Registration No.__________
File No. ____________
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. __ / /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 /X/
Amendment No. __ / /
Oppenheimer Developing Markets Fund
- -----------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Two World Trade Center, New York, New York 10048-0203
- -----------------------------------------------------------------
(Address of Principal Executive Offices)
212-323-0200
- -----------------------------------------------------------------
(Registrant's Telephone Number)
ANDREW J. DONOHUE, ESQ.
OppenheimerFunds, Inc.
Two World Trade Center, New York, New York 10048-0203
- -----------------------------------------------------------------
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
/ / Immediately upon filing pursuant to paragraph (b)
/ / On ______________, 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.
- -----------------------------------------------------------------
Approximate Date of Proposed Offering: As soon as practicable
after the effective date of this Registration Statement and
thereafter from day to day.
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
The Registrant elects to register an indefinite number of its
shares. The amount of the Registration fee is $500.
The Registrant hereby amends the Registration Statement on such
date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933 or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to Section 8(a), shall
determine.
<PAGE>
FORM N-1A
Oppenheimer Developing Markets 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 *
4 Front Cover Page; Investment Objective and Policies;
Investment Risks; Investment Techniques and
Strategies; 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;
Service Plan for Class A shares; Distribution and
Service Plans for Class B and Class C 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
10 Cover Page
11 Cover Page
12 *
13 Investment Objective and Policies; Investment Policies
and Strategies; Other Investment Techniques and
Strategies; Other 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 -- The Manager and its
Affiliates; Additional Information about the Fund;
Distribution and Service Plans; Back Cover
17 How the Fund is Managed; Brokerage Policies of the
Fund
18 About Your Account - Alternative Sales Arrangements-
Class A, Class B and Class C Shares
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
- ---------------
*Not applicable or negative answer.
<PAGE>
OPPENHEIMER DEVELOPING MARKETS FUND
Prospectus dated _____________, 1996
Oppenheimer Developing Markets Fund's investment objective is
to seek capital appreciation aggressively. Current income is not
an objective. The Fund invests primarily in equity securities of
issuers whose principal activities are located in developing
countries throughout the world. 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 ___________, 1996 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).
(logo) OppenheimerFunds
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 OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
Contents
ABOUT THE FUND
Expenses
A Brief Overview of the Fund
Investment Objective and Policies
Investment Risks
Investment Techniques and Strategies
How the Fund is Managed
Performance of the Fund
ABOUT YOUR ACCOUNT
How to Buy Shares
Class A Shares
Class B Shares
Class C Shares
Special Investor Services
AccountLink
Automatic Withdrawal and Exchange Plans
Reinvestment Privilege
Retirement Plans
How to Sell Shares
By Mail
By Telephone
How to Exchange Shares
Shareholder Account Rules and Policies
Dividends, Capital Gains and Taxes
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 your
share of the Fund's business operating expenses that you will bear
indirectly.
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 18, for an explanation of how and when
these charges apply.
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
<S> <C> <C> <C>
Maximum Sales Charge on Purchases
(as a % of offering price) 5.75% None None
Sales Charge on Reinvested Dividends None None None
Deferred Sales Charge (as a % of
the lower of the original purchase
price or redemption proceeds) None(1) 5% in the 1st 1% if redeemed
year, declining within 12
to 1% in the 6th months of
year and eliminated purchase(2)
thereafter(2)
Exchange Fee None None None
</TABLE>
- -----------------
(1) If you invest $1 million or more ($500,000 or more for
purchases by OppenheimerFunds prototype 401(k) plans) in Class A
shares, you may have to pay a sales charge of up to 1% if you sell
your shares within 18 calendar months 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 "Buying Class C
Shares" below.
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
------- ------- -------
Management Fees 1.00% 1.00% 1.00%
12b-1 Distribution Plan Fees 0.25% 1.00% 1.00%
Other Expenses 0.57% 0.57% 0.57%
Total Fund Operating Expenses 1.82% 2.57% 2.57%
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."
Because the Fund is a new fund and has no operating history, the
rates for the management fee and the 12b-1 fees are the maximum
rates that can be charged. "Other Expenses" in the table above are
estimates based on the Manager's projections of those expenses in
the Fund's first year of operations.
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.
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 and 3 years:
1 year 3 years
------ -------
Class A Shares $75 $111
Class B Shares $76 $110
Class C Shares $36 $80
If you did not redeem your investment, it would incur the
following expenses:
1 year 3 years
------ -------
Class A Shares $75 $111
Class B Shares $26 $80
Class C Shares $26 $80
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, which may be more or less than the
amounts 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.
What Is The Fund's Investment Objective? The Fund's
investment objective is to seek capital appreciation aggressively.
It does not invest to earn current income to pay to shareholders.
What Does the Fund Invest In? The Fund emphasizes
investments in equity securities of issuers whose principal
activities are located in the world's emerging or developing
markets. Investments in debt securities may be made to a limited
degree in what the Manager perceives to be normal market conditions
and without limitation as a temporary defensive measure or for
liquidity purposes in what the Manager perceives to be uncertain
market conditions. The Fund may also use hedging instruments and
certain derivative investments to try to manage investment risks.
These investments are more fully explained in "Investment Objective
and Policies," starting on page 6.
Who Manages the Fund? The Fund's investment adviser is
OppenheimerFunds, Inc., which (including a subsidiary) as of March
31, 1996, manages investment company portfolios having over $50
billion in assets. 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 __________. 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 16 for more information about the Manager and its
fees.
How Risky is the Fund? All investments carry risks to some
degree. It is important to remember that the Fund is an aggressive
capital appreciation fund designed for long-term investors for a
portion of their investments and is not designed for investors
seeking income or conservation of capital. The Fund's investments
are subject to changes in their value as a result of many 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 to 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
significantly more volatile than stock funds that do not invest
aggressively for capital appreciation or in emerging markets. The
fact that the Fund is a new fund with no operating history is also
a factor to consider. While the Manager tries to reduce some 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 6 for
a more complete discussion of the Fund's investment risks.
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 18 for more details.
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 18 for more details, including a discussion about
factors you and your financial advisor should consider in
determining which class may be appropriate for you.
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
29. The Fund also offers exchange privileges to other Oppenheimer
funds, described in "How to Exchange Shares" on page 31.
How Can I Tell How 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 based market
index. Please remember that past performance does not guarantee
future results.
Investment Objective and Policies
Objective. The Fund's objective is to seek capital appreciation
aggressively.
Investment Policies and Strategies. The Fund seeks capital
appreciation by emphasizing investments in equity securities of
issuers whose principal activities are located in "developing" or
"emerging" market countries. The Fund may invest in the following
types of equity securities: common stock, preferred stock,
securities convertible into common stock, rights and warrants to
acquire such securities and substantially similar forms of equity
with comparable risk characteristics. These securities may be
listed on securities exchanges, traded in various over-the-counter
markets, or may have no organized trading market. 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, as described below). The selection of securities is
made, among other things, on the basis of the Manager's view of a
security's potential for capital appreciation. Current income is
not a consideration in the selection of portfolio securities. A
portion of the Fund's assets may be invested in other types of
securities for liquidity purposes.
Under normal market conditions the Fund will invest at least
65% of its total assets in equity securities of issuers whose
principal activities are located in at least three different
"developing" or "emerging" market countries, or regions
("Developing Markets"). While the Fund intends to invest primarily
in equity securities of such issuers, the Fund may invest up to 35%
of its total assets in any combination of (i) debt securities of
government or corporate issuers in Developing Markets; (ii) equity
and debt securities of issuers in developed countries, including
the United States; and (iii) cash and money market instruments.
The Fund may invest less than 35% of its net assets in debt
securities, whether issued by domestic or foreign issuers, which
are rated below investment grade by Moody's Investors Service,
Inc., Standard & Poor's Corporation, Fitch Investors Service, Inc.,
Duff & Phelps, Inc. or another nationally recognized statistical
rating organization ("NRSRO") or in unrated securities, which in
the opinion of the Manager, are of comparable quality. The Fund
may, but is not required to, invest up to 100% of its assets in
foreign securities.
The Manager determines where an issuer's principal activities
are located by considering, among other things, such factors as its
country of organization, the principal trading market for its
securities and the source of its revenues and assets. The issuer's
principal activities generally may be deemed by the Manager to be
located in a particular country if: (a) the security is issued or
guaranteed by the government of that country or any of its
agencies, authorities or instrumentalities; (b) the issuer is
organized under the laws of, and maintains a principal office in,
that country; (c) the issuer has its principal securities trading
market in that country; (d) the issuer derives 50% or more of its
total revenues (alone or on a consolidated basis) from goods sold
or services performed in that country; or (e) the issuer has 50% or
more of its assets in that country.
Can the Fund's Investment Objective and Policies Change?
The Fund's investment objective is not a fundamental policy, and,
as such, may be changed without shareholder approval. As a matter
of policy, however, the Fund will not change its objective without
the approval of a majority of the Board of Trustees. The Fund's
investment policies and techniques are not "fundamental" unless
this Prospectus or the Statement of Additional Information says
that a particular policy or technique is "fundamental."
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.
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 the Manager determines 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
may hold foreign currency only in connection with the purchase or
sale or the reasonably anticipated purchase or sale of foreign
securities.
What are "Developing Markets"? For purposes of the Fund's
operations, Developing Markets will consist of all countries
determined by the Manager, from time to time, to have developing or
emerging economies and markets. These countries generally include
every country in the world except the United States, Canada, Japan,
Australia, New Zealand and most countries located in Western
Europe.
The Developing Markets Fund intends to focus its investments
in those Developing Markets which the Manager believes may have
strongly developing economies now or in the future and in which the
markets are believed by the Manager to be becoming more
sophisticated. For purposes of the Fund's policy of investing
under normal market conditions at least 65% of its total assets in
equity securities of issuers whose principal activities are located
in at least three different Developing Markets, the Fund will
consider investment in the following emerging markets among others:
Algeria
Argentina
Bangladesh
Bolivia
Botswana
Brazil
Chile
China
Colombia
Costa Rica
Cyprus
Czech Republic
Ecuador
Egypt
Ghana
Guyana
Hong Kong
Hungary
India
Indonesia
Iran
Israel
Jamaica
Jordan
Kenya
Lebanon
Malaysia
Mauritius
Mexico
Morocco
Myanmar
Nigeria
Pakistan
Paraguay
Peru
Philippines
Poland
Portugal
Republic of Slovakia
Russia
Singapore
South Korea
Sri Lanka
Swaziland
Taiwan
Thailand
Tanzania
Turkey
Uruguay
Vietnam
Zimbabwe
Although the Manager currently considers each of the above-
listed countries eligible for investment, the Fund may not be
invested in all such markets at all times. Moreover, investing in
some of those markets currently may not be considered by the
Manager to be desirable or feasible, due to, among other things,
the lack of adequate custody arrangements for the Fund's assets,
overly burdensome repatriation and other restrictions, the lack of
organized and liquid securities markets, unacceptable political
risks or for other reasons. In addition to the above-listed
countries which are eligible for investment, the Manager may make
investments in issuers in Developing Markets not specifically
listed above where investing may become desirable subsequent to the
date of this Prospectus.
What are "Growth-Type" Companies? These are companies that
the Manager believes are entering into a growth cycle in their
business, with the expectation that their stock may increase in
value. Growth companies may include larger, established companies
that the Manager believes are entering a growth phase, whether
because of the development of new products or markets, improved
sales, technological developments, or for other reasons. Growth
companies may also include companies that the Manager believes may
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, companies with projected earnings growth in
excess of the average. They may also include newer companies that
the manager believes may be in new or developing industries, or
which are developing new products or services, or expanding into
new markets for their products. In either case, growth-type
companies have what the Manager believes to be favorable prospects
for the long-term. Newer growth-type companies normally incur
losses or retain all or 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, among other things, capable management, sound
financial and accounting policies and successful product
development and marketing relative to other companies, as well as
other factors.
Portfolio Turnover. A change in the securities held by the
Fund is known as "portfolio turnover." The Fund ordinarily does not
engage in short-term trading to try to achieve its objective. As
a result, the Fund's portfolio turnover is not expected to be more
than 100% each year.
Portfolio turnover affects brokerage costs, dealer markups and
other transaction costs, and results in the Fund's realization of
capital gains or losses for tax purposes. It may also affect the
Fund's ability to qualify as a "regulated investment company" under
the Internal Revenue Code for tax deductions for dividends and
capital gains distributions the Fund pays to shareholders. The
Fund intends to qualify as a regulated investment company in its
current fiscal year, although it reserves the right not to qualify.
Investment Risks
All investments carry risks to some degree, whether they are risks
that market prices of the investment will fluctuate (this is known
as "market risk") or that the underlying issuer will experience
financial difficulties and may default on its obligation under a
fixed-income investment to pay interest and repay principal (this
is referred to as "credit risk"). These general investment risks
and the special risks of certain types of investments that the Fund
may hold are described below. They affect the value of the Fund's
investments, its investment performance and the prices of its
shares. These risks collectively form the risk profile of the
Fund.
Because of the types of securities the Fund invests in and the
investing techniques the Fund uses, the Fund is designed for
investors who are investing for the long term. It is not intended
for investors who are seeking assured income or preservation of
capital. While the Manager tries to reduce risks by diversifying
investments, by carefully researching securities before they are
purchased and, in some cases by using hedging techniques, changes
in overall market prices can occur at any time. There is no
assurance that the Fund will achieve its investment objective.
When you redeem your shares, they may be worth more or less than
what you paid for them.
Equity Investment Risks. Because the Fund normally invests
most, or a substantial portion, of its assets in equity securities,
the value of the Fund's portfolio will be affected by changes in
the stock markets. At times, these 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.
The Fund attempts to limit certain market risks by
diversifying its investments, that is, by not holding a substantial
amount of the stock of any one company and by not investing too
great a percentage of the Fund's assets in any one country. In
addition, the Fund does not concentrate its investments in any one
industry or group of industries.
Foreign Securities Risks. The Fund may invest up to 100% of
its assets in foreign securities. Transactions involving foreign
equity or debt securities or foreign currencies, and transactions
entered into in foreign countries, involve significant
considerations and risks not typically associated with investing in
U.S. markets. These include, among other things, changes in
currency rates, exchange control regulations, governmental
administration or economic or monetary policy (in the U.S. or
abroad) or circumstances in dealings between nations. Costs are be
incurred in connection with conversions between various currencies.
Special considerations may also include more limited information
about foreign issuers, higher brokerage and custody costs,
different or less stringent accounting standards and less developed
trading markets. Foreign securities markets may also be less
liquid, more volatile and less subject to government supervision
than in the U.S. Investments in foreign countries are affected by
other factors including the risk of expropriation, confiscatory
taxation and potential difficulties in enforcing contractual
obligations and may be subject to extended settlement periods.
More information about the risks and potential rewards of investing
in foreign securities is contained in the Statement of Additional
Information.
Special Risks of Developing Market Investments. The risks
of investing in foreign securities are intensified in the case of
investments in Developing Markets. In general, Developing Markets
may offer special investment opportunities because their securities
markets, industries and capital structure are growing rapidly, but
investments in these countries involve special material 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
securities purchased or the proceeds of sales of securities on a
timely basis. Developing Markets generally have smaller, less
developed trading markets and exchanges, which may result in a lack
of liquidity (so that the Fund may not be able to dispose of those
securities rapidly and at a reasonable price) and greater
volatility, which can materially affect the value of the securities
held by the Fund, and therefore its net asset value per share.
Developing Market countries may have relatively unstable
governments, present the risk of nationalization of businesses or
prohibitions of repatriation of assets. The economies of
Developing Market countries may be predominantly based on only a
few industries and may be highly vulnerable to changes in local or
global trade conditions. There may also be less developed legal and
accounting systems and less protection of property rights than more
developed countries. In addition, in some Developing Market
countries, general and/or industry specific restrictions on foreign
ownership may preclude the Fund from acquiring desirable
securities.
Special Risks of Lower-Grade Securities. The Fund can
invest in domestic and foreign debt obligations, including high-
yield, below-investment grade debt securities (including both rated
and unrated securities). Such investments may comprise less than
35% of the value of the Fund's net assets. These "lower-grade"
securities are commonly know as "junk bonds." All corporate debt
securities (whether foreign or domestic) are subject to some degree
of credit risk. High yield, lower-grade securities, whether rated
or unrated, often have speculative characteristics and special
risks that make them riskier investments than 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. For foreign lower-grade debt securities, these
risks are in addition to the risks of investing in foreign
securities, described above. 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.
Special Risks of Derivative Investments. The Fund can
invest in a number of different kinds of "derivative" investments.
In general, a "derivative investment" is a specially designed
investment whose performance in linked to the performance of
another investment of security, such as an option, future, index,
currency or commodity. The company issuing the instrument may fail
to pay the amount due on the maturity of the instrument. Also, the
underlying investment or security might not perform the way the
Manager expected it to perform. Markets, underlying securities and
indices may move in a direction not anticipated by the Manager.
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 will realize less principal or
income from the investment that expected. Certain derivative
investments held by the Fund may be illiquid. Please refer to
"Illiquid and Restricted Securities."
Special Risks of Hedging Instruments. 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 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 options,
futures and forward contracts are subject to special tax rules that
may affect the amount, timing and character of the Fund's income
and distributions, There are also special risks in particular
hedging strategies. For example, if a covered call written by the
Fund is exercised on an investment at the call price and will not
be able to realize any profit if the investment 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 are described in greater detail in the Statement of
Additional Information.
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.
Factors Considered in Selecting Foreign Securities. The
Manager presently intends to employ an investment strategy in
selecting foreign securities that considers the Manager's view of
the effects of worldwide trends on the growth of various business
sectors. These trends or "global themes", in the Manager's view,
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 believed by the
Manager to be 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 may present long-term growth opportunities.
When investing the Fund's assets, the Manager considers many
factors, including, among other things, 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.
Foreign Debt Securities. The Fund may invest in debt
securities of foreign companies or governments, including
Developing Market debt securities. To the extent that the Fund
does invest in debt securities, the Manager intends to focus
primarily 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 generally considers
convertible securities to be "equity equivalents" because of the
conversion feature, and because the security's rating has less
impact on the investment decision than in the case on non-
convertible securities. Capital appreciation in debt securities in
which the Fund invests may arise as a result of favorable changes
in relative foreign exchange rates or in relative interest rate
levels, the creditworthiness of issuers and/or in the
convertibility of such securities into equity securities.
Debt securities of government or corporate issuers in
Developing Markets often are rated below investment grade or are
not rated by U.S. rating agencies. The Fund will not invest in
debt securities, whether issued by a domestic or a foreign issuer,
which have a rating by an NRSRO of less than C or in debt
securities which are in default at the time of purchase. Foreign
debt securities are also subject to, among other things, interest
rate risks (the price of the security will tend to move down when
interest rates rise, and may go up 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 securities having
ratings below investment grade, which involve greater risks of
default and are commonly referred to as "junk bonds"). A
discussion of the risks associated with investments in lower-rated
or unrated debt securities and a description of rating categories
of principal rating organizations are contained in the Statement of
Additional Information.
Privatization Programs. The governments in some Developing
Markets have been engaged in programs of selling part or all of
their interests in government owned or controlled enterprises
("privatization programs"). The Manager believes that
privatization programs may offer opportunities for significant
capital appreciation, and intends to consider investment of assets
of the Fund in privatization programs in what it considers to be
appropriate circumstances. In certain Developing Markets, the
ability of foreign entities such as the Fund to participate in
privatization programs may be limited by local law and/or the terms
on which the Funds may be permitted to participate may be less
advantageous than those afforded local investors. There certainly
can be no assurance that these governments will continue to sell
enterprises currently owned or controlled by them or that
privatization programs will be successful.
Domestic Securities. In general, the Fund does not expect
that under normal circumstances it will hold significant amounts
of securities of U.S. issuers. It can, however, under normal
market conditions hold equity and debt securities, including lower-
rated and unrated debt securities, of U.S. issuers as described
above. See the Statement of Additional Information for a
discussion of the risks associated with investments in lower-rated
and unrated debt securities. However, when market conditions are
believed by the Manager to be unstable the Fund may invest without
limit in U.S. Government securities or high-quality U.S. short-term
debt securities for temporary defensive purposes, as discussed
below in "Temporary Defensive Measures".
Investment in Other Investment Companies. The Fund may be
able to invest in certain Developing Markets solely or primarily
through governmentally authorized investment vehicles or companies.
The Fund generally may invest up to 10% of its total assets in the
aggregate in shares of other investment companies and up to 5% of
its total assets in any one investment company, as long as each
investment does not represent more than 3% of the outstanding
voting securities of the acquired investment company. Investment
in other investment companies may involve the payment of
substantial premiums above the value of such investment companies'
portfolio securities, and is subject to limitations under the 1940
Act and market availability. The Fund does not intend to invest in
such investment companies unless, in the judgment of the Manager,
the potential benefits of such investment justify the payment of
any applicable premiums or sales charge. As a shareholder in an
investment company, the Fund would bear its ratable share of that
investment company's expenses, including its advisory and
administration fees. At the same time, the Fund would continue to
pay its own management fees and other expenses.
Temporary Defensive Measures. When market conditions are
considered by the Manager to be 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 under such circumstances the Fund would generally 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.
Loans of Portfolio Securities. To raise cash for liquidity
purposes and to earn income, 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
10% of the value of the Fund's total assets and are subject to the
conditions described in the Statement of Additional Information.
Repurchase Agreements. To maintain liquidity to meet
shareholder redemption requests, to settle portfolio trades, to
earn income or for defensive purposes, the Fund may enter into
repurchase agreements. In a repurchase transaction, the Fund buys
a security and simultaneously sells it to the seller for delivery
at a future date. They are used primarily for cash liquidity
purposes.
Repurchase agreements must be fully collateralized. However,
if the seller 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.
When-Issued and Forward Commitment Securities. The Fund may
purchase securities on a "when-issued" basis and may purchase or
sell such securities on a "forward commitment" basis in order to
hedge against anticipated changes in interest rates and prices.
The price is fixed at the time the commitment is made, but delivery
and payment for the securities take place at a later date. When-
issued and forward commitments may be sold prior to the settlement
date, but the Fund will purchase or sell when-issued securities and
forward commitments only with the intention of actually receiving
or delivering the securities, as the case may be. No income
accrues on securities which have been purchased pursuant to a
forward commitment or on a when-issued basis prior to delivery to
the Fund. There may be a risk of loss if the value of the security
changes prior to the settlement date. If the Fund disposes of the
right to acquire a when-issued security prior to its acquisition or
disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Funds
enter into a transaction on a when-issued or forward commitment
basis, a segregated account consisting of cash or high grade liquid
debt securities equal to the value of the when-issued or forward
commitment securities will be established and maintained with the
Fund's custodian bank and will be market to market daily.
Borrowing for Leverage. The Fund may borrow up to 10% of
the value of its total 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. Borrowing for
leverage is subject to limits under the Investment Company Act,
described in more detail in "Borrowing for Leverage" in the
Statement of Additional Information. The Fund can also borrow for
temporary or emergency purposes in amount not exceeding 5% of its
total assets at the time of the loan.
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 net assets in
warrants or rights. Included in that amount but, not to exceed 2%
of the Fund's net assets, are warrants whose underlying securities
are not traded on principal or domestic or foreign exchanges.
Warrants acquired by the Fund in units or attached to securities
are not subject to these restrictions. For further details, see
"Warrants and Rights" in the Statement of Additional Information.
Special Situations. The Fund may invest in securities of
companies that the Manager believes are in "special situations"
that may present opportunities for capital appreciation. 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.
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.
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 which cannot be
sold publicly until it is registered under the Securities Act of
1933 in the United States or under similar laws in foreign
countries. Subject to the Board's current restriction, which may
change from time to time, the Fund will not invest more than 15% of
its net assets in illiquid or restricted securities. The Fund's
percentage limitation on these investments does not apply to
certain restricted securities that are eligible for resale to
qualified institutional purchasers. See "Restricted and Illiquid
Securities" in the Statement of Additional Information for further
details.
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 the use of them described below. The 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, may, to a certain
degree, 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 may be used to try to protect against declines in the
dollar value of foreign securities the Fund owns, or to try 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.
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) or (2) foreign currencies (these are called
Forward Contracts and are discussed below).
Put and Call Options. The Fund may buy and sell certain
kinds of put options (puts) and call options (calls). A call or
put option may not be purchased if the value of all of the Fund's
put and call options would exceed 5% of the Fund's total assets.
Calls the Fund buys or sells must be traded on a securities or
commodities exchange, or be quoted by recognized dealers in those
options.
The Fund may buy calls only on securities, broadly-based stock
indices, foreign currencies or Stock Index Futures, or to terminate
its obligation on a call the Fund previously wrote.
The Fund may write (that is, sell) call options, including
call options on futures contracts it owns. Each call the Fund
writes must be "covered" while it is outstanding. That means the
Fund owns the investment on which the call was written or the Fund
owns and segregates liquid assets to satisfy its obligations if the
call is exercised. When the Fund writes a call, it receives cash
(called a premium). The call gives the buyer the ability to buy
the security on which the call was written from the Fund at the
call price during the period in which the call may be exercised.
If the value of the investment does not rise above the call price,
it is likely that the call will lapse without being exercised,
while the Fund keeps the cash premium (and the security). After
the Fund writes a call, not more than 25% of the Fund's total
assets may be subject to calls.
The Fund may purchase put options. Buying a put on a security
gives the Fund the right to sell the security at a set price to a
seller of a put on that security. The Fund can buy only those puts
that relate to securities that the Fund owns, broadly-based stock
indices, foreign currencies or Stock Index Futures. The Fund can
buy a put on a Stock Index Future whether or not the Fund owns the
particular Stock Index Future in its portfolio.
The Fund may write puts on securities, broadly-based stock
indices, foreign currencies or Stock Index Futures in an amount up
to 50% of its total assets but only if those puts are covered by
segregated liquid assets. In writing puts, there is a risk that
the Fund may be required to buy the underlying security at a
disadvantageous price.
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 Manager intends to limit the
Fund's 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.
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 seek 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
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 incur losses or 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.
Short Sales Against-the-Box. In a short sale, the seller
does not own the security that is sold, but normally borrows the
security to fulfill its delivery obligation. The seller later buys
the security to repay the loan, in the expectation that the price
of the security will be lower when the purchase is made, resulting
in a gain. The Fund may not sell securities short except in
collateralized transactions referred to as "short sales against-
the-box," where the Fund owns an equivalent amount of the
securities sold short. This technique is primarily used for tax
purposes. No more than 15% of the Fund's net assets will be held
as collateral for such short sales at any one time.
Other Investment Restrictions. The Fund has certain investment
restrictions that are fundamental policies. Under these
restrictions, the Fund cannot do any of the following:
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
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 assets would consist of securities of companies
in that industry.
All of the percentage restrictions described above and
elsewhere in this Prospectus (other than the regulatory percentage
limits in the Statement of Additional Information that apply to
borrowing), apply only at the time the Fund purchases a security.
The Fund need not dispose of a security merely because the size of
the Fund's assets has changed or the security has increased in
value relative to the size of the Fund. There are other
fundamental policies discussed in the Statement of Additional
Information.
How the Fund is Managed
Organization and History. The Fund was organized in May 1996 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 does not intend to hold annual meetings, 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 and Class C. 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 a subsidiary) currently manages investment
companies, including other Oppenheimer funds, with assets of more
than $50 billion as of March 31, 1996, and with more than 2.8
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.
Portfolio Manager. The Portfolio Manager of the Fund is
_________, who is employed by the Manager. He/she is the person
principally responsible for the day-to-day management of the Fund's
portfolio. During the past five years, Mr./Ms. ______ has also
served as an officer and portfolio manager for other Oppenheimer
funds, prior to which he/she was an ___________________.
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: 1.00% of the first $250
million of average annual net assets, .95% of the next $250
million, .90% of the next $500 million, and .85% of average annual
net assets in excess of $1 billion. The Fund's management fee is
higher than that paid by most other mutual funds, but is comparable
to fees paid by funds having similar investment objectives and
policies. The higher fees result from the fact that investing in
equity securities of companies in "developing" markets, which are
not widely followed by professional analysts, requires the Manager
to invest additional time and incur added expense in developing
specialized resources, including research facilities.
The Fund pays expenses related to its daily operations, such
as custodian fees, 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.
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.
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.
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.
ABOUT YOUR ACCOUNT
How to Buy Shares
Classes of Shares. The Fund offers investors three different
classes of shares. 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.
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 OppenheimerFunds prototype 401(k) plans).
If you purchase Class A shares as part of an investment of at least
$1 million ($500,000 for OppenheimerFunds prototype 401(k) 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 18
months of buying them, 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.
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.
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.
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 used the maximum sales charge rates that apply to each
class, considering 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.
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.
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 C shares from a
single investor.
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 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. Therefore, these examples should not be relied upon
as rigid guidelines.
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.
Additionally, dividends payable to Class B and Class C shareholders
will be reduced by the additional expenses borne by those classes
that are not borne by Class A, such as the Class B and Class C
asset-based sales charges described below and in the Statement of
Additional Information. 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.
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.
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.
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.
Under pension, profit-sharing and 401(k) 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.
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.
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.
Buying Shares Through Your Dealer. Your dealer will place
your order with the Distributor on your behalf.
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.
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.
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 on the Application
and in the Statement of Additional Information.
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. In
most cases, to enable you to receive that day's offering price, the
Distributor or its designated agent must 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 transmit it 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 may, in its sole
discretion, 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:
<TABLE>
<CAPTION>
Front-End Front-End
Sales Charge Sales Charge Commission
as Percentage as Percentage as Percentage
Amount of of Offering of Amount of Offering
Purchase Price Invested Price
- --------- ------------- ------------- -------------
<S> <C> <C> <C>
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%
</TABLE>
- ---------------------
The Distributor reserves the right to reallow the entire commission
to dealers. If that occurs, the dealer may be considered an
"underwriter" under Federal securities laws.
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:
Purchases aggregating $1 million or more; or
Purchases by an OppenheimerFunds prototype 401(k) plan 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.
The Distributor pays dealers of record commissions on those
purchases in an amount equal to the sum of 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. That commission will be paid only on the
amount of those purchases in excess of $1 million ($500,000 for
purchases by OppenheimerFunds prototype 401(k) plans) that were not
previously subject to a front-end sales charge and dealer
commission.
If you redeem any of those shares 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. That sales
charge will be equal to 1.0% of either (1) the aggregate net asset
value of the redeemed shares (not including shares purchased by
reinvestment of dividends or capital gain distributions) or (2) the
original cost of the shares, whichever is less. 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 18 months of the end of the calendar month of the purchase
of the exchanged shares, the sales charge will apply.
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. Dealers whose sales of Class A
shares of Oppenheimer funds (other than money market funds) under
OppenheimerFunds-sponsored 403(b)(7) custodial plans exceed $5
million per year (calculated per quarter), will receive monthly
one-half of the Distributor's retained commissions on those sales,
and if those sales exceed $10 million per year, those dealers will
receive the Distributor's entire retained commission on those
sales.
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:
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 value of
those shares will be based on the greater of the amount you paid
for the shares or their current value (at offering price). 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.
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.
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.
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:
the Manager or its affiliates;
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;
registered management investment companies, or separate
accounts of insurance companies having an agreement with the
Manager or the Distributor for that purpose;
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;
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);
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 investment 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);
employee benefit plans purchasing shares through a
shareholder servicing agent which the Distributor has appointed as
its agent to accept those purchase orders;
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;
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;
any unit investment trust that has entered into an
appropriate agreement with the Distributor;
a TRAC-2000 401(k) plan (sponsored by the former Quest for
Value Advisors) whose Class B or Class C shares of a Former Quest
for Value Fund were exchanged for Class A shares of that fund due
to the termination of the Class B and C TRAC-2000 program on
November 24, 1995; or
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:
shares issued in plans of reorganization, such as mergers,
asset acquisitions and exchange offers, to which the Fund is a
party;
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;
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;
shares purchased and paid for with the proceeds of shares
redeemed in the past 12 months 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
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:
for retirement distributions or loans to participants or
beneficiaries from qualified retirement plans, deferred
compensation plans or other employee benefit plans, including
OppenheimerFunds prototype 401(k) plans (these are all referred to
as "Retirement Plans");
to return excess contributions made to Retirement Plans;
to make Automatic Withdrawal Plan payments that are limited
annually to no more than 12% of the original account value;
involuntary redemptions of shares by operation of law or
involuntary redemptions of small accounts (see "Shareholder Account
Rules and Policies," below);
if, at the time a purchase order is placed for Class A
shares that would otherwise be subject to the Class A contingent
deferred sales charge, the dealer agrees in writing to accept the
dealer's portion of the commission payable on the sale 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); or
for distributions from OppenheimerFunds prototype 401(k)
plans for any of the following cases or 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) hardship
withdrawals, as defined in the plan; (3) under a Qualified Domestic
Relations Order, as defined in the Internal Revenue Code; (4) to
meet the minimum distribution requirements of the Internal Revenue
Code; (5) to establish "substantially equal periodic payments" as
described in Section 72(t) of the Internal Revenue Code, or (6)
separation from service.
