, Inc. dated October 1,1986: Previously filed with
Post- Effective Amendment No. 25 to the Registration Statement of
Oppenheimer Growth Fund (Reg. No. 2- 45272), 11/1/86, and refiled with
Post-Effective Amendment No. 45 of Oppenheimer Growth Fund (Reg. No.
2-45272), 8/22/94 pursuant to Item 102 of Regulation S-T and
incorporated herein by reference.
(7) Retirement Plan for Non-Interested Trustees or Directors
dated June 7, 1990: Filed with Post-Effective Amendment No. 97 to the
Registration Statement of Oppenheimer Fund (File No. 2- 14586),
8/30/90, refiled with Post-Effective Amendment No. 45 of Oppenheimer
Growth Fund (Reg. No. 2-45272), 8/22/94,pursuant to Item 102 of
Regulation S-T,and incorporated herein by reference.
(8) Form of Custodian Agreement between Registrant and The Bank
of New York: Previously filed with Registrant's initial Registration
Statement, 1/16/96, and incorporated herein by reference.
(9) Not applicable.
(10) Opinion and Consent of Counsel: Previously filed
with Registrant's Pre-Effective Amendment No. 1, 3/14/96, and
incorporated herein by reference.
(11) Independent Auditors' Consent: Filed herewith.
(12) Not applicable.
(13) Investment Letter from OppenheimerFunds, Inc. to Registrant:
Previously filed with Registrant's Pre-Effective Amendment No. 1,
3/14/96, and incorporated herein by reference.
(14) (i) Form of prototype Standardized and Non- Standardized
Profit-Sharing Plans and Money Purchase Plans for self-employed
persons and corporations: Filed with Post-Effective Amendment No. 3 to
the Registration Statement of Oppenheimer Global Growth & Income Fund
(Reg. No. 33-23799), 1/31/92, and refiled with Post-Effective
Amendment No. 7 to the Registration Statement of Oppenheimer Global
Growth & Income Fund (Reg. No. 33-23799), 12/1/94, pursuant to Item
102 of Regulation S-T, and incorporated herein by reference.
(ii) Form of Individual Retirement Account Trust Agreement:
Previously filed with Post-Effective Amendment No. 21 to the
Registration Statement of Oppenheimer U.S. Government Trust (Reg. No.
2-76645), 8/25/93 and incorporated herein by reference.
(iii) Form of Tax Sheltered Retirement Plan and Custody Agreement
for employees of public schools and tax-exempt organizations:
Previously filed with Post-Effective Amendment No. 47 to the
Registration Statement of Oppenheimer Growth Fund (Reg. No. 2-45272),
10/21/94, and incorporated herein by reference.
(iv) Form of Simplified Employee Pension IRA: Previously filed
with Post-Effective Amendment No. 42 to the Registration Statement of
Oppenheimer Equity Income Fund (Reg. No. 2-33043), 10/28/94, and
incorporated herein by reference.
(v) Form of Prototype 401(k) Plan: Previously filed with
Post-Effective Amendment No. 7 to the Registration Statement of
Oppenheimer Strategic Income & Growth Fund (Reg. No. 33-47378),
9/28/95, and incorporated herein by reference.
(15) (i) Distribution and Service Plan and Agreement for Class A
shares pursuant to Rule 12b-1
between Registrant and OppenheimerFunds Distributor, Inc. dated 3/21/96: Filed
herewith.
(ii) Amended and Restated Distribution and Service Plan and Agreement for
Class B shares pursuant to Rule 12b-1 between Registrant and
OppenheimerFunds Distributor, Inc. dated 2/12/98: Filed herewith.
(iii) Amended and Restated Distribution and Service Plan and
Agreement for Class C shares pursuant to Rule 12b-1 between
Registrant and OppenheimerFunds Distributor, Inc. dated
2/12/98: Filed herewith.
(16) Performance Data Computation Schedule:
Filed herewith.
(17) (i) Financial Data Schedule for Class A shares: Filed herewith.
(ii) Financial Data Schedule for Class B shares: Filed herewith.
(iii) Financial Data Schedule for Class C shares: Filed herewith.
(18) Oppenheimer Funds Multiple Class Plan under Rule 18f-3 dated
10/24/95: Previously filed with Post-Effective Amendment No. 12 to the
Registration Statement of Oppenheimer California Tax-Exempt Fund (Reg.
No. 33-23566), 11/1/95, and incorporated herein by reference.
-- Powers of Attorney and Certified Board Resolutions: Previously
filed with Registrant's initial Registration Statement, 1/16/96, and
incorporated herein by reference.
Item 25. Persons Controlled by or Under Common Control with Registrant
None
Item 26. Number of Holders of Securities
- -------- -------------------------------
Number of Record Holders
Title of Class as of March 6, 1998
-------------- -----------------------
Class A Shares of Beneficial Interest 14,455
Class B Shares of Beneficial Interest 15,190
Class C Shares of Beneficial Interest 2,694
Item 27. Indemnification
- -------- ---------------
Reference is made to the provisions of Article Seventh of Registrant's
Declaration of Trust filed as Exhibit 24(b)(1) to this Registration Statement.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
Registrant pursuant to the foregoing provisions or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Registrant
of expenses incurred or paid by a trustee, officer or controlling person of
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such trustee, officer or controlling person, Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
Item 28. Business and Other Connections of Investment Adviser
- -------- ----------------------------------------------------
(a) OppenheimerFunds, Inc. is the investment adviser of the
Registrant; it and certain subsidiaries and affiliates act in the same capacity
to other registered investment companies as described in Parts A and B hereof
and listed in Item 28(b) below.
(b) There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which each officer
and director of OppenheimerFunds, Inc. is, or at any time during the past two
fiscal years has been, engaged for his/her own account or in the capacity of
director, officer, employee, partner or trustee.
Name and Current Position
with OppenheimerFunds, Inc. Other Business and Connections
During
("OFI") the Past Two Years
Mark J.P. Anson,
Vice President Vice President of Oppenheimer Real
Asset Management, Inc. ("ORAMI");
formerly Vice President of Equity
Derivatives at Salomon Brothers,
Inc.
Peter M. Antos,
Senior Vice President An officer and/or portfolio
manager of certain Oppenheimer
funds; a
Chartered Financial Analyst; Senior
Vice President of HarbourView Asset
Management Corporation
("HarbourView"); prior to March,
1996 he was the senior equity
portfolio manager for the Panorama
Series Fund, Inc. (the "Company")
and other mutual funds and pension
funds managed by G.R. Phelps & Co.
Inc. ("G.R. Phelps"), the
Company's former investment
adviser, which was
a subsidiary of Connecticut Mutual
Life Insurance Company; was also
responsible for managing the common
stock department and common stock
investments of Connecticut Mutual
Life Insurance Co.
Lawrence Apolito,
Vice President None.
Victor Babin,
Senior Vice President None.
Bruce Bartlett,
Vice President An officer and/or portfolio
manager of certain Oppenheimer
funds.
Formerly a Vice President and
Senior
Portfolio Manager at First of
America Investment Corp.
Beichert, Kathleen None.
Rajeev Bhaman,
Vice President Formerly Vice President (January
1992 - February, 1996) of Asian
Equities for Barclays de Zoete
Wedd,
Inc.
Robert J. Bishop,
Vice President Vice President of Mutual Fund
Accounting (since May 1996); an
officer of other Oppenheimer funds;
formerly an Assistant Vice
President of OFI/Mutual Fund
Accounting (April 1994-May 1996),
and a Fund Controller for OFI.
George C. Bowen,
Senior Vice President & Treasurer Vice President (since June 1983)
and Treasurer (since March 1985)
of
OppenheimerFunds Distributor, Inc.
(the "Distributor"); Vice
President
(since October 1989) and Treasurer
(since April 1986) of HarbourView;
Senior Vice President (since
February 1992), Treasurer (since
July 1991)and a director (since
December 1991) of Centennial;
President, Treasurer and a director
of Centennial Capital Corporation
(since June 1989); Vice President
and Treasurer (since August 1978)
and Secretary (since April 1981)
of
Shareholder Services, Inc. ("SSI");
Vice President, Treasurer and
Secretary of Shareholder Financial
Services, Inc. ("SFSI") (since
November 1989); Treasurer of
Oppenheimer Acquisition Corp.
("OAC") (since June 1990);
Treasurer
of Oppenheimer Partnership
Holdings,
Inc. (since November 1989); Vice
President and Treasurer of ORAMI
(since July 1996); Chief Executive
Officer, Treasurer and a director
of MultiSource Services, Inc., a
broker-dealer (since December
1995);
an officer of other Oppenheimer
funds.
Scott Brooks,
Vice President None.
Susan Burton,
Assistant Vice President None.
Adele Campbell,
Assistant Vice President & Assistant
Treasurer: Rochester Division Formerly Assistant Vice President
of Rochester Fund Services, Inc.
Michael Carbuto,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds;
Vice President of Centennial.
Ruxandra Chivu,
Assistant Vice President None.
H.D. Digby Clements,
Assistant Vice President:
Rochester Division None.
O. Leonard Darling,
Executive Vice President Trustee (1993 - present) of
Awhtolia College - Greece.
Robert A. Densen,
Senior Vice President None.
Sheri Devereux,
Assistant Vice President None.
Robert Doll, Jr.,
Executive Vice President & Director An officer
and/or portfolio manager of certain
Oppenheimer funds.
John Doney,
Vice President An officer and/or portfolio
manager of certain Oppenheimer
funds.
Andrew J. Donohue,
Executive Vice President,
General Counsel and Director Executive Vice President (since
September 1993), and a director
(since January 1992) of the
Distributor; Executive Vice
President, General Counsel and a
director of HarbourView, SSI, SFSI
and Oppenheimer Partnership
Holdings, Inc. since (September
1995) and MultiSource Services,
Inc. (a broker-dealer) (since
December 1995); President and a
director of Centennial (since
September 1995); President and a
director of ORAMI (since July
1996); General Counsel (since May
1996) and Secretary (since April
1997) of OAC; Vice President of
OppenheimerFunds International,
Ltd.
("OFIL") and Oppenheimer Millennium
Funds plc (since October 1997); an
officer of other Oppenheimer funds.
George Evans,
Vice President An officer and/or portfolio
manager of certain Oppenheimer
funds.
Edward Everett,
Assistant Vice President None.
Scott Farrar,
Vice President Assistant Treasurer of Oppenheimer
Millennium Funds plc (since October
1997); an officer of other
Oppenheimer funds; formerly an
Assistant Vice President of
OFI/Mutual Fund Accounting (April
1994-May 1996), and a Fund
Controller for OFI.
Leslie A. Falconio,
Assistant Vice President None.
Katherine P. Feld,
Vice President and Secretary Vice President and Secretary of
the Distributor; Secretary of
HarbourView, MultiSource and
Centennial; Secretary, Vice
President and Director of
Centennial
Capital Corporation; Vice President
and Secretary of ORAMI.
Ronald H. Fielding,
Senior Vice President; Chairman:
Rochester Division An officer, Director and/or
portfolio manager of certain
Oppenheimer funds; Presently he
holds the following other
positions:
Director (since 1995) of ICI Mutual
Insurance Company; Governor (since
1994) of St. John's College;
Director (since 1994 - present) of
International Museum of Photography
at George Eastman House; Director
(since 1986) of GeVa Theatre.
Formerly he held the following
positions: formerly, Chairman of
the
Board and Director of Rochester
Fund
Distributors, Inc. ("RFD");
President and Director of Fielding
Management Company, Inc. ("FMC");
President and Director of Rochester
Capital Advisors, Inc. ("RCAI");
Managing Partner of Rochester
Capital Advisors, L.P., President
and Director of Rochester Fund
Services, Inc. ("RFS"); President
and Director of Rochester Tax
Managed Fund, Inc.; Director (1993
-1997) of VehiCare Corp.; Director
(1993 - 1996) of VoiceMode.
John Fortuna,
Vice President None.
Patricia Foster,
Vice President Formerly she held the following
positions: An officer of certain
Oppenheimer funds (May, 1993
-January, 1996); Secretary of
Rochester Capital Advisors, Inc.
and
General Counsel (June, 1993
-January 1996) of Rochester Capital
Advisors, L.P.
Jennifer Foxson,
Assistant Vice President None.
Paula C. Gabriele,
Executive Vice President Formerly, Managing Director (1990-
1996) for Bankers Trust Co.
Robert G. Galli,
Vice Chairman Trustee of the New York-based
Oppenheimer Funds. Formerly Vice
President and General Counsel of
Oppenheimer Acquisition Corp.
Linda Gardner,
Vice President None.
Alan Gilston,
Vice President Formerly Vice President for
Schroder Capital Management
International.
Jill Glazerman,
Assistant Vice President None.
Jeremy Griffiths,
Chief Financial Officer Currently a Member
and Fellow of the Institute of
Chartered Accountants; formerly an
accountant for Arthur Young (London,
U.K.).
Robert Grill,
Vice President Formerly Marketing Vice President
for Bankers Trust Company (1993-
1996); Steering Committee Member,
Subcommittee Chairman for American
Savings Education Council (1995-
1996).
Caryn Halbrecht,
Vice President An officer and/or portfolio
manager of certain Oppenheimer
funds;
formerly Vice President of Fixed
Income Portfolio Management at
Bankers Trust.
Elaine T. Hamann,
Vice President Formerly Vice President
(September, 1989 - January, 1997)
of Bankers
Trust Company.
Glenna Hale,
Director of Investor Marketing Formerly, Vice President
(1994-1997) of Retirement Plans
Services for
OppenheimerFunds Services.
Thomas B. Hayes,
Vice President None.
Barbara Hennigar,
Executive Vice President and
Chief Executive Officer of
OppenheimerFunds Services,
a division of the Manager President and
Director of SFSI; President and Chief
executive Officer of SSI.
Dorothy Hirshman, None.
Assistant Vice President
Alan Hoden,
Vice President None.
Merryl Hoffman,
Vice President None.
Nicholas Horsley,
Vice President Formerly a Senior Vice President
and Portfolio Manager for Warburg,
Pincus Counsellors, Inc. (1993-
1997), Co-manager of Warburg,
Pincus
Emerging Markets Fund (12/94
-10/97), Co-manager Warburg, Pincus
Institutional Emerging Markets Fund
- Emerging Markets Portfolio (8/96
-10/97), Warburg Pincus Japan OTC
Fund, Associate Portfolio Manager
of
Warburg Pincus International Equity
Fund, Warburg Pincus Institutional
Fund - Intermediate Equity
Portfolio, and Warburg Pincus EAFE
Fund.
Scott T. Huebl,
Assistant Vice President None.
Richard Hymes,
Assistant Vice President None.
Jane Ingalls,
Vice President None.
Byron Ingram,
Assistant Vice President None.
Ronald Jamison,
Vice President Formerly Vice President and
Associate General Counsel at
Prudential Securities, Inc.
Frank Jennings,
Vice President An officer and/or portfolio
manager of certain Oppenheimer
funds;
formerly, a Managing Director of
Global Equities at Paine Webber's
Mitchell Hutchins division.
Thomas W. Keffer,
Senior Vice President Formerly Senior Managing Director
(1994 - 1996) of Van Eck Global.
Avram Kornberg,
Vice President None.
Joseph Krist,
Assistant Vice President None.
Michael Levine,
Assistant Vice President None.
Shanquan Li,
Vice President Director of Board (since 2/96),
Chinese Finance Society; formerly,
Chairman (11/94-2/96), Chinese
Finance Society; and Director
(6/94-
6/95), Greater China Business
Networks.
Stephen F. Libera,
Vice President An officer and/or portfolio
manager for certain Oppenheimer
funds; a
Chartered Financial Analyst; a Vice
President of HarbourView; prior to
March 1996, the senior bond
portfolio manager for Panorama
Series Fund Inc., other mutual
funds
and pension accounts managed by
G.R.
Phelps; also responsible for
managing the public fixed-income
securities department at
Connecticut
Mutual Life Insurance Co.
Mitchell J. Lindauer,
Vice President None.
