Oppenheimer
Trinity Value FundSM
Prospectus dated November 28, 2000
Oppenheimer Trinity Value FundSM is a mutual fund that seeks long-term growth of
capital. The Fund invests primarily in "undervalued" stocks that are included in
the S&P 500/BARRA Value Index.
This Prospectus contains important information about the Fund's objective, its
investment policies, strategies and risks. It also contains important
information about how to buy and sell shares of the Fund and other account
features. Please read this Prospectus carefully before you invest and keep it
for future reference about your account. As with all mutual funds, the
Securities and Exchange Commission has not approved or disapproved the Fund's
securities nor has it determined that this Prospectus is accurate or complete.
It is a criminal offense to represent otherwise.
(OppenheimerFunds logo)
<PAGE>
Contents
About The Fund
The Fund's Investment Objective and Strategies
Main Risks of Investing in the Fund
The Fund's Performance
Fees and Expenses of the Fund
About the Fund's Investments
How the Fund is Managed
About Your Account
How to Buy Shares
Class A Shares
Class B Shares
Class C Shares
Class Y Shares
Special Investor Services
AccountLink
PhoneLink
OppenheimerFunds Internet Web Site
How to Sell Shares
By Mail
By Telephone
How to Exchange Shares
Shareholder Account Rules and Policies
Dividends, Capital Gains and Taxes
Financial Highlights
<PAGE>
A B O U T THE F U N D
The Fund's Investment Objective and Strategies
WHAT IS THE FUND'S INVESTMENT OBJECTIVE? The Fund's investment objective is
to seek long-term growth of capital.
WHAT DOES THE FUND MAINLY INVEST IN? The Fund invests in common stocks that are
included in the S&P 500/BARRA Value Index, a subset of stocks included in the
Standard & Poor's Composite Index of 500 Stocks ("S&P 500 Index"). The Fund does
not expect to invest in all of the stocks included in the S&P 500/BARRA Value
Index at the same time, and the Fund's investments in particular stocks may be
allocated in amounts that vary from the proportional weightings of those stocks
in the S&P 500/BARRA Value Index. Therefore, the Fund is not an "index" fund.
HOW DOES THE SUB-ADVISOR DECIDE WHAT SECURITIES TO BUY OR SELL?
The Fund's investment Manager, OppenheimerFunds, Inc. has engaged a Sub-Advisor,
Trinity Investment Management Corporation, to select the securities for the
Fund's portfolio. The Sub-Advisor primarily uses value-oriented investment
analyses to determine which stocks to buy and sell on behalf of the Fund. In
using these approaches, the Sub-Advisor looks for stocks that appear to be
temporarily undervalued by various measures. The Sub-Advisor seeks stocks having
prices that are relatively low in relation to what the team considers to be
their real worth or future prospects, with the expectation that the Fund will
realize appreciation in the value of its holdings.
The Sub-Advisor generally adheres to the following systematic,
disciplined investment process. While the Fund's investment process and its
implementation may vary in particular cases, the process includes the following
strategies:
o The Sub-Advisor considers stocks that are included in the S&P
500/BARRA Value Index as investments for the Fund's portfolio.
Under normal circumstances, at least 80% of the Fund's assets will
be invested in stocks included in the index.
o The Sub-Advisor uses proprietary quantitative valuation models
incorporating data derived from qualitative fundamental research
to identify stocks within the S&P 500/BARRA Value Index that it
considers undervalued. Individual stocks are selected for the
Fund's portfolio using a ranking process based on those valuation
models.
o Seeking to reduce the Fund's overall risk, the Sub-Advisor
diversifies the Fund's portfolio by allocating the Fund's
investments among industries within the S&P 500/BARRA Value Index.
The investment process is more fully described under "About the Fund's
Investments," below.
WHO IS THE FUND DESIGNED FOR? The Fund is designed primarily for investors
seeking capital growth in their investment over the long term. Investors should
be willing to assume the risks of short-term share price fluctuations that are
typical for a fund investing in stocks. The Fund is not designed for investors
requiring current income. Because of its focus on long-term growth, the Fund may
be appropriate for a portion of a retirement plan investment. The Fund is not a
complete investment program.
Main Risks of Investing in the Fund
All investments carry risks to some degree. The Fund's investments are
subject to changes in their value from a number of factors described below.
There is also the risk that poor security selection by the Sub-Advisor will
cause the Fund to underperform other funds having a similar objective.
RISKS OF INVESTING IN STOCKS. Stocks fluctuate in price, and their short-term
volatility at times may be great. Because the Fund focuses its investments in
stocks, the value of the Fund's portfolio will be affected by changes in the
stock markets. This market risk will affect the Fund's net asset value per
share, which will fluctuate as the values of the Fund's portfolio securities
change.
A variety of factors can affect the price of a particular stock and the
prices of individual stocks do not move in the same direction uniformly or at
the same time. Because the Fund limits its stock investments to stocks traded on
U.S. exchanges; the Fund's net asset value per share will be affected primarily
by changes in U.S. stock markets.
Additionally, stocks of issuers in a particular industry may be
affected by changes in economic conditions that affect that industry more than
others, or by changes in government regulations, availability of basic resources
or supplies, or other events. The Fund does not concentrate 25% or more of its
assets in any one industry, and the portfolio management team seeks to reduce
the effects of industry risks by diversifying the Fund's investments among 34
industry groups defined by the Sub-Advisor within the S&P 500/BARRA Value Index.
However, there is no assurance that this diversification strategy will reduce
fluctuations in the value of the Fund's shares related to events affecting the
stocks of issuers in a particular industry.
Other factors can affect a particular stock's price, such as poor
earnings reports by the issuer, loss of major customers, major litigation
against the issuer, or changes in government regulations affecting the issuer.
HOW RISKY IS THE FUND OVERALL? These risks collectively form the risk profile of
the Fund and can affect the value of the Fund's investments, its investment
performance and its price per share. Particular investments and important
strategies also have risks. These risks mean that you can lose money by
investing in the Fund. When you redeem your shares, they may be worth more or
less than what you paid for them. There is no assurance that the Fund will
achieve its investment objective.
The Fund focuses its investments in stocks for long-term growth of
capital, however, in the short term, stocks can be volatile. The price of the
Fund's shares can go up and down substantially. The Fund generally does not use
income-oriented investments to help cushion the Fund's total return from changes
in stock prices, except for temporary defensive purposes. In the
OppenheimerFunds spectrum, the Fund is generally more conservative than
aggressive growth stock funds, but more aggressive than funds that invest in
stocks and bonds.
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An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
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The Fund's Performance
Because the Fund commenced operations on September 1, 1999, calendar
year performance information for 1999 is not included in this Prospectus. To
obtain the Fund's performance information, you can either contact the Transfer
Agent at the toll free number on the back cover of this prospectus to request
the Fund's annual report, or visit the OppenheimerFunds Internet web site at
www.oppenheimerfunds.com.
Fees and Expenses of the Fund
The Fund pays a variety of expenses directly for management of its assets,
administration, distribution of its shares and other services. 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
the fees and expenses you may pay if you buy and hold shares of the Fund. The
numbers below are based on the Fund's expenses during its fiscal period ended
July 31, 2000.
Shareholder Fees (charges paid directly from your investment):
<TABLE>
<S> <C> <C> <C> <C>
---------------------------------- --------------------- -------------------- -------------------- -----------------
Class A Shares Class B Shares Class C Shares Class Y Shares
---------------------------------- --------------------- -------------------- -------------------- -----------------
---------------------------------- --------------------- -------------------- -------------------- -----------------
Maximum Sales Charge (Load) on 5.75% None None None
purchases
(as % of offering price)
---------------------------------- --------------------- -------------------- -------------------- -----------------
---------------------------------- --------------------- -------------------- -------------------- -----------------
Maximum Deferred Sales Charge None1 5%2 1%3 None
(Load) (as % of the lower of the
original offering price or
redemption proceeds)
---------------------------------- --------------------- -------------------- -------------------- -----------------
1. A contingent deferred sales charge may apply to redemptions of investments of $1 million or more
($500,000 for retirement plan accounts) of Class A shares. See "How to Buy Shares" for details.
2. Applies to redemptions in first year after purchase. The contingent deferred sales charge declines to 1%
in the sixth year and is eliminated after that.
3. Applies to shares redeemed within 12 months of purchase.
<PAGE>
Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)
-------------------------------------- ------------------ ------------------- ------------------ -------------------
Class A Shares Class B Shares Class C Shares Class Y Shares
-------------------------------------- ------------------ ------------------- ------------------ -------------------
-------------------------------------- ------------------ ------------------- ------------------ -------------------
Management Fees 0.75% 0.75% 0.75% 0.75%
-------------------------------------- ------------------ ------------------- ------------------ -------------------
-------------------------------------- ------------------ ------------------- ------------------ -------------------
Distribution and/or Service (12b-1) 0.11% 1.00% 1.00% N/A
Fees
-------------------------------------- ------------------ ------------------- ------------------ -------------------
-------------------------------------- ------------------ ------------------- ------------------ -------------------
Other Expenses 0.67% 0.66% 0.66% 0.67%
-------------------------------------- ------------------ ------------------- ------------------ -------------------
-------------------------------------- ------------------ ------------------- ------------------ -------------------
Total Annual Operating Expenses 1.53% 2.41% 2.41% 1.42%
-------------------------------------- ------------------ ------------------- ------------------ -------------------
-------------------------------------------------------------------------------------------------------------------
</TABLE>
Expenses may vary in future years. "Other expenses" are estimates of the
transfer agent fees, custodial fees, and accounting and legal expenses that the
Fund pays.
EXAMPLES. The following examples are intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds. The
examples assume that you invest $10,000 in a class of shares of the Fund for the
time periods indicated and reinvest your dividends and distributions.
The first example assumes that you redeem all of your shares at the end
of those periods. The second example assumes that you keep your shares. Both
examples also assume that your investment has a 5% return each year and that the
class's operating expenses remain the same. Your actual costs may be higher or
lower because expenses will vary over time. Based on these assumptions your
expenses would be as follows:
<TABLE>
<S> <C> <C> <C> <C>
--------------------------------------10-Years 1 1 Year 3 Years 5 Years
If shares are redeemed:
-------------------------------------------------------------------------- --------------------------------------------
-------------------------------------------------------------------------- --------------------------------------------
Class A Shares $2,294 $722 $1,031 $1,361
-------------------------------------------------------------------------- --------------------------------------------
-------------------------------------------------------------------------- --------------------------------------------
Class B Shares $2,327 $744 $1,051
-------------------------------------------------------------------------- --------------------------------------------
-------------------------------------------------------------------------- --------------------------------------------
Class C Shares $2,746 $344 $ 751
-------------------------------------------------------------------------- --------------------------------------------
-------------------------------------------------------------------------- --------------------------------------------
Class Y Shares $1,702 $145 $ 449 $ 776
-------------------------------------------------------------------------- --------------------------------------------
-------------------------------------------------------------------------- --------------------------------------------
If shares are not redeemed: 10 Years 1 1 Year 3 Years 5 Years
-------------------------------------------------------------------------- --------------------------------------------
-------------------------------------------------------------------------- --------------------------------------------
Class A Shares $2,294 $722 $1,031 $1,361
-------------------------------------------------------------------------- --------------------------------------------
-------------------------------------------------------------------------- --------------------------------------------
Class B Shares $2,327 $244 $ 751 $1,285
-------------------------------------------------------------------------- --------------------------------------------
-------------------------------------------------------------------------- --------------------------------------------
Class C Shares $2,746 $244 $ 751 $1,285
-------------------------------------------------------------------------- --------------------------------------------
-------------------------------------------------------------------------- --------------------------------------------
Class Y Shares $1,702 $145 $ 449 $ 776
-------------------------------------------------------------------------- --------------------------------------------
</TABLE>
In the first example, expenses include the initial sales charge for Class A and
the applicable Class B or Class C contingent deferred sales charges. In the
second example, the Class A expenses include the sales charge, but Class B and
Class C expenses do not include contingent deferred sales charges.
1 Class B expenses for years 7 through 10 are based on Class A expenses, since
Class B shares automatically convert to Class A after 6 years.
About the Fund's Investments
THE FUND'S PRINCIPAL INVESTMENT POLICIES. The Fund purchases only stocks that
are included in the S&P 500/BARRA Value Index. In rare instances, the Fund may
temporarily hold stocks that are removed from the S&P 500/BARRA Value Index or
even the S&P 500 Index.
S&P 500 Index. The S&P 500 Index is an unmanaged index of equity securities
that is a broad-based measure of changes in domestic stock market
conditions based on the average performance of 500 widely held stocks.
Standard & Poor's Corporation selects the stocks included in the index
and determines their relative weightings within the index. The index is
generally considered a "large cap" index. The Sub-Advisor's research
capabilities cover approximately 98% of the stocks included in the S&P
500 Index.
S&P 500/BARRA Value Index. The S&P 500/BARRA Value Index is a subset of
stocks included in the S&P 500 Index. The S&P 500/BARRA Value Index is
constructed by dividing the stocks in the S&P 500 Index according to a
single attribute: book-to-price ratio. The S&P 500/BARRA Value Index
contains stocks with higher book-to-price ratios. Stocks with lower
book-to-price ratios are contained in the S&P 500/BARRA Growth Index.
Each stock in the S&P 500 Index is assigned to either the S&P 500/BARRA
Value Index or the S&P 500/BARRA Growth Index so that the two indices
together comprise the S&P 500 Index.
Stocks included in the S&P 500/BARRA Value Index are generally
considered to be currently undervalued by the market and therefore
thought to provide an opportunity for long-term potential returns.
Stocks included in the S&P 500/BARRA Growth Index are generally
considered to be those with the best relative short-term appreciation
potential among the stocks included in the S&P 500 Index.
Investment Process. In selecting stocks for the Fund's portfolio, the
Sub-Advisor follows a three-step process intended to identify the
stocks within the S&P 500/BARRA Value Index that provide opportunity
for long-term potential returns.
The Sub-Advisor first divides the S&P 500/BARRA Value Index into 11
broad economic sectors it has defined (see the chart on next page).
Second, each day the New York Stock Exchange is open for trading, the
Sub-Advisor ranks the stocks in each of the 11 economic sectors of the
index according to their underlying values, which might be quite
different from their current stock market valuations.
The Sub-Advisor ranks each of the stocks in the 11 economic sectors
using quantitative models based upon the factors that have historically
affected the prices for stocks included in each sector. To identify
these factors, the Sub-Advisor uses a proprietary research library that
includes a database of historical stock prices and fundamental
information such as earnings, dividend yields, and other relevant
financial information.
The most undervalued stocks or most attractive stocks, as identified by
the Sub-Adviser's models, are assigned a ranking of 1 (the highest
ranking). The most overvalued stocks, as identified by the
Sub-Adviser's value models, are assigned a ranking of 10 (the lowest
ranking). The most undervalued or most attractive stocks are candidates
for purchase by the Fund. Although lower ranked or less attractive
stocks generally are candidates for sale if held by the Fund, the Fund
does invest in some lower ranked or less attractive stocks in an
attempt to reduce overall portfolio risk.
Third, in order to diversify the Fund's investment portfolio and
attempt to reduce overall portfolio risk, the Sub-Advisor seeks to
align the Fund's portfolio investments to the sector weights of the S&P
500/BARRA Value Index (see the chart on next page). The size of the
Fund's portfolio positions in the "undervalued" stocks generally is
related to the proportionate weights of those stocks within the S&P 500
Index. The size of the Fund's portfolio positions in lower ranked or
less attractive stocks generally are less than the proportionate
weights of those stocks within the index.
The Sub-Adviser generally will construct a portfolio of 50 to 100
stocks for the Fund across the 11 economic sectors and 34 industry
groups. The Fund's portfolio characteristics, such as its yield, price
to earnings ratio and price to book ratio, will generally reflect the
underlying characteristics of the S&P 500/BARRA Value Index.
There is no assurance the Fund's selection strategy will result in the Fund
achieving its objective of long-term growth of capital. Nor can there be any
assurance that the Fund's diversification strategy will actually reduce the
volatility of an investment in the Fund. The Statement of Additional Information
contains additional information about the Fund's investment policies and risks.
S&P 500/BARRA Value Index
11 Economic Sectors, 34 Industry Groups
Basic Material Capital Goods Comsumer Cyclicals
Chemicals Electric Equipment Retail/Merchandise
Forest Products Aerospace Entertainment
Metal Machinary Building Materials
Lodging & Restaurant
Publishing
Consumer Durables
Retail/Clothing
Consumer Staples Energy
Food/Bev/Tobacco Integrated Oils
Household Products Oil Products/Svcs
Food & Drug Retail
Health Care Miscellaneous Finance
Drugs Miscellaneous Consumer Finance
Hospital/Hospital Money Center Banks
Supply Insurance
Regional Banks
Transportation Technology Utilities
Automotive Computer Hardware Telephones
Transportation Computer Software Electric Utilities
Auto Parts Electronics Gas & Water
CAN THE FUND'S INVESTMENT OBJECTIVE AND POLICIES CHANGE? The Fund's
Board of Trustees can change non-fundamental investment policies without
shareholder approval, although significant changes will be described in
amendments to this Prospectus. Fundamental policies cannot be changed without
the approval of a majority of the Fund's outstanding voting shares. The Fund's
investment objective is not a fundamental policy, but will not be changed by the
Fund's Board of Trustees without advance notice to shareholders. Investment
restrictions that are fundamental policies are listed in the Statement of
Additional Information. An investment policy is not fundamental unless this
Prospectus or the Statement of Additional Information says that it is.
OTHER INVESTMENT STRATEGIES. To seek its objective, the Fund can also use the
investment techniques and strategies described below. The Fund may or may not
use these investment techniques. These techniques have certain risks, although
some are designed to help reduce the overall investment or market risks.
Portfolio Turnover. The Fund's investment process may cause the Fund to engage
in active and frequent trading. Therefore, the Fund may engage in
short-term trading while trying to achieve its objective. Portfolio
turnover increases brokerage costs the Fund pays (and reduces
performance). Additionally, securities trading can cause the Fund to
realize capital gains that are distributed to shareholders as taxable
distributions.
TemporaryDefensive Investments. In times of adverse or unstable market,
economic or political conditions, the Fund can invest up to 100% of its
assets in temporary defensive investments. Generally they would be
high-quality, short-term money market instruments, such as U.S.
government securities, highly rated commercial paper, short-term
corporate debt obligations, bank deposits or repurchase agreements. To
the extent the Fund invests defensively in these securities, it might
not achieve its investment objective of long-term growth of capital.
How the Fund Is Managed
THE MANAGER. The Manager, supervises the Fund's investment program and handles
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 that states the Manager's responsibilities. The agreement sets the
fees the Fund pays to the Manager and describes the expenses that the Fund is
responsible to pay to conduct its business.
The Manager has been as an investment adviser since January 1960. The
Manager (including subsidiaries) managed more than $125 billion in assets as of
October 31, 2000, including other Oppenheimerfunds with more than 5 million
including shareholder accounts. The Manager is located at Two World Trade
Center, 34th Floor, New York, New York 10048-0203.
The Manager's Fees. Under the Investment Advisory Agreement, the Fund pays
the Manager an advisory fee at an annual rate that declines on
additional assets as the Fund grows: 0.75% of the first $200 million of
average annual net assets of the Fund, 0.72% of the next $200 million,
0.69% of the next $200 million, 0.66% of the next $200 million, and
0.60% of average annual net assets in excess of $800 million. The
Fund's management fee for the period ended July 31, 2000 was 0.75% of
average annual net assets for each class of shares.
The Sub-Advisor The Manager retained the Sub-Advisor to provide day-to-day
portfolio management for the Fund. The Sub-Advisor has operated as an
investment advisor since 1980. As of September 30, 2000, the
Sub-Advisor managed over $3.7 billion for approximately 74 clients. The
Sub-Advisor also serves as sub-advisor to other investment companies
for which the Manager serves as investment advisor. The Sub-Advisor is
an affiliate of the Manager, and is located at 301 North Spring Street,
Bellefonte, Pennsylvania 16823. The Manager, not the Fund, pays the
Sub-Advisor an annual fee under a Sub-Advisory Agreement between the
Manager and the Sub-Advisor.
Portfolio Management Team. The Fund is managed by a team of individuals employed
by the Sub-Advisor. The portfolio management team is primarily responsible for
the selection of the Fund's portfolio securities.
A B O U T Y O U R A C C O U N T
How to Buy Shares
HOW DO YOU BUY SHARES? You can buy shares several ways, as described below.
through any dealer, broker or financial institution that has a sales
agreement with the Fund's Distributor, OppenheimerFunds Distributor, Inc., or
directly through the Distributor, or
automatically through an Asset Builder Plan under the OppenheimerFunds
AccountLink service. The Fund's Distributor OppenheimerFunds Distributor, Inc.,
may appoint servicing agents to accept purchase (and redemption) orders. The
Distributor, in its sole discretion, may reject any purchase order for the
Fund's shares.
Buying Shares Through Your Dealer. You can buy shares through any dealer,
broker, or financial institution that has a sales agreement with the
Distributor. 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, we
recommend that you discuss your investment with a financial advisor
before you make a purchase to be sure that the Fund is appropriate for
you.
Buying Shares by Federal Funds Wire. Shares purchased through the Distributor
may be paid for by Federal Funds wire. The minimum investment is
$2,500. Before sending a wire, call the Distributor's Wire Department
at 1.800.525.7048 to notify the Distributor of the wire, and to receive
further instructions.
Buying Shares Through OppenheimerFunds AccountLink. With AccountLink, you pay
for shares by electronic funds transfers from your bank account. Shares
are purchased for your account on the regular business day the
Distributor is instructed by you to initiate the Automated
ClearingHouse (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. Please refer to "AccountLink," below for more
details.
Buying Shares Through Asset Builder Plans. You may purchase shares of the Fund
(and up to four other Oppenheimer funds) automatically each month from
your account at a bank or other financial institution under an Asset
Builder Plan with AccountLink. Details are in the Asset Builder
Application and the Statement of Additional Information.
HOW MUCH MUST YOU INVEST? You can buy Fund shares 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, 403(b) plans, Automatic Exchange Plans and military
allotment plans, you can make initial and subsequent investments for as little
as $25 you can make additional purchases of at least $25 AccountLink.
Underretirement plans, such as IRAs, pension and profit-sharing plans and 401(k)
plans, you can start your account with as little as $250. If your IRA is started
under an Asset Builder Plan, the $25 minimum applies. Additional purchases may
be as little as $25.
The minimum investment requirement does not apply to 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 reinvesting distributions from unit investment trusts that have made
arrangements with the Distributor.
AT WHAT PRICE ARE SHARES SOLD? Shares are sold at their offering price (the net
asset value per share plus any initial sales charge that applies). The offering
price that applies to a purchase order is based on the next calculation of the
net asset value per share that is made after the Distributor receives the
purchase order at its offices in Denver, Colorado, or after any agent appointed
by the Distributor receives the order and sends it to the Distributor.
Net Asset Value. The net asset value of each class of shares is determined
as of the close of The New York Stock Exchange, on each day the Exchange is open
for trading (referred to in this Prospectus as a "regular business day"). The
Exchange normally closes at 4:00 P.M., New York time, but may close earlier on
some days. All references to time in this Prospectus mean "New York time."
The net asset value per share is determined 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. To determine net asset value, the Fund's Board of Trustees has
established procedures to value the Fund's securities, in general based on
market value. The Board has adopted special procedures for valuing illiquid and
restricted securities and obligations for which market values cannot be readily
obtained. Because some foreign securities trade in markets and on exchanges that
operate on weekends and U.S. holidays, the values of foreign investments might
change significantly on days when investors cannot buy or redeem shares.
The Offering Price. To receive the offering price for a particular day, in most
cases the Distributor or its designated agent must receive your order by the
time of day The New York Stock Exchange closes that day. If your order is
received on a day when the Exchange is closed or after it has closed, the order
will receive the next offering price that is determined after your order is
received.
Buying Through a Dealer. If you buy shares through a dealer, your dealer must
receive the order by the close of The New York Stock Exchange and transmit it to
the Distributor so that it is received before the Distributor's close of
business on a regular business day (normally 5:00 P.M.) to receive that day's
offering price. Otherwise, the order will receive the next offering price that
is determined.
[WHAT CLASSES OF SHARES DOES THE FUND OFFER?] The Fund offers investors four
different classes of shares. The different classes of shares represent
investments in the same portfolio of securities, but the classes are subject to
different expenses and will likely have different share prices. When you buy
shares, be sure to specify the class of shares. If you do not choose a class,
your investment will be made in Class A shares.
Class A Shares. If you buy Class A shares, you pay an initial sales charge
(on investments up to $1 million for regular accounts or $500,000 for
certain retirement plans). The amount of that sales charge will vary
depending on the amount you invest. The sales charge rates are listed
in "How Can I Buy Class A Shares?" below.
Class B Shares. If you buy Class B shares, you pay no sales charge at the
time of purchase, but you will pay an annual asset-based sales charge.