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. 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. The Distributor uses all of those fees 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 and to reimburse itself (if the
Fund's Board of Trustees authorizes such reimbursements, which it
has not done as yet) for its other expenditures under the Plan.
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
annual 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
charge will be assessed on the lesser of the net asset value of the
shares at the time of redemption or the original purchase price.
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:
Years Since Beginning of Contingent Deferred Sales Charge
Month in Which Purchase on Redemption in that Year
Order Was Accepted (As % of Amount 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.
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 charge will be assessed on the lesser of the
net asset value of the shares at the time of redemption or the
original purchase price. 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
costs in distributing Class B and 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 six 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 per year.
The Distributor uses the service fees to compensate dealers
for providing personal services for accounts that hold Class B or
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 and retains
the service fee paid by the Fund in that year. 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 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. Including the advance of the
service fee, 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 Distributor retains the Class B asset-based
sales charge.
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. Including the advance of the
service fee, the total amount 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 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.
The Distributor's actual expenses in selling Class B and 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 C
shares. If a Fund terminates either of its Plans, the Board of
Directors may allow the Fund to continue payments of the asset-
based sales charge to the Distributor for distributing shares
before the Plan was terminated.
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.
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);
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);
returns of excess contributions to Retirement Plans;
distributions from retirement plans to make "substantially
equal periodic payments" as permitted in Section 72(t) 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;
shares redeemed involuntarily, as described in "Shareholder
Account Rules and Policies," below; or
distributions from OppenheimerFunds 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; or (5)
for separation from service.
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:
shares sold to the Manager or its affiliates;
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
shares issued in plans of reorganization to which the Fund
is a party.
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 refer to the Application for details or
call the Transfer Agent for more information.
AccountLink privileges should be requested on the Application
you use to buy shares, or 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.
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.
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.
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.
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.
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.
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:
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 Application and Statement of
Additional Information for more details.
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:
Individual Retirement Accounts including rollover IRAs, for
individuals and their spouses
403(b)(7) Custodial Plans for employees of eligible tax-
exempt organizations, such as schools, hospitals and charitable
organizations
SEP-IRAs (Simplified Employee Pension Plans) for small
business owners or people with income from self-employment,
including SAR/SEP-IRAs
Pension and Profit-Sharing Plans for self-employed persons
and other employers
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.
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.
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):
You wish to redeem more than $50,000 worth of shares and
receive a check
The redemption check is not payable to all shareholders
listed on the account statement
The redemption check is not sent to the address of record on
your account statement
Shares are being transferred to a Fund account with a
different owner or name
Shares are redeemed by someone other than the owners (such
as an Executor)
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:
Your name
The Fund's name
Your Fund account number (from your account statement)
The dollar amount or number of shares to be redeemed
Any special payment instructions
Any share certificates for the shares you are selling,
The signatures of all registered owners exactly as the
account is registered, and
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 requests by mail:
OppenheimerFunds Services
P.O. Box 5270, Denver, Colorado 80217
Send courier or Express Mail requests to:
OppenheimerFunds Services
10200 E. Girard Avenue, 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.
To redeem shares through a service representative, call 1-
800-852-8457
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.
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.
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. To find out more information about this
service, please contact your dealer or broker. 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:
Shares of the fund selected for exchange must be available
for sale in your state of residence
The prospectuses of this Fund and the fund whose shares you
want to buy must offer the exchange privilege
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
You must meet the minimum purchase requirements for the fund
you purchase by exchange
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:
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."
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.
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.
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.
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.
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
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.
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.
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.
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.
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.
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.
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 and
Class C shares. Therefore, the redemption value of your shares may
be more or less than their original cost.
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 certified check or arrange with your bank
to provide telephone or written assurance to the Transfer Agent
that your purchase payment has cleared.
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.
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.
"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 certified Social Security or Employer Identification
Number when you sign your application, or if you violate Internal
Revenue Service regulations on tax reporting of income.
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.
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 and Class C 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 July 31st). 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 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 than for Class A shares. 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 August
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:
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.
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.
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.
Reinvest Your Distributions in Another Oppenheimer Fund
Account. You can reinvest all distributions in 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.
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.
"Buying a Dividend": When a fund goes ex-dividend, its
share price is reduced by the amount of the distribution. 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.
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
received when you sold them.
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.
<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
Reduced Class A Initial Sales Charge Rates for Certain Former
Quest Shareholders
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
Number of as a as a Percentage
Eligible Percentage Percentage of
Employees of Offering of Amount Offering
or Members Price Invested Price
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 22 and 23 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.
Special Class A Contingent Deferred Sales Charge Rates. Class A
shares of the Fund purchased by exchange of shares of other
Oppenheimer funds that were acquired as a result of the merger of
Former Quest for Value Funds into those Oppenheimer funds, and
which shares were subject to a Class A contingent deferred sales
charge prior to November 24, 1995 will be subject to a contingent
deferred sales charge at the following rates: if they are redeemed
within 18 months of the end of the calendar month in which they
were purchased, at a rate equal to 1.0% if the redemption occurs
within 12 months of their initial purchase and at a rate of 0.50 of
1.0% if the redemption occurs in the subsequent six months. Class
A shares of any of the Former Quest for Value Funds purchased
without an initial sales charge on or before November 22, 1995 will
continue to be subject to the applicable contingent deferred sales
charge in effect as of that date as set forth in the then-current
prospectus for such fund.
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:
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.
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.
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:
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.
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
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.
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.
Special Dealer Arrangements
Dealers who sold Class B shares of a Former Quest for Value Fund to
Quest for Value prototype 401(k) plans that were maintained on the
TRAC-2000 recordkeeping system and that were transferred to an
OppenheimerFunds prototype 401(k) plan shall be eligible for an
additional one-time payment by the Distributor of 1% of the value
of the plan assets transferred, but that payment may not exceed
$5,000 as to any one plan.
Dealers who sold Class C shares of a Former Quest for Value Fund to
Quest for Value prototype 401(k) plans that were maintained on the
TRAC-2000 recordkeeping system and (i) the shares held by those
plans were exchanged for Class A shares, or (ii) the plan assets
were transferred to an OppenheimerFunds prototype 401(k) plan,
shall be eligible for an additional one-time payment by the
Distributor of 1% of the value of the plan assets transferred, but
that payment may not exceed $5,000.
<PAGE>
Oppenheimer Developing Markets 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
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.
<PAGE>
Oppenheimer Developing Markets Fund
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
Statement of Additional Information dated ____________, 1996
This Statement of Additional Information of Oppenheimer
Developing Markets Fund is not a Prospectus. This document
contains additional information about the Fund and supplements
information in the Prospectus dated __________, 1996. 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>
<CAPTION>
Table of Contents
Page
<S> <C>
About the Fund
Investment Objective and Policies. . . . . . . . . . . . .
Investment Policies and Strategies . . . . . . . . . . . .
Other Investment Techniques and Strategies . . . . . . . .
Other Investment Restrictions. . . . . . . . . . . . . . .
How the Fund is Managed. . . . . . . . . . . . . . . . . .
Organization and History . . . . . . . . . . . . . . . . .
Trustees and Officers of the Fund . . . . . . . . . . . .
The Manager and Its Affiliates . . . . . . . . . . . . .
Brokerage Policies of the Fund . . . . . . . . . . . . .
Performance of the Fund . . . . . . . . . . . . . . . . .
Distribution and Service Plans . . . . . . . . . . . . .
About Your Account
How to Buy Shares . . . . . . . . . . . . . . . . . . . .
How to Sell Shares . . . . . . . . . . . . . . . . . . .
How to Exchange Shares . . . . . . . . . . . . . . . . .
Dividends, Capital Gains and Taxes . . . . . . . . . . .
Additional Information About the Fund . . . . . . . . . .
Financial Information About the Fund
Independent Auditors' Report . . . . . . . . . . . . . .
Financial Statements . . . . . . . . . . . . . . . . . .
Appendix A: Corporate Industry Classifications. . . . . . A-1
Appendix B: Description of Ratings. . . . . . . . . . . . B-1
</TABLE>
<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, including
the securities of issuers in Developing Markets, the Fund's
investment adviser, OppenheimerFunds, Inc. (the "Manager"),
evaluates the merits of securities primarily through the exercise
of its own investment analysis. These analyses may include, among
other things, evaluation of the strength of management and the
history of the issuer's operations, the soundness of the issuer's
financial and accounting policies and 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 the prospects for
the industry of which the issuer is a part, and legislative
proposals which might affect the issuer. In addition, the Manager
will ordinarily look for one of the following characteristics: an
above-average earnings growth per share; high return on invested
capital; effective research and product development, pricing
flexibility and general operating characteristics which will enable
the issuer to compete successfully in its intended markets.
The Fund intends to spread its investments (invest risk) among
the Developing Markets of at least three foreign countries under
normal market conditions. In determining an appropriate
distribution of investments among the various countries and
geographic regions in which the Fund may invest, the Manager
generally considers the following factors: prospects for relative
economic growth, the balance of payments, anticipated levels of
inflation, governmental policies influencing business conditions,
the outlook for currency relationships and the range of individual
investment opportunities available to international investors among
the various counties and geographic regions. 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 these
factors, the appreciation possibilities of particular issuers 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.
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 growth phase
because of the development of new products, businesses, markets or
other factors. Therefore, the Manager does not limit the selection
of investments in growth-type companies to issuers having a market
capitalization within a specific range.
Investing in Small, Unseasoned Companies. Many of the
securities offering the capital appreciation sought by the Fund
will involve investments in certain growth-type companies which do
not have a substantial operating history. These companies may have
limited product lines, markets or financial resources. 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 than
investments in larger more established companies, such as the risk
that their securities may be subject to more abrupt or erratic
market movements.
Foreign Securities. "Foreign securities" include equity and
debt securities of companies organized under the laws of countries
other than the United States and debt securities of foreign
governments. These securities 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 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 traded primarily 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 holding them must be approved by the Fund's Board of
Trustees 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.
Risks of Foreign Investing. Generally 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.
Special Risks of Investing in Developing Markets. The risks
of investing in foreign securities may be intensified in the case
of investments in Developing Markets.
Settlement of Transactions. Settlement procedures in
Developing Markets may differ from those of more established
securities markets. Securities issued by Developing Market
countries and by issuers located in those countries may be subject
to extended settlement periods. Delays in settlement could result
in temporary periods during which a portion of the Fund's assets is
uninvested and no return is earned on such assets. The inability
of the Fund to make intended purchases of securities due to
settlement problems could cause the Fund to miss investment
opportunities. Inability to dispose of portfolio securities due to
settlement problems could result in losses to the Fund due to
subsequent declines in the value of the portfolio security, a
decrease in the level of liquidity of the Fund's portfolio or, if
the Fund has entered into a contract to sell the security, in
possible liability to the purchaser.
Price Volatility. Securities prices in Developing Markets may
be significantly more volatile than is the case in more developed
nations of the world. In particular, countries with emerging
markets may have relatively unstable governments, present the risk
of nationalization of businesses, restrictions on foreign ownership
or prohibitions of repatriation of assets, and may have less
protection of property rights than more developed countries. The
economies of countries in Developing Markets may be predominantly
based on only a few industries and, as such, may be highly
vulnerable to changes in local or global trade conditions.
Less Developed Markets. Developing Market countries may have
less well-developed securities markets and exchanges, and
consequently lower trading volume, than the securities markets of
more developed countries. These markets may be unable to respond
effectively to increases in trading volume and, thus, prompt
liquidation of substantial portfolio holdings may be difficult at
times. As a result, these markets may be substantially less liquid
than those of more developed countries and the securities of
issuers located in these markets may have limited marketability.
Governmental Restrictions. In certain Developing Markets,
governmental approval for the repatriation of investment income,
capital or the proceeds of sales of securities by foreign investors
may be required. In addition, if a deterioration occurs in a
Developing Market's balance of payments or for other reasons, a
country could impose temporary restrictions on foreign capital
remittances. The Fund could be adversely affected by a delay in
obtaining a grant of, or a refusal to grant, any required
governmental approval for repatriation of capital, as well as the
application to the Fund of any restrictions on investments.
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.
Special Risks of Lower-Rated or Unrated 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 may invest less than 35% of the
value of its net assets in debt securities which are rated in the
lower rating categories and are also referred to as "lower-grade"
securities, and in unrated debt securities which, in the opinion of
the Manager, are of comparable quality. "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. See Appendix B for a description of Moody's and S&P
rating categories. The Fund will not invest in debt securities,
whether issued by a domestic or foreign issuer, which have a rating
by a nationally recognized statistical rating organization
("NRSRO") of less than C or in debt securities which are in default
at the time of purchase. 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. Changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity for
such securities to make principal and interest payments than is the
case for higher grade securities. Because most foreign debt
securities are not rated, the Fund's investments in such securities
will be based primarily on the Manager's credit analysis rather
than reliance on published ratings.
Debt securities rated below investment grade are considered by
the NRSROs to be predominantly speculative with respect to the
issuer's capacity to pay interest and repay principal and may
involve major risk exposure to adverse conditions. 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. Such securities are generally unsecured and are often
subordinated to other creditors of the issuer. To the extent that
the Fund is required to seek recovery upon a default in the payment
of principal or interest on its portfolio holdings, it may incur
additional expenses and may have limited legal recourse in the
event of a default. The Fund may purchase debt securities which,
although not rated by a NRSRO have been determined by the Manager
to be of comparable quality to rated securities in which the Fund
may invest. In the event that, due to a downgrade of one or more
debt securities, an amount in excess of 35% of the Fund's total
assets is held in securities rated below investment grade and
comparable unrated securities, the Manager will engage in an
orderly disposition of such securities to the extent necessary to
reduce the Fund's holdings of these securities to less than 35% of
total assets or less.
Ratings of debt securities represent the NRSROs' opinions
regarding their quality, are not a guarantee of quality and may be
reduced after a Fund has acquired the security. The Manager would
consider a reduction in the rating of a security or default by the
issuer in determining whether the Fund should continue to hold
security. The Fund is not obligated to dispose of securities when
issuers are in default or if the rating of the security is reduced.
Credit ratings attempt to evaluate the safety of principal and
interest payments and do not reflect an assessment of the
volatility of the security's market value or the liquidity of an
investment in the security. Also, NRSROs may fail to make timely
changes in credit ratings in response to subsequent events, so that
an issuer's financial condition may be better or worse than the
rating indicates. See Appendix B for further information regarding
S&P's and Moody's ratings.
Lower rated debt securities generally offer a higher current
yield than that available from higher grade issues, but they
involve higher risks, in that they are especially subject to
adverse changes in general economic conditions and in the
industries in which the issuers are engaged, to changes in the
financial condition of the issuers and to price fluctuation in
response to changes in interest rates. During periods of economic
downturn or rising interest rates, highly leveraged issuers may
experience financial stress, which could adversely affect their
ability to make payments of principal and interest and increase the
possibility of default. In addition, such issuers may not have
more traditional methods of financing available to them, and may be
unable to repay debt at maturity by refinancing. The risk of loss
due to default by such issuers is significantly greater because
such securities frequently are unsecured and subordinated to the
prior payment of senior indebtedness.
The market for lower rated securities has expanded rapidly in
recent years, and its growth paralleled a long economic expansion.
In the past, the prices of many lower rated debt securities
declined substantially, reflecting an expectation that many issuers
of such securities might experience financial difficulties. As a
result, the yields on lower rated debt securities rose
dramatically, However, such higher yields did not reflect the
value of the income stream that holders of such securities
expected, but rather the risk that holders of such securities could
lose a substantial portion of their value as a result of the
issuers' financial restructuring or default. There can be no
assurance that such declines will not recur. The market for lower
rated debt securities generally is thinner and less active than
that for higher quality securities, which may limit the Fund's
ability to sell such securities at fair value in response to
changes in the economy or the financial markets. Adverse publicity
and investor perceptions, whether or not based on fundamental
analysis, may also decrease the values and liquidity of lower rated
securities, especially in a thinly traded market.
Although the Manager will attempt to minimize the speculative
risks associated with the investments in such securities through
diversification, credit analysis and attention to current trends in
interest rates and other factors, investors should carefully review
the objectives and policies of the Fund and consider their ability
to assume the investment risks involved before making an investment
in the Fund.
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.
When-Issued and Forward Commitment Securities. The Fund may
purchase debt securities on a "when-issued" basis and may purchase
or sell such securities on a "forward commitment" basis in order to
hedge against anticipated changes in interest rates and prices.
The price, which is generally expressed in yield terms, is fixed at
the time the commitment is made, but delivery and payment for the
securities take place at a later date. When-issued and forward
commitments may be sold prior to the settlement date, but the Fund
will purchase or sell when-issued securities and forward
commitments only with the intention of actually receiving or
delivering the securities, as the case may be. No income accrues
on securities which have been purchased pursuant to a forward
commitment or on a when-issued basis prior to delivery to the Fund.
If the Fund disposes of the right to acquire a when-issued security
prior to its acquisition or disposes of its right to deliver or
receive against a forward commitment, it may incur a gain or loss.
At the time the Funds enter into a transaction on a when-issued or
forward commitment basis, a segregated account consisting of cash
or high grade liquid debt securities equal to the value of the
when-issued or forward commitment securities will be established
and maintained with the Fund's custodian bank and will be market to
market daily.
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.
Illiquid and Restricted Securities. To enable the Fund to
sell (in the United 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.
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.
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.
Under a repurchase agreement, the Fund acquires securities
subject to the seller's agreement to repurchase the securities as
a specified time and price. If the seller becomes subject to a
proceeding under the bankruptcy laws or its assets are otherwise
subject to a stay order, the Fund's right to liquidate the
securities may be restricted (during which time the value of the
securities could decline). The Fund has adopted procedures
intended to minimize any such risk. For example, the Fund will
enter into repurchase agreements only with "approved vendors". 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
under a repurchase agreement. 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.
Foreign repurchase agreements may be less well secured
than U.S. repurchase agreements, and may be denominated in foreign
currencies. They may also involve greater risk of loss if the
counterparty defaults. Some counterparties in these transactions
may be less creditworthy than those in U. S. markets.
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.
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
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.
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.
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. 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.
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 will 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.
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.
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 cash or liquid high-quality
debt securities in a separate account of the Fund having a value
equal to the aggregate amount of the Fund's net 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.
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 option premiums to no
more than 5% of the Fund's total assets for hedging strategies that
are not considered bona fide hedging strategies under the Rule.
Under the Rule, the Fund also must use short Futures and 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, cash or readily-marketable,
short-term (maturing in one year or less) debt instruments in an
amount equal to the market value of the securities underlying such
Future, less the margin deposit applicable to it.
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). One of the tests for
the Fund's qualification as a regulated investment company is that
less than 30% of its gross income must be derived from gains
realized on the sale of securities held for less than three months.
To comply with this 30% cap, the Fund will limit the extent to
which it engages in the following activities, but will not be
precluded from them: (i) selling investments, including Stock Index
Futures, held for less than three months, whether or not they were
purchased on the exercise of a call held by the Fund; (ii)
purchasing options which expire in less than three months; (iii)
effecting closing transactions with respect to calls or puts
written or purchased less than three months previously; (iv)
exercising puts or calls held by the Fund for less than three
months; or (v) writing calls on investments held less than three
months.
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 of gains (or losses) realized 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.
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.
Short Sales Against-the-Box. In this type of short sale,
while the short position is open, the Fund must own an equal amount
of the securities sold short, or by virtue of ownership of other
securities have the right, without payment of further
consideration, to obtain an equal amount of the securities sold
short. Short sales against-the-box may be made to defer, for
Federal income tax purposes, recognition of gain or loss on the
sale of securities "in the box" until the short position is closed
out. They may also be used to protect a gain on the security "in-
the-box" when the Fund does not want to sell it and recognize a
capital gain.
Other Investment Restrictions
Fundamental 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:
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;
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;
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;
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;
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;
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;
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
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.
As a matter of fundamental policy, the Fund also may invest
all of its assets in the securities of a single open-end management
investment company for which the Manager or one of its subsidiaries
or a successor is adviser or sub-adviser, notwithstanding any other
fundamental investment policy or limitation. That other fund must
have substantially the same fundamental investment objective,
policies and limitations as the Fund. The Fund is permitted by
this policy (but not required) to adopt a "master-feeder" structure
in which the Fund and other "feeder" funds would invest all of
their assets in a single pooled "master fund" in an effort to take
advantage of potential efficiencies. The Fund has no present
intention of adopting a "mater-feeder" structure, and would be
required to update its Prospectus and this Statement of Additional
Information prior to its doing so.
Non-Fundamental Investment Restrictions
The following operating policies of the Fund are not
fundamental policies and, as such, may be changed by vote of a
majority of the Fund's Board of Trustees without Shareholder
approval. these additional restrictions provide that:
The Fund cannot invest in companies for the primary purpose
of acquiring control or management thereof; or
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.
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.
In connection with the qualification of its shares in
certain states, the Fund has made the following undertakings.
These undertakings, which are not fundamental investment policies
of the Fund, shall terminate if the Fund ceases to qualify its
shares for sale in that state or if the state's applicable rules or
regulations are amended. The Fund has undertaken that (i) that it
will not invest any part of its assets in oil, gas or other mineral
exploration or development programs, and (ii) in the event that the
Fund adopts a "master-feeder" structure as described above under
"Fundamental Investment Restrictions," upon such conversion it will
comply with the Guidelines for Registration of Master Fund/Feeder
Funds as adopted by the NASAA membership.
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 the Appendix 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
instrument 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 business affiliations and occupations
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 Fund,
Oppenheimer Growth Fund, Oppenheimer Tax-Free Bond Fund,
Oppenheimer Money Market Fund, Inc., Oppenheimer Target Fund,
Oppenheimer U.S. Government Trust, Oppenheimer New York Tax-Exempt
Fund, Oppenheimer California Tax-Exempt Fund, Oppenheimer Multi-
State Tax-Exempt Trust, Oppenheimer Asset Allocation Fund,
Oppenheimer Gold & Special Minerals Fund, Oppenheimer Discovery
Fund, Oppenheimer Global Fund, Oppenheimer Global Growth & Income
Fund, Oppenheimer Global Emerging Growth Fund, Oppenheimer
Enterprise Fund, Oppenheimer Multi-Sector Income Trust and
Oppenheimer Multi-Government Trust (collectively, the "New York-
based Oppenheimer funds"). Messrs. Spiro, Bishop, Bowen, Donohue,
Farrar and Zack, respectively, hold the same offices with the other
New York-based Oppenheimer funds as with the Fund. As of the date
of this Statement of Additional Information, the Manager owned all
of the outstanding shares of the Fund as its initial shareholder
and no Trustee or officer of the Fund owned of record or
beneficially any shares of the Fund.
Leon Levy, Chairman of the Board of Trustees; Age 70
31 West 52nd Street, New York, New York 10019
General Partner of Odyssey Partners, L.P. (investment partnership)
and Chairman of Avatar Holdings, Inc. (real estate development).
Robert G. Galli, Trustee*; Age 62
Vice Chairman of OppenheimerFunds, Inc. (the "Manager") and Vice
President and Counsel of Oppenheimer Acquisition Corp. ("OAC"), the
Manager's parent holding company; formerly he held the following
positions: Executive Vice President & General Counsel of the
Manager and OppenheimerFunds Distributor, Inc. (the "Distributor"),
a director of the Manager and the Distributor, Vice President and
a director of HarbourView Asset Management Corporation
("HarbourView") and Centennial Asset Management Corporation
("Centennial"), investment adviser subsidiaries of the Manager, a
director of Shareholder Financial Services, Inc. ("SFSI") and
Shareholder Services, Inc. ("SSI"), transfer agent subsidiaries of
the Manager and an officer of other Oppenheimer funds.
Benjamin Lipstein, Trustee; Age 72
591 Breezy Hill Road, Hillsdale, New York 12529
Professor Emeritus of Marketing, Stern Graduate School of Business
Administration, New York University; Director of Sussex Publishers,
Inc (Publishers of Psychology Today and Mother Earth News) and of
Spy Magazine, L.P.
Bridget A. Macaskill, President and Trustee*; Age: 47
President, Chief Executive Officer and a Director of the Manager;
Chairman and a Director of SSI, President and a Director of OAC and
HarbourView; and a Director of Oppenheimer Partnership Holdings,
Inc., a holding company subsidiary of the Manager; formerly an
Executive Vice President of the Manager.
Elizabeth B. Moynihan, Trustee; Age 66
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 68
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), Enron-Dominion Cogen Corp. (cogeneration company),
Kemper Corporation (insurance and financial services company),
Fidelity Life Association (mutual life insurance company); formerly
Chairman of the Board of ICL, Inc. (information systems), and
President and Chief Executive Officer of The Conference Board, Inc.
(international economic and business research).
Edward V. Regan, Trustee; Age 65
40 Park Avenue, New York, New York 10016
Chairman of Municipal Assistance Corporation for the City of New
York; Senior Fellow, Jerome Levy Economics Institute, a member of
the U.S. Competitiveness Policy Council; a director of GranCare,
Inc. (health care provider); formerly New York State Comptroller
and trustee, New York State and Local Retirement Fund.
Russell S. Reynolds, Jr., Trustee; Age 64
200 Park Avenue, New York, New York 10166
Founder Chairman of Russell Reynolds Associates, Inc. (executive
recruiting); Chairman of Directors Publication, Inc. (consulting
and publishing); a trustee of Mystic Seaport Museum, International
House, Greenwich Historical Society and Greenwich Hospital.
Sidney M. Robbins, Trustee; Age 84
50 Overlook Road, Ossining, New York 10562
Chase Manhattan Professor Emeritus of Financial Institutions,
Graduate School of Business, Columbia University; Visiting
Professor of Finance, University of Hawaii; a director of The Korea
Fund, Inc. (closed-end investment company); a member of the Board
of Advisors, Olympus Private Placement Fund, L.P.; Professor
Emeritus of Finance, Adelphi University.
Donald W. Spiro, Vice Chairman and Trustee*; Age 70
Chairman Emeritus and a director of the Manager; formerly Chairman
of the Manager and OppenheimerFunds Distributor, Inc. (the
"Distributor").
Pauline Trigere, Trustee; Age 83
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 65
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 45
Executive Vice President and General Counsel of the Manager and
the Distributor; President and Director of Centennial; an officer
of other Oppenheimer funds; formerly Senior Vice President and
Associate General Counsel of the Manager and the Distributor;
Partner in, Kraft & McManimon (a law firm); an officer of First
Investors Corporation (a broker-dealer) and First Investors
Management Company, Inc. (broker-dealer and investment adviser);
director and an officer of First Investors Family of Funds and
First Investors Life Insurance Company.
George C. Bowen, Treasurer; Age 59
3410 South Galena Street, Denver, Colorado 80231
Senior Vice President and Treasurer of the Manager; Vice President
and Treasurer of the Distributor and HarbourView; Senior Vice
President, Treasurer, Assistant Secretary and a director of
Centennial; Vice President, Treasurer and Secretary of SSI and
SFSI; an officer of other
Oppenheimer funds.
Robert G. Zack, Assistant Secretary; Age 47
Senior Vice President and Associate General Counsel of the Manager,
Assistant Secretary of SSI, SFSI; an officer of other Oppenheimer
funds.
Robert J. Bishop, Assistant Treasurer; Age 37
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other Oppenheimer funds; formerly a Fund Controller for
the Manager, prior to which he was an Accountant for Yale &
Seffinger, P.C., an accounting firm, and previously an Accountant
and Commissions Supervisor for Stuart James Company Inc., a broker-
dealer.
Scott Farrar, Assistant Treasurer; Age 30
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other Oppenheimer funds; formerly a Fund Controller for
the Manager, prior to which he was an International Mutual Fund
Supervisor for Brown Brothers Harriman & Co., a bank, and
previously a Senior Fund Accountant for State Street Bank & Trust
Company.
[FN]
- ---------------
*A Trustee who is an "interested person" of the Fund as defined in
the Investment Company Act.
Remuneration of Trustees. The officers of the Fund are
affiliated with the Manager; they and the Trustees of the Fund who
are affiliated with the Manager (Ms. Macaskill and Messrs. Galli
and Spiro; Mr. Spiro and Ms. Macaskill are also an officers)
receive no salary or fee from the Fund. The Trustees of the Fund
(excluding Ms. Macaskill and Messrs. Galli and Spiro) received the
total amounts shown below for the 1995 calendar year from the New
York-based Oppenheimer funds listed in the first paragraph of this
section (and from Oppenheimer Global Environment Fund, Oppenheimer
Time Fund and Oppenheimer Mortgage Income Fund, which merged into
other Oppenheimer funds during 1995), for services in the positions
shown:
Total Compensation
From All
New York-based
Name and Position Oppenheimer Funds1
Leon Levy, Chairman and Trustee $141,000.00
Benjamin Lipstein, $ 86,200.00
Study Committee Member and Trustee
Elizabeth B. Moynihan, $ 60,625.00
Study Committee Member and2 Trustee
Kenneth A. Randall, $ 78,400.00
Audit Committee Member and Trustee
Edward V. Regan, $ 56,275.00
Audit Committee Member2 and Trustee
Russell S. Reynolds, Jr.,Trustee $52,100.00
Sidney M. Robbins, Study $122,100.00
Committee Chairman, Audit
Committee Vice-Chairman and Trustee
Pauline Trigere, Trustee $ 52,100.00
Clayton K. Yeutter, Trustee $ 52,100.00
- --------------------------------
1For the 1995 calendar year. As of the date of this Statement of
Additional Information, the Board has not yet established a fee for
service as a Trustee of the Fund.
2The Study and Audit Committees meet for all of the New York-based
Oppenheimer funds and the fees are allocated among the funds by the
Board.
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 at this time, nor
can the Fund estimate the number of years of credited service that
will be used to determine those benefits.
Major Shareholders. As of the date of this Statement of
Additional Information, the Manager was the sole initial
shareholder of the Fund's Class A, Class B and Class C shares.
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 three of whom (Ms.
Macaskill and Messrs. Spiro and Galli) 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.
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.
The Agreement contains no expense limitation. However,
independently of the Agreement, the Manager has undertaken that the
total expenses of the Fund in any fiscal year (including the
management fee but excluding taxes, interest, brokerage
commissions, distribution assistance payments and extraordinary
expenses, such as litigation costs) shall not exceed the most
stringent expense limitation imposed under state law applicable to
the registration of the Fund's shares. Pursuant of the
undertaking, the Manager's fee will be reduced at the end of a
month so that there will not be any accrued but unpaid liability
under this undertaking. Currently, the most stringent state
expense limitation is imposed by California and limits the Fund's
expenses (with specified exclusions) to 2.5% of the first $30
million of average annual net assets, 2.0% of the next $70 million
of average annual net assets and 1.5% of average annual net assets
in excess of $100 million. Any assumption of the Fund's expenses
under these limitations would lower the Fund's overall expense
ratio and increase its total return during any period during which
expenses are limited. The Manager reserves the right to amend or
terminate these expense undertakings at any time.
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.
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 and Class C 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. 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.
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.
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.
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:
1/n
(ERV)
(---) -1 = Average Annual Total Return
( P )
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:
ERV - P
------- = Total Return
P
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). 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.
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, or Class C 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.