David Mabry,
Assistant Vice President None.
Steve Macchia,
Assistant Vice President None.
Bridget Macaskill,
President, Chief Executive Officer
and Director Chief Executive Officer (since
September 1995); President and
director (since June 1991) of
HarbourView; Chairman and a
director
of SSI (since August 1994), and
SFSI
(September 1995); President (since
September 1995) and a director
(since October 1990) of OAC;
President (since September 1995)
and
a director (since November 1989)
of
Oppenheimer Partnership Holdings,
Inc., a holding company subsidiary
of OFI; a director of ORAMI (since
July 1996) ; President and a
director (since October 1997) of
OFIL, an offshore fund manager
subsidiary of OFI and Oppenheimer
Millennium Funds plc (since October
1997); President and a a director
of
other Oppenheimer funds; a
director
of the NASDAQ Stock Market, Inc.
and
of Hillsdown Holdings plc (a U.K.
food company); formerly an
Executive
Vice President of OFI.
Wesley Mayer,
Vice President Formerly Vice President (January,
1995 - June, 1996) of Manufacturers
Life Insurance Company.
Loretta McCarthy,
Executive Vice President None.
Kevin McNeil,
Vice President Treasurer (September, 1994
-present) for the Martin Luther King
Multi-Purpose Center (non-profit
community organization); Formerly
Vice President (January, 1995
-April, 1996) for Lockheed Martin
IMS.
Tanya Mrva,
Assistant Vice President None.
Lisa Migan,
Assistant Vice President None.
Robert J. Milnamow,
Vice President An officer and/or portfolio
manager of certain Oppenheimer
funds;
formerly a Portfolio Manager
(August, 1989 - August, 1995) with
Phoenix Securities Group.
Denis R. Molleur,
Vice President None.
Linda Moore,
Vice President Formerly, Marketing Manager (July
1995-November 1996) for Chase
Investment Services Corp.
Tanya Mrva,
Assistant Vice President None.
Kenneth Nadler,
Vice President None.
David Negri,
Vice President An officer and/or portfolio
manager of certain Oppenheimer
funds.
Barbara Niederbrach,
Assistant Vice President None.
Robert A. Nowaczyk,
Vice President None.
Richard M. O'Shaugnessy,
Assistant Vice President:
Rochester Division None.
Gina M. Palmieri,
Assistant Vice President None.
Robert E. Patterson,
Senior Vice President An officer and/or
portfolio manager of certain
Oppenheimer funds.
John Pirie,
Assistant Vice President Formerly, a Vice President with
Cohane Rafferty Securities, Inc.
Tilghman G. Pitts III,
Executive Vice President
and Director Chairman and Director of the
Distributor.
Jane Putnam,
Vice President An officer and/or portfolio
manager of certain Oppenheimer
funds.
Russell Read,
Senior Vice President Formerly a consultant for
Prudential Insurance on behalf of
the General
Motors Pension Plan.
Thomas Reedy,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds;
formerly, a Securities Analyst for the
Manager.
David Robertson,
Vice President None.
Adam Rochlin,
Vice President None.
Michael S. Rosen
Vice President; President,
Rochester Division An officer and/or portfolio
manager of certain Oppenheimer
funds;
Formerly, Vice President (June,
1983
- January, 1996) of RFS, President and
Director of RFD; Vice President and
Director of FMC; Vice President and
director of RCAI; General Partner of
RCA; Vice President and Director of
Rochester Tax Managed Fund Inc.
Richard H. Rubinstein,
Senior Vice President An officer and/or portfolio
manager of certain Oppenheimer
funds;
formerly Vice President and
Portfolio Manager/Security Analyst
for Oppenheimer Capital Corp., an
investment adviser.
Lawrence Rudnick,
Assistant Vice President None.
James Ruff,
Executive Vice President None.
Valerie Sanders,
Vice President None.
Ellen Schoenfeld,
Assistant Vice President None.
Stephanie Seminara,
Vice President Formerly, Vice President of
Citicorp Investment Services
Richard Soper,
Vice President None.
Nancy Sperte,
Executive Vice President None.
Donald W. Spiro,
Chairman Emeritus and Director Vice Chairman
and Trustee of the New York-based
Oppenheimer Funds; formerly Chairman
of the Manager and the Distributor.
Richard A. Stein,
Vice President: Rochester Division Assistant Vice President (since
1995) of Rochester Capitol
Advisors,
L.P.
Arthur Steinmetz,
Senior Vice President An officer and/or
portfolio manager of certain
Oppenheimer funds.
Ralph Stellmacher,
Senior Vice President An officer and/or
portfolio manager of certain
Oppenheimer funds.
John Stoma,
Senior Vice President, Director
Retirement Plans Formerly Vice President of U.S.
Group Pension Strategy and
Marketing
for Manulife Financial.
Michael C. Strathearn,
Vice President An officer and/or portfolio
manager of certain Oppenheimer
funds; a
Chartered Financial Analyst; a Vice
President of HarbourView; prior to
March 1996, an equity portfolio
manager for Panorama Series Fund,
Inc. and other mutual funds and
pension accounts managed by G.R.
Phelps.
James C. Swain,
Vice Chairman of the Board Chairman, CEO and Trustee,
Director or Managing Partner of the
Denver-
based Oppenheimer Funds; President and
a Director of Centennial; formerly
President and Director of OAMC, and
Chairman of the Board of SSI.
James Tobin,
Vice President None.
Jay Tracey,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds;
formerly Managing Director of
Buckingham Capital Management.
Gary Tyc,
Vice President, Assistant
Secretary and Assistant Treasurer Assistant Treasurer of the
Distributor and SFSI.
Ashwin Vasan,
Vice President An officer and/or portfolio
manager of certain Oppenheimer
funds.
Dorothy Warmack,
Vice President An officer and/or portfolio
manager of certain Oppenheimer
funds.
Jerry Webman,
Senior Vice President Director of New York-based tax-
exempt fixed income Oppenheimer
funds; Formerly, Managing Director
and Chief Fixed Income Strategist
at
Prudential Mutual Funds.
Christine Wells,
Vice President None.
Joseph Welsh,
Assistant Vice President None.
Kenneth B. White,
Vice President An officer and/or portfolio
manager of certain Oppenheimer
funds; a
Chartered Financial Analyst; Vice
President of HarbourView; prior to
March 1996, an equity portfolio
manager for Panorama Series Fund,
Inc. and other mutual funds and
pension funds managed by G.R.
Phelps.
William L. Wilby,
Senior Vice President An officer and/or
portfolio manager of certain
Oppenheimer funds; Vice President of
HarbourView.
Carol Wolf,
Vice President An officer and/or portfolio
manager of certain Oppenheimer
funds; Vice
President of Centennial; Vice
President, Finance and Accounting
and member of the Board of
Directors
of the Junior League of Denver,
Inc.; Point of Contact: Finance
Supporters of Children; Member of
the Oncology Advisory Board of the
Childrens Hospital; Member of the
Board of Directors of the Colorado
Museum of Contemporary Art.
Caleb Wong,
Assistant Vice President None.
Robert G. Zack,
Senior Vice President and
Assistant Secretary, Associate
General Counsel Assistant Secretary of SSI (since
May 1985), and SFSI (since
November
1989); Assistant Secretary of
Oppenheimer Millennium Funds plc
(since October 1997); an officer
of other Oppenheimer funds.
Jill Zachman,
Assistant Vice President:
Rochester Division None.
Arthur J. Zimmer,
Senior Vice President An officer and/or
portfolio manager of certain
Oppenheimer funds; Vice President of
Centennial.
The Oppenheimer Funds include the New York-based Oppenheimer
Funds, the Denver-based Oppenheimer Funds and the Oppenheimer/Quest Rochester
Funds, as set forth below:
New York-based Oppenheimer Funds
- --------------------------------
Oppenheimer California Municipal Fund Oppenheimer Capital Appreciation Fund
Oppenheimer Developing Markets Fund Oppenheimer Discovery Fund Oppenheimer
Enterprise Fund Oppenheimer Global Fund Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund Oppenheimer Growth Fund Oppenheimer
International Growth Fund Oppenheimer International Small Company Fund
Oppenheimer Money Market Fund, Inc. Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Municipal Trust Oppenheimer Multiple Strategies Fund
Oppenheimer Municipal Bond Fund Oppenheimer New York Municipal Fund Oppenheimer
Series Fund, Inc. Oppenheimer U.S.Government Trust Oppenheimer World Bond Fund
Quest/Rochester Funds
- ---------------------
Limited Term New York Municipal Fund
Oppenheimer Bond Fund For Growth
Oppenheimer MidCap Fund
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest For Value Funds
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Rochester Fund Municipals
Denver-based Oppenheimer Funds
- ------------------------------
Centennial America Fund, L.P. Centennial California Tax Exempt Trust Centennial
Government Trust Centennial Money Market Trust Centennial New York Tax Exempt
Trust Centennial Tax Exempt Trust Oppenheimer Cash Reserves Oppenheimer Champion
Income Fund Oppenheimer Equity Income Fund Oppenheimer High Yield Fund
Oppenheimer Integrity Funds Oppenheimer International Bond Fund Oppenheimer
Limited-Term Government Fund Oppenheimer Main Street Funds, Inc. Oppenheimer
Municipal Fund Oppenheimer Real Asset Fund Oppenheimer Strategic Income Fund
Oppenheimer Total Return Fund, Inc. Oppenheimer Variable Account Funds Panorama
Series Fund, Inc. The New York Tax-Exempt Income Fund, Inc.
The address of OppenheimerFunds, Inc., the New York-based
Oppenheimer Funds, the Quest Funds, OppenheimerFunds Distributor,
Inc., HarbourView Asset Management Corp., Oppenheimer Partnership
Holdings, Inc., and Oppenheimer Acquisition Corp. is Two World Trade
Center, New York, New York 10048-0203.
The address of the Denver-based Oppenheimer Funds, Shareholder
Financial Services, Inc., Shareholder Services, Inc.,
OppenheimerFunds Services, Centennial Asset Management Corporation,
Centennial Capital Corp., and Oppenheimer Real Asset Management,
Inc. is 6803 South Tucson Way, Englewood,Colorado 80012.
The address of MultiSource Services, Inc. is
1700 Lincoln Street, Denver, Colorado 80203.
The address of the Rochester-based funds is 350 Linden Oaks,
Rochester, New York 14625- 2807.
Item 29. Principal Underwriter
- -------- ---------------------
(a) OppenheimerFunds Distributor,
Inc. is the Distributor of the Registrant's shares. It is also the
Distributor of each of the other registered open-end investment companies for
which OppenheimerFunds, Inc. is the investment adviser, as described in Part
A
and B of this Registration Statement and listed in Item 28(b) above.
(b) The directors and officers of
the Registrant's principal underwriter are:
Name & Principal Positions & Offices Positions &
Offices
Business Address with Underwriter with Registrant
- ---------------- -------------------
- ------------------
- -
George C. Bowen(1) Vice President and Vice President
and
Treasurer Treasurer of the
Oppenheimer
funds.
Julie Bowers Vice President None
21 Dreamwold Road
Scituate, MA 02066
Peter W. Brennan Vice President None
1940 Cotswold Drive
Orlando, FL 32825
Maryann Bruce(2) Senior Vice President; None
Director: Financial
Institution Division
Robert Coli Vice President None
12 White Tail Lane
Bedminster, NJ 07921
Ronald T. Collins Vice President None
710-3 E. Ponce de Leon Ave.
Decatur, GA 30030
William Coughlin Vice President None
542 West Surf - #2N
Chicago, IL 60657
Mary Crooks(1)
E. Drew Devereaux(3) Assistant Vice President None
Rhonda Dixon-Gunner(1) Assistant Vice President None
Andrew John Donohue(2) Executive Vice Secretary of
President & Director the Oppen-heimer
funds.
Wendy H. Ehrlich Vice President None
4 Craig Street
Jericho, NY 11753
Kent Elwell Vice President None
41 Craig Place
Cranford, NJ 07016
Todd Ermenio Vice President None
11011 South Darlington
Tulsa, OK 74137
John Ewalt Vice President None
2301 Overview Dr. NE
Tacoma, WA 98422
George Fahey Vice President None
201 E. Rund Grove Rd.
#26-22
Lewisville, TX 75067
Katherine P. Feld(2) Vice President None
& Secretary
Mark Ferro Vice President None
43 Market Street
Breezy Point, NY 11697
Ronald H. Fielding(3) Vice President None
Reed F. Finley Vice President None
1657 Graefield
Birmingham, MI 48009
Wendy Fishler(2) Vice President None
Ronald R. Foster Senior Vice President None
11339 Avant Lane
Cincinnati, OH 45249
Patricia Gadecki Vice President None
950 First St., S.
Suite 204
Winter Haven, FL 33880
Luiggino Galleto Vice President None
10239 Rougemont Lane
Charlotte, NC 28277
Mark Giles Vice President None
5506 Bryn Mawr
Dallas, TX 75209
Ralph Grant(2) Vice President/National None
Sales Manager
Sharon Hamilton Vice President None
720 N. Juanita Ave.,#1
Redondo Beach, CA 90277
Byron Ingram(2) Assistant Vice President None
Mark D. Johnson Vice President None
129 Girard Place
Kirkwood, MO 63105
Michael Keogh(2) Vice President None
Richard Klein Vice President None
4820 Fremont Avenue So.
Minneapolis, MN 55409
Daniel Krause Vice President None
13416 Larchmere Square
Shaker Heights, OH 44120
Ilene Kutno(2) Assistant Vice President None
Todd Lawson Vice President None
3333 E. Bayaud Avenue
Unit 714
Denver, CO 80209
Wayne A. LeBlang Senior Vice President None
23 Fox Trail
Lincolnshire, IL 60069
Dawn Lind Vice President None
7 Maize Court
Melville, NY 11747
James Loehle Vice President None
30 John Street
Cranford, NJ 07016
Todd Marion Vice President None
21 N. Passaic Avenue
Chatham,N.J. 07928
Marie Masters Vice President None
520 E. 76th Street
New York, NY 10021
John McDonough Vice President None
P.O. Box 760
50 Riverview Road
New Castle, NH 03854
Tanya Mrva(2) Assistant Vice President None
Laura Mulhall(2) Senior Vice President None
Charles Murray Vice President None
18 Spring Lake Drive
Far Hills, NJ 07931
Wendy Murray Vice President None
32 Carolin Road
Upper Montclair, NJ 07043
Chad V. Noel Vice President None
3238 W. Taro Lane
Phoenix, AZ 85027
Joseph Norton Vice President None
2518 Fillmore Street
San Francisco, CA 94115
Patrick Palmer Vice President None
958 Blue Mountain Cr.
West Lake Village, CA 91362
Kevin Parchinski Vice President None
1105 Harney St., #310
Omaha, NE 68102
Randall Payne Vice President None
3530 Providence Plantation Way
Charlotte, NC 28270
Gayle Pereira Vice President None
2707 Via Arboleda
San Clemente, CA 92672
Charles K. Pettit Vice President None
22 Fall Meadow Dr.
Pittsford, NY 14534
Bill Presutti Vice President None
1777 Larimer St. #807
Denver, CO 80202
Tilghman G. Pitts, III(2) Chairman & Director None
Elaine Puleo(2) Vice President None
Minnie Ra Vice President None
895 Thirty-First Ave.
San Francisco, CA 94121
Michael Raso Vice President None
16 N. Chatsworth Ave.
Apt. 301
Larchmont, NY 10538
John C. Reinhardt(3) Vice President None
Douglas Rentschler Vice President None
867 Pemberton
Grosse Pointe Park, MI
48230
Ian Robertson Vice President None
4204 Summit Wa
Marietta, GA 30066
Michael S. Rosen(3) Vice President None
Kenneth Rosenson Vice President None
3802 Knickerbocker Place
Apt. #3D
Indianapolis, IN 46240
James Ruff(2) President None
Timothy Schoeffler Vice President None
1717 Fox Hall Road
Washington, DC 77479
Michael Sciortino Vice President None
785 Beau Chene Drive
Mandeville, LA 70471
Robert Shore Vice President None
26 Baroness Lane
Laguna Niguel, CA 92677
George Sweeney Vice President None
1855 O'Hara Lane
Middletown, PA 17057
Andrew Sweeny Vice President None
5967 Bayberry Drive
Cincinnati, OH 45242
Scott McGregor Tatum Vice President None
7123 Cornelia Lane
Dallas, TX 75214
David G. Thomas Vice President None
8116 Arlingon Blvd.
#123
Falls Church, VA 22042
Philip St. John Trimble Vice President None
2213 West Homer
Chicago, IL 60647
Sarah Turpin Vice President None
2735 Dover Road
Atlanta,GA 30327
Gary Paul Tyc(1) Assistant Treasurer None
Mark Stephen Vandehey(1) Vice President None
Marjorie Williams Vice President None
6930 East Ranch Road
Cave Creek, AZ 85331
(1) 6803 South Tucson Way, Englewood, Colorado 80112
(2) Two World Trade Center, New York, NY 10048-0203
(3) 350 Linden Oaks, Rochester, NY 14625-2807
(c) Not applicable.