If you sell your shares within six years of buying them, you will
normally pay a contingent deferred sales charge. That contingent
deferred sales charge varies depending on how long you own your shares,
as described in "How Can I Buy Class B Shares?" below.
Class C Shares. If you buy Class C shares, you pay no sales charge at the
time of purchase, but you will pay an annual asset-based sales charge.
If you sell your shares within 12 months of buying them, you will
normally pay a contingent deferred sales charge of 1%, as described in
"How Can I Buy Class C Shares?" below.
Class Y Shares. Class Y shares are offered only to certain institutional
investors that have special agreements with the Distributor.
WHICH CLASS OF SHARES SHOULD YOU CHOOSE? Once you decide that the Fund is an
appropriate investment for you, the decision as to which class of shares is best
suited to your needs depends on a number of factors that you should discuss with
your financial advisor. Some factors to consider 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.
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 discussion below is not intended to be investment advice or a
recommendation, because each investor's financial considerations are different.
The discussion below assumes that you will purchase only one class of shares,
and not a combination of shares of different classes. Of course, these examples
are based on approximations of the effect of current sales charges and expenses
projected over time, and do not detail all of the considerations in selecting a
class of shares. You should analyze your options carefully with your financial
advisor before making that choice.
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, compared to the effect over time of higher
class-based expenses on shares of Class B or Class C.
Investingfor the Shorter Term. While the Fund is meant to be a long-term
investment, if you have a relatively 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. That is because of the effect of the Class
B contingent deferred sales charge if you redeem within six 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 as 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.
And for investors who invest $1 million or more, in most cases Class A
shares will be the most advantageous choice, no matter how long you
intend to hold your shares. For that reason, the Distributor normally
will not accept purchase orders of $500,000 or more of Class B shares
or $1 million or more of Class C shares from a single investor.
Investingfor the Longer Term. If you are investing less than $100,000 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
appropriate.
Are There Differences In Account Features That Matter To You? Some account
features may not be available to Class B or Class C shareholders. Other
features may not be advisable (because of the effect of the contingent
deferred sales charge) for Class B or Class C shareholders. Therefore,
you should carefully review how you plan to use your investment account
before deciding which class of shares to buy.
Additionally, the 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 or Class Y shares, such as the Class B and
Class C asset-based sales charge described below and in the Statement
of Additional Information. Share certificates are not available for
Class B and Class C shares, and if you are considering using your
shares as collateral for a loan, that may be a factor to consider.
How Do Share Classes Affect Payments To My Broker? A salesperson, such as a
broker, may receive different compensation for selling one class of
shares than for selling another class. It is important to remember that
Class B and Class C contingent deferred sales charges and asset-based
sales charges have the same purpose as the front-end sales charge on
sales of Class A shares: to compensate the Distributor for commissions
and expenses it pays to dealers and financial institutions for selling
shares. The Distributor may pay additional compensation from its own
resources to securities dealers or financial institutions based upon
the value of shares of the Fund owned by the dealer or financial
institution for its own account or for its customers.
SPECIAL SALES CHARGE ARRANGEMENTS AND WAIVERS. Appendix B to the Statement of
Additional Information details the conditions for the waiver of sales charges
that apply in certain cases, and the special sales charge rates that apply to
purchases of shares of the Fund by certain groups, or under specified retirement
plan arrangements or in other special types of transactions. To receive a waiver
or special sales charge rate, you must advise the Distributor when purchasing
shares or the Transfer Agent when redeeming shares that the Special conditions
apply.
HOW CAN YOU BUY 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 other cases, reduced
sales charges may be available, as described below or in the Statement of
Additional Information. 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 or allocated to
your dealer as commission. The Distributor reserves the right to pay the entire
commission to dealers. The current sales charge rates and commissions paid to
dealers and brokers are as follows:
<TABLE>
<S> <C> <C> <C>
------------------------------- ---------------------------- ---------------------------- ----------------------------
Amount of Purchase Front-End Sales Charge As Front-End Sales Charge As Commission As Percentage
a Percentage of a Percentage of Net Amount
Offering Price Invested of Offering Price
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
Less than $25,000 5.75% 6.10% 4.75%
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
$25,000 or more but less than 5.50% 5.82% 4.75%
$50,000
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
$50,000 or more but less than 4.75% 4.99% 4.00%
$100,000
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
$100,000 or more but less 3.75% 3.90% 3.00%
than $250,000
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
$250,000 or more but less 2.50% 2.56% 2.00%
than $500,000
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
$500,000 or more but less 2.00% 2.04% 1.60%
than $1 million
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>
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
aggregating $1 million or more or for certain purchases by particular
types of retirement plans described in Appendix B to the Statement of
Additional Information. The Distributor pays dealers of record
commissions in an amount equal to 1.0% of purchases of $1 million or
more other than by those retirement accounts. For those retirement plan
accounts, the commission is 1.0% of the first $2.5 million, plus 0.50%
of the next $2.5 million, plus 0.25% of purchases over $5 million,
calculated on a calendar year basis. In either case, the commission
will be paid only on purchases that were not previously subject to a
front-end sales charge and dealer concession.1
If you redeem any of those shares within in 18-months "holding period"
measured from 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 the lesser of (1) the
aggregate net asset value of the redeemed shares at the time of
redemption (excluding shares purchased by reinvestment of dividends or
capital gain distributions) or (2) the original net asset value of the
redeemed shares. However, the Class A contingent deferred sales charge
will not exceed the aggregate amount of the commissions the Distributor
paid to your dealer on all purchases of Class A shares of all
Oppenheimer funds you made that were subject to the Class A contingent
deferred sales charge.
Can You Reduce Class A Sales Charges? You may be eligible to buy Class A
shares at reduced sales charge rates under the Fund's "Right of
Accumulation" or a Letter of Intent, as described in "Reduced Sales
Charges" in the Statement of Additional Information. The Class A
initial and contingent deferred sales charges are not imposed in the
circumstances described in Appendix B to the Statement of Additional
Information.
HOW CAN YOU BUY 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 the end of the calendar month of their purchase, a contingent
deferred sales charge will be deducted from the redemption proceeds. The Class B
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 B shares.
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 for the Class B contingent deferred sales
charge holding period:
<PAGE>
<TABLE>
<S> <C>
----------------------------------------------------------- --------------------------------------------------------
Contingent Deferred Sales Charge on
Years Since Beginning of Month in Which Redemptions in That Year
Purchase 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.
</TABLE>
AutomaticConversion of Class B Shares. Class B shares automatically convert to
Class A shares 72 months after you purchase them. 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 you hold convert, a prorated portion of
your Class B shares that were acquired by reinvesting 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 the Statement of Additional Information.
HOW CAN YOU BUY 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 a holding period of 12 months from the end of the calendar month of their
purchase, a contingent deferred sales charge of 1.0% will be deducted from the
redemption proceeds. 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.
WHO CAN BUY CLASS Y SHARES? Class Y shares are sold at net asset value per share
without sales charge directly to institutional investors that have special
agreements with the Distributor for this purpose. They may include insurance
companies, registered investment companies and employee benefit plans. For
example, Massachusetts Mutual Life Insurance Company, an affiliate of the
Manager, may purchase Class Y shares of the Fund and other Oppenheimer funds (as
well as Class Y shares of funds advised by MassMutual) for asset allocation
programs, investment companies or separate investment accounts it sponsors and
offers to its customers. Individual investors are not able to buy Class Y shares
directly.
An institutional investor that buys Class Y shares for its customers'
accounts may impose charges on those accounts. The procedures for buying,
selling, exchanging and transferring the Fund's other classes of shares and the
special account features available to investors buying those other classes of
shares do not apply to Class Y shares. An exception is that the time those
orders must be received by the Distributor or its agents or by the Transfer
Agent is the same for Class Y as for other share classes. However, those
instructions must be submitted by the institutional investor, not by its
customers for whose benefit the shares are held.
DISTRIBUTION AND SERVICE (12B-1) PLANS
Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class
A shares. It reimburses the Distributor for a portion of its costs
incurred for services provided to accounts that hold Class A shares.
Reimbursement is made quarterly at an annual rate of up to 0.25% of the
average annual net assets of Class A shares of the Fund. The
Distributor currently uses all of those fees to pay dealers, brokers,
banks and other financial institutions quarterly for providing personal
service and maintenance of accounts of their customers that hold Class
A shares.
Distribution and Service Plans for Class B and Class C Shares. The Fund has
adopted Distribution and Service Plans for Class B and Class C shares
to compensate the Distributor for its services and costs in
distributing Class B and Class C shares and servicing accounts. Under
the plans, the Fund pays the Distributor an annual asset-based sales
charge of 0.75% per year on Class B shares and on Class C shares. The
Distributor also receives a service fee of 0.25% per year under each
plan.
The asset-based sales charge and service fees increase Class B and
Class C expenses by 1.00% of the net assets per year of the respective
class. Because these fees are paid out of the Fund's assets on an
ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than other types of sales charges.
The Distributor uses the service fees to compensate dealers for
providing personal services for accounts that hold Class B or Class C
shares. The Distributor pays the 0.25% service fees to dealers in
advance for the first year after the shares were sold by the dealer.
After the shares have been held for a year, the Distributor pays the
service fees to dealers on a quarterly basis.
The Distributor currently pays sales concession 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 concessions 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 pays 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. In cases where the Distributor is the broker of
record,
i.e. shareholder directly invests in the Fund without the assistance of
a broker, the Distributor will retain the asset-based sales charge and
service fee for Class B and Class C shares.
Special Investor Services
ACCOUNTLINK. You can use our AccountLink feature to link your Fund account
with an account at a U.S. bank or other financial institution. It must be an
Automated Clearing House (ACH) member. AccountLink lets you:
transmit funds electronically to purchase shares by telephone (through a
service representative or by PhoneLink) or automatically under Asset Builder
Plans, or have the Transfer Agent send redemption proceeds or transmit dividends
and distributions directly to your bank account. Please call the Transfer Agent
for more information.
You may purchase shares 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.
AccountLink privileges should be requested on your Application or your
dealer's settlement instructions if you buy your shares through a 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.
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 OppenheimerFunds account you have already established by calling the
special PhoneLink number.
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.
CAN YOU SUBMIT TRANSACTION REQUESTS BY FAX? You may send requests for certain
types of account transactions to the Transfer Agent by fax (telecopier). Please
call 1.800.525.7048 for information about which transactions may be handled this
way. Transaction requests submitted by fax are subject to the same rules and
restrictions as written and telephone requests described in this Prospectus.
OPPENHEIMERFUNDS INTERNET WEB SITE. You can obtain information about the Fund,
as well as your account balance, on the OppenheimerFunds Internet web site, at
http://www.oppenheimerfunds.com. Additionally, shareholders listed in the
account registration (and the dealer of record) may request certain account
transactions through a special section of that web site. To perform account
transactions, you must first obtain a personal identification number (PIN) by
calling the Transfer Agent at 1.800.533.3310. If you do not want to have
Internet account transaction capability for your account, please call the
Transfer Agent at 1.800.525.7048. At times, the web site may be inaccessible or
its transaction features may be unavailable.
AUTOMATIC WITHDRAWAL AND EXCHANGE PLANS. The Fund has several plans that enable
you to sell shares automatically or exchange them to another OppenheimerFunds
account on a regular basis. Please call the Transfer Agent or consult the
Statement of Additional Information for details.
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 only 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 or Class Y shares. You must be
sure to ask the Distributor for this privilege when you send your payment.
RETIREMENT PLANS. You may buy shares of the Fund for your retirement plan
account. If you participate in a plan sponsored by your employer, the plan
trustee or administrator must buy the shares for your plan account. The
Distributor also offers a number of different retirement plans individuals and
employers can use: Individual Retirement Accounts (IRAs). These include regular
IRAs, Roth IRAs, SIMPLE IRAs, rollover IRAs and Education IRAs.
SEP-IRAs. These are Simplified Employee Pensions Plan IRAs for small business
owners or self-employed individuals.
403(b)(7) Custodial Plans. These are tax deferred plans for employees of
eligible tax-exempt organizations, such as schools, hospitals and
charitable organizations.
401(k) Plans. These are special retirement plans for businesses.
Pension and Profit-Sharing Plans. These plans are designed for businesses and
self-employed individuals.
Please call the Distributor for OppenheimerFunds retirement plan
documents, which include applications and important plan information.
How to Sell Shares
You can sell (redeem) 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 in proper form (which means that it must comply with the procedures
described below) and is accepted by the Transfer Agent. The Fund lets you sell
your shares by writing a letter or by telephone. You can also set up Automatic
Withdrawal Plans to redeem shares on a regular basis. 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 account, please call the Transfer Agent first, at 1.800.525.7048, for
assistance.
Certain Requests Require a Signature Guarantee. To protect you and the Fund
from fraud, the following redemption requests must be in writing and
must include a signature guarantee (although there may be other
situations that also require a signature guarantee):
You wish to redeem more than $100,000 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 being redeemed by
someone (such as an Executor) other than the owners
Where Can You Have Your Signature Guaranteed? The Transfer Agent will accept
a guarantee of your signature by a number of financial institutions,
including:
o a U.S. bank, trust company, credit union or savings association,
o a foreign bank that has a U.S. correspondent bank,
o a U.S. registered dealer or broker in securities, municipal securities or
government securities,
o 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.
Retirement Plan Accounts. There are special procedures to sell shares in an
OppenheimerFunds retirement plan account. Call the Transfer Agent for a
distribution request form. Special income tax withholding requirements
apply to distributions from retirement plans. You must submit a
withholding form with your redemption request to avoid delay in getting
your money and if you do not want tax withheld. If your employer holds
your retirement plan account for you in the name of the plan, you must
ask the plan trustee or administrator to request the sale of the Fund
shares in your plan account.
HOW DO I SELL 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 documents requested by the Transfer Agent to assure proper
authorization of the person asking to sell the shares.
------------------------------------------- ------------------------------------
Use the following address for Send courier or express mail requests to:
requests by mail:
OppenheimerFunds Services OppenheimerFunds Services
P.O. Box 5270 10200 E. Girard Avenue, Building D
Denver, Colorado 80217-5270 Denver, Colorado 80231
------------------------------------------ -------------------------------------
HOW DO YOU SELL SHARES BY TELEPHONE? You and your dealer representative of
record may also sell your shares by telephone. To receive the redemption price
calculated on a particular 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 OppenheimerFunds retirement plan account 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.
Are There Limits on Amounts Redeemed by Telephone?
TelephoneRedemptions Paid by Check. Up to $100,000 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.
TelephoneRedemptions 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.
CAN YOU SELL SHARES THROUGH YOUR DEALER? The Distributor has made arrangements
to repurchase Fund shares from dealers and brokers on behalf of their customers.
Brokers or dealers may charge for that service. If your shares are held in the
name of your dealer, you must redeem them through your dealer.
HOW CONTINGENT DEFERRED SALES CHARGES AFFECT REDEMPTIONS. If you purchase shares
subject to a Class A, Class B or Class C contingent deferred sales charge and
redeem any of those shares during the applicable holding period for the class of
shares, the contingent deferred sales charge will be deducted from the
redemption proceeds, unless you are eligible for a waiver of that sales charge
based on the categories listed in Appendix B to the Statement of Additional
Information and you advise the Transfer Agent of your eligibility for the waiver
when you place your redemption request.
A contingent deferred sales charge will be based on the lesser of the
net asset value of the redeemed shares at the time of redemption or the original
net asset value. A contingent deferred sales charge is not imposed on:
o the amount of your account value represented by an increase in net asset
value over the initial purchase price,
o shares purchased by the reinvestment of dividends or capital gains
distributions, or
o shares redeemed in the special circumstances described in Appendix B to the
Statement of Additional Information.
To determine whether a 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
the holding period that applies to that class, and (3) shares held the longest
during the holding period.
Contingent deferred sales charges are not charged when you exchange
shares of the Fund for shares of other Oppenheimer funds. However, if you
exchange them within the applicable contingent deferred sales change holding
period, the holding period will carry over to the fund whose shares you acquire.
Similarly, if you acquire shares of this Fund by exchanging shares of another
Oppenheimer fund that are still subject to a contingent deferred sales charge
holding period, that holding period will carry over to this Fund.
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 whose
share you purchase by exchange. Before exchanging into a fund, you must
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. In
some cases, sales charges may be imposed on exchange transactions. For tax
purposes, exchanges of shares involve a sale of the shares of the fund you own
and a purchase of the shares of the other fund, which may result in a capital
gain or loss. Please refer to "How to Exchange Shares" in the Statement of
Additional Information for more details.
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.
HOW DO YOU SUBMIT EXCHANGE REQUESTS? 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 address on the back cover. Exchanges of shares held under
certificates cannot be processed unless the Transfer Agent receives the
certificates with the request.
TelephoneExchange 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.
ARE THERE LIMITATIONS ON EXCHANGES? 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 conforms to the policies described above. It must be
received 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 exchange. For example, the
receipt of multiple exchange requests from a "market timer" might require the
Fund to sell securities at a disadvantageous time or price.
Because excessive trading can hurt fund performance and harm shareholders, the
Fund reserves the right to refuse any exchange request that it believes
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.
The Fund may impose these changes at any time, although it will provide you
notice when it is able to do so or when it is required to do so.
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
More information about the Fund's policies and procedures for buying, selling,
and exchanging shares is contained 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.
Telephonetransaction 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 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. The Transfer
Agent and the Fund will not be liable for losses or expenses arising
out of telephone instructions reasonably believed to be genuine.
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 value
of the securities in the Fund's portfolio fluctuates. The redemption
price, which is the net asset value per share, will normally differ for
each class of shares. The redemption value of your shares may be more
or less than their original cost.
Payment for redeemed shares ordinarily is made in cash. It is forwarded by check
or through AccountLink or by Federal Funds wire (as elected by the
shareholder) within seven days after the Transfer Agent receives
redemption instructions in proper form. However, under unusual
circumstances determined by the Securities and Exchange Commission,
payment may be delayed or suspended. For accounts registered in the name
of a broker-dealer, payment will normally be forwarded within three
business days after redemption.
The Transfer Agent may delay forwarding a check or processing a payment via
AccountLink for recently purchased shares, but only until the purchase
payment has cleared. That delay may be as much as 10 days from the date
the shares were purchased. That delay may be avoided if you purchase
shares by Federal Funds wire or certified check, or arrange with your
bank to provide telephone or written assurance to the Transfer Agent
that your purchase payment has cleared.
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. In some cases involuntary
redemptions may be made to repay the Distributor for losses from the
cancellation of share purchase orders.
Shares may be "redeemed in kind" under unusual circumstances (such as a lack
of liquidity in the Fund's portfolio to meet redemptions). This means
that the redemption proceeds will be paid with liquid securities from
the Fund's portfolio.
"Backup Withholding" of federal income tax may be applied against taxable
dividends, distributions and redemption proceeds (including exchanges)
if you fail to furnish the Fund your correct, certified Social Security
or Employer Identification Number when you sign your application, or if
you under-report your income to the Internal Revenue Service.
To avoid sending duplicate copies of materials to households, the Fund
will mail only one copy of each prospectus, annual and semi-annual
report to shareholders having the same last name and address on the
Fund's records. The consolidation of these mailings, called
householding, benefits the Fund through reduced mailing expense.
If you want to receive multiple copies of these materials, you may call
the Transfer Agent at 1.800.525.7048. You may also notify the Transfer
Agent in writing. Individual copies of prospectuses and reports will be
sent to you within 30 days after the Transfer Agent receives your
request to stop householding.
Dividends, Capital Gains and Taxes
DIVIDENDS. The Fund intends to declare dividends separately for each class of
shares from net investment income on an annual basis and to pay them to
shareholders in December on a date selected by the Board of Trustees. Dividends
and distributions paid on Class A and Class Y shares will generally be higher
than dividends for Class B and Class C shares, which normally have higher
expenses than Class A and Class Y. The Fund has no fixed dividend rate and
cannot guarantee that it will pay any dividends or distributions.
CAPITAL GAINS. The Fund may realize capital gains on the sale of portfolio
securities. If it does, it may make distributions out of any net short-term or
long-term capital gains in December of each year. The Fund may make supplemental
distributions of dividends and capital gains following the end of its fiscal
year. There can be no assurance that the Fund will pay any capital gains
distributions in a particular year.
WHAT CHOICES DO I HAVE FOR RECEIVING DISTRIBUTIONS? When you open your account,
specify on your application how you want to receive your dividends and
distributions. You have four options:
Reinvest All Distributions in the Fund. You can elect to reinvest all dividends
and capital gains distributions in additional shares of the Fund.
Reinvest Dividends or Capital Gains. You can elect to reinvest some
distributions (dividends, short-term capital gains or long-term capital
gains distributions) in the Fund while receiving other types of
distributions by check or having them sent to your bank account through
AccountLink.
Receive All Distributions in Cash. You can elect to receive a check for all
dividends and capital gains distributions or have them sent to your
bank through AccountLink.
Reinvest Your Distributions in Another OppenheimerFunds Account. You can
reinvest all distributions in the same class of shares of another
OppenheimerFunds account you have established
TAXES. If your shares are not held in a tax-deferred retirement account, you
should be aware of the following tax implications of investing in the Fund.
Distributions are subject to federal income tax and may be subject to state or
local taxes. Dividends paid from short-term capital gains and net investment
income are taxable as ordinary income. Long-term capital gains are taxable as
long-term capital gains when distributed to shareholders. It does not matter how
long you have held your shares. Whether you reinvest your distributions in
additional shares or take them in cash, the tax treatment is the same.
Every year the Fund will send you and the IRS a statement showing the
amount of any taxable distribution you received in the previous year. Any
long-term capital gains will be separately identified in the tax information the
Fund sends you after the end of the calendar year.
Avoid "Buying a Distribution". If you buy shares on or just before the
ex-dividend date or just before the Fund declares a capital gain
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.
Remember,There May Be Taxes on Transactions. Because the Fund's share price
fluctuates, you may have a capital gain or loss when you sell or
exchange your shares. 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. Any capital gain is subject to capital gains tax.
Returns of Capital Can Occur. 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.
This information is only a summary of certain federal income tax
information about your investment. You should consult with your tax adviser
about the effect of an investment in the Fund on your particular tax situation.
Financial Highlights
The Financial Highlights Table is presented to help you understand the Fund's
financial performance over the fiscal year. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned (or lost) on an investment
in the Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by KPMG LLP, the Fund's independent auditors, whose
report, along with the Fund's financial statements, is included in the Statement
of Additional Information, which is available on request.
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
CLASS A CLASS B CLASS C CLASS Y
------------------ ----------------- ----------------- -----------------
PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED
JULY 31, 2000(1) JULY 31, 2000(1) JULY 31, 2000(1) JULY 31, 2000(1)
-----------------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00
-----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .05 .01 (.02) .07
Net realized and unrealized loss (.50) (.53) (.41) (.50)
------------------ ----------------- ----------------- -----------------
Total loss from investment operations (.45) (.52) (.43) (.43)
-----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.03) (.03) -- (2) (.04)
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.52 $9.45 $9.57 $9.53
================== ================= ================= =================
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(3) (4.50)% (5.18)% (4.27)% (4.33)%
-----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $3,798 $643 $851 $1
-----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $2,802 $235 $260 $1
-----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(4)
Net investment income (loss) 0.52% (0.36)% (0.36)% 0.62%
Expenses 1.53% 2.41% 2.41% 1.42%
Expenses, net of indirect expenses 1.47% 2.35% 2.35% 1.37%
-----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 285% 285% 285% 285%
</TABLE>
1. For the period from September 1, 1999 (commencement of operations) to July
31, 2000.
2. Less than $0.005.
3. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or commencement of operations), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
4. Annualized for periods of less than one full year.
INFORMATION AND SERVICES
For More Information on Oppenheimer Trinity Value FundSM:
The following additional information about the Fund is available without charge
upon request:
STATEMENT OF ADDITIONAL INFORMATION This document includes additional
information about the Fund's investment policies, risks, and operations. It is
incorporated by reference into this Prospectus (which means it is legally
part of this Prospectus).
ANNUAL AND SEMI-ANNUAL REPORTS Additional information about the Fund's
investments and performance will be available in the Fund's Annual and
Semi-Annual Reports to shareholders. The Annual Report will include a
discussion of market conditions and investment
strategies that significantly
affected the Fund's performance
during its last fiscal year.
How to Get More Information:
You can request the Statement of Additional Information, the Annual and
Semi-Annual Reports (when they are available), and other information about the
Fund or your account:
By Telephone: Call OppenheimerFunds Services toll-free:
1.800.525.7048
By Mail: Write to: OppenheimerFunds Services,
P.O. Box 5270
Denver, Colorado 80217-5270
On the Internet:
You can send us a request by e-mail or read or down-load
documents on the OppenheimerFunds web site:
http://www.oppenheimerfunds.com
You can also obtain copies of the Statement of Additional Information and other
Fund documents and reports by visiting the SEC's Public Reference Room in
Washington, D.C. (Phone 1.202.942.8090) or the EDGAR database on the SEC's
Internet web site at http://www.sec.gov. Copies may be obtained after payment of
a duplicating fee by electronic request at the SEC's e-mail address:
[email protected] or by writing to the SEC's Public Reference Section,
Washington, D.C. 20549-0102.