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 or Class C 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 ranking of the
performance of its Class A, Class B or Class C shares by
Morningstar, Inc., an independent mutual fund monitoring service
that ranks mutual funds, including the Fund, monthly in broad
investment categories (equity, taxable bond, municipal bond and
hybrid) based on risk-adjusted investment return. Investment
return measures a fund's three, five and ten-year average annual
total returns (when available) in excess of 90-day U.S. Treasury
bill returns after considering sales charges and expenses. Risk
measures fund performance below 90-day U.S. Treasury bill monthly
returns. Risk and investment return are combined to produce star
rankings reflecting performance relative to the average fund in a
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%). Morningstar ranks the Class A,
Class B and Class C shares of the Fund in relation to other equity
funds. Rankings are subject to change monthly.
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 or Class C 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
or Class C 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 a Service Plan for Class A Shares and
Distribution and Service Plans for 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 for all or a
portion of its costs in connection with the distribution and/or
servicing of the shares of that class, as described in the
Prospectus. Each Plan has been approved by a vote of (i) 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, and (ii) the holders of a "majority" (as
defined in the Investment Company Act) of the shares of each class,
in each instance that vote having been cast by the Manager as the
sole initial holder of shares of that class.
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 will seek 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 the
Class B Plan shall also include the Distributor's distribution
costs for that quarter, and such costs for previous fiscal periods
that have been carried forward, as explained in the Prospectus and
below. 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.
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.
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 Rules of Fair Practice 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 and Class C
Shares. The availability of three 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.
The three 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 A, 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 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 and Class C 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 and Class C 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 that are 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 announcement (which is subject to change) states
that it will close on New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. It may also close on other days. The Fund may
invest a substantial portion of its assets in foreign securities
primarily listed on foreign exchanges which may trade on Saturdays
or customary U.S. business holidays on which the Exchange is
closed. Because the Fund's net asset value will not be calculated
on those days, the Fund's net asset values per share of Class A,
Class B and Class C shares of the Fund may be significantly
affected at times when shareholders cannot 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 U.S. 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 prices of the preceding trading day, or
closing bid and asked prices that day); (ii) securities traded on
a foreign securities exchange are valued generally 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 "asked" 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 "asked" 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 "asked" prices determined by a pricing
service approved by the Fund's Board of Trustees or obtained by the
Manger from two active market makers in the security on the basis
of reasonable inquiry; (v) money market debt securities that had a
maturity of less than 397 days when issued that have a remaining
maturity of 60 days or less are valued at cost, adjusted for
amortization of premiums and accretion of discounts; 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 "asked " prices provided by a single active market maker.
Trading in securities on European and Asian exchanges and
over-the-counter markets is normally completed before the close of
the 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 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 foreign 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 as close to
the time fixed for the valuation date as is reasonably practicable.
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, 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 asked 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, it shall be valued at the mean
between bid and asked prices obtained by the Manager from tow
active market makers (which in certain cases may be the bid price
if no asked price is available). Forward currency contracts are
valued at the closing price on the London foreign exchange market.
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 deferred credit is
included in the liability section. The credit is adjusted
("marked-to-market") to reflect the current market value of the
call or put. 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. In the case of foreign securities and corporate
bonds, when 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 any of the
types of securities described above. 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.
AccountLink. When shares are purchased through AccountLink, each
purchase must be at least $25.00. 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, a sibling's
spouse and a spouse's siblings, aunts, uncles, nieces and nephews.
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 Tax-Free Bond Fund<PAGE>
Oppenheimer New York Tax-Exempt Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Intermediate Tax-Exempt Fund
Oppenheimer Insured Tax-Exempt Fund
Oppenheimer Main Street California Tax-Exempt Fund
Oppenheimer Florida Tax-Exempt Fund
Oppenheimer Pennsylvania Tax-Exempt Fund
Oppenheimer New Jersey Tax-Exempt Fund
Oppenheimer Fund
Oppenheimer Discovery Fund
Oppenheimer Target Fund
Oppenheimer Growth Fund
Oppenheimer Equity Income Fund
Oppenheimer Value Stock Fund
Oppenheimer Asset Allocation 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 Strategic Income & Growth Fund
Oppenheimer Global Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer U.S. Government Trust
Oppenheimer International Bond Fund
Oppenheimer Enterprise 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
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
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.
Daily Cash Accumulation Fund, Inc.
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.
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 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.
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.
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.
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.
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 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. 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 and in the provisions of the
OppenheimerFunds Application relating to such Plans, as well as 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.
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.
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. 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, Centennial America Fund, L.P. and Daily Cash
Accumulation Fund, Inc, 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, including Rochester Fund Municipals and Limited Term New
York Municipal Fund. Class A shares of Rochester Fund Municipals
or Limited Term New York Municipal Fund acquired on the exchange of
Class M shares of Oppenheimer Bond Fund for Growth may be exchanged
for Class M shares of that fund. For accounts of Oppenheimer Bond
Fund for Growth established after March 8, 1996, Class M shares may
be exchanged for Class A shares of other Oppenheimer funds except
Rochester Fund Municipals and Limited Term New York Municipals.
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 12 months 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 18 months 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. In addition, the amount of dividends
paid by the Fund which may qualify for the deduction is limited to
the aggregate amount of qualifying dividends that the Fund derives
from its portfolio investments that the Fund has held for a minimum
period, usually 46 days. A corporate shareholder will not be
eligible for the deduction on dividends paid on Fund shares held
for 45 days or less. To the extent the Fund's dividends are
derived from gross income from option premiums, interest income or
short-term gains from the sale of securities or dividends from
foreign corporations, those dividends will not qualify 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
in which the Fund derives 30% or more of its gross income from the
sale of securities held less than three months, it may fail to
qualify (see "Tax Aspects of Covered Calls and Hedging
Instruments," above). If it did not so qualify, the Fund would be
treated for tax purposes as an ordinary corporation and receive no
tax deduction for payments made to shareholders.
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 and its affiliates.
<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 Transmission*
Gas Utilities*
Gold
Health Care/Drugs
Health Care/Supplies & Services
Homebuilders/Real Estate
Hotel/Gaming
Industrial Services
Insurance
Leasing & Factoring
Leisure
Manufacturing
Metals/Mining
Nondurable Household Goods
Oil - Integrated
Paper
Publishing/Printing
Railroads
RestaurantsSavings & Loans
Shipping
Special Purpose Financial
Specialty Retailing
Steel
Supermarkets
Telecommunications - Technology
Telephone - Utility
Textile/Apparel
Tobacco
Toys
Trucking
- ----------------------
* For purposes of the Fund's policy not to concentrate in
securities of issuers in the same industry, gas utilities and gas
transmission utilities will each be considered a separate industry.
<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.
<PAGE>
<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 DEVELOPING MARKETS FUND
FORM N-1A
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
- -------- ---------------------------------
(a) Financial Statements:
(1) Financial Highlights: Not applicable
(2) Report of Independent Auditors *
(3) Statement of Investments : Not applicable
(4) Statement of Assets and Liabilities *
(5) Statement of Operations: Not applicable
(6) Statement of Changes in Net Assets: Not applicable
(7) Notes to Financial Statements: Not applicable
- -----------------
*To be filed by amendment
(b) Exhibits:
(1) Declaration of Trust dated 5/7/96: Filed herewith
(2) By-Laws dated 5/7/96: Filed herewith
(3) Not applicable.
(4) (i) Specimen Class A Share Certificate: Filed
herewith
(ii) Specimen Class B Share Certificate: Filed
herewith
(iii) Specimen Class C Share Certificate: Filed
herewith
(5) Form of Investment Advisory Agreement: Filed
herewith
(6) (i) Form of General Distributor's Agreement:
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 and incorporated
herein by reference.
(8) Form of Custody Agreement between Registrant and
The Bank of New York: Filed herewith.
(9) Not applicable.
(10) Opinion and Consent of Counsel: To be filed by
amendment.
(11) Independent Auditors' Consent: To be filed by
amendment.
(12) Not applicable.
(13) Investment Letter from OppenheimerFunds, Inc. to
Registrant: To be filed by amendment.
(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) Form of Service Plan and Agreement for Class
A shares pursuant to Rule 12b-1: Filed
herewith.
(ii) Form of Distribution and Service Plan and
Agreement for Class B shares pursuant to Rule
12b-1: Filed herewith.
(iii) Form of Distribution and Service Plan and
Agreement for Class C shares pursuant to Rule
12b-1: Filed herewith.
(16) Performance Data Computation Schedule: Not
applicable.
(17) (i) Financial Data Schedule for Class A shares:
Not applicable.
(ii) Financial Data Schedule for Class B shares:
Not applicable.
(iii) Financial Data Schedule for Class C shares:
Not applicable.
(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 O Tax- Exempt Fund (Reg. No.
33-23566), 11/1/95, and incorporated herein by
reference.
-- Powers of Attorney and Certified Board Resolutions:
Filed herewith.
Item 25. Persons Controlled by or Under Common Control with
Registrant
- ------- ---------------------------------------------------------
None.
Item 26. Number of Holders of Securities
- -------- -------------------------------
Number of
Record Holders as of
the date of this
Title of Class Registration Statement
- -------------- ----------------------
Class A Shares of Beneficial Interest 0
Class B Shares of Beneficial Interest 0
Class C Shares of Beneficial Interest 0
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.
Other Business and Connections
with OppenheimerFunds, Inc.
Name & Current Position During the Past Two Years
- ----------------------- ------------------------------
Mark Anson, Vice President Formerly Vice President of Equity
Derivatives at Salomon Brothers,
Inc.
Lawrence Apolito,
Vice President None.
Victor Babin,
Senior Vice President None.
Robert J. Bishop,
Assistant Vice President Treasurer of the Oppenheimer Funds
(listed below); previously a Fund
Controller for OppenheimerFunds,
Inc. (the "Manager").
Bruce Bartlett,
Vice President Vice President and Portfolio Manager
of Oppenheimer Total Return Fund,
Inc., Oppenheimer Main Street Funds,
Inc. and Oppenheimer Variable
Account Funds; formerly a Vice
President and Senior Portfolio
Manager at First of America
Investment Corp.
Susan Burton,
Assistant Vice President None.
George Bowen, Senior
Vice President & Treasurer Treasurer of the New York-based
Oppenheimer Funds; Vice President,
Secretary and Treasurer of the
Denver-based Oppenheimer Funds. Vice
President and Treasurer of
OppenheimerFunds Distributor, Inc.
(the "Distributor") and HarbourView
Asset Management Corporation
("HarbourView"), an investment
adviser subsidiary of the Manager;
Senior Vice President, Treasurer,
Assistant Secretary and a director
of Centennial Asset Management
Corporation ("Centennial"), an
investment adviser subsidiary of the
Manager; Vice President, Treasurer
and Secretary of Shareholder
Services, Inc. ("SSI") and
Shareholder Financial Services, Inc.
("SFSI"), transfer agent
subsidiaries of the Manager;
President, Treasurer and Director of
Centennial Capital Corporation; Vice
President and Treasurer of Main
Street Advisers.
Michael A. Carbuto,
Vice President Vice President and Portfolio Manager
of Centennial California Tax Exempt
Trust, Centennial New York Tax
Exempt Trust and Centennial Tax
Exempt Trust; Vice President of
Centennial.
Ruxandra Chivu,
Assistant Vice President None.
O. Leonard Darling,
Executive Vice President Formerly Co-Director of Fixed Income
for State Street Research &
Management Co.
Robert A. Densen,
Senior Vice President None.
Robert Doll, Jr.,
Executive Vice President Vice President and Portfolio Manager
of Oppenheimer Growth Fund,
Oppenheimer Variable Account Funds;
Senior Vice President and Portfolio
Manager of Oppenheimer Strategic
Income & Growth Fund; Vice President
of Oppenheimer Quest Value Fund,
Inc., Oppenheimer Quest Officers
Value Fund, Oppenheimer Quest For
Value Funds and Oppenheimer Quest
Global Value Fund, Inc.
John Doney, Vice President Vice President and Portfolio Manager
of Oppenheimer Equity Income Fund.
Andrew J. Donohue,
Executive Vice President
& General Counsel Secretary of the New York-based
Oppenheimer Funds; Vice President of
the Denver-based Oppenheimer Funds;
Executive Vice President, Director
and General Counsel of the
Distributor; President and a
Director of Cetennial; formerly
Senior Vice President and Associate
General Counsel of the Manager and
the Distributor.
George Evans, Vice President Vice President and Portfolio Manager
of Oppenheimer Global Emerging
Growth Fund.
Scott Farrar,
Assistant Vice President Assistant Treasurer of the
Oppenheimer Funds; previously a Fund
Controller for the Manager.
Katherine P. Feld, Vice
President and Secretary Vice President and Secretary of
OppenheimerFunds Distributor, Inc.;
Secretary of HarbourView, Main
Street Advisers, Inc. and
Centennial; Secretary, Vice
President and Director of Centennial
Capital Corp.
Ronald H. Fielding,
Senior Vice President 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");
President and Director of Rochester
Fund Services, Inc. ("RFS");
President and Director of Rochester
Tax Managed Fund, Inc.; Vice
President and Portfolio Manager of
Rochester Fund Municipals and
Rochester Portfolio Series - Limited
Term New York Municipal Fund.
Patricia C. Foster,
Vice President Secretary of RFD, FMC, RCAI, RFS,
Rochester Fund Municipals, Rochester
Tax Managed Fund Inc., Bond Fund
Series - Oppenheimer Bond Fund for
Growth, Rochester Portfolio Series -
Limited Term New York Municipal
Fund.
Jon S. Fossel, Chairman of
the Board and Director Director of OAC, the Manager's
parent holding company; President,
CEO and a director of HarbourView; a
director of SSI and SFSI; President,
Director, Trustee, and Managing
General Partner of the Denver-based
Oppenheimer Funds; President and
Chairman of the Board of Main Street
Advisers, Inc.; formerly Chief
Executive Officer of the Manager.
John Fortuna, None.
Assistant Vice President
Robert G. Galli,
Vice Chairman Trustee of the New York-based
Oppenheimer Funds; Vice President
and Counsel of OAC; formerly he held
the following positions: a director
of the Distributor, Vice President
and a director of HarbourView and
Centennial, a director of SFSI and
SSI, an officer of other Oppenheimer
Funds and Executive Vice President
& General Counsel of the Manager and
the Distributor.
Linda Gardner,
Assistant Vice President None.
Ginger Gonzalez,
Vice President Formerly 1st Vice President /
Director of Creative Services for
Shearson Lehman Brothers.
Mildred Gottlieb,
Assistant Vice President Formerly served as a Strategy
Consultant for the Private Client
Division of Merrill Lynch.
Caryn Halbrecht,
Vice President Vice President and Portfolio Manager
of Oppenheimer Insured Tax-Exempt
Fund and Oppenheimer Intermediate
Tax Exempt Fund; an officer of other
Oppenheimer Funds; formerly Vice
President of Fixed Income Portfolio
Management at Bankers Trust.
Barbara Hennigar,
President and Chief Executive
Officer of OppenheimerFunds
Services, a division of
the Manager President and Director of SFSI.
Dorothy Hirshman, None.
Assistant Vice President
Alan Hoden, Vice President None.
Merryl Hoffman,
Vice President None.
Scott T. Huebl,
Assistant Vice President None.
Jane Ingalls,
Assistant Vice President Formerly a Senior Associate with
Robinson, Lake/Sawyer Miller.
Bennett Inkeles,
Assistant Vice President Formerly employed by Doremus &
Company, an advertising agency.
Ronald Jamison,
Vice President Formerly Vice President and
Associate General Counsel at
Prudential Securities, Inc.
Frank Jennings,
Vice President Portfolio Manager of Oppenheimer
Global Growth & Income Fund.
Formerly a Managing Director of
Global Equities at Paine Webber's
Mitchell Hutchins division.
Stephen Jobe, Vice President None.
Heidi Kagan,
Assistant Vice President None.
Avram Kornberg,
Vice President Formerly a Vice President with
Bankers Trust.
Paul LaRocco,
Assistant Vice President Portfolio Manager of Oppenheimer
Variable Account Funds; Associate
Portfolio Manager of Oppenheimer
Discovery Fund. Formerly a
Securities Analyst for Columbus
Circle Investors.
Mitchell J. Lindauer,
Vice President None.
Loretta McCarthy,
Executive Vice President None.
Bridget Macaskill,
President, Chief Executive
Officer and Director President, Director and Trustee of
the New York-based and the Denver-
based Oppenheimer funds; President
and a Director of OAC, HarbourView
and Oppenheimer Partnership
Holdings, Inc.; Director of Main
Street Advisers, Inc.; Chairman and
Director of SSI.
Timothy Martin,
Assistant Vice President Formerly Vice President, Mortgage
Trading, at S.N. Phelps & Co.,
Salomon Brothers, and Kidder
Peabody.
Sally Marzouk,
Vice President None.
Marilyn Miller,
Vice President Formerly a Director of marketing for
TransAmerica Fund Management
Company.
Robert J. Milnamow,
Vice President Vice President and Portfolio Manager
of Oppenheimer Main Street Funds,
Inc. Formerly a Portfolio Manager
with Phoenix Securities Group.
Denis R. Molleur,
Vice President None.
Kenneth Nadler,
Vice President None.
David Negri, Vice President Vice President and Portfolio Manager
of Oppenheimer Variable Account
Funds, Oppenheimer Strategic Income
Fund, Oppenheimer Strategic Income &
Growth Fund; an officer of other
Oppenheimer Funds.
Barbara Niederbrach,
Assistant Vice President None.
Robert A. Nowaczyk,
Vice President None.
Robert E. Patterson,
Senior Vice President Vice President and Portfolio Manager
of Oppenheimer Main Street Funds,
Inc., Oppenheimer Multi-State Tax-
Exempt Trust, Oppenheimer Tax-Exempt
Fund, Oppenheimer California Tax-
Exempt Fund, Oppenheimer New York
Tax-Exempt Fund and Oppenheimer Tax-
Free Bond Fund; Vice President of
The New York Tax-Exempt Income Fund,
Inc.; Vice President of Oppenheimer
Multi-Sector Income Trust.
Tilghman G. Pitts III,
Executive Vice President
and Director Chairman and Director of the
Distributor.
Jane Putnam,
Vice President Associate Portfolio Manager of
Oppenheimer Growth Fund; Vice
President and Portfolio Manager of
Oppenheimer Target Fund and
Oppenheimer Variable Account Funds.
Formerly Senior Investment Officer
and Portfolio Manager with Chemical
Bank.
Russell Read,
Vice President Formerly an International Finance
Consultant for Dow Chemical.
Thomas Reedy,
Vice President Vice President of Oppenheimer Multi-
Sector Income Trust and Oppenheimer
Multi-Government Trust; an officer
of other Oppenheimer Funds; formerly
a Securities Analyst for the
Manager.
David Robertson,
Vice President None.
Adam Rochlin,
Vice President Formerly a Product Manager for
Metropolitan Life Insurance Company.
Michael S. Rosen
Vice President Formerly Vice President 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.; Vice
President and Portfolio Manager of
Rochester Fund Series - The Bond
Fund For Growth.
David Rosenberg,
Vice President Vice President and Portfolio Manager
of Oppenheimer Limited-Term
Government Fund, Oppenheimer U.S.
Government Trust and Oppenheimer
Integrity Funds. Formerly Vice
President and Senior Portfolio
Manager for Delaware Investment
Advisors.
Richard H. Rubinstein,
Vice President Vice President and Portfolio Manager
of Oppenheimer Asset Allocation
Fund, Oppenheimer Fund and
Oppenheimer Variable Account Funds;
an officer of other Oppenheimer
Funds; formerly Vice President and
Portfolio Manager/Security Analyst
for Oppenheimer Capital Corp., an
investment adviser.
Lawrence Rudnick,
Vice President Formerly Vice President of Dollar
Dry Dock Bank.
James Ruff,
Executive Vice President None.
Ellen Schoenfeld,
Assistant Vice President None.
Diane Sobin,
Vice President Vice President and Portfolio Manager
of Oppenheimer Gold & Special
Minerals Fund, Oppenheimer Total
Return Fund, Inc. Oppenheimer Main
Street Funds, Inc. and Oppenheimer
Variable Account Funds; formerly a
Vice President and Senior Portfolio
Manager for Dean Witter
InterCapital, Inc.
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.
Arthur Steinmetz,
Senior Vice President Vice President and Portfolio Manager
of Oppenheimer Strategic Income
Fund, Oppenheimer Strategic Income &
Growth Fund; an officer of other
Oppenheimer Funds.
Ralph Stellmacher,
Senior Vice President Vice President and Portfolio Manager
of Oppenheimer Champion Income Fund
and Oppenheimer High Yield Fund; an
officer of other Oppenheimer Funds.
John Stoma,
Vice President Formerly Vice President of Pension
Marketing with Manulife Financial.
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 Vice President of the Manager; Vice
President and Portfolio Manager of
Oppenheimer Discovery Fund,
Oppenheimer Global Emerging Growth
Fund and Oppenheimer Enterprise
Fund. Formerly Managing Director of
Buckingham Capital Management.
Gary Tyc, Vice President,
Assistant Secretary and
Assistant Treasurer Assistant Treasurer of the
Distributor and SFSI.
Jeffrey Van Giesen,
Vice President Formerly employed by Kidder Peabody
Asset Management.
Ashwin Vasan, Vice President Vice President and Portfolio Manager
of Oppenheimer Multi-Sector Income
Trust, Oppenheimer Multi-Government
Trust and Oppenheimer International
Bond Fund; an officer of other
Oppenheimer Funds.
Valerie Victorson,
Vice President None.
Dorothy Warmack,
Vice President Vice President and Portfolio Manager
of Daily Cash Accumulation Fund,
Inc., Oppenheimer Cash Reserves,
Oppenheimer Variable Account Funds,
Centennial America Fund, L.P.,
Centennial Government Trust and
Centennial Money Market Trust; Vice
President of Centennial.
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.
William L. Wilby,
Senior Vice President Vice President and Portfolio Manager
of Oppenheimer Variable Account
Funds, Oppenheimer Global Fund and
Oppenheimer Global Growth & Income
Fund; Vice President of HarbourView;
an officer of other Oppenheimer
Funds.
Carol Wolf,
Vice President Vice President and Portfolio Manager
of Oppenheimer Money Market Fund,
Inc., Centennial America Fund, L.P.,
Centennial Government Trust,
Centennial Money Market Trust and
Daily Cash Accumulation Fund, Inc.;
Vice President of Oppenheimer Multi-
Sector Income Trust; Vice President
of Centennial.
Robert G. Zack,
Senior Vice President and
Assistant Secretary Associate General Counsel of the
Manager; Assistant Secretary of the
Oppenheimer Funds; Assistant
Secretary of SSI, SFSI; an officer
of other Oppenheimer Funds.
Arthur J. Zimmer,
Vice President Vice President and Portfolio Manager
of Oppenheimer Variable Account
Funds, Centennial America Fund,
L.P., Centennial Government Trust,
Centennial Money Market Trust and
Daily Cash Accumulation Fund, Inc.;
Vice President of Oppenheimer Multi-
Sector Income Trust; Vice President
of Centennial; an officer of other
Oppenheimer Funds.
The Oppenheimer Funds include the New York-based
Oppenheimer Funds and the Denver-based Oppenheimer Funds set forth
below:
New York-based Oppenheimer Funds
- --------------------------------
Oppenheimer Asset Allocation Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Discovery Fund
Oppenheimer Enterprise Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer International Growth Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-Government Trust
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Tax-Exempt Trust
Oppenheimer New York Tax-Exempt Fund
Oppenheimer Fund
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Quest for Value Funds
Oppenheimer Target Fund
Oppenheimer Tax-Free Bond Fund
Oppenheimer U.S. Government Trust
Denver-based Oppenheimer Funds
- ------------------------------
Oppenheimer Cash Reserves
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
Daily Cash Accumulation Fund, Inc.
The New York Tax-Exempt Income Fund, Inc.
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 Strategic Funds Trust
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Tax-Exempt Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
Rochester-based Funds
- -----------------------------
Rochester Fund Municipals
Bond Fund Series - Oppenheimer Bond Fund for
Growth
Rochester Portfolio Series - Limited Term
New York Municipal Fund
The address of OppenheimerFunds, Inc., the New York-based
Oppenheimer 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 Main Street Advisers, Inc. is 3410
South Galena Street, Denver, Colorado 80231.
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
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:
<TABLE>
<CAPTION>
Positions and
Name & Principal Positions & Offices Offices with
Business Address with Underwriter Registrant
- ---------------- ------------------- ------------
<S> <C> <C>
Christopher Blunt Vice President None
6 Baker Avenue
Westport, CT 06880
George Clarence Bowen+ Vice President & Treasurer Treasurer
Julie Bowers Vice President None
21 Dreamwold Road
Scituate, MA 02066
Peter W. Brennan Vice President None
1940 Cotswold Drive
Orlando, FL 32825
Mary Ann Bruce* Senior Vice President - None
Financial Institution Div.
Robert Coli Vice President None
12 Whitetail Lane
Bedminster, NJ 07921
Ronald T. Collins Vice President None
710-3 E. Ponce DeLeon Ave.
Decatur, GA 30030
William Coughlin Vice President None
1400 Laurel Avenue
Apt. W710
Minneapolis, MN 55403
Mary Crooks+ Vice President None
Paul Delli-Bovi Vice President None
750 West Broadway
Apt. 5M
Long Beach, NY 11561
Andrew John Donohue* Executive Vice Secretary
President & Director
Wendy H. Ehrlich Vice President None
4 Craig Street
Jericho, NY 11753
Kent Elwell Vice President None
41 Craig Place
Cranford, NJ 07016
John Ewalt Vice President None
2301 Overview Dr. NE
Tacoma, WA 98422
Katherine P. Feld* Vice President & Secretary None
Mark Ferro Vice President None
43 Market Street
Breezy Point, NY 11697
Ronald H. Fielding ++ Vice President None
Chairman, Rochester
Division
Reed F. Finley Vice President - None
1657 Graefield Financial Institution Div.
Birmingham, MI 48009
Wendy Fishler* Vice President - None
Financial Institution Div.
Ronald R. Foster Senior Vice President - None
11339 Avant Lane Eastern Division Manager
Cincinnati, OH 45249
Patricia Gadecki Vice President None
6026 First Ave. South,
Apt. 10
St. Petersburg, FL 33707
Luiggino Galleto Vice President None
10239 Rougemont Lane
Charlotte, NC 28277
Mark Giles Vice President - None
5506 Bryn Mawr Financial Institution Div.
Dallas, TX 75209
Ralph Grant* Vice President/National None
Sales Manager - Financial
Institution Div.
Sharon Hamilton Vice President None
720 N. Juanita Ave. - #1
Redondo Beach, CA 90277
Carla Jiminez Vice President None
609 Chimney Bluff Drive
Mt. Pleasant, SC 29464
Mark Johnson Vice President None
7512 Cromwell Dr. Apt 1
Clayton, MO 63105
Michael Keogh* Vice President None
Richard Klein Vice President None
4011 Queen Avenue South
Minneapolis, MN 55410
Ilene Kutno* Assistant Vice President None
Wayne A. LeBlang Senior Vice President - None
23 Fox Trail Director Eastern Div.
Lincolnshire, IL 60069
Dawn Lind Vice President - None
7 Maize Court Financial Institution Div.
Melville, NY 11747
James Loehle Vice President None
30 John Street
Cranford, NJ 07016
Laura Mulhall* Senior Vice President - None
Director of Key Accounts
Charles Murray Vice President None
50 Deerwood Drive
Littleton, CO 80127
Joseph Norton Vice President None
1550 Bryant Street
San Francisco, CA 94103
Patrick Palmer Vice President None
958 Blue Mountain Cr.
West Lake Village, CA 91362
Randall Payne Vice President - None
1307 Wandering Way Dr. Financial Institution Div.
Charlotte, NC 28226
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
William Presutti Vice President None
19 Spinnaker Way
Portsmouth, NH 03801
Tilghman G. Pitts, III* Chairman & Director None
Elaine Puleo* Vice President - None
Financial Institution Div.
Minnie Ra Vice President - None
109 Peach Street Financial Institution Div.
Avenel, NJ 07001
Ian Robertson Vice President None
4204 Summit Wa
Marietta, GA 30066
Michael S. Rosen++ Vice President None
President, Rochester
Division
James Ruff* President None
Timothy Schoeffler Vice President None
3118 N. Military Road
Arlington, VA 22207
Mark Schon Vice President None
10483 E. Corrine Dr.
Scottsdale, AZ 85259
Michael Sciortino Vice President None
785 Beau Chene Dr.
Mandeville, LA 70448
James A. Shaw Vice President - None
5155 West Fair Place Financial Institution Div.
Littleton, CO 80123
Robert Shore Vice President - None
26 Baroness Lane Financial Institution Div.
Laguna Niguel, CA 92677
Peggy Spilker Vice President - None
2017 N. Cleveland, #2 Financial Institution Div.
Chicago, IL 60614
Michael Stenger Vice President None
C/O America Building
30 East Central Pkwy
Suite 1008
Cincinnati, OH 45202
George Sweeney Vice President None
1855 O'Hara Lane
Middletown, PA 17057
Scott McGregor Tatum Vice President None
7123 Cornelia Lane
Dallas, TX 75214
Dave Thomas Vice President - None
111 South Joliet Circle Financial Institution Div.
#304
Aurora, CO 80112
Philip St. John Trimble Vice President None
2213 West Homer
Chicago, IL 60647
Gary Paul Tyc+ Assistant Treasurer None
Mark Stephen Vandehey+ Vice President None
Gregory K. Wilson Vice President None
2 Side Hill Road
Westport, CT 06880
* Two World Trade Center, New York, NY 10048-0203
+ 3410 South Galena St., Denver, CO 80231
++ 350 Linden Oaks, Rochester, NY 14625-2807
</TABLE>
(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 3410
South Galena Street, Denver, Colorado 80231.
Item 31. Management Services
- -------- -------------------
Not applicable.
Item 32. Undertakings
- -------- ------------
(a) Not applicable.
(b) Registrant undertakes to file a post-effective amendment,
using financial statements which need not be certified, within four
to six months from the effective date of its registration statement
under the Securities Act of 1933.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or
the Investment Company Act of 1940, the Registrant 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 5th of June, 1996.
OPPENHEIMER DEVELOPING MARKETS FUND
By: /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
- ---------- ----- ----
/s/ Leon Levy* Chairman of the June 5, 1996
- ------------- Board of Trustees
Leon Levy
/s/ Bridget A. Macaskill* President, Principal June 5, 1996
- ------------------------ Executive Officer
Bridget A. Macaskill and Trustee
/s/ George Bowen* Treasurer and June 5, 1996
- ---------------- Principal Financial
George Bowen and Accounting Officer
/s/ Robert G. Galli* Trustee June 5, 1996
- -------------------
Robert G. Galli
/s/ Benjamin Lipstein* Trustee June 5, 1996
- ---------------------
Benjamin Lipstein
/s/ Elizabeth B. Moynihan* Trustee June 5, 1996
- -------------------------
Elizabeth B. Moynihan
/s/ Kenneth A. Randall* Trustee June 5, 1996
- ----------------------
Kenneth A. Randall
/s/ Edward V. Regan* Trustee June 5, 1996
- -------------------
Edward V. Regan
/s/ Russell S. Reynolds, Jr.* Trustee June 5, 1996
- ----------------------------
Russell S. Reynolds, Jr.
/s/ Sidney M. Robbins* Trustee June 5, 1996
- ---------------------
Sidney M. Robbins
/s/ Donald W. Spiro* Trustee June 5, 1996
- -------------------
Donald W. Spiro
/s/ Pauline Trigere* Trustee June 5, 1996
- -------------------
Pauline Trigere
/s/ Clayton K. Yeutter* Trustee June 5, 1996
- ----------------------
Clayton K. Yeutter
*By: /s/ Robert G. Zack
- --------------------------------
Robert G. Zack, Attorney-in-Fact
<PAGE>
OPPENHEIMER DEVELOPING MARKETS FUND
EXHIBIT INDEX
Form N-1A
Item No. Description
- --------- -----------
24(b)(1) Declaration of Trust
24(b)(2) Bylaws
24(b)(4)(i) Specimen Class A Share Certificate
24(b)(4)(ii) Specimen Class B Share Certificate
24(b)(4)(iii) Specimen Class C Share Certificate
24(b)(5) Form of Investment Advisory Agreement
24(b)(6)(i) Form of General Distributor's Agreement
24(b)(8) Form of Custody Agreement
24(b)(15)(i) Form of Service Plan and Agreement for Class A
Shares
24(b)(15)(ii) Form of Distribution and Service Plan and Agreement
for Class B Shares
24(b)(15)(iii) Form of Distribution and Service Plan and Agreement
for Class C Shares
- -- Certified Board Resolutions and Powers of Attorney
Exhibit 24(b)(1)
DECLARATION OF TRUST
OF
OPPENHEIMER DEVELOPING MARKETS FUND
This DECLARATION OF TRUST, made this 7th day of May, 1996, by
and among the individuals executing this Declaration of Trust as
the Trustees.