Item 30. Location of Accounts and Records
The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
rules promulgated thereunder are in the possession of OppenheimerFunds, Inc. at
its offices at 6803 Tucson Way, Englewood, Colorado 80112.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Not applicable.
(b) Not applicable.
(c) Registrant undertakes to call a meeting of shareholders for the purpose
of voting upon the question of the removal of a Trustee or Trustees when
requested in writing 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.
<PAGE>
C-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the Investment
Company Act of 1940, the Registrant certifies that it meets all the requirements
for effectiveness of this Registration Statement pursuant to Rule 485(b) under
the Securities Act of 1933 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of New York and State of New York on the March 13, 1998.
OPPENHEIMER INTERNATIONAL GROWTH FUND
/s/ Bridget A. Macaskill*
Bridget A. Macaskill, President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities on
the dates
indicated:
Signatures: Title Date
- ----------- ----- ----
Chairman of the
/s/ Leon Levy* Board of Trustees March 13, 1998
- ---------------------------
Leon Levy
/s/ Donald W. Spiro*
Donald W. Spiro Trustee March 13, 1998
/s/ George Bowen* Treasurer and March 13, 1998
- ---------------------------
George Bowen Principal Financial
and Accounting
Officer
/s/ Bridget A. Macaskill*
Bridget A. Macaskill President, Principal March 13, 1998
Executive Officer
and Trustee
/s/ Robert G. Galli* Trustee March 13, 1998
- ---------------------------
Robert G. Galli
/s/ Benjamin Lipstein* Trustee March 13, 1998
- ---------------------------
Benjamin Lipstein
/s/ Kenneth A. Randall* Trustee March 13, 1998
- ---------------------------
Kenneth A. Randall
/s/ Russell S. Reynolds* Trustee March 13, 1998
- ---------------------------
13, 1998
Russell S. Reynolds, Jr.
/s/ Pauline Trigere* Trustee March 13, 1998
Pauline Trigere
/s/ Elizabeth B/ Moynihan* Trustee March 13, 1998
- --------------------------
Elizabeth B. Moynihan
/s/ Clayton K. Yeutter* Trustee March 13, 1998
- --------------------------
Clayton K. Yeutter
/s/ Edward V. Regan* Trustee March 13, 1998
- --------------------------
Edward V. Regan
*By: /s/ Robert G. Zack
Robert G. Zack, Attorney-in-Fact
C-2
<PAGE>
OPPENHEIMER INTERNATIONAL GROWTH FUND
EXHIBIT INDEX
Form N-1A
Item No. Description
24(b)(1)(a) Amended and Restated Declaration of Trust
24(b)(4)(iv) Specimen Class Y Share Certificate
24(b)(5) Investment Advisory Agreement
24(b)(6)(i) General Distributor's Agreement
24(b)(11) Independent Auditors' Consent
24(b)(15)(i) Distribution and Service Plan and Agreement for Class A
Shares
24(b)(15)(ii) Amended and Restated Distribution and Service Plan and
Agreement for Class B Shares
24(b)(15)(iii) Amended and Restated Distribution and Service Plan and
Agreement for Class C Shares
24(b)(16) Performance Data Computation Schedule
24(b)(17)(i) Financial Data Schedule for Class A Shares as of 11/30/97
24(b)(17)(ii) Financial Data Schedule for Class B Shares as of 11/30/97
24(b)(17)(iii) Financial Data Schedule for Class C Shares as of 11/30/97
C-3
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
OPPENHEIMER INTERNATIONAL GROWTH FUND
This AMENDED AND RESTATED DECLARATION OF TRUST, made this 9th day of
October, 1997, by and among the individuals executing this Amended and
Restated Declaration of Trust as the Trustees.
WHEREAS, the Trustees established Oppenheimer International Growth Fund as
a business trust under the laws of the Commonwealth of Massachusetts by its
Declaration of Trust dated December 8, 1995, for the investment and reinvestment
of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed under this
Declaration of Trust IN TRUST as herein set forth below.
FIRST: This Trust shall be known as OPPENHEIMER INTERNATIONAL
GROWTH FUND. The address of Oppenheimer International Growth Fund is
Two World Trade Center, New York, NY 10048. The Registered Agent for
Service is Massachusetts Mutual Life Insurance Company, 1295 State
Street, Springfield, Massachusetts 01111, Attention: Stephen Kuhn,
Esq.
SECOND: Whenever used herein, unless otherwise required by the
context or specifically provided:
1. All terms used in this Declaration of Trust that are defined in the
1940 Act (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. "Class" means a class of a series of Shares of the Trust
established and designated under or in accordance with the provisions
of Article FOURTH.
5. "Commission" means the Securities and Exchange Commission.
6. "Declaration of Trust" shall mean this Declaration of Trust as it
may be amended or restated from time to time.
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7. 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.
8. "Series" refers to series of Shares of the Trust established and
designated under or in accordance with the provisions of Article
FOURTH.
9. "Shareholder" means a record owner of Shares of the Trust.
10. "Shares" refers to the transferable units of interest into
which the beneficial interest in the Trust or any Series or Class 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.
11. The "Trust" refers to the Massachusetts business trust created by this
Declaration of Trust, as amended or restated from time to time.
12. "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, business trusts, partnerships, investment companies,
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
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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 Classes 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, redeem or cancel its Shares, or to classify or
reclassify any unissued Shares or any Shares previously issued and
reacquired of any Series or Class into one or more Series or Classes
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.
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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,
without obtaining shareholder approval, to create one or more Series of Shares
in addition to the Series specifically established and designated in part 3 of
this Article FOURTH, and to divide the shares of any Series into three or more
Classes pursuant to Part 2 of this Article FOURTH, all as they deem necessary or
desirable, to establish and designate such Series and Classes, and to fix and
determine the relative rights and preferences as between the different Series of
Shares or Classes as to right of redemption and the price, terms and manner of
redemption, liabilities and expenses to be borne by any Series or Class, 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 or Classes 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 and each Class of a Series that may be issued is unlimited, and the
Trustees may issue Shares of any Series or Class 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 or Classes of 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 or any Class of
any Series in addition to that established and designated in part 3 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 such Class 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 or Class of any Series of the Trust
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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 or Class 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 or Class generally.
2. The Trustees shall have the authority from time to time, without
obtaining shareholder approval, to divide the Shares of any Series into three or
more Classes as they deem necessary or desirable, and to establish and designate
such Classes. In such event, each Class of a Series shall represent interests in
the designated Series of the Trust and have such voting, dividend, liquidation
and other rights as may be established and designated by the Trustees. Expenses
and liabilities related directly or indirectly to the Shares of a Class of a
Series may be borne solely by such Class (as shall be determined by the
Trustees) and, as provided in Article FIFTH, a Class of a Series may have
exclusive voting rights with respect to matters relating solely to such Class.
The bearing of expenses and liabilities solely by a Class of Shares of a Series
shall be appropriately reflected (in the manner determined by the Trustees) in
the net asset value, dividend and liquidation rights of the Shares of such Class
of a Series. The division of the Shares of a Series into Classes and the terms
and conditions pursuant to which the Shares of the Classes of a Series will be
issued must be made in compliance with the 1940 Act. No division of Shares of a
Series into Classes shall result in the creation of a Class of Shares having a
preference as to dividends or distributions or a preference in the event of any
liquidation, termination or winding up of the Trust, to the extent such a
preference is prohibited by Section 18 of the 1940 Act as to the Trust.
The relative rights and preferences Class A shares, Class B shares, Class
C shares and Class Y shares shall be the same in all respects except that, and
unless and until the Board of Trustees shall determine otherwise: (i) when a
vote of Shareholders is required under this Declaration of Trust or when a
meeting of Shareholders is called by the Board of Trustees, the Shares of a
Class shall vote exclusively on matters that affect that Class only; (ii) the
expenses and liabilities related to a Class shall be borne solely by such Class
(as determined and allocated to such Class by the Trustees from time to time in
a manner consistent with parts 2 and 3 of Article FOURTH); and (iii) pursuant to
paragraph 10 of Article NINTH, the Shares of each Class shall have such other
rights and preferences as are set forth from time to time in the then effective
prospectus and/or statement of additional information relating to the Shares.
Dividends and distributions on the Class A, Class B, Class C and Class Y Shares
may differ from the dividends and distributions on any other such Class, and the
net asset value of Class A, Class B, Class C and Class Y Shares may differ from
the net asset value of any other such Class.
3. Without limiting the authority of the Trustees set forth in part 1 of
this Article FOURTH to establish and designate any further Series,
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the Trustees hereby establish one Series of Shares having the same name as the
Trust, and said Shares shall be divided into four Classes, which shall be
designated Class A, Class B, Class C and Class Y shares. The Shares of that
Series and any Shares of any further Series or Classes 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 or Classes 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) (1) Liabilities Belonging to Series. The liabilities, expenses,
costs, charges and reserves attributable to each Series shall be charged and
allocated to the assets belonging to each particular Series. Any general
liabilities, expenses, costs, charges and reserves of the Trust which are not
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 each 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 shareholders of all Series for all
purposes.
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(2) Liabilities Belonging to a Class. If a Series is divided into
more than one Class, the liabilities, expenses, costs, charges and reserves
attributable to a Class shall be charged and allocated to the Class to which
such liabilities, expenses, costs, charges or reserves are attributable. Any
general liabilities, expenses, costs, charges or reserves belonging to the
Series which are not identifiable as belonging to any particular Class shall be
allocated and charged by the Trustees to and among any one or more of the
Classes 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
each Class are herein referred to as "liabilities belonging to" that Class. Each
allocation of liabilities, expenses, costs, charges and reserves by the Trustees
shall be conclusive and binding upon the holders of all Classes for all
purposes.
(c) Dividends. Dividends and distributions on Shares of a particular
Series or Class may be paid to the holders of Shares of that Series or Class,
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,
capital gains accrued or realized, and capital and surplus, from the assets
belonging to that Series, as the Trustees may determine, after providing for
actual and accrued liabilities belonging to such Series or Class. All dividends
and distributions on Shares of a particular Series or Class shall be distributed
pro rata to the Shareholders of such Series or Class in proportion to the number
of Shares of such Series or Class held by such Shareholders 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 and all Classes of each
Series that have been established and designated shall be entitled to
receive, as a Series or Class, when and as declared by the Trustees,
the excess of the assets belonging to that Series over the liabilities
belonging to that Series or Class. The assets so distributable to the
Shareholders of any particular Class and Series shall be distributed
among such Shareholders in proportion to the number of Shares of such
Class of that Series held by them and recorded on the books of the
Trust.
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(e) Transfer. All Shares of each particular Series or Class shall be
transferable, but transfers of Shares of a particular Class and Series will be
recorded on the Share transfer records of the Trust applicable to such Series or
Class of that Series only at such times as Shareholders shall have the right to
require the Trust to redeem Shares of such Series or Class of that Series and at
such other times as may be permitted by the Trustees.
(f) Equality. Each Share of a Series shall represent an equal
proportionate interest in the assets belonging to that Series (subject to the
liabilities belonging to such Series or any Class of that Series), and each
Share of any particular Series shall be equal to each other Share of that Series
and shares of each Class of a Series shall be equal to each other Share of such
Class; but the provisions of this sentence shall not restrict any distinctions
permissible under this Article FOURTH that may exist with respect to Shares of
the different Classes of a Series. The Trustees may from time to time divide or
combine the Shares of any particular Class or Series into a greater or lesser
number of Shares of that Class or Series without thereby changing the
proportionate beneficial interest in the assets belonging to that Series or
allocable to that Class in any way affecting the rights of Shares of any other
Class or Series.
(g) Fractions. Any fractional Share of any Class and Series, if
any such fractional Share is outstanding, shall carry proportionately
all the rights and obligations of a whole Share of that Class and
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 (i) holders
of Shares of any Series shall have the right to exchange said Shares into Shares
of one or more other Series of Shares, (ii) holders of shares of any Class shall
have the right to exchange said Shares into Shares of one or more other Classes
of the same or a different Series, and/or (iii) the Trust shall have the right
to carry out exchanges of the aforesaid kind, in each case 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 Class and Series
that has been established and designated. No certification certifying the
ownership of Shares need be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the use of facsimile
signatures, the transfer of Shares and similar matters. The record books of the
Trust as kept by the Trust or any transfer or similar agent, as the case may be,
shall be conclusive as to who are the Shareholders and as to the number of
Shares of each Class and Series held from time to time by each such Shareholder.
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(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 from time
to time.
3. Except as herein otherwise provided, 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 separately ("Individual
Series 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
Series Voting as described above. If the shares of a Series shall be divided
into Classes as provided in Article FOURTH, the shares of each Class shall have
identical voting rights except that the Trustees, in their discretion, may
provide a Class of a Series with exclusive voting rights with respect to matters
which relate solely to such Classes. If the Shares of any Series shall be
divided into Classes with a Class having exclusive voting rights with respect to
certain matters, the quorum and voting requirements described below with respect
to action to be taken by
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the Shareholders of the Class of such Series on such matters shall be applicable
only to the Shares of such Class. 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 or Class of
any Series, outstanding and entitled to vote thereat shall constitute a quorum
at any meeting of the Shareholders or of that Series or Class, respectively;
provided however, that if any action to be taken by the Shareholders or by a
Series or Class 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, except as otherwise provided in Article NINTH. 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 and Class
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 Shares 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
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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 then
effective Prospectus and/or Statement of Additional Information relating to the
Shares under the Securities Act of 1933, as amended from time to time) 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 be
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) of the 1940
Act, and, if an exemptive order or orders are issued by the Commission, such
order or orders shall be deemed part of said 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.
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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 or she 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 a 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 as custodian of any assets of the Trust a bank or trust
company or any other entity qualified and eligible to act as a custodian,
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
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<PAGE>
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, 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 Class or Series of
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<PAGE>
the Trust as they consider appropriate without prior shareholder approval;
(q) to establish officers' and 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;
(r) to invest all or substantially all of the Trust's assets
in another registered investment company;
(s) to determine whether a minimum and/or maximum value should apply
to accounts holding shares, to fix such values and establish the procedures to
cause the involuntary redemption of accounts that do not satisfy such criteria;
and
(t) to engage, employ or appoint any person or entities to perform
any act for the Trust or the Trustees and to authorize their compensation.
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. This
paragraph shall not limit the right of the Trustees to assert claims against any
shareholder based upon the acts or omissions of such shareholder or for any
other reason. There is hereby expressly disclaimed shareholder and Trustee
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
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<PAGE>
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 would ordinarily be charged to capital
or to income.