No one has been authorized to provide any information about the Fund or to make
any representations about the Fund other than what is contained in this
Prospectus. This Prospectus is not an offer to sell shares of the Fund, nor a
solicitation of an offer to buy shares of the Fund, to any person in any state
or other jurisdiction where it is unlawful to make such an offer.
The Fund's shares
are distributed by:
[logo] OppenheimerFunds
Distributors, Inc.
The Fund's SEC File No. 811-09361
PR0381.001.1100
Printed on recycled paper.
<PAGE>
Oppenheimer Trinity Value FundSM
South Tucson Way, Englewood, Colorado 80112
1-800-525-7048
Statement of Additional Information dated November 28, 2000
This Statement of Additional Information is not a Prospectus. This
document contains additional information about the Fund and supplements
information in the Prospectus dated November 28, 2000. 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, or
by downloading it from the OppenheimerFunds Internet web site at
www.oppenheimerfunds.com.
Contents
Page
About the Fund
Additional Information About the Fund's Investment Policies and Risks...........
The Fund's Investment Policies.............................................
Other Investment Techniques and Strategies.................................
Investment Restrictions....................................................
How the Fund is Managed ........................................................
Organization and History...................................................
Trustees and Officers......................................................
The Manager................................................................
The Sub-Advisor............................................................
Brokerage Policies of the Fund..................................................
Distribution and Service Plans..................................................
Performance of the Fund.........................................................
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: Economic Sectors and Industry Groups........................... A-1
Appendix B: Special Sales Charge Arrangements and Waivers.................. B-1
<PAGE>
A B O U T T H E F U N D
Additional Information About the Fund's Investment Policies and Risks
The investment objective, the principal investment policies and the
main risks of the Fund are described in the Prospectus. This Statement of
Additional Information contains supplemental information about those policies
and risks and the types of securities that the Fund can purchase. Additional
information is also provided about the strategies that the Fund may use to try
to achieve its objective.
The Fund's Investment Policies. The composition of the Fund's portfolio and the
techniques and strategies that the Fund's Sub-Advisor, Trinity Investment
Management Corporation, can use in selecting portfolio securities may vary over
time. The Fund is not required to use the investment techniques and strategies
described below at all times in seeking its goal. It may use some of the special
investment techniques and strategies at some times or not at all. Nonetheless,
when selecting the Fund's portfolio investments, the Fund's the Sub-Advisor, who
is retained by the Manager, OppenheimerFunds, Inc., typically adheres to the
following disciplined, systematic approach, which is more fully described in the
Prospectus.
Each day the New York Stock Exchange is open for trading, the
Sub-Advisor ranks nearly all of the stocks comprising the S&P 500/BARRA Value
Index according to their relative valuations, which may vary substantially from
current market valuations. The S&P 500/BARRA Value Index is a subset of the
Standard & Poor's Composite Index of 500 Stocks, consisting of approximately 300
to 400 common stocks. The Sub-Advisor determines these rankings by dividing the
S&P 500/BARRA Value Index into 11 broad economic sectors (Appendix A) and using
specially selected valuation models.
After identifying the most undervalued and most overvalued stocks in
the S&P 500/BARRA Value Index, the Sub-Advisor generally selects the most
undervalued stocks for the Fund's portfolio. In order to diversify the Fund's
portfolio investments and attempt to reduce overall portfolio risk, the
Sub-Advisor seeks to align the Fund's portfolio investments with the sector
weights of the index (See Appendix A).
In selecting stocks for the Fund's portfolio, the portfolio management
team, whose members are employed by the Sub-Advisor, primarily uses
value-oriented investment analyses. In using these approaches, the portfolio
management team looks for stocks that appear to be temporarily undervalued by
various measures. The portfolio management team seeks stocks having prices that
are relatively low in relation to what the team considers to be their real worth
or future prospects, with the expectation that the Fund will realize
appreciation in the value of its holdings.
Some of the measures used to identify undervalued stocks include, among others:
|_| Dividend Discount, which calculates the present value of the projected
stream of future dividends; stocks that sell at discounts to present value
are favored.
|_| Earnings Momentum, which is based on the percentage change in trailing
four-quarter earnings per share over the last three months.
|_| Cashflow Plowback, which seeks high cashflow relative to
capital structure and low price/cashflow ratio. The plowback feature is based on
net cashflow (cashflow minus dividends) retained by a company each year and
available for reinvestment or plowback into the business, providing a basis for
future growth.
|_| Price/earnings Ratio, which is the stock's price divided by
its earnings per share. A stock having a price/earnings ratio lower than its
historical range, or lower than the market as a whole or that of similar
companies may offer attractive investment opportunities.
|_| Price/book value Ratio, which is the stock price divided by
the book value of the company per share. It measures the company's stock price
in relation to its asset value.
|_| Dividend Yield, which is measured by dividing the annual
dividend by the stock price per share.
There is no assurance the Fund's stock selection strategy will result
in the Fund achieving its objective of long-term capital growth. Nor can there
be any assurance that the Fund's diversification strategy will actually reduce
the volatility of an investment in the Fund.
|X| Portfolio Turnover. "Portfolio turnover" describes the rate at
which the Fund trades its portfolio securities during prior fiscal years. For
example, if the Fund sold all of its securities during the year, its portfolio
turnover rate would be 100% or more. The Fund's portfolio turnover rate will
fluctuate from year to year. The Fund is expected to have a portfolio turnover
rate of approximately 100% annually. Increased portfolio turnover creates higher
brokerage and transaction costs for the Fund, which may reduce its overall
performance. Additionally, the realization of capital gains from selling
portfolio securities may result in distributions of taxable capital gains to
shareholders, since the Fund will normally distribute all of its capital gains
realized each year, to avoid excise taxes under the Internal Revenue Code.
Other Investment Techniques and Strategies
|X| Temporary Defensive Investments. For temporary defensive purposes,
the Fund can invest in repurchase agreements and a variety of "money market
securities." Money market securities are high-quality, short-term debt
instruments that may be issued by the U.S. government, corporations, banks or
other entities. They may have fixed, variable or floating interest rates. The
following is a brief description of the types of money market securities the
Fund may invest in.
|_| Repurchase Agreements. The Fund can acquire securities subject to
repurchase agreements. It might do so for liquidity purposes to meet
anticipated redemptions of Fund shares, or pending the investment of the
proceeds from sales of Fund shares, or pending the settlement of portfolio
securities transactions, or for defensive purposes.
In a repurchase transaction, the Fund buys a security from, and
simultaneously resells it to, an approved vendor for delivery on an agreed-upon
future date. 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. Approved vendors include U.S. commercial
banks, U.S. branches of foreign banks, or broker-dealers that have been
designated as primary dealers in government securities. They must meet credit
requirements set by the Fund's Board of Trustees from time to time.
The majority of these transactions run from day to day, and delivery
pursuant to the resale typically occurs within one to five days of the purchase.
Repurchase agreements having a maturity beyond seven days are subject to the
Fund's fundamental policy limits on holding illiquid investments. The Fund
cannot enter into a repurchase agreement that causes more than 10% of its total
assets to be subject to repurchase agreements having a maturity beyond seven
days. There is no limit on the amount of the Fund's assets that may be subject
to repurchase agreements having maturities of seven days or less.
Repurchase agreements, considered "loans" under the Investment Company
Act, are 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. However, if the vendor fails to
pay the resale price on the delivery date, the Fund may incur costs in disposing
of the collateral and may experience losses if there is any delay in its ability
to do so. The Sub-Advisor will monitor the vendor's creditworthiness to confirm
that the vendor is financially sound and will continuously monitor the
collateral's value.
|_| U.S. Government Securities. These include obligations
issued or guaranteed by the U.S. Treasury or other U.S. government agencies or
corporate entities referred to as "instrumentalities" of the U.S. government.
The obligations of U.S. government agencies or instrumentalities in which the
Fund may invest may or may not be guaranteed or supported by the "full faith and
credit" of the United States. "Full faith and credit" means generally that the
taxing power of the U.S. government is pledged to the payment of interest and
repayment of principal on a security. If a security is not backed by the full
faith and credit of the United States, the owner of the security must look
principally to the agency issuing the obligation for repayment. The owner might
not be able to assert a claim against the United States if the issuing agency or
instrumentality does not meet its commitment. The Fund will invest in securities
of U.S. government agencies and instrumentalities only if the Sub-Advisor is
satisfied that the credit risk with respect to such agency or instrumentality is
minimal.
|_| Bank Obligations. The Fund may buy time deposits, certificates of deposit
and bankers' acceptances. They must be :
o obligations issued or guaranteed by a domestic or foreign bank (including a
foreign branch of a domestic bank) having total assets of at least $1
billion,
o banker's acceptances (which may or may not be supported by letters of
credit) only if guaranteed by a U.S. commercial bank with total assets of
at least U.S. $1 billion.
The Fund can make time deposits. These are non-negotiable deposits in a
bank for a specified period of time. They may be subject to early withdrawal
penalties. Time deposits that are subject to early withdrawal penalties are
subject to the Fund's limits on illiquid investments, unless the time deposit
matures in seven days or less. "Banks" include commercial banks, savings banks
and savings and loan associations.
|_| Commercial Paper. The Fund may invest in commercial paper,
if it is rated within the top two rating categories of Standard & Poor's and
Moody's. If the paper is not rated, it may be purchased if issued by a company
having a credit rating of at least "AA" by Standard & Poor's or "Aa" by Moody's.
The Fund may buy commercial paper, including U.S. dollar-denominated
securities of foreign branches of U.S. banks, issued by other entities if the
commercial paper is guaranteed as to principal and interest by a bank,
government or corporation whose certificates of deposit or commercial paper may
otherwise be purchased by the Fund.
|_| Variable Amount Master Demand Notes. Master demand notes
are corporate obligations that permit the investment of fluctuating amounts by
the Fund at varying rates of interest under direct arrangements between the
Fund, as lender, and the borrower. They permit daily changes in the amounts
borrowed. The Fund has the right to increase the amount under the note at any
time up to the full amount provided by the note agreement, or to decrease the
amount. The borrower may prepay up to the full amount of the note without
penalty. These notes may or may not be backed by bank letters of credit.
Because these notes are direct lending arrangements between the lender
and borrower, it is not expected that there will be a trading market for them.
There is no secondary market for these notes, although they are redeemable (and
thus are immediately repayable by the borrower) at principal amount, plus
accrued interest, at any time. Accordingly, the Fund's right to redeem such
notes is dependent upon the ability of the borrower to pay principal and
interest on demand.
The Fund has no limitations on the type of issuer from whom these notes
will be purchased. However, in connection with such purchases and on an ongoing
basis, the Sub-Advisor will consider the earning power, cash flow and other
liquidity ratios of the issuer, and its ability to pay principal and interest on
demand, including a situation in which all holders of such notes made demand
simultaneously. Investments in master demand notes are subject to the limitation
on investments by the Fund in illiquid securities. Currently, the Fund does not
intend that its investments in variable amount master demand notes will exceed
5% of its total assets.
|X| Loans of Portfolio Securities. To raise cash for liquidity
purposes, the Fund can lend its portfolio securities to brokers, dealers and
other types of financial institutions approved by the Fund's Board of Trustees.
These loans are limited to not more than 10% of the value of the Fund's total
assets. The Fund currently does not intend to engage in loans of securities, but
if it does so, such loans will not likely exceed 5% of the Fund's total assets.
There are some risks in connection with securities lending. The Fund
might experience a delay in receiving additional collateral to secure a loan, or
a delay in recovery of the loaned securities if the borrower defaults. The Fund
must receive collateral for a loan. Under current applicable regulatory
requirements (which are subject to change), on each business day the loan
collateral must be at least equal to the value of the loaned securities. It must
consist of cash, bank letters of credit, securities of the U.S. government or
its agencies or instrumentalities, 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. The terms of the letter of credit and the issuing bank both
must be satisfactory to the Fund.
When it lends securities, the Fund receives amounts equal to the
dividends or interest on loaned securities. It also receives one or more of (a)
negotiated loan fees, (b) interest on securities used as collateral, and (c)
interest on any short-term debt securities purchased with such loan collateral.
Either type of interest may be shared with the borrower. The Fund may also pay
reasonable finder's, custodian and administrative fees in connection with these
loans. The terms of the Fund's loans must meet applicable tests under the
Internal Revenue Code and must permit the Fund to reacquire loaned securities on
five days' notice or in time to vote on any important matter.
|X| Illiquid and Restricted Securities. Under the policies and
procedures established by the Fund's Board of Trustees, the Manager determines
the liquidity of certain of the Fund's investments. Investments may be illiquid
because of the absence of an active trading market, making it difficult to value
them or dispose of them promptly at an acceptable price. A restricted security
is one that has a contractual restriction on its resale or which cannot be sold
publicly until it is registered under the Securities Act of 1933.
As a fundamental policy, the Fund will not invest more than 10% of its
total assets in illiquid or restricted securities, including repurchase
agreements having a maturity beyond seven days, portfolio securities for which
market quotations are not readily available and time deposits that mature in
more than 2 days. Certain restricted securities that are eligible for resale to
qualified institutional purchasers, as described below, may not be subject to
that limit. The Manager monitors holdings of illiquid securities on an ongoing
basis to determine whether to sell any holdings to maintain adequate liquidity.
To enable the Fund to sell its holdings of a restricted security not
registered under the Securities Act of 1933, the Fund may have to cause those
securities to be registered. The expenses of registering restricted securities
may be negotiated by the Fund with the issuer at the time the Fund buys the
securities. When the Fund must arrange registration because the Fund wishes to
sell the security, a considerable period may elapse between the time the
decision is made to sell the security and the time the security is registered so
that the Fund could sell it. The Fund would bear the risks of any downward price
fluctuation during that period.
The Fund may also acquire restricted securities through private
placements. Those securities have contractual restrictions on their public
resale. Those restrictions might limit the Fund's ability to dispose of the
securities and might lower the amount the Fund could realize upon the sale.
The Fund has limitations that apply to purchases of restricted
securities, as stated above. Those percentage restrictions do not limit
purchases of restricted securities that are eligible for sale to qualified
institutional purchasers under Rule 144A of the Securities Act of 1933, if those
securities have been determined to be liquid 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 holdings of that security may be considered to be illiquid.
Investment Restrictions
|X| What Are "Fundamental Policies?" Fundamental policies are those
policies that the Fund has adopted to govern its investments that can be changed
only by the vote of a "majority" of the Fund's outstanding voting securities.
Under the Investment Company Act, a "majority" vote is defined as the vote of
the holders of the lesser of:
|_| 67% or more of the shares present or represented by proxy at a
shareholder meeting, if the holders of more than 50% of the
outstanding shares are present or represented by proxy, or
|_| more than 50% of the outstanding shares.
Policies described in the Prospectus or this Statement of Additional
Information are "fundamental" only if they are identified as such. The Fund's
Board of Trustees can change non-fundamental policies without shareholder
approval. However, significant changes to investment policies will be described
in supplements or updates to the Prospectus or this Statement of Additional
Information, as appropriate. The Fund's principal investment policies are
described in the Prospectus.
|X| Does the Fund Have Fundamental Policies? The following investment
restrictions are fundamental policies of the Fund.
|_| The Fund cannot buy securities issued or guaranteed by any one
issuer if more than 5% of its total assets would be invested in securities of
that issuer or if it would then own more than 10% of that issuer's voting
securities. This limitation applies to 75% of the Fund's total assets. This
limitation does not apply to securities issued by the U.S. government or any of
its agencies or instrumentalities.
|_| The Fund cannot invest in companies for the purpose of acquiring
control or management of them.
|_| The Fund cannot lend money. However, it can invest in debt
securities that the Fund's investment policies and restrictions permit it to
purchase. The Fund may also lend its portfolio securities and enter into
repurchase agreements.
|_| The Fund cannot concentrate investments. That means it cannot
invest 25% or more of its total assets in companies in any one industry.
Obligations of the U.S. government, its agencies and instrumentalities are not
considered to be part of an "industry" for the purposes of this restriction.
|_| The Fund cannot invest in real estate or in interests in real
estate. However, the Fund can purchase readily-marketable securities of
companies holding real estate or interests in real estate.
|_| The Fund cannot underwrite securities of other companies. A
permitted exception is in case it is deemed to be an underwriter under the
Securities Act of 1933 when reselling any securities held in its own portfolio.
|_| The Fund cannot invest in physical commodities or commodity
contracts. This does not prohibit the Fund from purchasing or selling options
and futures or from buying or selling hedging instruments as permitted by any of
its other investment policies.
|_| The Fund cannot borrow money except from banks in amounts not in
excess of 5% of its assets as a temporary measure to meet redemptions.
|_| The Fund cannot pledge, mortgage or hypothecate any of its assets.
However, this does not prohibit the escrow arrangements contemplated by the put
and call activities of the Fund or other collateral or margin arrangements in
connection with any of the hedging instruments permitted by any of its other
policies.
|_| The Fund cannot issue "senior securities," but this does not
prohibit certain investment activities for which assets of the Fund are
designated as segregated, or margin, collateral or escrow arrangements are
established, to cover the related obligations. Examples of those activities
include borrowing money, reverse repurchase agreements, delayed-delivery and
when-issued arrangements for portfolio securities transactions, and contracts to
buy or sell derivatives, hedging instruments, options or futures.
Unless the Prospectus or this Statement of Additional Information
states that a percentage restriction applies on an on-going basis, it applies
only at the time the Fund makes an investment. The Fund need not sell securities
to meet the percentage limits if the value of the investment increases in
proportion to the size of the Fund.
|X| Does the Fund Have Additional Restrictions That Are Not "Fundamental"
Policies?
The Fund has the additional operating policies that are not
"fundamental," and which can be changed by the Board of Trustees without
shareholder approval.
|_| The Fund can invest all of its assets in the securities of a single
open-end management investment company for which the Manager, one of its
subsidiaries or a successor is the investment advisor or sub-advisor. That fund
must have substantially the same fundamental investment objective, policies and
limitations as the Fund.
For purposes of the Fund's policy not to concentrate its investments as
described above, the Fund has adopted the industry classifications set
forth in Appendix A to this Statement of Additional Information. That is
not a fundamental policy.
How the Fund Is Managed
Organization and History. The Fund is an open-end, diversified management
investment company with an unlimited number of authorized shares of beneficial
interest. The Fund was organized as a Massachusetts business trust in May 1999.
The Fund is governed by a Board of Trustees, which is responsible for
protecting the interests of shareholders under Massachusetts law. The Trustees
meet periodically throughout the year to oversee the Fund's activities, review
its performance, and review the actions of the Manager and Sub-Advisor. Although
the Fund will not normally hold annual meetings of its shareholders, it may hold
shareholder meetings from time to time on important matters, and shareholders
have the right to call a meeting to remove a Trustee or to take other action
described in the Fund's Declaration of Trust.
<PAGE>
|_| Classes of Shares. 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 four classes of
shares: Class A, Class B, Class C and Class Y. All classes invest in the same
investment portfolio. Each class of shares:
o has its own dividends and distributions,
o pays certain expenses which may be different for the different classes,
o may have a different net asset value,
o may have separate voting rights on matters in which interests of one class
are different from interests of another class, and
o votes as a class on matters that affect that class alone.
Shares are freely transferable, and each share of each class has one vote at
shareholder meetings, with fractional shares voting proportionally on
matters submitted to the vote of shareholders. Each share of the Fund
represents an interest in the Fund proportionately equal to the interest of
each other share of the same class.
The Trustees are authorized to create new series and classes of shares.
The Trustees may reclassify unissued shares of the Fund into additional series
or classes of shares. The Trustees also may divide or combine the shares of a
class into a greater or lesser number of shares without changing the
proportionate beneficial interest of a shareholder in the Fund. Shares do not
have cumulative voting rights or preemptive or subscription rights. Shares may
be voted in person or by proxy at shareholder meetings.
|_| Meetings of Shareholders. 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. It will also do so 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.
If the Trustees receive a request from at least 10 shareholders 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. The shareholders making the request
must have been shareholders for at least six months and must hold shares of the
Fund valued at $25,000 or more or constituting at least 1% of the Fund's
outstanding shares, whichever is less. The Trustees may also take other action
as permitted by the Investment Company Act.
|_| Shareholder and Trustee Liability. The Fund's Declaration of Trust
contains an express disclaimer of shareholder or Trustee liability for the
Fund's obligations. It also provides for indemnification and reimbursement of
expenses out of the Fund's property for any shareholder held personally liable
for its obligations. The Declaration of Trust also states that upon request, the
Fund shall assume the defense of any claim made against a shareholder for any
act or obligation of the Fund and shall satisfy any judgment on that claim.
Massachusetts law permits a shareholder of a business trust (such as the Fund)
to be held personally liable as a "partner" under certain circumstances.
However, the risk that a Fund shareholder will incur financial loss from being
held liable as a "partner" of the Fund is limited to the relatively remote
circumstances in which the Fund would be unable to meet its obligations.
The Fund's contractual arrangements state that any person doing
business with the Fund (and each shareholder of the Fund) agrees under its
Declaration of Trust to look solely to the assets of the Fund for satisfaction
of any claim or demand that may arise out of any dealings with the Fund.
Additionally, the Trustees shall have no personal liability to any such person,
to the extent permitted by law.
Trustees and Officers of the Fund. The Fund's Trustees and officers and their
principal occupations and business affiliations and occupations during the past
five years are listed below. Trustees denoted with an asterisk (*) below are
deemed to be "interested persons" of the Fund under the Investment Company Act.
All of the Trustees are trustees or directors of the following New York-based
Oppenheimer funds:2
<TABLE>
<S> <C>
Oppenheimer California Municipal Fund Oppenheimer International Small Company Fund
Oppenheimer Capital Appreciation Fund Oppenheimer Large Cap Growth Fund
Oppenheimer Capital Preservation Fund Oppenheimer Money Market Fund, Inc.
Oppenheimer Developing Markets Fund Oppenheimer Multiple Strategies Fund
Oppenheimer Discovery Fund Oppenheimer Multi-Sector Income Trust
Oppenheimer Emerging Growth Fund Oppenheimer Multi-State Municipal Trust
Oppenheimer Emerging Technologies Fund Oppenheimer Municipal Bond Fund
Oppenheimer Enterprise Fund Oppenheimer New York Municipal Fund
Oppenheimer Europe Fund Oppenheimer Series Fund, Inc.
Oppenheimer Global Fund Oppenheimer U.S. Government Trust
Oppenheimer Global Growth & Income Fund Oppenheimer Trinity Core Fund
Oppenheimer Gold & Special Minerals Fund Oppenheimer Trinity Growth Fund
Oppenheimer Growth Fund Oppenheimer Trinity Value Fund
Oppenheimer International Growth Fund Oppenheimer World Bond Fund
</TABLE>
Ms. Macaskill and Messrs. Spiro, Donohue, Wixted, Zack, Bishop and Farrar
respectively hold the same offices with the other New York-based Oppenheimer
funds as with the Fund.
Leon Levy, Chairman of the Board of Trustees, Age: 75.
280 Park Avenue, New York, NY 10017
General Partner of Odyssey Partners, L.P. (investment partnership) (since
1982) and Chairman of Avatar Holdings, Inc. (real estate development).
Donald W. Spiro, Vice Chairman of the Board of Trustees, Age: 74.
399 Ski Trail, Smoke Rise, New Jersey 07405
Formerly he held the following positions: Chairman Emeritus (August 1991 -
August 1999), Chairman (November 1987 - January 1991) and a director (January
1969 - August 1999) of the Manager; President and Director of OppenheimerFunds
Distributor, Inc., a subsidiary of the Manager and the Fund's Distributor (July
1978 - January 1992).
Bridget A. Macaskill*, President and Trustee; Age: 52.
Two World Trade Center, New York, New York 10048-0203
Chairman (since August 2000), Chief Executive Officer (since September 1995) and
a director (since December 1994) of the Manager; President (since September
1995) and a director (since October 1990) of Oppenheimer Acquisition Corp., the
Manager's parent holding company; President, Chief Executive Officer and a
director (since March 2000) of OFI Private Investments, Inc., an investment
adviser subsidiary of the Manager; Chairman and a director of Shareholder
Services, Inc. (since August 1994) and Shareholder Financial Services, Inc.
(since September 1995), transfer agent subsidiaries of the Manager; President
(since September 1995) and a director (since November 1989) of Oppenheimer
Partnership Holdings, Inc., a holding company subsidiary of the Manager;
President and a director (since October 1997) of OppenheimerFunds International
Ltd., an offshore fund management subsidiary of the Manager and of Oppenheimer
Millennium Funds plc; a director of HarbourView Asset Management Corporation
(since July 1991) and of Oppenheimer Real Asset Management, Inc. (since July
1996), investment adviser subsidiaries of the Manager; a director (since April
2000) of OppenheimerFunds Legacy Program, a charitable trust program established
by the Manager; a director of Prudential Corporation plc (a U.K. financial
service company); President and a trustee of other Oppenheimer funds; formerly
President of the Manager (June 1991 - August 2000).