WHEREAS, the Trustees wish to establish a trust fund under the
laws of the Commonwealth of Massachusetts, for the investment and
reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and
property contributed to the trust fund hereunder shall be held and
managed under this Declaration of Trust in trust as herein set
forth below.
FIRST: This Trust shall be known as OPPENHEIMER DEVELOPING
MARKETS FUND. The address of Oppenheimer Developing Markets 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.
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 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.
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 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 and Class C 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 or Class C
Shares may differ from the dividends and distributions on any other
such Class, and the net asset value of Class A, Class B or Class C
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, the Trustees hereby establish one Series of Shares
having the same name as the Trust, and said Shares shall be divided
into three Classes, which shall be designated Class A, Class B and
Class C. 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.
(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.
(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.
(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
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 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.
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
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 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 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, 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 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 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:
1. In case any Shareholder or former Shareholder shall be
held to be personally liable solely by reason of his being or
having been a Shareholder and not because of his acts or omissions
or for some other reason, the Shareholder or former Shareholder (or
the Shareholders, heirs, executors, administrators or other legal
representatives or in the case of a corporation or other entity,
its corporate or other general successor) shall be entitled out of
the Trust estate to be held harmless from and indemnified against
all loss and expense arising from such liability. The Trust shall,
upon request by the Shareholder, assume the defense of any such
claim made against any Shareholder for any act or obligation of the
Trust and satisfy any judgment thereon.
2. It is hereby expressly declared that a trust and not a
partnership is created hereby. No individual Trustee hereunder
shall have any power to bind the Trust, the Trust's officers or any
Shareholder. All persons extending credit to, doing business with,
contracting with or having or asserting any claim against the Trust
or the Trustees shall look only to the assets of the Trust for
payment under any such credit, transaction, contract or claim; and
neither the Shareholders nor the Trustees, nor any of their agents,
whether past, present or future, shall be personally liable
therefor; notice of such disclaimer shall be given in each
agreement, obligation or instrument entered into or executed by the
Trust or the Trustees. Nothing in this Declaration of Trust shall
protect a Trustee against any liability to which such Trustee would
otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in
the conduct of the office of Trustee hereunder.
3. The exercise by the Trustees of their powers and
discretion hereunder in good faith and with reasonable care under
the circumstances then prevailing, shall be binding upon everyone
interested. Subject to the provisions of paragraph 2 of this
Article NINTH, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law. The Trustees may take advice
of counsel or other experts with respect to the meaning and
operations of this Declaration of Trust, applicable laws,
contracts, obligations, transactions or any other business the
Trust may enter into, and subject to the provisions of paragraph 2
of this Article NINTH, shall be under no liability for any act or
omission in accordance with such advice or for failing to follow
such advice. The Trustees shall not be required to give any bond
as such, nor any surety if a bond is required.
4. This Trust shall continue without limitation of time but
subject to the provisions of sub-sections (a), (b), (c) and (d) of
this paragraph 4.
(a) The Trustees, with the favorable vote of the holders
of a majority of the outstanding voting securities, as defined in
the 1940 Act, of any one or more Series entitled to vote, may sell
and convey the assets of that Series (which sale may be subject to
the retention of assets for the payment of liabilities and
expenses) to another issuer for a consideration which may be or
include securities of such issuer. Upon making provision for the
payment of liabilities, by assumption by such issuer or otherwise,
the Trustees shall distribute the remaining proceeds ratably among
the holders of the outstanding Shares of the Series the assets of
which have been so transferred.
(b) The Trustees, with the favorable vote of the
holders of a majority of the outstanding voting securities, as
defined in the 1940 Act, of any one or more Series entitled to
vote, may at any time sell and convert into money all the assets of
that Series. Upon making provisions for the payment of all
outstanding obligations, taxes and other liabilities, accrued or
contingent, of that Series, the Trustees shall distribute the
remaining assets of that Series ratably among the holders of the
outstanding Shares of that Series.
(c) The Trustees, with the favorable vote of the holders
of a majority of the outstanding voting securities, as defined in
the 1940 Act, of any one or more Series entitled to vote, may
otherwise alter, convert or transfer the assets of that Series or
those Series.
(d) Upon completion of the distribution of the remaining
proceeds or the remaining assets as provided in sub-sections (a)
and (b), and in subsection (c) where applicable, the Series the
assets of which have been so transferred shall terminate, and if
all the assets of the Trust have been so transferred, the Trust
shall terminate and the Trustees shall be discharged of any and all
further liabilities and duties hereunder and the right, title and
interest of all parties shall be 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 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 Declaration
of Trust may be executed by and on behalf of the Trust and the
Trustees by an officer or officers of the Trust.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
instrument as of the 7th day of May, 1996.
/s/ Robert G. Galli /s/ Leon Levy
- ------------------- -------------
Robert G. Galli Leon Levy
11-54 Shearwater Court One Sutton Place
Jersey City, NJ 07305 New York, NY 10022
/s/ Benjamin Lipstein /s/ Bridget A. Macaskill
- --------------------- ------------------------
Benjamin Lipstein Bridget A. Macaskill
591 Breezy Hill Road 200 E. 69th St. Apt 32B
Hillsdale, NY 12529 New York, New York 10021
/s/ Elizabeth B. Moynihan /s/ Kenneth A. Randall
- ------------------------- ----------------------
Elizabeth B. Moynihan Kenneth A. Randall
801 Pennsylvania Avenue 6 Whittaker's Mill
Washington, DC 20004 Williamsburg, VA 23185
/s/ Edward V. Regan /s/ Russell S. Reynolds
- ------------------- -----------------------
Edward V. Regan Russell S. Reynolds
40 Park Avenue 39 Clapboard Ridge Road
New York, NY 10016 Greenwich, CT 06830
/s/ Sidney M. Robbins /s/ Donald W. Spiro
- --------------------- -------------------
Sidney M. Robbins Donald W. Spiro
50 Overlook Road 399 Ski Trail
Ossining, NY 10562 Kinnelon, NJ 07405
/s/ Pauline Trigere /s/ Clayton K. Yeutter
- ------------------- ----------------------
Pauline Trigere Clayton K. Yeutter
525 Park Avenue 1325 Merrie Ridge Road
New York, NY 10021 McLean, Virginia 22101
Exhibit 24(b)(2)
OPPENHEIMER DEVELOPING MARKETS FUND
(the "Trust")
BY-LAWS
ARTICLE I
SHAREHOLDERS
Section 1. Place of Meeting. All meetings of the
Shareholders (which term as used herein shall, together with all
other terms defined in the Declaration of Trust, have the same
meaning as in the Declaration of Trust) shall be held at the
principal office of the Trust or at such other place as may from
time to time be designated by the Board of Trustees and stated in
the notice of meeting.
Section 2. Shareholder Meetings. Meetings of the
Shareholders for any purpose or purposes may be called by the
Chairman of the Board of Trustees, or by the President or by the
Board of Trustees and shall be called by the Trustees upon
receipt of the request in writing signed by Shareholders holding
not less than one tenth of the entire number of Shares issued and
outstanding and entitled to vote thereat. Such request shall
state the purpose or purposes of the proposed meeting.
Section 3. Notice of Meetings of Shareholders. Not less
than ten days' and not more than 120 days' written notice of
every meeting of Shareholders, stating the time and place thereof
(and the general nature of the business proposed to be transacted
at any special or extraordinary meeting), shall be given to each
Shareholder entitled to vote thereat by leaving the same with him
or at his residence or usual place of business or by mailing it,
postage prepaid and addressed to him at his address as it appears
upon the books of the Trust.
No notice of the time, place or purpose of any meeting of
Shareholders need be given to any Shareholder who attends in
person or by proxy or to any Shareholder who, in writing executed
and filed with the records of the meeting, either before or after
the holding thereof, waives such notice.
Section 4. Record Dates. The Board of Trustees may fix, in
advance or from time to time, a record date not exceeding 120
days and not less than 10 days preceding the date of any meeting
of Shareholders or of the Shareholders of any Series or Class for
the determination of the Shareholders of record entitled to
notice of and to vote at a Shareholders' meeting; for the
determination of Shareholders entitled to receive dividends,
distributions, rights or allotments of rights; or for any other
purpose requiring the fixing of a record date. Only such
Shareholders of record on such date shall be entitled to notice
of and to vote at such meeting, receive such dividends, rights or
allotments, or otherwise participate as the case may be.
Section 5. Access to Shareholder List. The Board of
Trustees shall make available a list of the names and addresses
of all Shareholders as recorded on the books of the Trust, upon
receipt of the request in writing signed by not less than ten
Shareholders (who have been such for at least 6 months) holding
Shares of the Trust valued at $25,000 or more at current net
asset value (as defined in the Trust's Prospectus) or holding not
less than one percent in amount of the entire number of shares of
the Trust issued and outstanding; such request must state that
such Shareholders wish to communicate with other Shareholders
with a view to obtaining signatures to a request for a meeting to
remove one or more trustees pursuant to this Section 5 or Section
2 of Article II of these By-Laws and be accompanied by a form of
communication to the Shareholders. The Board of Trustees may, in
its discretion, satisfy its obligation under this Section 5 by
either, as required by Section 16(c) of the Investment Company
Act, making available the Shareholder List to such Shareholders
at the principal offices of the Trust, or at the offices of the
Trust's transfer agent, during regular business hours, or by
mailing a copy of such Shareholders' proposed communication and
form of request, at their expense, to all other Shareholders.
Notwithstanding the foregoing, the Board of Trustees may also
take such other action as may be permitted under Section 16(c) of
the Investment Company Act.
Section 6. Quorum, Adjournment of Meetings. The presence
in person or by proxy of the holders of record of at least one-
third of the Shares, or of the shares of any Series or Class, of
the Trust issued and outstanding and entitled to vote thereat,
shall constitute a quorum, respectively, at all meetings of the
Shareholders; provided, however, that if any action to be taken
by the Shareholders or by a Series 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 a quorum is present, a vote of a majority of the quorum
shall be sufficient to transact all business at the meeting. If
at any meeting of the Shareholders there shall be less than a
quorum present, the Shareholders or Trustees present at such
meeting may, without further notice, adjourn the same from time
to time until a quorum shall attend, but no business shall be
transacted at any such adjourned meeting except such as might
have been lawfully transacted had the meeting not been adjourned.
Section 7. Voting and Inspectors. At all meetings of
Shareholders, each Shareholder shall be entitled to one vote on
each matter submitted to a vote of the Shareholders or to a vote
of the Shareholders of the affected Series or Class for each
Share standing in his name on the books of the Trust on the date
fixed for determination of Shareholders or the Shareholders of
the affected Series or Class entitled to vote at such meeting
(except, if the Board so determines, for Shares redeemed prior to
the meeting), and each such Series shall vote as an individual
class ("Individual Class Voting"); a Series or Class shall be
deemed to be affected when a vote of the holders of that Series
or Class on a matter is required by the Investment Company Act of
1940; provided, however, that as to any matter with respect to
which a vote of Shareholders is required by the Investment
Company Act of 1940 or by any applicable law that must be
complied with, such requirements as to a vote by Shareholders
shall apply in lieu of Individual Class Voting as described
above. Any fractional Share shall carry proportionately all the
rights of a whole Share, including the right to vote and the
right to receive dividends. Any Shareholder thus entitled to
vote at any such meeting of Shareholders shall be entitled to
vote either in person or by proxy appointed by an instrument in
writing subscribed by such Shareholder or his duly authorized
attorney-in-fact. Proxies may also or may instead be given by any
electronic or telecommunication device or in any other manner
permitted by law.
All elections of Trustees shall be had by a plurality of the
votes cast and all questions shall be decided by a majority of
the votes cast, in each case at a duly constituted meeting,
except as otherwise provided in the Declaration of Trust or in
these By-Laws or by specific statutory provision superseding the
restrictions and limitations contained in the Declaration of
Trust or in these By-Laws.
At any election of Trustees, the Board of Trustees prior
thereto may, or, if they have not so acted, the Chairman of the
meeting may, and upon the request of the holders of ten percent
(10%) of the Shares entitled to vote at such election shall,
appoint two inspectors of election who shall first subscribe an
oath or affirmation to execute faithfully the duties of
inspectors at such election with strict impartiality and
according to the best of their ability, and shall after the
election make a certificate of the result of the vote taken. No
candidate for the office of Trustee shall be appointed such
Inspector.
The Chairman of the meeting may cause a vote by ballot to be
taken upon any election or matter, and such vote shall be taken
upon the request of the holders of ten percent (10%) of the
Shares entitled to vote on such election or matter.
Section 8. Conduct of Shareholders' Meetings. The meetings
of the Shareholders shall be presided over by the Chairman of the
Board of Trustees, if any, or if he shall not be present, by the
President, or if he shall not be present, by a Vice-President, or
if none of the Chairman of the Board of Trustees, the President
or any Vice-President is present, by a chairman to be elected at
the meeting. The Secretary of the Trust, if present, shall act
as Secretary of such meetings, or if he is not present, an
Assistant Secretary shall so act, or if neither the Secretary nor
an Assistant Secretary is present, than the meeting shall elect
its secretary.
Section 9. Concerning Validity of Proxies, Ballots, Etc.
At every meeting of the Shareholders, all proxies shall be
received and taken in charge of and all ballots shall be received
and canvassed by the secretary of the meeting, who shall decide
all questions touching the qualification of voters, the validity
of the proxies, and the acceptance or rejection of votes, unless
inspectors of election shall have been appointed as provided in
Section 7, in which event such inspectors of election shall
decide all such questions.
ARTICLE II
BOARD OF TRUSTEES
Section 1. Number and Tenure of Office. The business and
affairs of the Trust shall be conducted and managed by a Board of
Trustees consisting of the number of initial Trustees, which
number may be increased or decreased as provided in Section 2 of
this Article. Each Trustee shall, except as otherwise provided
herein, hold office until the next meeting of Shareholders of the
Trust following his election called for the purpose of electing
Trustees or until his successor is duly elected and qualifies.
Trustees need not be Shareholders.
Section 2. Increase or Decrease in Number of Trustees;
Removal. The Board of Trustees, by the vote of a majority of the
entire Board, may increase the number of Trustees to a number not
exceeding fifteen, and may elect Trustees to fill the vacancies
created by any such increase in the number of Trustees until the
next meeting called for the purpose of electing Trustees or until
their successors are duly elected and qualify; the Board of
Trustees, by the vote of a majority of the entire Board, may
likewise decrease the number of Trustees to a number not less
than three but the tenure of office of any Trustee shall not be
affected by any such decrease. Vacancies occurring other than by
reason of any such increase shall be filled by a vote of a
majority of the entire Board then sitting. In the event that
after the proxy material has been printed for a meeting of
Shareholders at which Trustees are to be elected and any one or
more nominees named in such proxy material should die, become
incapacitated or fail to stand for election, the authorized
number of Trustees shall be automatically reduced by the number
of such nominees, unless the Board of Trustees prior to the
meeting shall otherwise determine.
A Trustee at any time may be removed either with or without
cause by resolution duly adopted by the affirmative votes of the
holders of not less than two-thirds of the outstanding Shares of
the Trust, present in person or by proxy at any meeting of
Shareholders at which such vote may be taken. Any Trustee at any
time may be removed for cause by resolution duly adopted at any
meeting of the Board of Trustees provided that notice thereof is
contained in the notice of such meeting and that such resolution
is adopted by the vote of at least two thirds of the Trustees
whose removal is not proposed. As used herein, "for cause" shall
mean any cause which under Massachusetts law would permit the
removal of a Trustee of a business trust.
Section 3. Place of Meeting. The Trustees may hold their
meetings, have one or more offices, and keep the books of the
Trust outside Massachusetts at any office or offices of the Trust
or at any other place as they may from time to time by resolution
determine, or, in the case of meetings, as they may from time to
time by resolution determine or as shall be specified or fixed in
the respective notices or waivers of notice thereof.
Section 4. Regular Meetings. Regular meetings of the Board
of Trustees shall be held at such time and on such notice, if
any, as the Trustees may from time to time determine.
Section 5. Special Meetings. Special meetings of the Board
of Trustees may be held from time to time upon call of the
Chairman of the Board of Trustees, the President or two or more
of the Trustees, by oral, telegraphic or written notice duly
served on or sent or mailed to each Trustee not less than one day
before such meeting. No notice need be given to any Trustee who
attends in person or to any Trustee who in writing executed and
filed with the records of the meeting either before or after the
holding thereof, waives such notice. Such notice or waiver of
notice need not state the purpose or purposes of such meeting.
Section 6. Quorum. A majority of the Trustees then in
office shall constitute a quorum for the transaction of business,
provided that a quorum shall in no case be less than two
Trustees. If at any meeting of the Board there shall be less
than a quorum present (in person or by open telephone line, to
the extent permitted by the Investment Company Act of 1940 (the
"1940 Act")), a majority of those present may adjourn the meeting
from time to time until a quorum shall have been obtained. The
act of the majority of the Trustees present at any meeting at
which there is a quorum shall be the act of the Board, except as
may be otherwise specifically provided by statute, by the
Declaration of Trust or by these By-Laws.
Section 7. Executive Committee. The Board of Trustees may,
by the affirmative vote of a majority of the entire Board, elect
from the Trustees an Executive Committee to consist of such
number of Trustees (but not less than two) as the Board may from
time to time determine. The Board of Trustees by such affirmative
vote shall have power at any time to change the members of such
Committee and may fill vacancies in the Committee by election
from the Trustees. When the Board of Trustees is not in session,
the Executive Committee shall have and may exercise any or all of
the powers of the Board of Trustees in the management of the
business and affairs of the Trust (including the power to
authorize the seal of the Trust to be affixed to all papers which
may require it) except as otherwise provided by law and except
the power to increase or decrease the size of, or fill vacancies
on, the Board. The Executive Committee may fix its own rules of
procedure, and may meet, when and as provided by such rules or by
resolution of the Board of Trustees, but in every case the
presence of a majority shall be necessary to constitute a quorum.
In the absence of any member of the Executive Committee, the
members thereof present at any meeting, whether or not they
constitute a quorum, may appoint a member of the Board of
Trustees to act in the place of such absent member.
Section 8. Other Committees. The Board of Trustees, by the
affirmative vote of a majority of the entire Board, may appoint
other committees which shall in each case consist of such number
of members of the Board (not less than two) and shall have and
may exercise such powers as the Board may determine in the
resolution appointing them. A majority of all members of any
such committee may determine its action, and fix the time and
place of its meetings, unless the Board of Trustees shall
otherwise provide. The Board of Trustees shall have power at any
time to change the members and powers of any such committee, to
fill vacancies, and to discharge any such committee.
Section 9. Informal Action by and Telephone Meetings of
Trustees and Committees. Any action required or permitted to be
taken at any meeting of the Board of Trustees or any committee
thereof may be taken without a meeting, if a written consent to
such action is signed by all members of the Board, or of such
committee, as the case may be. Trustees or members of a
committee of the Board of Trustees may participate in a meeting
by means of a conference telephone or similar communications
equipment; such participation shall, except as otherwise required
by the 1940 Act, have the same effect as presence in person.
Section 10. Compensation of Trustees and Committee Members.
Trustees and members of the Committees appointed by the Board
shall be entitled to receive such compensation from the Trust for
their services as may from time to time be voted by the Board of
Trustees.
Section 11. Dividends. Dividends or distributions payable
on the Shares of any Series or Class of the Trust may, but need
not be, declared by specific resolution of the Board as to each
dividend or distribution; in lieu of such specific resolutions,
the Board may, by general resolution, determine the method of
computation thereof, the method of determining the Shareholders
of the Series or Class to which they are payable and the methods
of determining whether and to which Shareholders they are to be
paid in cash or in additional Shares.
Section 12. Indemnification. Before an indemnitee shall be
indemnified by the Trust, there shall be a reasonable
determination upon review of the facts that the person to be
indemnified was not liable by reason of disabling conduct as
defined in the Declaration of Trust. Such determination may be
made either by vote of a majority of a quorum of the Board who
are neither "interested persons" of the Trust or the investment
adviser nor parties to the proceeding or by independent legal
counsel in a written opinion. The Trust may advance attorneys'
fees and expenses incurred in a covered proceeding to the
indemnitee if the indemnitee undertakes to repay the advance
unless it is determined that he is entitled to indemnification
under the Declaration of Trust. Also at least one of the
following conditions must be satisfied: (1) the indemnitee
provides security for his undertaking, or (2) the Trust is
insured against losses arising by reason of lawful advances, or
(3) a majority of the disinterested nonparty Trustees or
independent legal counsel in a written opinion shall determine,
based upon review of all of the facts, that there is reason to
believe that the indemnitee will ultimately be found entitled to
indemnification.
ARTICLE III
OFFICERS
Section 1. Executive Officers. The executive officers of
the Trust shall include a Chairman of the Board of Trustees, a
President, one or more Vice-Presidents (the number thereof to be
determined by the Board of Trustees), a Secretary and a
Treasurer. The Chairman of the Board and the President shall be
selected from among the Trustees. The Board of Trustees may also
in its discretion appoint Assistant Secretaries, Assistant
Treasurers, and other officers, agents and employees, who shall
have authority and perform such duties as the Board or the
Executive Committee may determine. The Board of Trustees may
fill any vacancy which may occur in any office. Any two offices,
except those of Chairman of the Board and Secretary, and
President and Secretary, may be held by the same person, but no
officer shall execute, acknowledge or verify any instrument in
more than one capacity, if such instrument is required by law or
these By-Laws to be executed, acknowledged or verified by two or
more officers.
Section 2. Term of Office. The term of office of all
officers shall be until their respective successors are chosen
and qualify; however, any officer may be removed from office at
any time with or without cause by the vote of a majority of the
entire Board of Trustees.
Section 3. Powers and Duties. The officers of the Trust
shall have such powers and duties as generally pertain to their
respective offices, as well as such powers and duties as may from
time to time be conferred by the Board of Trustees or the
Executive Committee. Unless otherwise ordered by the Board of
Trustees, the Chairman of the Board shall be the Chief Executive
Officer.
ARTICLE IV
SHARES
Section 1. Share Certificates. The Board of Trustees has
discretion to determine from time to time whether (i) all of the
Shares of the Trust or any Series or Class shall be issued
without certificates, or (ii) if certificates are to be issued
for any Shares, the extent and conditions for such issuance, and
the form(s) of such certificates.
Section 2. Transfer of Shares. Shares of any Series or
Class shall be transferable on the books of the Trust by the
holder thereof in person or by his duly authorized attorney or
legal representative, upon surrender and cancellation of
certificates, if any, for the same number of Shares of that
Series or Class, duly endorsed or accompanied by proper
instruments of assignment and transfer, with such proof of the
authenticity of the signature as the Trust or its transfer agent
may reasonably require; in the case of shares not represented by
certificates, the same or similar requirements may be imposed by
the Board of Trustees.
Section 3. Share Ledgers. The share ledgers of the Trust,
containing the names and addresses of the Shareholders of each
Series or Class of the Trust and the number of shares of that
Series or Class, held by them respectively, shall be kept at the
principal offices of the Trust or at the offices of the transfer
agent of the Trust.
Section 4. Lost, Stolen or Destroyed Certificates. The
Board of Trustees may determine the conditions upon which a new
certificate may be issued in place of a certificate which is
alleged to have been lost, stolen or destroyed; and may, in their
discretion, require the owner of such certificate or his legal
representative to give bond, with sufficient surety to the Trust
and the transfer agent, if any, to indemnify it and such transfer
agent against any and all loss or claims which may arise by
reason of the issue of a new certificate in the place of the one
so lost, stolen or destroyed.
ARTICLE V
SEAL
The Board of Trustees shall provide a suitable seal of the
Trust, in such form and bearing such inscriptions as it may
determine.
ARTICLE VI
FISCAL YEAR
The fiscal year of the Trust shall be fixed by the Board of
Trustees.
ARTICLE VII
AMENDMENT OF BY-LAWS
The By-Laws of the Trust may be altered, amended, added to
or repealed by the Shareholders or by majority vote of the entire
Board of Trustees, but any such alteration, amendment, addition
or repeal of the By-Laws by action of the Board of Trustees may
be altered or repealed by the Shareholders.
Exhibit 24(b)(4)(i)
OPPENHEIMER DEVELOPING MARKETS FUND
Class A Share Certificate (8-1/2" x 11")
I. FRONT OF CERTIFICATE (All text and other matter lies within
decorative border)
(upper left) box with heading: (upper right) box with
heading:
NUMBER (OF SHARES) CLASS A SHARES
(certificate number above)
(centered below boxes)
Oppenheimer Developing Markets Fund
A MASSACHUSETTS BUSINESS TRUST
(at left) (at right)
THIS IS TO CERTIFY THAT SEE REVERSE FOR
CERTAIN DEFINITIONS
(box with number)
CUSIP _____________
(at left)
is the owner of
(centered)
FULLY PAID CLASS A SHARES OF BENEFICIAL INTEREST OF
OPPENHEIMER DEVELOPING MARKETS 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.
(at left of seal) (at right of seal)
(signature) Dated:
- --------------------- ------------------------
SECRETARY PRESIDENT
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
OPPENHEIMER DEVELOPING MARKETS FUND
SEAL
1996
COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed vertically)
Countersigned
OPPENHEIMER SHAREHOLDER SERVICES
(A DIVISION OF OPPENHEIMERFUNDS, INC.)
Denver (Colo) 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 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), and transfer(s) unto
(at right) PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE (box below)
- ----------------------------------------------------------------
(Please print or type name and address of assignee)
- ----------------------------------------------------------------
- ----------------- Class A 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.
Dated: ------------
Signed:------------------------
(Both must sign if joint owners)
Signature(s)
guaranteed Name of Guarantor
by:
Signature of Officer/Title
(text printed vertically to right of above paragraph)
NOTICE: The signature(s) to this assignment must correspond with
the name(s) as written upon the face of the certificate in every
particular without alteration or enlargement or any change
whatever.
(text printed in box to left of signature guarantee)
Signatures must be guaranteed by a financial institution of the
type described in the current prospectus of the Fund.
(at left) (at right)
PLEASE NOTE: This document contains OppenheimerFunds
a watermark when viewed at an angle. logotype
It is invalid without this watermark.
- ------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
Exhibit 24(b)(4)(ii)
OPPENHEIMER DEVELOPING MARKETS FUND
Class B Share Certificate (8-1/2" x 11")
I. FRONT OF CERTIFICATE (All text and other matter lies within
decorative border)
(upper left) box with heading: (upper right) box with
heading:
NUMBER (OF SHARES) CLASS B SHARES
(certificate number above)
(centered below boxes)
Oppenheimer Developing Markets Fund
A MASSACHUSETTS BUSINESS TRUST
(at left) (at right)
THIS IS TO CERTIFY THAT SEE REVERSE FOR
CERTAIN DEFINITIONS
(box with number)
CUSIP _____________
(at left)
is the owner of
(centered)
FULLY PAID CLASS B SHARES OF BENEFICIAL INTEREST OF
OPPENHEIMER DEVELOPING MARKETS 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.
(at left of seal) (at right of seal)
(signature) Dated:
- --------------------- ------------------------
SECRETARY PRESIDENT
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
OPPENHEIMER DEVELOPING MARKETS FUND
SEAL
1996
COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed vertically)
Countersigned
OPPENHEIMER SHAREHOLDER SERVICES
(A DIVISION OF OPPENHEIMERFUNDS, INC.)
Denver (Colo) 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 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), and transfer(s) unto
(at right) PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE (box below)
- ----------------------------------------------------------------
(Please print or type name and address of assignee)
- ----------------------------------------------------------------
- ----------------- Class B 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.
Dated: ------------
Signed:------------------------
(Both must sign if joint owners)
Signature(s)
guaranteed Name of Guarantor
by:
Signature of Officer/Title
(text printed vertically to right of above paragraph)
NOTICE: The signature(s) to this assignment must correspond with
the name(s) as written upon the face of the certificate in every
particular without alteration or enlargement or any change
whatever.
(text printed in box to left of signature guarantee)
Signatures must be guaranteed by a financial institution of the
type described in the current prospectus of the Fund.
(at left) (at right)
PLEASE NOTE: This document contains OppenheimerFunds
a watermark when viewed at an angle. logotype
It is invalid without this watermark.
- ------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
Exhibit 24(b)(4)(iii)
OPPENHEIMER DEVELOPING MARKETS FUND
Class C Share Certificate (8-1/2" x 11")
I. FRONT OF CERTIFICATE (All text and other matter lies within
decorative border)
(upper left) box with heading: (upper right) box with
heading:
NUMBER (OF SHARES) CLASS C SHARES
(certificate number above)
(centered below boxes)
Oppenheimer Developing Markets Fund
A MASSACHUSETTS BUSINESS TRUST
(at left) (at right)
THIS IS TO CERTIFY THAT SEE REVERSE FOR
CERTAIN DEFINITIONS
(box with number)
CUSIP _____________
(at left)
is the owner of
(centered)
FULLY PAID CLASS C SHARES OF BENEFICIAL INTEREST OF
OPPENHEIMER DEVELOPING MARKETS 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.
(at left of seal) (at right of seal)
(signature) Dated:
- --------------------- ------------------------
SECRETARY PRESIDENT
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
OPPENHEIMER DEVELOPING MARKETS FUND
SEAL
1996
COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed vertically)
Countersigned
OPPENHEIMER SHAREHOLDER SERVICES
(A DIVISION OF OPPENHEIMERFUNDS, INC.)
Denver (Colo) 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 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), and transfer(s) unto
(at right) PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE (box below)
- ----------------------------------------------------------------
(Please print or type name and address of assignee)
- ----------------------------------------------------------------
- ----------------- Class C 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.
Dated: ------------
Signed:------------------------
(Both must sign if joint owners)
Signature(s)
guaranteed Name of Guarantor
by:
Signature of Officer/Title
(text printed vertically to right of above paragraph)
NOTICE: The signature(s) to this assignment must correspond with
the name(s) as written upon the face of the certificate in every
particular without alteration or enlargement or any change
whatever.
(text printed in box to left of signature guarantee)
Signatures must be guaranteed by a financial institution of the
type described in the current prospectus of the Fund.
(at left) (at right)
PLEASE NOTE: This document contains OppenheimerFunds
a watermark when viewed at an angle. logotype
It is invalid without this watermark.
- ------------------------------------------------------------------
THIS SPACE MUST NOT BE COVERED IN ANY WAY
Exhibit 24(b)(5)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the ____ day of _______, 1996, by and
between OPPENHEIMER DEVELOPING MARKETS 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.
(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 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:
1.00% of the first $250 million of aggregate net assets;
.95% of the next $250 million;
.90% of the next $500 million;
.85% in excess of $1 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, 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.
(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.
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 DEVELOPING MARKETS FUND
By:--------------------------------
Andrew J. Donohue
Secretary
OPPENHEIMERFUNDS, INC.
By:--------------------------------
Andrew J. Donohue
Executive Vice President
Exhibit 24(b)(6)(i)
GENERAL DISTRIBUTOR'S AGREEMENT
BETWEEN
OPPENHEIMER DEVELOPING MARKETS FUND
AND
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
Date: __________, 1996
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
Two World Trade Center, Suite 3400
New York, NY 10048
Dear Sirs:
OPPENHEIMER DEVELOPING MARKETS FUND, a Delaware 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.
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 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 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 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 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 ________________________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, 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.
If the foregoing is in accordance with your understanding, so
indicate by signing in the space provided below.
OPPENHEIMER DEVELOPING MARKETS FUND
By:--------------------------------
Andrew J. Donohue
Secretary
Accepted:
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
By:-------------------------------
Katherine P. Feld
Vice President & Secretary
Exhibit 24(b)(8)
OPPENHEIMER DEVELOPING MARKETS FUND
CUSTODY AGREEMENT
Agreement made as of this ___ day of ___, 1996, between
OPPENHEIMER DEVELOPING MARKETS FUND, a business trust organized and
existing under the laws of the State of Delaware, having its
principal office and place of business at 2 World Trade Center, New
York, New York 10048 (hereinafter called the "Fund"), and THE BANK
OF NEW YORK, a New York corporation authorized to do a banking
business, having its principal office and place of business at 48
Wall Street, New York, New York 10286 (hereinafter called the
"Custodian").