7. The By-Laws of the Trust may divide the Trustees into classes and
prescribe the tenure of office of the several classes, but no class of Trustee
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,
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<PAGE>
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 thereby 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 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 Trustees of
the Trust may be composed in part of partners, directors, officers or employees
of any such firm or corporation, and officers of the Trust may have been or may
be or become partners, directors, officers or employees of any such firm or
corporation, and in the absence of fraud the Trust and any such firm or
corporation may deal freely with each other, and no such contract or transaction
between the Trust and any such firm or corporation shall be invalidated or in
any way affected thereby, nor shall any Trustee or officer of the Trust be
liable to the Trust or to any Shareholder or creditor thereof or to any other
person for any loss incurred by it or him solely because of the existence of any
such contract or transaction; provided that nothing herein shall protect any
director or officer of the Trust against any liability to the trust or to its
security holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his 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
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<PAGE>
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 by-law
provisions to implement subparagraphs (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 indemnities 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. The Trustees are empowered, in their absolute discretion, to
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<PAGE>
establish bases or times, or both, for determining the net asset value per Share
of any Class and Series in accordance with the 1940 Act and to authorize the
voluntary purchase by any Class and Series, either directly or through an agent,
of Shares of any Class and 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 Class and 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 together with
any additional documentation that may be reasonably required by the Trust or its
transfer agent to evidence the authority of the tenderor to make such request,
plus any period of time during which the right of the holders of the shares of
such Class of that Series to require the Trust to redeem such shares has been
suspended. Any such payment may be made in portfolio securities of such Class 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 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 Class and 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 or Class 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 "Oppenheimer" included in the name of the Trust and of
any Series shall be used pursuant to a royalty-free, non-exclusive license from
OppenheimerFunds, Inc. ("OFI"), incidental to and as part of any one or more
advisory, management or supervisory contracts which may be entered into by the
Trust with OFI. Such license shall allow OFI to inspect and subject to the
control of the Board of Trustees to control the nature and quality of services
offered by the Trust under such name. The license may be terminated by OFI upon
termination of such advisory, management or supervisory contracts or without
cause upon 60 days' written notice, in which case neither the Trust nor any
Series or Class shall have any further right to use the name "Oppenheimer" 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
and the names of any Series or Classes accordingly.
NINTH:
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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
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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 canceled 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 an original.
6. The Trust set forth in this instrument is created under and is to be
governed by and construed and administered according to the laws of the
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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, if a vote of Shareholders
is required under this Declaration of Trust, 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 may 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
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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 9th day of October, 1997.
/s/ Briget A. Macaskill /s/ Robert G. Galli
Bridget A. Macaskill, Trustee Robert G. Galli, Esq., Trustee
160 E. 81st Street 19750 Beach Road, Apt. #401
New York, NY 10028 Jupiter Island, FL 33469
/s/ Leon levy /s/ Benjamin Lipstein
Leon Levy, Trustee Dr. Benjamin Lipstein, Trustee
One Sutton Place South, Apt. 3A 591 Breezy Hill Road
New York, NY 10022 Hillsdale, NY 12529
/s/ Elizabeth B. Moynihan /s/ Kenneth A. Randall
Elizabeth B. Moynihan, Trustee Kenneth A. Randall, Trustee
801 Pennsylvania Ave., N.W. 6 Whittaker's Mill
Apt., 1115 Willimsburg, VA 23185
Washington, D.C. 20004
/s/ Edward V. Regan /s/ Russell S. Reynolds
Edward V. Regan, Trustee Russell S. Reynolds, Jr., Trustee
40 Park Avenue, Apt. 17C 39 Clapboard Ridge Road
New York, NY 10016 Greenwich, CN 06830
/s/ Donald W. Spiro /s/ Pauline Trigere
Donald W. Spiro, Trustee Pauline Trigere. Trustee
399 Ski Trail 525 Park Avenue, Apt. 7B
Smoke Rise, NJ 07405 New York, NY 10021
/s/ Clayton K. Yeutter
Clayton K. Yeutter, Trustee
1325 Merrie Ridge Road
McLean, Virginia 22101
OPPENHEIMER INTERNATIONAL GROWTH FUND
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. XX-000000
(upper right box with heading: CLASS Y SHARES below cert. no.)
(centered below boxes): OPPENHEIMER INTERNATIONAL GROWTH FUND
A MASSACHUSETTS BUSINESS TRUST
(at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
(box with number) CUSIP 68380L407
(at left) _________________________ is the owner of
(centered) FULLY PAID CLASS Y SHARES OF BENEFICIAL INTEREST OF
OPPENHEIMER INTERNATIONAL GROWTH FUND
(hereinafter called the "Fund", transferable only on the books of
the Fund 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 Fund 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 Fund and the signatures of its
duly authorized officers.
(signature Dated: (signature
at left of seal) at right of seal)
/s/ George C. Bowen /s/ Bridget A. Macaskill
---------------------- ------------------------
TREASURER PRESIDENT
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
<PAGE>
OPPENHEIMER INTERNATIONAL GROWTH FUND
SEAL
1995
COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed vertically)
Countersigned
OPPENHEIMERFUNDS SERVICES
(A DIVISION OF OPPENHEIMERFUNDS, INC.)
Englewood (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)
- -----------------------------------------------------
__________________________________________ Class Y 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 Fund with full power of substitution in the premises.
<PAGE>
Dated: ______________________
Signed: __________________________
--------------------------
(Both must sign if joint owners)
Signature(s) ___________________
guarantee Name of Guarantor
by: ___________________
Signature of
Officer/Title
NOTICE: The signature(s) to this assignment must vertically to
correspond with the name(s) as written upon the right of above face of
the certificate in every particular paragraph) without alteration or
enlargement or any change whatever.
(text printed in Signatures must be guaranteed by a financial box to left
of institution of the type described in the current signature(s))
prospectus of the Fund.
PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle. It is invalid without "four hands"
this watermark: logotype
- ------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 21st day of March, 1996, by and between
OPPENHEIMER INTERNATIONAL GROWTH FUND (the "Fund"), and OPPENHEIMERFUNDS, INC.
("OFI").
WHEREAS, the Fund is an open-end, diversified management investment
company registered as such with the Securities and Exchange Commission (the
"Commission") pursuant to the Investment Company Act of 1940 (the "Investment
Company Act"), and OFI 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 OFI and OFI 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. OFI shall, in all matters, give to the
Fund and its 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 its
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 OFI 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 any of the Fund's portfolio securities which
are either not registered for public sale or not being traded on any securities
market.
2. Investment Management.
(a) OFI 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.
<PAGE>
(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, OFI 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 OFI from
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or reckless disregard of its obligations and duties under the Agreement,
OFI 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 OFI 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 OFI or any of its directors, officers or
employees from buying, selling or trading any securities for its 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 OFI
of its duties and obligations under this Agreement and under the Investment
Advisers Act of 1940.
3. Other Duties of OFI.
OFI 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 its
operations for the shareholders of the Fund; composition of proxy materials for
meetings of the Fund's shareholders and the composition of such registration
statements as may be required by federal securities laws for continuous public
sale of shares of the Fund. OFI shall, at its own cost and expense, also provide
the Fund with adequate office space, facilities and equipment.
4. Allocation of Expenses.
All other costs and expenses not expressly assumed by OFI under this
Agreement, or to be paid by the General Distributor of the shares of the Fund,
shall be paid by the Fund, including, but not limited to (i) interest and taxes;
(ii) brokerage commissions; (iii) premiums for fidelity and other insurance
coverage requisite to its operations; (iv) the fees and expenses of its
Trustees; (v) legal and audit expenses; (vi) custodian and transfer agent fees
and expenses; (vii) expenses incident to the redemption of its shares; (viii)
expenses incident to the issuance of its shares against payment therefor by or
on behalf of the subscribers thereto; (ix) fees and expenses, other than as
hereinabove provided, incident to the registration under federal securities laws
of shares of the 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 obligation which the Fund may
have to indemnify its officers and
2
<PAGE>
Trustees with respect thereto. Any officers or employees of OFI or any entity
controlling, controlled by or under common control with OFI, 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 OFI.
The Fund agrees to pay OFI and OFI 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 assets of
the Fund as of the close of each business day and payable monthly at the
following annual rates:
.80% of the first $250 million of aggregate net assets; .77%
of the next $250 million; .75% of the next $500 million; .69%
of the next $1 billion; and .67% of aggregate net assets over
$2 billion.
6. Use of Name "Oppenheimer."
OFI hereby grants to the Fund a royalty-free, non-exclusive license to use
the name "Oppenheimer" in the name of the Fund for the duration of this
Agreement and any extensions or renewals thereof. Such license may, upon
termination of this Agreement, be terminated by OFI, 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 "Oppenheimer" in the name of the Fund or
otherwise. The name "Oppenheimer" may be used or licensed by OFI in connection
with any of its activities or licensed by OFI to any other party.
7. Portfolio Transactions and Brokerage.
(a) OFI is authorized, in arranging the Fund's portfolio transactions, to
employ or deal with such members of securities or commodities exchanges, brokers
or dealers, including "affiliated" broker dealers (as that term is defined in
the Investment Company Act) (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,
consistent with the provisions of subparagraph "(c)" of this paragraph "7," the
benefit of such investment information or research as may be of significant
assistance to the performance by OFI of its investment management functions.
(b) OFI shall select broker-dealers to effect the Fund's portfolio
transactions on the basis of its estimate of their ability to obtain best
execution of particular and related portfolio transactions.
The abilities of a broker-dealer to obtain best execution of particular
portfolio transaction(s) will be judged by OFI on the basis of all relevant
factors and considerations including, insofar as feasible,
3
<PAGE>
the execution capabilities required by the transaction or transactions; the
ability and willingness of the broker-dealer to facilitate the Fund's portfolio
transactions by participating therein for its own account; the importance to the
Fund of speed, efficiency or confidentiality; the broker-dealer's apparent
familiarity with sources from or to whom particular securities might be
purchased or sold; as well as any other matters relevant to the selection of a
broker-dealer for particular and related transactions of the Fund.
(c) OFI shall have discretion, in the interests of the Fund, to allocate
brokerage on the Fund's portfolio transactions to broker-dealers other than
affiliated broker-dealers, qualified to obtain best execution of such
transactions who provide brokerage and/or research services (as such services
are defined in Section 23(e)(3) of the Securities Exchange Act of 1934) for the
Fund and/or other accounts for which OFI and its affiliates exercise "investment
discretion" (as that term is defined in Section 3(a)(35) of the Securities
Exchange Act of 1934) and to cause the Fund to pay such broker-dealers a
commission for effecting a portfolio transaction for the Fund that is in excess
of the amount of commission another broker-dealer adequately qualified to effect
such transaction would have charged for effecting that transaction, if OFI
determines, in good faith, that such commission is reasonable in relation to the
value of the brokerage and/or research services provided by such broker-dealer,
viewed in terms of either that particular transaction or the overall
responsibilities of OFI and its investment advisory affiliates with respect to
the accounts as to which they exercise investment discretion. In reaching such
determination, OFI will not be required to place or attempt to place a specific
dollar value on the brokerage and/or research services provided or being
provided by such broker-dealer. In demonstrating that such determinations were
made in good faith, OFI shall be prepared to show that all commissions were
allocated for the purposes contemplated by this Agreement and that the total
commissions paid by the Fund over a representative period selected by the Fund's
trustees were reasonable in relation to the benefits to the Fund.
(d) OFI shall have no duty or obligation to seek advance competitive
bidding for the most favorable commission rate applicable to any particular
portfolio transactions or to select any broker-dealer on the basis of its
purported or "posted" commission rate but will, to the best of its ability,
endeavor to be aware of the current level of the charges of eligible
broker-dealers and to minimize the expense incurred by the Fund for effecting
its portfolio transactions to the extent consistent with the interests and
policies of the Fund as established by the determinations of its Board of
Trustees and the provisions of this paragraph "7."
(e) The Fund recognizes that an affiliated broker-dealer (i) may act as
one of the Fund's regular brokers so long as it is lawful for it so to act; (ii)
may be a major recipient of brokerage commissions paid by the Fund; and (iii)
may effect portfolio transactions for the Fund only if the commissions, fees or
other remuneration received or to be received by it are determined in accordance
with procedures contemplated by any rule, regulation or order adopted under the
Investment Company Act for determining the permissible level of such
commissions.
4
<PAGE>
(f) Subject to the foregoing provisions of this paragraph "7", OFI may
also consider sales of Fund shares and shares of other investment companies
managed by OFI or its affiliates as a factor in the selection of broker-dealers
for the Fund's portfolio transactions.
8. Duration.
This Agreement will take effect on the date first set forth above and will
continue in effect until November 30, 1996, and thereafter, from year to year,
so long as such continuance shall be approved at least annually in the manner
contemplated by Section 15 of the Investment Company Act.
9. Termination.
This Agreement may be terminated (i) by OFI 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 OFI (which notice may be waived by OFI) provided that such
termination by the Fund shall be directed or approved by the vote of a majority
of all of the Trustees of the Fund then in office or by the vote of the holders
of a "majority" (as defined in the Investment Company Act) of the outstanding
voting securities of the Fund.
10. Assignment or Amendment.
This Agreement may not be amended without the affirmative vote or written
consent of the holders of a "majority" of the outstanding voting securities of
the Fund, and shall automatically and immediately terminate in the event of its
"assignment," as defined in the Investment Company Act.
11. Disclaimer of Shareholder Liability.
OFI 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. OFI 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.
5
<PAGE>
12. Definitions.
The terms and provisions of this Agreement shall be interpreted and
defined in a manner consistent with the provisions and definitions of the
Investment Company Act.
OPPENHEIMER INTERNATIONAL GROWTH FUND
By: /s/ Andrew J. Donohue
----------------------------
Andrew J. Donohue, Secretary
OPPENHEIMERFUNDS, INC.
/s/ Andrew J. Donohue
---------------------------
Andrew J. Donohue
Executive Vice President
6
GENERAL DISTRIBUTOR'S AGREEMENT
BETWEEN
OPPENHEIMER INTERNATIONAL GROWTH FUND
AND
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
Date: March 21, 1996
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
Two World Trade Center, Suite 3400
New York, NY 10048
Dear Sirs:
OPPENHEIMER INTERNATIONAL GROWTH FUND, a Massachusetts business trust (the
"Fund"), is registered as an investment company under the Investment Company Act
of 1940 (the "1940 Act"), and an indefinite number of one or more classes of its
shares of beneficial interest ("Shares") have been registered under the
Securities Act of 1933 (the "1933 Act") to be offered for sale to the public in
a continuous public offering in accordance with the terms and conditions set
forth in the Prospectus and Statement of Additional Information ("SAI") included
in the Fund's Registration Statement as it may be amended from time to time (the
"current Prospectus and/or SAI").
In this connection, the Fund desires that your firm (the "General
Distributor") act in a principal capacity as General Distributor for the sale
and distribution of Shares which have been registered as described above and of
any additional Shares which may become registered during the term of this
Agreement. You have advised the Fund that you are willing to act as such General
Distributor, and it is accordingly agreed by and between us as follows:
1. Appointment of the Distributor. The Fund hereby appoints you as the
sole General Distributor, pursuant to the aforesaid continuous public offering
of its Shares, and the Fund further agrees from and after the date of this
Agreement, that it will not, without your consent, sell or agree to sell any
Shares otherwise than through you, except (a) the Fund may itself sell shares
without sales charge as an investment to the officers, trustees or directors and
bona fide present and former full-time employees of the Fund, the Fund's
Investment Adviser and affiliates thereof, and to other investors who are
identified in the current Prospectus and/or SAI as having the privilege to buy
Shares at net asset value; (b) the Fund may issue shares in connection with a
merger, consolidation or acquisition of assets on such basis as may be
authorized or permitted under the 1940 Act; (c) the Fund may issue shares for
the reinvestment of dividends and other distributions of the Fund or of any
other Fund if permitted by the current Prospectus and/or SAI; and (d) the Fund
may issue shares as underlying securities of a unit investment trust if such
unit investment trust has elected to use Shares as an underlying investment;
provided that in no event as to any of the foregoing exceptions shall Shares be
issued and sold at less than the then-existing net asset value.