Robert G. Galli, Trustee, Age: 67.
19750 Beach RoadJupiter, FL 33469
A Trustee or Director of other Oppenheimer funds. Formerly he held the following
positions: Vice Chairman (October 1995 - December 1997) and Executive Vice
President (December 1977 - October 1995) of the Manager; Executive Vice
President and a director (April 1986 - October 1995) of HarbourView Asset
Management Corporation.
Phillip A. Griffiths, Trustee, Age: 62.
97 Olden Lane, Princeton, N. J. 08540
The Director of the Institute for Advanced Study, Princeton, N.J. (since 1991)
and a member of the National Academy of Sciences (since 1979); formerly (in
descending chronological order) a director of Bankers Trust Corporation, Provost
and Professor of Mathematics at Duke University, a director of Research Triangle
Institute, Raleigh, N.C., and a Professor of Mathematics at Harvard University.
Benjamin Lipstein, Trustee, Age: 77.
591 Breezy Hill Road, Hillsdale, N.Y. 12529
Professor Emeritus of Marketing, Stern Graduate School of Business
Administration, New York University.
Elizabeth B. Moynihan, Trustee, Age: 71.
801 Pennsylvania Avenue, N.W., Washington, D.C. 20004
Author and architectural historian; a trustee of the Freer Gallery of Art
(Smithsonian Institute), Executive Committee of Board of Trustees of the
National Building Museum; a member of the Trustees Council, Preservation League
of New York State.
Kenneth A. Randall, Trustee, Age: 73.
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), and Prime Retail,
Inc. (real estate investment trust); formerly President and Chief Executive
Officer of The Conference Board, Inc. (international economic and business
research) and a director of Lumbermens Mutual Casualty Company, American
Motorists Insurance Company and American Manufacturers Mutual Insurance Company.
Edward V. Regan, Trustee, Age: 70.
40 Park Avenue, New York, New York 10016
Chairman of Municipal Assistance Corporation for the City of New York; Senior
Fellow of Jerome Levy Economics Institute, Bard College; a director of RBAsset
(real estate manager); a director of OffitBank; Trustee, Financial Accounting
Foundation (FASB and GASB); President, Baruch College of the City University of
New York; formerly New York State Comptroller and trustee, New York State and
Local Retirement Fund.
Russell S. Reynolds, Jr., Trustee, Age: 68.
8 Sound Shore Drive, Greenwich, Connecticut 06830
Chairman of The Directorship Search Group, Inc. (corporate governance consulting
and executive recruiting); a director of Professional Staff Limited (a U.K.
temporary staffing company); a life trustee of International House (non-profit
educational organization), and a trustee of the Greenwich Historical Society.
Clayton K. Yeutter, Trustee, Age: 69.
10475 E. Laurel Lane, Scottsdale, Arizona 85259
Of Counsel, Hogan & Hartson (a Washington, D.C. law firm). Other directorships:
Allied Zurich Pl.c; ConAgra, Inc.; FMC Corporation; Farmers Group Inc.;
Oppenheimer Funds; Texas Instruments Incorporated; Weyerhaeuser Co. and Zurich
Allied AG.
|X| Remuneration of Trustees. The officers of the Fund and certain
Trustees of the Fund (Ms. Macaskill) who are affiliated with the Manager receive
no salary or fee from the Fund. The remaining Trustees of the Fund received the
compensation shown below from the Fund with respect to the Fund's first fiscal
year ended July 31, 2000. The compensation from all of the New York-based
Oppenheimer funds (including the Fund) represented compensation received as a
director, trustee or member of a committee of the boards of those funds during
the calendar year 1999.
<PAGE>
<TABLE>
<S> <C> <C> <C>
------------------------------------ -------------------------- ------------------------ -----------------------------
Retirement Total
Benefits Compensation
Trustee's Name Accrued as Part from all
----------------------------------- Aggregate Compensation of Fund New York based Oppenheimer
and Other Positions from Fund1 Expenses Funds (29 Funds)2
------------------------------------ -------------------------- ------------------------ -----------------------------
Leon Levy $22 $0 $166,700
Chairman
------------------------------------ -------------------------- ------------------------ -----------------------------
Donald Spiro $5 $0 $10,250
Vice Chairman
------------------------------------ -------------------------- ------------------------ -----------------------------
Robert G. Galli $12 $0 $177,715
Study Committee Member
------------------------------------ -------------------------- ------------------------ -----------------------------
Phillip A. Griffiths $5 $0 $5,125
Trustee
------------------------------------ -------------------------- ------------------------ -----------------------------
Benjamin Lipstein
Study Committee Chairman, $20 $0 $144,100
Audit Committee Member
------------------------------------ -------------------------- ------------------------ -----------------------------
Elizabeth B. Moynihan $14 $0 $101,500
Study Committee
Member
------------------------------------ -------------------------- ------------------------ -----------------------------
Kenneth A. Randall $13 $0 $93,100
Audit Committee Member
------------------------------------ -------------------------- ------------------------ -----------------------------
Edward V. Regan $13 $0 $92,100
Proxy Committee Chairman, Audit
Committee Member
------------------------------------ -------------------------- ------------------------ -----------------------------
Russell S. Reynolds, Jr. $10 $0 $68,900
Proxy Committee
Member
------------------------------------ -------------------------- ------------------------ -----------------------------
Clayton K. Yeutter $8 $0 $51,675
Proxy Committee
Member
------------------------------------ -------------------------- ------------------------ -----------------------------
</TABLE>
1. Aggregate compensation includes fees, deferred compensation, if any, and
retirement plan benefits accrued for a trustee. Effective January 1, 2000,
Pauline Trigere resigned as a trustee of the Fund.
2. For the 1999 calendar year.
3. Calendar year 1999 figures include compensation from the Oppenheimer New
York, Quest and Rochester funds.
4. Includes $5 deferred under Deferred Compensation Plan described below.
5. Includes $2 deferred under Deferred Compensation Plan described below.
|X| Retirement Plan for Trustees. The Fund has adopted a retirement
plan that provides for payments to retired Trustees. Payments are up to 80%
of the average compensation paid during a Trustee's five years of service
in which the highest compensation was received. A Trustee must serve as
trustee for any of the New York-based Oppenheimer funds for at least 15
years to be eligible for the maximum payment. Each Trustee's retirement
benefits will depend on the amount of the Trustee's future compensation and
length of service. Therefore the amount of those benefits cannot be
determined at this time, nor can we estimate the number of years of
credited service that will be used to determine those benefits.
|X| Deferred Compensation Plan for Trustees. The Board of Trustees has
adopted a Deferred Compensation Plan for disinterested trustees that
enables them to elect to defer receipt of all or a portion of the annual
fees they are entitled to receive from the Fund. Under the plan, the
compensation deferred by a Trustee is periodically adjusted as though an
equivalent amount had been invested in shares of one or more Oppenheimer
funds selected by the Trustee. The amount paid to the Trustee under the
plan will be determined based upon the performance of the selected funds.
Deferral of Trustees' fees under the plan will not materially affect
the Fund's assets, liabilities or net income per share. The plan will not
obligate the Fund to retain the services of any Trustee or to pay any particular
level of compensation to any Trustee. Pursuant to an Order issued by the
Securities and Exchange Commission, the Fund may invest in the funds selected by
the Trustee under the plan without shareholder approval for the limited purpose
of determining the value of the Trustee's deferred fee account.
|_| Major Shareholders. As of November 15, 2000, the only persons who
owned of record or was known by the Fund to own beneficially 5% or more of any
class of the Fund's outstanding shares was: (1) OppenheimerFunds, Inc., 6803
South Tucson Way, Englewood, CO 80112, who owned 210,000.00 Class A shares
(representing approximately 47.96% of the Fund's then-outstanding Class A
shares); (2) Blake D. Gall, 131 Blackberry Lane, Boalsburg, PA 16827, who owned
23,729.780 Class A shares (representing approximately 5.42% of the Fund's
then-outstanding Class A shares); (3) NFSC for the benefit of William H. Martin,
265, Brush Valley Road, Boalsburg, PA 16827, who owned 10,070.493 Class C shares
(representing 8.06% of the Fund's then-outstanding Class C shares); (4)
Donaldson Lufkin Jenrette Securities Corporation Inc., P.O. Box 2052, Jersey
City, NJ 07303, who owned 6,493.506 Class C shares (representing approximately
5.20% of the then-outstanding Class C shares); and (5) OppenheimerFunds, Inc.,
6803 South Tucson Way, Englewood, CO 80112, who owned 100 Class Y shares
(representing approximately 100% of the Fund's then-outstanding Class Y shares).
The Manager. The Manager is wholly-owned by Oppenheimer Acquisition Corp., a
holding company controlled by Massachusetts Mutual Life Insurance Company. 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 enforced by the Manager.
|X| Code of Ethics. The Fund, the Manager and the Distributor 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. Covered persons include
persons with knowledge of the investments and investment intentions of the Fund
and other funds advised by the Manager. The Code of Ethics does permit personnel
subject to the Code to invest in securities, including securities that may be
purchased or held by the Fund, subject to a number of restrictions and controls.
Compliance with the Code of Ethics is carefully monitored and enforced by the
Manager.
The Code of Ethics is an exhibit to the Fund's registration statement
filed with the Securities and Exchange Commission and can be reviewed and copied
at the SEC's Public Reference Room in Washington, D.C. You can obtain
information about the hours of operation of the Public Reference Room by calling
the SEC at 1-202-942-8090. The Code of Ethics can also be viewed as part of the
Fund's registration statement on the SEC's EDGAR database at the SEC's Internet
web site at http://www.sec.gov. Copies may be obtained, after paying a
duplicating fee, by electronic request at the following E-mail address:
[email protected]., or by writing to the SEC's Public Reference Section,
Washington, D.C. 20549-0102.
|_| The Investment Advisory Agreement. The Manager provides investment
advisory and management services to the Fund under an investment advisory
agreement between the Manager and the Fund. The Manager handles the Fund's
day-to-day business, and the agreement permits the Manager to enter into
sub-advisory agreements with other registered investment advisors to obtain
specialized services for the Fund, as long as the Fund is not obligated to pay
any additional fees for those services. The Manager has retained the Sub-Advisor
pursuant to a separate Sub-Advisory Agreement, described below, under which the
Sub-Advisor buys and sells portfolio securities for the Fund. The members of the
portfolio management team of the Fund are employed by the Sub-Advisor and are
the persons principally responsible for the day-to-day management of the Fund's
portfolio, as described below.
Under the investment advisory agreement, the Fund pays the Manager an
annual fee in monthly installments, based on the average daily net assets of the
Fund. That fee is described in the prospectus.
The investment advisory agreement between the Fund and the Manager
requires the Manager, at its expense, to provide the Fund with adequate office
space, facilities and equipment. It also requires the Manager to provide and
supervise the activities of all administrative and clerical personnel required
to provide effective administration for the Fund. Those responsibilities include
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.
The Fund pays expenses not expressly assumed by the Manager under the
advisory agreement. The investment advisory agreement lists examples of expenses
paid by the Fund. The major categories relate to calculation of the Fund's net
asset values per share, 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 management fees paid by the Fund to
the Manager are calculated at the rate described above, which is applied to the
assets of the Fund as a whole. The fees are allocated to each class of shares
based upon the relative proportion of the Fund's net assets represented by that
class.
----------------------------------- --------------------------------------------
Management Fees Paid to OppenheimerFunds,Inc
Period Ended:
--------------------------------------- ----------------------------------------
7/31/001 $22,550
--------------------------------------- ----------------------------------------
1. For the period from 9/1/99 (commencement of operations).
The investment advisory agreement states that in the absence of willful
misfeasance, bad faith, gross negligence in the performance of its duties or
reckless disregard of its obligations and duties under the investment advisory
agreement, the Manager is not liable for any loss the Fund sustains for any
investment, adoption of any investment policy, or the purchase, sale or
retention of any security.
The agreement permits the Manager to act as investment advisor for any
other person, firm or corporation and to use the names "Oppenheimer" and
"Trinity" in connection with other investment companies for which it may act as
investment advisor or general distributor. If the Manager shall no longer act as
investment advisor to the Fund, the Manager may withdraw the right of the Fund
to use the names "Oppenheimer" or "Trinity" as part of its name.
The Sub-Advisor. The Sub-Advisor is a wholly-owned subsidiary of Oppenheimer
Acquisition Corp., a holding company controlled by Massachusetts Mutual
Life Insurance Company. The Manager and the Sub-Advisor are affiliates.
|_| The Sub-Advisory Agreement. Under the Sub-Advisory Agreement
between the Manager and the Sub-Advisor, the Sub-Advisor shall regularly provide
investment advice with respect to the Fund and invest and reinvest cash,
securities and the property comprising the assets of the Fund. Under the
Sub-Advisory Agreement, the Sub-Advisor agrees not to change the portfolio
management team of the Fund without the written approval of the Manager. The
Sub-Advisor also agrees to provide assistance in the distribution and marketing
of the Fund.
Under the Sub-Advisory Agreement, the Manager pays the Sub-Advisor an
annual fee in monthly installments, based on the average daily net assets of the
Fund. The fee paid to the Sub-Advisor under the Sub-Advisory Agreement is paid
by the Manager, not by the Fund. The fee declines on additional assets as the
Fund grows: 0.25% of the first $150 million of average annual net assets of the
Fund, 0.17% of the next $350 million, and 0.14% of average annual net assets in
excess of $500 million.
The Sub-Advisory Agreement states that in the absence of willful
misfeasance, bad faith, negligence or reckless disregard of its duties or
obligations, the Sub-Advisor shall not be liable to the Manager for any act or
omission in the course of or connected with rendering services under the
Sub-Advisory Agreement or for any losses that may be sustained in the purchase,
holding or sale of any security.
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory Agreement and the Sub-Advisory
Agreement. One of the duties of the Sub-Advisor under the Sub-Advisory Agreement
is to arrange the portfolio transactions for the Fund. The Fund's investment
advisory agreement with the Manager and the Sub-Advisory Agreement contain
provisions relating to the employment of broker-dealers to effect the Fund's
portfolio transactions. The Manager and the Sub-Advisor are authorized to employ
broker-dealers, including "affiliated" brokers, as that term is defined in the
Investment Company Act. They may employ broker-dealers that, in their best
judgment based on all relevant factors, will implement the policy of the Fund to
obtain, at reasonable expense, the "best execution" of the Fund's portfolio
transactions. Among other things, "best execution" means prompt and reliable
execution at the most favorable price obtainable.
The Manager and the Sub-Advisor need not seek competitive commission
bidding. However, they are expected to be aware of the current rates of eligible
brokers and to minimize the commissions paid to the extent consistent with the
interests and policies of the Fund as established by its Board of Trustees.
The Manager and the Sub-Advisor may select brokers (other than
affiliates) that provide brokerage and/or research services for the Fund and/or
the other accounts over which the Manager, the Sub-Advisor or their respective
affiliates have investment discretion. The commissions paid to such brokers may
be higher than another qualified broker would charge, if the Manager or
Sub-Advisor, as applicable, makes a good faith determination that the commission
is fair and reasonable in relation to the services provided. Subject to those
considerations, as a factor in selecting brokers for the Fund's portfolio
transactions, the Manager and the Sub-Advisor may also consider sales of shares
of the Fund and other investment companies for which the Manager or an affiliate
serves as investment advisor.
The Sub-Advisory Agreement permits the Sub-Advisor to enter into
"soft-dollar" arrangements through the agency of third parties to obtain
services for the Fund. Pursuant to these arrangements, the Sub-Advisor will
undertake to place brokerage business with broker-dealers who pay third parties
that provide services. Any such "soft-dollar" arrangements will be made in
accordance with policies adopted by the Board of the Trust and in compliance
with applicable law.
Brokerage Practices Followed by the Manager. Brokerage for the Fund is allocated
subject to the provisions of the investment advisory agreement and the
Sub-Advisory agreement and the procedures and rules described above. Generally,
the Sub-Advisor's portfolio traders allocate brokerage based upon
recommendations from the Fund's portfolio management team. In certain instances,
the team may directly place trades and allocate brokerage. In either case, the
Sub-Advisor's executive officers supervise the allocation of brokerage.
Transactions in securities other than those for which an exchange is
the primary market are generally done with principals or market makers. In
transactions on foreign exchanges, the Fund may be required to pay fixed
brokerage commissions and therefore would not have the benefit of negotiated
commissions available in U.S. markets. Brokerage commissions are paid primarily
for transactions in listed securities or for certain fixed-income agency
transactions in the secondary market. Otherwise brokerage commissions are paid
only if it appears likely that a better price or execution can be obtained by
doing so.
The Sub-Advisor serves as investment manager to a number of
clients, including other investment companies, and may in the future act as
investment manager or advisor to others. It is the practice of the Sub-Advisor
to allocate purchase or sale transactions among the Fund and other clients whose
assets it manages in a manner it deems equitable. In making those allocations,
the Sub-Advisor considers several main factors, including the respective
investment objectives, the relative size of portfolio holdings of the same or
comparable securities, the availability of cash for investment, the size of
investment commitments generally held and the opinions of the persons
responsible for managing the portfolios of the Fund and other client's accounts.
When orders to purchase or sell the same security on identical
terms are placed by more than one of the funds and/or other advisory accounts
managed by the Sub-Advisor or its affiliates, the transactions are generally
executed as received, although a fund or advisory account that does not direct
trades to a specific broker (these are called "free trades") usually will have
its order executed first. Orders placed by accounts that direct trades to a
specific broker will generally be executed after the free trades. All orders
placed on behalf of the Fund are considered free trades. However, having an
order placed first in the market does not necessarily guarantee the most
favorable price. Purchases are combined where possible for the purpose of
negotiating brokerage commissions. In some cases that practice might have a
detrimental effect on the price or volume of the security in a particular
transaction for the Fund.
Purchases of portfolio securities from underwriters include a
commission or concession paid by the issuer to the underwriter. Purchases from
dealers include a spread between the bid and asked prices. The Fund seeks to
obtain prompt execution of these orders at the most favorable net price.
The investment advisory agreement and the Sub-Advisory agreement permit
the Manager and the Sub-Advisor to allocate brokerage for research services. The
research services provided by a particular broker may be useful only to one or
more of the advisory accounts of the Sub-Advisor and its affiliates. The
investment research received for the commissions of those other accounts may be
useful both to the Fund and one or more of the Sub-Advisor's other accounts.
Investment research may be supplied to the Sub-Advisor by a third party at the
instance of a broker through which trades are placed.
Investment research services include information and analysis on
particular companies and industries as well as market or economic trends and
portfolio strategy, market quotations for portfolio evaluations, information
systems, computer hardware and similar products and services. If a research
service also assists the Sub-Advisor in a non-research capacity (such as
bookkeeping or other administrative functions), then only the percentage or
component that provides assistance to the Sub-Advisor in the investment
decision-making process may be paid in commission dollars.
The research services provided by brokers broadens the scope and
supplements the research activities of the Sub-Advisor. That research provides
additional views and comparisons for consideration, and helps the Sub-Advisor to
obtain market information for the valuation of securities that are either held
in the Fund's portfolio or are being considered for purchase. The Sub-Advisor
provides information to the Manager and the Board about the commissions paid to
brokers furnishing such services, together with the Sub-Advisor's representation
that the amount of such commissions was reasonably related to the value or
benefit of such services.
------------------------------------ -------------------------------------------
Period Ended 7/31: Total Brokerage Commissions Paid by the Fund2
------------------------------------ -------------------------------------------
20001 $12,3073
------------------------------------ -------------------------------------------
1. For the period from 9/1/99 (commencement of operations).
2. Amounts do not include spreads or concessions on principal
transactions on a net trade basis. 3. In the period ended 7/31/00, the
amount of transactions directed to brokers for research services was
$445,816 and the amount of the commissions paid to broker-dealers for
those services was $611.
Distribution and Service Plans
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 different classes of shares of the Fund. The Distributor is not
obligated to sell a specific number of shares. Expenses normally attributable to
sales are borne by the Distributor.
The compensation paid to (or retained by) the Distributor from the sale
of shares or on the redemption of shares during the Fund's three most recent
fiscal years is shown in the table below.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
-------------- ------------------ -------------------- -------------------- ------------------- --------------------
Period Aggregate Class A Front- Commissions Commissions Commissions
Front-End End Sales on Class A on Class B on Class C
Sales Charges Charges Shares Shares Shares
Ended on Class A Retained by Advanced by Advanced by Advanced by
7/31: Shares Distributor* Distributor Distributor Distributor
-------------- ------------------ -------------------- -------------------- ------------------- --------------------
-------------- ------------------ -------------------- -------------------- ------------------- --------------------
2000 $10,091 $2,654 $1,281 $18,872 $6,991
-------------- ------------------ -------------------- -------------------- ------------------- --------------------
*Includes amounts retained by a broker-dealer that is an affiliate or a parent
of the Distributor.
---------------- ------------------------------- -------------------------------- ----------------------------------
Period Class A Class B Class C
Contingent Deferred Contingent Deferred Contingent Deferred Sales
Ended Sales Charges Retained Sales Charges Retained Charges Retained by
7/31 by Distributor by Distributor Distributor
---------------- ------------------------------- -------------------------------- ----------------------------------
---------------- ------------------------------- -------------------------------- ----------------------------------
2000 $0 $1,041 $208
---------------- ------------------------------- -------------------------------- ----------------------------------
</TABLE>
For additional information about distribution of the Fund's shares,
including fees and expenses, please refer to "Distribution and Service Plans,"
below.
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 under
Rule 12b-1 of the Investment Company Act. Under those plans the Fund pays the
Distributor for all or a portion of its costs incurred in connection with the
distribution and/or servicing of the shares of the particular class.
Each plan has been approved by a vote of the Board of Trustees,
including a majority of the Independent Trustees3, cast in person at a meeting
called for the purpose of voting on that plan. The shareholder vote for the
Service Plan for Class A shares and the Distribution and Service Plans for Class
B and Class C shares was cast by the Manager as the sole initial holder of Class
A, Class B and Class C shares of the Fund.
Under the plans, the Manager and the Distributor may make payments to
affiliates, in their sole discretion, from time to time, and may use their own
resources (at no direct cost to the Fund) to make payments to brokers, dealers
or other financial institutions for distribution and administrative services
they perform. The Manager may use its profits from the advisory fee it receives
from the Fund. In their sole discretion, the Distributor and the Manager may
increase or decrease the amount of payments they make from their own resources
to plan recipients.
Unless a plan is terminated as described below, the plan continues in
effect from year to year but only if the Fund's Board of Trustees and its
Independent Trustees specifically vote annually to approve its continuance.
Approval must be by a vote cast in person at a meeting called for the purpose of
voting on continuing the plan. A plan 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.
The Board of Trustees and the Independent Trustees must approve all
material amendments to a plan. An amendment to increase materially the amount of
payments to be made under a plan must be approved by shareholders of the class
affected by the amendment. Because Class B shares of the Fund automatically
convert into Class A shares, the Fund must obtain the approval of both Class A
and Class B shareholders for a proposed material amendment to the Class A Plan
that would materially increase payments under the Plan. That approval must be by
a "majority" (as defined in the Investment Company Act) of the shares of each
class, voting separately by class.
While the Plans are in effect, the Treasurer of the Fund shall provide
separate written reports on the plans to the Board of Trustees at least
quarterly for its review. The Reports shall detail the amount of all payments
made under a plan and the purpose for which the payments were made. Those
reports are subject to the review and approval of the Independent Trustees.
Each Plan states 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 the selection and nomination process as
long as the final decision as to selection or nomination is approved by a
majority of the Independent Trustees.
Under the plans for a class, no payment will be made to any recipient
in any quarter in which the aggregate net asset value of all Fund shares of that
class held by the recipient for itself and its customers does not exceed a
minimum amount, if any, that may be set from time to time by a majority of the
Independent Trustees. The Board of Trustees has set no minimum amount of assets
to qualify for payments under the plans.
|_| Class A Service Plan Fees. Under the Class A service plan, the
Distributor currently uses the fees it receives from the Fund to pay brokers,
dealers and other financial institutions (they are referred to as "recipients")
for personal services and account maintenance services they provide for their
customers who hold Class A shares. The services 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. The Class A
service plan permits reimbursements to the Distributor at a rate of up to 0.25%
of average annual net assets of Class A shares. While the plan permits the Board
to authorize payments to the Distributor to reimburse itself for services under
the plan, the Board has not yet done so. The Distributor makes payments to plan
recipients quarterly at an annual rate not to exceed 0.25% of the average annual
net assets consisting of Class A shares held in the accounts of the recipients
or their customers.