WITNESSETH, that for and in consideration of the mutual
promises hereinafter set forth, the Fund and the Custodian agree as
follows:
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases, shall have the following meanings:
1. "Agreement" shall mean this Custody Agreement and all
Appendices and Certifications described in the Exhibits delivered
in connection herewith.
2. "Authorized Person" shall mean any person, whether or not
such person is an Officer or employee of the Fund, duly authorized
by the Board of Trustees of the Fund to give Oral Instructions and
Written Instructions on behalf of the Fund and listed in the
Certificate annexed hereto as Appendix A or such other Certificate
as may be received by the Custodian from time to time, provided
that each person who is designated in any such Certificate as an
"Officer of OSS" shall be an Authorized Person only for purposes of
Articles XII and XIII hereof.
3. "Book-Entry System" shall mean the Federal
Reserve/Treasury book-entry system for United States and federal
agency securities, its successor or successors and its nominee or
nominees.
4. "Call Option" shall mean an exchange traded Option
with respect to Securities other than Index, Futures Contracts, and
Futures Contract Options entitling the holder, upon timely exercise
and payment of the exercise price, as specified therein, to
purchase from the writer thereof the specified underlying
instruments, currency, or Securities.
5. "Certificate" shall mean any notice, instruction, or
other instrument in writing, authorized or required by this
Agreement to be given to the Custodian which is actually received
(irrespective of constructive receipt) by the Custodian and signed
on behalf of the Fund by any two Officers. The term Certificate
shall also include instructions by the Fund to the Custodian
communicated by a Terminal Link.
6. "Clearing Member" shall mean a registered broker-dealer
which is a clearing member under the rules of O.C.C. and a member
of a national securities exchange qualified to act as a custodian
for an investment company, or any broker-dealer reasonably believed
by the Custodian to be such a clearing member.
7. "Collateral Account" shall mean a segregated account so
denominated which is specifically allocated to a Series and pledged
to the Custodian as security for, and in consideration of, the
Custodian's issuance of any Put Option guarantee letter or similar
document described in paragraph 8 of Article V herein.
8. "Covered Call Option" shall mean an exchange traded
Option entitling the holder, upon timely exercise and payment of
the exercise price, as specified therein, to purchase from the
writer thereof the specified underlying instruments, currency, or
Securities (excluding Futures Contracts) which are owned by the
writer thereof.
9. "Depository" shall mean The Depository Trust Company
("DTC"), a clearing agency registered with the Securities and
Exchange Commission, its successor or successors and its nominee or
nominees. The term "Depository" shall further mean and include any
other person authorized to act as a depository under the Investment
Company Act of 1940, its successor or successors and its nominee or
nominees, specifically identified in a certified copy of a
resolution of the Fund's Board of Trustees specifically approving
deposits therein by the Custodian, including, without limitation,
a Foreign Depository.
10. "Financial Futures Contract" shall mean the firm
commitment to buy or sell financial instruments on a U.S.
commodities exchange or board of trade at a specified future time
at an agreed upon price.
11. "Foreign Subcustodian" shall mean an "Eligible Foreign
Custodian" as defined in Rule 17-5 which is appointed by the
Custodian to perform or coordinate the receipt, custody and
delivery of Foreign Property of the Fund outside the United States
in a manner consistent with the provisions of this Agreement and
whose written contract is approved by the Board of Trustees of the
Fund in accordance with Rule 17f-5. References to the Custodian
herein shall, when appropriate, include reference to its Foreign
Subcustodians.
12. "Foreign Depository" shall mean an entity organized under
the laws of a foreign country which operates a system outside the
United States in general use by foreign banks and securities
brokers for the central or transnational handling of securities or
equivalent book-entries which is regulated by a foreign government
or agency thereof and which is an "Eligible Foreign Custodian" as
defined in Rule 17f-5.
13. "Foreign Securities" shall mean securities and/or short
term paper as defined in Rule 17f-5 under the Act, whether issued
in registered or bearer form.
14. "Foreign Property" shall mean Foreign Securities and
money of any currency which is held outside of the United States.
15. "Futures Contract" shall mean a Financial Futures
Contract and/or Index Futures Contracts.
16. "Futures Contract Option" shall mean an Option with
respect to a Futures Contract.
17. "Investment Company Act of 1940" shall mean the
Investment Company Act of 1940, as amended, and the rules and
regulations thereunder.
18. "Index Futures Contract" shall mean a bilateral agreement
pursuant to which the parties agree to take or make delivery of an
amount of cash equal to a specified dollar amount times the
difference between the value of a particular index at the close of
the last business day of the contract and the price at which the
futures contract is originally struck.
19. "Index Option" shall mean an exchange traded Option
entitling the holder, upon timely exercise, to receive an amount of
cash determined by reference to the difference between the exercise
price and the value of the index on the date of exercise.
20. "Margin Account" shall mean a segregated account in the
name of a broker, dealer, futures commission merchant, or a
Clearing Member, or in the name of the Fund for the benefit of a
broker, dealer, futures commission merchant, or Clearing Member, or
otherwise, in accordance with an agreement between the Fund, the
Custodian and a broker, dealer, futures commission merchant or a
Clearing Member (a "Margin Account Agreement"), separate and
distinct from the custody account, in which certain Securities
and/or money of the Fund shall be deposited and withdrawn from time
to time in connection with such transactions as the Fund may from
time to time determine. Securities held in the Book-Entry System
or a Depository shall be deemed to have been deposited in, or
withdrawn from, a Margin Account upon the Custodian's effecting an
appropriate entry in its books and records.
21. "Money Market Security" shall mean all instruments and
obligations commonly known as a money market instruments, where the
purchase and sale of such securities normally requires settlement
in federal funds on the same day as such purchase or sale,
including, without limitation, certain Reverse Repurchase
Agreements, debt obligations issued or guaranteed as to interest
and/or principal by the government of the United States or agencies
or instrumentalities thereof, any tax, bond or revenue anticipation
note issued by any state or municipal government or public
authority, commercial paper, certificates of deposit and bankers'
acceptances, repurchase agreements with respect to Securities and
bank time deposits.
22. "Nominee" shall mean, in addition to the name of the
registered nominee of the Custodian, (i) a partnership or other
entity of a Foreign Subcustodian which is used solely for the
assets of its customers other than the Custodian and the Foreign
Subcustodian, if any, by which it was appointed; or (ii) the
nominee of a Foreign Depository which is used for the securities
and other assets of its customers, members or participants.
23. "O.C.C." shall mean the Options Clearing Corporation, a
clearing agency registered under Section 17A of the Securities
Exchange Act of 1934, its successor or successors, and its nominee
or nominees.
24. "Officers" shall mean the President, any Vice President,
the Secretary, the Treasurer, the Controller, any Assistant
Secretary, any Assistant Treasurer, and any other person or
persons, whether or not any such other person is an officer or
employee of the Fund, but in each case only if duly authorized by
the Board of Trustees of the Fund to execute any Certificate,
instruction, notice or other instrument on behalf of the Fund and
listed in the Certificate annexed hereto as Appendix B or such
other Certificate as may be received by the Custodian from time to
time; provided that each person who is designated in any such
Certificate as holding the position of "Officer of OSS" shall be an
Officer only for purposes of Articles XII and XIII hereof.
25. "Option" shall mean a Call Option, Covered Call Option,
Index Option and/or a Put Option.
26. "Oral Instructions" shall mean verbal instructions
actually received (irrespective of constructive receipt) by the
Custodian from an Authorized Person or from a person reasonably
believed by the Custodian to be an Authorized Person.
27. "Put Option" shall mean an exchange traded Option with
respect to instruments, currency, or Securities other than Index
Options, Futures Contracts, and Futures Contract Options entitling
the holder, upon timely exercise and tender of the specified
underlying instruments, currency, or Securities, to sell such
instruments, currency, or Securities to the writer thereof for the
exercise price.
28. "Repurchase Agreement" shall mean an agreement pursuant
to which the Fund buys Securities and agrees to resell such
Securities at a described or specified date and price.
29. "Reverse Repurchase Agreement" shall mean an agreement
pursuant to which the Fund sells Securities and agrees to
repurchase such Securities at a described or specified date and
price.
30. "Rule 17f-5" shall mean Rule 17f-5 (Reg. Section 270.17f-
5) promulgated by the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended.
31. "Security" shall be deemed to include, without
limitation, Money Market Securities, Call Options, Put Options,
Index Options, Index Futures Contracts, Index Futures Contract
Options, Financial Futures Contracts, Financial Futures Contract
Options, Reverse Repurchase Agreements, over the counter Options on
Securities, common stocks and other securities having
characteristics similar to common stocks, preferred stocks, debt
obligations issued by state or municipal governments and by public
authorities, (including, without limitation, general obligation
bonds, revenue bonds, industrial bonds and industrial development
bonds), bonds, debentures, notes, mortgages or other obligations,
and any certificates, receipts, warrants or other instruments
representing rights to receive, purchase, sell or subscribe for the
same, or evidencing or representing any other rights or interest
therein, or rights to any property or assets.
32. "Senior Security Account" shall mean an account
maintained and specifically allocated to a Series under the terms
of this Agreement as a segregated account, by recordation or
otherwise, within the custody account in which certain Securities
and/or other assets of the Fund specifically allocated to such
Series shall be deposited and withdrawn from time to time in
accordance with Certificates received by the Custodian in
connection with such transactions as the Fund may from time to time
determine.
33. "Series" shall mean the various portfolios, if any, of
the Fund as described from time to time in the current and
effective prospectus for the Fund, except that if the Fund does not
have more than one portfolio, "Series" shall mean the Fund or be
ignored where a requirement would be imposed on the Fund or the
Custodian which is unnecessary if there is only one portfolio.
34. "Shares" shall mean the shares of beneficial interest of
the Fund and its Series.
35. "Terminal Link" shall mean an electronic data
transmission link between the Fund and the Custodian requiring in
connection with each use of the Terminal Link the use of an
authorization code provided by the Custodian and at least two
access codes established by the Fund, provided, that the Fund shall
have delivered to the Custodian a Certificate substantially in the
form of Appendix C.
36. "Transfer Agent" shall mean Oppenheimer Shareholder
Services, a division of Oppenheimer Management Corporation, its
successors and assigns.
37. "Transfer Agent Account" shall mean any account in the
name of the Fund, or the Transfer Agent, as agent for the Fund,
maintained with United Missouri Bank or such other Bank designated
by the Fund in a Certificate.
38. "Written Instructions" shall mean written communications
actually received (irrespective of constructive receipt) by the
Custodian from an Authorized Person or from a person reasonably
believed by the Custodian to be an Authorized Person by telex or
any other such system whereby the receiver of such communications
is able to verify by codes or otherwise with a reasonable degree of
certainty the identity of the sender of such communication.
ARTICLE I
APPOINTMENT OF CUSTODIAN
1. The Fund hereby constitutes and appoints the Custodian
as custodian of the Securities and moneys at any time owned or held
by the Fund during the period of this Agreement.
2. The Custodian hereby accepts appointment as such
custodian and agrees to perform the duties thereof as hereinafter
set forth.
ARTICLE II
CUSTODY OF CASH AND SECURITIES
1. Except for monies received and maintained in the Transfer
Agent Account, or as otherwise provided in paragraph 7 of this
Article or in Article VIII or XV, the Fund will deliver or cause to
be delivered to the Custodian all Securities and all moneys owned
by it, at any time during the period of this Agreement, and shall
specify with respect to such Securities and money the Series to
which the same are specifically allocated, and the Custodian shall
not be responsible for any Securities or money not so delivered.
Except for assets held at DTC, the Custodian shall physically
segregate, keep and maintain the Securities of the Series separate
and apart from each other Series and from other assets held by the
Custodian. Except as otherwise expressly provided in this
Agreement, the Custodian will not be responsible for any Securities
and moneys not actually received by it, unless the Custodian has
been negligent or has engaged in willful misconduct with respect
thereto. The Custodian will be entitled to reverse any credit of
money made on the Fund's behalf where such credits have been
previously made and moneys are not finally collected, unless the
Custodian has been negligent or has engaged in willful misconduct
with respect thereto; provided that if such reversal is thirty (30)
days or more after the credit was issued, the Custodian will give
five (5) days' prior notice of such reversal. The Fund shall
deliver to the Custodian a certified resolution of the Board of
Trustees of the Fund, substantially in the form of Exhibit A
hereto, approving, authorizing and instructing the Custodian on a
continuous and on-going basis to deposit in the Book-Entry System
all Securities eligible for deposit therein, regardless of the
Series to which the same are specifically allocated and to utilize
the Book-Entry System to the extent possible in connection with its
performance hereunder, including, without limitation, in connection
with settlements of purchases and sales of Securities, loans of
Securities and deliveries and returns of Securities collateral.
Prior to a deposit of Securities specifically allocated to a Series
in any Depository, the Fund shall deliver to the Custodian a
certified resolution of the Board of Trustees of the Fund,
substantially in the form of Exhibit B hereto, approving,
authorizing and instructing the Custodian on a continuous and
ongoing basis until instructed to the contrary by a Certificate to
deposit in such Depository all Securities specifically allocated to
such Series eligible for deposit therein, and to utilize such
Depository to the extent possible with respect to such Securities
in connection with its performance hereunder, including, without
limitation, in connection with settlements of purchases and sales
of Securities, loans of Securities, and deliveries and returns of
Securities collateral. Securities and moneys deposited in either
the Book-Entry System or a Depository will be represented in
accounts which include only assets held by the Custodian for
customers, including, but not limited to, accounts in which the
Custodian acts in a fiduciary or representative capacity and will
be specifically allocated on the Custodian's books to the separate
account for the applicable Series. Prior to the Custodian's
accepting, utilizing and acting with respect to Clearing Member
confirmations for Options and transactions in Options for a Series
as provided in this Agreement, the Custodian shall have received a
certified resolution of the Fund's Board of Trustees, substantially
in the form of Exhibit C hereto, approving, authorizing and
instructing the Custodian on a continuous and on-going basis, until
instructed to the contrary by a Certificate to accept, utilize and
act in accordance with such confirmations as provided in this
Agreement with respect to such Series. All Securities are to be
held or disposed of by the Custodian for, and subject at all times
to the instructions of, the Fund pursuant to the terms of this
Agreement. The Custodian shall have no power or authority to
assign, hypothecate, pledge or otherwise dispose of any Securities
except as provided by the terms of this Agreement, and shall have
the sole power to release and deliver Securities held pursuant to
this Agreement.
2. The Custodian shall establish and maintain separate
accounts, in the name of each Series, and shall credit to the
separate account for each Series all moneys received by it for the
account of the Fund with respect to such Series. Money credited to
a separate account for a Series shall be subject only to drafts,
orders, or charges of the Custodian pursuant to this Agreement and
shall be disbursed by the Custodian only:
(a) As hereinafter provided;
(b) Pursuant to Certificates or Resolutions of the
Fund's Board of Trustees certified by an Officer and by the
Secretary or Assistant Secretary of the Fund setting forth the name
and address of the person to whom the payment is to be made, the
Series account from which payment is to be made, the purpose for
which payment is to be made, and declaring such purpose to be a
proper corporate purpose; provided, however, that amounts
representing dividends, distributions, or redemptions proceeds with
respect to Shares shall be paid only to the Transfer Agent Account;
(c) In payment of the fees and in reimbursement of
the expenses and liabilities of the Custodian attributable to such
Series and authorized by this Agreement; or
(d) Pursuant to Certificates to pay interest,
taxes, management fees or operating expenses (including, without
limitation thereto, Board of Trustees' fees and expenses, and fees
for legal accounting and auditing services), which Certificates set
forth the name and address of the person to whom payment is to be
made, state the purpose of such payment and designate the Series
for whose account the payment is to be made.
3. Promptly after the close of business on each day, the
Custodian shall furnish the Fund with confirmations and a summary,
on a per Series basis, of all transfers to or from the account of
the Fund for a Series, either hereunder or with any co-custodian or
Subcustodian appointed in accordance with this Agreement during
said day. Where Securities are transferred to the account of the
Fund for a Series but held in a Depository, the Custodian shall
upon such transfer also by book-entry or otherwise identify such
Securities as belonging to such Series in a fungible bulk of
Securities registered in the name of the Custodian (or its nominee)
or shown on the Custodian's account on the books of the Book-Entry
System or the Depository. At least monthly and from time to time,
the Custodian shall furnish the Fund with a detailed statement, on
a per Series basis, of the Securities and moneys held under this
Agreement for the Fund.
4. Except as otherwise provided in paragraph 7 of this
Article and in Article VIII, all Securities held by the Custodian
hereunder, which are issued or issuable only in bearer form, except
such Securities as are held in the Book-Entry System, shall be held
by the Custodian in that form; all other Securities held hereunder
may be registered in the name of the Fund, in the name of any duly
appointed registered nominee of the Custodian as the Custodian may
from time to time determine, or in the name of the Book-Entry
System or a Depository or their successor or successors, or their
nominee or nominees. The Fund agrees to furnish to the Custodian
appropriate instruments to enable the Custodian to hold or deliver
in proper form for transfer, or to register in the name of its
registered nominee or in the name of the Book-Entry System or a
Depository any Securities which it may hold hereunder and which may
from time to time be registered in the name of the Fund. The
Custodian shall hold all such Securities specifically allocated to
a Series which are not held in the Book-Entry System or in a
Depository in a separate account in the name of such Series
physically segregated at all times from those of any other person
or persons.
5. Except as otherwise provided in this Agreement and unless
otherwise instructed to the contrary by a Certificate, the
Custodian by itself, or through the use of the Book-Entry System or
a Depository with respect to Securities held hereunder and therein
deposited, shall with respect to all Securities held for the Fund
hereunder in accordance with preceding paragraph 4:
(a) Promptly collect all income, dividends and
distributions due or payable;
(b) Promptly give notice to the Fund and promptly
present for payment and collect the amount of money or other
consideration payable upon such Securities which are called, but
only if either (i) the Custodian receives a written notice of such
call, or (ii) notice of such call appears in one or more of the
publications listed in Appendix D annexed hereto, which may be
amended at any time by the Custodian without the prior consent of
the Fund, provided the Custodian gives prior notice of such
amendment to the Fund;
(c) Promptly present for payment and collect for
the Fund's account the amount payable upon all Securities which
mature;
(d) Promptly surrender Securities in temporary form
in exchange for definitive Securities;
(e) Promptly execute, as custodian, any necessary
declarations or certificates of ownership under the Federal Income
Tax Laws or the laws or regulations of any other taxing authority
now or hereafter in effect;
(f) Hold directly, or through the Book-Entry System
or the Depository with respect to Securities therein deposited, for
the account of a Series, all rights and similar securities issued
with respect to any Securities held by the Custodian for such
Series hereunder; and
(g) Promptly deliver to the Fund all notices,
proxies, proxy soliciting materials, consents and other written
information (including, without limitation, notices of tender
offers and exchange offers, pendency of calls, maturities of
Securities and expiration of rights) relating to Securities held
pursuant to this Agreement which are actually received by the
Custodian, such proxies and other similar materials to be executed
by the registered holder (if Securities are registered otherwise
than in the name of the Fund), but without indicating the manner in
which proxies or consents are to be voted.
6. Upon receipt of a Certificate and not otherwise, the
Custodian, directly or through the use of the Book-Entry System or
the Depository, shall:
(a) Promptly execute and deliver to such persons as
may be designated in such Certificate proxies, consents,
authorizations, and any other instruments whereby the authority of
the Fund as owner of any Securities held hereunder for the Series
specified in such Certificate may be exercised;
(b) Promptly deliver any Securities held hereunder
for the Series specified in such Certificate in exchange for other
Securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the exercise of any right,
warrant or conversion privilege and receive and hold hereunder
specifically allocated to such Series any cash or other Securities
received in exchange;
(c) Promptly deliver any Securities held hereunder
for the Series specified in such Certificate to any protective
committee, reorganization committee or other person in connection
with the reorganization, refinancing, merger, consolidation,
recapitalization or sale of assets of any corporation, and receive
and hold hereunder specifically allocated to such Series in
exchange therefor such certificates of deposit, interim receipts or
other instruments or documents as may be issued to it to evidence
such delivery or such Securities as may be issued upon such
delivery; and
(d) Promptly present for payment and collect the
amount payable upon Securities which may be called as specified in
the Certificate.
7. Notwithstanding any provision elsewhere contained herein,
the Custodian shall not be required to obtain possession of any
instrument or certificate representing any Futures Contract, any
Option, or any Futures Contract Option until after it shall have
determined, or shall have received a Certificate from the Fund
stating, that any such instruments or certificates are available.
The Fund shall deliver to the Custodian such a Certificate no later
than the business day preceding the availability of any such
instrument or certificate. Prior to such availability, the
Custodian shall comply with Section 17(f) of the Investment Company
Act of 1940 in connection with the purchase, sale, settlement,
closing out or writing of Futures Contracts, Options, or Futures
Contract Options by making payments or deliveries specified in
Certificates in connection with any such purchase, sale, writing,
settlement or closing out upon its receipt from a broker, dealer,
or futures commission merchant of a statement or confirmation
reasonably believed by the Custodian to be in the form customarily
used by brokers, dealers, or future commission merchants with
respect to such Futures Contracts, Options, or Futures Contract
Options, as the case may be, confirming that such Security is held
by such broker, dealer or futures commission merchant, in book-
entry form or otherwise in the name the Custodian (or any nominee
of the Custodian) as custodian for the Fund; provided, however,
that notwithstanding the foregoing, payments to or deliveries from
the Margin Account and payments with respect to Securities to which
a Margin Account relates, shall be made in accordance with the
terms and conditions of the Margin Account Agreement. Whenever any
such instruments or certificates are available, the Custodian
shall, notwithstanding any provision in this Agreement to the
contrary, make payment for any Futures Contract, Option, or Futures
Contract Option for which such instruments or such certificates are
available only against the delivery to the Custodian of such
instrument or such certificate, and deliver any Futures Contract,
Option or Futures Contract Option for which such instruments or
such certificates are available only against receipt by the
Custodian of payment therefor. Any such instrument or certificate
delivered to the Custodian shall be held by the Custodian hereunder
in accordance with, and subject to, the provisions of this
Agreement.
ARTICLE III
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
OTHER THAN OPTIONS, FUTURES CONTRACTS,
FUTURES CONTRACT OPTIONS, REPURCHASE AGREEMENTS,
REVERSE REPURCHASE AGREEMENTS AND SHORT SALES
1. Promptly after each execution of a purchase of Securities
by the Fund, other than a purchase of an Option, a Futures
Contract, a Futures Contract Option, a Repurchase Agreement, a
Reverse Repurchase Agreement or a Short Sale, the Fund shall
deliver to the Custodian (i) with respect to each purchase of
Securities which are not Money Market Securities, a Certificate,
and (ii) with respect to each purchase of Money Market Securities,
a Certificate, oral Instructions or Written Instructions,
specifying with respect to each such purchase: (a) the Series to
which such Securities are to be specifically allocated; (b) the
name of the issuer and the title of the Securities; (c) the number
of shares or the principal amount purchased and accrued interest,
if any; (d) the date of purchase and settlement; (e) the purchase
price per unit; (f) the total amount payable upon such purchase;
(g) the name of the person from whom or the broker through whom the
purchase was made, and the name of the clearing broker, if any; and
(h) the name of the broker or other party to whom payment is to be
made. Custodian shall, upon receipt of such Securities purchased
by or for the Fund, pay to the broker specified in the Certificate
out of the moneys held for the account of such Series the total
amount payable upon such purchase, provided that the same conforms
to the total amount payable as set forth in such Certificate, oral
Instructions or Written Instructions.
2. Promptly after each execution of a sale of Securities by
the Fund, other than a sale of any Option, Futures Contract,
Futures Contract Option, Repurchase Agreement, Reverse Repurchase
Agreement or Short Sale, the Fund shall deliver such to the
Custodian (i) with respect to each sale of Securities which are not
Money Market Securities, a Certificate, and (ii) with respect to
each sale of Money Market Securities, a Certificate, Oral
Instructions or Written Instructions, specifying with respect to
each such sale: (a) the Series to which such Securities were
specifically allocated; (b) the name of the issuer and the title of
the Security; (c) the number of shares or principal amount sold,
and accrued interest, if any; (d) the date of sale and settlement;
(e) the sale price per unit; (f) the total amount payable to the
Fund upon such sale; (g) the name of the broker through whom or the
person to whom the sale was made, and the name of the clearing
broker, if any; and (h) the name of the broker to whom the
Securities are to be delivered. On the settlement date, the
Custodian shall deliver the Securities specifically allocated to
such Series to the broker in accordance with generally accepted
street practices and as specified in the Certificate upon receipt
of the total amount payable to the Fund upon such sale, provided
that the same conforms to the total amount payable as set forth in
such Certificate, oral Instructions or Written Instructions.
ARTICLE IV
OPTIONS
1. Promptly after each execution of a purchase of any Option
by the Fund other than a closing purchase transaction, the Fund
shall deliver to the Custodian a Certificate specifying with
respect to each Option purchased: (a) the Series to which such
Option is specifically allocated; (b) the type of Option (put or
call); (c) the instrument, currency, or Security underlying such
Option and the number of Options, or the name of the in the case of
an Index Option, the index to which such Option relates and the
number of Index Options purchased; (d) the expiration date; (e) the
exercise price; (f) the dates of purchase and settlement; (g) the
total amount payable by the Fund in connection with such purchase;
and (h) the name of the Clearing Member through whom such Option
was purchased. The Custodian shall pay, upon receipt of a Clearing
Member's written statement confirming the purchase of such Option
held by such Clearing Member for the account of the Custodian (or
any duly appointed and registered nominee of the Custodian) as
Custodian for the Fund, out of moneys held for the account of the
Series to which such Option is to be specifically allocated, the
total amount payable upon such purchase to the Clearing Member
through whom the purchase was made, provided that the same conforms
to the amount payable as set forth in such Certificate.
2. Promptly after the execution of a sale of any Option
purchased by the Fund, other than a closing sale transaction,
pursuant to paragraph 1 hereof, the Fund shall deliver to the
Custodian a Certificate specifying with respect to each such sale:
(a) the Series to which such Option was specifically allocated; (b)
the type of Option (put or call); (c) the instrument, currency, or
Security underlying such Option and the number of Options, or the
name of the issuer and the title and number of shares subject to
such Option or, in the case of a Index Option, the index to which
such Option relates and the number of Index Options sold; (d) the
date of sale; (e) the sale price; (f) the date of settlement; (g)
the total amount payable to the Fund upon such sale; and (h) the
name of the Clearing Member through whom the sale was made. The
Custodian shall consent to the delivery of the Option sold by the
Clearing Member which previously supplied the confirmation
described in preceding paragraph of this Article with respect to
such Option upon receipt by the Custodian of the total amount
payable to the Fund, provided that the same conforms to the total
amount payable as set forth in such Certificate.
3. Promptly after the exercise by the Fund of any Call
Option purchased by the Fund pursuant to paragraph 1 hereof, the
Fund shall deliver to the Custodian a Certificate specifying with
respect to such Call Option: (a) the Series to which such Call
Option was specifically allocated; (b) the name of the issuer and
the title and number of shares subject to the Call Option; (c) the
expiration date; (d) the date of exercise and settlement; (e) the
exercise price per share; (f) the total amount to be paid by the
Fund upon such exercise; and (g) the name of the Clearing Member
through whom such Call Option was exercised. The Custodian shall,
upon receipt of the Securities underlying the Call Option which was
exercised, pay out of the moneys held for the account of the Series
to which such Call Option was specifically allocated the total
amount payable to the Clearing Member through whom the Call Option
was exercised, provided that the same conforms to the total amount
payable as set forth in such Certificate.
4. Promptly after the exercise by the Fund of any Put Option
purchased by the Fund pursuant to paragraph 1 hereof, the Fund
shall deliver to the Custodian a Certificate specifying with
respect to such Put Option: (a) the Series to which such Put
Option was specifically allocated; (b) the name of the issuer and
the title and number of shares subject to the Put Option; (c) the
expiration date; (d) the date of exercise and settlement; (e) the
exercise price per share; (f) the total amount to be paid to the
Fund upon such exercise; and (g) the name of the Clearing Member
through whom such Put Option was exercised. The Custodian shall,
upon receipt of the amount payable upon the exercise of the Put
Option, deliver or direct a Depository to deliver the Securities
specifically allocated to such Series, provided the same conforms
to the amount payable to the Fund as set forth in such Certificate.
5. Promptly after the exercise by the Fund of any Index
Option purchased by the Fund pursuant to paragraph 1 hereof, the
Fund shall deliver to the Custodian a Certificate specifying with
respect to such Index Option: (a) the Series to which such Index
Option was specifically allocated; (b) the type of Index Option
(put or call) (c) the number of Options being exercised; (d) the
index to which such Option relates; (e) the expiration date; (f)
the exercise price; (g) the total amount to be received by the Fund
in connection with such exercise; and (h) the Clearing Member from
whom such payment is to be received.
6. Whenever the Fund writes a Covered Call Option, the Fund
shall promptly deliver to the Custodian a Certificate specifying
with respect to such Covered Call Option: (a) the Series for which
such Covered Call Option was written; (b) the name of the issuer
and the title and number of shares for which the Covered Call
Option was written and which underlie the same; (c) the expiration
date; (d) the exercise price; (e) the premium to be received by the
Fund; (f) the date such Covered Call Option was written; and (g)
the name of the Clearing Member through whom the premium is to be
received. The Custodian shall deliver or cause to be delivered,
upon receipt of the premium specified in the Certificate with
respect to such Covered Call Option, such receipts as are required
in accordance with the customs prevailing among Clearing Members
dealing in Covered Call Options and shall impose, or direct a
Depository to impose, upon the underlying Securities specified in
the Certificate specifically allocated to such Series such
restrictions as may be required by such receipts. Notwithstanding
the foregoing, the Custodian has the right, upon prior written
notification to the Fund, at any time to refuse to issue any
receipts for Securities in the possession of the Custodian and not
deposited with a Depository underlying a Covered Call Option.
7. Whenever a Covered Call Option written by the Fund and
described in the preceding paragraph of this Article is exercised,
the Fund shall promptly deliver to the Custodian a Certificate
instructing the Custodian to deliver, or to direct the Depository
to deliver, the Securities subject to such Covered Call Option and
specifying: (a) the Series for which such Covered Call Option was
written; (b) the name of the issuer and the title and number of
shares subject to the Covered Call Option; (c) the Clearing Member
to whom the underlying Securities are to be delivered; and (d) the
total amount payable to the Fund upon such delivery. Upon the
return and/or cancellation of any receipts delivered pursuant to
paragraph 6 of this Article, the Custodian shall deliver, or direct
a Depository to deliver, the underlying Securities as specified in
the Certificate upon payment of the amount to be received as set
forth in such Certificate.
8. Whenever the Fund writes a Put Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with
respect to such Put Option: (a) the Series for which such Put
Option was written; (b) the name of the issuer and the title and
number of shares for which the Put Option is written and which
underlie the same; (c) the expiration date; (d) the exercise price;
(e) the premium to be received by the Fund; (f) the date such Put
Option is written; (g) the name of the Clearing Member through whom
the premium is to be received and to whom a Put Option guarantee
letter is to be delivered; (h) the amount of cash, and/or the
amount and kind of Securities, if any, specifically allocated to
such Series to be deposited in the Senior Security Account for such
Series; and (i) the amount of cash and/or the amount and kind of
Securities specifically allocated to such Series to be deposited
into the Collateral Account for such Series. The Custodian shall,
after making the deposits into the Collateral Account specified in
the Certificate, issue a Put Option guarantee letter substantially
in the form utilized by the Custodian on the date hereof, and
deliver the same to the Clearing Member specified in the
Certificate upon receipt of the premium specified in said
Certificate. Notwithstanding the foregoing, the Custodian shall be
under no obligation to issue any Put Option guarantee letter or
similar document if it is unable to make any of the representations
contained therein.