1
<PAGE>
2. Sale of Shares. You hereby accept such appointment and agree to use
your best efforts to sell Shares, provided, however, that when requested by the
Fund at any time because of market or other economic considerations or abnormal
circumstances of any kind, or when agreed to by mutual consent of the Fund and
the General Distributor, you will suspend such efforts. The Fund may also
withdraw the offering of Shares at any time when required by the provisions of
any statute, order, rule or regulation of any governmental body having
jurisdiction. It is understood that you do not undertake to sell all or any
specific number of Shares.
3. Sales Charge. Shares shall be sold by you at net asset value plus a
front-end sales charge not in excess of 8.5% of the offering price, but which
front-end sales charge shall be proportionately reduced or eliminated for larger
sales and under other circumstances, in each case on the basis set forth in the
Fund's current Prospectus and/or SAI. The redemption proceeds of shares offered
and sold at net asset value with or without a front-end sales charge may be
subject to a contingent deferred sales charge ("CDSC") under the circumstances
described in the current Prospectus and/or SAI. You may reallow such portion of
the front-end sales charge to dealers or cause payment (which may exceed the
front-end sales charge, if any) of commissions to brokers through which sales
are made, as you may determine, and you may pay such amounts to dealers and
brokers on sales of shares from your own resources (such dealers and brokers
shall collectively include all domestic or foreign institutions eligible to
offer and sell the Shares), and in the event the Fund has more than one class of
Shares outstanding, then you may impose a front-end sales charge and/or a CDSC
on Shares of one class that is different from the charges imposed on Shares of
the Fund's other class(es), in each case as set forth in the current Prospectus
and/or SAI, provided the front-end sales charge and CDSC to the ultimate
purchaser do not exceed the respective levels set forth for such category of
purchaser in the Fund's current Prospectus and/or SAI.
4. Purchase of Shares.
(a) As General Distributor, you shall have the right to accept or
reject orders for the purchase of Shares at your discretion.
Any consideration which you may receive in connection with a
rejected purchase order will be returned promptly.
(b) You agree promptly to issue or to cause the duly appointed
transfer or shareholder servicing agent of the Fund to issue as your
agent confirmations of all accepted purchase orders and to transmit a
copy of such confirmations to the Fund. The net asset value of all
Shares which are the subject of such confirmations, computed in
accordance with the applicable rules under the 1940 Act, shall be a
liability of the General Distributor to the Fund to be paid promptly
after receipt of payment from the originating dealer or broker (or
investor, in the case of direct purchases) and not later than eleven
business days after such confirmation even if you have not actually
received payment from the originating dealer or broker or investor. In
no event shall the
2
<PAGE>
General Distributor make payment to the Fund later than
permitted by applicable rules of the National Association of
Securities Dealers, Inc.
(c) If the originating dealer or broker shall fail to make timely
settlement of its purchase order in accordance with applicable rules
of the National Association of Securities Dealers, Inc., or if a
direct purchaser shall fail to make good payment for shares in a
timely manner, you shall have the right to cancel such purchase order
and, at your account and risk, to hold responsible the originating
dealer or broker, or investor. You agree promptly to reimburse the
Fund for losses suffered by it that are attributable to any such
cancellation, or to errors on your part in relation to the effective
date of accepted purchase orders, limited to the amount that such
losses exceed contemporaneous gains realized by the Fund for either of
such reasons with respect to other purchase orders.
(d) In the case of a canceled purchase for the account of a
directly purchasing shareholder, the Fund agrees that if such investor
fails to make you whole for any loss you pay to the Fund on such
canceled purchase order, the Fund will reimburse you for such loss to
the extent of the aggregate redemption proceeds of any other shares of
the Fund owned by such investor, on your demand that the Fund exercise
its right to claim such redemption proceeds. The Fund shall register
or cause to be registered all Shares sold to you pursuant to the
provisions hereof in such names and amounts as you may request from
time to time and the Fund shall issue or cause to be issued
certificates evidencing such Shares for delivery to you or pursuant to
your direction if and to the extent that the shareholder account in
question contemplates the issuance of such certificates. All Shares
when so issued and paid for, shall be fully paid and non-assessable by
the Fund (which shall not prevent the imposition of any CDSC that may
apply) to the extent set forth in the current Prospectus and/or SAI.
5. Repurchase of Shares.
(a) In connection with the repurchase of Shares, you are
appointed and shall act as Agent of the Fund. You are authorized, for
so long as you act as General Distributor of the Fund, to repurchase,
from authorized dealers, certificated or uncertificated shares of the
Fund ("Shares") on the basis of orders received from each dealer
("authorized dealer") with which you have a dealer agreement for the
sale of Shares and permitting resales of Shares to you, provided that
such authorized dealer, at the time of placing such resale order,
shall represent (i) if such Shares are represented by certificate(s),
that certificate(s) for the Shares to be repurchased have been
delivered to it by the registered owner with a request for the
redemption of such Shares executed
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<PAGE>
in the manner and with the signature guarantee required by the
then-currently effective prospectus of the Fund, or (ii) if
such Shares are uncertificated, that the registered owner(s)
has delivered to the dealer a request for the redemption of
such Shares executed in the manner and with the signature
guarantee required by the then-currently effective prospectus
of the Fund.
(b) You shall (a) have the right in your discretion to accept or
reject orders for the repurchase of Shares; (b) promptly transmit
confirmations of all accepted repurchase orders; and (c) transmit a
copy of such confirmation to the Fund, or, if so directed, to any duly
appointed transfer or shareholder servicing agent of the Fund. In your
discretion, you may accept repurchase requests made by a financially
responsible dealer which provides you with indemnification in form
satisfactory to you in consideration of your acceptance of such
dealer's request in lieu of the written redemption request of the
owner of the account; you agree that the Fund shall be a third party
beneficiary of such indemnification.
(c) Upon receipt by the Fund or its duly appointed transfer or
shareholder servicing agent of any certificate(s) (if any has been
issued) for repurchased Shares and a written redemption request of the
registered owner(s) of such Shares executed in the manner and bearing
the signature guarantee required by the then-currently effective
Prospectus or SAI of the Fund, the Fund will pay or cause its duly
appointed transfer or shareholder servicing agent promptly to pay to
the originating authorized dealer the redemption price of the
repurchased Shares (other than repurchased Shares subject to the
provisions of part (d) of Section 5 of this Agreement) next determined
after your receipt of the dealer's repurchase order.
(d) Notwithstanding the provisions of part (c) of Section 5 of
this Agreement, repurchase orders received from an authorized dealer
after the determination of the Fund's redemption price on a regular
business day will receive that day's redemption price if the request
to the dealer by its customer to arrange such repurchase prior to the
determination of the Fund's redemption price that day complies with
the requirements governing such requests as stated in the current
Prospectus and/or SAI.
(e) You will make every reasonable effort and take all reasonably
available measures to assure the accurate performance of all services
to be performed by you hereunder within the requirements of any
statute, rule or regulation pertaining to the redemption of shares of
a regulated investment company and any requirements set forth in the
then-current Prospectus and/or SAI of the Fund. You shall correct any
error or omission made by you in the performance of your duties
hereunder of which you shall have received notice
4
<PAGE>
in writing and any necessary substantiating data; and you
shall hold the Fund harmless from the effect of any errors or
omissions which might cause an over- or under-redemption of
the Fund's Shares and/or an excess or non-payment of
dividends, capital gains distributions, or other
distributions.
(f) In the event an authorized dealer initiating a repurchase
order shall fail to make delivery or otherwise settle such order in
accordance with the rules of the National Association of Securities
Dealers, Inc., you shall have the right to cancel such repurchase
order and, at your account and risk, to hold responsible the
originating dealer. In the event that any cancellation of a Share
repurchase order or any error in the timing of the acceptance of a
Share repurchase order shall result in a gain or loss to the Fund, you
agree promptly to reimburse the Fund for any amount by which any loss
shall exceed then- existing gains so arising.
6. 1933 Act Registration. The Fund has delivered to you a copy of its
current Prospectus and SAI. The Fund agrees that it will use its best efforts to
continue the effectiveness of the Registration Statement under the 1933 Act. The
Fund further agrees to prepare and file any amendments to its Registration
Statement as may be necessary and any supplemental data in order to comply with
the 1933 Act. The Fund will furnish you at your expense with a reasonable number
of copies of the Prospectus and SAI and any amendments thereto for use in
connection with the sale of Shares.
7. 1940 Act Registration. The Fund has already registered under
the 1940 Act as an investment company, and it will use its best
efforts to maintain such registration and to comply with the
requirements of the 1940 Act.
8. State Blue Sky Qualification. At your request, the Fund will take such
steps as may be necessary and feasible to qualify Shares for sale in states,
territories or dependencies of the United States, the District of Columbia, the
Commonwealth of Puerto Rico and in foreign countries, in accordance with the
laws thereof, and to renew or extend any such qualification; provided, however,
that the Fund shall not be required to qualify shares or to maintain the
qualification of shares in any jurisdiction where it shall deem such
qualification disadvantageous to the Fund.
9. Duties of Distributor. You agree that:
(a) Neither you nor any of your officers will take any long or
short position in the Shares, but this provision shall not
prevent you or your officers from acquiring Shares for
investment purposes only; and
(b) You shall furnish to the Fund any pertinent information
required to be inserted with respect to you as General
Distributor within the purview of the
5
<PAGE>
Securities Act of 1933 in any reports or registration
required to be filed with
any governmental authority; and
(c) You will not make any representations inconsistent with the
information contained in the current Prospectus and/or SAI;
and
(d) You shall maintain such records as may be reasonably required
for the Fund or its transfer or shareholder servicing agent to respond
to shareholder requests or complaints, and to permit the Fund to
maintain proper accounting records, and you shall make such records
available to the Fund and its transfer agent or shareholder servicing
agent upon request; and
(e) In performing under this Agreement, you shall comply with all
requirements of the Fund's current Prospectus and/or SAI and all
applicable laws, rules and regulations with respect to the purchase,
sale and distribution of Shares.
10. Allocation of Costs. The Fund shall pay the cost of composition and
printing of sufficient copies of its Prospectus and SAI as shall be required for
periodic distribution to its shareholders and the expense of registering Shares
for sale under federal securities laws. You shall pay the expenses normally
attributable to the sale of Shares, other than as paid under the Fund's
Distribution Plan under Rule 12b-1 of the 1940 Act, including the cost of
printing and mailing of the Prospectus (other than those furnished to existing
shareholders) and any sales literature used by you in the public sale of the
Shares and for registering such shares under state blue sky laws pursuant to
paragraph 8.
11. Duration. This Agreement shall take effect on the date first written
above, and shall supersede any and all prior General Distributor's Agreements by
and among the Fund and you. Unless earlier terminated pursuant to paragraph 12
hereof, this Agreement shall remain in effect until November 30, 1996. This
Agreement shall continue in effect from year to year thereafter, provided that
such continuance shall be specifically approved at least annually: (a) by the
Fund's Board of Trustees or by vote of a majority of the voting securities of
the Fund; and (b) by the vote of a majority of the Trustees, who are not parties
to this Agreement or "interested persons" (as defined the 1940 Act) of any such
person, cast in person at a meeting called for the purpose of voting on such
approval.
12. Termination. This Agreement may be terminated (a) by the General
Distributor at any time without penalty by giving sixty days' written notice
(which notice may be waived by the Fund); (b) by the Fund at any time without
penalty upon sixty days' written notice to the General Distributor (which notice
may be waived by the General Distributor); or (c) by mutual consent of the Fund
and the General Distributor, provided that such termination by the Fund shall be
directed or approved by the Board of Trustees of the Fund or by the vote of the
holders of a "majority" of the outstanding voting securities of the Fund. In the
event this Agreement is terminated by the Fund,
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<PAGE>
the General Distributor shall be entitled to be paid the CDSC under paragraph 3
hereof on the redemption proceeds of Shares sold prior to the effective date of
such termination.
13. Assignment. This Agreement may not be amended or changed except in
writing and shall be binding upon and shall enure to the benefit of the parties
hereto and their respective successors; however, this Agreement shall not be
assigned by either party and shall automatically terminate upon assignment.
14. Disclaimer of Shareholder Liability. The General Distributor
understands and agrees 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 General Distributor 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.
15. Section Headings. The heading of each section is for descriptive
purposes only, and such headings are not to be construed or interpreted as part
of this Agreement.
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<PAGE>
If the foregoing is in accordance with your understanding, so indicate by
signing in the space provided below.
OPPENHEIMER INTERNATIONAL GROWTH
FUND
By: /s/ Andrew J. Donohue
----------------------------------
Andrew J. Donohue
Secretary
Accepted:
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
By: /s/ Katherine P. Feld
-------------------------------
Katherine P. Feld
Vice President & Secretary
8
INDEPENDENT AUDITORS' CONSENT
To The Board of Trustees of
Oppenheimer International Growth Fund:
We consent to the use in this Registration Statement of
Oppenheimer International Growth Fund of our report dated December 19,
1997, appearing in the Statement of Additional Information, which is a
part of such Registration Statement, and to the reference to our firm
under the heading "Financial Highlights" appearing in the Prospectus,
which is also a part of such Registration Statement.
/s/ KPMG Peat Marwick LLP
- --------------------------------------------------
KPMG Peat Marwick LLP
Denver, Colorado
March 16, 1998
Exhibit 24(b)(15)(i)
SERVICE PLAN AND AGREEMENT
BETWEEN
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
AND
OPPENHEIMER INTERNATIONAL GROWTH FUND
FOR CLASS A SHARES
SERVICE PLAN AND AGREEMENT (the "Plan") dated the 21st day of March, 1996, by
and between OPPENHEIMER INTERNATIONAL GROWTH FUND (the "Fund") and
OPPENHEIMERFUNDS DISTRIBUTOR, INC. (the "Distributor").
1. The Plan. This Plan is the Fund's written service plan for its Class A Shares
described in the Fund's registration statement as of the date this Plan takes
effect, contemplated by and to comply with Article III, Section 26 of the Rules
of Fair Practice of the National Association of Securities Dealers, pursuant to
which the Fund will reimburse the Distributor for a portion of its costs
incurred in connection with the that hold Class A Shares (the "Shares") of such
series and class of the Fund. The Fund may be deemed to be acting as distributor
of securities of which it is the issuer, pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "1940 Act"), according to the terms of this
Plan. The Distributor is authorized under the Plan to pay "Recipients," as
hereinafter defined, for rendering services and for the maintenance of Accounts.
Such Recipients are intended to have certain rights as third-party beneficiaries
under this Plan.
2. Definitions. As used in this Plan, the following terms shall have the
following meanings:
(a) "Recipient" shall mean any broker, dealer, bank or other institution
which: (i) has rendered services in connection with the personal service
and maintenance of Accounts; (ii) shall furnish the Distributor (on behalf
of the Fund) with such information as the Distributor shall reasonably
request to answer such questions as may arise concerning such service; and
(iii) has been selected by the Distributor to receive payments under the
Plan. Notwithstanding the foregoing, a majority of the Fund's Board of
Trustees (the "Board") who are not "interested persons" (as defined in the
1940 Act) and who have no direct or indirect financial interest in the
operation of this Plan or in any agreements relating to this Plan (the
"Independent Trustees") may remove any broker, dealer, bank or other
institution as a Recipient, whereupon such entity's rights as a
third-party beneficiary hereof shall terminate.
(b) "Qualified Holdings" shall mean, as to any Recipient, all Shares owned
beneficially or of record by: (i) such Recipient, or (ii) such customers,
clients and/or accounts as to which such Recipient is a fiduciary or
custodian or co-fiduciary or co-custodian (collectively, the "Customers"),
but in no event shall any such Shares be deemed owned by more than one
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Recipient for purposes of this Plan. In the event that two entities would
otherwise qualify as Recipients as to the same Shares, the Recipient which
is the dealer of record on the Fund's books shall be deemed the Recipient
as to such Shares for purposes of this Plan.