Any unreimbursed expenses the Distributor incurs with respect to Class
A shares in any fiscal year cannot be recovered in subsequent years. The
Distributor may not use payments received under the Class A Plan to pay any of
its interest expenses, carrying charges, or other financial costs, or allocation
of overhead.
|_| Class B and Class C Service and Distribution Plan Fees. Under each
plan, service fees and distribution 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 Class B and Class C plans
provide for the Distributor to be compensated at a flat rate for its services,
whether its costs in distributing Class B and Class C shares and servicing
accounts are more or less than the amounts paid by the Fund under the plan for
the period for which the fee is paid. The types of services that recipients
provide in return for service fees are similar to the services provided under
the Class A service plan, described above.
The Class B and the Class C Plans permit the Distributor to retain both
the asset-based sales charges and the service fees or to pay recipients the
service fee on a quarterly basis, without payment in advance. However, the
Distributor currently intends to pay the service fee to recipients in advance
for the first year after the shares are purchased. After the first year shares
are outstanding, the Distributor makes service fee payments quarterly on those
shares. The advance payment is based on the net asset value of shares sold.
Shares purchased by exchange do not qualify for the advance service fee payment.
If Class B or Class C shares are redeemed during the first year after their
purchase, the recipient of the service fees on those shares will be obligated to
repay the Distributor a pro rata portion of the advance payment of the service
fee made on those shares. In cases where the Distributor is the broker of record
for Class B and Class C shares, i.e. shareholder without the services of a
broker directly invests in the Fund, the Distributor will retain asset-based
sales charge and service fee for Class B and Class C shares.
The Distributor retains the asset-based sales charge on Class B
shares. The Distributor retains the asset-based sales charge on Class C shares
during the first year the shares are outstanding. It pays the asset-based sales
charge as an ongoing commission to the recipient on Class C shares outstanding
for a year or more. If a dealer has a special agreement with the Distributor,
the Distributor will pay the Class B and/or Class C service fee and the
asset-based sales charge to the dealer quarterly in lieu of paying the sales
commissions and service fee in advance at the time of purchase.
The asset-based sales charges on Class B and Class C shares allow investors
to buy 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. The payments are made to the Distributor in recognition that the
Distributor: o pays sales commissions to authorized brokers and dealers at the
time of sale and pays service fees as described above,
o may finance payment of sales commissions and/or the advance of the service
fee payment to recipients under the plans, or may provide such financing
from its own resources or from the resources of an affiliate,
o employs personnel to support distribution of Class B and Class C shares,
and
o bears the costs of sales literature, advertising and prospectuses (other
than those furnished to current shareholders) and state "blue sky"
registration fees and certain other distribution expenses.
The Distributor's actual expenses in selling Class B and Class C shares
may be more than the payments it receives from the contingent deferred sales
charges collected on redeemed shares and from the Fund under the plans. If
either the Class B or the Class C plan is terminated by the Fund, the Board of
Trustees may allow the Fund to continue payments of the asset-based sales charge
to the Distributor for distributing shares before the plan was terminated. The
plans allow for the carry-forward of distribution expenses, to be recovered from
asset-based sales charges in subsequent fiscal periods.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------
Distribution Fees Paid to the Distributor for the Period Ended 7/31/00
-----------------------------------------------------------------------------------------------------------------
------------------------ ------------------- -------------------- ---------------------- ------------------------
Class: Total Amount Distributor's Distributor's
Aggregate Unreimbursed
Unreimbursed Expenses as %
Payments Retained by Expenses of Net Assets
Under Plan Distributor Under Plan of Class
------------------------ ------------------- -------------------- ---------------------- ------------------------
------------------------ ------------------- -------------------- ---------------------- ------------------------
Class B Plan $2,132 $1,988 $17,104 2.66%
------------------------ ------------------- -------------------- ---------------------- ------------------------
------------------------ ------------------- -------------------- ---------------------- ------------------------
Class C Plan $2,359 $2,198 $9,503 1.12%
------------------------ ------------------- -------------------- ---------------------- ------------------------
</TABLE>
All payments under the Class B and the Class C plans are subject to the
limitations imposed by the Conduct Rules of the National Association of
Securities Dealers, Inc. on payments of asset-based sales charges and service
fees.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses a variety of terms to
illustrate its investment performance. Those terms include "cumulative total
return," "average annual total return," "average annual total return at net
asset value" and "total return at net asset value." An explanation of how total
returns are calculated is set forth below. You can obtain current performance
information by calling the Fund's Transfer Agent at 1-800-525-7048 or by
visiting the OppenheimerFunds Internet web site at
http://www.oppenheimerfunds.com.
The Fund's illustrations of its performance data in advertisements must
comply with rules of the Securities and Exchange Commission. Those rules
describe the types of performance data that may be used and how it is to be
calculated. In general, any advertisement by the Fund of its performance data
must include the average annual total returns for the advertised class of shares
of the Fund. Those returns must be shown 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 (or its submission for
publication).
Use of standardized performance calculations 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 the
Fund's performance information as a basis for comparison with other investments:
|_| Total 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. Your account's performance will vary
from the model performance data if your dividends are received in
cash, or you buy or sell shares during the period, or you bought
your shares at a different time and price than the shares used in
the model.
|_| An investment in the Fund is not insured by the FDIC or any other
government agency. |_| The Fund's performance returns do not reflect the effect
of taxes on dividends and capital gains
distributions.
|_| The principal value of the Fund's shares and total returns are not
guaranteed and normally will fluctuate on a daily basis.
|_| When an investor's shares are redeemed, they may be worth more or less than
their original cost. |_| Total returns for any given past period represent
historical performance information and are not, and
should not be considered, a prediction of future returns.
The performance of each class of shares is shown separately, because
the performance of each class of shares will usually be different. That is
because of the different kinds of expenses each class bears. The total returns
of each class of shares of the Fund are affected by market conditions, the
quality of the Fund's investments, the maturity of debt investments, the types
of investments the Fund holds, and its operating expenses that are allocated to
the particular class.
|X| Total Return Information. There are different types of "total
returns" 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
and that the investment is redeemed at the end of the period. Because of
differences in expenses for each class of shares, the total returns for each
class are separately measured. 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 actual year-by-year performance. The
Fund uses standardized calculations for its total returns as prescribed by the
SEC. The methodology is discussed below.
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 without
sales charge, as described below). For Class B shares, payment of the applicable
contingent deferred sales charge is applied, depending on the period for which
the return is shown: 5.0% in the first year, 4.0% in the second year, 3.0% in
the third and fourth years, 2.0% in the fifth year, 1.0% in the sixth year and
none thereafter. For Class C shares, the 1% contingent deferred sales charge is
deducted for returns for the 1-year period. There is no sales charge on Class Y
shares.
|_| Average Annual Total Return. The "average annual total
return" of each class 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" in the formula) to achieve an
Ending Redeemable Value ("ERV" in the formula) of that investment, according to
the following formula:
1/n
(ERV)
(---) -1 = Average Annual Total Return
( P )
|_| Cumulative Total Return. 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
|_| Total Returns at Net Asset Value. From time to time the
Fund may also quote a cumulative or an average annual total return "at net asset
value" (without deducting sales charges) 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.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------
The Fund's Total Returns for the Periods Ended 7/31/00
-----------------------------------------------------------------------------------------------------------------------
-------------- ------------------------ -------------------------------------------------------------------------------
Cumulative Total Average Annual Total Returns
Class of Returns (10 years or
Shares Life of Class)
-------------- ------------------------ -------------------------------------------------------------------------------
-------------- ------------------------ ------------------------ -------------------------- ---------------------------
1-Year 5-Year or Life 10-Year or Life
-------------- ------------------------ ------------------------ -------------------------- ---------------------------
-------------- ----------- ------------ ----------- ------------ ------------ ------------- ------------ --------------
After Without After Without After Without After Without
Sales Sales Sales Sales Sales Sales Charge Sales Sales Charge
Charge Charge Charge Charge Charge Charge
-------------- ----------- ------------ ----------- ------------ ------------ ------------- ------------ --------------
-------------- ----------- ------------ ----------- ------------ ------------ ------------- ------------ --------------
Class A -9.99%1 -4.50%1 N/A N/A N/A N/A N/A N/A
-------------- ----------- ------------ ----------- ------------ ------------ ------------- ------------ --------------
-------------- ----------- ------------ ----------- ------------ ------------ ------------- ------------ --------------
Class B -9.90%1 -5.18%1 N/A N/A N/A N/A N/A N/A
-------------- ----------- ------------ ----------- ------------ ------------ ------------- ------------ --------------
-------------- ----------- ------------ ----------- ------------ ------------ ------------- ------------ --------------
Class C -5.23%1 -4.27%1 N/A N/A N/A N/A N/A N/A
-------------- ----------- ------------ ----------- ------------ ------------ ------------- ------------ --------------
-------------- ----------- ------------ ----------- ------------ ------------ ------------- ------------ --------------
Class Y -4.33%1 -4.33%1 N/A N/A N/A N/A N/A N/A
-------------- ----------- ------------ ----------- ------------ ------------ ------------- ------------ --------------
1. Inception of Class A, Class B, Class C and Class Y: 9/01/99
</TABLE>
Other Performance Comparisons. The Fund compares its performance annually to
that of an appropriate broadly-based market index in its Annual Report to
shareholders. You can obtain that information by contacting the Transfer Agent
at the addresses or telephone numbers shown on the cover of this Statement of
Additional Information. The Fund may also compare its performance to that of
other investments, including other mutual funds, or use rankings of its
performance by independent ranking entities. Examples of these performance
comparisons are set forth below.
|_| Lipper Rankings. From time to time the Fund may publish the ranking
of the performance of its classes of shares by Lipper Analytical Services, Inc.
Lipper is 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. Lipper currently ranks the Fund's performance against all
other growth funds. 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. Lipper also publishes
"peer-group" indices of the performance of all mutual funds in a category that
it monitors and averages of the performance of the funds in particular
categories.
|_| Morningstar Ratings and Rankings. From time to time the Fund may
publish the ranking and/or star rating of the performance of its classes of
shares by Morningstar, Inc., an independent mutual fund monitoring service.
Morningstar rates and ranks mutual funds in broad investment categories:
domestic stock funds, international stock funds, taxable bond funds and
municipal bond funds. The Fund is included in the domestic stock funds category.
Morningstar proprietary star ratings reflect historical risk-adjusted
total investment return. Investment return measures a fund's (or class's) one-,
three-, five- and ten-year average annual total returns (depending on the
inception of the fund or class) in excess of 90-day U.S. Treasury bill returns
after considering the fund's sales charges and expenses. Risk is measured by a
fund's (or class's) performance below 90-day U.S. Treasury bill returns. Risk
and investment return are combined to produce star ratings reflecting
performance relative to the other funds in the fund's category. Five stars is
the "highest" ranking (top 10% of funds in a category), four stars is "above
average" (next 22.5%), three stars is "average" (next 35%), two stars is "below
average" (next 22.5%) and one star is "lowest" (bottom 10%). The current star
rating is the fund's (or class's) overall rating, which is the fund's 3-year
rating or its combined 3- and 5-year ranking (weighted 60%/40% respectively), or
its combined 3-, 5-, and 10-year rating (weighted 40%/30%/30%, respectively),
depending on the inception date of the fund (or class). Ratings are subject to
change monthly.
The Fund may also compare its total return ranking to that of other
funds in its Morningstar category, in addition to its star rating. Those total
return rankings are percentages from one percent to one hundred percent and are
not risk-adjusted. For example, if a fund is in the 94th percentile, that means
that 94% of the funds in the same category performed better than it did.
|_| Performance Rankings and Comparisons by Other Entities and
Publications. From time to time the Fund may include in its advertisements and
sales literature performance information about the Fund cited in newspapers and
other periodicals such as The New York Times, The Wall Street Journal, Barron's,
or similar publications. That information may include performance quotations
from other sources, including Lipper and Morningstar. The performance of the
Fund's classes of shares may be compared in publications to the performance of
various market indices or other investments, and averages, performance rankings
or other benchmarks prepared by recognized mutual fund statistical services.
Investors may also wish to compare the returns on the Fund's share
classes to the return on fixed-income investments available from banks and
thrift institutions. Those include certificates of deposit, ordinary
interest-paying checking and savings accounts, and other forms of fixed or
variable time deposits, and various other instruments such as Treasury bills.
However, the Fund's returns and share price are not guaranteed or insured by the
FDIC or any other agency and will fluctuate daily, while bank depository
obligations may be insured by the FDIC and may provide fixed rates of return.
Repayment of principal and payment of interest on Treasury securities is backed
by the full faith and credit of the U.S. government.
From time to time, the Fund may publish rankings or ratings of the
Manager or Transfer Agent, and of 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 and
investor services by third parties may include comparisons of their services to
those provided by other mutual fund families selected by the rating or ranking
services. They may be based upon the opinions of the rating or ranking service
itself, using its research or judgment, or based upon surveys of investors,
brokers, shareholders or others.
A B O U T Y O U R A C C O U N T
How to Buy Shares
Additional information is presented below about the methods that can be
used to buy shares of the Fund. Appendix B contains more information about the
special sales charge arrangements offered by the Fund, and the circumstances in
which sales charges may be reduced or waived for certain classes of investors.
AccountLink. When shares are purchased through AccountLink, each purchase must
be at least $25. Shares will be purchased two regular business days following
the regular business day you instruct the Distributor to initiate the Automated
Clearing House ("ACH") transfer to buy the shares. That instruction must be
received prior to the close of The New York Stock Exchange that day. Dividends
will begin to accrue on shares purchased with the proceeds of ACH transfers on
the business day after the shares are purchased. The Exchange normally closes at
4:00 P.M., but may close earlier on certain days. The proceeds of ACH transfers
are normally received by the Fund 3 days after the transfers are initiated. If
the proceeds of the ACH transfer are not received on a timely basis, the
Distributor reserves the right to cancel the purchase order. 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 Appendix B to this
Statement of Additional Information because the Distributor or dealer or broker
incurs little or no selling expenses.
|_| 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 for your joint accounts, or for trust or
custodial accounts on behalf of your children who are minors,
and
|_| 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, and
|_| 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.
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. The Distributor will add the value, at
current offering price, of the shares you previously purchased and currently own
to the value of current purchases to determine the sales charge rate that
applies. The reduced sales charge will apply only to current purchases. You must
request it when you buy shares.
|_| The Oppenheimer Funds. The Oppenheimer funds are those mutual funds
for which the Distributor acts as the distributor or the sub-distributor and
currently include the following:
<TABLE>
<S> <C>
Oppenheimer Bond Fund Oppenheimer Main Street California Municipal Fund
Oppenheimer California Municipal Fund Oppenheimer Main Street Growth & Income Fund
Oppenheimer Capital Appreciation Fund Oppenheimer Main Street Opportunity Fund
Oppenheimer Capital Income Fund Oppenheimer Main Street Small Cap Fund
Oppenheimer Capital Preservation Fund Oppenheimer MidCap Fund
Oppenheimer Champion Income Fund Oppenheimer Multiple Strategies Fund
Oppenheimer Convertible Securities Fund Oppenheimer Municipal Bond Fund
Oppenheimer Developing Markets Fund Oppenheimer New York Municipal Fund
Oppenheimer Disciplined Allocation Fund Oppenheimer New Jersey Municipal Fund
Oppenheimer Disciplined Value Fund Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Discovery Fund Oppenheimer Quest Balanced Value Fund
Oppenheimer Emerging Growth Fund Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Emerging Technologies Fund Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Enterprise Fund Oppenheimer Quest Opportunity Value Fund
Oppenheimer Europe Fund Oppenheimer Quest Small Cap Value Fund
Oppenheimer Florida Municipal Fund Oppenheimer Quest Value Fund, Inc.
Oppenheimer Global Fund Oppenheimer Real Asset Fund
Oppenheimer Global Growth & Income Fund Oppenheimer Senior Floating Rate Fund
Oppenheimer Gold & Special Minerals Fund Oppenheimer Strategic Income Fund
Oppenheimer Growth Fund Oppenheimer Total Return Fund, Inc.
Oppenheimer High Yield Fund Oppenheimer Trinity Core Fund
Oppenheimer Insured Municipal Fund Oppenheimer Trinity Growth Fund
Oppenheimer Intermediate Municipal Fund Oppenheimer Trinity Value Fund
Oppenheimer International Bond Fund Oppenheimer U.S. Government Trust
Oppenheimer International Growth Fund Oppenheimer World Bond Fund
Oppenheimer International Small Company Fund Limited-Term New York Municipal Fund
Oppenheimer Large Cap Growth Fund Rochester Fund Municipals
Oppenheimer Limited-Term Government Fund
and the following money market funds:
Centennial New York Tax Exempt Trust
Centennial America Fund, L. P. Centennial Tax Exempt Trust
Centennial California Tax Exempt Trust Oppenheimer Cash Reserves
Centennial Government Trust Oppenheimer Money Market Fund, Inc.
Centennial Money Market Trust
</TABLE>
There is an initial sales charge on the purchase of Class A shares of
each of the Oppenheimer funds except the money market funds. Under certain
circumstances described in this Statement of Additional Information, redemption
proceeds of certain money market fund shares may be subject to a contingent
deferred sales charge.
|_| Letters of Intent. Under a Letter of Intent, if you purchase Class
A shares or Class A 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. You can include purchases made
up to 90 days before the date of the Letter.
A Letter of Intent is an investor's statement in writing to the Distributor
of the intention to purchase Class A shares or Class A and Class B shares of the
Fund (and other Oppenheimer funds) during a 13-month period (the "Letter of
Intent period"). At the investor's request, this may 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 of shares which, when added
to the investor's holdings of shares of those funds, will equal or exceed the
amount specified in the Letter. Purchases made by reinvestment of dividends or
distributions of capital gains and purchases made at net asset value without
sales charge do not count toward satisfying the amount of the Letter.
A Letter enables an investor to count the Class A and Class B shares
purchased under the Letter to obtain the reduced sales charge rate on purchases
of Class A shares of the Fund (and other Oppenheimer funds) 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 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. However, 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. That amount is described in "Terms of
Escrow," below (those terms may be amended by the Distributor 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 a Letter of Intent. If those terms are amended, as they may be from time to
time by the Fund, the investor agrees to be bound by the amended terms and 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
total purchases. 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 Prospectus, the sales
charges paid will be adjusted to the lower rate. That adjustment will be made
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.
The Transfer Agent will not hold shares in escrow for purchases of
shares of the Fund and other Oppenheimer funds by OppenheimerFunds prototype
401(k) plans under a Letter of Intent. If the intended purchase amount under a
Letter of Intent 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 will
be no adjustment of commissions paid to the broker-dealer or financial
institution of record for accounts held in the name of that plan.
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 up 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 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 total minimum investment 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. That sales
charge adjustment will apply to any shares redeemed prior to the completion
of the Letter. If the 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 of other Oppenheimer funds acquired subject to a
contingent deferred sales charge, and (c) Class A or Class B shares
acquired by exchange of either (1) 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 (2) 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 to buy shares directly
from a bank account, you must enclose a check (the minimum is $25) for the
initial purchase with your application. Shares purchased by Asset Builder Plan
payments from bank accounts are subject to the redemption restrictions for
recent purchases described in the Prospectus. Asset Builder Plans are available
only if your bank is an ACH member. Asset Builder Plans may not be used to buy
shares for OppenheimerFunds employer-sponsored qualified retirement accounts.
Asset Builder Plans also enable shareholders of Oppenheimer Cash Reserves to use
their fund account to make monthly automatic purchases of shares of up to four
other Oppenheimer funds.
If you make payments from your bank account to purchase shares of the Fund, your
bank account will be debited automatically. Normally, the debit will be made two
business days prior to the investment dates you selected on your Application.
Neither the Distributor, the Transfer Agent nor the Fund shall be responsible
for any delays in purchasing shares that result from delays in ACH
transmissions.
Before you establish Asset Builder payments, you should obtain a
prospectus of the selected fund(s) from your financial advisor (or the
Distributor) and request an application from the Distributor. Complete the
application and return it. You may change the amount of your Asset Builder
payment or you can terminate these automatic investments at any time by writing
to the Transfer Agent. The Transfer Agent requires a reasonable period
(approximately 10 days) after receipt of your instructions to implement them.
The Fund reserves the right to amend, suspend, or discontinue offering Asset
Builder plans at any time without prior notice.
Retirement Plans. Certain types of Retirement Plans are entitled to purchase
shares of the Fund without sales charge or at reduced sales charge rates, as
described in Appendix B to this Statement of Additional Information. Certain
special sales charge arrangements described in that Appendix apply to retirement
plans whose records are maintained on a daily valuation basis by Merrill Lynch
Pierce Fenner & Smith, Inc. or an independent record keeper that has a contract
or special arrangement with Merrill Lynch. If on the date the plan sponsor
signed the Merrill Lynch record keeping service agreement the plan has less than
$3 million in assets (other than assets invested in money market funds) invested
in applicable investments, then the retirement plan may purchase only Class B
shares of the Oppenheimer funds. Any retirement plans in that category that
currently invest in Class B shares of the Fund will have their Class B shares
converted to Class A shares of the Fund when the Plan's applicable investments
reach $5 million.
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.
Classes of Shares. Each class of shares of the Fund represents an interest in
the same portfolio of investments of the Fund. However, each class has different
shareholder privileges and features. The net income attributable to Class B or
Class C shares and the dividends payable on Class B or Class C shares will be
reduced by incremental expenses borne solely by that class. Those expenses
include the asset-based sales charges to which Class B and Class C are subject.
The availability of different classes of shares permits an investor to
choose the method of purchasing shares that is more appropriate for the
investor. That may depend on the amount of the purchase, the length of time the
investor expects to hold shares, and other relevant circumstances. Class A
shares normally are sold subject to an initial sales charge. While Class B and
Class C shares have no initial sales charge, the purpose of the deferred sales
charge and asset-based sales charge on Class B and Class C shares is the same as
that of the initial sales charge on Class A shares - to compensate the
Distributor and brokers, dealers and financial institutions that sell shares of
the Fund. A salesperson who is entitled to receive compensation from his or her
firm for selling Fund shares may receive different levels of compensation for
selling one class of shares than another.
The Distributor will not accept any order in the amount of $500,000 or
more for Class B shares or $1 million or more for Class C shares on behalf of a
single investor (not including dealer "street name" or omnibus accounts). That
is because generally it will be more advantageous for that investor to purchase
Class A shares of the Fund.
|_| Class B Conversion. The conversion of Class B shares to Class A
shares is subject to the continuing availability of a private letter ruling from
the Internal Revenue Service, or an opinion of counsel or tax adviser, to the
effect that the conversion of Class B shares does not constitute a taxable event
for the shareholder 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 shareholder, and absent such exchange, Class
B shares might continue to be subject to the asset-based sales charge for a
longer period of time.
|_| Allocation of Expenses. 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.
The methodology for calculating the net asset value, dividends and
distributions of the Fund's share classes recognizes two types of expenses.
General expenses that do not pertain specifically to any one class are allocated
pro rata to the shares of all classes. The allocation is based on the percentage
of the Fund's total assets that is represented by the assets of each class, and
then equally to each outstanding share within a given class. Such general
expenses include management fees, legal, bookkeeping and audit fees, printing
and mailing costs of shareholder reports, Prospectuses, Statements of Additional
Information and other materials for current shareholders, fees to unaffiliated
Trustees, custodian expenses, share issuance costs, organization and start-up
costs, interest, taxes and brokerage commissions, and non-recurring expenses,
such as litigation costs.
Other expenses that are directly attributable to a particular class are
allocated equally to each outstanding share within that class. Examples of such
expenses include distribution and service plan (12b-1) fees, transfer and
shareholder servicing agent fees and expenses and shareholder meeting expenses
(to the extent that such expenses pertain only to a specific class).
Determination of Net Asset Values Per Share. The net asset values per share of
each class of shares of the Fund are determined as of the close of business of
The New York Stock Exchange on each day that the Exchange is open. The
calculation is done 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
Exchange normally closes at 4:00 P.M., New York time, but may close earlier on
some other 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,
Martin Luther King, Jr. Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day. It may also close on other days.
Dealers other than Exchange members may conduct trading in certain
securities on days on which the Exchange is closed (including weekends and
holidays) or after 4:00 P.M. on a regular business day. The Fund's net asset
values will not be calculated on those days and the values of some of the Fund's
portfolio securities may change significantly on these days, when shareholders
may not purchase or redeem shares. Additionally, trading on European and Asian
stock exchanges and over-the-counter markets normally is completed before the
close of The New York Stock Exchange.