9. Whenever a Put Option written by the Fund and described
in the preceding paragraph is exercised, the Fund shall promptly
deliver to the Custodian a Certificate specifying: (a) the Series
to which such Put Option was written; (b) the name of the issuer
and title and number of shares subject to the Put Option; (c) the
Clearing Member from whom the underlying Securities are to be
received; (d) the total amount payable by the Fund upon such
delivery; (e) the amount of cash and/or the amount and kind of
Securities specifically allocated to such Series to be withdrawn
from the Collateral Account for such Series and (f) the amount of
cash and/or the amount and kind of Securities, specifically
allocated to such series, if any, to be withdrawn from the Senior
Security Account. Upon the return and/or cancellation of any Put
Option guarantee letter or similar document issued by the Custodian
in connection with such Put Option, the Custodian shall pay out of
the moneys held for the account of the series to which such Put
Option was specifically allocated the total amount payable to the
Clearing Member specified in the Certificate as set forth in such
Certificate, upon delivery of such Securities, and shall make the
withdrawals specified in such Certificate.
10. Whenever the Fund writes an Index Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with
respect to such Index Option: (a) the Series for which such Index
Option was written; (b) whether such Index Option is a put or a
call; (c) the number of Options written; (d) the index to which
such Option relates; (e) the expiration date; (f) the exercise
price; (g) the Clearing Member through whom such Option was
written; (h) the premium to be received by the Fund; (i) the amount
of cash and/or the amount and kind of Securities, if any,
specifically allocated to such Series to be deposited in the Senior
Security Account for such Series; (j) the amount of cash and/or the
amount and kind of Securities, if any, specifically allocated to
such Series to be deposited in the Collateral Account for such
Series; and (k) the amount of cash and/or the amount and kind of
Securities, if any, specifically allocated to such Series to be
deposited in a Margin Account, and the name in which such account
is to be or has been established. The Custodian shall, upon
receipt of the premium specified in the Certificate, make the
deposits, if any, into the Senior Security Account specified in the
Certificate, and either (1) deliver such receipts, if any, which
the Custodian has specifically agreed to issue, which are in
accordance with the customs prevailing among Clearing Members in
Index Options and make the deposits into the Collateral Account
specified in the Certificate, or (2) make the deposits into the
Margin Account specified in the Certificate.
11. Whenever an Index Option written by the Fund and
described in the preceding paragraph of this Article is exercised,
the Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to such Index Option: (a) the Series for
which such Index Option was written; (b) such information as may be
necessary to identify the Index Option being exercised; (c) the
Clearing Member through whom such Index Option is being exercised;
(d) the total amount payable upon such exercise, and whether such
amount is to be paid by or to the Fund; (e) the amount of cash
and/or amount and kind of Securities, if any, to be withdrawn from
the Margin Account; and (f) the amount of cash and/or amount and
kind of Securities, if any, to be withdrawn from the Senior
Security Account for such Series; and the amount of cash and/or the
amount and kind of Securities, if any, to be withdrawn from the
Collateral Account for such Series. Upon the return and/or
cancellation of the receipt, if any, delivered pursuant to the
preceding paragraph of this Article, the Custodian shall pay out of
the moneys held for the account of the Series to which such Stock
Index Option was specifically allocated to the Clearing Member
specified in the Certificate the total amount payable, if any, as
specified therein.
12. Promptly after the execution of a purchase or sale by the
Fund of any Option identical to a previously written Option
described in paragraphs, 6, 8 or 10 of this Article in a
transaction expressly designated as a "Closing Purchase
Transaction" or a "Closing Sale Transaction", the Fund shall
promptly deliver to the Custodian a Certificate specifying with
respect to the Option being purchased: (a) that the transaction is
a Closing Purchase Transaction or a Closing Sale Transaction; (b)
the Series for which the Option was written; (c) the instrument,
currency, or Security subject to the Option, or, in the case of an
Index Option, the index to which such Option relates and the number
of Options held; (d) the exercise price; (e) the premium to be paid
by or the amount to be paid to the Fund; (f) the expiration date;
(g) the type of Option (put or call); (h) the date of such purchase
or sale; (i) the name of the Clearing Member to whom the premium is
to be paid or from whom the amount is to be received; and (j) the
amount of cash and/or the amount and kind of Securities, if any, to
be withdrawn from the Collateral Account, a specified Margin
Account, or the Senior Security Account for such Series. Upon the
Custodian's payment of the premium or receipt of the amount, as the
case may be, specified in the Certificate and the return and/or
cancellation of any receipt issued pursuant to paragraphs 6, 8 or
10 of this Article with respect to the Option being liquidated
through the Closing Purchase Transaction or the Closing Sale
Transaction, the Custodian shall remove, or direct a Depository to
remove, the previously imposed restrictions on the Securities
underlying the Call Option.
13. Upon the expiration, exercise or consummation of a
Closing Purchase Transaction with respect to any Option purchased
or written by the Fund and described in this Article, the Custodian
shall delete such Option from the statements delivered to the Fund
pursuant to paragraph 3 Article III herein, and upon the return
and/or cancellation of any receipts issued by the Custodian, shall
make such withdrawals from the Collateral Account, and the Margin
Account and/or the Senior Security Account as may be specified in
a Certificate received in connection with such expiration,
exercise, or consummation.
14. Securities acquired by the Fund through the exercise of
an Option described in this Article shall be subject to Article IV
hereof.
ARTICLE V
FUTURES CONTRACTS
1. Whenever the Fund shall enter into a Futures Contract,
the Fund shall deliver to the Custodian a Certificate specifying
with respect to such Futures Contract, (or with respect to any
number of identical Futures Contract (s)): (a) the Series for
which the Futures Contract is being entered; (b) the category of
Futures Contract (the name of the underlying index or financial
instrument); (c) the number of identical Futures Contracts entered
into; (d) the delivery or settlement date of the Futures
Contract(s); (e) the date the Futures Contract(s) was (were)
entered into and the maturity date; (f) whether the Fund is buying
(going long) or selling (going short) such Futures Contract(s); (g)
the amount of cash and/or the amount and kind of Securities, if
any, to be deposited in the Senior Security Account for such
Series; (h) the name of the broker, dealer, or futures commission
merchant through whom the Futures Contract was entered into; and
(i) the amount of fee or commission, if any, to be paid and the
name of the broker, dealer, or futures commission merchant to whom
such amount is to be paid. The Custodian shall make the deposits,
if any, to the Margin Account in accordance with the terms and
conditions of the Margin Account Agreement. The Custodian shall
make payment out of the moneys specifically allocated to such
Series of the fee or commission, if any, specified in the
Certificate and deposit in the Senior Security Account for such
Series the amount of cash and/or the amount and kind of Securities
specified in said Certificate.
2. (a) Any variation margin payment or similar payment
required to be made by the Fund to a broker, dealer, or futures
commission merchant with respect to an outstanding Futures Contract
shall be made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
(b) Any variation margin payment or similar payment
from a broker, dealer, or futures commission merchant to the Fund
with respect to an outstanding Futures Contract shall be received
and dealt with by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
3. Whenever a Futures Contract held by the Custodian
hereunder is retained by the Fund until delivery or settlement is
made on such Futures Contract, the Fund shall deliver to the
Custodian prior to the delivery or settlement date a Certificate
specifying: (a) the Futures Contract and the Series to which the
same relates; (b) with respect to an Index Futures Contract, the
total cash settlement amount to be paid or received, and with
respect to a Financial Futures Contract, the Securities and/or
amount of cash to be delivered or received; (c) the broker, dealer,
or futures commission merchant to or from whom payment or delivery
is to be made or received; and (d) the amount of cash and/or
Securities to be withdrawn from the Senior Security Account for
such Series. The Custodian shall make the payment or delivery
specified in the Certificate, and delete such Futures Contract from
the statements delivered to the Fund pursuant to paragraph 3 of
Article III herein.
4. Whenever the Fund shall enter into a Futures Contract to
offset a Futures Contract held by the Custodian hereunder, the Fund
shall deliver to the Custodian a Certificate specifying: (a) the
items of information required in a Certificate described in
paragraph 1 of this Article, and (b) the Futures Contract being
offset. The Custodian shall make payment out of the money
specifically allocated to such Series of the fee or commission, if
any, specified in the Certificate and delete the Futures Contract
being offset from the statements delivered to the Fund pursuant to
paragraph 3 of Article III herein, and make such withdrawals from
the Senior Security Account for such Series as may be specified in
the Certificate. The withdrawals, if any, to be made from the
Margin Account shall be made by the Custodian in accordance with
the terms and conditions of the Margin Account Agreement.
ARTICLE VI
FUTURES CONTRACT OPTIONS
1. Promptly after the execution of a purchase of any Futures
Contract Option by the Fund, the Fund shall deliver to the
Custodian a Certificate specifying with respect to such Futures
Contract Option: (a) the Series to which such Option is
specifically allocated; (b) the type of Futures Contract Option
(put or call); (c) the type of Futures Contract and such other
information as may be necessary to identify the Futures Contract
underlying the Futures Contract Option purchased; (d) the
expiration date; (e) the exercise price; (f) the dates of purchase
and settlement; (g) the amount of premium to be paid by the Fund
upon such purchase; (h) the name of the broker or futures
commission merchant through whom such Option was purchased; and (i)
the name of the broker, or futures commission merchant, to whom
payment is to be made. The Custodian shall pay out of the moneys
specifically allocated to such Series the total amount to be paid
upon such purchase to the broker or futures commissions merchant
through whom the purchase was made, provided that the same conforms
to the amount set forth in such Certificate.
2. Promptly after the execution of a sale of any Futures
Contract Option purchased by the Fund pursuant to paragraph 1
hereof, the Fund shall deliver to the Custodian a Certificate
specifying with respect to each such sale: (a) Series to which
such Futures Contract Option was specifically allocated; (b) the
type of Future Contract Option (put or call); (c) the type of
Futures Contract and such other information as may be necessary to
identify the Futures Contract underlying the Futures Contract
Option; (d) the date of sale; (e) the sale price; (f) the date of
settlement; (g) the total amount payable to the Fund upon such
sale; and (h) the name of the broker of futures commission merchant
through whom the sale was made. The Custodian shall consent to the
cancellation of the Futures Contract Option being closed against
payment to the Custodian of the total amount payable to the Fund,
provided the same conforms to the total amount payable as set forth
in such Certificate.
3. Whenever a Futures Contract Option purchased by the Fund
pursuant to paragraph 1 is exercised by the Fund, the Fund shall
promptly deliver to the Custodian a Certificate specifying: (a)
the Series to which such Futures Contract Option was specifically
allocated; (b) the particular Futures Contract Option (put or call)
being exercised; (c) the type of Futures Contract underlying the
Futures Contract Option; (d) the date of exercise; (e) the name of
the broker or futures commission merchant through whom the Futures
Contract Option is exercised; (f) the net total amount, if any,
payable by the Fund; (g) the amount, if any, to be received by the
Fund; and (h) the amount of cash and/or the amount and kind of
Securities to be deposited in the Senior Security Account for such
Series. The Custodian shall make, out of the moneys and Securities
specifically allocated to such Series, the payments of money, if
any, and the deposits of Securities, if any, into the Senior
Security Account as specified in the Certificate. The deposits, if
any, to be made to the Margin Account shall be made by the
Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
4. Whenever the Fund writes a Futures Contract Option, the
Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to such Futures Contract Option: (a) the
Series for which such Futures Contract Option was written; (b) the
type of Futures Contract Option (put or call); (c) the type of
Futures Contract and such other information as may be necessary to
identify the Futures Contract underlying the Futures Contract
Option; (d) the expiration date; (e) the exercise price; (f) the
premium to be received by the Fund; (g) the name of the broker or
futures commission merchant through whom the premium is to be
received; and (h) the amount of cash and/or the amount and kind of
Securities, if any, to be deposited in the Senior Security Account
for such Series. The Custodian shall, upon receipt of the premium
specified in the Certificate, make out of the moneys and Securities
specifically allocated to such Series the deposits into the Senior
Security Account, if any, as specified in the Certificate. The
deposits, if any, to be made to the Margin Account shall be made by
the Custodian in accordance with the terms and conditions of the
Margin Account Agreement.
5. Whenever a Futures Contract Option written by the Fund
which is a call is exercised, the Fund shall promptly deliver to
the Custodian a Certificate specifying: (a) the Series to which
such Futures Contract Option was specifically allocated; (b) the
particular Futures Contract Option exercised; (c) the type of
Futures Contract underlying the Futures Contract Option; (d) the
name of the broker or futures commission merchant through whom such
Futures Contract Option was exercised; (e) the net total amount, if
any, payable to the Fund upon such exercise; (f) the net total
amount, if any, payable by the Fund upon such exercise; and (g) the
amount of cash and/or the amount and kind of Securities to be
deposited in the Senior Security Account for such Series. The
Custodian shall, upon its receipt of the net total amount payable
to the Fund, if any, specified in such Certificate make the
payments, if any, and the deposits, if any, into the Senior
Security Account as specified in the Certificate. The deposits, if
any, to be made to the Margin Account shall be made by the
Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
6. Whenever a Futures Contract Option which is written by
the Fund and which is a put is exercised, the Fund shall promptly
deliver to the Custodian a Certificate specifying: (a) the Series
to which such Option was specifically allocated; (b) the particular
Futures Contract Option exercised; (c) the type of Futures Contract
underlying such Futures Contract Option; (d) the name of the broker
or futures commission merchant through whom such Futures Contract
Option is exercised; (e) the net total amount, if any, payable to
the Fund upon such exercise; (f) the net total amount, if any,
payable by the Fund upon such exercise; and (g) the amount and kind
of Securities and/or cash to be withdrawn from or deposited in, the
Senior Security Account for such Series, if any. The Custodian
shall, upon its receipt of the net total amount payable to the
Fund, if any, specified in the Certificate, make out of the moneys
and Securities specifically allocated to such Series, the payments,
if any, and the deposits, if any, into the Senior Security Account
as specified in the Certificate. The deposits to and/or
withdrawals from the Margin Account, if any, shall be made by the
Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
7. Promptly after the execution by the Fund of a purchase
of any Futures Contract Option identical to a previously written
Futures Contract Option described in this Article in order to
liquidate its position as a writer of such Futures Contract Option,
the Fund shall deliver to the Custodian a Certificate specifying
with respect to the Futures Contract Option being purchased: (a)
the Series to which such Option is specifically allocated; (b) that
the transaction is a closing transaction; (c) the type of Future
Contract and such other information as may be necessary to identify
the Futures Contract underlying the Futures Option Contract; (d)
the exercise price; (e) the premium to be paid by the Fund; (f) the
expiration date; (g) the name of the broker or futures commission
merchant to whom the premium is to be paid; and (h) the amount of
cash and/or the amount and kind of Securities, if any, to be
withdrawn from the Senior Security Account for such Series. The
Custodian shall effect the withdrawals from the Senior Security
Account specified in the Certificate. The withdrawals, if any, to
be made from the Margin Account shall be made by the Custodian in
accordance with the terms and conditions of the Margin Account
Agreement.
8. Upon the expiration, exercise, or consummation of a
closing transaction with respect to, any Futures Contract Option
written or purchased by the Fund and described in this Article, the
Custodian shall (a) delete such Futures Contract Option from the
statements delivered to the Fund pursuant to paragraph 3 of Article
III herein and (b) make such withdrawals from and/or in the case of
an exercise such deposits into the Senior Security Account as may
be specified in a Certificate. The deposits to and/or withdrawals
from the Margin Account, if any, shall be made by the Custodian in
accordance with the terms and conditions of the Margin Account
Agreement.
9. Futures Contracts acquired by the Fund through the
exercise of a Futures Contract Option described in this Article
shall be subject to Article VI hereof.
ARTICLE VII
SHORT SALES
1. Promptly after the execution of any short sales of
Securities by any Series of the Fund, the Fund shall deliver to the
Custodian a Certificate specifying: (a) the Series for which such
short sale was made; (b) the name of the issuer-and the title of
the Security; (c) the number of shares or principal amount sold,
and accrued interest or dividends, if any; (d) the dates of the
sale and settlement; (e) the sale price per unit; (f) the total
amount credited to the Fund upon such sale, if any, (g) the amount
of cash and/or the amount and kind of Securities, if any, which are
to be deposited in a Margin Account and the name in which such
Margin Account has been or is to be established; (h) the amount of
cash and/or the amount and kind of Securities, if any, to be
deposited in a Senior Security Account, and (i) the name of the
broker through whom such short sale was made. The Custodian shall
upon its receipt of a statement from such broker confirming such
sale and that the total amount credited to the Fund upon such sale,
if any, as specified in the Certificate is held by such broker for
the account of the Custodian (or any nominee of the Custodian) as
custodian of the Fund, issue a receipt or make the deposits into
the Margin Account and the Senior Security Account specified in the
Certificate.
2. Promptly after the execution of a purchase to close-out
any short sale of Securities, the Fund shall promptly deliver to
the Custodian a Certificate specifying with respect to each such
closing out: (a) the Series for which such transaction is being
made; (b) the name of the issuer and the title of the Security; (c)
the number of shares or the principal amount, and accrued interest
or dividends, if any, required to effect such closing-out to be
delivered to the broker; (d) the dates of closing-out and
settlement; (e) the purchase price per unit; (f) the net total
amount payable to the Fund upon such closing-out; (g) the net total
amount payable to the broker upon such closing-out; (h) the amount
of cash and the amount and kind of Securities to be withdrawn, if
any, from the Margin Account; (i) the amount of cash and/or the
amount and kind of Securities, if any, to be withdrawn from the
Senior Security Account; and (j) the name of the broker through
whom the Fund is effecting such closing-out. The Custodian shall,
upon receipt of the net total amount payable to the Fund upon such
closing-out, and the return and/or cancellation of the receipts, if
any, issued by the Custodian with respect to the short sale being
closed-out, pay out of the moneys held for the account of the Fund
to the broker the net total amount payable to the broker, and make
the withdrawals from the Margin Account and the Senior Security
Account, as the same are specified in the Certificate.
ARTICLE VIII
REPURCHASE AND REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters a Repurchase Agreement or
a Reverse Repurchase Agreement with respect to Securities and money
held by the Custodian hereunder, the Fund shall deliver to the
Custodian a Certificate, or in the event such Repurchase Agreement
or Reverse Repurchase Agreement is a Money Market Security, a
Certificate, Oral Instructions, or Written Instructions specifying:
(a) the Series for which the Repurchase Agreement or Reverse
Repurchase Agreement is entered; (b) the total amount payable to or
by the Fund in connection with such Repurchase Agreement or Reverse
Repurchase Agreement and specifically allocated to such Series; (c)
the broker, dealer, or financial institution with whom the
Repurchase Agreement or Reverse Repurchase Agreement is entered;
(d) the amount and kind of Securities to be delivered or received
by the Fund to or from such broker, dealer, or financial
institution; (e) the date of such Repurchase Agreement or Reverse
Repurchase Agreement; and (f) the amount of cash and/or the amount
and kind of Securities, if any, specifically allocated to such
Series to be deposited in a Senior Security Account for such Series
in connection with such Reverse Repurchase Agreement. The
Custodian shall, upon receipt of the total amount payable to or by
the Fund specified in the Certificate, Oral Instructions, or
Written Instructions make or accept the delivery to or from the
broker, dealer, or financial institution and the deposits, if any,
to the Senior Security Account, specified in such Certificate, Oral
Instructions, or Written Instructions.
2. Upon the termination of a Repurchase Agreement or a
Reverse Repurchase Agreement described in preceding paragraph 1 of
this Article, the Fund shall promptly deliver a Certificate or, in
the event such Repurchase Agreement or Reverse Repurchase Agreement
is a Money Market Security, a Certificate, Oral Instructions, or
Written Instructions to the Custodian specifying: (a) the
Repurchase Agreement or Reverse Repurchase Agreement being
terminated and the Series for which same was entered; (b) the total
amount payable to or by the Fund in connection with such
termination; (c) the amount and kind of Securities to be received
or delivered by the Fund and specifically allocated to such Series
in connection with such termination; (d) the date of termination;
(e) the name of the broker, dealer, or financial institution with
whom the Repurchase Agreement or Reverse Repurchase Agreement is to
be terminated; and (f) the amount of cash and/or the amount and
kind of Securities, if any, to be withdrawn from the Senior
Securities Account for such Series. The Custodian shall, upon
receipt or delivery of the amount and kind of Securities or cash to
be received or delivered by the Fund specified in the Certificate,
Oral Instructions, or Written Instructions, make or receive the
payment to or from the broker, dealer, or financial institution and
make the withdrawals, if any, from the Senior Security Account,
specified in such Certificate, Oral Instructions, or Written
Instructions.
3. The Certificates, Oral Instructions, or Written
Instructions described in paragraphs 1 and 2 of this Article may
with respect to any particular Repurchase Agreement or Reverse
Repurchase Agreement be combined and delivered to the Custodian at
the time of entering into such Repurchase Agreement or Reverse
Repurchase Agreement.
ARTICLE IX
LOANS OF PORTFOLIO SECURITIES OF THE FUND
1. Promptly after each loan of portfolio Securities
specifically allocated to a Series held by the Custodian hereunder,
the Fund shall deliver or cause to be delivered to the Custodian a
Certificate specifying with respect to each such loan: (a) the
Series to which the loaned Securities are specifically allocated;
(b) the name of the issuer and the title of the Securities, (c) the
number of shares or the principal amount loaned, (d) the date of
loan and delivery, (e) the total amount to be delivered to the
Custodian against the loan of the Securities, including the amount
of cash collateral and the premium, if any, separately identified,
and (f) the name of the broker, dealer, or financial institution to
which the loan was made. The Custodian shall deliver the
Securities thus designated to the broker, dealer or financial
institution to which the loan was made upon receipt of the total
amount designated in the Certificate as to be delivered against the
loan of Securities. The Custodian may accept payment in connection
with a delivery otherwise than through the Book-Entry System or a
Depository only in the form of a certified or bank cashier's check
payable to the order of the Fund or the Custodian drawn on New York
Clearing House funds.
2. In connection with each termination of a loan of
Securities by the Fund, the Fund shall deliver or cause to be
delivered to the Custodian a Certificate specifying with respect to
each such loan termination and return of Securities: (a) the
Series to which the loaned Securities are specifically allocated;
(b) the name of the issuer and the title of the Securities to be
returned, (c) the number of shares or the principal amount to be
returned, (d) the date of termination, (e) the total amount to be
delivered by the Custodian (including the cash collateral for such
Securities minus any offsetting credits as described in said
Certificate), and (f) the name of the broker, dealer, or financial
institution from which the Securities will be returned. The
Custodian shall receive all Securities returned from the broker,
dealer, or financial institution to which such Securities were
loaned and upon receipt thereof shall pay, out of the moneys held
for the account of the Fund, the total amount payable upon such
return of Securities as set forth in the Certificate.
ARTICLE X
CONCERNING MARGIN ACCOUNTS, SENIOR SECURITY
ACCOUNTS, AND COLLATERAL ACCOUNTS
1. The Custodian shall establish a Senior Security Account
and from time to time make such deposits thereto, or withdrawals
therefrom, as specified in a Certificate. Such Certificate shall
specify the Series for which such deposit or withdrawal is to be
made and the amount of cash and/or the amount and kind of
Securities specifically allocated to such Series to be deposited
in, or withdrawn from, such Senior Security Account for such
Series. In the event that the Fund fails to specify in a
Certificate the Series, the name of the issuer, the title and the
number of shares or the principal amount of any particular
Securities to be deposited by the Custodian into, or withdrawn
from, a Senior Securities Account, the Custodian shall be under no
obligation to make any such deposit or withdrawal and shall
promptly notify the Fund that no such deposit has been made.
2. The Custodian shall make deliveries or payments from a
Margin Account to the broker, dealer, futures commission merchant
or Clearing Member in whose name, or for whose benefit, the account
was established as specified in the Margin Account Agreement.
3. Amounts received by the Custodian as payments or
distributions with respect to Securities deposited in any Margin
Account shall be dealt with in accordance with the terms and
conditions of the Margin Account Agreement.
4. The Custodian shall to the extent permitted by the Fund's
Declaration of Trust, investment restrictions and the Investment
Company Act of 1940 have a continuing lien and security interest in
and to any property at any time held by the Custodian in any
Collateral Account described herein. In accordance with applicable
law the Custodian may enforce its lien and realize on any such
property whenever the Custodian has made payment or delivery
pursuant to any Put Option guarantee letter or similar document or
any receipt issued hereunder by the Custodian; provided, however,
that the Custodian shall not be required to issue any Put Option
guarantee letter unless it shall have received an opinion of
counsel to the Fund or its investment adviser that the issuance of
such letters is authorized by the Fund and that the Custodian's
continuing lien and security interest is valid, enforceable and not
limited by the Declaration of Trust, any investment restrictions or
the Investment Company Act of 1940. In the event the Custodian
should realize on any such property net proceeds which are less
than the Custodian's obligations under any Put Option guarantee
letter or similar document or any receipt, such deficiency shall be
a debt owed the Custodian by the Fund within the scope of Article
XIV herein.
5. On each business day the Custodian shall furnish the Fund
with a statement with respect to each Margin Account in which money
or Securities are held specifying as of the close of business on
the previous business day: (a) the name of the Margin Account; (b)
the amount and kind of Securities held therein; and (c) the amount
of money held therein. The Custodian shall make available upon
request to any broker, dealer, or futures commission merchant
specified in the name of a Margin Account a copy of the statement
furnished the Fund with respect to such Margin Account.
6. The Custodian shall establish a Collateral Account and
from time to time shall make such deposits thereto as may be
specified in a Certificate. Promptly after the close of business
on each business day in which cash and/or Securities are maintained
in a Collateral Account for any Series, the Custodian shall furnish
the Fund with a statement with respect to such Collateral Account
specifying the amount of cash and/or the amount and kind of
Securities held therein. No later than the close of business next
succeeding the delivery to the Fund of such statement, the Fund
shall furnish to the Custodian a Certificate or Written
Instructions specifying the then market value of the Securities
described in such statement. In the event such then market value
is indicated to be less than the Custodian's obligation with
respect to any outstanding Put Option guarantee letter or similar
document, the Fund shall promptly specify in a Certificate the
additional cash and/or Securities to be deposited in such
Collateral Account to eliminate such deficiency.
ARTICLE XI
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Fund shall furnish to the Custodian a copy of the
resolution of the Board of Trustees of the Fund, certified by the
Secretary or any Assistant Secretary, either (i) setting forth with
respect to the Series specified therein the date of the declaration
of a dividend or distribution, the date of payment thereof, the
record date as of which shareholders entitled to payment shall be
determined, the amount payable per Share of such Series to the
shareholders of record as of that date and the total amount payable
to the Transfer Agent Account and any sub-dividend agent or co-
dividend agent of the Fund on the payment date, or (ii) authorizing
with respect to the Series specified therein and the declaration of
dividends and distributions thereon the Custodian to rely on Oral
Instructions, Written Instructions, or a Certificate setting forth
the date of the declaration of such dividend or distribution, the
date of payment thereof, the record date as of which shareholders
entitled to payment shall be determined, the amount payable per
Share of such Series to the shareholders of record as of that date
and the total amount payable to the Transfer Agent Account on the
payment date.
2. Upon the payment date specified in such resolution, Oral
Instructions, Written Instructions, or Certificate, as the case may
be, the Custodian shall pay to the Transfer Agent Account out of
the moneys held for the account of the Series specified therein the
total amount payable to the Transfer Agent Account and with respect
to such Series.
ARTICLE XII
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any Shares, it shall deliver
or cause to be delivered, to the Custodian a Certificate duly
specifying:
(a) The Series, the number of Shares sold, trade
date, and price; and
(b) The amount of money to be received by the
Custodian for the sale of such Shares and specifically allocated to
the separate account in the name of such Series.
2. Upon receipt of such money from the Fund's General
Distributor, the Custodian shall credit such money to the separate
account in the name of the Series for which such money was
received.
3. Upon issuance of any Shares of any Series the Custodian
shall pay, out of the money held for the account of such Series,
all original issue or other taxes required to be paid by the Fund
in connection with such issuance upon the receipt of a Certificate
specifying the amount to be paid.
4. Except as provided hereinafter, whenever the Fund desires
the Custodian to make payment out of the money held by the
Custodian hereunder in connection with a redemption of any Shares,
it shall furnish, or cause to be furnished, to the Custodian a
Certificate specifying:
(a) The number and Series of Shares redeemed; and
(b) The amount to be paid for such Shares.
5. Upon receipt of an advice from an Authorized Person
setting forth the Series and number of Shares received by the
Transfer Agent for redemption and that such Shares are in good form
for redemption, the Custodian shall make payment to the Transfer
Agent Account out of the moneys held in the separate account in the
name of the Series the total amount specified in the Certificate
issued pursuant to the foregoing paragraph 4 of this Article.
ARTICLE XIII
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian should in its sole discretion advance
funds on behalf of any Series which results in an overdraft because
the moneys held by the Custodian in the separate account for such
Series shall be insufficient to pay the total amount payable upon
a purchase of Securities specifically allocated to such Series, as
set forth in a Certificate, Oral Instructions, or Written
Instructions or which results in an overdraft in the separate
account of such Series for some other reason, or if the Fund is for
any other reason indebted to the Custodian with respect to a
Series, (except a borrowing for investment or for temporary or
emergency purposes using Securities as collateral pursuant to a
separate agreement and subject to the provisions of paragraph 2 of
this Article), such overdraft or indebtedness shall be deemed to be
a loan made by the Custodian to the Fund for such Series payable on
demand and shall bear interest from the date incurred at a rate per
annum (based on a 360-day year for the actual number of days
involved) equal to the Federal Funds Rate plus 1/2%, such rate to
be adjusted on the effective date of any change in such Federal
Funds Rate but in no event to be less than 6% per annum. In
addition, unless the Fund has given a Certificate that the
Custodian shall not impose a lien and security interest to secure
such overdrafts (in which event it shall not do so), the Custodian
shall have a continuing lien and security interest in the aggregate
amount of such overdrafts and indebtedness as may from time to time
exist in and to any property specifically allocated to such Series
at any time held by it for the benefit of such Series or in which
the Fund may have an interest which is then in the Custodian's
possession or control or in possession or control of any third
party acting in the Custodian's behalf. The Fund authorizes the
Custodian, in its sole discretion, at any time to charge any such
overdraft or indebtedness together with interest due thereon
against any money balance in an account standing in the name of
such Series' credit on the Custodian's books. In addition, the
Fund hereby covenants that on each Business Day on which either it
intends to enter a Reverse Repurchase Agreement and/or otherwise
borrow from a third party, or which next succeeds a Business Day on
which at the close of business the Fund had outstanding a Reverse
Repurchase Agreement or such a borrowing, it shall prior to 9 a.m.,
New York City time, advise the Custodian, in writing, of each such
borrowing, shall specify the Series to which the same relates, and
shall not incur any indebtedness, including pursuant to any Reverse
Repurchase Agreement, not so specified other than from the
Custodian.
2. The Fund will cause to be delivered to the Custodian by
any bank (including, if the borrowing is pursuant to a separate
agreement, the Custodian) from which it borrows money for
investment or for temporary or emergency purposes using Securities
held by the Custodian hereunder as collateral for such borrowings,
a notice or undertaking in the form currently employed by any such
bank setting forth the amount which such bank will loan to the Fund
against delivery of a stated amount of collateral. The Fund shall
promptly deliver to the Custodian a Certificate specifying with
respect to each such borrowing: (a) the Series to which such
borrowing relates; (b) the name of the bank, (c) the amount and
terms of the borrowing, which may be set forth by incorporating by
reference an attached promissory note, duly endorsed by the Fund,
or other loan agreement, (d) the time and date, if known, on which
the loan is to be entered into, (e) the date on which the loan
becomes due and payable, (f) the total amount payable to the Fund
on the borrowing date, (g) the market value of Securities to be
delivered as collateral for such loan, including the name of the
issuer, the title and the number of shares or the principal amount
of any particular Securities, and (h) a statement specifying
whether such loan is for investment purposes or for temporary or
emergency purposes and that such loan is in conformance with the
Investment Company Act of 1940 and the Fund's prospectus and
Statement of Additional Information. The Custodian shall deliver
on the borrowing date specified in a Certificate the specified
collateral and the executed promissory note, if any, against
delivery by the lending bank of the total amount of the loan
payable, provided that the same conforms to the total amount
payable as set forth in the Certificate. The Custodian may, at the
option of the lending bank, keep such collateral in its possession,
but such collateral shall be subject to all rights therein given
the lending bank by virtue of any promissory note or loan
agreement. The Custodian shall deliver such Securities as
additional collateral as may be specified in a Certificate to
collateralize further any transaction described in this paragraph.