3. Payments.
(a) Under the Plan, the Fund will make payments to the Distributor, within
forty-five (45) days of the end of each calendar quarter, in the amount of
the lesser of: (i) .0625% (.25% on an annual basis) of the average during
the calendar quarter of the aggregate net asset value of the Shares,
computed as of the close of each business day, or (ii) the Distributor's
actual expenses under the Plan for that quarter of the type approved by
the Board. The Distributor will use such fee received from the Fund in its
entirety to reimburse itself for payments to Recipients and for its other
expenditures and costs of the type approved by the Board incurred in
connection with the personal service and maintenance of Accounts
including, but not limited to, the services described in the following
paragraph. The Distributor may make Plan payments to any "affiliated
person" (as defined in the 1940 Act) of the Distributor if such affiliated
person qualifies as a Recipient.
The services to be rendered by the Distributor and Recipients in
connection with the personal service and the maintenance of Accounts may
include, but shall not be limited to, the following: answering routine
inquiries from the Recipient's customers concerning the Fund, providing
such customers with information on their investment in shares, assisting
in the establishment and maintenance of accounts or sub-accounts in the
Fund, making the Fund's investment plans and dividend payment options
available, and providing such other information and customer liaison
services and the maintenance of Accounts as the Distributor or the Fund
may reasonably request. It may be presumed that a Recipient has provided
services qualifying for compensation under the Plan if it has Qualified
Holdings of Shares to entitle it to payments under the Plan. In the event
that either the Distributor or the Board should have reason to believe
that, notwithstanding the level of Qualified Holdings, a Recipient may not
be rendering appropriate services, then the Distributor, at the request of
the Board, shall require the Recipient to provide a written report or
other information to verify that said Recipient is providing appropriate
services in this regard. If the Distributor still is not satisfied, it may
take appropriate steps to terminate the Recipient's status as such under
the Plan, whereupon such entity's rights as a third-party beneficiary
hereunder shall terminate.
Payments received by the Distributor from the Fund under the Plan
will not be used to pay any interest expense, carrying charges or other
financial costs, or allocation of overhead by the Distributor, or for any
other purpose other than for the payments described in this Section 3. The
amount payable to the Distributor each quarter will be reduced to the
extent that reimbursement payments otherwise permissible under the Plan
have not been authorized by the Board of Trustees for that quarter. Any
unreimbursed expenses incurred for any quarter by the Distributor may not
be recovered in later periods.
(b) The Distributor shall make payments to any Recipient quarterly, within
forty-five (45) days of the end of each calendar quarter, at a rate not to
exceed .0625% (.25% on an annual basis) of the average during the calendar
quarter of the aggregate net asset value of
<PAGE>
the Shares computed as of the close of each business day, of Qualified
Holdings owned beneficially or of record by the Recipient or by its
Customers. However, no such payments shall be made to any Recipient for
any such quarter in which its Qualified Holdings do not equal or exceed,
at the end of such quarter, the minimum amount ("Minimum Qualified
Holdings"), if any, to be set from time to time by a majority of the
Independent Trustees. A majority of the Independent Trustees may at any
time or from time to time increase or decrease and thereafter adjust the
rate of fees to be paid to the Distributor or to any Recipient, but not to
exceed the rate set forth above, and/or increase or decrease the number of
shares constituting Minimum Qualified Holdings. The Distributor shall
notify all Recipients of the Minimum Qualified Holdings and the rate of
payments hereunder applicable to Recipients, and shall provide each
Recipient with written notice within thirty (30) days after any change in
these provisions. Inclusion of such provisions or a change in such
provisions in a revised current prospectus shall constitute sufficient
notice.
(c) Under the Plan, payments may be made to Recipients: (i) by
OppenheimerFunds, Inc. ("OFI") from its own resources (which may include
profits derived from the advisory fee it receives from the Fund), or (ii)
by the Distributor (a subsidiary of OFI), from its own resources.
4. Selection and Nomination of Trustees. While this Plan is in effect, the
selection or replacement of Independent Trustees and the nomination of those
persons to be Trustees of the Fund who are not "interested persons" of the Fund
shall be committed to the discretion of the Independent Trustees. Nothing herein
shall prevent the Independent Trustees from soliciting the views or the
involvement of others in such selection or nomination if the final decision on
any such selection and nomination is approved by a majority of the incumbent
Independent Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the Fund shall
provide at least quarterly a written report to the Fund's Board for its review,
detailing the amount of all payments made pursuant to this Plan, the identity of
the Recipient of each such payment, and the purposes for which the payments were
made. The report shall state whether all provisions of Section 3 of this Plan
have been complied with. The Distributor shall annually certify to the Board the
amount of its total expenses incurred that year with respect to the personal
service and maintenance of Accounts in conjunction with the Board's annual
review of the continuation of the Plan.
6. Related Agreements. Any agreement related to this Plan shall be in writing
and shall provide that: (i) such agreement may be terminated at any time,
without payment of any penalty, by vote of a majority of the Independent
Trustees or by a vote of the holders of a "majority" (as defined in the 1940
Act) of the Fund's outstanding voting securities of the Class, on not more than
sixty days written notice to any other party to the agreement; (ii) such
agreement shall automatically terminate in the event of its "assignment" (as
defined in the 1940 Act); (iii) it shall go into effect when approved by a vote
of the Board and its Independent Trustees cast in person at a meeting called for
the purpose of voting on such agreement; and (iv) it shall, unless terminated as
herein provided, continue in effect from year to year only so long as such
continuance is specifically approved at least annually by the Board and its
Independent Trustees cast in person at a meeting called for the purpose of
voting on such continuance.
<PAGE>
7. Effectiveness, Continuation, Termination and Amendment. This Plan has been
approved by a vote of the Independent Trustees cast in person at a meeting
called on February 22, 1996 for the purpose of voting on this Plan, and shall
take effect on the date that the Fund's Registration Statement is declared
effective by the Securities and Exchange Commission. Unless terminated as
hereinafter provided, it shall continue in effect from year to year thereafter
or as the Board may otherwise determine only so long as such continuance is
specifically approved at least annually by the Board and its Independent
Trustees cast in person at a meeting called for the purpose of voting on such
continuance. This Plan may be terminated at any time by vote of a majority of
the Independent Trustees or by the vote of the holders of a "majority" (as
defined in the 1940 Act) of the Fund's outstanding voting securities of the
Class. This Plan may not be amended to increase materially the amount of
payments to be made without approval of the Class A Shareholders, in the manner
described above, and all material amendments must be approved by a vote of the
Board and of the Independent Trustees.
8. Disclaimer of Shareholder and Trustee Liability. The Distributor understands
that the obligations of the Fund under this Plan are not binding upon any
Trustee or shareholder of the Fund personally, but bind only the Fund and the
Fund's property. The Distributor represents that it has notice of the provisions
of the Declaration of Trust of the Fund disclaiming shareholder and Trustee
liability for acts or obligations of the Fund.
OPPENHEIMER INTERNATIONAL GROWTH FUND
/s/ Robert G. Zack
---------------------------------
Robert G. Zack, Assistant Secretary
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
/s/ Katherine P. Feld
-------------------------------
Katherine P. Feld
Vice President & Secretary
AMENDED AND RESTATED
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
With
OppenheimerFunds Distributor, Inc.
For Class B Shares of
Oppenheimer International Growth Fund
This Amended and Restated Distribution and Service Plan and Agreement (the
"Plan") is dated as of the 12th day of February, 1998, by and between
Oppenheimer International Growth Fund (the "Fund") and OppenheimerFunds
Distributor, Inc. (the "Distributor").
1. The Plan. This Plan is the Fund's written distribution and service plan for
Class B shares of the Fund (the "Shares"), contemplated by Rule 12b-1 as it may
be amended from time to time (the "Rule") under the Investment Company Act of
1940 (the "1940 Act"), pursuant to which the Fund will compensate the
Distributor for its services in connection with the distribution of Shares, and
the personal service and maintenance of shareholder accounts that hold Shares
("Accounts"). The Fund may act as distributor of securities of which it is the
issuer, pursuant to the Rule, according to the terms of this Plan.
The terms and provisions of this Plan shall be interpreted and defined in a
manner consistent with the provisions and definitions contained in (i) the 1940
Act, (ii) the Rule, (iii) Rule 2830 of the Conduct Rules of the National
Association of Securities Dealers, Inc., or any amendment or successor to such
rule (the "NASD Conduct Rules") and (iv) any conditions pertaining either to
distribution-related expenses or to a plan of distribution to which the Fund is
subject under any order on which the Fund relies, issued at any time by the U.S.
Securities and Exchange Commission ("SEC").
2. Definitions. As used in this Plan, the following terms shall have the
following meanings:
(a) "Recipient" shall mean any broker, dealer, bank or other person or
entity which: (i) has rendered assistance (whether direct, administrative or
both) in the distribution of Shares or has provided administrative support
services with respect to Shares held by Customers (defined below) of the
Recipient; (ii) shall furnish the Distributor (on behalf of the Fund) with such
information as the Distributor shall reasonably request to answer such questions
as may arise concerning the sale of Shares; and (iii) has been selected by the
Distributor to receive payments under the Plan.
(b) "Independent Trustees" shall mean the members of the Fund's Board of
Trustees who are not "interested persons" (as defined in the 1940 Act) of the
Fund and who have no direct or indirect financial interest in the operation of
this Plan or in any agreement relating
to this Plan.
(c) "Customers" shall mean such brokerage or other customers or investment
advisory or other clients of a Recipient, and/or accounts as to which such
Recipient provides administrative support services or is a custodian or other
fiduciary.
(d) "Qualified Holdings" shall mean, as to any Recipient, all Shares owned
beneficially or of record by: (i) such Recipient, or (ii) such Recipient's
Customers, but in no event shall any such Shares
1
<PAGE>
be deemed owned by more than one Recipient for purposes of this Plan. In the
event that more than one person or entity would otherwise qualify as Recipients
as to the same Shares, the Recipient which is the dealer of record on the Fund's
books as determined by the Distributor shall be deemed the Recipient as to such
Shares for purposes of this Plan.
3. Payments for Distribution Assistance and Administrative Support
Services.
(a) Payments to the Distributor. In consideration of the payments made by
the Fund to the Distributor under this Plan, the Distributor shall provide
administrative support services and distribution assistance services to the
Fund. Such services include distribution assistance and administrative support
services rendered in connection with Shares (1) sold in purchase transactions,
(2) issued in exchange for shares of another investment company for which the
Distributor serves as distributor or sub-distributor, or (3) issued pursuant to
a plan of reorganization to which the Fund is a party. If the Board believes
that the Distributor may not be rendering appropriate distribution assistance or
administrative support services in connection with the sale of Shares, then the
Distributor, at the request of the Board, shall provide the Board with a written
report or other information to verify that the Distributor is providing
appropriate services in this regard. For such services, the Fund will make the
following payments to the Distributor:
(i) Administrative Support Services Fees. Within forty-five (45)
days of the end of each calendar quarter, the Fund will make payments in the
aggregate amount of 0.0625% (0.25% on an annual basis) of the average during
that calendar quarter of the aggregate net asset value of the Shares computed as
of the close of each business day (the "Service Fee"). Such Service Fee payments
received from the Fund will compensate the Distributor for providing
administrative support services with respect to Accounts. The administrative
support services in connection with Accounts may include, but shall not be
limited to, the administrative support services that a Recipient may render as
described in Section 3(b)(i) below.
(ii) Distribution Assistance Fees (Asset-Based Sales Charge). Within
ten (10) days of the end of each month, the Fund will make payments in the
aggregate amount of 0.0625% (0.75% on an annual basis) of the average during the
month of the aggregate net asset value of Shares computed as of the close of
each business day (the "Asset-Based Sales Charge") outstanding for no more than
six years (the "Maximum Holding Period"). Such Asset-Based Sales Charge payments
received from the Fund will compensate the Distributor for providing
distribution assistance in connection with the sale of Shares.
The distribution assistance to be rendered by the Distributor in
connection with the Shares may include, but shall not be limited to, the
following: (i) paying sales commissions to any broker, dealer, bank or other
person or entity that sells Shares, and\or paying such persons "Advance Service
Fee Payments" (as defined below) in advance of, and\or in amounts greater than,
the amount provided for in Section 3(b) of this Agreement; (ii) paying
compensation to and expenses of personnel of the Distributor who support
distribution of Shares by Recipients; (iii) obtaining financing or providing
such financing from its own resources, or from an affiliate, for the interest
and other borrowing costs of the Distributor's unreimbursed expenses incurred in
rendering distribution assistance and administrative support services to the
Fund; and (iv) paying other direct distribution costs, including
2
<PAGE>
without limitation the costs of sales literature, advertising and prospectuses
(other than those prospectuses furnished to current holders of the Fund's shares
("Shareholders")) and state "blue sky" registration expenses.
(b) Payments to Recipients. The Distributor is authorized under
the Plan to pay Recipients (1) distribution assistance fees for
rendering distribution assistance in connection with the sale of
Shares and/or (2) service fees for rendering administrative support
services with respect to Accounts. However, no such payments shall be
made to any Recipient for any such quarter in which its Qualified
Holdings do not equal or exceed, at the end of such quarter, the
minimum amount ("Minimum Qualified Holdings"), if any, that may be set
from time to time by a majority of the Independent Trustees. All fee
payments made by the Distributor hereunder are subject to reduction or
chargeback so that the aggregate service fee payments and Advance
Service Fee Payments do not exceed the limits on payments to
Recipients that are, or may be, imposed by the NASD Conduct Rules. The
Distributor may make Plan payments to any "affiliated person" (as
defined in the 1940 Act) of the Distributor if such affiliated person
qualifies as a Recipient or retain such payments if the Distributor
qualifies as a Recipient.
(i) Service Fee. In consideration of the administrative support
services provided by a Recipient during a calendar quarter, the Distributor
shall make service fee payments to that Recipient quarterly, within forty-five
(45) days of the end of each calendar quarter, at a rate not to exceed 0.0625%
(0.25% on an annual basis) of the average during the calendar quarter of the
aggregate net asset value of Shares, computed as of the close of each business
day, constituting Qualified Holdings owned beneficially or of record by the
Recipient or by its Customers for a period of more than the minimum period (the
"Minimum Holding Period"), if any, that may be set from time to time by a
majority of the Independent Trustees.
Alternatively, the Distributor may, at its sole option, make the
following service fee payments to any Recipient quarterly, within forty-five
(45) days of the end of each calendar quarter: (i) "Advance Service Fee
Payments" at a rate not to exceed 0.25% of the average during the calendar
quarter of the aggregate net asset value of Shares, computed as of the close of
business on the day such Shares are sold, constituting Qualified Holdings, sold
by the Recipient during that quarter and owned beneficially or of record by the
Recipient or by its Customers, plus (ii) service fee payments at a rate not to
exceed 0.0625% (0.25% on an annual basis) of the average during the calendar
quarter of the aggregate net asset value of Shares, computed as of the close of
each business day, constituting Qualified Holdings owned beneficially or of
record by the Recipient or by its Customers for a period of more than one (1)
year. At the Distributor's sole option, the Advance Service Fee Payments may be
made more often than quarterly, and sooner than the end of the calendar quarter.
In the event Shares are redeemed less than one year after the date such Shares
were sold, the Recipient is obligated to and will repay the Distributor on
demand a pro rata portion of such Advance Service Fee Payments, based on the
ratio of the time such Shares were held to one (1) year.
The administrative support services to be rendered by Recipients in
connection with the Accounts may include, but shall not be limited to, the
following: answering routine inquiries concerning the Fund, assisting in the
establishment and maintenance of accounts or sub-accounts in the Fund and
processing Share redemption transactions, making the Fund's investment plans and
dividend payment options available, and providing such other information and
services in connection with the rendering
3
<PAGE>
of personal services and/or the maintenance of Accounts, as the Distributor
or the Fund may reasonably
request.
(ii) Distribution Assistance Fees (Asset-Based Sales Charge)
Payments. In its sole discretion and irrespective of whichever alternative
method of making service fee payments to Recipients is selected by the
Distributor, in addition the Distributor may make distribution assistance fee
payments to a Recipient quarterly, within forty-five (45) days after the end of
each calendar quarter, at a rate not to exceed 0.1875% (0.75% on an annual
basis) of the average during the calendar quarter of the aggregate net asset
value of Shares computed as of the close of each business day constituting
Qualified Holdings owned beneficially or of record by the Recipient or its
Customers for no more than six years and for any minimum period that the
Distributor may establish. Distribution assistance fee payments shall be made
only to Recipients that are registered with the SEC as a broker-dealer or are
exempt from registration.