Changes in the values of securities traded on foreign exchanges or
markets as a result of events that occur after the prices of those securities
are determined, but before the close of The New York Stock Exchange, will not be
reflected in the Fund's calculation of its net asset values that day unless the
Manager determines that the event is likely to effect a material change in the
value of the security. The Manager may make that determination, under procedures
established by the Board.
|_| Securities Valuation. The Fund's Board of Trustees has established
procedures for the valuation of the Fund's securities. In general those
procedures are as follows:
|_| Equity securities traded on a U.S. securities exchange or on NASDAQ are
valued as follows:
(1) If last sale information is regularly reported, they are valued at
the last reported sale price on the principal exchange on which they are
traded or on NASDAQ, as applicable, on that day, or
(2) if last sale information is not available on a valuation date,
they are valued at the last reported sale price preceding the valuation
date if it is within the spread of the closing "bid" and "asked" prices on
the valuation date or, if not, at the closing "bid" price on the valuation
date.
|_| Equity securities traded on a foreign securities exchange generally are
valued in one of the following ways: (1) at the last sale price available
to the pricing service approved by the Board of Trustees, or (2) at the
last sale price obtained by the Manager from the report of the principal
exchange on which the security is traded at its last trading session on or
immediately before the valuation date, or (3) at the mean between the "bid"
and "asked" prices obtained from the principal exchange on which the
security is traded or, on the basis of reasonable inquiry, from two market
makers in the security.
|_| 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.
|_| The following securities are valued at the mean between the "bid"
and "asked" prices determined by a pricing service approved by the Fund's Board
of Trustees or obtained by the Manager from two active market makers in the
security on the basis of reasonable inquiry:
(1) debt instruments that have a maturity of more than 397 days when issued,
(2) debt instruments that had a maturity of 397 days or less when issued and
have a remaining maturity of more than 60 days, and
(3) non-money market debt instruments that had a maturity of 397 days or less
when issued and which have a remaining maturity of 60 days or less.
|_| The following securities are valued at cost, adjusted for
amortization of premiums and accretion of discounts:
(1) money market debt securities held by a non-money market fund that had a
maturity of less than 397 days when issued that have a remaining maturity
of 60 days or less, and
(2) debt instruments held by a money market fund that have a remaining maturity
of 397 days or less.
|_| 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, a security may be priced at the mean between
the "bid" and "asked" prices provided by a single active market maker
(which in certain cases may be the "bid" price if no "asked" price is
available).
In the case of U.S. government securities, mortgage-backed securities,
corporate bonds and foreign government securities, when last sale information is
not generally available, the Manager may use pricing services approved by the
Board of Trustees. The pricing service may use "matrix" comparisons to the
prices for comparable instruments on the basis of quality, yield and maturity.
Other special factors may be involved (such as the tax-exempt status of the
interest paid by municipal securities). The Manager will monitor the accuracy of
the pricing services. That monitoring may include comparing prices used for
portfolio valuation to actual sales prices of selected securities.
The closing prices in the London foreign exchange market on a
particular business day that are provided to the Manager by a bank, dealer or
pricing service that the Manager has determined to be reliable are used to value
foreign currency, including forward contracts, and to convert to U.S. dollars
securities that are denominated in foreign currency.
Puts, calls, and futures are valued at the last sale price on the
principal exchange on which they are traded or on Nasdaq, as applicable, as
determined by a pricing service approved by the Board of Trustees or by the
Manager. If there were no sales that day, they shall be valued at 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. If not, the value shall be the closing bid price on the principal exchange
or on Nasdaq on the valuation date. If the put, call or future is not traded on
an exchange or on Nasdaq, it shall be valued by the mean between "bid" and
"asked" prices obtained by the Manager from two active market makers. In certain
cases that may be at the "bid" price if no "asked" price is available.
When the Fund writes an option, an amount equal to the premium received is
included in the Fund's Statement of Assets and Liabilities as an asset. An
equivalent credit is included in the liability section. The credit is adjusted
("marked-to-market") to reflect the current market value of the option. In
determining the Fund's gain on investments, if a call or put written by the Fund
is exercised, the proceeds are increased by the premium received. If a call or
put written by the Fund expires, the Fund has a gain in the amount of the
premium. If the Fund enters into a closing purchase transaction, it will have a
gain or loss, depending on whether the premium received was more or less than
the cost of the closing transaction. If the Fund exercises a put it holds, the
amount the Fund receives on its sale of the underlying investment is reduced by
the amount of premium paid by the Fund.
Information on how to sell shares of the Fund is stated in the
Prospectus. The information below provides additional information about the
procedures and conditions for redeeming shares.
How to Sell Shares
Reinvestment Privilege. Within six months of a redemption, a shareholder may
reinvest all or part of the redemption proceeds of:
|_| Class A shares purchased subject to an initial sales charge or
Class A shares on which a contingent deferred sales charge was paid, or
|_| Class B shares that were subject to the Class B contingent
deferred sales charge when redeemed. 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 in "How to Exchange Shares" below. Reinvestment will be at the
net asset value next computed after the Transfer Agent receives the
reinvestment order. The shareholder must ask the Transfer Agent for that
privilege at the time of reinvestment. This privilege does not apply to
Class C or Class Y shares. 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.
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.
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 liquid securities from the
portfolio of the Fund, in lieu of cash.
The Fund has elected to be governed by Rule 18f-1 under the Investment
Company Act. Under that rule, 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 Fund will value securities used to pay redemptions in
kind using the same method the Fund uses to value its portfolio securities
described above under "Determination of Net Asset Values Per Share." That
valuation will be made as of the time the redemption price is determined.
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 will not cause the involuntary redemption of shares in an
account if the aggregate net asset value of such shares has fallen below the
stated minimum solely as a result of market fluctuations. If the Board exercises
this right, it may also fix the requirements for any notice to be given to the
shareholders in question (not less than 30 days). The Board may alternatively
set requirements for the shareholder to increase the investment, or set other
terms and conditions so that the shares would not be involuntarily redeemed.
Transfers of Shares. A transfer of shares to a different registration is not an
event that triggers the payment of sales charges. Therefore, shares are not
subject to the payment of a contingent deferred sales charge of any class at the
time of transfer to the name of another person or entity. It does not matter
whether the transfer occurs by absolute assignment, gift or bequest, as long as
it does not involve, directly or indirectly, a public sale of the shares. When
shares subject to a contingent deferred sales charge are transferred, the
transferred shares will remain subject to the contingent deferred sales charge.
It will be 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
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,
OppenheimerFunds 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 (1) state the reason for the
distribution; (2) state the owner's awareness of tax penalties if the
distribution is premature; and (3) conform to the requirements of the plan and
the Fund's other redemption requirements.
Participants (other than self-employed persons) in
OppenheimerFunds-sponsored pension or profit-sharing plans with shares of the
Fund held in the name of the plan or its fiduciary may not directly request
redemption of their accounts. The plan administrator or fiduciary 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 and submitted to the
Transfer Agent 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 Sub-Advisor, the
Distributor, and the Transfer Agent assume no responsibility to determine
whether a distribution satisfies the conditions of applicable tax laws and will
not be responsible for any 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. Shareholders should contact their
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
an order placed by the dealer or broker. However, 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 closes. Normally, the Exchange closes at 4:00 P.M., but
may do so earlier on some days. Additionally, the order must have been
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. The signature(s) of the registered owners on the
redemption documents must be guaranteed 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
(having a value of at least $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. Payments must also be sent to the address of record for
the account and the address must not have been changed within the prior 30 days.
Required minimum distributions from OppenheimerFunds-sponsored 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
Account Application or by signature-guaranteed instructions sent to the Transfer
Agent. Shares are normally redeemed pursuant to an Automatic Withdrawal Plan
three business days before the payment transmittal date you select in the
Account Application. If a contingent deferred sales charge applies to the
redemption, the amount of the check or payment will be reduced accordingly.
The Fund cannot guarantee receipt of a payment on the date requested.
The Fund reserves the right to amend, suspend or discontinue offering these
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 contingent deferred sales charge is waived as described in Appendix B
to this Statement of Additional Information.
By requesting an Automatic Withdrawal or Exchange Plan, the shareholder
agrees to the terms and conditions that apply to such plans, as stated below.
These provisions may be amended from time to time by the Fund and/or the
Distributor. When adopted, any amendments will automatically apply to existing
Plans.
|X| Automatic Exchange Plans. Shareholders can authorize the Transfer
Agent 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.
Instructions should be provided on the OppenheimerFunds Application or
signature-guaranteed instructions. 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.
|X| Automatic Withdrawal Plans. Fund shares will be redeemed as
necessary to meet withdrawal payments. Shares acquired without a sales charge
will be redeemed first. 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 these plans should not be considered as a yield or income on your
investment.
The Transfer Agent will administer the investor's Automatic Withdrawal
Plan as agent for the shareholder(s) (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 not taken by the Transfer Agent in good faith to administer the
Plan. Share 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.
Shares will be redeemed to make withdrawal payments at the net asset
value per share determined on the redemption date. Checks or AccountLink
payments representing the proceeds of Plan withdrawals will normally be
transmitted three business days prior to the date selected for receipt of the
payment, according to the choice specified in writing by the Planholder. Receipt
of payment on the date selected cannot be guaranteed.
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 after 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 to redeem all, or any part of, the
shares held under the Plan. That notice must be in proper form in accordance
with the requirements of the then-current Prospectus of the Fund. In that case,
the Transfer Agent will redeem the number of shares requested at the net asset
value per share in effect and will mail a check for the proceeds to the
Planholder.
The Planholder may terminate a Plan at any time by writing to the
Transfer Agent. The Fund may also give directions to the Transfer Agent to
terminate a Plan. The Transfer Agent will also terminate a Plan upon its receipt
of evidence satisfactory to it that the Planholder has died or is legally
incapacitated. Upon termination of a Plan by the Transfer Agent or the Fund,
shares that have not been redeemed will be held in uncertificated form in the
name of the Planholder. The account will continue as a dividend-reinvestment,
uncertificated account unless and until proper instructions are received from
the Planholder, his or her executor or guardian, or another authorized person.
To use shares held under the Plan as collateral for a debt, the
Planholder may request issuance of a portion of the shares in certificated form.
Upon written request from the Planholder, the Transfer Agent will determine the
number of shares for which a certificate may be issued without causing the
withdrawal checks to stop. 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 Oppenheimer funds
that have a single class without a class designation are deemed "Class A" shares
for this purpose. You can obtain a current list showing which funds offer which
classes by calling the Distributor at 1-800-525-7048.
|_| All of the Oppenheimer funds currently offer Class A, B and C
shares except Oppenheimer Money Market Fund, Inc., Centennial Money Market
Trust, Centennial Tax Exempt Trust, Centennial Government Trust, Centennial New
York Tax Exempt Trust, Centennial California Tax Exempt Trust, and Centennial
America Fund, L.P., which only offer Class A shares.
|_| Oppenheimer Main Street California Municipal Fund currently offers
only Class A and Class B shares. |_| Class B and Class C shares of
Oppenheimer Cash Reserves are generally available only by exchange
from the same class of shares of other Oppenheimer funds or through
OppenheimerFunds-sponsored 401 (k) plans. |_| Class Y shares of
Oppenheimer Real Asset Fund may not be exchanged for shares of any
other Fund.
Class A shares of Oppenheimer funds may be exchanged at net asset value
for shares of any money market fund offered by the Distributor. 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. They may also be used to purchase shares of Oppenheimer funds subject to
a contingent deferred sales charge.
Shares of Oppenheimer Money Market Fund, Inc. purchased with the
redemption proceeds of shares of other mutual funds (other than funds managed by
the Manager or its subsidiaries) redeemed within the 30 days prior to that
purchase may subsequently be exchanged for shares of other Oppenheimer funds
without being subject to an initial or contingent deferred sales charge. To
qualify for that 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. If requested, they must
supply proof of entitlement to this privilege.
For accounts established on or before March 8, 1996 holding Class M
shares of Oppenheimer Convertible Securities Fund, Class M shares can be
exchanged only for Class A shares of other Oppenheimer funds. Exchanges to Class
M shares of Oppenheimer Convertible Securities Fund are permitted from Class A
shares of Oppenheimer Money Market Fund, Inc. or Oppenheimer Cash Reserves that
were acquired by exchange of Class M shares. No other exchanges may be made to
Class M shares.
Shares of the Fund acquired by reinvestment of dividends or
distributions from any of the other Oppenheimer funds 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.
The Fund may amend, suspend or terminate the exchange privilege at any
time. Although the Fund may impose these changes at any time, it will provide
you with notice of such changes when it is able to do so. It may also be
required to provide 60 days notice prior to materially amending or terminating
the exchange privilege. That 60 day notice is not required in extraordinary
circumstances.
|_| How Exchanges Affect Contingent Deferred Sales Charges. 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. 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 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. Before exchanging
shares, shareholders should take into account how the exchange may affect any
contingent deferred sales charge that might be imposed in the subsequent
redemption of remaining shares.
If Class B shares of any Oppenheimer fund are exchanged for Class B
shares of Oppenheimer Limited-Term Government Fund or Limited-Term New York
Municipal Fund and are subsequently redeemed from those two funds, they will be
subject to the contingent deferred sales charge of the Oppenheimer fund from
which they were exchanged (which will be at a higher rate). They will not be
subject to the contingent deferred sales charge of Oppenheimer Limited-Term
Government Fund or Limited-Term New York Municipal Fund.
Shareholders owning shares of more than one class must specify which
class of shares they wish to exchange.
|_| Limits on Multiple Exchange Orders. 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.
|_| Telephone Exchange Requests. When exchanging shares by telephone, a
shareholder must have an existing account in the fund to which the exchange is
to be made. Otherwise, the investors must obtain a Prospectus of that fund
before the exchange request may be submitted. For full or partial exchanges of
an account made by telephone, any special account features such as Asset Builder
Plans and Automatic Withdrawal Plans 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.
|_| Processing 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 Fund may refuse the
request.
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.
The different Oppenheimer funds available for exchange have different
investment objectives, policies and risks. 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
Dividends and Distributions. The Fund has no fixed dividend rate and there can
be no assurance as to the payment of any dividends or the realization of any
capital gains. The dividends and distributions paid by a class of shares will
vary from time to time depending on market conditions, the composition of the
Fund's portfolio, and expenses borne by the Fund or borne separately by a class.
Dividends are calculated in the same manner, at the same time, and on the same
day for each class of shares. However, dividends on Class B and Class C shares
are expected to be lower than dividends on Class A and Class Y shares. That is
because of the effect of the asset-based sales charge on Class B and Class C
shares. Those dividends will also differ in amount as a consequence of any
difference in the net asset values of the different classes of shares.
Dividends, distributions and 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. Reinvestment will be made 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. Unclaimed accounts may be subject to
state escheatment laws, and the Fund and the Transfer Agent will not be
liable to shareholders or their representatives for compliance with those
laws in good faith.
Tax Status of the Fund's Dividends and Distributions. The Federal tax treatment
of the Fund's dividends and capital gains distributions is briefly highlighted
in the Prospectus.
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. The amount of dividends paid by the Fund that may qualify for
the deduction is limited to the aggregate amount of qualifying dividends that
the Fund derives from 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.
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. If it
does not, the Fund must pay an excise tax on the amounts not distributed. It is
presently anticipated that the Fund will meet those requirements. However, the
Board of Trustees and the Manager might determine in a particular year that it
would be in the best interests 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.
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). 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 Internal Revenue Code contains a
number of complex tests relating to qualification which the Fund might not meet
in any particular year. 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.
If prior distributions made by the Fund must be re-characterized as a
non-taxable return of capital at the end of the fiscal year as a result of the
effect of the Fund's investment policies, they will be identified as such in
notices sent to shareholders.
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 above. Reinvestment will be
made without sales charge at the net asset value per share in effect at the
close of business on the payable date of the dividend or distribution. To elect
this option, the shareholder must notify the Transfer Agent in writing and must
have an existing account in the fund selected for reinvestment. Otherwise the
shareholder first must obtain a prospectus for that fund and an application from
the Distributor to establish an account. Dividends and/or distributions from
shares of certain other Oppenheimer funds (other than Oppenheimer Cash Reserves)
may be invested in shares of this Fund on the same basis.
Additional Information About the Fund
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 shares of the other Oppenheimer
funds and is sub-distributor for funds managed by a subsidiary of the Manager.
The Transfer Agent. OppenheimerFunds Services, the Fund's Transfer Agent, is a
division of the Manager. It is responsible for maintaining the Fund's
shareholder registry and shareholder accounting records, and for paying
dividends and distributions to shareholders. It also handles shareholder
servicing and administrative functions. It acts on an "at-cost" basis. It also
acts as 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 numbers shown on the back cover.
The Custodian. The Bank of New York is the custodian of the Fund's assets. The
custodian bank's responsibilities include safeguarding and controlling the
Fund's portfolio securities and handling the delivery of such securities to and
from the Fund. It will be the practice of the Fund to deal with the custodian
bank in a manner uninfluenced by any banking relationship the custodian bank 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.
Those uninsured balances at times may be substantial.
Independent Auditors. KPMG LLP is the independent auditor of the Fund. The firm
audits the Fund's financial statements and performs other related audit
services. KPMG LLP also acts as auditor for certain other funds advised by the
Manager and its affiliates.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of Oppenheimer Trinity Value Fund:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Trinity Value Fund as of July 31,
2000, and the related statement of operations, statement of changes in net
assets and financial highlights for the period from September 1, 1999
(commencement of operations) to July 31, 2000. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of July 31, 2000, by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Oppenheimer Trinity Value Fund as of July 31, 2000, and the results of its
operations, the changes in its net assets and financial highlights for the
period from September 1, 1999 (commencement of operations) to July 31, 2000, in
conformity with accounting principles generally accepted in the United States of
America.
/s/ KPMG LLP
KPMG LLP
Denver, Colorado
August 21, 2000
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS July 31, 2000
MARKET VALUE
SHARES SEE NOTE 1
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 96.4%
-------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS - 3.4%
-------------------------------------------------------------------------------------------------------------------------
CHEMICALS - 2.4%
-------------------------------------------------------------------------------------------------------------------------
Dow Chemical Co. 2,900 $ 83,375
-------------------------------------------------------------------------------------------------------------------------
Du Pont (E.I.) de Nemours & Co. 900 40,781
----------------
124,156
-------------------------------------------------------------------------------------------------------------------------
PAPER - 1.0%
-------------------------------------------------------------------------------------------------------------------------
Westvaco Corp. 1,900 52,131
-------------------------------------------------------------------------------------------------------------------------
CAPITAL GOODS - 8.0%
-------------------------------------------------------------------------------------------------------------------------
AEROSPACE/DEFENSE - 1.1%
-------------------------------------------------------------------------------------------------------------------------
TRW, Inc. 1,300 58,419
-------------------------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT - 0.8%
-------------------------------------------------------------------------------------------------------------------------
Rockwell International Corp. 1,200 42,075
-------------------------------------------------------------------------------------------------------------------------
MANUFACTURING - 6.1%
-------------------------------------------------------------------------------------------------------------------------
Bemis Co., Inc. 800 27,500
-------------------------------------------------------------------------------------------------------------------------
Crane Co. 1,400 30,800
-------------------------------------------------------------------------------------------------------------------------
Danaher Corp. 300 15,281
-------------------------------------------------------------------------------------------------------------------------
Deere & Co. 1,700 65,556
-------------------------------------------------------------------------------------------------------------------------
Parker-Hannifin Corp. 200 7,112
-------------------------------------------------------------------------------------------------------------------------
Tektronix, Inc. 300 18,450
-------------------------------------------------------------------------------------------------------------------------
Temple-Inland, Inc. 1,000 43,437
-------------------------------------------------------------------------------------------------------------------------
Tyco International Ltd. 1,500 80,250
-------------------------------------------------------------------------------------------------------------------------
United Technologies Corp. 600 35,025
----------------
323,411
-------------------------------------------------------------------------------------------------------------------------
COMMUNICATION SERVICES - 9.3%
-------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-LONG DISTANCE - 5.5%
-------------------------------------------------------------------------------------------------------------------------
AT&T Corp. 2,900 89,719
-------------------------------------------------------------------------------------------------------------------------
Sprint Corp. (Fon Group) 3,200 114,000
-------------------------------------------------------------------------------------------------------------------------
Verizon Communications 1,600 75,200
-------------------------------------------------------------------------------------------------------------------------
WorldCom, Inc. (1) 300 11,719
----------------
290,638
-------------------------------------------------------------------------------------------------------------------------
TELEPHONE UTILITIES - 3.8%
-------------------------------------------------------------------------------------------------------------------------
BellSouth Corp. 1,900 75,644
-------------------------------------------------------------------------------------------------------------------------
SBC Communications, Inc. 3,000 127,687
----------------
203,331
-------------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS - 9.2%
-------------------------------------------------------------------------------------------------------------------------
AUTOS & HOUSING - 5.0%
-------------------------------------------------------------------------------------------------------------------------
Ford Motor Co. 1,100 51,219
-------------------------------------------------------------------------------------------------------------------------
Fortune Brands, Inc. 2,400 54,000
-------------------------------------------------------------------------------------------------------------------------
General Motors Corp. 1,200 68,325
-------------------------------------------------------------------------------------------------------------------------
Whirlpool Corp. 2,100 90,694
----------------
264,238
-------------------------------------------------------------------------------------------------------------------------
LEISURE & ENTERTAINMENT - 1.1%
-------------------------------------------------------------------------------------------------------------------------
Marriott International, Inc., Cl. A 1,500 60,000
-------------------------------------------------------------------------------------------------------------------------
MEDIA - 0.5%
-------------------------------------------------------------------------------------------------------------------------
Meredith Corp. 800 25,450
</TABLE>
9 Oppenheimer Trinity Value Fund
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS Continued
MARKET VALUE
SHARES SEE NOTE 1
<S> <C> <C>
-------------------------------------------------------------------------------------------------------------------------
Retail: General - 1.2%
-------------------------------------------------------------------------------------------------------------------------
Sears Roebuck & Co. 2,100 $ 62,737
-------------------------------------------------------------------------------------------------------------------------
RETAIL: SPECIALTY - 1.4%
-------------------------------------------------------------------------------------------------------------------------
Target Corp. 2,600 75,400
-------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 5.0%
-------------------------------------------------------------------------------------------------------------------------
ENTERTAINMENT - 0.7%
-------------------------------------------------------------------------------------------------------------------------
McDonald's Corp. 1,200 37,800
-------------------------------------------------------------------------------------------------------------------------
FOOD & DRUG RETAILERS - 1.0%
-------------------------------------------------------------------------------------------------------------------------
CVS Corp. 1,400 55,212
-------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD GOODS - 3.3%
-------------------------------------------------------------------------------------------------------------------------
Kimberly-Clark Corp. 1,000 57,437
-------------------------------------------------------------------------------------------------------------------------
Procter & Gamble Co. 2,100 119,437
----------------
176,874
-------------------------------------------------------------------------------------------------------------------------
ENERGY - 11.4%
-------------------------------------------------------------------------------------------------------------------------
ENERGY SERVICES - 1.1%
-------------------------------------------------------------------------------------------------------------------------
Halliburton Co. 500 23,062
-------------------------------------------------------------------------------------------------------------------------
Schlumberger Ltd. 300 22,181
-------------------------------------------------------------------------------------------------------------------------
Transocean Sedco Forex, Inc. 300 14,850
----------------
60,093
-------------------------------------------------------------------------------------------------------------------------
OIL: DOMESTIC - 8.6%
-------------------------------------------------------------------------------------------------------------------------
Apache Corp. 200 9,950
-------------------------------------------------------------------------------------------------------------------------
Burlington Resources, Inc. 1,200 39,150
-------------------------------------------------------------------------------------------------------------------------
Chevron Corp. 800 63,200
-------------------------------------------------------------------------------------------------------------------------
Exxon Mobil Corp. 3,300 264,000
-------------------------------------------------------------------------------------------------------------------------
Kerr-McGee Corp. 200 10,975
-------------------------------------------------------------------------------------------------------------------------
ONEOK, Inc. 600 16,012
-------------------------------------------------------------------------------------------------------------------------
Texaco, Inc. 1,000 49,437
----------------
452,724
-------------------------------------------------------------------------------------------------------------------------
OIL: INTERNATIONAL - 1.7%
-------------------------------------------------------------------------------------------------------------------------
Royal Dutch Petroleum Co., NY Shares 1,500 87,375
-------------------------------------------------------------------------------------------------------------------------
FINANCIAL - 29.0%
-------------------------------------------------------------------------------------------------------------------------
BANKS - 15.4%
-------------------------------------------------------------------------------------------------------------------------
Bank of America Corp. 1,500 71,062
-------------------------------------------------------------------------------------------------------------------------
BB&T Corp. 4,200 104,737
-------------------------------------------------------------------------------------------------------------------------
Firstar Corp. 2,400 47,400
-------------------------------------------------------------------------------------------------------------------------
J.P. Morgan & Co., Inc. 1,000 133,500
-------------------------------------------------------------------------------------------------------------------------
Northern Trust Corp. 1,400 104,825
-------------------------------------------------------------------------------------------------------------------------
SunTrust Banks, Inc. 2,400 114,900
-------------------------------------------------------------------------------------------------------------------------
U.S. Bancorp 3,700 70,994
-------------------------------------------------------------------------------------------------------------------------
Wells Fargo Co. 4,000 165,250
----------------
812,668
-------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL - 11.6%
-------------------------------------------------------------------------------------------------------------------------
American Express Co. 2,100 119,044
-------------------------------------------------------------------------------------------------------------------------
Citigroup, Inc. 4,200 296,362
-------------------------------------------------------------------------------------------------------------------------
Fannie Mae 2,700 134,663
-------------------------------------------------------------------------------------------------------------------------
Freddie Mac 1,100 43,381
-------------------------------------------------------------------------------------------------------------------------
Synovus Financial Corp. 1,000 18,000
----------------
611,450
</TABLE>
10 Oppenheimer Trinity Value Fund
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS Continued
MARKET VALUE
SHARES SEE NOTE 1
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------------------
Insurance - 2.0%
-------------------------------------------------------------------------------------------------------------------------
American International Group, Inc. 900 $ 78,919
-------------------------------------------------------------------------------------------------------------------------
Torchmark Corp. 1,100 27,363
----------------
106,282
-------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 3.5%
-------------------------------------------------------------------------------------------------------------------------
HEALTHCARE/DRUGS - 2.2%
-------------------------------------------------------------------------------------------------------------------------
Pharmacia Corp. 1,038 56,831
-------------------------------------------------------------------------------------------------------------------------
UnitedHealth Group, Inc. 700 57,269
----------------
114,100
-------------------------------------------------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES - 1.3%
-------------------------------------------------------------------------------------------------------------------------
Biomet, Inc. 500 22,375
-------------------------------------------------------------------------------------------------------------------------
HEALTHSOUTH Corp. (1) 3,500 20,781
-------------------------------------------------------------------------------------------------------------------------
Tenet Healthcare Corp. 900 27,394
----------------
70,550
-------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY - 9.7%
-------------------------------------------------------------------------------------------------------------------------
COMPUTER HARDWARE - 5.6%
-------------------------------------------------------------------------------------------------------------------------
Apple Computer, Inc. (1) 1,100 55,894
-------------------------------------------------------------------------------------------------------------------------
Compaq Computer Corp. 3,800 106,638
-------------------------------------------------------------------------------------------------------------------------
Hewlett-Packard Co. 700 76,431
-------------------------------------------------------------------------------------------------------------------------
Pitney Bowes, Inc. 1,700 58,863
----------------
297,826
-------------------------------------------------------------------------------------------------------------------------
ELECTRONICS - 3.1%
-------------------------------------------------------------------------------------------------------------------------
Advanced Micro Devices, Inc. (1) 900 64,744
-------------------------------------------------------------------------------------------------------------------------
Molex, Inc. 900 42,342
-------------------------------------------------------------------------------------------------------------------------
Motorola, Inc. 900 29,756
-------------------------------------------------------------------------------------------------------------------------
Novellus Systems, Inc. (1) 500 26,969
----------------
163,811
-------------------------------------------------------------------------------------------------------------------------
PHOTOGRAPHY - 1.0%
-------------------------------------------------------------------------------------------------------------------------
Eastman Kodak Co. 900 49,388
-------------------------------------------------------------------------------------------------------------------------
Xerox Corp. 300 4,463
----------------
53,851
-------------------------------------------------------------------------------------------------------------------------
UTILITIES - 7.9%
-------------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES - 3.1%
-------------------------------------------------------------------------------------------------------------------------
AES Corp. (The) (1) 1,400 74,813
-------------------------------------------------------------------------------------------------------------------------
Duke Energy Corp. 1,400 86,363
----------------
161,176
-------------------------------------------------------------------------------------------------------------------------
GAS UTILITIES - 4.8%
-------------------------------------------------------------------------------------------------------------------------
El Paso Energy Corp. 200 9,675
-------------------------------------------------------------------------------------------------------------------------
Enron Corp. 2,100 154,613
-------------------------------------------------------------------------------------------------------------------------
Sempra Energy 4,900 91,875
----------------
256,163
----------------
Total Common Stocks (Cost $5,082,045) 5,099,941
</TABLE>
11 Oppenheimer Trinity Value Fund
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS Continued
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
<S> <C> <C>
-------------------------------------------------------------------------------------------------------------------------
Repurchase Agreements - 5.0%
-------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with Banc One Capital Markets, Inc.,
6.53%, dated 7/31/00, to be repurchased at $265,048 on
8/1/00, collateralized by U.S. Treasury Nts., 4.25%-7.875%,
8/31/00--8/15/09, with a value of $193,589 and U.S. Treasury
Bonds, 5.25%--14%, 8/15/03--11/15/28, with a value of
$77,326 (Cost $265,000) $ 265,000 $ 265,000
-------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $5,347,045) 101.4% 5,364,941
-------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (1.4) (71,941)