The Fund shall cause all Securities released from collateral status
to be returned directly to the Custodian, and the Custodian shall
receive from time to time such return of collateral as may be
tendered to it. In the event that the Fund fails to specify in a
Certificate the Series, the name of the issuer, the title and
number of shares or the principal amount of any particular
Securities to be delivered as collateral by the Custodian, to any
such bank, the Custodian shall not be under any obligation to
deliver any Securities.
ARTICLE XIV
CUSTODY OF ASSETS OUTSIDE THE U.S.
1. The Custodian is authorized and instructed to employ, as
its agent, as subcustodians for the securities and other assets of
the Fund maintained outside of the United States the Foreign
Subcustodians and Foreign Depositories designated on Schedule A
hereto. Except as provided in Schedule A, the Custodian shall
employ no other Foreign Custodian or Foreign Depository. The
Custodian and the Fund may amend Schedule A hereto from time to
time to agree to designate any additional Foreign Subcustodian or
Foreign Depository with which the Custodian has an agreement for
such entity to act as the Custodian's agent, as subcustodian, and
which the Custodian in its absolute discretion proposes to utilize
to hold any of the Fund's Foreign Property. Upon receipt of a
Certificate or Written Instructions from the Fund, the Custodian
shall cease the employment of any one or more of such subcustodians
for maintaining custody of the Fund's assets and such custodian
shall be deemed deleted from Schedule A.
2. The Custodian shall limit the securities and other assets
maintained in the custody of the Foreign Subcustodians to: (a)
"foreign securities," as defined in paragraph (c)(1) of Rule 17f-5
under the Investment Company Act of 1940, and (b) cash and cash
equivalents in such amounts as the Fund may determine to be
reasonably necessary to effect the foreign securities transactions
of the Fund.
3. The Custodian shall identify on its books as belonging
to the Fund, the Foreign Securities held by each Foreign
Subcustodian.
4. Each agreement pursuant to which the Custodian employs
a Foreign Subcustodian shall be substantially in the form reviewed
and approved by the Fund and will not be amended in a way that
materially affects the Fund without the Fund's prior written
consent and shall:
(a) require that such institution establish custody
account(s) for the Custodian on behalf of the Fund and physically
segregate in each such account securities and other assets of the
fund, and, in the event that such institution deposits the
securities of the Fund in a Foreign Depository, that it shall
identify on its books as belonging to the Fund or the Custodian, as
agent for the Fund, the securities so deposited;
(b) provide that:
(1) the assets of the Fund will not be subject to
any right, charge, security interest, lien or claim of any kind in
favor of the Foreign Subcustodian or its creditors, except a claim
of payment for their safe custody or administration;
(2) beneficial ownership for the assets of the Fund
will be freely transferable without the payment of money or value
other than for custody or administration;
(3) adequate records will be maintained identifying
the assets as belonging to the Fund;
(4) the independent public accountants for the Fund
will be given access to the books and records of the Foreign
Subcustodian relating to its actions under its agreement with the
Custodian or confirmation of the contents of those records;
(5) the Fund will receive periodic reports with
respect to the safekeeping of the Fund's assets, including, but not
necessarily limited to, notification of any transfer to or from the
custody account(s); and
(6) assets of the Fund held by the Foreign
Subcustodian will be subject only to the instructions of the
Custodian or its agents.
(c) Require the institution to exercise reasonable care
in the performance of its duties and to indemnify, and hold
harmless, the Custodian from and against any loss, damage, cost,
expense, liability or claim arising out of or in connection with
the institution's performance of such obligations, with the
exception of any such losses, damages, costs, expenses, liabilities
or claims arising as a result of an act of God. At the election of
the Fund, it shall be entitled to be subrogated to the rights of
the Custodian with respect to any claims against a Foreign
Subcustodian as a consequence of any such loss, damage, cost,
expense, liability or claim of or to the Fund, if and to the extent
that the Fund has not been made whole for any such loss, damage,
cost, expense, liability or claim.
5. Upon receipt of a Certificate or Written Instructions,
which may be continuing instructions when deemed appropriate by the
parties, the Custodian shall on behalf of the Fund make or cause
its Foreign Subcustodian to transfer, exchange or deliver
securities owned by the Fund, except to the extent explicitly
prohibited therein. Upon receipt of a Certificate or Written
Instructions, which may be continuing instructions when deemed
appropriate by the parties, the Custodian shall on behalf of the
fund pay out or cause its Foreign Subcustodians to pay out monies
of the Fund. The Custodian shall use all means reasonably
available to it, including, if specifically authorized by the Fund
in a Certificate, any necessary litigation at the cost and expense
of the Fund (except as to matters for which the Custodian is
responsible hereunder) to require or compel each Foreign
Subcustodian or Foreign Depository to perform the services required
of it by the agreement between it and the Custodian authorized
pursuant to this Agreement.
6. The Custodian shall maintain all books and records as
shall be necessary to enable the Custodian readily to perform the
services required of it hereunder with respect to the Fund's
Foreign Properties. The Custodians shall supply to the Fund from
time to time, as mutually agreed upon, statements in respect of the
Foreign Securities and other Foreign Properties of the Fund held by
Foreign Subcustodians, directly or through Foreign Depositories,
including but not limited to an identification of entities having
possession of the Fund's Foreign Securities and other assets, an
advice or other notification of any transfers of securities to or
from each custodial account maintained for the Fund or the
Custodian on behalf of the Fund indicating, as to securities
acquired for the Fund, the identity of the entity having physical
possession of such securities. The Custodian shall promptly and
faithfully transmit all reports and information received pertaining
to the Foreign Property of the Fund, including, without limitation,
notices or reports of corporate action, proxies and proxy
soliciting materials.
7. Upon request of the Fund, the Custodian shall use
reasonable efforts to arrange for the independent accountants of
the Fund to be afforded access to the books and records of any
Foreign Subcustodian, or confirmation of the contents thereof,
insofar as such books and records relate to the Foreign Property of
the Fund or the performance of such Foreign Subcustodian under its
agreement with the Custodian; provided that any litigation to
afford such access shall be at the sole cost and expense of the
Fund.
8. The Custodian recognizes that employment of a Foreign
Subcustodian or Foreign Depository for the Fund's Foreign
Securities and Foreign Property is permitted by Section 17(f) of
the Investment Company Act of 1940 only upon compliance with
Section (a) of Rule 17f-5 promulgated thereunder. With respect to
the Foreign Subcustodians and Foreign Depositories identified on
Schedule A, the Custodian represents that it has furnished the Fund
with certain materials prepared by the Custodian and with such
other information in the possession of the Custodian as the Fund
advised the Custodian was reasonably necessary to assist the Board
of Trustees of the Fund in making the determinations required of
the Board of Trustees by Rule 17f-5, including, without limitation,
consideration of the matters set forth in the Notes to Rule 17f-5.
If the Custodian recommends any additional Foreign Subcustodian or
Foreign Depository, the Custodian shall supply information similar
in kind and scope to that furnished pursuant to the preceding
sentence. Further, the Custodian shall furnish annually to the
Fund, at such time as the Fund and Custodian shall mutually agree,
information concerning each Foreign Subcustodian and Foreign
Depository then identified on Schedule A similar in kind and scope
to that furnished pursuant to the preceding two sentences.
9. The Custodian's employment of any Foreign Subcustodian
or Foreign Depository shall constitute a representation that the
Custodian believes in good faith that such Foreign Subcustodian or
Foreign Depository provides a level of safeguards for maintaining
the Fund's assets not materially different from that provided by
the Custodian in maintaining the Fund's securities in the United
States. In addition, the Custodian shall monitor the financial
condition and general operational performance of the Foreign
Subcustodians and Foreign Depositories and shall promptly inform
the Fund in the event that the Custodian has actual knowledge of a
material adverse change in the financial condition thereof or that
there appears to be a substantial likelihood that the shareholders'
equity of any Foreign Subcustodian will decline below $200 million
(U.S. dollars or the equivalent thereof) or that its shareholders'
equity has declined below $200 million , or that the Foreign
Subcustodian or Foreign Depository has breached the agreement
between it and the Custodian in a way that the Custodian believes
adversely affects the Fund. Further, the Custodian shall advise
the Fund if it believes that there is a material adverse change in
the operating environment of any Foreign Subcustodian or Foreign
Depository.
ARTICLE XV
CONCERNING THE CUSTODIAN
1. The Custodian shall use reasonable care in the
performance of its duties hereunder, and, except as hereinafter
provided, neither the Custodian nor its nominee shall be liable for
any loss or damage, including counsel fees, resulting from its
action or omission to act or otherwise, either hereunder or under
any Margin Account Agreement, except for any such loss or damage
arising out of its own negligence, bad faith, or willful misconduct
or that of the subcustodians or co-custodians appointed by the
Custodian or of the officers, employees, or agents of any of them.
The Custodian may, with respect to questions of law arising
hereunder or under any Margin Account Agreement, apply for and
obtain the advice and opinion of counsel to the Fund, at the
expense of the Fund, or of its own counsel, at its own expense, and
shall be fully protected with respect to anything done or omitted
by it in good faith in conformity with such advice or opinion. The
Custodian shall be liable to the Fund for any loss or damage
resulting from the use of the Book-Entry System or any Depository
arising by reason of any negligence, bad faith or willful
misconduct on the part of the Custodian or any of its employees or
agents.
2. Notwithstanding the foregoing, the Custodian shall be
under no obligation to inquire into, and shall not be liable for:
(a) The validity (but not the authenticity) of the issue
of any Securities purchased, sold, or written by or for the Fund,
the legality of the purchase, sale or writing thereof, or the
propriety of the amount paid or received therefor, as specified in
a Certificate, Oral Instructions, or Written Instructions;
(b) The legality of the sale or redemption of any
Shares, or the propriety of the amount to be received or paid
therefor, as specified in a Certificate;
(c) The legality of the declaration or payment of any
dividend by the Fund, as specified in a resolution, Certificate,
Oral Instructions, or Written Instructions;
(d) The legality of any borrowing by the Fund using
Securities as collateral;
(e) The legality of any loan of portfolio
Securities, nor shall the Custodian be under any duty or obligation
to see to it that the cash collateral delivered to it by a broker,
dealer, or financial institution or held by it at any time as a
result of such loan of portfolio Securities of the Fund is adequate
collateral for the Fund against any loss it might sustain as a
result of such loan, except that this subparagraph shall not excuse
any liability the Custodian may have for failing to act in
accordance with Article X hereof or any Certificate, Oral
Instructions or Written Instructions given in accordance with this
Agreement. The Custodian specifically, but not by way of
limitation, shall not be under any duty or obligation periodically
to check or notify the Fund that the amount of such cash collateral
held by it for the Fund is sufficient collateral for the Fund, but
such duty or obligation shall be the sole responsibility of the
Fund. In addition, the Custodian shall be under no duty or
obligation to see that any broker, dealer or financial institution
to which portfolio Securities of the Fund are lent pursuant to
Article X of this Agreement makes payment to it of any dividends or
interest which are payable to or for the account of the Fund during
the period of such loan or at the termination of such loan,
provided, however, that the Custodian shall promptly notify the
Fund in the event that such dividends or interest are not paid and
received when due; or
(f) The sufficiency or value of any amounts of money
and/or Securities held in any Margin Account, Senior Security
Account or Collateral Account in connection with transactions by
the Fund, except that this subparagraph shall not excuse any
liability the Custodian may have for failing to establish,
maintain, make deposits to or withdrawals from such accounts in
accordance with this Agreement. In addition, the Custodian shall
be under no duty or obligation to see that any broker, dealer,
futures commission merchant or Clearing Member makes payment to the
Fund of any variation margin payment or similar payment which the
Fund may be entitled to receive from such broker, dealer, futures
commission merchant or Clearing Member, to see that any payment
received by the Custodian from any broker, dealer, futures
commission merchant or Clearing Member is the amount the Fund is
entitled to receive, or to notify the Fund of the Custodian's
receipt or non-receipt of any such payment.
3. The Custodian shall not be liable for, or considered to
be the Custodian of, any money, whether or not represented by any
check, draft, or other instrument for the payment of money,
received by it on behalf of the Fund until the Custodian actually
receives such money directly or by the final crediting of the
account representing the Fund's interest at the Book-Entry System
or the Depository.
4. With respect to Securities held in a Depository, except
as otherwise provided in paragraph 5(b) of Article III hereof, the
Custodian shall have no responsibility and shall not be liable for
ascertaining or acting upon any calls, conversions, exchange
offers, tenders, interest rate changes or similar matters relating
to such Securities, unless the Custodian shall have actually
received timely notice from the Depository in which such Securities
are held. In no event shall the Custodian have any responsibility
or liability for the failure of a Depository to collect, or for the
late collection or late crediting by a Depository of any amount
payable upon Securities deposited in a Depository which may mature
or be redeemed, retired, called or otherwise become payable.
However, upon receipt of a Certificate from the Fund of an overdue
amount on Securities held in a Depository the Custodian shall make
a claim against the Depository on behalf of the Fund, except that
the Custodian shall not be under any obligation to appear in,
prosecute or defend any action suit or proceeding in respect to any
Securities held by a Depository which in its opinion may involve it
in expense or liability, unless indemnity satisfactory to it
against all expense and liability be furnished as often as may be
required, or alternatively, the Fund shall be subrogated to the
rights of the Custodian with respect to such claim against the
Depository should it so request in a Certificate. This paragraph
shall not, however, excuse any failure by the Custodian to act in
accordance with a Certificate, Oral Instructions, or Written
Instructions given in accordance with this Agreement.
5. The Custodian shall not be under any duty or obligation
to take action to effect collection of any amount due the Fund from
the Transfer Agent of the Fund nor to take any action to effect
payment or distribution by the Transfer Agent of the Fund of any
amount paid by the Custodian to the Transfer Agent of the Fund in
accordance with this Agreement.
6. The Custodian shall not be under any duty or obligation
to take action to effect collection of any amount if the Securities
upon which such amount is payable are in default, or if payment is
refused after the Custodian has timely and properly, in accordance
with this Agreement, made due demand or presentation, unless and
until (i) it shall be directed to take such action by a Certificate
and (ii) it shall be assured to its satisfaction of reimbursement
of its costs and expenses in connection with any such action, but
the Custodian shall have such a duty if the Securities were not in
default on the payable date and the Custodian failed to timely and
properly make such demand for payment and such failure is the
reason for the non-receipt of payment.
7. The Custodian may, with the prior approval of the Board
of Trustees of the Fund, appoint one or more banking institutions
as subcustodian or subcustodians, or as co-Custodian or co-
Custodians, of Securities and moneys at any time owned by the Fund,
upon such terms and conditions as may be approved in a Certificate
or contained in an agreement executed by the Custodian, the Fund
and the appointed institution; provided, however, that appointment
of any foreign banking institution or depository shall be subject
to the provisions of Article XV hereof.
8. The Custodian agrees to indemnify the Fund against and
save the Fund harmless from all liability, claims, losses and
demands whatsoever, including attorney's fees, howsoever arising or
incurred because of the negligence, bad faith or willful misconduct
of any subcustodian of the Securities and moneys owned by the Fund.
9. The Custodian shall not be under any duty or obligation
(a) to ascertain whether any Securities at any time delivered to,
or held by it, for the account of the Fund and specifically
allocated to a Series are such as properly may be held by the Fund
or such Series under the provisions of its then current prospectus,
or (b) to ascertain whether any transactions by the Fund, whether
or not involving the Custodian, are such transactions as may
properly be engaged in by the Fund.
10. The Custodian shall be entitled to receive and the Fund
agrees to pay to the Custodian all reasonable out-of-pocket
expenses and such compensation as may be agreed upon in writing
from time to time between the Custodian and the Fund. The
Custodian may charge such compensation, and any such expenses with
respect to a Series incurred by the Custodian in the performance of
its duties under this Agreement against any money specifically
allocated to such Series. The Custodian shall also be entitled to
charge against any money held by it for the account of a Series the
amount of any loss, damage, liability or expense, including counsel
fees, for which it shall be entitled to reimbursement under the
provisions of this Agreement attributable to, or arising out of,
its serving as Custodian for such Series. The expenses for which
the Custodian shall be entitled to reimbursement hereunder shall
include, but are not limited to, the expenses of subcustodians and
foreign branches of the Custodian incurred in settling outside of
New York City transactions involving the purchase and sale of
Securities of the Fund. Notwithstanding the foregoing or anything
else contained in this Agreement to the contrary, the Custodian
shall, prior to effecting any charge for compensation, expenses, or
any overdraft or indebtedness or interest thereon, submit an
invoice therefor to the Fund.
11. The Custodian shall be entitled to rely upon any
Certificate, notice or other instrument in writing, Oral
Instructions, or Written Instructions received by the Custodian and
reasonably believed by the Custodian to be genuine. The Fund
agrees to forward to the Custodian a Certificate or facsimile
thereof confirming Oral Instructions or Written Instructions in
such manner so that such Certificate or facsimile thereof is
received by the Custodian, whether by hand delivery, telecopier or
other similar device, or otherwise, by the close of business of the
same day that such Oral Instructions or Written Instructions are
given to the Custodian. The Fund agrees that the fact that such
confirming instructions are not received by the Custodian shall in
no way affect the validity of the transactions or enforceability of
the transactions thereby authorized by the Fund. The Fund agrees
that the Custodian shall incur no liability to the Fund in acting
upon Oral Instructions or Written Instructions given to the
Custodian hereunder concerning such transactions provided such
instructions reasonably appear to have been received from an
Authorized Person.
12. The Custodian shall be entitled to rely upon any
instrument, instruction or notice received by the Custodian and
reasonably believed by the Custodian to be given in accordance with
the terms and conditions of any Margin Account Agreement. Without
limiting the generality of the foregoing, the Custodian shall be
under no duty to inquire into, and shall not be liable for, the
accuracy of any statements or representations contained in any such
instrument or other notice including, without limitation, any
specification of any amount to be paid to a broker, dealer, futures
commission merchant or Clearing Member. This paragraph shall not
excuse any failure by the Custodian to have acted in accordance
with any Margin Agreement it has executed or any Certificate, Oral
Instructions, or Written Instructions given in accordance with this
Agreement.
13. The books and records pertaining to the Fund, as
described in Appendix E hereto, which are in the possession of the
Custodian shall be the property of the Fund. Such books and
records shall be prepared and maintained by the Custodian as
required by the Investment Company Act of 1940, as amended, and
other applicable Securities laws and rules and regulations. The
Fund, or the Fund's authorized representatives, shall have access
to such books and records during the Custodian's normal business
hours. Upon the reasonable request of the Fund, copies of any such
books and records shall be provided by the Custodian to the Fund or
the Fund's authorized representative, and the Fund shall reimburse
the Custodian its expenses of providing such copies. Upon
reasonable request of the Fund, the Custodian shall provide in hard
copy or on micro-film, whichever the Custodian elects, any records
included in any such delivery which are maintained by the Custodian
on a computer disc, or are similarly maintained, and the Fund shall
reimburse the Custodian for its expenses of providing such hard
copy or micro-film.
14. The Custodian shall provide the Fund with any report
obtained by the Custodian on the system of internal accounting
control of the Book-Entry system, each Depository or O.C.C., and
with such reports on its own systems of internal accounting control
as the Fund may reasonably request from time to time.
15. The Custodian shall furnish upon request annually to the
Fund a letter prepared by the Custodian's accountants with respect
to the Custodian's internal systems and controls in the form
generally provided by the Custodian to other investment companies
for which the Custodian acts as custodian.
16. The Fund agrees to indemnify the Custodian against and
save the Custodian harmless from all liability, claims, losses and
demands whatsoever, including attorney's fees, howsoever arising
out of, or related to, the Custodian's performance of its
obligations under this Agreement, except for any such liability,
claim, loss and demand arising out of the negligence, bad faith, or
willful misconduct of the Custodian, any co-Custodian or
subcustodian appointed by the Custodian, or that of the officers,
employees, or agents of any of them.
17. Subject to the foregoing provisions of this Agreement,
the Custodian shall deliver and receive Securities, and receipts
with respect to such Securities, and shall make and receive
payments only in accordance with the customs prevailing from time
to time among brokers or dealers in such Securities and, except as
may otherwise be provided by this Agreement or as may be in
accordance with such customs, shall make payment for Securities
only against delivery thereof and deliveries of Securities only
against payment therefor.
18. The Custodian will comply with the procedures, guidelines
or restrictions ("Procedures") adopted by the Fund from time to
time for particular types of investments or transactions, e.g.,
Repurchase Agreements and Reverse Repurchase Agreements, provided
that the Custodian has received from the Fund a copy of such
Procedures. If within ten days after receipt of any such
Procedures, the Custodian determines in good faith that it is
unreasonable for it to comply with any new procedures, guidelines
or restrictions set forth therein, it may within such ten day
period send notice to the Fund that it does not intend to comply
with those new procedures, guidelines or restrictions which it
identifies with particularity in such notice, in which event the
Custodian shall not be required to comply with such identified
procedures, guidelines or restrictions; provided, however, that,
anything to the contrary set forth herein or in any other agreement
with the Fund, if the Custodian identifies procedures, guidelines
or restrictions with which it does not intend to comply, the Fund
shall be entitled to terminate this Agreement without cost or
penalty to the Fund upon thirty days' written notice.
19. Whenever the Custodian has the authority to deduct monies
from the account for a series without a Certificate, it shall
notify the Fund within one business day of such deduction and the
reason for it. Whenever the Custodian has the authority to sell
Securities or any other property of the Fund on behalf of any
Series without a Certificate, the Custodian will notify the Fund of
its intention to do so and afford the Fund the reasonable
opportunity to select which Securities or other property it wishes
to sell on behalf of such Series. If the Fund does not promptly
sell sufficient Securities or Deposited Property on behalf of the
Series, then, after notice, the Custodian may proceed with the
intended sale.
20. The Custodian shall have no duties or responsibilities
whatsoever except such duties and responsibilities as are
specifically set forth or referred to in this Agreement, and no
covenant or obligation shall be implied in this Agreement against
the Custodian.
ARTICLE XVI
TERMINATION
1. Except as provided in paragraph 3 of this Article, this
Agreement shall continue until terminated by either the Custodian
giving to the Fund, or the Fund giving to the Custodian, a notice
in writing specifying the date of such termination, which date
shall be not less than 60 days after the date of the giving of such
notice. In the event such notice or a notice pursuant to paragraph
3 of this Article is given by the Fund, it shall be accompanied by
a copy of a resolution of the Board of Trustees of the Fund,
certified by an Officer and the Secretary or an Assistant Secretary
of the Fund, electing to terminate this Agreement and designating
a successor custodian or custodians, each of which shall be
eligible to serve as a custodian for the Securities of a management
investment company under the Investment Company Act of 1940. In
the event such notice is given by the Custodian, the Fund shall, on
or before the termination date, deliver to the Custodian a copy of
a resolution of the Board of Trustees of the Fund, certified by the
Secretary or any Assistant Secretary, designating a successor
custodian or custodians. In the absence of such designation by the
Fund, the Custodian may designate a successor custodian which shall
be a bank or trust company eligible to serve as a custodian for
Securities of a management investment company under the Investment
Company Act of 1940 and which is acceptable to the Fund. Upon the
date set forth in such notice this Agreement shall terminate, and
the Custodian shall upon receipt of a notice of acceptance by the
successor custodian on that date deliver directly to the successor
custodian all Securities and moneys then owned by the Fund and held
by it as Custodian, after deducting all fees, expenses and other
amounts for the payment or reimbursement of which it shall then be
entitled.
2. If a successor custodian is not designated by the Fund
or the Custodian in accordance with the preceding paragraph, the
Fund shall upon the date specified in the notice of termination of
this Agreement and upon the delivery by the Custodian of all
Securities (other than Securities held in the Book-Entry System
which cannot be delivered to the Fund) and moneys then owned by the
Fund be deemed to be its own custodian and the Custodian shall
thereby be relieved of all duties and responsibilities pursuant to
this Agreement arising thereafter, other than the duty with respect
to Securities held in the Book Entry System which cannot be
delivered to the Fund to hold such Securities hereunder in
accordance with this Agreement.
3. Notwithstanding the foregoing, the Fund may terminate
this Agreement upon the date specified in a written notice in the
event of the "Bankruptcy" of The Bank of New York. As used in this
sub-paragraph, the term "Bankruptcy" shall mean The Bank of New
York's making a general assignment, arrangement or composition with
or for the benefit of its creditors, or instituting or having
instituted against it a proceeding seeking a judgment of insolvency
or bankruptcy or the entry of a order for relief under any
applicable bankruptcy law or any other relief under any bankruptcy
or insolvency law or other similar law affecting creditors rights,
or if a petition is presented for the winding up or liquidation of
the party or a resolution is passed for its winding up or
liquidation, or it seeks, or becomes subject to, the appointment of
an administrator, receiver, trustee, custodian or other similar
official for it or for all or substantially all of its assets or
its taking any action in furtherance of, or indicating its consent
to approval of, or acquiescence in, any of the foregoing.
ARTICLE XVII
TERMINAL LINK
1. At no time and under no circumstances shall the Fund be
obligated to have or utilize the Terminal Link, and the provisions
of this Article shall apply if, but only if, the Fund in its sole
and absolute discretion elects to utilize the Terminal Link to
transmit Certificates to the Custodian.
2. The Terminal Link shall be utilized only for the purpose
of the Fund providing Certificates to the Custodian and the
Custodian providing notices to the Fund and only after the Fund
shall have established access codes and internal safekeeping
procedures to safeguard and protect the confidentiality and
availability of such access codes. Each use of the Terminal Link
by the Fund shall constitute a representation and warranty that at
least two officers have each utilized an access code that such
internal safekeeping procedures have been established by the Fund,
and that such use does not contravene the Investment Company Act of
1940 and the rules and regulations thereunder.
3. Each party shall obtain and maintain at its own cost and
expense all equipment and services, including, but not limited to
communications services, necessary for it to utilize the Terminal
Link, and the other party shall not be responsible for the
reliability or availability of any such equipment or services,
except that the Custodian shall not pay any communications costs of
any line leased by the Fund, even if such line is also used by the
Custodian.
4. The Fund acknowledges that any data bases made available
as part of, or through the Terminal Link and any proprietary data,
software, processes, information and documentation (other than any
such which are or become part of the public domain or are legally
required to be made available to the public) (collectively, the
"Information"), are the exclusive and confidential property of the
Custodian. The Fund shall, and shall cause others to which it
discloses the Information, to keep the Information confidential by
using the same care and discretion it uses with respect to its own
confidential property and trade secrets, and shall neither make nor
permit any disclosure without the express prior written consent of
the Custodian.
5. Upon termination of this Agreement for any reason, each
Fund shall return to the Custodian any and all copies of the
Information which are in the Fund's possession or under its
control, or which the Fund distributed to third parties. The
provisions of this Article shall not affect the copyright status of
any of the Information which may be copyrighted and shall apply to
all Information whether or not copyrighted.
6. The Custodian reserves the right to modify the Terminal
Link from time to time without notice to the Fund, except that the
Custodian shall give the Fund notice not less than 75 days in
advance of any modification which would materially adversely affect
the Fund's operation, and the Fund agrees not to modify or attempt
to modify the Terminal Link without the Custodian's prior written
consent. The Fund acknowledges that any software provided by the
Custodian as part of the Terminal Link is the property of the
Custodian and, accordingly, the Fund agrees that any modifications
to the same, whether by the Fund or the Custodian and whether with
or without the Custodian's consent, shall become the property of
the Custodian.
7. Neither the Custodian nor any manufacturers and suppliers
it utilizes or the Fund utilizes in connection with the Terminal
Link makes any warranties or representations, express or implied,
in fact or in law, including but not limited to warranties of
merchantability and fitness for a particular purpose.
8. Each party will cause its officers and employees to treat
the authorization codes and the access codes applicable to Terminal
Link with extreme care, and irrevocably authorizes the other to act
in accordance with and rely on Certificates and notices received by
it through the Terminal Link. Each party acknowledges that it is
its responsibility to assure that only its authorized persons use
the Terminal Link on its behalf, and that a party shall not be
responsible nor liable for use of the Terminal Link on behalf of
the other party by unauthorized persons of such other party.
9. Notwithstanding anything else in this Agreement to the
contrary, neither party shall have any liability to the other for
any losses, damages, injuries, claims, costs or expenses arising as
a result of a delay, omission or error in the transmission of a
Certificate or notice by use of the Terminal Link except for money
damages for those suffered as the result of the negligence, bad
faith or willful misconduct of such party or its officers,
employees or agents in an amount not exceeding for any incident
$100,000; provided, however, that a party shall have no liability
under this Section 9 if the other party fails to comply with the
provisions of Section 11.
10. Without limiting the generality of the foregoing, in no
event shall either party or any manufacturer or supplier of its
computer equipment, software or services relating to the Terminal
Link be responsible for any special, indirect, incidental or
consequential damages which the other party may incur or experience
by reason of its use of the Terminal Link even if such party,
manufacturer or supplier has been advised of the possibility of
such damages, nor with respect to the use of the Terminal Link
shall either party or any such manufacturer or supplier be liable
for acts of God, or with respect to the following to the extent
beyond such person's reasonable control: machine or computer
breakdown or malfunction, interruption or malfunction of
communication facilities, labor difficulties or any other similar
or dissimilar cause.
11. The Fund shall notify the Custodian of any errors,
omissions or interruptions in, or delay or unavailability of, the
Terminal Link as promptly as practicable, and in any event within
24 hours after the earliest of (i) discovery thereof, and (ii) in
the case of any error, the date of actual receipt of the earliest
notice which reflects such error, it being agreed that discovery
and receipt of notice may only occur on a business day. The
Custodian shall promptly advise the Fund whenever the Custodian
learns of any errors, omissions or interruption in, or delay or
unavailability of, the Terminal Link.
12. Each party shall, as soon as practicable after its
receipt of a Certificate or a notice transmitted by the Terminal
Link, verify to the other party by use of the Terminal Link its
receipt of such Certificate or notice, and in the absence of such
verification the party to which the Certificate or notice is sent
shall not be liable for any failure to act in accordance with such
Certificate or notice and the sending party may not claim that such
Certificate or notice was received by the other party.
ARTICLE XVIII
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate signed by
two of the present Officers of the Fund under its seal, setting
forth the names and the signatures of the present Authorized
Persons. The Fund agrees to furnish to the Custodian a new
Certificate in similar form in the event that any such present
Authorized Person ceases to be an Authorized Person or in the event
that other or additional Authorized Persons are elected or
appointed. Until such new Certificate shall be received, the
Custodian shall be entitled to rely and to act upon Oral
Instructions, Written Instructions, or signatures of the present
Authorized Persons as set forth in the last delivered Certificate
to the extent provided by this Agreement.
2. Annexed hereto as Appendix B is a Certificate signed by
two of the present Officers of the Fund under its seal, setting
forth the names and the signatures of the present Officers of the
Fund. The Fund agrees to furnish to the Custodian a new
Certificate in similar form in the event any such present officer
ceases to be an officer of the Fund, or in the event that other or
additional officers are elected or appointed. Until such new
Certificate shall be received, the Custodian shall be entitled to
rely and to act upon the signatures of the officers as set forth in
the last delivered Certificate to the extent provided by this
Agreement.
3. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Custodian, other than
any Certificate or Written Instructions, shall be sufficiently
given if addressed to the Custodian and mailed or delivered to it
at its offices at 90 Washington Street, New York, New York 10286,
or at such other place as the Custodian may from time to time
designate in writing.
4. Any notice or other instrument in writing, authorized or
rehired by this Agreement to be given to the Fund shall be
sufficiently given if addressed to the Fund and mailed or delivered
to it at its office at the address for the Fund first above
written, or at such other place as the Fund may from time to time
designate in writing.
5. This Agreement constitutes the entire agreement between
the parties, replaces all prior agreements and may not be amended
or modified in any manner except by a written agreement executed by
both parties with the same formality as this Agreement and approved
by a resolution of the Board of Trustees of the Fund, except that
Appendices A and B may be amended unilaterally by the Fund without
such an approving resolution.