The distribution assistance to be rendered by the Recipients in
connection with the sale of Shares may include, but shall not be limited to, the
following: distributing sales literature and prospectuses other than those
furnished to current Shareholders, providing compensation to and paying expenses
of personnel of the Recipient who support the distribution of Shares by the
Recipient, and providing such other information and services in connection with
the distribution of Shares as the Distributor or the Fund may reasonably
request.
(c) A majority of the Independent Trustees may at any time or from time to
time increase or decrease the rate of fees to be paid to the Distributor or to
any Recipient, but not to exceed the rates set forth above, and/or direct the
Distributor to increase or decrease the Maximum Holding Period, any Minimum
Holding Period or any Minimum Qualified Holdings. The Distributor shall notify
all Recipients of any Minimum Qualified Holdings, Maximum Holding Period and
Minimum Holding Period that are established and the rate of payments hereunder
applicable to Recipients, and shall provide each Recipient with written notice
within thirty (30) days after any change in these provisions. Inclusion of such
provisions or a change in such provisions in a revised current prospectus shall
constitute sufficient notice.
(d) The Service Fee and the Asset-Based Sales Charge on Shares are subject
to reduction or elimination under the limits to which the Distributor is, or may
become, subject under the NASD Conduct Rules.
(e) Under the Plan, payments may also be made to Recipients: (i) by
OppenheimerFunds, Inc. ("OFI") from its own resources (which may include profits
derived from the advisory fee it receives from the Fund), or (ii) by the
Distributor (a subsidiary of OFI), from its own resources, from Asset- Based
Sales Charge payments or from the proceeds of its borrowings, in either case, in
the discretion of OFI or the Distributor, respectively.
(f) Recipients are intended to have certain rights as third-party
beneficiaries under this Plan, subject to the limitations set forth below. It
may be presumed that a Recipient has provided distribution assistance or
administrative support services qualifying for payment under the Plan if it has
Qualified Holdings of Shares that entitle it to payments under the Plan. In the
event that either the Distributor or
4
<PAGE>
the Board should have reason to believe that, notwithstanding the level of
Qualified Holdings, a Recipient may not be rendering appropriate distribution
assistance in connection with the sale of Shares or administrative support
services for Accounts, then the Distributor, at the request of the Board, shall
require the Recipient to provide a written report or other information to verify
that said Recipient is providing appropriate distribution assistance and/or
services in this regard.
If the Distributor or the Board of Trustees still is not
satisfied after the receipt of such report, either may take
appropriate steps to terminate the Recipient's status as such under
the Plan, whereupon such Recipient's rights as a third-party
beneficiary hereunder shall terminate. Additionally, in their
discretion, a majority of the Fund's Independent Trustees at any time
may remove any broker, dealer, bank or other person or entity as a
Recipient, where upon such person's or entity's rights as a
third-party beneficiary hereof shall terminate. Notwithstanding any
other provision of this Plan, this Plan does not obligate or in any
way make the Fund liable to make any payment whatsoever to any person
or entity other than directly to the Distributor. The Distributor has
no obligation to pay any Service Fees or Distribution Assistance Fees
to any Recipient if the Distributor has not received payment of
Service Fees or Distribution Fees from the Fund.
4. Selection and Nomination of Trustees. While this Plan is in effect, the
selection and nomination of persons to be Trustees of the Fund who are not
"interested persons" of the Fund ("Disinterested Trustees") shall be committed
to the discretion of the incumbent Disinterested Trustees. Nothing herein shall
prevent the incumbent Disinterested Trustees from soliciting the views or the
involvement of others in such selection or nominations as long as the final
decision on any such selection and nomination is approved by a majority of the
incumbent Disinterested Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the Fund shall
provide written reports to the Fund's Board for its review, detailing the amount
of all payments made under this Plan and the purpose for which the payments were
made. The reports shall be provided quarterly, and shall state whether all
provisions of Section 3 of this Plan have been complied with.
6. Related Agreements. Any agreement related to this Plan shall be in writing
and shall provide that: (i) such agreement may be terminated at any time,
without payment of any penalty, by a vote of a majority of the Independent
Trustees or by a vote of the holders of a "majority" (as defined in the 1940
Act) of the Fund's outstanding Class B voting shares; (ii) such termination
shall be on not more than sixty days' written notice to any other party to the
agreement; (iii) such agreement shall automatically terminate in the event of
its "assignment" (as defined in the 1940 Act); (iv) such agreement shall go into
effect when approved by a vote of the Board and its Independent Trustees cast in
person at a meeting called for the purpose of voting on such agreement; and (v)
such agreement shall, unless terminated as herein provided, continue in effect
from year to year only so long as such continuance is specifically approved at
least annually by a vote of the Board and its Independent Trustees cast in
person at a meeting called for the purpose of voting on such continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Amended and
Restated Plan has been approved by a vote of the Board and of the Independent
Trustees and replaces the Fund's prior Distribution and Service Plan for Class B
Shares. Unless terminated as hereinafter provided, it shall continue in effect
until renewed by the Board in accordance with the Rule and thereafter from year
to
5
<PAGE>
year or as the Board may otherwise determine but only so long as such
continuance is specifically approved at least annually by a vote of the Board
and its Independent Trustees cast in person at a meeting called for the purpose
of voting on such continuance.
This Plan may not be amended to increase materially the amount of payments
to be made under this Plan, without approval of the Class B Shareholders at a
meeting called for that purpose, and all material amendments must be approved by
a vote of the Board and of the Independent Trustees.
This Plan may be terminated at any time by vote of a majority of the
Independent Trustees or by the vote of the holders of a "majority" (as defined
in the 1940 Act) of the Fund's outstanding Class B voting shares. In the event
of such termination, the Board and its Independent Trustees shall determine
whether the Distributor shall be entitled to payment from the Fund of all or a
portion of the Service Fee and/or the Asset-Based Sales Charge in respect of
Shares sold prior to the effective date of such termination.
8. Disclaimer of Shareholder and Trustee Liability. The Distributor understands
that the obligations of the Fund under this Plan are not binding upon any
Trustee or shareholder of the Fund personally, but bind only the Fund and the
Fund's property. The Distributor represents that it has notice of the provisions
of the Declaration of Trust of the Fund disclaiming shareholder and Trustee
liability for acts or obligations of the Fund.
Oppenheimer International Growth Fund
By: /s/ Andrew J. Donohue
----------------------------
Andrew J. Donohue, Secretary
OppenheimerFunds Distributor, Inc.
By: /s/ Katherine P. Feld
------------------------------------
Katherine P. Feld, Vice President &
Secretary
AMENDED AND RESTATED
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
with
OppenheimerFunds Distributor, Inc.
For Class C Shares of
Oppenheimer International Growth Fund
This Amended and Restated Distribution and Service Plan and Agreement (the
"Plan") is dated as of the 12th day of February, 1998, by and between
Oppenheimer International Growth Fund (the "Fund") and OppenheimerFunds
Distributor, Inc. (the "Distributor").
1. The Plan. This Plan is the Fund's written distribution and service plan for
Class C shares of the Fund (the "Shares"), contemplated by Rule 12b-1 as it may
be amended from time to time (the "Rule") under the Investment Company Act of
1940 (the "1940 Act"), pursuant to which the Fund will compensate the
Distributor for its services in connection with the distribution of Shares, and
the personal service and maintenance of shareholder accounts that hold Shares
("Accounts"). The Fund may act as distributor of securities of which it is the
issuer, pursuant to the Rule, according to the terms of this Plan. The terms and
provisions of this Plan shall be interpreted and defined in a manner consistent
with the provisions and definitions contained in (i) the 1940 Act, (ii) the
Rule, (iii) Rule 2830 of the Conduct Rules of the National Association of
Securities Dealers, Inc., or any applicable amendment or successor to such rule
(the "NASD Conduct Rules") and (iv) any conditions pertaining either to
distribution-related expenses or to a plan of distribution to which the Fund is
subject under any order on which the Fund relies, issued at any time by the U.S.
Securities and Exchange Commission ("SEC").
2. Definitions. As used in this Plan, the following terms shall have the
following meanings:
(a) "Recipient" shall mean any broker, dealer, bank or other person or
entity which: (i) has rendered assistance (whether direct, administrative or
both) in the distribution of Shares or has provided administrative support
services with respect to Shares held by Customers (defined below) of the
Recipient; (ii) shall furnish the Distributor (on behalf of the Fund) with such
information as the Distributor shall reasonably request to answer such questions
as may arise concerning the sale of Shares; and (iii) has been selected by the
Distributor to receive payments under the Plan.
(b) "Independent Trustees" shall mean the members of the Fund's Board of
Trustees who are not "interested persons" (as defined in the 1940 Act) of the
Fund and who have no direct or indirect financial interest in the operation of
this Plan or in any agreement relating
to this Plan.
(c) "Customers" shall mean such brokerage or other customers or investment
advisory or other clients of a Recipient, and/or accounts as to which such
Recipient provides administrative support services or is a custodian or other
fiduciary.
(d) "Qualified Holdings" shall mean, as to any Recipient, all Shares
owned beneficially or
1
<PAGE>
of record by: (i) such Recipient, or (ii) such Recipient's Customers, but in no
event shall any such Shares be deemed owned by more than one Recipient for
purposes of this Plan. In the event that more than one person or entity would
otherwise qualify as Recipients as to the same Shares, the Recipient which is
the dealer of record on the Fund's books as determined by the Distributor shall
be deemed the Recipient as to such Shares for purposes of this Plan.
3. Payments for Distribution Assistance and Administrative Support
Services.
(a) Payments to the Distributor. In consideration of the payments made by
the Fund to the Distributor under this Plan, the Distributor shall provide
administrative support services and distribution services to the Fund. Such
services include distribution assistance and administrative support services
rendered in connection with Shares (1) sold in purchase transactions, (2) issued
in exchange for shares of another investment company for which the Distributor
serves as distributor or sub-distributor, or (3) issued pursuant to a plan of
reorganization to which the Fund is a party. If the Board believes that the
Distributor may not be rendering appropriate distribution assistance or
administrative support services in connection with the sale of Shares, then the
Distributor, at the request of the Board, shall provide the Board with a written
report or other information to verify that the Distributor is providing
appropriate services in this regard. For such services, the Fund will make the
following payments to the Distributor:
(i) Administrative Support Services Fees. Within forty-five (45)
days of the end of each calendar quarter, the Fund will make payments in the
aggregate amount of 0.0625% (0.25% on an annual basis) of the average during
that calendar quarter of the aggregate net asset value of the Shares computed as
of the close of each business day (the "Service Fee"). Such Service Fee payments
received from the Fund will compensate the Distributor for providing
administrative support services with respect to Accounts. The administrative
support services in connection with Accounts may include, but shall not be
limited to, the administrative support services that a Recipient may render as
described in Section 3(b)(i) below.
(ii) Distribution Assistance Fees (Asset-Based Sales Charge). Within
ten (10) days of the end of each month, the Fund will make payments in the
aggregate amount of 0.0625% (0.75% on an annual basis) of the average during the
month of the aggregate net asset value of Shares computed as of the close of
each business day (the "Asset-Based Sales Charge"). Such Asset-Based Sales
Charge payments received from the Fund will compensate the Distributor for
providing distribution assistance in connection with the sale of Shares.
The distribution assistance services to be rendered by the Distributor in
connection with the Shares may include, but shall not be limited to, the
following: (i) paying sales commissions to any broker, dealer, bank or other
person or entity that sells Shares, and/or paying such persons "Advance Service
Fee Payments" (as defined below) in advance of, and/or in amounts greater than,
the amount provided for in Section 3(b) of this Agreement; (ii) paying
compensation to and expenses of personnel of the Distributor who support
distribution of Shares by Recipients; (iii) obtaining financing or providing
such financing from its own resources, or from an affiliate, for the interest
and other borrowing costs of the Distributor's unreimbursed expenses incurred in
rendering distribution assistance and administrative support services to the
Fund; and (iv) paying other direct distribution costs, including without
limitation the costs of sales literature, advertising and prospectuses (other
than those
2
<PAGE>
prospectuses furnished to current holders of the Fund's shares ("Shareholders"))
and state "blue sky" registration expenses.
(b) Payments to Recipients. The Distributor is authorized under the Plan
to pay Recipients (1) distribution assistance fees for rendering distribution
assistance in connection with the sale of Shares and/or (2) service fees for
rendering administrative support services with respect to Accounts. However, no
such payments shall be made to any Recipient for any quarter in which its
Qualified Holdings do not equal or exceed, at the end of such quarter, the
minimum amount ("Minimum Qualified Holdings"), if any, that may be set from time
to time by a majority of the Independent Trustees. All fee payments made by the
Distributor hereunder are subject to reduction or chargeback so that the
aggregate service fee payments and Advance Service Fee Payments do not exceed
the limits on payments to Recipients that are, or may be, imposed by the NASD
Conduct Rules. The Distributor may make Plan payments to any "affiliated person"
(as defined in the 1940 Act) of the Distributor if such affiliated person
qualifies as a Recipient or retain such payments if the Distributor qualifies as
a Recipient.
In consideration of the services provided by Recipients, the Distributor
shall make the following payments to Recipients:
(i) Service Fee. In consideration of administrative support services
provided by a Recipient during a calendar quarter, the Distributor shall make
service fee payments to that Recipient quarterly, within forty-five (45) days of
the end of each calendar quarter, at a rate not to exceed 0.0625% (0.25% on an
annual basis) of the average during the calendar quarter of the aggregate net
asset value of Shares, computed as of the close of each business day,
constituting Qualified Holdings owned beneficially or of record by the Recipient
or by its Customers for a period of more than the minimum period (the "Minimum
Holding Period"), if any, that may be set from time to time by a majority of the
Independent Trustees.
Alternatively, the Distributor may, at its sole option, make the following
service fee payments to any Recipient quarterly, within forty-five (45) days of
the end of each calendar quarter: (A) "Advance Service Fee Payments" at a rate
not to exceed 0.25% of the average during the calendar quarter of the aggregate
net asset value of Shares, computed as of the close of business on the day such
Shares are sold, constituting Qualified Holdings, sold by the Recipient during
that quarter and owned beneficially or of record by the Recipient or by its
Customers, plus (B) service fee payments at a rate not to exceed 0.0625% (0.25%
on an annual basis) of the average during the calendar quarter of the aggregate
net asset value of Shares, computed as of the close of each business day,
constituting Qualified Holdings owned beneficially or of record by the Recipient
or by its Customers for a period of more than one (1) year. At the Distributor's
sole option, Advance Service Fee Payments may be made more often than quarterly,
and sooner than the end of the calendar quarter. In the event Shares are
redeemed less than one year after the date such Shares were sold, the Recipient
is obligated to and will repay the Distributor on demand a pro rata portion of
such Advance Service Fee Payments, based on the ratio of the time such Shares
were held to one (1) year.
The administrative support services to be rendered by Recipients in
connection with the Accounts may include, but shall not be limited to, the
following: answering routine inquiries concerning the Fund, assisting in the
establishment and maintenance of accounts or sub-accounts in the
3
<PAGE>
Fund and processing Share redemption transactions, making the Fund's investment
plans and dividend payment options available, and providing such other
information and services in connection with the rendering of personal services
and/or the maintenance of Accounts, as the Distributor or the Fund may
reasonably request.