--------------- -----------
NET ASSETS 100.0% $5,293,000
=============== ===========
</TABLE>
1. Non-income-producing security.
See accompanying Notes to Financial Statements.
12 Oppenheimer Trinity Value Fund
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES July 31, 2000
-------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C>
Investments, at value (cost $5,347,045) - see accompanying statement $5,364,941
-------------------------------------------------------------------------------------------------------------------------------
Cash 1,343
-------------------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 20,884
Interest 4,168
Investments sold 3,869
Other 4
-----------------
Total assets 5,395,209
-------------------------------------------------------------------------------------------------------------------------------
LIABILITIES Payables and other liabilities:
Investments purchased 73,491
Shares of beneficial interest redeemed 19,672
Distribution and service plan fees 2,389
Shareholder reports 1,775
Transfer and shareholder servicing agent fees 171
Trustees' compensation 95
Other 4,616
-----------------
Total liabilities 102,209
-------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $5,293,000
=================
-------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital $5,330,493
-------------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income 5,131
-------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (60,520)
-------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 17,896
-----------------
Net assets $5,293,000
=================
</TABLE>
13 Oppenheimer Trinity Value Fund
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES Continued
-------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
Class A Shares:
<S> <C>
Net asset value and redemption price per share (based on net assets of
$3,797,560 and 398,732 shares of beneficial interest outstanding) $9.52
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $10.10
-------------------------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $643,078
and 68,050 shares of beneficial interest outstanding) $9.45
-------------------------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $851,409
and 88,928 shares of beneficial interest outstanding) $9.57
-------------------------------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $953 and 100 shares of beneficial interest outstanding) $9.53
</TABLE>
See accompanying Notes to Financial Statements.
14 Oppenheimer Trinity Value Fund
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the Period from September 1, 1999
(commencement of operations) to July 31, 2000
-------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
<S> <C>
Dividends $51,860
-------------------------------------------------------------------------------------------------------------------------------
Interest 8,116
-----------------
Total income 59,976
-------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 22,550
-------------------------------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 2,769
Class B 2,132
Class C 2,359
-------------------------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 1,660
Class B 184
Class C 210
Class Y --
-------------------------------------------------------------------------------------------------------------------------------
Shareholder reports 8,989
-------------------------------------------------------------------------------------------------------------------------------
Registration and filing fees 4,040
-------------------------------------------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 1,727
-------------------------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 1,655
-------------------------------------------------------------------------------------------------------------------------------
Insurance expense 1,264
-------------------------------------------------------------------------------------------------------------------------------
Trustees' compensation 122
-------------------------------------------------------------------------------------------------------------------------------
Other 197
-----------------
Total expenses 49,858
Less expenses paid indirectly (1,654)
-----------------
Net expenses 48,204
-------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 11,772
-------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized loss on investments (60,520)
-------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 17,896
-----------------
Net realized and unrealized loss (42,624)
--------------------------------------------------------------------------------------------------------------=================
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ($30,852)
=================
</TABLE>
See accompanying Notes to Financial Statements.
15 Oppenheimer Trinity Value Fund
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
PERIOD ENDED
JULY 31, 2000(1)
-------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
<S> <C>
Net investment income $ 11,772
-------------------------------------------------------------------------------------------------------------------------------
Net realized loss (60,520)
-------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 17,896
-----------------
Net decrease in net assets resulting from operations (30,852)
-------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment
income:
Class A (7,408)
Class B (185)
Class C (1)
Class Y (4)
-------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from
beneficial interest transactions:
Class A 3,769,200
Class B 630,688
Class C 828,562
Class Y --
-------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Total increase 5,190,000
-------------------------------------------------------------------------------------------------------------------------------
Beginning of period 103,000 (2)
-----------------
End of period (including undistributed net investment
income of $5,131 for the period ended July 31, 2000) $5,293,000
=================
</TABLE>
1. For the period from September 1, 1999 (commencement of operations) to July
31, 2000.
2. Reflects the value of the Manager's initial seed money investment at
August 18, 1999.
See accompanying Notes to Financial Statements.
16 Oppenheimer Trinity Value Fund
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
CLASS A CLASS B CLASS C CLASS Y
------------------ ----------------- ----------------- -----------------
PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED
JULY 31, 2000(1) JULY 31, 2000(1) JULY 31, 2000(1) JULY 31, 2000(1)
-----------------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00
-----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .05 .01 (.02) .07
Net realized and unrealized loss (.50) (.53) (.41) (.50)
------------------ ----------------- ----------------- -----------------
Total loss from investment operations (.45) (.52) (.43) (.43)
-----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.03) (.03) -- (2) (.04)
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.52 $9.45 $9.57 $9.53
================== ================= ================= =================
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(3) (4.50)% (5.18)% (4.27)% (4.33)%
-----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $3,798 $643 $851 $1
-----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $2,802 $235 $260 $1
-----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(4)
Net investment income (loss) 0.52% (0.36)% (0.36)% 0.62%
Expenses 1.53% 2.41% 2.41% 1.42%
Expenses, net of indirect expenses 1.47% 2.35% 2.35% 1.37%
-----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 285% 285% 285% 285%
</TABLE>
1. For the period from September 1, 1999 (commencement of operations) to July
31, 2000.
2. Less than $0.005.
3. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or commencement of operations), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
4. Annualized for periods of less than one full year.
See accompanying Notes to Financial Statements.
17 Oppenheimer Trinity Value Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Trinity Value Fund (the Fund) is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
The Fund's investment objective is to seek long-term growth of capital. The
Fund's investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C and Class Y shares. Class A shares are
sold at their offering price, which is normally net asset value plus a front-end
sales charge. Class B and Class C shares are sold without a front-end sales
charge but may be subject to a contingent deferred sales charge (CDSC). Class Y
shares are sold to certain institutional investors without either a front-end
sales charge or a CDSC. All classes of shares have identical rights to earnings,
assets and voting privileges, except that each class has its own expenses
directly attributable to that class and exclusive voting rights with respect to
matters affecting that class. Classes A, B and C have separate distribution
and/or service plans. No such plan has been adopted for Class Y shares. Class B
shares will automatically convert to Class A shares six years after the date of
purchase. The following is a summary of significant accounting policies
consistently followed by the Fund.
SECURITIES VALUATION Securities listed or traded on National Stock Exchanges or
other domestic or foreign exchanges are valued based on the last sale price of
the security traded on that exchange prior to the time when the Fund's assets
are valued. In the absence of a sale, the security is valued at the last sale
price on the prior trading day, if it is within the spread of the closing bid
and asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are valued
primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
REPURCHASE AGREEMENTS The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
FEDERAL TAXES The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required. As of July 31, 2000, the
Fund had available for federal income tax purposes an unused capital loss
carryover as follows:
EXPIRING
--------------
2008 $60,520
TRUSTEES' COMPENSATION The Fund has adopted an unfunded retirement plan for the
Fund's independent Board of Trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service.
The Board of Trustees has adopted a deferred compensation plan for independent
trustees that enables trustees to elect to defer receipt of all or a portion of
annual compensation they are entitled to receive from the Fund. Under the plan,
the compensation deferred is periodically adjusted as though an equivalent
amount had been invested for the Board of Trustees in shares of one or more
Oppenheimer funds selected by the trustee. The amount paid to the Board of
Trustees under the plan will be determined based upon the performance of the
selected funds. Deferral of trustees' fees under the plan will not affect the
net assets of the Fund, and will not materially affect the Fund's assets,
liabilities or net investment income per share.
18 Oppenheimer Trinity Value Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
1. SIGNIFICANT ACCOUNTING POLICIES Continued
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
CLASSIFICATION OF DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Net investment
income (loss) and net realized gain (loss) may differ for financial statement
and tax purposes. The character of dividends and distributions made during the
fiscal year from net investment income or net realized gains may differ from its
ultimate characterization for federal income tax purposes. Also, due to timing
of dividends and distributions, the fiscal year in which amounts are distributed
may differ from the fiscal year in which the income or realized gain was
recorded by the Fund.
The Fund adjusts the classification of distributions to shareholders to reflect
the differences between financial statement amounts and distributions determined
in accordance with income tax regulations. Accordingly, during the period ended
July 31, 2000, amounts have been reclassified to reflect a decrease in paid-in
capital of $957. Undistributed net investment income was increased by the same
amount. Net assets of the Fund were unaffected by the reclassifications.
EXPENSE OFFSET ARRANGEMENTS Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
OTHER Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Certain dividends from foreign
securities will be recorded as soon as the Fund is informed of the dividend if
such information is obtained subsequent to the ex-dividend date. Realized gains
and losses on investments and unrealized appreciation and depreciation are
determined on an identified cost basis, which is the same basis used for federal
income tax purposes.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period.
Actual results could differ from those estimates.
19 Oppenheimer Trinity Value Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
PERIOD ENDED JULY 31, 2000(1)
SHARES AMOUNT
<S> <C> <C>
----------------------------------------------------------------------------------------
CLASS A
Sold 436,509 $4,185,851
Dividends and/or distributions reinvested 120 1,147
Redeemed (47,897) (417,798)
-------- ----------
Net increase 388,732 $3,769,200
======== ==========
----------------------------------------------------------------------------------------
CLASS B
Sold 78,094 $ 727,466
Dividends and/or distributions reinvested 19 182
Redeemed (10,163) (96,960)
-------- ----------
Net increase 67,950 $ 630,688
======== ==========
----------------------------------------------------------------------------------------
CLASS C
Sold 91,083 $ 850,172
Dividends and/or distributions reinvested -- --
Redeemed (2,255) (21,610)
-------- ----------
Net increase 88,828 $ 828,562
======== ==========
----------------------------------------------------------------------------------------
CLASS Y
Sold -- $ --
Dividends and/or distributions reinvested -- --
Redeemed -- --
-------- ---------
Net increase -- $ --
======== =========
</TABLE>
1. For the period from September 1, 1999 (commencement of operations) to
July 31, 2000.
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the period ended July 31, 2000, were
$14,545,705 and $9,403,139, respectively.
As of July 31, 2000, unrealized appreciation (depreciation) based on cost of
securities for federal income tax purposes of $5,347,045 was:
<TABLE>
<S> <C>
Gross unrealized appreciation $274,178
Gross unrealized depreciation (256,282)
--------
Net unrealized appreciation $ 17,896
========
</TABLE>
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee of 0.75% of
the first $200 million of average annual net assets of the Fund, 0.72% of the
next $200 million, 0.69% of the next $200 million, 0.66% of the next $200
million, and 0.60% of average annual net assets in excess of $800 million. The
Fund's management fee for the period ended July 31, 2000 was an annualized rate
of 0.75%, before any waiver by the Manager if applicable.
20 Oppenheimer Trinity Value Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES CONTINUED
TRANSFER AGENT FEES OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund on an
"at-cost" basis. OFS also acts as the transfer and shareholder servicing agent
for the other Oppenheimer funds.
SUB-ADVISOR FEES The Manager pays Trinity Investment Management Corporation (the
Sub-Advisor) based on the fee schedule set forth in the Prospectus. For the
period ended July 31, 2000, the Manager paid $6,458 to the Sub-Advisor.
DISTRIBUTION AND SERVICE PLAN FEES Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the period
indicated.
<TABLE>
<CAPTION>
------------------- ------------------ -------------------- ---------------- ----------------- ----------------
AGGREGATE CLASS A FRONT-END COMMISSIONS ON COMMISSIONS ON COMMISSIONS ON
FRONT-END SALES SALES CHARGES CLASS A SHARES CLASS B SHARES CLASS C SHARES
CHARGES ON CLASS RETAINED BY ADVANCED BY ADVANCED BY ADVANCED BY
PERIOD ENDED A SHARES DISTRIBUTOR DISTRIBUTOR(1) DISTRIBUTOR(1) DISTRIBUTOR(1)
------------------- ------------------ -------------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C>
July 31, 2000 $10,091 $2,654 $1,281 $18,872 $6,991
------------------- ------------------ -------------------- ---------------- ----------------- ----------------
</TABLE>
1. THE DISTRIBUTOR ADVANCES COMMISSION PAYMENTS TO DEALERS FOR CERTAIN
SALES OF CLASS A SHARES AND FOR SALES OF CLASS B AND CLASS C SHARES FROM
ITS OWN RESOURCES AT THE TIME OF SALE.
<TABLE>
<CAPTION>
---------------------- ------------------------------ ---------------------------- ---------------------------
CLASS A CONTINGENT DEFERRED CLASS B CONTINGENT CLASS C CONTINGENT
SALES CHARGES RETAINED BY DEFERRED SALES CHARGES DEFERRED SALES CHARGES
PERIOD ENDED DISTRIBUTOR RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR
----------------------- ------------------------------ ---------------------------- ---------------------------
<S> <C> <C> <C>
July 31, 2000 $-- $1,041 $--
----------------------- ------------------------------ ---------------------------- ---------------------------
</TABLE>
The Fund has adopted a Service Plan for Class A shares and Distribution and
Service Plans for Class B and Class C shares under Rule 12b-1 of the Investment
Company Act. Under those plans the Fund pays the Distributor for all or a
portion of its costs incurred in connection with the distribution and/or
servicing of the shares of the particular class.
CLASS A SERVICE PLAN FEES Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements to
the Distributor at a rate of up to 0.25% of average annual net assets of Class A
shares purchased. The Distributor makes payments to plan recipients quarterly at
an annual rate not to exceed 0.25% of the average annual net assets consisting
of Class A shares of the Fund. For the period ended July 31, 2000, payments
under the Class A plan totaled $2,769 prior to Manager waivers if applicable,
all of which were paid by the Distributor to recipients. Any unreimbursed
expenses the Distributor incurs with respect to Class A shares in any fiscal
year cannot be recovered in subsequent years.
CLASS B AND CLASS C DISTRIBUTION AND SERVICE PLAN FEES Under each plan, service
fees and distribution 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 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 under
the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B shares. The
Distributor retains the asset-based sales charge on Class C shares during the
first year the shares are outstanding. The asset-based sales charges on Class B
and Class C shares allow investors to buy shares without a front-end sales
charge while allowing the Distributor to compensate dealers that sell those
shares.
21 Oppenheimer Trinity Value Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
The Distributor's actual expenses in selling Class B and Class C shares may be
more than the payments it receives from the contingent deferred sales charges
collected on redeemed shares and asset-based sales charges from the Fund under
the plans. If any plan is terminated by the Fund, the Board of Trustees may
allow the Fund to continue payments of the asset-based sales charge to the
Distributor for distributing shares before the plan was terminated. The plans
allow for the carry-forward of distribution expenses, to be recovered from
asset-based sales charges in subsequent fiscal periods.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
DISTRIBUTION FEES PAID TO THE DISTRIBUTOR FOR THE PERIOD ENDED JULY
31, 2000, WERE AS FOLLOWS:
----------------------------------------------------------------------------------------------------------------------
DISTRIBUTOR'S
DISTRIBUTOR'S AGGREGATE UNREIMBURSED EXPENSES
TOTAL PAYMENTS AMOUNT RETAINED BY UNREIMBURSED EXPENSES AS % OF NET ASSETS OF
UNDER PLAN DISTRIBUTOR UNDER PLAN CLASS
------------------- --------------------- ---------------------- ---------------------------- ------------------------
<S> <C> <C> <C> <C>
CLASS B PLAN $2,132 $1,988 $17,104 2.66%
------------------- --------------------- ---------------------- ---------------------------- ------------------------
CLASS C PLAN 2,359 2,198 9,503 1.12
------------------- --------------------- ---------------------- ---------------------------- ------------------------
</TABLE>
5. BANK BORROWINGS
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.45%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of 0.08%
per annum.
The Fund had no borrowings outstanding during the period ended July 31, 2000.
<PAGE>
Appendix A
-----------------------------------------------------------
S&P 500/BARRA Value Index
--------------------------------------------------------------------------------
11 Economic Sectors, 34 Industry Groups
Basic Material Capital Goods Comsumer Cyclicals
Chemicals Electric Equipment Retail/Merchandise
Forest Products Aerospace Entertainment
Metal Machinary Building Materials
Lodging & Restaurant
Publishing
Consumer Durables
Retail/Clothing
Consumer Staples Energy
Food/Bev/Tobacco Integrated Oils
Household Products Oil Products/Svcs
Food & Drug Retail
Health Care Miscellaneous Finance
Drugs Miscellaneous Consumer Finance
Hospital/Hospital Money Center Banks
Supply Insurance
Regional Banks
Transportation Technology Utilities
Automotive Computer Hardware Telephones
Transportation Computer Software Electric Utilities
Auto Parts Electronics Gas & Water
<PAGE>
Appendix B
OppenheimerFunds Special Sales Charge Arrangements and Waivers
In certain cases, the initial sales charge that applies to purchases of Class A
shares1 of the Oppenheimer funds or the contingent deferred sales charge that
may apply to Class A, Class B or Class C shares may be waived.2 That is because
of the economies of sales efforts realized by OppenheimerFunds Distributor,
Inc., (referred to in this document as the "Distributor"), or by dealers or
other financial institutions that offer those shares to certain classes of
investors.
Not all waivers apply to all funds. For example, waivers relating to Retirement
Plans do not apply to Oppenheimer municipal funds, because shares of those funds
are not available for purchase by or on behalf of retirement plans. Other
waivers apply only to shareholders of certain funds.
For the purposes of some of the waivers described below and in the Prospectus
and Statement of Additional Information of the applicable Oppenheimer funds, the
term "Retirement Plan" refers to the following types of plans:
(1) plans qualified under Sections 401(a) or 401(k) of the Internal Revenue
Code, (2) non-qualified deferred compensation plans, (3) employee benefit plans3
(4) Group Retirement Plans4 (5) 403(b)(7) custodial plan accounts (6) Individual
Retirement Accounts ("IRAs"), including traditional IRAs, Roth IRAs, SEP-IRAs,
SARSEPs or
SIMPLE plans
The interpretation of these provisions as to the applicability of a special
arrangement or waiver in a particular case is in the sole discretion of the
Distributor or the transfer agent (referred to in this document as the "Transfer
Agent") of the particular Oppenheimer fund. These waivers and special
arrangements may be amended or terminated at any time by a particular fund, the
Distributor, and/or OppenheimerFunds, Inc. (referred to in this document as the
"Manager").
Waivers that apply at the time shares are redeemed must be requested by the
shareholder and/or dealer in the redemption request.
1. Certain waivers also apply to Class M shares of Oppenheimer Convertible
Securities Fund.
2. In the case of Oppenheimer Senior Floating Rate Fund, a
continuously-offered closed-end fund, references to contingent deferred
sales charges mean the Fund's Early Withdrawal Charges and references to
"redemptions" mean "repurchases" of shares.
3. An "employee benefit plan" means any plan or arrangement, whether or not it
is "qualified" under the Internal Revenue Code, under which Class A shares
of an Oppenheimer fund or funds are purchased by a fiduciary or other
administrator for the account of participants who are employees of a single
employer or of affiliated employers. These may include, for example,
medical savings accounts, payroll deduction plans or similar plans. The
fund accounts must be registered in the name of the fiduciary or
administrator purchasing the shares for the benefit of participants in the
plan.
4. The term "Group Retirement Plan" means any qualified or non-qualified
retirement plan for employees of a corporation or sole proprietorship,
members and employees of a partnership or association or other organized
group of persons (the members of which may include other groups), if the
group has made special arrangements with the Distributor and all members of
the group participating in (or who are eligible to participate in) the plan
purchase Class A shares of an Oppenheimer fund or funds through a single
investment dealer, broker or other financial institution designated by the
group. Such plans include 457 plans, SEP-IRAs, SARSEPs, SIMPLE plans and
403(b) plans other than plans for public school employees. The term "Group
Retirement Plan" also includes qualified retirement plans and non-qualified
deferred compensation plans and IRAs that purchase Class A shares of an
Oppenheimer fund or funds through a single investment dealer, broker or
other financial institution that has made special arrangements with the
Distributor enabling those plans to purchase Class A shares at net asset
value but subject to the Class A contingent deferred sales charge. I.
Applicability of Class A Contingent Deferred Sales Charges in Certain Cases
Purchases of Class A Shares of Oppenheimer Funds That Are Not Subject to Initial
Sales Charge but May Be Subject to the Class A Contingent Deferred Sales Charge
(unless a waiver applies).