6. This Agreement shall extend to and shall be binding upon
the parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable by
the Fund without the written consent of the Custodian, or by the
Custodian or The Bank of New York without the written consent of
the Fund, authorized or approved by a resolution of the Fund's
Board of Trustees. For purposes of this paragraph, no merger,
consolidation, or amalgamation of the Custodian, The Bank of New
York, or the Fund shall be deemed to constitute an assignment of
this Agreement.
7. This Agreement shall be construed in accordance with the
laws of the State of New York without giving effect to conflict of
laws principles thereof. Each party hereby consents to the
jurisdiction of a state or federal court situated in New York City,
New York in connection with any dispute arising hereunder and
hereby waives its right to trial by jury.
8. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but
such counterparts shall, together, constitute only one instrument.
9. A copy of the Declaration of Trust of the Fund is on file
with the Secretary of The Commonwealth of Massachusetts, and notice
is hereby given that this instrument is executed on behalf of the
Board of Trustees of the Fund as Trustees and not individually and
that the obligations of the instrument are not binding upon any of
the Trustees or shareholders individually but are binding upon the
assets and property of the Fund; provided, however, that the
Declaration of Trust of the Fund provides that the assets of a
particular series of the Fund shall under no circumstances be
charges with liabilities attributable to any other series of the
Fund and that all persons extending credit to, or contracting with
or having any claim against a particular series of the Fund shall
look only to the assets of that particular series for payment of
such credit, contract or claim.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective Officers, thereunto
duly authorized and their respective seals to be hereunto affixed,
as of the day and year first above written.
OPPENHEIMER DEVELOPING MARKETS FUND
By:--------------------------------
Andrew J. Donohue, Secretary
[SEAL]
Attest:
By:----------------------------------------
Robert G. Zack, Assistant Secretary
THE BANK OF NEW YORK
[SEAL] By:--------------------------------
-----------------------, Vice President
Attest:
- -----------------------------------
<PAGE>
APPENDIX A
I, Andrew J. Donohue, Secretary, and I, Robert G. Zack, Assistant
Secretary, of Oppenheimer Developing Markets Fund, a Delaware
business trust (the "Fund") do hereby certify that:
The following individuals have been duly authorized by the Board
of Trustees of the Fund in conformity with the Fund's Declaration
of Trust and By-Laws to give Oral instructions and Written
Instructions on behalf of the Fund, except that those persons
designated as being an "Officer of OSS" shall be an Authorized
Person only for purposes of Articles XII and XIII. The signatures
set forth opposite their respective names are their true and
correct signatures.
Name Position Signature
George C. Bowen Treasurer
Andrew J. Donohue Senior Vice President OFI
Robert G. Zack Assistant Secretary
Scott Farrar Assistant Treasurer
Mitchell J. Lindauer Vice President OFI
Katherine P. Feld Vice President OFI
Robert Bishop Assistant Treasurer
Robert Kelly Supervisor OFI
Mark Binning Securities Coordinator
Janelle Gellerman Controller OFI
Craig Kinnunen Controller OFI
Nancy Fulton Controller OFI
Kim Harbage Controller OFI
Chang Lee Securities Coordinator OFI
Daniel Baxten Securities Coordinator OFI
IN WITNESS WHEREOF, I hereunto set my hand in the seal of
Oppenheimer Developing Markets Fund as of the ___th day of
________, 1996.
----------------------------------
Andrew J. Donohue, Vice President
-----------------------------------
Robert G. Zack, Assistant Secretary<PAGE>
<PAGE>
APPENDIX B
I, Andrew J. Donohue, Secretary, and I, Robert G. Zack, Assistant
Secretary, of Oppenheimer Developing Markets Fund, a Delaware
business trust (the "Fund"), do hereby certify that:
The following individuals for whom a position other than
"Officer of OSS" is specified serve in the following positions with
the Fund and each has been duly elected or appointed by the Board
of Trustees of the Fund to each such position and qualified
therefor in conformity with the Fund's Declaration of Trust and By-
Laws. With respect to the following individuals for whom a
position of "Officer of OSS" is specified, each such individual has
been designated by a resolution of the Board of Trustees of the
Fund to be an Officer for purposes of the Fund's Custody Agreement
with The Bank of New York, but only for purposes of Articles XII
and XIII thereof and a certified copy of such resolution is
attached hereto. The signatures of each individual below set forth
opposite their respective names are their true and correct
signatures:
Name Position Signature
George C. Bowen Treasurer
Andrew J. Donohue Senior Vice President OFI
Robert G. Zack Assistant Secretary
Scott Farrar Assistant Treasurer
Mitchell J. Lindauer Vice President OFI
Katherine P. Feld Vice President OFI
Robert Bishop Assistant Treasurer
Robert Kelly Supervisor OFI
Mark Binning Securities Coordinator
Janelle Gellerman Controller OFI
Craig Kinnunen Controller OFI
Nncy Fulton Controller OFI
Kim Harbage Controller OFI
Chang Lee Securities Coordinator OFI
Daniel Baxten Securities Coordinator OFI
IN WITNESS WHEREOF, I hereunto set my hand in the seal of
Oppenheimer Developing Markets Fund, as of the ____ day of _______,
1996.
_________________________________
Andrew J. Donohue, Vice President
__________________________________
Robert G. Zack, Assistant Secretary
<PAGE>
APPENDIX C
The undersigned, Andrew J. Donohue, hereby certifies that he is
the duly elected and acting Secretary of Oppenheimer Developing
Markets Fund (the "Fund"), further certifies that the following
resolutions were adopted by the Board of Trustees of the Fund at a
meeting duly held on ____________ 1996 at which a quorum was at all
times present and that such resolutions have not been modified or
rescinded and are in full force and effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to
a Custody Agreement between The Bank of New York and the Fund
(the "Custody Agreement") is authorized and instructed on a
continuous and ongoing basis to act in accordance with, and to
rely on instructions by the Fund to the Custodian communicated
by a Terminal Link as defined in the Custody Agreement.
RESOLVED, that the Fund shall establish access codes and grant
use of such access codes only to officers of the Fund as defined
in the Custody Agreement, and shall establish internal
safekeeping procedures to safeguard and protect the
confidentiality and availability of such access codes.
RESOLVED, that Officers of the Fund as defined in the Custody
Agreement shall, following the establishment of such access
codes and such internal safekeeping procedures, advise the
Custodian that the same have been established by delivering a
Certificate, as defined in the Custody Agreement, and the
Custodian shall be entitled to rely upon such advise.
IN WITNESS WHEREOF, I hereunto set my hand in the seal of
Oppenheimer Developing Markets Fund as of the _____ day of
___________, 1996.
_________________________________
Andrew J. Donohue, Secretary
<PAGE>
APPENDIX D
I, _________________, a Vice President with THE BANK OF NEW
YORK, do hereby designate the following publications:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
JJ Kenney Municipal Bond Service
London Financial Times
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
IN WITNESS WHEREOF, I hereunto set my hand in the seal of The Bank
of New York, as of the _____ day of ___________, 1996.
________________________________
Jorge Ramos, Vice President
<PAGE>
APPENDIX E
The following books and records pertaining to Fund shall be
prepared and maintained by the Custodian and shall be the property
of the Fund:
None.
<PAGE>
EXHIBIT A
CERTIFICATION
The undersigned, Robert G. Zack, hereby certifies that he is the
duly elected and acting Assistant Secretary of Oppenheimer
Developing Markets Fund, a Delaware business trust (the "Fund"),
and further certifies that the following resolution was adopted by
the Board of Trustees of the Fund at a meeting duly held on
_________________, 1996, at which a quorum was at all times present
and that such resolution has not been modified or rescinded and is
in full force and effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian
pursuant to a Custody Agreement between The Bank of New
York and the Fund (the "Custody Agreement") is
authorized and instructed on a continuous and ongoing
basis to deposit in the Book-Entry System, as defined in
the Custody Agreement, all Securities eligible for
deposit therein, regardless of the Series to which the
same are specifically allocated, and to utilize the
Book-Entry System to the extent possible in connection
with its performance thereunder, including, without
limitation, in connection with settlements of purchases
and sales of Securities, loans of Securities, and
deliveries and returns of Securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of
Oppenheimer International Growth Fund, as of the ______ day of
________, 1996.
__________________________________
Robert G. Zack, Assistant Secretary
[SEAL]
<PAGE>
EXHIBIT B
The undersigned, Andrew J. Donohue, hereby certifies that he is
the duly elected and acting Secretary of Oppenheimer Developing
Markets Fund, a Delaware business trust (the "Fund"), and further
certifies that the following resolution was adopted by the Board of
Trustees of the Fund at a meeting duly held on ________________,
1996, at which a quorum was at all times present and that such
resolution has not been modified or rescinded and is in full force
and effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian
pursuant to a Custody Agreement between The Bank of New
York and the Fund (the "Custody Agreement") is
authorized and instructed on a continuous and ongoing
basis until such time as it receives a Certificate, as
defined in the Custody Agreement, to the contrary to
deposit in The Depository Trust Company ("DTC") as a
"Depository" as defined in the Custody Agreement, all
Securities eligible for deposit therein, regardless of
the Series to which the same are specifically allocated,
and to utilize DTC to the extent possible in connection
with its performance thereunder, including, without
limitation, in connection with settlements of purchases
and sales of Securities, loans of Securities, and
deliveries and returns of Securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of
Oppenheimer International Growth Fund, as of the _______ day of
_______, 1996.
__________________________________
Andrew J. Donohue, Secretary
[SEAL]
<PAGE>
EXHIBIT B-1
CERTIFICATION
The undersigned, Andrew J. Donohue, hereby certifies that he is
the duly elected and acting Secretary of Oppenheimer Developing
Markets Fund, a Delaware business trust (the "Fund"), and further
certifies that the following resolution was adopted by the Board of
Trustees of the Fund at a meeting duly held on February 22, 1996,
at which a quorum was at all times present and that such resolution
has not been modified or rescinded and is in full force and effect
as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian
pursuant to a Custody Agreement between The Bank of New
York and the Fund (the "Custody Agreement") is
authorized and instructed on a continuous and ongoing
basis until such time as it receives a Certificate, as
defined in the Custody Agreement, to the contrary to
deposit in the Participants Trust Company as a
Depository, as defined in the Custody Agreement, all
Securities eligible for deposit therein, regardless of
the Series to which the same are specifically allocated,
and to utilize the Participants Trust Company to the
extent possible in connection with its performance
thereunder, including, without limitation, in connection
with settlements of purchases and sales of Securities,
loans of Securities, and deliveries and return of
Securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of
Oppenheimer Developing Markets Fund, as of the ______ day of
_______, 1996.
_________________________________
Andrew J. Donohue, Secretary
[SEAL]
<PAGE>
EXHIBIT C
CERTIFICATION
The undersigned, Andrew J. Donohue, hereby certifies that he is
duly elected and acting Secretary of Oppenheimer Developing Markets
Fund, a Delaware business trust (the "Fund") and further certifies
that the following resolution was adopted by the Board of Trustees
of the Fund at a meeting duly held on _________________, 1996, at
which a quorum was at all times present and that such resolution
has not been modified or rescinded and is in full force and effect
as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian
pursuant to a Custody Agreement between The Bank of New
York and the Fund (the "Custody Agreement") is
authorized and instructed on a continuous and ongoing
basis until such time as it receives a Certificate, as
defined in the Custody Agreement, to the contrary, to
accept, utilize and act with respect to Clearing Member
confirmations for Options and transactions in Options,
regardless of the Series to which the same are
specifically allocated, as such terms are defined in the
Custody Agreement, as provided in the Custody Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of
Oppenheimer Developing Markets Fund, as of the _____ day of
_______, 1996.
___________________________________
Andrew J. Donohue, Secretary
[SEAL]
<PAGE>
EXHIBIT D
[THE FORM OF FOREIGN SUBCUSTODIAN AGREEMENT VARIES DEPENDING ON THE
COUNTRY. PLEASE CONTACT OPPENHEIMERFUNDS, INC FOR A SPECIFIC FORM
OF FOREIGN SUBCUSTODIAN AGREEMENT]
Exhibit 24(b)(15)(i)
SERVICE PLAN AND AGREEMENT
WITH
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
FOR CLASS A SHARES OF
OPPENHEIMER DEVELOPING MARKETS FUND
SERVICE PLAN AND AGREEMENT (the "Plan") dated the _______ day of
_________, 1996, by and between OPPENHEIMER DEVELOPING MARKETS 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 personal service and
maintenance of shareholders accounts 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
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 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.
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 ______________, 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 until
____________ 1996 and 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 DEVELOPING MARKETS FUND
By:________________________________
Andrew J. Donohue, Secretary
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
By:________________________________
Katherine P. Feld
Vice President & Secretary
prosp\785.12a
Exhibit 24(b)(15)(ii)
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
WITH
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
FOR CLASS B SHARES OF
OPPENHEIMER DEVELOPING MARKETS FUND
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the "Plan") dated the
____ day of ____________, 1996, by and between OPPENHEIMER
DEVELOPING MARKETS 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 (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 Distributor is authorized under the Plan to pay "Recipients,"
as hereinafter defined, for rendering (1) distribution assistance
in connection with the sale of Shares and/or (2) administrative
support services with respect to Accounts. Such Recipients are
intended to have certain rights as third-party beneficiaries under
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)
Article III, Section 26, of the Rules of Fair Practice of the
National Association of Securities Dealers, Inc., or its successor
(the "NASD Rules of Fair Practice") 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 Securities and Exchange
Commission.
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. 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 person or entity as a
Recipient, whereupon such person's or 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 brokerage or other customers, or investment
advisory or other clients of such Recipient 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 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) The Fund will make payments to the Distributor, (i)
within forty-five (45) days of the end of each calendar
quarter, in the aggregate amount of 0.0625% (0.25% 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 (the "Service Fee"), plus (ii)
within ten (10) days of the end of each month, in the
aggregate amount of 0.1875% (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 six years or less
(the "Maximum Holding Period"). Such Service Fee payments
received from the Fund will compensate the Distributor and
Recipients for providing administrative support services with
respect to Accounts. Such Asset-Based Sales Charge payments
received from the Fund will compensate the Distributor and
Recipients for providing distribution assistance in connection
with the sale of Shares.
The administrative support services in connection with
the Accounts to be rendered by Recipients 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 of personal services and/or the maintenance
of Accounts, as the Distributor or the Fund may reasonably
request.
The distribution assistance in connection with the sale
of Shares to be rendered by the Distributor and Recipients may
include, but shall not be limited to, the following:
distributing sales literature and prospectuses other than
those furnished to current holders of the Fund's Shares
("Shareholders"), and providing such other information and
services in connection with the distribution of Shares as the
Distributor or the Fund may reasonably request.
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 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 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, 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.
(b) The Distributor shall make service fee payments to any
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, to be set from time to time
by a majority of the Independent Trustees.
Alternatively, the Distributor may, at its sole option,
make service fee payments ("Advance Service Fee Payments") to
any Recipient quarterly, within forty-five (45) days of the
end of each calendar quarter, at a rate not to exceed (i)
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) 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, subject to reduction or chargeback so
that the Advance Service Fee Payments do not exceed the limits
on payments to Recipients that are, or may be, imposed by
Article III, Section 26, of the NASD Rules of Fair Practice.
In the event Shares are redeemed less than one year after the
date such Shares were sold, the Recipient is obligated and
will repay to 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 Advance Service Fee Payments described in part (i) of
this paragraph (b) may, at the Distributor's sole option, be
made more often than quarterly, and sooner than the end of the
calendar quarter. 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 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 direct the
Distributor to increase or decrease the Minimum Holding Period
or the Minimum Qualified Holdings. The Distributor shall
notify all Recipients of the Minimum Qualified Holdings,
Maximum Holding Period and Minimum Holding Period, if any, 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. 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.
(c) The Service Fee and the Asset-Based Sales Charge on
Shares are subject to reduction or elimination of such amounts
under the limits to which the Distributor is, or may become,
subject under Article III, Section 26, of the NASD Rules of
Fair Practice. The distribution assistance and administrative
support 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 in advance of, and\or 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; (iv) paying other
direct distribution costs, including without limitation the
costs of sales literature, advertising and prospectuses (other
than those furnished to current Shareholders) and state "blue
sky" registration expenses; and (v) any service rendered by
the Distributor that a Recipient may render pursuant to part
(a) of this Section 3. Such services include distribution
assistance and administrative support services rendered in
connection with Shares acquired (i) by purchase, (ii) in
exchange for shares of another investment company for which
the Distributor serves as distributor or sub-distributor, or
(ii) pursuant to a plan of reorganization to which the Fund is
a party. In the event that the Board should have reason to
believe 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.
(d) 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, from Asset-Based
Sales Charge payments or from its borrowings.
(e) 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. In no event shall the amounts to
be paid to the Distributor exceed the rate of fees to be paid
by the Fund to the Distributor set forth in paragraph (a) of
this section 3.
4. Selection and Nomination of Trustees. While this Plan is in
effect, the selection and nomination of those persons to be
Trustees of the Fund who are not "interested persons" of the Fund
("Disinterested Trustees") shall be committed to the discretion of
such Disinterested Trustees. Nothing herein shall prevent the
Disinterested 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 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 services rendered in connection with the
distribution of the Shares, the amount of all payments made 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 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
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
Plan has been approved by a vote of the Board and its Independent
Trustees cast in person at a meeting called on ____________ 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
until ___________ 1996 and 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 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
without approval of the Class B Shareholders, in the manner
described above, 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 voting securities of the
Class. 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 DEVELOPING MARKETS FUND
By:________________________________
Andrew J. Donohue, Secretary
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
By:__________________________________
Katherine P. Feld
Vice President & Secretary
prosp\785.12b
Exhibit 24(b)(15)(iii)
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
WITH
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
FOR CLASS C SHARES OF
OPPENHEIMER DEVELOPING MARKETS FUND
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the "Plan") dated the
____ day of ________ 1996, by and between OPPENHEIMER DEVELOPING
MARKETS 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 (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 Distributor is authorized under the Plan to pay "Recipients,"
as hereinafter defined, for rendering (1) distribution assistance
in connection with the sale of Shares and/or (2) administrative
support services with respect to Accounts. Such Recipients are
intended to have certain rights as third-party beneficiaries under
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)
Article III, Section 26, of the Rules of Fair Practice of the
National Association of Securities Dealers, Inc., or its successor
(the "NASD Rules of Fair Practice") 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 Securities and Exchange
Commission.
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. 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 person or entity as a
Recipient, whereupon such person's or 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 brokerage or other customers, or investment
advisory or other clients of such Recipient 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 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) The Fund will make payments to the Distributor, within
forty-five (45) days of the end of each calendar quarter, in
the aggregate amount (i) of 0.0625% (0.25% 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 (the "Service Fee"), plus (ii) 0.1875% (0.75% 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 (the "Asset Based Sales Charge").
Such Service Fee payments received from the Fund will
compensate the Distributor and Recipients for providing
administrative support services with respect to Accounts.
Such Asset Based Sales Charge payments received from the Fund
will compensate the Distributor and Recipients for providing
distribution assistance in connection with the sale of Shares.
The administrative support services in connection with
the Accounts to be rendered by Recipients 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 of personal services and/or the maintenance
of Accounts, as the Distributor or the Fund may reasonably
request.
The distribution assistance in connection with the sale
of Shares to be rendered by the Distributor and Recipients may
include, but shall not be limited to, the following:
distributing sales literature and prospectuses other than
those furnished to current holders of the Fund's Shares
("Shareholders"), and providing such other information and
services in connection with the distribution of Shares as the
Distributor or the Fund may reasonably request.
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 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 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, 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.
(b) The Distributor shall make service fee payments to any
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, to be set from time to time
by a majority of the Independent Trustees.
Alternatively, the Distributor may, at its sole option,
make service fee payments ("Advance Service Fee Payments") to
any Recipient quarterly, within forty-five (45) days of the
end of each calendar quarter, at a rate not to exceed (i)
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) 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, subject to reduction or chargeback so
that the Advance Service Fee Payments do not exceed the limits
on payments to Recipients that are, or may be, imposed by
Article III, Section 26, of the NASD Rules of Fair Practice.
In the event Shares are redeemed less than one year after the
date such Shares were sold, the Recipient is obligated and
will repay to 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 Advance Service Fee Payments described in part (i) of
this paragraph (b) may, at the Distributor's sole option, be
made more often than quarterly, and sooner than the end of the
calendar quarter. 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 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 direct the
Distributor to increase or decrease the Minimum Holding Period
or the Minimum Qualified Holdings. The Distributor shall
notify all Recipients of the Minimum Qualified Holdings,
Maximum Holding Period and Minimum Holding Period, if any, 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. 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.
(c) The Service Fee and the Asset-Based Sales Charge on
Shares are subject to reduction or elimination of such amounts
under the limits to which the Distributor is, or may become,
subject under Article III, Section 26, of the NASD Rules of
Fair Practice. The distribution assistance and administrative
support 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 in advance of, and\or 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; (iv) paying other
direct distribution costs, including without limitation the
costs of sales literature, advertising and prospectuses (other
than those furnished to current Shareholders) and state "blue
sky" registration expenses; and (v) any service rendered by
the Distributor that a Recipient may render pursuant to part
(a) of this Section 3. Such services include distribution
assistance and administrative support services rendered in
connection with Shares acquired (i) by purchase, (ii) in
exchange for shares of another investment company for which
the Distributor serves as distributor or sub-distributor, or
(ii) pursuant to a plan of reorganization to which the Fund is
a party. In the event that the Board should have reason to
believe 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.
(d) 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, from Asset-Based
Sales Charge payments or from its borrowings.
(e) 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. In no event shall the amounts to
be paid to the Distributor exceed the rate of fees to be paid
by the Fund to the Distributor set forth in paragraph (a) of
this section 3.
4. Selection and Nomination of Trustees. While this Plan is in
effect, the selection and nomination of those persons to be
Trustees of the Fund who are not "interested persons" of the Fund
("Disinterested Trustees") shall be committed to the discretion of
such Disinterested Trustees. Nothing herein shall prevent the
Disinterested 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 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 services rendered in connection with the
distribution of the Shares, the amount of all payments made 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 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
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
Plan has been approved by a vote of the Board and its Independent
Trustees cast in person at a meeting called on _______________
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
until ______________ 1996 and 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 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
without approval of the Class C Shareholders, in the manner
described above, 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 voting securities of the
Class. 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 DEVELOPING MARKETS FUND
By:________________________________
Andrew J. Donohue, Secretary
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
By: _______________________________
Katherine P. Feld
Vice President & Secretary
prosp\785.12c
OPPENHEIMER DEVELOPING MARKETS FUND
CERTIFIED RESOLUTIONS OF THE BOARD
APRIL 11, 1996
At a meeting of the Board for the above referenced fund (the
"Fund") held on April 11, 1996, the members thereof by unanimous
vote of those present adopted and approved the following
resolutions:
"RESOLVED, that Andrew J. Donohue or Robert G. Zack, and
each of them, be, and the same hereby is, appointed the attorney-
in-fact and agent of Bridget A. Macaskill, as President of the Fund
(Principal Executive Officer), and George C. Bowen, as Treasurer of
the Fund (Principal Financial and Accounting Officer), with full
power of substitution and resubstitution, to sign on the behalf of
such officers of the Fund any and all Registration Statements
(including any post-effective amendments to such Registration
Statements) under the Securities Act of 1933 and the Investment
Company Act of 1940 and any amendments and supplements thereto, and
other documents in connection thereunder, and to file the same,
with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission; and be it
further
RESOLVED, that Andrew J. Donohue or Robert G. Zack, and
each of them, hereby is authorized, empowered and directed, in the
name and on behalf of the Fund, to take such additional action and
to execute and deliver such additional documents and instruments as
any of them may deem necessary or appropriate to implement the
provisions of the foregoing resolution, the authority for the
taking of such action and the execution and delivery of such
documents and instruments of such documents and instruments to be
conclusively evidenced thereby."
In witness whereof, the undersigned has hereunto set his hand
this 11th day of April, 1996.
/s/ Robert G. Zack
____________________
Robert G. Zack
Assistant Secretary
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes
and appoints Andrew J. Donohue or Robert G. Zack, and each of them,
his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his
or her capacities as a trustee of OPPENHEIMER DEVELOPING MARKETS
FUND(the "Fund"), to sign on his (her) behalf any and all
Registration Statements (including any post-effective amendments to
Registration Statements) under the Securities Act of 1933, the
Investment Company Act of 1940 and any amendments and supplements
thereto, and other documents in connection thereunder, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises,
as fully as to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and each of them, may lawfully do or
cause to be done by virtue hereof.
Dated: April 11, 1996
/s/ Leon Levy
--------------
Leon Levy
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes
and appoints Andrew J. Donohue or Robert G. Zack, and each of them,
his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his
or her capacities as a trustee of OPPENHEIMER DEVELOPING MARKETS
FUND(the "Fund"), to sign on his (her) behalf any and all
Registration Statements (including any post-effective amendments to
Registration Statements) under the Securities Act of 1933, the
Investment Company Act of 1940 and any amendments and supplements
thereto, and other documents in connection thereunder, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises,
as fully as to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and each of them, may lawfully do or
cause to be done by virtue hereof.
Dated: April 11, 1996
/s/ Donald W. Spiro
-------------------
Donald W. Spiro
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes
and appoints Andrew J. Donohue or Robert G. Zack, and each of them,
his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his
or her capacities as a trustee of OPPENHEIMER DEVELOPING MARKETS
FUND(the "Fund"), to sign on his (her) behalf any and all
Registration Statements (including any post-effective amendments to
Registration Statements) under the Securities Act of 1933, the
Investment Company Act of 1940 and any amendments and supplements
thereto, and other documents in connection thereunder, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises,
as fully as to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and each of them, may lawfully do or
cause to be done by virtue hereof.
Dated: April 11, 1996
/s/ Benjamin Lipstein
---------------------
Benjamin Lipstein
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes
and appoints Andrew J. Donohue or Robert G. Zack, and each of them,
his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his
or her capacities as a trustee of OPPENHEIMER DEVELOPING MARKETS
FUND(the "Fund"), to sign on his (her) behalf any and all
Registration Statements (including any post-effective amendments to
Registration Statements) under the Securities Act of 1933, the
Investment Company Act of 1940 and any amendments and supplements
thereto, and other documents in connection thereunder, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises,
as fully as to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and each of them, may lawfully do or
cause to be done by virtue hereof.
Dated: April 11, 1996
/s/ Sidney M. Robbins
---------------------
Sidney M. Robbins
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes
and appoints Andrew J. Donohue or Robert G. Zack, and each of them,
his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his
or her capacities as a trustee of OPPENHEIMER DEVELOPING MARKETS
FUND (the "Fund"), to sign on his (her) behalf any and all
Registration Statements (including any post-effective amendments to
Registration Statements) under the Securities Act of 1933, the
Investment Company Act of 1940 and any amendments and supplements
thereto, and other documents in connection thereunder, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises,
as fully as to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and each of them, may lawfully do or
cause to be done by virtue hereof.
Dated: April 11, 1996
/s/ Russell S. Reynolds, Jr.
----------------------------
Russell S. Reynolds, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes
and appoints Andrew J. Donohue or Robert G. Zack, and each of them,
his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his
or her capacities as a trustee of OPPENHEIMER DEVELOPING MARKETS
FUND(the "Fund"), to sign on his (her) behalf any and all
Registration Statements (including any post-effective amendments to
Registration Statements) under the Securities Act of 1933, the
Investment Company Act of 1940 and any amendments and supplements
thereto, and other documents in connection thereunder, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises,
as fully as to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and each of them, may lawfully do or
cause to be done by virtue hereof.
Dated: April 20, 1996
/s/ Pauline Trigere
-------------------
Pauline Trigere
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes
and appoints Andrew J. Donohue or Robert G. Zack, and each of them,
his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his
or her capacities as a trustee of OPPENHEIMER DEVELOPING MARKETS
FUND(the "Fund"), to sign on his (her) behalf any and all
Registration Statements (including any post-effective amendments to
Registration Statements) under the Securities Act of 1933, the
Investment Company Act of 1940 and any amendments and supplements
thereto, and other documents in connection thereunder, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises,
as fully as to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and each of them, may lawfully do or
cause to be done by virtue hereof.
Dated: April 11, 1996
/s/ Elizabeth B. Moynihan
--------------------------
Elizabeth B. Moynihan
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes
and appoints Andrew J. Donohue or Robert G. Zack, and each of them,
his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his capacity as
the Treasurer (Principal Financial and Accounting Officer) of
OPPENHEIMER DEVELOPING MARKETS FUND (the "Fund"), to sign on his
behalf any and all Registration Statements (including any post-
effective amendments to Registration Statements) under the
Securities Act of 1933, the Investment Company Act of 1940 and any
amendments and supplements thereto, and other documents in
connection thereunder, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully as to all intents
and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, and each
of them, may lawfully do or cause to be done by virtue hereof.
Dated: April 11, 1996
/s/ George Bowen
-----------------
George Bowen
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes
and appoints Andrew J. Donohue or Robert G. Zack, and each of them,
his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his
or her capacities as a trustee of OPPENHEIMER DEVELOPING MARKETS
FUND(the "Fund"), to sign on his (her) behalf any and all
Registration Statements (including any post-effective amendments to
Registration Statements) under the Securities Act of 1933, the
Investment Company Act of 1940 and any amendments and supplements
thereto, and other documents in connection thereunder, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises,
as fully as to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and each of them, may lawfully do or
cause to be done by virtue hereof.
Dated: April 11, 1996
/s/ Edward V. Regan
-------------------
Edward V. Regan
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes
and appoints Andrew J. Donohue or Robert G. Zack, and each of them,
his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his
or her capacities as a trustee of OPPENHEIMER DEVELOPING MARKETS
FUND(the "Fund"), to sign on his (her) behalf any and all
Registration Statements (including any post-effective amendments to
Registration Statements) under the Securities Act of 1933, the
Investment Company Act of 1940 and any amendments and supplements
thereto, and other documents in connection thereunder, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises,
as fully as to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and each of them, may lawfully do or
cause to be done by virtue hereof.
Dated: April 11, 1996
/s/ Robert G. Galli
-------------------
Robert G. Galli
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes
and appoints Andrew J. Donohue or Robert G. Zack, and each of them,
his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his
or her capacities as a trustee and President (Principal Executive
Officer) of OPPENHEIMER DEVELOPING MARKETS FUND(the "Fund"), to
sign on his (her) behalf any and all Registration Statements
(including any post-effective amendments to Registration
Statements) under the Securities Act of 1933, the Investment
Company Act of 1940 and any amendments and supplements thereto, and
other documents in connection thereunder, and to file the same,
with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full
power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully as to all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents, and each of them, may lawfully do or cause to
be done by virtue hereof.
Dated: April 11, 1996
/s/ Bridget A. Macaskill
------------------------
Bridget A. Macaskill
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes
and appoints Andrew J. Donohue or Robert G. Zack, and each of them,
his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his
or her capacities as a trustee of OPPENHEIMER DEVELOPING MARKETS
FUND(the "Fund"), to sign on his (her) behalf any and all
Registration Statements (including any post-effective amendments to
Registration Statements) under the Securities Act of 1933, the
Investment Company Act of 1940 and any amendments and supplements
thereto, and other documents in connection thereunder, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises,
as fully as to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and each of them, may lawfully do or
cause to be done by virtue hereof.
Dated: April 11, 1996
/s/ Clayton K. Yeutter
-----------------------
Clayton K. Yeutter
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes
and appoints Andrew J. Donohue or Robert G. Zack, and each of them,
his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his
or her capacities as a trustee of OPPENHEIMER DEVELOPING MARKETS
FUND(the "Fund"), to sign on his (her) behalf any and all
Registration Statements (including any post-effective amendments to
Registration Statements) under the Securities Act of 1933, the
Investment Company Act of 1940 and any amendments and supplements
thereto, and other documents in connection thereunder, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises,
as fully as to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and each of them, may lawfully do or
cause to be done by virtue hereof.
Dated: April 11, 1996
/s/ Kenneth A. Randall
----------------------
Kenneth A. Randall