(ii) Distribution Assistance Fee (Asset-Based Sales Charge)
Payments. Irrespective of whichever alternative method of making service fee
payments to Recipients is selected by the Distributor, in addition the
Distributor shall make distribution assistance fee payments to each Recipient
quarterly, within forty-five (45) days after the end of each calendar quarter,
at a rate not to exceed 0.1875% (0.75% on an annual basis) of the average during
the calendar quarter of the aggregate net asset value of Shares computed as of
the close of each business day constituting Qualified Holdings owned
beneficially or of record by the Recipient or its Customers for a period of more
than one (1) year. Alternatively, at its sole option, the Distributor may make
distribution assistance fee payments to a Recipient quarterly, at the rate
described above, on Shares constituting Qualified Holdings owned beneficially or
of record by the Recipient or its Customers without regard to the 1- year
holding period described above. Distribution assistance fee payments shall be
made only to Recipients that are registered with the SEC as a broker-dealer or
are exempt from registration.
The distribution assistance to be rendered by the Recipients in connection
with the sale of Shares may include, but shall not be limited to, the following:
distributing sales literature and prospectuses other than those furnished to
current Shareholders, providing compensation to and paying expenses of personnel
of the Recipient who support the distribution of Shares by the Recipient, and
providing such other information and services in connection with the
distribution of Shares as the Distributor or the Fund may reasonably request.
(c) A majority of the Independent Trustees may at any time or from time to
time (i) increase or decrease the rate of fees to be paid to the Distributor or
to any Recipient, but not to exceed the rates set forth above, and/or (ii)
direct the Distributor to increase or decrease any Minimum Holding Period, any
maximum period set by a majority of the Independent Trustees during which fees
will be paid on Shares constituting Qualified Holdings owned beneficially or of
record by a Recipient or by its Customers (the "Maximum Holding Period"), or
Minimum Qualified Holdings. The Distributor shall notify all Recipients of any
Minimum Qualified Holdings, Maximum Holding Period and Minimum Holding Period
that are established and the rate of payments hereunder applicable to
Recipients, and shall provide each Recipient with written notice within thirty
(30) days after any change in these provisions. Inclusion of such provisions or
a change in such provisions in a supplement or amendment to or revision of the
prospectus of the Fund shall constitute sufficient notice.
(d) The Service Fee and the Asset-Based Sales Charge on Shares are subject
to reduction or elimination under the limits to which the Distributor is, or may
become, subject under the NASD Conduct Rules.
4
<PAGE>
(e) Under the Plan, payments may also be made to Recipients: (i) by
OppenheimerFunds, Inc. ("OFI") from its own resources (which may include profits
derived from the advisory fee it receives from the Fund), or (ii) by the
Distributor (a subsidiary of OFI), from its own resources, from Asset-Based
Sales Charge payments or from the proceeds of its borrowings, in either case, in
the discretion of OFI or the Distributor, respectively.
(f) Recipients are intended to have certain rights as third-party
beneficiaries under this Plan, subject to the limitations set forth below. It
may be presumed that a Recipient has provided distribution assistance or
administrative support services qualifying for payment under the Plan if it has
Qualified Holdings of Shares that entitle it to payments under the Plan. If
either the Distributor or the Board believe that, notwithstanding the level of
Qualified Holdings, a Recipient may not be rendering appropriate distribution
assistance in connection with the sale of Shares or administrative support
services for Accounts, then the Distributor, at the request of the Board, shall
require the Recipient to provide a written report or other information to verify
that said Recipient is providing appropriate distribution assistance and/or
services in this regard. If the Distributor or the Board of Trustees still is
not satisfied after the receipt of such report, either may take appropriate
steps to terminate the Recipient's status as a Recipient under the Plan,
whereupon such Recipient's rights as a third-party beneficiary hereunder shall
terminate. Additionally, in their discretion a majority of the Fund's
Independent Trustees at any time may remove any broker, dealer, bank or other
person or entity as a Recipient, whereupon such person's or entity's rights as a
third-party beneficiary hereof shall terminate. Notwithstanding any other
provision of this Plan, this Plan does not obligate or in any way make the Fund
liable to make any payment whatsoever to any person or entity other than
directly to the Distributor. The Distributor has no obligation to pay any
Service Fees or Distribution Assistance Fees to any Recipient if the Distributor
has not received payment of Service Fees or Distribution Assistance Fees from
the Fund.
4. Selection and Nomination of Trustees. While this Plan is in effect, the
selection and nomination of persons to be Trustees of the Fund who are not
"interested persons" of the Fund ("Disinterested Trustees") shall be committed
to the discretion of the incumbent Disinterested Trustees. Nothing herein shall
prevent the incumbent Disinterested Trustees from soliciting the views or the
involvement of others in such selection or nomination as long as the final
decision on any such selection and nomination is approved by a majority of the
incumbent Disinterested Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the Fund shall
provide written reports to the Fund's Board for its review, detailing the amount
of all payments made under this Plan and the purpose for which the payments were
made. The reports shall be provided quarterly, and shall state whether all
provisions of Section 3 of this Plan have been complied with.
6. Related Agreements. Any agreement related to this Plan shall be in writing
and shall provide that: (i) such agreement may be terminated at any time,
without payment of any penalty, by a vote of a majority of the Independent
Trustees or by a vote of the holders of a "majority" (as defined in the 1940
Act) of the Fund's outstanding voting Class C shares; (ii) such termination
shall be on not more than sixty days' written notice to any other party to the
agreement; (iii) such agreement shall automatically terminate in the event of
its "assignment" (as defined in the 1940 Act); (iv) such agreement shall go into
effect when approved by a vote of the Board and its Independent Trustees cast
5
<PAGE>
in person at a meeting called for the purpose of voting on such agreement; and
(v) such agreement shall, unless terminated as herein provided, continue in
effect from year to year only so long as such continuance is specifically
approved at least annually by a vote of the Board and its Independent Trustees
cast in person at a meeting called for the purpose of voting on such
continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Amended and
Restated Plan has been approved by a vote of the Board and of the Independent
Trustees and replaces the Fund's prior Distribution and Service Plan for Class C
Shares. Unless terminated as hereinafter provided, it shall continue in effect
until renewed by the Board in accordance with the Rule and thereafter from year
to year or as the Board may otherwise determine but only so long as such
continuance is specifically approved at least annually by a vote of the Board
and its Independent Trustees cast in person at a meeting called for the purpose
of voting on such continuance.
This Plan may not be amended to increase materially the amount of payments
to be made under this Plan, without approval of the Class C Shareholders at a
meeting called for that purpose and all material amendments must be approved by
a vote of the Board and of the Independent Trustees.
This Plan may be terminated at any time by vote of a majority of the
Independent Trustees or by the vote of the holders of a "majority" (as defined
in the 1940 Act) of the Fund's outstanding Class C voting shares. In the event
of such termination, the Board and its Independent Trustees shall determine
whether the Distributor shall be entitled to payment from the Fund of all or a
portion of the Service Fee and/or the Asset-Based Sales Charge in respect of
Shares sold prior to the effective date of such termination.
8. Disclaimer of Shareholder and Trustee Liability. The Distributor understands
that the obligations of the Fund under this Plan are not binding upon any
Trustee or shareholder of the Fund personally, but bind only the Fund and the
Fund's property. The Distributor represents that it has notice of the provisions
of the Declaration of Trust of the Fund disclaiming shareholder and Trustee
liability for acts or obligations of the Fund.
Oppenheimer International Growth Fund
By: /s/ Andrew J. Donohue
-------------------------------
Andrew J. Donohue, Secretary
OppenheimerFunds Distributor, Inc.
By: /s/ Katherine P. Feld
----------------------------------------
Katherine P. Feld, Vice President &
Secretary
6
Oppenheimer International Growth Fund
Exhibit 24(b)(16) to Form N-1A
Performance Data Computation Schedule
The Fund's average annual total returns and total returns are calculated as
described below, on the basis of the Fund's distributions, for the past 10 years
which are as follows:
Distribution Amount From Amount From
Reinvestment Investment Long or Short-Term Reinvestment
(Ex)Date Income Capital Gains Price
Class A Shares
12/17/96 0.0000000 0.0000000 11.530
Class B Shares
12/17/96 0.0000000 0.0000000 11.440
Class C Shares
12/17/96 0.0000000 0.0000000 11.450
Oppenheimer International Growth Fund
Page 2
1. Average Annual Total Returns for the Periods Ended 11/30/97:
The formula for calculating average annual total return is as follows:
1/number of years = n {(ERV/P)^n} - 1 = average annual total return
Where: ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period
P = hypothetical initial investment of $1,000
Class A Shares
Examples, assuming a maximum Examples at NAV:
sales charge of 5.75%:
One Year One Year
{($1,153.64/$1,000)^ 1} - 1 = 15{($1,224.02/$1,000)^ 1} - 1 = 22.40%
Inception Inception
<PAGE>
{($1,354.37/$1,000)^.5950}- 1 = 19{($1,437.00/$1,000)^.5950}- 1 = 24.08%
Class B Shares
Examples, assuming a maximum Examples at NAV:
contingent deferred sales charge
of 5.00% for the first year, and
4.00% for the inception year:
One Year One Year
{($1,164.59/$1,000)^ 1} - 1 = 16{($1,214.59/$1,000)^ 1} - 1 = 21.46%
Inception Inception
{($1,375.00/$1,000)^.5950}- 1 = 20{($1,415.00/$1,000)^.5950}- 1 = 22.94%
Class C Shares
Examples, assuming a maximum Examples at NAV:
contingent deferred sales charge
of 1.00% for the first year, and
0.00% for the inception year:
One Year One Year
{($1,205.26/$1,000)^ 1} - 1 = 20{($1,215.26/$1,000)^ 1} - 1 = 21.53%
Inception Inception
{($1,417.00/$1,000)^.5950}- 1 = 23{($1,417.00/$1,000)^.5950}- 1 = 23.05%
Oppenheimer International Growth Fund
Page 3
2. Cumulative Total Returns for the Periods Ended 11/30/97:
<PAGE>
The formula for calculating cumulative total return is as follows:
(ERV - P) / P = Cumulative Total Return
Class A Shares
Examples, assuming a maximum Examples at NAV:
sales charge of 5.75%:
One Year One Year
$1,153.64 - $1,000/$1,000 = 15$1,224.02 - $1,000/$1,000 = 22.40%
Inception Inception
$1,354.37 - $1,000/$1,000 = 35$1,437.00 - $1,000/$1,000 = 43.70%
Class B Shares
Examples, assuming a maximum Examples at NAV:
contingent deferred sales charge
of 5.00% for the first year, and
4.00% for the inception year:
One Year One Year
$1,164.59 - $1,000/$1,000 = 16$1,214.59 - $1,000/$1,000 = 21.46%
Inception Inception
$1,375.00 - $1,000/$1,000 = 37$1,415.00 - $1,000/$1,000 = 41.50%
Class C Shares
Examples, assuming a maximum Examples at NAV:
contingent deferred sales charge
of 1.00% for the first year, and
0.00% for the inception year:
One Year One Year
$1,205.26 - $1,000/$1,000 = 20$1,215.26 - $1,000/$1,000 = 21.53%
Inception Inception
$1,417.00 - $1,000/$1,000 = 41$1,417.00 - $1,000/$1,000 = 41.70%
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 1005728
<NAME> Oppenheimer International Growth-Class A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-START> DEC-01-1996
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 220,856,165
<INVESTMENTS-AT-VALUE> 232,676,949
<RECEIVABLES> 8,509,694
<ASSETS-OTHER> 927
<OTHER-ITEMS-ASSETS> 321,434
<TOTAL-ASSETS> 241,509,004
<PAYABLE-FOR-SECURITIES> 5,000,222
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,316,277
<TOTAL-LIABILITIES> 6,316,499
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 219,677,359
<SHARES-COMMON-STOCK> 8,542,249
<SHARES-COMMON-PRIOR> 1,440,770
<ACCUMULATED-NII-CURRENT> (40,740)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,465,952
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 12,089,934
<NET-ASSETS> 122,720,086
<DIVIDEND-INCOME> 1,263,221
<INTEREST-INCOME> 468,774
<OTHER-INCOME> 0
<EXPENSES-NET> 2,618,016
<NET-INVESTMENT-INCOME> (886,021)
<REALIZED-GAINS-CURRENT> 4,336,322
<APPREC-INCREASE-CURRENT> 9,540,445
<NET-CHANGE-FROM-OPS> 12,990,746
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9,482,388
<NUMBER-OF-SHARES-REDEEMED> 2,380,909
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 207,452,545
<ACCUMULATED-NII-PRIOR> (21,513)
<ACCUMULATED-GAINS-PRIOR> (3,576)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 976,002
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,618,016
<AVERAGE-NET-ASSETS> 66,156,000
<PER-SHARE-NAV-BEGIN> 11.74
<PER-SHARE-NII> (0.05)
<PER-SHARE-GAIN-APPREC> 2.68
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 14.37
<EXPENSE-RATIO> 1.78
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 1005728
<NAME> Oppenheimer International Growth-Class B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-START> DEC-01-1996
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 220,856,165
<INVESTMENTS-AT-VALUE> 232,676,949
<RECEIVABLES> 8,509,694
<ASSETS-OTHER> 927
<OTHER-ITEMS-ASSETS> 321,434
<TOTAL-ASSETS> 241,509,004
<PAYABLE-FOR-SECURITIES> 5,000,222
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,316,277
<TOTAL-LIABILITIES> 6,316,499
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 219,677,359
<SHARES-COMMON-STOCK> 6,399,267
<SHARES-COMMON-PRIOR> 744,245
<ACCUMULATED-NII-CURRENT> (40,740)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,465,952
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 12,089,934
<NET-ASSETS> 90,564,815
<DIVIDEND-INCOME> 1,263,221
<INTEREST-INCOME> 468,774
<OTHER-INCOME> 0
<EXPENSES-NET> 2,618,016
<NET-INVESTMENT-INCOME> (886,021)
<REALIZED-GAINS-CURRENT> 4,336,322
<APPREC-INCREASE-CURRENT> 9,540,445
<NET-CHANGE-FROM-OPS> 12,990,746
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,811,211
<NUMBER-OF-SHARES-REDEEMED> 1,156,189
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 207,452,545
<ACCUMULATED-NII-PRIOR> (21,513)
<ACCUMULATED-GAINS-PRIOR> (3,576)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 976,002
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,618,016
<AVERAGE-NET-ASSETS> 45,553,000
<PER-SHARE-NAV-BEGIN> 11.65
<PER-SHARE-NII> (0.12)
<PER-SHARE-GAIN-APPREC> 2.62
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 14.15
<EXPENSE-RATIO> 2.56
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 1005728
<NAME> Oppenheimer International Growth-Class C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-START> DEC-01-1996
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 220,856,165
<INVESTMENTS-AT-VALUE> 232,676,949
<RECEIVABLES> 8,509,694
<ASSETS-OTHER> 927
<OTHER-ITEMS-ASSETS> 321,434
<TOTAL-ASSETS> 241,509,004
<PAYABLE-FOR-SECURITIES> 5,000,222
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,316,277
<TOTAL-LIABILITIES> 6,316,499
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 219,677,359
<SHARES-COMMON-STOCK> 1,546,171
<SHARES-COMMON-PRIOR> 184,273
<ACCUMULATED-NII-CURRENT> (40,740)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,465,952
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 12,089,934
<NET-ASSETS> 21,907,604
<DIVIDEND-INCOME> 1,263,221
<INTEREST-INCOME> 468,774
<OTHER-INCOME> 0
<EXPENSES-NET> 2,618,016
<NET-INVESTMENT-INCOME> (886,021)
<REALIZED-GAINS-CURRENT> 4,336,322
<APPREC-INCREASE-CURRENT> 9,540,445
<NET-CHANGE-FROM-OPS> 12,990,746
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,911,937
<NUMBER-OF-SHARES-REDEEMED> 1,550,039
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 207,452,545
<ACCUMULATED-NII-PRIOR> (21,513)
<ACCUMULATED-GAINS-PRIOR> (3,576)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 976,002
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,618,016
<AVERAGE-NET-ASSETS> 10,864,000
<PER-SHARE-NAV-BEGIN> 11.66
<PER-SHARE-NII> (0.13)
<PER-SHARE-GAIN-APPREC> 2.64
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 14.17
<EXPENSE-RATIO> 2.55
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