There is no initial sales charge on purchases of Class A shares of any
of the Oppenheimer funds in the cases listed below. However, these purchases may
be subject to the Class A contingent deferred sales charge if redeemed within 18
months of the end of the calendar month of their purchase, as described in the
Prospectus (unless a waiver described elsewhere in this Appendix applies to the
redemption). Additionally, on shares purchased under these waivers that are
subject to the Class A contingent deferred sales charge, the Distributor will
pay the applicable commission described in the Prospectus under "Class A
Contingent Deferred Sales Charge."4 This waiver provision applies to:
|_| Purchases of Class A shares aggregating $1 million or more.
|_| Purchases by a Retirement Plan (other than an IRA or 403(b)(7) custodial
plan) that:
(1) buys shares costing $500,000 or more, or (2) has, at the time of purchase,
100 or more eligible employees or total plan assets of $500,000 or more, or
(3) certifies to the Distributor that it projects to have annual plan purchases
of $200,000 or more.
|_| Purchases by an OppenheimerFunds-sponsored Rollover IRA, if the purchases
are made:
(1) through a broker, dealer, bank or registered investment adviser that has
made special arrangements with the Distributor for those purchases, or
(2) by a direct rollover of a distribution from a qualified Retirement Plan if
the administrator of that Plan has made special arrangements with the
Distributor for those purchases.
|_| Purchases of Class A shares by Retirement Plans that have any of
the following record-keeping arrangements:
(1) The record keeping is performed by Merrill Lynch Pierce Fenner & Smith,
Inc. ("Merrill Lynch") on a daily valuation basis for the Retirement Plan.
On the date the plan sponsor signs the record-keeping service agreement
with Merrill Lynch, the Plan must have $3 million or more of its assets
invested in (a) mutual funds, other than those advised or managed by
Merrill Lynch Asset Management, L.P. ("MLAM"), that are made available
under a Service Agreement between Merrill Lynch and the mutual fund's
principal underwriter or distributor, and (b) funds advised or managed by
MLAM (the funds described in (a) and (b) are referred to as "Applicable
Investments").
(2) The record keeping for the Retirement Plan is performed on a daily
valuation basis by a record keeper whose services are provided under a
contract or arrangement between the Retirement Plan and Merrill Lynch. On
the date the plan sponsor signs the record keeping service agreement with
Merrill Lynch, the Plan must have $3 million or more of its assets
(excluding assets invested in money market funds) invested in Applicable
Investments.
(3) The record keeping for a Retirement Plan is handled under a service
agreement with Merrill Lynch and on the date the plan sponsor signs that
agreement, the Plan has 500 or more eligible employees (as determined by
the Merrill Lynch plan conversion manager).
|_| Purchases by a Retirement Plan whose record keeper had a cost-allocation
agreement with the Transfer Agent on or before May 1, 1999.
<PAGE>
II. Waivers of Class A Sales Charges of Oppenheimer Funds
A. 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 (and no commissions are paid by the Distributor on such
purchases): |_| The Manager or its affiliates.
|_| Present or former officers, directors, trustees and employees (and their
"immediate families") of the Fund, the Manager and its affiliates, and
retirement plans established by them for their employees. 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, a spouse's siblings, aunts, uncles,
nieces and nephews; relatives by virtue of a remarriage (step-children,
step-parents, etc.) are included.
|_| 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 which are identified as such 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 advisors that
have entered into an agreement with the Distributor providing
specifically for the use of shares of the Fund in particular
investment products made available to their clients. Those clients
may be charged a transaction fee by their dealer, broker, bank or
advisor for the purchase or sale of Fund shares.
|_| Investment advisors and financial planners who have entered into
an agreement for this purpose with the Distributor and who charge
an advisory, consulting or other fee for their services and buy
shares for their own accounts or the accounts of their clients.
|_| "Rabbi trusts" that buy shares for their own accounts, if the
purchases are made through a broker or agent or other financial
intermediary that has made special arrangements with the
Distributor for those purchases.
|_| Clients of investment advisors or financial planners (that have
entered into an agreement for this purpose with the Distributor)
who buy shares for their own accounts may also purchase shares
without sales charge but only if their accounts are linked to a
master account of their investment advisor or financial planner on
the books and records of the broker, agent or financial
intermediary with which the Distributor has made such special
arrangements . Each of these investors may be charged a fee by the
broker, agent or financial intermediary for purchasing shares.
|_| 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 (or its successor) is the
investment advisor (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.
|_| A unit investment trust that has entered into an appropriate agreement with
the Distributor.
|_| Dealers, brokers, banks, or registered investment advisers that have entered
into an agreement with the Distributor to sell shares to defined contribution
employee retirement plans for which the dealer, broker or investment adviser
provides administration services. |-|
<PAGE>
Retirement Plans and deferred compensation plans and trusts used to fund those
plans (including, for example, plans qualified or created under sections
401(a), 401(k), 403(b) or 457 of the Internal Revenue Code), in each case
if those purchases are made through a broker, agent or other financial
intermediary that has made special arrangements with the Distributor for
those purchases.
|_| 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 Class C TRAC-2000 program on November 24, 1995.
|_| A qualified Retirement Plan 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, if that arrangement was
consummated and share purchases commenced by December 31, 1996.
B. 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 sales charges (and no commissions are paid by the Distributor on such
purchases):
|_| 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 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 through a broker-dealer that has entered into a special
agreement with the Distributor to allow the broker's customers to purchase
and pay for shares of Oppenheimer funds using the proceeds of shares
redeemed in the prior 30 days from a mutual fund (other than a fund managed
by the Manager or any of its subsidiaries) on which an initial sales charge
or contingent deferred sales charge was paid. This waiver also applies to
shares purchased by exchange of shares of Oppenheimer Money Market Fund,
Inc. that were purchased and paid for in this manner. This waiver must be
requested when the purchase order is placed for shares of the Fund, and the
Distributor may require evidence of qualification for this waiver.
|_| Shares purchased with the proceeds of maturing principal units of any
Qualified Unit Investment Liquid Trust Series.
|_| Shares purchased by the reinvestment of loan repayments by a participant in
a Retirement Plan for which the Manager or an affiliate acts as sponsor.
C. 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:
|_| To make Automatic Withdrawal Plan payments that are limited annually to no
more than 12% of the account value adjusted annually.
|_| Involuntary redemptions of shares by operation of law or involuntary
redemptions of small accounts (please refer to "Shareholder Account Rules
and Policies," in the applicable fund Prospectus).
|_| For distributions from Retirement Plans, deferred compensation plans or
other employee benefit plans for any of the following purposes:
(1) Following the death or disability (as defined in the Internal Revenue Code)
of the participant or beneficiary. The death or disability must occur after the
participant's account was established.
(2) To return excess contributions.
(3) To return contributions made due to a mistake of fact.
(4) Hardship withdrawals, as defined in the plan.5
(5) Under a Qualified Domestic Relations Order, as defined in the Internal
Revenue Code, or, in the case of an IRA, a divorce or separation agreement
described in Section 71(b) of the Internal Revenue Code.
(6) To meet the minimum distribution requirements of the Internal Revenue Code.
(7) To make "substantially equal periodic payments" as described in Section
72(t) of the Internal Revenue Code.
(8) For loans to participants or beneficiaries.
(9) Separation from service.6
(10) Participant-directed redemptions to purchase shares of a mutual fund (other
than a fund managed by the Manager or a subsidiary of the Manager) if the
plan has made special arrangements with the Distributor.
(11) Plan termination or "in-service distributions," if the redemption proceeds
are rolled over directly to an OppenheimerFunds-sponsored IRA.
|_| For distributions from Retirement Plans having 500 or more
eligible employees, except distributions due to termination of all
of the Oppenheimer funds as an investment option under the Plan.
|_| For distributions from 401(k) plans sponsored by broker-dealers
that have entered into a special agreement with the Distributor
allowing this waiver.
III. Waivers of Class B and Class C Sales Charges of Oppenheimer Funds
The Class B and Class C contingent deferred sales charges will not be applied to
shares purchased in certain types of transactions or redeemed in certain
circumstances described below.
A. 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: |_| Shares redeemed involuntarily,
as described in "Shareholder Account Rules and Policies," in the
applicable Prospectus.
|_| 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.
|_| Distributions from accounts for which the broker-dealer of record
has entered into a special agreement with the Distributor allowing
this waiver.
|_| Redemptions of Class B shares held by Retirement Plans whose
records are maintained on a daily valuation basis by Merrill Lynch
or an independent record keeper under a contract with Merrill
Lynch.
|_| Redemptions of Class C shares of Oppenheimer U.S. Government Trust
from accounts of clients of financial institutions that have
entered into a special arrangement with the Distributor for this
purpose.
|_| Redemptions requested in writing by a Retirement Plan sponsor of
Class C shares of an Oppenheimer fund in amounts of $1 million or
more held by the Retirement Plan for more than one year, if the
redemption proceeds are invested in Class A shares of one or more
Oppenheimer funds.
|-|
Distributions from Retirement Plans or other employee benefit plans for any
of the following purposes:
(1) Following the death or disability (as defined in the Internal Revenue Code)
of the participant or beneficiary. The death or disability must occur after
the participant's account was established in an Oppenheimer fund.
(2) To return excess contributions made to a participant's account.
(3) To return contributions made due to a mistake of fact.
(4) To make hardship withdrawals, as defined in the plan.7
(5) To make distributions required under a Qualified Domestic Relations Order
or, in the case of an IRA, a divorce or separation agreement described in
Section 71(b) of the Internal Revenue Code.
(6) To meet the minimum distribution requirements of the Internal Revenue Code.
(7) To make "substantially equal periodic payments" as described in Section
72(t) of the Internal Revenue Code.
(8) For loans to participants or beneficiaries.8
(9) On account of the participant's separation from service.9
(10) Participant-directed redemptions to purchase shares of a mutual fund (other
than a fund managed by the Manager or a subsidiary of the Manager) offered
as an investment option in a Retirement Plan if the plan has made special
arrangements with the Distributor.
(11) Distributions made on account of a plan termination or "in-service"
distributions, if the redemption proceeds are rolled over directly to an
OppenheimerFunds-sponsored IRA.
(12) Distributions from Retirement Plans having 500 or more eligible employees,
but excluding distributions made because of the Plan's elimination as
investment options under the Plan of all of the Oppenheimer funds that had
been offered.
(13) For distributions from a participant's account under an Automatic
Withdrawal Plan after the participant reaches age 59 1/2 , as long as the
aggregate value of the distributions does not exceed 10% of the account's
value, adjusted annually.
(14) Redemptions of Class B shares under an Automatic Withdrawal Plan for an
account other than a Retirement Plan, if the aggregate value of the
redeemed shares does not exceed 10% of the account's value, adjusted
annually.
|_| Redemptions of Class B shares or Class C shares under an Automatic
Withdrawal Plan from an account other than a Retirement Plan if
the aggregate value of the redeemed shares does not exceed 10% of
the account's value annually.
B. 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.
|_| Shares issued in plans of reorganization to which the Fund is a party.
|_| Shares sold to present or former officers, directors, trustees or
employees (and their "immediate families" as defined above in
Section I.A.) of the Fund, the Manager and its affiliates and
retirement plans established by them for their employees.
<PAGE>
IV. Special Sales Charge Arrangements for Shareholders of Certain Oppenheimer
Funds Who Were Shareholders of Former Quest for Value Funds
The initial and contingent deferred sales charge rates and waivers for Class A,
Class B and Class C shares described in the Prospectus or Statement of
Additional Information of the Oppenheimer funds are modified as described below
for certain persons who were shareholders of the former Quest for Value Funds.
To be eligible, those persons must have been shareholders on November 24, 1995,
when OppenheimerFunds, Inc. became the investment advisor to those former Quest
for Value Funds. Those funds include:
<PAGE>
Oppenheimer Quest Value Fund, Inc. Oppenheimer Quest Small Cap Value Fund
Oppenheimer Quest Balanced Value Fund Oppenheimer Quest Global Value Fund
Oppenheimer Quest Opportunity Value Fund
These arrangements also apply to shareholders of the following funds
when they merged (were reorganized) into various Oppenheimer funds on November
24, 1995:
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
Quest for Value California Tax-Exempt Fund
All of the funds listed above are referred to in this Appendix as the
"Former Quest for Value Funds." The waivers of initial and contingent deferred
sales charges described in this Appendix apply to shares of an Oppenheimer fund
that are either:
|_| acquired by such shareholder pursuant to an exchange of shares of an
Oppenheimer fund that was one of the Former Quest for Value Funds, or
|_| purchased by such shareholder by exchange of shares of another Oppenheimer
fund that were acquired pursuant to the merger of any of the Former Quest
for Value Funds into that other Oppenheimer fund on November 24, 1995.
A. Reductions or Waivers of Class A Sales Charges.
|X| Reduced Class A Initial Sales Charge Rates for Certain Former Quest
for Value Funds Shareholders.
Purchases by Groups and Associations. The following table sets forth the initial
sales charge rates for Class A shares purchased by members of "Associations"
formed for any purpose other than the purchase of securities. The rates in the
table apply if 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.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
------------------------------ ---------------------------- ---------------------------- ----------------------------
Number of Eligible Employees Initial Sales Charge as a Initial Sales Charge as a Commission as % of
or Members % of Offering Price % of Net Amount Invested Offering Price
------------------------------ ---------------------------- ---------------------------- ----------------------------
------------------------------ ---------------------------- ---------------------------- ----------------------------
9 or Fewer 2.50% 2.56% 2.00%
------------------------------ ---------------------------- ---------------------------- ----------------------------
------------------------------ ---------------------------- ---------------------------- ----------------------------
At least 10 but not more 2.00% 2.04% 1.60%
than 49
------------------------------ ---------------------------- ---------------------------- ----------------------------
</TABLE>
<PAGE>
For purchases by 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 in the applicable fund's Prospectus.
Purchases made under this arrangement qualify for the lower of either
the sales charge rate in the table based on the number of members of an
Association, or the sales charge rate that applies under the Right of
Accumulation described in the applicable fund's Prospectus and Statement of
Additional Information. Individuals who qualify under this arrangement for
reduced sales charge rates as members of Associations also may purchase shares
for their individual or custodial accounts at these reduced sales charge rates,
upon request to the Distributor.
|X| Waiver of Class A Sales Charges for Certain Shareholders. Class A
shares purchased by the following investors are not subject to any Class A
initial or contingent deferred sales charges:
|_| Shareholders 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 who acquired shares of any Former Quest for Value Fund by
merger of any of the portfolios of the Unified Funds.
|X| Waiver of Class A Contingent Deferred Sales Charge in Certain
Transactions. The Class A contingent deferred sales charge will not apply to
redemptions of Class A shares 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.
B. Class A, Class B and Class C Contingent Deferred Sales Charge Waivers.
|X| Waivers for Redemptions of Shares Purchased Prior to March 6, 1995.
In the following cases, the contingent deferred sales charge will be waived for
redemptions of Class A, Class B or Class C shares of an Oppenheimer fund. The
shares must have been acquired by the merger of a Former Quest for Value Fund
into the fund or by exchange from an Oppenheimer fund that was a Former Quest
for Value Fund or into which such fund merged. Those shares must have been
purchased prior to March 6, 1995 in connection with:
|_| 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 value, adjusted annually, and
|_| liquidation of a shareholder's account if the aggregate net asset value of
shares held in the account is less than the required minimum value of such
accounts.
|X| Waivers for Redemptions of Shares Purchased on or After March 6,
1995 but Prior to November 24, 1995. In the following cases, the contingent
deferred sales charge will be waived for redemptions of Class A, Class B or
Class C shares of an Oppenheimer fund. The shares must have been acquired by the
merger of a Former Quest for Value Fund into the fund or by exchange from an
Oppenheimer fund that was a Former Quest For Value Fund or into which such
Former Quest for Value Fund merged. Those shares must have been purchased on or
after March 6, 1995, but prior to November 24, 1995:
|_| redemptions following the death or disability of the shareholder(s) (as
evidenced by a determination of total disability by the U.S. Social
Security Administration);
|_| withdrawals under an automatic withdrawal plan (but only for Class B or
Class C shares) where the annual withdrawals do not exceed 10% of the
initial value of the account value; adjusted annually, and
|_| 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 Oppenheimer fund described in this section if the
proceeds are invested in the same Class of shares in that fund or another
Oppenheimer fund within 90 days after redemption.
V. Special Sales Charge Arrangements for Shareholders of Certain Oppenheimer
Funds Who Were Shareholders of Connecticut Mutual Investment Accounts, Inc.
The initial and contingent deferred sale charge rates and waivers for Class A
and Class B shares described in the respective Prospectus (or this Appendix) of
the following Oppenheimer funds (each is referred to as a "Fund" in this
section):
o Oppenheimer U. S. Government Trust,
o Oppenheimer Bond Fund,
o Oppenheimer Disciplined Value Fund and
o Oppenheimer Disciplined Allocation Fund
are modified as described below for those Fund shareholders who were
shareholders of the following funds (referred to as the "Former Connecticut
Mutual Funds") on March 1, 1996, when OppenheimerFunds, Inc. became the
investment adviser to the Former Connecticut Mutual Funds:
Connecticut Mutual Liquid Account
Connecticut Mutual Government Securities Account
Connecticut Mutual Income Account
Connecticut Mutual Growth Account
Connecticut Mutual Total Return Account
CMIA LifeSpan Capital Appreciation Account
CMIA LifeSpan Balanced Account
CMIA Diversified Income Account
A. Prior Class A CDSC and Class A Sales Charge Waivers.
|_| Class A Contingent Deferred Sales Charge. Certain shareholders of a
Fund and the other Former Connecticut Mutual Funds are entitled to continue to
make additional purchases of Class A shares at net asset value without a Class A
initial sales charge, but subject to the Class A contingent deferred sales
charge that was in effect prior to March 18, 1996 (the "prior Class A CDSC").
Under the prior Class A CDSC, if any of those shares are redeemed within one
year of purchase, they will be assessed a 1% contingent deferred sales charge on
an amount equal to the current market value or the original purchase price of
the shares sold, whichever is smaller (in such redemptions, any shares not
subject to the prior Class A CDSC will be redeemed first).
Those shareholders who are eligible for the prior Class A CDSC are:
(1) persons whose purchases of Class A shares of a Fund and other
Former Connecticut Mutual Funds were $500,000 prior to March 18,
1996, as a result of direct purchases or purchases pursuant to
the Fund's policies on Combined Purchases or Rights of
Accumulation, who still hold those shares in that Fund or other
Former Connecticut Mutual Funds, and
(2) persons whose intended purchases under a Statement of Intention
entered into prior to March 18, 1996, with the former general
distributor of the Former Connecticut Mutual Funds to purchase
shares valued at $500,000 or more over a 13-month period
entitled those persons to purchase shares at net asset value
without being subject to the Class A initial sales charge.
Any of the Class A shares of a Fund and the other Former Connecticut
Mutual Funds that were purchased at net asset value prior to March 18, 1996,
remain subject to the prior Class A CDSC, or if any additional shares are
purchased by those shareholders at net asset value pursuant to this arrangement
they will be subject to the prior Class A CDSC.
|_| Class A Sales Charge Waivers. Additional Class A shares of a Fund
may be purchased without a sales charge, by a person who was in one (or more) of
the categories below and acquired Class A shares prior to March 18, 1996, and
still holds Class A shares:
(1) any purchaser, provided the total initial amount invested in
the Fund or any one or more of the Former Connecticut Mutual
Funds totaled $500,000 or more, including investments made
pursuant to the Combined Purchases, Statement of Intention
and Rights of Accumulation features available at the time of
the initial purchase and such investment is still held in
one or more of the Former Connecticut Mutual Funds or a Fund
into which such Fund merged;
(2) any participant in a qualified plan, provided that the total
initial amount invested by the plan in the Fund or any one
or more of the Former Connecticut Mutual Funds totaled
$500,000 or more;
(3) Directors of the Fund or any one or more of the Former Connecticut Mutual
Funds and members of their immediate families;
(4) employee benefit plans sponsored by Connecticut Mutual Financial Services,
L.L.C. ("CMFS"), the prior distributor of the Former Connecticut Mutual
Funds, and its affiliated companies;
(5) one or more members of a group of at least 1,000 persons
(and persons who are retirees from such group) engaged in a
common business, profession, civic or charitable endeavor or
other activity, and the spouses and minor dependent children
of such persons, pursuant to a marketing program between
CMFS and such group; and
(6) an institution acting as a fiduciary on behalf of an
individual or individuals, if such institution was directly
compensated by the individual(s) for recommending the
purchase of the shares of the Fund or any one or more of the
Former Connecticut Mutual Funds, provided the institution
had an agreement with CMFS.
Purchases of Class A shares made pursuant to (1) and (2) above may be
subject to the Class A CDSC of the Former Connecticut Mutual Funds described
above.
Additionally, Class A shares of a Fund may be purchased without a sales
charge by any holder of a variable annuity contract issued in New York State by
Connecticut Mutual Life Insurance Company through the Panorama Separate Account
which is beyond the applicable surrender charge period and which was used to
fund a qualified plan, if that holder exchanges the variable annuity contract
proceeds to buy Class A shares of the Fund.
B. Class A and Class B Contingent Deferred Sales Charge Waivers.
In addition to the waivers set forth in the Prospectus and in this Appendix,
above, the contingent deferred sales charge will be waived for redemptions of
Class A and Class B shares of a Fund and exchanges of Class A or Class B shares
of a Fund into Class A or Class B shares of a Former Connecticut Mutual Fund
provided that the Class A or Class B shares of the Fund to be redeemed or
exchanged were (i) acquired prior to March 18, 1996 or (ii) were acquired by
exchange from an Oppenheimer fund that was a Former Connecticut Mutual Fund.
Additionally, the shares of such Former Connecticut Mutual Fund must have been
purchased prior to March 18, 1996:
(1) by the estate of a deceased shareholder;
(2) upon the disability of a shareholder, as defined in Section 72(m)(7) of the
Internal Revenue Code;
(3) for retirement distributions (or loans) to participants or beneficiaries
from retirement plans qualified under Sections 401(a) or 403(b)(7)of the
Code, or from IRAs, deferred compensation plans created under Section 457
of the Code, or other employee benefit plans;
(4) as tax-free returns of excess contributions to such retirement or employee
benefit plans;
(5) in whole or in part, in connection with shares sold to any state, county,
or city, or any instrumentality, department, authority, or agency thereof,
that is prohibited by applicable investment laws from paying a sales charge
or commission in connection with the purchase of shares of any registered
investment management company;
(6) in connection with the redemption of shares of the Fund due to a
combination with another investment company by virtue of a merger,
acquisition or similar reorganization transaction;
(7) in connection with the Fund's right to involuntarily redeem or liquidate
the Fund;
(8) in connection with automatic redemptions of Class A shares and Class B
shares in certain retirement plan accounts pursuant to an Automatic
Withdrawal Plan but limited to no more than 12% of the original value
annually; or
(9) as involuntary redemptions of shares by operation of law, or under
procedures set forth in the Fund's Articles of Incorporation, or as adopted
by the Board of Directors of the Fund.
VI. Special Reduced Sales Charge for Former Shareholders of Advance America
Funds, Inc.
Shareholders of Oppenheimer Municipal Bond Fund, Oppenheimer U.S. Government
Trust, Oppenheimer Strategic Income Fund and Oppenheimer Equity Income Fund who
acquired (and still hold) shares of those funds as a result of the
reorganization of series of Advance America Funds, Inc. into those Oppenheimer
funds on October 18, 1991, and who held shares of Advance America Funds, Inc. on
March 30, 1990, may purchase Class A shares of those four Oppenheimer funds at a
maximum sales charge rate of 4.50%.
VII. Sales Charge Waivers on Purchases of Class M Shares of Oppenheimer
Convertible Securities Fund
Oppenheimer Convertible Securities Fund (referred to as the "Fund" in this
section) may sell Class M shares at net asset value without any initial sales
charge to the classes of investors listed below who, prior to March 11, 1996,
owned shares of the Fund's then-existing Class A and were permitted to purchase
those shares at net asset value without sales charge:
|_| the Manager and its affiliates,
|_| present or former officers, directors, trustees and employees (and their
"immediate families" as defined in the Fund's Statement of Additional
Information) of the Fund, the Manager and its affiliates, and retirement
plans established by them or the prior investment advisor of the Fund for
their employees,
|_| registered management investment companies or separate accounts of
insurance companies that had an agreement with the Fund's prior investment
advisor or 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 in the preceding section or financial institutions that
have entered into sales arrangements with those dealers or brokers (and
whose identity is made known to the Distributor) or with the Distributor,
but only if the purchaser certifies to the Distributor at the time of
purchase that the purchaser meets these qualifications,
|_| dealers, brokers, or registered investment advisors that had entered into
an agreement with the Distributor or the prior distributor of the Fund
specifically providing for the use of Class M shares of the Fund in
specific investment products made available to their clients, and dealers,
brokers or registered investment advisors that had entered into an
agreement with the Distributor or prior distributor of the Fund's shares to
sell shares to defined contribution employee retirement plans for which the
dealer, broker, or investment advisor provides administrative service.
<PAGE>
--------------------------------------------------------------------------------
Oppenheimer Trinity Value FundSM
--------------------------------------------------------------------------------
Internet Web Site:
www.oppenheimerfunds.com
Investment Advisor
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
Sub-Advisor
Trinity Investment Management Corporation
301 North Spring Street
Bellefonte, Pennsylvania 16823
Distributor
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian Bank
The Bank of New York
One Wall Street
New York, New York 10015
Independent Auditors
KPMG LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
PX0381.1100
